NEW GROUND (GROUND 5) - WRONG TEST WAS APPLIED
24 Mr Weng raised, as a new ground of appeal, the contention that the Tribunal constructively failed to exercise its jurisdiction by asking itself whether it was satisfied that Mr Weng had obtained a substantial ownership interest in an eligible business in Australia instead of the question posed by s 134(1) of the Act, namely, whether it was satisfied that Mr Weng had not obtained a substantial ownership interest in an eligible business in Australia.
25 The argument is that the power to cancel arises if the Minister 'is satisfied that its holder has not obtained a substantial ownership interest in an eligible business in Australia'. If the power to cancel arises, then the Minister has a discretion as to whether to cancel the visa.
26 Thus it is argued that s 134(2) of the Act operates as a restriction on the power to cancel. It relevantly prevents the cancellation if the Minister 'is satisfied' that the holder has made the relevant 'genuine efforts'.
27 Mr Weng argues that in order to cancel a visa, the Minister and the Tribunal must first form a positive opinion about the matters in s 134(1) of the Act. The distinction between the formation of a positive opinion and merely not being satisfied of something is said to be contextually supported. The questions under s 134 of the Act arise in circumstances where a person has already been granted a visa and has a valuable right to enter and reside in Australia. The context then, unlike with an initial application for a visa, is not one where the visa holder bears an onus of bringing material forward that might satisfy the decision-maker of certain matters. To the contrary, the Tribunal is to be positively satisfied of a negative and its opinion has to be reasonably formed. If it is left in any doubt, it is required to determine the question in favour of the holder of the visa.
28 In the present situation, Mr Weng claimed that he owned 40% of the issued shares in SII and that SII carried on a property development business. The Tribunal accepted that ownership of 40% of the shares was a substantial ownership interest. Accordingly, the next question was whether the Tribunal was satisfied that SII's property development activities did not constitute a business. However, Mr Weng argues that it did not answer that question. Rather it asked whether it was satisfied that those activities did constitute a business concluding (at [33]) it was not, saying: 'I'm not satisfied that SII is engaged in a business'.
29 Complaint is raised that the same approach was taken by the Tribunal in relation to the 'eligible business' issue (at [40]). A similar conclusion was expressed in relation to the Tribunal stating that it was not satisfied that he made genuine efforts etc (see Tribunal's reasons (at [59])).
30 It follows accordingly, Mr Weng argues, that the reasoning of the Tribunal shows that the Tribunal did not form the opinion necessary for the power to cancel to arise. That conclusion is strengthened when one reviews the entirety of the reasons. Mr Weng contends that when addressing that part of the matter in s 134(1)(a) concerned with 'substantial ownership interest' and in s 134(1)(b) concerned with involvement 'in the day-to-day management', the Tribunal suggested Mr Weng was to satisfy it that he met the statutory criteria as distinct from the Tribunal being satisfied that he did not. Mr Weng argues that at every point in its reasons where it had to express a conclusion or finding referable to s 134 of the Act, the Tribunal did so in terms that suggested it was incumbent upon Mr Weng to persuade it of the relevant matter. This, it is argued, was not the correct approach and confirms that the Tribunal did not address the correct test for the purposes of s 134(1) of the Act. Therefore, it is argued that the Tribunal committed jurisdictional error in that it did not form the opinion required by s 134(1) of the Act before the visa could be cancelled.
31 The Minister accepts that s 134(1) of the Act confers on the Minister a discretionary power of cancellation in respect of a business visa 'if the Minister is satisfied that its holder' has not, is not or does not meet the requirements in paras (a), (b) and (c) respectively. The Minister rejects the contention that, in substance, the Tribunal misconstrued the nature of its power because it assumed that a lack of satisfaction was sufficient when what it needed to form was a positive opinion.
32 The Minister argues that the Tribunal correctly stated (at [3]) in unambiguous terms the requirements of s 134(1) including that the Minister may cancel a business skills visa if 'satisfied that its holder' (emphasis added) has not, is not or will not meet the requirements in paras (a), (b) and (c) respectively. The summary by the Tribunal (at [3]) is not merely a direct quotation of the exact terms but is a correct paraphrasing of the effect of that subsection.
33 Additionally, the Minister points to the fact that the Tribunal (at [6]) identified that it had to decide whether any of the grounds in s 134(1) of the Act for cancellation of Mr Weng's Business Skills visa were made out. The Tribunal concluded (at [7]) 'for the following reasons I am satisfied that the decision to cancel Mr Weng's business visa should be affirmed'.
34 As to the latter references where the Tribunal refers to being 'not satisfied', these need to be read fairly and in context in light of what the High Court has said in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259. The Minister argues that what the Tribunal was in fact saying or doing was making evidentiary findings based on the evidence and the contentions advanced before it. On a fair reading of the reasons as a whole, the Minister contends that the Tribunal reached conclusions on the evidence by which it was satisfied that Mr Weng had not obtained a substantial ownership interest in a 'business' or an 'eligible business' in Australia.
35 I accept the argument for Mr Weng on this point for the reasons that follow.
36 In McDonald, a Full Court decision, the appellant succeeded on appeal from the Tribunal which had affirmed a decision of the delegate of the Director-General of Social Security to cancel a valid pension previously ordered to Ms McDonald. The appellant's pension had been cancelled due to the Commonwealth Medical Officer deciding that she was no longer medically entitled. Ms McDonald appealed to the Tribunal. In an amended ground directed to the question of onus of proof, the Full Court made it clear that in the Tribunal, the common law notion of onus of proof was inapplicable. Woodward J said (at 356):
… a tribunal will still have to determine practical problems such as the sequence of receiving evidence and what to do if it is unable to reach a clear conclusion on an issue, but it is more likely to find the answer to such questions in the statutes under which it is operating, or in considerations of natural justice or common sense, than in the technical rules relating to onus of proof developed by the courts. However these may be of assistance in some cases where the legislation is silent.
…
There is certainly no legal onus of proof arising from the fact that this is an "appeals" tribunal, because the AAT is required, in effect, by s. 43 of the AAT Act, to put itself in the position of the administrator in carrying out its review and, in the light of the material before the AAT, (not the material before the administrator, Drake v. Minister for Immigration and Ethnic Affairs (1979) 46 F.L.R. 409 at 419) make its own decision in place of the administrator's. The AAT itself, in a series of cases beginning with re Ladybird Children's Wear Pty Ltd (1976) 1 A.L.D. 1, has taken the view that there is no presumption that the administrator's decision is correct. This is clearly the right approach to the matter.
37 Jenkinson J noted (at 368) that the passage quoted by Woodward J from the Tribunal decision implied that it was a requirement of the Act that the applicant's pension be cancelled unless she were found to be permanently incapacitated for work.
38 His Honour, however, noted that it was a requirement of that Act that the pension be cancelled if Ms McDonald were found not to be permanently incapacitated for work. If that were so, his Honour concluded there was error of law demonstrated in the Tribunal's reasons. All that could be discerned was that the Tribunal was unpersuaded to the degree required, that there was a permanent incapacity.
39 These passages in McDonald were followed by Spender J in Ross v Minister for Immigration and Multicultural Affairs (2000) 107 FCR 1. His Honour took into account Wu Shan Liang observing (at [26]):
26 In Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259, Brennan CJ, Toohey, McHugh and Gummow JJ said (at 271-272):
"When the Full Court referred to 'beneficial construction', it sought to adopt an approach mandated by a long series of cases, the best exemplar of which is Collector of Customs v Pozzolanic (1993) 43 FCR 280. In that case, a Full Court of the Federal Court (Neaves, French and Cooper JJ) collected authorities for various propositions as to the practical restraints on judicial review. It was said that a court should not be 'concerned with looseness in the language ... nor with unhappy phrasing' of the reasons of an administrative decision-maker (at 287). The Court continued (at 287): 'The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error.'
These propositions are well settled. They recognise the reality that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon overzealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed [see McAuliffe v Secretary, Department of Social Security (1992) 28 ALD 609 at 616]."
To cavil with "an eye keenly attuned" would be an example of the sort of approach that passage seeks to eschew.
40 Having thus noted the care to avoid overzealous judicial review, Spender J continued (at [27]):
27 The difficulties in this case, while of the Minister's officers' making, are not simply a matter of semantics, or the consequence of a pedantic view of the words used by the Minister to indicate his decision. The words put before the Minister as recording the choices open to him, and his indication of his agreement with the statement "I do not exercise my discretion to not cancel the visa", demonstrate to me that he wrongly interpreted s 501(2) as conferring a discretion to not cancel the visa. That was an error of law within s 476(1)(e) of the Act. It is apparent that the Minister believed that once pars (a) and (b) of s 501(2) were satisfied he was obliged to cancel the visa unless he positively decided that he should not do so.
41 After referring to McDonald per Woodward J (at 358-359) and Jenkinson J (at 369), Spender J continued (at [34]):
34 The view of Jenkinson J in McDonald was that the Tribunal considered that the applicant's pension should be cancelled unless she were found to be permanently incapacitated for work, whereas the requirement of the Act was that the pension should be cancelled if she was found not to be permanently incapacitated for work. This difference in approach, his Honour concluded, involved an error of law.
42 In the circumstances of this review by the Tribunal, it was a precondition to the exercise of the power described under s 134(1) that a specific mental state be held. In the absence of positively forming such an opinion as to satisfaction, there was no power to carry out the cancellation. This was explained by Gummow J in Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 (at [130]-[131]) (footnotes omitted):
130 The "jurisdictional fact", upon the presence of which jurisdiction is conditioned, need not be a "fact" in the ordinary meaning of that term. The precondition or criterion may consist of various elements and whilst the phrase "jurisdictional fact" is an awkward one in such circumstances it will, for convenience, be retained in what follows. In Bankstown Municipal Council v Fripp, Isaacs and Rich JJ pointed out that, with the object of preventing litigation on questions of jurisdictional fact, the legislature may introduce into the criterion elements of opinion or belief by the decision-maker. Section 65 of the Act is an example. The prosecutor was entitled to the grant of a visa only if the Minister were "satisfied" that the prosecutor answered the description in s 36(2).
131 A determination that the decision-maker is not "satisfied" that an applicant answers a statutory criterion which must be met before the decision-maker is empowered or obliged to confer a statutory privilege or immunity goes to the jurisdiction of the decision-maker and is reviewable under s 75(v) of the Constitution. This is established by a long line of authority in this Court which proceeds upon the footing that s 75 is a constitutional grant of jurisdiction to the Court.
43 After citing Attorney-General (NSW) v Quin (1990) 170 CLR 1, (per Brennan J) Gummow J continued:
133 In R v Connell; Ex parte Hetton Bellbird Collieries Ltd, Latham CJ said:
"[W]here the existence of a particular opinion is made a condition of the exercise of power, legislation conferring the power is treated as referring to an opinion which is such that it can be formed by a reasonable man who correctly understands the meaning of the law under which he acts. If it is shown that the opinion actually formed is not an opinion of this character, then the necessary opinion does not exist."
The Chief Justice added:
"It should be emphasised that the application of the principle now under discussion does not mean that the court substitutes its opinion for the opinion of the person or authority in question. What the court does do is to inquire whether the opinion required by the relevant legislative provision has really been formed. If the opinion which was in fact formed was reached by taking into account irrelevant considerations or by otherwise misconstruing the terms of the relevant legislation, then it must be held that the opinion required has not been formed. In that event the basis for the exercise of power is absent, just as if it were shown that the opinion was arbitrary, capricious, irrational, or not bona fide."
44 It is necessary then to examine the Tribunal's actual reasoning, so as to discern whether the new appeal ground raises no more than overzealous attention to semantics on the one hand or a substantive error of law, on the other.
45 Paragraphs [30] to [33] of the Tribunal's reasons read:
30. I accept that Mr Weng may be considering investing in further property and may need to wait until the sale of the Bonython properties before proceeding but mere repetition does not itself make an investment activity a business.
31. I accept Mr Weng's contention that, by its nature, property development is slower to realise than some other types of business and may take longer to acquire the characteristic of repetition. I accept that profit is a motive in the purchase, development and sale of the Bonython properties. (I accept that actual profit is not necessary in order to find SII to be a business). However, profit alone is not sufficient to make SII's activity a business; any private investment aims to make profit.
32. In my view, SII's activities lack sufficient of the "badges of trade" that the courts have referred to as indicia of business activity. I am not satisfied that Mr Weng's son and associates have done more than help out with general research into investment possibilities, even if they spent considerable time doing so.
33. Mr Weng acknowledges that he is a very successful businessman in China. By contrast, his investments in Australia lack a sense of forward planning and activity consistent with business activity rather than private investment. He continues to cast about for investment opportunities. In all the circumstances, I find that Mr Weng is a private person looking for investment opportunities through SII. I am not satisfied that SII is engaged in a business.
46 These paragraphs of the Tribunal's decision do, in my view, reflect that the Tribunal was deciding whether to accept or reject arguments advanced by Mr Weng in discharge of some onus that he had to satisfy the Tribunal. Where the words 'I accept' are used in those paragraphs, they appear to reflect this as a matter of substantive approach and not simply a question of language usage at the end of [33].
47 Taken in context, the words which precede the conclusion (at [33]), suggest that the Tribunal was not persuaded by Mr Weng to a particular point of view that SII was engaged in a business. Another way to test this is to see whether the preceding paragraphs of the decision reflect an approach consistent with the statutory test leading to a conclusion that the Tribunal was satisfied that SII was not engaged in a business. The words which precede the conclusion (in [33]) would support Mr Weng's argument.
48 In this particular case there can be no reasonable suggestion that Mr Weng's application was patently hopeless. It follows that the correct approach assumes more importance. If there was no evidence to support the argument advanced by Mr Weng, then as a matter of reality, a conclusion which is expressed in terms of absence of satisfaction may be of less or little significance. That is not this case however. There was a substantial amount of evidence on which the Tribunal could equally have reached the opposite conclusion. It was not for the Federal Magistrates Court or for this Court to reverse such a conclusion merely on the merits, providing the right test was applied. Where the wrong test was applied in circumstances where there was ample evidence on which the opposite conclusion was open, the significance of applying the correct test assumes greater importance.
49 The approach in [30] to [33] continues in the reasons. The Tribunal (at [39]), again, commences the paragraph with the words 'nor am I satisfied that SII's activity is resulting or will result …'.
50 This is followed with the conclusion (at [40]) 'I am not satisfied that SII is carrying on an eligible business within the meaning of the Act'.
51 Once again, the Tribunal appears to have adopted the wrong test, having regard to the requirements of the statute and by reference to the Full Court decision in McDonald.
52 On the topic of whether Mr Weng was involved in the day-to-day management of the business, the paragraphs dealing with this topic ([41]-[45]) speak in terms of contentions advanced by Mr Weng and ultimately a preparedness on the part of the Tribunal to accept those contentions. This does, again, reflect an approach on the part of the Tribunal that Mr Weng was required to prove his case. Of course, Mr Weng does not appeal from the positive conclusion in his favour but these paragraphs, in my view, do suggest that the Tribunal was of the view that Mr Weng was required to satisfy it as to the statutory criteria.
53 The next block of the Tribunal's reasons contained in [46]-[59] addressed the topic of whether Mr Weng had made genuine efforts for the purpose of s 134(2) of the Act. Once again, having referred throughout to the evidence and arguments advanced by Mr Weng, the Tribunal concluded, (at [59]) 'I am not satisfied that Mr Weng has made a genuine effort to obtain a substantial ownership interest in an eligible business such that his visa should not be cancelled'. On this occasion, the Tribunal has adopted the correct, (if not rather awkward), test even though paragraph 59 expresses a double negative, consistently with the terminology of the Act. The criterion under s 134(2), as with s 134(1), goes to the question of the existence of a negative situation.
54 When the Tribunal's decision is examined in its totality to consider the reasoning process, it is only the opening paragraph ([3]) of the reasons which accurately cites the statutory test for the purpose of s 134(1) of the Act. In my view, para 33 and para 40 reflect the wrong test. It cannot be safely concluded, in my view, that the Tribunal has approached the question on the basis required by the statute, that it is to be satisfied positively of the criteria in s 134(1).
55 Reading the entirety of the decision, I accept the argument for Mr Weng that, in reality, the wrong test was applied and that it is not simply a matter of a semantic distinction. It follows, therefore, that on ground 5, Mr Weng has established that there was jurisdictional error on the part of the Tribunal.