FEDERAL COURT OF AUSTRALIA

Wen v Minister for Immigration & Multicultural Affairs [2000] FCA 320

MIGRATION –Application to review a delegate’s decision not to grant a Business Skills (Migrant) (Class AD) Business Owner (Subclass 127) Visa – whether the delegate held the belief that it was necessary or appropriate, in applying cl 127.212(2) of the Migration Regulations, to require an applicant to “specify or prove the source of money that gave rise” to net assets – whether such a belief amounted to an error of law – the interpretation of “net assets” in cl 127.212(2) – whether the evidence provided by the applicant so clearly supported the grant of the visa that a failure to do so would amount to an error of law.

ADMINISTRATIVE LAW – Migration Act 1958 (Cth) – criteria required to be satisfied before visa granted – decision maker declined to grant visa because one criterion not satisfied – whether a decision maker must also address each of the other primary criteria specified – whether error of law not to consider other criteria in circumstances.

Administrative Appeals Tribunal Act 1975 (Cth) s 43(2)

Administrative Decisions (Judicial Review) Act 1977 (Cth) s 13

Migration Act 1958 (Cth) ss 29, 30, 31, 47, 47(1), 54, 55, 56, 58, 62 65, 65(1)(b), 66(2)(c), 368, 430, 476(1)(3), 496

Migration Regulations 1994 (Cth) regs 1.03, 1.11A, 2.03, 2.12C, cll 127.211, 127.212, 127.212(2)(a), 127.213 - 127.218, 127.221, 127.222, 127.223 - 127.226

Eshetu v Minister for Immigration and Multicultural Affairs (1997) 71 FCR 300 applied

Sun Zhan Qui v Minister for Immigration and Ethnic Affairs (1997) 151 ALR 505 applied

Minister for Immigration and Ethnic Affairs v Wu Shun Liang (1996) 185 CLR 259 applied

Norvill v Chapman (1995) 133 ALR 226 distinguished

Ly Kim Tong v Minister for Immigration and Multicultural Affairs [1999] FCA 15 distinguished

A v Pelekanakis [1999] FCA 236 referred to

Paramanthem v Minister for Immigration and Multicultural Affairs (1998) 160 ALR 24 referred to

Burns v Australian National University (1982) 61 FLR 76 applied

Dornan v Riordan (1990) 24 FCR 564 applied

Australian Postal Corporation v Lucas (1991) 33 FCR 101 applied

McAuliffe v Secretary, Department of Social Security (1991) 13 AAR 462 applied

Commonwealth of Australia v Smith (1988) 10 AAR 277 referred to

McAuliffe v Secretary, Department of Social Security (1992) 28 ALD 609 applied

Our Town FM Pty Ltd v Australian Broadcasting Tribunal (1987) 16 FCR 465 applied

Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500 applied

Commonwealth of Australia v Pharmacy Guild of Australia (1989) 91 ALR 65 applied

Minister for Immigration and Multicultural Affairs v Ozmanian (1996) 71 FCR 1 applied

ZHANG LUI WEN v MINISTER FOR IMMIGRATION

& MULTICULTURAL AFFAIRS

S 70 OF 1999

MANSFIELD J

23 MARCH 2000

ADELAIDE

THE COURT ORDERS THAT:

1.         The application is dismissed.

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

REASONS FOR JUDGMENT

1                     This is an application to review a decision of a delegate of the respondent (“the delegate”) of 21 July 1999, refusing to grant to the applicant a Business Skills (Migrant) (Class AD) Business Owner (Subclass 127) Visa (“the visa”).

2                     The primary criteria, specified pursuant to reg 2.03 of the Migration Regulations (“the Regulations”), to be satisfied at the time of the application for the visa are set out in cl 127.21 of Sch 2 to the Regulations.  Clause 127.212 contains the criteria relevant to the present application.  It is in the following terms:

“(1)     The applicant has overall had a successful business career.

(2)           In any 2 fiscal years in the 4 fiscal years immediately preceding the making of the application:

(a)        the net assets of:

(i)                  the applicant; or

(ii)                the applicant and his or her spouse together;

in a qualifying business or qualifying businesses were not less than the equivalent of AUD300,000 in each of those years; and

(b)                if a qualifying business referred to in paragraph (a) was operated by a publicly listed company, the shareholding of:

(i)                  the applicant; or

(ii)                the applicant and his or her spouse together;

was at least 10% of the total issued capital of the company.”

3                     The delegate found that the applicant had not met the requirements of cl 127.212(2)(a).  He found that the applicant did not have “net business assets” in two of the four fiscal years preceding his application for the visa of $300,000.  The expression “net business assets” was used by the delegate upon the basis that the businesses in which the applicant claims to have had assets are “qualifying businesses”, as defined in reg 1.03 of the Regulations.

4                     The delegate’s reasons were in the following terms:

“The SubClass 127 criterion requires personal ownership of assets.  As the PRC economy is in transition to a socialist market economy, determination and evidencing of personal ownership of business assets is complex.  There is scope for decision makers to inquire into the source of an applicant’s claimed assets, in order to reach a proper degree of satisfaction that an applicant is indeed the legal and beneficial owner of a business interest.  The evidence you provided in your application was insufficient to establish your personal ownership of the assets you have claimed.

You were given an opportunity, in a letter dated 22 April 1999, to provide further evidence in support of your application.  In that letter the issue of source of capital and the low level of profits/cash generated from the operating activities of your main businesses was addressed.  You were required to provide a clear paper trail and a clear explanation of how you accumulated the capital funds of HK$ 5 million and HK$28.8 million that were invested in Longtech Enterprises Limited as registered capital and shareholder’s loans.

On 2 July 1999 you forwarded a number of documents including your bank savings book, two untranslated internal profit calculation statements of two real estate joint ventures, and an explanation on the losses of the companies.  You did not, however, take the opportunity to explain the source of your capital funds invested in Longtech Enterprises Ltd and history of your participation in real estate business activity.  The additional documentation submitted did not provide a clear paper trail and a clear explanation of the source of your net business assets.  It would appear that the source of your capital funds came from your share of profits in two real estate joint ventures and the two unverified profit calculation statements submitted.  These, however, will not be regarded as an acceptable evidence to demonstrate the level of your equity interest and earnings in the real estate businesses.

I do not accept, on the basis of information submitted, that you have demonstrated to an acceptable level that you can satisfy the legal criteria of Migration 127.212(2).  In the absence of sufficient relevant documentation you have failed to demonstrate that you personally owned the net business assets in two of the last four years and accordingly, your application is refused.”

5                     The delegate did not indicate whether the criteria specified in cl 127.211 and cll 127.213 – 127.218 were satisfied.  These criteria must also be met at the time of the application if it is to be successful.  Clause 127.22 specifies the primary criteria to be met at the time of the decision.  Clause 127.221 requires that the applicant continues to satisfy the criteria in cll 127.211 - 127.217 at the time of the decision.  Also, the delegate did not refer to cl 127.221, however the delegate clearly remained unsatisfied at the time of the application that the criteria in subs (2) of the clause were met.  In respect of the applicant’s points score called for by cl 127.222, the delegate said that it was “not applicable”.  The criteria required by cll 127.223 - 127.226 were also not referred to by the delegate.  It is clear that the delegate did not refer to those other criteria because, whatever views were taken with respect to them, the application for the visa failed on the basis that the criteria in cl 127.212(2) had not been met.

6                     At the conclusion of the delegate’s reasons, under a section for other factors not previously taken into account, the delegate added:

“Other problems relating to this application was the failure to provide Annual Return of Longtech Enterprises Limited for fiscal 1995/1996 or 1996/1997.”

The grounds of contention

7                     There were three grounds of contention.

8                     The applicant first submitted that the decision involved an error of law, being an incorrect interpretation of cl 127.212(2) in reaching the decision to reject the application for the visa.  It was submitted that the delegate had interpreted cl 127.212(2) as containing a requirement that the applicant “specify or prove the source of the money that gave rise” to the net assets.  Secondly, it was submitted that the decision involved an error of law, being an incorrect application of the law to the facts as found.  That was because, it was submitted, the delegate regarded the failure of the applicant to supply the history of his participation in real estate business activities as constituting a failure to comply with a request made by the Australian Consulate General Hong Kong Migration Office dated 22 April 1999, when there had been an appropriate supply of information pursuant to that request.  Finally, the applicant submitted that the requirements set down by s 56 of the Act to be observed in connection with the making of the decision were not observed, because the delegate did not make any finding or determination in relation to the criteria specified in other clauses of cl 127.21 and in cl 127.22 of Sch 2 to the Regulations.

Background

9                     The applicant was born in Guandong province in China on 2 October 1966.  He is a citizen of Sierra Leone, and holds a passport issued by the Republic of Sierra Leone.  He is married with two children.  One of the children was born in China in 1995 and the second in Hong Kong in 1996.  In his application for a visa, dated 24 December 1998, he said that he was the managing director of Longtech Enterprises Ltd (“Longtech”), a trading and investment company.  He gave an address in Hong Kong as his current address.  He said that previously, from January 1988 to January 1992, he had been employed as the sales manager of Shenzhen Qidong Industrial Company Ltd (“Shenzhen Qidong”), a trading and development company in China.

10                  He said that the Longtech business was located both in Hong Kong and in China, and was involved in food and beverages manufacture.

11                  The supplementary information the applicant supplied to the Department of Immigration and Multicultural Affairs disclosed that:

·        He owned 99 per cent of the issued shares in Longtech, and was its current managing director; he had been involved with Longtech since March 1992

·        He owned 95 per cent of the issued shares in Capital Lane International Ltd (“Capital”), and was also its current managing director; he had been involved with Capital since 2 August 1994.

12                  He gave his net assets in Longtech and in Capital as follows:

13                  He said his net business assets at the time of his application were $A5,288,391 and that he was able to transfer to Australia $A1,000,000 within two years (using the then current, and slightly reduced, exchange rate).  He did not wish to disclose his personal assets, which comprised land in China which is hard to have valued.

14                  He described his two main businesses as Longtech and Capital, an “extension” of Longtech.  The address for each premises was given as a Hong Kong address.

15                  Enclosed with his application were audited financial statements of Longtech and Capital, and other records of those companies, including “Annual Returns”.  The application described the business as a joint venture in the making and distribution of beer in China, tobacco products and distribution of machinery parts.  He described the distribution arrangements, through other joint venture companies.  He also referred to a joint venture with Tin Lung Enterprises Ltd to establish Dianhue Industrial (Shenzhen) Co Ltd to establish a cigarette packing business, in which the investment was $US4.5  million for a 30 per cent equity.  No evidence of that investment was produced.

16                  He said Capital operates through a subsidiary Capital Lane Wine Company Ltd (“Capital Wine”) in the local sale of wine and other transit trading business.  It is the overseas sales representative and distributor of certain Chinese wine products.  It is the Chinese distributor of certain French wine products.

17                  He described in detail his responsibilities in operating the businesses of Longtech and Capital (or Capital Wine).  He had thirteen staff in Hong Kong in 1996.

18                  The documents produced in support of the application were the financial statements of Longtech for the two years ending 31 March 1997 and 31 March 1998, and of Capital for those same periods, and parts of the banking records of the applicant with the Hong Kong Bank and with the American Express Bank.  Those financial statements were audited by chartered accountants in Hong Kong.  They included the directors’ and auditors’ reports, the profit and loss account, the balance sheet, and the notes to the accounts.

19                  On 22 April 1999 the Australian Consulate General Hong Kong, Migration Office, wrote to the applicant concerning his visa application (“the request for information”).  It sought the following:

“Evidence of Net Business Assets of $300,000 AUD – appropriate financial statements for at least two fiscal years and documents evidencing ownership for those two fiscal years are essential.  Policy relating to this requirement can be found in PAM 3 Schedule 2 – Permanent Visa (Migrant) – Business Owner – Visa 127.

.         evidence that you personally invested HK$5 million into Longtech Enterprises Limited as Registered Capital e.g. your old personal bank books and bank transfer advices.

.         according to the financial statements submitted, you advanced HK$28,814,082 to the company in the form of Shareholder’s loans in 1996.  The company use the funds to make investments in two PRC companies …  The total investment in these two associated companies is HK$28,877,517.  Please provide a clear paper trail and a clear explanation of how did you accumulate the funds of HK$28.8 million.

…

.         evidence that you have overall had a successful business career.

.           The financial statements submitted shows Longtech Enterprises Limited suffered a net loss of HK$137,693 since its establishment in 1992 and Capital Lane International Limited suffered an accumulated net loss of HK$1,420,033.17.  It appears that you do not meet the Migration Regulation 127.212(1) “an overall successful business career”.”

20                  On 24 June 1999, the applicant’s migration agent responded, indicating that the applicant was still awaiting certain bank information and would provide certain information direct.  That letter enclosed an explanation for past trading losses.  The migration agent, in his capacity as a chartered accountant, asserted that the applicant’s business strategies for promoting new products seemed correct.

21                  It was said that the trading losses of Longtech in 1993 were due to establishment expenses, but that Longtech had then traded profitably so that retained earnings by 1997 totalled $HK201,873.  Capital, he said, had incurred an initial loss of $HK1,420,033 because of strategies undertaken to secure market penetration:  reduced margin and high promotional expenses, so that the market once established would be profitable at industry normal levels of margins and promotional expenses.  He also enclosed two sheets, written in Chinese and not translated (contrary to the request, although the respondent did not formally complain of that fact on this application) which, apparently, the delegate was able to read.  The delegate has written on the sheets:  ‘Profit Calculation statement –Land in Huizhon’ and ‘Profit Calculation Statement – Land in Shanghai’.

22                  The Longtech financial statements for the year ending 31 March 1994 were also produced.

23                  The applicant also produced some documents concerning Chuxiong Deligold Brewery Co Ltd (“Chuxiong”) and Hailin Wuhuan Brewery Co Ltd (“Hailin”) including two ‘Auditor’s Verification’ Reports in English.  That relating to Chuxiong, as at 31 December 1997, stated that it had registered capital of $US4,624,000 and total investment of $US9,200,000.  Two entities had contributed $US8,351,228 (90.8 per cent).  Yunnan Chuxiong Cigarette Company and Hong Kong Longda Enterprises Ltd had invested $4,848,575 and $3,502,653 respectively, largely in Chinese currency.

24                  In relation to Hailin, at 16 January 1995 Hong Kong Longda Enterprises had invested 4,500,000 yuan and Mudanjiang Brewery Factory 10,500,000 yuan.  Those investments were made by Wuhuan Brewery Factory converting its equipment into its investment of 10,500,000 yuan.  Hong Kong Longda Enterprises Ltd had contributed its 4,500,000 yuan (30 per cent) by

·        payment of $HK1,442,477

·        converting a motor vehicle into capital for RMB 700,000

·        payment of 40,100 yuan

·        payment of RMB 1,170,000 to Light Industry Machinery Factory of Guandong Province to pay for equipment ordered by Wuhuan Brewery Factory

·        paid RMB 1,000,000 to Wuhuan Brewery Factory (the timing of the latter two payments is consistent with those payments being made to Wuhuan Brewery Factory in respect of the plant and equipment which it then converted into capital in Hailan.

25                  Included in the notes of the respondent is the following:

“Established a company in H.K. in 1992, paid-in capital 5 million, company suffered losses since establishment, in 1995 & 1996 PA advanced HK$28.8 million more to the H.K. company.  The company use the money to make investments in two PRC companies which manufacture beers.  I suspect the H.K. company is the window company for some State entities in China, since the company had not generated any profits up to 31 December 1995 ¦50, and only small profits in 1996 and 1997 ¦185, DA needs to explain the source of capital put into Longtech for acquiring two beers co.”

26                  The translation of the two sheets shows they are “profit settlement” statements for land in Guandong Province dated 20 December 1993 and for land in Shanghai dated 3 July 1996.

27                  The Guandong Province statement shows a purchase price of 23,672,000 yuans (no purchase date is disclosed) and a profit on sale of 24,200,000 yuans divided as to 60 per cent to East Sea International Group Company Ltd and as to 40 per cent to Zhang Huiwen (9,680,000 yuans).

28                  The Shanghai statement shows a purchase price of 125,580,000 yuans (again, no purchase date is disclosed) and a net profit on sale of 79,080,000 yuans divided as to 65 per cent to Shanghai Guandong Real Estate and Property Company and as to 35 per cent to Zhang Huiwen (27,678,000 yuans).

29                  The translation of the bank passbooks shows a passbook in the name of Zhang Huiwen with Lucheng City Credit Union with substantial deposits and almost equivalent withdrawals during 1994 in three tranches totalling 19,830,000 yuans, one substantial deposit and then equivalent withdrawals in 1995 of 5,900,000 yuans, and three substantial deposits and almost equivalent withdrawals during 1996 totalling some 10,988,600 yuans.  There are no deposits which on their face tie to the two amounts apparently received in the two property settlements, although the period covered by the passbook (as translated) does not extend before 1 March 1994 or after 20 July 1996.

30                  As the information before the delegate showed, Longtech had the following profit (loss) after tax for the years for which information was provided:

and Capital the following:

31                  The Annual Returns of Capital for 1995, 1996 and 1997 showed that it was incorporated in Hong Kong on 2 August 1994, and that the applicant has 95 per cent of the 2,000,000 issued shares.

32                  Longtech was incorporated in Hong Kong on 19 March 1992.  Its Annual Returns for 1993 and 1995 were produced.  They show that from 10 August 1992, Zhang Huiwen held 99 per cent of its 5,000,000 issued shares.

33                  The delegate has apparently accepted that references to Zhang Huiwen in certain of the documents relate to the applicant.

Consideration of Contentions

34                  Sections 29 and 30 of the Act empower the respondent to grant a non-citizen a visa, inter alia, to remain permanently in Australia.  Section 31 provides for prescribed classes of visas, and for regulations to prescribe criteria for a visa.  The applicant is only eligible for the visa if he satisfies the prescribed criteria:  s 65 of the Act.

35                  The applicant had to satisfy, inter alia, the criteria in cl 127.212(2)(a) of Sch 2 to the Regulations.  It is the obligation of the respondent to consider a valid application for the visa:  s 47.  That function may, however, be delegated:  s 496 of the Act.  In the present circumstances, the delegate became the person with the power and the obligation to determine whether the applicant satisfied those criteria.  In doing so, the delegate was obliged to have regard to the information provided to the respondent:  ss 54 and 55, and including information provided in response to the request for information:  s 56(1).

36                  The first submission is not that the delegate failed to have regard to such information.  It is that the delegate wrongly interpreted cl 127.212(2)(a) so as to require the applicant to specify and prove the source of the funds which gave rise to the net assets of the applicant, in this case his interest in Longtech and in Capital.

37                  In the Procedures Advice Manual containing generic guidelines for Business Skills Visas (called by the acronym PAM.3, a term I shall adopt in these reasons) published by the Department of Immigration and Multicultural Affairs, the point is made (par 9.2) that an applicant’s net assets in a business are calculated by reference to that applicant’s share in the business.  It is also necessary to have regard to the balance of any loans made by an applicant to the business, and on the other hand, to any loans made by the business to the applicant and to any other loans made to the applicant by an outside source to finance that applicant’s investment in the business.  So much is common sense, and is uncontentious.

38                  Par 9.13 of PAM.3 makes the point that an applicant needs evidence to establish the value of that applicant’s net assets.  In the case of an interest in an incorporated company, it identifies some ways in which that interest, and its value, may be evidenced.  It indicates that balance sheets in audited financial statements are generally acceptable as evidence of net assets.  Par 9.14 deals with the source and ownership of assets.  It stipulates that, if a delegate has reasonable concerns about the legal ownership of any claimed asset, that delegate may request further evidence as to the ownership of the asset and its source.  Documents that provide evidence of the source of an asset, or of the accumulation of assets, may therefore be relevant.  Again, in my view, there is nothing exceptionable in those observations.  They are also a matter of common sense.

39                  The financial statements of Longtech indicate that during the year ended 31 March 1996, the applicant advanced to Longtech a sum in excess of $HK28,000,000.  The material also indicated that the applicant had invested $HK5,000,000 in Longtech in 1993.  It is evident that the delegate was concerned about the source of those funds.  If the source of those funds was a third party, for example by borrowings from a financial institution, then the applicant’s net assets would have to reflect that.  Another example might have been that the applicant was a nominee for an undisclosed third party, and acted as a conduit in applying those funds to Longtech.  In those circumstances, he might not be the beneficial owner of the assets which comprised the shares in Longtech in his name, and the advance in his name to Longtech.

40                  The critical question is whether the delegate took the view that it was necessary for the delegate, by reason of cl 127.212(2), to require the applicant to prove the source of the funds which gave rise to the net assets of the applicant or whether the delegate, in the process of considering the material, took the view that in the particular circumstances it was appropriate to seek that information.  In my judgment, it was the latter step which the delegate took.  That appears from consideration of the delegate’s reasons.  It is confirmed by the terms of the request for information.  The delegate noted that Longtech operates in China, and it was that fact together with the fact that those funds were apparently used to invest in two Chinese based companies (totalling $HK28,877,517), which caused the delegate to seek information to be satisfied that the assets were in fact assets of the applicant.  The delegate’s reasons express the foundation for that inquiry as being within the “scope” of the consideration required by cl 127.212(2).  They do not demonstrate that the delegate took the view that, as a matter of law to satisfy cl 127.212(2) in every case there is an obligation to undertake such an inquiry.

41                  The applicant contended that the delegate had misinterpreted the term “net assets” in cl 127.212(2) by adopting the definitions of “assets” and “verifiable” in PAM.3, or by applying reg 1.11A defining “beneficial ownership” out of context.  There is, however, nothing in the delegate’s reasons to support those contentions.  The delegate has not expressly referred to PAM.3 in that context, or to reg 1.11A.  In addition, I do not consider that reference to the definition of “assets” and “verifiable” in PAM.3 would have caused the delegate to interpret cl 127.212(2) so as to oblige the delegate to seek proof of the source of funds which gave rise to the applicant’s claimed interests in Longtech.  The definition of “assets” is straightforward, and does not touch upon the means of proof of ownership of assets.  It does refer to the definition of “verifiable”.  That term also, in my view, is not used in a contentious way.  It “means capable of being confirmed in source documents or other official records in order to present a true picture”.  The example is given of audited financial statements.  Even if applicable, it does not require the delegate to seek proof of the source of funds used to acquire such assets.

42                  Regulation 1.11A(1) relevantly provides that, for certain parts of Sch 2 including cl 127 applicable to the visa, ownership by an applicant of an asset includes beneficial ownership only if the beneficial ownership is evidenced in accordance with reg 1.11A(2).  Regulation 1.11A(2) describes the means of proof of beneficial ownership, including a trust instrument or a contract.  The expressions “owner” and “ownership interest” appear in cll 127.211, 127.213 and 127.216 of Sch 2 to the Regulations.  Again, there is nothing in the delegate’s reasons, or in the letter requesting information from the applicant, which indicates that the delegate has been led by reg 1.11A to conclude that cl 127.212(2) obliges the delegate to require proof from the applicant of the source of funds used to acquire the applicant’s net assets.  Paragraphs 9.13 and 9.14 of PAM.3 do not point the delegate to that conclusion.  The references in the delegate’s reasons to “personal ownership” are, in context, simply a way of the delegate describing the need to be satisfied that the assets are in reality the applicant’s assets.

43                  Consequently, in my judgment, the delegate did not adopt the incorrect interpretation of cl 127.212(2) of Sch 2 to the Regulations which has been asserted.  The delegate has simply taken the step of requiring evidence of the source of the funds available to the applicant to acquire his interests in Longtech because, on the material initially supplied, and having regard to the location of the conduct of Longtech’s business and its interests in Chinese based corporations, the delegate was concerned that the applicant might not be the true owner of the assets he claimed.  That was a matter for the delegate to decide.  It cannot be the case that a delegate must accept at face value the accuracy of material supplied in support of an application such as the present.  No doubt, often the material presented will satisfy the delegate in terms of cl 127.212(2).  But if a delegate has doubts about the reliability of that material, the delegate is empowered under s 56 of the Act to seek further information to explore those doubts and to see whether the satisfaction required is attained.  It may be that the delegate, on the material first presented by the applicant, could have concluded that the criteria in cl 127.212(2) were satisfied.  The delegate was not obliged to form that conclusion.  The fact that, in the circumstances, the delegate chose to seek the further information identified in the request for information does not, in my judgment, involve any error of law.

44                  It was also contended that the delegate had committed the same error of law, that is of treating cl 127.212(2) as obliging the delegate to require the applicant to provide proof of the source of the funds applied to his interests in Longtech, for another reason.  It was contended that, because all the evidence points towards showing the applicant owned the shares in Longtech and the loan to Longtech, and that funds were available to the applicant from the two real estate ventures referred to, the delegate had somehow erred in law in that manner.  An error of law in the process by which a particular decision was reached may be ascertained by inference:  Eshetu v Minister for Immigration and Multicultural Affairs (1997) 71 FCR 300 at 307 (Davies J).  The submission, in effect, is that the whole of the evidence is so clear that the delegate must have misapplied cl 127.212(2) by requiring the additional material referred to.  It was acknowledged that the delegate had explained that Longtech operates in China, and that the evidencing of personal ownership of business assets in China is complex.  It was submitted that the delegate was wrong in taking that step, because Longtech is a Hong Kong company.  The delegate is a co-author of a Newsletter on the People’s Republic of China Business Skills Applications, dated 28 November 1997.  It highlights the difficulties of considering such applications because the determination of personal ownership of assets in China is difficult, inter alia, because the economy is in transition, and because of the incidence of document fraud.

45                  I am not persuaded that the delegate has made an error of law as claimed.  As the submission acknowledges, the delegate did have an express reason for seeking information as to the source of funds.  It may be that that reason reflects a misapprehension about whether Longtech is a company affected by the issues concerning personal ownership of assets in China on the basis that it operates in China, or because it has invested in two Chinese based companies.  That is not necessarily the case.  The delegate may have formed those concerns even with the belief that Longtech was incorporated in Hong Kong.  The delegate does not say that Longtech is incorporated in China.  But even such a misapprehension, if established, would not constitute an error of law reviewable under s 476(1)(e).  It may constitute an error of fact which gave rise to the request for information under s 56.  However, that request was made, and it is not itself the subject of an attack in this application.  Once the foundation existed for the request, in the delegate’s mind, there is no reason to conclude that the delegate considered the applicant’s claim for a visa upon the basis that the delegate was obliged as a matter of law to require the applicant to provide the requested information under cl 127.212(2), and that that information be provided, before the visa could be granted.

46                  In my judgment, the delegate’s decision is not infected with the legal error contended for.  The delegate is not shown to have failed to properly appreciate the legal principles applicable to the determination of the facts relevant to cl 127.212(2):  Sun Zhan Qui v Minister for Immigration and Ethnic Affairs (1997) 151 ALR 505 per Wilcox J at 550 and per Burchett J at 562.

47                  The second error of law asserted was in the delegate’s consideration of the information supplied by the applicant in response to the letter of 22 April 1999.  It was submitted that the delegate wrongly regarded the applicant’s failure to provide the history of his participation in real estate business activities as a failure to comply with a request made under s 56 of the Act.  It was argued that the delegate had breached ss 56 and 58 of the Act.

48                  In my judgment, that complaint must fail.  The request for information under s 56 in essence, as the delegate said, sought a “clear paper trail and a clear explanation of how you accumulated the funds of HK$5 million and HK$28.8 million to invest in Longtech”.  In the delegate’s view, that request was not fully met.  The information provided did not explain the source of the capital funds invested in Longtech, nor did it explain the “history of your participation in real estate business activity.”  The delegate did not regard the two unverified profit calculation statements as acceptable evidence of monies derived from those transactions, or that those monies all belonged to the applicant.

49                  In my judgment, the delegate did not err in law in its finding that the material provided did not provide a clear paper trail and a clear explanation of how those amounts were accumulated.  Apart from the fact that the two documents are not verified in any way, they do not explain when the properties were acquired, nor how the applicant came to acquire his claimed interest, nor the source of his funds to do so.  Until 1992 (when he was aged twenty-six), the applicant, according to his application, had worked as a sales manager in China for Shenzhen Oidong.  He does not assert anything to suggest that this employment attracted a high remuneration.  Somehow, prior to the disposition of those properties (presumably some time before the disposition because there is nothing to indicate that the properties were improved by the applicant and his co-owner), the applicant had funds of some 9,468,800 yuan to pay for his share of the Guandong property and then some 43,953,000 to pay for his share of the Shanghai property.  The ‘profit’ statement does not suggest that either property was purchased with any borrowed funds.  The banking records supplied do not indicate how the applicant’s share of the proceeds from those two sales was applied.

50                  The observations of the High Court in Minister for Immigration and Ethnic Affairs v Wu Shun Liang (1996) 185 CLR 259 as to the approach to be adopted in considering the reasons for decision of an administrative decision maker are apposite:  per Brennan CJ, Toohey, McHugh and Gummow JJ at 271 - 272, and per Kirby J at 290 - 293.  I do not consider that the delegate’s reasons can properly be criticised for referring to the history of the applicant’s real estate activities.  That topic was but a sub-theme of the primary request for information.  It was made relevant by the applicant’s response to the request for information.  The applicant produced the two sheets purporting to indicate a source of substantial funds.  The delegate’s observations about that material are not, in my view, inaccurate.  I do not consider that the delegate then treated the history of the applicant’s real estate activities as specifically the subject of the request for information.  The observation is upon the quality of the response to that request.  The delegate accurately referred to the request in the reasons, referring to the additional material as not providing “a clear paper trail and a clear explanation of the source” of the applicant’s net business assets.  That passage accurately reflects the terms of the request.

51                  In any event, the delegate’s reasons do not demonstrate that the delegate drew any inference adverse to the applicant by reason of the quality of the responsive information.  The delegate’s view was simply that that information, together with that earlier provided, did not satisfy the criteria in cl 127.212(2).  The reasons why that information did not persuade the delegate in favour of the applicant are given.  Consequently, even if the delegate had wrongly understood the request for information to have been for the history of the applicant’s activities in real estate, (and I do not consider that the delegate made that error), that misunderstanding did not play any part in the delegate’s decision.  It was simply the lack of information of itself to which the delegate referred, not the fact that the failure to provide such information had any additional significance.  There is no suggestion that the delegate did not consider all the information received:  ss 54(1), 55(1) and 56(1).  I note in addition that the Minister is empowered to make a decision on a visa application after the prescribed time for responding to a request for information under s 56 has elapsed, without taking further action to obtain the additional information:  s 62.  In the present circumstances, the delegate was entitled to make a decision on the visa application in the light of such additional information as the applicant chose to provide.

52                  The third matter argued was that the delegate erred in failing to address each of the primary criteria specified in cl 127.21 and 127.22 in the reasons for the decision.  That argument, if successful, would not lead to the application for judicial review being successful, because the applicant would (subject to the other matters argued) still be found not to meet the criteria in cl 127.212(2).  Consequently, the visa application would fail in any event:  s 65(1)(b).  However, counsel contended, the Court should make orders directing the delegate to consider, and give reasons for the decision in relation to, each of the primary criteria specified.  Otherwise, it was put, the applicant would not know whether he had satisfied the delegate on those other criteria and would not be able to make an informed decision whether to reapply for the visa.  Under cl 1104 of Sch 1 to the Regulations, the first instalment of the visa application charge payable at the time of the application is $3,100:  see reg 2.12C.

53                  Counsel for the applicant relied upon s 47(1) of the Act.  It provides:

“The Minister is to consider a valid application for a visa.”

54                  The obligation to consider the visa application carried with it, it was contended, the obligation to make a finding on each of the relevant criteria specified by sub class 127, at least in circumstances where the delegate had sought additional information under s 56 of the Act.  It was contended that the decisions of the Court in Norvill v Chapman (1995) 133 ALR 226 (“Norvill”) and in Ly Kim Tong v Minister for Immigration and Multicultural Affairs [1999] FCA 15 (“Ly Kim Tong”), supported that contention.

55                  I do not consider that either of those decisions support the applicant’s contention.  Norvill concerned the question, inter alia, whether the Minister for Aboriginal and Torres Strait Islander Affairs, in making a declaration under s 10 of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth), had considered a report prepared in accordance with that Act and representations attached to the report.  The Minister had not read the representations attached to the report.  The issue was whether, upon the proper construction of the legislation, the Minister was obliged personally to consider the representations.  See per Black CJ at 238, Burchett J at 251 and Kiefel J at 270.  It is apparent that the Court was not addressing the particular argument now urged upon the Court.  In Ly Kim Tong, the Court was asked to review a decision of a delegate of the Minister not to grant a tourist visa.  That visa had been refused because that delegate was not satisfied that the visa applicant intended to make a genuine short stay visit to Australia, and so one of the criteria necessary for the grant of that visa was not met.  It was not argued, on the judicial review application, that that delegate should nevertheless have determined, and given reasons for the decision, in relation to whether the other criteria applicable to that visa were met.  The argument in that case, which the applicant submits supports the present application, was that that delegate had failed to give genuine consideration to the visa application, and had failed to have regard to all the information placed before him.  Those arguments were, however, directed to attacking the decision that the visa application was not genuine.  That is, they were directed to the consideration of the criterion upon which the decision was based, not to other criteria applicable to that visa.  In my judgment, her Honour’s consideration of those arguments in that context does not touch upon the contention presently under consideration.

56                  It is the obligation of the Minister or the delegate under s 47 to consider the application.  The delegate has done that.  The delegate must consider all the information provided in relation to the application:  ss 54 and 56.  It does not follow from that obligation that the delegate must address every issue which might arise on the consideration of the application.  That will depend upon the process of consideration.  It may emerge very quickly that a particular application must fail because it does not meet a particular criterion applicable.  If so, ss 54, 55 and 56 do not oblige the delegate to nevertheless address all other criteria which might have become relevant had that particular hurdle been overcome.  Those sections impose an obligation on the delegate to consider the information to which they refer:  A v Pelekanakis [1999] FCA 236 (“Pelekanakis”).  As Weinberg J said in Pelekanakis, that obligation requires the delegate to have realistic regard to all the information in question.  In that case, the reasons of the delegate for refusing the application showed that the delegate had failed to do so, and so had not performed the statutory duty imposed upon him.  Merkel J in Paramanthem v Minister for Immigration and Multicultural Affairs (1998) 160 ALR 24 at 57 made the same point in a related context, and referred to a number of other authorities to the same effect.

57                  However, the mere fact that the delegate decided the application on a discrete matter essential to the success of the application does not demonstrate a failure to have had regard to that information.  The Minister or the delegate is ultimately charged with the obligation of granting or refusing the visa:  s 65.  In my judgment, in making that determination, the delegate must address the correct legal question or questions which the determination of the application requires.  But if the answer to one of those questions leads to the conclusion that the application must fail s 47 does not impose the obligation of addressing the other questions, if they are independent of the question determined, so that their determination would make no difference to the outcome of the application.

58                  That conclusion is reinforced by the obligation of the delegate to give reasons for decision:  s 66(2)(c).  That provision is not in such detailed terms as ss 368 and 430 of the Act which apply to the Immigration Review Tribunal and the Refugee Review Tribunal respectively.  I also note the terms of the obligation to give reasons for decision imposed upon the Administrative Appeals Tribunal under s 43(2) of the Administrative Appeals Tribunal Act 1975 (Cth) and the obligation imposed on decision makers under s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth).

59                  The purpose of such obligations is to ensure that the reasoning underlying the decision may be understood:  Burns v Australian National University (1982) 61 FLR 76; Dornan v Riordan (1990) 24 FCR 564 (“Dornan”).  In Australian Postal Corporation v Lucas (1991) 33 FCR 101, Burchett J set aside a decision of the Administrative Appeals Tribunal precisely because the Tribunal had failed to make findings on material questions of fact which would have enabled its reasoning process to be understood.

60                  However, it has been held that the failure to make findings of fact on questions which do not form part of the decision does not give rise to a reviewable error of law:  McAuliffe v Secretary, Department of Social Security (1991) 13 AAR 462 (“McAuliffe”).  In McAuliffe, the Administrative Appeals Tribunal had affirmed a decision that the applicant had received certain unemployment benefits to which he was not entitled and that the benefits so received were recoverable as a debt due to the Commonwealth.  To have been eligible for those benefits, the applicant must have met the four requirements specified in s 116(1)(c) of the Social Security Act 1947 (Cth).  The Tribunal’s decision was based upon the failure of the applicant to satisfy the first of those requirements.  It was argued that the Tribunal had fallen into error in failing to consider the other requirements of s 116(1)(c).  Von Doussa J said (at 468 - 469):

“But once the Tribunal concluded that the appellant was not unemployed within the meaning of s 116(1)(c), he could not qualify for benefit, and it was not necessary for the Tribunal to go further.  A failure by the Tribunal to include findings on questions of fact which do not form part of its decision does not, in my view, constitute a failure to comply with s 43(2B) of the [Administrative Appeals Tribunal Act 1975].”

See also Commonwealth of Australia v Smith (1988) 10 AAR 277 at 283.

61                  McAuliffe was affirmed on appeal:  McAuliffe v Secretary, Department of Social Security (1992) 28 ALD 609 (Spender, Foster and O’Loughlin JJ).

62                  In Dornan at 567 the Court stressed that the obligation to give reasons must be sensibly interpreted and applied with a view to achieving good and effective administration.  In Our Town FM Pty Ltd v Australian Broadcasting Tribunal (1987) 16 FCR 465 at 481, Wilcox J said of s 25B of the Broadcasting Act 1942 (Cth):

“There are, of course, limits upon the extent of the obligation arising out of s 25B.  It is not necessary that the report deal with every matter which was, or which might have been, raised in the proceedings.  It is enough that the findings and reasons deal with the substantial issues upon which the decision turned.”

63                  Similar views were expressed by Woodward J in Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500 at 507 and by Sheppard J in Commonwealth of Australia v Pharmacy Guild of Australia (1989) 91 ALR 65 at 88.

64                  Those decisions, although directed at the question whether the reasons for the decision were adequate, indicate that the obligation of an administrative decision maker is to determine the particular application and to expose the reasons for that determination.  It is not to determine all issues which might have been addressed to determine the application if it is not necessary to do so to reach a conclusion on the application.  In the present circumstances, the delegate was to consider the application pursuant to s 47 and to decide whether to grant it or to refuse it pursuant to s 65.  It was not to consider and make findings with respect to other matters which did not form part of the decision.

65                  Accordingly, I consider that the third matter argued on behalf of the applicant must also fail.

66                  Finally, the applicant was critical of the delegate’s observation, at the end of the reasons, that the applicant had failed to provide the Annual Return for Longtech for the years 1995/96 and 1996/97.  It is unclear whether the reference is to Annual Returns, strictly so-called.  As noted earlier, its Annual Returns for 1993 and 1995 were produced to the Tribunal.  If it refers to Annual Returns, it appears to be correct.  If it refers to financial statements, it is incorrect.  That observation, even if it be incorrect, does not affect the delegate’s decision.  It is clear that the delegate had considered Longtech’s financial statements.  They provided the information upon which the request for information was made under s 56 of the Act.  The Annual Returns of Longtech which were before the delegate contain no real financial information.  They could not have affected the outcome of the delegate’s consideration of the criteria specified in cl 27.212(2) of the Regulations.  In those circumstances, the comment, even if gratuitous, and erroneous, would not have altered the outcome of the application:  see Minister for Immigration and Multicultural Affairs v Ozmanian (1996) 71 FCR 1.

67                  In my judgment, this application must be dismissed.

Associate:

Dated:              23 March 2000