FEDERAL CIRCUIT COURT OF AUSTRALIA
TENG & ORS v MINISTER FOR IMMIGRATION & ANOR	[2015] FCCA 1197	

Catchwords: 
MIGRATION – Judicial review of decision of the Migration Review Tribunal – Tribunal refused application for Business Skills (Residence) (Class DF) visas – Applicants did not satisfy cl.892.211 of Schedule 2 of the Migration Regulations because the main business nominated by the Applicant did not meet the definition of a qualifying business.	

Legislation:
Acts Interpretation Act 1901 (Cth), s.15AA
Export Expansions Grant Act 1978 (Cth), s.4
Federal Circuit Court Rules 2001 (Cth), r.16.01
Migration Act 1958 (Cth), s.65
Migration Regulations 1994 (Cth), Schedule 2, cls.892.211 & 892.221 and regs.1.03 & 1.11	

Lobo v Minister for Immigration and Multicultural and Indigenous Affairs [2003] 132 FCR 93
Li v Minister for Immigration and Citizenship [2011] HCA Trans 309
Trevisan & Anor v Commissioner of Taxation (1991) 29 FCR 157
GTK Trading Pty Ltd v Export Development Grants Board (1981) 40 ALR 375	

First Applicant:	Ching-Feng Teng	

Second Applicant:	MEI-LI LINH	

Third Applicant:	SHAO-CHIEH Teng	

Fourth Applicant:	WEN-CHIEH	

First Respondent:	Minister for Immigration & Border Protection	

Second Respondent:	Migration Review Tribunal	

File Number:	ADG 30 of 2014	

Judgment of:	Judge Simpson	

Hearing date:	15 October 2014	

Date of Last Submission:	15 October 2014	

Delivered at:	Adelaide	

Delivered on:	18 May 2015	

REPRESENTATION
Counsel for the Applicant:	Mr S D Ower	

Solicitors for the Applicant:	McDonald Steed McGrath	

Counsel for the Respondents:	Mr S A McDonald	

Solicitors for the Respondents:	Australian Government Solicitors	

ORDERS
(1)	The Application filed on 23 January 2014 is dismissed pursuant to r.16.01 of the Federal Circuit Court Rules 2001 (Cth).
(2)	The Applicants shall pay the First Respondent’s costs fixed in the sum of $6,646.00.

(1)	
FEDERAL CIRCUIT COURT 
OF AUSTRALIA 
AT Adelaide	
ADG 30 of 2014
Ching-Feng Teng	
First Applicant

MEI-LI LINH	
Second Applicant

SHAO-CHIEH Teng	
Third Applicant

WEN-CHIEH	
Fourth Applicant

And

Minister for Immigration & Border Protection	
First Respondent
Migration Review Tribunal	
Second Respondent

REASONS FOR JUDGMENT
Introduction
1.	I have before me an application for judicial review of a decision of the Migration Review Tribunal (“the Tribunal”) made on 19 December 2013 to affirm a decision of a Delegate to refuse to grant the Applicants’ Business Skills (Residence) (Class DF) visas under s.65 of the Migration Act 1958 (Cth) (“the Act”).  
Orders sought.
2.	The Applicants seek the following orders:
	“1.	An order in the nature of certiorari to quash the decision of the second respondent made on 19 December 2013 in Migration Review Tribunal case number 1108188.
	2.	A writ in the nature of mandamus requiring the second respondent to review the decision of the Delegate of the First Respondent made on 19 July 2013 according to law.
	3.	An order that the First Respondent pay the Applicant’s costs of this application.
	4.	Such further or other orders as this Honourable Court sees fit.”
Grounds of review
3.	The Applicants’ grounds of the Application are as follows:
	“1.	The second respondent committed jurisdictional error in determining that the policy as expressed in PAM was determinative of the question whether the business activity undertaken by the Applicant was a “qualifying business”, even though the second respondent’s interpretation of the policy expressed in PAM that led to an outcome that was not consistent with the Migration Legislation or Regulations.
	Particulars
	1.1	The second respondent noted that the term “qualifying business” is defined as “a business that operates for the purpose of making profit through the provision of goods, services or goods and services to the public” (MRT decision paragraph 12).
	1.2	The second respondent accepted that the oaten hay exported by the Australian enterprise was exported for the purpose of being sold to the public (MRT decision paragraph 22), but found that the fact that the oaten hay was exported initially to an intermediary company and then sold to the public precluded a finding under PAM that the goods were sold to the public.
	2.	The second respondent committed jurisdictional error in adopting a perverse interpretation of the term “qualifying business” which was not consistent with the legislative intention or the purpose of the visa subclass 892.
	
	Particulars
	2.1	The second respondent found that the Australian enterprise was not a qualifying business because goods and services were not provided to the public.  It is not the intention of parliament that an Australian business that sells goods to individuals and businesses overseas through an intermediary company be precluded from meeting the definition of “qualifying business”.
	3.	The second respondent committed jurisdictional error in finding (MRT decision paragraph 20) that the “only customer” of ACT R&D Corporation Pty Ltd (the Australian enterprise) is ACTS R&D Corporation Company Ltd (Taiwan).
	Particulars
	3.1	Having found that the oaten hay exported by the Australian enterprise was exported for the purpose of being sold to the public but through an intermediary company (the Taiwan business), the second respondent found that the Taiwan company was the “only customer” of the Australian enterprise.  The Applicant submits that all of the end users in Taiwan were in fact customers of the Australian enterprise.
	4.	The second respondent committed jurisdictional error in determining that the definition of the term “qualifying business” in Migration Regulation 1.03 required that the Australian enterprise be operated for the purpose of making profit through the provision of goods directly to the public.
	Particulars
	4.1	The definition of the term “qualifying business” does not preclude a business meeting the definition where goods and services are sold to the public through an intermediary business overseas.”
Background
4.	There are four named Applicants in these judicial review proceedings.  The First Applicant (who, in these reasons I will refer to as “the Applicant”), is a Taiwanese national.  He applied for a Business Skills (Class DF) Subclass 892 visa.  Each of the Second, Third and Fourth Applicants were included in that application as dependents of the First Applicant.  If the Applicant failed to be granted a visa, then, so too would the dependent applicants.
The Delegate
5.	On 20 December 2010, the Applicants applied to the Department of Immigration and Border Protection (as it was then called) for Business Skills (Residence) (Class DF) visas.
6.	As part of his application to the Delegate of the Minister for the visa, the Applicant submitted a Form 1217 “Business Skills profile: Business Owner (Resident)”.  In the section of the form headed “Main business 1”, the Applicant recorded the business name as “ACTS R & D Corporation Pty Ltd” (“the Australian Company”).  In answer to the question in the form, “What was/is the major activity of this business?” the Applicant responded, “To export oaten hay to Taiwan from Australia”.
7.	The Delegate refused the visa application as the Applicant did not satisfy cl.892.211 of Schedule 2 to the Migration Regulations 1994 (Cth) (“the Regulations”) because the main business nominated by the Applicant did not meet the definition of a qualifying business.
The Tribunal
8.	On 10 August 2011, the Applicants filed an application for review of the Delegate’s decision to the Migration Review Tribunal (“the Tribunal”).
9.	The Applicants appeared before the Tribunal on 4 November 2013 to give evidence and present argument.
10.	The Applicants were represented at the review by their registered migration agent.
11.	The Tribunal accepted that the Australian Company carried on a business of exporting oaten hay and selling it to another company owned by the Applicant that was based in Taiwan.  That other company was named “ACTS R & D Corporation Co Ltd (Taiwan)” (“the Taiwanese Company”).  The Tribunal held that the Australian Company’s provision of goods to the Taiwanese Company was not the provision of goods “to the public” and that, accordingly, one of the criteria for the grant of the visa was not satisfied.
12.	The Tribunal ultimately concluded on 19 December 2013 that the decision under review should be affirmed, and published its reasons.
13.	The Applicants filed an application to this Court on 23 January 2014 seeking judicial review of the Tribunal’s decision.
The legislation
14.	It is necessary to examine the legislative requirements for the grant of the visas sought by the Applicants.
15.	The criteria for the grant of a Business Skills (Class DF) Subclass 892 visa are set out in cl.892 of Schedule 2 of the Regulations.  Relevantly, one of the primary criteria to be satisfied at the time of the application was cl.892.211(1).  That clause stated:
	“The Applicant has had, and continues to have, an ownership interest in 1 or more actively operating main businesses in Australia for at least 2 years immediately before the application is made.”
16.	Clause 892.221 of Schedule 2 provides, as a time of decision criteria, that the Applicant must continue to satisfy the criterion in cl.892.211.
17.	The expression “main business” in cl.892.211(1) is defined in reg.1.11(1) of the Regulations in the following terms:
	“For the purpose of these Regulations and subject to subregulation (2), a business is a main business in relation to an Applicant for a visa if:
	(a)	the Applicant has, or has had, an ownership interest in the business; and
	(b)	the Applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business; and
	(c)	the value of the Applicant’s ownership interest, or the total value of the ownership interests of the Applicant and the Applicant’s spouse or de facto partner, in the business is or was:
	(i)	if the business is operated by a publicly listed company – at least 10% of the total value of the business; or
	(ii)	if:
	(A)	the business is not operated by a publicly listed company; and
	(B)	the annual turnover of the business is at least AUD400 000;
	at least 30% of the total value of the business; or
	(iii)	if:
	(A)	the business is not operated by a publicly listed company; and 
	(B)	the annual turnover of the business is less than AUD400 000;
	at least 51% of the total value of the business; and
	(d)	the business is a qualifying business.”
18.	The expression “qualifying business” in reg.1.11(1)(d) is in turn defined in reg.1.03 as follows:
	“qualifying business means an enterprise that:
	(a)	is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public; and
	(b)	is not operated primarily or substantially for the purpose of speculative or passive investment.”
19.	One of the issues in this case is whether the Tribunal correctly interpreted the definition of “qualifying business” in reg.1.03 of the Regulations.  
20.	A strict and literal interpretation of the terms of the definition of ‘qualifying business’ will have an unfortunate consequence for the Applicant.  The Applicant will not be granted the visa that he seeks as the Applicant’s main business will not be a qualifying business.  Without the visas the Applicants will not be able to continue with their trade with Australia.
21.	A helpful synopsis of the Applicant’s case has been provided in the Applicant’s Outline of Submissions.  I have considered it appropriate to include below a portion of those submissions as I believe that it provides a good understanding of the legal and commercial issues involved in this case.
Portion of Applicant’s Outline of Submissions
	“An Australian company fully owned and operated by Mr Teng exports oats to Taiwan.  It does so by formally selling those oats to a Taiwanese company fully owned and operated by Mr Teng.  The Taiwanese company then formally sells the oats to farmers, and transfers the money paid (after payment of duty and tax) back to the Australian company.  All profit is made by the Australian company.
	The Migration Review Tribunal (“the Tribunal”) was required to be satisfied that Mr Teng’s enterprise “is operated for the purpose of making profit through the provisions of goods … to the public”.
	It refused Mr Teng (and his family) a visa on ground that the Australian company “does not sell to the public; his Taiwanese company does” (CB 381 [23]).
	In Commissioner of Taxation v Ryan (2000) 201 CLR 109 at [79], Kirby J said:
	“Literalism was the common approach to statutory construction observed by courts of the common law, including this Court, in 1963 … However, two developments in the past forty years have modified this approach.”
	His Honour went on to  note that the first such development was legislation permitting resort to extrinsic materials such as s.15AA of the Acts Interpretation Act 1901 (Cth) (at [80] – [81]), and then continued (at [82]):
	“Secondly, … moves of the common law itself to adopt a more purposive approach to the task of statutory construction.  … In the last decade, there have been numerous cases in which members of this Court, referring to the statutory and common law developments, have insisted that the proper approach to the construction of federal legislation is that which advances and does not frustrate or defeat the ascertained purpose of the legislature, to the full extent permitted by the language which the Parliament has chosen.  Even to the point of reading words into legislation in proper cases, courts will now endeavour, more wholeheartedly than in the past, to carry into effect an apparent legislative purpose.  Examples of this approach abound in Australia, England and elsewhere.  This Court should not return to the dark days of literalism.”
	Regrettably, the Tribunal in this case has not only returned to the dark days of literalism in its construction of the relevant words (being the definition of “qualifying business” in r 1.03 of the Migration Regulations 1994 (Cth), but done so in a manner that has had a “capricious and absurd result” (Cf Ryan at [83]).”
22.	I do not agree with the submissions of the Applicant that the decision of the Tribunal in this case resulted in a “capricious and absurd result”.  Nor do I believe that, were the Court to decide in favour of the Respondents in this case, that this would necessarily be a “return to the dark days of literalism”.  
Submissions and conclusions
23.	I accept the Applicant’s proposition that an error by the Tribunal as to the construction of a criterion for a visa is a jurisdictional error.
24.	The Applicants submit that the Tribunal has construed the Regulations, “in the most literal of fashions (namely that) an Australian company only qualifies if it enters into contracts with third parties which may bring profit.”  To adopt a purposive approach to this legislation, it is necessary to first search for the purpose of the legislation.  It is not sufficient to simply examine the consequences of the matter at hand and to then interpret the legislation in the way most convenient and acceptable to the parties.
25.	I note that s.15AA of the Acts Interpretation Act 1901 (Cth) requires that the interpretation that would best achieve the purpose or objects of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to any other interpretation.  I note also what was said in Trevisan & Anor v Commissioner of Taxation that:
	“Section 15AA requires a court to prefer one construction to another. Such a requirement can only have meaning where two constructions are otherwise open. The section is not a warrant for redrafting legislation nearer to an assumed desire of the legislature. It is not for the courts to legislate; a meaning, though illuminated by the statutory injunction to promote the purpose or object underlying the Act, must be found in the words of Parliament.” 
26.	The case of GTK Trading Pty Ltd v Export Development Grants Board provides a good example of the application of s.15AA.  Their Honours Evatt, Deane and Ellicott JJ decided that a reference in s.4 of the Export Expansions Grant Act 1978 (Cth), to “goods … produced … in Australia” should include fish caught in the seas above the Australian Continental shelf.  This being a construction of the Act was adopted by the Court with an eye aimed at clearly promoting the purpose and object underlying the section.
27.	The Applicants here have not put forward a construction of the words that define a qualifying business for the purposes of reg.1.03.  They seem to simply say that the Court should ignore the requirement that the company make profits by sale to the public.
28.	The Applicant submits that the “purpose of the relevant definition in reg.1.03 is clear from its text: to prevent nominal, false or mere “paper” enterprises or corporations being established in order to qualify for the visa.  This is extended by paragraph (b) to prohibit enterprises that engage in “speculative” or “passive” investments from being qualifying businesses.”  The Applicants then submit that there is no suggestion that the Applicant’s business falls afoul of this purpose.  They say that the establishment of the Australian Company as an adjunct to the Taiwanese Company was clearly not a mere nominal, paper or false exercise.  They say that the evidence was clear; namely that the goods were being sold to farmers (“the public”), but needed to be formally paid for by reason of the Taiwanese Company due to the restrictions placed on an import licence.  They say that whilst there may (or may not) have been a contractual relationship between the Australian Company and the farmers, there is no doubt that the sale to farmers for profit was the Australian Company’s purpose.  They further submit that the fact that the sale was done through another company owned and operated by the First Applicant was irrelevant and say that the purpose was to make a profit for the Australian Company and that the Taiwanese Company retained no money after payment of duty and tax.
29.	The Respondent submits that none of the grounds of review have merit.  They submit that there has been no jurisdictional error and the application should therefore be dismissed.
30.	The Respondent also submits, if the order sought by the Applicants were to be made, that the Tribunal would be required to review the decision of the Minister’s Delegate according to law.  The Tribunal would then be found to refuse to grant the visa because the Applicant is not in Australia, with the result that it would be futile to grant the relief sought.
31.	I propose to address the issues in this case at this stage, without regard to the consequences if the Applicant is successful in its Application.
Ground one
32.	The first ground of judicial review asserts that the Tribunal determined that the policy “as expressed by PAM”, (ie the Department’s Procedures and Advice Manual No.3) was determinative of the question of whether the business activity undertaken by the Applicant was a “qualifying business”.  The Tribunal stated at paragraphs 18 to 20 in its reasons that PAM only provides some guidance and that it did not have a legally binding status. 
33.	In my opinion, the Tribunal correctly recognised that the policy contained in PAM was only a guide to the application of the legislation and did not have a legally binding status.  The Applicant’s suggestion that the Tribunal treated the policy as “determinative” of the question of whether the business activity undertaken by the Applicant was a “qualifying business” cannot therefore be sustained.  
34.	The fact that the Tribunal adopted a meaning of the phrase, “the provision of goods … to the public”, that was at least broadly consistent with the guidance set out in PAM does not in my view, demonstrate that the Tribunal treated the policy as either binding upon it or determinative of the question in had to decide.
35.	In my opinion, ground one fails.
Ground two
36.	The Applicants submit that the Tribunal committed jurisdictional error in adopting a perverse interpretation of the term “qualifying business” which was not consistent with the legislative intention or the purpose of the visa subclass 892.  The Applicant then gives particulars of the ground stating that the Tribunal found that the Australian Company was not a qualifying business because goods and services were not provided to the public, and that it was not the intention of Parliament that an Australian business that sells goods to individuals and businesses overseas through an intermediary company, be precluded from meeting the definition of “qualifying business”.
37.	The Applicant has failed to explain on what basis he has come to the conclusion that he has about the relevant legislative “intention” or the “purpose of visa subclass 892”.
38.	The Applicant appears to be suggesting that the Tribunal fell into jurisdictional error by adopting an erroneous construction of the phrase contained within the statutory definition of “qualifying business” in reg.1.03, namely, “operated for the purposes of making profit through the provision of goods to the public”.  The Applicant appears to be arguing that this phrase should be interpreted such that if the goods to be supplied by the enterprise, in this case the Australian Company, are ultimately supplied to the public, that this should be sufficient to make the enterprise a qualifying business.  
39.	It is quite correctly pointed out by the Respondents in their submissions that the Tribunal required a more direct connection, namely, that the enterprise must make its profit through (or, if you will, by virtue of) the provision of goods to the public.
40.	The Respondent’s Outline of Submissions contained the following well expressed and thoughtful response to the Applicant’s submissions:
	“The applicant’s submissions effectively seeks to break up the expression “operated for the purpose of making profit through the provisions of goods ... to the public” into its constituent parts and to concentrate on the concept of “provision of goods to the public”, divorced from its context and its place in the remainder of the expression.  It ignores the import of the preposition, “through”.
	The expression “operated for the purpose of making profit through the provision of goods … to the public”, when considered as a whole, does not merely require that the applicant’s business be operated for the purpose of profit and that that is supply goods or services to someone, which are then ultimately provided to the public.  Rather, what is required to be demonstrated is a particular kind of connection or relationship between the business of the Australian company and the provision of goods to the public: it must be shown that the Australian company derives profit through the provision of goods to the public.  The word “through”, in that context, can only sensibly mean “by virtue of”.
	The Australian company makes its profit through the provision of goods to the Taiwanese company.  Importantly, it makes that profit regardless of whether the goods that it supplies to the Taiwanese company are ever provided to the public.  The Australian company having provided particular goods to the Taiwanese company, the profit made by the Australian company would be unaffected by a subsequent choice the Taiwanese company might make as to how it should deal with those goods: provision to the public, indefinite warehousing, trading on commodities markets, dumping into the sea, etc.
	As well as taking proper account of the place of the words “provision of goods to the public” in the entire legislative expression of which they form a part, the requirement that the enterprise itself derive a profit through providing goods and services to the public also tends to reduce the prospect of the setting up of separate but related entities, operating distinct but interconnected enterprises, in such a way as to ensure that, while the turnover passes through the business of the Australian company, the bulk of the group’s profit is made in a country other than Australia.  (It is not suggested that the applicant’s businesses were established with this intent).  On the other hand, the construction urged by the applicant would facilitate just such a practice.
	Moreover, if it were sufficient that an Australian business make profit by its participation in a process which results in the provision of goods or services to the public, then there would be no textual basis to distinguish between a business which itself supplies goods to a single related overseas company, which goods ultimately end up in the hands of the public, and a business which supplied goods (say, plant or machinery used to manufacture consumer goods, or component parts of consumer goods) exclusively to a single related overseas company, which then uses those goods to produce other goods which it provides to the public.  It is suggested that the latter plainly is not the kind of business contemplated by the definition of “qualifying business””.
41.	The Respondent then points out that had the Applicant and his legal advisors fully analysed the legal position, there might have been a way that the Applicant could have overcome the present impediment and to have obtained the visa.  He continues:
	“It is to be emphasised that the visa application was made on the basis that the relevant business was that carried on by ACTS R & D Corporation Pty Ltd.  It might have been possible for the applicant to seek a visa on the basis that the Australian company and the Taiwanese company were both involved in the same “enterprise”, and that that enterprise jointly carried on by the two companies was a “qualifying business” and the relevant “main business”.  However, the applicant has never advanced his application on that basis and did not provide evidence which would have enabled the Tribunal to find as a matter of fact that the Australian and Taiwanese companies carried on a single enterprise.”
42.	I adopt the above portions of the Respondent’s outline as part of my reasons.
43.	For the above reasons, in my opinion, the Tribunal correctly understood and interpreted the phrase, “qualifying business”.  There was no jurisdictional error.  Ground two is therefore without merit.
Ground three
44.	This ground alleges that the Tribunal committed jurisdictional error in finding that the only customer of the Australian Company was the Taiwanese Company.  For the reasons that follow, this ground is without merit.
45.	The Tribunal identified the evidence that it relied upon for its finding that the only customer of this Australian Company was the Taiwanese Company as the evidence provided by the Applicant to the Department and the Tribunal.  This evidence included commercial invoices.  Those documents proved that the only purchaser of the goods of the Australian Company, and therefore its only customer, was the Taiwanese Company.  Correspondence from the Applicant’s solicitor conceded this issue.  In the letter from Mr Teng’s solicitor dated 25 October 2013 it is stated that, “the officer of the Department correctly identified that the businesses (ie the Australian Company businesses) are imported by a single Taiwanese entity, ACTS Taiwan (ie the Taiwanese Company).”
46.	The letter continued, “On the basis that the exports were being supplied to a single entity and on which was not independent of the Australian exporter, and wholly owned (by) Mr Teng, the officer found that the goods were not being provided to the public”.
47.	To suggest, as ground three does, that all the end users in Taiwan were in fact customers of the Australian Company, is without logic and blatantly incorrect.
48.	Ground three does not reveal a jurisdictional error and should be dismissed.
Ground four
49.	The Applicant does not pursue ground four.
Conclusion
50.	As ground one, two and three are all without merit, as jurisdictional error is not revealed and as ground four is abandoned, the application should be dismissed with costs.
Orders
51.	I make the orders to be found at the beginning of these reasons.
I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of Judge Simpson

Associate:  

Date: 18 May 2015