Liu v Minister for Immigration & Multicultural Affairs [2000] FCA 1504

FEDERAL COURT OF AUSTRALIA

Liu v Minister for Immigration and Multicultural Affairs

[2000] FCA 1504 MIGRATION – business (long stay) visa – need for applicant to be temporarily resident in Australia – whether Minister had regard to relevant material – whether criteria misconstrued WORDS AND PHRASES – "need"

Migration Regulations (Cth) Sch 2, cl 457.223 LIU YONG SHUN v MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS V 445 of 1999 FINKELSTEIN J MELBOURNE 26 OCTOBER 2000

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V 445 of 1999

BETWEEN: LIU YONG SHUN

Applicant

AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS

Respondent

JUDGE: FINKELSTEIN J

DATE OF ORDER: 26 OCTOBER 2000

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT: 1. The application be dismissed. 2. Each party bear his own costs.

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

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V 445 of 1999

BETWEEN: LIU YONG SHUN

Applicant

AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS

Respondent

JUDGE: FINKELSTEIN J

DATE: 26 OCTOBER 2000

PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 The applicant, Mr Liu, is a wealthy Chinese businessman. He controls three corporations in the People's Republic of China, one that conducts a transportation business, one that arranges warehouse storage and one that sells building construction materials. In 1996 Mr Liu established Yonglida International Trade Australia Pty Ltd in Australia. He holds 60 per cent of its issued capital. Mr Liu, his wife and sister (who is an Australian citizen) are the directors of Yonglida International. The company exports seafood and sheepskins to China. It currently has an annual turnover of around $1.5 million. 2 In 1998 Mr Liu decided to expand the operations of Yonglida International. His proposal is that the company establish a meat processing and manufacturing business to export meat, particularly beef and lamb, to China. Mr Liu also proposes that Yonglida International export Australian wine to China. Mr Liu believes that rising living standards in China have created the potential for a large market for Australian wine. Yonglida International requires approximately $500,000 to finance the proposed expansion of its activities. Mr Liu will provide that money from his own funds. 3 Mr Liu wishes to remain in Australia for some time to oversee the expansion of his company's operations. He holds a subclass 456 visa, referred to as a business (short stay) visa, which permits him to enter Australia on multiple occasions and to remain on each occasion for up to three months. The visa is valid until 10 October 2001. However, the visa does not meet Mr Liu's present requirements. Mr Liu wishes to remain in Australia beyond 10 October 2001. Accordingly Mr Liu applied for a subclass 457 visa, known as a business (long stay) visa. A business (long stay) visa permits the holder to remain in Australia for up to four years. In his application, Mr Liu specified that he sought the visa for four years. 4 The criteria which Mr Liu was required to satisfy to obtain a business (long stay) visa are found in Pt 457 of Sch 2 to the Migration Regulations (Cth). Clause 457.223(7) relevantly provides: "The applicant meets the requirements of this subclause if the Minister is satisfied that among other things: (a) the applicant proposes to develop in Australia a business activity that will be: (i) conducted by the applicant as a principal; and (ii) of benefit to Australia; and (b) the applicant has a genuine and realistic commitment: (i) to maintain or obtain an ownership interest in a business in Australia; and (ii) to maintain a direct and continuous involvement in the management of the business; and (iii) to make decisions that affect the overall direction and performance of the business from day to day; and (c) nothing adverse is known to Immigration about the applicant's business background; and (d) the applicant has net assets of: (i) not less than AUD250,000; or (ii) a lesser amount that the Minister considers to be adequate; to conduct or establish the business; and (e) the applicant has personal attributes and background that are relevant to, and consistent with, the nature of the proposed business; and (f) the applicant has demonstrated that there is need for the applicant to be temporarily resident in Australia to conduct or establish the proposed business." 5 The information contained in the application for the visa was incomplete. Accordingly, Mr Liu was requested to attend an interview at the Australian embassy in Beijing to provide further information to support his application. Mr Liu went to the embassy and was interviewed by an immigration officer, Mr Kane. Mr Liu has sworn an affidavit describing what occurred at the interview. His account has not been challenged. Mr Liu said that the interview went for two hours. He was asked questions about his business activities and his financial status. Mr Liu explained his proposal concerning the new activities of the Australian company. He also said something about the need for him to be in Australia. I set out portions from two paragraphs of his affidavit: "4. I advised Mr Kane that in order to establish the meat processing/manufacturing business in Australia, a large amount of capital (approximately A$500,000) was needed both to establish it and to develop it. In addition, a great deal of work was required to both establish and develop the business and I would be personally in charge of it. I advised Mr Kane that there was no one else who had the experience and expertise to whom I could entrust the enormous task of establishing this substantial business. I told Mr Kane that after the business was operating smoothly and successfully, which could take some time, I would return to China. 5. I explained in detail the nature of the business I wished to establish in Australia, namely to establish a meat processing factory to export predominantly beef and lamb products to China. In addition, the factory would be involved in the packaging and export of seafood products which I had already been involved with in the past. I provided a number of documents to Mr Kane … concerning the market research I had undertaken into the meat export business. I explained to Mr Kane that I intended to purchase land in Laverton [an outer Melbourne suburb] to establish the meat processing factory and that I had met suppliers both of the raw meat products and the necessary machinery in Australia. I advised Mr Kane that I had travelled to Australia on two occasions for this purpose." 6 Mr Liu also provided a number of documents to Mr Kane. They included a press release by the Minister for Primary Industries and Energy concerning the approval of abattoirs established to process meat for the export market, price lists from two Australian meat suppliers, one of whom was a proposed joint venturer with Yonglida International, and plans for a proposed factory to be established at Laverton, an outer suburb of Melbourne. Although the documents were given to Mr Kane, they did not find their way onto the file maintained by the Department of Immigration and Multicultural Affairs in relation to Mr Liu's application for a visa. 7 The application for the business (long stay) visa was considered by a delegate of the Minister for Immigration and Multicultural Affairs and was refused. The delegate decided that he was not satisfied that Mr Liu met the requirements of cl 457.223(7)(f). Having reached that conclusion, the delegate did not consider whether Mr Liu had satisfied the remaining criteria, it being unnecessary to do so. If the Minister (or his delegate) is not satisfied that all the criteria for the grant of a visa have been satisfied, he must refuse to grant the visa: s 65(1)(b) of the Migration Act 1958 (Cth). 8 Although under no statutory obligation, the delegate provided reasons explaining why Mr Liu had failed to satisfy the requirements of cl 457.223(7)(f). The reasons are short and it is convenient that they be set out in full: "Migration Regulation 457.223(7)(f) states that you as the applicant need to demonstrate that there is a need to be temporarily resident in Australia to conduct or establish the proposed business. I have assessed your submissions and said intention to remain in Australia for the period of four years against this regulation. I find that outside of your said intention of purchasing a factory to construct a meat processing centre, no further evidence of action to meet your goal has been produced. No other information has been provided which would include an investigative report or market survey of any business environment within Australia. Our records show that you travelled to Australia twice using a 456 business visa for an approximate period of 46 days. While you have provided evidence of ongoing business of importing seafood, wool and sheepskins utilising your 456 visa, you have not demonstrated a more immediate need to remain in Australia as a resident. Currently, your 456 multiple entry business visa remains valid until 10.10.2001. Assessing the evidence provided, you are able to accomplish your current business operations while utilising the 456 visa. I cannot be satisfied based solely on your stated intentions, without evidence, of your need to remain in Australia for the amount of time listed on your application. As you have applied for a 457 Long Stay Business visa, you are expected to demonstrate possessing a deeper understanding of the business environment than what you have presented in your application. I therefore am not satisfied that you have met this criteria." 9 Mr Liu now applies to review the decision of the delegate and asks that the decision be quashed. The Federal Court has jurisdiction to entertain an application under s 476 of the Migration Act, to review a "judicially reviewable decision", as defined in s 475. The decision of the delegate refusing to grant a visa is a judicially reviewable decision. There are, however, limits to the grounds upon which a judicially reviewable decision may be reviewed. The permitted grounds of review are found in s 476(1). Mr Liu relies on three of those grounds: first, that the procedures that were required by the Migration Act to be observed in connection with the making of the decision were not observed (s 476(1)(a)); second, that the decision involved an error of law, being an error involving an incorrect interpretation of the applicable law (s 476(1)(e)); third, that the decision involved an error of law, being an incorrect application of the law to the facts as found by the delegate (s 476(1)(e)). 10 To understand the first ground, namely that the delegate failed to observe the required procedures, it is necessary to refer to other provisions of the Migration Act. The Migration Act sets out a number of procedures that must be followed in connection with the making, and the consideration of, an application for a visa. Section 54(1) requires the Minister, in deciding whether to grant or refuse to grant a visa, to have regard to all of the information in the application for the visa. The information in the application is not only the information that is contained in the application form. It includes information that is given under s 55: s 54(2)(c). Section 55 provides that an applicant for a visa may give the Minister any additional relevant information and the Minister must have regard to that information in making a decision whether to grant or refuse to grant a visa. Section 56 also provides that in considering an application for a visa, the Minister may, if he or she wishes, get any information that he or she considers relevant and if the Minister gets such information he or she must have regard to it. 11 Mr Liu argues that the delegate failed to comply with the procedures set out in the Migration Act because he did not have regard to all of the information that Mr Liu had provided in support of his application. It is alleged that the information provided to Mr Kane during the interview, and certain documents that were handed over, were not considered by the delegate because he did not receive them. In passing, I note that Mr Liu also made some complaint that the delegate failed to seek further information in relation to the application before deciding to refuse the grant of a visa, but it is clear that the delegate was under no duty to obtain any further information, and I propose to say nothing more about this matter. Thus, the sole issue for me to determine is whether the delegate was provided with the information that Mr Liu gave to Mr Kane. Mr Liu does not argue that if the delegate had the information he nevertheless failed to have regard to it. 12 I have no direct evidence that Mr Kane passed on to the delegate that which he had been told by Mr Liu. What the evidence does show is that an electronic information system was used by officers in the Department stationed at the embassy to assist in processing visa applications and that on this system there is a file relating to Mr Liu's application. Mr Kane posted a summary of his interview with Mr Liu on the system. In almost all respects Mr Kane's summary accords with Mr Liu's recollection. In two respects, however, there are differences. First, the summary does not record that any documents were provided by Mr Liu. This notwithstanding, some of the documents that Mr Liu handed over found their way on to the Department's file. The second difference concerns the reason given by Mr Liu for wishing to remain in Australia for four years. It will be remembered that in his affidavit Mr Liu said that his presence was required because there was no one who had the experience and expertise to whom Mr Liu could entrust the task of establishing the new operation. Mr Kane's summary puts the matter somewhat differently. It reads: "States if sent an executive instead of going himself he would not be able to transfer funds (?). He would know what type of goods would be acceptable to Chinese clients." I will return to this later. 13 The evidence of an officer of the Department formerly stationed at the embassy was that it was the usual practice for staff considering an application for a visa to refer to information stored on the system. This evidence tends to establish that the delegate did consider Mr Kane's summary: Connor v Blacktown District Hospital [1971] 1 NSWLR 713; Olga Investments Pty Ltd v Citipower Ltd [1998] 3 VR 485. So also does the fact that later entries on the system were made by the delegate. In all the circumstances, I am satisfied that the delegate had regard to Mr Kane's summary. 14 On the other hand, I cannot be satisfied that the delegate was shown all of the documents that were produced by Mr Liu, especially those documents that did not find their way on to Mr Liu's file. The fact that the documents were not on the file suggests they were not seen by the delegate. The delegate's reasons also indicate that he had not seen the documents. For example, the missing documents show that Mr Liu had taken some steps towards progressing his intention to set up operation in Australia, yet the delegate said that "outside your said intention of purchasing a factory to construct a meat processing centre, no further evidence of action to meet your goal has been produced." 15 The fact that the delegate did not have regard to all of the documents that Mr Liu had produced does not, of itself, render unlawful the decision of the delegate. An application for a business (long stay) visa must satisfy a number of criteria. Each piece of information that an applicant provides in support of his visa application will often relate to some, but not all, of those criteria. So it is in this case. The only issue that was considered by the delegate was whether there was "a need for [the applicant] to be temporarily resident in Australia". It is only to "relevant information" in respect of this criterion that the Minister was required to have regard: s 55(1). None of the missing documents related to that issue. Accordingly, the failure to have regard to those documents cannot vitiate the decision. 16 This brings me back to the discrepancy between Mr Liu's recollection of what was said at the interview, and Mr Kane's note of the interview. Mr Liu recalls having provided some content to his claim that there was a "need" for him to be a temporary resident in Australia that is not set out in Mr Kane's note. Mr Liu was not cross-examined on his affidavit, which is hardly surprising as he is not in Australia. Accordingly it would be wrong to reject his evidence, or even question it to any great extent, unless I was of the view that what he says is improbable, and I am certainly not of that opinion. On the other hand, a comparison of Mr Kane's note with Mr Liu's recollection shows that Mr Kane's record provides far more detail of what was said. I would expect this to be so in relation to a contemporaneous record made for the purpose of recording information relevant to a visa application. It would be reasonable to assume that an official such as Mr Kane would record in detail the substance of what he had been told. Moreover, being a contemporaneous record, Mr Kane's account is likely to be a more reliable record than Mr Liu's present recollection of a conversation that occurred two years ago. In all the circumstances, I am disposed to act on the assumption that Mr Kane accurately recorded what he was told, and for reasons mentioned earlier, this information was considered by the delegate. The result is that I cannot find that the delegate, when considering whether Mr Liu satisfied the criterion in cl 457.223(7)(f), failed to have regard to any oral information that was given by Mr Liu during his interview. 17 I now turn to the second ground. It is alleged that the delegate failed to properly interpret the criterion in cl 457.223(7)(f) in two respects. First, it is said that the delegate was in error in construing the clause as requiring the applicant for a visa to show a need to remain in Australia for the period for which the visa is sought, in this case four years. 18 Clause 457.223(7)(f) requires an applicant to demonstrate a need to be temporarily resident in Australia for a relevant purpose. Because a business (long stay) visa is a temporary visa permitting the holder to remain in Australia for a period of more than three months but not more than four years (cl 457.511), the need for temporary residence should be understood as a need to remain in Australia for a period in excess of three months. An applicant may need to remain in Australia for more than four years, but that need is not relevant because the visa cannot operate for more than four years. On the other hand, if an applicant who otherwise satisfies the applicable criteria can demonstrate a need to remain in Australia for, say, three years, he should be granted a visa although his application states that he is asking for a visa for four years. But the visa would be granted for three years and not four years. In effect, the delegate must consider two separate matters. First, he must determine whether there is a need for an applicant to be temporarily resident in Australia for more than three months. If there was no such need, no visa would be granted. Second, he must determine what should be the duration of the visa to be granted to the applicant, the parameters being between three months and four years. The delegate must then grant the visa for the period for which the need had been established. 19 The delegate said that he was not satisfied on the evidence that Mr Liu had a "need to remain in Australia for the amount of time listed on [his] application". This is an ambiguous statement. On one reading the delegate might be saying that unless Mr Liu had satisfied him that he had a need to remain in Australia for four years, (being the period for which the visa was sought), he would not satisfy cl 457.223(7)(f). If that was the delegate's understanding of the effect of the clause, he was wrong. 20 However, I do not think that the delegate has fallen into the error of which he has been accused. On a fair reading of his reasons, I understand the delegate to be saying that Mr Liu had not satisfied him of a need to remain in Australia for a period exceeding three months. Hence the delegate's reference to Mr Liu being able to accomplish his objectives by the use of his existing visa. The delegate was plainly of opinion that Mr Liu could oversee the establishment of the new business operations by coming to Australia on short trips, each not exceeding three months. He also seems to have been of the view that Mr Liu had no need to be temporarily resident in Australia after 10 October 2001, (the date on which the subclass 456 visa expires), at least for the purpose of the new business. Based on the limited information that was provided by Mr Liu to establish his "need", the delegate's conclusion was open. 21 The second alleged error in interpretation is based on the penultimate sentence of the reasons. To repeat, the delegate said: "As you have applied for a 457 Long Stay Business visa, you are expected to demonstrate possessing a deeper understanding of the business environment than what you have presented in your application." It is said that the delegate has impermissibly imposed an additional criterion not found in cl 457.223(7). 22 It is not clear what the delegate had in mind when making that statement. The Minister submits that there is no demonstrated error of interpretation because the statement is purely gratuitous. It is no more than an observation as to what the delegate would expect of a person in Mr Liu's position. Accordingly, so the argument goes, the delegate did not add to the criteria. 23 Mr Liu says that this is too beneficial a construction to be placed on the reasons and that, read fairly, the delegate has added an element to cl 457.223(7)(f) that is not there. The phrase "you are expected" is suggestive of a requirement. It is immediately followed by the sentence "I am therefore not satisfied that you have met this [a reference to the particular clause] criteria." This also suggests that the delegate had imposed an additional criterion. 24 However, when read in context, and bearing in mind that the delegate was not providing reasons to satisfy a statutory obligation, I believe that the point the delegate was seeking to make was that, for Mr Liu to establish the requisite need to be a temporary resident, it was incumbent upon him to have a concrete proposal against which that need could be measured, as otherwise it would not be possible for the delegate to be satisfied of the existence of the relevant need. In other words, the penultimate sentence should be understood, not as a separate requirement that the delegate was imposing, but as a comment additional to the delegate's earlier observation that Mr Liu's proposals for the Australian company were not sufficiently definite with the result that it was impossible to determine whether there was a need for the applicant to be resident in Australia. So understood, the delegate did not misconstrue cl 457.223(7)(f). This said, if the Minister (or his delegate) places undue weight on the inchoate nature of a proposal for the purpose of assessing need under cl 457.223(7)(f), that in itself may demonstrate an error in the construction of the clause. Speaking generally, the inchoate nature of a proposed business activity will have greater relevance, if at all, when the Minister (or his delegate) is considering the other criteria for a business (long stay) visa. 25 The final alleged error concerns the meaning of the word "need" in cl 457.223(7)(f). Mr Liu contends that a "need" will be established if his presence is "desirable". He says that the delegate did not have that meaning in mind when making his decision. 26 To establish the requisite "need", an applicant need not show that the proposed business activity could not be established or conducted in his or her absence. What we are concerned with is the establishment or maintenance of a business. The requisite "need" must be understood in that context. That is, the meaning of "need" must be determined from the point of view of a businessman. An applicant must demonstrate that, in a business or commercial sense, there is a need for him or her to be resident in Australia, in the sense that there is a practical necessity for that presence. If the presence of the applicant in Australia is important, or might reasonably be regarded as important, for the success of the business, a sufficient "need" will be made out. Thus, if an applicant has some special skill which is significant to the success of the business, and the business can benefit from that skill with the applicant's presence, that will suffice. On the other hand, "need" is not established if the only input an applicant would have into the new enterprise is the provision of finance. That said, there is nothing to indicate that the delegate gave an incorrect meaning to the word "need". 27 In the result, the application will be dismissed. I am not disposed, however, to award costs in favour of the Minister. It was not until after the hearing that the Minister, with the applicant's consent, tendered evidence concerning the storage of information on the electronic information system maintained at the embassy at Beijing. Were it not for that evidence, it is likely that a different result would have been reached.