Minister for Immigration and Citizenship v Hart

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

GREENWOOD J 36 The Migration Act 1958 (Cth) ("the Act") provides for a wide range of visas that may be granted by the Minister to a non‑citizen conferring permission to enter and remain in Australia (s 29). One object of the Act is to regulate in the national interest the coming into and presence in Australia of non‑citizens (s 4). A visa, known as a permanent visa, may entitle a non‑citizen to remain in Australia indefinitely (s 30(1)). Alternatively, a visa, known as a temporary visa, may entitle a non‑citizen to remain in Australia for a specified period (s 30(2)). The wide range of visas established under the Act in order to serve the national interest, are classified by classes (s 31). There are many different visas and each class of visa reflects one way in which the national interest might be served by granting such a visa. Each class of visa is subject to conditions imposed by either the Act or regulations made under the Act (s 41) and applications for each particular class of visa are subject to criteria about which the Minister or his or her delegate must be satisfied when considering an application. 37 Each class of visa under the Act is set out in Schedule 1 to the Migration Regulations 1994 (Cth) ("the Regulations"). Many visas are also made up of subclasses and the criteria relating to those subclasses are contained in Schedule 2 to the Regulations. One class of permanent visa is described by cl 1104A of Schedule 1 as a "Business Skills - Established Business (Residence) (Class BH)" visa (an "Established Business Visa"). That visa consists of a subclass (cl 1104A(4)) designated as subclass 845 and described as an "Established Business in Australia" subclass. 38 On 7 August 2006, Ms Tracey Hart, a national of the United Kingdom, applied to the Minister for an Established Business Visa under the Act on her own behalf and that of her son who was then aged 6. At the date of her application the criteria, relevant for present purposes, applying to a subclass 845 application by operation of Schedule 2 were these. Subclass 845 Established Business in Australia 845.1 Interpretation Note 1 AUD, ownership interest and qualifying businessare defined in regulation 1.03; and main businessis defined in regulation 1.11. Note 2 As to beneficial ownership of an asset or ownership interest, see regulation 1.11A. Note 3 There are no interpretation provisions specific to this Part. … 845.213 The applicant: (a) has had an ownership interest in 1 or more established main businesses in Australia for the period of 18 months immediately preceding the making of the application; and (b) continues to have an interest of that kind. 845.214 The total value of the net assets in Australia of the applicant, or the applicant and the applicant's spouse together: (a) is; and (b) has been throughout the period of 12 months immediately preceding the making of the application; at least AUD250,000. 845.215 The total value of the net assets owned by the applicant, or by the applicant and the applicant's spouse together, in the main business or main businesses in Australia: (a) is; and (b) has been throughout the period of 12 months immediately preceding the making of the application; at least AUD100,000. 845.216 In the 12 months immediately preceding the making of the application, the applicant, as the owner of an interest in a main business or main businesses in Australia, maintained direct and continuous involvement in the management of that business or those businesses from day to day and in making decisions that affected the overall direction and performance of that business or those businesses. 845.217 The applicant has overall had a successful business career. … 39 Clause 845.213 uses the terms "ownership interest" and "main businesses". Regulation 1.11 defines main business in these terms: 1.11 Main business (1) For the purposes of these Regulations and subject to subregulation (2), a business is a main business in relation to an applicant for a visa if: (a) the applicant has, or has had, an ownership interest in the business; and (b) the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business; and (c) the value of the applicant's ownership interest, or the total value of the ownership interests of the applicant and the applicant's spouse, in the business is or was at least 10% of the total value of the business; and (d) the business is a qualifying business. (2) If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses. 40 Regulation 1.11A(1) addresses the notion that an ownership interest only includes a beneficial interest if the beneficial interest is evidenced in accordance with subregulation (2) which involves producing to the Minister a copy of any relevant document that demonstrates the source and origin of that beneficial interest, and in particular, a trust instrument. 41 By Regulation 1.03, the term "ownership interest" has the meaning given to it by s 134(10) of the Act which is in these terms: ownership interest, in relation to a business, means an interest in the business as: (a) a shareholder in a company that carries on the business; or (b) a partner in a partnership that carries on the business; or (c) the sole proprietor of the business; including such an interest held indirectly through one or more interposed companies, partnerships or trusts. 42 The definition of main business uses the term "qualifying business" which by Regulation 1.03 is defined in these terms: qualifying business means an enterprise that: (a) is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public; and (b) is not operated primarily or substantially for the purpose of speculative or passive investment. 43 Accordingly, Australia's national interest can be seen from these provisions to be served, for the purposes of the Act, by granting indefinite and thus permanent residence to a non‑citizen who has for the relevant periods had the required threshold of financial commitment to an enterprise operated in Australia for the purpose of profit‑making in which an applicant plays a direct and continuous role in day-to-day management and decision‑making so as to guide the performance of that enterprise, and the nature of the interest "in relation to that business" is "an interest in the business" in any one of the three ways identified in the definition of "ownership interest". 44 On 27 March 2007, the Minister's delegate refused Ms Hart's application for an established business visa. On 26 April 2007, she applied to the Migration Review Tribunal ("the Tribunal") for review. In the course of that review the Tribunal on 9 November 2007 wrote to Ms Hart and requested her to comment on a range of matters concerning the legal and structural arrangements put in place for the conduct of the business in which she contended she held an ownership interest. Ms Hart responded by providing a statutory declaration sworn by her addressing those matters and by providing the Tribunal with documents relating to her capital contribution. Ms Hart also provided the Tribunal with a statutory declaration by her stepfather, Mr Yates, describing the establishment of the business. Mr Yates and his wife, the applicant's mother, had also contributed capital to the business. Ms Hart put correspondence from her accountant, Mr Cabrera, before the Tribunal together with financial accounts and other documents in relation to a company called Northside Cabinets Pty Ltd concerning the conduct by that company of a cabinet making business. Ms Hart gave oral evidence before the Tribunal about those matters and her role in that business. 45 The Tribunal reviewed that material. 46 The application and other documents before the Tribunal demonstrated that Ms Hart commenced her involvement in the business in November 2004. The business is called "Northside Cabinets". The business is conducted by Northside Cabinets Pty Ltd ("the company"). The principal activity of the business is cabinet‑making. The company was incorporated on 12 June 2003 and commenced operation on 16 November 2004. The Tribunal noted the evidence of Mr Yates that at the time of the acquisition of the company, advice was received by him and his family members that "for the sake of asset protection" Mr Yates was to be the sole director of the company, and his wife and stepdaughter would be shareholders in the company. There are 100 issued shares of $1.00 each. Ms Tracey Hart has 20 shares. Mr and Mrs Yates each have 40 shares. Documents were put before the Tribunal consisting of a Trust Deed relating to the "Yates Family Trust". The Deed is dated 12 June 2003. The trustee of the Yates Family Trust is the company. The Principal is Mr Yates and the Primary Beneficiaries are Mr Yates, his wife and Ms Hart. They are also the Default Beneficiaries. The Secondary and Tertiary Beneficiaries are defined in terms of persons who bear a relevant relationship (spouse, child, etc) to the Primary Beneficiaries, and such nominated classes of persons who may be appointed by the Principal from time to time. The company as trustee by cl 3.1 of the trust instrument is required to determine in each year the income of the trust allowing for all relevant expenses. 47 Clause 3.3 of the trust instrument provides: The Trustee may at any time prior to the expiration of any year determine with respect to all or any part of the Income of the Trust Fund derived during any such year: (a) to pay, apply or Set Aside such Income or any part of it for all or one or more of the Primary Beneficiaries living or in existence at the time of the determination; (b) to pay, apply or Set Aside such Income or any part of it for all or one or more of the Secondary Beneficiaries living or in existence at the time of the determination; (c) to pay, apply or Set Aside such Income or any part of it for all or one or more of the Tertiary Beneficiaries living or in existence at the time of the determination; (d) to accumulate such Income or any part of it, provided that if the Trustee has not by the Thirtieth (30th) day of June in each such year exercised its discretion to pay, apply, Set Aside or accumulate the whole or any part of such Income then the Trustee shall hold it on trust absolutely for the Default Beneficiaries. 48 By cl 3.5, any amount set aside for any beneficiary shall not form part of the trust fund but shall be held upon trust for that beneficiary absolutely with a power in the trustee pending payment to invest or apply that amount for the benefit of the beneficiary in the manner provided for in the instrument in relation to the trust fund. Clause 3.7 provides for vested interests in these terms: 3.7 Vested Interest It is declared that each of the Beneficiaries in whose favour: (a) the Trustee may pay, apply, or Set Aside the Income for that year; or (b) upon the failure of the Trustee to exercise his discretion to pay, apply, Set Aside or accumulate under clause 3, shall be entitled to share in the Income for that year as is provided in this Deed, SHALL have an immediate and indefeasible vested interest in that part of the Income for that year to which that Beneficiary is entitled. It is the express intention of the Settlor that each of the Beneficiaries shall be presently entitled to their share of such Income where the Trustee shall pay, apply or Set Aside the Income or, failing the exercise of the Trustee's discretion to pay, apply, Set Aside or accumulate, such Beneficiary shall be entitled to share in such Income as provided in this Deed and shall be presently entitled to his or her or their share of such Income. 49 Clause 3.7 recognises that at the relevant date, 30 June in each year, a beneficiary will become presently entitled to the relevant income for that year. 50 By cl 5.1, the trustee has the power, to be exercised in its absolute discretion, to apply the whole or any part of the trust fund to or for the benefit of all or any one or more exclusively of the others, of the beneficiaries as the trustee thinks fit. Clause 7 confers a power on the principal to appoint any person to be a beneficiary of the trust and the principal may remove a trustee from office. 51 Financial accounts for the company as trustee of the Yates Family Trust were put before the Tribunal. The notes to the accounts show that in the financial year ending 30 June 2005, Ms Hart introduced capital of $116,671.00 and received drawings of $3,098.00 resulting in a carried-forward balance into the financial year ending 30 June 2006 of $113,573.00. In that year Ms Hart received drawings of $9,659.00 resulting in a current account balance in her favour at 30 June 2006 of $103,914.00. In the financial year ending 30 June 2005, Mr Yates contributed capital of $143,741.00 and received drawings of $27,833.00 resulting in a carry‑forward contribution into the financial year ending 30 June 2006 of $115,907.00. In the financial year ending 30 June 2006 Mr Yates received a share of the profit of the business and was paid drawings resulting in a current account balance of $81,498.00 at 30 June 2006. His wife, Beryl Yates, contributed capital of $143,741.00 in the financial year ending 30 June 2005, obtained drawings and had a carry‑forward balance into the financial year ending 30 June 2006 of $122,363.00. She received a share of profit in that financial year and was paid drawings resulting in a current account balance at 30 June 2006 of $108,961.00. 52 In the financial year ending 30 June 2006, the gross profit from trading carried on by the trustee in its capacity as trustee of the Yates Family Trust was $854,653.00. Gross sales were $1,586,183.00. The expenses were $825,641.00. The net profit for the financial year ending 30 June 2006 including minor additional income was $39,753.00. In the course of conducting the business in the financial year ending 30 June 2005 the trustee paid salary and wages to employees of $248,101.00 and superannuation contributions of $19,914.00, among other expenses. In the financial year ending 30 June 2006, the trustee paid for contract work to be done of $100,522.00 and paid salaries and wages to employees of the company in conducting the business of $458,504.00. Superannuation contributions made on behalf of those employees amounted to $38,964.00. The company's accounts and financial documents show that 11 men and women were employed by the company in undertaking the cabinet‑making business. The records also show that the trustee in its trading capacity paid tax pursuant to business activity statements in the periods ending 25 November 2005, 28 February 2006, 12 May 2006 and 11 August 2006 of $38,104.00, $45,403.00, $25,842.00 and $41,442.00 respectively. 53 Accordingly, the cabinet‑making enterprise conducted by the trustee in its capacity as trustee of the Yates Family Trust provided 11 people with employment, provided contract work to others, generated significant sales, produced a profit in the years ending 30 June 2005 and 30 June 2006 and accounted for tax. 54 In evidence before the Tribunal, Ms Hart said that at the commencement of the business, five people were employed and at the date of her evidence, 14 people were employed including three installers/fitters, five or six cabinet‑makers, one machinist and five people in the office including Mr Yates and Ms Hart. Ms Hart gave evidence of her involvement in the day‑to‑day business which involved quoting on jobs, organising construction and installation, pursuing the completion of orders, interviewing and employing new staff and other functions. 55 The Tribunal concluded that Ms Hart was able to provide the Tribunal with a comprehensive and clear explanation of the operation of the business. The ultimate findings of the Tribunal are contained in three paragraphs in these terms. Overall, the available documentation [to which reference is made in these reasons], together with the evidence of Ms Hart, Mr Yates and Mr Cabrera provided at [the] hearing satisfied the Tribunal that Ms Hart has a 20 per cent shareholding in Northside Cabinets Pty Ltd and that she is actively involved in the operations of that business, both in the management of the business, its overall direction, and its day‑to‑day operations. Northside Cabinets Pty Ltd is owned by the Yates Family Trust. Northside Cabinets Pty Ltd is the trustee of the Yates Family Trust and Mr Yates [is[ the principal of the trust. Also, during the relevant period Mr Yates was the only director of the company. However, the Tribunal is satisfied that the company was structured in this way for asset protection purposes and it is not how the business is managed on a day‑to‑day basis. It was clear to the Tribunal that Ms Hart's role in the business during the relevant period involved her directly managing the business day‑to‑day and making decisions affecting the overall direction and performance of the business. The Tribunal is therefore satisfied that Ms Hart has had, and continues to have an established main business in Australia, being Northside Cabinets Pty Ltd, for the period 18 months immediately before the making of the application [7 August 2006]. The business is a qualifying business as it is operated for the purpose of supplying goods to the Australian markets. The applicant has a 20 per cent shareholding, above the required 10 per cent and the Tribunal is satisfied that she is actively involved in all relevant aspects of the business. As a result, the Tribunal is satisfied that Ms Hart satisfies the provisions of clause 845.213. 56 The Tribunal remitted Ms Hart's application to the Minister for reconsideration coupled with a direction that Ms Hart met the criteria of cl 845.213 for a subclass 845 visa. 57 It seems clear from the findings of fact made by the Tribunal based on its reference to the "available documentation" and the oral evidence that the Tribunal found that Northside Cabinets Pty Ltd in its capacity as trustee of the Yates Family Trust conducted the "operations of [the] business" in which Ms Hart was found to have a management role in the overall direction and day‑to‑day operation of that business. Ms Hart was found to have a 20% shareholding in that company. The Tribunal found that although the company was "structured" on the footing of a business conducted by a company as trustee of a family trust with Mr Yates as the only director of the company and principal of the trust, that structure was adopted on advice for "asset protection purposes". These brief findings of the Tribunal are entirely consistent with a finding that the business of Northside Cabinets was conducted by Northside Cabinets Pty Ltd as trustee of the Yates Family Trust. The Tribunal found however that such a structure did not reflect the day‑to‑day management of the business. The findings of fact reflect active engagement by Ms Hart "in all relevant aspects of the business" which was found to be a qualifying business. 58 The Minister sought judicial review before the Federal Magistrates Court of Australia to set aside the Tribunal's decision on grounds of jurisdictional error. The Minister contended before the Federal Magistrates Court that the Tribunal had fallen into jurisdictional error by failing to refer to the terms of the Trust Deed which necessarily were a relevant consideration in determining whether Ms Hart enjoyed any "interest" as a beneficiary for the purposes of the trust instrument in any of the assets, capital or income of the business enterprise, so as to determine the nature of her contended ownership interest. The Minister also contended that the Tribunal had failed to consider "the nature of the trust, and specifically whether it was a fixed trust or a discretionary trust". The third ground of error was said to be a failure to have regard to a policy document described as a "Procedures Advice Manual 3". The principal contention advanced by the Minister before the Federal Magistrates Court was that the Tribunal had made a clear error of law in the application of the statutory test as the Tribunal had equated a shareholding in the trustee of a discretionary trust with an ownership interest in the assets of the trust. 59 The Federal Magistrates Court dismissed the Minister's application. 60 Federal Magistrate Jarrett concluded that in his view Northside Cabinets Pty Ltd carried on the cabinet‑making business of Northside Cabinets and did so as trustee of a trust. FM Jarrett observed that the company is entitled to the income of the business and liable for its debts subject to its rights, duties and obligations under the Trust Deed. FM Jarrett accepted the Minister's submissions that the beneficiaries of the trust had no interest in the trust assets other than a right to the due administration of the trust. At [20], FM Jarrett considered that the "relevant inquiry in the case before me is whether the company in which there is the necessary shareholding carries on the relevant business". FM Jarrett noted the observations of Dowsett J in Ng v The Minister [2002] FCA 1146 to the effect that an ownership interest necessarily involved a proprietorial interest rather than "merely being employed in the administration of the business which appears to have been the involvement of the trustee [in the events before Dowsett J]". 61 FM Jarrett concluded that the decision in CPT Custodian Pty Ltd v Commissioner of State Revenue (Vic) (2005) 224 CLR 98 informed the resolution of the issues before the learned Federal Magistrate. That was so because FM Jarrett understood CTP Custodian as determining that where the legal title to an asset is vested in a discretionary trustee, as in this case, with no identified beneficial interest vested in a designated beneficiary, the bundle of legal and beneficial interests in the relevant business assets resided in the trustee and thus Ms Hart held an ownership interest through her shareholding in an entity that held all relevant proprietary interests. 62 The Minister relies upon 10 grounds of appeal in seeking to demonstrate error on the part of the learned Federal Magistrate. However, in the course of submissions counsel for the Minister noted that these grounds "boil down" to the following propositions: (a) the learned Federal Magistrate erred in finding that the necessary "ownership interest" could be established merely by the visa applicant establishing ownership of shares in a corporate trustee company to a discretionary trust which had as one of its assets the relevant business, without regard to whether the visa applicant had any beneficial interest in or control over the trust assets rather than following the reasoning of the Federal Court in Ng to the effect that establishing an "ownership interest" required some proprietorial involvement of the visa applicant in the business (this covers grounds 1, 2, 3, 4, 5 and 6 of the notice of appeal). (b) the learned Federal Magistrate erred in failing to consider: (i) the terms of the trust instrument and the Procedures Advice Manual (ground 8); (ii) the fact that the interpretation favoured by the learned Magistrate would: · be inconsistent with other provisions of the Act and the Regulations as well as the legislative intention (grounds 7 and 9(b) of the notice of appeal); and · lead to absurd results (ground 9(a) of the notice of appeal). 63 The Minister's essential proposition is that Federal Magistrate Jarrett erred by failing to find that no ownership interest arose in Ms Hart, as she exercised no "proprietorial involvement" over the trust assets either by way of control over those assets or by reason of any beneficial interest in them. Ground 2 concerns contended error arising out of a failure on the part of FM Jarrett to consider the terms of the trust instrument, the Procedures Manual and the relevant regulations. 64 It is undoubtedly true that a beneficiary of a so‑called discretionary trust enjoys no more than an expectancy. Such a beneficiary has no ownership interest either legal or equitable in any of the assets of the trust subject to a number of considerations. The beneficiaries under the Yates Family Trust did not enjoy any vested beneficial interest other than in the income at the relevant date upon the exercise of the power. The beneficiaries represented classes of objects of the discretionary power conferred upon the trustee by the trust instrument. Ms Hart was one of the class of objects to be considered in any potential distribution and in that capacity she had a right in equity to the due administration of the trust. That right was accompanied by at least a fiduciary duty on the part of the trustee to consider whether and in what way the trustee should exercise the power conferred upon it. 65 It is equally true that a shareholder in a company enjoys the particular rights attached to a share but enjoys no legal or equitable interest in the assets of the company in which the share is held. Therefore, it would be anomalous to describe a shareholder as having an ownership interest in the assets of a company or a business conducted by a company. In the modern world of shareholder representative groups, shareholders in a market sense in listed entities have a real interest in the capacity of a company to generate a return on assets as it affects the share price. However, the Parliament of the Commonwealth must be taken to have understood the orthodoxy of the position that a shareholder enjoys no legal or beneficial interest, or put another way, no ownership interest in the assets deployed by a company in conducting its business undertaking whether a listed entity or a proprietary family company. 66 Accordingly, when the Parliament enacted a definition of ownership interest for the purposes of the Migration Act and Regulations which defined an ownership interest in relation to a business to mean an interest in the business as a shareholder in a company that carries on the business, the Parliament must be taken to have departed from orthodoxy so as to establish a construct, in the migration context, in relation to Established Business Visas, so as to bring about the result that, as a shareholder, an applicant would enjoy a qualifying ownership interest in relation to a business, in the circumstances of the integers that must be made out in order to satisfy the applicable criteria for such a visa. Presumably, the Parliament intended that a non‑citizen who invests the relevant threshold of capital or financial support in a qualifying business for the relevant period and continuously engages in the management and decision‑making affecting the overall direction and performance of the business, would by doing so, serve Australia's national interest in encouraging the development and expansion of enterprise business activity which might be productive of employment and the transmission of goods and services into a relevant market. An element of serving the national interest through enabling non‑citizens to obtain a permanent "Business Skills - Established Business (Residence) (Class BH)" visa involves, in the statutory context of such a visa, treating an applicant who has a shareholding in a qualifying business within the notion of a main business as that term is understood, as having an ownership interest in that business. 67 The resolution of this appeal is to be found in the Tribunal's findings of fact and the application in the context of the Act generally, of the statutory construct adopted by the Act in defining an ownership interest (CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408). 68 The factual position is this. 69 The company carries on a business undertaking of cabinet- making. It makes and sells cabinets. It generated sales of $1,586,183.00 in the financial year ending 30 June 2006 in doing so. In order to do so, it acquired goods and services in 33 categories of subject matter of $825,641.00 including labour services from 11 men and women. It uses plant and equipment which it depreciates to manufacture cabinets. Some of the employees are cabinet-makers. At least one employee is a machinist. The company carries on these trading activities for the purpose of making a profit and did so in the financial years ending 30 June 2005 and 30 June 2006. The entire trading undertaking and field of transactions comprising the cabinet-making business is that of the company. Ms Hart has a 20 per cent shareholding in that company, engaged in that business undertaking. She therefore has an ownership interest in the business of cabinet-making as a shareholder of the company by operation of the definition in s 134(10) of the Act. 70 It is true that the company carries on the cabinet-making business in a particular capacity. It operates the business in its capacity as a trustee of a trading trust. The instrument places that trust within that category of trust often called a discretionary trust, a term which seems to have "no fixed meaning" and is "used to describe particular features of certain express trusts" (Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 at 234) or a "purely discretionary" trust (Federal Commissioner of Taxation v Vegners (1989) 90 ALR 547 at 552). In that capacity, although the class of objects of the trust enjoy no vested beneficial interest in the assets of the trust, they remain the objects of the discretionary power in relation to any distributions and enjoy the right in equity to due administration of the trust coupled with a fiduciary duty in the trustee to consider whether and in what way the trustee should exercise the power conferred on it under the trust instrument. If the company in carrying on the business activity of cabinet-making does so in conformity with the duties and obligations as trustee, the trustee is entitled to an indemnity out of the assets of the trust in respect of liabilities arising out of the field of business transactions it has entered into. The right of indemnity confers a "beneficial interest" in the trust assets in the trustee (Octavo Investments Ltd v Knight (1979)144 C LR 360 at 367 per Stephen, Mason, Aickin and Wilson JJ.) 71 Although the trustee conducts the cabinet-making business in this capacity, the business assets and the cabinet-making undertaking is conducted and operated by the company. No beneficial interest in the assets or the undertaking is vested in any member of any class of objects. The company owns and deploys the assets in furthering the undertaking coupled with a duty by reason of its particular capacity. 72 The Act does not disqualify the applicant from having an ownership interest in a business as shareholder in a company that carries on that business, if the company does so in the capacity of a trustee of a discretionary trust or, in a particular trustee capacity. 73 Further, the definition of ownership interest ought not to be considered in isolation from other integers. The question is not simply whether a shareholding in a company confers an interest in the ownership of a company's assets. If that were the scope of the enquiry, the question would answer itself. There is a relationship between the various aspects of the criteria that must be satisfied. The applicant must demonstrate that she has had an ownership interest in a main business from 7 February 2005. The main business must be a qualifying business being an enterprise carried on for a profit‑making purpose. At the date of decision the applicant must continue to have an ownership interest. The value of the applicant's ownership interest as a shareholder must be at least 10% of the total value of the qualifying business. Since an ownership interest in relation to a business means an interest in the business as a shareholder, the applicant's shareholding of 20% represents 20% of the total value of the business. The applicant must continuously engage directly in the business and exercise day‑to‑day decision‑making affecting the overall direction and performance of the qualifying business. 74 It is true that categories (b) and (c) in the definition of ownership interest concern a form of business engagement which involves ownership in an orthodox sense which conveys the notion of proprietorial engagement. However, it follows as a matter of orthodoxy that an interest in a qualifying business taken up by an applicant in the capacity of a partner in a partnership that carries on the qualifying business or as a sole proprietor of the business would necessarily have a proprietorial interest in the business as compared with a shareholder in a company who would not. Thus, it was necessary for the purposes of the definition to create statutorily the construct that an applicant for an Established Business Visa would have an ownership interest in a qualifying business, as a shareholder. 75 In this case, each of those integers is made out. The Tribunal found that the participants in the business had been given advice to establish the qualifying business on the basis that a company would be adopted as the business vehicle, Mr Yates would be the sole director and the company would conduct the business. The findings of the Tribunal are entirely consistent with an acceptance that the company carried on the business as trustee of the Yates Family Trust. The particular structure was adopted for asset protection purposes. The Minister says that the structural circumstance that Ms Hart simply enjoys rights in a share in a company that is a trustee of a discretionary trust, where it necessarily follows that she enjoys no legal or beneficial interest in any of the assets of the trust, disqualifies, as a matter of construction, any ownership interest arising in Ms Hart. Having regard to the statutory purpose for an Established Business Visa and the relationship between the definition of ownership interest and the criteria to be satisfied in respect of such a visa, I am not satisfied that the proper construction is the disqualification of an ownership interest in a qualifying business in circumstances where the applicant holds a share in a company conducting the business as trustee of a discretionary trust. 76 Ms Hart contends that a further consideration involves an acceptance of the proposition that in the case of a discretionary trust where no beneficiary has any vested entitlement, the legal and beneficial interests in the assets of the trust vest as a bundle of rights and interests in the trustee until a particular power is exercised which might effect the crystallisation of a vested beneficial interest in an object of the trust (Glenn v Federal Commissioner of Land Tax (1915) 20 CLR 490; CPT Custodian Pty Ltd v Commissioner of State Revenue (Vic) (2005) 224 CLR 98 and Kennon v Spry [2008] HCA 56; 83 ALJR 145). Therefore, it follows, it is said, that by reason of the right in equity of Ms Hart to due administration of the trust coupled with a fiduciary duty on the part of the trustee to consider whether and in what way the trustee should exercise the power conferred by the trust instrument; the right of indemnity the trustee enjoys out of the trust assets; and the collection of legal and beneficial interests in the assets of the trust held by the trustee pending the due performance of the trustee's duties, Ms Hart holds a share in a company that, in any event, has interests which might properly be described as "proprietorial" interests. Although the authorities seek to dispel notions which have been described as elevated to "dogma" to the effect that where ownership is vested in a trustee, equitable ownership must necessarily be vested in someone else, the consideration of the nature of ownership in that bundle of rights and interests at any point along the continuum of the exercise of a power conferred on a trustee, has been considered in the context of specific statutory provisions whether arising under the tax legislation of the Commonwealth, the Bankruptcy Act 1966 (Cth), the Family Law Act 1975 (Cth) or other legislation. It seems to me however that the question to be determined in the resolution of this appeal must be determined in the context of the findings of fact made by the Tribunal and the application of the particular statutory provisions applying to an Established Business Visa, to those facts. 77 As to the question of the Tribunal's consideration or otherwise of the "Procedures Advice Manual 3", it seems to me that the Tribunal made enquiry of Ms Hart by its letter of 9 November 2007, of matters the subject of the Manual, that is, the apparent adoption of a structure that involved the company conducting the business in the capacity of trustee of the Yates Family Trusts; the use of a "business trust" more generally; ownership of the relevant assets; the role of Mr Yates as Principal; and the relevance of those issues to the question of whether Ms Hart had at the relevant date an "ownership interest" for the purposes of the Act. The reasoning of the Tribunal addresses those issues and findings were made about them. The subject matter of the Manual was therefore taken into account. 78 To the extent that the Minister says that the Tribunal failed to apply the Manual and failed to find in conformity with the Manual that a shareholding in a company acting as trustee of a trust confers no ownership interest in the relevant business for the purposes of the Act, the question is whether in the context of the particular findings of fact, Ms Hart had an ownership interest in a relevant business as shareholder in a company that carried on that business. If the Manual seeks to bring about a result that Ms Hart does not have an ownership interest in the business of cabinet-making as a shareholder in a company that carries on that business by deploying assets used in the business and engaging in the field of transactions necessary to undertake the business, because the company is a trustee of a discretionary trust, the Manual, to that extent, is inconsistent with the Act and Regulations. 79 Accordingly, having regard to these observations, I am not satisfied that there is any demonstrated error on the part of the learned Federal Magistrate in concluding that the Tribunal did not fall into jurisdictional error in its construction and application of the provisions of the Act and Regulations. The learned Federal Magistrate did not, in my view, engage in error in dismissing the application for judicial review.

80 It follows that the appeal to this Court must be dismissed with costs. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

LOGAN J 81 The First Respondent to this appeal, Ms Tracy Kym Hart, is a British citizen. In August 2006 she sought permanent residence in Australia, applying under the Migration Act 1958 (Cth) (Migration Act) for that type of visa known as a BH - Business Skills - Established Business (Residence) (Class BH) visa (Established Business visa). 82 On 27 March 2007, a delegate of the Minister for Immigration and Citizenship (the Minister) refused Ms Hart's application. She then applied for the review of that decision by the Migration Review Tribunal (the Tribunal). In that application she was successful. On 18 January 2008, the Tribunal decided that Ms Hart met the criteria for an Established Business visa and that the matter should be remitted to the Minister accordingly. That decision and the Tribunal's reasons were communicated to her under cover of a letter dated 1 February 2008 from the Tribunal. 83 The Minister challenged the Tribunal's decision by way of a judicial review application in the Federal Magistrates Court. On 12 June 2008, that court dismissed the Minister's application. It is from that decision that the Minister has appealed to this Court. 84 The Tribunal was named as the Second Respondent to the Minister's application to the Federal Magistrates Court. It properly filed a submitting appearance in those proceedings. In this appeal the Minister initially did not name the Tribunal as a respondent. It should have been so named: SAAP v Minister for Immigration and Multicultural Affairs (2005) 228 CLR 294 at 310, [43]; 324, [91]; 341, [153] and 347, [180]. Realising this omission, the Minister sought at the outset of the hearing of the appeal to add the Tribunal as a respondent. He intimated that the Tribunal had advised that it consented to this joinder and again adopted a submitting approach. Joinder was not opposed by Ms Hart. In those circumstances the Court directed that the Tribunal be joined as a respondent. 85 The Minister's grounds of appeal are prolix. It is unnecessary to consider them seriatim because their essence was distilled by counsel for the Minister in his outline of submissions to the following propositions, which were developed in oral argument: (a) the learned Federal Magistrate erred in finding that the necessary "ownership interest" could be established merely by the visa applicant establishing ownership of shares in a corporate trustee company to a discretionary trust which had as one of its assets the relevant business, without regard to whether the visa applicant had any beneficial interest in or control over the trust assets, rather than following the reasoning of the Federal Court in Ng to the effect that establishing an "ownership interest" required some proprietorial involvement of the visa applicant in the business (this covers grounds 1, 2, 3, 4, 5 and 6 of the notice of appeal). (b) the learned Federal Magistrate erred in failing to consider: (i) the terms of the trust instrument and the Procedures Advice Manual (ground 8); (ii) the fact that the interpretation favoured by the learned Magistrate would: · be inconsistent with other provisions of the Act and the Regulations as well as the legislative intention (grounds 7 and 9(b) of the notice of appeal); and · lead to absurd results (ground 9(a) of the notice of appeal). 86 To give context to a consideration of the merits, if any, of these propositions and to the reasons for judgement of the Federal Magistrates Court it is necessary to detail the presently material criteria for the grant of an Established Business visa and the findings of fact which were made by the Tribunal, as well as to refer to uncontroversial evidence which was before the Tribunal.

The visa criteria 87 Subclass 845 within Sch 2 to the Migration Regulations 1994 (Cth) (the Regulations) made under the Migration Act sets out particular criteria which must be satisfied in order to qualify for the grant of an Established Business visa. At the material time, it was relevantly provided in respect of Subclass 845: Subclass 845 Established Business in Australia 845.1 Interpretation Note 1 AUD, ownership interestand qualifying businessare defined in regulation 1.03; and main business is defined in regulation 1.11. Note 2 As to beneficial ownership of an asset or ownership interest, see regulation 1.11A. Note 3 There are no interpretation provisions specific to this Part. 845.213 The applicant: (a) has had an ownership interest in 1 or more established main businesses in Australia for the period of 18 months immediately preceding the making of the application; and (b) continues to have an interest of that kind. 845.214 The total value of the net assets in Australia of the applicant, or the applicant and the applicant's spouse together: (a) is; and (b) has been throughout the period of 12 months immediately preceding the making of the application; at least AUD250,000. 845.215 The total value of the net assets owned by the applicant, or by the applicant and the applicant's spouse together, in the main business or main businesses in Australia: (a) is; and (b) has been throughout the period of 12 months immediately preceding the making of the application; at least AUD100,000. 845.216 In the 12 months immediately preceding the making of the application, the applicant, as the owner of an interest in a main business or main businesses in Australia, maintained direct and continuous involvement in the management of that business or those businesses from day to day and in making decisions that affected the overall direction and performance of that business or those businesses. 845.217 The applicant has overall had a successful business career. The following definitions are found in reg 1.03 of the Regulations: ownership interesthas the meaning given to it in subsection 134 (10) of the Act. qualifying businessmeans an enterprise that: (a) is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public; and (b) is not operated primarily or substantially for the purpose of speculative or passive investment. Regulations 1.11 and 1.11A materially provided: 1.11 Main business (1) For the purposes of these Regulations and subject to subregulation (2), a business is a main business in relation to an applicant for a visa if: (a) the applicant has, or has had, an ownership interest in the business; and (b) the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business; and (c) the value of the applicant's ownership interest, or the total value of the ownership interests of the applicant and the applicant's spouse, in the business is or was at least 10% of the total value of the business; and (d) the business is a qualifying business. (2) If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses. 1.11A Ownership for the purposes of certain Parts of Schedule 2 (1) … for Parts … 845 … of Schedule 2, ownership by an applicant, or the applicant's spouse, of an asset, an eligible investment or an ownership interest, includes beneficial ownership only if the beneficial ownership is evidenced in accordance with subregulation (2). It is not necessary to set out reg 1.11A(2). "Ownership interest" is defined by s 134(10) of the Act as follows: ownership interest, in relation to a business, means an interest in the business as: (a) a shareholder in a company that carries on the business; or (b) a partner in a partnership that carries on the business; or (c) the sole proprietor of the business; including such an interest held indirectly through one or more interposed companies, partnerships or trusts.

Tribunal Findings and Evidence 88 The Tribunal's findings are compressed: Overall, the available documentation, together with the evidence Ms Hart, Mr Yates and Mr Cabrera provided at hearing satisfied the Tribunal that Ms Hart has a 20 per cent shareholding in Northside Cabinets Pty Ltd and that she is actively involved in the operations of that business, both in the management of the business, its overall direction and its day-to-day operations. Northside Cabinets Pty Ltd is owned by the Yates Family Trust. Northside Cabinets Pty Ltd is the trustee of the Yates Family Trust and Mr Yates is the principal of the trust. Also, during the relevant period Mr Yates was the only director of the company. However, the Tribunal is satisfied that the company was structured in this way for asset protection purposes and it is not how the business in managed on a day to day basis. It was clear to the Tribunal that Ms Hart's role in the business during the relevant period involved her directly managing the business day to day and making decisions affecting the overall direction and performance of the business. The Tribunal is therefore satisfied that Ms Hart has had and continues to have an established main business in Australia, being Northside Cabinets Pty Ltd, for the period 18 months immediately before the making of the application. The business is a qualifying business as it is operated for the purpose of supplying goods to the Australian markets. The applicant has a 20 per cent shareholding, above the required 10 per cent and the Tribunal is satisfied that she is actively involved in all relevant aspects of the business. As a result, the Tribunal is satisfied that Ms Hart satisfies the provisions of cl 845.213. 89 The evidence before the Tribunal included the following: (a) an Australian Securities and Investments Commission (ASIC) extract for the company Northside Cabinets Pty Ltd (Northside); (b) the trust deed in respect of the Yates Family Trust, of which Northside was the trustee; (c) the financial statements for Northside in its capacity as trustee for the Yates Family Trust for the year ended 30 June 2006. 90 The ASIC search disclosed that, of the 100 issued shares in Northside, Ms Hart held 20. The remaining shareholding was divided equally between a Mr Richard Yates and a Mrs Beryl Yates. Statutory declarations in evidence before the Tribunal disclosed that Mr Yates was Ms Hart's step father and that Mrs Yates was her mother. 91 The following provisions of the trust deed should be set out: 1. DEFINITIONS & INTERPRETATION 1.1 Definitions … "the Trust Fund" means: (a) the Settlement Sum; (b) any further or additional Property which any Person company or corporation may donate to, assign to, transfer to or vest in or cause to be vested in the Trustee to be held upon the trusts and subject to the powers and provisions of this Trust; (c) any other Property which may from time to time be held by the Trustee upon and subject to the trusts contained in this Deed; (d) the money, investments and Property of every description for the time being and from time to time representing the Property referred to in subclauses (a) to (c) hereof; and (e) any Income of the Trust Fund accumulated by the Trustee pursuant to the power so to do contained in this Deed. 3. DISCRETION AS TO INCOME OF THE TRUST FUND 3.1 Determine Income The Trustee shall in each year determine the Income of the Trust Fund after allowing for all expenses of the Trust Fund. 3.3 Trustee may determine The Trustee may at any time prior to the expiration of any year determine with respect to all or any part of the Income of the Trust Fund derived during any such year: (a) to pay, apply or Set Aside such Income or any part of it for all or one or more of the Primary Beneficiaries living or in existence at the time of the determination; (b) to pay, apply or Set Aside such Income or any part of it for all or one or more of the Secondary Beneficiaries living or in existence at the time of the determination; (c) to pay, apply or Set Aside such Income or any part of it for all or one or more of the Tertiary Beneficiaries living or in existence at the time of the determination; (d) to accumulate such Income or any part of it, provided that if the Trustee has not by the Thirtieth (30th) day of June in each such year exercised its discretion to pay, apply, Set Aside or accumulate the whole or any part of such Income then the Trustee shall hold it on trust absolutely for the Default Beneficiaries. 3.5 Amounts Set Aside Any amount Set Aside for any Beneficiary (or held for a Beneficiary pursuant to the proviso to subclause 3.3) shall not form part of the Trust Fund but shall, upon such setting aside or upon the Thirtieth (30th) day of June in that year, be held by the Trustee as a separate Trust Fund upon trust for such Beneficiary absolutely with power to the Trustee pending payment over to such Beneficiary to invest or apply for the benefit of such Beneficiary or deal with such fund or any resulting Income or any part of such Income in the manner provided for in this Deed in relation to the Trust Fund. 3.7 Vested Interest It is declared that each of the Beneficiaries in whose favour: (a) the Trustee may pay, apply or Set Aside the Income for that year; or (b) upon the failure of the Trustee to exercise his discretion to pay, apply Set Aside or accumulate under this clause 3, shall be entitled to share in the Income for that year as is provided in this Deed. 4 DISCRETION AS TO CAPITAL OF THE TRUST FUND 4.1 Termination and Vesting The Trust shall terminate and the Trust Fund shall vest absolutely on the Perpetuity Date. Upon such termination and vesting the Trustee: (a) may pay and assign part of whole of the Trust Fund to such one or more of the Tertiary Beneficiaries then living or in existence (whether to the exclusion of some of them or not); and (b) shall pay and assign the whole of the Trust Fund (or the balance, if any, as the case may be) to such one or more of the Primary Beneficiaries and the Secondary Beneficiaries then living or in existence (whether to the exclusion of some of them or not), in such proportions between the described classes of Beneficiaries and in such amounts to the members of those respective classes as the Trustee shall in its absolute discretion think fit, provided that where any Beneficiary chosen by the Trustee has not attained the age of Eighteen (18) years the Trustee may pay and assign the proportion of the Trust Fund appointed to him to such infant Beneficiary or to his parent, guardian or a bank account in the name of that Beneficiary or in his name and the name of his parent or guardian and the receipt of the parent, guardian, in fact Beneficiary or banker shall be a good and sufficient discharge of the obligations of the Trustee in that regard and the Trustee shall not be bound to see to the application of any such amount or thing. 5. POWER TO PAY OR APPLY FOR BENEFIT OF BENEFICIARIES 5.1 Apply whole or part The Trustee shall have and may exercise in its absolute discretion at any time and from time to time prior to the Perpetuity Date, power to pay or apply the whole or any part of the Trust Fund to or for the benefit of all or any one or more exclusively of the others of the Primary Beneficiaries, the Secondary Beneficiaries or the Tertiary Beneficiaries then living or in existence and in such proportions or manner as the Trustee shall think fit. 7 APPOINTMENT OF ADDITIONAL BENEFICIARIES 7.1 Principal may appoint Notwithstanding anything to the contrary herein contained the Principal may at any time and form time to time before the Perpetuity Date, by notice in writing to the Trustee, or in the manner prescribed in clause 30, appoint any Person, corporation, trust, charity, body or association, incorporated, or unincorporated who or which is alive or in existence at the date of such appointment, to be a Beneficiary for the purpose of this Deed and the appointee shall as and from the date of such appointment become a Primary Beneficiary, a Secondary Beneficiary or a Tertiary Beneficiary according to the specification of such appointment and in the event that such appointment does not specify the class of Beneficiary to which the appointee shall belong, the appointee shall as and from the date of such appointment become a Tertiary Beneficiary, provided that the Principal shall not appoint: (a) the Settlor or his personal representatives; (b) any trust which would, if appointed, result in an infringement of the law against perpetuities. 14. DEATH, REPLACEMENT, REMOVAL OR RESIGNATION OF TRUSTEE 14.2 Principal may remove The Principal may at any time and from time to time without the consent of any Person by Deed or in the manner prescribed in clause 30, remove any Trustee from office and may also at any time and from time to time and without the consent of any Person by deed appoint any Person to be a Trustee either alone or together with any continuing Trustee jointly or severally. Upon the death of the Principal, these separate powers of removal and appointment may be exercised by the legal personal representatives of the Principal provided that neither the Principal nor any Person in whom this power shall vest may appoint the Settlor to be the Trustee. For the purposes of the trust, Mr Yates was "the Principal". The "primary beneficiaries" were Mr and Mrs Yates and Ms Hart. Those same persons comprised the "default beneficiaries". It is not necessary to set out other definitions in the trust deed. 92 It was not submitted on behalf of either party to the appeal that the Tribunal's references in the passage quoted to the trust structure having been adopted for "asset protection" purposes and that this was not the way it operated in practice were tantamount to a finding that the adoption of a trustee capacity by Northside in terms of the trust deed was a sham. That being so, the impact of the quoted provisions of the trust deed is that, absent the operation of a default proviso, and the favourable exercise of the trustee's discretion, Ms Hart can have no vested interest in either the income or the capital of the Yates Family Trust. Rather, what she has is an expectancy. The following passage from the speech of Lord Reid in Gartside v Inland Revenue Commissioners [1968] AC 553 at 607, with which Lords Morris of Borth-y-Gest and Guest agreed, accurately describes her situation: {A} right to require trustees to consider whether they will pay you something does not enable you to claim anything. If the trustees do decide to pay you something, you do not get it by reason of having the right to have your case considered; you get it only because the trustees have decided to give it to you. See also to like effect in that case Lord Wilberforce's speech (with which Lord Hodson agreed) at 615. In conformity with these views it has, for example, been held that a beneficiary under a discretionary trust has no interest in land forming part of the trust fund and is therefore unable validly to caveat against dealings in that land: Walter v Registrar of Titles and anor [2003] VSCA 122 at [15] per Chernov JA, Ormiston JA and Ashley AJA agreeing. 93 The balance sheet for the 2006 financial year for Northside in its capacity as trustee of the Yates Family Trust discloses, inter alia that: (a) intangible assets include goodwill in the sum of $123, 591.00; and (b) current liabilities include liabilities arising from loan by beneficiaries, one being, according to note 6 to the accounts a then current indebtedness of $103,914.00 to Ms Hart.

Federal Magistrates Court Judgement 94 The following passages contain the essence of the reasons for judgement of the Federal Magistrates Court: 18 As the decision of the High Court of Australia in CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 79 ALJR 1724 demonstrates, however, the Trust does not own the business. It does not have a proprietary interest in it, but rather it is owned, both legally and beneficially, by the trustee. 19 In CPT Custodians, at paragraph 25, the High Court said this: Glenn v Federal Commissioner of Land Tax 25. In that case, Griffith CJ said of an argument for the Revenue that it was: "based on the assumption that whenever the legal estate in land is vested in a trustee there must be some person other than the trustee entitled to it in equity for an estate of freehold in possession, so that the only question to be answered is who is the owner of that equitable estate. In my opinion, there is a prior inquiry, namely, whether there is any such person. If there is not, the trustee is entitled to the whole estate in possession, both legal and equitable." That statement was a prescient rejection of a "dogma" that, where ownership is vested in a trustee, equitable ownership must necessarily be vested in someone else because it is an essential attribute of a trust that it confers upon individuals a complex of beneficial legal relations which may be called ownership. The current state of authority, exemplified by Commissioner of Taxation v Linter Textiles Australia Ltd (In liq), bears out what was said in Glenn by Griffith CJ. General remarks in Chief Commissioner of Stamp Duties v ISPT Pty Ltd, a case referred to extensively in Arjon, may be at odds with what was said in Glenn to the extent that they go beyond construction of the particular New South Wales stamp duty legislation, but it is unnecessary to pursue the question here. (footnotes omitted). 20 The relevant inquiry in the case before me is whether the company in which there is the necessary shareholding carries on the relevant business. In Ng v The Minister [2002] FCA 1146 Dowsett J was dealing with a case not dissimilar to the present. In that case his Honour said at paragraph 32: [The applicant] was a shareholder in the trustee, but that share gave him an interest only in that company. The trustee had no interest in the trust business. Its own business may have been that of acting as trustee or of managing a business. In the event of a liquidation, the applicant's shareholding would have entitled him to participate in the distribution of any surplus of the trustee's own assets after payment of debts. However, that would not have entitled him to participate in any distribution of the trust assets, save to the extent that the trustee was entitled to any indemnity from them. It is therefore difficult to see how, as a shareholder in the trustee, he had any interest in the trust business. It is true that in a sense the company was "carrying on" that business, but I doubt whether that was the intention of the definition. The definition as a whole relevantly reads: Ownership interest, in relation to a business, means that interest in the business as ... a shareholder in a company that carries on the business ... Clearly, the "interest" is an interest in a business and the business, in this case, was a trust asset, not an asset of the trustee. The better view is that the words "carries on the business" describe involvement as a proprietor rather than merely being employed in the administration of the business, which appears to have been the involvement of the trustee. 21 According to his Honour, a mere "carrying on" of a business, without having a proprietorial interest in it, is not sufficient to meet the relevant definition of "ownership interest". But as the passage in his Honour's reasons immediately following that extracted above makes clear, his Honour's remarks were obiter. 22 Ng was decided before CPT Custodians and as CPT Custodians makes clear, where legal title to an asset is vested in a trustee in circumstances where a holder of a relevant beneficial interest cannot be identified, the trustee holds both the legal and equitable title to the asset. That is to say it is, in all senses, the owner of the relevant asset (the business in this case); subject at all times however to the terms and conditions of the trust. 23 If that view is correct, then the Tribunal was clearly correct in concluding that Ms Yates had an ownership interest in Northside Cabinets. Having regard to the nature of the discretionary trust in this case it cannot, and was not suggested, that the beneficiaries of that trust retained any beneficial interest in any of the trust assets. That being so, it seems to me that, as a matter of principle, Northside Cabinets Pty Ltd was at all times the legal and beneficial owner of Northside Cabinets. 24 Ordinarily, a Federal Magistrate will accord significant weight and rarely depart from a judgment of a single Judge of the Federal Court of Australia, but in this case I feel comfortable in doing so, having regard to the ratio of the decision in CPT Custodians, the fact that decision was delivered after the decision of in Ng and that the court's remarks in Ng were obiter. 95 I now turn to the merits of the competing arguments in the appeal.

An "ownership interest"? 96 At the forefront of the Minister's submissions was the argument that, reading the provisions of sub-class 845 as a whole, "the requirement for there to be some 'ownership interest' in the relevant business is so that the visa applicant can demonstrate a record of financial commitment to the business through some personal financial involvement and exposure to risk". From this it was said to follow that "mere ownership of at least 10% of the shareholding in a corporate trustee of a discretionary trust, without any ability in the shareholder to control distributions and without any interest of the shareholder as beneficiary under the trust would not … further the apparent regulatory purpose." It was submitted that such an approach was supported by the purposive approach to construction counselled by s 15AA of the Acts Interpretation Act 1901 (Cth), applicable to the construction of the Regulations by s 13 of the Legislative Instruments Act 2003 (Cth). Further support for this approach was said to be found in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381, [69]. 97 The Minister then pointed to the terms of reg 1.11(1)(c) of the Regulations, emphasising the words "the total value of the business". In context, it was said to follow that "the concept of 'ownership interest in the business' involves ownership of at least some proportion of the total value of the business." 98 The Minister further submitted that the approach adopted by Dowsett J in Ng v The Minister[2002] FCA 1146 to the construction of "ownership interest" was correct. 99 On behalf of Ms Hart it was contended that the Tribunal had made a finding that, by virtue of her 20% holding of the issued shares in Northside, she had the requisite "ownership interest" in that company's business. Implicit in this contention was a rejection of the construction of the term "ownership interest" promoted by the Minister and the proposition that, as the term was properly construed, it was lawfully open for the Tribunal to have made that finding. Further, for the reasons given by the learned Federal Magistrate, it was submitted that Ng's case was not correctly decided. 100 That the primary object of statutory construction is, as McHugh, Gummow, Kirby and Hayne JJ observed in the paragraph in Project Blue Sky cited by the Minister, "to construe the relevant provision so that it is consistent with the language and purpose of all of the provisions of the statute" is not in doubt. 101 It is clear enough from both context and the employment of the adjective "ownership" in the term that "interest" is being used in a proprietary sense in the definition of "ownership interest". Paragraph 1.11(1)(c) of the Regulations, relied on in the submissions of the Minister, supplies part of the definition of "main business" and, in that sense, forms part of the regulatory context in which the term "ownership interest" is employed. It does not though have any singular utility in the reaching of a conclusion that, in the definition of "ownership interest", the word "interest" is being used in a proprietary sense. Rather, that conclusion flows from a consideration of all of the provisions in sub-class 845. They have the apparent purpose of rewarding with residential status a visa applicant who has, in the way described in sub-class 845, both an investment of a particular type and value and a sustained managerial involvement in an established Australian business. The concern of the definition of "ownership interest" is to identify a particular type of interest, not the value of that interest. 102 "Business" itself is not a defined term. When, as in the definition of "ownership interest" and in the Regulations the word is used in a commercial sense, it is synonymous with an enterprise, a "going concern", a commercial activity. The term "interest in a business" has the appearance of referring to a separate item of property but is really a reference to an interest in the assets which are employed in, form part of and permit the carrying on of that "business". That is because the word "business" is not descriptive of a separate legal entity. 103 Under the general law, "a trust is not a juristic person with a legal personality distinct from that of the trustee and beneficiary": Heydon and Leeming, Jacobs' Law of Trusts in Australia (7th Ed, Lexis Nexis Butterworth 2006) (Heydon & Leeming) at [101]. 104 It is a feature of the definition of "ownership interest" incorporated by reference for the purposes of the Regulations from s 134(10) of the Act that it transcends traditional notions of proprietorship and separate legal personality. That a shareholder has, by virtue of that shareholding, no proprietary interest in the business carried on by the company in which the shares are held or in the assets held by the company and necessary for the conduct of that business was confirmed as long ago as 1897 by the House of Lords in the celebrated case of Salomon v A Salomon & Co Ltd [1897] AC 22. Yet item (a) of the definition of "ownership interest" deems such an interest to exist. 105 Paragraph (b) of the definition might also be thought to modify a general law position. Under the general law, "a partner has no title to specific property owned by the partnership, he has a beneficial interest in the partnership assets, indeed in each and every asset of the partnership. … His share in the partnership consists of a right to a proportion of the surplus after the realisation of the assets and payment of the debts and liabilities of the partnership": Commissioner of Taxation v Everett (1979-1980) 143 CLR 440 at 446. Under the general law a partner's interest is a right to a distribution of net partnership income or, on dissolution, surplus partnership capital. Yet item (b) of the definition of "ownership interest" treats a partner's interest in a much looser sense. 106 The reference to "such an interest" in the inclusory concluding words of the definition refers to an interest as defined in items (a), (b) or (c). The evident intent is that such an interest may permissibly be traced back to a visa applicant through an interposed corporation or beneficial holding. 107 The assets, including goodwill, of the business conducted by Northside formed part of the trust fund of the Yates Family Trust: see the definition of "Trust Fund" in cl 1.1 of the trust deed and the balance sheet for Northside as trustee of that trust for the year ended 30 June 2006. Ms Hart was but a member of a class of beneficiaries in respect of whom a discretionary power of appointment fell for exercise. Under the general law, described above by reference to Gartside's case and uninstructed by the definition of "ownership interest", it would be odd to regard her as having any proprietary interest in the business. 108 Items (a), (b) and (c) in the definition of "ownership interest" form part of a clause which delineates the type of interest which is to be regarded as falling within that term. The definition omits from items (a), (b) and (c) any qualification relative to the carrying on of the business in a trustee capacity. That is not a licence though to ignore the existence or terms of any relevant trust in ascertaining whether and what "interest" in a given business a visa applicant has. Artificial construct though it may be, the definition materially requires one to look to the interest in the "business" operated by Northside, not in that company. And that business was one operated by the company in a trustee capacity. 109 A similar dilemma to the present confronted Dowsett J in Ng v Minister for Immigration and Multicultural Affairs [2002] FCA 1146 (Ng's case). There, as here, the visa applicant held shares in a corporate trustee which in that capacity conducted the relevant "main business". The relevant passage (para 32 and para 33) from his Honour's judgement was quoted in the judgement delivered in the court below. It appears in the extract from that judgement which I have set out above. Self evidently from this passage, Dowsett J, as I do, regarded the definition of "ownership interest" as directed to a proprietary interest. That the only interest which the company might have in the trust assets employed in the business was via a right of indemnity was influential in his concluding that the visa applicant had no "ownership interest". 110 According to the learned Federal Magistrate, "the relevant inquiry … is whether the company in which there is the necessary shareholding carries on the relevant business". His Honour conceived that CPT Custodian Pty Ltd v Commissioner of State Revenue (Vic) (2005) 224 CLR 98 (CPT Custodian) was not only at odds with the reasoning of Dowsett J in Ng's Case but also that it provided an answer as to whether Ms Hart was to be regarded as having an "ownership interest" as defined. As I understand the reasoning in the court below, especially having regard to the extract from his Honour's reasons which I have quoted, the present utility of CPT Custodian lies in the affirmation by Gleeson CJ, McHugh, Gummow, Callinan and Heydon JJ (at [25]) of the correctness of the rejection by Griffith CJ in Glenn v Commissioner of Land Tax (1915) 20 CLR 490 "of a 'dogma' that, where ownership is vested in a trustee, equitable ownership must necessarily be vested in someone else because it is an essential attribute of a trust that it confers upon individuals a complex of beneficial legal relations which may be called ownership." That being so, and given that, absent the favourable exercise of the trustee's discretion, no member of any class of beneficiaries had any beneficial interest in any of the income or capital of the Yates Family Trust, it followed, in the learned Federal Magistrate's opinion, that Northside enjoyed the legal and beneficial interest in the business it conducted. It then followed, in his Honour's opinion, that, as a shareholder in Northside, Ms Hart had an "ownership interest" in that business. That reasoning was adopted in the submissions made on behalf of Ms Hart in the appeal. 111 With respect, CPT Custodian is not determinative of the outcome in the present case in the way apprehended by the learned Federal Magistrate. In that case, the relevant inquiry was whether the appellant, which held units in a particular unit trust, fell within the definition of "owner" for the purposes of the Land Act 1958 (Vic). In turn, that depended upon whether it should be regarded as having a beneficial entitlement to any land for any estate of freehold in possession. Having regard to the terms of the trust in question, it was held not to have such an entitlement. 112 The relevant inquiry in the present case is quite different. That inquiry is not as stated by the learned Federal Magistrate. It is whether the visa applicant holds an interest in a business in one of the ways described in the definition of "ownership interest"? 113 In the circumstances of the present case, answering the question posed by the learned Federal Magistrate serves only to explain why it is that Ms Hart has no interest in the business. True it is that Northside carries on the business but it does so as a trustee. All of the assets necessary for the carrying on of that business form part of the trust fund of the Yates Family Trust. To adopt an apposite statement made in Buckle v Commissioner of Stamp Duties (1998) 192 CLR 226 at 242, [37], "the trustee might accurately be described as the owner of those assets, but as subjected to the equitable obligations imposed" [by the trust deed of, in the present case, the Yates Family Trust]. Having regard to the terms of the trust deed governing the Yates Family Trust and in light of CPT Custodian and Buckle, that does not mean that Northside's technical holding of the legal and beneficial interest in the business assets gives its shareholders an interest in that business, even having regard to item (a) in the definition of "ownership interest". 114 Even though the definition of "ownership interest" sets aside the separate legal personality of Northside, that does not convert any of the assets necessary for the carrying on of the business into an asset in which its shareholders have an interest. Item (a) in that definition would only grant them such an interest if Northside carried on business in its own right. If it did carry on the business in its own right and having regard to item (a) in the definition, each shareholder could then be regarded as having an interest in each corporate asset necessary for the carrying on of the cabinet making business. 115 Northside is obliged to administer each of the assets of the Yates Family Trust according to the terms of the trust deed. One way of testing what interest in any of the assets so administered (or their worth in money) a shareholder in Northside might have is to ask what of these would be available to a shareholder upon a winding up of Northside? This, in essence, is what Dowsett J did in Ng's case. As his Honour appreciated, none would be lawfully available for such a distribution because each formed part of the trust fund and would be required on a winding up to be dealt with in accordance with the terms of the trust, not by way of distribution under the corporation's constitution. 116 It follows then that the learned Federal Magistrate was mistaken in deciding that the Tribunal was entitled on the facts it found to conclude that Ms Hart had an "ownership interest". Rather, having found that the business was operated by a corporate trustee under the terms of a discretionary trust by virtue of which Ms Hart could have nothing more than a mere expectancy of benefit, the Tribunal was obliged to find that she had no "ownership interest". 117 For completeness, I should make brief reference to another aspect of the Minister's submissions. The Minister made reference to the terms of a Departmental publication known as the Procedures Advice Manual. This manual is apparently formulated by the Minister's department to give guidance to decision-makers when considering visa applications and with the aim of ensuring a consistency of approach administratively. These, with respect, are worthy goals but are no substitute for regard to the terms of the Act and the Regulations or, insofar as relevant, the general law. 118 More particularly, there is advanced in the manual and adopted by the Minister in his submissions the notion that demonstrating "complete and effective control over the trust income and assets" of a discretionary trust can be sufficient to confer an "ownership interest". Having regard to the definition and to Gartside's case, this is a considerable and unwarranted extension of the language employed in the definition. Notions of the effective control of a discretionary trust such as described by French J (as the Chief Justice then was) in Re Richstar Enterprises Pty Ltd; ASIC v Carey (No 6) (2006) 153 FCR 509 at 520-521 [36] and [37] are foreign to the definition of "ownership interest" as it stands. As that definition stands, even had Ms Hart held a majority of the shares in Northside and been the "Principal" in respect of the Yates Family Trust, her interest in its business would nonetheless have been nothing more than an expectancy. I note further that, in Re Richstar Enterprises, after a wide ranging survey of authority, including Gartside's case, French J (at [37]) described such a position no higher than "something approaching … the ownership of the trust property".

Value of Ms Hart's interest? 119 Even if, contrary to the conclusion I have reached, the coincidence of Ms Hart's holding shares in Northside and that company's carrying on of the relevant business meant that, by virtue of the wording of item (a) of the definition of "ownership interest", she was to be taken to hold such an interest in the business notwithstanding that Northside was a corporate trustee, that part of the definition of "main business" found in reg 1.11(1)(c) would still require a valuation to be made of that interest. 120 This valuation requirement came to form a further or alternative basis for the Minister's contention that the court below was in error in upholding the Tribunal's decision. It was submitted that a valuation of the interest necessarily required the taking into account of the fact that the business was operated in a trustee capacity. From this it was said to follow that, even if the shares were deemed to constitute an interest in the business, the value of that interest must necessarily be "Nil". 121 Mrs Hart's response again sought support in the use made in the court below of CPT Custodian. As I have endeavoured to demonstrate already, that use was misplaced. The equitable obligations inherent in Northside's operation of the business in a trustee capacity cannot be ignored in a valuation of the worth of a share in that company in respect of the business it operated. The nature of those obligations means that none of the assets employed in operating the business form any part of the asset backing for a share in Northside. This was not appreciated either by the Tribunal or in the court below. The result is that it was erroneous to regard Ms Hart's shares as worth 20% of the value of the business and thus that she met the criterion specified in reg 1.11(1)(c). 122 For these reasons, the appeal must be allowed and the orders of the Federal Magistrates Court set aside. In lieu thereof, it should be ordered that the decision of the Tribunal should be quashed. As Ms Hart cannot in law meet the visa criterion found in cl 845.213, in lieu of the Tribunal's decision, the matter should be remitted to the Minister with a direction to that effect. 123 Ms Hart should pay the Minister's costs in this Court and in the court below. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.