Quarm v Minister for Immigration & Citizenship

MAGISTRATES COURT 8 The appellant applied to the Federal Magistrates Court for a review of the Tribunal's decision. Three grounds were propounded. The first was that either clause 880.230(2) or reg 4(3) of the 2006 Regulations (see [5]) was beyond power because it was ambiguous in its relationship with reg 4 of the 2005 Regulations (see [3]). The second was that those provisions were laws "with respect to the acquisition of property" which were not "on just terms", contrary to s 51(xxxi) of the Constitution. The third was that they were not authorised by the regulation making powers in the Migration Act 1958 (Cth) (the Act) and were entirely disproportionate to the purposes of the Act. 9 The argument put to the Magistrate on the first ground was that: · clause 880.230(2) applies to applications made but not finally determined before 1 July 2006 · clause 880.230(2) depends for its effect on an assessment being made under subclause (1) · subclause (1) (although not the numbering thereof) applies for visa applications made after 1 July 2005 (reg 4 of the 2005 Regulations) · thus subclause (2) may apply to an application made before subclause (1) has come into force, which is impossible because subclause (2) can only apply when subclause (1) is engaged. 10 The Magistrate rejected the claim, based on the propositions at [9], that clause 880.230(2) was invalid "because the ambiguity of having a regulatory provision that applies before the coming into force of another provision upon which it depends cannot have been intended by Parliament". His Honour said at [32]‑[33]: 32. The drafting of the 2006 transitional provision must be understood to rely upon two assumptions based upon the legislative history. The first is that the text of cl 880.230 which was modified was the text inserted by the 2005 amendment. The second is that the 2005 text was qualified in its operation by the 2005 transitional provision. On these assumptions, the legislative change made by the 2006 amendments was a change to the effect of the 2005 amendments in their application according to their transitional provision. The 2006 transitional provision should, therefore, be readily seen to have had the intention that the additional requirement of new cl 880.230(2) should apply to all un‑finalised visa applications made after 1 July 2005. 33. Since the provision which was amended carried with it a limited operation in respect of un‑finalised applications, it was unnecessary to repeat this limitation in the 2006 transitional provision, and it was sufficient to indicate, in effect, that the 2006 amendment would apply to such applications as were subject to cl 880.230 (renumbered as cl 880.230(1)) and were un‑finalised as at 1 July 2006. There was therefore no defect in the drafting of the 2006 transitional provision, whether described as an ambiguity, inconsistency, impossibility, lacuna, or otherwise. 11 The Magistrate rejected the second ground of attack on the basis that the receipt and retention by the Commonwealth of the visa application fee was not an "acquisition" within s 51(xxxi). 12 His Honour rejected the third ground and upheld the assailed provisions under the power in s 31(3) of the Act to "prescribe criteria for a visa or visas of a particular class". He said he could find nothing in the Act suggesting an intention to preclude a change to the criteria that are to be applied when deciding an application made before the change.

GROUNDS OF APPEAL 13 The appellant claims that the Magistrate erred in three respects: (a) in not holding that the 2006 transitional provision contemplated the application of clause 880.230(2) to all applications not finalised before 1 July 2006 (including cases lodged before the operational date of subclause (1)), and that as a result the transitional provision was invalid as being arbitrary and capricious in its effect; (b) in not characterising the 2006 transitional provision, read with clause 880.230(2), as a law "with respect to the acquisition of property", and in not holding that the Minister's retention of the visa application fee paid by the appellant was an acquisition of property other than on just terms, and (c) in not holding that clause 880.230(2), as given effect by the 2006 transitional provision, is not supported by s 31(3), s 504 or any other provision of the Act.

Arbitrary and capricious 14 The appellant's contention that the 2006 transitional provision is invalid because of the absurdity of having a regulatory provision that applies before the coming into force of another provision upon which it depends involves these steps: · clause 880.230 as originally enacted in 2005 had effect only in relation to a visa application made on or after 1 July 2005 · clause 880.230(2) applies to the assessment mentioned in subclause (1) · subclause (2) applies to visa applications made but not finally determined before 1 July 2006 · thus the class of applications to which subclause (2) applies may include applications made before 1 July 2005 (ie applications to which subclause (1) does not apply). 15 The absurdity is said to result in invalidity because no reasonable person could have devised the 2006 transitional provision; it is a fantastic and capricious law. Particular reliance was placed on the observations of Lockhart J as a member of the Full Court in Minister for Primary Industries and Energy v Austral Fisheries Pty Ltd (1993) 40 FCR 381 (Austral Fisheries) at 382: Delegated legislation is not invalid on the ground of unreasonableness in the sense that the courts may form a different view as to what is reasonable. Unreasonableness in this branch of the law means unreasonable in the sense that "a merely fantastic and capricious by‑law, such as reasonable men could not make in good faith" is bad, because delegated legislation of this kind could not be regarded as an exercise of the power conferred upon the subordinate legislative body making the delegated legislation …. At 401 the other members of the Full Court (Beaumont and Hill JJ) endorsed the primary judge's holding that the provisions under attack were "capricious and irrational, such that no reasonable person could ever have devised" them. 16 The first three steps at [14] are not in dispute. The conclusion in the last step is, and in my view does not follow from those that precede it. Subclause (2) applies only if the assessment mentioned in subclause (1) is carried out and has a particular character. It thus has no operation if subclause (1) does not apply. The 2006 transitional provision does not purport to give subclause (2) any operation beyond the class of visa applications covered by (the existing) subclause (1), namely those made on or after 1 July 2005. A visa application lodged before 1 July 2005 remains unaffected by any part of clause 880.230. 17 This construction of the provisions accords with the ordinary meaning of the words and produces a sensible result. It is thus to be preferred to that propounded by the appellant, which would produce what she describes as an absurdity, namely that subclause (2) would purport to apply in some cases where it has no work to do for want of any assessment having been required by subclause (1). See, for example, Public Transport Commission (NSW) v J Murray‑Moore (NSW) Pty Ltd (1975) 132 CLR 336 at 350 and Widgee Shire Council v Bonney (1907) 4 CLR 977 at 983. 18 The same result may be arrived at by a slightly different approach. When clause 880.230 was amended in 2006, the change was effected not by repealing and re‑enacting the former clause, but by renumbering it as subclause (1) and qualifying it by the insertion of subclause (2). The natural understanding of that process is that the qualification does not purport to apply beyond the scope of that which it qualifies. Thus subclause (2) would not apply to any visa application not already caught by the original clause. Even without the aid of the process by which the amendment was made, the same approach applies to the construction of the amended version of clause 880.230. 19 Even if the appellant's construction were correct, the absurdity asserted would not in my view result in invalidity. The application of subclause (2) to cases where it had no work to do could not affect the outcome of any visa application, and accordingly there is no absurd result that can be pointed to as a basis for arguing that the transitional provision is "merely fantastic and capricious …, such as reasonable men could not make in good faith" or "capricious and irrational, such that no reasonable person could ever have devised it". 20 Of course the appellant's case is not within the class she labels absurd. Her application was lodged after 1 July 2005 and was thus caught by clause 880.230 from the outset. 21 The appellant raised an alternative attack on the 2006 transitional provision that was not put to the Magistrate. This was that it was invalid because its application to cases clearly within its scope (applications lodged between 1 July 2005 and 1 July 2006) could lead to arbitrary and unjust results. Counsel gave three examples: (a) Two identical applications are lodged on the same day, both relying on qualifications from an unregistered course. One is assigned to an efficient assessor and is finalised before 1 July 2006. The other goes to a less efficient assessor and is finalised after that date. (b) An application is processed and refused prior to 1 July 2006 on the basis of an erroneous interpretation of some other criterion. An application for review is not heard before that date, with the result that the Tribunal must reject the application based on the amendment, even though it finds that the application should have been approved by the primary decision maker. (c) A dishonest decision maker puts an application aside and finalises it after the amendment comes into effect. 22 In this connection the appellant relied on the obiter observations of Gyles J in Li v Minister for Immigration and Multicultural Affairs (1999) 94 FCR 219 (Li). There in question was a regulation deeming documents dispatched in a particular way to have been received at a particular time. At [46] to [47] Gyles J said: [T]he description of the legislation in Austral Fisheries … is apt to describe the result of applying subregs (1)(a) and (2) of reg 5.03. The result is not simply the possibility of some illogical or strange result depending upon the circumstances. It is the certainty of an absurd result if the notification is posted on the seventh day, as the regulation expressly contemplates. The inevitable result of that state of facts is that the applicant will simply not receive the prescribed number of days in which to make an application for review as required by s 347(1) and reg 4.10. Thus, another way of analysing the matter is to say that the delegated legislation is inconsistent with the legislation, and in particular with s 347(1). … I cannot accept that in the present context Parliament would intend that delegated legislation may validly contemplate the certainty that the Minister may correctly follow its provisions, yet the applicant will not receive the benefit of the prescribed statutory period of notice. 23 Gyles J's obiter observations were approved by two members of the Full Court in Minister for Immigration and Multicultural Affairs v Singh (2000) 98 FCR 77 at [49], where their Honours noted that reg 5.03 could produce the absurd result that the document, if sent on the seventh day after its date, was to be taken to have been received before that could possibly be the case. 24 The Minister accepts that the differential results that could arise between two visa applicants whose positions are otherwise the same depending on the luck of the draw is unfortunate. However, he says that this is the inevitable result where the regulation maker wishes promptly to close a loophole in the existing criteria, and that scope for debate as to the consequences of such a measure does not mean that it lacks a rational foundation. Support for this view, which I accept, is provided by the distinction drawn by Starke J in City of Brunswick v Stewart (1941) 65 CLR 88 at 98 ‑ "it is one thing to say that the provision is drastic, and another to affirm that it is so capricious and oppressive that no reasonable mind can justify it". 25 The present case is quite unlike Austral Fisheries 40 FCR 381, where the formula for the allocation of quotas was based on a statistical fallacy which operated to produce such a capricious and irrational result that no reasonable person could have devised it. It is also unlike Li 94 FCR 219, where the delegated legislation was inconsistent with the Act itself. That is not the case here. Indeed, little assistance is to be derived from other cases on capriciousness and irrationality. Each depends on its own facts. For the reasons I have sought to express, I do not regard the result in the present case as having either of those characteristics.

Ultra vires 26 Section 31(3) provides that the regulations may prescribe criteria for visas of a specified class. That is what clause 880.230(2) purports to do. The Magistrate said the ultra vires argument required the appellant to locate an intent in the Act that its regulation making powers (s 31(3) and s 504(1)) cannot be used, after an application has been made, to effect a change in visa criteria applicable at the date of decision. His Honour found no such intent. On the appeal the appellant's counsel relied on s 93 of the Act as disclosing the relevant intent. That section had not been drawn to the Magistrate's attention. Section 93 appears in Subdivision B of Division 3 of Part 2 dealing with the "points system". Section 92 provides: This Subdivision has effect where one of the prescribed criteria in relation to a visa of a particular class is the criterion that the applicant receives the qualifying score when assessed as provided by this Subdivision. Section 93 provides: (1) The Minister shall make an assessment by giving the applicant the prescribed number of points for each prescribed qualification that is satisfied in relation to the applicant. (2) In this section: prescribed means prescribed by regulations in force at the time the assessment is made. The appellant contends that s 93 shows that the legislature envisaged a general rule that an applicant should have the benefit of regulations in force at the time of application, and that the section creates an exception to the general rule. 27 Section 65 of the Act provides that after considering a valid visa application the Minister, if satisfied that the criteria for the visa prescribed by the Act or the regulations have been satisfied, must grant the visa. If not so satisfied, the Minister is required to refuse the visa. The criteria there referred to are those in force at the time the Minister makes the decision. As counsel for the Minister pointed out, it is common for amendments to be made to the regulations, and for grandfathering to occur, so that in respect of a particular application a decision maker may be required to apply criteria that were in force at some earlier time. That is done by means of transitional provisions, and does not change the basic proposition in s 65 that the decision maker must apply the criteria in force at the time of decision. 28 As indicated earlier, the power to prescribe criteria is in s 31. In s 93 Parliament has decided that a particular kind of assessment is to be made according to qualifications that are prescribed at the time the assessment is made. That does not, in my view, suggest anything in relation to the power of the regulation maker to say whether a particular set of criteria are to be applied to a particular applicant in either the form they took at the time of application or the time of decision. There is in truth no dichotomy. There is the time of decision model (eg s 93) and the time of application model, which the appellant says is inherent in the Act. But there is also the middle ground where it is left to the regulation maker to prescribe whether, in the case of an amendment to criteria, the old or the new ones are to apply. The fact that in a provision such as s 93 Parliament has specified that in a particular situation the time of decision criteria are to be applied, is quite consistent with the default position being that the regulation maker can specify the applicable time on a case by case basis. 29 As appears from ss 92 and 93 read together, the application of s 93 to any visa or class of visa application depends on the way in which the criteria in the regulations have been framed (s 92). That, in my view, is not a firm basis for an inference as to the scope of the regulation making power itself. 30 In my view s 93 does not give rise to the implication the appellant must establish, namely that the power in s 31(3) to prescribe criteria does not enable the alteration, between the time an application is lodged and the time of decision, of criteria to be established at the time of decision. 31 The attack on the validity of clause 880.230(2) and the 2006 transition provision fails. The Magistrate correctly so decided.

"Acquisition of property" 32 It was common ground that when the appellant paid the visa application fee there was no acquisition of property within s 51(xxxi). She paid the fee voluntarily. There was no compulsory acquisition, expropriation or requisition. See Health Insurance Commission v Peverill (1994) 179 CLR 226 at 235, 299 (Peverill) and Smith v ANL Ltd (2000) 204 CLR 493 at [128] per Hayne J, with whom McHugh J agreed. 33 The appellant claims that the making of clause 880.230(2) and the 2006 transitional provision changed the character of the fee. It took away any chance of the appellant obtaining the visa, and the value of her access to the visa determination process, for which she had paid the fee, was entirely removed. The amendment, combined with the transitional provision and s 46(1)(ba), turned the payment of the fee into an ex post facto expropriation. Those provisions became laws "with respect to" the acquisition of property. Section 46(1) prescribes the requirements for a "valid visa" for the purposes of other provisions such as s 65. See [27]. One such requirement (par (ba)) is that any visa application charge required by the regulations to be paid at the time of application has been paid. The appellant relied on Mutual Pools and Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 (Mutual Pools) at 188 as authority that a law can have more than one character. She claimed that there was no reason why a law cannot have different characters in different circumstances. It was said that when the Commonwealth obtains a fee for the provision of a benefit, and later legislation takes away the value of that benefit (in the sense of any prospect of obtaining it), the amount paid is acquired by the Commonwealth other than on just terms. 34 The central question is whether there has been an acquisition of property belonging to the appellant. That arises for decision before one gets to the question canvassed in cases such as Mutual Pools 179 CLR 155, which is whether the law has the constitutional character of a law with respect to the acquisition of property. 35 In order for the voluntarily paid fee to become an expropriated asset, the challenged provisions must have defeated some right that was acquired by the appellant when she entered into the transaction constituted by the visa application accompanied by the fee. What she thereby obtained was the right to have her application considered and determined according to law. That right is enforceable by public law remedies such as mandamus. It is not a right to a particular outcome. The right to have an application determined according to law is always subject to the power of Parliament and its delegates to change the law. Accordingly there is no right to have an application considered against criteria that exist at the time the application is made. In Peverill 179 CLR at 261, McHugh J quoted with approval the observation of Pitney J in New York Central RR Co v White (1917) 243 US 188 at 198 that "No person has a vested interest in any rule of law entitling him to insist that it shall remain unchanged for his benefit". 36 The change that occurred as a result of the impugned provisions, although it affected her chances of success, was not a change which detracted from any rights the appellant obtained on the making of her valid application. 37 The Magistrate correctly rejected the contention that there had been an acquisition of property. 38 In the event that his submission on s 51(xxxi) failed, the Minister sought to rely on s 3B of the Act. That section provides that if the Act results in an acquisition of property and a provision of the Act would not be valid in the absence of compensation, compensation is payable. In view of my conclusion that there has been no acquisition of property here, it is not necessary to deal with this submission. I observe however that there appears to me to be considerable force in the appellant's submission that s 3B does not apply because it is the transitional provision in the regulations that would result in the acquisition of property, and it is that provision that would be invalid if there had been an acquisition. No part of the Act would result in an acquisition and no part of the Act would as a result be invalid apart from s 3B. The existence of many provisions of the Act specifically mentioning the regulations made under the Act makes it difficult to read references in s 3B to "the Act" alone as including the regulations. Examples of provisions referring to "this Act and the regulations" are found in ss 91R(1), 91S, 91T, 96(1), 137(2), 197AC(3)(b), 245, 269, 336D, 336L, 474(3)(i), 493(1) and 504(1)(a)(i).

39 All grounds of appeal having been rejected, the appeal must be dismissed. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg.

Associate: Dated: 22 August 2008 Counsel for the Appellant: LJ Karp

Solicitor for the Appellant: Christopher Levingston & Associates

Solicitor for the First Respondent: Australian Government Solicitor