Zhou v Minister for Immigration
[2003] FMCA 169
•8 May 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ZHOU & ORS v MINISTER FOR IMMIGRATION | [2003] FMCA 169 |
| MIGRATION – Review of decision of the Migration Review Tribunal affirming a decision of the delegate of the Minister refusing to grant a business skills (residence) (Class BH) visa – no reviewable error disclosed – application dismissed. |
Migration Act 1958 (Cth), ss.134(10), 340(10)
Judiciary Act 1903 (Cth), s.39B
Federal Magistrates Court Rules 2001, Part 21, Rule 21.10
Federal Magistrates Court Rules 2001, Rule 21.15
Migration Regulations 1994
| Applicants: | BAI PEI ZHOU HUI LING FENG |
| Respondent: | MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS |
| File No: | MZ 1089 of 2002 |
| Orders made: | 8 May 2003 |
| Delivered at: | Melbourne |
| Hearing Date: | 1 May 2003 |
| Judgment of: | Hartnett FM |
REPRESENTATION
| Counsel for the Applicants: | Mr Tom Hurley |
| Solicitors for the Applicants: | Chua Tan & Associates |
| Counsel for the Respondent: | Mr Horan |
| Solicitors for the Respondent: | Australian Government Solicitor |
ORDER
The Court orders that:
The application is dismissed.
The applicant pay the respondent's costs pursuant to the Federal Magistrates Court Rules 2001 Part 21 Rule 21.10 as agreed or in default of agreement as taxed.
It is certified that pursuant to Rule 21.15 of the Federal Magistrates Court Rules2001 this matter reasonably required the attendance of counsel as advocate.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MZ 1089 of 2002
| BAI PEI ZHOU, HUI LING SENG, GUAN KI ZHOU |
Applicants
And
| MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS |
Respondent
REASONS FOR JUDGMENT
The matter proceeds in this Court following an order that it be transferred to the Federal Magistrates Court of Australia being an order made by Gray J on 24 October 2002.
On 26 September 2002 the applicants filed an application to review a decision of the Migration Review Tribunal made on 30 August 2002. Filed with that application was an affidavit sworn by Bai Pei Zhou. That application was amended by amended application filed 18 December 2002. The applicants sought to review the decision of the Migration Review Tribunal (MRT) to affirm the decision under review of 8 November 1999 finding the applicants were not entitled to the grant of a Business Skills (Residence) (class BH) subclass 846 visa in response to an application lodged on 25 February 1999. It was also decided that the applicants were not entitled to a Business Skills (Residence) (class BH) subclass 845 (established business in Australia) visa. The application to review is made under s.39B of the Judiciary Act 1903 (Cth).
History
The applicants are citizens of the Peoples Republic of China. The first applicant (the applicant) is the husband of the second named applicant and they are the parents of their daughter, the third named applicant, Ms Guan Ki Zhou born 1 June 1984.
The applicant first entered Australia on 3 August 1996. He departed on 11 August 1996 and re-entered lawfully at various times thereafter. He was at those times in Australia as a holder of a subclass 456 business (short stay) visa. On 25 July 1997 the applicant entered Australia on a subclass 456 visa. On 14 August 1997 the applicant was granted a (Class UC) subclass 457 business (long stay) visa valid until 12 March 1999.
On 28 September 1997 the applicant signed a pre-contract agreement to purchase a supermarket business with a formal contract being entered into between the applicant and other parties on 30 October 1997 with settlement of the purchase occurring on 15 November 1997. The applicant deposed in his affidavit sworn 26 September 2002 to have taken control of the company operating the supermarket (which came to be known as Song Chen Supermarket Pty Ltd) on 15 November 1997. At this time the applicant commenced to manage the supermarket business on a daily basis. On the same day, namely 15 November 1997, the applicant was appointed as the director and secretary of Lai Yan Hing Investments Pty Ltd with such company on 26 November 1997 changing its name to Song-Chen Supermarkets Pty Ltd. The applicant continues to be the director of Song Chen Pty Ltd. The applicant holds a 100 per cent interest in this company.
In addition to the foregoing, the applicant remains the holder of 50 per cent of the issued shares in a company known as Great Wall (Australia) Trading Co. Pty Ltd (hereafter ‘Great Wall’) having held such shareholding since the incorporation of this company in 1996.
On 25 February 1999 the applicant applied for a (class BH) Business Skills (Residence) visa nominating subclass 846 (State-Territory Sponsored Regional Established Business in Australia) as the visa subclass that he believed applied to him. The second and third applicants were included in the application as members of the applicant's family unit.
In support of his application the applicant nominated two businesses being those claimed to be operated by Great Wall and Song Chen Supermarket Pty Ltd.
On 8 November 1999 a delegate of the Minister rejected the applicant's subclass 846 visa application. The delegate also found that the applicant did not meet the criteria for grant of visa subclasses 840, 841, 842, 843, 844 and 845. The applicant subsequently applied to the MRT and on 31 July 2002 a hearing was conducted at the Tribunal. The applicants were represented and the applicant gave evidence at the Tribunal hearing. Submissions were made on behalf of the applicants at that time with further submissions being forwarded following the hearing. At the time of the hearing before the MRT the applicant requested that his application should further be considered, not only against the criteria of the subclass 846 but also against other relevant subclasses in particular subclass 845.
By its decision dated 30 August 2002 the MRT dismissed the application for review. The MRT concluded that the applicant did not satisfy the subclass 846 visa because he had not had an ownership interest:
Throughout the two years immediately preceding the making of the application
within clause 846.212 of the Migration (1994) Regulations nor satisfied subclass 845 because the applicant had not had an ownership interest from 25 August 1997.
Migration Review Tribunal hearing
The application to the MRT was supported by a submission dated
16 May 2000 prepared by the then migration agent of the applicant.
A further submission was lodged dated 15 September 2000 by the applicant's solicitors. That submission noted:
a)PAM-3 enabled visa applicants for the 845 and 846 subclass to have two business interests (CB 182);
b)The visa applicant satisfied subclass 845.
By notice dated 17 June 2002 the MRT invited the applicant to comment on the proposition that:
Of the two nominated businesses, the second business has not been established for two years immediately preceding (the) application. As the review applicant has not provided financial statements for the first business it may not succeed.
(CB 205).
The solicitors for the applicant responded by submission dated 24 June 2002. Reference to the earlier submission was made.
The applicant argued in submissions forwarded to the MRT following the hearing and at the hearing before me that had the applicant's business partner initially agreed to conduct the supermarket business under Great Wall then the applicant would have met the 18 month requirement necessary to satisfy the criteria required for a subclass 845 visa. It was submitted that Mr Cheng had failed to provide the applicant with the correct migration advice and had caused delays to the applicant's plan to establish a business in Australia. This was because:-
On 7 August 1996 the applicant had set up the first company Great Wall with his former migration agent, with an intention of conducting a business in Australia. The applicant entered into a partnership agreement with Mr Lawrence Cheng. Initially the parties were interested in operating an export and import business. However, the applicant realised that Mr Cheng was not prepared to make any contribution to the business besides being named as a director of the company Great Wall Pty Ltd. The applicant proposed to his business partner that they purchase a supermarket business. However, Mr Cheng disagreed with the applicant's business proposals and accordingly, the company Great Wall Pty Ltd was not used to purchase the supermarket business which was ultimately purchased by the applicant in his own name using the corporate vehicle of Song Chen Supermarket Pty Ltd to conduct the supermarket business.
(CB 212 – 214).
Further, in submissions before the Court the applicant argued that he should be deemed to have acquired an ownership interest as defined under s.340(10) of the Migration Act 1958 (Cth) (the Act) in the supermarket commencing at the time of signing of the pre-contract agreement to purchase the supermarket business on 28 September 1997. The applicant claimed that he was the sole proprietor of the business from that time.
Consideration
Regulation 1.07 of the Migration Regulations 1994 provides that, to be granted a visa, a person must meet all the prescribed criteria for the subclass of visa that are contained in that Part of Schedule 2 which bears the number of the subclass. Applicants for a class or classes of visa must satisfy all the requirements relating to that class in the Act and Regulations before the visa applied for can be granted. When an applicant fails to meet any one of the criteria for the grant of that visa, the visa must be refused. The applicant must be considered against the criteria for all of the subclasses included in the class of visa applied for.
One of the criteria for a subclass 846 visa required the applicant to have had an "ownership interest" in a business or businesses throughout the two years immediately preceding the making of the application. For the purposes of his visa application, the applicant relied on the two main businesses of Great Wall of which the applicant was the managing director and a 50 per cent shareholder, and Song Chen Supermarket Pty Ltd (hereinafter Song Chen) in which the applicant held a 100 per cent interest. The applicant stated that the date on which he began his involvement in the Song Chen business was September 1997.
On 11 June 1999 the delegate of the Minister had sent a facsimile to the applicant inviting him to provide evidence regarding business turnover and noting that turnover for the business purchased in September 1997 could not be counted as one of the main businesses as it had not been owned by the applicant throughout the two years prior to the application (CB 107). The officer requested the applicant to provide financial statements for Great Wall for the two year period from 25 February 1997 to 25 February 1999.
At the Tribunal hearing, the applicant gave evidence that the business of Great Wall was to import to Australia and export from China goods. However, due to differences between the directors and shareholders the company did not commence business.
The applicant advanced claims with respect to subclass 845 and subclass 846 visas. Both these subclasses incorporate the concept of ownership interest and main business. Ownership interest is defined in s.134(10) of the Act:
Ownership interest
In relation to a business, means an interest in the business as;
a)a shareholder in a company that carries on the business; or
b)a partner in a partnership that carries on the business; or
c)the sole proprietor of the business;
including such an interest held indirectly through one or more interposed companies, partnerships or trusts.
The Tribunal found that as the applicant was the registered holder of
50 per cent of the issued shares in Great Wall and 100 per cent of the issued shares in Song Chen he therefore had an ownership interest as defined in both companies.
Main business is defined in regulation 1.11 of the Migration Regulations 1994 as follows:
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, in the business is or was at least 10 per cent 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 one qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than two of those qualifying businesses as main businesses.
Qualifying business is also defined by regulation 1.03 as:
Qualifying business means an enterprise that:
(a)is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public; and
(b)is not operated primarily or substantially for the purpose of speculative or passive investment.
The Tribunal found that although the applicant had an ownership interest in Great Wall, the company had not traded and therefore did not meet the definition of qualifying business. In addition the Tribunal found the applicant had not maintained a day-to-day involvement in the management of the business as required by Regulation 1.11(1)(b). Consequently Great Wall could not be claimed as a main business.
The Tribunal found that the applicant had an ownership interest in Song Chen and that that company business satisfied the definitions of qualifying business and of main business. However, the Tribunal found that the sole proprietorship ownership interest of the applicant in Song Chen commenced on the day that he took control of the company, namely 15 November 1997. The Tribunal found 15 November 1997 to be the date on which the applicant paid the balance of purchase moneys and became entitled to possession of the business and to the profits.
The Tribunal did not accept the submission of the applicant that the applicant should be deemed to have acquired an ownership interest in the supermarket from August 1997 on the basis that the time spent by the applicant in setting up the supermarket business should be included nor the submission that the ownership interest dated from 28 September 1997 being the date of the offer to purchase the business. The Tribunal found the applicant did not become the sole proprietor of the business until the settlement date fixed by the contract which was the date on which he paid the balance of purchase moneys. The Tribunal noted that the words of s.134(10) of the Act were clear and referred to a sole proprietor of the business.
The Tribunal found that Song Chen was the applicant's only main business; that the applicant had not maintained an ownership interest in that business throughout the two year period from 25 February 1997 and that accordingly the applicant could not satisfy clause 846.212(a) of Schedule 2 of the Migration Regulations 1994. The date of
25 February 1997 was taken because the date of lodgment of the application was 25 February 1999. The Tribunal found that the ownership interest did not commence until 15 November 1997 and therefore the application for a subclass 846 visa failed.
The Tribunal also considered the applicant's request to be assessed for a subclass 845 visa. Clause 845.213(a) required the applicant to have an ownership in the business for 18 months immediately preceding the application (from 25 August 1997). The Tribunal found that the applicant’s ownership interest did not commence until 15 November 1997 as referred to above. Therefore the applicant could not satisfy subclause 845.213(a) and that application also failed.
The applicant argued that the Tribunal has committed jurisdictional errors of law. In particular the applicant asserted with respect to the applicant's entitlement to a subclause 846 visa that the Tribunal erred:-
(a)in the construction of clause 846.212(a) as requiring an ownership interest throughout a period of 24 consecutive months prior to the making of the application as opposed to the two previous calendar years or financial years; and
(b)in the construction of the definition of “ownership interest” in s.134(10) of the Act so as to exclude a person who holds an entitlement to become a shareholder in a company or has agreed to become a partner in a partnership; and
(c)in the construction of the definition of “qualifying business” in Regulation 1.03 as requiring that an enterprise physically trade rather than merely be operated for the purpose of making profit.
With respect to the Tribunal's decision relating to the entitlement to a subclass 845 visa, the applicant asserted the Tribunal erred in :
a)the construction of “ownership interest” for the purposes of clause 845.213 as not being capable of being satisfied by substantial compliance and by the ownership interest of the applicant in equity from 28 September 1997; and
b)the construction of “ownership interest” in s.134(10) of the Act and clause 845.213 as not encompassing equitable or contingent interests, including the commitment of the applicant to enter into a contract to obtain the Song Chen supermarket prior to 25 August 1997.
I find that the Tribunal did not make any of the errors of law as alleged by the applicant and did not misconstrue, misapply or fail to comply with any requirements or limitations in either the Act or the Regulations. I accept the respondent’s submission that there is no room for a concept of "substantial compliance" with clause 845.213 or with any other criteria prescribed for the grant of a (Class BH) visa.
The ordinary meaning of the term "years" used in clause 846.212(a) means a 12 month period ending on the relevant date on which the application is made. Had Parliament intended to refer to the different concept of financial year or calendar year it would have employed a different term and, indeed, such construction is consistent with the analogous criterion in clause 845.213 which requires an ownership interest for a period of 18 months immediately preceding the making of the application. In any event, as put by the respondent’s counsel, the construction alleged by the applicant does not assist the applicant. The two financial years immediately preceding the making of the application were the years ended 30 June 1998 and 30 June 1997 respectively and the two calendar years immediately preceding the making of the application were the years ended 31 December 1998 and 31 December 1997 respectively. In other words, this construction would have required the applicant to demonstrate an ownership interest from an even earlier date of either 1 January 1997 or 1 July 1996 – as opposed to 25 February 1997.
The relevant sub-paragraph of “ownership interest” applied by the Tribunal was the sub-paragraph relating to an interest in the business as c) the sole proprietor. The relevant question for the Tribunal was at what time did the applicant acquire ownership and control of the supermarket business. Prior to 15 November 1997 neither the applicant nor any company or partnership with which he was connected held any interest in the supermarket business that was ultimately taken over by Song Chen in the nature of ownership interest as a sole proprietor. The applicant contended that he acquired an economic interest and/or a legal interest and/or an equitable and/or contingent interest which was capable of constituting an ownership interest for the purposes of clause 845.213 either prior to the signing of the pre contract agreement on
28 September 1997, as a result of his decision to devote all his resources to identifying a suitable regional supermarket business, or on 28 September 1997 on the signing of the pre contract agreement. The Tribunal's finding of fact that the ownership interest in the supermarket business did not commence until 15 November 1997 cannot be disturbed by this Court. The definition of ownership interest in s.134(10) of the Act is quite explicit. It requires an interest of the shareholder as a partner or as a sole proprietor. The applicant needed to demonstrate an ownership interest from 25 August 1997 in the Song Chen supermarket business. He could not. Nor could he pursuant to Regulation 1.11A.
I find the Tribunal to have been correct in its approach to the definition of “qualifying business” and in particular the requirement that the business must be:
operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public.
On the evidence it is clear that the company Great Wall never commenced trading. It could not be described as being a business which operated ... through the provision of goods and services … to the public. The filing of annual returns and nothing more did not make it so. In addition, the Tribunal was entitled to find on the evidence that the company, Great Wall, did not satisfy paragraph (b) of the definition of “main business” which required the applicant to have maintained a direct and continuous involvement in the day-to-day management of the business and in making decisions affecting the overall directions and performance of the business.
I dismiss the application and order that the applicant pay the respondent's costs pursuant to Part 21 Rule 21.10 of the Federal Magistrates Court Rules. I note I have some sympathy with the submission that the applicants clearly met the spirit of the criteria for a visa but failed to meet the letter of it in these circumstances. It is, however, for this Court to apply the law to matters that come before it. I thank each of Mr Hurley and Mr Horan again for their thorough and helpful submissions.
I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of Hartnett FM
Associate: L.M.Dorian
Date: 15 May 2003
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