Campbell & Ors v Minister for Immigration & Anor [2011] FMCA 61 (9 February 2011)

Last Updated: 10 February 2011

FEDERAL MAGISTRATES COURT OF AUSTRALIA

CAMPBELL & ORS v MINISTER FOR IMMIGRATION & ANOR

[2011] FMCA 61

MIGRATION – Migration review Tribunal – Business Skills (Residence) (Class DF) (subclass 892) visa – whether applicant had an ownership interest in main business as one of two co-trustees of a trading trust. WORDS AND PHRASES – Ownership interest.

Migration Act 1958 (Cth), ss.134(10)(a), 134(10) (b), 134(10) (c) Migration Regulations 1994, regs. 892.211

Ellis v Kerr [1910] 1 Ch 0 529 Pelham v Pelham [1955] SASR 53 Estate of Just (No.1) (1973) SASR 508 Hart v Minister for Immigration and Citizenship [2008] FMCA 1067 Minister for Immigration v Hart [2009] FCAFC 112; (2009) 179 FCR 212

First Applicant:

PETER STUART CAMPBELL

Second Applicant:

CRESSIDA JANE CAMPBELL

Third Applicant:

WILLIAM CAMPBELL

Fourth Applicant:

SEBASTIAN CAMPBELL

Fifth Applicant:

ISABELLA JACQUELINE CAMPBELL

First Respondent:

MINISTER FOR IMMIGRATION & CITIZENSHIP

Second Respondent:

MIGRATION REVIEW TRIBUNAL

File Number:

BRG 248 of 2010

Judgment of:

Jarrett FM

Hearing date:

20 August, 2010

Date of Last Submission:

8 September, 2010

Delivered at:

Brisbane

Delivered on:

9 February, 2011

REPRESENTATION

Counsel for the Applicants:

Mr Boccabella

Solicitors for the Applicants:

A J Torbey & Associates

Counsel for the Respondents:

Ms Kidson

Solicitors for the Respondents:

Clayton Utz

ORDERS

(1) The application for review is dismissed.
(2) The applicants pay the first respondent’s costs of and incidental to the application fixed in the sum of $5, 865.00.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE

BRG 248 of 2010

PETER STUART CAMPBELL

First Applicant

CRESSIDA JANE CAMPBELL

Second Applicant

WILLIAM CAMPBELL

Third Applicant

SEBASTIAN CAMPBELL

Fourth Applicant

ISABELLA JACQUELINE CAMPBELL

Fifth Applicant

And

MINISTER FOR IMMIGRATION & CITIZENSHIP

First Respondent

MIGRATION REVIEW TRIBUNAL

Second Respondent

REASONS FOR JUDGMENT

1. This application seeks orders that a decision of a migration review tribunal made on 24 February, 2010 in respect of the applicants be quashed, that the first respondent be restrained from giving effect to the decision and that mandamus issue requiring the second respondent to reconsider the application the subject of the quashed decision and decide it according to law.
2. Peter Campbell is the primary visa applicant and the remaining applicants are members of his immediate family. The applications can be determined together because the outcome of Mr Campbell’s application will determine the outcome for each of the others.
3. The parties agree, and having regard to the decision of the Tribunal I agree, that the issue to be determined is whether the Tribunal properly construed the phrase ownership interest as it is defined in s.134(10)(c) of the Migration Act 1958. Put in the specific context of the facts of this case, the issue is: as one of two trustees of the JAG Trust that carry on the Trust’s business known as Urban Café, is Mr Campbell the sole proprietor of that business for the purposes of s.134(10)(c) of the Act?
4. For the reasons that follow, I have concluded that Mr Campbell is not the sole proprietor of the business Urban Café Bangalow for the purposes of s.134(1)(c) of the Act. The Tribunal has not fallen into jurisdictional error as Mr Campbell argues, and this application must be dismissed.

Background

5. Mr Campbell is a British national who, for the purposes of earning a livelihood, has visited Australia on a number of occasions since 1992. On 15 May, 2007 and whilst he was in Australia, Mr Campbell applied for a Business Skills (Residence) (Class DF) (subclass 892) visa.
6. On 20 February, 2008 a delegate of the Minister refused the application for the visa on the basis that Mr Campbell had not demonstrated that he had an ownership interest in a relevant business within the meaning of s.134(10) of the Act - something that was necessary if he was secure the grant of the visa.
7. Mr Campbell lodged an application for review of the delegate’s decision by a Migration Review Tribunal on 6 March, 2008. The Tribunal conducted a hearing of the matter on 5 June, 2009 and 2 November, 2009. On 23 February, 2010 the Tribunal affirmed the delegate’s decision to refuse the visa.

Statutory Framework

8. The criteria for a subclass 892 visa are set out in Schedule 2 to the Migration Regulations 1994. Clause 892.2 of Schedule 2 to the Regulations sets out the primary criteria to be satisfied for the grant of the visa sought by Mr Campbell. There are several criteria that need to be met. Central to the issue in this case is the criterion prescribed by clause 892.211 which must be satisfied at the time of the application for the visa. At the time of Mr Campbell’s application clause 892.211 was in the following terms:
   • 892.21 Criteria to be satisfied at time of application
   • 892.211 (1) The applicant has had, and continues to have an ownership interest in 1 or more actively operating main businesses in Australia for at least 2 years immediately before the application is made.
   • (2) For each business to which subclause (1) applies:
   • (a) an Australian Business Number has been obtained; and
   • (b) all Business Activity Statements required by the Australian Taxation Office (the ATO ) for the period mentioned in subclause (1) have been submitted to the ATO and have been included in the application.
9. Regulation 1.03 of the Migration Regulations 1994 provides that the phrase ownership interest where it appears in the Regulations has the meaning given to that term by s.134 (10) of the Migration Act. Section 134(1) is in the following terms:
   • ownership interest, in relation to a business, means an interest in the business as:
   • (a) a shareholder in a company that carries on the business; or
   • (b) a partner in a partnership that carries on the business; or
   • (c) the sole proprietor of the business;
   • including such an interest held indirectly through one or more interposed companies, partnerships or trusts.
10. For the purposes of the criterion prescribed by cl.892.211, the relevant two year period during which Mr Campbell had to have held an ownership interest in a relevant business was found by the Tribunal to be from 14 May, 2005 to 15 May, 2007. There is no challenged to that finding.
11. Mr Campbell nominated two businesses as main businesses for the purposes of cl.892.211, namely GTS Surfboards Pty Ltd and the JAG Trust.
12. Mr Campbell held 25% of the issued capital in GTS. GTS maintained an interest in a surfboard wholesale distribution business. The Tribunal found that Mr Campbell had an ownership interest in that business based upon his 25% shareholding in GTS. However, Mr Campbell also had to establish that in the 12 months immediately before the application was made, GTS had an annual turnover of at least A$200,000 (by reason of cl.892.213 of the Regulations). The Tribunal found that the turnover of GTS in the relevant 12 month period was only $74,988.24 and accordingly, although Mr Campbell had an ownership interest in that business, he could not establish all that was necessary for the grant of the visa based upon his interest in GTS alone. That aspect of the Tribunal’s decision was not challenged on this application.

The Tribunal’s Findings of Fact

13. The Tribunal made the following findings.
14. The JAG Trust was established by a deed made on 24 October, 2002. Jonathan Michael Allison and Georgina Louise Sangster were the trustees of the Trust upon its establishment. The beneficiaries of the JAG Trust upon its establishment were Mr Allison and Ms Sangster.
15. On 15 April 2003, Mr Allison and Ms Sangster purchased a business known as Urban Café. On 1 July 2003, Mr Allison and Ms Sangster entered into a partnership agreement with Mr Campbell to carry on business in partnership under the partnership name, Urban Café Bangalow. Mr Allison and Ms Sangster’s combined interest in the partnership was 66.6% and Mr Campbell’s interest in the partnership was 33.3%.
16. From May, 2004 a business known as Bang Thai Restaurant was operated by the JAG Trust.
17. On 16 February, 2005 Chez Allison Pty Ltd was incorporated. From 18 February, 2005 to 13 July, 2006 Mr Allison and Ms Sangster were directors of Chez Allison, however Ms Sangster ceased to be director from the latter date. The shareholders were originally Ms Sangster and Mr and Mrs Allison, but Ms Sangster disposed of her shareholding at some point not the subject of a particular finding by the Tribunal.
18. On 28 March, 2005 pursuant to powers granted to them by the terms of the Trust, the Trustees of the JAG Trust admitted Mr Campbell as a General Beneficiary according to the provisions of the Trust, subject to two conditions. The conditions were that:
    1. Mr Campbell provide management and consultancy services on a weekly basis of administration, marketing, financial and compliance needs of the JAG Trust; and
    2. around 12 months from 31 March, 2005 Mr Campbell make a capital contribution to the JAG Trust of between $70,000 and $100,000.
19. The Tribunal found that by 30 March, 2006 Chez Allison had become the Trustee of the Trust and Mr Allison and Ms Sangster were Principal Beneficiaries. How that had come about is not clear from the evidence before, or the findings of, the Tribunal. No challenge, however, is made to that finding.
20. Moreover, by 30 March, 2006 the original of the trust deed executed in 2002 had become lost. The Tribunal found that Chez Allison as Trustee and Mr Allison and Ms Sangster as Principal Beneficiaries entered into a Deed of Confirmation which stated that all copies of the 2002 Trust Deed had been misplaced, and that the trustees and principal beneficiaries had agreed to adopt the trust powers, terms and conditions of the form of deed attached to the Deed of Confirmation in place of the misplaced the 2002 Trust Deed.
21. The Tribunal found that the Trust as constituted following the execution of the Deed of Confirmation was a discretionary trust. That seems an apt description having regard to the terms of the Trust Deed.
22. Another thing occurred on 30 March, 2006. A Deed of Variation was entered into by Chez Allison and Mr Campbell whereby Mr Campbell was appointed as a trustee of the JAG Trust along with Chez Allison.
23. On 30 September, 2006 the ABN for the partnership between Mr Campbell, and Mr Allison and Ms Sangster was cancelled. The Tribunal found that in October, 2006 the business formerly conducted by the partnership - Urban Café Bangalow - became a part of the JAG Trust’s assets. That finding by the Tribunal was not challenged.
24. Because Mr Campbell’s partnership interest in the business Urban Café Bangalow ceased at that point, the Tribunal determined that that interest was not available to him to demonstrate that he met the criteria set out in cl.892.211(1) of the Regulations.
25. At some point after 15 November, 2006 Mr Campbell made what is described in the Tribunal’s reasons as a “beneficiary contribution” of $75,000 to the Trust.

The Tribunal’s Decision as to the JAG Trust

26. The Tribunal considered whether Mr Campbell had an ownership interest in the JAG Trust for the relevant period. The Tribunal noted that Mr Campbell’s main business was the Urban Cafe, and that he had in the past an ownership interest in that business as a partner with Mr Allison and Ms Sangster from 1 July, 2003 until October, 2006. After that date, however, the business known as Urban Cafe was found by the Tribunal to be an asset of the JAG Trust.
27. At paragraph [59] of the reasons for decision, the Tribunal said:
    • 59. The primary the (sic) applicant, in accordance with [Minister for Immigration v Hart [2009] FCAFC 112; (2009) 179 FCR 212], must satisfy the definition of ‘ownership interest’ in section 134(10) to establish an ‘ownership interest’ in Urban Café for the purposes of clause 892.211 and for Urban Café to meet the definition of ‘main business’ in regulation 1.11 for the purposes of clause 892.211 and 892.213. Further, the decision in Hart establishes that that definition is not in conformity with the ordinary understanding of the general law but involves a specific legal construct for the purposes of the migration legislation.
    • 60. The definition of ‘ownership interest’ is expressed in exhaustive terms. If the primary applicant does not meet any of the three alternate forms of ‘ownership interest’ in section 134(10), he cannot be found to have an ‘ownership interest’ in any of the JAG Trust businesses, including Urban Café for the purposes of the regulations, irrespective of whether he would have such an interest at general law.
    • ...
    • 62. In relation to step 1, it was submitted that the primary applicant was the legal owner of the JAG Trust businesses as a trustee of the JAG Trust with Chez Allison. The businesses were carried on by the primary applicant and Chez Allison jointly on behalf of the Trust. However, this form of interest did not fall within any of the three relevant forms of ownership interest recognised by section 134(10). As submitted, on the reasoning of Spender and Greenwood JJ, the relevant interest for the purposes of section 134(10) may be held indirectly through a trust, however the form of interest must still be as shareholder in a company carrying on the business, or as a partner in a partnership carrying on the business, or as a sole proprietor of the business. For example, in Hart the respondent was a 20% shareholder in a company that carried on business as a trustee.
    • 63. On the evidence the primary applicant did not have an interest in one of the JAG Trust businesses, including Urban Café, as sole proprietor. There is also no evidence that the primary applicant has, in the relevant period, been a shareholder in a company that carries on the businesses. Although the shareholders of Chez Allison could meet this description. ...
28. Consequently, the Tribunal found that Mr Campbell’s interest in the businesses of the JAG Trust was not an ownership interest as defined by section 134(10) of the Act. He did not have an ownership interest in Urban Café or the other businesses of the JAG Trust for at least two years immediately before the application was made on 15 May, 2007 and, therefore, he did not satisfy cl.892.211 of the Regulations.
29. The Tribunal did not go on to consider and determine whether Mr Campbell satisfied any other criteria for the grant of the relevant visa.

Consideration

30. The grounds of the application relied upon by Mr Campbell in the Application are eleven in number, but in reality they are eleven different ways of expressing the same point: namely that the Tribunal erred when it determined that:
    1. the relevant businesses were carried on by Mr Campbell and Chez Allison jointly on behalf of the Trust; and
    2. therefore, on the proper construction of s.134(10) Mr Campbell could not be said to have been carrying on the relevant business as a sole proprietor during the relevant period.
31. Despite the submissions of the first respondent to the contrary, it is clear that the Tribunal found that Mr Campbell and Chez Allison carried on the business of the Trust jointly. It was on that basis that the Tribunal rejected Mr Campbell’s argument that he had an ownership interest in Urban Café: para 62 of the Tribunal’s reasons for decision.
32. The Tribunal’s finding on that point must be correct. Trustees have a duty to act personally and in the case of a private, non-charitable trust if there is more than one trustee, their decisions ordinarily must be unanimous: Estate of Just (No.1) (1973) SASR 508 at 513 – 514. that means that they must act jointly.
33. Both parties drew my attention to the decision in Pelham v Pelham [1955] SASR 53 and in particular, the following passage, at 57:
    • "Co-trustees are joint tenants of a freehold. They are seised per my at per tout (Murray v Hall [1849] EngR 309; (1879) 7 CB 441; 137 ER 175 at 454 (CB), 180 n(a)(ER)). There is but a single freehold. Trustees differ from joint tenants, who are beneficial owners, in that trustees hold the legal estate subject to, and for the purposes of the trust. As a consequence, their interests are not of a nature that can be severed. Each joint tenant has an identical interest in the whole land and every part of it. Neither of them holds any part to the exclusion of the other. There is unity of possession for the purposes of the trust. .. " (Emphasis added)
34. Mr Campbell argues that because co-trustees must act jointly and, in law, they are seen as one, the Tribunal ought to have found that he was a sole proprietor of the Trust’s business.
35. Both parties referred extensively to the decision of the Full Court of the Federal Court in Minister for Immigration and Citizenship v Hart [2009] FCAFC 112; [2009] 179 FCR 212. Hart was concerned with the phrase ownership interest as it is defined in s.134(10)(a) of the Act. The focus of the judgments in that case was upon the requirement in that subsection that the relevant company in which the visa applicant was a shareholder was carrying on business. The ratio of the judges in the plurality (Spender and Greenwood JJ) was to the effect that it was not to the point that the relevant company in that case was acting in its capacity as trustee when it was carrying on the relevant business (as all members of the court determined that it was). All that was necessary to meet s.134(10)(a) was a determination that it was carrying on the relevant business. Any further enquiry as to the capacity in which it was carrying on the business was irrelevant.
36. The requirement that the relevant person or entity be carrying on a relevant business is absent from s.134(10)(c). That sub-section requires that the visa applicant has an interest in the business as:...the sole proprietor of the business.
37. Given the nature of the JAG Trust, for the reasons expressed by me in Hart v Minister for Immigration and Citizenship, it seems to me that the trustees in this case – Mr Campbell and Chez Allison Pty Ltd – are probably the owner at law and in equity of the Trust’s assets, subject at all times to the terms and conditions of the trust. That is to say, they are both proprietors of the relevant business. But that only answers half of the question – the question of proprietorship.
38. Mr Campbell argues:
    • 15. Extrapolating the reasoning of both the Full Federal Court and the Federal Magistrates Court [in Hart], it is clear that the Urban Cafe is owned by the trustees, namely Chez Allison Pty Ltd and Mr Campbell.
    • 16. The law on co-trustees is that every trustee holds the property in the trust as far as legal title is concerned in a non-divisible manner. In other words each trustee owns the whole of the property. In trust law if there is more than one trustee one does not calculate the percentage legal ownership of a trust asset by dividing the number of trustees in existence into 100. Each trustee owns 100% of the trust. Each trustee therefore is a 'sole proprietor' .
    • ...
    • 18. Once this is appreciated then Mr Campbell holds his asset as a sole proprietor.
    • 19. The term “sole proprietor” is a broad term tempered by the statutory extension- " ... including such an interest held indirectly through one or more interposed companies, partnerships or trusts;"
39. However, sub-section 134(10)(c) makes it clear that the visa applicant’s interest in the business must be as the sole proprietor of the relevant business. That tends against the notion that there could be more than one sole proprietor. Indeed, on Mr Campbell’s argument both he and Chez Allison could properly be called the sole proprietor of the business for the purposes of s.134(10)(c).
40. Is Mr Campbell the sole proprietor? In my view he is not. He is one of two trustees. The trustees are bound to act jointly in the exercise of their powers and duties pursuant to the Trust. That they must act together and unanimously, however, does not mean that Mr Hart is the sole proprietor of Urban Café. If Mr Campbell’s argument was correct, the word the where it appears in s.134(10)(c) should be read as a and it would be possible, for the purposes of the Act to have more than one sole proprietor of the same business. Even accepting as I do that: The definition in s.134(10) of an “ownership interest”, in relation to a business, is a definition by Parliament, which definition is in disconformity with the ordinary meaning of such an interest under the general law (per Spender J in Hart at [27]), to construe the phrase the sole proprietor in s.134(10)(c) as wide enough to include one of two proprietors who must act jointly and who, on the interpretation contended for would both be considered the sole proprietor, is to mangle the language of the section beyond permissible limits.
41. During the course of argument I raised with the parties the prospect that the co-trustees may be carrying on the trust business in partnership and so s.134(10)(b) was relevant.
42. Although not having argued either before the delegate or the Tribunal that s.134(10)(b) had any relevance, Mr Campbell now contends that he and Chez Allison were during the relevant period carrying on the Trust’s business as partners and co-trustees.
43. However, in my view no issue of a partnership between the co-trustees in fact arises. They are not carrying on the trust business as partners, but rather as co-trustees jointly. Inter se they have no rights as do partners. They hold but one office and jointly discharge the duties of that single, joint, inseparable office. In Estate of Just (No.1) (above) Jacobs J said at 513:
    • ... In the case of co-trustees of a private trust, the office is a joint one. Where the administration of the trust is vested in co-trustees, they all form, as it were, but one collective trustee and therefore must execute the duties of the office in their joint capacity. Sometimes, one of several trustees is spoken of as the active trustee, but the court knows of no such distinction: all who accept the office are in the eyes of the law active trustees. If any one refuses or is incapable to join, it is not competent for the other to proceed without him, and if for any reason they are unable to appoint a new trustee in his place, the administration of the trust must devolve upon the court...
44. The first respondent points out that the relationship between partners is contractual and the basis of all partnerships is the contract between the parties. Thus, given that co-trustees occupy one, inseparable office, they cannot contract with one another so that it might be said that they are discharging their duties as co-trustees in partnership.
45. As the first respondent submits, the inability of co-trustees to contract with each other is illustrated by the decision in Ellis v Kerr [1910] 1 Ch D 529. In that case, three individuals became trustees of property and later purported to covenant with two of their number. Warrington J decided that the covenant was void and unenforceable. His Honour explained (at 534):
    • ... a man cannot make a contract with himself. One would have thought it only required to be stated to be self-evident that it makes no difference that he joins in that contract with himself some other person either as covenantor or covenantee, if the obligation on the one side, or, as the case may be, the right to enforce that obligation on the other side, is joint.
46. In my view, no question of a partnership between Mr Campbell and Chez Allison is demonstrated on the facts of the case as found by the Tribunal.

Conclusion

47. In my view no error has been demonstrated the decision of the Tribunal. The application must be dismissed with costs.

I certify that the preceding 47Error! Style not defined.!Syntax Error, !Error! Style not defined.Error! Style not defined.!Syntax Error, !forty-sevenforty-seven (47) paragraphs are a true copy of the reasons for judgment of Jarrett FM

Date: 9 February, 2011