Nassif v Minister for Immigration & Multicultural & Indigenous Affairs

Federal Court of Australia|2003-05-20|Before: Branson J

REASONS FOR JUDGMENT 1 The applicant seeks review of a decision of the Migration Review Tribunal ('the Tribunal') to refuse to grant the applicant a Business Skills (Residence) (Class BH), Subclass 845 (Established Business in Australia) visa ('the business visa'). 2 The applicant is a citizen of Lebanon. He has siblings who live in Australia and who are involved in the construction and property development industry. The applicant arrived in Australia on 3 February 1996 on a Short Stay visitor visa. He received several further visas and on 21 April 1997 he was granted a Business Long Stay Subclass 457 visa that was valid until 21 April 1999. He subsequently received several bridging visas. 3 On 24 November 1999 the applicant lodged an application for the business visa. A delegate of the respondent refused the application on 30 June 2000. The applicant lodged an application for review by the Tribunal of this decision on 25 July 2000. In a decision dated 28 November 2002 the Tribunal affirmed the decision not to grant the applicant the business visa he sought. The Tribunal found that the applicant did not satisfy the criterion specified in cl 845.215 of Schedule 2 to the Migration Regulations 1994 (Cth) ('the Regulations') as a criterion to be satisfied at the time of application.

STATUTORY PROVISIONS 4 The criterion specified by cl 845.215 of Schedule 2 to the Regulations ('cl 845.215') is in the following terms: '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.' 5 Regulation 1.11 deals with the meaning of 'main business'. It provides: '(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.' (emphasis added) 6 An 'ownership interest' within the meaning of the definition of 'main business' has the meaning given to it by s 134(10) of the Migration Act 1958 (Cth) ('the Act') (see the definition of 'ownership interest' in r 1.03). Section 134(10) of the Act contains the following definition: '"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.' 7 'Qualifying business' is defined by r 1.03 as follows: '"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.' 8 'Business' is not defined in the Regulations or in the Act.

THE APPLICATION 9 The application is brought under s 39B of the Judiciary Act 1903 (Cth) and the Act. The applicant seeks a writ of certiorari to quash the decision of the Tribunal and a declaration that the decision of the Tribunal is void and of no effect. He also seeks a writ of prohibition preventing the respondent or his delegates or agents from acting upon or giving effect to or enforcing the Tribunal's decision. 10 Both parties agree that the central issue in this application is whether or not the Tribunal correctly interpreted and applied cl 845.215. The grounds of the application are set out in the application as follows: 'The [Tribunal] committed jurisdictional error of law by asking itself the wrong question. Particulars The Tribunal asked itself whether the applicant had net assets of the necessary value in a specified business entity, whereas it should have asked whether he owned assets to that value in a business or businesses.' The applicant submits that the Tribunal incorrectly interpreted the words 'the main business or main businesses' in cl 845.215 by equating the word 'business' to 'single business entity'.

THE BUSINESS VISA APPLICATION 11 To apply for the business visa, the applicant was required to complete a prescribed form, namely form 1138, which is headed 'Business skills profile: Established business in Australia'. Part C of form 1138 has the sub-heading 'Main business(es)'. Notes under the heading of Part C of the form instruct an applicant that 'You may nominate up to 2 main businesses only'. The form then provides for information to be inserted on the form concerning 'Main business 1' and thereafter for information to be inserted concerning 'Main business 2'. In respect of each of 'Main business 1' and 'Main business 2' provision is made on the form for the applicant to provide, amongst other information, the following information: 'Business name Address of business premises Telephone number … What was/is your position/title in this business What was/is the major activity of this business.' 12 The applicant completed form 1138 by filling in the spaces provides for information concerning 'Main business 1' but not the spaces provided for information concerning 'Main business 2'. 13 The applicant wrote 'Holdmark (Australia) Pty Ltd' ('Holdmark') in the space provided for the provision of the business name. He indicated that he was 'director, shareholder, secretary [and] public officer' of Holdmark and owned 100 per cent of the company in 1998 and 1999. He described the major activity of Holdmark as 'formwork, general construction and property investment'. 14 In support of his application, the applicant also provided a document titled 'Business Investment Profile of Bakhos Khazen Nassif' and copies of a number of other supporting documents. These document go into considerable detail in outlining the financial affairs of the applicant. The documents make clear that the applicant is financially involved, both through Holdmark and personally, with a number of different companies. The Business Investment Profile document states that the applicant:

invested $100,000 in Nassif Bros Formwork Pty Limited in January 1997 in a joint venture agreement;
invested $100,000 in Holdmark in January 1998;
invested $300,000 in Erinco Pty Limited in 1998; and
is a beneficiary of the Jayoun Family Trust, which is a family trust which conducts property developments, with an estimated share in the trust of $1.5 million. 15 Further supporting documents were later provided to the Tribunal. The Tribunal was also provided with documents from which it was asked to infer that the applicant had provided $100,000 to Oz Leb Developments Pty Ltd very soon after 4 April 1997. 16 In written submissions to the Tribunal dated 27 June 2002, the applicant's solicitor explained: 'The "main business" which is relied on for this application is not a single company. This was I believe the difficulty which led the delegate to reject the application in the first place. As is commonly the case in family businesses, and particularly in the building industry in Sydney, formal business entities are not as important as the informal arrangements between the principals in respect of capital investment and management control. In this particular case, there are several legal entities involved: · Holdmark (Aust) Pty Ltd · Erinco Pty Ltd · Nassif Bros Formwork Pty Ltd · Jayoun Family Trust.' 17 The applicant's solicitor also provided evidence of a joint venture agreement between Nassif Bros Formwork Pty Ltd and Bakohs Nassif, dated 6 December 1996, which he submitted 'gives credence to the claim that the family has for some time run its business affairs on the basis of common effort for the family good.'

THE TRIBUNAL DECISION 18 The Tribunal conducted a hearing on 17 September 2002. The applicant, his accountant and one of the applicant's brothers gave oral evidence. The Tribunal also had regard, in making its decision, to the documents in the file of the Department of Immigration & Multicultural & Indigenous Affairs and to documents submitted to the Tribunal by the applicant both before and after the hearing. 19 The Tribunal in its written reasons for decision said that at the hearing before it the applicant claimed: 'that he and his family are running a family business in which his siblings have companies that act in concert, one providing formwork, another supplying labour and another handling property development. It was clear from his evidence that he regarded assets in one company being part of the assets of the whole. He said that for this reason it did not matter that his $100,000 contribution was not direct to the nominated main business, but was to some of the other family companies. The visa applicant's brother largely confirmed the visa applicant's evidence.' 20 The Tribunal's understanding of the applicant's claim as presented at the hearing accords with the applicant's solicitor's written submissions referred to above. 21 The respondent's submissions helpfully provide the following summary of the findings made by the Tribunal: 'a. In relation to the loans made by the applicant to Nassif and Erico: i. There was no documentary evidence to substantiate these; and ii. Those companies were not nominated by the applicant in his application as main businesses. b. in relation to the loan by the applicant to Oz Leb Development Pty Ltd, that company was not nominated by the applicant in his application. c. the loans from Holdmark (Australia) Pty Ltd to Nassif and Erico were made in the period from July 1999 to June 2000. d. the balance sheets of Holdmark (Australia Pty Ltd) showed net losses and an equity of $71,302.30, less than the requisite amount; e. there was no documentary evidence to establish the $100,000 claimed to have been loaned by the applicant to Holdmark (Australia) Pty Ltd. f. the applicant had no personal interest in Holdmark Developers Pty Ltd.' The applicant did not challenge the accuracy of this summary. 22 The Tribunal also noted that the delegate of the respondent who made the primary decision believed that the unaudited financial statements provided by the applicant did not fulfil the requirements of the Regulations and could not be considered. The Tribunal stated that the delegate's view on this matter was incorrect and that unaudited financial accounts could be considered, although they might be given less weight than would be given to audited material. 23 The Tribunal concluded that the applicant had not met 'the requirements of regulation 845.215 in that he did not in the 12 months preceding the visa application hold an interest of at least $100,000 in his Main Business in Australia.' The applicant therefore, the Tribunal found, did not meet the criteria for the grant of the Business visa.

CONSIDERATION 24 The applicant submits that the Tribunal equated 'main business' with a single business entity. As a result, the Tribunal only inquired into whether the applicant had sufficient assets in Holdmark to fulfil the criterion in cl 845.215. The applicant submits that the Tribunal should have inquired into whether or not the applicant had sufficient assets to satisfy the requirement in the group of entities that the applicant submitted comprised the business. 25 The respondent submits that the Tribunal was correct to treat Holdmark alone as the 'main business' for the purpose of the application. It submits that Holdmark was the only business over which the applicant had sufficient control to fulfil the requirements of r 1.11(1)(b) and that it was the main business nominated by the applicant in his application. 26 In my view, the applicant is correct in his submissions that the Tribunal considered only whether the applicant had sufficient assets in Holdmark to met the criterion specified by cl 845.215. I do not understand the respondent to dispute that the Tribunal took this approach. The Tribunal made its understanding of the 'main business' clear when it stated that: 'the visa applicant must establish that throughout the period from 23 November 1998 until 24 November 1999 (the date of the application) he owned assets of at least AU$100,000 in the main business in Australia (in this case his nominated company, Holdmark (Australia) Pty Ltd).' 27 Similarly, in refusing to consider any assets the applicant might have in Nassif Bros Formwork Pty Ltd, Erinco Pty Ltd and Oz Leb Development Pty Ltd, the Tribunal stated that: 'No documentary evidence to substantiate these claims [the loans to Nassif Bros Formwork Pty Ltd and Erinco Pty Ltd] have been provided to the department or to the Tribunal and as these companies have not been included as the visa applicant's nominated businesses, the Tribunal is unable to include the loans as satisfying the requirements of regulation 845.215. As previously stated, the Main Business in Australia that is required by regulation 845.215 is Holdmark (Australia) Pty Ltd. The same reasoning applies to the payment to Oz Leb Development Pty Ltd.' 28 A crucial issue to be determined on this application is the meaning of the expressions 'main business' and 'main businesses' in the context of cl 845.215. As is mentioned above, no statutory definition of 'business' is available to assist the determination of this issue. The dictionary definitions of 'business' are so numerous and so diverse that they provide little assistance for present purposes. I note, however, a few of the apparently more relevant definitions to be found in the Oxford English Dictionary, 2nd edn, and the Macquarie Dictionary, 2nd edn, respectively. 29 The Oxford English Dictionary, 2nd edn, includes the following definitions of 'business' amongst many others: '12.a. A person's official or professional duties as a whole; stated occupation, profession or trade. … 13.a. In general sense: action which occupies time, demands attention and labour; esp. serious occupation, work, as opposed to pleasure or recreation. … 14.a. (With pl.) A pursuit or occupation demanding time and attention; a serious employment as distinguished from a pastime. b. spec. A particular occupation; a trade or profession. … 23. A commercial enterprise regarded as a "going concern"; a commercial establishment with all its "trade", liabilities etc.' 30 The Macquarie Dictionary, 2nd edn, includes the following definitions of 'business': '1. one's occupation, profession or trade. 2. Econ. the purchase and sale of goods in an attempt to make a profit. 3. Comm. a person, partnership, or corporation engaged in this; an established or going enterprise or concern: to be in business … 6. that with which one is principally and seriously concerned.' 31 In Re Australian Industrial Relations Commission; ex parte Australian Transport Officers Federation (1990) 171 CLR 216 Mason CJ, Gaudron and McHugh JJ observed at 226: '[o]f all words, the word "business" is notorious for taking its colour and its content from its surroundings …' (citation omitted) 32 In the present case the most relevant aspect of the surroundings of the word 'business' is the definition of 'main business' contained in r 1.11 (see [5] above). To understand the nature of a business that can be a 'main business' it is necessary to give consideration to the definitions contained in s 134(10) of the Act and r 1.03 respectively of 'ownership interest' and 'qualifying business' (see [6] and [7] above). Each of these expressions is used in r 1.11. 33 It is convenient to consider first the definition of 'qualifying business'. This is because a 'main business' in relation to an application for a visa must be a 'qualifying business' (see r 1.11(1)(d)). It is significant, in my view, that a 'qualifying business' is defined to mean an 'enterprise' of a particular kind (see [7] above). Each of the Oxford English Dictionary and the Macquarie Dictionary confirms that 'enterprise' is a word of general meaning which is broadly synonymous with 'undertaking'. Had it been intended that an 'enterprise' within the meaning of r 1.03 was to be limited to the commercial activities of a single legal entity, whether a natural person, a partnership or a company, one would have expected the regulation to say so. 34 The inference to be drawn from the use in the definition of 'qualifying business' of the word 'enterprise' is strengthened by the use in the s 134(10) definition of 'ownership interest' of the indefinite article in respect of the words 'company' and 'partnership' (see [6] above). It seems plainly to be intended that an 'ownership interest' in relation to a business can derive from, for example, a shareholding in a company that carries on the business together with another entity. Were it not so intended, paragraph (a) of the s 134(10) definition would presumably read: 'a shareholder in the company that carried on the business.' 35 I conclude that it is not a necessary characteristic of a 'main business' for the purpose of the criterion specified by cl 845.215 that the business be carried on by a single entity. I do not understand the respondent to have contended that, as a matter off construction of cl 845.215, a 'main business' may not extend beyond the commercial activity of a single entity. Rather, as I understood the case of the respondent, it was argued that, by completing form 1138 in the way in which he did (see [12] above), the applicant limited his claim to be entitled to the business visa to a claim based on his interest in Holdmark. To this extent the respondent supported the approach adopted by the Tribunal. 36 There is reason to think that the way in which the applicant completed form 1138 was significantly influenced by the format of the form itself. In any event, the Tribunal, like the Refugee Review Tribunal, has an inquisitorial role (Muin v Refugee Review Tribunal [2002] HCA 30; 190 ALR 601 per Gleeson CJ at [7]; McHugh J at [97]; Kirby J at [208] and Hayne J at [263]). The Tribunal is required to respond to the case that the applicant before it actually advances (Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 esp per Kirby J at [78]). The matters referred to in [14]-[17] and [19] above demonstrate clearly that the applicant did not base his claim solely on his interest in Holdmark, and that the Tribunal was under no misapprehension in this regard. 37 The Tribunal did not, however, give consideration to the case which was clearly put before it by the submissions dated 27 June 2002. By failing to do so it denied the applicant natural justice and constructively failed to exercise its jurisdiction by denying a hearing of the kind which the Act required that the applicant be given (Dranichnikov v Minister for Immigration and Multicultural Affairs per Gummow and Callinan JJ at [23]-[25]). 38 The respondent submits that there was no evidence to suggest that, had the relevant main business been considered as a business conducted by a number of companies, the applicant had a sufficient degree of control over a business defined in this way to fulfil the requirements of r 1.11(1)(b). For this reason the respondent submits that the Tribunal was correct to consider Holdmark alone as the main business. 39 This was not the reasoning process adopted by the Tribunal. The Tribunal did not consider r 1.11(1)(b) and issues of control and then conclude that the applicant lacked sufficient control for any entity other than Holdmark to be relevant. The Tribunal did not discuss the requirements of r 1.11(1)(b). It is possible, although I express no view on this point, that, had the Tribunal considered the control issue, it would have reached the conclusion that the respondent submits would have been the correct decision. Similarly it is possible that, had the Tribunal considered whether all or some of the entities to which the applicant referred could have been part of a relevant 'main business', it would have concluded that they could not. It might have found that the only relevant business was Holdmark. However, the result of the jurisdictional error made by the Tribunal is that the Tribunal appears not to have turned its mind to these necessary questions. It is no answer to the applicant's complaint to say that the Tribunal might have found against the applicant had it approached the case correctly. It is not possible to conclude that on the material before it the Tribunal could not have found in favour of the applicant. 40 The mistake made by the Tribunal was similar to that which the majority of the High Court found had been made by the Refugee Review Tribunal in Dranichnikov v Minister for Immigration and Multicultural Affairs. In that case Kirby J at [88] said: '…where, as here, the mistake is essentially definitional, and amounts to a basic misunderstanding of the case brought by an applicant, the resulting flaw is so serious as to undermine the lawfulness of the decision in question in a fundamental way.' 41 Jurisdictional errors of this kind are not protected by the privative clause in s 474 of the Act (Plaintiff S157/2002 v Commonwealth of Australia [2003] HCA 2; 195 ALR 24; NAEB of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 25 at [4]). 42 I also note incidentally that the Tribunal stated that one reason for not considering the loans made by the applicant to Nassif Bros Formwork Pty Ltd and Erinco Pty Ltd was that no evidence of the loans had been provided. This is incorrect. The documents attached to the applicant's original visa application include balance sheets dated June 1999 for Nassif Bros Formwork Pty Limited which lists as a current liability a loan from the applicant for $100,000 and for Erinco Pty Limited which lists as a current liability a loan from the applicant for $300,000. 43 I note further that it would seem to be desirable for the format of form 1138 to be reconsidered. Its present format has a tendency to lead an applicant to name a single business entity as the applicant's 'main business' notwithstanding that it might not be appropriate to do so.

CONCLUSION 44 The Tribunal made a jurisdictional error in failing to consider whether or not the criterion specified in cl 845.215 was met by the total value of the net assets owned by the applicant in his 'main business' as properly understood. The decision of the Tribunal should be quashed. Although no order of mandamus has been sought, the consequence of quashing the Tribunal's decision is that the Tribunal has before it the task of reviewing the delegate's decision (SBAV v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCA 1076). I am not presently satisfied that any further order is necessary. Each party will have leave to seek the making of further orders should he consider it necessary to do so. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

Migration Regulations 1994(Cth)rr 1.03, 1.11, Schedule

Migration Act 1958(Cth)s 134(10)

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