FEDERAL COURT OF AUSTRALIA Nice Shoes Aust Pty Ltd v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 252 MIGRATION –MigrationRegulation 1.20D(2)(c)(ii) – standard business sponsor – MRT decision – judicial review of – whether applicant's record of training satisfactory – purpose and context of regulation – applicant importer, wholesaler and retailer – on-the-job training in retail aspect of business operations only – training must be reasonably commensurate to nature and extent of business operations in Australia Migration Regulations 1994 1.20D Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 Macquarie Dictionary (Rev 3rd ed, 2001) New Oxford Dictionary of English (1998) NICE SHOES AUST PTY LTD v MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS AND MIGRATION REVIEW TRIBUNAL N 2199 of 2003 BRANSON J 18 MARCH 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 2199 of 2003 BETWEEN: NICE SHOES AUST PTY LTD APPLICANT AND: MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS FIRST RESPONDENT MIGRATION REVIEW TRIBUNAL SECOND RESPONDENT JUDGE: BRANSON J DATE OF ORDER: 18 MARCH 2004 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application for judicial review of the decision of the Migration Review Tribunal be dismissed. 2. The applicant pay the respondents' costs. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 2199 of 2003 BETWEEN: NICE SHOES AUST PTY LTD APPLICANT AND: MINISTER FOR IMMIGRATION & MULTICULTURAL & INDIGENOUS AFFAIRS FIRST RESPONDENT MIGRATION REVIEW TRIBUNAL SECOND RESPONDENT JUDGE: BRANSON J DATE: 18 MARCH 2004 PLACE: SYDNEY REASONS FOR JUDGMENT introduction 1 By an amended application dated 13 February 2004 the applicant seeks judicial review of a decision of the second respondent ('the Tribunal'). By its decision the Tribunal affirmed a decision of a delegate of the first respondent ('the Minister') that the applicant does not meet the criteria prescribed by regulation 1.20D of the Migration Regulations 1994 ('reg 1.20D') for approval as a standard business sponsor. 2 The second respondent has filed an appearance by which it submits to such order as the Court may make, save as to costs. 3 The only ground of review upon which the applicant relied at hearing was that the Tribunal misinterpreted and misapplied reg 1.20D. 4 For the reasons set out below the application for judicial review of the decision of the Tribunal will be dismissed. the criteria 5 The critical criterion for the purposes of this application is that prescribed by reg 1.20D(2)(c)(ii). It is appropriate to place that criterion in context. Regulation 1.20D relevantly provides: '(1) Subject to this regulation, the Minister may … approve or reject an application for approval as … a standard business sponsor. (2) The Minister must approve an application for approval as a … standard business sponsor, made in accordance with regulation 1.20C if: (a) the Minister is satisfied that the applicant for approval is actively and lawfully operating in Australia a business in which the employment of the holder of a Subclass 457 (Business (Long Stay)) visa would contribute to: (i) the creation or maintenance of employment for Australian citizens or Australian permanent residents; or (ii) expansion of Australian trade in goods or services; or (iii) the improvement of Australian business links with international markets; or (iv) competitiveness within sectors of the Australian economy; and' (b) … (c) the Minister is satisfied that the applicant for approval: (i) will introduce to, or utilise or create in, Australia new or improved technology or business skills; or (ii) has a satisfactory record of, or a demonstrated commitment towards, training Australian citizens and Australian permanent residents in the business operations of the applicant in Australia; ….' (emphasis added) reasons of the tribunal 6 The Tribunal noted that the applicant claims to operate a business in Australia as a wholesaler and retailer of shoes. 7 Song Qi Lin ('Mr Lin') and Yun Yun Zhu ('Ms Zhu') gave evidence to the Tribunal on behalf of the applicant. In [14]-[18] of its written reasons for decision the Tribunal summarised the evidence of Mr Lin and Ms Zhu as follows: '14. Mr Lin stated that there were 9 people employed in the business. Ms Zhu and himself, and 7 staff: 4 full-time and 3 part-time. The full-time workers were salespersons. One of them also undertook quality control of the imported goods, and he was a manager. This person's duties included: he had to know everything about the shoes and their parts; all were imported from China; sometimes they sold local shoes. The business had 2 retail shops and 3 market stalls. The shop at Burwood is managed by a person who was full-time, but is presently part-time. The other shop was managed by someone who is presently on leave as they have a workers compensation claim. The part-time workers are salespersons. 15. Sales staff are trained on-the-job. They have to understand everything about shoes in the shop: sizes and materials. They learn how to use the computer and how to serve the customers. 16. Quality control person is taught the procedure of how to make shoes. For example the top and bottom parts are joined and are made from different materials. He showed a shoe to the Tribunal. Training is on-the job. The training takes a very long time. For example he and Ms Zhu were still learning after 5 years. The quality controller can tell whether the shoes are of good quality. They receive samples of the goods to check the quality. Sometimes someone goes to China to inspect the shoes. 17. People who manage the shops are taught on-the-job. They are taught: how to communicate with and serve customers; to use a computer; about shoes (the materials and quality); and understand what a customer would like to buy. The business pairs a person with one of the owners or with someone who has been working there quite a while. Two persons had received training in the past year to be a shop manager. Mr Lin looks after the warehouse and next year another person would be hired to do so. 18. The business continues to train staff. They propose to expand to Melbourne and Brisbane by opening more retail shops. They imported particular shoes which was introducing "new technology" into Australia.' 8 The Tribunal's consideration of whether the applicant satisfied the criterion prescribed by reg 1.20D(2)(c)(ii) is reflected in [37]-[42] of its written reasons for decisions. Those paragraphs read as follows: '37. Mr Lin and Ms Zhu are registered owners of the business and temporary residents. Mr Lin holds a position as General Manager and Ms Zhu holds a position as Managing Director and Deputy General Manager. 38. The duties of the other "managers" in the business appear to largely come within the occupation of retail supervisors: a position that has an entry requirement in Australia of an AQF Certificate II or one year of relevant experience. Nor do the wages paid to staff indicate highly skilled managers are employed. In 2002-03, total wages paid to all employees amounted to $126,854. This included $52,000 paid to Mr Lin and Ms Zhu. Accordingly, the remaining staff (presently comprising 4 full‑time and 3 part‑time employees) were paid a total wage of about $74,854. Information concerning the employees shows that the retail supervisors receive about $19,760 and $22,230 respectively which are not wages commensurate with skilled or highly skilled managers. 39. All training given to staff has been on-the job and is not quantifiable. The training given to the retail supervisors appears to be general and covers such areas as: general knowledge of the production process of the shoes in China; knowledge of the products and what they are made from; how to detect quality problems in the products; how to use the shop computer for sales; supervision of staff; customer relations. Shop assistants receive similar on‑the‑job training in the products, computer systems and customer relations. 40. There is no compelling evidence before the Tribunal that the on‑the‑job training of sales staff is extensive or covers any more than the basics of product knowledge and selling the products. In Australia, there is no particular entry requirement for sales staff. Similarly, the training given to managers has been on‑the‑job and there is no compelling evidence before the Tribunal that it has been significant. 41. There is no compelling evidence before the Tribunal that the business pays for staff to attend internal courses or vocational courses. The financial reports for the business do not show any money has been spent on training staff in past financial years. The 'training plans' provided to the Tribunal are not sufficiently detailed to be quantifiable, and would not be able to be monitored by the Department. 42. The business proposes to open further retail stores in the future in Melbourne, Brisbane and Sydney. The further shops, should they be established, would necessitate shop managers or retail supervisors and the training plan provided to the Tribunal shows the same training would be given as is given to the current retail supervisors, although the business indicated it would seek persons with a diploma in business management/sales/marketing. At the hearing Mr Lin stated the on-the-job training of all staff would continue. As indicated above, such limited and basic on‑the‑job training is not quantifiable. 9 The Tribunal was not satisfied that the applicant has a satisfactory record of, or a demonstrated commitment towards, training Australian citizens and Australian permanent residents. applicant's submissions 10 Mr Karp, counsel for the applicant, argued that the Tribunal misinterpreted and misapplied reg 1.20D(2)(c) by adding several unjustifiable glosses to the paragraph. In particular he argued that the rate of remuneration of the applicant's employees was irrelevant to the issue which the Tribunal was required to consider, that the relevant regulation did not require that the applicant's record of training be of 'quantifiable', 'extensive' or 'significant' training and that nothing precluded on‑the‑job training from coming within the criterion. consideration 11 It is possible to accept the accuracy of the particular arguments advanced on behalf of the applicant without concluding that the Tribunal misapplied or misinterpreted reg 1.20D(c). As Brennan CJ, Toohey, McHugh and Gummow JJ observed in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272: '… the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed.' 12 The Tribunal in this case, standing in the shoes of the Minister, was required to determine whether it was satisfied that the applicant has 'a satisfactory record of, or a demonstrated commitment towards, training Australian citizens and Australian permanent residents in the business operations of the applicant in Australia'. In making that determination the Tribunal was entitled to give consideration to any aspect of the evidence and other material before it that was not irrelevant to the determination. 13 The purpose intended to be served by the criterion presented by reg 1.20D(2)(c)(ii) can be identified by considering the content of that criterion in the context provided by reg 1.20D as a whole. Of particular significance in this regard is reg 1.20D(2)(a) which is set out in [5] above. 14 The terms of reg 1.20D read as a whole demonstrate that the approval of an applicant as a standard business sponsor is intended to benefit the Australian economy. For an approval to be granted the Minister must be satisfied that the applicant for approval is lawfully operating a business in Australia in which the employment of the holder of a Subclass 457 visa would contribute to one of the aspects of the Australian economy identified in reg 1.20D(2)(a)(i), (ii), (iii) or (iv). Additionally, the Minister must be satisfied that the applicant for approval itself will do one of the things referred to in reg 1.20D(2)(c)(i) or satisfy one of the requirements of reg 1.20D(2)(c)(ii). 15 It is in the above context that the particular requirement of reg 1.20D(2)(c)(ii) must be considered. It can be seen to be a requirement that the Minister be satisfied that the applicant for approval will contribute to the Australian economy by providing training to Australian citizens and Australian permanent residents in its business operations. As the applicant's commitment towards training Australian citizens and Australian permanent residents in its business operations was sought to be demonstrated principally by its training record, it is sufficient to concentrate on the question of whether the Tribunal misunderstood what was involved in determining whether it was satisfied that the applicant 'has a satisfactory record of … training Australian citizens and Australian permanent residents in the business operations of the applicant in Australia'. 16 The Macquarie Dictionary (Rev 3rd ed, 2001) relevantly defines 'satisfactory' as meaning 'affording satisfaction; fulfilling all demands or requirements'. The New Oxford Dictionary of English (1998) may indicate a lesser standard. It relevantly defines 'satisfactory' as meaning 'fulfilling expectations or needs; acceptable, though not outstanding or perfect'. The difficulty that attends the use of the term 'satisfactory' to qualify the record of training to which reg 1.20D(2)(c)(ii) refers is that the Migration Regulations 1994 provide no measure or standard against which a record of training is to be assessed in determining whether it affords satisfaction or is acceptable albeit not perfect. In the circumstances the necessary measure or standard must be found by implication from reg 1.20D read as a whole. Seen in that context, in my view, a 'satisfactory record' of training is a record that demonstrates that the applicant provides training to Australian citizens and Australian permanent residents to a degree reasonably commensurate with the nature and extent of its business operations in Australia. To put it in ordinary language, that the applicant makes a reasonable contribution to the training of the Australian workforce having regard to the nature and extent of its business operations in Australia. 17 The applicant's business operations in Australia are shown by the material that was before the Tribunal to be the importing into Australia of shoes manufactured in China and the wholesale and retail sale of those shoes in Australia. The training upon which the applicant relied for the purpose of satisfying reg 1.20D(2)(c)(ii) was training pertinent to the retail side of its business only. It was not contended by the first respondent that reg 1.20D(2)(c)(ii) calls for a satisfactory record of training in the totality of an applicant's business operations in Australia. However, it seems to me that, where an applicant's record of training relates to one aspect only of its business operations in Australia, a higher level of training might be necessary to establish a 'satisfactory record' than where the record of training relates to the totality of the applicant's business operations in Australia. The required record of training, in my view, must be 'satisfactory' having regard to the nature and extent of the applicant's business operations in Australia. To illustrate the point, I take as an example a hypothetical applicant whose principal business operation in Australia is the operation and management of a recording studio that specialises in making original recordings of orchestral music. This hypothetical applicant operates, as a subsidiary business operation, a shop for the retail sale of compact discs on which orchestral music is recorded. It seems to me that, for the purposes of reg 1.20D, if the hypothetical applicant's record of training of Australian citizens and Australian permanent residents related only to the training of its retail sales personnel, the content and quality of that training would have to be out of the ordinary before it could be said that its relevant record of training in its 'business operations' in Australia was 'satisfactory'. That is because the hypothetical applicant would have no record of training with respect to its principal business operation. On the other hand, if the hypothetical applicant's record of training extended across all of its business operations in Australia, or alternatively, involved providing a high level of training to Australian citizens or Australian permanent residents in an aspect of the recording industry in which the Australian workforce is under‑skilled, the record could more readily be found to be 'satisfactory' in the relevant sense. 18 Seen in the above light, the consideration given by the Tribunal to the wages paid to those who were said to have benefited from the present applicant's record of training does not, in my view, disclose a misinterpretation or misapplication of reg 1.20D. Nor does it disclose that the Tribunal took into account an irrelevant consideration. The reasons of the Tribunal reveal that it had regard to the wages paid to those who had been the recipients of training provided by the applicant to assist it in reaching a view as to the level of training that they had received. For the reasons given above, the level of training that they had received was a relevant consideration. The wages paid to them was an indicator, although not necessarily the only indicator, of the level of that training. 19 Similarly, in my view, the consideration given by the Tribunal to the nature of the training provided by the applicant does not disclose a misinterpretation or misapplication of reg 1.20D. Nor does it disclose that the Tribunal took into account an irrelevant consideration. As is mentioned above, the relevant issue for the Tribunal's consideration was whether it was satisfied that the applicant has a satisfactory record of training Australian citizens and Australian permanent residents in its business operations in Australia. It is entirely understandable that the Tribunal might be less readily satisfied that a record of training is satisfactory where that record is of unquantifiable training all undertaken on‑the‑job than where that record is of quantifiable training undertaken, for example, at a training institution. That is not to say that on‑the‑job training that is not quantifiable can never provide the basis of a satisfactory record of training. It is just that a record of on‑the‑job training of a kind that is not quantifiable might prove difficult to evaluate for the purpose of determining whether that record of training is a 'satisfactory record'. By contrast, a record of quantifiable training undertaken while free from the distraction of ordinary duties is likely to be more readily evaluated. 20 The Tribunal's consideration of whether the training of the applicant's sales staff was 'extensive' and whether the training of its managers was 'significant' is, in my view, to be seen in the same light. It is true that reg 1.20D(2)(c)(ii) does not require that a record of training be a record of extensive or significant training. However, a record of extensive or significant training will more readily provide the Tribunal with the satisfaction required by reg 1.20D(2)(c) than a record of training not shown to be either extensive or significant. For the reasons given in [17] above, where, as in this case, the record of training relates to one aspect only of a multi‑faceted business, the scope and importance of the training may assume particular significance. 21 In my view, it has not been shown that the Tribunal misinterpreted or misapplied reg 1.20D. conclusion 22 The application for judicial review of the decision of the Tribunal will be dismissed with costs. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson. Associate: Dated: 18 March 2004 Counsel for the Applicant: L J Karp Solicitor for the Applicant: Ma & Company Counsel for the Respondent: J Smith Solicitor for the Respondent: Blake Dawson Waldron Date of Hearing: 25 February 2004 Date of Judgment: 18 March 2004