Sood v Minister for Immigration & Citizenship

THE TRIBUNAL DECISION 7 The Tribunal dealt first with reg 1.20D(2)(c)(i). After noting that the appellant's primary application form answered "no" to the following question: Will your business introduce, utilise or create new or improved technology or business skills? New or improved technology or business skills generally means "leading edge" technology or skills that are not readily available in Australia. The new or improved technology or business skills should be a significant implementation which will add to the efficiency, competitiveness or profitability of the business. the Tribunal concluded that on the evidence before it, it was not satisfied that the sandcasting technique was a new or improved technology or that the appellant was responsible for its introduction into Australia. 8 In relation to reg 1.20D(2)(c)(ii), the Tribunal found that although the appellant had provided some training, there was nothing in the vicinity of $4,000 to $5,000. It concluded that, based on the evidence, the training that had been provided was not adequate to satisfy the requirements of the regulation. The Tribunal therefore affirmed the first respondent's decision.

THE COURT BELOW 9 Before the Federal Magistrate, the appellant's application raised the following two grounds: 1. The Tribunal fell into jurisdictional error or failed to act within jurisdiction in failing to have regard to relevant material or considerations. Particulars (a) The Tribunal, while not satisfied that the [appellant] met all the criteria under Reg 1.20D(2) which specified that the Minister and the Tribunal must approve an application, failed to consider the exercise of its discretion to grant or to refuse the [appellant's] application to the Tribunal. (b) The Tribunal did not consider whether Mr Sood was introducing, or would utilise, a "new or improved technology" within the meaning of Reg 1.20D(2)(c)(i) of the Migration Regulations 1994 if the sandcasting technique, although an old technique, was new to Australia. 2. The Tribunal fell into jurisdictional error in interpreting or applying the law. Particulars (a) The Tribunal, while not satisfied that the [appellant] met all the criteria under Regulation 1.20D(2) which specified when the Minister and the Tribunal must approve an application, failed to consider the exercise of its discretion to grant or to refuse the [appellant's] application to the Tribunal. (b) The Tribunal did not consider whether Mr Sood was introducing, or would utilise, a "new or improved technology" within the meaning of Regulation 1.20D(2)(c)(i) of the Migration Regulations 1994 if the sandcasting technique, although an old technique, was new to Australia. 10 Notwithstanding the way in which the grounds were formulated by the appellant in his judicial review application, the Federal Magistrate considered the appellant to be alleging two errors said to amount to jurisdictional error: (1) the failure on the part of the Tribunal to acknowledge and exercise a residual discretion to grant or refuse the application even if the appellant did not meet all of the criteria specified in the regulation; and (2) the failure to construe the term "new" in the regulation as meaning "new to Australia," and then find as a matter of fact that sandcasting was a technology new to Australia. The Federal Magistrate considered and rejected each of the grounds.

APPLICATION TO THIS COURT 11 This proceeding is an appeal from a decision of the Federal Magistrates Court under s 25(1AA) of the Federal Court of Australia Act 1976 (Cth) ("FCA Act"). The appellant seeks prerogative relief of the kind issued in the exercise of the Federal Court's original jurisdiction under s 39B(1) of the Judiciary Act 1903 (Cth) (as reflected in s 476A of the Act and the limited grant of original jurisdiction under that provision). The appeal to this Court is in the nature of a rehearing and not an appeal in the strict sense: Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507. The question on appeal is whether the decision of the Federal Magistrate is affected by some legal, factual or other error: Allesch v Maunz (2000) 203 CLR 172 at [23]. Section 28(1) of the FCA Act provides that, on appeal, the Court may affirm, reverse or vary a decision of the Federal Magistrates Court and make such judgment or order as, in all of the circumstances, is appropriate including that the decision of the Federal Magistrate be set aside and the proceeding remitted to the Tribunal for further determination. 12 Two grounds of appeal were set out in the Notice of Appeal filed in this Court on 12 September 2008. The particulars were extensive. However, as the appellant's written submissions made clear, the principal grounds of complaint were that the Federal Magistrate fell into error when he failed to: a) Find that the Minister and the Tribunal had a discretion to approve or reject an application under s 140E of the Act. b) Distinguish the decision in Shao v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 478. c) Properly interpret and apply reg 1.20D(2)(c)(i). d) Properly consider whether the Appellant's sand casting technology was introducing or utilising a new or improved technology within the meaning of reg 1.20D(2)(c)(i). e) Apply the decision in Minister for Immigration and Citizenship v Sok [2008] FACFC 18 when considering the interpretation of s 140E or reg 1.20D. 13 As can be seen, grounds A, B, and E effectively amount to a reassertion of the appellant's first (residual discretion) point before the Federal Magistrate, while grounds C and D reassert the appellant's second point about the proper construction and application of the term "new" in the regulation.

ANALYSIS - RESIDUAL DISCRETION (GROUNDS A, B AND E) 14 The appellant contends that, despite the express words of reg 1.20D, if an applicant fails to satisfy all of the criteria set out in the regulation, the first respondent (and therefore the Tribunal) nevertheless retains a "residual discretion" to grant an application. The source of that "residual discretion" was identified first as reg 1.20D (para 8) and the later as s 140E of the Act (para 14). The appellant's written and oral submissions proceeded on the basis that the "residual discretion" was to be found in s 140E of the Act. 15 As the appellant rightly submitted, it is necessary to start with the legislation. Section 140E of the Act provides that "[t]he Minister must approve a person as a sponsor if prescribed criteria are satisfied". So much is clear. However, the appellant went on to contend that because the Act does not provide what is to happen should the prescribed criteria not be met, this "creates a discretion by which the Minister may approve (or not approve) a person as a sponsor" in those circumstances. In the end, the appellant's contention is that the legislature should and would have drafted the section to read "must only" and not simply "must" if it had wanted to establish a non-discretionary rule. That contention is without foundation. 16 The problem with the appellant's reading of the statute is that it is contrary to the express words of the section, the context, the legislative history, and the case law. With respect to the express words, the section provides when the Minister must approve a person as a sponsor. It does not expressly confer a discretion - such discretion is to be found, if at all, by negative implication. As Emmett J said in Shao at [13] in relation to an earlier version of reg 1.20D (in force prior to the addition of s 140E to the Act), the appellant's construction "would be a curious construction because it would confer on the Minister a discretion at large as to whether or not to approve an application but would restrict the Minister's discretion to reject an application". As Emmett J also noted in Shao (at [17], in reliance on numerous earlier authorities cited at [16]), it is not reasonable, given the trouble to which the drafters of the regulation went in specifying the circumstances in which applications must be approved, to understand the statute as then going on to provide that the Minister can, in any event, approve any application he wishes in the exercise of an unfettered discretion. So understood, the statute would make the regulation largely superfluous. 17 Moreover, in my view, the appellant's construction finds no support in the relevant extrinsic materials. The Explanatory Memorandum to the Migration Legislation Amendment (Sponsorship Measures) Act 2003 (which introduced s 140E of the Act), upon which the appellant relies (para 23), simply restated the express words of the new provision - "new subsection 140E(1) ensures that the Minister must approve a person as a sponsor if the person satisfies prescribed criteria". It says nothing about what is to occur if the prescribed criteria are not satisfied. More informative is the comparison of reg 1.20D(1) as it existed at the time of Shao and as it existed at the time of the appellant's application. In Shao, reg 1.20D(1) provided: "Subject to this regulation, the Minster may … approve or reject an application for approval as a pre-qualified business sponsor or as a standard business sponsor": at [11]. By the time of the appellant's application, s 140E of the Act been inserted which contains the word "must", the preamble to reg 1.20D had been inserted referring to s 140E and "may" had been changed to "must" in the relevant part of regulation: see [4] above. These changes further support the view that the intent of the legislature and rule-makers over time has been to limit the discretion of the Minister, not to expand it. To find that in 2003 the legislature intended to insert a residual discretion into the statute of the sort contended for by the appellant would be inconsistent with the concurrent effort to eliminate whatever discretion might have existed in the regulation. 18 The second but related point raised by the appellant in relation to the residual discretion question concerned the manner in which the Federal Magistrate dealt with the decision of Emmett J in Shao. The appellant's primary submission was that the Federal Magistrate failed to distinguish Shao. In my view, even if the Federal Magistrate had failed to distinguish Shao in the manner contended for by the appellant, the result would be no different because the matter is finally determined by the express words of the statute in the manner earlier explained. Moreover, even though Emmett J was dealing with an earlier version of the regulatory provisions, I agree with his Honour's analysis and would adopt it. The legislative history shows that, if anything, the case for the reading in Shao is now even stronger than it was at the time that decision was decided. It therefore follows that if reg 1.20D(2) at it existed at the time of Shao, did not previously contain a residual discretion, the addition of s 140E to the Act coupled with the change from "may" to "must" in reg 1.20D(1) should not be seen to change that analysis. 19 Finally, having determined that s 140E of the Act contains no "residual discretion" of the kind alleged by the appellant, it is unnecessary to consider the application of the general principles governing the exercise of ministerial discretion said by the appellant to have been set out by the Full Court in Minister for Immigration and Citizenship v Sok (2008) 165 FCR 586, reversed by Sok v Minister for Immigration and Citizenship [2008] HCA 50. 20 For the foregoing reasons, the appellant's grounds of appeal A, B, and E must be rejected.

NEW OR IMPROVED TECHNOLOGY OR BUSINESS SKILLS - GROUNDS C AND D 21 These grounds of appeal concerned the manner in which the Tribunal (and the Federal Magistrate) construed reg 1.20D(2)(c)(i). The contention was that the Tribunal had applied the wrong test by asking itself two questions, namely (1) is the technology a new or improved technology and (2) is the appellant responsible for its introduction into Australia, instead of applying a "single criterion"? 22 This contention is not made out. First, the express words of reg 1.20D(c)(i) provide that if the Minister is satisfied that the applicant for approval "will introduce to, or utilise or create in, Australia new or improved technology or business skills", the Minister must approve the application. It is those words and not some other form of words that is to be applied. As the Federal Magistrate correctly noted ([2008] FMCA 1126 at [24]), the section on its face raises two questions - first, whether the technology or business skills are new or improved; and secondly, the manner in which the appellant deals with that technology or business skills in Australia. 23 With respect to the second question, I am inclined to the view that the Tribunal committed error. As noted earlier, the Tribunal concluded (at [35] of its reasons): "[T]he Tribunal is not satisfied that the sandcasting technique is a new or improved technology or that the review applicant is responsible for its introduction into Australia." At best, the latter half of this conclusion is infelicitously phrased. To the extent that it suggests that the regulation provides for only one manner in which the technology may be brought to Australia, it is erroneous as a matter of law. As is clear from the express words of the regulation, there are three ways in which an applicant can bring about the advent of new or improved technology or business skills in Australia: first, he can introduce it to Australia (eg the applicant could tour the country giving lectures about how to build nanoprobes even though he did not create [invent] nanoprobes or build [utilise] them himself in Australia); second, he can utilise it in Australia (eg the applicant could himself build nanoprobes in Australia shortly after attending a lecture at which nanoprobe technology was introduced to Australia); or third, he can create it in Australia (eg the applicant could invent nanoprobes in Australia). In this case, the appellant could have satisfied the second question posed by reg 1.20D(2)(c)(i) by simply showing that he utilised sandcasting in Australia whether or not he was the one who introduced it to Australia or created it. 24 It is, I suppose, possible that the Tribunal was simply using the phrase "introduced to" in [35] of its reasons as a shorthand for all three of the prescribed options. After all, it would not be odd in colloquial speech to refer to a person who created a certain technology as having introduced that technology to the world. It is also possible that the Tribunal was simply mirroring the language used by the appellant himself in stating that he "would like to introduce [sandcasting] skills and have them incorporated into an accredited jewellery making course in Australia." However, given the evidence before the Tribunal that the appellant's business would utilise sandcasting in Australia, which should have been enough to satisfy the second question, it seems more likely that the Tribunal (and subsequently the Federal Magistrate ([2008] FMCA 1126 at [24]) erroneously took the view that the second question could only be satisfied by introduction of the technology; otherwise the Tribunal presumably would not have found that the appellant failed to meet both aspects of the regulation. 25 Notwithstanding this finding of error, it remains the case that both questions asked by the regulation must be answered affirmatively in order for the Minister to be satisfied. That is, even if the Tribunal erred in construing the second part of reg 1.20D(2)(c)(i), that error must be deemed harmless (ie remittal would be futile) unless there was also error in the conclusion that sandcasting is not a new or improved technology or business skill: Re Refugee Tribunal; Ex parte Aala (2000) 204 CLR 82 at [104] (stating that relief on judicial review will be refused where the Court is satisfied that the error did not affect the outcome of the administrative decision). In my view, there was not. 26 The first issue on this point is whether, as a matter of law, the word "new" in the regulation should be understood as "new to Australia" or simply new generally. In my view, the language of the regulation taken as a whole, and particularly the three alternative means for dealing with the technology or skill, the former construction is to be preferred, as the Federal Magistrate also found: [2008] FMCA 1126 at [26]. By providing that an applicant can satisfy the regulation by using or introducing a skill or technology in Australia even if he did not create it necessarily implies: (1) that the skill or technology was created elsewhere; and therefore (2) in that case at least, the skill or technology is no longer new. In other words, the juxtaposition of alternatives suggests that what the regulation is concerned with is whether the skill or technology is new to Australia. This reading is consistent with the purpose of the regulation and business sponsorship more generally - namely, that the applicant be adding something of value to the Australian community. Indeed, counsel for the first respondent accepted that "new to Australia" was the correct construction of the term. 27 So far, so good. The problem for the appellant, however, arises at the factual level. Findings of fact are the exclusive province of the Tribunal subject to issues of unreasonableness, arbitrariness, or irrationality: SZLGP v Minister for Immigration and Citizenship [2008] FCA 1198 at [15]-[26]. To the extent that the appellant is complaining about those findings of fact, the appellant is impermissibly seeking merits review. That is the case here. The Tribunal considered the material put forward by the appellant and made findings on that material, including a finding that it was not satisfied that the sandcasting technique was a new or improved technology. That material included evidence: (1) that the appellant himself answered "no" to a question posed by the first respondent about whether sandcasting would "introduce, utilise or create new or improved technology or business skills" not readily available in Australia (see [7] above); (2) that the appellant said the technology was an old one; and (3) that the appellant said the technology was not commonly taught or practised in Australia. In other words, the appellant's own evidence suggested that sandcasting was, at least to some extent, already utilised in Australia. On that evidence, even if another decision-maker might have been minded to reach a different conclusion, it cannot be said that it was unreasonable, arbitrary, or irrational for the Tribunal to find that sandcasting was not new to Australia. 28 Notwithstanding that a factual finding that was adverse to the appellant (ie that sandcasting was not new to Australia) was open to the Tribunal, two further questions arise: (1) whether the Tribunal's reasons for decision on this aspect could fairly be understood as misdirecting itself as to proper construction of the regulation by erroneously requiring the technology to be new generally rather than new to Australia; and (2) if so, did that error of law affect the finding of fact so that the matter should be remitted to the Tribunal even though it would be open to the Tribunal to reach the same conclusion applying the proper construction of the regulation. The appellant argued that, even though it might have been open for the Tribunal to have reached the same conclusion had it properly construed the regulation, the matter should be remitted for rehearing because there was still a reasonable possibility that it might decide the question of fact differently with a proper understanding of the regulation. 29 The Tribunal's reasons for decision on this aspect (at [35]) (as set out in [23] above) are ambiguous, at best. The Federal Magistrate (at [26]) gave the Tribunal the benefit of the doubt, without discussion, and assumed that the Tribunal had adopted and applied the correct construction of the term "new" as "new to Australia". Notwithstanding the lack of clarity in both the Tribunal's and Federal Magistrate's reasons, the authorities suggest that the approach of the Federal Magistrate was open to him: eg Australian Gas Light Company v Valuer-General (1940) 40 SR (NSW) 126 at 137-138 (per Jordan CJ) and Vetter v Lake Macquarie City Council (2000) 202 CLR 439 at [77] (per Kirby J). As Jordan CJ said in Australian Gas Light Company in relation to judicial review of a finding of fact that is dependent upon a conclusion of law: (4) Such a finding can be disturbed only (a) if there is no evidence to support its inferences, or (b) if the facts inferred by it and supported by evidence are incapable of justifying the finding of fact based upon those inferences, or if it has misdirected itself in law. Thus, if the facts inferred by the tribunal from the evidence before it are necessarily within the description of a word or phrase in a statute or necessarily outside that description, a contrary decision is wrong in law. If, however, the facts so inferred are capable of being regarded as either within or without the description, according to the relative significance attached to them, a decision either way by a tribunal of fact cannot be disturbed by a superior Court which can determine only questions of law. (Emphasis added and footnotes omitted). 30 The relevant rule that emerges from this passage is that a factual finding, even where based on an erroneous understanding of the law, cannot be disturbed on judicial review unless the finding could not have been made with the benefit of a proper understanding of the law. That is the case here, where the factual finding (ie that sandcasting was not new to Australia) was open on either construction of the regulation - that is, the fact found by the Tribunal was not necessarily outside the description of the word "new" in the regulation even when properly understood as meaning "new to Australia". In those circumstances, it cannot be said that the factual finding "betrays a mistaken view of the applicable law" such as to warrant being disturbed on judicial review by the Federal Magistrate or this Court. 31 For those reasons, grounds of appeal C and D should also be rejected.

CONCLUSION 32 Based on the foregoing, I would dismiss the appeal and order the appellant to pay the first respondent's costs of the appeal to be taxed in default of agreement. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.

Associate: Dated: 26 November 2008 Counsel for the Appellant: Ms G King-Siem

Solicitor for the Appellant: Veron da Gama & Associates