Ayaad v Minister for Immigration, Citizenship and Multicultural Affairs [2025] FCA 543

KEROLOS ABDELMESSIEH NOSHY KAMEL (and another named in the Schedule)

MINISTER FOR IMMIGRATION, CITIZENSHIP AND MULTICULTURAL AFFAIRS

1. The application be dismissed.
2. The Applicants pay the First Respondent's costs, to be taxed if not agreed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

1. These two proceedings relate to a decision of the Administrative Appeals Tribunal made on 2 May 2023, whereby the Tribunal affirmed the delegate's decision not to grant each of the applicants a Business Skills (Residence) (Class DF) (Subclass 892) visa (the Visa). One of the proceedings (VID 415 of 2023) (s 39B Proceeding) is an application for relief under s 39B of the Judiciary Act 1903 (Cth) in respect of an alleged refusal by the Tribunal to refer the case to the Minister for consideration by the Minister for intervention under s 351 of the Migration Act 1958 (Cth). The other proceeding (VID 1156 of 2024) (Transferred Proceeding) is an application for judicial review of the decision of the Tribunal, transferred to this Court from the Federal Circuit and Family Court of Australia under s 153 of the Federal Circuit and Family Court of Australia Act 2021 (Cth).
2. For the reasons that follow, each of the applications is dismissed with costs.

1. The first applicant is a citizen of Egypt who arrived in Australia on 31 January 2014 as the holder of a State/Territory Sponsored Business Owner (Provisional) (Subclass 163) visa. The second applicant is the first applicant's wife. The third and fourth applicants are the first applicant's children.
2. The application for the Visa was made on 7 March 2018.
3. The first applicant did not purchase an existing business in Australia but in November 2015 registered a commercial cleaning business, C&K Services Pty Ltd, which commenced operations in January 2016. The business operated from the applicants' home (TR [12]).

1. The primary criteria were required to be satisfied by at least one member of the family unit. Relevantly, the criteria required to be satisfied at the time the application for the Visa was made included those set out in cl 892.212 of Sch 2 to the Migration Regulations 1994 (Cth), which provided:

Unless the appropriate regional authority has determined that there are exceptional circumstances, the applicant meets at least 2 of the following requirements:

(a) in the period of 12 months ending immediately before the application is made, the main business in Australia, or main businesses in Australia, of the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together:

(i) provided an employee, or employees, with a total number of hours of employment at least equivalent to the total number of hours that would have been worked by 1 full-time employee over that period of 12 months; and

(ii) provided those hours of employment to an employee, or employees, who:

(A) were not the applicant or a member of the family unit of the applicant; and

(B) were Australian citizens, Australian permanent residents or New Zealand passport holders;

(b) the business and personal assets in Australia of the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together:

(i) have a net value of at least AUD250 000; and

(ii) had a net value of at least AUD250 000 throughout the period of 12 months ending immediately before the application is made; and

(iii) have been lawfully acquired by the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together;

(c) the assets owned by the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, in the main business or main businesses in Australia:

(i) have a net value of at least AUD75 000; and

(ii) had a net value of at least AUD75 000 throughout the period of 12 months ending immediately before the application is made; and

(iii) have been lawfully acquired by the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together.

1. The delegate refused the applications for the Visas on the basis that the criteria were not satisfied.

1. Before the Tribunal, the first applicant submitted that he satisfied the requirements in cl 892.212(a) and 892.212(c).
2. Before the Tribunal, the first applicant relied upon evidence relating to the period 1 January 2017 to 31 December 2017.
3. The Tribunal reasons record (at TR [13]):

The Tribunal explained the requirements of cl 892.212 and noted that the relevant period (12 months prior to the application was lodged with the Department) runs from 7 March 2017 to 7 March 2018. The Tribunal further acknowledged that the applicant nominated the period from 1 January 2017 to 31 December 2017 as the relevant period, which is acceptable.

1. The Tribunal (at TR [42]) found that the business entity nominated by the applicant was C&K Services Pty Ltd.

1. In relation to the application of cl 892.212(a), the Tribunal recorded in its reasons (at TR [43]) that:

According to the primary decision record, the applicant chose the relevant period to evidence this employment as being 1 January 2017 until 31 December 2017, a period which is acceptable.

1. Before the Tribunal, the first applicant had given evidence that the business employed one full‑time employee (Mr Morcos) from January 2017 to mid-2018 as a cleaner. The first applicant's evidence concerning the hours worked by Mr Morcos varied over the course of the hearing. Initially, the first applicant's evidence was that Mr Morcos worked approximately 20 hours per week. The first applicant then "clarified" that he could not remember exactly how many hours per week Mr Morcos worked in the business.
2. Despite claiming that Mr Morcos had signed an employment agreement with C&K Services Pty Ltd on 1 January 2017, no copy of a signed agreement was provided by the applicants.
3. The first applicant's evidence was that he paid Mr Morcos in cash every fortnight. There were no bank records or other independently verifiable records that related to the payment of Mr Morcos' salary. The original BAS lodged on behalf of C&K Services Pty Ltd for the period from January to March 2017 did not evidence the payment of any wages during that quarter. Superannuation contributions for Mr Morcos were only paid in July 2020, after Mr Morcos ceased his employment with C&K Services Pty Ltd (TR [47]-[49]).
4. The first applicant provided the Tribunal with copies of what purported to be C&K Services Pty Ltd weekly payslips for Mr Morcos for the period 6 January 2017 to 29 December 2017 showing Mr Morcos worked 30 hours per week and that both superannuation contributions and PAYG tax deductions had been made. The payslips were not consistent with the first applicant's oral evidence. The Tribunal found the payslips to be false (TR [57]).
5. The Tribunal found that there was no definition in the Act or the Regulations of full‑time employment. It was Departmental policy that if agreed or award hours do not apply, full‑time employment was regarded as meaning "not less than 30 hours a week", but the Tribunal recognised that those guidelines were not binding on it (TR [55]). The Tribunal found that there was no verifiable evidence of the terms of an agreement between Mr Morcos and C&K Services Pty Ltd. The Tribunal noted that according to the Cleaning Services Industry Award, a full‑time employee is an ongoing employee engaged to work an average of 38 hours per week.
6. The Tribunal at TR [59] was not satisfied that Mr Morcos worked at least 30 hours per week at C&K Services Pty Ltd. (The Court observes that the reference at TR [59] to "the applicant" appears to be an error and should be understood to refer to Mr Morcos, given the context in which the reference appears.)
7. The Tribunal at TR [60] concluded that:

Based on the evidence before it, the Tribunal is not satisfied that in the period of 12 months ending immediately before the application is made, C&K Services Pty Ltd provided Mr Morcos with a total number of hours of employment at least equivalent to the total number of hours that would have been worked by one full-time employee over that period of 12 months. Accordingly, the Tribunal finds that the applicant does not meet the requirements of cl 892.212(a).

1. In relation to the application of cl 892.212(c), the Tribunal reasons record (at TR [61]):

To meet cl 892.212(c), the assets owned by the applicant and his spouse in the main business in Australia must have a net value of at least $75,000 throughout the period of 12 months ending immediately before the application is made. According to the primary decision record, the applicant supplied information which indicates that the applicable 12-month period is 1 January 2017 to 31 December 2017, a period which is acceptable.

1. The applicant had provided to the Department financial statements (balance sheets) that showed the applicant owned net assets in the main business with a net value of $78,239 as at 31 December 2016 and $123,239 as at 31 December 2017. Bank statements provided to the Department showed the business had cash of $7,518 as at 31 December 2016 and cash of $13,290 as at 31 December 2017. The applicant also provided the Department with "abridged financial statements" for C&K Services Pty Ltd for the 12 month periods ending 31 December 2016 and 31 December 2017 showing non-current assets in the amounts of $27,860 as at 31 December 2016 and $86,489 as at 31 December 2017.
2. In 2019, the first applicant engaged a new accountant. The first applicant provided the Tribunal with financial statements for the financial years ended 30 June 2017, showing net business assets of $192,673, and ended 30 June 2018, showing net business assets of $234,711. In each of those financial statements, the first applicant claimed amounts on account of goodwill. For the year ended 30 June 2017, the first applicant claimed goodwill in the amount of $90,000 and in the year ended 30 June 2018, goodwill in the amount of $110,000.
3. The Tribunal (at TR [68]-[69]) did not accept the amounts claimed as goodwill as part of the main business net assets because, under accounting standards, an amount can only be recorded on account of goodwill if a business is purchased. The first applicant did not purchase the business.
4. The Tribunal observed that the financial statements included a "receivable" as a non-current asset in each of the financial years ended 30 June 2017 and 30 June 2018. The first applicant's accountant gave evidence to the Tribunal that the receivable represented a loan made to the first applicant as a director of C&K Services Pty Ltd. There were no ledger accounts relating to a director's loan. The Tribunal reasons record:
   1. According to [the first applicant's current accountant]'s evidence, without having relevant directors' loan ledgers it is not possible to determine the exact amount of the loan during the relevant period from 1 January 2017 to 31 December 2017.
   2. Accordingly, based on the evidence before it, the Tribunal is unable to determine the exact amount of the directors' loan during the relevant period from 1 January 2017 to 31 December 2017 and is therefore not satisfied that the amounts of $93,355 and $154,172 can be included in the applicant's net business assets.
5. The Tribunal concluded that:
   1. Based on the evidence before it, the Tribunal is not satisfied that the assets owned by the applicant, the applicant's spouse or de facto partner, or the applicant and his spouse or de facto partner together, in the main business in Australia had a net value of at least $75,000 throughout the period of 12 months ending immediately before the application was made.

75. Accordingly, the applicant does not meet the requirements of cl 892.212(c).

1. Because the first applicant did not satisfy the requirements in cl 892.212(a) or cl 892.212(c), the first applicant did not satisfy at least two of the three criteria set out in cl 892.212 and therefore that clause was not satisfied. The Tribunal affirmed the decision under review.

1. The Tribunal reasons record:
   1. When invited to do so, the applicant's representative requested that, if the Tribunal finds that the applicant does not meet the requirements of cl 892.212, it refer the matter to the Minister for the exercise of his discretion under s 351 of the Act.
   2. The Tribunal observed that in his written submissions, the representative did not seek the referral, nor did he provide submissions and documentary evidence in support of such a request. The Tribunal further noted that the applicant can approach the Minister directly.
2. Later in its reasons, the Tribunal records that:
   1. The applicant requested that the Tribunal refer the case to the Department for consideration by the Minister pursuant to s 351 of the Act which gives the Minister discretion to substitute a decision of the Tribunal for another decision that is more favourable to the applicant, if the Minister thinks that it is in the public interest to do so.
   2. The representative submitted that the applicant and his family have been living in Australia for almost 10 years, that they operate a successful business in Australia and employ Australian citizens. He further submitted that the applicant relied on the advice of his former migration agent and that he has made significant contributions to Australian society.
   3. The Tribunal has considered the applicant's submissions and the ministerial guidelines relating to the discretionary power set out in PAM3 [the Department's Procedures Advice Manual] "Minister's guidelines on ministerial powers (s.351, s.417, and s.501J)".
   4. Based on the evidence before it, the Tribunal is not satisfied that this matter exhibits unique or exceptional circumstances that warrant referral to the Minister. However, the Tribunal notes that following this decision the applicant can make a direct request to the Minister under s 351 of the Act should he wish to do so.
3. The Tribunal did not refer the matter to the Department.

1. It is convenient to address the Transferred Proceedings first.
2. By originating application, the applicants appealed against the decision of the Tribunal on the basis that the Tribunal had made a jurisdictional error by misconstruing the phrase "the period of 12 months ending immediately before the application is made" in cl 892.212 of Sch 2 of the Regulations. The Visa application was made on 7 March 2018 so the correct statutory period was 7 March 2017 to 7 March 2018. It was contended that the Tribunal proceeded on the basis of an "acceptable" period of 1 January 2017 to 31 December 2017 when the statute did not allow for such a period. The error of the Tribunal was said to be in failing to apply the correct statutory criterion and thereby failing to carry out its statutory task.
3. The applicants' contention is not accepted. It relies upon a misconstruction of the Tribunal's reasoning and conclusions. When properly construed, the Tribunal's reasons demonstrate that the Tribunal did not fail to apply the correct statutory criterion, though the Tribunal's reasoning could have been more clearly expressed.
4. The Tribunal's reasons, as extracted above, noted that the relevant period ran from 7 March 2017 to 7 March 2018 (TR [13]). The Tribunal expressed its conclusion on the application of cl 892.212(a) by reference to "the period of 12 months ending immediately before the application is made" (TR [60]). The Tribunal was not satisfied that "C&K Services Pty Ltd provided Mr Morcos with a total number of hours of employment at least equivalent to the total number of hours that would have been worked by one full-time employee over that period of 12 months" (TR [60]) (emphasis added). In its reasoning in relation to the application of cl 892.212(c), the Tribunal observed that to "meet cl 892.212(c), the assets owned by the applicant and his spouse in the main business in Australia must have a net value of at least $75,000 throughout the period of 12 months ending immediately before the application is made" (TR [61]) and in relation to the director's loan, found that it was "not possible to determine the exact amount of the loan during the relevant period from 1 January 2017 to 31 December 2017" (TR [72]). The Tribunal was not satisfied that the alleged values of the directors loans could be included in the value of the net business assets (TR [72]). The Tribunal concluded that the requirements of cl 892.212(c) were not met because the Tribunal was not satisfied "the assets owned by the applicant, the applicant's spouse or de facto partner, or the applicant and his spouse or de facto partner together, in the main business in Australia had a net value of at least $75,000 throughout the period of 12 months ending immediately before the application was made" (emphasis added) (TR [74]).
5. The Tribunal's references (at TR [13], [32], [43], [61] and [72]-[73]) to the period of 1 January 2017 to 31 December 2017 need to be understood in context. The language used by the Tribunal in referring (at TR [13], [43], [61]) to the first applicant as having "nominated the period from 1 January 2017 to 31 December 2017 as the relevant period" or referring to the period from 1 January 2017 to 31 December 2017 as being "acceptable" was infelicitous.
6. When understood in context, the reference in the Tribunal's reasons to the period of 1 January 2017 to 31 December 2017 is a reference to the period in respect of which the applicant provided evidence, particularly financial records. The period of 1 January 2017 to 31 December 2017 was "acceptable" in the sense that evidence in relation to that period was probative to demonstrating the satisfaction of the Regulations over the statutory period of 7 March 2017 to 7 March 2018 because those periods significantly overlapped.
7. For the applicants to satisfy cl 892.212(a), Mr Morcos needed to have been provided with a total number of hours of employment at least equivalent to the total number of hours that would have been worked by one full-time employee over the period of 12 months ending on 7 March 2018. The applicants had submitted to the Tribunal that cl 892.212(a) was satisfied because the business employed one full-time employee from January 2017 to mid-2018 as a cleaner by employing Mr Morcos to work 20 or 30 hours per week. Having regard to the way the applicants had put their case, the Tribunal could not be satisfied that the criteria in cl 892.212(a) were satisfied if Mr Morcos had not been provided with work hours per week equivalent to full‑time employment over the months of March 2017 to December 2017.
8. It was not possible for the applicants to satisfy cl 892.212(c)(ii) (which required the net value of the assets owned by the first and second applicants in C&K Services Pty Ltd to be at least $75,000 throughout the period of 12 months ending 7 March 2018) if the net value of the assets owned by the first and second applicants in C&K Services Pty Ltd as at 31 December 2017 was not at least $75,000. The balance sheet as at 31 December 2017 was therefore probative of whether the statutory criteria in cl 892.212(c) were satisfied.
9. The Tribunal's reference to an "acceptable" period appeared to have mirrored a reference in the delegate's decision which was under review. The reasons for the delegate's decision record:

In relation to subclause 892.212(a).

...The applicant chose the relevant period to evidence this employment as being 1 January 2017 until 31 December 2017, a period which is acceptable.

...

In relation to subclause 892.212(c).

... The applicant supplied information which indicates that the applicable 12 month period is 31 December 2016 to 31 December 2017, a period which is acceptable.

1. Following the hearing, the Minister provided the Court with a copy of Departmental guidelines titled "PAM3 GenGuideM - Business visas - Visa applications and related procedures". Those guidelines include guidance for assessing applications and relevantly provide that:

Financial statements are required in order to show the financial position and performance of an entity.

...

1. Some business visas, such as the Visas in the present case, require financial statements to cover a specified period immediately before the application is made. Under a heading titled "Acceptable statements", the guidelines relevantly provide that:

• Ÿ Second stage Business visas [including Subclass 892 Visas] require financial statements to cover a specified period immediately before the application is made. Under [Departmental] policy, the term "immediately before the application is made" means the three month period immediately prior to the date the visa application was made. Further documentation must be sought if financial statements cover periods ending more than three months prior to the date the visa application was made.

1. The heading in the guidelines contributed to the infelicitous language in the delegate's reasons. That language then also appeared in the Tribunal's reasons. Financial statements prepared in accordance with accounting standards may well provide evidence of the value of the net assets of a business. Financial statements will ordinarily be prepared for a fiscal year that is unlikely to coincide with the period provided for in the Regulations. As explained at [35] above, where the Regulations require a financial position to exist throughout the relevant period, and financial statements that cover a period that materially overlaps with the relevant period provided for in the Regulations are provided, the financial statements will be probative of the facts necessary to satisfy the requirements in the Regulations. However, that is not to say that a period different from the period provided for in the Regulations is substituted or nominated as "acceptable".
2. The delegate's decision was reached after the delegate had considered the information contained in the Departmental guidelines. The Tribunal acknowledged that the guidelines in PAM3 cannot go beyond the wording of the legislation and noted that it was not bound to follow the guidelines (TR [55]).
3. Read in their entirety, the Tribunal's reasons disclose that the Tribunal drew its conclusions in relation to the period provided for in the Regulations and not in respect of some other period. The reasoning supporting those conclusions was logical and coherent. The Tribunal did not fail to carry out its statutory task or misdirect itself as to the legal criteria to be applied.

1. By an originating application, the applicants sought declaratory relief and certiorari. At the hearing, the claim for certiorari was not pressed in submissions. The declaration sought by the applicants was that:

the decision of the Administrative Appeals Tribunal made on 2 May 2023 in purported compliance with section 10.2 of the Minister's guidelines on ministerial powers (s351, s417 and s501J) (11 March 2016): (a) exceeded the executive power of the Commonwealth; and/or (b) was not authorised by the Administrative Appeals Tribunal Act 1975 (Cth) and was prohibited by s 351 of the Migration Act 1958 (Cth).

1. The applicants submitted that the Tribunal acted unlawfully in its decision not to refer the applicants to the Minister for the potential exercise of the power in s 351 of the Act. It was submitted that the Tribunal applied the 2016 Ministerial Instructions which, for the reasons given in Davis v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 10; 279 CLR 1, were inconsistent with s 351 of the Act. In so doing, it was said that the Tribunal acted in a way that was not authorised by the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) and was prohibited by s 351 of the Act_._
2. The High Court in Davis considered the relationship between the Minister and the Department administered by the Minister. The High Court at [24] (Kiefel CJ, Gageler and Gleeson JJ) recognised that s 64 of the Constitution requires that Ministers be appointed to administer Departments, and that Departmental officers, like Ministers, are "officers of the Executive Government of the Commonwealth". However, a statute may limit or impose conditions on the exercise of executive power and thereby put constraints and conditions on the relationship between the Minister and his or her Department. The Minister could not confer on the Minister's Department a power to make decisions that by statute only the Minister could make personally. The Ministerial instructions in Davis were found by the High Court to do that which the statute prohibited.
3. There is no relationship between the Tribunal and the Minister of the kind that was the subject of consideration in Davis. The Tribunal does not perform a function of advising or assisting the Minister in performance of Ministerial functions. The Tribunal does not act under Departmental instruction in the performance of the Tribunal's statutory review functions except where a statute specifically requires it to do so.
4. The applicants' submission is premised on a misunderstanding of the Tribunal's actions. The Tribunal was not, by its refusal, making a decision in exercise of the powers conferred upon it by the AAT Act. The Tribunal was not making a decision pursuant to s 351 of the Act. Although its reasons for decision could have been more clearly expressed, the Tribunal was not refusing to refer to the Minister a request made to the Minister. The Tribunal was not purporting to make a procedural decision on behalf of the Minister to not consider making a substantive decision to substitute a more favourable decision. The Tribunal was not purporting to evaluate on the Minister's behalf a request made to the Minister. The Tribunal was refusing to make a request to the Minister on the applicants' behalf by refusing to lodge a request with the Minister's Department.
5. The Tribunal in its reasons (at TR [81]) referred to the Minister's guidelines on ministerial powers. The applicants rely on that reference as demonstrating that the Tribunal was applying those guidelines to make a decision to not put the Minister in a position to consider whether to exercise his powers. The guidelines were annexed to an affidavit of Ms Lewis which was taken as read. They were Departmental instructions, one of the purposes of which was to explain "when [the Minister's] department should refer a case to [the Minister]". The instructions to the Department were that:

Cases that have one or more unique or exceptional circumstances, such as those described below, may be referred to me for possible consideration of the use of my intervention powers...

Cases which do not meet these guidelines for referral, and with the types of circumstances described below, are inappropriate for me to consider. The Department will finalise these cases without referral to me and advise the person or their authorised representative in writing:

• Ÿ the request is made by a person who is not the subject of the request or their authorised representative...

1. In a section of the guidelines titled "Who can make a request", the guidelines provide:

A request for my intervention can generally only be made by a person who is the subject of the request or their authorised representative.

My Department may initiate a request, including where a case is referred for my attention by a review tribunal. A review tribunal may refer a case to the Department if the member believes the issues involved fall within the unique or exceptional circumstances described in section 4 of these guidelines. The Department will assess the circumstances of the case and may refer the case to me where it meets my guidelines for referral. If the Department assesses that the case does not meet my guidelines for referral, the Department will finalise the case according to these guidelines.

1. The language used in the guidelines is unhelpful and confusing in its use of the phrase "refer a case". A review tribunal does not perform the functions of the Department to "refer a case". When the Minister's instructions to the Department make reference to a case that is "refer[red] for [the Minister's] attention by a review tribunal", the Ministerial instructions are referencing a case in which a review tribunal asks the Department to initiate a request for Ministerial intervention.
2. The Tribunal was not refusing to refer a case to the Minister with the consequence that the case was finalised. Rather, the Tribunal was refusing to take an action to make a request to the Department for Ministerial intervention. This did not result in a case or a request being finalised by the Department because no request ever existed within the Department. It resulted in the Tribunal not making a request or taking a step to commence a process by which a request might be made and received by officers in the Department. There was no dispositive evaluation of a request of the kind in Davis (see [38]) because no request was ever made. The Tribunal refused to take a step to commence a request for the exercise of Ministerial power being made to the Minister or Minister's Department. The applicants were left free to initiate their own request.
3. There was no decision of the Tribunal or exercise of power by the Tribunal that was prohibited by s 351 of the Act.
4. In any event, the Court would not in its discretion make a declaration of the kind sought by the applicants. Unlike Davis, the actions of the Tribunal did not result in the finalisation of a request that had been made to the Minister for intervention. No request had ever been made to the Minister or received by the officials in the Minister's Department. The applicants accepted that relief could not oblige the Tribunal to reconsider whether or not to "refer" the applicants to the Minister. The applicants remained free to make any request for Ministerial intervention that they wished. A declaration would have no foreseeable consequences for the applicants (cf Davis at [62]; Plaintiff M61/2010E v Commonwealth [2010] HCA 41; 243 CLR 319 at [103] (French CJ, Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ), citing Gardner v Dairy Industry Authority of New South Wales (1977) 52 ALJR 180; 18 ALR 55 at 69 (Mason J) and 71(Aickin J)).

I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hespe.

VID 415 of 2023 VID 1156 of 2024