Yang v Minister for Immigration and Border Protection
[2014] FCCA 1576
•14 October 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| YANG & ORS v MINISTER FOR IMMIGRATION & ANOR | [2014] FCCA 1576 |
| Catchwords: WORDS AND PHRASES – Main business. |
| Legislation: Migration Act 1958 (Cth), s.134 |
| Ibrahim v Minister for Immigration & Anor [2009] FMCA 593 Lafu v Minister for Immigration (2009) 112 ALD 1 Nassif v Minister for Immigration (2003) 129 FCR 448 Tickner v Chapman (1995) 57 FCR 451 |
| First Applicant: | YINZHU YANG |
| Second Applicant: | XIANYAO CHEN |
| Third Applicant: | XINGMING CHEN |
| Fourth Applicant: | BAOQUAN CHEN |
| Fifth Applicant: | BAOCHENG CHEN |
| First Respondent: | MINISTER FOR IMMIGRATION & BORDER PROTECTION |
| Second Respondent: | MIGRATION REVIEW TRIBUNAL |
| File Number: | SYG 2451 of 2013 |
| Judgment of: | Judge Driver |
| Hearing date: | 21 July 2014 |
| Date of Last Submission: | 24 July 2014 |
| Delivered at: | Sydney |
| Delivered on: | 14 October 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr L Karp with Ms C Cantrall |
| Solicitors for the Applicant: | Kinslor Prince Lawyers |
| Solicitors for the Respondents: | Ms L Buchanan Australian Government Solicitor |
ORDERS
The application as amended on 21 July 2014 is dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2451 of 2013
| YINZHU YANG |
First Applicant
XIANYAO CHEN
Second Applicant
XINGMING CHEN
Third Applicant
BAOQUAN CHEN
Fourth Applicant
BAOCHENG CHEN
Fifth Applicant
And
| MINISTER FOR IMMIGRATION & BORDER PROTECTION |
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 (Tribunal). The decision was made on 12 September 2013. The Tribunal affirmed a decision of a delegate of the Minister not to grant the applicants Business Skills (Residence) (Class DF) visas. There are five applicants who are a wife and husband and their children.
The following statement of background facts is derived from the submissions of the parties.
The first applicant (Mrs Yang) is the primary applicant for the visas the subject of the Tribunal decision. The other applicants are members of Mrs Yang’s family unit and are secondary visa applicants. Any references in this judgment to “the applicant” are references to Mrs Yang.
In an application lodged on 16 April 2010, Mrs Yang nominated two companies as her “main businesses” for the purposes of satisfying the time of application criteria in clause 890.211 of Schedule 2 to the Migration Regulations 1994 (Cth) (Regulations), that Mrs Yang “has had, and continues to have, an ownership interest in one or more actively operating main businesses in Australia for at least two years immediately before the application is made”.
Mrs Yang nominated in her application and in a covering submission the businesses “My Global Enterprises Pty Ltd” (MGE) and “Pengyuelou Investments Group Pty Ltd” (Pengyuelou)[1]. In her application, Mrs Yang stated that she had been a “director” of MGE and a “director/manager” of Pengyuelou[2].
[1] Relevant Documents (RD) 38 and 3.8
[2] RD 38
In a “statement of business activities” provided with her application, Mrs Yang said that MGE traded as Minyue Seafood Restaurant (MSR)[3]. She became a shareholder of MGE in December 2007[4] and undertook “research to improve the business’s operation”[5]. She claimed that relationships between shareholders and poor internal management “led Minyue Seafood Restaurant to the downfall of the business”[6]. Mrs Yang became a shareholder of Pengyuelou in October 2008. MGE sold MSR to Pengyuelou in November 2008[7]. Pengyuelou began trading under the name of Pengyuelou Seafood Restaurant (PSR)[8]. Mrs Yang claimed that in light of the failure of MSR, she “decided to invest Pengyuelou Seafood Restaurant and actively attend to the daily operation and management and promotion”[9].
[3] RD 41[5]
[4] RD 43[13]
[5] RD 43[14]
[6] RD 43[15] and see RD 45[24]
[7] RD 43[15]
[8] RD 45-6
[9] RD 45[24]
Documents provided with the application included business registration documents, the contract for the sale of MSR from MGE to Pengyuelou[10], a lease of premises in Auburn for which MGE was lessee and which was later assigned to Pengyuelou[11], financial statements and Business Activity Statements for both MGE and Pengyuelou. After being requested by the Minister’s Department to provide more information regarding her management role in the nominated business in the two years preceding the lodgement of her application[12], Mrs Yang provided further documents, including what were said to be minutes of directors meetings of MGE[13]. Mrs Yang also provided documents to show that she held shareholdings sufficient to hold an ownership interest in each of the main businesses nominated[14].
[10] RD 50-75
[11] RD 158-199
[12] RD 312-313
[13] RD 350-359
[14] RD 55, 74
On 4 August 2011, a delegate of the Minister refused to grant the applicants visas[15]. The delegate found that Mrs Yang’s initial statement of business activities did not evidence involvement in the management and decision-making of MGE during the period 17 April 2008 and early November 2008. The delegate did not accept that the minutes of directions meetings were reliable evidence of the period in question and, in the absence of other evidence, found Mrs Yang not satisfy clause 890.211 of Schedule 2 to the Regulations[16].
[15] RD 434-442
[16] RD 439-440
The delegate also found that Mrs Yang did not satisfy clause 890.221 of the Regulations which requires the applicant to continue to satisfy clause 890.211 of the Regulations at the time of decision. The delegate found that the Department’s investigations revealed that Pengyuelou no longer owned PSR and that Mrs Yang had not been a shareholder of Pengyuelou since 1 September 2010[17].
[17] RD 440-441
On 12 August 2011, the applicants applied to the Tribunal for review of the delegate’s decision[18]. The applicants provided company extracts to the Tribunal that showed that Pengyuelou had been deregistered and that PSR no longer held its business name but made submissions that, while MGE had ceased trading and Mrs Yang had sold her shares in Pengyuelou, Mrs Yang now held 50% of the shareholding in another company Pengueyuelou Holdings Group Pty Ltd which operated a supermarket. The applicants submitted that this meant Mrs Yang still met the criteria in clause 890.221[19].
[18] RD 443
[19] RD 467-484. However, the ASIC company extract for Pengyuelou Holding Group Pty Ltd shows that this company had also been deregistered on 21 August 2013
On 10 September 2013, the first and second applicants attended a hearing before the Tribunal[20]. The Tribunal heard evidence from the applicant and a Mr Liang who had worked at MSR as a manager and later became a director of Pengyuelou. The applicant confirmed in evidence to the Tribunal that PSR had ceased operating as a restaurant; that Pengyuelou had been deregistered and that she had ceased involvement in the company in August 2010 when she was forced out by other shareholders. Both the applicant and Mr Liang were questioned by the Tribunal about the applicant’s involvement in MGE[21].
[20] RD 485
[21] See transcript annexed to the affidavit of David Prince dated 4 July 2014
Tribunal decision
In its decision, the Tribunal affirmed the decision of a delegate of the Minister to refuse the applicants’ application for visas[22].
[22] RD 490-505
Given the definition of “ownership interest” in s.134(10) of the Migration Act 1958 (Cth) (Migration Act), the Tribunal was satisfied that Mrs Yang held an ownership interest in MGE and Pengyuelou at the time of application[23].
[23] RD 501 [79]
The Tribunal was not satisfied, however, that Mrs Yang had maintained “direct and continuous involvement” in the management of MGE from day to day and in making decisions affecting the overall direction and performance of the business. It noted that there was little documentary evidence about Mrs Yang’s management of MGE apart from minutes of meetings which the Tribunal did not accept in light of the concerns regarding the reliability of the documents and the paucity of other documentation. The Tribunal considered the evidence of Mr Liang and Mrs Yang but was not satisfied Mrs Yang met the criteria in clause 890.211 of Schedule 2 to the Regulations. Given its findings about Mrs Yang’s involvement in MGE during the first seven months of the relevant two year period, it did not consider Mrs Yang’s involvement in Pengyuelou for the remainder of that period[24].
[24] RD 501-502 [80]-[86]
The Tribunal also found that Mrs Yang did not satisfy clause 890.221 of Schedule 2 to the Regulations because she no longer had any ownership interest or management involvement in either MGE or Pengyuelou. On Mrs Yang’s own evidence, she ceased involvement in MGE in about November 2008. She also ceased being both a shareholder and director of Pengyuelou by September 2010[25].
[25] RD 502-3 [87]-[92]
The Tribunal considered the submission that Mrs Yang operated another business, Pengyuelou Holdings Group Pty Ltd, which could be taken into account for the purposes of the application. The Tribunal found, however, that regulation 1.11(2) of the Regulations prevented Mrs Yang from nominating more than two main businesses and that, in any event, the applicants could not rely upon a new company which was not nominated at the time of application[26].
[26] RD 503 [92]-[94]
The judicial review application
These proceedings began with a show cause application filed on 10 October 2013. The applicants now rely upon an amended application filed in court by leave on 21 July 2014. There are three grounds in the amended application which were pursued:
1. The Tribunal erred in its consideration of whether the applicant met Sch. 2 cls 890.211 and 890.221 by;
(a) Construing the applicant’s main business or main businesses as the entities or vehicles which controlled or operated such businesses.
(b) Failing to distinguish between the applicant’s main business or main businesses and the entities or vehicles which controlled or operated such businesses.
2. The Tribunal erred by construing cl. 890.221 as not being able to be satisfied by an applicant’s ownership interest in a business or businesses other than by no more than two businesses nominated on the applicant’s visa application form.
3. The Tribunal fell into jurisdictional error by failing to lawfully consider the evidence of Mr Liang.
I have before me as evidence the book of relevant documents filed on 8 January 2014, as well as the affidavit of David John Prince made on 4 July 2014, to which is attached a Spark & Cannon transcript of the hearing conducted by the Tribunal on 10 September 2013.
The parties both made oral and written submissions.
Consideration
Relevantly, clause 890.211 of Schedule 2, which is a “time of application” criterion, stated as follows:
(1) The applicant has had, and continues to have, an ownership interest in 1 or more actively operating main businesses in Australia for at least 2 years immediately before the application is made.
Migration Regulation 1.03 states that the term, “ownership interest” as applied to a business has the meaning given in subsection 134(10) of the Migration Act, that includes, among other things, “a shareholder in a company which carries on the business”. The term “main business” is defined in Migration Regulation 1.11 as follows:
1.11 Main business
(1)For the purposes of these Regulations and subject to subregulation (2), a business is a main business in relation to an applicant for a visa if:
(a)the applicant has, or has had, an ownership interest in the business; and
(b)the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business; and
(c)the value of the applicant’s ownership interest, or the total value of the ownership interests of the applicant and the applicant’s spouse or de facto partner, in the business is or was at least 10% of the total value of the business; and
(d)the business is a qualifying business.
(2)If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses.
Regulation 1.03 defines a “qualifying business” as an “enterprise”.
Clause 890.221, which was a “time of decision” criterion, required that the applicant continued to satisfy criteria 890.211, 890.215 and 890.216.
Mrs Yang’s visa application
Question 13 of the prescribed form 47BU completed by Mrs Yang required her to give details of the names and addresses of her main businesses, the dates in which she commenced in the businesses and the major activity of the businesses[27]. It may be observed that that form exhibited the same shortcomings as those criticised by Branson J in Nassif v Minister for Immigration[28], in that it requires a person to identify a business entity as a business where that may be inappropriate (because as explained later, a business entity may be different from a business). I shall return to Nassif later.
[27] RD 38
[28] (2003) 129 FCR 448 at [43]
In completing that form Mrs Yang identified MGE as her first main business, and Pengyuelou as her second main business. She stated that her involvement with MGE commenced on 6 December 2007 and that with Pengyuelou on 20 October 2008. The major activity of both was stated to be a restaurant in Auburn NSW[29].
[29] RD 38
In a statement attached to her visa application, Mrs Yang stated that MGE traded as MSR[30]. She described how she had become a shareholder and investor in MGE: that a Miss Lijing Yu transferred 150 ordinary shares and 173 preference shares to her on 6 December 2007[31]. She also described the work that she undertook to increase the restaurant’s business and the reasons for its “downfall”, and its sale, on 3 November 2008 to Pengyuelou[32].
[30] RD 41[5]
[31] RD 42-3, RD 45[24]
[32] RD 43[14]-[15]
Mrs Yang continued that on 20 October 2008 she was appointed as a director of Pengyuelou[33]. I interpolate that a “Deed of Consent to the Assignment of Lease” document[34] read with the principal lease[35] indicates that the lease of the premises occupied by MSR was assigned to Pengyuelou for use as a restaurant on 3 March 2009. Thereafter the restaurant continued at the same address trading as PSR.
[33] RD 43[16]
[34] RD 186-199
[35] RD 158-185
Mrs Yang then described her work in attending to the daily management of the restaurant[36].
[36] RD 45[24]-46 [25]–47 [29]
A great volume of supporting documents was supplied[37]. Most of these documents related to business activities in 2009 and 2010, and may not by themselves constitute evidence that Mrs Yang maintained direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business in the two years prior to the making of the application.
[37] RD 48-419
The delegate’s decision
The delegate found that Mrs Yang had nominated two companies (MGE and Pengyuelou) as main businesses[38]. She was not satisfied that Mrs Yang had maintained a “direct and continuous involvement” in the management of the Minyue Seafood Restaurant in the period April to November 2008 and that therefore she could not meet clause 890.211 read with regulation 1.11[39].
[38] RD 437[20]; 438[25]
[39] RD 440 [35]-[38]
The delegate also noted that departmental investigators visited the restaurant on 21 January 2010 and 11 February 2011, and observed on the later occasion that it was operating under a different name. Subsequent investigations revealed that it was no longer owned by Pengyuelou and that Mrs Yang had not been a shareholder in that company since 1 September 2010[40].
[40] RD 440[41]
In the Migration Review Tribunal
The Tribunal application was lodged on 12 August 2011[41].
[41] RD 443ff
Prior to the hearing, Mrs Yang’s migration agent wrote to the Tribunal saying, among other things, that Mrs Yang had ceased operation in what the agents described as her main business, Pengyuelou, in or around October 2011. They also made a tentative submission on the construction of clause 890.221 to the effect that at the time of decision a visa applicant need not operate the same business as at the time of application[42].
[42] RD 464
On 9 September 2013 the migration agents forwarded a submission written by Mr David Prince of Kinslor Prince Lawyers, whom the agents had retained for that purpose. Mr Prince was instructed that Mrs Yang sold her shares in Pengyuelou to the other shareholders following a business dispute[43], and that in August 2010 she established Pengyuelou Holdings Group Pty Ltd (ACN 145 910 461) and holds nearly 50% of shares in that company[44].
[43] RD 467
[44] RD 468
Mr Prince offered four alternative constructions of clause 890.221:
a)Mrs Yang has maintained the same business(es) as were present at the time of satisfaction of clause 890.211, with the same business activities and subject matter;
b)Mrs Yang has maintained the same business(es) as were present at the time of satisfaction of clause 890.211, although the business activities and subject matter may have changed;
c)Mrs Yang has an ownership interest in a different legal vehicle although the business activities were the same as used to satisfy clause 890.211;
d)both the vehicle through which the business was conducted, and the business activities have changed from those used to satisfy clause 890.211.
Mr Prince submitted that each of these scenarios could satisfy clause 890.221[45]. It may be noted that implicit in Mr Prince’s submissions were that there was not a necessary co identity between a business and the entity or legal person who or which operates that business.
[45] RD 468-9
At the hearing the Tribunal advised that it saw the issues as whether Mrs Yang met clauses 890.211 and 890.221[46]. It confirmed with Mrs Yang that she ceased involvement in Pengyuelou in August 2011 after being forced to sell her shares to other directors[47]. The Tribunal member also put to Ms Yang that Pengyuelou has been deregistered and that she did not maintain a continuous involvement in it[48]. Mrs Yang responded, “But actually I was there every day”[49]. The conversation continued from T 9 line 10:
[46] transcript (“T”) 5
[47] T 6-8
[48] T 8-9
[49] T 9 line 8
MS DIMITRIADIS: Yes, but you're not there now, because you haven't been involved in it since August 2010. You see, I have to make a decision now, whether you continue to have this involvement now.
INTERPRETER: No, not now.
MS DIMITRIADIS: All right. I mean, it appears that you did not meet clause 890.221. Because you're no longer involved in that business and have not been involved for three years.
INTERPRETER: Well, I do have another business.
MS DIMITRIADIS: Yes, but I'm not looking at the other business. I can only look at the businesses that you nominated when you lodged the visa application.
At T 11 lines 17-18 Mrs Yang’s advisor stated that she now ran a supermarket business. After further discussion the Tribunal member stated that she doubted how this was relevant, given that this business was not nominated at the time of the application[50].
[50] from T 11 line 37
Mrs Yang called a witness, Mr Liang, who gave evidence that:
a)he worked with Mrs Yang for two years in “Minhulu” (sic) when she was his boss[51];
b)he worked at PSR from December 2007, and by that time Mrs Yang was his boss and shareholder[52];
c)they managed the business together[53]; and
d)she did participate in the management of the business[54].
[51] T 15 lines 33-34
[52] T 15 lines 41-43
[53] T 16 lines 8-11
[54] T 16 lines 21-32
The Tribunal’s decision
After stating at [72][55] that the relevant timeframe for the purposes of clause 890.211 was 16 April 2008 to 16 April 2010 (that is two years before the making of the application), the Tribunal observed that at the time of the application, Mrs Yang had nominated two companies as main businesses – MGE and Pengyuelou – and found that these were her nominated businesses[56]. It observed, correctly, that MGE purchased a restaurant and that Pengyuelou purchased that restaurant in November 2008 and traded as PSR at the same premises in Auburn[57].
[55] RD 500
[56] RD 500 [73]
[57] RD 500 [75]
The Tribunal found that Mrs Yang has an ownership interest in MGE and Pengyuelou[58].
[58] RD 501 [79]
After discussing the lack of what it considered satisfactory documentation evidencing Mrs Yang’s involvement in MGE prior to October 2008[59], the Tribunal did not accept that she had a management role and attended to the day to day affairs of MGE[60]. It found that:
The very few documents that were provided about the applicant’s management of the business of [MGE] and the evidence of the applicant and Mr Liang are not sufficient to satisfy the Tribunal that the applicant meets cl. 890.211.
[59] RD 501-2[80]-[84]
[60] RD 501 [84]-[85]
In relation to clause 890.221, the Tribunal found, uncontroversially, that Ms Yang ceased being a director of Pengyuelou in August 2010, and that Pengyuelou had since been deregistered[61]. It found that Mrs Yang could not meet clause 890.211 because she was no longer involved in Pengyuelou and had not been involved for three years[62]. It considered that the other business, that operates as a supermarket, was not relevant because she did not nominate the company trading as a supermarket when she lodged the visa application, given, so the Tribunal said, that she had already nominated two main businesses, citing regulation 1.11(2)[63]. It dismissed Mr Prince’s construction of clause 890.211[64].
The applicants’ contentions
[61] RD 502[88]
[62] RD 503[91]
[63] RD 503[92]
[64] RD 503 [93]-[94]
An asserted definitional error
The applicants contend that the Tribunal approached its consideration of whether Mrs Yang met clauses 890.211 and 890.221 on the basis of a misconception. That is, it failed to distinguish between a business (an enterprise or activity) and the vehicle or entity which operates or runs that business. In Nassif Branson J considered the meaning of the term, “main business” in the context of regulations 1.11, 1.03 and s.134(10) of the Migration Act, which are the same provisions as are relevant here, and concluded that for the purposes of clause 845.215 that it is not a necessary characteristic of a “main business” that it be carried on by a single entity[65]. Her Honour also criticised the relevant prescribed form which appeared to identify the “main business” with the entity running that business[66].
[65] at FCR 455 [35]
[66] FCR 457 [43]
In the present case both MGE and Pengyuelou operated the business of a restaurant. That was the enterprise. Two companies operated that business in turn. The applicants complain that the Tribunal failed to recognise this. By conflating the enterprise with the entity, the Tribunal is said to have committed a interpretational error going to the heart of its jurisdictional task.
Clauses 890.211 and 890.221, read with regulations 1.11(2) limit to two the number of “main businesses” available to Mrs Yang. The applicants submit that there is no indication in the wording of any of these provisions that would require the ownership interest in two main businesses to exist at the same time. Equally, there is nothing in the wording that would prevent an interest in one business ceasing and Mrs Yang acquiring a relevant interest in another business shortly before that event.
Further, the applicants submit that there is nothing in those provisions which requires that the business(es) used to satisfy clause 890.211 are also used to satisfy clause 890.221. The plain words of clause 890.221 do not suggest or require that result. Indeed, the policy underlying the sub class 890 visa category would seem to be to encourage entrepreneurship, which may include the buying, building up and selling of businesses, and the construction put on clause 890.221 by the Tribunal is an “arbitrary and extreme approach” which would inhibit that policy.
The Tribunal’s consideration of whether the applicant met the two year requirement in clause 890.211
In coming to its conclusion at that Mrs Yang did not meet the two year requirement, the Tribunal considered the documentation submitted to it, and purported to consider the evidence of Mrs Yang and Mr Liang.
The applicants complain that the Tribunal showed no interest in Mr Liang’s evidence. It asked no questions about what Mrs Yang actually did in MGE or MSR. The Tribunal’s lack of interest is said to be evident at T 16 line 4 where it asked, after Mr Liang made a brief initial statement, “Anything else”. At T 16 line 34 it asked, after another statement, “Is that it?”
The applicants contend that the Tribunal’s concern should have been to determine whether Mr Liang could give evidence about Mrs Yang’s work with the company rather than the restaurant, which was the business of the company. Mr Liang did indeed give some evidence to that effect. But the Tribunal appears to have been satisfied before Mr Liang gave evidence that the application could not succeed because it thought that it could only consider the “businesses” (that is the companies) stated in the visa application[67].
[67] see T 8-9
This is said to be further revealed very clearly by the member’s exchange with Mr Liang at T 17 from line 11:
MS DIMITRIADIS: Okay, so for Minhulu seafood restaurant - sorry. All right, so you were just an employee at Minhulu Seafoods, were you, seafood restaurant?
MR LIANG: Yes.
MS DIMITRIADIS: You weren't involved in the company as a director or as a shareholder, were you?
INTERPRETER: No, I was not by that time, I was a manager.
MS DIMITRIADIS: All right, thank you. That's it, thank you.
The implication was that as a mere employee at the restaurant, even a manager, Mr Liang had no relevant evidence to offer because he was not a shareholder or director of the company. However, he was the restaurant manager and therefore in an excellent position to be able to give evidence about Mrs Yang’s management of the business. The applicants submit that the Tribunal’s finding that, among other things, Mr Liang’s evidence was not sufficient to satisfy the Tribunal that he met clause 890.211[68] must be seen in this context.
[68] at RD 502[85]
Thus, the applicants submit that the Tribunal’s error in equating the entity with the business affected its decision as to whether Mrs Yang met clause 890.211. Independently of that error, the Tribunal also, in their submission, failed to consider (that is to direct an active intellectual process to the subject matter of the consideration[69] the evidence that Mr Liang did give.
The Minister’s contentions
[69] Tickner v Chapman (1995) 57 FCR 451 at 462; Lafu v Minister for Immigration (2009) 112 ALD 1 at 7 [48]-[49]
Ground 1 – main business
The applicants appear to now assert that there was only one “main business” nominated by Mrs Yang, being a seafood restaurant which was operated at different times by the two businesses which the applicant (in fact) nominated as her main businesses in her visa application.
The Minister contends that the Tribunal did not fail to distinguish between the entity which operates or runs a business and the business or “enterprise” operated for the purposes of making a profit (see definition of “main business” and “qualifying business” in regulation 1.11 and regulation 1.03 of the Regulations). The Tribunal was aware that the businesses were those nominated by the applicant, being two companies which each traded under the business names MSR and PSR running restaurants[70].
[70] see RD 500 [73]-[75]
Contrary to the applicants’ present claim, there was not “one restaurant”. Mrs Yang specifically nominated two separate businesses in her application, which she identified as two companies each running a restaurant. She provided the details of each business, including the different company and tax registration and ownership details, and provided information regarding the trading names of each business[71].
[71] RD 2-4, 38-39
Mrs Yang’s statement annexed to her application also made clear that she nominated two restaurant businesses. The first business, MSR, had failed due to poor management and had then been sold to a different company. That company then established a new restaurant trading under a different name, PSR[72]. This is thus said to be a very different case to that considered in Nassif where a number of family companies and a family trust were jointly involved in the operation at one time of a family business.
[72] RD 41-48
Resolution
During oral argument, I gave the parties the opportunity to make post hearing submissions on the impact of the Federal Court decision in Ibrahim v Minister for Immigration[73]. The applicants filed additional submissions on 24 July 2014 which sought to distinguish the present case from that case. There is no doubt that I am bound by the decision in Ibrahim to the extent that it cannot be distinguished. In my view, the Federal Court decision is relevant and applicable to the circumstances of this case. In that case, Jagot J, after dealing with the relevant statutory provisions, dealt with my finding in the antecedent proceedings[74] where I had found that the Tribunal had fallen into essentially the same error as alleged by Ground 1 in the present case. At [26] her Honour reviewed that decision in the following terms:
The Federal Magistrate found error in the Tribunal’s treatment of the “main business” in which the appellant claimed to have an “ownership interest”. The Federal Magistrate found that the Tribunal did not ask itself whether, as the appellants claimed, the main business was the business carried on by REI and Multi in that the business in which those two entitles were involved was the same. Instead the Tribunal incorrectly distinguished the decisions in Nassif v Minister for Immigration and Multicultural and Indigenous [Affairs] (2003) 129 FCR 448; [2003] FCA 481 and Liang v Minister for Immigration (2009) 157 FCR 184; [2009] FCA 189 and, in so doing, took into account irrelevant considerations in respect of the characterisation of the main business, being that: - (i) Multi did not exist when the visa applications were made (at [25]), (ii) the first appellant’s motivation in ceasing trading through REI and continuing trading through Multi (at [28]), (iii) the first appellant was not a shareholder in Multi (at [28]), and (iv) REI and Multi were separate legal entities (at [30]). The Federal Magistrate concluded that the Tribunal had taken into account these considerations irrelevant to the question about the “main business” because it had conflated that issue with the “ownership interest” issue (at [28] and [30]).
[73] [2009] FCA 1328
[74] Ibrahim v Minister for Immigration & Anor [2009] FMCA 593
Her Honour found no error in the Tribunal’s approach in that case. At [30]-[33] her Honour stated:
The structure of the Tribunal’s reasons is difficult to follow on a first reading. Nevertheless, it is clear that the Tribunal properly informed itself about the law by reference to Nassif and Liang in [42]. In so doing it accepted that a business is not a legal entity but, rather, is an enterprise or undertaking. The Tribunal dealt with the ownership interest in [43]. It turned to the identification of “the business” in [44]. In the present case, unlike Nassif, the Tribunal (at [44]) dealt with the appellants’ case as put (namely, that Multi is the same operation and thus same business as REI). The Tribunal accepted that the two businesses were very similar. It did not accept, however, that they were the same business (at [45]). The Tribunal did not do so because it inferred that there must have been a benefit to the first appellant in winding up REI and setting up Multi as a “new business” (that is, avoiding adverse personal consequences by reason of laws regulating corporations). The Tribunal also considered it relevant that the first appellant had been the sole shareholder in REI but was not a shareholder in Multi (all of the shares in Multi being owned by the second appellant). The Tribunal considered the different ownership arrangements inconsistent with the claim that REI and Multi were the same business. In [46] the Tribunal, in effect, provides a summary of its earlier conclusions with respect to both the main business and the ownership interest issues.
I do not accept the appellants’ submission that the Tribunal failed to ask itself what the main business was. The Tribunal may not have posed this question in terms but it determined the case as put by the appellant that REI and Multi were the same business and together constituted the main business. The Tribunal rejected this submission. In so doing it kept in mind that the mere fact that the two companies were separate legal entities could not be determinative of the task of characterisation of the business. It undertook the task of characterisation by reference to factors which it was not prohibited by law from taking into account. The weight it gave to the competing factors was a matter for the Tribunal. The conclusion it reached – that the business of the two companies was very similar but not the same – was open to it on the material it had available. The fact that others may take a different view of the facts is beside the point. The task of characterisation is vested in the Tribunal. Provided it performs it task in accordance with its statutory remit a court on review cannot interfere.
I thus do not agree with the Federal Magistrate that the Tribunal erred. Contrary to [24] of the Federal Magistrate’s reasons, the Tribunal was entitled to distinguish Nassif and Liang on the grounds it used. As the Federal Magistrate found in [25], the Tribunal dealt with the appellant’s case as put (see [44] of the Tribunal’s reasons which makes this clear). I have already rejected the approach based on irrelevant considerations apparent in [28]-[31] of the Federal Magistrate’s reasons. Insofar as those paragraphs raise other concerns about the Tribunal’s decision-making process I do not agree that ownership structure is necessarily irrelevant to the application of the main business criteria merely because the definition of that term requires an ownership interest at any time. The reason for this is that the terms “a business” and “the business”, as they appear in the definition of “main business”, are not defined. Identifying “the business” for the purpose of the definition of “main business” is left to the Tribunal. Where an applicant claims a single “business” is transacted through multiple entities the Tribunal is entitled to consider the ownership structure of each entity at any time it thinks relevant in order to work out whether it accepts the applicant’s identification of “the business”. Once it identifies “the business” the Tribunal, in deciding whether that business is a “main business” in relation to the applicant, is bound by the definition of “main business” and the question is then whether “the applicant has, or has had, an ownership interest in the business” as defined. In other words, if the Tribunal required an ownership interest at a particular time when deciding if a business is a main business, the Tribunal would err. But nothing in the statute prohibits the Tribunal from considering the ownership arrangements of any relevant entity at any time for the purpose of identifying “the business” forming a part of the definition of the “main business”.
In the present case, the Tribunal recognised that it had to identify “the business” before it could apply the definition of “main business”. The Tribunal thus did not conflate the ownership interest and main business questions. When it referred to the ownership structure of REI and Multi in [45] the Tribunal was doing so for the purpose of dealing with the appellants’ submission that the two carried out the same “business”. As noted, it rejected the appellants’ case. Having found that REI and Multi were not the same business and thus not “the business” for the purpose of applying the definition of “main business” the Tribunal was entitled in its summary concluding paragraph in [46] of its reasons to revisit the ownership interest question in the terms it did (that is, by reference to each of REI and Multi and not to them together).
It follows that I am bound by the proposition that ownership structure is not necessarily irrelevant to the application of the main business criteria. The identification of “the business” for those criteria is left to the Tribunal. Importantly, where an applicant claims a single “business” is transacted through multiple entities, the Tribunal is entitled to consider the ownership structure of each entity at any time it thinks relevant in order to work out whether it accepts the applicant’s identification of the “business”. Having identified the “business”, the Tribunal is bound by the definition of “main business”. The Tribunal is entitled to consider the ownership arrangements of any relevant entity at any time for the purpose of identifying the “business” from part of the definition of the “main business”.
In the present case, as noted in the Minister’s submissions, it was the applicants who asserted the existence of two businesses by reference to two ownership structures. The Tribunal was entitled to accept that characterisation. I agree with the Minister that no error is established in the Tribunal’s approach to that issue.
The Tribunal’s consideration of clause 890.221
Clause 890.221 requires, among other things, that at the time of decision the applicant must continue to satisfy clause 890.211. Clause 890.211 requires that:
(1) The applicant has had, and continues to have, an ownership interest in 1 or more actively operating main businesses in Australia for at least 2 years immediately before the application is made.
I accept the Minister’s submissions on the interpretation of these clauses.
The applicants assert jurisdictional error due to the Tribunal finding that clause 890.221 cannot be satisfied by an ownership interest in a business or businesses other than by the two businesses nominated at the time of application.
Contrary to the applicants’ submissions, it is clear when clause 890.211, 890.221 and regulation 1.11(2) of the Regulations are read together that one or both of the main businesses nominated for the purpose of satisfying clause 890.211 must be those used to satisfy the criteria in clause 890.221.
Regulation 1.11 defines “main business” for the purposes of the Regulations. It states:
(1) For the purposes of these Regulations and subject to subregulation (2), a business is a main business in relation to an applicant for a visa if:
(a) the applicant has, or has had, an ownership interest in the business; and
(b) the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business; and
…
(d) the business is a qualifying business.
(2) If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses.
Regulation 1.11(2) makes clear that an applicant can only nominate up to two main businesses for the purposes of an application. The time of application criterion requires the nomination at time of application of one or more main businesses in Australia, which must, by regulation 1.11, be limited to two. An applicant must continue to hold an ownership interest in those main businesses over a period of two years.
It is, in my view, clear that the regulation is intended to ensure continuity in the holding of an ownership interest. Such continuity is emphasised by the requirements in regulation 1.11(1)(b) to maintain a direct and continuous involvement in the day to day management of those businesses. The requirement in clause 890.221 that an applicant continue to satisfy clause 890.211 at the time of decision, requires the applicant to continue to satisfy the requirement in light of the limitation on the number of main businesses which can be nominated for the purpose of the Regulations at the time of application. There is nothing “extreme” or “arbitrary” in such a construction. Rather, such a construction is consistent with the regulatory requirement for ownership continuity over a two year period prior to application. A similar argument made by the applicant was rejected in relation to a similar regulation in Tung-Liang Liang v Minister for Immigration[75].
[75] [2009] FCA 189
Ground 3 – did the Tribunal lawfully consider the evidence of Mr Liang?
I agree with the Minister’s submissions on this issue.
The Tribunal was required to consider whether there was a main business for the purpose of determining whether, for the purpose of satisfying clause 890.211, the applicant “maintains or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business”[76].
[76] see rule 1.11(1)(b) of the Regulations
At the hearing, Mr Liang was put forward as being able to give evidence in relation to the applicant’s management of the first two companies (MGE and Pengyuelou)[77]. Mr Liang’s evidence[78] was that he had worked at MSR as a manager from December 2007, “when [the applicant] was still my boss”, that is a shareholder. When asked if there was anything else, Mr Liang gave evidence that the applicant became a business partner when Pengyuelou started, and they then managed that business together. He later said that he and Mrs Yang established a new company in 2008, but before then he had worked for Mrs Yang as a manager of the restaurant. The Tribunal clearly considered this evidence, along with that of Mrs Yang[79], but was not satisfied that the evidence, including the documentary evidence, or lack thereof, indicated that Mrs Yang had day to day management of the business.
[77] transcript p 13 l 16
[78] transcript pages 15-17
[79] RD 498-499 [63]-[66], 501 [83]
There is no basis for the inference that the Tribunal failed to properly consider Mr Liang’s evidence, or that any jurisdictional error arises from its consideration of the evidence.
Conclusion
The applicants have failed to establish any jurisdictional error in the Tribunal’s decision. The decision is therefore a privative clause decision and the application must be dismissed.
I will so order.
I will hear the parties as to costs.
I certify that the preceding seventy-five (75) paragraphs are a true copy of the reasons for judgment of Judge Driver
Associate:
Date: 14 October 2014
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