PROBLEMS OF INTERPRETATION: ADDING A GLOSS TO IMMIGRATION INSTRUCTIONS: PARENT RETIREMENT AND THE ANNUAL INCOME REQUIREMENT OF $60K
The Immigration and Protection Tribunal (the Tribunal) has in two decisions issued in 2023 incorrectly interpreted F3.5 Parent Retirement Category requirements. At F3.5.a(v) the Immigration Instructions require the principal applicant to “demonstrate an annual income of at least NZ$60,000…”. This is clarified in F3, 15.5.b as being “at the time of application”.
Section 72 of the Immigration Act 2009 (the IA) requires at (1) that where the Minister or an immigration officer “makes any decision in relation to an application for a residence class visa, that decision must be made in terms of the residence instructions applicable at the time the application was made and any discretion exercised must be in terms of those instructions”. Residence Instructions therefore have the full force of the law similar to statutory and regulatory provisions. It is important to note the final clause of s 72(1) indicating that any discretion must be in terms of those Instructions. This is equivalent to section 10 of the Legislation Act 2019 which requires statutory language to be interpreted from its text and in light of its purpose and context.
The two decisions against which this paper is written are AX (Parent Retirement) [2023] NZIPT 206510 (9 March 2023), (T R Cook) and BA (Parent Retirement) [2023] NZIPT 206657, 29 November 2023 (M Avia). The Tribunal’s two decisions interpret the phrase “demonstrate an annual income of at least NZ$60,000” as requiring evidence of actual earnings involving NZ$60,000 over a 12-month period prior to the lodgement of the application.
The annual income requirement is in addition to the “nominated” funds and or assets of at least $1m that will be invested in New Zealand. With regard to “settlement funds” this could be in a form of an asset which will need to be valued at least $0.5m but of course if it is in the form of a property or other asset, it may not need to generate income. The settlement fund or asset can remain wherever it is situated. It is simply a reserve. Obviously, if there is a liquidated asset of $.5m, it may generate interest, or if invested in shares or bonds, income through dividends etc.
Interpretation in New Zealand is purposive as discussed briefly above. At section 10 of the Legislation Act 2019, the meaning of legislation must be ascertained “from its text and in light of its purpose and context.” This normally requires a careful look at the wording itself but within context. The Tribunal determines under s 188(a) of the IA whether a decision is “correct in terms of the residence instructions applicable at the time of the application.” It requires careful and contextual interpretation. “Correctness” requires the Tribunal to interpret the Instructions. As a matter of general principle this ensures that the rules are transparent and that an applicant is able to ascertain what is required before the application is lodged by consulting the rules (the Operational Manual) Transparency of the rules, and the right to know what they are is central to the Rule of Law). Any unwritten “gloss” takes us away from transparency.
It is important to note that there is no specific reference in either the Parent Retirement Category Immigration Instructions, or in any advisory on the Immigration website or elsewhere that requires an applicant under the Parent Retirement Category to establish, through a set of historic documents, that $60K has actually been earned in the 12 months prior to the application being lodged. Neither is there a warning that this is a requirement. Neither would it be fair that, before filing an applicant he or she should first study the Tribunal’s rulings. That does not suggest transparency either.
The correct approach therefore is to examine the meaning of the words from its text and purpose. As it will be seen below, the writer of this paper considers that it is sufficient to establish an asset or assets that are highly likely to generate the income required at the time of filing. This should be sufficient to “demonstrate an annual income”, at the time of filing.
It is accepted that the term “demonstrate” however probably requires something more than an uncorroborated promise from a company or companies to issue the applicant an annual dividend over the following 12 months and during the investment period. It would depend on the facts of the case. If the applicant was the sole shareholder for example and it could be established that the company has had a regular income over a number of previous years, and was currently trading, then such evidence would “demonstrate” an annual income etc. A recent purchase of such a company would potentially be sufficient to “demonstrate” an income.
In another case scenario, for example an applicant may have sold an asset (house, business, or a building) and the sale proceeds are available at the time of the application but the sale has only just occurred. The money is in the bank at the time of filing. There would then be no income history of 12 months. Let us assume that the sale proceeds came to $2m, allowing $1m for the investment, $.5m to be invested in bonds and equities as the “settlement funds” and an additional say $500,000 for further investment, the interest or dividends from which would create an income of $60K (in fact the earnings from the settlement fund could also be used). This would clearly generate enough funds to establish (demonstrate) an annual income, as required, by referencing likely income (either interest from an interest-bearing account, income from bonds and/or dividends from shares and equities). The fact that the sale of the property has occurred immediately before the filing of the application would mean, under the current Tribunal’s ruling, that as the income cannot be verified over the previous 12 months, that the annual income was not “demonstrated”. This involves the making of an unwritten rule, and removes transparency.
The important point here is that the Immigration Instructions in fact only require that the documentation “demonstrate an annual income”. The Tribunal cannot with respect insert a “gloss” to suggest that the income must have been received over a 12-month period prior to the application. That adds to the rule and is therefore not “correct” in terms of the words used in the policy (Instructions).
The purpose of the annual income requirement is to ensure that during the investment period (after residence is approved) the applicant(s) is/are able to support themselves without access to New Zealand’s social security or income support. The objective of the policy stated at F3.1 is “to provide a residence class visa to those with family links to New Zealand who wish to make a significant contribution to New Zealand’s economy.” The significant contribution is of course the investment of $1m, for a four year period.
The High Court has ruled previously against importing a “gloss” in interpretation of our immigration rules. For example, see Hossain v The Chief Executive of the Department of Labour AP102/02 (21 June 2002) a judgement of J Doogue. Immigration New Zealand in Sydney had been interpreting sponsorship requirements for the sponsorship of a partner of an Australian citizen spouse for residence, as requiring an Australian passport holder (who is deemed to be a New Zealand resident), to be actually residing in New Zealand, or to have established actual residence. This was not then stated in the policy (Instructions). It now is. The general objective of this sponsorship policy was directed at maintaining family unity, so that an Australian citizen could move to New Zealand with his or her partner.
The Court held that the refusal to grant the spouse residence because the sponsoring Australian citizen-deemed-to-be-a-New Zealand-resident had not yet taken up residence in New Zealand was incorrect. It added an additional requirement, not found in the wording at the time.
The Tribunal (the Residence Appeal Authority at the time) had earlier refused the appeal and the matter had therefore gone on appeal to the High Court on a point of law. The Crown had argued that the Tribunal was entitled to take a less than “literal” interpretation and that the Australian passport holder could first progress into New Zealand, settle down and then make the residence application. The Court held that to adopt an interpretation which would require the sponsoring spouse to first come to New Zealand to set up residence as containing an element of “unreality in respect of human affairs inconsistent with the general policy expressed in R1 and F1 and with the apparent intent of paragraph F2.1 (see [43]). “The Court went on to say at [44]:
“…If the Government residence policy had as a requirement that the Australian passport holder should have to reside in New Zealand before that passport holder is able to sponsor his or her spouse’s residence in New Zealand, there would be no reason whatever why the provision relating to spouses and de-facto in Parts F.2 and F.3 should not reflect the same approach is contained with the succeeding parts of the Government residence policy related to parents, children and siblings. Those parts have relatively clear and unambiguous statements as to the residence requirement of the sponsor. The very absence of any corresponding requirement in respect of spouses and de factos carries with it a strong inference that there is no corresponding obligation in those cases……”
The Court continued at [47]:
“…If there is any wish to control the entry of spouses or person who are entitled to enter in New Zealand, one would expect it to be spelt out in relation to tests such as that rather than a test dependent upon the sponsoring spouse having resided within New Zealand for a particular term. To require such a test, which would inevitably involve the spouses being separated and being apart, would appear to be contrary to the whole philosophy underlying the provisions relating to spousal sponsorship or the sponsorship applicable to de-facto relationships…..”
I have not referred to the detailed analysis involving the approach to interpretation of immigration policies (now Immigration Instructions) also discussed by Doogue J in Hossain. In that case both parties (the appellant’s counsel and the Crown) accepted the ruling of the Court of Appeal in Patel v Chief Executive of Department of Labour [1997] NZAR 264, 271 and the approach taken by Bingham J (as he then was) in the UK, in R v Immigration Tribunal, Ex-parte Shaikh [1981] 3 All ER 29, 35. The cases pointed against allowing rules to be interpreted as having requirements that are not expressly stated.
This approach to interpretation of Instructions also arose in a case before Brewer J: JPH Investments Ltd and Jagmeet Gill v Chief Executive of MIBIE, [2018] NZHC 1707. In that case an immigration officer held that a diploma in business management was not relevant to the management of a restaurant business (Bolliwood). The court accepted that the job offer was broadly relevant to the qualification that had been achieved and that it was not required in the Instructions that there be a direct correlation between the job offer and all aspects of the qualification (such as there could be with a restaurant management qualification). A holistic view of the appellant’s qualifications was required in interpreting the Instruction at WB1.5. Similarly, the broad relevance of qualifications to a job was all that was required for a post-study work visa. Requiring a “specific” qualification in restaurant management was not required by the wording.
With reference to the rulings in BA and AX, there is no express requirement to establish documentation proving that $60K has been earned over the previous 12 months. The requirement in the instructions is that the applicant must “demonstrate” the income.
As indicated above, there could be an asset or a newly liquidated sum which would clearly give rise to the required income. It would therefore be open to the applicant to provide sufficient documentation confirming that such income was (then) available (and forward looking) in order to meet the requirement in the instructions centred around the word “demonstrate.”
To “demonstrate” an annual income can involve establishing such income over the last 12 months, but that is not the only way of confirming it. Similarly, our Sydney Office was not entitled to rewrite “Australian passport holder” as “Australian passport-holder-now-established-as-a-resident in New Zealand.”
To require the income to have been earned over the previous 12 months (prior to the application) in order to “demonstrate an annual income” involves the addition of a “gloss,” and is an unfair and unreasonable departure from the wording of the Instructions (an unwritten rule). It is unfair because there was no warning that this is a requirement. A careful reading of F3 clearly establishes if there are assets or funds that can establish the three elements ($1 million investment funds, 0.5 million settlement funds and $60K per annum) then the application can be made, and it meets the Immigration Instructions. It ticks all the boxes.
It is a breach of natural justice (and the rule of law) if the rules turn, not on the text of the Immigration Instructions themselves but on some knowledge that a few individuals might have, (such as immigration lawyers or other individuals who have studied the rulings of the Tribunal in AX and BA). It may be that on the facts of an individual case, the proposed income does not “demonstrate” an annual income, at the time the application is lodged. It will depend on the case. However, a flexible interpretation is indicated in the Immigration Instructions themselves. For example, F3.15.25 indicates examples of how an annual income may be established (but is not limited to those descriptors). This involves pensions, earnings from rental properties, dividends from share portfolios, interest from investments, profits from company ownerships and share market trading. The pension might have only just arisen, upon reaching a threshold age, for example (and not have been held over the previous 12 months). There is no requirement that the pension has already been earned over the previous 12 months. That is why the Instructions just require the applicant to “demonstrate” the income. The word “demonstrate” is suggestive of that flexibility. The Tribunal incorrectly takes away that flexibility.
Clearly the phraseology in F3.15.25 when juxtaposed against the requirement to “demonstrate an annual income” and therefore suggests a forward-looking exercise. Of course, the evidence to establish a future profit from company ownership or share dividends, etc or interest from investments, must be credible and the documentation must establish that the income is likely. At no point in time, however, is it a backward-looking assessment in the Instruction itself, though of course past performance would be a bonus. The previous 12 months may help, but is not a requirement. There is no rule therefore that requires proof of earnings over the previous 12 months. The policy (Immigration Instructions) clearly indicates an “evaluative” decision. That cannot be avoided. In the case scenario suggested above where through an asset sale, if there then is a liquidated fund in the bank at the time of filing (which would normally attract an income from interest which would then be predictable), the conclusion that an income is “demonstrated” seems rather straightforward. There is money in the bank. Banks pay interest, established companies pay dividends.
Delays
There is a further concern. If immigration processing delays cases for several years as happened during Covid, it may be the case that the applicant’s income, by the time the case is decided, is then well established. Where circumstances alter in the applicants favour, then of course Immigration New Zealand can accept the “refiling” of a case so that it can be determined at the current time. Possibly because counsel in each of the above cases did not refer to such a remedial proposal as suggested here, the Tribunal could not consider this issue. If by the time the case is being considered, there is 12 months of such income, then the case meets policy in accordance with this (incorrect) interpretation at the “re-filing” point. The Immigration Instructions presuppose immediate processing, which in fact often is not the case.
When an appeal is lodged it can only be tested on the terms of the refusal (unless special circumstances apply). However, if at the time of application it is not clear that an income of $60K was then available (and it would be very clear if there is a liquidated sum of money in the bank) then, the intention of policy may be later met if during the long delays (and of course we have had delays of up to 3 years) the evidence concerning the annual income of $60K has crystallised, or is made clearer.
If an exception to instructions cannot be granted in this manner to acknowledge the current income, then a refiling (payment of a new filing fee could be negotiated), with all the documents in the current application to be carried across to the new application whereby it would then be established that at the time of the (new) application, policy (instructions) has been met. There have been many instances where Immigration New Zealand has accepted an improving situation favourably through the mechanism of a “refiling,” over many years. That could be “negotiated” on a case-by-case basis and of course it would depend on the circumstances involved.
20 August 2024
D J Ryken
Ryken and Associates