Fric v Immigration and Protection Tribunal

[2016] NZHC 1208

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-2220

CIV-2015-404-2221 [2016] NZHC 1208

BETWEEN

SONCH FRIC

First Applicant

MAJA KOROSEC Second Applicant

FIONA McLOUGHLIN Third Applicant

AND

THE IMMIGRATION AND PROTECTION TRIBUNAL First Respondent

THE CHIEF EXECUTIVE OF THE MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT Second Respondent

Hearing:	23 February 2016
Counsel:	D A Webb and R A Kay for Applicants C Paterson for Second Respondent
Judgment:	7 June 2016

JUDGMENT OF PAUL DAVISON J

This judgment was delivered by me on 7 June 2016 at 4pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:   Lane Neave (Christchurch) for Applicants

Meredith Connell (Auckland) for Second Respondent

FRIC v THE IMMIGRATION AND PROTECTION TRIBUNAL [2016] NZHC 1208 [7 June 2016]

Introduction

[1]      The  three  applicants  seek  leave  to  appeal  against  the  decisions  of  the Immigration and Protection Tribunal (the Tribunal), declining their visa applications for residence under the skilled migrant category.  They also apply to bring review proceedings in respect of those same Tribunal decisions.

[2]      The  second  respondent  opposes  all  applications  on  the  basis  that  the requirements for leave to be granted have not been made out.1

Background

[3]      The first applicant, Ms Sonch Fric, is a Slovenian citizen.   She arrived in New Zealand in January 20122 and, on 15 May 2012, she applied for a residence visa under the skilled migrant category.

[4]      The second applicant, Ms Maja Korosec, is also a Slovenian citizen.   She arrived in New Zealand in August 20103  and, on 22 June 2012, she applied for a residence visa under the skilled migrant category.

[5]      The third applicant, Ms Fiona McLoughlin, is from the United Kingdom. She arrived in New Zealand in January 20124  and, on 3 September 2014, she also applied for a residence visa under the skilled migrant category.

[6]      All of the applicants are employed by Phenomena Ltd5  (Phenomena) as life consultants, each having previously obtained a diploma in life consultancy from

1      By  memorandum of  consent  for  the  first  respondent  dated  27  November  2014,  the  first respondent was removed as a party to the appeal pursuant to r 4.56(1)(a) of the High Court Rules.   By memorandum dated 27 November 2015, the first respondent was excused from further attendance in relation to the application for review proceedings, stating that it would abide the decision of this Court.

2      Ms Fric visited New Zealand six times between 1999 and 2000, and four times thereafter in

2003 and 2006.  On 12 March 2000, she arrived in New Zealand and was refused a visa on the basis that Immigration New Zealand suspected she had  come to  New Zealand to work at Phenomena rather than for a holiday. She left New Zealand the following day.

3      Ms Korosec visited New Zealand in 1999, and spent four years as a student between 2001 and

2005.  She arrived to New Zealand in August 2010 and, other than seven relatively short trips out of New Zealand, she has stayed in New Zealand since.

4      Ms McLoughlin had two brief visits to New Zealand prior to arriving in January 2012.

5      Phenomena Ltd trades as Takaro Lodge.

Phenomena Academy (the Academy) although, at least in the case of Ms Fric, she did not attend or complete the three-year programme in New Zealand.

[7]      The  applicants  applied  for  residence  under  the  skilled  migrant  category, claiming that their employment positions as life consultants substantially match the description for the occupation of “Counsellors nec” as set out in the Australian and New Zealand Standard Classification of Occupations (ANZSCO).

[8]      Following an extensive exchange of correspondence in which Immigration New Zealand (INZ) notified the applicants of potentially prejudicial information in its  possession  and  posed  questions  as  to  the  completeness  and  accuracy of  the supporting information and documentation provided by the applicants, on 19 and 20

March 2014, INZ declined to grant visas to the applicants.

[9]      INZ’s decisions were appealed to the Tribunal, and by three separate written

decisions dated 25 August 2015, the Tribunal dismissed those appeals.

Takaro Lodge

[10]     Takaro  Lodge  (the  Lodge)  is  located  in  Southland  in  a  remote  location adjacent to Fiordland National Park. The nearest town is Te Anau.

[11]     Phenomena was incorporated in 1998 by Ms Aiping Wang and her husband, Aleksander Fulepp, and thereafter established the Academy, then operating at and from Takaro Lodge.   In 2002, the Academy became NZQA accredited and commenced offering courses of study for a diploma of life consultancy.  In around

2004/2005, NZQA withdrew the Academy’s accreditation as an education provider, which in turn led to the deportation of a number of students.

[12]     Following the withdrawal of the Academy’s NZQA accreditation, the Lodge carried  on  business  by  providing  luxury  accommodation  for  short-stay  guests through until about 2008.

[13]     After several years, the Lodge was reopened to guests in early 2012.  More recently, the only occupants of the Lodge are the staff responsible for management

and maintenance of the land and premises, and the life consultants (being the applicants) who reside at the Lodge and provide online services to Phenomena’s clients via Skype.

The applications for residence

[14]     On 14 May 2012, INZ conducted a site visit at the Lodge.  Two Immigration Officers, Mr Hutt and Ms Owen, met with Ms Fric and Ms McLoughlin and obtained information from them regarding their employment responsibilities and the operation of the Lodge and business of Phenomena.  Ms Korosec was not present during the site visit because she was out of town.

[15]     Following the visit, Mr Hutt prepared a report dated 25 May 2012 in which he noted the following:

(a)      None of the cabins at the Lodge were occupied and there was no evidence of recent or future occupation.  According to the director of the Lodge, Ms Sarah McCrum, the Lodge had not had any guests present or staying at the premises since 2008.

(b)Ms Fric and Ms McLoughlin each described their daily activities.  Ms McLoughlin said that her client base comprised only two clients but that it could extend to three.   The standard time allocation for each consultancy session is one hour.

(c)      Ms  Fric  further  explained  that  part  of  their  job  description  also included attending to “hands on” rejuvenation sessions.  This would require several different therapeutic disciplines being carried out on clients, such as reflexology, acupressure application, Chinese hammer therapy and guided meditation.   As there were no clients at the premises, no rejuvenation sessions were in fact being carried out at the Lodge, and the business principally comprised consultations with clients via Skype charged at a cost of GBP250 per hour or a flat rate of  € 2,000 per month.

(d)Ms Fric explained that alongside consultancy, there is a “second tier” aspect  to  their  job  description  which  required  them  to  build  up business in New Zealand with a view to marketing the Lodge as a five-star, self-catering retreat.

[16]     Mr Hutt observed that no client records were kept.  Following a query about this, it transpired that:

… all the clients are actually members of this ‘rejuvenation’ group who have effectively  bought  into  the  ‘rejuvenation’ franchise.    Each  one  is  now running their own business either in Europe or the United States and these sessions are to deal with their own health, well-being and relationships with an emphasis on financial results.

[17]  Mr Hutt concluded in his report:

It is debateable as to whether the minimum of 30 hours work per week, as per Immigration Instructions, is actually met under the current arrangements.

… there is a significant question mark as to why someone needs to be employed in New Zealand on a work visa, for a position that is actually conducted via the internet.  The role currently being performed by a Takaro Lodge Life Consultant could equally be achieved in the home country of those work visa holders.

It would seem that the role of any Life Consultant at Takaro Lodge … is one that seeks to promote the Lodge and build the business network and contacts… this is a marketing role and does not sit within the scope of a Life Consultant.

[18]     He recommended that:

… full verification be undertaken prior to further visas being issued for a Life Consultant role or any gardening/horticultural role linked to Takaro Lodge.

[19]     Mr Hutt’s observations were summarised in an INZ verification report dated

14 May 2012.   This was attached to letters sent to Ms Korosec, Ms Fric and Ms

McLoughlin respectively on 28 August 2012; 31 August 2012 and 10 September

2013.

[20]     On 28 August 2012, an Immigration Officer, Ms Michelle Gan, wrote to Ms Korosec expressing INZ’s concerns as to whether her employment at the Lodge was in fact full time, sustainable and genuine.  Ms Gan also questioned the sustainability

of the business on a medium to long term basis, and made a request for further information regarding her salary and income.

[21]     On 19 October 2012, Lane Neave, solicitors acting for Ms Korosec, wrote to Ms Gan asserting that their client’s employment was full time, genuine and sustainable.  Their letter enclosed a revised and permanent employment agreement, which they said confirmed her full-time employment on an on-going (rather than fixed-term) basis.  On Ms Korosec’s behalf, they acknowledged that the Lodge had no clients staying at its premises and that all consultancy work was being carried out via internet based communications, but contended that this was irrelevant and in any event, “it was always the intention of Phenomena Limited to re-open the Lodge again as soon as conditions allowed”.  They further asserted that Ms Korosec’s job description and duties required a highly intensive form of coaching, and her role involved several hours of counselling each day.   They explained that client records were in fact kept, but had not been made available during the site visit because of their highly sensitive nature.  Various further documents were provided in support of these assertions, including evidence that accommodation bookings at the Lodge were being made.   Ms Korosec also supplied a copy of Phenomena’s business plan to support her claim that the Lodge was able to provide her with genuine and stable employment, despite asserting that the documentation already provided to INZ was sufficient to support her application.

[22]     On 2 April 2013, an INZ Verification Officer, Mr Campbell Paterson, writing to Lane Neave, requested from the applicants the following information:

·    Sustainability

o  Number of bed nights sold

o  Average length of stay for each guest

o  How many guests took up ‘ad ons’ of Life Coaching sessions

o  What local or extra staff, were hired for housekeeping, FOH

and F&B positions during the guest stay

o  What services were provided to the guests during their stay- F&B

o  What forward bookings does the lodge have over the next 6 months.

·    Fulltime Employment

o  How many onsite coaching sessions have been undertaken for guests

o  What are the daily duties/routines, for the Life Coaches

o  How many ‘Skype’ sessions were undertaken, per day for each

Life Coach.

[23]     On 29 April 2013, Lane Neave wrote to Mr Paterson, responding to his request for further information, and advised that:

Phenomena Limited (trading as Takaro Lodge) meets policy criteria at SM7.15 in line with the questions presented.  This is because Takaro Lodge is in a financially sustainable position to support the employment of the three applicants applying for residency, and this is clearly demonstrated by the responses given by Phenomena Limited and their accountants.

[24]     Lane  Neave  enclosed  a  letter  from  Mr  Gavin  Short,  accountant  for Phenomena, confirming that the company provides “high end accommodation and consultancy services”, and that “large profits are being generated”.6  Lane Neave added:

We submit that, without sufficient clear financial or other evidence that Phenomena Limited cannot sustain the Life Consultants’ employment, it is not reasonable for INZ to dismiss the enclosed evidence demonstrating that it is sustainable.

We further submit… there are no compelling reasons for INZ to reject this

most up to date evidence that has been provided with these submissions.

[25]     The Lane Neave letter advised that the applicants’ daily duties and routines comprised at least four to five Skype consultancy sessions, as well as time spent de- briefing and in preparation for those sessions, adding that when guests were present

at the Lodge, there were additional life consultancy and rejuvenation sessions to

6      Also enclosed was a letter from Mr Short providing financial projections to 31 March 2013; “these projections are based on estimated judgement and consultation with Phenomena Limited. The  projections illustrate  that  if  the  current  Life  Consultants at  Takaro  Lodge  have  their residence applications approved, the business is very likely to be able to generate a substantial increase in its income over the next 12 months and indicates the additional benefits that these employees will have on future profitability.”

prepare for.   Further, the applicants were responsible for checking their mail and responding to correspondence from clients.

[26]     On  11  June  2013,  Mr  Paterson  made  a  request  for  the  names  and identification details of the “numerous staff” assisting with general gardening and housekeeping, previously referred to in the Lane Neave letter of 29 April 2013.  On 2

July 2013, there was a further request for proof of historic sales, followed by another request on 4 July 2013 for GST returns for April and May 2013 and an updated list of confirmed reservations for 2013.

[27]     On 4 July 2013, Lane Neave replied saying:

Unfortunately we cannot help but feel there is an alter [sic] motive at play here.  INZ appear to have either predetermined a negative decision on these applications, or seem to be trying to head that way, because there seems to be a concerted and significant effort to try to find negative information on this company; when actually no material negative information from an INZ policy perspective exists.  It may well be that we are reading to [sic] much into this, so perhaps a second assumption can be made by INZ behaviour in these  applications,  being  that  perhaps  INZ  simply  does  not  believe  the content and accuracy of the financial projections made by their chartered accountant? If there are any issues about the accuracy or reliability of the projections from INZ’s point of view, please list those concerns so we can forward those to our clients [sic] accountant for a response, and therefore bring a close to the issue INZ have with the sustainability of this employer.

[28]     On 5 July 2013, Lane Neave wrote to Mr Paterson expressing their view that sufficient documentation had already been provided to support the applications but nevertheless, enclosing the Phenomena draft financial statements for the year ending

31 March 2013.

[29]     A second verification report was prepared by Mr Paterson on 9 July 2013.

The report noted the Lodge’s history as follows:

Takaro Lodge… was established in 1998 to set up an academy (Phenomena

Academy) teaching Life Consultancy.

The Lodge and Phenomena Ltd are owned by Aiping WANG (also known as

FULEPP) and her husband Aleksander FULEPP.

The academy was NZQA accredited and provided a Level 7, 3 year Diploma in Life Consultancy.  In October 2004, NZQA withdrew the accreditation to the   academy,   due   to   none   [sic]   compliance   of   a   Private   Training Establishment (PTE).

As a result of the NZQA accreditation withdrawal, a number of people on Student Visas were advised to depart NZ. After lengthy communications, 12 people were formally removed from New Zealand at a total crown [sic] cost of $40,000.

…

[30]     Under a heading entitled, “Open Source Information”, the report stated:

Extensive  research  has  been  done  via  the  internet,  utilising  the  Google search engine.  A number of articles have been located that raise concerns about the history of The Lodge but also around people who are associated with The Lodge and their businesses throughout Europe.

Although some of the information is up to 12 years old, it is still relevant as it directly relates to people who currently run The Lodge:

1.June 2002 – New Zealand Herald article writes about the British newspaper Mail on Sunday, warning people not to deposit money into a London organisation named Energy Bank or Satellite 603. This company was established by Aiping WANG with her husband. Sarah McCRUM was the Managing Director as well as Managed The Lodge.   The article states that  the Energy Bank takes  non- refundable deposits for sessions and training but warns the lump sum monies (some up to $20,000) were only to be used for Energy bank sessions.

2.November 2004 to February 2008 – ‘Silly beliefs blog’.  Comments provided on this website detail concerns around vulnerable people paying as much as 30,000 euros [sic] to receive ‘energy’ from Aiping WANG and the recruitment of people through various charities, to make money to be invested in WANG’s business in China.  There are also notes about a group of 15 blind students studying at the

‘Energy Clinic’ (operated by WANG) and then working for WANG,
in Croatia for free.

3.June 2008 to May 2012 –  - Information relates to Life’s 4 Living (charitable trust started by WANG in UK). Accounts detailing that L4L are “charity muggers” where people were recruited to raise money for the charity.  Once money collected the organisers disappeared without paying the staff.

4.September 2004 to May 2008 – forum.rickross.com – information states that Aiping WANG’s followers are “financially exploited” and “At least four of them have died.  All four were reported to reject proper medical treatment because they trusted in the healing power of Mrs WANG.”

…

5.    February 2008 – Hollyfordwatch – Article and associated responses repeat concerns relating to ‘Life’s 4 Living’ and the ‘Energy Bank’ and their supposed “money making scams”.

[31]     After listing some concerns with the information provided by the applicants in support of their application, Mr Paterson commented:

Concerns

Based on the information presented above, it is submitted that the business of Phenomena Ltd, does not meet SM7.20 (c) as it creates unacceptable risks to the integrity of New Zealand’s immigration laws.

There are [sic] significant publicly available information raising concerns about the services provided and the money for those services; concerns that the current services offered can be provided anywhere in the world as they are done via the internet, to people in other parts of the world; concerns that the business does not have the resources or structures (staffing) in place to offer the ‘5 star experience’ that is being promoted by the company.

[32]     By letter dated 10 September 2013, Ms Gan set out potentially prejudicial information (PPI) held by INZ in relation to each of the applicants, and enclosed a copy of the second verification report, advising that:

(a)      INZ  was  not  satisfied  that  the  applicants’ working  hours  can  be considered full time.   The applicants’ own account of their day at work as conveyed to INZ at the site visit on 14 May 2012 did not appear to constitute full time employment, and in any event, there was no evidence that consultation or counselling actually took place given, for example, client records (including fee payments) were not made available.

(b)INZ had been unable to verify the true nature of the applicants’ job description.   The time said to be spent attending to a rejuvenation session was not considered relevant to the claimed occupation of “Counsellors   nec”   (those   tasks   being   undertaken   by   massage therapists and beauty therapists) and therefore cannot count towards

calculation of working hours.7

(c)      INZ was concerned that the applicants’ employment at the Lodge was

not ongoing and sustainable.

7      Also  noting,  the  working hours  spend  on  rejuvenation sessions, alone,  are  not  enough to constitute full time employment as massage therapist which is an occupation listed in Appendix

6.

(d)The applicants, as consultants, were training “E-Rejuvenation” franchisees  via Skype,  which  meant  that  they did  not  need  to  be physically in New Zealand to carry out the job description.

(e)      In light of Phenomena’s history, there was a serious concern that the applicants’ employment may create unacceptable risks to the integrity of New Zealand immigration or employment laws, policies or instructions, specifically stating:

Bearing in mind that the Life consultants are employed to train Rejuvenation franchisees and it is reported in the Site Visit Report that the existing clients were made up of members of the group who had bought the life consultancy sessions, there is a risk that NZ Immigration laws and policies may be comprised.

…

New Zealand Qualifications authority (NZQA) has withdrawn Phenomena Academy’s  accreditation  as  a  recognised  education provider.  Phenomena Ltd may be seen through the training of the franchisees to be again providing Life Consultancy training which has not been sanctioned by NZQA.

[33]     The applicants were advised in that letter that a decision on their applications had not yet been made, and they were invited to make any comments or provide further information by 24 September 2013.

[34]     On 13 November 2013, Lane Neave responded to Ms Gan by way of separate letters written on behalf of each of the applicants.   These letters asserted that the applicants had already provided all of the relevant information, and that INZ ought to consider the applicants’ employment holistically as being a substantial match to the ANZSCO  description  of  a  counsellor.    The  letters  enclosed  a  selection  of consultancy focus sheets developed by Ms Fric, intending to show that records were kept of client progress and goals.   Also provided were examples of each of the applicants’ Skype records showing a history of the daily counselling sessions they had had with their clients.  Relevantly, each of the Lane Neave letters state:

We suggest the length of time INZ has taken to generate the verification report, since our previous PPI response was submitted in October 2012, has been unfair to our client and we submit the report is discriminating in its nature.  We also consider INZ has breached the INZ principles of fairness

and   natural  justice,   specifically  those   set   out   in  A1.5   of   the   INZ

Instructions…

... We submit that some of the information provided in the verification report is based on research which has been conducted on the internet, sourcing publically available information, which may or may not be correct.   The internet sources are not verified sources of information which can be relied on as evidence of Phenomena’s business activities or indeed, providing relevant information to [the applicants’] current application.

It appears that the prejudicial views held by the verification officer, in our view without a reasonable explanation, have been accepted at face value by the case officer for this application, without question.   This has led to circumstances where a fair decision by INZ may be compromised if INZ does not avoid bias or partiality.  This prejudicial view has also created an unbalanced view of the issues which INZ considers still need addressing, which means the application is not being given proper and fair consideration. We  submit  that  INZ  has  now  lost  its  objectivity  with  regard  to  this application and indeed, the activities of the employer, Phenomena.

Therefore, we submit INZ has produced a biased opinion against our client with a pre-determined decision to decline the application…

[35]     In these letters, Lane Neave also complained that INZ had failed to give reasons   for   holding   the   view   that   the   applicants’  employment   created   an unacceptable risk to the integrity of New Zealand’s immigration or employment laws, policies or instructions, and claimed that INZ’s failure to give reasons was a breach of the principles of fairness and natural justice and, specifically, a breach of “A1.5 Fairness” of the INZ Operational Manual (the Manual).  Lane Neave further stated that INZ’s conclusions were “unfounded”, and commented that it was “beyond the writer’s comprehension as to how INZ has reached the concerns it has”.

[36]     On 22 November 2013, Ms Gan wrote to Lane Neave confirming receipt of their letters dated 13 November 2013, and requesting further information on various matters, including Phenomena’s audited statements for the year ending March 2013; evidence of client interaction; and receipt of salary payments.   Ms Gan also acknowledged earlier receipt of Phenomena’s handwritten cheque stubs as evidence of cash withdrawals for salary payments but stated that, in order to corroborate the information and the IRD earnings summary provided, INZ required copies of Phenomena’s bank statements showing the corresponding withdrawals of cash as per the information on the cheque stubs.  She also advised that copies of the payslips for the applicants would be helpful.

[37]     On 6 December 2013, Lane Neave provided INZ with copies of Phenomena’s

bank statements for 2011 to 2013, together with copies of cheque stubs from January

2011 to December 2012; copies of payslips and IRD taxable income; and wage details for the period of 2011 to 2013, as evidence of payments of salary to each of the applicants.  Also provided were copies of the 2013 holiday schedules, showing that the applicants had taken leave and therefore not been paid their full salary.  On

24 January 2014, the applicants’ bank statements were also provided.

[38]     On 28 and 29 January 2014, Ms Gan wrote to Lane Neave and advised each of the applicants that INZ was not satisfied there was a conclusive record of salary payments, saying:

From the above transactions, it appears that moneys are being “rolled around”...

You claimed that due to the remote location of the work place, the employer would  pay you  cash  by drawing out  a lump  sum cheque.    Presumably, someone from the office would cash the moneys and distribute the cash to you and your colleagues.   For this reason, you claim that your salary payments could not be shown in your bank statements.

We find the reasoning of a remote location is not credible and unacceptable. The employer had shown that it could pay you salary by Telephone Bill Payment and yet it had done so only on [4 months out of the 2 years in the case of Ms McLoughlin; 3 months out of the 3.4 years in the case of Ms Korosec;  7  months  out  of  the  2  years  in  the  case  of  Ms  Fric]…   The employer obviously had internet banking and yet it had not chosen to pay salary in this simple and direct manner.

We are concerned that there are no conclusive records of your salary payments.   We are not satisfied at present that you had received salary according to your Employment Agreement despite your declaration of tax to the Inland Revenue Department.  The handwritten comments on the cheque butts and on the bank statements of the employer are not conclusive proof that you had indeed received your share of salary.

[39]     Having been advised that INZ considered that there was no “conclusive” evidence to support their application by way of PPI, the applicants were advised to provide any further information by 12 February 2014.

[40]     On 4 March 2014, Lane Neave again wrote to INZ on behalf of each of the applicants, raising the issue of fairness and natural justice, and submitting that the points raised by Ms Gan’s letter of 24 January 2014 were speculative and irrelevant.

They explained that the applicants preferred to be paid in cash, and that this was provided for in each of their written employment agreements.  This was said to be a “perfectly reasonable  explanation”,  particularly in  light  of the applicants’ letters which explained their reasons for choosing to be paid in cash.   For example, Ms McLoughlin explained:

I receive my salary in each month, as per my employment contract.  I choose to be paid in cash because Takaro is really far from town.  I don’t have my own car, and I don’t go to town very often.   My colleagues and I have arranged that every week one of us will drive to Te Anau and buy everything that we all need.

Most of the time, I deposit around $500 onto my account so that I can shop online if I need to.  Te Anau is a very small town and there is not a lot of choice for things to buy, so I like to be able to shop online if I need to.

[41]     As to the allegation of money being “rolled around”, Lane Neave complained this conclusion was without foundation or reasoning, saying:

It also appears that the prejudicial views by INZ against [the applicants’] employer, Phenomena, and its practices, in our view without a reasonable explanation, has led to circumstances where a fair decision by INZ may be compromised if INZ does not avoid its continued misconceptions.  We are of the view, yet again, INZ has produced a biased opinion against our client with what appears to be pre-determination to decline the application.  INZ’s on-going  analysis  of  [the  applicants’]  innocuous  bank  transactions  is evidence of this because it is over the top, unnecessary and without foundation.   Further, INZ has concluded that although Phenomena clearly has the ability to pay salaries through internet banking, it has chosen not to, and that this situation determines that [the applicants have not] received [their] salary according to [their] Employment Agreement.   We cannot understand how a reasonable decision maker would draw such a conclusion base don [sic] the evidence presented.

[42]     The letter further states that INZ had failed to give reasons as to why it considers there are “unacceptable risks” to the integrity of New Zealand’s immigration or employment laws, policies or instructions, and that such a failure has put the applicants  and  their employer at  a disadvantage  as  they are  “unable to provide evidence demonstrating that there is no risk, because based on the facts of their position they do not know what the risk is.”

[43]     Lane Neave went on to assert that the applicants’ employment was genuine and  that  their  employer  was  complying  with  all  relevant  employment  and immigration laws in New Zealand.

The INZ decisions declining the applications

[44]     On 19 and 20 March 2014, Ms Gan notified each of the applicants by letter that their applications for a residence visa had been declined by INZ, on the basis that:

(a)      INZ was not satisfied that the applicants’ employment was genuine or that it was a position paid by salary.  INZ said that, apart from some occasions of direct transfer payments, there was no other satisfactory evidence  to  show  that  the  applicants  had  actually  received  full monthly salary payments either by online/telephone payments or cash. INZ referred to the applicants’ explanations as to why they preferred receiving payments in cash but ultimately did not find such explanations  credible,  referring  to  the  applicants’ regular  banking transactions which suggested they were not in fact inhibited by their remote location.   It also said that if it were true that the applicants sometimes received direct payments because Ms Fric was travelling or unavailable, then all of them would have received direct payments at the same time and the same number of times (which they did not). INZ also referred to the IRD records but stated that, despite being an official document:

… it is not a conclusive proof itself that you had in fact received your full monthly salary.  It can only prove that the employer or you had forwarded the tax payment to IRD based on the amount of salary that you were supposed to have received.  After taking into account all the facts and concerns surrounding the employment, there is a probability that the earnings and the tax had been declared for the purpose of immigration.

(b)INZ was not satisfied that Phenomena was compliant with all relevant immigration and employment laws in force in New Zealand.  That is a direct result of INZ’s finding that there was no satisfactory evidence showing   that   the   applicants   had   received   full   monthly  salary payments.

[45]     INZ was also of the view that Phenomena created unacceptable risks to the

integrity   of   New   Zealand’s   immigration   or   employment   laws,   policies   or

instructions, having regard to “some negative public information sourced from the internet”  and  INZ’s  finding  that  Phenomena  was  not  making  monthly  salary payments to its employees.  INZ also referred to the Academy, expressing its concern that:

The employment of the Life Consultants will enable the employer, Phenomena Ltd to indirectly revive the business of Phenomena Academy by conducting the  Life  Consultancy trainings  again  without  the sanction  of NZQA.  As they are being conducted online via Skype and internet which does  not  require  them  to  be  physically  present  in  New  Zealand,  it circumvents the need for these trainees to apply for suitable visas to study in New Zealand, such as the student visas.

[46]     INZ noted that it accepted some of the applicants’ evidence relevant to the

issue of job description and sustainability of employment.

[47]     On 28 April 2014, the applicants filed notices  of appeal to the Tribunal against INZ’s decisions pursuant to s 187 of the Immigration Act (the Act).   The Tribunal’s decisions are summarised next.

The Tribunal decisions

[48]     The Tribunal heard the appeals together and delivered three simultaneous decisions on 25 August 2015, in which it declined to allow the appeals.     The Tribunal’s reasons were the same in each case and all expressed in the same terms. For convenience, I refer to the Tribunal’s decisions as one.

[49]     The Tribunal’s decisions commenced with an observation that a blameless applicant may fail to meet the requirements of SM7.20.c.c (entitled “Requirements for employers”) if, for example, his or her employer does not have a history of compliance with all immigration and employment laws in force in New Zealand. The phrase “history of compliance” means the assessment of compliance is not narrowly construed; and under SM.7.20.c.c, an applicant’s employment can fail to qualify for points, where, notwithstanding an employer’s history of compliance, INZ considers the employment poses an unacceptable risk to the integrity of immigration or employment laws, policies or instructions.  The Tribunal noted that the scope of SM.7.20.c.c is very broad and, if asserted, “will require explanation of the nexus

between the employment and the risk”.  Ultimately, the Tribunal observed, INZ has a discretion to determine what it considers to be an unacceptable risk “so long as any such risk is reasonable and [INZ] properly articulates it”.

[50]     The Tribunal noted that an employer’s history of unscrupulous or discredited practices is certainly capable of creating an unacceptable risk to the integrity of New Zealand’s immigration or employment laws, policies or instructions.  However, INZ fell into error by failing to identify “just what internet information it was relying on, and how it determined that the allegations were credible” when referring to “negative public information”.  Further, INZ did not refer to Ms Fric’s comment at the site visit that “the company had moved away from [emphasis on healing individuals who had terminal illnesses] many years ago”, which was said to be a “direct response” to these allegations.  It concluded:

… Immigration New Zealand simply outlined various excerpts from the internet in a verification report, labelled them “negative public information”, and made no effort to verify that information.  Instruction A1.15.c (effective

29 November 2010) requires Immigration New Zealand to distinguish fact

from “opinion, rumour, allegation, assumption or report”.  It failed to do so in this case and therefore this “negative public information” was insufficient

to  establish  a  ground,  in  its  own  right,  for  finding  the  appellant’s

employment   by   Ms   Wang   and/or   Phenomena   Limited   created   an unacceptable risk.

[51]     The Tribunal went on to observe that  INZ also referred to a “cluster of concerns” when concluding there were unacceptable risks; namely that:

… the existing clients of the [applicants] were persons who had previously bought E-Rejuvenation franchises.   It contended that the life consultants were employed to train these franchisees on Skype, which suggested that Phenomena Limited was providing life consultancy training not sanctioned by the NZQA.  This occurred in a context where such training had earlier been   offered   by   Phenomena   Academy,   but   where   the   Academy’s accreditation had been removed for non-compliance.  This in turn had meant that a number of the Academy’s students had had to be removed from New Zealand at the state’s cost.   Immigration New Zealand also noted that the present training was being provided online, thereby obviating any need for trainees to be in New Zealand on student visas.

[52]     The   Tribunal   noted   these   concerns   were   obviously   relevant   to   the determination of the applications, and INZ was entitled to take them into account. The Tribunal also stated these concerns were raised by INZ, but that the applicants had failed to address them in a meaningful way.

[53]     The Tribunal did not agree with the applicants’ submission that INZ had

failed to give reasons for its finding of unacceptable risk.  It explained:

Immigration  New Zealand set  out that  it considered  its instructions and policies would be undermined by the appellant’s employment for the following reasons: Phenomena’s clients were effectively trainees but, as they were offshore, they did not require student visas; this training had been previously offered by the Phenomena Academy whose NZQA accreditation was withdrawn for non-compliance; and the withdrawal of accreditation had resulted in a significant cost to the New Zealand state because it had had [sic] to remove ex-trainees at a cost of about $40,000.

These findings constitute, in the Tribunal’s view, valid concerns about immigration laws, instructions or policies…

[54]     Again, the Tribunal noted that the applicants did not engage these reasons; and failed to provide any submissions or material to show that these concerns were unfounded or untrue.  Accordingly, INZ was right to decline the applications on the basis of unacceptable risk to the integrity of immigration laws, instructions or policies.

[55]     Turning to the issue of salary payments, the Tribunal, referring to R5.5 of the Manual (Evidential requirements), noted that INZ was not restricted as to the type of evidence it may take into account in order to satisfy itself that an applicant meets the relevant residence instructions.  The Tribunal found that the evidence is consistent with the applicants being paid in cash, as per the employment agreement.  However:

… in view of the fact that [the applicants’] monthly salary was paid directly into [their] bank account [seven times in the case of Ms Fric; three times in the case of Korosec; and four times in the case of Ms McLoughlin], Immigration New Zealand quite properly required an explanation as to why, on the balance of the occasions, [the applicants were] paid in cash.   Once that explanation had been offered, Immigration New Zealand was entitled to assess its credibility.

[56]     Furthermore, INZ was entitled to take its finding on this point into account as a “makeweight to its finding” that the applicants’ employment did not comply with SM7.20.a.i (paying employees and complying with employment laws) and/or that it presented an unacceptable risk to the integrity of New Zealand’s immigration or employment laws, policies or instructions (SM7.20.c.c).

[57]     The Tribunal addressed the applicants’ complaint that INZ had applied a

criminal standard of proof when requiring evidence of earnings.  It went on to say:

Clearly, in many cases, a summary of earnings will suffice to show the payment of wages or salary.   However, where a suspicion has been raised that payments might not have been made, it is correct to say that a summary of earnings is not proof that in fact money has changed hands.  On its face, it is  evidence  only of  the correct  amount  of  tax  being paid  to  the  Inland Revenue Department in terms of the taxpayer’s declared annual salary.

[58]     The Tribunal did not consider that there was sufficient evidence upon which INZ could properly make a finding that funds were being “rolled around”, but stated that INZ was nonetheless justified in concluding that the evidence did not adequately show that the applicants were in receipt of salary payments.

[59]     Addressing the allegations of bias and predetermination, the Tribunal agreed that  INZ had failed to  explain why it  accepted as credible the internet reports. However, INZ had nevertheless given other adequate reasons for finding the applicants’ employment presented an unacceptable risk.  In its view:

Those reasons were properly put to the appellant as potentially prejudicial information, and were not addressed to Immigration New Zealand’s satisfaction.  As set out above, the Tribunal has found those reasons to be valid in their own right; it has considered the proposition that Immigration New  Zealand’s  judgement  was  clouded  by  its  finding  in  regard  to  the negative internet reports and discounts it, as the conclusions it reached on the other grounds were fair and reasonable.

[60]     It further noted:

By their very nature, reasons for finding the appellant’s employment created an unacceptable risk were negative findings against her employer.  That does not necessarily mean they were biased.  Ms Wang and Phenomena Academy had a negative immigration history quite apart from the unverified internet allegations.

[61]     The Tribunal  added  that  there  were  aspects  of  the evidence  which  were challenged by INZ but later accepted as being credible and reliable.

[62]     Overall, the Tribunal considered that sufficient reasons were given for INZ’s view that the applicants’ employment presented an unacceptable risk.

[63]     The Tribunal then turned to consider whether, pursuant to s 188(1)(f) of the

Act, it should:

confirm the decision as having been correct in terms of the residence instructions applicable at the time the visa application was made, but recommend that the special circumstances of the applicant are such as to warrant consideration by the Minister as an exception to those instructions.

[64]   Having considered each of the applicants’ circumstances, the Tribunal considered there was nothing about their circumstances which could be described as uncommon  or  out  of  the  ordinary  so  as  to  warrant  the  finding  of  special circumstances under s 188(1)(f).

Grounds  of  applications  for leave  to  appeal  and  for leave  to  bring  review proceedings

[65]     The applicants rely on the following ground in support of their application for leave to appeal:8

That the Tribunal and Immigration New Zealand (INZ) applied an inappropriately  high  standard  of  proof  when  making  findings  of  fact  in respect of the Applicants’ application for residence visas.

[66]     The  application  for  leave  to  bring  review  proceedings  is  made  on  the following grounds:9

2.   That Immigration New Zealand (INZ) and the Tribunal considered irrelevant matters; and

3.  That INZ and the Tribunal failed to properly consider relevant matters;

and

4.  That the applicants were not given an opportunity to be properly heard in that INZ had failed to adequately inform the Applications of the reasons for INZ’s decisions.

8      Leave to bring an appeal from a decision of the Tribunal is required by the Immigration Act

2009, s 245(1).

9      Leave to bring review proceedings in respect of a final determination of the Tribunal is required by the Immigration Act 2009, s 249 (3).

Submissions for the applicants

The applications for leave to appeal

[67]     In relation to the applications for leave to appeal, Mr Webb for the applicants, challenges the Tribunal’s factual findings, saying they are so grave so as to constitute an error of law.  In his submission:

(a)      the Tribunal erred in concluding that Phenomena’s delivery of Skype- based services to offshore clients presents a risk to immigration laws, instructions or policies;

(b)the Tribunal failed to identify that at no time did INZ advise the applicants of its concern regarding the $40,000 cost to remove the Academy’s former students; and

(c)      the Tribunal erred in concluding that the removal of the Academy’s students is relevant here because Phenomena is not providing services to clients who are in New Zealand, therefore the possibility of deportation costs is not applicable in the circumstances.

[68]     Mr Webb further submits that there is nothing to prevent the applicants from providing web-based services to overseas clients, and consequently, the Tribunal erred in determining that there is a reasonable risk to the integrity of immigration law, policies or instructions.

[69]     Mr Webb refers to the evidence provided by the applicants that they were being paid a genuine salary by Phenomena, as well as the applicants’ explanation of infrequent non-cash payments, and he submits that the Tribunal failed to recognise that INZ had refused to accept “a wealth of evidence” which he says demonstrates the legitimacy of the applicants’ employment.   For example, the applicants had already offered a reasonable explanation to INZ as to why, on certain occasions, they had received salary payments other than in cash.   In Mr Webb’s submission, the Tribunal also failed to consider whether INZ’s discretion was properly exercised in

accordance with and for the purposes of furthering the purposes of the Act.   Mr Webb therefore submits that the Tribunal failed to properly address whether the applications should have been granted under R5.30 of the Manual, which provides:

Approving an application

Applications for a residence class via must be approved if the immigration officer is satisfied that:

a.   the applicant has provided all evidence required by the applicable residence instructions, and any additional evidence requested by the immigration officer; and

b.   the applicant meets applicable residence instructions including the requirements of health and character.

[70]     Mr Webb submits the Manual is silent as to the degree to which an applicant must  satisfy  INZ  in  respect  of  an  application  for  residence.    In  Mr  Webb’s submission, the Tribunal erred by adopting a standard of proof that went far beyond the requisite standard, whether it be expressed as the civil standard, or on the balance of probabilities, or some other articulation.  Mr Webb says the identification of the correct standard to be applied by INZ when deciding if it is “satisfied”, is a question of law which, pursuant to s 245(3), ought to be submitted to the High Court for its decision.

[71]     Moreover, says Mr Webb, R5.5 of the Manual, which enables an immigration officer to seek further information, must be used with care and in accordance with the purpose of the Act and not as a means of effectively raising or usurping the standard of proof.

[72]     Turning to the second limb of s 245(3), Mr Webb submits that the question of law is one that, by reason of its general or public importance, ought to be submitted to this Court for its decision.   He refers to the high volume of applications being received and declined by INZ each year.   Out of a total of 159,173 applications received, INZ declined 19,976 in 2010.   He says that although these applications would have been declined for a variety of different reasons, many of them would have been declined because INZ had not been satisfied by the evidence submitted by the applicants in a context where the standard of being “satisfied” is itself unclear.

For that reason, he submits that the standard of proof is a question of general or public importance.

The applications for leave to bring review proceedings

[73]     In support of the applications for leave to review the Tribunal’s decision, Mr Webb submits the process followed by the Tribunal in reaching the three decisions was  flawed  in  several  respects.    First,  the  Tribunal  failed  to  properly  consider relevant facts.  For example, he says, there is nothing to prohibit the applicants from receiving salary payments in cash and there was sufficient evidence to show that Phenomena   had   paid   accurate   salary   amounts   to   each   of   the   applicants. Furthermore, Phenomena and each of the applicants entered into an employment agreement which complied with all statutory requirements and, further, that Phenomena had always ensured that the applicants had valid work visas indicating a commitment to complying with immigration law, policies and instructions.

[74]     Secondly, Mr Webb submits that the Tribunal erroneously attached significant weight  to  the  fact  that  the Academy  had  previously  provided  life  consultancy training to New Zealand based clients for some time without having the requisite NZQA accreditation authorising it to do so.  In Mr Webb’s submission, the Tribunal was wrong to rely on this fact given that the applicants’ employer is an entirely different business entity, namely Phenomena.   Furthermore, the Tribunal failed to explain why Phenomena’s provision of Skype-based services to overseas clients constitutes a threat to New Zealand’s immigration or employment laws or instructions.  Lastly, submits Mr Webb, the Tribunal attached significant weight to the costs associated with the deportation of some of the Academy’s students, saying that Phenomena itself presents no such risk because it does not provide services to students here in New Zealand, and therefore, there is no possibility of costs being incurred to return students to their home countries.   In any event, it provides life consultancy services, and not training services.

[75]     Thirdly, Mr Webb submits that the Tribunal failed to keep an open mind when dealing with the factual background.  Specifically, he says the Tribunal failed to give proper consideration as to whether INZ dealt with the applications in a

manner that demonstrated bias or predetermination.   He says that although the Tribunal found that INZ was wrong to rely on internet sources supporting an impression of “negative public information”, it failed to address and consider the extent to which this information tainted INZ’s assessment and consideration of the applications, particularly as INZ did not acknowledge at any point that its reliance on the internet sourced information was inappropriate.

[76]     Fourthly,  submits  Mr  Webb,  the  Tribunal  was  wrong  to  state  that  the applicants were given sufficient notice of INZ’s concerns.  In his submission, at no point did INZ inform the applicants that it was concerned about the costs associated with the earlier deportation of the Academy’s students and, by failing to do so, it deprived the applicants of an opportunity to address INZ’s concerns on this point. Moreover, INZ failed to properly explain the nexus between the applicants’ employment and the risks that INZ perceived.

[77]     Mr Webb emphasises the general or public importance of the issues brought by these applications.   This submission is strengthened by the strong prospects of success, says Mr Webb.  He further expresses the concern that should the applicants be deported from New Zealand, there is a real risk that Phenomena would not be able to continue and sustain its business.

Statutory criteria for leave to appeal from the Tribunal

[78]     Section  245  creates  a  right  to  appeal  with  leave  to  the  High  Court  on questions of law.  Section 245(3) provides:

In determining whether to grant leave to appeal under this section, the court to which the application for leave is made must have regard to whether the question of law involved in the appeal is one that by reason of its general or public importance or for any other reason ought to be submitted to the High Court for its decision.

[79]     In  LMN  v  Immigration  and  Protection  Tribunal  New  Zealand,  Duffy  J

emphasised the narrow grounds for granting leave under s 245.  She explained:10

10     LMN v Immigration and Protection Tribunal New Zealand [2013] NZHC 2077 at [2].

In short, the applicant must show that his application raises a question in law of general or public importance, or which for any other reason should be submitted to this Court for its decision.  Thus, factual errors or legal errors that are no more than a misapplication of existing legal principle to the particular facts of the case will not qualify.  The effect of s 245 is to grant the Tribunal authority to misapply settled law to the facts of a case before it. Only if the legal errors have a wider significance that extends beyond the applicant will the Court have jurisdiction to grant leave to appeal. The key issue for determination, therefore, is whether the applicant has identified legal errors on the part of the Tribunal that extend beyond the individual case. Consideration also needs to be given to whether the applicant falls into the remaining category of providing “any other reason” for his appeal to be submitted to this Court for determination.

[80]     Duffy J explained further:11

I consider that any errors of law committed by the Tribunal  would  not qualify  under  the  for  “any  other  reason”  ground  in  s  245.    I  do  not understand that ground to authorise a case specific analysis of errors of law unless there is some additional factor that warrants this Court hearing an appeal from the Tribunal’s decision.

[81]     Such an observation appears to be consistent with the Court of Appeal’s comment in Minister of Immigration v Jooste,12 when referring to s 67 of the Judicature Act 1908.   The test under s 67 is summarised in  Waller v Hider as follows:13

Upon a second appeal this Court is not engaged in the general correction of error.    Its  primary  function  is  then  to  clarify  the law  and  to  determine whether it has been properly construed and applied by the Court below.  It is not every alleged error of law that is of such importance, either generally or to the parties, as to justify further pursuit of litigation…

[82]     In Jooste, the Court of Appeal considered that the test under s 245 is similar to that applying to second appeals to the Court of Appeal under s 67.14

[83]     Duffy J reiterated that, from the perspective of the applicant who seeks to pursue a case-specific analysis of legal errors on the part of the Tribunal, judicial review may offer a more helpful remedy as there, the Court is not constrained by the

considerations imposed by s 245.

11 At [33].

12     Minister of Immigration v Jooste [2014] NZCA 23.

13     Waller v Hider [1988] 1 NZLR 412 (CA) at 412.

14 At [18].

[84]     In Taafi v Minister of Immigration, the applicant’s case was based wholly upon criticisms of the Tribunal’s factual findings.15   Kós J set out what he termed a “triple hurdle” which an applicant faced:16

(a)     First, the applicant will need to show a seriously arguable case that factual  findings  by  the  Tribunal  are  actually  incorrect. An  appeal Court will not interfere where there is an available evidential basis for the Court’s finding.

(b)     Secondly, the applicant will need to show that the factual errors are, in combination and in the context of the whole decision, so grave as to constitute an error of law. That is, it is seriously arguable that:

(i)   the Tribunal has made a finding of fact which is based on no evidence, based on evidence inconsistent with or contradictory of  another  finding  of  fact,  or  contradictory  of  the  only reasonable conclusion of fact available on the evidence; and

(ii)  the  errors  of  fact  are  so  significant  and  extensive  that  a properly-directed Tribunal may well have reached a different decision  overall  on  the  application  to  quash  the  deportation order.

(c)     Thirdly, the applicant must show that the question of law (here based on alleged fundamental errors of fact) is one of general or public importance,  or  for  some  other  reason  ought  to  be  considered  on appeal. The former is a hard ask in the case of factual errors, no matter how profound. (Here, the applicant does not seek to argue that the questions he presents meet the requirement of being of general or public importance. Thus he relies on the alternative limb that there is “other reason”  why the question should be submitted to the High Court.) In my view it would only be in exceptional circumstances, involving individual injustice to such an extent that the Court simply could not countenance the first instance decision standing, that this alternative requirement will be met.

[85]     Faire  J  in  SK  v  Immigration  and  Protection  Tribunal  adopted  Kós  J’s comment that it would only be in exceptional circumstances that the “any other reason” limb would be appropriately triggered.17

[86]     In R M v Immigration and Protection Tribunal, Palmer J did not consider that s 245(3) needs to be or should be narrowly construed to the extent explained by Duffy J in LMM and Kós J in Taafi.18   He accepted that s 245 “indicates Parliament’s

intent to limit appeals in immigration decisions”, but considered that the “any other

15     Taafi v Minister of Immigration [2013] NZAR 1037 (HC).

16 At [19].

17     SK v Immigration and Protection Tribunal [2014] NZHC 2693 at [9].

18     R M v Immigration and Protection Tribunal [2016] NZHC 735.

reason” limb preserves judicial flexibility in the considerations relevant to granting

leave.  He explained:19

The subsection sets out what a court must have regard to; it does not purport

to set out the test a court must apply…

Parliament’s use of this phrase [any other reason] indicates that it intended to allow judges to use their discretion when encountering situations it could not envisage. The essence of that is allowing judges to make decisions in the interests of justice, especially in a field in which human rights may be at stake.

Should I grant leave to bring the appeals?

[87]     The parties are in agreement that the applicants’ principal ground of appeal is based on their challenge to the Tribunal’s findings of facts, and both rely on the “triple hurdle” test of Kós J referred to above as being applicable.

[88]     Here, the applicants have not established that there is a seriously arguable case that the Tribunal’s factual findings are incorrect.   I agree with Ms Paterson’s submission that what the applicants are challenging are the Tribunal’s conclusions rather  than  the  factual  findings  upon  which  those  conclusions  are  based.    For example, it is not in dispute that Phenomena delivers Skype-based services to overseas clients, many of whom are “trainees” involved with E-Rejuvenation franchises which are themselves established to operate life consultancy businesses. Similarly, it is not disputed that Phenomena began to provide those services subsequent to (i) the Academy having previously provided NZQA-accredited life consultancy training to students residing at the Lodge and (ii) the Academy losing its NZQA accreditation.

[89]     What the applicants really challenge here is the Tribunal’s conclusion that their employment creates an unacceptable risk to the integrity of New Zealand’s immigration  or  employment  laws,  policies  or  instructions  on  the  basis  that Phenomena is indirectly reviving the former business carried out by the Academy by conducting life consultancy training without NZQA accreditation.   Such a finding

rests upon undisputed facts (summarised at [88]), and results from the Tribunal’s

19     At [35]-[36].

evaluative  determination  and  exercise  of  judgement  on  the  available  evidence.

Accordingly, there is no basis to interfere with the Tribunal’s findings.

[90]     Nevertheless,   the   applicants   disagree   with   the   Tribunal’s   finding   of unacceptable risk and maintain they are not providing training to overseas clients via Phenomena.   However, the discretionary nature of the phrase “unacceptable risks” and the general way in which SM.7.20.c.c is expressed, is a clear indication that it is to be interpreted and applied in a manner which does not require INZ to be certain on the issue of risk.  I agree with the Tribunal’s observation that:

a risk to the integrity of a law, instruction or policy is a wider, and possibly more amorphous, concern than an identifiable breach of a law or an instruction…

Essentially though, Immigration New Zealand has a discretion to determine what  is  considers  to  be  an  unacceptable  risk  to  the  integrity  of  New Zealand’s immigration or employment policies so long as any such risk is reasonable and Immigration New Zealand properly articulates it.

[91]     Here, INZ chose to exercise its discretion as to findings of risk and I agree with the Tribunal’s assessment that the exercise of such a discretion in the circumstances was founded upon a sufficient and reliable factual basis and is reasonable.

[92]     Quite apart from the Tribunal’s observations, and putting the issue of NZQA accreditation aside, the applicants argue that there are no unacceptable risks to the integrity of New Zealand’s immigration or employment laws, policies or instructions in this case, simply because there is nothing prohibiting them from providing internet services to overseas clients.  I make two observations.  First, the Tribunal’s decisions did not suggest anything to the contrary so there is no actual finding the applicants can point to which can be challenged on appeal.

[93]     Secondly, although Mr Webb is right to argue there is no legal provision preventing a person in  New  Zealand from  providing online services  to  persons outside New Zealand, when considering the grant of a resident visa under the skilled migrant  category,  INZ  and the Tribunal will have regard to the  skilled migrant category objective, which is to provide for the grant of a resident visa to people who demonstrate that they:

·    have skills to fill identified needs and opportunities in New Zealand;

and

·are able to transfer those skills to New Zealand and link with local needs and opportunities; and

·are able to demonstrate an ability to contribute to New Zealand both economically and socially; and

·    are  able  to  demonstrate  an  ability  to  successfully settle  in  New

Zealand.

[94]     I consider that it is not unreasonable for INZ and the Tribunal to consider that by providing services to clients outside New Zealand, the applicants’ employment involves them in activities that are inconsistent with the objectives of the skilled migrant category as they are not catering to local needs and opportunities.

[95]     Returning to Kós J’s test, I do not agree that the issues relating to the alleged fundamental errors of fact, raised by the applicants in this case, have wider implications beyond the individuals concerned.   That is because the factual circumstances of this case are rather unusual and fall outside the general thrust of skilled migrant cases which involve the provision of skilled services for the benefit of the public of New Zealand.   Here, as has been reiterated by both INZ and the Tribunal, the services provided by the applicants rely on internet connection.  The quality of those services can essentially be provided regardless of whether they are located in New Zealand or elsewhere.  Accordingly, the issues that the applicants rely on do not meet the statutory requirement of being of general or public importance.

[96]     Next, Mr Webb submits that the Tribunal failed to consider that INZ had ignored “a wealth of evidence” demonstrating the legitimacy of the applicants’ employment.  This error, says Mr Webb, is attributed to the fact that INZ had applied the wrong standard of proof; being a higher standard than required.

[97]     The starting point is R5.30 of the Manual, which provides:

R5.30 Approving an application

Applications for a residence class visa must be approved if the immigration officer is satisfied that:

athe applicant has provided all evidence required by the applicable residence instructions, and any additional evidence requested by the immigration officer; and

bthe applicant meets applicable residence instructions including the requirements of health and character.

[98]     The term “satisfied” is not defined in the Manual.  Ms Paterson however, has referred me to two authorities in support of the proposition that “reference to the civil standard of proof, on the balance of probabilities, was acceptable when discussing what was required to “satisfy” the Tribunal”.20    I agree that this is the correct standard to be applied in this context and add that, in a situation such as the present where INZ’s suspicion has been justifiably aroused, more information will usually be required in order to satisfy INZ to the requisite standard.  However, the

fact that additional information is sought by INZ does not mean that it is applying a higher standard.  What it means, is that where questions arise as to the cogency or completeness of the material or information presented in support of an application, those questions will need to be addressed and satisfactorily answered before INZ can determine that it is satisfied that the requisite criteria have been met.  A request for more information and the provision of additional information better informs INZ and enables it to decide whether or not it is satisfied, but does not alter or change the standard of proof by which INZ determines whether or not it is satisfied.

[99]     That view appears consistent with that taken by the Tribunal:

Clearly, in many cases, a summary of earnings will suffice to show the payment of wages or salary.  However, where suspicion has been raised that payments might not have been made, it is correct to say that a summary of earnings is not proof…

[100]   I do not agree with Mr Webb’s contention that in the case of the applicants, INZ applied a higher standard of proof by reason of its requests for additional evidence.  Rather than indicating the standard had been elevated, INZ’s requests for further information were consistent with the relevant principles of natural justice. The requests were a clear indication by INZ that it did not consider the material already provided by the applicants to be sufficient to satisfy it of the requirements for

the issue of a skilled migrant based residence class visa, and as a consequence of its

20     Faavae v Minister of Immigration (1997) 11 PRNZ 168 (HC); Soane v Minister of Immigration

HC, Wellington AP184/94, 20 June 1997.

requests,  further  opportunities  were  given  to  the  applicants  to  provide  further evidence to INZ before it made decisions to either grant or decline their applications. Rather than being indicative of applying a higher standard of proof, I consider the actions of INZ in requesting further information is a creditworthy example of INZ informing the applicants of information deficiencies in their supporting material and providing them with an opportunity to rectify the situation before their applications were finally determined.

[101]   I also agree with the Tribunal’s comment that once any additional evidence was provided, INZ was entitled and indeed required to assess its reliability and credibility.   The applicants have not shown that INZ’s findings of credibility, as upheld by the Tribunal, were unjustifiable or wrong.

[102]   Again, I do not consider the issues raised by an appeal, if leave were granted, would involve matters of general or public importance.   As noted above, the applicants have provided figures as to the number of declined applications for residence visas each year; the point being that “many of [those applications] would have been declined because INZ had not been satisfied by the evidence submitted by the applicants”.   However, the basis upon which those applications were declined cannot be explained by reference to the standard of proof applied by INZ when deciding whether or not it was “satisfied” by supporting information and material presented to it.   Accordingly, I do not consider that the number of the declined applications for residence referred to by Mr Webb provides any support for the proposition that the appeal would involve a matter of general or public importance.

[103]   Lastly, I note that it is implicit that the Tribunal did not take issue with INZ’s refusal to approve the applicants’ applications under R5.30 of the Manual on the basis of not being satisfied that the applicants met the applicable residence criteria. That is because:

(a)      it did not consider that the applicants’ employment was genuine, and were employment positions paid by salary or wages in terms of a contract of services (SM7.15.a.ii and SM7.15.a.iii);

(b)       it did not consider that the applicants’ employer complied with all

relevant and immigration law in New Zealand (SM7.20.c(a)); and

(c)       it   considered   the  applicants’  employer  had   a  history  of  non- compliance with immigration and employment laws.

[104] For those reasons, the applications for leave to appeal are dismissed.

Statutory criteria for the granting of leave to bring review proceedings

[105]   An application for judicial review under the Act requires leave of the court. Section 249 relevantly provides:

249    Restriction   on  judicial  review   of   matters  within  Tribunal’s

jurisdiction

(1)     No review proceedings may be brought in any court in respect of a decision where the decision (or the effect of the decision) may be subject to an appeal to the Tribunal under this Act unless an appeal is made and the Tribunal issues final determinations on all aspects of the appeal.

(2)     No review proceedings may be brought in any court in respect of any matter before the Tribunal unless the Tribunal has issued final determinations in respect of the matter.

(3)     Review proceedings may then only be brought in respect of a decision or matter described in subsection (1) or (2) if the High Court has granted  leave  to  bring  the  proceedings  or,  if  the  High  Court  has refused to do so, the Court of Appeal has granted leave.

…

(6)     In determining whether to grant leave for the purposes of this section, the court to which the application for leave is made must have regard to—

(a)   whether review proceedings would involve issues that could not be adequately dealt with in an appeal against the final determination of the Tribunal; and

(b)    if paragraph (a) applies, whether those issues are, by reason of their general or public importance or for any other reason, issues that ought to be submitted to the High Court for review.

(7)     A  court  that  grants  leave  under  subsection  (3)  to  bring  review proceedings must state the issue or issues to be determined in the proceedings.

(8)     Nothing in this section limits any other provision of this Act that affects or restricts the ability to bring review proceedings.

[106] In SK v Immigration and Protection Tribunal, Faire J noted the leave requirements under s 249 “indicates a deliberate legislative intention to limit the scope of judicial review from immigration decisions”,21  and took the view that the scope for granting leave to judicially review is as narrow as Duffy J’s interpretation in the s 245 context.

[107]   In R M, Palmer J took a different view:

Parliament did not intend to allow decision-makers power conclusively to determine any question of law. And, indeed, while it diminishes the dimensions of the window of availability for judicial review, s 249 still leaves the window open and, constitutionally appropriately, provides the judiciary with the discretion to open and close it.

[108]   Palmer J went on to say:

The judiciary will not give leave to hopeless cases and the Bill of Rights does  not  require  them to  do  so,  given  the  demonstrable  justification  in conserving public resources and in not delaying execution of immigration law in the public interest.

Have the applicants satisfied the requirements of s 249(6) so as to be granted leave to bring review proceedings?

[109]   By s 249(6), I am required to have regard to two matters.   The first is to consider whether the applicants’ review proceedings would involve issues that could not be adequately dealt with in an appeal against the final determination of the Tribunal.  Here, the applicants base their applications on the process undertaken by the Tribunal in making its decisions.  That being the case, such issues are generally of a kind susceptible to being put under examination by way of review.  Whether there are sufficient grounds present in this case so as to warrant leave being granted is the question I turn to address.

[110]   To  begin  with,  I  do  not  agree  with  the  applicants’ submission  that  the

Tribunal  failed  to  consider  a  number  of  factors,  described  as  “the  wealth  of evidence” showing that the applicants were employed by Phenomena on a genuine

21 At [5].

and legitimate basis.  To the contrary, the evidence to which the applicants refer was considered and taken into account by both INZ and the Tribunal.  As I have already said,  it  is  the  weight  given  by  the  Tribunal  to  that  factual  material  and  the conclusions  drawn  from  the  available  evidence  which  is  challenged  by  the applicants.  As an example, there is nothing to suggest that the Tribunal (or INZ) took issue with the applicants’ evidence that:

(a)      the applicants were legally entitled to ask to be paid their monthly salary in cash, and that Phenomena was required to pay the applicants in cash;

(b)the   applicants   entered   into   an   employment   agreement   with Phenomena, the terms of which provided that they were to be paid in cash; and

(c)       Phenomena had made salary payments to each of the applicants.

[111]   Against this background, the Tribunal found that, contrary to the terms of the employment agreements, the applicants were receiving salary payments directly by electronic deposits into their personal accounts.   Following its assessment of the applicants’ credibility, the Tribunal was not satisfied that the applicants’ terms of employment met the requirements of SM.7.20.c.c.

[112]   I  agree  with  Ms  Paterson’s  submission  that  the  weight  attributed  to  the material relating to the basis of the applicants’ employment, and the evaluation of the reliability of the information and the credibility of the explanations presented by the applicants, together with the determination of the competing propositions as to whether that material established their employment to be genuine, are all matters for the decision maker and do not provide a basis for intervention on review.  In GA v

Refugee Status Appeals Authority, Priestley J held:22

a judicial review application cannot possibly be used as a guise to invite this

Court to reassess credibility issues and the weight given to evidence.

22     GA v Refugee Status Appeals Authority HC Auckland CIV-2005-404-1520, 1 March 2006 at

[37]. See also Berryman v Solicitor-General [2008] 2 NZLR 772 (HC) at [84].

[113]   Next,  the  applicants  argue  that  the  Tribunal  considered  and  attached significant weight to Phenomena’s connection to the Academy, saying that Phenomena is an entirely separate and different business entity.  While it is true that the two entities are distinct in a strictly legal sense, in substance, that is not the case. The two business entities had common ownership and control; and the applicants, now  employed  by  Phenomena,  previously  obtained  their  diplomas  from  the Academy, which was operating from the Lodge wherein Phenomena is presently trading.  Significantly the Tribunal concluded that the applicants, by means of their work at Phenomena, are providing life consultancy training to overseas clients notwithstanding the absence of NZQA accreditation.   In these circumstances, it is reasonable to consider that the Academy’s history as regards loss of NZQA accreditation is a relevant factor under SM7.20.b and, once again, the weight attributed to this matter is not a proper basis for review.

[114] In Mr Webb’s submission, Phenomena will not and cannot repeat the Academy’s mistakes since the services provided by the applicants in this case are all conducted via the internet.  This means that deportations and associated costs could not occur since none of Phenomena’s clients are here in New Zealand.  While that may well account for the risk relating to deportation costs, there remains the further risk of damage or loss to the integrity of the New Zealand Qualifications Framework (NZQF)  caused  by  Phenomena  providing  vocational  training  in  New  Zealand without NZQA approval and accreditation, addressed above.   As the diploma qualifications would necessarily be issued by the New Zealand based Phenomena, the offering and awarding of such diploma qualifications by an unaccredited educational entity would inevitably damage and cause loss to the integrity of the NZQF.

[115]   As I understand it, the applicants say that the Tribunal wrongly rejected the applicants’ evidence of bias and predetermination.  This argument is misconceived, because the applicants’ contention is not that the Tribunal had exhibited bias or predetermination but rather, that INZ had done so.  A judicial review application is limited in its scope to the lawfulness or otherwise of the decision making process, namely, that of the Tribunal.  That is particularly so in light of the introduction of the s 249 leave provision, which is taken to reflect a deliberate intention by Parliament

to restrict the “the dimensions of the window” of availability for judicial review.23  A challenge alleging bias on the part of INZ is therefore well beyond the scope of judicial review.

[116]   In these circumstances, an application for review cannot be employed as a means of indirectly challenging a decision made by INZ.   Furthermore, it is noteworthy that there is a statutory right to appeal in relation to decisions concerning residence class visas, which has already been employed and exhausted here.

[117]   In any event, I do not agree with the applicants that the Tribunal wrongly dismissed their complaints of bias and predetermination on the part of INZ.  To the contrary, the Tribunal was of the view that despite INZ failing to explain why it accepted  as  credible  the  internet  reports,  it  nevertheless  gave  other  reasons  for finding the applicants’ employment presented an unacceptable risk; hence removing any allegation of bias or predetermination.  In its view:

[t]hose reasons were properly put to the appellant as potentially prejudicial information, and were not addressed to Immigration New Zealand’s satisfaction.  As set out above, the Tribunal has found those reasons to be valid in their own right; it has considered the proposition that Immigration New  Zealand’s  judgement  was  clouded  by  its  finding  in  regard  to  the negative internet reports and discounts it, as the conclusion it reached on the other grounds were fair and reasonable.

[118]   It further noted:

By their very nature, reasons for finding the appellant’s employment created an unacceptable risk were negative findings against her employer.  That does not necessarily mean they were biased.  Ms Wang and Phenomena Academy had a negative immigration history quite apart from the unverified internet allegations.

[119]   I find that there is no basis to support the proposition that INZ exhibited bias or predetermination in its management and consideration of the applications, and I find that the Tribunal addressed and correctly determined that there was no basis for the applicants’ allegation of bias.   Accordingly, this ground could not possibly be

made out on review.

23     Note also, that section is partly headed, “restrictions on judicial review…”

[120]   Lastly,  the  applicants  complain  that  they  were  not  informed  of  INZ’s concerns as to unacceptable risks and, in particular, INZ failed to specify which particular law, policy or instruction was at risk.  By failing to do so, says Mr Webb, INZ deprived the applicants of an opportunity to address and satisfy these concerns. I decline to entertain  these complaints  given that,  as  I have set  out  above,  the applicants were clearly on notice of INZ’s concerns.  I add, further, that there is no requirement on the part of INZ to give reasons as to why it considered the applicants’ employment poses unacceptable risks.   All that was required by R5.20.5 (entitled “Potentially prejudicial information”) was for INZ to give each applicant an opportunity to comment before a decision to decline to grant a visa was made on the basis of any potentially prejudicial information that the applicant was not necessarily aware  of.    INZ  had  done  this.    Rule  5.20.5  cannot  be  interpreted  as  requiring anything more. There is no obligation to give reasons.

General or public importance or for any other reason

[121]   The second matter I must have regard to is whether the issues raised on review ought to be submitted to the High Court by reason of their general or public importance.

[122]   For reasons I have already traversed, this ground is not met.

[123]   The applicants have not satisfied the requirements of s 249(6), and I decline leave to bring judicial review proceedings.

Conclusion

[124]   The applications are dismissed.

[125]   If  costs  are  sought  by  the  successful  second  respondent  and  cannot  be resolved, a memorandum must be filed by counsel for the second respondent within

28 days, with a memorandum in reply 14 days thereafter.

Paul Davison J