Galani v Chief Executive of the Ministry of Business, Innovation and Employment
[2018] NZHC 383
•12 March 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2017-404-2171
[2018] NZHC 383
UNDER the Judicature Amendment Act 1972 and the Judicial Review Procedure Act 2016 IN THE MATTER
of an application for judicial review under s 4 of the Judicature Amendment Act 1972
BETWEEN
SRICHAND GALANI
Applicant
AND
CHIEF EXECUTIVE OF THE MINISTRY OF BUSINESS INNOVATION AND
EMPLOYMENT
Respondent
Hearing: 2 March 2018 Appearances:
A Ayoub and T Choudhury for Applicant
K G Stephen and M G A Madden for Respondent
Judgment:
12 March 2018
JUDGMENT OF LANG J
[on application for judicial review]
This judgment was delivered by me on12 March 2018 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date……………
GALANI v CHIEF EXECUTIVE OF THE MINISTRY OF BUSINESS INNOVATION AND EMPLOYMENT [2018] NZHC 383 [12 March 2018]
[1] Mr Galani came to New Zealand in 2016 on a two-stage Entrepreneur Work Visa. At the conclusion of the first stage, a Business Immigration Specialist (the Specialist) employed by Immigration New Zealand concluded Mr Galani had not met the threshold requirements enabling him to progress to the second stage. This resulted in the expiry of Mr Galani’s visa. He is now required to leave New Zealand voluntarily or face deportation.
[2] Mr Galani seeks judicial review of the Specialist’s decision. His statement of claim contends the decision was “erroneous”, and that the Specialist “did not consider the totality of the evidence” presented on Mr Galani’s behalf and/or “did not place enough weight on said evidence”. Mr Galani also contends the Specialist’s decision is unreasonable.
The statutory scheme
[3] An Entrepreneur Work Visa provides a person entering New Zealand with a temporary entry class visa that is potentially valid for up to three years. The visa permits the holder to be self-employed in New Zealand, and is subject to conditions in the form of immigration instructions (the Instructions) certified by the Minister of Immigration under s 22 of the Immigration Act 2009 (the Act).1
[4]The Instructions record the objective of the visa scheme as follows:
BB1 Objective
The objective of this category is to contribute to economic growth by enabling experienced business people to grow or establish high growth and innovative businesses with export potential in New Zealand.
[5] The visa permits the holder to reside in New Zealand for an initial period of 12 months (the start-up stage). During this period, the holder is required to take reasonable steps to establish a business in New Zealand using funds transferred from overseas. The proposed business, and the funds required to set up the business, are specified in a business plan submitted by the applicant when he or she applies for the
1 The immigration instructions form part of the conditions of the visa by operation of law: Immigration Act 2009, s 49(1)(c). They are published in the Immigration New Zealand Operational Manual.
visa. If the visa holder fails to meet specified requirements before the conclusion of the start-up stage, the visa will expire. If the visa holder meets those requirements, the visa will remain valid for a further two year period.
[6] In order to obtain a visa of this type the applicant must demonstrate to the satisfaction of a Specialist that he or she will provide a minimum capital investment of $100,000, unless that requirement is waived.2 The applicant must also nominate funds and/or assets equivalent in value to the total capital investment identified in the business plan, and demonstrate both that he or she is the owner of the funds or assets and that they have been earned or acquired legally.3 The applicant must also provide evidence to satisfy the Specialist that, in addition to investment capital, he or she has sufficient funds to support the applicant and any dependents who will be travelling to New Zealand.4
[7] The Instructions relevantly describe the steps the applicant must take towards the end of the first stage as follows:
BB4.5 Requirements at the end of the Entrepreneur Start-Up stage
a.Towards the end of the Entrepreneur Start-Up stage, the holder must provide evidence to satisfy a business immigration specialist that:
i.the investment capital for the proposed business, as stated in the business plan, has been transferred directly from the holder’s bank account(s) through the banking system to New Zealand; and
ii.reasonable steps have been taken to establish or invest in the business as set out in the business plan.
…
[8] The Instructions then go on to provide the means by which the applicant may establish these matters:
BB4.5.1 Evidence of reasonable steps taken to establish and operate a business
a.Evidence of transferring investment capital to New Zealand through the banking system may include but is not limited to:
2 Immigration New Zealand Operational Manual, BB3.1(a).
3 BB3.5(b).
4 BB3.1(g).
i.telegraphic transfer forms
ii.bank statements
iii.other documents, evidence and information the business immigration specialist considers may demonstrate the transfer of investment capital to New Zealand through the banking system.
b.Evidence of reasonable steps taken to establish and operate a business may include but is not limited to:
i.documents evidencing the constitution of the business (e.g. certificate of incorporation)
ii.audited accounts
iii.GST records
iv.other tax records
v.property purchase or lease documents relating to the business’ site
vi.invoices for business equipment and supplies
vii.other documents, evidence and information a business immigration specialist considers may demonstrate reasonable steps taken to establish or invest in a business (e.g. employment agreements, bank statements, utility company invoices, sales agreements, contracts to provide products or services).
This case
[9] Mr Galani applied for an Entrepreneur Work Visa in October 2015. In support of his application he filed a business plan, written submissions and other documentation. He proposed to establish a business involving the subdivision of sections to create additional housing in the Auckland area. This would require a capital investment of at least $1 million. These funds were to be transferred into his business bank account in New Zealand from a bank account held in his name with the NBD Bank in the United Arab Emirates (UAE). Mr Galani said he would be working full time in the business, and that the business would employ one other person for at least 30 hours per week.
[10] Mr Galani was granted an Entrepreneur Work Visa on 29 April 2016 for an initial period of 12 months. On 26 April 2017, Mr Galani’s lawyers applied on his behalf to progress the visa for a further two year period. The solicitors provided the
Specialist with a range of documents in support of the application. The Specialist and Mr Galani’s solicitors then engaged in further correspondence in which the Specialist sought further information about the funds Mr Galani had transferred to New Zealand and about progress in the property development project.
[11] On 25 August 2017, the Specialist decided Mr Galani had not provided sufficient evidence to establish the requirements to enable him to remain in New Zealand for a further two year period. The Specialist reached this decision for two reasons:
(a)Mr Galani had not transferred funds to New Zealand from his nominated bank account in the UAE. Instead, he had transferred funds totalling more than $1 million to his New Zealand business account from two other bank accounts outside New Zealand. The Specialist concluded there was insufficient evidence to establish that these were the funds nominated in the application for a visa. As a result, the Specialist could not consider whether Mr Galani had beneficial ownership of the funds and/or whether they had been acquired legally.
(b)The Specialist concluded that the employee of Mr Galani’s company in New Zealand did not appear to be working the number of hours stated in the employment agreement. The Specialist also concluded that Mr Galani was not working full time in his business and that neither of the two subdivisions that he had commenced appeared to have appropriate regulatory consents to enable the construction of dwellings to begin. She therefore concluded he had not taken reasonable steps to establish his business within the start-up stage.
The proposed grounds of review
[12] There are obvious difficulties with Mr Galani’s first ground of review, namely that the Specialist’s decision was erroneous. Judicial review is concerned with the validity of the process used to reach a decision rather than the correctness of the decision unless it is unreasonable in the manner I shall shortly describe.
[13] Mr Galani’s argument that the Specialist did not place sufficient weight on the evidence he provided likewise cannot succeed. The weight to be given to relevant considerations is a matter for the decision maker and cannot give rise to a ground of review unless the decision is unreasonable.
[14] It follows that the only valid grounds on which Mr Galani can challenge the Specialist’s decision are that she failed to take into account relevant considerations or she took into account irrelevant considerations. Alternatively, he may argue that the decision was unreasonable in the circumstances.
The law as to unreasonableness
[15] The law in this area is currently subject to some debate. Traditionally the courts have applied the so-called “Wednesbury test” of unreasonableness in cases involving decisions made in an immigration context. This relies on the following passages from the judgment of Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation:5
It is clear that the local authority are entrusted by Parliament with the decision on a matter which the knowledge and experience of that authority can best be trusted to deal with. The subject-matter with which the condition deals is one relevant for its consideration. They have considered it and come to a decision upon it. It is true to say that, if a decision on a competent matter is so unreasonable that no reasonable authority could ever have come to it, then the courts can interfere. That, I think, is quite right; but to prove a case of that kind would require something overwhelming, and, in this case, the facts do not come anywhere near anything of that kind.
…
The court is entitled to investigate the action of the local authority with a view to seeing whether they have taken into account matters which they ought not to take into account, or conversely, have refused to take into account or neglected to take into account matters which they ought to take into account. Once that question is answered in favour of the local authority, it may be still possible to say that, although the local authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case, again, I think the court can interfere. The power of the court to interfere in each case is not as an appellate authority to override a decision of the local authority, but as a judicial authority which is concerned, and concerned only, to see whether the local authority have
5 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 (CA) at 230 and 233-4.
contravened the law by acting in excess of the powers which Parliament has confided in them.
(Emphasis added)
[16] Palmer J recently questioned the logic of the Wednesbury approach in Hu v Immigration and Protection Tribunal.6 Palmer J pointed out that the Wednesbury test involves circular reasoning because it provides a test for unreasonableness based on unreasonableness.7 His Honour preferred an approach similar to that taken by the Supreme Court in Bryson v Three Foot Six Ltd in relation to circumstances in which a factual determination may constitute an error of law.8 In Bryson the Supreme Court referred to Edwards v Bairstow, in which Lord Radcliffe had identified three (rare) situations in which a factual determination might constitute an error of law.9 These were where there was no evidence to support the decision, where the evidence was inconsistent with and contradictory of the determination and where “the true and only reasonable conclusion contradicts the determination”.10 The Supreme Court said in Bryan that each of these involved decisions that were “so insupportable – so clearly untenable - as to amount to an error of law; proper application of the law requires a different answer”.11
[17] Palmer J supported this approach in the context of review based on unreasonableness for the following reasons:12
[29] The Court made it clear this is a “very high hurdle”. But it is well established and conceptually coherent. I consider the Supreme Court’s reformulation of Edwards v Bairstow offers a better account of unreasonableness constituting illegality in judicial review than the circular words used in Wednesbury. Where a decision is so insupportable or untenable that proper application of the law requires a different answer, it is unlawful because it is unreasonable.
[30] Lord Radcliffe’s three scenarios, encapsulated by the Supreme Court as an insupportable or untenable ultimate conclusion, also assist in identifying what constitutes a relatively narrow but usable concept of unreasonableness. A decision may be unreasonable if it is not supported by any evidence, or if the evidence is inconsistent with or contradictory of it, or if the only
6 Hu v Immigration and Protection Tribunal [2017] NZHC 41, [2017] NZAR 508.
7 At [27].
8 Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721.
9 Edwards v Bairstow [1956] AC 14 (HL).
10 At 36.
11 At [26].
12 Hu v Immigration and Protection Tribunal, above n 6.
reasonable conclusion contradicts the determination. The first two of these involve the adequacy of the evidential foundation of the decision. The last involves the chain of logical reasoning in the application of the law to the facts: if there is a material disconnect in the chain of logic from a fact or a legal proposition to a conclusion, a decision may be unreasonable and therefore unlawful.
(footnote omitted)
[18] The observations made by Palmer J in Hu are yet to be considered at appellate level. In AH v Immigration and Protection Tribunal Muir J recently acknowledged them, but described the situations identified in Edwards v Bairstow as “matters of nuance”.13 Muir J did not consider the issue affected the outcome in the case before him so he did not consider the proposed new test further.
[19] I acknowledge there are significant advantages in Palmer J’s approach because it provides greater transparency than the Wednesbury test. The obvious risk in applying the Wednesbury test is that it leaves scope for the Court to substitute its own decision for that of the decision maker where it considers the original decision to have been wrong on the merits. That runs counter to the underlying rationale for judicial review, which restricts review to issues of process rather than substance. And, as Palmer J points out,14 the passages set out above from Wednesbury demonstrate that Lord Greene was concerned to ensure the courts did not review the merits of administrative decisions other than in truly exceptional cases.
[20] Mr Stephen for the Chief Executive submitted that there is now a significant body of case law, including decisions of the Court of Appeal and Supreme Court, confirming that the Wednesbury test remains the applicable test for unreasonableness in an immigration context.15 I agree with that statement as far as it goes, but the authorities on which he relied were deportation cases. I have not located any authority confirming that the Wednesbury approach also applies in the present context.
13 AH v Immigration and Protection Tribunal [2017] NZHC 1880 at [48].
14 At [26].
15 See Puli’uvea v Removal Review Authority (1996) 2 HRNZ 510 (CA) at 522, affirmed in Huang v Minister of Immigration [2008] NZCA 377, [2009] 2 NZLR 700 at [39] and [67], upheld by the Supreme Court in Huang v Minister of Immigration [2009] NZSC 77; Singh v Minister of Immigration [2011] NZCA 532 at [33]-[34]; see also Singh (Kulbir) v Chief Executive, Ministry of Business, Innovation and Employment [2015] NZCA 592, [2016] NZAR 93 at [42]-[47].
[21] This issue was not the subject of detailed submissions by either counsel, however, so I do not propose to consider it further. For reasons that will become apparent, the outcome in the present case would be the same regardless of which test is applied.
Decision
The transfer of funds to New Zealand
[22] The only ground on which Mr Galani challenges this aspect of the Specialist’s decision is that it was unreasonable.
[23] Instruction BB3.5 prescribes the requirements for capital investment in the applicant’s proposed business as follows:
BB3.5 Requirement for capital investment
a.An applicant must be able to make a minimum capital investment (see BB3.5.10) of NZ$100,000 in to their proposed business, unless waived as per BB3.5.1 below.
b.The principal applicant must:
i. nominate funds and/or assets equivalent in value to the total capital investment identified in the business plan; and
ii. demonstrate ownership of these funds and/or assets (see BB3.5.5); and
iii. demonstrate that the nominated funds and/or assets have been earned or acquired legally (see BB6.1.5).
[24] As both counsel agreed, the Instructions clearly anticipate that the applicant will use the funds nominated under Instruction BB3.5 to establish the proposed business. This must be so because in deciding whether to grant the visa the Specialist must be satisfied the applicant owns the funds or assets and that they have been lawfully acquired. If an applicant was free to use other funds to establish the business the Specialist would have no opportunity to form a view on those pre-requisites before deciding to issue the visa. Applicants for this type of visa must therefore ensure they use the funds or assets nominated in the application to establish the business.
[25] In his original application Mr Galani nominated a bank account in his name with the Emirates NBD Bank in the UAE as the funding source for his proposed business. He said he had earned these funds from trading in business overseas. He provided supporting documentation that established he had the ability to access the sum of AED 4.481 million (equivalent to NZ$1.9 million) from that account.16
[26] There is no dispute, however, that after Mr Galani was granted a visa he transferred a total sum of NZ$1.102 million into his bank account in New Zealand. These deposits were made between 31 May 2016 and 14 February 2017, and came from bank accounts in the name of Mr Galani and Galani Textile Trading Co Ltd. Mr Galani maintains the latter was the company through which he traded before arriving in New Zealand. Both accounts were held with the FGB Bank in the UAE.
[27] The Specialist was not prepared to take into account the funds transferred from the FGB Bank in assessing Mr Galani’s eligibility for an extension of his visa because they did not come from the bank account Mr Galani had nominated in his application for a visa. The Specialist said this prevented her from assessing whether Mr Galani was the beneficial owner of the funds and/or whether he had acquired them lawfully.
[28] The requirements of the Instructions reflect the need to ensure that funds entering the country are the property of those who introduce them and they have been acquired legally. Any other approach runs the risk of making this country a safe haven for unlawfully acquired property. A decision made in accordance with the legal requirements of the Instructions cannot be regarded as unreasonable regardless of which test is applied. It follows that this ground of review cannot succeed.
[29] Strictly speaking, this finding is sufficient to dispose of the application for review. Counsel agreed that the application could not succeed unless Mr Galani could successfully challenge both of the grounds on which the Specialist made her decision. For completeness, however, I will consider Mr Galani’s challenge to the second ground on which the Specialist declined his application.
16 The bank statement Mr Galani provided in support of his original application only showed a credit balance in the account of approximately AED 23,524 but it appears to be common ground that the account was a facility that enabled Mr Galani to draw down up to AED 4.481 million.
Failure to take reasonable steps to establish the property development business in New Zealand
[30] Mr Galani challenges this aspect of the Specialist’s decision on two bases. First, he contends there were errors of process because the Specialist took into account irrelevant considerations and failed to take into account relevant matters. Secondly, he contends the decision was unreasonable.
Errors of process
[31] Mr Galani had been granted a visa to establish a business that was to acquire and subdivide residential land in Auckland. This involved the renovation of existing dwellings and the construction of new dwellings on subdivided sections.
[32] By the time Mr Galani sought an extension of his visa he had incorporated a company, Galani Realties Ltd, through which he proposed to operate his business. He had also employed a Mr Lachhani to work for the company. By that stage the company had purchased one property and agreed to buy another.
[33] In finding that Mr Galani had not taken reasonable steps to establish the business the Specialist took issue with the extent to which Mr Galani and the employee were said to be working on the project. She also considered insufficient progress had been made towards construction of dwellings on the two properties to enable sales to occur. In particular, she noted that building consents had not yet been issued to enable the construction of houses on the properties to begin.
[34] Care obviously needs to be taken in this area. The focus must be on the reasonableness of the steps taken by the holder to establish the proposed business rather than on ultimate outcome. Focus on outcome carries risk because, although the apparent lack of any appreciable outcome may indicate a lack of reasonable steps being taken to establish the business, that will not necessarily be the case. There may be legitimate reasons why a visa holder who takes reasonable steps to establish a business is nevertheless prevented from achieving goals set out in a business plan. That is particularly so in a property development business, because it will inevitably be required to obtain regulatory consents in order to achieve sales of property. The
speed with which these can be obtained will depend to some degree on the time taken by the regulatory authorities to process applications, and the nature of any conditions or requirements the authorities might impose.
[35] A Specialist who is required to decide whether a visa holder has taken reasonable steps to establish a property development business will therefore need to determine whether the point the business has reached during the start-up stage is reasonable having regard to the nature and scope of its business. Where no sales have been achieved by the end of that period, the holder will need to demonstrate it has taken reasonable steps not only to set up a business structure but also to acquire and develop property. This will usually include the obtaining of regulatory consents.
[36] Mr Galani purchased a property situated at 74 Cape Hill Road on 23 August 2016. The previous owner of the property had obtained a resource consent for the property in the form of a subdivision consent.17 The consent had conditions attached that the owner of the land was required to meet to the satisfaction of the Auckland Council. Before new titles would issue it was necessary for the owner to obtain a certificate from the Council under s 224(c) of the Resource Management Act 1991 (a s 224 certificate) confirming it had approved the survey plan, and that all of the conditions attached to the subdivision consent had been satisfied. At that point the owner could lodge the certificate with the Registrar-General of Land to enable the survey plan to be deposited. This would enable new titles to be issued.
[37] Mr Galani’s subdivision consultant did not lodge the necessary documents with the Council to enable a s 224 certificate to be issued until 14 July 2017. On 24 July 2017 he sent an email to Mr Galani advising him that the Council’s engineer had been on leave, and as a consequence the Council was “running behind tending to this work”.
[38] Mr Galani’s architect similarly sent him an email on 31 July 2017 confirming that he was working on the drawings for a building consent to issue.
17 Section 87(b) of the Resource Management Act 1991 includes subdivision consents within the definition of resource consent.
[39] On 29 June 2017 Mr Galani’s company had also entered into an unconditional agreement to purchase a second property at 15 Scott Point. It paid a deposit of
$300,000 in relation to that acquisition the following month.
[40] The issue for the Specialist was therefore whether these actions constituted reasonable steps to establish a property development business. Her decision was as follows:
Reasonable steps to establish your business
Immigration instructions require at BB4.5a(ii) that you take reasonable steps to establish the business, as set out in the business plan.
We wrote to you on 08 August 2017 to request more information about your involvement in your real estate development business and to clarify the building progress, on land your business had purchased.
Specifically, we raised concern that when we contacted you on 27 July 2017, you advised that construction had not commenced on a residential property at 74 Cape Hill Road, Pukekohe, Auckland. You advised that this was because you did not yet have required building consent from Auckland Council & that your full-time involvement in your business was organising this consent.
In our letter, we raised concern that you provided an email from Mike Williams, Airey Consultants that appeared to show the business was responsible for building consent. We also raised concern that neither 74 Cape Hill Road nor land you later purchased at 15 and 15a Scott Point, Hobsonville, Auckland appeared to have regulatory consent, as required by BB6.1.50 instructions, relating to real estate development.
In response to our concern, your advisor stated “the property at 74 Cape Hill Road does not require [you] to obtain a grant for resource consent. The reason being that they had purchased this property with already existing resource consent as the reason for the purchase was to subdivide the property”. No evidence of consents was provided. Your advisor also provided a timeline of your involvement in the business which outlined tasks you have undertaken for your business in May 2016, July 2016, November 2016, January 2017 & between April & June 2017.
We have considered your response and the additional information provided on 16 August 2017. We are not satisfied this addresses our concerns for the following reasons:
·There has been no evidence provided to show regulatory consent has been granted at 74 Cape Hill Road or 15 and 15a Scott Point
·The response that you do not need consent to proceed with building
74 Cape Hill Road is inconsistent with your comments in the telephone conversation on 27 July 2017 & an email from Leo Liu, the building’s architect, dated 31 July 2017, that he was awaiting documents and would then lodge the consent
·There is insufficient evidence of your full-time active involvement in your business, as your business has not commenced operation
We are therefore unable to be satisfied that you meet BB4.5(a)(ii) instruction which requires that reasonable steps have been taken to establish the business as set out in the business plan.
[41] I consider there are several flaws in the Specialist’s reasoning process. First, the Specialist considered there was an inconsistency between Mr Galani’s claim that the Cape Hill property already had a resource consent and comments he had made to her during a telephone conversation on 27 July 2017 as well as observations his architect had made in the email sent to Mr Galani on 31 July 2017. There was in fact no inconsistency between these statements because the latter were made in relation to the building consent. That was a different form of consent to the resource consent by way of subdivision consent. There is nothing to suggest Mr Galani’s claim that the Cape Hill property came with resource consent was incorrect. Had the Specialist properly understood the email from Mr Galani’s land consultant dated 14 July 201718, she would have appreciated the distinction between the two forms of consent.
[42] Secondly, the last bullet point of the passage set out above suggests the Specialist considered Mr Galani’s business had not yet commenced operation. That was incorrect because the material before the Specialist indicated Mr Galani had taken several steps to establish the business. The issue for the Specialist was whether these were reasonable in the circumstances. In addition, the first bullet point stated that Mr Galani had provided no evidence to show regulatory consent had been granted for either property. This overlooks the fact that the property was purchased with a subdivision consent already in existence. The task for the Specialist was to evaluate whether Mr Galani had taken reasonable steps to continue the subdivision process during the start-up stage.
[43] The reference in the fourth paragraph to Instruction BB 6.1.50 is also difficult to fathom. Instruction BB 6.1.50(c) contains a general requirement that, in the case of businesses involving residential property development, “the new developments must have been approved and gained any required consents by any relevant regulatory authorities (including local authorities)”. Although Mr Galani had not completed the
18 Referred to above at [37].
process of obtaining new titles and building consents by August 2017, he had commenced that process. He was therefore complying with Instruction BB 6.1.50. Again, the issue was not whether Mr Galani had completed that process. It was whether he had taken reasonable steps to establish the business.
[44] Viewing the decision as a whole, I consider the Specialist erred in law by focussing on the fact that Mr Galani had not yet obtained the necessary consents when the real issue was whether he had taken reasonable steps to establish his business. The obtaining of consents was just one aspect of that process. I therefore consider this aspect of the Specialist’s decision is amenable to review.
Was the decision unreasonable?
[45] The next issue is whether the decision was also unreasonable. In this context the Specialist had the benefit of a timeline provided by Mr Galani’s solicitors when they wrote to her on 16 August 2017 in response to initial concerns she had expressed in an email dated 8 August 2017. A copy of the timeline is attached to this judgment as an Appendix for ease of reference. Several comments can be made about the matters contained in the timeline.
[46] First, it is clear that Mr Galani was absent from New Zealand for considerable periods during the start-up stage. He left New Zealand on 10 May 2016 and remained overseas until 7 July 2016. The timeline explains this was necessary “to arrange to get the funds transferred to his New Zealand bank account in order to begin investing into the establishment of his business”. This explanation is difficult to accept. In his original application Mr Galani had nominated his account with the Emirates NBD as the source from which he would fund the establishment of his business. He has not explained why he needed to leave New Zealand for two months to arrange for funding from an alternative source. That should not have been necessary given the apparent availability of funds drawn on the NBD account.
[47] Mr Galani then went overseas again between 7 and 19 August “to sort out matters relating to his business in India and Dubai”. He made a further trip between 25 August and 3 November 2017 “to deal with business affairs and personal matters”. Mr Galani then left New Zealand again on 18 January 2017 and did not return until
6 April 2017. During this period he employed Mr Lachhani to work for the company and he began work using Mr Galani’s home office on 1 March 2017. After Mr Galani returned on 6 April he began looking for suitable office premises. He secured these the following month.
[48] The timeline therefore discloses that Mr Galani was overseas for 208 days during the start-up stage. This was nearly two-thirds of the year. The explanations he has given suggest he made the trips principally to deal with his personal and business affairs outside New Zealand. A reasonable Specialist could therefore reasonably conclude Mr Galani was concentrating during this period on his affairs overseas rather than in New Zealand.
[49] Furthermore, although work on the Cape Hill development was clearly ongoing even whilst Mr Galani was overseas, he has never explained why his land consultant did not lodge the application for a s 224 certificate with the Council until 14 July 2017. This was nearly 15 months after he received his visa. Nor has he explained why his architect had not produced working drawings sufficient to obtain a building consent by 30 July 2017. There may have been valid reasons for these apparent delays, but if so Mr Galani did not provide them to the Specialist. I therefore consider that, on the basis of the information Mr Galani provided in August 2017, it was open to the Specialist to reasonably conclude he had not taken reasonable steps to establish his property development business by that date.
[50] It follows that the application for review could not succeed on the ground that the Specialist’s decision was unreasonable.
Result
[51]The application for review is dismissed.
Costs
[52] The respondent has succeeded and is entitled to an award of costs in its favour. It shall have costs on a category 2B basis together with disbursements fixed by the Registrar.
Addendum
[53] Although neither ground for review has succeeded, there may be grounds on which Mr Galani could reasonably ask the Chief Executive to reconsider matters afresh. Mr Galani (and/or his company Galani Textile Trading Co Ltd) would appear to be the beneficial owners of the funds used to establish the business in New Zealand. There is also no reason to believe they acquired those funds illegally. Furthermore, I consider Instruction BB 4.5a(i)19 to be ambiguous because it does not require the visa holder to provide evidence to satisfy a Specialist that the funds introduced came from the funds or assets nominated in the original application. That requirement must be inferred from the wording used in Instruction BB 3.5(b).20
[54] In addition, I have found the second ground on which the Specialist declined Mr Galani’s application is amenable to review on grounds relating to process but not on the ground that it was unreasonable. I am conscious, however, that Mr Galani may have a credible explanation for his apparent failure to act with greater expedition in obtaining a s 224 certificate and building consents.
[55] Mr Galani has now introduced a considerable sum of money into the New Zealand economy in reliance on the visa he obtained in April 2016. In doing so he has no doubt contributed to some extent to this country’s economic growth. It is a matter entirely for the Chief Executive, but a fresh appraisal of Mr Galani’s position may now be appropriate having regard to the concerns I have raised above.
Lang J
Solicitors:
Legal Associates, Papatoetoe, Auckland Crown Law, Wellington
19 Set out above at [7].
20 Set out above at [23].
Appendix: Timeline
April 2016
§Mr Galani moved to New Zealand with his family once approval in principle was given.
May 2016:
§Upon approval and the return of his passports, he travelled overseas on 10 May 2016 in order to arrange to get the funds transferred to his New Zealand bank account in order to begin investing into the establishment of his businesss.
July 2016:
§Returned to New Zealand on 07 July 2016. Mr. Galani began his search for properties to invest in, as well as set up office spaces, meet with accountants, lawyers, surveyors and other tradesmen.
August 2016:
§Mr Galani returned back overseas on 07 August to sort out matters relating to his business in India and Dubai.
§Returned back to New Zealand on 19 August
§Purchased 74 Cape Hill Road property on 23 August. Deposited $480,000 NZD.
§The plan was to subdivide the property at 74 Cape Hill Road into two lots and build two houses. In order to further that plan, Mr Galani began dealing with the Auckland Council, property surveyors and engineers.
§During this time, Mr Galani was operating his business affairs from his home office whilst looking for a separate office space.
§25 August – Travelled overseas to deal with business affairs and personal matters.
November 2016:
§03 November 2016 – Returned to New Zealand and began subdivision work at site 74 Cape Hill Road
§Dealt with necessary parties to perform the subdivision work.
§Began looking for employees and office spaces. An employee was sought early as the pressure was mounting. Mr. Galani was working long hours.
December 2016 & January 2017:
§Holiday season – Mr. Galani was not aware that everyone takes breaks around this period of time. Less work was completed.
§18 January 2017 – Mr. Galani travelled overseas to sort out business and personal affairs.
§Whilst overseas, Mr. Galani hired Mr. Lachhani to start working for him from 1 March 2017 in order to look after his 74 Cape Hill Road project whilst Mr. Galani was overseas.
March 2017:
§Mr. Lachhani began work from Mr. Galani’s home office at 22 Nirvana Way, Mt. Roskill.
§Mr. Lachhani dealt with real estate agents, architects and trades people in order to further the sub-division work at 74 Cape Hill Road and begin planning the building process.
§Mr. Lachhani also began looking for other properties for Mr. Galani to purchase.
§Mr. Lachhani worked full time, a minimum of 30 hours a week.
April 2017:
§06 April – Mr. Galani returned to New Zealand.
§The search for an office space continued.
§Mr. Galani’s office space was finalized – 94 B Stoddard Road, Mt Roskill.
May 2017:
§Work began from office space.
§03 May – Mr. Galani continued his search for other properties to purchase and develop as per his business plan.
§Work at 74 Cape Hill Road was ongoing – communications, phones, emails with all parties involved. Final work and inspections were going on.
June 2017:
§Scott Point properties were signed on 20 June after many negotiations
July 2017:
§Completed all services for subdivision at 74 Cape Hill Road
§July 14 – Applied for a Section 224C Certificate – Property, Consents and Licensing. Council processing time frames for this application are 2 – 3 months
§Architect is working concurrently on the building plans. It takes four weeks to submit the plans, and council approval time frame is another 2 – 3 months
§Deposit of $300,000 paid for the Scott Point property
August 2017:
§Currently working with Architect and Master Builder for plans with the Scott Point property.
§Following up with Council for the Section 224C application and the Architect for 74 Cape Hill Road plans.
September 2017:
§Mr. Galani plans on going overseas to organize funds for the settlement of Scott Point.
§Work with surveyors, developers and council to obtain title.
October 2017:
§Once title is issued, Mr. Galani will proceed with his business plan and begin the process of advertising and selling off the properties in which he has begun work for. This depends on how quickly the council issues permissions and how fast the construction company works.
§The process of building at 74 Cape Hill Road is expected to take approximately 6 months.
§The process of building at Scott Point is planned to begin for February 2018.
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