Ng v Minister for Immigration & Multicultural Affairs

Federal Court of Australia|2002-09-16|Before: Dowsett J

Introduction 1 On 28 March 2002 the Migration Review Tribunal (the "tribunal") upheld the decision of a delegate of the respondent, refusing to grant to the applicant a Business Skills (Residence) (Class BH) Visa Subclass 845 pursuant to the Migration Act 1958 (Cth) (the "Act") and regulations made thereunder. The applicant seeks prerogative relief pursuant to s 39B of the Judiciary Act 1903 (Cth) and other orders.

The visa 2 The criteria for the relevant visa are prescribed in Subclass 845. For present purposes, it is necessary only to consider cl 845.213 which requires that 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 3 Regulation 1.03 defines "ownership interest" as having the meaning given to it in subs 134(10) of the Act. Subsection 134(10) defines it as: … 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. 4 Both the delegate and the tribunal also relied upon the Procedures Advice Manual. Although I have not reproduced the relevant passage here, I will refer to it in some detail at a later stage.

Background 5 In his original application, the applicant claimed to hold a 25 per cent share in a company, Entrence Pty Ltd (the "trustee") trading as Inn on the Park. He stated that the trustee's net assets were $1,303,002.00. He also claimed to own 25 per cent of another company, Inn on the Park Management Group Pty Ltd. He stated that the turnover of these businesses was, in the twelve months prior to the application, $1,447,227.00 and that in such period $510,321.00 was paid as wages. On 29 April 1999, the respondent requested further information in relation to the application. In response to this request, the applicant supplied the deed of settlement of the Ng Metropolitan Trust and documents relating to other businesses. 6 It seems that the trustee, as trustee of that trust, conducted a motel business known as "Inn on the Park". It was a discretionary trust. The settlor was a solicitor. The principal was Tee Hian Ng, the applicant's brother. His duties as principal included appointing and removing the trustee. He also had power to add beneficiaries. The applicant is one of five nominated "primary beneficiaries". The other four are the applicant's parents, one of his sisters and his brother. The "default beneficiaries" are the applicant, one of his sisters and his brother. The trustee was incorporated on 28 June 1996. As far as the evidence goes the directors are Alfred Alfredo Ng, Kim Chwee Ng (the applicant's father), Sio Pei Ng (the applicant's sister), Tee Hian Ng (the applicant's brother) and the applicant. The applicant and Alfred Alfredo Ng are both company secretaries. There are four members of the company, each holding one share. They are the applicant's parents, the applicant's brother and the applicant. 7 The company, Inn on the Park Management Group Pty Ltd was incorporated on 30 June 1997 as Zabetti Pty Ltd. It changed its name on 26 March 1998. The directors are Tee Hian Ng (the applicant's brother), Thye Cheong Chang, Siak Nim Goh, Kian Bee Quah and the applicant. The company secretary is Tee Hian Ng. The company has two members, each holding one share. They are Siow Chan Ng (one of the applicant's sisters) and Tee Hian Ng. It seems that this company has virtually no assets and is no longer relevant for the purposes of the application. 8 On 11 May 2000, the delegate refused the application on the basis that the applicant had not satisfied the requirements of cl 845.213 of the regulations. On 8 June 2000, the applicant applied to the tribunal for review of that decision. On 26 June 2000, the tribunal confirmed that the application had been received. On 30 November 2000, the applicant was advised that his application had been transferred from the Canberra registry of the tribunal to the Melbourne registry. On 14 December 2001, the tribunal wrote to the applicant, inviting him to comment on certain matters and to provide further information. The letter appears to have been intended to satisfy the requirements of subs 359(2) and subs 359A(1) of the Act, to which provisions I will later refer in detail. The applicant was asked to respond by 11 January 2002. On 18 December 2001, the applicant's solicitor sought an extension of time in which to reply. He also indicated that the applicant required an oral hearing. The tribunal extended the relevant time until 25 January 2001. The applicant provided no information or comments prior to that date, and the tribunal proceeded to determine the matter. The applicant's solicitor has sworn that he had drafted a letter to the tribunal on 15 January 2002. This letter was not received by the tribunal. As I understand it, it is now accepted that it was not sent. 9 On 12 March 2002, the tribunal wrote to the applicant inviting him to attend on 28 March 2002 to receive the tribunal's decision. On 15 March 2002, the applicant's solicitor sent a facsimile to the tribunal, attaching a copy of the minutes of a meeting of the directors of the trustee, purportedly held on 1 February 1997. The minutes contained a resolution that the Ng family would provide capital funding for the Inn on the Park project in the amount of $1 500 000.00. The applicant's contribution was to be 30 per cent or $450,000.00. Also attached were financial statements previously provided in support of the initial application. Those statements disclosed that the Ng family was a creditor of the trustee in an amount slightly in excess of $1,500,000. This material was supplied to the relevant tribunal member. In a minute dated 27 March 2002, the tribunal member recorded that he had noted the additional material supplied by fax on 15 March 2002 and that the information was already before the tribunal and had been taken into account. On 28 March 2002, the tribunal handed down its decision, affirming the original decision, apparently on much the same grounds.

The Application before this Court 10 The applicant filed the present application on 30 April 2002, claiming relief on two grounds, namely: ® that the tribunal failed to observe the requirements of natural justice and/or procedures required by the Act in connection with the making of the decision; and ® that the decision involved errors of law. 11 During the hearing, the applicant sought to argue that the tribunal had not complied with s 359A of the Act. This should probably be seen as a further aspect of the "natural justice" point.

natural justice 12 The applicant claims that he was denied a hearing. Sections 359, 359A, 359C and 360 of the Act provide relevantly as follows: 359 (1) In conducting the review, the Tribunal may get any information that it considers relevant. However, if the Tribunal gets such information, the Tribunal must have regard to that information in making the decision on the review. (2) Without limiting subsection (1), the Tribunal may invite a person to give additional information. (3) … 359A (1) Subject to subsection (2), the Tribunal must: (a) give to the applicant, in the way that the Tribunal considers appropriate in the circumstances, particulars of any information that the Tribunal considers would be the reason, or a part of the reason, for affirming the decision that is under review; and (b) ensure, as far as is reasonably practicable, that the applicant understands why it is relevant to the review; and (c) invite the applicant to comment on it. … (4) This section does not apply to information: … (b) that the applicant gave for the purpose of the application; … … 359C (1) If a person: (a) is invited under section 359 to give additional information; and (b) does not give the information before the time for giving it has passed; the Tribunal may make a decision on the review without taking any further action to obtain the additional information. (2) If the applicant: (a) is invited under section 359A to comment on information; and (b) does not give the comments before the time for giving them has passed; the Tribunal may make a decision on the review without taking any further action to obtain the applicant's views on the information. 360 (1) The Tribunal must invite the applicant to appear before the Tribunal to give evidence and present arguments relating to the issues arising in relation to the decision under review. (2) Subsection (1) does not apply if: (a) the Tribunal considers that it should decide the review in the applicant's favour on the basis of the material before it; or (b) the applicant consents to the Tribunal deciding the review without the applicant appearing before it; or (c) subsection 359C(1) or (2) applies to the applicant. (3) If any of the paragraphs in subsection (2) of this section apply, the applicant is not entitled to appear before the Tribunal. 13 Sections 359, 359A, 359C and 360 of the Act appear to be procedural, designed to streamline the way in which the tribunal deals with applications. Gyles J said in NAAX v Minister for Immigration & Multicultural Affairs [2002] FCA 263 at [34] - [35]: The Act must be construed as it now stands, including s 474 and including the express prescriptive provisions governing the procedure of the Tribunal… In my opinion, s 474 operates according to its terms, which are inconsistent with the existence of implied duty to afford procedural fairness by supplying information going beyond the requirements of … the Act, no matter upon which theory any such implication would be drawn. 14 His Honour's view was informed by extensive reference to the Revised Explanatory Memorandum and the Minister's Second Reading Speech. It is unnecessary for me to reproduce those here. Kiefel J agreed with this view in Hashimi v Minister for Immigration & Multicultural Affairs [2002] FCA 988 at [17] and [22]: … the only way in which the provisions can be reconciled is to read s 359A as imposing an obligation upon the Tribunal with respect to the provision of information during the course of the review proceedings; but that a breach of it was not intended to invalidate the decision, so far as this Court is concerned. No provision is made in s 359A(1) or elsewhere for the consequences of a breach. … Section 359A(1) requires that information, facts and other material available to the Tribunal, but not to an applicant, be provided to the applicant for comment … it is contended that the Tribunal ought to have warned the applicant that there was insufficient material put forward by her to have requested further material. That is not what s 359A(1) requires. Whilst the Tribunal has the power to obtain further information, it is not obliged to do so in every case, nor to fill in gaps in the material put forward to support the claims. This was a case where the necessary material would have been known to and able to be produced by the applicant or her representatives, if it was available. 15 I agree with their Honours' views. An applicant is entitled to a hearing before an unfavourable decision is made, but he or she must first provide comments in writing and any other information which the tribunal may seek. Clearly, the applicant failed to comply with the tribunal's request contained in the letter of 14 December 2001 so that subss 359C(1) and (2) both applied to him. For present purposes, I assume that the tribunal nonetheless had the power to conduct a hearing at that stage had it thought it appropriate to do so. However the information provided on 15 March 2002 hardly went beyond that previously provided. It disclosed which members of the Ng family had funded the trust and the amount of each contribution, but that was no more than marginally relevant for the purposes of the tribunal. 16 The tribunal's request for submissions and information was akin to directions as to the conduct of proceedings in a court. The sanction for non-compliance was prescribed in the Act. Had the applicant demonstrated that it had anything useful to add to the material before the tribunal or to explain it, it would have been desirable that the tribunal consider those matters notwithstanding the fact that they were raised at a late stage. However the applicant failed to demonstrate that he had anything to say, even on 15 March. He was given a chance to be heard and declined it. In those circumstances it cannot be said that the tribunal erred in not allowing the applicant a further opportunity to be heard. 17 In oral argument, the applicant's counsel submitted that the invitation to comment and supply information did not satisfy the requirements of the Act because it did not sufficiently identify the matters which the applicant should address in response to it. However the applicant could have been in no doubt that the tribunal did not consider that the material before it demonstrated compliance with either cl 845.213 or cl 843.215. This was not a case in which the tribunal was concerned about a discrete part of the material. Rules concerning onus of proof may be of little or no relevance for present purposes but nonetheless, it was for the applicant to demonstrate that his affairs were organized in a way which entitled him to the visa in question. Such matters were not within the knowledge of the tribunal. There is no merit in this criticism.

Error of law 18 This aspect of the applicant's argument depends upon the trust deed and three other documents supplied by the applicant at various stages of the review process: the minutes of meeting purportedly held on 1 February 1997, exhibit 1, being a letter signed by Tee Hian Ng, Tee Seng Ng, Siow Pei Ng, Kim Chwee Ng and Geok Yue Lim on 8 March 1997 and the application for review by the tribunal. 19 Exhibit 1 was purportedly "signed by the Ng family as directors of Entrence Pty Ltd as well as a personal agreement between the family". The five signatories are the five primary beneficiaries pursuant to the trust deed. Tee Hian Ng is also the principal. A company search conducted on 22 December 1998 shows that the directors of the trustee were then Alfred Alfredo Ng (who is not mentioned in the letter), Kim Chwee Ng, Siow Pei Ng, Tee Hian Ng and Tee Seng Ng. Alfred Alfredo Ng was apparently appointed on 9 July 1996 and was presumably a director as at the date of the letter of 8 March 1997. If so, the letter cannot reflect a resolution of the board. Further, Geok Yue Lim was not a director. The letter records that the family intended to apply for permanent residence using the structure of the trust and that Tee Hian Ng (described in the body of the letter as Michael Ng) had been made principal because he was the only Australian permanent resident and "for asset protection". The letter then recorded that: Michael Ng and the family agree that each of the beneficiaries named in the Ng Metropolitan Trust who are also the directors of Entrence Pty Ltd, shall own the trust assets equally. Michael Ng agrees that he will not remove Entrence Pty Ltd as trustee without the consent of the other Ng family members and directors and must always act in the best interests of the Ng family. 20 I assume for the moment that the agreement evidenced by the letter would be enforceable by the parties inter se and that Michael Ng, as principal, was entitled to bind himself as to the future exercise of powers conferred upon him by the trust deed. Nonetheless the beneficiaries under the trust deed could not vary their respective entitlements under it or create new interests, at least in so far as the evidence discloses. Although the beneficiaries of a bare trust, if all are of full legal capacity, may unite to terminate the trust, that is not the case here. The trust is not a bare trust. In any event, the beneficiaries have not purported to so act. At most, their "agreement" means that they are obliged to share equally such funds as may be appointed to any of them by the trustee. 21 In his application to the tribunal for review of the earlier decision, the applicant claimed that the delegate had misunderstood the relevant regulations as they applied to his position. He submitted that: ® The role of an appointor of a trust has, in law, been misinterpreted by the decision maker. ® The appointor is a director of the trustee and is constrained at law from acting in a manner inconsistent with the best interests of the company and its members which include the applicant. ® There is an agreement between the members of the company that their ownership of trust assets is proportionate to their shareholding in the company and the appointor's power is only to be exercised with their consent. ® The single appointor was for asset protection purposes only. ® The applicant was general manager of the business. 22 As can be seen, the application reflected the contents of the letter of 8 March 1997 although it went a little further. Finally, the minutes of the meeting of 1 February 1997 record a meeting of directors of Entrence Pty Ltd attended by Tee Hian Ng, Alfred A Ng, Kim Chwee Ng, Siow Pei Ng and Tee Seng Ng. It was resolved that: The Ng family provide capital funding towards the Inn on the Park project to the amount of $1.5 million. The contribution towards the $1.5 million are as follows: Tee Seng Ng (Dixon) 30 per cent $450,000 Siow Pei Ng (Nancy) 30 per cent $450,000 Ng Family Group 40 per cent $600,000 It was further resolved that should further fundings be required additional fund to be contributed in the above ratio. The balance was to be borrowed from the St George Bank. 23 Presumably, this resolution operated as authority for the trustee to borrow funds from the nominated lenders. Of course that says nothing about their respective interests in the trustee or its assets, let alone in the trust estate. They were to be creditors of the trustee. Had they sought to recover their debts by action, they would have sued it. It may, in turn, have been entitled to reimburse itself out of the assets of the trust. However the creditors would have acquired no interest in the trust assets as a result of the loan. 24 These dealings amongst the Ng family members appear to have acquired relevance because of certain references in the original decision to the Procedures Advice Manual issued by the Department. I have now had reference to Part 9.8 of the document which deals with trusts. This is not a policy document in the usual sense but rather an attempt to explain the law of trusts in a simple way. For present purposes, the relevant aspect concerns discretionary trusts and the requirements of the definition of "ownership interest" in subs 134(10). It states that there is some doubt as to the capacity of any party to a discretionary trust to demonstrate an ownership interest in trust assets. It then states at par 9.8.13: However, under policy, ownership of all of the assets in a discretionary trust may be acceptable in certain circumstances, if: ® the applicant is the trustee and a beneficiary for the period of claimed ownership; and ® all the named beneficiaries of the trust are included in the visa application. 25 At par 9.8.14 the document advises: Business Migration Section is conducting further research into the ownership of discretionary trusts. Officers are advised to contact the Section if they are proposing to accept ownership of discretionary trust assets that fall outside the above policy guidance. 26 As I understand it, the effect of this is that where all of the beneficiaries of a discretionary trust are included in the visa application, they should be treated as owning the property, provided that one of them is also trustee. In other circumstances, the matter should be referred to the Business Migration Section. Paragraph 9.8.15 deals with what are described as "unacceptable claims to ownership of trust assets". The word "unacceptable" presumably means that the arrangement in question should be treated as not satisfying the relevant statutory provision or regulation. The paragraph advises that an ownership claim will be unacceptable if it is by a person who is merely a trustee, beneficiary or appointor. Brief explanations are given. The only criticism which might be made of these explanations is that there is no express reference to the situation of a default beneficiary who, it might be argued, holds a share in the trust, subject only to divestiture by an exercise of the power to appoint. Paragraph 9.9 deals with the evidence required to establish beneficial ownership. It is not necessary to consider it further. 27 The following extract from the delegate's original decision must be understood in the context of the advice in the Procedures Advice Manual: According to the Procedure Advice Manual (PAM) at 9.8, to have control of the assets of a trust, the applicant has to be the appointor/principal, trustee, and one of the beneficiaries. This is because the appointor/principal has total discretion as to whom will be the trustee, and can change the trustee at any time. The trustee has total control of the assets and income of the trust and can dispose of or withhold these at any time. The named beneficiaries are the only individuals who can receive income from the trust. As Tee Seng Ng is not the appointor/principal I do not accept that he has control of the assets of the business, and I therefore find that he does not need regulations 845.213 and 845.215. 28 Clause 845.213 speaks of an "ownership interest" rather than control. Clause 845.215 (which is not presently relevant) speaks of the value of assets "owned by the applicant, or by the applicant and the applicant's spouse together …". The delegate may have erred in considering questions of control. The real question ought to have been whether or not the applicant had an ownership interest in the relevant business. Alternatively, the delegate may simply have been using a shorthand form of expression. Whether this be so or not, there is no reason to believe that the tribunal made any similar error. In par 17 it referred to the various factual matters which are set out above (concerning alleged agreements between the various members of the family) and then observed: No evidence of any such agreement has been provided. 29 In par 22 the tribunal stated: In regard to the first nominated business, Entrence Pty Ltd trading as Inn on the Park, it appears that the assets are owned and controlled by the NG Metropolitan Trust. The visa applicant is not the appointor/principal of the said Trust. TheTtribunal is of the view that the visa applicant does not have an ownership or control of the nominated business sufficient to meet the requirement of ownership interest. This matter was put to the visa applicant and since he did not respond to enquiries made by officers of the Tribunal this matter was unable to be pursued further. On the evidence before it the Tribunal finds that the visa applicant does not have an ownership interest in the first of the businesses nominated by him. 30 As to the second business, the claim was also dismissed. I do not understand that matter to be pressed at the present time, no doubt because the company had no significant assets. 31 I have considerable doubts as to whether the applicant's interest in the Ng Metropolitan Trust could ever have satisfied the definition of "ownership interest" in subs 134(10). Leaving aside for the moment the question of his shareholding in the trustee, it is clear that he was not a partner in a partnership carrying on any business, nor was he the sole proprietor of any business. Even if one looks to interests "held indirectly through one or more interposed companies, partnerships or trusts" he still had no interest as a partner because there was no partnership. Similarly, on even the most extreme view of the facts, taking into account all trusts and all corporate entities, he could not be said to have been the sole proprietor of any business. Thus it seems to me that it was only if he could demonstrate that he was, either directly or indirectly, a shareholder in a company which carried on the business that he could have satisfied the requirements of the definition. 32 He 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 an interest in the business as … a shareholder in a company that carries on the business … . 33 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. 34 Whether or not I am correct in these views, it seems that the original decision-maker and the tribunal were willing to entertain the possibility that the applicant may, in some way, have derived an ownership interest from his entitlements under the trust deed. It is possible to take a wider view of the definition than I have suggested. In the end the tribunal was not satisfied on the evidence that the applicant had an ownership interest. I am unable to see that it erred in so concluding. Even if one were to accept that the default beneficiaries under the trust deed held some interest subject to the possibility of divestiture, it would, in my view, be impossible to bring such an interest within any of the three limbs of the definition of "ownership interest". Further, the notion of an "ownership interest" obviously implies something more than an interest which may be divested at the discretion of a third party, in this case the trustee.

availability of relief 35 In any event, the tribunal's decision is obviously within the scope of s 474 of the Act which provides: (1) A privative clause decision: (a) is final and conclusive; and (b) must not be challenged, appealed against, reviewed, quashed or called in question in any court; and (a) is not subject to prohibition, mandamus, injunction, declaration or certiorari in any court on any account. (2) In this section: privative clause decision means a decision of an administrative character made, proposed to be made, or required to be made, as the case may be, under this Act or under a regulation or other instrument made under this Act (whether in the exercise of a discretion or not), other than a decision referred to in subsection (4) or (5). (3) A reference in this section to a decision includes a reference to the following: … (h) conduct preparatory to the making of a decision, including the taking of evidence or the holding of an inquiry or investigation; (i) a decision on review of a decision, irrespective of whether the decision on review is taken under this Act or a regulation or other instrument under this Act, or under another Act; (j) a failure or refusal to make a decision. 36 The decision of the Full Court in NAAV v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCAFC 228 establishes that the s 474 privative clause applies in the way contemplated by Dixon J in R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598. Pursuant to that decision the tribunal's decision will be valid if it is: … a bona fide attempt to exercise its power, … it relates to the subject matter of the legislation, and … it is reasonably capable of reference to the power given to (it).

Does the power relate to the subject matter of the legislation? 37 The tribunal refused to grant a visa under the Act. Clearly this condition is satisfied.

Is the decision reasonably capable of reference to the power possessed by the tribunal? 38 In order to answer this question, it is necessary to look at the context of the Act and the decision of the tribunal. Some connection must be shown between the decision made and the source from which the tribunal derived its power. The tribunal's processes, decision and reasons all purported to address the factual issues which the tribunal was obliged to address. Taking the applicant's argument in this respect at its highest, this is no more than a case of apparent error made within jurisdiction, but nonetheless still reasonably capable of reference to the power conferred upon the tribunal.

Was the decision a bona fide attempt by the tribunal to exercise its power? 39 Allsop J said in NAAG of 2002 v MIMIA [2002] FCA 713 at [24]: Bad faith is not just a matter of poor execution or poor decision-making involving error. It is a lack of an honest or genuine attempt to undertake the task in a way meriting personal criticism of the Tribunal or officer in question. Finn J in Daihatsu Australia v. Federal Commissioner of Taxation (2001) 184 ALR 576 at [30] referred, by way of exemplification, to the exercise of a power knowingly for an improper purpose or where no attempt is made, knowingly, to act conformably with duty. Heerey J in SBAP v. Refugee Review Tribunal [2002] FCA 590 at [47] said that the phrase "bona fide" involved a serious question involving personal fault on the part of the decision-maker going beyond error of fact or law. It must be clearly identified and proved. 40 In the present case, no attempt was made by the applicant to identify and prove any such lack of bona fides on the part of the tribunal. There is no reason to doubt that it made an honest attempt to undertake its task. 41 In written submissions made after the publication of the reasons of the Full Court in Turcan v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 228, the applicant argued that the error of law in the present case was of a kind which was in some way reviewable notwithstanding the principle established in Hickman. I can see no merit in the argument.

Conclusion 42 The applicant has failed to demonstrate any basis for the limited relief now available in connection with such a decision. 43 The application should be dismissed with costs.

I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Dated: 16 September 2002 Counsel for the Applicant: Mr L Boccabella

Solicitor for the Respondent: Blake Dawson Waldron

At a glance

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