Zhonghua Zhang and Minister for Immigration and Citizenship
[2012] AATA 475
•25 July 2012
[2012] AATA 475
Division GENERAL ADMINISTRATIVE DIVISION File Number
2010/1771
Re
Zhonghua Zhang
APPLICANT
And
Minister for Immigration and Citizenship
RESPONDENT
DECISION
Tribunal Egon Fice, Senior Member
Date 25 July 2012 Place Melbourne The Tribunal affirms the decision of the delegate of the Minister for Immigration and Citizenship to cancel the Business Skills Visa of Mr Zhonghua Zhang on 19 April 2010.
...[sgd].....................................................................
Egon Fice, Senior Member
MIGRATION – remittal – Business Skills Visa – cancellation of Business Skills Visa – genuine effort – substantial ownership interest – day-to-day management of an eligible business –
evidentiary material lodged following remittal – residual discretion
Acts Interpretation Act 1901 (Cth) s 33(2A)
Administrative Appeals Tribunal Act 1975 (Cth) s 43
Corporations Act 2001 (Cth) ss 601AD, 601AH(5)
Migration Act 1958 (Cth) ss 41(1), 134, 134(1), 134(2), 134(3), 134(4), 134(10), 135, 137, 303(1), 501(2)
Social Security Act 1947 (Cth)
Migration Regulations 1994 (Cth)
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Freeman v Secretary, Department of Social Security (1988) 19 FCR 342
Kim v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 304
McDonald v Director-General of Social Security (1984) 1 FCR 354
Morales v Minister for Immigration and Multicultural Affairs (1998) 51 ALD 519
Oates v Consolidated Capital Services Pty Ltd [2007] NSWSC 680
Ross v Minister for Immigration and Multicultural Affairs (2000) 107 FCR 1
Samad v District Court (NSW) (2002) 209 CLR 140
Shi v Migration Agents Registration Authority (2008) 235 CLR 286
Weng v Minister for Immigration and Citizenship (No 2) (2011) 121 ALD 77
White and Another v Baycorp Advantage Business Information Services Ltd and Others (2006) 200 FLR 125
REASONS FOR DECISION
Egon Fice, Senior Member
Mr Zhonghua Zhang was granted a Business Skills Visa, subclass 132, on 26 September 2006. Mr Zhang's wife and his son were included on that visa.
On 5 January 2009 the Department of Immigration and Citizenship (the Department) sent to Mr Zhang via his authorised representatives in Australia, Australia Lawyers and Business Consulting, a letter as part of its 24 month survey of business skills migrants. The purpose of the survey is to determine whether the visa holder is meeting the conditions for holding the visa and, if not, whether there were grounds to cancel the visa.
After receiving a response from Mr Zhang's representatives in Australia, the Department, on 23 December 2009, issued a notice stating that it intended to cancel the Business Skills Visas held by Mr Zhang, his wife and his son. In a letter dated 19 April 2010 the Minister notified Mr Zhang's legal representatives that his Business Skills Visa had been cancelled. By reason of s 134(4) of the Migration Act 1958 (the Act) the Business visas held by his wife and son were also taken to be cancelled.
On 6 May 2010 Mr Zhang lodged with the Tribunal an application for review of the Minister's decision to cancel his Business visa. On 4 May 2011 the Tribunal handed down its decision, affirming the decision of the Minister. On 31 May 2011 Mr Zhang lodged an appeal with the Federal Magistrates Court of Australia (the Federal Magistrates Court).
On 19 August 2011 Federal Magistrate Burchardt made orders by consent of the parties whereby the Tribunal's decision made on 4 May 2011 was set aside. He ordered that the matter be remitted to the Tribunal for reconsideration according to law. These are the reasons for my decision made following reconsideration of that decision. Although Mr Zhang's Business Skills Visa ceased to be in effect on 26 September 2011 due to expiry of the visa period, and the Tribunal cannot reinstate that visa, Mr Zhang nevertheless requested that a decision be made as to whether the Minister's decision to cancel his visa on 19 April 2010 was the correct or preferable decision. That is because he did not wish his records with the Department of Immigration and Citizenship to record a cancellation of a visa.
THE EFFECT OF THE REMITTAL BY FEDERAL MAGISTRATE BURCHARDT
The effect of the Order setting aside the decision of the Tribunal means there is no operative Tribunal decision and that a fresh determination must be made by the Tribunal (see Morales v Minister for Immigration and Multicultural Affairs (1998) 51 ALD 519 at 532). Because the Order remitting the matter to the Tribunal was made by consent, there were no reasons given by the Federal Magistrate for the remittal other than a note which followed the Order. That note stated:
The first respondent [the Minister] concedes that the decision of the second respondent [the Tribunal] is affected by jurisdictional error on the basis that the Tribunal made the same jurisdictional error as in Weng v Minister for Immigration and Citizenship (No 2) [2011] FCA 444, by failing to apply the correct statutory tests as required by s.134(1) of the Migration Act 1958 (Cth).
Weng v Minister for Immigration and Citizenship (No 2) (2011) 121 ALD 77 also involved the cancellation of a Business Skills Visa. The Federal Court (McKerracher J) at 82, explained that the applicant’s contention in that case was that the Tribunal constructively failed to exercise its jurisdiction by asking itself whether it was satisfied that Mr Weng had obtained a substantial ownership interest in an eligible business in Australia, instead of the question posed by s 134(1) of the Act, namely, whether it was satisfied that Mr Weng had not obtained a substantial ownership interest in an eligible business in Australia. The applicant contended that the context, unlike an initial application for a visa, was not one where the visa holder bears the onus of bringing material forward that might satisfy the decision maker of certain matters. To the contrary, the Tribunal had to be positively satisfied of a negative and its opinion had to be reasonably formed.
The relevant parts of s 134(1) provide:
134 Cancellation of business visas
(1)Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investment-linked visa or a family member’s visa), by written notice given to its holder, if the Minister is satisfied that its holder:
(a)has not obtained a substantial ownership interest in an eligible business in Australia; or
(b)is not utilising his or her skills in actively participating at a senior level in the day-to-day management of that business; or
(c)does not intend to continue to:
(i) hold a substantial ownership interest in; and
(ii) utilise his or her skills in actively participating at a senior level in the day-to-day management of;
an eligible business in Australia.
According to McKerracher J, the Tribunal's decision stated: for the following reasons I am satisfied that the decision to cancel Mr Weng’s business visa should be affirmed. His Honour referred to the Full Court of the Federal Court of Australia decision in McDonald v Director-General of Social Security (1984) 1 FCR 354. In particular, his Honour quoted from the decision of Woodward J at 357 where he said:
There is certainly no legal onus of proof arising from the fact that this is an "appeals" tribunal, because the AAT is required, in effect, by s. 43 of the AAT Act, to put itself in the position of the administrator in carrying out its review and, in the light of the material before the AAT, (not the material before the administrator, Drake v. Minister for Immigration and Ethnic Affairs (1979) 46 F.L.R. 409 at 419) make its own decision in place of the administrator's. The AAT itself, in a series of cases beginning with re Ladybird Children's Wear Pty Ltd (1976) 1 A.L.D. 1, has taken the view that there is no presumption that the administrator's decision is correct. This is clearly the right approach to the matter.
McKerracher J also referred to the Federal Court (Spender J) decision in Ross v Minister for Immigration and Multicultural Affairs (2000) 107 FCR 1. That case involved the Minister cancelling a visa under s 501(2) of the Act on the grounds that he reasonably suspected that person did not pass the character test. Section 501(2) provides:
(2) The Minister may cancel a visa that has been granted to a person if:
(a)the Minister reasonably suspects that the person does not pass the character test; and
(b)the person does not satisfy the Minister that the person passes the character test.
Despite the clear discretion to cancel a visa if the conditions set out in s 501 are met, the decision made by the Minister used the following words: I do not exercise my discretion to not cancel the visa. According to Spender J, the words put before the Minister and his indication of agreement with the statement I have mentioned above, demonstrated that the Minister wrongly interpreted s 501(2) as conferring a discretion to not cancel the visa. His Honour said, at 7:
… It is apparent that the Minister believed that once pars (a) and (b) of s 501(2) were satisfied he was obliged to cancel the visa unless he positively decided that he should not do so.
Spender J then went on to state his conclusion in that case. He pointed out that he did not agree with the contention for the Minister that a discretion not to cancel a visa is the same as a discretion to cancel a visa. He referred to s 501(2) being permissive and that it conferred a power to cancel a visa in the exercise of the Minister's discretion. The Minister's interpretation of that section was evidenced by the explanations given to him by his officers that the section obliged him to cancel a visa unless it was satisfied that he should not. He then said:
There is, in my view, an important difference between power and obligation. I want to make it plain that I am not concerned in these proceedings with any question of onus: the question in this case flows from a possible difference in what the Minister does, depending on whether the material before him positively satisfies him that the Visa should be cancelled (which in my view is what the section directs) or whether it does not.
Spender J also referred to McDonald's case and noted that while it was in a very different context and it involved quite different statutory provisions, the case was of some assistance to him. He referred in particular to passages from the reasons given by Woodward and Jenkinson JJ.
Although Woodward J made it clear that there can be no evidential onus of proof in proceedings before the AAT unless the relevant legislation provided for it, he pointed out that the legislation with which the Full Court was concerned, that is, the Social Security Act 1947, did not do so. His Honour then said he would prefer not to have referred to the concept of onus of proof in arriving at his result. Rather, he said it was a question of proper interpretation of the Social Security Act. Jenkinson J said that the Tribunal was required in that case to determine whether the Social Security Act, upon its proper construction, required that the applicant's pension be cancelled if she were found not to be permanently incapacitated for work, or required that the pension be cancelled unless she were found to be permanently incapacitated for work. His Honour then said, at 369:
In a court the principles are expressed in terms of the onus or burden of proof. When those principles are applied in an administrative tribunal, there may be risk of misconception if the curial modes of expression are employed.
McKerracher J, after reviewing the authorities I have referred to above, examined the Tribunal's actual reasoning. His Honour concluded at 87:
These paragraphs of the tribunal's decision do, in my view, reflect that the tribunal was deciding whether to accept or reject arguments advanced by Mr Weng in discharge of some onus that he had to satisfy the tribunal. Where the words “I accept” are used in those paragraphs, they appear to reflect this as a matter of substantive approach and not simply a question of language usage at the end of [33].
McKerracher J also referred to the finding of the Tribunal where it stated: I am not satisfied that SII is carrying on an eligible business within the meaning of the Act. He said the Tribunal had apparently adopted the wrong test in coming to this conclusion.
His Honour also referred to the topic of whether Mr Weng was involved in the day-to-day management of the business. He said the Tribunal spoke in terms of the contention as advanced by Mr Weng and ultimately a preparedness on the part of the Tribunal to accept those contentions. His Honour said this again reflected an approach on the part of the Tribunal that Mr Weng was required to prove his case.
McKerracher J referred to the Tribunal's reasons about whether Mr Weng had made genuine efforts for the purpose of s 134(2) of the Act. In that case, the Tribunal said that it was not satisfied Mr Weng had made a genuine effort to obtain a substantial ownership interest in an eligible business. His Honour said that on this occasion, the Tribunal adopted the correct test.
I confess to having some difficulty in understanding the decision of McKerracher J in Weng. It appears that his Honour's reasons for decision are based on the words used by the Tribunal reflecting that the applicant was required to discharge an onus to satisfy the Tribunal of certain facts. Although McDonald's case was argued on the onus of proof ground, Woodward J and Jenkinson J rejected the onus of proof approach to the problem before them. Woodward J stated plainly that there can be no evidential onus of proof in proceedings before the AAT unless the relevant legislation provided for it. Jenkinson J simply relied on the words of the Act in question. He concluded that it was a requirement of the Social Security Act that the pension be cancelled if the applicant were found not to be permanently incapacitated for work. By way of distinction, the Tribunal found that the applicant’s pension should be cancelled unless she was found to be permanently incapacitated for work. Likewise, in Ross’ case, Spender J expressly stated that he was not concerned with any question of onus. His Honour’s conclusion is simply based on words used in s 501(2) of the Act.
Despite McKerracher J relying on and apparently applying McDonald and Ross, his decision is based squarely on the onus of proof argument advanced by Mr Weng. If I am correct about that, then it appears to me that his Honour's attention should have been drawn to this passage in McDonald's case, at 357:
It is possible to imagine a case where the act [Act] which the administrator is applying places a requirement or onus on one or other of the parties to an issue to establish a particular state of facts on which the administrator’s decision would be based. If that were so, the same requirement or onus would apply before the AAT. But that is not this case.
My problem in understanding the reasons for decision in the Weng case also arises for the reason that it makes no mention of s 137 of the Act. It provides:
137 Provision of information—holders of business visas
(1)The Secretary may by written notice require the holder of a business visa to give the Secretary such information as is specified in the notice.
(2)The Secretary may not require information under subsection (1) unless the information is to be used by the Secretary or the Minister for the purpose of the administration of this Act or of regulations made under this Act.
(3)A notice under subsection (1) is only valid in the period of 3 years commencing:
(a)if the holder was in Australia when he or she was first granted a business visa—on the day on which that first visa was granted; or
(b)if the holder was not in Australia when he or she was first granted a business visa—on the day on which the holder first entered Australia after that first visa was granted.
(4)Without limiting the generality of the information that may be required under subsection (1), the Secretary may require the holder to advise the Secretary in writing of any change in the address of the holder during a period specified in the notice.
(5)A notice under subsection (1) must state that the information must be provided within a period of 28 days commencing on a day specified in the notice.
(6)The day specified in the notice may be:
(a)the day on which the notice is issued; or
(b)a later particular day; or
(c)the day on which an event specified in the notice occurs.
(7)A person who fails to comply with a notice under subsection (1) commits an offence at the end of every successive 28 day period that is contained in the period commencing on the day specified in the notice and ending when the person complies with the notice.
(7A) Subsection (7) does not apply if the person has a reasonable excuse.
Note: A defendant bears an evidential burden in relation to the matter in subsection (7A) (see subsection 13.3(3) of the Criminal Code).
(7B) An offence against subsection (7) is an offence of strict liability.
Note: For strict liability, see section 6.1 of the Criminal Code.
(8)Subsection 4K(2) of the Crimes Act 1914 does not apply to an offence under subsection (7).
(10) In this section:
business visa has the same meaning as in section 134.
Penalty: $5,000.
In the letter dated 26 September 2006 notifying Mr Zhang that he had been granted a Business Talent (subclass 132) Visa, the visa officer set out the conditions of Mr Zhang's visa in an attachment to that letter (Attachment B). Section 41(1) of the Act provides that the Migration Regulations may provide that visas, or visas of a specified class, are subject to specified conditions. The conditions relevant to a Subclass 132 Business Visa are set out in Schedule 2 of the Migration Regulations 1994. Attachment B also set out Mr Zhang's obligations as the primary visa holder. It pointed out that as part of his application for a Business Skills Visa he signed a declaration agreeing to meet certain obligations after his arrival in Australia. The document set out those obligations and then pointed out that Mr Zhang agreed to make genuine efforts to obtain and maintain a substantial ownership interest in a business in Australia; and to participate at a senior level in the day-to-day management of that business. Attachment B states:
In signing the declaration you also acknowledged your responsibility to complete surveys regarding your business activities in Australia. DIMA will generally request that you complete such a survey at approximately 2 years after your arrival in Australia.
For further details regarding your obligations, please see the attached copy of your signed declaration at Attachment A.
On 5 January 2009 an officer of the Department of Immigration and Citizenship wrote to Mr Zhang’s legal representative requesting that he complete a Survey of Business Skills Migrant – 24-months (form 1010). The letter reminded Mr Zhang that at the time he applied for his Business Skills Class Visa he signed a Business Skills Declaration agreeing to accurately and fully complete surveys for three years after his initial arrival in Australia. The letter also stated that Mr Zhang agreed to provide the Department of Immigration and Citizenship with information about his business activities or any other information as required. The letter went on to say:
Your client is required to provide supporting documentation with his survey form. This information will be used to assess whether your client has obtained a substantial ownership interest in an eligible business in Australia, that your client is actively participating at a senior level in the day-to-day management of that business, that your client intends to continue operating such a business or that your client has made genuine and ongoing efforts to engage in eligible business activity.
The letter of 5 January 2009 is a notice given by the Secretary pursuant to s 137 of the Act. A visa holder who fails to comply with that notice commits an offence under the Act. Furthermore, as the notice plainly states, the information obtained from the visa holder will be used to assess whether that person satisfies the conditions for the grant of the visa. In fact, as the Minister's Procedures Advice Manual 3 states, a delegate of the Minister must decide whether there are grounds for cancellation under s 134(1)(a), (b) or (c) or whether there has been “genuine” effort within the meaning of s 134(2).
In a letter dated 23 December 2009 a delegate of the Department of Immigration and Citizenship wrote to Mr Zhang notifying him of the Department's intention to consider cancellation of his Business Skills Visa. The reasons stated for considering cancellation included:
·Based on your 24-month survey and supporting documentation, you have not obtained a substantial ownership interest in an eligible business and utilised your skills in actively participating at a senior level in the day-to-day management of an eligible business in Australia for the following reasons…
·You have provided insufficient evidence to demonstrate that you have obtained a substantial ownership interest in an eligible business in Australia and used your skills in actively managing the business. I am therefore not satisfied that you meet the requirements of section 134(1).
·While a business skills visa may be cancelled under section 134(1), it may not be cancelled under section 134(2) if the visa holder is deemed to have made genuine efforts to engage in business and meet visa requirements. I am not currently satisfied that you meet your visa obligations under section 134(2) for the following reasons…
·There is an expectation that a visa holder will make sustained and continued efforts to meet visa requirements, however it appears the research you have conducted is sporadic and a preliminary nature only. There is no evidence in the form of feasibility and due diligence studies, consultations with banks or business advisors, or that you have conducted serious and comprehensive research into business opportunities in Australia.
·A check of movement records indicates that you have been present in Australia for 28 days since your initial arrival in December 2006. It is expected that a genuine effort would require significant time in Australia to explore business opportunities, contacts and sources of supplies, inspect premises and goods, develop relationships and gain an understanding of local practices. I am not satisfied that you are committed to engaging in business activity in Australia and meeting your visa requirements.
Section 135 of the Act provides that before cancelling a visa, the Minister must give its holder a written notice stating that the Minister proposes to cancel the visa and inviting its holder to make representations to the Minister concerning the proposed cancellation. The Minister is required to give due consideration to any representations made by the visa holder.
It is only after the process which I have referred to above is complete that the Minister or his delegate may cancel a business visa in accordance with the provisions set out in s 134 of the Act.
I have taken some care to analyse the decision in Weng's case because the parties had difficulty in explaining to me the errors which are said to arise in my reasons for decision given on 4 May 2011 after the first hearing of this matter. Furthermore, it will affect the way in which I must deal with further evidentiary material which was put to me in the course of rehearing this matter.
The Full Court of the Federal Court in Morale's case was dealing with a decision made by Sackville J who remitted that matter to the Tribunal. His Honour ordered that the matter be remitted to the tribunal to be dealt with according to law. He made no direction about the hearing of further evidence. Relying on the judgement of Sackville J, the Full Court found that his Honour was aware of dissatisfaction with the state of the evidence before him and that he contemplated, at least, the possibility of further evidence being adduced on remittal. The Court said that if Sackville J had intended to limit the introduction of further evidence it would have been a simple matter for him to have made that direction. He did not do so and he expressly declined to give the general direction that the Tribunal not receive further evidence. The Court therefore found that the intention and effect of the order made by Sackville J was that the whole matter was remitted to the Tribunal, without limitation as to the presentation of further evidence or as to the scope of the matter to be dealt with.
In this case, the intention of the Federal Magistrate is not so clear. All I have before me for guidance is the reference to Weng's case. As best as I was able to determine at the hearing, the parties were concerned with the expression I used in paragraph 6 of my decision where I explained that the issues which I was required to determine were whether Mr Zhang had:
(a)obtained a substantial ownership interest in an eligible business in Australia; and
(b)utilised his skills in actively participating at a senior level in the day-to-day management of the business.
As I understood the submissions made by Mr N Poynder of counsel, who appeared on behalf of Mr Zhang, I had asked myself an incorrect question, that is, whether I was satisfied that the applicant had obtained a relevant ownership interest in an eligible business, rather than, as required by s 134(1) of the Act, whether I was satisfied that the applicant had not obtained a relevant ownership interest. This was despite the fact that at paragraph 46 of my reasons for decision on the first hearing of this matter, I said: It follows from the above that I must find Mr Zhang has not obtained a substantial ownership interest in an eligible business in Australia because he cannot satisfy the definition of ownership interest in s 134(10) of the Act. Mr Zhang had not acquired any shares in New Pacific (Kinnears) Pty Ltd, the Trustee of the New Pacific Trust which was the entity he claimed conducted the eligible business on which he relied. He did not have an ownership interest as that expression is defined in s 134(10) of the Act.
The problem is further compounded when one examines the definition of the expression eligible business found in s 134(10) of the Act. The definition is stated in the following way:
eligible business means a business that the Minister reasonably believes is resulting or will result in one or more of the following:
(a)the development of business links with the international market;
(b)the creation or maintenance of employment in Australia;
(c)the export of Australian goods or services;
(d)the production of goods or the provision of services that would otherwise be imported into Australia;
(e)the introduction of new or improved technology to Australia;
(f)an increase in commercial activity and competitiveness within sectors of the Australian economy.
It appears the Minister (and therefore the Tribunal on review) is required to form a positive belief about the business the applicant claims he is conducting. Nevertheless, the discretion to cancel a business visa under s 134(1)(a) is enlivened if the Minister is satisfied that the holder of a business visa has not obtained a substantial ownership interest in an eligible business. In other words, the Minister is required to be satisfied about a negative which includes a positive belief.
McDonald's case makes it clear that the concept of a legal onus of proof does not apply in the Tribunal unless the Act which the administrator is applying places a requirement or onus on one or other of the parties to an issue to establish a particular state of facts on which the administrator's decision would be based.
In the case of a Business Skills Visa, where the applicant for that visa has given the Minister a declaration stating that he or she will complete a 24 month survey report which, according to the notice issued under s 137 of the Act, will be used to determine whether the holder of the visa has obtained a substantial ownership interest in an eligible business in Australia; or is utilising his or her skills in actively participating at a senior level in the day-to-day management of the business; it appears to me that the holder of a Business Skills Visa has an obligation to satisfy the Minister that he or she has met those requirements. That obligation is clearly not identical to the legal onus of proof understood by the courts. It is nevertheless a burden which must be borne by the visa holder and, I should add, one which he or she has agreed to bear as a condition of the grant of the visa.
Based on whether or not a Business Skills Visa holder satisfies the conditions on which the visa was granted, the Minister will determine whether his discretion to cancel the visa is enlivened. Another way of expressing it is that under s 134(1) of the Act, if a Business Visa Holder is unable to establish, on the 24 month survey, that he or she meets the requirements set out in (a), (b) or (c), then the Minister will be satisfied that the holder of the visa has not met the requirements set out in those subparagraphs.
Section 134(2) provides that the Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; to utilise his or her skills in actively participating at a senior level in the day-to-day management of the business; and intends to continue to make such genuine efforts. This subsection is clearly different to the first subsection in that the Minister must be satisfied about positive matters. In my opinion, this simply underscores the fact that the Business Skills Visa holder bears the burden of establishing that he or she satisfies the conditions for the grant of the visa, or is making genuine efforts to do so. The words used by the decision maker in coming to his or her conclusion cannot alter that burden.
Despite my misgivings regarding the decision in Weng, I am of course bound by the decision of the Federal Court. Furthermore, as directions were made in this matter by Deputy President Constance regarding the lodging of further evidentiary material, I need to deal with that new material. I am also conscious of the fact that the Tribunal is required to make its decision based on the material before it at the time of hearing the matter (see Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 68). That may include material additional to that which was before the Minister or his delegate at the time the decision to cancel was made. I will deal presently with whether that includes the new material lodged with the Tribunal following the remittal decision. I do not propose to revisit the evidentiary material (nor was I asked by the parties to do so) which was before me on the first occasion as my findings of fact on that material should stand for the purposes of the remittal hearing.
EVIDENTIARY MATERIAL LODGED FOLLOWING REMITTAL
Mr Poynder submitted that in accordance with the High Court of Australia decision in Shi v Migration Agents Registration Authority (2008) 235 CLR 286, the Tribunal is required to take into consideration all further evidence produced up until the review hearing, including evidence of developments in Mr Zhang's business activities since the original decision. This is despite the fact that Mr Zhang's Business visa ceased to be in effect on 26 September 2011.
With respect to Mr Poynder, the decision in Shi is not quite as expansive as he submitted. Kirby J explained that although there are a number of considerations which lead to a conclusion that the Tribunal is not ordinarily confined to material that was before the primary decision maker, or to consideration of events that occurred up to the time of its decision, the review contemplated by s 43 of the Administrative Appeals Tribunal Act 1975 (the AAT Act) is one addressed to a decision. His Honour said, at 300-301:
… the fact that the review contemplated by s 43 of the AAT Act is one addressed to a "decision", inferentially arising under a different federal enactment, makes it necessary in each case to identify the precise nature and incidents of the decision that is the subject of the review.
Sometimes, it may be inherent in the nature of a particular decision that review of the decision is confined to identified past events. If, for example, under federal legislation, a pension is payable at fortnightly rests, by reference to particular qualifications that may themselves alter over time, a "review" of an administrative "decision" to grant or refuse such a pension, by reference to statutory qualifications, may necessarily be limited to the facts at the particular time of the decision.
… There is thus a general approach deriving in particular from the statutory function of substituting one administrative decision for another. Nevertheless, the particular nature of the "decision" in question may sometimes, exceptionally, confine the Tribunal's attention to the state of the evidence as at a particular time.
Hayne and Heydon JJ also referred to the possibility of some statutory limitation for confining further material put into evidence. Their Honours said, at 315:
Once it is accepted that the Tribunal is not confined to the record before the primary decision-maker, it follows that, unless there is some statutory basis for confining that further material to such as would bear upon circumstances as they existed at the time of the initial decision, the material before the Tribunal will include information about conduct and events that occurred after the decision under review. If there is any such statutory limitation, it would be found in the legislation which empowered the primary decision-maker to act; there is nothing in the AAT Act which would provide such a limitation.
Kiefel J, who dissented, said, at 327-328:
In considering what is the right decision, the Tribunal must address the same question as the original decision-maker was required to address.
… Where the decision to be made contains no temporal element, evidence of matters occurring after the original decision may be taken into account by the Tribunal in the process of informing itself.
Kiefel J referred to the decision of Davies J in Freeman v Secretary, Department of Social Security (1988) 19 FCR 342 which was a decision by the Tribunal to cancel Mrs Freeman's widow's pension. She said, at 328:
The Tribunal was entitled to take into account all the facts placed before it, but the issue was whether the decision it was reviewing, to cancel the pension, was the correct or preferable decision when it was made. It was not whether Mrs Freeman had an entitlement to a widow's pension at the date of the Tribunal's decision.
Kiefel J stated that in each case, what is entailed in a decision is to be ascertained by reference to the statute providing for it. Her Honour explained that in the case before the Court, the question was whether the Migration Agents Registration Authority should exercise its powers under s 303(1) of the Migration Act 1958 because the appellant had breached the Code of Conduct. She then said, at 329:
… That part of the decision which comprises the finding, that the ground in para (h) had been made out, was referable to conduct which had occurred to a point in time. That is the nature of the finding required by the provision. It follows that the Tribunal was restricted to a consideration of events to that point and not those occurring later, in determining for itself whether there had been non-compliance with the Code. …
It should be understood that the Court in Shi's case was concerned with the question whether Mr Shi was a fit and proper person to give immigration assistance. The majority held that the answer to this question was not limited by any temporal constraints regarding evidence of the applicant's fitness. Although Kiefel J dissented, she did not disagree with the majority regarding the principles to be applied where the Tribunal reviews a decision. One must first look to the statute concerned to determine whether there is a basis for confining the material to be considered to that which was available when the original decision-maker made the decision. Even if there is no statutory basis for so confining the evidentiary material, one must look to see whether the further material in fact bears upon circumstances as they existed at the time of the initial decision.
In Mr Zhang's case, if there are any temporal limitations imposed by the Act, they are those set out in Subdivision G which deals with the cancellation of business visas. As I have already stated above, a Business Skills Visa is issued to an applicant on the condition that, in accordance with the declaration made, the applicant completes a business skills survey at approximately two years after first arrival in Australia.
At about the two year period following the grant of the visa, the Secretary issued to Mr Zhang a notice under s 137 of the Act requesting specific information about his business activities. Mr Zhang was made aware that the information he provided on the survey would be used to determine whether he satisfied the statutory requirements for holding that visa. After considering the information provided by Mr Zhang, the Minister gave him notice under s 135 of the Act that he proposed to cancel his visa. Mr Zhang was accorded the opportunity to make representations concerning the proposed cancellation. After considering those representations, the Minister elected to cancel Mr Zhang's Business Skills Visa. In my opinion, unless any of the new evidentiary material lodged with the Tribunal following cancellation bears upon the circumstances as they existed at the time of the initial decision, it should not be considered on rehearing of the matter.
The most significant new evidence lodged by Mr Zhang related to his acquisition of a substantial ownership interest in a business in Australia. It will be recalled that on the first hearing of this matter, I found that Mr Zhang had not obtained a substantial ownership interest in an eligible business in Australia because he did not meet the definition of ownership interest in the Act. He had not acquired any shares in New Pacific (Kinnears) Pty Ltd (New Pacific) as the trustee of the New Pacific Trust. Although I had minutes of a meeting of New Pacific held on 27 January 2011 indicating a resolution was passed at that meeting where Mr Zhang was appointed a director of New Pacific, and that 30 shares would be transferred from Mr Richard Gu to a company in which Mr Zhang held 60% of the shares, there was no evidence that those shares were in fact transferred to that company (World Town Group (Australia) Pty Ltd (World Town Group)).
Mr Zhang lodged a historical extract of New Pacific obtained from the Australian Securities and Investment Commission (ASIC) with the Tribunal on 4 May 2012. That extract discloses Mr Zhang was appointed a director of New Pacific on 31 May 2011 and that he ceased to be a director on 9 December 2011. Notice of his appointment was lodged with ASIC on 15 November 2011. That notice also, incorrectly according to Mr Zhang, gave notification of the acquisition of 20 shares by World Town Group. Furthermore, the historical extract lodged with the Tribunal on 4 May 2012 discloses World Town Group as the holder of 30 ordinary shares in New Pacific. The document advising ASIC of that shareholding was lodged on 10 February 2012. These events clearly took place substantially after I had delivered my first decision in this matter on
4 May 2011. In fact, the notices were lodged with ASIC after Mr Zhang's Business Skills Visa had ceased to be in effect.
Even if I were to form the opinion that the evidence of the shareholding in New Pacific by World Town Group should now be taken into account, there is a further significant problem with my taking that course of action. Mr T Eteuati, who appeared on behalf of the Minister, directed my attention to a historical extract regarding World Town Group obtained from ASIC on 8 February 2012. That document discloses that World Town Group was deregistered on 4 December 2011. The effect of deregistration is set out at
s 601AD of the Corporations Act 2001. The most significant consequence is that the company ceases to exist on deregistration.
However, Mr Poynder tendered in evidence a letter from ASIC dated 5 April 2012 in which ASIC informed World Town Group that it had been reinstated to the register on
5 April 2012. This occurred following the payment of annual review fees for the 2010 and 2011 calendar years which was the reason why the company was deregistered.
The effect of this deregistration period is that between 4 December 2011 and 5 April 2012, the company World Town Group did not exist. Mr Poynder submitted that the consequences of reinstatement are that the company is taken to have continued in existence as if it had not been deregistered. That is quite plainly correct as is stated in
s 601AH(5) of the Corporations Act. However, that section provides only a limited measure of retrospectivity and does not validate anything purportedly done on behalf of the deregistered company during the period of deregistration (see the decision of the Supreme Court of New South Wales in White and Another v Baycorp Advantage Business Information Services Ltd and Others (2006) 200 FLR 125, at 152). The limited measure of retrospectivity was applied by White J in an unreported judgement of the Supreme Court of New South Wales, Equity Division, in Oates v Consolidated Capital Services Pty Ltd [2007] NSWSC 680. In dealing with the effect of s 601AH(5) of the Corporations Act, his Honour said, at [35]:
Whilst, on the making of the order for reinstatement, the company will be taken to have continued in existence, I do not accept that it is to be taken to have continued to have a registered office, when in fact it did not, and when there was no-one who could have acted for it or have received documents on its behalf.
Although it is not entirely clear as to when the 30 shares were acquired by World Town Group, if they were acquired at or about the time notification of the acquisition was given to ASIC, it could not have received those shares. Ordinarily, the period for lodging notification of a change to company details with ASIC is 28 days. While I accept it is not clear whether, following reregistration, World Town Group has become the holder of 30 shares in New Pacific as I had no submissions made on this point, nor did I have any evidence before me which might suggest an allotment was made after reregistration, I do have serious concerns as to whether in fact World Town Group is the holder of 30 shares in New Pacific.
In any event, in my opinion, I should not take into account the retrospective attempt by Mr Zhang's legal advisers to establish he held an ownership interest in New Pacific. That is because I am of the view that the cancellation provisions in the Migration Act are enlivened as a consequence of the circumstances which existed at the 24 month survey event. It is that event which forms the basis for the exercise of the Minister's discretion to cancel the Business Skills Visa. Furthermore, Mr Zhang was unable to establish that he met the genuine effort provisions in s 134(2) of the Act. In my opinion, there is a temporal element which arises out of the conditions upon which the visa is granted. In examining whether the decision made by the Minister was the correct or preferable decision, it seems to me that I must do so in accordance with the circumstances which existed at the time of the 24 month survey. Otherwise, the 24 month survey serves no purpose. Even if I am wrong about that, it cannot be correct that a deficiency in meeting the requirements for holding a Business Skills Visa can be rectified after the visa has ceased to be in effect. That would simply make no sense.
Mr Poynder also submitted that in determining whether Mr Zhang has acquired an ownership interest in an eligible business in Australia, I should take into account the fact that New Pacific as trustee for the New Pacific Unit Trust is conducting the development project at the old Kinnears Rope Factory. He submitted that because Mr Zhang had a 60% ownership in World Town group which owns 190 of the 1000 units issued in the Kinnears Trust, his total ownership in the Kinnears project was 11.4%.
The problem with this submission is the fact that ownership interest is a defined term in the Act and it makes no reference to all to the holding of units in a unit trust. I dealt with this issue extensively in my first decision, referring to the Federal Court decisions dealing specifically with this definition. I have not changed my opinion.
Therefore, I find that Mr Zhang had not obtained a substantial ownership interest in an eligible business in Australia at the time of the 24 month survey. In fact, I find that Mr Zhang had not obtained a substantial ownership interest in an eligible business in Australia at any time during the visa period. That, in itself, enlivened the Minister’s discretion to cancel his visa.
In my first decision, I formed the view that the redevelopment of the Kinnears site was at a preliminary stage as the land was waiting to be rezoned and a loan facility with Bankwest needed to be refinanced. Mr Poynder submitted that both of these issues have now been resolved. In a letter dated 1 September 2011, of the Minister for Planning informed AXF Properties Pty Ltd that the Kinnears Rope Works site had been rezoned from a Business 3 Zone to a Mixed Use Zone with an Environmental Audit Overlay. I also had a Folio History Report obtained from the Department of Sustainability and Environment on 15 December 2011 which disclosed that the Bankwest mortgage was discharged on 11 August 2011. I accept that document to be sufficient evidence of the refinancing of the proposed project at the Kinnears Rope Works site.
Mr Poynder submitted that in light of the above, there was compelling evidence upon which the Tribunal could reasonably believe that the development will now proceed. Therefore, it followed that it would create or maintain employment in Australia and result in commercial activity and competitiveness within sectors of the Australian economy. These of course are matters listed under the definition of eligible business in
s 134(10) of the Act.
Although I accept that two of the major hurdles preventing the development from proceeding have been overcome during the visa period, the project nevertheless remains in an embryonic stage. Attached to Mr Zhang's further supplementary witness statement which was signed by Mr Zhang on 5 February 2012, was a report from O'Neill Group Pty Ltd which is a firm of consulting engineers and managers. That report notes that further investigation is needed to be undertaken prior to the submission of planning drawings and that those investigations will need to be documented in detail prior to the building permit stage. The investigation is needed to be undertaken consistent with any requirements made by the relevant authorities. The report also noted that it had addressed comments provided by the Maribyrnong City Council requesting further clarification on a number of items in relation to the provision of drainage, roads and infrastructure to the site. The report specifically addresses items such as water, sewer, gas, electricity, telecommunications, stormwater, stormwater drainage, drainage strategy, stormwater retention, roads and infrastructure.
There is a further report, dated 7 November 2011, attached to Mr Zhang's further supplementary witness statement which refers to the Ministerial Direction No 1 dealing with potentially contaminated land. The report states that by applying the Environmental Audit Overlay, the planning authority has made an assessment that the land is potentially contaminated land, and is unlikely to be suitable for a sensitive use without more detailed assessment and remediation works or management. When Mr Zhang was asked in his examination-in-chief whether the project was ready to proceed to construction, he answered not yet and pointed out that it takes a long time, even 3 to 5 years in China but longer in Australia. He also suggested that construction work may commence by 2014. Even if I could, which I seriously doubt, take account of the new material presented by Mr Zhang, in my opinion, this project remains at the planning stage and it cannot be reasonably said that it will result in one or more of those factors set out under the definition of eligible business. That remains purely speculative.
Mr Zhang and Mr Gu, who gave oral evidence in support of Mr Zhang, were asked to explain Mr Zhang's participation in the management of New Pacific. When asked in examination-in-chief what he was in fact doing in support of the Kinnear development, Mr Zhang answered that he had lots of experience in planning and that he needed to do research regarding materials which needed to be purchased and low-cost products which could be purchased in China and Hong Kong. In cross-examination Mr Zhang agreed that he spent time on marketing and research but that he had not produced any documents as a consequence of that work. He said that he spent a lot of time thinking and talking with persons who had migrated to Australia and comparing prices for products from various sources. Mr Gu's evidence was that he had many discussions with Mr Zhang about the project because of his extensive experience in property development. Most of those discussions were by telephone.
Even if I were to take into account the oral evidence given on the rehearing of this matter, I would nevertheless find that Mr Zhang does not actively participate in the day-to-day management of the business of New Pacific. He did not make any of the business decisions nor was he involved in negotiating with banks regarding the refinancing of the project. Mr Zhang departed Australia on 24 February 2011 after the first hearing of this matter before the Tribunal. He did not return to Australia until 12 September 2011, remaining for five days. Had Mr Zhang been actively participating in the day-to-day management of the business, I would have expected him to have moved to Australia to conduct that business, which is the very purpose of the grant of the visa. Although it is true that following my affirmation of the Minister's delegate's decision on 4 May 2011, Mr Zhang's visa was cancelled, there was no apparent reason why on application to the Federal Magistrates Court appealing my decision, Mr Zhang could not have sought a stay of my decision. He did not do so.
Mr Zhang also put into evidence three contracts of sale of real estate, evidencing the purchase of apartments in Doncaster, Victoria. The purchaser of one of those apartments was Mr Zhang and the other two were purchases by his family. I am uncertain as to what I should make of those purchases as they do not appear to be relevant to Mr Zhang's business visa. Given that Mr Zhang has not made any attempt to relocate himself to Australia for the purpose of conducting business in this country, if those purchases are intended to indicate his intention to relocate to Australia, they do not achieve that aim. At best, they are investments made by Mr Zhang in property in Australia. There was no evidence that either he or any of his family members had moved into those apartments.
Mr Poynder submitted that even if I were not persuaded that Mr Zhang met the requirements set out in s 134(1) of the Act, he nevertheless satisfied the genuine effort requirement in s 134(2) and (3) of the Act. I believe Mr Poynder intended to say that if I were persuaded that Mr Zhang did not meet the requirements set out in s 134(1) of the Act, then he satisfied the genuine effort requirements. Mr Poynder referred to Mr Zhang's early efforts to establish an export business through World Town Group. I have already referred to those efforts in my first decision and my opinion about that has not altered. They do not disclose a genuine effort on behalf of Mr Zhang to establish an export business.
RESIDUAL DISCRETION
As I understood Mr Poynder, should I find Mr Zhang had not made the genuine effort as set out in s 134(2) and (3) of the Act, and I was satisfied that he had not obtained a substantial ownership interest in an eligible business in Australia; was not utilising his skills in actively participating at a senior level in the day-to-day management of that business; or he did not intend to continue to do those things, although that enlivened the discretion to cancel Mr Zhang's business visa, I should nevertheless decline to do so.
Mr Poynder relied on decisions made by this Tribunal and the Federal Court where the discretion was exercised not to cancel a business visa. The Federal Court (Kiefel J) dealt squarely with this point in Kim v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 304. Her Honour referred to s 33(2A) of the Acts Interpretation Act 1901 which provides that where a statute provides that an act may be done, the act may be done at the discretion of the person. However, she accepted that the use of the word may, while presumptive, is not conclusive of the existence of the discretion and it may instead impose a duty to act. Her Honour referred to the High Court decision in Samad v District Court (NSW) (2002) 209 CLR 140 where Gleeson CJ and McHugh J considered that the statutory context may be crucial to the question whether, on its true construction, the statute imposes a duty to exercise the power in certain circumstances. Kiefel J said that there were some factors which weigh against the likelihood that the Minister was obliged to act as no words indicative of obligation are used in s 134(1). She concluded, at 310-311:
The Minister might be satisfied of the matters referred to in subs (1) and not be satisfied as to the efforts made as referred to in subs (2) but nevertheless consider in a particular case that further time should be given to the visa holder to undertake what was required of them. An explanation satisfactory to the Minister, of inaction up to the point of assessment, might be given. The nature of the power to cancel is a continuing one. There is no apparent purpose to be achieved by requiring cancellation whenever the Minister is undertaking an assessment of what has been undertaken by the visa holder. The Minister retains the right to cancellation under s 134(1) at all times. This does not suggest that the Minister is to be obliged to cancel a business visa if the Minister is not satisfied at a particular point during the currency of the visa of the matters in s 134(2).
Mr Poynder's submission that s 134(1) of the Act acts in a permissive sense rather than creating an obligation on the Minister to cancel the business visa is clearly correct. Therefore, having found that the conditions for cancellation are established, I need to examine whether there is any basis upon which the Minister's discretion should be exercised in favour of Mr Zhang.
Mr Poynder submitted that the cases dealing with the cancellation of business visas establishes that the exercise of the residual discretion may be appropriate where an applicant needs more time to fulfil his or her visa obligations. He submitted that Mr Zhang's involvement in the development of the Kinnears site was delayed for a very significant period by the need to have the site rezoned. He said that this led to Mr Zhang not being able to fully exercise his role as project manager for this project. However, now that rezoning of the site was complete and that issues including project finance had been resolved, the future of the project was now assured.
With respect to Mr Poynder, that clearly overstates the present position. The evidence of Mr Zhang and Mr Gu was that construction was still a number of years away. It also remained subject to being able to sell sufficient residential accommodation off the plan. Further, as the more recent reports attached to Mr Zhang's further supplementary witness statement indicate, there remain a number of issues to be resolved prior to any construction commencing. There was no evidence that any of this work required Mr Zhang's presence in Australia at this time.
I find that this is not an appropriate case for the Tribunal to consider the exercise of its residual discretion not to cancel Mr Zhang's visa.
CONCLUSION
Although the visa period in respect of Mr Zhang's Business Skills Visa ended on
26 September 2011, he nevertheless maintained that there was a purpose in the Tribunal rehearing this matter on remittal from the Federal Magistrates Court because he was concerned that his record with the Department of Immigration and Citizenship would continue to disclose the cancelled visa. He accepted that the Tribunal could not reinstate that visa.On the rehearing of this matter, Mr Zhang had lodged with the Tribunal a further witness statement annexing a number of additional documents. There were also a number of additional documents lodged with the Tribunal which were taken into evidence. Although I found that I should not have regard to that additional material in coming to my decision, if I am wrong about that, it would not have altered my decision.
I am satisfied that the matters set out in s 134(1)(a)-(c) are established. I am also satisfied that Mr Zhang has not established the matters set out in s 134(2) of the Act. It follows that the discretion to cancel Mr Zhang's Business Skills Visa is enlivened and in my opinion, the decision of the delegate of the Minister to cancel Mr Zhang's visa on
19 April 2010 was correct. I affirm that decision.
I certify that the preceding seventy-four (74) paragraphs are a true copy of the reasons for the decision herein of Egon Fice, Senior Member. ...[sgd].....................................................................
Associate
Dated 25 July 2012
Date of hearing 10 May 2012 Counsel for the Applicant Mr N Poynder Solicitors for the Applicant Asia Pacific Lawyers Advocate for the Respondent Mr T Eteuati Solicitors for the Respondent Clayton Utz
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