Zhang v Minister for Immigration, Citizenship and Multicultural Affairs

Federal Court of Australia|2023-06-12|Before: Mr J, Downes J

The appeal is dismissed.
The appellants pay the respondents' costs of the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

DOWNES J: 1 The appellants are Chinese citizens. 2 The first appellant, Zhimin Zhang, was granted a Business Skills - Business Talent (Migrant) (Class EA) (Subclass 132) visa on 4 August 2016. His wife (Zhiying Xu) and his son (Xinsong Zhang) were both dependent applicants to the first appellant's visa application and were granted the same visa on 4 August 2016. They are the second and third appellants respectively. 3 On 30 July 2018, the Department of Immigration and Border Protection sent correspondence to the first appellant requiring him to complete a "Survey of Business Skills visa holders" (Form 1010). On 18 July 2019, following receipt of the completed Form 1010 and other information, the appellants were each sent a "Notice of Intention to Consider Cancellation of Your Visa Under Section 134 of the Migration Act 1958". On 15 August 2019, the appellants provided submissions and other documents in response to these Notices. 4 On 21 October 2019, a delegate of the first respondent ('Minister') notified the appellants of his decision to cancel the first appellant's visa pursuant to s 134(1) of the Migration Act 1958 (Cth) and the second and third appellants' visas under s 134(4) of that Act. 5 On 24 October 2019, the appellants applied to the Administrative Appeals Tribunal for review of the delegate's decision, relying on the following matters to support their contention that the visas should not be cancelled: (1) In 2014, the first appellant had paid $1.6 million to acquire a 49.24% interest in a property development called the "Bookara Beach Resort Development No 3 Pty Ltd" (the 'Bookara Beach resort'), which he continued to hold. At the time of the Tribunal's decision, the Bookara Beach resort needed a further $35-$40 million to be "anything other than a possibility" (according to the Tribunal), had not yet been the subject of a development application, and had only one other identifiable prospective investor, with whom no binding agreement had been entered. (2) The appellants (between them) owned six real properties in Australia, which they referred to as their "business real estate portfolio", and which constituted an investment of close to $3 million at the time of the hearing. The appellants stated in closing submissions that, following settlement of another property purchase, the value of this portfolio had grown to $3.47 million. (3) The first appellant was involved in or had an ownership interest in a company called Round and Round Pty Ltd, which attempted (but failed) to export $80,000 of Australian wine to China in 2020. That company's wine export licence expired on 16 January 2021. (4) In early 2020, the first appellant signed an offer on behalf of Round and Round Pty Ltd (as Trustee for the Xinsong Family Trust) to purchase a supermarket and paid a deposit of $73,000, but decided not to proceed with that acquisition. The deposit was forfeited. (5) The appellants also referred in their submissions to an "experimental" transaction of the importation of a container load of toilet paper at a time when Australia was experiencing an apparent shortage in April 2020, although the details about this transaction are scant. This transaction was said to be "not really relevant" except to demonstrate business intent. 6 The Tribunal affirmed the decision of the Minister on 29 April 2021. An application for judicial review of the Tribunal's decision was brought in the Federal Circuit and Family Court of Australia (Division 2) ('FCFCOA') ('J'), and was dismissed on 16 August 2022. The appellants bring this appeal from that decision. 7 For the reasons which follow, the appeal will be dismissed with costs.

ISSUES ON THE APPEAL 8 The focus of the appeal was on two key issues. 9 First, whether the Tribunal misunderstood or misapplied the words "genuine effort" as they appear in s 134(2) of the Migration Act. 10 Second, whether the Tribunal's exercise of residual discretion not to cancel the visas had miscarried. 11 In relation to the second issue, the appellants applied for leave to rely upon an affidavit of Mr Harry Cao dated 31 May 2023 concerning events which post-dated the decision of the FCFCOA (being the failed attempt by the first appellant to obtain another form of visa). Leave was refused, primarily on the basis that the appellants were not able to justify its admission. Further, the evidence was of such little weight that its admission would not be likely to lead to a different result. 12 Another affidavit of Mr Cao dated 23 March 2023 (which also dealt with a failed visa application by the first appellant) somehow made its way into the Appeal Book as being part of the material which was before the FCFCOA (when it could not have been). The appellants accepted that I did not need to have regard to that affidavit. 13 As part of their submissions, the appellants also relied on comments by the Minister for Home Affairs in a speech dated 27 April 2023. The content of that speech had little, if any, relevance to the issues in this appeal, and so did not assist the appellants.

ISSUE 1 - "GENUINE EFFORT" 14 The term "genuine effort" appears in subss 134(2)(a) to (c) of the Migration Act, in the context of the bar to cancellation (as well as s 134(3), which sets out some matters that may be taken into account in determining whether a person has made the genuine effort referred to in subsection (2)). 15 Section 134(2) of the Migration Act provides: (2) The Minister must not cancel a business visa under subsection (1) if the Minister is satisfied that its holder: (a) has made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia; and (b) has made a genuine effort to utilise his or her skills in actively participating at a senior level in the day-to-day management of that business; and (c) intends to continue to make such genuine efforts. 16 For s 134(2) to apply, the requirements in subss 134(2)(a), (b) and (c) must all be satisfied. This was the approach which was taken by the Tribunal and the primary judge: [54] J. No appeal is brought in relation to that construction of s 134(2). 17 The appellants submit that the key to the Tribunal's error is at [56] of its reasons when it "wrongly focused on the end point rather than at [the] point when the bulk of the 'genuine effort' was made". They complain that, in [56] of its reasons, the Tribunal "wrongly conflated" the two concepts which arise under s 134(1) and s 134(2), and that the "point of the 'genuine effort' business visa regime is to encourage risk taking in business". They submit that "[o]ne can make a 'genuine effort' even though the business fails (or as in this case is stalled)". 18 The appellants' submissions cannot be accepted for the following reasons. 19 The premise of the appellants' submissions, and their complaint about the approach taken by the Tribunal in [56] of the reasons, was not established. There was no conflation of the two provisions of the Migration Act as claimed. Paragraph 56 contained the Tribunal's reasons and its finding that the Bookara Beach resort, which was "best characterised as a long-time stalled, prospective property development", was not a "business" for the purposes of s 134(1). That paragraph was not concerned with s 134(2) nor with any meaning to be ascribed to the words "genuine effort" in that section. 20 Further and contrary to the appellants' submissions, there is no reason to think that the Tribunal was under some misunderstanding as to what a "genuine effort" was in the context of s 134(2) of the Migration Act. Nor is it correct to say that the Tribunal considered that a successful outcome was required for there to be a "genuine effort". Instead, as correctly observed by the primary judge at [58] J: …The Tribunal was clearly aware that there could be a genuine effort that fell short of success. Not only is this obvious from the context of the legislation, which for reasons explained above, the Tribunal properly understood, but it is also clear from the manner in which the Tribunal applied s 134(2). For example, at [86] of its reasons, the Tribunal accepted that it might be arguable that s 134(2)(a) might be met in relation to the aborted (that is, failed) purchase of the supermarket, but there was no evidence or submission that s 134(2)(b) and (c) were met. 21 Finally, by their submissions, the appellants failed to grapple with the actual findings of the Tribunal, and the primary judge, which led to the conclusion that s 134(2) was not satisfied. 22 In particular, as appears from [86], [90], [93] and [97] of its reasons, the Tribunal found that the evidence adduced by the appellants did not satisfy the requirements of subss 134(2)(a), (b) and (c). 23 There was no contention by the appellants before the primary judge (and none is raised on this appeal) that the Tribunal had such evidence before it, or what that evidence was, being evidence which satisfied each of s 134(2)(a), s 134(2)(b) and s 134(2)(c). Indeed, as the primary judge observed (again, correctly, with respect): (1) The Tribunal's reasons centre on the understanding that for the bar to cancellation in s 134(2) to arise, each of the requirements in subparagraphs (a)-(c) had to be met. The applicants did not identify to the Tribunal the evidence on which they relied to establish that each of the three requirements in s 134(2) was met: [62] J; (2) Reading the Tribunal reasons fairly, the Tribunal found that the applicants did not identify evidence to show that they met all of the cumulative requirements in s 134(2)(a), (b) and (c): [64] J; (3) It is clear, in particular from [86], that the Tribunal considered s 134(2) and found that the applicants' evidence did not establish that each of the conditions in s 134(2)(a), (b) and (c) were met, and the applicants had not even advanced submissions in relation to subsections (b) and (c): [67] J. 24 For these reasons, the appellants' complaint that the Tribunal misunderstood or misapplied the words "genuine effort" as they appear in s 134(2) of the Migration Act is without merit, and their argument that this provides a basis to uphold the appeal from the primary judge must be rejected.

ISSUE 2 - THE RESIDUAL DISCRETION 25 It was common ground between the parties below that the Tribunal had a broad residual discretion under s 134(1) of the Migration Act not to cancel the appellants' visas, even where the conditions of s 134(2) had not been met. 26 At [102] of its reasons, the Tribunal set out what it described as the "thrust" of the Minister's Statement of Facts, Issues and Contentions which (relevantly to the appellants' submissions) included these statements: (1) Tribunals have repeatedly observed that the business visa scheme contemplates that such visa holders would remain resident in Australia (Re Ong and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 178 at [31]; Re Ng and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 299 at [12]): [102(b)]; (2) This is supported by the Second Reading Speech of the Migration Amendment Bill (No 2) 1992 (Cth), which introduced s 134 of the Act: [102(c)]; (3) At the time of application, a visa applicant must acknowledge the business objectives of that visa category. They must also understand that there is an expectation that they will make genuine efforts to comply with the business objectives. There are reporting requirements within the first three years of the visa grant. Additionally, such a visa can only be cancelled under s 134 if a relevant notice was given to an applicant within three years of visa grant or date of arrival in Australia: [102(d)]; (4) The first applicant appears to have only spent minimal time in Australia. There is certainly nothing to suggest that he and his family have moved to Australia permanently: [102(e)(i)]; (5) The applicants are able to apply for other visas that do not have the same stringent obligations, in the event that they wish to visit Australia: [102(e)(iii)]. 27 At [103] of its reasons, the Tribunal stated: The Tribunal agrees with the Respondent's analysis of the law and his submissions in relation to the exercise of the discretion not to cancel the Applicants' visas. At most, what the First Applicant has established is that he has invested some $5 million in property in Australia. He does not need a visa to maintain and protect that interest. Insofar as the Applicants wish to visit Australia then more appropriate visas can be sought as and when needed. Given the scheme of the Act, the purposes for which visas are issued and the particular requirements attaching to different types of visas, the First Applicant does not require a Business Skills - Business Talent (Migrant) (Class EA) (Subclass 132) visa, and it would be inappropriate for him to hold one. 28 Each of the various attacks on these reasons will now be addressed.

Paragraphs 102(b) and 102(c) of the Tribunal's reasons 29 The appellants submit that the Tribunal erred in accepting the submission recited at [102(b)] of its reasons on the basis that, "[It is] simply wrong. There is no policy that visa holders should remain in Australia". 30 The fundamental problem with this submission is that it mischaracterises what is stated at [102(b)], which was a statement that Tribunals in certain cases (which are identified) have observed that the business visa scheme contemplates that such visa holders would remain resident in Australia. Mr Boccabella of counsel, who appeared for the appellants, accepted that the decisions cited in [102(b)] did make such observations. 31 Further, to contemplate something is not to require it. As such, acceptance by the Tribunal of a submission that certain observations were made in the cases cited by the Minister about what the scheme contemplates is not the adoption by the Tribunal of a policy that business visa holders should remain resident in Australia. The primary judge formed the same view about this aspect of the Tribunal's reasons at [47] J, albeit in connection with a slightly different argument by the appellants that [103] of the Tribunal's reasons amounted to "policy making on the run": see [46] J. 32 The appellants also challenge the statement, accepted by the Tribunal at [102(c)] of its reasons, that the observations of Tribunals concerning what is contemplated by the business visa scheme, as referred to in [102(b)], is supported by the Second Reading Speech. They contend that the Second Reading Speech does not provide such support. 33 The Second Reading Speech relevantly states: I turn now to the amendments which relate to business migrants who arrive in Australia. The Bill provides a legal framework to implement two aspects of the Government's new business skills migration category, which I announced on 17 December 1991. The first is a system of mandatory participation by business skills migrants in the monitoring of their business activities after their arrival in Australia. The second is the creation of a power for the Minister to cancel permanent entry permits and entry visas of business skills migrants after their arrival in Australia if they do not enter into business activities which meet the objectives of the category or make a genuine effort to do so. … The Bill includes provisions which mean that the power [to cancel] cannot be used against a business migrant unless the Minister has notified him or her of the intention to do so within three years of the migrant's arrival in Australia. … [The Bill] also recognises that, as permanent residents, business migrants should not be under the threat of cancellation indefinitely. (emphasis added.) 34 Having regard to the emphasised words above, the Second Reading Speech does support the proposition that the business visa scheme contemplates that visa holders would remain resident in Australia. It refers to the visa holders arriving in Australia (four times) and it also refers to the visa holder monitoring their business activities after their arrival in Australia (which implies that they will remain in Australia for that purpose). It also refers to the visa holders as "permanent residents" in express terms. For these reasons, the statement made in [102(c)] of the reasons is not incorrect as claimed by the appellants. 35 In any event and contrary to the appellants' submissions, acceptance by the Tribunal of a submission that the Second Reading Speech provides support for the observations referred to in [102(b)] is not the adoption by the Tribunal of a policy that business visa holders should remain resident in Australia. The primary judge formed the same view about this aspect of the Tribunal's reasons at [47] J. 36 The appellants also complain that: … there are a host of AAT decisions on s134. The cases contain the usual divergence of opinion on policy as is often found in the AAT. It is unfortunate the [Minister] did not draw the AAT's attention to those decisions. 37 However, there was nothing to prevent the appellants from drawing the Tribunal's attention to any decision which advanced a different proposition to those cases which were cited by the Minister. 38 Turning to the cases which are cited by the appellants in this appeal, they either do not contradict Re Ong and Re Ng (see Re Liu and Minister for Immigration, Multicultural and Indigenous Affairs [2004] AATA 1397 at [43]; Re Karim and Minister for Immigration and Multicultural and Indigenous Affairs [2006] AATA 56 at [73]) or only address the narrow (and different) point that a visa applicant's business activities must be conducted in Australia to satisfy the Minister that the applicant is participating, or is making genuine efforts to participate, in the day-to-day management of an eligible business at a senior level: Re Dhanjal and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 1120 at [88]-[89]; Re Widjaja and Minister for Immigration and Multicultural and Indigenous Affairs [2003] AATA 380 at [40]; Re Lie and Minister for Immigration and Multicultural and Indigenous Affairs (2004) 79 ALD 159; [2004] AATA 159 at [26]. 39 Further, in certain of the cases cited by the appellants, the applicant's intended future residence in Australia was a factor which was considered as part of the decision to set aside the visa cancellation decision: Re Karim at [73]; Re Lie at [26]. 40 For these reasons, the appellants' complaints about [102(b)] and [102(c)] are without merit, and are rejected.

Paragraph 102(d) of the Tribunal's reasons 41 The appellants next submit that [102(d)] of the Tribunal's reasons betrays a misunderstanding of the residual discretion as only being enlivened "when the visa holders may not have made a genuine effort". Specifically, the appellants submit: In paragraph 102(d), the AAT misunderstands that the residual discretion only comes into force when the visa holders may not have made a genuine effort. Therefore, the AAT has misunderstood that the pre-conditions for the exercise of the discretion do not drive the exercise of the discretion (see by parity of reasoning the words of Sackville J in the Full Federal Court decision of Lu v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 340: It is true that the authorities have accepted that s 501 prescribes the failure to satisfy the character test as a condition precedent to the exercise of the discretion to cancel a visa and does not create a presumption as to how the discretion should be exercised: Aksu v Minister for Immigration & Multicultural Affairs [2001] FCA 514;, at [10], per Dowsett J, cited with approval by Kiefel & Bennett JJ in Minister for Immigration & Multicultural & Indigenous Affairs v Huynh (2004) 211 ALR 126, at 143 [72]. This is another basis as to why the discretion miscarried. (emphasis original.) 42 The appellants also cited the decision of Lu v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 141 FCR 346; [2004] FCAFC 340 before the Tribunal, and submitted that, "even if the condition precedent to the exercise of the cancellation power in s 134 is met (which is denied), there is no presumption that the cancellation power should be exercised in a particular way". 43 Before the primary judge, the appellants contended that "the Tribunal failed to grapple with the fact that it had a very broad residual discretion": [34] J. However, as observed by the primary judge (with respect, correctly) at [37] and [38] J: It is abundantly clear from the Tribunal's reasons that the Tribunal was aware that: (a) upon finding that a ground for cancellation in s 134(1) existed, and cancellation was not prohibited under s 134(2), the Tribunal retained a residual discretion not to cancel the first applicant's visa; and (b) the residual discretion was a broad discretion. …For present purposes, the Court highlights the following paragraphs of the Tribunal reasons as examples of paragraphs that support the finding at [37] above. (a) The Tribunal clearly demonstrated its understanding that there was a residual discretion when it identified the issues for its consideration at [25]. The Tribunal there said (emphasis added): The dispute in this matter (as identified by the Respondent at [sic] set out at [13] above) comes down to a review of: (a) whether the First Applicant's identified business interests satisfy a condition under s 134(1) to trigger the discretion to cancel the visas; and (b) if one of those conditions was met, whether the conditions required for the bar under s 134(2) were met; (c) even if the bar under s 134(2) does not apply, whether the residual discretion under s 134(1) not to cancel the visas should be exercised; and (d) if the Tribunal finds that the First Applicant's visa should be cancelled, whether the cancellation of the wife and son's visas would result in extreme hardship. (b) The Tribunal's inclusion of a section under the heading 'Should the residual discretion not to cancel the visas be exercised?' also clearly shows that it was aware that it had a residual discretion not to cancel the applicants' visas. (c) The Tribunal acknowledged that the residual discretion was a broad one at [23] and [24] of its reasons where it noted and accepted as correct the Minister's contention that the 'residual discretion is broad, but it must be exercised in the context of the legislation in which it is found'. (emphasis original.) 44 These reasons of the Tribunal belie the notion that the Tribunal presumed that the cancellation power should be exercised in a particular way, or that it misunderstood when the residual discretion came into play. 45 Further, [102(d)] itself does not indicate any misunderstanding by the Tribunal of the kind which is asserted by the appellants. Rather, that paragraph of the reasons includes a revised extract of the Second Reading Speech, which read as follows: Each business migrant acknowledges at the time of application that he or she understands the business objectives of the category and the expectation that they will make genuine efforts to comply with them. 46 For these reasons, this complaint is also without merit, and is rejected.

Paragraphs 102(e) and 103 of the Tribunal's reasons 47 The appellants challenge the Tribunal's decision on the basis that it was "not aware of" or "misunderstood" the consequences of its decision and therefore the discretion miscarried. This argument is premised on the Tribunal's reference in [102(e)(iii)] and [103] to the appellants' ability to "apply for" or seek a more appropriate visa, in circumstances where the Minister failed to demonstrate what that alternative visa would have been. 48 This is a new argument which was not raised before the Tribunal. 49 On 20 October 2020, the Minister filed a Statement of Facts, Issues and Contentions in which it was submitted that the first appellant was "able to apply for other visas that do not have the same stringent obligations" and there was no evidence the third appellant could not obtain a "student visa". On 16 November 2020, the appellants filed opening submissions which did not challenge these submissions and nor was this issue raised by the appellants in the hearing held on that same day. On 11 February 2021, the appellants filed written "post-hearing submissions" which similarly did not challenge the Minister's submission that alternative visas were available, or otherwise submit that the Minister had failed to demonstrate what those alternative visas would have been. 50 Therefore, the only material before the Tribunal was the uncontested submission by the Minister that other visas were available to the appellants. Given that the appellants could have, but chose not to, challenge that submission, or assert that the Minister had failed to establish what those alternative visas were, or themselves demonstrate that no other visas were available to them, the conclusion that other more appropriate visas were available to the appellants was open to the Tribunal on the material before it. 51 There is an additional problem with the appellant's challenge to the Tribunal's reasons. 52 Before the primary judge, the appellants complained that there was no evidence before the Tribunal about what more appropriate visas the appellants should have applied for: [46] J. Further, the two affidavits sought to be relied upon by the appellants in this appeal were directed to the issue of whether the first appellant had been able to obtain an alternative visa in lieu of the one which had been cancelled. 53 It is therefore apparent that the issue of the availability of alternative visas was something which could have been the subject of evidence adduced by the Minister in the Tribunal had it been raised. However, as observed by the Full Court in Stolyar v Scott (Trustee) [2023] FCAFC 61 (Banks-Smith, Downes and Jackman JJ) at [62]: A party on appeal is generally bound by its conduct of the case at first instance, and is not entitled to raise new issues on appeal. In a case where, had the issue been raised in the Court below, evidence could have been given which by any possibility could have prevented the point from succeeding, the point cannot be taken afterwards… (citations omitted.) 54 Because it would be procedurally unfair to the Minister to do so, the appellants should not be permitted to advance this argument now. 55 For these reasons, the appellants' complaint about [102(e)] and [103] is rejected.

Impending expiration of visas 56 The appellants next contend that the Tribunal was unaware of the consequences of its decision because it did not appreciate that the appellants' visas would expire on 4 August 2021, which was proximate in time to the date of the Tribunal's decision on 29 April 2021. Counsel for the appellants submitted that: …the tribunal member, in the exercise of a discretion, determined it was inappropriate for the applicant to hold a visa for a few months without explaining, obviously, why that was the case. 57 At the hearing of the appeal, the appellants conceded that the relevance of the date of expiration of the visa was not raised by them before the Tribunal. The complaint now made about the Tribunal's failure to take the date of expiration into account was also not raised by the appellants before the primary judge. Accordingly, the appellants require leave to advance what is, in effect, a new ground of appeal. 58 The appellants did not explain why this new ground was not advanced below. 59 As Gleeson CJ stated in Appellant S395/2002 v Minister for Immigration and Multicultural Affairs (2003) 216 CLR 473; [2003] HCA 71 at [1]: …this Court has insisted that, on judicial review, a decision of the Tribunal must be considered in the light of the basis upon which the application was made, not upon an entirely different basis which may occur to an applicant, or an applicant's lawyers, at some later stage in the process. (citations omitted.) See also Calvey v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCAFC 104 at [33] (Bromwich, Thomas and Raper JJ). 60 Further, the granting of leave to advance the new ground does not appear to be in the interests of justice given the advanced stage of the proceedings, and that this is now the second attempt to impugn the Tribunal's decision. 61 Finally, the new ground of appeal lacks merit because, as the Minister submitted, the date of expiration of the visa was not a matter which the Tribunal was obliged to consider or mention, there being no mandatory relevant considerations for the exercise of the discretion. 62 For these reasons, leave to advance this ground of appeal (to the extent that it is tied to this new argument) is refused.

DISPOSITION 63 For these reasons, the appeal must be dismissed. Costs will follow the event. I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Downes.

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