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Essof & Anor v Minister for Immigration & Anor [2009] FMCA 13 (27 January 2009)

Last Updated: 29 January 2009

FEDERAL MAGISTRATES COURT OF AUSTRALIA

ESSOF & ANOR v MINISTER FOR IMMIGRATION & ANOR

MIGRATION – Application to review decision of AAT declining to overturn decision to cancel business visa – whether erroneous findings of fact leading to conclusion based on those facts amounts to jurisdictional error – identification of jurisdictional facts – whether impermissible fettering of statutory discretion.


Kim v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 31
Craig v The State of South Australia [1995] HCA 58; (1995) 184 CLR 163
Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476
Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259
Abebe v Commonwealth of Australia (1998) 197 CLR 510
Re Minister for Immigration; ex parte Durairajasingham (2000) 168 ALR 407
Re Minister for Immigration and Multicultural Affairs; ex parte Applicant S20/2002 [2003] HCA 30; (2003) 198 ALR 59
SZITB v Minister for Immigration and Citizenship [2007] FCA 1954
Prasad v Minister for Immigration and Citizenship [2007] FCA 1739
Re Minister for Immigration and Multicultural Affairs; ex parte Applicant S20/2002 [2003] HCA 30; (2003) 198 ALR 59
Avon Downs Pty Ltd v FCT [1949] HCA 26; (1949) 78 CLR 353
Buck v Bavone [1976] HCA 24; (1976) 135 CLR 110
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611
MIMIA; ex parte Cohen (2001) 117 ALR 473
Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259

First Applicant:
MAHOMED EBRAHIM ESSOF

Second Applicant:
KHATIJA ISMAIL ESSOF

First Respondent:
MINISTER FOR IMMIGRATION & CITIZENSHIP

Second Respondent:
ADMINISTRATIVE APPEALS TRIBUNAL

File Number:
BRG 1006 of 2007

Judgment of:
Wilson FM

Hearing date:
14 March 2008

Date of Last Submission:
14 March 2008

Delivered at:
Brisbane

Delivered on:
27 January 2009

REPRESENTATION

Counsel for the Applicants:
Mr See

Solicitors for the Applicants:
Indian Oz Pacific Pty Ltd

Counsel for the Respondents:
Mr Brady

Solicitors for the Respondents:
Clayton Utz

ORDERS

(1) The application is dismissed.
(2) The Applicants are ordered to pay the Respondents’ costs fixed in the sum of $5,000.00.
FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

BRG 1006 of 2007

MAHOMED EBRAHIM ESSOF

First Applicant


KHATIJA ISMAIL ESSOF

Second Applicant


And


MINISTER FOR IMMIGRATION & CITIZENSHIP

First Respondent

ADMINISTRATIVE APPEALS TRIBUNAL

Second Respondent


REASONS FOR JUDGMENT

  1. The Applicants challenge the decision of the Second Respondent, delivered on 30 October 2007, which affirmed the decision of the delegate of the First Respondent to cancel the First Applicant’s business visa pursuant to s.134 Migration Act 1958.
  2. The First Applicant is a citizen of Zimbabwe. On 3 November 2003 he was granted a Business Skills (Migrant) (Class AD) (Sub-Class 127 – Business Owner) Visa. The Second Applicant was granted a family member’s visa, dependent on the continued validity of the First Applicant’s business visa.
  3. By letter dated 1 December 2006 the Department of Immigration and Multicultural Affairs, on behalf of the First Respondent, advised the First Applicant of its intention to consider cancellation of his visa. On the hearing of the Application, there was no argument that s.135 of the Act had not been complied with.
  4. On 28 March 2007 the delegate of the First Respondent decided to cancel the First Applicant’s business visa. The First Applicant sought review by the Second Respondent, pursuant to s.136 of the Act. The Second Respondent affirmed the delegate’s decision.
  5. At the hearing of the application the Applicants, by their counsel, abandoned ground 3 in the Application. The Applicants therefore rely on two grounds to challenge the decision of the Second Respondent:
    1. The Second Respondent committed a jurisdictional error in the exercise of its discretion under s.134(1) of the Act, by determining that the First Applicant had not made a genuine effort to obtain a substantial ownership in an eligible business in Australia;
    2. The Second Respondent committed a jurisdictional error in the exercise of its discretion under s.134(1) of the Act, by failing to exercise jurisdiction or exceeding the authority or powers given to it under the Act, by determining that the First Applicant was required to satisfy the Second Respondent, that he had “made a genuine effort to satisfy the tests in Section 134(2) of the Act” [Para 12 of the Decision].
  6. The abandonment of ground 3 means that to succeed the Second Applicant depends entirely on the success of the First Applicant.
  7. The focus of argument in the present case was s.134 of the Act, in particular subsections (1), (2) and (3) thereof which provide:
  8. As Kiefel J observed in Kim v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 31 at [14]:
  9. At [19] her Honour said:
  10. Her Honour held that even if the Minister (or, subsequently, the Tribunal) was not satisfied as required by s.134(2) of the Act, nevertheless there was a residual discretion under s.134(1) of the Act not to cancel the business visa. Neither party challenged the correctness of the decision in Kim.
  11. Both parties accepted, correctly, that this Court can only review decisions of the Tribunal if it can be demonstrated that the Tribunal member fell into jurisdictional error.
  12. A general description of what constitutes jurisdictional error is to be found in the decision of Brennan, Toohey and McHugh JJ in Craig v The State of South Australia [1995] HCA 58; (1995) 184 CLR 163 at 179:
  13. There was considerable debate in the present case, particularly in connection with the Applicant’s first ground of review, as to whether the applicants were seeking a merits review (as the First Respondent contended), or whether the Tribunal had erred in its determination of a jurisdictional fact (as the Applicants contended) such as would constitute jurisdictional error.
  14. Before proceeding further, it is useful to understand what can and what cannot be challenged on application to this court, and what is involved in the concept of jurisdictional error where one is considering a statute which requires the decision-maker to be satisfied of certain matters, or to reach an opinion on a matter.
  15. A merits review simpliciter is not permissible: Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259. There is no error of law or jurisdictional error in the Tribunal making a wrong finding of a fact that is not a jurisdictional fact: Abebe v Commonwealth of Australia [1999] HCA 14; (1998) 197 CLR 510 at 560. Adverse credibility findings are properly the function of the decision-maker and generally not susceptible to judicial review by the court: Re Minister for Immigration; ex parte Durairajasingham (2000) 168 ALR 407 per McHugh J at [67]. As Gleeson CJ pointed out in Re Minister for Immigration and Multicultural Affairs; ex parte Applicant S20/2002 (2003) 198 ALR 59 at 62 reviewable error is not established purely because, on the material before the decision maker, the court would have reached the required state of satisfaction. As Flick J observed in SZITB v Minister for Immigration and Citizenship [2007] FCA 1954 at [17]:
  16. Section 134(2) of the Act requires the Minister (and subsequently the Tribunal) to be satisfied of three matters. In Prasad v Minister for Immigration and Citizenship [2007] FCA 1739 Logan J considered that the “satisfaction” is the jurisdictional fact rather than the objective existence of the criteria specified in the paragraphs that follow.
  17. In Re Minister for Immigration and Multicultural Affairs; ex parte Applicant S20/2002 [2003] HCA 30; (2003) 198 ALR 59 at [8] Gleeson CJ, in dealing with statutory provisions which operate upon the state of satisfaction, or lack of satisfaction of an administrative decision maker adopted what Dixon J said in Avon Downs Pty Ltd v FCT (1949) 78 CLR 353 at 360:
  18. At [54] McHugh and Gummow J said:
  19. In Buck v Bavone (1976) 135 CLR 110 at 118-9, in a passage frequently quoted in this area of judicial discourse, and relied on by the First Respondent, Gibbs J said of statutory provisions which require satisfaction of certain jurisdictional facts:
  20. In Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 Gummow J paid considerable attention to what amounts to jurisdictional error where it is alleged that jurisdictional fact has been erroneously found. His Honour said, at [130] – [140]:
  21. Re MIMIA; ex parte Cohen (2001) 117 ALR 473 at [35] McHugh J said:
  22. At [36] McHugh J said:
  23. In the present case, in so far as the first ground in the Application is concerned, the relevant jurisdictional fact is the state of satisfaction of the decision maker about the three matters in s.134(2) of the Act. In my view, in relation to the first ground relied upon by the Applicants, many of the matters about which they complain, if accepted to be correct, constitute errors in the determination of subsidiary facts. That is not jurisdictional error. The reasoning of the Tribunal reveals that it asked itself the correct questions, considered the correct matters, and did not take into account irrelevant matters. The Tribunal member was not satisfied of each of the three matters set out in s.134(2) of the Act. As I explain below, it was sufficient for the Tribunal member to not be satisfied of any of the three matters in s.134(2) for the statutory prohibition created by that subsection to become inoperative. The Applicants cannot successfully argue that the Tribunal did not ask itself or consider the correct questions. Rather, they complain that the answers the Tribunal arrived at were infected by incorrect findings of fact.
  24. The Applicants submit that its erroneous fact finding shaped the way in which the Tribunal member achieved her state of satisfaction (or non satisfaction). I disagree. As the reasons of the Tribunal reveal, read in their entirety, the Tribunal member correctly applied the statute in arriving at her state of satisfaction. Whether or not a different Tribunal member, or this Court, would have reached a different decision on the same evidence is beside the point. Unless the Applicants can successfully point to an error in the process of reasoning, even if it involved some incorrect facts, the application cannot succeed.
  25. I am prepared to accept that the process of fact finding undertaken by the Tribunal may in some cases be so flawed that in truth no state of satisfaction as required by the statute could be achieved, but that is not this case.
  26. In my consideration of the reasons of the Tribunal I have borne in mind the observations in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259:
  27. The reasoning of the Tribunal was as follows. References to paragraph numbers are to those paragraphs in the reasons:
    1. The First Applicant arrived in Australia in December 2006 and the Second Applicant in April 2007. Prior to the grant of the visa the First Applicant had travelled to Australia to identify business opportunities;
    2. In July 2005 the First Applicant was offered and subsequently purchased a 10% shareholding in Reece’s Hire and Structures Pty Ltd (“Reece”), said to be a West Australian premier event, temporary structure and catering supplies hire business, valued at $150,000. The 12,501 ‘A’ class shares that he purchased had limited voting power;
    1. The First Applicant believed this shareholding fulfilled the requirement that he acquire an interest in an eligible Australian business. Before the Tribunal the First Applicant acknowledged that it did not (paragraph [4]);
    1. The shares were held by the First Applicant as a passive investment with no right to any profits of the business;
    2. The First Applicant’s representative conceded that the First Applicant did not satisfy the requirements of s.134(1) of the Act (paragraph [6]). The primary argument was whether the First Applicant’s visa should not be cancelled because he had made genuine efforts to obtain a substantial ownership interest in an eligible business in Australia, and he intended to continue to make such efforts;
    3. At paragraph [12], the Tribunal member stated: “I had to consider whether I was satisfied that [the First Applicant] has made a genuine effort to satisfy the tests in section 134(2) of the Act;
    4. At paragraph [13] the Tribunal member stated: “I was mindful also of the residual discretion which can be exercised pursuant to the decision in Kim, and the discretion which can be exercised in favour of an Applicant in that further time can be given to the visa holder to undertake what was required of him or her”;
    5. The Tribunal member considered that she had to limit her consideration of the evidence up to the date of the cancellation decision except insofar as subsequent events cast light on the decision made on that date. The Tribunal member stated that evidence of future intentions, genuine efforts and action taken beyond the date of cancellation could also be taken into account (paragraphs [18-24]). It was not submitted that there was any error in this approach;
    6. The Tribunal addressed the question of whether the First Applicant had made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia at paragraphs [26] – [38];
    7. In considering the First Applicant’s claim that he had made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, the Tribunal member referred to the First Applicant’s role in Reece (paragraph [32]) but found his shareholding was a passive investment (paragraph [33]). It was pointed out that the First Applicant did not hold the shares at the date of cancellation of his visa;
    8. The Tribunal member also referred to the evidence regarding the conditional purchase of a Mrs Fields Bakehouse franchise (paragraph [36]);
    1. The Tribunal member said at paragraph [38]: “It is undisputed that [the First Applicant] did not have any interest in a business in Australia when his Business Visa was cancelled, but in considering whether [the First Applicant] has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, I find it difficult to accept that he has made that genuine effort. He states that he intends to continue to make genuine efforts. He told me about the business interests he has explored. I find that research was very superficial. Just the day before the hearing, he signed a contract for a Mrs Fields franchise, a business he knows nothing about, and in which he has had no previous experience.”;
    1. At paragraphs [39] – [45] the Tribunal member considered whether the First Applicant had made a genuine effort to utilise his skills in actively participating at a senior level in the day to day management of Reece and intends to continue to make such genuine efforts. At [40] the Tribunal member said that she was not satisfied the First Applicant actually participated in the day to day management of Reece. No other business was identified in which the First Respondent said that he has utilised his skills;
    2. The Tribunal member said, at paragraph [44], that she was not satisfied on the evidence that the First Applicant had made a genuine effort in terms of s.134(2) of the Act;
    3. The Tribunal then considered whether the First Applicant had persuaded it that he intends to continue to make efforts to obtain the requisite shareholding, and participate in management, as required by s.134(2)(c) of the Act;
    4. The Tribunal member made reference to s.134(3) of the Act which adumbrates matters that can be taken into account in assessing whether the First Applicant made the genuine effort referred to in s.134(2) of the Act, and then proceeded to consider each of those matters at paragraphs [47] to [72]. The Tribunal member was not satisfied that the First Applicant satisfied the criteria in s.134(3) of the Act;
    5. The Tribunal member then said, at paragraph [73], that she was not satisfied that the First Applicant met the tests for the discretion to be exercised in relation to s.134(2) of the Act (my emphasis);
    6. Before paragraph 87 of the Reasons, there is a heading “Consideration of the Residual Discretion”;
    7. At paragraph 87, the Tribunal member states:
      • “I have found that [the First Applicant] does not satisfy the indicia for section 134(2) of the Act, in that I am not satisfied that he has made a genuine effort in the terms of the legislation. However, the Tribunal has a discretion not to exercise the power to cancel a business visa even if the criteria set out in the legislation are not satisfied. That discretion can be exercised in favour of [the First Applicant] if I am satisfied that further time should be given to him to undertake what was required of him (Kim).”
    8. The Tribunal member declined to exercise the residual discretion in favour of the First Applicant (paragraphs [88] – [98]) and concludes at [98]:
      • “I am not satisfied that [the first applicant] qualifies for more time in the terms of the discretion in Kim, and I cannot therefore exercise the discretion in his favour.”
    9. The Tribunal affirmed the decision under review.
  28. It was accepted by both parties that the requirements of s.134(2) of the Act were conjunctive, in the sense that if the decision maker was not satisfied of any one of the three, the statutory prohibition set up by s.134(2) did not apply.
  29. That is important in the present case because, even if the Tribunal erroneously took into account ‘facts’ in relation to one of the subsections, which were not actually facts because there was no evidence about the particular matter, the Tribunal may nevertheless have correctly considered another subsection and properly concluded that s.134(2) was not satisfied.
  30. It is also important to identify what ‘business’ is being considered under s.134(2) of the Act. In my view, each of the subparagraphs of s.134(2) is directed to the same business. More than one business may be considered, but all three subsections must be satisfied in relation to at least one of such businesses before the statutory prohibition is enlivened. That is, it is not sufficient, in my view, for an applicant to adduce evidence that he has made the genuine effort referred to in subparagraph (a) in relation to business X, and that he intends to continue to make genuine efforts in relation to business Y. An applicant must adduce evidence that satisfies the decision maker that all three subparagraphs are satisfied in respect of the same business.
  31. The Applicants criticise the language of the Tribunal member in paragraph [73] of the reasons, which I have highlighted above. The language used was infelicitous. However, in my view, when the reasons are read in their entirety it is plain that the Tribunal member was not seeking to introduce some discretion under s.134(2) of the Act, or seeking to mandate how that discretion should be exercised. Rather, the Tribunal member sequentially dealt with each of the elements of s.134(2), where appropriate by reference to s.134(3) of the Act, and reached a conclusion about her state of satisfaction. That is what the statute requires.
  32. The Applicants then point to facts that they contend the Tribunal has erroneously used to reach its level of satisfaction.
  33. As to s.134(2)(a) of the Act, the Applicants submit that the Tribunal wrongly took into account the fact that Reece was in liquidation, when it was not; that the First Applicant did not hold shares in Reece when his visa was cancelled, when he did; and that the First Applicant did not have any interest in a business in Australia when his visa was cancelled, when he did.
  34. Although these are all matters of fact, if the Tribunal has acted entirely on wrong facts in reaching a decision, that can constitute jurisdictional error. I am prepared to accept that the Tribunal wrongly concluded that the First Applicant had not made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia (Reece), as at the date his visa was cancelled. It was incorrect for the Tribunal member to state, at [38], that it was ‘undisputed’ that the First Applicant did not have any interest in a business in Australia when his visa was cancelled. Further, the Tribunal member does not appear to have differentiated between the First Applicant’s genuine effort to obtain a substantial ownership interest in Reece, and the First Applicant’s subsequent attempts to purchase a business including the Mrs Field’s franchise business.
  35. The Tribunal member does not appear to have come to any reasoned conclusion about s.134(2)(a) of the Act in so far as the First Applicant’s purchase of his shareholding in Reece is concerned. This is probably because the Tribunal member has erroneously accepted that the company had ceased to exist at the date of cancellation of the First Applicant’s visa; and rather focussed on other businesses in which the First Applicant had expressed an intention to acquire.
  36. As to the conclusion reached by the Tribunal that it was not satisfied that the First Applicant had made a genuine effort to acquire a substantial ownership interest in any other business, I conclude that the Tribunal’s decision is unimpeachable. It involves a rejection of the First Applicant’s submissions and evidence, which is the province of the Tribunal. No jurisdictional error is demonstrated in the Tribunal’s reasoning in that regard.
  37. I conclude therefore that the Tribunal erred in so far as it was not satisfied, as required by s.134(2)(a) of the Act, but only in respect of the First Applicant’s investment in Reece. Not being satisfied in terms of s.134(2)(a) in respect of businesses other than Reece meant that it was strictly unnecessary for the Tribunal to consider subsections (2)(b) and (2)(c) in relation to those businesses. Therefore, the only business in respect of which the First Applicant could seek to persuade the Tribunal of the matters in ss.134(2)(b) and (c) of the Act was the Reece business.
  38. In that regard the Tribunal was not satisfied that the First Applicant had made the genuine effort specified in s.134(2)(b) of the Act.
  39. The Applicants submit that when regard is had to paragraph [39] of the Tribunal’s reasons, the Tribunal member did not consider s.134(2)(b) in the context of Reece, because it stated “in [the First Applicant’s] case there is no such business in existence . . .” However, at paragraph [40] of the reasons (when read together with paragraphs [32] and [33]) the Tribunal has, in my view, considered s.134(2)(b) in relation to the First Applicant’s investment in Reece. In my view, the Tribunal correctly considered the appropriate evidence and came to a conclusion reasonably open to it. It was open for the Tribunal member to conclude that the First Applicant’s interest in Reece was a passive investment. That was not a decision that no reasonable person could make.
  40. I conclude that it was open to the Tribunal to conclude that it was not satisfied of the matter in s.134(2)(b) and that it did not err jurisdictionally in doing so.
  41. The weakest link in the Applicants’ argument concerns s.134(2)(c) of the Act. No challenge was made to the Tribunal’s finding at [40] that the First Applicant had redeemed his investment in Reece and had received his money back in June 2007 (some three months after the cancellation decision). Counsel for the Applicants did not address s.134(2)(c) in his written submissions.
  42. The Tribunal addressed s.134(2)(c) in relation to future potential investments of the First Applicant. As I have said, it was not necessary for the Tribunal to embark upon that consideration, because it was not satisfied of the matters in s.134(2)(a) in respect of those other businesses. However, what is required by s.134(2)(c) of the Act for the Applicants to succeed on this limb of their argument is for the Tribunal to be satisfied that the First Applicant intends to continue to make such genuine efforts in relation to the Reece business. Although it has not expressly said so, that state of satisfaction could not have been reached by the Tribunal, given that the First Applicant withdrew from his investment with the company.
  43. Although it was not necessary for it to do so, given my conclusion that each of ss.134(2)(a), (b) and (c) must be satisfied in respect of the one business, the Tribunal has also considered whether the First Applicant satisfied it that he intended to make genuine efforts to obtain a substantial interest in and participate in the day to day management of some other business having regard to the matters referred to in s.134(3) of the Act. The Tribunal’s conclusions of fact were reasonably open to it.
  44. The Tribunal considered each of the matters in s.134(2) of the Act and was not satisfied of each of them. No successful challenge has been made to the Tribunal’s consideration of ss.134(2)(b) and (c). It follows that the first ground in the application must fail.
  45. As to the second ground, the Applicants submit that s.134(1) confers a discretionary power for the Minister to cancel a business visa, subject to s.134(2) and s.135 of the Act. That is plainly correct and is not controversial in these proceedings. As I have said, neither party challenged the correctness of the decision in Kim.
  46. What the Applicants contend is that the Tribunal has wrongly purported to exercise the discretion under s.134(2) of the Act; and has wrongly imposed a statutory test or precursor for exercising the discretion. This, it is said, follows from paragraphs [12] and [73] of the reasons of the Tribunal.
  47. In my view, neither of these arguments should be accepted. It is plain from paragraphs [13] and [87] ff of the reasons that the Tribunal member was aware that there was a residual discretion that could be exercised, and that Kim was the relevant authority in that regard.
  48. In so far as paragraph [12] of the reasons are concerned I think that a fair reading reveals that the Tribunal member was proceeding on the basis that the First Applicant could not gainsay one or more of the specified factors in s.134(1) of the Act. That is, the Tribunal member accepted that the Minister had the discretion to cancel the First Applicant’s visa if statutory prohibition in s.134(2) of the Act did not apply. Having concluded that it was not satisfied of the three matters in s.134(2) of the Act, the Tribunal then turned to the exercise of the residual discretion.
  49. In paragraph [73] of the reasons the Tribunal member does refer to the discretion arising under s.134(2) of the Act. That is plainly wrong. When regard is had to paragraphs [87] ff of the reasons I consider that the Tribunal member clearly understood that the residual discretion was enlivened even if the decision maker was not satisfied of the matters in s.134(2) of the Act.
  50. When paragraphs [87] and following of the reasons are read, in my view the argument of the Applicants that the Tribunal has sought to introduce some statutory test that has to be satisfied before the discretion can be favourably exercised cannot be sustained.
  51. The Tribunal has correctly recognised that there is a residual discretion, has considered the competing arguments of the parties and has exercised its discretion adversely to the Applicants. No jurisdictional error has been demonstrated in that process. In exercising its discretion the Tribunal has not sought to import any threshold test, whether under s.134(3) as contended by the Applicants, or otherwise.
  52. The second ground in the Application therefore fails.
  53. It follows that the Application must be dismissed, with costs.

I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of Wilson FM


Associate: Lynnette Chin


Date: 27 January 2009

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