1415814 (Migration)

[2016] AATA 3124

1415814 (Migration) [2016] AATA 3124 (21 January 2016)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mr Changhyeong Lee
Mrs Mikyeong Lee
Ms Jaeim Lee
Mr Jaehyeok Lee
Ms Jaeeun Lee

CASE NUMBER:  1415814

DIBP REFERENCE(S):  CLF2014/112116 CLF2014/112117 CLF2014/45764 CLF2014/45767

MEMBER:Rania Skaros

DATE:21 January 2016

PLACE OF DECISION:  Sydney

DECISION:The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration with the direction that the first named applicant meets:

·cl.892.212 of Schedule 2 to the Regulations.

Statement made on 21 January 2016 at 3:21pm

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Immigration on 19 September 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).

2. The visa applicants applied for the visa on 24 March 2014. The delegate refused to grant the visa on the basis that the applicant did not meet cl.892.212 because the delegate was not satisfied that the applicant met cl.892.212(b) or (c).

3. The applicants appeared before the Tribunal on 13 October 2015 to give evidence and present arguments. The Tribunal hearing was conducted with the assistance of an interpreter in the Korean and English languages.

4. The applicants were represented in relation to the review by their registered migration agent. The representative attended the Tribunal hearing.

5. For the following reasons, the Tribunal has concluded that the matter should be remitted for reconsideration.

   CONSIDERATION OF CLAIMS AND EVIDENCE

6. The issue in the present case is whether the applicant meets cl.892.212, which requires as follows:

   892.212

   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 in Australia, or main businesses in Australia, of the applicant, the applicant’s or , 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 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 or , or the applicant and his or her spouse or de facto partner together:

   (i)      have a net value of at least AUD250 000; and

   (ii)      had a net value of at least AUD250 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 or , or the applicant and his or her spouse or de facto partner together, in the or main businesses in Australia:

   (i)      have a net value of at least AUD75 000; and

   (ii)      had a net value of at least AUD75 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.

7. The Tribunal has had regard to Form 949 that was approved by the appropriate regional authority which indicates there are no exceptional circumstances in this case. Accordingly, the applicant is required to meet at two of the three requirements in cl.892.212.

8. The applicant is not claiming to meet the requirements in relation to business and personal assets in cl.892.212(b).

9. Information on the Department’s file, including PAYG summaries, payslips, accountant’s letter regarding wages and evidence of permanent residence/citizenship of the employees indicates that the main business employed one full-time employee (or part-time equivalent) in the 12 months immediately preceding the application. The Tribunal accordingly finds that cl.892.212(a) is met.

10. In relation to the requirements in cl.892.212(c), the applicant provided to the Department financial statements for the year ended 30 June 2013. The Department requested financial statements that covered the 12 months period immediately prior to the application being made. The applicant then provided financial statements for the year ended 30 June 2014. As the financial statements for the relevant period were not provided, the delegate could not be satisfied that the applicant met the requirements in cl.892.212(c).

11. In response to a request for further information on review, the Tribunal received the following documents; financial statements for Vision Korea Pty Ltd (the Company) for the 12 months periods ended 23 March 2014 and 23 March 2013, Contract for Sale of Business in relation to the purchase of Daorae Restaurant by the Company, bank statements for the Company, bank guarantee, copy of a bank cheque evidencing payment for the business and invoices for the purchase of equipment.

12. The Contract of Sale, dated 2 September 2011, indicates that Vision Korea Pty Ltd agreed to purchase the restaurant for $140,000, which included $90,000 for goodwill and $50,000 for equipment. The bank records indicate that the applicant transferred by ITF $140,000 into the account of Vision Korea on 12 September 2011. These funds were then used to pay the outstanding amount for the purchase price of the business and the bank guarantee.  

13. The financial statements as at 23 March 2014 indicated that the Company had total assets of $151,648, including $95,638 of goodwill. The company’s current liabilities were $5,542. The non-current liabilities included an unsecured director’s loan of $131,947. The equity was $14,157, being the total assets less total liabilities.

14. In submissions to the Tribunal, the representative explained that the director’s loan on the financial statements refer to the funds transferred to Vision Korea Pty Ltd by the applicant for purchase the restaurant business.

15. At the hearing the Tribunal raised the concern that the funds transferred by the applicant to the company was used to acquire the main business and may not be considered as a ‘loan’ to the business. The Tribunal queried the purpose of itemising the purchase funds as a director’s loan to the business given that the applicant’s assets in the business, as the sole owner, would exceed the required amount of $75,000 notwithstanding the loan. The applicant stated that the reports were prepared by his accountant and agreed for the Tribunal to contact the accountant to obtain further information. The applicant gave evidence that the funds transferred to purchase the business in Australia were acquired through his business activities and accumulated savings in Korea.

16. The Tribunal contacted Mr Paul Park, CPA at YSP Accounting, who told the Tribunal that while normally capital used to purchase a business is not indicated as a loan, in this case where the applicant is the sole owner of the company, the funds, which were transferred by the applicant to the company, and were used by the company to purchase a business as part of the company’s operations, can be reported as a loan. Mr Park stated that the funds from the applicant could be converted as company equity at any time because the funds were provided by the applicant as the sole owner. 

17. The Tribunal has considered Mr Park’s explanation, and while it is prepared to accept that for reporting purposes the funds could be indicated on the balance sheet as a director’s loan, for immigration purposes, it does not consider the funds transferred to the Company to be a “loan” to the main business as it was the capital used for the purchase of the business itself. For these reasons, the Tribunal will disregard the amount of the loan when making its calculations on the net value of the applicant’s assets in the business.

18. In relation to goodwill, the Tribunal notes that it was calculated as at 23 March 2013 and 23 March 2014 to be $95,638. However, as the applicant paid only $90,000 for goodwill at time of purchase, as indicated by the contract of sale, the Tribunal considers that, in the absence of other evidence, the value of the goodwill is no more than the amount for it.

19. Considering the above, the Tribunal calculated the net assets of the business as at 23 March 2014 to be $140,468 (total assets $146,010 less total liabilities $5542) and as at 23 March 2013 to be $146,983 (total assets $154,383 less total liabilities $7400).

20. In light of the above, the Tribunal is satisfied that throughout the period of 12 months ending immediately before the date of application, the net assets of the business was at least $AUD75,000.

21. As the applicant held 100% of the shares in the Company, the Tribunal finds that at the time of application, and throughout he period of 12 months ending immediately before the date of application, the assets owned by the applicant in the main business had a net value of at least AUD75,000, and which have been lawfully acquired by the applicant. The applicant therefore meets the requirements of cl.892.212(c). 

22. As the applicant satisfies cl.892.212(a) and (c), the Tribunal finds cl.892.212 is met.

23. In the circumstances it is therefore appropriate for the Tribunal to remit the matter to the Department for consideration of the remaining criteria for the grant of the visas.

    DECISION

24. The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named applicant meets:

    ·cl.892.212 of Schedule 2 to the Regulations.

    Rania Skaros
    Member