FEDERAL COURT OF AUSTRALIA

Weng v Minister for Immigration and Citizenship (No 2) [2011] FCA 444

THE COURT ORDERS THAT:

1.    The appeal is allowed.

2.    The parties to file within 14 days written submissions, or consent orders, as to the appropriate relief and as to costs.

3.    The outstanding issues referred to in order 2 be determined on the papers.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

INTRODUCTION

1    The appellant (Mr Weng) appeals from a decision of a Federal Magistrate (Weng v Minister for Immigration & Anor [2010] FMCA 670). In that decision, his Honour dismissed an application for review of a decision of the Administrative Appeals Tribunal (the Tribunal). The Tribunal in turn had dismissed an application for review of a decision of a delegate of the first respondent (the Minister) to cancel Mr Weng’s Business Skills visa.

2    Mr Weng contends that the Federal Magistrate erred in concluding that the Tribunal had properly addressed the questions of whether:

(a)    certain property development activities were a ‘business’ or an ‘eligible business’;

(b)    Mr Weng had made a genuine effort to obtain an ownership interest in an eligible business in Australia; and

(c)    it should exercise its discretion to cancel Mr Weng’s visa.

3    With leave (unopposed save as to costs thrown away), Mr Weng raises an issue not argued in the Federal Magistrates Court, namely, whether the Tribunal committed jurisdictional error by failing to form the opinion required by s 134(1) of the Migration Act 1958 (Cth) (the Act).

4    The new ground raises the question of whether, in substance, the Tribunal applied the correct statutory test. Correctly, in my view, the Minister did not oppose the amendment even though the matter had not been argued either before the Tribunal or before the Federal Magistrate. The Minister reserved his rights in relation to costs.

5    The argument advanced by Mr Weng is supported by an early authority of the Full Court of this Court, McDonald v Director-General of Social Security (1984) 1 FCR 354 per Woodward J (at 358-359) and Jenkinson J (at 369). The remarks made in that case, as discussed in detail below, have been accepted in subsequent authority. I do not understand the Minister’s suggestion to be that the approach taken in that authority was incorrect but rather that, as a matter of substance in this instance, it was clear that the Tribunal knew the correct test to apply. The fact that it may have occasionally used language which differed slightly from the correct test did not mean there had been a departure from application of the correct test.

6    While it is well established that overzealous and nit-picking attention to language used in reasoning of a Tribunal is inappropriate, nevertheless, in this case for the reasons which follow and on consideration of the substance of the reasons of the Tribunal, taken as an entirety, in my view, the new ground of appeal is made out.

7    The other grounds of appeal do not succeed.

STATUTORY FRAMEWORK

8    This appeal gives rise to consideration of the provisions of s 134 of the Act in the following terms (with emphasis added):

134    Cancellation of business visas

(1)    Subject to subsection (2) and to section 135, the Minister may cancel a business visa (other than an established business in Australia visa, an investmentlinked visa or a family member’s visa), by written notice given to its holder, if the Minister is satisfied that its holder:

(a)    has not obtained a substantial ownership interest in an eligible business in Australia; or

(b)    is not utilising his or her skills in actively participating at a senior level in the daytoday management of that business; or

(c)    does not intend to continue to:

(i)    hold a substantial ownership interest in; and

(ii)    utilise his or her skills in actively participating at a senior level in the daytoday management of;

an eligible business in Australia.

(2)    The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder:

(a)    has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and

(b)    has made a genuine effort to utilise his or her skills in actively participating at a senior level in the daytoday management of that business; and

(c)    intends to continue to make such genuine efforts.

(3)    Without limiting the generality of matters that the Minister may take into account in determining whether a person has made the genuine effort referred to in subsection (2), the Minister may take into account any or all of the following matters:

(a)    business proposals that the person has developed;

(b)    the existence of partners or joint venturers for the business proposals;

(c)    research that the person has undertaken into the conduct of an eligible business in Australia;

(d)    the period or periods during which the person has been present in Australia;

(e)    the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;

(f)    the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;

(g)    business activity that is, or has been, undertaken by the person;

(h)    whether the person has failed to comply with a notice under section 137;

(i)    if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level of a daytoday management of a business:

(i)    the length of time that the person held the ownership interest or participated in the management (as the case requires); and

(ii)    the reasons why the person no longer holds the interest or participates in the management (as the case requires).

…

(7)    If the Minister cancels a business visa under this section, the Minister must include in the notice given to its holder:

(a)    the Minister’s reason for the cancellation; and

(b)    a statement to the effect that the holder may, within 28 days after receiving the notice, apply to the Administrative Appeals Tribunal for review of the cancellation.

…

(10)    In this section:

business visa means:

(a)    a visa included in a class of visas, being a class that:

(i)    has the words “Business Skills” in its title; and

(ii)    is prescribed for the purposes of this paragraph; or

(b)    a visa:

(i)    to which a prescribed provision of the Migration Reform (Transitional Provisions) Regulations applies; and

(ii)    that is of a kind prescribed for the purposes of this paragraph; or

(c)    a return visa that is granted to a person who is or was the holder of a business permit or business visa;

that is or was granted on or after 17 February 1992.

…

eligible business means a business that the Minister reasonably believes is resulting or will result in one or more of the following:

(a)    the development of business links with the international market;

(b)    the creation or maintenance of employment in Australia;

(c)    the export of Australian goods or services;

(d)    the production of goods or the provision of services that would otherwise be imported into Australia;

(e)    the introduction of new or improved technology to Australia;

(f)    an increase in commercial activity and competitiveness within sectors of the Australian economy.

established business in Australia visa means a business visa a criterion for whose grant:

(a)    relates to the applicant having an established business in Australia; or

(b)    is that the applicant is a member of the family unit of the holder of a visa a criterion for whose grant is as mentioned in paragraph (a).

BACKGROUND

9    On 18 October 2005, Mr Weng was granted a Business Skills visa. The Minister cancelled that visa on 4 June 2009 as he was not satisfied that Mr Weng had obtained a substantial ownership interest in a business in Australia. The Minister was also not satisfied that Mr Weng was using his skills in actively participating at a senior level in the day-to-day management of the business or that he intended to continue to hold the substantial ownership interest or utilise the skills.

10    Mr Weng holds a 40% interest and is the sole director of an Australian company, Southeast International Investment Pty Ltd (SII). His wife and son each hold 30%. SII was formed in order to undertake property development in Canberra. In December 2007 it purchased real estate in the suburb of Bonython. SII engaged a building firm to build three houses on the Bonython block in November 2008. Construction had been completed and two of three houses were for sale as at the time of the Tribunal decision. The third house at that time was occupied by Mr Weng’s son. Prior to this time, SII had purchased and sold a residential property in Dixon in the Australian Capital Territory.

11    On 12 February 2009, a delegate of the Minister sent Mr Weng a notice of intention to cancel his visa under s 134 of the Act. It indicated that Mr Weng had not provided any evidence of his shareholding in SII, SII’s business activities, SII’s employees, or his involvement in the management of the business. The delegate informed Mr Weng that she was considering cancelling the visa as there was insufficient evidence that he had made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, to utilise his skills in the management of that business or to demonstrate that he intended to continue a substantial ownership interest in the business and to use his skills in it.

12    On behalf of Mr Weng, his agent responded on 18 March 2009 indicating that construction on the properties had commenced following a delay in obtaining approval of development applications. The agent advised that a third person was giving assistance to Mr Weng in return for 10% of the profits of SII on the sale of the properties. The agent advised that Mr Weng had maintained direct control of the day-to-day affairs of the company’s business through contact with his son. The efforts made by Mr Weng in the development and management of the business of SII were described in great detail in a statutory declaration accompanying the agent’s letter. In addition, Dr Lin provided a statutory declaration in which he stated that the investment by Mr Weng had created almost 10 construction jobs in Canberra.

13    A delegate of the Minister, on 4 June 2009, determined to cancel Mr Weng’s visa, having found that SII’s activities were ‘ad-hoc and for the purpose of a migration outcome rather than for establishing a business’. The delegate was not satisfied that Mr Weng intended to continue to own a substantial ownership interest and participate at a senior level in the day-to-day management of an eligible business as required by s 134(1)(c). She was also not satisfied that Mr Weng met the requirement of skill utilisation set out by s 134(1)(b) of the Act.

THE DECISION IN THE TRIBUNAL

14    The Tribunal accepted that Mr Weng had a substantial ownership in SII and that he was involved in the day-to-day management of its activities. In considering whether SII was engaged in business, the Tribunal accepted that SII had purchased and developed the land in Canberra and that two of the blocks were for sale. Mr Weng claimed that he was assisted by two people in connection with that development who were both to receive 10% of the profits from the sale of the properties. The Tribunal accepted that profit was a motive in the purchase, development and sale of the properties.

15    However, the Tribunal was not satisfied that SII was engaged in a business because Mr Weng’s ‘investments in Australia lacked a sense of forward planning and activity consistent with business activity rather than private investment’.

16    The Tribunal concluded that Mr Weng was, in effect, a private person looking for investment opportunities through SII.

17    The Tribunal also considered whether SII was, in any event, engaged in an ‘eligible business’. It concluded that it was not because it had only employed one person and the activities of others involved had been ad-hoc and had none of the characteristics of employment in any real sense. It accepted that SII had used or engaged various services in developing the properties but gave little weight to this on the basis that to do so would be ‘the case in any property development including private property development’. Although it did not say quite as much, the flavour of the reasoning is that SII was no more than an alter ego or a corporate investment vehicle for Mr Weng.

18    The Tribunal, therefore, sitting in the shoes of the Minister, was satisfied that there were grounds for cancelling Mr Weng’s visa under s 134(1) of the Act.

19    The Tribunal also examined the efforts made by Mr Weng to establish a business in Australia other than his efforts in connection with SII’s property development in order to consider whether he had met the ‘genuine effort’ criteria in s 134(2) of the Act. The Tribunal was of the view that Mr Weng had made no effort that was more than ‘superficial or token’.

20    In relation to residual discretion, the Tribunal considered but rejected the argument that unanticipated circumstances had led to delay in implementing his plans, finding that the failure to establish a business was because Mr Weng was continuing to look for investment opportunities. In this regard, the Tribunal relied on its previous finding that he had made no genuine efforts to establish a business in Australia. The Tribunal did not consider the efforts made in connection with SII’s property development. Accordingly, the Tribunal affirmed the decision of the delegate.

FEDERAL MAGISTRATES COURT DECISION

21    On appeal to the Federal Magistrates Court, in relation to ‘business’ and ‘eligible business’, the Federal Magistrate concluded (at [13] and [14]) that there was no jurisdictional error as the Tribunal had assessed the relevant evidence and come to a conclusion based on that assessment.

22    In relation to ‘genuine efforts’, his Honour concluded (at [15]) that the Tribunal had properly focussed on Mr Weng’s efforts other than those connected with the property development because it had concluded that SII was not a ‘business’ or an ‘eligible business’.

23    His Honour rejected arguments that the Tribunal had failed to give ‘proper, genuine and realistic’ consideration to the exercise of its discretion or that its decision was so unreasonable that no reasonable tribunal could have made it.

NEW GROUND (GROUND 5) – WRONG TEST WAS APPLIED

24    Mr Weng raised, as a new ground of appeal, the contention that the Tribunal constructively failed to exercise its jurisdiction by asking itself whether it was satisfied that Mr Weng had obtained a substantial ownership interest in an eligible business in Australia instead of the question posed by s 134(1) of the Act, namely, whether it was satisfied that Mr Weng had not obtained a substantial ownership interest in an eligible business in Australia.

25    The argument is that the power to cancel arises if the Minister ‘is satisfied that its holder has not obtained a substantial ownership interest in an eligible business in Australia’. If the power to cancel arises, then the Minister has a discretion as to whether to cancel the visa.

26    Thus it is argued that s 134(2) of the Act operates as a restriction on the power to cancel. It relevantly prevents the cancellation if the Minister ‘is satisfied’ that the holder has made the relevant ‘genuine efforts’.

27    Mr Weng argues that in order to cancel a visa, the Minister and the Tribunal must first form a positive opinion about the matters in s 134(1) of the Act. The distinction between the formation of a positive opinion and merely not being satisfied of something is said to be contextually supported. The questions under s 134 of the Act arise in circumstances where a person has already been granted a visa and has a valuable right to enter and reside in Australia. The context then, unlike with an initial application for a visa, is not one where the visa holder bears an onus of bringing material forward that might satisfy the decision-maker of certain matters. To the contrary, the Tribunal is to be positively satisfied of a negative and its opinion has to be reasonably formed. If it is left in any doubt, it is required to determine the question in favour of the holder of the visa.

28    In the present situation, Mr Weng claimed that he owned 40% of the issued shares in SII and that SII carried on a property development business. The Tribunal accepted that ownership of 40% of the shares was a substantial ownership interest. Accordingly, the next question was whether the Tribunal was satisfied that SII’s property development activities did not constitute a business. However, Mr Weng argues that it did not answer that question. Rather it asked whether it was satisfied that those activities did constitute a business concluding (at [33]) it was not, saying: ‘I’m not satisfied that SII is engaged in a business’.

29    Complaint is raised that the same approach was taken by the Tribunal in relation to the ‘eligible business’ issue (at [40]). A similar conclusion was expressed in relation to the Tribunal stating that it was not satisfied that he made genuine efforts etc (see Tribunal’s reasons (at [59])).

30    It follows accordingly, Mr Weng argues, that the reasoning of the Tribunal shows that the Tribunal did not form the opinion necessary for the power to cancel to arise. That conclusion is strengthened when one reviews the entirety of the reasons. Mr Weng contends that when addressing that part of the matter in s 134(1)(a) concerned with ‘substantial ownership interest’ and in s 134(1)(b) concerned with involvement ‘in the day-to-day management’, the Tribunal suggested Mr Weng was to satisfy it that he met the statutory criteria as distinct from the Tribunal being satisfied that he did not. Mr Weng argues that at every point in its reasons where it had to express a conclusion or finding referable to s 134 of the Act, the Tribunal did so in terms that suggested it was incumbent upon Mr Weng to persuade it of the relevant matter. This, it is argued, was not the correct approach and confirms that the Tribunal did not address the correct test for the purposes of s 134(1) of the Act. Therefore, it is argued that the Tribunal committed jurisdictional error in that it did not form the opinion required by s 134(1) of the Act before the visa could be cancelled.

31    The Minister accepts that s 134(1) of the Act confers on the Minister a discretionary power of cancellation in respect of a business visa ‘if the Minister is satisfied that its holder’ has not, is not or does not meet the requirements in paras (a), (b) and (c) respectively. The Minister rejects the contention that, in substance, the Tribunal misconstrued the nature of its power because it assumed that a lack of satisfaction was sufficient when what it needed to form was a positive opinion.

32    The Minister argues that the Tribunal correctly stated (at [3]) in unambiguous terms the requirements of s 134(1) including that the Minister may cancel a business skills visa if ‘satisfied that its holder’ (emphasis added) has not, is not or will not meet the requirements in paras (a), (b) and (c) respectively. The summary by the Tribunal (at [3]) is not merely a direct quotation of the exact terms but is a correct paraphrasing of the effect of that subsection.

33    Additionally, the Minister points to the fact that the Tribunal (at [6]) identified that it had to decide whether any of the grounds in s 134(1) of the Act for cancellation of Mr Weng’s Business Skills visa were made out. The Tribunal concluded (at [7]) ‘for the following reasons I am satisfied that the decision to cancel Mr Weng’s business visa should be affirmed’.

34    As to the latter references where the Tribunal refers to being ‘not satisfied’, these need to be read fairly and in context in light of what the High Court has said in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259. The Minister argues that what the Tribunal was in fact saying or doing was making evidentiary findings based on the evidence and the contentions advanced before it. On a fair reading of the reasons as a whole, the Minister contends that the Tribunal reached conclusions on the evidence by which it was satisfied that Mr Weng had not obtained a substantial ownership interest in a ‘business’ or an ‘eligible business’ in Australia.

35    I accept the argument for Mr Weng on this point for the reasons that follow.

36    In McDonald, a Full Court decision, the appellant succeeded on appeal from the Tribunal which had affirmed a decision of the delegate of the Director-General of Social Security to cancel a valid pension previously ordered to Ms McDonald. The appellant’s pension had been cancelled due to the Commonwealth Medical Officer deciding that she was no longer medically entitled. Ms McDonald appealed to the Tribunal. In an amended ground directed to the question of onus of proof, the Full Court made it clear that in the Tribunal, the common law notion of onus of proof was inapplicable. Woodward J said (at 356):

… a tribunal will still have to determine practical problems such as the sequence of receiving evidence and what to do if it is unable to reach a clear conclusion on an issue, but it is more likely to find the answer to such questions in the statutes under which it is operating, or in considerations of natural justice or common sense, than in the technical rules relating to onus of proof developed by the courts. However these may be of assistance in some cases where the legislation is silent.

…

There is certainly no legal onus of proof arising from the fact that this is an "appeals" tribunal, because the AAT is required, in effect, by s. 43 of the AAT Act, to put itself in the position of the administrator in carrying out its review and, in the light of the material before the AAT, (not the material before the administrator, Drake v. Minister for Immigration and Ethnic Affairs (1979) 46 F.L.R. 409 at 419) make its own decision in place of the administrator's. The AAT itself, in a series of cases beginning with re Ladybird Children's Wear Pty Ltd (1976) 1 A.L.D. 1, has taken the view that there is no presumption that the administrator's decision is correct. This is clearly the right approach to the matter.

37    Jenkinson J noted (at 368) that the passage quoted by Woodward J from the Tribunal decision implied that it was a requirement of the Act that the applicant’s pension be cancelled unless she were found to be permanently incapacitated for work.

38    His Honour, however, noted that it was a requirement of that Act that the pension be cancelled if Ms McDonald were found not to be permanently incapacitated for work. If that were so, his Honour concluded there was error of law demonstrated in the Tribunal’s reasons. All that could be discerned was that the Tribunal was unpersuaded to the degree required, that there was a permanent incapacity.

39    These passages in McDonald were followed by Spender J in Ross v Minister for Immigration and Multicultural Affairs (2000) 107 FCR 1. His Honour took into account Wu Shan Liang observing (at [26]):

26    In Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259, Brennan CJ, Toohey, McHugh and Gummow JJ said (at 271-272):

“When the Full Court referred to ‘beneficial construction’, it sought to adopt an approach mandated by a long series of cases, the best exemplar of which is Collector of Customs v Pozzolanic (1993) 43 FCR 280. In that case, a Full Court of the Federal Court (Neaves, French and Cooper JJ) collected authorities for various propositions as to the practical restraints on judicial review. It was said that a court should not be ‘concerned with looseness in the language ... nor with unhappy phrasing’ of the reasons of an administrative decision-maker (at 287). The Court continued (at 287): ‘The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error.’

These propositions are well settled. They recognise the reality that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon overzealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed [see McAuliffe v Secretary, Department of Social Security (1992) 28 ALD 609 at 616]."

To cavil with "an eye keenly attuned" would be an example of the sort of approach that passage seeks to eschew.

40    Having thus noted the care to avoid overzealous judicial review, Spender J continued (at [27]):

27    The difficulties in this case, while of the Minister's officers' making, are not simply a matter of semantics, or the consequence of a pedantic view of the words used by the Minister to indicate his decision. The words put before the Minister as recording the choices open to him, and his indication of his agreement with the statement "I do not exercise my discretion to not cancel the visa", demonstrate to me that he wrongly interpreted s 501(2) as conferring a discretion to not cancel the visa. That was an error of law within s 476(1)(e) of the Act. It is apparent that the Minister believed that once pars (a) and (b) of s 501(2) were satisfied he was obliged to cancel the visa unless he positively decided that he should not do so.

41    After referring to McDonald per Woodward J (at 358-359) and Jenkinson J (at 369), Spender J continued (at [34]):

34    The view of Jenkinson J in McDonald was that the Tribunal considered that the applicant's pension should be cancelled unless she were found to be permanently incapacitated for work, whereas the requirement of the Act was that the pension should be cancelled if she was found not to be permanently incapacitated for work. This difference in approach, his Honour concluded, involved an error of law.

42    In the circumstances of this review by the Tribunal, it was a precondition to the exercise of the power described under s 134(1) that a specific mental state be held. In the absence of positively forming such an opinion as to satisfaction, there was no power to carry out the cancellation. This was explained by Gummow J in Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 (at [130]-[131]) (footnotes omitted):

130    The "jurisdictional fact", upon the presence of which jurisdiction is conditioned, need not be a "fact" in the ordinary meaning of that term. The precondition or criterion may consist of various elements and whilst the phrase "jurisdictional fact" is an awkward one in such circumstances it will, for convenience, be retained in what follows. In Bankstown Municipal Council v Fripp, Isaacs and Rich JJ pointed out that, with the object of preventing litigation on questions of jurisdictional fact, the legislature may introduce into the criterion elements of opinion or belief by the decision-maker. Section 65 of the Act is an example. The prosecutor was entitled to the grant of a visa only if the Minister were "satisfied" that the prosecutor answered the description in s 36(2).

131    A determination that the decision-maker is not "satisfied" that an applicant answers a statutory criterion which must be met before the decision-maker is empowered or obliged to confer a statutory privilege or immunity goes to the jurisdiction of the decision-maker and is reviewable under s 75(v) of the Constitution. This is established by a long line of authority in this Court which proceeds upon the footing that s 75 is a constitutional grant of jurisdiction to the Court.

43    After citing Attorney-General (NSW) v Quin (1990) 170 CLR 1, (per Brennan J) Gummow J continued:

133    In R v Connell; Ex parte Hetton Bellbird Collieries Ltd, Latham CJ said:

"[W]here the existence of a particular opinion is made a condition of the exercise of power, legislation conferring the power is treated as referring to an opinion which is such that it can be formed by a reasonable man who correctly understands the meaning of the law under which he acts. If it is shown that the opinion actually formed is not an opinion of this character, then the necessary opinion does not exist."

The Chief Justice added:

"It should be emphasised that the application of the principle now under discussion does not mean that the court substitutes its opinion for the opinion of the person or authority in question. What the court does do is to inquire whether the opinion required by the relevant legislative provision has really been formed. If the opinion which was in fact formed was reached by taking into account irrelevant considerations or by otherwise misconstruing the terms of the relevant legislation, then it must be held that the opinion required has not been formed. In that event the basis for the exercise of power is absent, just as if it were shown that the opinion was arbitrary, capricious, irrational, or not bona fide."

44    It is necessary then to examine the Tribunal’s actual reasoning, so as to discern whether the new appeal ground raises no more than overzealous attention to semantics on the one hand or a substantive error of law, on the other.

45    Paragraphs [30] to [33] of the Tribunal’s reasons read:

30.    I accept that Mr Weng may be considering investing in further property and may need to wait until the sale of the Bonython properties before proceeding but mere repetition does not itself make an investment activity a business.

31.    I accept Mr Weng’s contention that, by its nature, property development is slower to realise than some other types of business and may take longer to acquire the characteristic of repetition. I accept that profit is a motive in the purchase, development and sale of the Bonython properties. (I accept that actual profit is not necessary in order to find SII to be a business). However, profit alone is not sufficient to make SII’s activity a business; any private investment aims to make profit.

32.    In my view, SII’s activities lack sufficient of the “badges of trade” that the courts have referred to as indicia of business activity. I am not satisfied that Mr Weng’s son and associates have done more than help out with general research into investment possibilities, even if they spent considerable time doing so.

33.    Mr Weng acknowledges that he is a very successful businessman in China. By contrast, his investments in Australia lack a sense of forward planning and activity consistent with business activity rather than private investment. He continues to cast about for investment opportunities. In all the circumstances, I find that Mr Weng is a private person looking for investment opportunities through SII. I am not satisfied that SII is engaged in a business.

46    These paragraphs of the Tribunal’s decision do, in my view, reflect that the Tribunal was deciding whether to accept or reject arguments advanced by Mr Weng in discharge of some onus that he had to satisfy the Tribunal. Where the words ‘I accept’ are used in those paragraphs, they appear to reflect this as a matter of substantive approach and not simply a question of language usage at the end of [33].

47    Taken in context, the words which precede the conclusion (at [33]), suggest that the Tribunal was not persuaded by Mr Weng to a particular point of view that SII was engaged in a business. Another way to test this is to see whether the preceding paragraphs of the decision reflect an approach consistent with the statutory test leading to a conclusion that the Tribunal was satisfied that SII was not engaged in a business. The words which precede the conclusion (in [33]) would support Mr Weng’s argument.

48    In this particular case there can be no reasonable suggestion that Mr Weng’s application was patently hopeless. It follows that the correct approach assumes more importance. If there was no evidence to support the argument advanced by Mr Weng, then as a matter of reality, a conclusion which is expressed in terms of absence of satisfaction may be of less or little significance. That is not this case however. There was a substantial amount of evidence on which the Tribunal could equally have reached the opposite conclusion. It was not for the Federal Magistrates Court or for this Court to reverse such a conclusion merely on the merits, providing the right test was applied. Where the wrong test was applied in circumstances where there was ample evidence on which the opposite conclusion was open, the significance of applying the correct test assumes greater importance.

49    The approach in [30] to [33] continues in the reasons. The Tribunal (at [39]), again, commences the paragraph with the words ‘nor am I satisfied that SII’s activity is resulting or will result …’.

50    This is followed with the conclusion (at [40]) ‘I am not satisfied that SII is carrying on an eligible business within the meaning of the Act’.

51    Once again, the Tribunal appears to have adopted the wrong test, having regard to the requirements of the statute and by reference to the Full Court decision in McDonald.

52    On the topic of whether Mr Weng was involved in the day-to-day management of the business, the paragraphs dealing with this topic ([41]-[45]) speak in terms of contentions advanced by Mr Weng and ultimately a preparedness on the part of the Tribunal to accept those contentions. This does, again, reflect an approach on the part of the Tribunal that Mr Weng was required to prove his case. Of course, Mr Weng does not appeal from the positive conclusion in his favour but these paragraphs, in my view, do suggest that the Tribunal was of the view that Mr Weng was required to satisfy it as to the statutory criteria.

53    The next block of the Tribunal’s reasons contained in [46]-[59] addressed the topic of whether Mr Weng had made genuine efforts for the purpose of s 134(2) of the Act. Once again, having referred throughout to the evidence and arguments advanced by Mr Weng, the Tribunal concluded, (at [59]) ‘I am not satisfied that Mr Weng has made a genuine effort to obtain a substantial ownership interest in an eligible business such that his visa should not be cancelled’. On this occasion, the Tribunal has adopted the correct, (if not rather awkward), test even though paragraph 59 expresses a double negative, consistently with the terminology of the Act. The criterion under s 134(2), as with s 134(1), goes to the question of the existence of a negative situation.

54    When the Tribunal’s decision is examined in its totality to consider the reasoning process, it is only the opening paragraph ([3]) of the reasons which accurately cites the statutory test for the purpose of s 134(1) of the Act. In my view, para 33 and para 40 reflect the wrong test. It cannot be safely concluded, in my view, that the Tribunal has approached the question on the basis required by the statute, that it is to be satisfied positively of the criteria in s 134(1).

55    Reading the entirety of the decision, I accept the argument for Mr Weng that, in reality, the wrong test was applied and that it is not simply a matter of a semantic distinction. It follows, therefore, that on ground 5, Mr Weng has established that there was jurisdictional error on the part of the Tribunal.

GROUND 1

56    In light of my conclusion in relation to appeal ground 5 which assumed the primary importance in both the written and oral arguments for Mr Weng, the remaining grounds may be disposed of more briefly.

57    The first ground of appeal is that the Federal Magistrate erred in failing to find that the Tribunal committed jurisdictional error in finding that SII was engaged in a ‘business’ within the meaning of the definition of ‘eligible business’ in s 134(10) of the Act because it was engaged in activity consistent with it being a vehicle for private investment by Mr Weng.

58    In relation to this ground, Mr Weng argues that the Tribunal’s conclusion was driven by its understanding that there was some inconsistency in the use by Mr Weng of a company for private investment purposes and that company undertaking a business.

59    On four occasions the Tribunal refers to this as being a dichotomy. For Mr Weng it is argued that there is no such inconsistency even on the view taken by the Tribunal of the ordinary meaning of the word ‘business’. This misunderstanding led the Tribunal to focus on Mr Weng’s activities and motivation and to derive from that a conclusion about the company. The question posed by s 134(1) of the Act, however, is whether the company was engaged in a business not whether Mr Weng was so engaged. It is argued that the Tribunal misdirected itself and failed to properly address the direct question.

60    It does not appear to me that this was the Tribunal’s process of reasoning. The Tribunal did conclude that all that SII had done could have been done by Mr Weng himself or that in reality that was what was happening. That did not mean that use of a corporate vehicle would never be different for investing in an eligible business, but simply not in the present case. There was no relevant distinction between Mr Weng and SII.

61    Correctly, the Tribunal stated (at [21]) that the term ‘business’ is not defined in the Act but denoted ‘activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis’.

62    The analysis by the Tribunal of Mr Weng’s prior attempts at business activity, the activities undertaken by SII in relation to property development, the absence of sufficient badges of trade and insufficient forward planning and activity consistent with business activity entitled the Tribunal, on the merits, to arrive at its conclusion. The reasoning of the Tribunal does not portray any misunderstanding of the notion of ‘business’ as that term is used in s 134 of the Act.

63    It follows that ground 1 does not succeed.

GROUND 2

64    Under ground 2, Mr Weng argues that the Federal Magistrate erred in failing to:

(a)    address and determine a contention that the Tribunal committed jurisdictional error in construing subs (b) of the definition of ‘eligible business’ in s 134(10) of the Act as being referable only to labour that was directly employed by the ‘business’ in question;

(b)    find that the Tribunal committed jurisdictional error in construing subs (b) of the definition of ‘eligible business’ in s 134(10) of the Act as being only referable to labour that was directly employed in the ‘business in question’; and

(c)    further and alternatively, find that the Tribunal committed a jurisdictional error in construing subs (b) of the definition of ‘eligible business’ in s 134(10) of the Act or in applying it to the facts as found insofar as it found that the business of SII was engaged in was not an ‘eligible business’ because the employment effects of its property investment activities were no different to any other property development including private property development. (emphasis added)

65    In support of this ground, Mr Weng argues that there is no rational connection between the characterisation of an activity as a private property development and the conclusion that the activity does not result in employment. It is argued that the Tribunal misunderstood what was required by s 134(10) of the Act in a way that led to jurisdictional error. Once it had accepted, as it appears to have done, that the development resulted in employment of builders, planners and real estate agents, it was bound to conclude that if the activity was a business as it was, it was an eligible business.

66    I cannot agree with that contention. The definition of ‘eligible business’ in s 134(10) of the Act is predicated on the formation of an opinion by the Minister or relevantly by the Tribunal standing in the shoes of the Minister. The expression is defined as being ‘a business that the Minister reasonably believes is resulting or will result in … the creation or maintenance of employment in Australia’. Therefore, to be an ‘eligible business’, the Minister must form a reasonable belief about the capacity of that business to result in the creation or maintenance of employment in Australia.

67    Mr Weng is contending, in effect, that the Tribunal asked itself the wrong question because it simply assumed that SII had to directly employ labour in order for the business to be an ‘eligible business’. The Tribunal did not proceed on such a misapprehension, in my view. The Tribunal noted (at [39]) that the impact of the activity of SII was similar to that in another decision dealt with by the Tribunal, namely, Tan v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 808, where the impact of an isolated property development transaction ‘on any employment’ would be ‘marginal at best’. A further basis for the Tribunal’s belief was its conclusion that although SII may have engaged various services in developing the properties, that was the case with any property development including private development. Thus, in the Tribunal’s reasonable belief, the business was not creating or maintaining nor would it, in the future, create or maintain employment in Australia. On the evidence, that was a conclusion open to the Tribunal.

68    It is not apparent that the Tribunal has confined or misconstrued the question in the manner submitted by Mr Weng. To the contrary, the Tribunal has asked the correct question and answered it fairly on the information properly before it. It follows that ground 2 is not made out.

GROUND 3

69    Mr Weng’s third ground of appeal is that the Federal Magistrate erred in failing to find that the Tribunal committed jurisdictional error in failing to consider whether the efforts made by Mr Weng in relation to the property development activities of SII satisfied s 134(2)(a) of the Act. Mr Weng contends that there was a failure on the part of the Tribunal to consider the efforts made by him specifically in connection with SII’s property development. Rather, it restricted itself to his efforts elsewhere. The Federal Magistrate concluded this was ‘understandable because the Tribunal came to the view that the SII was not a business or an eligible business’. Mr Weng argues that it does not follow that the efforts in property development were not to obtain a substantial ownership interest in an eligible business.

70    The premise of s 134(2)(a) of the Act is that even though there is no eligible business, a skilled business person’s visa should not be cancelled if there has been a genuine effort by that person to obtain a substantial ownership in an eligible business. The Tribunal accepted that Mr Weng’s efforts in the property development were genuine. They were successful to the extent that properties were purchased, developed and marketed. There had been a loose profit sharing joint venture with two others for this purpose. All of this was done with a view to profit and with the intention of repeating it. According to the Tribunal, however, what was lacking was a ‘sense of forward planning’ and ‘activity consistent with business activity’. The relevant portion of the Tribunal’s decision is at [46]-[59], where the Tribunal said:

46.    Although I find there is ground for cancelling Mr Weng’s visa under s 134(1)(a) of the Act, it may not be cancelled so long as he meets each of the “genuine efforts” criteria in s 134(2).

47.    Section 134(3) provides that the factors which may be taken into account in determining whether a “genuine effort” has been made include:

(a)    business proposals that the person has developed;

(b)    the existence of partners or joint venturers for the business proposals;

(c)    research that the person has undertaken into the conduct of an eligible business in Australia;

(d)    the period or periods during which the person has been present in Australia;

(e)    the value of assets transferred to Australia by the person for use in obtaining an interest in an eligible business;

(f)    the value of ownership interest in eligible businesses in Australia that are, or have been, held by the person;

(g)    business activity that is, or has been, undertaken by the person;

(h)    whether the person has failed to comply with a notice under section 137;

(j)    if the person no longer holds a substantial ownership interest in a particular business or no longer utilises his or her skills in actively participating at a senior level of a day-to-day management of a business:

(i)    the length of time that the person held the ownership interest or participated in the management (as the case requires); and

(ii)    the reasons why the person no longer holds the interest or participates in the management (as the case requires).

48.    Mr Weng relies on his original business plan, coupled with his sound business experience in China, his trips to Australia and the research he has conducted while here, and the transfer to Australia of assets worth over $2 million as evidence of his genuine efforts to satisfy the requirements of the Act. The Minister maintains his efforts lack the necessary vigour and determination.

49.    “Genuine” is an ordinary word that should be given its ordinary meaning. The relevant meaning provided by the Oxford English Dictionary is “having the character or origin represented; real, true, not counterfeit, unfeigned, unadulterated”.

50.    In Yam v Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 283 the Tribunal said [at 53] that “genuine” in s 134(2) means effort that is more than “superficial or token” and I agree.

51.    In a section of the statement accompanying his visa application headed “Moving My Business and Assets to Australia”, Mr Weng said his plans were in the very early stage “until I am personally able to move to Australia”. He said that, in the short term, he would open bank accounts, set up an office and “arrange for networking of investment and products”; depending on these, he could “formulate more exact budgets and make realistic future orders for product shipments”. He referred to his decision to move to Canberra and to “fine-tuning” his plans “when I arrive in Canberra”.

52.    In a written statement to the respondent on 18 March 2009 Mr Weng said he was “currently in the process of transferring his business interests from China to Australia” but is could not happen overnight. When questioned by the Tribunal, Mr Weng maintained that, by “transferring” his interests he meant that he would conduct business in both China and Australia.

53.    I do not accept Mr Weng’s explanation. Even allowing for some language difference, his statements clearly indicate his intention to move here to live and to transfer his assets here. He has not done either.

54.    I accept that Mr Weng’s plans have changed over time, and I do not suggest that moving to Australia or transferring assets here is necessary for him to satisfy s 134(1)(a) or (b), but that he has not done so tends to undermine his claims and his credibility generally.

55.    In a written statement in October 2009, Mr Weng said that, by February 2009, his investigations had led him to decide against pursuing a coffee shop but to “go ahead” with manchester, household and kitchen items, health food and “souvenir/tourism”. His statement concluded that he planned to continue in real estate and, in the meantime, he would continue to develop the health products and souvenir/tourism area as well as the sale of kitchen appliances.

56.    Mr Weng gave oral evidence that, other than property development, only the kitchen appliance business is now proceeding. He maintained that, by “go ahead” he meant only that he would continue to research and investigate the other possibilities. I do not accept his explanation and, moreover, Mr Weng conceded that, other than the kitchen appliance store, he has not researched the other options since February 2009.

57.    Mr Weng’s proposal for the kitchen appliance business still appears vague and unformed. On 26 November 2009, SII applied to register a trademark for the business and Mr Weng says he is currently negotiating to lease premises in Canberra. He has produced correspondence from a real estate agent about a property which he plans to visit next week. He now claims that he plans to open a second outlet as well. He has produced a Letter of Employment Interest signed on 10 November 2009 by which Mr Xiang Lan is to receive a salary and profit, and holds a 30% share in the kitchen appliance business.

58.    However, when questioned by the Tribunal, Mr Weng was at first surprisingly vague about his imminent investment in this venture and indicated a figure of $30,000. He then said he would be investing $600,000 by way of loan to Mr Lan. It is very difficult to reconcile this apparent lack of planning with genuine business activity, particularly after more than three years of investigation and research. I accept the Minister’s contention that Mr Weng plans to lend money to Mr Lan to operate a business and to receive a return on the loan. It does not follow that any involvement by SII constitutes a genuine effort to engage in business activity.

59.    I am not satisfied that Mr Weng has made a genuine effort to obtain a substantial ownership interest in an eligible business such that his visa should not be cancelled.

71    The examination by the Tribunal of the issue (at [46]-[59]) canvasses Mr Weng’s activities in the broad sense including, for example, reference (at [48]) to his transfer to Australia of assets worth in excess of $2 million. This transfer was in respect of the property development. The Tribunal noted that he planned to continue in real estate (at [55]) and property development (at [56]). The conclusion reached (at [59]) can only fairly be regarded as a conclusion, having regard to the entirety of Mr Weng’s circumstances, that he had not made genuine efforts.

72    The Federal Magistrate actually held (at [15]) that ‘most [not all] of the Tribunal’s conclusions relating to this issue referred to genuine efforts in respect of businesses other than that of property development’ (emphasis added).

73    The Tribunal properly addressed all the considerations under s 134(2) of the Act. It has not been shown to have erred and this ground also must fail.

GROUND 4

74    The fourth ground of appeal for Mr Weng is that the Federal Magistrate erred in failing to find that the Tribunal committed jurisdictional error in failing to consider whether the efforts made by Mr Weng in relation to the property development activities of SII warranted the exercise of the discretion conferred by s 134(1) of the Act in favour of Mr Weng. Mr Weng argues that the error made by the Tribunal in connection with the ‘genuine effort’ issue flowed through to the purported exercise of its discretion.

75    The Tribunal’s disposition of the residual discretion issue is set out in [60]-[63] of its reasons as follows:

60.    The residual discretion is broad but is to be exercised in the context of the legislation in which it is given: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40.

61.    The discretion is designed to give the decision-maker flexibility to deal with unanticipated circumstances: Pan and MIAC [2007] AATA 1724 [24]. Factors that might be taken into account include where the applicant needs more time to complete genuine efforts: Koosasi v Minister for Immigration and Citizenship [2007] AATA 1311. It is always possible that circumstances may arise beyond the applicant’s control or which could not reasonably have been anticipated.

62.    Mr Weng contends that the unanticipated circumstances in his case were that his research led him to abandon his original idea for an electrical retail store, following which further research was necessary, leading to a delay in the establishment of his business.

63.    For the reasons I have already given, I do not accept that Mr Weng has made genuine efforts to establish a business here. The fact that he has still not established a business is because he continues to look for investment opportunities and that may take some time. I do not accept there has been unexpected delay or that there is any other reason that the discretion should be exercised in Mr Weng’s favour.

76    Mr Weng says that as the genuine efforts findings did not include consideration of Mr Weng’s efforts concerning property development, the inference flows that the Tribunal did not consider those efforts in relation to the discretion.

77    Mr Weng does complain, again, about the failure on the part of the Tribunal to take into account his efforts concerning property development. The Tribunal expressly recognised that the residual discretion was broad but noted that it was to be exercised in the context of the legislation (at [60]). The Tribunal concluded that it did not see ‘any other reason’ for exercising the residual discretion in favour of Mr Weng (see [63]).

78    There is no reason to construe what the Tribunal says as involving anything other than a full consideration of the circumstances as presented by Mr Weng including his activities in relation to property development. Mr Weng had the benefit of legal representation at the hearing before the Tribunal and submissions were put on his behalf to the Tribunal. There is no reason to consider that the Tribunal failed to take into account all matters raised by Mr Weng through his legal representative. Similarly, he was represented before the Federal Magistrate on the application for review. There is no indication of any matter of significance having been raised before the Tribunal that was not taken into account.

79    The Tribunal concluded that there could not have been unexpected delay because the delay was a consequence of not making a real effort.

80    No error is demonstrated under this ground.

CONCLUSION

81    On the new ground 5 alone which was not argued before the Federal Magistrate and was permitted as an amendment on the hearing of this appeal, the appeal succeeds.

82    I will direct that the parties file written submissions (or consent orders) in relation to relief and costs within 14 days. Those matters will be dealt with on the papers.

Associate:

Dated:    5 May 2011