1406689 (Migration) - [2016] AATA 4364

1406689 (Migration) [2016] AATA 4364 (8 September 2016)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Mr Ziqing Ji
CASE NUMBER:  1406689
DIBP REFERENCE(S):  CLF2013/190776 CLF2013/190777 CLF2014/43094 CLF2014/43095
MEMBER:Marten Kennedy
DATE:8 September 2016
PLACE OF DECISION:  Adelaide
DECISION:The Tribunal affirms the decision not to grant the applicant a Business Skills (Residence) (Class DF) visa.

Statement made on 08 September 2016 at 1:22pm

STATEMENT OF DECISION AND REASONS

This is an application for review of a decision made by a delegate of the Minister for Immigration on 21 March 2014 to refuse to grant the visa applicant a Business Skills (Residence) (Class DF) Subclass 892 visa under s.65 of the Migration Act 1958 (the Act).
The visa applicant applied for the visa on 9 August 2013. The delegate refused to grant the visa on the basis that the applicant failed to meet an essential criterion for the grant of the visa at cl.892.212 of Schedule 2 to the Regulations.
At the time of the delegate’s decision, the issue of concern to the delegate was whether the first named applicant (hereafter the applicant) satisfied the requirements of cl.892.212 of Schedule 2 to the Regulations. That provision requires:
Unless the appropriate regional authority has determined that there are exceptional circumstances, the applicant meets at least 2 of the following requirements:
(a) in the period of 12 months ending immediately before the application is made, the main business in Australia, or main businesses in Australia, of the applicant, the applicant's spouse or de facto partner , or the applicant and his or her spouse or de facto partner together: (i) provided an employee, or employees, with a total number of hours of employment at least equivalent to the total number of hours that would have been worked by 1 full-time employee over that period of 12 months; and
(ii) provided those hours of employment to an employee, or employees, who:
(A) were not the applicant or a member of the family unit of the applicant; and
(B) were Australian citizens, Australian permanent residents or New Zealand passport holders;
(b) the business and personal assets in Australia of the applicant, the applicant's spouse or de facto partner , or the applicant and his or her spouse or de facto partner together:
(i) have a net value of at least AUD 250,000; and
(ii) had a net value of at least AUD 250,000 throughout the period of 12 months ending immediately before the application is made; and (iii) have been lawfully acquired by the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together;
(c) the assets owned by the applicant, the applicant’s spouse or de facto partner , or the applicant and his or her spouse or de facto partner together, in the main business or main businesses in Australia:
(i) have a net value of at least AUD 75,000; and
(ii) had a net value of at least AUD 75,000 throughout the period of 12 months ending immediately before the application is made; and (iii) have been lawfully acquired by the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together.
At the time of application, the applicant relied on his association with a business operated by ‘Home Cheer Wood Industry Pty Ltd ACN 135 886 010’, trading as ‘Homecheer’ as his ‘main business’. The 12-month period ending immediately before the date of application referred to in cl.892.212 was 9 August 2012 to 8 August 2013.
At the time of the delegate’s decision, the delegate had examined the evidence available against the latter two subclauses. The delegate identified however that the financial information provided covering the financial years ending 30 June 2012 and 30 June 2013 demonstrated that the applicant’s interest in the business was a liability exceeding $230 000 in each year. The delegate had examined the balance sheet of the company and identified significant unsecured loans from the applicant (and thus purporting to be assets of the applicant), but was not satisfied that the bulk of the loan claims were supported by evidence. The delegate recognised only loans to the business by the applicant supported by conclusive evidence, and after doing so calculated that the requirements of neither cl.892.212(b) or (c) were met. As the appropriate regional authority had not determined that there were exceptional circumstances, it followed that the applicant could not meet cl.892.212, and the delegate refused the visa.
The applicant was first invited to appear before the Tribunal on 3 July 2015, but the hearing was postponed at the applicant’s request to 18 August 2015. It emerged at the hearing that the applicant had attempted to lodge several hundred folios of business records with the Tribunal shortly before the hearing, but the Tribunal’s computers had rejected the lodgement for being too large. That hearing was abandoned, and the large volume of material was subsequently received in hard copy.
Subsequent examination of those records and further investigations led me to seek the assistance of the Department to inspect the business’ premises. It is convenient to reproduce subsequent correspondence from the Tribunal, issued pursuant to section 359A of the Act, setting out the evidence provided to the Tribunal from the inspection and raising new issues for determination in this review:
Context
As you are aware, the visa was refused by the Department because insufficient evidence was provided to the delegate to verify certain loans made by you to your company ‘Home Cheer Wood Industries’ Pty Ltd.
In this regard, you are required to demonstrate assets in your ‘main business’ over a certain amount in relation to a particular time frame for the purposes of cl.892.212 of Schedule 2 to the Regulations).
You have provided Chinese financial documentation to the Tribunal that may serve to demonstrate that you have met liabilities of your Australian company through personal payment of suppliers in China. The Tribunal has examined this information and will take this evidence into account.
However, cl.892.212 focuses on your ‘main business(es)’. The Department did not expressly assess whether Home Cheer Wood Industries Pty Ltd was or continues to be a ‘main business’ in respect of you.   Also, clauses 892.211 and 892.221 require you to have an actively operating ‘main business’ ‘in Australia’ at the time of application and continue to satisfy that requirement at the time of decision.
You must also be personally engaged in the day to day management of a business for it to be a ‘main business’: r.1.11 of the Regulations.
Particulars of the information that the Tribunal considers would be the reason or part of the reason for affirming the decision that is under review:
1.    The Tribunal arranged for officers of the Australian Border Force to attend the premises of Home Cheer Wood Industries Pty Ltd at 9A Fairford Street Bassendean WA to make observations and conduct enquiries. The officers were asked to make observations as to:
·whether business or manufacturing activity appears to be being conducted from those premises;
·whether any staff appear to be employed at those premises;
·whether, upon enquiry, an individual is identified as a manager of the business, and who that person is;
·whether that person knows who Mr Ziqing Ji is, and what they know of his role in the business, and for how long he has had that role, with as much detail as possible as to his tasks and involvement in the Australian business’ activities.
2.    On 2 February 2016, the Tribunal received a report advising:
·The premises at 9A Fairford Street Bassendean are vacant, and advertised for rent;
·A worker in a neighbouring business informed the officers that the premises had been vacant for a couple of months, but the previous tenant was Home Cheer;
·Colliers International are offering the premises for rent. A representative of Colliers informed the officers that the premises have been empty for at least 6 months, but possibly as much as 12 months. Colliers are the second agents asked to find tenants as the previous agent failed to find a tenant.
3.    The officers concluded that you are not operating a business at those premises, and have not done so for a considerable period of time.
4.    No alternative business premises can be identified for HomeCheer. ‘Yellow Pages’ listings identify 9A Fairford Street as the premises of the business as at the date of this letter.
5.    Departmental records disclose that you have spent minimal time in Australia after 26 August 2013.
Why the information is relevant to the review:
1. At the time of decision, you must continue to satisfy the requirement (at cl.892.211 of Schedule 2 to the Regulations) that you have an ownership interest in 1 or more actively operating main businesses in Australia: cl 892.221 of Schedule 2 to the Regulations.
2.    The ownership interest in an actively operating main business in Australia used to satisfy time of decision criterion cl.892.211 of Schedule 2 to the Regulations must be the same interest (in the same business) used to satisfy time of decision criterion cl.892.221 of Schedule 2 to the Regulations: Liang v MIAC (2009) 175 FCR 184 (in the context of subclass 845 and r.1.11 of the Regulations)
3.    The information provided to the Tribunal by the officers of the Australian Border Force to the effect that the premises of the business are vacant and have been vacant for an extended period of time would lead the Tribunal to conclude that HomeCheer Wood Industry Pty Ltd is not actively operating in Australia.
4.    For a business to be a ‘main business’ in respect of you, you must maintain direct and continuous involvement in management of the business from day to day.
5.    The information available to the Tribunal from the Department’s records of you having spent minimal time in Australia after 26 August 2013 would lead the Tribunal to conclude that you have not maintained and do not maintain continuous involvement in management of the business from day to day.
The consequences of the information being relied upon in affirming the decision that is under review.
6.    If you do not satisfy an essential criterion for the grant of the visa, the visa must be refused, and the Tribunal will affirm the decision under review.
Other matters
Recently, in response to the Tribunal’s request for updated financial information about Homecheer Pty Ltd, you have provided financial information about West Lakewood Pty Ltd. In your response, please elaborate on the relevance of this information to the decision under review.
On 23 March 2016, the Tribunal received a response to its letter, and further clarification on 1 April 2016. Business records from an entity ‘West Lakewood Pty Ltd’ were provided. An accountant for the company advised that this company had been trading since 5 January 2015. ASIC records established the company to be wholly owned by the applicant.
The applicant advised, through his agent, that Home Cheer had moved in December 2014. A statement from Mr Quanlong Hong states that a unit in Bibra Lake was made available to Home Cheer rent free because he was a shareholder of the company. The applicant had forgotten to tell the Tribunal this at the hearing of 18 August 2015, and the company had not changed its address with the bank either. The applicant said that Home Cheer traded in the first 10 months of 2015. The applicant stated that Home Cheer ceased trading at the end of 2015.
The responses of the applicant did not engage with other aspects of the Tribunal’s correspondence, such as the relevance of the activities of West Lakewood Pty Ltd, or the consequences of the purported main business of the applicant ceasing to trade in light of the requirements of time of decision criterion cl.892.221 of Schedule 2 to the Regulations.
On 2 June 2016, the Tribunal pressed the applicant again for an explanation in this regard:
On 8 March 2016, the Tribunal invited your comment or response to information obtained during a site visit of the former premises of Home Cheer Pty Ltd. A report from the site visit indicated Home Cheer was no longer trading from those premises on 2 February 2016 and had not done so for some time.
As you will recall, the Tribunal pointed out that at the time of decision, you must continue to satisfy the requirements of cl.892.211 of Schedule 2 to the Regulations that you have an ownership interest in 1 or more actively operating main businesses in Australia: cl.892.221 of Schedule 2 to the Regulations.
The Tribunal also pointed out in its letter that relevant Federal Court authority appeared to hold that the ownership interest in an actively operating Australian business at the time of decision must be the same interest in the same business at the time of decision: Liang v MIAC (2009) 175 FCA 184. See also Yang [2014] FCCA 1576.
The Tribunal had noted that you had at that point recently provided financial information pertaining to a new entity named ‘West Lakewood Pty Ltd’. The Tribunal asked you to elaborate on the relevance of West Lakewood Pty Ltd for this visa application.
In response, you provided information purporting to demonstrate that Home Cheer Pty Ltd continued to trade out of other premises until it ceased trading at the end of 2015. You provided evidence of a shareholder purporting to demonstrate that other premises were leased to Home Cheer Pty Ltd rent free. You say that you forgot to tell the Tribunal that the business had relocated.
You did not address the Tribunal’s invitation to explain the relevance of information pertaining to ‘West Lakewood Pty Ltd’, in light of the principle in Liang.
You have also provided documents referring to an entity named ‘Hywood’, and the Tribunal has noted references that this entity exported logs to China ‘on behalf of’ West Lakewood Pty Ltd.
Today, the Tribunal has learned that you intend to travel outside Australia for a period of time. The Tribunal regrets that it has not yet been able to accommodate a further hearing in this review after the receipt of further material from you in April.
In these circumstances, the Tribunal wishes to further progress this review for the time being with written submissions. In this way, the Tribunal hopes to better understand your case so that if a hearing is to be rescheduled later in the year it can focus on other matters. The Tribunal also hopes that the preparation of submissions might focus those advising you on whether there are impediments to a favourable outcome, and whether the application is futile.
The Tribunal asks you to address the following matters in written submissions:
1. How will you meet the requirements of cl.892.221 of Schedule 2 to the Regulations in circumstances where Home Cheer Pty Ltd was the only business nominated at the time of application and that business has now ceased trading?
1. As previously requested, please explain the relevance of information about West Lakewood Pty Ltd given that business was not trading for the two years ending immediately prior to the date of application?
1. Please explain what you mean by the expression that ‘Hywood’ has exported goods to China ‘on behalf of’ West Lakewood Pty Ltd, and what that means in terms of you meeting the criterion at cl.892.211 and cl.892.221 of Schedule 2 to the Regulations.
Furthermore, in the letter of 8 March 2016, the Tribunal brought to your attention information from the Department’s records indicating you had spent minimal time in Australia since 26 August 2013. The Tribunal explained that it must be satisfied that you have maintained continuous involvement in management of the business from day to day. You have not addressed this concern of the Tribunal in your response.
1. Please provide evidence demonstrating that you maintained continuous involvement in management of the business from day to day, and explain how this was possible in circumstances where you were not in Australia during much of the relevant period.
Your engagement with the Tribunal’s requests in this letter will assist the further conduct of this matter.
The Tribunal will take into account any non-response to these matters when scheduling a further hearing and considering any request for rescheduling in light of your travel out of Australia.
Please provide written submissions addressing these matters by 8 July 2016.
The applicant did not provide any response to this correspondence.
Throughout August 2016, at my instruction, the Registry attempted to make contact with the applicant’s registered migration agent to discuss the progress of the case and my request for submissions addressing these matters. The Tribunal was unable to make contact with the agent, and requests by the Tribunal for its calls to be returned were not answered.
A further hearing was arranged for today, 8 September 2016.
At the hearing, I restated the matters that had come to my attention and the concerns that had arisen in relation to cl.892.221.
In response, the applicant explained that at the time of the visa application, he had intended to continue operating Home Cheer, but had unfortunately had arguments with other shareholders. The applicant confirmed that Home Cheer had ceased operating as previously advised, although told me the company continued in existence.
The applicant explained that he had thought the new company, West Lakewood Pty Ltd, would satisfy immigration requirements. I observed that West Lakewood Pty Ltd had not been established until after the visa application had been made. I observed also that Home Cheer had intended to undertake manufacturing in Australia, but West Lakewood was an import and export company. I observed also the different ownership arrangements and I revisited the requirement at the time of application pertaining to the period of 12 months ending immediately before the application, and the authority of the Federal Court to the effect that the ownership interest in the actively operating main business in Australia used to satisfy time of decision criterion cl.892.211 of Schedule 2 to the Regulations must be the same interest (in the same business) used to satisfy time of decision criterion.
CONSIDERATION
It is convenient to extract the relevant requirements of cl.892.211 (to be satisfied at the time of application) and cl.892.221 (to be satisfied at the time of decision), as it is those criteria upon which resolution of this review now turns:
·Cl.892.211 of Schedule 2 to the Regulations relevantly provides as follows:
(1)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.
…
·Cl.892.221 of Schedule 2 to the Regulations relevantly provides as follows:
“The applicant:
(a) continues to satisfy the criteria in clauses 892.211 …
The meaning of the term ‘main business’ is itself regulated by r.1.11, r.1.03 of the Regulations and section 134(1) of the Act. It is not however necessary to elaborate on those requirements.
As mentioned above, I find that the applicant nominated one main business in the Form 1217 lodged with the Department on 9 August 2013. The business identified was Homecheer Wood Industry Pty Ltd. The applicant identified a 30% interest in the business in 2012 and 45% in 2013. The activity of the business was identified to be manufacturing and distribution of timber flooring.
I find that the business ceased operating in late 2015 in the circumstances recounted to me by the applicant. I have considered the applicant’s evidence that the corporate entity continues to exist, but note the emphasis in cl.892.211(1) (which must continue to be satisfied at the time of decision at cl. 892.221) that the business be actively operating.

I consider the consequences of these findings by reference to the Court’s reasoning in Yang & Ors v Minister for Immigration & Anor [2014] FCCA, as I have foreshadowed I may in correspondence with the applicant. In that case, the Court was considering the criteria for a subclass 890 visa, but I consider the reasoning applicable to this subclass 892 visa application because the relevant criteria are expressed in materially identical terms.
In the case of Yang the applicant nominated two different companies as businesses. Each of the companies ran a different restaurant. In that case, by the time of decision, Ms Yang no longer had any ownership interest or management involvement in either of the companies. However, the Tribunal in that case considered a submission that Mrs Yang operated another business under a different name which could be taken into account for the purpose of the application.
The Court determined,
“Contrary to the applicants’ submissions, it is clear when clause 890.211, 890.221 and regulation 1.11(2) of the Regulations are read together that one or both of the main businesses nominated for the purpose of satisfying clause 890.211 must be those used to satisfy the criteria in clause 890.221.”[65]
After quoting regulation 1.11, the Court said as follows:
…
“It is, in my view, clear that the regulation is intended to ensure continuity in the holding of an ownership interest. Such continuity is emphasised by the requirements in regulation 1.11(1)(b) to maintain a direct and continuous involvement in the day to day management of those businesses. The requirement in clause 890.221 that an applicant continue to satisfy clause 890.211 at the time of decision, requires the applicant to continue to satisfy the requirement in light of the limitation on the number of main businesses which can be nominated for the purpose of the Regulations at the time of application. There is nothing ‘extreme’ or ‘arbitrary’ in such a construction. Rather, such a construction is consistent with the regulatory requirement for ownership continuity over a two year period prior to application. A similar argument made by the applicant was rejected in relation to a similar regulation in Tung-Liang Liang v Minister for Immigration.[1]”[paragraph 68]
[1] [2009] FCA 189
I consider I am bound by the Court’s approach in this regard to construe cl.892.211 and cl.892.221 the same way. Applying that construction to the facts as I have found, the applicant cannot continue to satisfy the requirements of cl. 892.211 at the time of decision, and so does not meet the requirements of cl.892.221.
While I have examined the evidence provided to me about West Lakewood Pty Ltd, I am unable to construe West Lakewood Pty Ltd as the ‘main business’ satisfying the time of application requirements at cl. 892.211 in circumstances where it was not established until after the date of the visa application. I am unable to accept the applicant’s contention that West Lakewood Pty Ltd satisfies the criteria for the grant of the visa in light of the authority in Yang.
I find that the applicant does not meet the requirements of cl.892.221 in these circumstances. As this is an essential criterion for the grant of the visa, the visa must be refused.
There is no evidence before the Tribunal to suggest that the criteria for any of the other visa subclasses in class DF is made out by the applicant.
DECISION
The Tribunal affirms the decision not to grant the applicant a Business Skills (Residence) (Class DF) visa.
Marten Kennedy
Member