FEDERAL COURT OF AUSTRALIA

Gu v Minister for Immigration & Multicultural Affairs [1999] FCA 991

MIGRATION – validity of cancellation of visa under s 128 Migration Act 1958 – validity of decision under s 131 not to revoke cancellation – whether delegate had regard to relevant criteria – error of law.

MIGRATION – whether it would be futile to remit the matter for further consideration.

Migration Act 1958 (Cth) ss 116(1)(a), 128, 129, 131, 476(1)(e), 476(1)(g)

Migration Regulations reg 457.223(7)

Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 applied

Lek v Minister for Immigration Local Government and Ethnic Affairs (1993) 43 FCR 100 considered

Rahim v Minister for Immigration and Ethnic Affairs (1997) 78 FCR 223 considered

Jaswal v Minister for Immigration and Multicultural Affairs (Tamberlin J, unreported,

24 September 1998) considered

Nguyen v Minister for Immigration and Multicultural Affairs (1998) 158 ALR 639 considered

Minister for Immigration and Multicultural Affairs v Israelian [1999] FCA 649 considered

WEN DI GU v MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS

S 18 OF 1999

MANSFIELD J

ADELAIDE

23 JULY 1999

THE COURT ORDERS THAT:

1.                  The decisions of the respondent by his delegate on 6 January 1999 to cancel the visa of the applicant Wen Di Gu under s 128 of the Migration Act 1958 (Cth) and on 7 February 1999 to affirm the cancellation of the visa under s 131 of the Migration Act 1958 (Cth) are set aside.

2.                  The respondent pay to the applicant costs of the application to be taxed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     This application concerns the validity of the cancellation of a visa under s 128 of the Migration Act 1958 (Cth) (“the Act”) and of the decision under s 131 of the Act not to revoke that cancellation.

2                     The respondent by his delegate may cancel a visa at any time under s 128 if the visa holder is outside Australia.  The relevant ground for the exercise of that power in this matter is that expressed in s 128(a)(i) of the Act, namely that the respondent is satisfied that there is a ground for cancelling a visa under s 116.  In the present circumstances, it was said that s 116(1)(a) provided that ground.  It entitles the respondent to cancel a visa if satisfied that

“any circumstances which permitted the grant of the visa no longer exist.”

3                     On 28 March 1998 the applicant was granted a Temporary Business Entry (Class UC) Visa Subclass 457 – Business (Long Stay) (“the visa”) under the Act and the Migration Regulations (“the Regulations”).  It permitted her to travel to, enter and remain in Australia until 27 March 2002.

4                     It is common ground that the relevant criteria required to be satisfied at the time of granting the visa were those relating to independent executives (reg 457.223(7)) which was in the following terms:

“The applicant meets the requirements of this subclause if the Minister is satisfied that:

(a)      the applicant proposes to develop in Australia a business activity that will be:

(i)                  conducted by the applicant as a principal; and

(ii)                of benefit to Australia; and

(b)      the applicant has a genuine and realistic commitment:

(i)                 to maintain or obtain an ownership interest in a business in Australia; and

(ii)               to maintain a direct and continuous involvement in the management of the business; and

(iii)             to make decisions that affect the overall direction and performance of the business from day to day; and

(c)      nothing adverse is known to Immigration about the applicant’s business background; and

(d)      the applicant has net assets of:

(i)                  not less than AUD 250,000; or

(ii)               a lesser amount that the Minister consider to be adequate;

to conduct or establish the business, …”

5                     That visa was granted upon application made by her on 30 October 1997.

6                     On 1 November 1997, reg 457.223(7) was amended by Migration Regulations (Amendment) Statutory Rule No. 288 of 1997, to add subpar (e) and (f) in the following terms:

“(e)      the applicant has personal attributes and background that are relevant to, and consistent with, the nature of the proposed business; and

(f)      the applicant has demonstrated that there is need for the applicant to be temporarily resident in Australia to conduct or establish the proposed business.”

7                     The respondent accepts, for the purposes of this application only, that subpar (f) of reg 457.223(7), did not apply to the applicant at the time of the grant of the visa, and so cannot identify “circumstances which permitted the grant of the visa” which might no longer exist under s 116(1)(a) of the Act for the purposes of the decision under review.  That acknowledgment is significant for the purposes of resolution of this application.

8                     The applicant was born on 24 January 1970.  She is a native of the People’s Republic of China.  There is evidence on the departmental file, apparently considered at the time the application for the visa was granted, that she is a director of Kuku Kuru Sushi Australia Pty Ltd (“the company”), and holds one third of the issued shares in the company.  She is said to have been experienced in operating restaurants, and to be fluent in Japanese.  She subscribed $101,500 towards her investment in the company.  For the financial year ended 30 June 1997, the company had modest sales of $180,819.32 and a net operating loss of $13,069.26  There is also information that she held substantial cash assets in Australia in her name, about the nature of the business of the company (an operator of a chain of Japanese restaurants), and about the role which it was contemplated that she would play in the company’s operations.

9                     On 2 January 1998, the applicant married in a traditional ceremony and subsequently on 5 March 1998 married in a civil ceremony.  She entered Australia on 8 March 1998 and, after the grant of the visa, she left Australia on 8 April 1998.  She had not returned to Australia by the time of the decision under review.

10                  The applicant’s husband desired also to obtain a visa for entry to Australia, and to that end completed an application which he dated and signed on 1 May 1998.  Documents accompanying that application confirmed the genuineness of the marriage.  That application was not lodged until 10 August 1998.  It led to certain investigations being undertaken in respect of the applicant’s husband.  On 31 December 1998, the applicant attended the Australian Visa Office in Shanghai for an interview in relation to that application.  In the course of that interview, the delegate of the respondent apparently formed the view that the applicant might no longer have been eligible to hold the visa.  He informed her of that view, and arranged a further interview on 6 January 1999 to give her the opportunity of showing why the visa should not be cancelled.  She provided information.  It is apparent that the delegate took an adverse view as to the reliability of certain of that information.  The delegate had checked the number of international telephone calls to Australia made by the applicant between 17 July 1998 and 22 December 1998.  There had been thirteen, of which nine lasted less than one minute.  The concluding notes of the delegate are in the following terms:

“I have deciided [sic] to cancel the visa as Ms Gu is not an IE but a passive investor in a business in Australia.  I do not accept the reasons placed forward by Ms Gu provide suffeicnt [sic] reason why the cancellation should not proceed.  Ms Gu movements and lack of knowledeg [sic] of her claimed business in Australia indicate to me she is not managing a business as the principal; has not provided evidence of ownership interest; is not maintaining direct and continuous involvement in the management of the business; is not making decisions that effect [sic] the overall direction of the business from day to day and I find there is no need for her to be temporarily resident in Australia.  Visa will be cancelled.”

11                  On 6 January 1999, the applicant was handed a notice of cancellation of the visa under s 128 of the Act.  That letter said that the cancellation was “because the circumstances that existed at the time of grant of your visa no longer exist i.e. you do not meet the requirements for the Business (Long Stay) Subclass 457 (Independent Executive) visa”. The “Decision Record Visa Cancellation under s 116 or s 128 of the Migration Act 1958 – visa holder outside Australia” identified the reasons for that decision.  It was provided to the applicant under s 129 of the Act.  Those reasons were expressed as follows:

“Reasons:  Ms Guo departed Australia twelve (12) days after visa grant and has not returned to date.  Ms Guo could not provide evidence

·             of running and managing an Australian business as the principal;

·             of maintaining an ownership interest in a business in Australia;

·            of maintaining a direct and continuous involvement in the management of an Australian business;

·            is making decisions that affect the overall direction and performance of the business from day to day; and

·            has not demonstrated that there is need for her to be temporarily resident in Australia to conduct or establish a proposed business.”

12                  Those reasons represent the paraphrase of the provisions of reg 457.223(7)(a)(i), and (b)(i)-(iii) and (f).  They pay no apparent heed to the introductory words to subreg (7)(a) and (b).  It may be that the delegate did so, but he certainly did not say so.  His focus expressly is upon the applicant being unable to provide evidence of the factual matters which the sub-paragraphs of the regulation refer to.  It is not a focus upon the criteria in subreg (7), which includes the words in subreg (7)(a) and (b).  In the case of subreg (7)(b), the criteria focuses attention upon whether the applicant has a genuine and realistic commitment to the three matters in subpars (i)-(iii) rather than simply to subpars (i)-(iii) as states of fact in themselves.  In the case of subreg (7)(a), the criterion is whether the applicant proposes to develop a business activity with certain characteristics rather than to whether the business activity already has those characteristics.  Of course, it is not appropriate to analyse the reasons for decision of the administrative decision maker with an eye finely attuned to error:  Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272, but the reasons do expressly focus on whether the applicant was in fact doing the things to which the subpars refer rather than to her state of mind or intention.  It is also difficult to understand how the delegate could have reached the view that the applicant no longer had a genuine and realistic commitment to maintain or obtain an ownership interest in a business in Australia.  He found that she was a passive investor in such a business.  The only information before the delegate was that she had invested $101,500 in the company.  It is, however, not necessary to address those matters further because the delegate further considered those reasons under s 131 and a later document records the outcome of that further consideration.  It would otherwise be necessary to consider the extent to which those reasons indicated reviewable error under s 476(1)(e) and (1)(g) of the Act.

13                  The applicant then had the opportunity of responding to that notice.  She did so.  On 28 January 1999, a lengthy submission of information and other material was sent to the delegate on her behalf by a registered migration service.  It is not necessary to consider that material in detail.  It explained the nature of the business, and the applicant’s reasons for her delay in returning to Australia.  Having made plans to return to Australia with her husband, after the grant of her visa, she became pregnant and suffered a miscarriage on 5 May 1998.  She was hospitalised for some time, but then again became pregnant and was hospitalised further but ultimately again miscarried.  That occupied a period of some months between May and August 1998.

14                  The respondent, under s 131 was obliged to consider that response.

15                  Section 131(1) provides:

“Subject to subsection (2), after considering any response to a notice under section 129 of the cancellation of a visa, the Minister:

(a)      if not satisfied that there was a ground for the cancellation; or

(b)      if satisfied that there is another reason why the cancellation should be revoked;

is to revoke the cancellation.”

16                  The same delegate of the respondent considered the applicant’s response.  He did not alter his conclusion, but his reasons were, in some respects, then different.  By notice of 7 February 1999, the delegate of the respondent informed the applicant that he had decided not to revoke the cancellation of the visa.  His reasons were:

“After considering your response, the Department has decided not to revoke the cancellation of your visa under 128 because you have not demonstrated that there is a need for you to be temporarily in Australia as the holder of a Business (Long Stay – Independent Executive) Subclass 457 Visa.  You do not manage an Australian business on a day to day basis.  You demonstrated little knowledge of your business investment in Australia.  Your absence from Australia from almost the date of grant of your visa indicates the business does not require your presence in Australia.”

17                  In my view those reasons clearly demonstrate errors of law on the part of the delegate. 

18                  The first and fourth sentences of those reasons are clearly references to subreg (7)(f).  It did not apply to the grant of the visa to the applicant, and in the circumstances could not provide a basis for the cancellation of the visa under s 116(1)(a).  That was acknowledged by the respondent.

19                  The second and third sentences do not expressly relate to criteria for the visa expressed in reg 457.223(7).  It is not a necessary circumstance for the grant of the visa that the applicant manage an Australian business on a day to day basis.  The relevant criteria appears to be that which appears in reg 457.223(7)(b)(ii) and (iii), namely that the applicant at the time of the grant of the visa has a genuine and realistic commitment to maintain a direct and continuous involvement in the management of the business of the company, and a commitment to make decisions that affect the overall direction and performance of the business from day to day.  It is not an accurate paraphrase of those two criteria, or of either of them, to consider whether the applicant was managing the business on a day to day basis.  The delegate has not addressed the question which s 116(1)(a) provokes, namely whether the commitment which the applicant was found to have had at the time the visa was granted no longer exists.  I have considered whether the third sentence of the reasons, namely that the applicant demonstrated little knowledge of the business investment in Australia, or the reasons as a whole, might indicate that the delegate had addressed the correct question under s 116(1)(a) despite the apparent focus on whether she was in fact managing the business on a day to day basis.  It may be the case, in certain circumstances, that events after the grant of a visa may properly lead to the view that the commitment which was found to exist at the time of the grant of the visa may no longer exist.  The level of awareness of, or involvement in, the business after the visa was granted may be facts which demonstrate that the commitment which once existed may no longer exist.  However, I am satisfied the delegate of the respondent has not addressed the continued existence of the commitment prescribed by reg 457.223(7)(b) at all, simply because there is nothing in the reasons, or in the earlier reasons given in the document of 6 January 1999, which indicates that he has done so.  His focus is expressly on what the applicant is doing, or not doing, in relation to the business rather than upon whether she has, or still has, a genuine and realistic commitment to maintain a direct and continuous involvement in the management of the business and to make decisions concerning it of the character specified in subreg (7)(b)(iii).

20                  In my judgment, the delegate of the respondent erred in law in directing his attention to whether as a fact, at the time of the cancellation decision, the applicant was maintaining a direct and continuous involvement in the management of the business and was making decisions that affected the overall direction and performance of the business from day to day, rather than to whether she still had the commitment to which subreg (7)(b) directs attention.

21                  The respondent contended that, other than the error which the delegate has made in having regard to subreg (7)(f) as providing a basis for cancelling the visa, he had not otherwise fallen into error.  It was then contended that, notwithstanding the error in relying upon subreg (7)(f) when it did not apply to the grant of the visa, the decision should not be set aside because it would serve no useful purpose to do so.  I have found that the delegate fell into error in addition in failing to address the continued existence of the criteria in subreg (7)(b)(ii) and (iii) in any event.  Even if I were wrong in that conclusion, I would not find that the decision should be allowed to stand.

22                  There are cases where, despite the finding of a particular error having been made, a decision is not set aside or remitted for further consideration because it would be futile to do so:  see eg. Lek v Minister for Immigration Local Government and Ethnic Affairs (1993) 43 FCR 100 per Wilcox J at 136; Rahim v Minister for Immigration and Ethnic Affairs (1997) 78 FCR 223 per Sackville J at 238, Jaswal v Minister for Immigration and Multicultural Affairs (Tamberlin J, unreported, 24 September 1998).  Merkel J in Nguyen v Minister for Immigration and Multicultural Affairs (1998) 158 ALR 639 at 647-648 discussed considerations relevant to whether the Court should exercise its discretion to grant relief under s 481 of the Act when it was contended that it would be futile to do so.  The Full Court in Minister for Immigration and Multicultural Affairs v Israelian [1999] FCA 649 also recently considered that question (per Einfeld and North JJ at pars 8-12).

23                  In the circumstances of this matter, I do not think it would be appropriate to dismiss the application because it would be futile to set aside the cancellation of the visa.  That involves the assumption that the decision, although made at least in part in error, would be arrived at in any event.  I am not persuaded that that is the case.  If the decision is set aside, the effect will be that the visa will then be in force.  It is a matter for the respondent whether or not to re-activate reconsideration of the decision to cancel the visa.  He need not do so.  If he does so, it may not be the same delegate who addresses the reconsideration.  It is by no means clear that another delegate would necessarily come to the conclusion that the applicant no longer satisfies the criteria in subreg (7)(b).  There is, in my view, at least some prospect that an alternative view of her commitment in terms of that subregulation would be taken, particularly in the light of her explanation for her lengthy absence from Australia on which the particular decision maker has apparently placed only little weight.  It is also unclear, from the reasons, whether those findings which I have identified as attributable to subreg (7)(b)(ii) and (iii) were influenced to some degree by the delegate’s findings particularly attributable to subreg (7)(f).  If considerations relating to subreg (7)(f) are removed from the decision making equation, I am not persuaded that the respondent, if he chooses to consider again whether to cancel the visa, would necessarily conclude that the visa should be cancelled.

24                  In my judgment, the proper order is simply to set aside the decisions of the respondent by his delegate to cancel the visa under s 128, and to affirm the cancellation of the visa under s 131.  I so order.  I do not think any consequential orders are necessary.  The respondent may be empowered under various provisions of the Act to cancel the visa, provided proper grounds for that cancellation exist.  It is neither necessary nor appropriate in those circumstances to refer the particular decision now set aside to him for further consideration.

25                  In my view the respondent should pay to the applicant costs of the application to be taxed.

Associate:

Dated:              23 July 1999