Bodenstein v Minister for Immigration and Citizenship

(i) the health criteria for it (if any) have been satisfied; and

(ii) the other criteria for it prescribed by this Act or the regulations have been satisfied; and

(iii) the grant of the visa is not prevented by section 40 (circumstances when granted), 500A (refusal or cancellation of temporary safe haven visas), 501 (special power to refuse or cancel) or any other provision of this Act or of any other law of the Commonwealth; and

(iv) any amount of visa application charge payable in relation to the application has been paid;

(b) if not so satisfied, is to refuse to grant the visa.

4 Failure by the Minister to be satisfied of any of the matters in s 65(1)(a)(i)-(iv) denies him the power to grant the visa. Section 65(1)(a)(ii) contemplates the prescription of requirements for particular visas. In the case of the Subclass 457 (Business (Long Stay)) visa the relevant requirements are set out in clause 457 of Schedule 2 to the Migration Regulations 1994 (Cth). As might be expected the requirements of clause 457 are both lengthy and detailed. Amongst them are specifications dealing with the particular type of business with which an applicant is associated. These are set forth in clause 457.223. Mr Bodenstein's application was made on the basis that he was an independent executive with an established business in Australia. Clause 457.223(7A)(c)(iv) set out one of the many prescribed requirements which the Minister had to be satisfied of if he was to grant the visa pursuant to s 65(1). For present purposes it is sufficient to observe that clause 457.223(7A)(c)(iv) provides: (7A) The applicant meets the requirements of this subclause if:

5 It is convenient to refer to this as the "capital requirement". The power under s 65 to grant or refuse visa applications was permitted to be delegated to another person by reason of s 496 of the Act. On 5 July 2006 a delegate of the Minister determined that he was not satisfied that Mr Bodenstein met the capital requirement and hence refused his and his families' application for the visa. From that decision they appealed to the Tribunal which in a decision handed down on 1 August 2007 affirmed it on the basis that it was not satisfied that the capital requirement had been met. 6 Both before the delegate and the Tribunal Mr Bodenstein sought to prove his compliance with the capital requirement by reference to two assets. The first of these was a loan made by him to a trust known as the Mandarin Trust. Before the Tribunal were the financial statements for the Mandarin Trust for the financial year ending 30 June 2004. Those accounts show a loan from Mr Bodenstein to the Trust of $383,937 as at 30 June 2004 which was said to be non-current and interest bearing. About this asset the Tribunal reasoned as follows: The Tribunal has discounted the applicant's claim that he has a loan asset valued at at least $510,000 with Mandarin Trust on the grounds that the applicant is the sole owner of Mandarin Trust and the claimed asset is therefore fully offset by Mandarin Trust's liability for the loan. The applicant also noted at the hearing that Mandarin Trust itself is not earning income or profits and is currently in a net liability position. 7 That conclusion must be read in light of the Tribunal's earlier statement: At the hearing, the applicant noted that the estimated $510,000 value of his loan asset to Mandarin Trust represented only the principal of the loan and not accrued interest. He also affirmed that he is the owner of Mandarin Trust and that Mandarin Trust was not earning income or profits and was currently in a net liability position. The applicant said that he was in ongoing discussions with various business interests aimed at resuming trading in the future but there was nothing to show as yet. 8 Although it is not pertinent to the issues raised in this appeal it may be helpful to compare that statement to the transcript provided by Mr Bodenstein to this Court of what occurred at the Tribunal hearing: TL: In relation to the $510,000 with Mandarin Trust. Now who owns Mandarin Trust?

AB: I the bonefishes. [scil: I am the beneficiary.]

AB: I'm the owner, basically. As far as I know the Trust regulation it's not ah.

TL: So AMIR that would suggest that although perhaps legally the trust owed you at least $510,000 um it's clearly not in a position to give you $510,000?

9 The second asset Mr Bodenstein pointed to were proceedings pending before the Supreme Court of New South Wales. The Tribunal dealt with this as follows [AB3/274]: The Tribunal accepts that the applicant may be awarded a substantial sum of money if he is successful in his claim for damages currently before the Supreme Court of NSW. However it is not known when this matter will be decided by the Court. At the hearing the applicant said that it was possible that the case would be finalised "by the beginning of next year." Given the uncertainty of the outcome of the Court proceedings and the Tribunal's obligation under the Act to provide a mechanism that is fair, just, economical, informal and quick, the Tribunal is not prepared to defer its decision until such time, probably no earlier than 2008, that the applicant's court case is decided. 10 The proceedings in question remain on foot and are brought by Mr Bodenstein against, inter alia, a Mr Voukelatous, who was the landlord of Mr Bodenstein's former business premises at 39 Glebe Point Road, Glebe in New South Wales. There was before the Tribunal an affidavit sworn by Mr Bodenstein in those proceedings which outlined, in some detail, the nature of that claim. At the risk of oversimplification it appears that Mr Bodenstein and his landlord fell into disagreement about the terms of the lease and about who was to bear responsibility for certain alleged structural defects. The disagreement was inflamed when Mr Voukelatous excluded Mr Bodenstein from the premises by changing the locks on 1 June 2003. 11 The proceedings were commenced, according to Mr Bodenstein's affidavit, on 17 February 2005. In his written submissions to this Court Mr Bodenstein said that the proceedings were listed for hearing for three days commencing 13 February 2009 in the Supreme Court which I accept.

The grounds of appeal 12 Before the Federal Magistrates Court Mr Bodenstein argued that the Tribunal's decision should be quashed because, first, he had total net assets of more then $250,000; secondly, he had sufficient assets to continue the business even if he did not have net assets worth $250,000; and, thirdly, he needed to stay in Australia to conduct his business. The federal magistrate concluded that none of these matters could show jurisdictional error in the Tribunal's decision. Since the jurisdiction of that Court is limited by the need to identify such error in the decision of the Tribunal, the application was dismissed. 13 This conclusion by the federal magistrate was clearly correct and, indeed, Mr Bodenstein did not seek to suggest otherwise. Instead, in this Court he raised two sets of issues. The first related, broadly speaking, to the fairness of the procedure adopted by the federal magistrate; the second to a series of errors alleged to have been made by the Tribunal. These errors were not argued by Mr Bodenstein before the Federal Magistrates Court. Mr Bodenstein accepted, correctly, that the pursuit of these grounds required the Court's leave. It is convenient to deal first with the grounds relating to the Federal Magistrates Court.

The grounds relating to the Federal Magistrates Court 14 Mr Bodenstein argued first that he had been denied procedural fairness because the federal magistrate had not referred him to the pro bono panel. Rule 12.03 of the Federal Magistrates Court Rules 2001 (Cth) provides: (1) The Court may refer a party to a Registrar for referral to a lawyer on the pro bono panel for legal assistance in relation to a proceeding before the Court, if to do so is in the interests of the administration of justice.

(b) the capacity of the party to obtain legal assistance outside the scheme; and

(c) the nature and complexity of the proceeding; and

(d) any other matter that the Court considers appropriate.

(3) The Registrar must attempt to arrange for legal assistance to be provided to the party by a lawyer on the pro bono panel.

(4) However the party must not be referred to a lawyer for legal assistance without the agreement of the lawyer.

(5) If assistance is unavailable after the Court has referred a party for legal assistance, the Court may proceed to hear the matter.

15 The reasons put forward as to why there had been a denial of procedural fairness were as follows: (a) he had served an affidavit seeking referral to that panel; (b) the Federal Magistrates Court was informed that he had no money and that his attempts to secure representation had been unsuccessful; (c) the Minister's representatives had joined with him in making the request; and (d) in those circumstances, the application should have been granted. 16 The Minister submitted that each of those matters was a factual assertion unsubstantiated by evidence. That submission is correct for there was no evidence before me of what happened, in relation to this issue, before the federal magistrate. This is sufficient to dispose of the ground. However, even if those matters had been proved it would not have shown a denial of procedural fairness or a denial of natural justice. This is for two reasons. 17 First, the requirements of procedural fairness (or, as it was formerly known, natural justice) required the Bodensteins to be given an opportunity to put their case to the federal magistrate. That opportunity was afforded to them. Although it has been held that in certain circumstances a serious criminal proceeding may be stayed if an accused person is not afforded legal representation, it is apparent that that power is a manifestation of the Court's power to stay an unfair criminal trial: Dietrich v The Queen (1992) 177 CLR 292 at 311 per Mason CJ and McHugh J, 361-362 per Toohey J, 365 per Gaudron J. However, Dietrich is not concerned with civil proceedings. More importantly, it has been held that the rules of procedural fairness in civil proceedings do not extend to requiring the provision of legal representation: New South Wales v Canellis (1994) 181 CLR 309 at 330-331 per Mason CJ, Dawson, Toohey and McHugh JJ; cf Rivera v United States of America [2004] FCAFC 154 at [26]-[28] per Heerey, Sundberg and Crennan JJ. 18 Secondly, even if that were not so, Mr Bodenstein has shown no error in the way the federal magistrate dealt with the application for referral. Although I express no concluded view on the matter, it is likely that an attack on the exercise of the power in r 12.03 would need to comply with the principles enunciated in House v The King (1936) 55 CLR 499. In particular it would be necessary to show that the federal magistrate approached the exercise of the power on an erroneous basis or took into account some extraneous consideration or failed to take into account some essential matter. This ground must be rejected. 19 Mr Bodenstein's second complaint about the Federal Magistrates Court was that it had exceeded its jurisdiction. In essence his point was that by permitting the Tribunal's decision not to grant the visas to stand, the federal magistrate was effectively pre-emptorily terminating the Supreme Court proceedings because without Mr Bodenstein here to prosecute them they would inevitably be dismissed. I would accept that, generally speaking, the Federal Magistrates Court has no power to dismiss Supreme Court proceedings. However, that is not what the federal magistrate did. Both before and after his decision those proceedings remained on foot. 20 A variant of this argument was that the federal magistrate's decision undermined the exercise by the Supreme Court of its jurisdiction. There may well be some circumstances where the removal of a litigant from the jurisdiction might be a contempt of the court seized with the litigation. However, the removal of an alien by force of federal law could never be a contempt of purely state court proceedings. This ground too must therefore be rejected.

The grounds relating to the Tribunal 21 Five fresh arguments about the Tribunal's conduct of the matter were raised in this Court for the first time. Such a course requires a grant of leave. The Minister did not oppose the grant of leave. It is apparent from the grounds pursued by Mr Bodenstein before the federal magistrate that he did not appreciate the need to demonstrate jurisdictional error. In the circumstances this is understandable. There will be a grant of leave. 22 The first complaint about the Tribunal was that it had effectively dismissed the Supreme Court proceedings or, at least, undermined them. I have already rejected that argument in relation to the Federal Magistrates Court. It must be rejected in relation to the Tribunal for the same reasons. 23 The second complaint is that the Tribunal misinterpreted the expression "asset" in the capital requirement by not treating the Supreme Court's proceedings as an asset. This is not, however, an accurate description of what the Tribunal did. As the passages I have set out above show, the Tribunal accepted that the proceedings might well result in Mr Bodenstein receiving substantial damages. Its point was not that it did not think the proceedings were an asset; rather, it was that given that the money which might result from those proceedings would not be available for some time, it was not prepared to postpone its consideration of the matter to permit that to occur. It is implicit in that approach that the Tribunal accepted that the proceedings - or perhaps more precisely, the choses in action underpinning the proceedings - were an asset. Of course, what the capital requirement provision stipulated was net assets of $250,000 "to conduct the business". Mr Bodenstein argued that those words did not qualify the expression "net assets". However, as can be seen from the text of the capital requirement provision, this argument is without substance. 24 The relevant business was said to be that conducted by MPSA Pty Ltd, which appears to be an acronym for Morden Paint Sydney Australia. Mr Bodenstein submitted to the Tribunal that MPSA Pty Ltd had conducted business since its establishment. The Tribunal did not expand in any detail on the nature of this business. It appeared to assume that the business conducted by MPSA Pty Ltd continued to exist. An examination of Mr Bodenstein's affidavit in the Supreme Court proceedings could have led to the opposite view. However this is of little moment. The Tribunal thought that the asset comprising the Supreme Court proceedings was not presently, nor even proximately, available. There could be no error in it therefore concluding that the asset was not available "to conduct the business". 25 Mr Bodenstein submitted that his business was now the business of conducting the Supreme Court proceedings and that he did not need any money to conduct that business. But the business specified in Mr Bodenstein's visa application was not the business of running a court case; it was a paint business conducted by MPSA Pty Ltd. It would be possible for Mr Bodenstein to apply for the visa on the basis that the business to be conducted was the litigation. However, he has not done this. If he had, there would have been a real question, one would think, whether the Minister could have been satisfied, as clause 457.223(7)(a)(ii) required him to be, that the business constituted by Mr Bodenstein's case was "of benefit to Australia". 26 As an aspect of the same ground, Mr Bodenstein also took issue with the Tribunal's reference to him having admitted he was "broke" on the basis that this said nothing about whether he had net assets worth more than $250,000. However, this argument impermissibly ignores the link between the net assets and the conduct of the business. Mr Bodenstein's admission that he was "broke" was capable of being seen as saying a great deal about the assets he had available to conduct the business of MPSA Pty Ltd. This ground should be rejected. 27 The third complaint was a series of interrelated points about the nature of the business made up of the Supreme Court proceedings. It was said that those proceedings were his business; that he needed no assets to conduct the business; that the capital requirement was to be applied flexibly and that the loan to the Mandarin Trust would turn out to be valuable. I reject the premise on which these arguments rest. As I have endeavoured to show, the business in respect of which the visa was sought was the paint business conducted by MPSA Pty Ltd. The Minister has not been asked to consider an application by Mr Bodenstein for a Subclass 457 (Business (Long Stay)) visa to conduct the business of suing Mr Voukalatous. That the loan to the Mandarin Trust might increase in value is also of no moment for the Tribunal rejected it as an asset not because it was of no value but because Mr Bodenstein was the beneficiary of the trust. 28 The fourth complaint was that the Tribunal had been biased and prejudiced against Mr Bodenstein because it had pointed out to him that he had applied for a waiver of the Tribunal's fees on the basis of impecuniosity, and that there was an inconsistency between that and his assertion to the Tribunal that he had net assets in excess of $250,000. This was said to be buttressed by three matters: (a) the fee waiver point should not have been used since the Tribunal was examining financial statutes; (b) the fee waiver letter sent by Mr Bodenstein was a "stupid mistake"; and (c) that innocent mistake tainted the whole of the Tribunal's reasoning process. 29 The first point is unusual. No such legal prohibition existed; even if it did non-compliance with it would not reveal bias on the part of the Tribunal. The frankness of the second point should be welcomed but again is no warrant for concluding that the Tribunal was biased. So far as the final point is concerned it is apparent that Mr Bodenstein's attempt to obtain the fee waiver did not advance his cause. It was quite legitimate for the Tribunal to be cognisant of that matter. The allegation that this revealed bias on its part is quite without substance. 30 Finally, Mr Bodenstein complained that the Tribunal should have deferred its consideration of the matter until the determination of the Supreme Court proceedings. No doubt it could have done so. However a failure by it so to do discloses no error, still less jurisdictional error. There may, of course, be circumstances in which a failure to adjourn may result in a breach of s 357A(3) of a kind analogous to a denial of procedural fairness: cf Applicant NAHF of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 128 FCR 359 at 365 per Hely J. However, no such issue arises here. 31 The appeal must be dismissed with costs. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

Associate: Dated: 6 February 2009 The first appellant appeared in person.

Solicitor for the First Respondent: Mr A Markus of the Australian Government Solicitor