FEDERAL COURT OF AUSTRALIA

Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v ERY19 [2021] FCAFC 133

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed with costs.

2.    The respondent’s application for a protection visa dated 23 October 2012 be determined by the Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs according to law.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

WIGNEY J:

1    The respondent to this appeal, who for ease of reference will be referred to as Mr Z, is a citizen of the People’s Republic of China who has sought asylum in Australia. The appellant, the Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs refused Mr Z’s application for a Protection (Class XA) visa, not because it was not accepted that Australia owed him protection obligations, but because the Minister was not satisfied that Mr Z passed the “character test” in s 501 of the Migration Act 1958 (Cth). That decision, however, was set aside by the primary judge, who found that it was infected by jurisdictional error: ERY19 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 569. In this appeal, the Minister contended that the primary judge erred in so finding.

2    The appeal raises two main issues. The first issue is whether the primary judge misconstrued or misapplied s 501(6)(h) of the Act, that being the provision upon which the Minister relied in finding that Mr Z did not pass the character test. The second issue is whether the primary judge erred in finding that the Minister’s decision was legally unreasonable.

3    I have had the benefit of reading, in draft, the reasons for judgment of Lee and Wheelahan JJ. I agree with Lee and Wheelahan JJ that the appeal should be dismissed with costs. That is primarily because, like Lee and Wheelahan JJ, I have concluded that, irrespective of the issue concerning the proper construction of s 501(6)(h) of the Act, the primary judge did not err in finding that the Minister’s decision was legally unreasonable. I have, however, reached a different conclusion concerning the construction issue.

4    Lee and Wheelahan JJ have comprehensively summarised the relevant facts, the Minister’s decision, the proceedings before the primary judge, the key findings made by the primary judge, the grounds of appeal and Mr Z’s notice of contention. That allows me to go directly to the two main issues raised by the appeal.

THE CONSTRUCTION ISSUE

5    Subsection 501(1) of the Act provides that the “Minister may refuse to grant a visa to a person if the person does not satisfy the Minister that the person passes the character test”. The “character test”, for the purposes of s 501(1), is effectively defined in s 501(6), which provides a long list of circumstances in which a person does not pass the character test. One of those circumstances is the circumstance in s 501(6)(h): “an Interpol notice in relation to a person, from which it is reasonable to infer that the person would present a risk to the Australian community or a segment of that community, is in force”.

6    The construction issue arises because the primary judge’s conclusion concerning the proper construction of s 501(6)(h) differs from the findings made by Thawley J in FUD18 v Minister for Home Affairs [2020] FCA 48. The judgment in FUD18 was handed down shortly before the primary judge handed down his judgment, though regrettably that was not drawn to his Honour’s attention.

7    In FUD18, Thawley J made the following points concerning s 501(6)(h) of the Act (at [43]-[48]). First, read with s 501(1), s 501(6)(h) “directs attention to whether it is reasonable to infer from an Interpol Notice that, if the visa were not refused the person would present a risk”. Second, “the question whether a person would present a risk necessarily allows consideration of possibilities because it involves a consideration of what might or might not occur in the future”. Third, “the provision is not framed in terms of an inquiry into the probabilities of a person doing some specific act” and “[a]ll other things being equal, it is more difficult to reach a conclusion that a particular risk will eventuate than that a risk is present”. Fourth, in contrast to s 501(6)(d) and (g), “the provision does not identify any specific area or topic of risk” and “the area of risk … is unconfined by the express words of the provision”.

8    The primary judge’s construction of s 501(6)(h) of the Act differed from Thawley J’s construction in two potentially important respects. First, his Honour noted that, unlike a number of other sections in the Act, s 501(6)(h) employed the word “would”, as opposed to “might”. The word “would” required a “higher probability” than the word “might” and conveyed that “it is expected that the risk will materialise” (emphasis in original): Judgment at [48]. Second, the primary judge considered that the word “risk” is used in s 501(6)(h) “as a noun meaning ‘a thing regarded as a threat or source of danger’” and was “not an expression of possibility, as in ‘to present a risk of danger’”: Judgment at [48]. His Honour then concluded as follows (at [49]):

The result is that the information derived from the Interpol notice that is relied on by the Minister to conclude that a person does not pass the character test as expressed in s 501(6)(h) must be such as to allow the reasonable inference to be drawn that, if the person was granted a visa or if their visa was not cancelled, they probably would present a risk to the Australian community or a segment of that community. If the inference cannot reasonably be drawn, then the person passes the character test (see the words at the end of sub-s (6)).

9    The Minister contended that the primary judge’s construction of s 501(6)(h) of the Act was wrong. He embraced the construction of s 501(6) in FUD18. In the Minister’s submission, the word “risk” itself “imports notions of possibility or chance” and that the words “would” and “might” as used in s 501(6) are “relevantly synonymous”. The result, according to the Minister, was that s 501(6)(h) required “much less than persuasion that the risk will eventuate”. The Minister submitted that s 501 of the Act is directed to the risk of harm to the Australian community and that an “assessment of the risk of harm involves consideration of the possibilities and permits a degree of (permissible) speculation on the part of the Minister”.

10    While I would not necessarily embrace everything that the primary judge said concerning the construction and operation of s 501(6)(h) of the Act, I am not persuaded that the primary judge erred as contended by the Minister.

11    Before addressing the proper construction of s 501(6)(h), I should perhaps note that the judgment of Thawley J in FUD18 was the subject of an appeal. That appeal was dismissed, though primarily on the basis that the relief sought by the appellant was refused on discretionary grounds. The Full Court’s judgment in that appeal was handed down on the same day as the judgment in this matter. My reasons in respect of the construction issue in this matter are essentially the same as my reasons in respect of the construction issue in the appeal FUD18. My reasons are included in both judgments for ease of reference.

12    Turning then to the construction issue, it now effectively goes without saying that, when it comes to construing a statutory provision, the starting point is the text of the relevant provision, though the text must be considered in its statutory context and having regard to the provision’s apparent purpose: Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41 at [47]; s 15AA of the Acts Interpretation Act 1901 (Cth). Taking that approach, the following points emerge.

13    First, with the possible exception of the reference to an “Interpol notice”, the text of s 501(6)(h) of the Act uses words and phrases which are ordinary English words and phrases which should be given their ordinary meaning.

14    Second, the word which has mainly given rise to the rival or conflicting constructions of s 501(6)(h) of the Act is the word “risk”. The difficulty is that, like many words, the word “risk” may have different meanings depending on the context in which it is used. To give but one example of a dictionary definition, the Shorter Oxford English Dictionary (5th ed, Oxford University Press, 2002) defines the meaning of “risk”, when used as a noun, as including: “[d]anger; (exposure to) the possibility of loss, injury, or other adverse circumstance”; “[a] chance or possibility of danger, commercial loss, or other risk”; and “[a] person considered a liability or danger; a person exposed to risk”. The current online version of the Oxford English Dictionary similarly includes the following two meanings of the noun “risk”: “([e]xposure to) the possibility of loss, injury, or other adverse or unwelcome circumstance” (first meaning); and “[a] person or thing regarded as likely to produce a good or bad outcome in a particular respect”, or “[a] person or thing regarded as a threat or source of danger” (second meaning).

15    It is apparent that, the primary judge considered that “risk” in s 501(6)(h) had the second meaning and meant “danger”, or that the relevant person was a “threat or source of danger” (at [48]), whereas it would appear that Thawley J in FUD18 considered that the word “risk” when used in s 501(6)(h) primarily had the first meaning and meant, in effect, exposure to the possibility of loss, injury or other adverse circumstance (at [44] and [61]). The distinction between these different meanings of “risk” is in some respects quite fine, but it is potentially important. The first meaning essentially directs attention to whether there is a possibility or probability of some event happening in the future; or, as Thawley J put it, “allows consideration of possibilities because it involves a consideration of what might or might not occur in the future”. The second meaning is directed to the character of a person; whether they are a threat or source of danger, or at least a person likely to produce a bad outcome.

16    Third, there are some textual and contextual considerations which would suggest that the word “risk” in s 501(6)(h) bears the second of the two meanings – the meaning essentially adopted or accepted by the primary judge – that the relevant person (the visa applicant) was a threat or source of danger to the Australian community.

17    One contextual consideration is that, if “risk” was to bear the meaning that appears to have been adopted by Thawley J in FUD18 – “(exposure to) the possibility of loss, injury or other adverse circumstance” – it might reasonably be expected that the nature of the possible loss, injury or adverse circumstance would be identified in the provision. As Thawley J acknowledged in FUD18 at [45], however, s 501(6)(h) does not identify any specific act that might occur in the future.

18    That may be contrasted with the use of the word “risk” in s 501(6)(d) of the Act. The test in s 501(6)(d) is that “in the event the person were allowed to enter or to remain in Australia, there is a risk that the person would” engage in certain types of conduct, including “engage in criminal conduct in Australia”, or “harass, molest, intimidate or stalk another person in Australia”, or “vilify a segment of the Australian community” et cetera. As can be seen, the word “risk” in the context of s 501(6)(d) clearly bears the first of the two meanings of “risk” referred to earlier; the possibility or probability of something occurring in the future. The risk is that the person would or might do one or more of the identified acts in s 501(6)(d) in the future.

19    Paragraph 501(6)(h) was inserted in the Act after s 501(6)(d) of the Act. If the word “risk” in s 501(6)(h) means, in effect, the possibility that the person might do something in the future which is harmful to the Australian community, it is difficult to see how it adds at all to what is already in s 501(6)(d) of the Act. The drafter, it seems, deliberately chose to frame s 501(6)(h) in quite different terms, presumably so that it had some separate operation or application to s 501(6)(d). The test in s 501(6)(h) is not that there is a risk that the person would engage in certain conduct, but that the person “would present a risk”. The words “would” and “risk” in the two subparagraphs are inverted: “a risk that the person would” in s 501(6)(d) and “would present a risk” in s 501(6)(h). That suggests that the word “risk” in s 501(6)(h) is used to denote “danger”, or to focus on an assessment of the character of the person; that the person is a threat or source of danger. Construing s 501(6)(h) in that way gives it some separate work to do.

20    These textual and contextual considerations suggest that the “test” in s 501(6)(h) is whether it is reasonable to infer from an Interpol Notice that, if the visa applicant is granted a visa and thereby permitted to enter or remain in Australia, he or she would present a risk, in the sense of a danger or threat, to the Australian community or a segment of it. That is, the test is directed to determining whether the visa applicant is a particular type of person (a danger or threat to the community), as opposed to determining whether there is a risk, in the sense of possibility or probability, that the visa applicant would or might engage in some unspecified harmful conduct if granted a visa.

21    Fourth, s 501(6)(h) must of course be considered in the context of s 501 as a whole, and in particular s 501(1). Subsection 501(1) of the Act gives the Minister a discretion to refuse to grant a visa to a person if the person does not satisfy the Minister that they pass the character test. In many cases, the enlivenment of that significant discretion may have serious implications for a visa applicant. One can readily see a proper basis for enlivening the discretion where it is reasonable to infer, relevantly from an extant Interpol notice in relation to a visa applicant, that the visa applicant would present a danger to the Australian community or a segment of it. It is, in contrast, more difficult to see a basis for enlivening the jurisdiction simply because it is reasonable to infer that there is a possibility that the person might engage in some unspecified conduct that might expose the Australian community, or a segment of it, to some unspecified loss, injury or adverse consequence.

22    As I have said, the distinction between the competing interpretations of s 501(6)(h) is in some respects a fine distinction. To say that a person would be a threat or danger to the Australian community in some respects involves an assessment of the probability that they may engage in some harmful conduct in the future. The difference, it seems to me, reduces to one of probabilities. Construing s 501(6)(h) as requiring a reasonable inference that the person would present a threat or danger to the Australian community would tend to require a higher degree of satisfaction that the person would be likely to engage in harmful conduct than if it were construed as simply requiring a reasonable inference that there is a risk, in the sense of possibility, that the person would engage in some unspecified conduct in the future.

23    As fine as the distinction may be, the upshot of my consideration of s 501(6)(h) of the Act is that, while I would not necessarily embrace all that the primary judge said concerning the construction and operation of that provision, I am not persuaded that his Honour’s construction of s 501(6)(h) of the Act was erroneous as contended by the Minister. It follows that grounds 1 and 2 of the Minister’s notice of appeal have no merit and must be rejected.

THE UNREASONABLNESS ISSUE

24    The Minister’s exercise of his discretion to refuse Mr Z’s visa application on the basis that he was not satisfied that Mr Z passed the test in s 501(6)(h) was subject to the implied condition that the Minister act reasonably: Judgment at [94], citing Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 at [53] (Gageler J). The primary judge concluded that the Minister’s finding that it was reasonable to infer from the Interpol red notice that Mr Z would present a risk to the Australian community or a segment of it was legally unreasonable. That was because there was no “evident and intelligible justification” for it, no “logical connection between the evidence and the inferences or conclusions drawn” and no “reasonable basis to draw the inference”: Judgment at [71] and [72]. The issue is whether the primary judge erred in so concluding.

25    In my view the primary judge did not err in arriving at those conclusions. I agree with Lee and Wheelahan JJ that, whatever construction of s 501(6)(h) is the correct construction, the Minister’s apparent finding that Mr Z did not meet the test in s 501(6)(h) was legally unreasonable. So too was his decision to refuse Mr Z’s visa application on the strength of that finding.

26    It is, with the greatest respect to the Minister, very difficult to comprehend or make any real sense of his reasons for finding that it was reasonable to infer from the Interpol red notice in relation to Mr Z that Mr Z would present a risk to the Australian community or a segment of that community. Before addressing those reasons, it is important to identify some features of the relevant Interpol red notice.

27    First, Lee and Wheelahan JJ have provided a useful distillation of some of the important features of the Interpol notice system. It is unnecessary to repeat what their Honours have said in that regard. In summary, Interpol notices are simply a means of communication and cooperation between police forces in member countries. The International Criminal Police Organisation, or Interpol, is an inter-governmental organisation which facilitates cooperation between police forces in member countries by enabling them to share and access data. One of the ways it does that is by issuing notices.

28    There are different types of colour-coded Interpol notices. The relevant Interpol notice in respect of Mr Z is an ‘Interpol red notice’. Interpol red notices may be issued where a police force in one country wants a person to be located and arrested for prosecution or to serve a sentence. The Interpol red notice in force against Mr Z relates to his arrest for prosecution, not for the purposes of serving a sentence. While an Interpol red notice will not be published unless it complies with Interpol’s constitution, Interpol performs only a very limited role in reviewing the information provided by a police force when seeking a red notice on the basis of a warrant for the arrest of a person for prosecution. It does not interrogate the accuracy, reliability or credibility of the allegations that form the basis of the arrest warrant. There is, therefore, no reasonable basis upon which it could be inferred or concluded that allegations made by a police force which are the subject of an Interpol red notice are somehow rendered more credible or reliable by reason of issue of their inclusion in the notice. They remain mere allegations.

29    Second, the Interpol red notice in question in this matter was issued on the basis of an arrest warrant issued by the Jintan Public Security Bureau, Jiang Su Province in the People’s Republic of China on 22 November 2012. The notice itself was published on 12 March 2013. There is, however, no evidence or indication that any steps have been taken by the relevant authority in China to request the Australian Federal Police to arrest Mr Z for the purpose of extradition. That is despite the fact that the notice itself indicates that the Chinese authorities well knew that Mr Z was in Australia and despite the fact that the notice contains an assurance that “extradition will be sought upon arrest” of Mr Z.

30    It should perhaps be noted, in this context, that there is no ratified extradition treaty between Australia and China. Nevertheless, the obvious inaction on the part of the Chinese authorities in seeking to have Mr Z arrested and extradited is capable of casting some doubt on the veracity of the allegations and their ability to support any possible extradition request.

31    Third, the summary of the “facts of the case” and the “[a]dditional facts of the case” in the Interpol red notice are somewhat difficult to understand. The summary of facts alleges (using acronyms instead of the company names referred to in the notice) that Mr Z, as the “legal representative” of a company, JJGC, diverted a sum of money (60 million yuan) to his private account and spent the money “in his personal capacity and [on] debt repaying”. That allegation is perhaps comprehensible.

32    The confusion arises from the “[a]dditional facts”, which in some respects do not appear to engage with, or relate at all to, that allegation. The additional facts allege that Mr Z registered three companies, ZTC, CTC and DTC and then “colluded with” three other individuals who were the legal representatives and shareholders of those companies. The collusion is alleged to have involved Mr Z and those three individuals using ZTC, CTC and DTC to borrow a sum of money (15 million yuan) from a financial institution, JHMC, with JJGC as the “secured party”. The allegation appears to be that Mr Z and the other three individuals used those loan monies for “personal consumption and debt repaying”.

33    The charge which is said to form the basis of the arrest warrant is said to be a charge of “[d]efrauding the banks or other monetary institutions of loans” contrary to Article 193 of the “criminal law of [the] People’s Republic of China”. On one view of the alleged facts, however, if there was a fraud perpetrated by Mr Z, it was a fraud on the companies of which Mr Z and the other individuals were the legal representatives, rather than the financial institutions that made the loans. It is difficult to see how the mere fact that the three companies which borrowed money from the banks were subsequently unable to repay those loans necessarily constituted a fraud, let alone a fraud by Mr Z. It would also seem that JJGC, the company in respect of which Mr Z was the legal representative and which featured prominently in the summary of the “facts of the case”, was not one of the borrowers. It was only a “secured party” in respect of the loans.

34    Third, and in any event, it is clear that the facts recited in the Interpol red notice are no more than bare allegations made by the Jintan Public Security Bureau. There is nothing in the notice itself to indicate that the allegations are credible or reliable and capable of being proved or substantiated. As noted earlier, the fact that Interpol issued a red notice on the strength of the arrest warrant issued by the Jintan Public Security Bureau does not imbue the allegations in the arrest warrant with any additional authority or cogency.

35    Fourth, regard must plainly be had to the fact that the arrest warrant and allegations that formed the basis of the red notice emanated from authorities in China. In assessing whether it is reasonable to draw an inference or inferences from an Interpol notice, it must plainly be relevant to consider the source of the information in the notice. All other things being equal, it is difficult to see why information or allegations which emanated from a police force in a liberal democracy with an independent criminal justice and judicial system would not be worthy of significantly more weight than information or allegations which emanated from a police force or security agency in an undemocratic authoritarian regime in which there is no independent criminal justice system.

36    There was information which was before the Minister’s department which was capable of casting doubt on the credibility and reliability of the information or allegations in the Interpol red notice and, perhaps more significantly, doubt on the likelihood that the allegations against Mr Z had been fairly and impartially investigated and even more doubt on the likelihood that the charge would be tested in an impartial and independent court or tribunal. The information which the primary judge considered to be at least constructively before the Minister suggested, in summary, that torture and forced confessions are common features of the criminal justice system in China, that the criminal justice system is biased towards guilt and that virtually everyone who is charged in China is convicted: Judgment at [57], [75] and [98].

37    The Minister’s findings and reasons must be considered in the context of these important features of the Interpol red notice in question and the surrounding circumstances. The fundamental problem with the Minister’s findings and reasons is that, despite acknowledging (at paragraph 21 of the statement of reasons) that the allegations in the notice “have not been proven” it is readily apparent that the Minister proceeded on the basis that the allegations not only had substance, but that Mr Z had in fact offended as alleged. There was, however, no probative material and no logical or rational foundation for any such finding.

38    The clearest indications in the Minister’s reasons that the Minister proceeded on the basis that Mr Z had offended as alleged are at paragraph 39 (where that paragraph number first appears) and the third paragraph under the subheading “conclusion” (erroneously numbered paragraph 36). In those paragraphs, the Minister referred to the “seriousness of [Mr Z’s] criminal offending” and the harm to which the Australian community would be exposed should Mr Z “reoffend in a similar fashion”. There are other references in the reasons to the risk or possibility of Mr Z “reoffending”. At paragraph 20, for example, the Minister reasoned that a “perpetrator of this type of sophisticated fraud has the capacity and may continue to have the motivation to repeat the conduct such that it cannot be said there is no risk of reoffending”. That reasoning only applied to Mr Z’s circumstances if he had already offended and was, in fact, a “perpetrator” of the alleged fraud. The risk of reoffending is referred to again in paragraphs 21 and 32 the Minister’s reasons where the Minister refers to the “likelihood” of Mr Z “repeating such conduct” and “offending in Australia”.

39    In paragraph 21 of his reasons, the Minister appears to advance two reasons for finding that the allegations against Mr Z either have substance or should be accepted. The first is that Mr Z is said to have “conceded he did take the money as a loan of which he did not repay as promised”. The second is that Mr Z would be “subjected to a life sentence if the charges are proven”. Neither of those matters are capable of supporting a finding that the allegations have substance or should be accepted.

40    As for the first, Mr Z did not concede that he borrowed money from the companies referred to in the Interpol red notice. Rather, he denied committing any offence and provided the Minister with some information and documentation concerning some of his past financial dealings in China. That information and documentation referred to loans. As the primary judge correctly found, however, those loans were not the same as the loans referred to in the allegations in the notice: Judgment at [65], [69] and [71].

41    As for the second, it is difficult to see how the fact that the offence in respect of which Mr Z had been charged carried a potential penalty of life imprisonment could logically or rationally suggest that the underlying allegations had some substance. Was the Minister suggesting that the allegations must be true because the authorities in China would not charge Mr Z with such a serious offence if they were not true? If so, that proposition is self-evidently absurd, particularly given the country information concerning the criminal justice system in China: see Judgment [56]-[58].

42    There is a further reason for finding that the Minister’s decision was legally unreasonable. A material element of the Minister’s reasons (in paragraph 34) for exercising his discretion against Mr Z was that the “Australian community would expect that a person facing serious charges should resolve those matters before their visa application is approved”. In making that finding, the Minister appears to have completely ignored the basis upon which his department had found that Australia owed Mr Z protection obligations. In short, it had been accepted, on the basis of credible information concerning the criminal justice system in China, that there was a real risk, or substantial grounds for believing, that if Mr Z was required to return to China, he would be imprisoned, interrogated and tortured on account of the allegations which formed the basis of the Interpol red notice. Needless to say, he could not expect a fair trial. In those circumstances, it is preposterous to suggest that the Australian community would expect Mr Z to return China to “resolve those matters” before his visa application was approved.

43    I note that while the primary judge found that this aspect of the Minister’s decision “fails the test of legal reasonableness” because it “lacks any intelligible justification” (Judgment at [104]), his Honour found that this error was not material (Judgment at [105]). I respectfully do not agree. I am unable to see how it could be concluded that there could not realistically have been a different decision if this error had not been made. In any event, even if this particular error considered alone may not have been material, it was and is plainly material when considered along with the other manifest defects and deficiencies with the Minister’s decision.

44    I should finally add that I agree with Lee and Wheelahan JJ’s observations concerning the unsatisfactory nature of the Minister’s reasons generally. The Minister’s reasons are, in parts, little more than gibberish.

45    In all the circumstances, I am not persuaded that the primary judge erred in finding that the Minister’s decision was legally unreasonable. It follows that grounds 3 and 4 of the Minister’s notice of appeal have no merit and are rejected.

CONCLUSION AND DISPOSITION

46    None of the Minister’s grounds of appeal have been made out. It is, in those circumstances, unnecessary to consider Mr Z’s notice of contention.

47    The appeal should be dismissed with costs.

Associate:

Dated:    30 July 2021

REASONS FOR JUDGMENT

LEE AND WHEELAHAN JJ:

A    INTRODUCTION AND BACKGROUND

48    This is an appeal from orders made by a judge of this Court quashing a decision made by the appellant, the Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (Minister), under s 501(1) of the Migration Act 1958 (Cth) (Act) to refuse to grant the respondent a Protection (Class XA) visa (protection visa): ERY19 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 569; (2020) 170 ALD 83 (primary judgment or J).

49    The primary judge upheld the respondent’s challenge to the Minister’s decision on the basis that the Minister misconstrued s 501(6)(h) of the Act, misapplied that provision to the facts of this case and, as a consequence, exercised his power under s 501(1) in a legally unreasonable manner.

50    The facts underlying the dispute are detailed comprehensively by the primary judge (at J [2]–[13]) and can be summarised as follows:

(1)    The respondent is a citizen of the People’s Republic of China (PRC) who arrived in Australia in October 2012 as a holder of a tourist visa. Shortly before that visa expired, the respondent made an application for a protection visa, claiming to fear persecution on account of his religious beliefs.

(2)    On 12 March 2013, Interpol issued a red notice (IRN) at the request of the PRC authorities. The IRN stated that the respondent had been charged with “[d]efrauding the banks or other monetary institutions of loans” contrary to Article 193 of the Criminal Law of the PRC and that an arrest warrant had been issued in respect of the respondent by the Jintan Public Security Bureau in November 2012. The IRN also included the following information:

Summary of facts of the case[:]

Since July 2012, through the method of Net Transferring, [the respondent], legal representative of [Company A], diverted 60 million yuan of the company’s account to his private account, and spent the money in his personal consumption and debt repaying afterwards.

Additional facts of the case:

Ever since March 2012, [the respondent] established [Company B], [Company C], and [Company D] in [place] by registering and contributing actually in the name of others. He colluded with [X], [Y] and [Z], legal representatives as well as shareholders of three companies. They used the three companies as the borrower, [Company A] as the secured party, and fabricated the use of loan to gain other’s trust, so that they got a loan of 15 million yuan from [Company E], contributing to the unrecovery of the loan due to their use for personal consumption and debt repaying.

(Names of persons and companies anonymised).

(3)    Earlier, on 6 March 2013, the Minister’s department (Department) wrote to the respondent inviting him to comment on unfavourable information it had received, namely that the Australian government had been notified by the PRC authorities that the respondent was wanted by the Public Security Bureau on suspicion of committing a serious economic crime (embezzlement of company funds in an amount roughly equivalent to AUD$6 million), that a criminal investigation had been initiated in his case and his PRC passport had been cancelled.

(4)    In a fax sent on 15 March 2013, responding to the Department’s letter, the respondent denied the embezzlement. He claimed that he was unable to pay a commission to a local government mayor for arranging a loan because a bank had reneged on a promise to give him a business loan, that the mayor now wanted revenge and that this was the source of the criminal charges.

(5)    It appears that in June 2013, the respondent sent the Department copies of court documents pertaining to a civil dispute between him and his wife and a named entity (including what appears to be a judgment given against the respondent and his wife on 18 February 2013) and a further civil dispute between his wife and another named entity.

(6)    In May 2018, the respondent was given notice of the intention of the Minister to consider refusing to grant him a protection visa and the respondent was provided with an opportunity to comment. The notice stated that the Department held information about the respondent’s “criminal history” which suggested that he may not pass the character test by virtue of s 501(6)(d)(i) of the Act. Enclosed with the invitation were documents including the letter from the Department dated 6 March 2013, the respondent’s response to that letter dated 15 March 2013 and copies of Chinese civil litigation documents, which the respondent had given to the Department in June 2013.

(7)    In August 2018, the respondent’s solicitor responded to the Department’s notice. It is not clear whether, by the time this letter was written, the respondent had been given a copy of the IRN, although the evidence suggests that he was aware of it. Referring to the IRN, the respondent argued that he was being prosecuted in the PRC for, in effect, a failed business venture, that he maintained his innocence and that non-refoulement obligations were owed to him.

(8)    In January 2019, an officer of the Department recommended that Australia owes protection obligations to the respondent under s 36(2)(aa) of the Act (Report). The officer found that there is a real risk that the respondent will suffer significant harm as a necessary and foreseeable consequence of being removed to the PRC. This was not on the basis of fear of religious persecution, which claim was rejected, but rather on the basis that because of the allegations in the IRN, there was a likelihood of torture by the police until he confessed and almost certain conviction followed by life imprisonment in appalling conditions. The officer did not make any assessment in relation to the character test in s 501 and stated that such an assessment should be conducted to consider whether the respondent ought to be granted a protection visa.

(9)    In May 2019, the Department issued a letter to the respondent, enclosing a copy of the IRN and identifying s 501(6)(h) as the revised ground on which the Minister suspected he might not pass the character test.

(10)    Also in May 2019, the respondent responded to the letter, stating that the allegations in the IRN were “based on trumped up charges”. The respondent stated that his venture had failed and referred to an unpaid loan, adding again that the failure to repay loan monies was “not a crime”. He maintained his innocence, expressed regret in his past conduct and stressed that his “past mistakes [are] not likely to be repeated”. He further said that the charges were “aided and abetted by officials who expect [him] to continue paying bribes” upon his return to the PRC.

B    THE DECISION OF THE MINISTER

51    In October 2019, the Minister personally made a decision to refuse the grant of a protection visa to the respondent under s 501(1) of the Act. The Minister found (at [8]–[9]) that it was “a matter of objective fact” that an Interpol notice was in force in relation to the respondent and, in considering whether it was reasonable to infer from the IRN that the respondent posed a risk to the Australian community, had regard to “the seriousness of the alleged conduct” and “representations made on behalf of [the respondent] regarding the nature and validity of the IRN”. Of importance, the Minister went on to note the following (at [19]–[22]):

19.    Having considered all available information, I find that the arguments by [the respondent] and his representative do not invalidate the Interpol notice. I accept that not every Interpol notice supports a reasonable suspicion of risk, however I do not consider that this IRN falls into that category.

20.    I note the large amounts of money involved in the allegations against [the respondent] and the seriousness of the alleged criminal conduct. In my view, fraud involving substantial quantities of funds is indicative of a level of sophistication in the criminal conduct. A perpetrator of this type of sophisticated fraud has the capacity and may continue to have the motivation to repeat the conduct such that it cannot be said there is no risk of reoffending.

21.    I acknowledge that the allegations have not been proven, but note that [the respondent] has conceded he did take the money as a loan of which he did not repay as promised and as provided above in the civil litigation both he and his wife have been requested to repay the loan. I also note his representative’s comments that in Chinese law he would be subjected to a life sentence if the charges are proven. It is therefore not without some substance that [the respondent] would be under suspicion of these charges.

22.    On balance I am of the view that there is a serious and substantial issue to be addressed and, taken together with the possibility of reoffending, I infer that that [sic] [the respondent] poses a risk to a segment of the Australian community. Therefore I find that [the respondent] has not satisfied me that she [sic] passes the character test and she [sic] does not pass the character test by virtue of s 501(6)(h) of the [Act].

52    Overall, as the primary judge observed (at J [50]), it appears that the Minister’s conclusion that it is reasonable to infer that the respondent would present a risk to the Australian community was based on the following factors: (1) large amounts of money being involved in the allegations against the respondent and the seriousness of the alleged criminal conduct; (2) a perpetrator of the type alleged has the capacity and may continue to have the motivation to repeat that conduct such that it cannot be said there is no risk of reoffending; and (3) the respondent apparently conceding that “he did take the money as a loan” which he did not repay and the fact that if found guilty, the respondent would be subject to a life sentence in the PRC (presumably indicating the seriousness of the crime), factors which founded the conclusion that “it is therefore not without some substance that [the respondent] would be under suspicion of these charges”.

53    The Minister then had regard to a number of discretionary considerations in determining whether to refuse the respondent’s application for a protection visa. The Minister acknowledged (at [32]) that the respondent had not been convicted of the alleged offence and denied having committed it, but recognised “the possibility that he is guilty of large-scale fraudulent activities”. Given this possibility, the Minister could not “rule out entirely the likelihood of [the respondent] having access to misappropriated funds or of repeating such conduct in Australia”. Accordingly, the Minister found “that there is a likelihood of [the respondent] offending in Australia” and gave “weight to the fact that if he did so, it could result in major financial losses to the members of the Australian community”. The Minister also observed (at [34]) that “[w]hile it has not yet been conclusively established that [the respondent] has actually committed a crime, I consider that the Australian community would expect that a person facing serious charges should resolve those matters before their visa application is approved.”

54    Finally, after accepting that his Department had found the respondent to be a person to whom Australia owes non-refoulement obligations, the Minister referred to the legal consequences of a refusal to grant the respondent a protection visa (at [37]–[38]):

37.    I am aware that the statutory consequence of a decision to refuse to grant [the respondent] a Protection visa is that, as an unlawful non-citizen, [he] would become liable to removal from Australia under s 198 of the Act as soon as reasonably practicable, and in the meantime, detention under s 189. I am also aware that s 197C of the Act provides that for the purposes of s 198, it is irrelevant whether Australia has non-refoulement obligations in respect of an unlawful non-citizen.

38.    I am mindful that even if I refuse to grant [the respondent] a Protection visa, I have a personal non-compellable power in s 195A of the Act to grant a visa to him if I think it is in the public interest to do so. I am also mindful that if I do not consider exercising that power, or do not exercise it in [the respondent]’s favour, he will be liable to removal as soon as reasonably practicable in accordance with s 198 of the Act, including to China, having regard to s 197C.

39.    I have had regard to the existence of non-refoulement obligations in this case and have carefully weighed this factor against the seriousness of [the respondent]’s criminal offending in the making of my decision whether to refuse to grant him a Protection visa.

55    The Minister found that the seriousness of the respondent’s conduct and the “possibility of further offending” outweighed all countervailing considerations and it was concluded that the respondent poses “an unacceptable risk of harm” to the Australian community: see [36] and [41]. The Minister therefore exercised his discretion to refuse the respondent’s protection visa application under s 501(1): [42].

C    THE PROCEEDING BEFORE THE PRIMARY JUDGE

56    As they pertain to the issues on appeal, the primary judge’s reasons dealt with four issues: (1) the proper construction of s 501(6)(h); (2) whether it was reasonable for the Minister to infer from the IRN that the respondent would present a risk to the Australian community or a segment of it; (3) whether the Minister was required to consider the reasons given by an officer of his Department in the Report; and (4) whether the reasoning in BAL19 v Minister for Home Affairs [2019] FCA 2189; (2019) 168 ALD 276 was applicable.

57    It will be necessary to engage at some length with the reasoning of the primary judge below, but at present it sufficies to note that in respect of these issues, his Honour found that: (1) the terms of s 501(6)(h) require that it must be reasonable to infer from the notice that the person would present, not might present, a risk to the Australian community or a segment of it; (2) in the circumstances, the Minister could not reasonably have inferred from the IRN that the respondent would present a risk to the Australian community or a segment of it; (3) the findings in the Report were not required to be considered given that they were not a relevant mandatory consideration and did not form part of the claims made by the respondent in his application; and (4) it was unnecessary to determine whether BAL19 applied in light of the other findings.

D    THE APPEAL

58    Four grounds of appeal were advanced before this Court and can essentially be summarised by reference to the following two propositions:

(1)    the primary judge erred in holding that the Minister misconstrued and misapplied the statutory test for the drawing of a reasonable inference under s 501(6)(h) of the Act and his Honour himself misconstrued and misapplied that provision (Construction Ground); and

(2)    the primary judge erred in holding that the Minister’s decision was legally unreasonable (Unreasonableness Ground).

59    Further, two points were raised by the respondent by way of a notice of contention, namely that the primary judge erred in:

(1)    failing to find that the Minister was required to consider the reasons given by an officer of his Department in the Report recommending that the respondent is a person to whom Australia owes protection obligations (Failure to Consider Contention); and

(2)    failing to find the Minister could not have reasonably reached a conclusion that he may decide to grant the respondent a visa pursuant to s 195A of the Act in view of the reasons that he gave for refusing the respondent’s application for a protection visa (BAL19 Contention).

60    We will deal with each of the grounds of appeal and points of contention in turn.

D.1    The Construction Ground

61    Regrettably, the Construction Ground arises in circumstances where the primary judge’s attention was not drawn to Thawley J’s decision in FUD18 v Minister for Home Affairs [2020] FCA 48; (2020) 168 ALD 474, delivered one month earlier, which also considered the proper construction of s 501(6)(h). This is significant for two reasons: first, the primary judge, unsurprisingly, proceeded on the basis that (at J [28]) “[t]o date, there is no authority in this Court or the High Court that has considered the proper construction of s 501(6)(h)”; and secondly, the conclusions reached by the two judges are inconsistent. This less than satisfactory state of affairs was said to be attributed partly to different legal teams on the matters and attempts by the Minister to prevent publication of the judgment in FUD18 (which ended up being entirely unsuccessful).

62    Ultimately, we have reached the conclusion that the Minster’s reasons are infected by jurisdictional error no matter which construction is adopted, meaning it is strictly unnecessary to express a concluded view on the Construction Ground. However, given the length of time dedicated to the Construction Ground in both written and oral submissions, it is necessary to address it in some depth.

Preliminary Observations

The statutory power

63    Before turning to the proper construction of s 501(6)(h), it is necessary to recall the statutory context in which this provision operates and the nature of the decision-making process.

64    Section 501(1)–(2) and (6)(h) are in the following terms:

501    Refusal or cancellation of visa on character grounds

Decision of Minister or delegate — natural justice applies

(1)    The Minister may refuse to grant a visa to a person if the person does not satisfy the Minister that the person passes the character test.

Note:     Character test is defined by subsection (6).

(2)    The Minister may cancel a visa that has been granted to a person if:

(a)     the Minister reasonably suspects that the person does not pass the character test; and

(b)     the person does not satisfy the Minister that the person passes the character test.

…

Character Test

(6)    For the purposes of this section, a person does not pass the character test if:

…

(h)    an Interpol notice in relation to the person, from which it is reasonable to infer that the person would present a risk to the Australian community or a segment of that community, is in force.

65    The power conferred by s 501(2) was recently considered by the High Court in Minister for Immigration and Border Protection v Makasa [2021] HCA 1; (2021) 386 ALR 200 (at 207–8 [34]–[40] per Kiefel CJ, Gageler, Keane, Gordon and Edelman JJ). While s 501(2) differs in some respects from s 501(1) (the relevant power pursuant to which the Minister purported to refuse the respondent’s visa), the underlying approach taken by the High Court to interpreting s 501(2) is informative; that is, the approach is two-staged and binary at both stages.

66    The first stage of the decision-making process is completed by the decision-maker making a binary decision either to be satisfied by the visa applicant that he or she passes the character test or not to be so satisfied. A person does not pass the character test by reason of the occurrence of one or more of the circumstances set out in s 501(6). If none of the circumstances in s 501(6) is enlivened, then the person passes the character test.

67    The second stage of the decision-making process is reached only if the outcome of the first stage is that the decision-maker finds that the person does not pass the character test. The second stage then involves the decision-maker, reasonably, exercising a discretion the outcome of which is the making by the decision-maker of a further binary decision either to refuse the visa in the exercise of discretion or not to refuse the visa in the exercise of discretion.

68    It is the first stage of the above analysis, in particular the construction of one part of s 501(6), with which this Court is primarily concerned, and which was the subject of competing interpretations in FUD18 and the primary judgment.

Interpol notices

69    Before turning to the reasoning of the primary judge and Thawley J in FUD18, it is also well to make some contextual remarks about Interpol notices and how they operate.

70    The Interpol notice system was considered by the primary judge (at J [37]–[42]), by Thawley J in FUD18 (at [55]), and in an earlier interlocutory dispute of the same proceeding in FUD18 v Minister for Home Affairs [2019] FCA 1858 (at [41]–[50]). It is unnecessary to repeat the entirety of what was canvassed in those decisions, but it is important to highlight the following salient aspects of the Interpol notice system (which were not in dispute on the appeal):

(1)    Interpol notices are international requests for cooperation or alerts allowing police in member countries to share critical law-enforcement information. The foundational rules governing that system are the Interpol Constitution, Interpol Rules, and the Statute of the Commission for the Control of Interpol’s Files (Commission Statute).

(2)    IRN’s are but one of numerous categories of Interpol notices (Interpol Rules, arts 73 and 82). Other categories include Green and Orange Notices, which may warn of threats posed by individuals based upon previous criminal convictions or other grounds (Interpol Rules, arts 89 and 93); and Yellow and Black Notices, which are published to locate a missing person, identify a person unable to identify himself/herself, and to locate dead bodies (Interpol Rules, arts 90 and 91).

(3)    In the case of IRNs, the persons concerned are wanted by national jurisdictions for prosecution or to serve a sentence based on an arrest warrant or court decision. IRNs are used to assist national police forces in identifying and locating these persons with a view to their arrest and extradition or similar lawful action.

(4)    The Interpol Rules (arts 83, 84 and 86) require that for an IRN to be issued, certain minimum data must be provided, including “minimum judicial data”, that certain assurances must be given by a National Central Bureau (NCB) (a body appointed by the country to liaise with the country’s various departments, other NCB’s and Interpol (Interpol Constitution, art 32)) and that the General Secretariat shall conduct a legal review of all IRNs prior to their publication to ensure compliance with Interpol’s Constitution and Interpol Rules. The minimum judicial data provided by an NCB to ground the lawful issue of an IRN need only consist of a “summary of the facts of the case”, a description of the charges, relevant laws covering the offence and maximum penalty, and “reference to a valid arrest warrant or judicial decision having the same effect” (Interpol Rules, art 83(2)(b)). As the primary judge pointed out (at J [41]), this means that there is nothing to say that because an allegation is recorded in an Interpol notice it is any more reliable, or any more likely to be the truth, than an allegation made by the national police service that generated the notice.

(5)    Interpol plays a limited role in reviewing requests for notices and notices once published. While it checks the compliance of notice requests with the Interpol Rules (arts 74(2)(a) and 77), it is not responsible for interrogating the credibility or accuracy of the statements submitted by an NCB in support of its request, nor for seeking or reviewing any underlying evidence that purportedly supports those statements. The Commission’s power in reviewing an application to correct or delete an Interpol notice is “limited to examining the compliance of the processing of data with Interpol’s rules”: Commission Statute, art 33(3).

(6)    While some Interpol member countries consider an IRN to be a valid request for provisional arrest for possible extradition, in Australia persons cannot be arrested on the basis of an IRN alone. Rather, the requesting country must seek the person’s extradition in relation to the offence and an extradition arrest warrant needs to be issued by an Australian magistrate.

Examining the differing constructions

71    In examining the question of construction, this section draws on the submissions advanced both on the appeal in this proceeding and on the appeal in FUD18, which was heard relatively contemporaneously by the same bench, and in which judgment is being delivered contemporaneously: see FUD18 v Minister for Home Affairs [2021] FCAFC 132.

72    The primary judge observed the following in relation to the construction of s 501(6)(h) (at [42]–[49]):

42.    In enacting s 501(6)(h), Parliament must be taken to have known that there are different types of Interpol notices and that they might convey different information that may or may not be relevant to, or that may have different degrees of cogency in, an assessment of whether the person who is the subject of the notice would present a risk to the Australian community or a segment of that community.

43.    It follows that the mere fact of an Interpol notice being in force cannot be sufficient, on its own, to lead to the inference reasonably being drawn. There must be something in the notice from which the relevant inference can reasonably be drawn. In the case of a conviction in another country of a serious crime, that on its own may be sufficient. But in the case of charges or an indictment against someone, that may not be sufficient. Each case will turn on its own facts and circumstances.

44.    The Minister submits that an Interpol notice is not just any document containing unsupported allegations – it is official documentation requesting the location and arrest of someone for the purposes of prosecution. Whilst that is true, the fact of the allegations being officially made says nothing on its own about whether the allegations are credible. Aside from any other considerations, their credibility may depend on who makes them or the circumstances in which they are made. For example, someone facing political persecution in a foreign country might well be the subject of trumped up allegations of criminal conduct in an IRN as an element of that persecution.

45.    As to how credible the allegations must be before the relevant inference can reasonably be drawn, account must also be taken of the meaning of the word “would” in paragraph (h). “Would” is used here as a modal auxiliary verb to the verb “present”. “Might” could have been used. That the choice of “would” rather than “might” has some significance is suggested by the use of “might” in many sections of the Migration Act where “would” could otherwise have been used, eg ss 24, 116(1)(e), 129(1)(e), 134B(b), 140XG(1), 268BK(1), 268CL(2), 370(2), 371(3), 432(2), 433(3), 487C(1) and 503(3).

46.    Particularly significant is s 116(1)(e) which includes this wording: “the Minister may cancel a visa if he or she is satisfied that … the presence of its holder in Australia is or may be, or would or might be, a risk to … the health, safety or good order of the Australian community or a segment of the Australian community.” As with s 501(6)(h) read with s 501(1), this employs the language of the Minister being satisfied and the notion of risk to the Australian community. However, rather than requiring that the risk “would” be present, it covers the bases of “may be, or would or might be”.

47.    Similarly, s 134B(b) provides that the Minister must cancel a visa held by a person if an assessment by ASIO contains advice that ASIO suspects that the person “might be” a risk to security.

48.    These contrasts drive one to the conclusion that “would” in s 501(6)(h) has the effect of requiring a higher probability than if “might” had been used. That is to say, from the Interpol notice it must be reasonable to infer that the person would present, not might present, a risk to the Australian community or a segment of that community. The use of “would” conveys that it is expected that the risk will materialise. That should be taken to mean more probable than not. Here, “risk” is used as a noun meaning “a thing regarded as a threat or source of danger”: OED Online (Oxford University Press, March 2020). It is not an expression of possibility, as in “to present a risk of danger”.

49.    The result is that the information derived from the Interpol notice that is relied on by the Minister to conclude that a person does not pass the character test as expressed in s 501(6)(h) must be such as to allow the reasonable inference to be drawn that, if the person was granted a visa or if their visa was not cancelled, they probably would present a risk to the Australian community or a segment of that community. If the inference cannot reasonably be drawn, then the person passes the character test (see the words at the end of subs (6)).

73    In FUD18 (at [43]–[48]), Thawley J also analysed at length the proper construction of s 501(6)(h). Relevantly, he commenced by making four observations about the provision:

43.     … First, the issue in s 501(6)(h) arises in the overall statutory context of s 501, namely of determining whether a particular visa should be refused or cancelled. Read with s 501(1) and (6)(h) directs attention to whether it is reasonable to infer from an Interpol notice that, if the visa were not refused, the person would present a risk.

44.    Secondly, the question whether a person would present a risk necessarily allows consideration of possibilities because it involves a consideration of what might or might not occur in the future.

45.    Thirdly, the provision is not framed in terms of an inquiry into the probabilities of a person doing some specific act, for example, something harmful or otherwise contrary to the interests of the Australian community; the question is whether the person “would present a risk” to the Australian community. All other things being equal, it is more difficult to reach a conclusion that a particular risk will eventuate than that a risk is present.

46.    Fourthly, the provision does not identify any specific area or topic of risk. This may be contrasted with other provisions. For example, s 501(6)(d) refers to a risk that the person would, amongst other things, engage in criminal conduct or harass a person or vilify a segment of the Australian community or incite discord or represent a danger through disruptive activities or threatening harm …

47.    Another example is furnished by s 501(6)(g) which refers to a “risk to security” …

48.    Whilst the word “risk” in s 501(6)(h) takes its meaning from the whole of the statutory context, the area of risk the subject of s 501(6)(h) is unconfined by the express words of the provision.

74    His Honour further observed (at [52]) that the question posed by s 501(6)(h) is not whether the Court would draw the inference from the IRN that the person would present a risk to the Australian community or a segment of it, but rather “the question is whether the applicant has discharged his onus of establishing that it is not legally open for the Minister to draw such an inference”. His Honour went on to highlight (at [53]) that:

… the Minister’s decision-making is occurring in an administrative rather than judicial context. The Minister is not bound by rules of evidence such as those which operate in court proceedings to restrict the admissibility of evidence or the manner in which evidence or material might be used. It might be reasonably open in an administrative context to make findings and draw inferences from a document such as the IRN where those findings and inferences might not be available or might not have been made in a judicial context.

75    Further, after determining that the regulatory framework as it relevantly applied to the IRN (including the Interpol Rules) could be considered by a decision-maker in deciding whether an inference should be drawn from the notice, his Honour found (at [59]–[62]) that:

59.    Inferences can properly be drawn from the fact that a law enforcement agency in Vietnam had issued an arrest warrant relating to a crime which carried a potential term of imprisonment of 20 years, including as to the likelihood of the existence of material sufficient to permit the issue of an arrest warrant. It would be open to draw an inference that Interpol issued the IRN being satisfied that its rules and conditions for the issue of a red notice had been met. A decision-maker might take that into account in considering what inferences to draw and what weight to give those inferences. Inferences could be drawn as to the possibility or likelihood of the alleged offence in fact having occurred.

60.    Inferences could be drawn about the character of a person who engaged in conduct alleged in the IRN and addendum. Inferences might be made about whether such a person might engage in that conduct again or other conduct or might engage in some form of conduct in Australia considered to present a risk.

61.    A conclusion about risk can be drawn from what is accepted as having occurred, or possibly having occurred, in the past. Contrary to the applicant’s submission, the fact that the relevant asserted past events have been specifically identified and occurred in Vietnam in particular circumstances does not necessarily confine the availability of inferences to whether the same or substantially similar events would occur or make it necessarily unreasonable to reach a conclusion that the person presents a risk to Australia. 

62.    What inferences should be drawn is a matter for the Minister. It is not possible to say that no administrative decision-maker acting reasonably could infer from the IRN and addendum that the person would present a risk to the Australian community or a segment of that community.

76    In determining which construction of s 501(6)(h) is to be preferred, it is necessary to consider the text, context and purpose of the provision.

The text, context and purpose of s 501(6)(h)

77    The text is the natural starting and ending place in any construction inquiry: Commissioner of Taxation of the Commonwealth of Australia v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 (at 519 [39] per French CJ, Hayne, Crennan, Bell and Gageler JJ).

78    Immediately, one must appreciate that the term “would” in s 501(6)(h) is used in a prospective sense. It is enough to satisfy the subsection for it to be reasonable to infer from the Interpol notice that the person “would” present, if granted a visa, or if his or her visa is not cancelled, a “risk” to the Australian community or a segment of it. The prospective use of the word “would” in the phrase “would present a risk” leaves the word “risk” to require no more than a possibility of harm. Alternatively stated, the words “would present” only acknowledge that the risk (to the Australian community or a segment of it) is contingent upon the non-citizen being in Australia, and that the risk is the likelihood of a future event occurring.

79    Indeed, it is not significant that the word “risk” is used without an object in s 501(6)(h); it simply means that “risk” constitutes the adverse outcome to which the provision is directed. As Thawley J observed in FUD18 (at [48]), “the word “risk” in s 501(6)(h) takes its meaning from the whole of the statutory context [and] … is unconfined by the express words of the provision”: cf, for example, s 501(6)(d). What is important to note, however, is that as well as being unconfined by an express object, the term “risk” takes its natural and ordinary meaning (as a noun), which according to the current online version of the Oxford English Dictionary, is “([e]xposure to) the possibility of loss, injury, or other adverse or unwelcome circumstance” (emphasis added). Nothing in the text of s 501(6)(h) requires the Minister to be satisfied that the risk will materialise or that a person the subject of an Interpol notice presenting a risk to the Australian community is more probable than not: cf J [48]–[49].

80    In relation to context, the primary judge considered a number of provisions in the Act where the term “might” appears where it was said “would” could otherwise have been used: see J [45]. It was said that this has significance in demonstrating the legislature intended for a higher threshold to be met in s 501(6)(h) by the use of the term “would”. In particular, the primary judge relied on the terms of s 116(1)(e), which provides that “the Minister may cancel a visa if he or she is satisfied that … the presence of its holder in Australia is or may be, or would or might be, a risk to … the health, safety or good order of the Australian community or a segment of the Australian community” (emphasis added). On appeal, it was said that it is significant that s 116(1)(e) (in its current form) and ss 501(6)(e)–(h) were all inserted by the same amending act (Migration Amendment (Character and General Visa Cancellation) Act 2014 (Cth)) and that the standard of satisfaction required to invoke s 116(1)(e) was reduced from “is or would be” to “is or may be, or would or might be”. The respondent noted that the Explanatory Memorandum to the Bill which became the amending Act explained that the amendment to s 116(1)(e) sought to “lower the threshold of this cancellation ground”: Explanatory Memorandum, Migration Amendment (Character and General Visa Cancellation) Bill 2014 (Cth) (at [13]).

81    As noted above, however, in the context of s 501(6)(h), the word “risk” imputes notions of possibility. This is consistent with how this Court, prior to the amendment, construed the words “is or would be” in s 116(1)(e). Indeed, Goldberg J in Tien v Minister for Immigration and Multicultural Affairs (1998) 89 FCR 80 (at 94) found that s 116(1)(e):

… requires there to be an element of a risk that the person’s presence in Australia might be disruptive to the proper administration or observance of the law in Australia or might create difficulties or public disruption in relation to the values, balance and equilibrium of Australian society.

(Emphasis added).

See also Newall v Minister for Immigration and Multicultural Affairs [1999] FCA 1624 (at [21] and [30] per Branson J).

82    We do not consider that the amendments to s 116(1)(e) and the Explanatory Memorandum to the Bill inserting that provision should be taken to impact upon the way in which s 501(6)(h), an unrelated provision, operates on its own terms. As Tien demonstrates, not only can “would” relevantly refer to the person being present in Australia, but the word “risk” is sufficient to connote possibility in quite the same way as by the use of the word “might”. Ultimately, contrary to the submissions of the respondent, these semantic comparisons are not overly helpful. Inevitably, words are deployed in different contexts.

83    For example, other comparisons could be deployed to demonstrate that this understanding of the provision makes sense. Section 5J(1)(b), for example, provides that a person has a well-founded fear of persecution if there is a “real chance” that, if he or she is returned to his or her home country, he or she “would be persecuted” for one or more of the reasons mentioned in s 5J(1)(a). The word “would”, in that context, looks to the future; it does not denote “a probability or a strong likelihood”, for a “real chance” of persecution may not require anything more than a ten per cent chance of harm: see Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 (at 429 per McHugh J).

84    Another submission of the appellant in FUD18, which it is convenient to address here, was that s 501(6)(h) needs to be contrasted with s 501(6)(d). Section 501(6)(d)(v) provides that a person will not pass the character test if “in the event that the person were allowed to enter or to remain in Australia, there is a risk that the person would … represent a danger to the Australian community or to a segment of that community”. Emphasis was placed on the fact that s 501(6)(d)(v) uses the term “would”, like subs (h), but rather than simply referring to a “risk to the Australian community”, subs (d)(v) refers to a “risk” that the person would “represent a danger to the Australian community”. Accordingly, it was said that given the term “risk” is used with an object in s 501(6)(d)(v) it must be construed in the probabilistic sense; the object of the risk identified as being “a danger to the Australian community”. If both subss (d)(v) and (h) use “risk” in the probabilistic sense of referring to what might or might not occur in the future, it was said that subs (h) would be subsumed by subs (d)(v) and rendered somewhat superfluous.

85    This examination, again, tends to overcomplicate the construction inquiry. In any event, three distinguishing features can be identified. First, as the respondent conceded in oral submissions, there is a difference in the terms of subss (d)(v) and (h), namely that the former specifies an object of the risk, being “a danger”, whereas the latter talks in terms of “risk” at large. Secondly, and critically, as is explained below (at [100]–[102]), there is a sound argument that the legislative intent was to differentiate subs (h) from subs (d)(v) by posing a test of objective reasonableness in respect of the former, not a subjective assessment by the Minister, like in respect of the latter. Thirdly, unlike subs (d)(v), which allows for a global assessment of a person’s conduct, subs (h) ties the inference to a specific source, namely the Interpol notice.

86    As to purpose, the mischief to which s 501 is directed is “the risk of harm to the Australian community from criminal or other undesirable conduct by non-citizens who may engage in such conduct”: KDSP v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCAFC 108; (2020) 279 FCR 1 (at 17 [57] per Bromberg J). As Thawley J observed in FUD18 (at [44]), an assessment of risk of harm involves consideration of possibilities and permits a degree of permissible speculation on the part of the Minister. We do accept, however, that an appeal to purpose has its limitations, especially in an inquiry like the present, where the question of construction is to determine where Parliament has drawn the line in assessing risk as identified by reference to an Interpol Notice: see Carr v Western Australia [2017] HCA 47; (2007) 232 CLR 138 (at 142–3 [5]–[6] per Gleeson CJ).

87    In the end, and giving weight to the High Court’s remarks in Commissioner of Taxation v Consolidated Media Holdings (at 519 [39] per French CJ, Hayne, Crennan, Bell and Gageler JJ) that the task of statutory construction must always return to the statutory text, the preferable view is that the construction adopted by Thawley J in FUD18 on this point is correct.

88    Before moving on, one further point should be noted. The respondent submitted that paragraph [55] of the Explanatory Memorandum to the Bill inserting s 501(6)(h) suggests that it could reasonably be inferred in some cases from the mere fact of an Interpol notice being in force in relation to a non-citizen that he or she might present a risk to the Australian community. That paragraph is in the following terms:

The purpose of new paragraphs 501(6)(g) and (h) of the Migration Act is to acknowledge that a person who is the subject of an adverse ASIO assessment or Interpol notice is likely to represent a threat to the security of the Australian community or a segment of that community. These amendments ensure that a person objectively does not pass the character test if either of these provisions apply to them, without the need to further assess them against the subjective criteria in subsection 501(6) of the Migration Act.

89    The respondent argued that this understanding conflates that which is required to invoke ss 501(6)(g) and 501(6)(h) and, as such, fails to deal with the words “from which it is reasonable to infer” in s 501(6)(h). We are inclined to agree. If Parliament intended for the mere fact of an Interpol notice being in force to be a sufficient reason to determine that someone does not pass the character test, it would have said so. Instead, the qualifying words “from which it is reasonable to infer” have been included. One assumes this is because it was thought that if the Government’s own domestic security agency has made an assessment of a person that assessment can be taken at face value, whereas an extra threshold ought to apply to notices issued by an international agency such as Interpol. This also makes sense when one acknowledges that Interpol notices can be issued for an array of reasons, not simply to notify the international community of a convicted criminal and that a notice being in force does not automatically provide a basis for the arrest of a person in Australia: see above at [70(6)]. Of course, this does not mean that the notice on its own is insufficient to ground the reasonable inference, but that the contents of the notice will need to be considered in determining whether the inference is within the bounds of reasonableness.

An objective test or a process of evaluation?

90    A final point of dispute that arises on the proper construction of s 501(6)(h) (set out at [64] above) focusses on the significance to be given to the word “reasonable”. The two competing positions can be summarised as follows:

(1)    The submission of the appellant in FUD18 (endorsed by the respondent to the current appeal in oral submissions) was that s 501(6)(h) poses an objective question, namely: is it is reasonable to infer from the Interpol notice that the person would present a risk to the Australian community or a segment it? The consequence being that any inference drawn by the Minister must be based on the existence of facts which are sufficient to induce that state of mind in a reasonable person (objective reasonableness).

(2)    The submission of the Minister was that s 501(6)(h), read with s 501(1), calls for the Minister to engage in an evaluative exercise as to whether the Minister is subjectively satisfied of the existence of a certain state of affairs, that is, he must ask himself: am I satisfied that it is reasonable to infer from the notice that the person would present a risk to the Australian community or a segment of it? The consequence being that for there to be jurisdictional error, the evaluation of the Minister must be one that is beyond the boundaries of a lawful decision because it is lacking rationality or an intelligible justification, such that it can be characterised as being legally unreasonable (legal unreasonableness).

91    The distinction is subtle but may be one of significance in an individual case. This, however, is not such a case. That is because we have concluded that the Minister’s reasons fail the test of objective reasonableness and are legally unreasonable, meaning it is unnecessary to form a concluded view on this issue. But a few observations may be made.

92    While initially it might be thought surprising that the Act imports notions of objective reasonableness, the weight of considerations appear to support such a conclusion.

93    First, the core argument of the Minister, namely that s 501(1) imports a subjective element into the interpretation of s 501(6)(h) is not compelling. It is well established that while ss 501(1) and 501(6) must be read together, their operation is temporally distinct: s 501(6) must be assessed prior to the Minister reaching a level of satisfaction required by s 501(1). This is because s 501(6) provides a complete statement as to when a person does not pass the character test, and unless one of those circumstances is enlivened, the person is taken to have satisfied the character test, at which point the discretion embodied in s 501(1) has no work to do: Makasa (at 207–8 [34]–[40] per Kiefel CJ, Gageler, Keane, Gordon and Edelman JJ). Therefore, s 501(1) cannot be said to inject an element of subjectivity into the construction of 501(6)(h).

94    Secondly, whether an element of subjectivity can be sourced from the terms of s 501(6)(h) itself is similarly questionable when one considers the use of the term “reasonable” in the section and applies the High Court’s reasoning in George v Rockett (1990) 170 CLR 104.

95    Section 501(6) provides for a number of circumstances in which a person will not pass the character test. Some are satisfied by the presence of an objectively identifiable factoid (subss (a), (aa), (ab), (e), (f) and (g)), while others call for the Minister to engage in an assessment in order to determine whether the person satisfies a certain criterion (subs (b), (ba), (c), (d)). Subsection (h) is unique in this regard. On the one hand, it calls for an assessment to be made (ie, the drawing of an inference), while on the other hand, it stipulates such assessment must be “reasonable”. Further, unlike subs (ba), which provides that a person does not pass the character test if “the Minister reasonably suspects that the person has” engaged in certain conduct (terms which introduce an element of subjectivity), subs (h) talks in terms of the assessment being “reasonable” at large.

96    This is where the High Court’s reasoning in George becomes relevant. George concerned the issue of a search warrant by a stipendiary magistrate. The relevant statute required a justice to whom an application for a search warrant was made to satisfy himself that the conditions for the issue of the warrant were fulfilled. The matters which had to be made to appear to the issuing justice had to appear on complaint made on oath and had to contain sufficient facts to found the reasonable suspicion and reasonable belief. Critically, Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ stated that (at 112):

When a statute prescribes that there must be “reasonable grounds” for a state of mind – including suspicion and belief – it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person. That was the point of Lord Atkin’s famous, and now orthodox, dissent in Liversidge v Anderson [[1942] AC 206] … Therefore it must appear to the issuing justice, not merely to the person seeking the search warrant, that reasonable grounds for the relevant suspicion and belief exist.

97    It is arguable that George stands for the proposition that where legislation, such as the legislation in this case, prescribes a requirement that a state of satisfaction be “reasonable”, the role of the Court on review is to determine for itself, on the basis of the documents to which the decision-maker was authorised to have regard, whether that state of mind is reasonable. This is supported by the way in which the High Court has since applied the reasoning in George. For present purposes, two examples will suffice.

98    In McKinnon v Secretary, Department of Treasury [2006] HCA 45; (2006) 228 CLR 423, the question for determination was whether there existed reasonable grounds for the claim that disclosure of a document would be contrary to the public interest. Gleeson CJ and Kirby J, after endorsing the reasoning of the Court in George, stated (at 429–30 [10]–[12]):

10.    … [T]he point of the objectivity of such a test, when it is necessary to consider whether a primary decision-maker had reasonable grounds for a given state of mind, is that the question is not whether the primary decision-maker thinks he or she has reasonable grounds.

11.    To decide whether it was reasonably open to a decision-maker, on the evidence, to make a judgment such as a decision whether a person was (or was not) negligent, or whether the known facts are sufficient to induce in a reasonable person a suspicion or belief that someone is guilty of a crime, or whether there are reasonable grounds for a claim that a course of action (such as disclosure of a document) would be contrary to the public interest, involves an evaluation of the known facts, circumstances and considerations which may bear rationally upon the issue in question. …

12.    Where a claim, or an argument, or a conclusion or some other state of mind (such as suspicion, or belief, or satisfaction) involves an interplay of observation (of objective facts and circumstances), opinion, and judgment (which may involve an evaluation of matters such as reasonableness of conduct, or of the public interest), the question whether there are reasonable grounds for such a claim, or argument, or state of mind requires a consideration of all relevant matters and an assessment of the reasonableness of the claim, or argument, or state of mind having regard to all relevant considerations. Suppose the question is whether there are reasonable grounds for suspecting that A killed B. Suppose that A is a person of violent propensity, who had a motive to kill B, and had declared an intention to do so. Let it be assumed that those three facts are incontestable. In the absence of any other facts they may lead to a conclusion that there are reasonable grounds for suspecting that A killed B. Suppose, however, that A has an undisputed alibi. The first three facts then cease to constitute reasonable grounds for the suspicion. The question cannot be answered without considering all four facts. It is not a hypothetical question. It is a question to be answered in the light of all the known circumstances. This applies to all relevant considerations whether they be matters of objective fact (as in the example given), or of opinion, or of argument. Until all relevant considerations, that is, all (known) considerations that could have a rational bearing upon the claim, or state of mind, or decision under review, are taken into account, it is impossible to form a just and fair judgment whether, objectively considered, there are reasonable grounds for the claim that the disclosure of the document would be contrary to the public interest. It is not enough for the Tribunal to ask whether there are facts, or opinions, or arguments that rationally bear upon that topic. All relevant matters must be taken into account; not for the purpose of deciding whether the Tribunal agrees with the Minister, but for the more limited purpose of deciding whether there are reasonable grounds for the claim which the Minister accepted.

99    Further, in Prior v Mole [2017] HCA 10; (2017) 261 CLR 265, which involved the consideration of a power conditioned on a member of the state police force having reasonable grounds for believing that, because of a person’s intoxication, he or she may cause harm to himself or herself or someone else, all members of the Court considered the existence of the power to be conditioned upon proof of facts and circumstances sufficient to induce in the mind of a reasonable person a positive inclination towards acceptance of the subject matter of the belief: see 270 [4] per Kiefel and Bell JJ, at 277 [23]–[24] per Gageler J, at 292 [73] per Nettle J, and at 298 [98]–[101] per Gordon J. Indeed, it could be said in the current case that the state of satisfaction required to draw an inference is higher than that required to found a mere suspicion or belief, as was required in George.

100    Thirdly, it is a well-accepted principle of construction that a Court must strive to give effect to every word of a provision and every provision of an Act: see Commonwealth v Baume (1905) 2 CLR 405 (at 415 per Griffiths CJ, and at 419 per O’Connor J); Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32; (2011) 244 CLR 144 (at 192 [97] per Gummow, Hayne, Crennan and Bell JJ). This is grounded in the principle that an Act is to be construed as a whole and that it is “improbable that the framers of legislation could have intended to insert a provision which has virtually no practical effect”: Minister of State for Resources v Dover Fisheries Pty Ltd (1993) 43 FCR 565 (at 574 per Gummow J, with whom Hill and Cooper JJ agreed). A corollary to this is that it may be the case that other provisions of a statute reveal that a particular expression in one provision is to have a meaning which is broader or narrower than might at first glance be thought: see Ross v The Queen (1979) 141 CLR 432 (at 440 per Gibbs CJ, with whom Barwick, Stephen, Mason and Aickin JJ agreed).

101    Here, a crucial provision of the Act is s 501(6)(d)(v), which is in the following terms:

  (6)  For the purposes of this section, a person does not pass the character test if:

…

(d)  in the event the person were allowed to enter or to remain in Australia, there is a risk that the person would:

…

(v)    represent a danger to the Australian community or to a segment of that community, whether by way of being liable to become involved in activities that are disruptive to, or in violence threatening harm to, that community or segment, or in any other way;

102    If it were the case that both subss (d)(v) and (h) require the Minister to engage in a subjective assessment of the risk posed by an individual to the Australian community, then, as was prefaced above, the operation of s 501(6)(h) would be rendered somewhat superfluous. That is because there is nothing in subs (d)(v) preventing the Minister from taking an Interpol notice into account when assessing whether a person represents a danger to the Australian community or a segment of it. The better view is to give subs (6)(h) distinct work to do in the character test, and that is done by understanding the provision to pose a test of objective reasonableness.

103    Fourthly, this understanding is furthered by giving weight to the Explanatory Memorandum to the Bill inserting s 501(6)(h), which notes (at [55]) that the insertion of subss (6)(g)–(h):

… ensure that a person objectively does not pass the character test if either of these provisions apply to them, without the need to further assess them against the subjective criteria in subsection 501(6) of the [Act].

(Emphasis added).

104    Therefore, while it is unnecessary in the present case to come to a concluded view on this element of the construction of s 501(6)(h), there is much to be said for the view that s 501(6)(h) poses a test of objective reasonableness.

105    For completeness, we note that in the current circumstances it is also unnecessary to express a view on whether the reasoning of the Full Court in Taulahi v Minister for Immigration and Border Protection [2016] FCAFC 177; (2016) 246 FCR 146 (at 181–2 [142]–[144] per Kenny, Flick and Griffiths JJ) means that the principle of legality should apply to the construction of s 501(6)(h) of the Act.

D.2    The Unreasonableness Ground

106    With the proper construction of s 501(6)(h) now in mind, it is convenient to turn to the substance of the Unreasonableness Ground. As noted above, we have formed the view that the Minister’s reasons are unreasonable regardless of which construction is adopted; or, as the respondent colourfully but accurately put it, are “so irrational that it doesn’t matter what test is deployed”: T41.36–7.

107    The Minister submitted that the primary judge’s erroneous construction of s 501(6)(h) affected his Honour’s findings as to whether the Minister could reasonably have inferred from the IRN that the respondent would present a risk to the Australian community or a segment of it.

108    The starting point in any inquiry as to whether s 501(6)(h) is enlivened must always be the Interpol notice. All things being equal, the Minister may reasonably infer that a person would present a risk to the Australian community or a segment of it from the Interpol notice itself. The difficulty with the reasoning of the primary judge is that, while his Honour saw the notice as the starting point of the inquiry, his immediate conclusion was that (at [54]–[55]):

54.    From what is stated in the IRN, it cannot reasonably be inferred that the applicant would present a risk to the Australian community, or a segment of that community. The IRN records no more than unproved allegations against the applicant and that he is wanted in the PRC for trial. There is nothing in the notice from which it can be inferred that there is a reasonable case to be made against the applicant, or even any evidence at all in support of the charges recorded in the notice.

55.    Moreover, it is illogical and unreasonable to conclude on the basis of unsubstantiated allegations against someone that there is a risk of the person reoffending; until there is a reasonable basis to infer that the person offended in the first instance, there cannot be any reasonable basis to infer that they might reoffend.

109    With great respect to the primary judge who was given limited assistance on this point, these conclusions are inconsistent with the text of s 501(6)(h). Nothing in s 501(6)(h) calls for the Minister to be satisfied that the non-citizen in relation to whom an Interpol notice is in force actually offended in the manner described in the notice, that there is “a reasonable case to be made” against him or her, or that there is “evidence … in support of the charges”. As Thawley J observed in FUD18 (at [61]), inferences can be made about whether a person might engage in some form of conduct in Australia considered to present a risk from what is accepted as having occurred, or possibly having occurred, in the past.

110    However, this does not automatically render the inference drawn by the Minister reasonable. Weight needs to be given to information, where it exists, which goes to confirming or denying, or bearing upon the credibility or reliability of, the information contained in the notice. To use an extreme example, if there was country information about Ruritania which said that all IRNs that it issues are bogus, then, as one would expect, it is unlikely that it is reasonable for the Minister to infer from the face of the notice alone that a person in respect of whom Ruritania had issued an IRN would present a risk to the Australian community or a segment of it.

111    Here, the primary judge’s findings of legal unreasonableness were said to be fortified by two pieces of information and how they were (or were not) dealt with by the Minister in his reasons: (a) the country information about the PRC’s criminal justice system; and (b) the purported link between the failure of the respondent to repay loans and the alleged embezzlement.

112    It is convenient to deal with each of these pieces of information in turn, before turning to consider the Minister’s reasons and the inference drawn more generally.

Country Information

113    The primary judge considered the country information set out and accepted in the Report, which found that the respondent is a person in respect of whom Australia owes non-refoulement obligations. Although not directly before the Minister, the primary judge (at [64]) found that the Minister was constructively aware of the contents of the Report. This country information included findings such as: (a) there is no presumption of innocence in the PRC and the criminal justice system is biased towards a presumption of guilt; (b) according to the Supreme People’s Court, in 2011 the combined conviction rate for first and second instance criminal trials was 99.9%; (c) most defendants in the PRC face significant bias in the criminal justice system and do not have adequate legal assistance; (d) one recent study found that approximately 95% of the criminal cases surveyed relied on defendant confessions and that the vast majority of defence efforts failed to challenge confessions; and (e) torture remains widespread in the PRC.

114    His Honour observed (at [64]) that while it was accepted by the Minister that he could rely on the allegations in the IRN from the PRC as having some substance, the information in the possession of the Department in relation to the same matter showed that advice to be doubtful. His Honour went on to conclude (at [64]) that:

Given the information in the knowledge of the Department in the context of the same matter under consideration by the Minister, and thus constructively within the knowledge of the Minister, allegations as to criminal conduct emanating from the PRC police authorities could not reasonably be taken at face value. No reasonable inference could accordingly be drawn by the Minister as to the risk presented by the applicant simply from the IRN itself.

115    There is no error in this conclusion being drawn, even if we have come to a different conclusion as to the construction of s 501(6)(h). There was no attack on the primary judge’s summary of the authorities (at J [59]–[64]) supporting the proposition that the contents of the Report were constructively before the Minister. Appreciating as much, regardless of the test one applies, anyone considering the present notice would need to exercise real caution in drawing an inference that someone alleged to have committed an offence in fact committed that offence, and thereby presents a risk to the Australian community or a segment of it. Indeed, despite an arrest warrant purportedly being issued by the Chinese authorities, the Minister’s conclusion (at [22]) that there is “a possibility of reoffending” in Australia cannot, without explanation, stand against the findings made in relation to the Chinese criminal justice system, particularly in circumstances where the allegations in the IRN have undergone no independent scrutiny, other than as to matters of form in accordance with Interpol’s Rules: see above (at [70(4)–(5)]).

116    Further, we should note it is of concern more generally that, while it is true inferences can be drawn from what is accepted as having occurred, or possibly having occurred, in the past, in parts of his reasons the Minister appears to proceed on the basis that the respondent has been proven to have offended in the manner alleged. For example, reference is made to the “seriousness of the [respondent’s] criminal offending” (at [39]); that a “perpetrator of this type … has the capacity and may continue to have the motivation to repeat the conduct such that it cannot be said there is no risk of reoffending” (at [20]); that there is a potential for “further offending” and that the “Australian community could be exposed to (significant) harm should the [respondent] reoffend in a similar fashion” (at [36], erroneously numbered).

The purported connexion between the embezzlement and the failure to repay loans

117    As to matters outside of the IRN, the primary judge considered that the apparent connexion drawn by the Minister between the allegations in the notice and the information volunteered by the respondent concerning his inability to repay loans, was unreasonable. The relevant paragraphs of the Minister’s reasons dealing with this issue are extracted above (at [51]).

118    In this regard his Honour found (at [65]–[69]):

65.    … the Minister acknowledged that the allegations have not been proven, that the applicant maintained his innocence of the crime of which he is accused and that he had a clear police certificate from Australia. The only matter that the Minister apparently regarded as inculpatory is the fact that the applicant accepted that he had taken “the money as a loan” which he had not repaid … . The applicant’s acceptance of an unpaid debt was part of his explanation of his innocence and is at best neutral insofar as commission of the offence is concerned. The applicant did not accept that the money that is the subject of the charges in the IRN is the same money as the loan.

66.    The applicant points to the fact that the companies that are identified in the IRN, as the borrowers and the lender, are different from the companies that the applicant refers to in his exculpatory statement in which he admits that there is a loan that he did not repay. On that basis the applicant submits that the acknowledgement of an unpaid loan cannot serve to support any of the allegations in the IRN.

67.    The IRN identifies the lending company (A Co) and three borrowing companies (B Co, C Co and D Co) that were allegedly “used” by the applicant in collusion with three other people. However, the applicant’s explanation of his financial circumstances says that the lending company was a bank (E Bank Co), although another bank (F Bank Co) is also mentioned. The applicant states that he was the borrower in order to fund the operations of two companies (G Co and H Co) which are different from any of the borrowing companies named in the IRN. The one company (H Co) would appear to possibly be the same as the company referred to in the IRN as the “secured party” as they have very similar although not identical names. (I have anonymised the companies in order to protect the applicant’s identify. [sic])

68.    It is also to be noted that the Chinese court documents that were included in the documents furnished to the Minister, including a judgment against the applicant, reflect the applicant as borrower and the lender as yet another company (I Co).

69.    The short point is that there is no apparent tie-up between the allegations in the IRN, on the one hand, and the applicant’s explanation and what is revealed by the court documents provided by him, on the other. That serves to reinforce the point that the applicant’s admission of an unpaid debt cannot logically serve to support the allegations in the IRN or the Minister’s conclusion that there is “some substance” to the applicant being “under suspicion of these charges”.

119    In writing and at some length orally, the Minister took the Court to a number of documents in which the respondent, either personally or through his solicitor, denied any wrongdoing but volunteered information concerning his inability to repay loans and linked this to the “trumped up” charges the subject of the IRN: see, for example, those discussed at [50(10)] above. The Minister submitted that, fairly read, the statements of the respondent and his legal representatives were either: (1) capable of being read as directed to the IRN to which the respondent was responding; or (2) could be taken to be directed to the broad admission of an unpaid loan that was connected with the charges being “trumped up”. It was on these bases, along with the fact that the charges alleged carry a term of life imprisonment, that it was said the Minister was entitled to find it as being “not without some substance that [the respondent] would be under suspicion of these charges”.

120    Further, it was said that the finding in the balance of the first sentence of paragraph [21] of the Minister’s reasons, as to the respondent and his wife having been requested to repay “the loan” in the civil litigation in the PRC, should be understood as a separate finding pertaining to the respondent having borrowed and not re-paid money. Put another way, it was said that the Minister did not understand the loan the subject of the civil proceedings in the PRC to be the same as the loan described by the respondent in his statement and submissions. The Minister drew support for this proposition from the fact that at [7] and [12] of his reasons, the Minister demonstrated he was aware that the PRC civil proceedings involved different entities and amounts from that in question in the IRN.

121    The content of paragraph [21] is problematical. In the critical passage of his reasons, the Minister “acknowledge[s] that the allegations have not been proven, but note[s] that [the respondent] has conceded he did take the money as a loan of which he did not repay as promised and as provided above in the civil litigation both he and his wife have been requested to repay the loan.” Despite counsel for the Minister saying everything he could to explain this sentence away, one cannot help but conclude that the Minister was confusing the money the subject of the allegations in the IRN with the money the respondent conceded he did not repay as a loan. In fact, the Minister ultimately seems to have accepted that this may be the case: T22.19.

122    Nor do we accept the fall back argument that it was simply understandable for the Minister to draw such a connexion because the respondent had volunteered information about unpaid loans in his statements to the Department. No matter what information was volunteered, the evidence is pellucid in demonstrating that the respondent strenuously denied any allegation of illicit conduct. As the primary judge observed (at [69]), the respondent’s admission of an unpaid debt cannot logically serve to support the allegations in the IRN or the Minister’s conclusion that there is “some substance” to him being “under suspicion of these charges”, particularly when there is no apparent connexion between the events underlying the fraud charges and the loan in question (other than the respondent’s explanation that the charges are “trumped up” at the instigation of someone involved in the circumstances of his failure to repay the loan). We should note for completeness that nor do we accept that the alleged crime apparently carrying a term of life imprisonment gives weight to the Minister’s conclusion that there is “some substance” to the charges, particularly given the findings outlined above that were made in relation to the Chinese criminal justice system.

The Minister’s reasons generally

123    As would be evident by now, it is fair to say that the Minister’s reasons are not a fountain of clarity. It is well established that the reasons of an administrative decision-maker must not be read with an eye keenly attuned to the perception of error and that a common sense and realistic approach should be taken to understanding the reasons as a whole: see Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 (at 271–2 per Brennan CJ, Toohey, McHugh and Gummow JJ). But that does not mean that the reasons should not be logical and easy to understand. The reality is that these reasons are riddled with typographical errors, including basic mistakes like confusing the gender of the respondent. One cannot help but infer that parts of the reasons are the product of a hotchpotch copy and paste job.

124    In particular, in respect of the critical passages, it took the members of the bench multiple readings to understand what the Minister was intending to convey. This no doubt also led to a range of alternative submissions having to be put by counsel as they struggled to grapple with the reasoning process of the decision-maker. Further, in other points of the reasons, it was unclear whether the Minister understood what provision of the Act he was applying. For example, the Minister’s conclusion (at [19]) that “[h]aving considered all available information … the arguments of the [respondent] and his representative do not invalidate the [IRN]” and his finding that while “not every Interpol notice supports a reasonable suspicion of risk … I do not consider that this IRN falls into that category”, are confused and confusing. This is because there is no requirement that the impugned Interpol notice needs to be “invalidated” and, as the respondent submitted, “suspicion” is simply “not the test of course”: T44.38.

125    While there are real demands on administrative decision-makers, especially the Minister personally making a determination, this cannot be an excuse for the use of gibberish and the lack of a good proof read. Indeed, here, errors of substance, like that referred to above, have fortified our conclusion that the Minister’s decision was infected by jurisdictional error.

Conclusion

126    While respectfully disagreeing with some of the primary judge’s observations, we are satisfied that his Honour did not err in concluding that it cannot reasonably be inferred from the IRN that the respondent would present a risk to the Australian community or a segment of it and finding that the Minister’s exercise of discretion to refuse the respondent’s visa was infected by jurisdictional error.

D.3    Failure to Consider Contention

127    While not strictly necessary given our other findings, it is convenient to address briefly the two points raised by the notice of contention.

128    The first point of contention alleges that the primary judge erred in failing to find (at J [82]–[88]) that the lawful exercise of the Minister’s jurisdiction required him to consider the reasons given in the Report for recommending that the respondent is a person to whom Australia owes protection obligations under s 36(2)(aa) of the Act.

129    As discussed above, the primary judge (at [59]–[64]) found that “material in the possession of the Department must clearly be treated as being in the possession of the Minister” (citing Minister for Aboriginal Affairs v Peko-Wallsend (1986) 162 CLR 24 (at 31 per Gibbs CJ; see also at 45 per Mason J and at 66 per Brennan J)), meaning that the Report and recommendation that the respondent is a person to whom Australia owes protection obligations was constructively before the Minister. Both parties accepted, however, that although the Minister was aware of the Report (there being clear references to it in the submission made to him and it being cited in his reasons), the actual Report was not before the him and the conclusions in the Report as to the harm awaiting the respondent upon his return to China were not directly considered by the him.

130    On this issue below, the primary judge found (at J [82]–[88]) that there was no reason why the Report had to be considered by the Minister because:

(1)    s 501(6) does not expressly require any particular matters to be considered by the Minister other than that which is stated in the section (i.e. whether or not the person satisfies the Minister that they pass the character test in light of the relevant subsection); and

(2)    the respondent made no claim in his visa application or in subsequent submissions as to the matters referred to in the Report, such as that there is no presumption of innocence in the Chinese justice system, that 99.9% of defendants in criminal proceedings are convicted or that prison conditions are overcrowded and otherwise appalling.

131    The primary judge also found (at [86]) that the Minister’s acceptance of his Department’s finding that the respondent is a person to whom Australia owes protection obligations necessarily implies that he accepted there were substantial grounds for believing that a necessary and foreseeable consequence of the respondent being removed from Australia to China is that there is a real risk he will suffer significant harm. His Honour held (at J [87]) that it adds nothing to the Minister’s consideration of the respondent’s circumstances, such as to enable the Minister to make a proper and lawful decision under s 501(1), to give character and texture to the particular nature of the significant harm that the respondent is said to face in China.

132    The respondent submitted that his Honour erred by:

(1)    not giving active intellectual consideration to the Report, and thereby failing to fulfil the jurisdictional requirement of considering “the merits of the case” before him; and

(2)    concluding that the Report adds nothing to the Minister’s consideration because had the Minister considered the Report he may have concluded that there was a near certainty of conviction, that the respondent would be tortured before and after conviction and that he would be held in appalling conditions for life; factors which may realistically have affected the decision.

133    With respect, neither of these propositions is well founded.

134    The Minister was under a duty to have regard to a “substantial, clearly articulated argument relying upon established facts” as an incident of his duty to afford natural justice to the respondent: Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 (at 1092 [24] per Gummow and Callinan JJ, with whom Hayne J agreed at 1102 [95]); DVE18 v Minister for Home Affairs [2020] FCAFC 83; (2020) 276 FCR 401 (at 409 [34]–[35] per Perram, Charlesworth and Stewart JJ). Whether that duty has been discharged in the exercise of power by the Minister personally under s 501(1) falls to be considered largely by reference to the evidence and/or submissions provided by the respondent: cf Minister for Immigration and Citizenship v Khadgi [2010] FCAFC 145; (2010) 190 FCR 248 (at 277–8 [83] per Stone, Foster and Nicholas JJ).

135    The respondent placed reliance on the Full Court’s decision in Carrascalao v Minister for Immigration and Border Protection [2017] FACFC 107; (2017) 252 FCR 352 and the expression (explained at 364 [46]–[47] per Griffiths, White and Bromwich JJ) that the Minister is under a general obligation to “consider” the merits of the case before making a decision. Their Honours in Carrascalao said that “consideration” in this sense called for the relevant decision-maker to engage in an “active intellectual process” in assessing the merits of a case. But, as the primary judge, with respect, correctly pointed out (at J [82]), the error in the respondent’s approach is not with regard to the nature of the task that was required to be undertaken by the Minister, but rather what was required to be the subject of that task.

136    On our reading of the joint judgment in Carrascalao, in the context of the exercise of power under s 501(1) by the Minister personally, the preferable view is that consideration of the “merits of the case” should be understood to refer to either: (1) the claims made and material in support of those claims provided by a visa applicant (in the sense described in Dranichnikov (at 1092 [24] per Gummow and Callinan JJ, with whom Hayne J agreed at 1102 [95])); or (2) a mandatory relevant consideration (in sense described in Peko-Wallsend (at 39–40 per Mason J)). As the primary judge found, the contents of the Report do not fall into either category.

137    By contrast, the respondent did claim that he would be imprisoned and tortured to death if returned to the PRC and a finding to that effect was in the Report. That claim, and the Department’s conclusion that the respondent is a person to whom Australia owes protection obligations, were considered by the Minister (at [36]) and weighed against other factors that militated against the grant of the visa: see [39] and [40]. It therefore cannot be said that the Minister did not engage in an “active intellectual process” in relation to these factors.

138    In any event, in the Department’s submission to the Minister, it referred to the respondent’s application, his claim that “if he were to return to China he would be placed in gaol and tortured to death” (at [37]) and the Department’s conclusion that he is a person to whom Australia owes protection obligations (at [38]). Implicit in the findings of the Minister was therefore an acceptance of the conclusion in the Report that the respondent would be imprisoned and tortured if returned to the PRC. Indeed, it is difficult to see, as the primary judge acknowledged (at J [86]–[87]), when there was already a finding that the respondent is a person in respect of whom non-refoulement obligations are owed, how the provision of the Report to the Minister could realistically have made a difference to the outcome of the application. It is plain from the Minister’s findings that he was of the view that considerations of significant harm and non-refoulement did not outweigh the factors adverse to the respondent.

139    The primary judge’s approach was not infected by error and the Failure to Consider Contention should not be accepted.

D.4    BAL19 Contention

140    With reference to paragraphs [37]–[39] of the Minister’s reasons (quoted at [54] above), the respondent submitted that the Minister could not have reasonably reached a conclusion that he may decide to grant the respondent a visa pursuant to s 195A of the Act in view of the reasons that the Minister gave for refusing the respondent’s application for a protection visa. This point relies on the reasoning of Rares J in BAL19 (at 287 [42]).

141    In BAL19, Rares J reasoned that once the Minister personally refused to grant the applicant in that case a protection visa on the basis that the applicant was a risk to the Australian community or a segment of that community, knowing that Australia actually owed non-refoulement obligations in respect of the visa applicant, no reasonable occasion could arise for the Minister to exercise his non-compellable power to allow the applicant to apply for another substantive visa, absent a substantial and indefinite period of further immigration detention in which a change would occur and, in fact, had occurred to the risk on which the Minister had acted. The reasoning of Rares J on this point was followed by Katzmann J in AEM20 v Minister for Home Affairs [2020] FCA 623; (2020) 277 FCR 229 (at 328–31 [108]–[117]).

142    The Minister submitted that the reasoning of Rares J in BAL19 either has no application here or is wrong and should not be followed. It was said that the reasoning in BAL19 and AEM20 assume the circumstances that exist at the time the Minister might give consideration to the exercise of any non-compellable power under s 195A will be the same as those in existence when the Minister made his decision under s 501(1). However, it may be the case, it was said, that circumstances change in the intervening period such that, for example, the respondent does not present any risk of harm to the Australian community, or facts and circumstances may present such that the Minister nonetheless considers that the exercise of his non-compellable power is appropriate. Reliance was placed on the Full Court’s statement in Ayoub v Minister for Immigration and Border Protection [2015] FCAFC 83; (2015) 231 FCR 513 (at 519 [19] per Flick, Griffiths and Perry JJ) that “[f]uture exercises of discretion and statutory power are to be resolved when they arise”.

143    The primary judge found that, in light of the conclusions reached in relation to the other grounds of review and given that BAL19 was then subject and an appeal, it was unnecessary to decide this point. In circumstances where: (1) the reasoning in BAL19 has been the subject of Full Court clarification on other bases (see KDSP (Bromberg, O’Callaghan and Steward JJ) and Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v BFW20 (by his litigation representative BFW20A) [2020] FCAFC 121; (2020) 171 ALD 102 (Allsop CJ, Kenny, Besanko, Mortimer and Moshinsky JJ)); (2) the appeal referred to by the primary judge has been otherwise discontinued; and (3) we have reached the same conclusions as the primary judge with respect to the Unreasonableness Ground, no view needs to be expressed in relation to this point of contention.

F    CONCLUSION AND ORDERS

144    One further point should be noted. It appears that while an order seeking a writ of mandamus was sought below directing the Minister (whether personally or by his delegate) to consider and determine the respondent’s application for a protection visa according to law, no such order was made by the primary judge, despite his Honour quashing the decision of the Minister. In all the circumstances, the appropriate course is for this Court to make an order to such effect.

145    For the reasons we have explained, the appeal should be dismissed. Costs should follow the event.

Associate:

Dated:    30 July 2021