Zhang v Minister for Immigration
[2006] FMCA 1345
•13 September 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ZHANG & ORS v MINISTER FOR IMMIGRATION & ANOR | [2006] FMCA 1345 |
| MIGRATION – Review of decision by Migration Review Tribunal – whether Migration Review Tribunal applied proper test in considering whether the Applicant’s interest in a company met his visa conditions – whether s.359A(1) of the Migration Act 1958 (Cth) was enlivened by the evidence of a witness. |
| Judiciary Act 1903 (Cth), s.39B Migration Act 1958 (Cth), ss.65; 359A(1); 424A(1); 424A(3)(b); 474; pt.8 div.2 Migration Regulations 1994, sch.2 |
| SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 SZECG v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 733 |
| First Applicant: | WEN ZHANG |
| Second Applicant: | LI YANG |
| Third Applicant: | YING ZHANG |
| First Respondent: | MINISTER FOR IMMIGRATION & MULTICULTURAL AFFAIRS |
| Second Respondent: | MIGRATION REVIEW TRIBUNAL |
| File number: | SYG117 of 2005 |
| Judgment of: | Emmett FM |
| Hearing date: | 29 August 2006 |
| Date of last submission: | 29 August 2006 |
| Delivered at: | Sydney |
| Delivered on: | 13 September 2006 |
REPRESENTATION
| Counsel for the Applicant: | Mr C. Colborne |
| Solicitors for the Applicant: | Mr R. Kessels, Kesselsgoddard & Ajuria |
| Counsel for the Respondent: | Mr R. Bromwich |
| Solicitors for the Respondent: | Mr D. Sim, Clayton Utz Lawyers |
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG117 of 2005
| WEN ZHANG |
First Applicant
| LI YANG |
Second Applicant
| YING ZHANG |
Third Applicant
And
| MINISTER FOR IMMIGRATION & MULTICULTURAL AFFAIRS |
First Respondent
| MIGRATION REVIEW TRIBUNAL |
Second Respondent
REASONS FOR JUDGMENT
Introduction
This is an application pursuant to s.39B of the Judiciary Act 1903 (Cth) and Part 8 Division 2 of the Migration Act 1958 (Cth) (“the Act”) for judicial review of a decision of the Migration Review Tribunal (“the Tribunal”) dated 23 December 2004. The Tribunal decision affirmed a decision of the delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (“the Delegate”) dated 14 March 2002.
The application for a Business Skills (Residence) (Class BH) visa was refused on the basis that the first named applicant did not meet the requirements of condition 845.215 of Schedule 2 of the Migration Regulations 1994 (“the Regulations”).
The first named applicant is a 48 year old male who is a citizen of the People’s Republic of China (“the Applicant”). The second named applicant is the Applicant’s wife and the third named applicant is the Applicant’s 24 year old daughter. The applications of both the second named applicant and the third named applicant depend on the Applicant.
The Applicant first arrived in Australia on 28 June 1997 on a Temporary Business Entry (Class UC) visa, subclass 456 Business (Short Stay). He then travelled back and forth between Australia and overseas for a number of periods with a variety of different business class visas.
On 7 May 2001, the Applicant lodged an application for a Business Skills (Residence) (Class BH) visa with the Department of Immigration and Multicultural and Indigenous Affairs (“the Department”) under the Act.
On 14 March 2002, the Delegate refused the Applicant’s application for a Business Skills (Residence) (Class BH) visa on the basis that the Applicant failed to meet the requirements of subclass 845 of Schedule 2 of the Regulations.
On 5 April 2002, the Applicant lodged an application for review of the Delegate’s decision by the Tribunal. On 23 December 2004, the Tribunal affirmed the decision of the Delegate not to grant the applicants Business Skills (Residence) (Class BH) visas.
On 14 January 2005, the Applicant filed an application in this Court seeking judicial review of the Tribunal’s decision.
The Tribunal proceeding
The decision of the Tribunal is accurately summarised by the Applicant in written submissions prepared by counsel as follows:
“5. The Applicant and his family are from the People’s Republic of China. On 7 May 2001 (CB 101.4), the Applicant applied for a Business Skills (Residence) (Class BH) visa (“Business Skills visa”) (CB 3-24). The main criteria for the Business Skills visa were set out by the Tribunal at CB 912. One criteria in clause 845.215 was that –
The total value of net assets owned by the applicant…in the main business or main businesses in Australia:
(a) is; and
(b) has been throughout the period of 12 months immediately preceding the making of the application;
at least AUD 100,000.
6. The other relevant requirement was that the Applicant’s ownership interest in the business was at least 10% of the total value of the business.
7. On 14 March 2002, a delegate of the First Respondent refused the application on the basis that she was not satisfied the Applicant met the requirements of clause 845.215. This was because she was not satisfied he had legal title to the funds used to finance his interest in his nominated “main businesses in Australia”. Nor was she satisfied that his interest in them was exclusive or independent of any interest Brightfull International Ltd or other offshore family companies may have in those businesses (CB 317.3).”
The Applicant claimed that he had legal and beneficial ownership of shares in Hightrade Construction Pty Limited. It was common ground between the parties that the Applicant held 350,002 shares over the relevant period, being between May 2000 and May 2001, and that the value of those shares was in excess of $100,000. It was also common ground that the interest asserted was at least 10% of the total value of the business.
The Tribunal saw the issue between the parties as whether or not those shares were beneficially owned by the Applicant such that condition 845.215 is satisfied. Because the Applicant does not assert the shares were a gift, it was necessary to consider whether the Applicant was entitled to the funds used to purchase the shares.
The Applicant claimed that funds from family businesses in the People’s Republic of China (“the PRC”), in which he had an interest, were the source of funds used for the purchase of 350,002 shares in Hightrade Construction Pty Limited on behalf of the Applicant. The allotment of the shares to the Applicant occurred upon payment received from High Trade Company Pty Limited, being a company owned by the Applicant’s brother and in respect of which the Applicant held no shares.
In support of his claims, the Applicant relied on annual returns of various companies filed with the Australian Securities and Investment Commission (“ASIC”) and a report prepared by WHK Greenwoods. Those documents disclosed that the Applicant was the legal and beneficial owner of the 350,002 shares in Hightrade Construction Pty Limited and that those shares had a value at the relevant time well in excess of $100,000.
The WHK Greenwoods report confirmed that no physical payment was provided by the Applicant to either his brother or High Trade Company Pty Limited because the shares originally allotted to the Applicant’s brother upon the establishment of Hightrade Constructions Pty Limited were paid for using funds held on behalf of the Applicant by the Applicant’s brother.
However, the ASIC documents and the WHK Greenwoods report were prepared on the instructions of the Applicant and his brother who simply asserted the fact of the Applicant’s beneficial ownership in the shares in Hightrade Construction Pty Limited.
The Applicant had the assistance of a migration agent both in the preparation of his documents in support of his visa application and before the Tribunal. The Applicant’s brother provided a statutory declaration to the Tribunal in support of his brother’s claims and also gave oral evidence to the Tribunal.
The Tribunal was diligent in identifying the history of the companies with which the Applicant had claimed to be associated and which he claimed were the source of his funds used to acquire his interest in Hightrade Construction Pty Limited and in relation to the capitalisation of Hightrade Constructions Pty Limited itself.
The Tribunal held that, for the purposes of condition 845.215, ownership of an asset requires a beneficial or equitable interest in the asset. The Tribunal stated that an enquiry into whether the Applicant is the legal and beneficial owner of the share holding in Hightrade Construction Pty Limited during the relevant period is a proper enquiry to make in deciding if the Applicant satisfies condition 845.215.
The Tribunal was not satisfied that the funds used in the ultimate acquisition by the Applicant of shares in Hightrade Construction Pty Limited came from funds in which the Applicant had an interest and was entitled.
The Tribunal noted that the documents relating to the remittance of funds indicated that the funds were remitted to the Applicant’s brother’s company in Australia from various sources, including overseas companies and the brother himself. The Tribunal noted that a company wholly owned by the Applicant’s brother, Brightfull International Limited, remitted substantial funds to Australia. However, the Tribunal noted that there was no independent information about the share holding of that company and only a copy of registration of the company was provided. The Tribunal also noted that remittances from other companies were not supported by any other documentation.
Accordingly, the Tribunal concluded, “There is no credible independent evidence that the visa applicant was involved in /invested in companies or businesses overseas or in the companies remitting funds.”
The Tribunal then went on to note the following matters arising from the evidence before it:
i)The initial allotment of shares in Hightrade Construction Pty Limited to the Applicant on 19 December 1997, being 175,000 shares, were not in fact paid for until 26 February 1998, that being the final payment of a series of three payments made between 19 December 1997 and 26 February 1998. This was not consistent with the ASIC Form 207 which indicated that the allotment was fully paid for as at 19 December 1997.
ii)The Applicant was unable to provide information on the names of entities with which he claimed to be involved in the PRC. However, the Tribunal did note the Applicant’s brother stated in oral evidence that the Applicant had some role in other overseas companies, whereas in his statutory declaration the Applicant’s brother did not disclose any role enjoyed by the Applicant in two of the brother’s companies (NHE and JXH).
iii)The Applicant’s involvement in Beijing Haiside Garments and Accessories Co (“BHG&A”), a company owned by his brother. The Tribunal noted that the Applicant claimed to have been the general manager between 1996 and 1997. However, this was inconsistent with information provided by the Applicant’s brother in his statutory declaration that stated that the Applicant was involved as general manager between 1994 and 1996.
The Tribunal concluded that it was not satisfied that the Applicant met condition 845.215 of his visa and as condition 845.215 is a mandatory condition, the Tribunal had no option but to affirm the decision under review.
The proceeding before this Court
The Applicant was represented by counsel, Mr Colborne, before this Court.
By consent the Applicant relied on a further amended application at the hearing in the following terms:
“1. The Tribunal did not complete the exercise of its jurisdiction in that it did not make any finding whether or not it was satisfied that, during the relevant period, the primary visa applicant held shares in Hightrade Construction Pty Ltd (“Hightrade”) beneficially.
2. The Tribunal committed jurisdictional error in that it misinterpreted or misapplied clause 845.215 of schedule 2 to the Regulations to the Migration Act 1958 (Cth) (the “Act”) and the definition of “ownership interest” in sub-section 134(10) of the Act.
Particulars
In construing and applying clause 845.215 of schedule 2 to the Regulations and the definition of “ownership interest” in sub-section 134(10) of the Act the Tribunal erred in that it determined whether the funds used to capitalise High Trade Pty Ltd (“High Trade”) were beneficially owned by the primary visa applicant rather than whether his shareholding in Hightrade Construction was beneficially owned by him.
3. The Tribunal committed jurisdictional error in finding that it was not satisfied that the primary visa applicant did not satisfy clause 845.215 of schedule 2 to the Regulations in that its reasoning was irrational, illogical and not based upon findings or inferences of fact supported by logical grounds.
Particulars
In the event that the Tribunal’s reason are to be construed as containing a finding that the primary visa applicant was not the beneficial shareholder of shares in Hightrade Construction, then such a finding was illogical and irrational in that the Tribunal assumed that such a finding necessarily followed from its findings that it was not satisfied that the primary visa applicant had a beneficial interest in the funds used to capitalise High Trade.
5. The Tribunal committed jurisdictional error in failing to comply with section 359A of the Act.
Particulars
The Tribunal erred by failing to put to the primary visa applicant, in accordance with s359A, inconsistencies it relied on in making its decision, between –
(a) information on the visa application and the information provided in the statutory declaration of Mr Li Zhang about the primary visa pplicant’s [sic] role at Beijing Haiside; and
(b) information in Mr Li Zhang’s statutory declaration and Mr Li Zhang’s testimony about the primary visa applicant’s involvement in the family companies in China.”
Counsel for the Applicant distilled the Applicant’s grounds into two contentions;
i)Grounds 1, 2 and 3 – That the Tribunal erred in failing to make a finding as to whether or not the Applicant was the beneficial owner of shares in Hightrade Construction Pty Limited and in the circumstances its decision was not based on logical grounds.
ii)Ground 5 – That the Tribunal breached its obligation under s.359A(1) of the Act in that it used inconsistencies in the claims by the Applicant in his visa application and the evidence before the Tribunal as part of the reason for affirming the decision under review.
Grounds 1, 2 and 3 – Allegation that the Tribunal was required to make a finding as to whether or not the Applicant was the beneficial owner of shares
It was common ground that funds sent from various overseas companies were originally sent to the Applicant’s brother’s company, High Trade Company Pty Limited, and were used to capitalise Hightrade Construction Pty Limited.
Counsel for the Applicant contended that the Tribunal was obliged to determine the legal consequences of the 1997 and 1998 share transactions and whether that position had changed between those dates and 7 May 2001. Counsel for the Applicant submitted that whether the Applicant had any interest in the funds used to capitalise Hightrade Construction Pty Limited could not be determinative of that issue.
Counsel for the Applicant contended that the Tribunal erred in considering whether the Applicant had a beneficial interest in funds used to capitalise Hightrade Construction Pty Limited, rather than, whether the Applicant was the beneficial owner, during the relevant 12 month period between 7 May 2000 and 7 May 2001, of the shares he had acquired in Hightrade Construction Pty Limited.
The First Respondent submitted that this ground of review is fundamentally misconceived in that it is based on the proposition that the Tribunal was only required to come to a concluded view as to whether or not the Applicant beneficially held the shares in Hightrade Construction Pty Limited.
The First Respondent conceded that the other conditions of 845.215 were met by the Applicant, namely the value of the shares in the Applicant’s name being in excess of $100,000, with a total value of not less than 10% of the value of the business.
It was common ground between the parties that the argument before the Tribunal on behalf of the Applicant had centred around the contention that legal ownership of shares was sufficient to satisfy condition 845.215.
The Tribunal correctly found that ownership of an asset requires more than legal title.
The Tribunal noted that a person could own an asset legally and beneficially where the asset had been a bona fide gift. However, the Tribunal noted that no such submission was made in respect of the Applicant’s shares in Hightrade Construction Pty Limited. Nor was there any evidence of such assertion before this Court.
The Tribunal correctly identified the nature of the enquiry before it as whether or not the Applicant was the beneficial and legal owner of the shares in Hightrade Constructions Pty Limited during the relevant period.
The Tribunal found there was no credible independent evidence before it that the Applicant had any interest in any of the companies responsible for remitting funds for the purpose of the capitalisation of Hightrade Constructions Pty Limited. The Tribunal clearly stated that it was not satisfied, on the evidence before it, that the funds remitted from overseas were funds to which the Applicant had an entitlement.
It is for the Applicant to satisfy the Tribunal that he satisfies condition 845.215 in demonstrating that the funds, which he claimed were used as the source of the Applicant’s shares in Hightrade Constructions Pty Limited, were funds in which he had an interest.
The Applicant claimed that the funds used for the acquisition of the shares, ultimately transferred or allotted to him, were from funds to which he was beneficially entitled. However, the Applicant failed to satisfy the Tribunal that he had any interest, either legal or beneficial, in any of those companies whose funds were used directly or indirectly for the capitalisation of Hightrade Constructions Pty Limited.
In the circumstances, the question for consideration by the Tribunal was not, merely, whether or not the Applicant had a beneficial interest as well as a legal interest in the shares in Hightrade Construction Pty Limited. It was for the Applicant to satisfy the Tribunal that:
a)the shares in Hightrade Construction Pty Limited were purchased from funds in respect of which the Applicant had an interest and to which the Applicant was entitled;
b)the minimum value of the shares was at least $100,000;
c)the percentage of the Applicant’s overall interest in the business was not less than 10% of the total value of the business;
d)that (a), (b) and (c) were the fact between 7 May 2000 and 7 May 2001.
Section 65 of the Act states that a decision maker is required to grant a visa if an Applicant satisfies prescribed criteria. If the decision maker is not so satisfied then that decision maker must refuse the visa.
The Applicant failed to satisfy the Tribunal that the conditions of his visa were met insofar as the Tribunal was not satisfied that the Applicant had any interest in the funds used to capitalise Hightrade Constructions Pty Limited and, therefore, could not be satisfied that condition 845.215 was met. That is because, it was only the Applicant’s interest in Hightrade Constructions Pty Limited, being the qualifying business nominated by the Applicant, that was capable of consideration by the Tribunal as to whether or not the Applicant satisfied condition 845.215 of his visa.
The Applicant asserted that his interest in Hightrade Constructions Pty Limited was reflected in the shares he had acquired in his name. Because the Tribunal was not satisfied that the Applicant had any interest in the funds used to capitalise Hightrade Constructions Pty Limited, and from which his acquisition of shares was funded, it could not be satisfied that the Applicant had any beneficial interest in the shares.
It is clear that the Tribunal understood that it was bound to inquire whether the Applicant was the beneficial owner of the shares in Hightrade Constructions Pty Limited and made such observation in its decision in those terms.
The Applicant failed to satisfy the Tribunal that he met the conditions of his visa. The Tribunal made clear its reasons for its failure to be satisfied and its findings and conclusions were open to it on the evidence and material before it.
In the circumstances, not being satisfied that the Applicant met the criteria required for the sub class 845 visa, the Tribunal was obliged to refuse to grant the visa.
Accordingly, grounds 1, 2 and 3 are not made out.
There is no ground 4 identified in the further amended application
Ground 5 – Allegation that Tribunal failed to comply with s.359A(1) of the Act
Counsel for the Applicant contended that the Tribunal erred in two respects in failing to comply with its obligations pursuant to s.359A(1) of the Act. They are as follows:
i)The Tribunal had regard to inconsistent evidence provided by the Applicant in his visa application and evidence provided by the Applicant’s brother in his statutory declaration given to the Tribunal.
ii)The Tribunal relied on inconsistencies between the Applicant’s evidence in his visa application that he acted as general manager in BHG&A between 1994 and 1996 and the Applicant’s brother’s evidence that he was in a similar role in other overseas companies.
In relation to (i) above, the Applicant, in his visa application, stated that he was employed as the general manager in BHG&A between 1996 and 1997. The Applicant’s brother, in a statutory declaration provided to the Tribunal, confirmed that the Applicant fulfilled that role, however, stated that he did so from late 1994 until 1996. The Tribunal noted “While the agent identified problems with the interpreter’s translation of the Tribunal’s concerns about this, this matter has not been addressed/explained in the post hearing submissions.”
Counsel for the Applicant contended that the Tribunal made use of that inconsistency as part of the reason for its adverse finding that “There is no credible independent evidence that the visa applicant was involved in/invested in companies or businesses overseas or in the companies remitting funds”. I reject that contention.
That finding by the Tribunal relates purely to its concern that the only evidence of any beneficial ownership by the Applicant and any of the funds used for the purchase by the Applicant of his shares in Hightrade Constructions Pty Limited was based on self serving documents in the nature of annual returns and the report by WHK Greenwoods that was based solely on the instructions and assertions of the Applicant and his brother.
The “inconsistency” in the dates upon which the Applicant claimed to have acted as general manager in BHG&A as stated by him in his visa application, as being from 1996 to 1997 and his brother’s assertion in his statutory declaration that he worked in that role between 1994 and 1996, would appear to be irrelevant to any conclusion by the Tribunal that the Applicant was not the beneficial owner of shares in Hightrade Constructions Pty Limited worth more than $100,000. There is no suggestion of a claim by the Applicant that in acting as general manager in BHG&A, he acquired any interest in the funds of that company that were used in the purchase of his shares in Hightrade Constructions Pty Limited.
Counsel for the Applicant referred to SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 at the following paragraphs: Weinberg J at [158], [163]-[164] and Allsop J at [216], [220], [225] and [227]-[228].
The First Respondent submitted that the Tribunal’s decision should be read fairly as a whole and not with an eye keenly attuned to error (Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259).
Certainly the Tribunal does not state that it makes any adverse finding arising out of the inconsistencies in the dates during which the Applicant is said to have acted as general manager.
In the circumstances, it did not form any part of the reason for the Tribunal affirming the decision under review and therefore is not information caught by the obligations of s.359A(1) of the Act.
In relation to (ii) above, counsel for the Applicant contends that the oral evidence of the Applicant’s brother, given to the Tribunal at the hearing, that the Applicant had the same role as acting general manager in BHG&A in other overseas companies, was information that enlivened the Tribunal’s obligations to comply with s.359A(1) of the Act.
In support of that contention, counsel for the Applicant referred to SZECG v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 733 (“SZECG”), where Branson J held that evidence from an applicant’s husband, put before the Tribunal orally, was capable of enlivening the obligation of s.424A(1), particularly where that evidence was not confined to the evidence, from that witness, foreshadowed by the applicant. Branson J held that evidence, given by a witness at the hearing that clearly went beyond the evidence anticipated by the applicant, and which formed part of the reason for that Tribunal affirming the decision under review, was information that required compliance with s.424A(1) and was not necessarily excluded by operation of s.424A(3)(b) of the Act. In accordance with those principles, by analogy, I accept that such a construction of s.359A(1) is appropriate.
In the case before this Court, it is not clear to me exactly what was meant by the oral evidence of the Applicant’s brother that “the visa applicant had some role in other overseas companies”, or, how it could amount to part of the Tribunal’s reason for affirming the decision under review.
Certainly, the Tribunal makes no finding that evidence by the Applicant’s brother caused the Tribunal to make any adverse finding in respect of the Applicant’s claims or formed any part of its reasons for affirming the decision under review. In my view, such evidence was taken by the Tribunal to appear to be supporting the Applicant’s contention that he was involved in other overseas companies and therefore met the Tribunal’s observation that the Applicant was unable to provide information on the names of the entities he was involved in the PRC.
If the Tribunal’s observation that the Applicant’s brother, in his oral evidence, indicated that the Applicant had some role in other overseas companies, whereas, his statutory declaration did not indicate that the Applicant had any role in two identified companies, then, again, it is evidence that would appear to go neither here nor there. In any event, it was not information used by the Tribunal as part of its reasons for affirming the decision under review.
Clearly, at the heart of the Tribunal’s conclusion that it was not satisfied that the Applicant was the owner of funds used to purchase shares in Hightrade Construction Pty Limited, was the fact that, despite the multitude of companies in which the Applicant claimed to be involved and to which the Applicant claimed to be entitled, there was no credible independent evidence, other than self serving documents provided by the Applicant, as to any involvement or investment by the Applicant in any of the companies or businesses, overseas or otherwise, remitting funds used for the capitalisation of Hightrade Construction Pty Limited.
Nor, was the Applicant able to provide information on the names or entities with which he claimed to be involved in the PRC.
It is difficult to see how the Applicant’s brother’s oral evidence at the hearing that the Applicant had some role in other overseas companies, was anything other than consistent with the Applicant’s claims before the Tribunal. There is certainly no inconsistent information provided by the brother of the nature referred to, where such inconsistency was used by the Tribunal as part of the reason for affirming the decision under review. The findings and conclusions made by the Tribunal arising out of this evidence were open to the Tribunal on the evidence and material before it
Accordingly there was no breach by the Tribunal of its obligations under s.359A(1) of the Act.
Accordingly, ground 2 is not made out.
Conclusion
The Tribunal’s decision is not affected by jurisdictional error and is therefore a privative clause decision. Accordingly, pursuant to s.474 of the Act, this Court has no jurisdiction to interfere.
The proceeding before this Court is dismissed with costs.
I certify that the preceding sixty-seven (67) paragraphs are a true copy of the reasons for judgment of Emmett FM
Associate: S. Kwong
Date: 12 September 2006
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