1417465 (Migration)

[2016] AATA 3460

1417465 (Migration) [2016] AATA 3460 (3 March 2016)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mr Habib Ahmed Chaudhry
Mrs Shazia Habib
Ms Iswa Chaudhry
Ms Aaima Habib Chaudhry
Mr Daniyal Habib Chaudhry

CASE NUMBER:  1417465

DIBP REFERENCE(S):  CLF2014/119540 CLF2014/47507

MEMBER:Alison Mercer

DATE:3 March 2016

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named applicant meets the following criteria for a Subclass State/Territory Sponsored Business Owner (Residence) visa:

·cl.892.212 of Schedule 2 to the Regulations.

Statement made on 03 March 2016 at 2:42pm

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 7 October 2014 to refuse to grant the applicants Business Skills (Residence) (Class DF) Subclass 892 visas under s.65 of the Migration Act 1958 (the Act).

2. The applicants applied for the visa on 26 March 2014. The delegate refused to grant the visa on the basis that the first named applicant (the applicant) did not satisfy the requirements of cl.892.212(b) and in his circumstances, was unable to satisfy two of the three alternate requirements of cl.892.212 overall. An extract of the relevant legislation is attached to the decision.

3. The delegate also refused the visa applications of the second, third, fourth and fifth named applicants (the applicant’s wife and children) on the basis that they did not meet the secondary visa criteria requiring them to be members of the family unit of a person who held a subclass 892 visa, and there was no evidence to indicate that they met the primary visa criteria in their own right.

4. The applicant appeared before the Tribunal on 5 February 2016 to give evidence and present arguments. The Tribunal also took evidence from Mr Nasir Pervaiz Chaudhry, the applicant’s nephew and a director of CH & Sons Pty Ltd.

5. The applicants were represented in relation to the review by their registered migration agent, Ms Sukhraj Deol. The agent attended the Tribunal hearing.

6. Following the hearing, the Tribunal received additional documents on 24 February 2016 from the applicant’s agent, consisting of:

   ·statement from the Allied Bank printed 15 February 2016 showing transactions between 1 January 2011 to 30 June 2011 for the account of the applicant (branch: Model Town, Lahore) showing receipt of PKR 5,500,000 via online transfer on 3 March 2011 and debit by cheque for the same amount on 17 March 2011 (amongst other transactions);

   ·Lahore Development Authority Transfer Letter (original copy) dated 22 June 2011 indicating the applicant sold a property in Johar Town, Lahore, and transferred the title on that date;

   ·Challan form for the above transaction, dated 16 June 2011; and

   ·Agreement to sell dated 1 March 2011 in relation to the above transaction, price agreed as PKR 5,500,000 to be paid into the applicant’s Allied Bank account on 1 March 2011.

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

   CONSIDERATION OF CLAIMS AND EVIDENCE

8. The issue for the Tribunal is whether the applicant met cl.892.212 at the time he made his visa application on 26 March 2014.  That clause provides that:

   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) throughout the 12 months immediately before the application is made, the main business in Australia, or main businesses in Australia, of the applicant, the applicant's spouse, or the applicant and his or her spouse together, employed at least 1 full-time employee (or a number of part-time employees working an equivalent number of hours) who:

   (i) is not the applicant or a member of the family unit of the applicant; and

   (ii) is an Australian citizen, an Australian permanent resident or a New Zealand passport holder;

   (b) the net value of the business and personal assets in Australia of the applicant, the applicant's spouse, or the applicant and his or her spouse together, is, and has been throughout the 12 months immediately before the application is made, at least AUD250 000;

   (c) the total value of the net assets owned by the applicant, the applicant's spouse, or the applicant and his or her spouse together, in the main business or main businesses in Australia is, and has been throughout the 12 months immediately before the application is made, at least AUD75 000.

9. The Tribunal finds that the relevant period for consideration in this case is the 12 month period between 25 March 2013 and 25 March 2014.

10. The applicant relies on Chaudhury Traders Pty Ltd (‘Chaudhury’) as his main business.  The material before the Tribunal (including records of the Australian Security and Investment Commission (ASIC)) indicates that the applicant has been the 100% shareholder in this company since 23 September 2011.

11. It is not in question that the Victorian state government (as the appropriate regional authority) has not certified there are exceptional circumstances which would exempt the applicant from the need to satisfy cl.892.212. Therefore the applicant must satisfy two of the three alternate criteria in clause 892.212 in order to meet the requirements of cl.892.212 as a whole.

12. The applicant did not claim that Chaudhury had the equivalent of more than one full-time Australian citizen or permanent resident employee who was not the applicant or a family member of his for the relevant 12 month period.  He provided no evidence to indicate that he did have a non-family member employee in the business. The Tribunal therefore finds the applicant does not meet the requirements of cl.892.212(a).

13. Accordingly, the applicant must satisfy both cl.892.212(b) and (c) in order to satisfy cl.892.212 as a whole.

14. The Tribunal notes that the delegate was not satisfied that the applicant met cl.892.212(c) on the basis that:

    ·    the financial statements for Chaudhury Traders Pty Ltd for the years ending 31 December 2012 and 31 December 2013 showed net assets in the business as $1,065 and $6,328 respectively;

    ·    while Departmental policy allowed for the value of any loans made by the applicant to the business to be added to the business’ net value, the loans of $111,258 (as at 31 December 2012) and $106,975 (as at 31 December 2013) were not accepted as the documentary evidence provided was insufficient to recognise all of each of these amounts as loans from the applicant to the company;

    ·    transfers of $3,000 on 14 October 2011 and $56,000 on 8 November 2011 from the applicant’s account to the company’s account was accepted as being loans from the applicant to the company;

    ·    however, other amounts claimed to be loans ($40,000 and $10,000) were not accepted;

    ·    a receipt from the applicant’s brother, Muhammad Pervais Chaudhary, stating that the applicant loaned him Rs 5,500,000 in 2011 was not accepted as evidence of a loan by the applicant to him. Although the applicant provided evidence of having transferred this sum out of his Pakistani bank account on 17 March 2011, there was no evidence to indicate to whom it was transferred or for what purpose;

    ·    a settlement of loan letter stating that Muhammad Pervais Chaudhry was the owner of CH & Sons Pty Ltd and that this company paid back the loan to the main applicant in November 2011 was given little weight as no substantial evidence showing that Muhammad Pervais Chaudhry was the owner of CH & Sons Pty Ltd was provided;

    ·    while a bank account statement for Chaudhry Traders was provided showing that $40,000 was deposited on 21 October 2011, there was no indication of the source of the deposit, nor of the amount being transferred or withdrawn from another bank account.  The delegate was therefore not satisfied that the applicant loaned this money to the company;

    ·    the deposit on the applicant’s company bank account statement of $10,000 on 9 November 2011 stated that the money was deposited by CH & Sons Pty Ltd, but no reliable evidence had been provided to indicate who owned that company.  As such, the delegate was not satisfied that these amounts were loaned to the company by the applicant;

    ·    other amounts of $1,911.29, $7,477.72, $35,942.23, $407.45, $1,228.76, $150; $547.94, $620.93, $9,179.50 and $132.58 were also claimed as loans to the company on the ledger provided by the applicant, but only journal entries, tax invoices from the accountant and a letter from the accountant were provided. Bank account statements for these loans (that is, showing the actual transfers of relevant amounts) were not provided.  The delegate was again not satisfied that these amounts were loaned to the company by the applicant; and

    ·    as the delegate was only satisfied on the documentary evidence that the funds loaned by the applicant to the company totalled $59,000, she found that the net assets (including loans to the company) in the business were $60,065 at 31 December 2012 and $65,328 at 31 December 2013. The delegate found that this fell short of the requirement in cl.892.212(c) for the applicant to have had a net value in the main business of at least $75,000 throughout the 12 month period immediately prior to the date of the visa application.

15. Based on the above findings, the delegate also found that the applicant did not satisfy cl.892.212(b) to have business and personal assets in Australia with a net value of at least $250,000 at the time of application and in the 12 month period immediately preceding his visa application. Accepting the applicant’s net assets in the business as $60,065 at 31 December 2012 and $65,328 at 31 December 2013, and accepting the applicant’s evidence that his personal net assets were $142,174 as at 31 December 2012 and $148,267 as at 31 December 2013, the delegate found that the applicant’s business and personal assets in Australia did not have a net value of at least $250,000 in the relevant period.  Rather, she found that the applicant’s total net assets at 31 December 2012 were $202,238 and $213,595 as at 31 December 2013.  She found the applicant therefore did not satisfy cl.892.212(b).

16. The delegate concluded that as the applicant did not satisfy 2 out of the 3 subclauses in cl.892.212, he therefore could not satisfy the clause overall. As he did not meet cl.892.212, the delegate refused the visa without considering the other criteria.  The delegate noted that the applicant had not indicated that he was seeking to satisfy the criteria for any of the other subclasses within Class DF and there was no evidence that he had applied in any other subcategory.

17. The applicants’ agent provided a submission addressing this criterion to the Tribunal on 13 April 2015.  In summary, she argued that:

    ·the application was lodged on the basis that the applicant satisfied cl.892.212(b) and (c);

    ·the applicant’s total business assets were $82,065 for Year 2012 and $87,238 for Year 2013, and his personal assets were $285,636 for Year 2013;

    ·the applicant’s accountant had provided a summary of his finance, and supporting documents had been provided, including an Expense Statement with details of expenses and all documents, including the applicant’s bank statements and invoices to prove that $22,041.66 was the initial capital to start up the business;

    ·the applicant had given a loan to his brother, Muhammad Pervaiz Chaudhary, for PKR 5,500,000 and this loan was returned to the applicant.  A bank statement from Allied Bank was attached to prove that the applicant withdrew this amount from his account on 17 March 2011 and another statement from another bank, (Faysabank) was attached as evidence that on 17 March 2011, this amount was cleared by cheque into the account of Muhammad Pervaiz Chaudhary.  A receipt of loan was also attached to verify this;

    ·the applicant’s brother returned the loan to him in October 2011 by way of a deposit of $40,000 on 21 October 2011 and a further deposit of $10,000 on 9 November 2011 into Chaudhury Trader’s ANZ Business account; and

    ·evidence was also attached verifying that the applicant’s brother Muhammad Pervaiz Chaudhary owned CH & Sons Pty Ltd.

18. The attached documents consisted of the following:

    ·letter dated 13 March 2014 [sic, signed 13 March 2015] from Naveed Jamil of Accontax Pty Ltd (Public Accountants, Registered Tax Agents and Business Consultants).  Mr Jamil states that when the applicant lodged his visa application on 26 March 2014, the applicant supplied financial information for his business prepared by Wealth Accounting & Taxation Services.  Mr Jamil states that there was some information in the internal ledger that was supplied in error, as some of the expenses were paid by the director of the business from his personal account because the company bank account had not been set up at that time. Mr Jamil included the rectification and detailed explanation along with supporting documents. He stated that, as per his calculations, he concluded that $22,014.66 should be considered as initial capital used to establish the business and therefore should count towards the applicant’s total assets.  Mr Jamil further stated that he had provided a detailed statement relating to the loan between the applicant and his brother, and believed that the loan of $50,000 returned to the applicant by his brother should count towards the applicant’s total assets;

    ·Expense statement provided by Mr Jamil as follows:

Date	Description	Amount	Bank account	Support	Attachment
1.19/9/11	Business Adv. Deposit	$5,000	Personal	Receipt/bank statement	Yes
2.22/9/11	Business Adv. Deposit	$6,000	Personal	Receipt/bank statement	Yes
3.13/10/11	ASIC registration fee	$660	Personal	Tax invoice/bank statement	Yes
4.11/10/11	Purchase trading stock from Cignall	$3,178.99	Company	Tax invoice/bank statement	Yes
5.15/11/11	Settlement fee/business legal	$1,447.51	Company	Tax invoice/bank statement	Yes
6.17/11/11	Hume Council rates	$175	Company	Tax invoice/bank statement	Yes
7.18/11/11	Shop rent security bond ($1417 x 2 months)	$2,834	Company	Settlement/bank statement	Yes
8.18/11/11	Rent and rate adjustment	$2,746.16	Cash paid	Settlement	Yes

·certified copy of ANZ Advantage Cheque account statement of Mr H A Chaudhry showing (1) withdrawal of $5,000 on 19 September 2011, (2) $6,000 on 22 September 2011, and (3) withdrawal of $660 on 13 October 2011;

·certified copies of 2 receipts issued to the applicant by Valentines Business Brokers for (1) $5,000 paid by cheque on 16 September 2011 for ‘holding deposit’ on milk bar in Broadmeadows (contract price $92,800), and (2) $6,000 paid by cheque for ‘balance deposit’ for same business, received on 21 September 2011;

·certified copy of tax invoice issued on 23 September 2011 for ASIC fee of $660 for Chaudhry Traders Pty Ltd;

·certified copy of ANZ Business Classic account statement for Chaudhry Traders showing (4) withdrawal of $4,000 in cash on 10 November 2011; (5) EFTPOS withdrawal of $1447.51 on 15 November 2011, (6) EFTPOS withdrawal of $175 on 17 November 2011 and (7) EFTPOS withdrawal of $2,834 on 18 November 2011;

·certified copy of Tax invoice issued by Cignall Preston Market on 10 November 2011 for cigarettes totalling $3,178 (with annotation that this was paid in cash by withdrawal from the bank; see (4) above);

·certified copy of receipt issued to Chaudhry Traders by Hume City Council on 16 November 2011 for $175  (see (6) above);

·certified copy of Statement of Account in relation to ‘Chaudhry Traders from Duc Hai Do & Thi Tuyet Nga Vu re: Milk Bar in Broadmeadows’,  prepared by Fernandez & Johnson on 9 November 2011, showing (8) adjustments as shown on Statement of Adjustments $2,746 [with annotation that this was paid in cash from savings], (7) payment of security deposit as per variation of lease: $2,834, (6) transfer of Food Registration fee to the City of Hume of $175; and (5) Fernandez & Johnson tax invoice of $1,447.51;

·certified copy of Statement of Adjustments for above transaction, prepared on 9 November 2011, indicating that purchaser Chaudhry Traders is to pay vendors $2,746.16 ((8) above refers);

·certified copy of tax invoice dated 7 November 2011 from Fernandez & Johnson to Chaudhry Traders for $1,447.51 for professional services in purchase of milkbar by the company;

·document entitled ‘Loan Agreement between [the applicant] and Muhammad Pervaiz Chaudhry’ [presumably prepared by Mr Jamil] showing following transactions:

Transaction at Lahore Pakistan Loan Given

Date	Amount	Exchange rate	From	Loan from	Loan to	Bank transfer in	Loan agreement receipt number
17/3/11	PKR 5,500,000	89.42 AUD	Allied Bank Lahore	Habib A Chaudhry	M Pervaiz Chaudhry	Faysal Bank, Lahore	D302112

Transaction at Melbourne Australia Loan Return

Date	Amount	Exchange Rate	From	Loan return from	Loan received by	Bank transfer in	Cheque number
21/10/11	AUD$40,000	89.42 AUD	ANZ	M Pervaiz Chaudhry, director of CH & Sons P/L	Habib A Chaudhry, director of Chaudhry Traders P/L	ANZ	1096
9/11/11	AUD $10,000	89.42 AUD	ANZ	M Pervaiz Chaudhry, director of CH & Sons P/L	Habib A Chaudhry, director of Chaudhry Traders P/L	ANZ	Internet transfer 812413

Total: AUD $50,000

·certified copy of statement for the applicant from Allied Bank, Lahore, showing transfer of PKR 5,500,000 on 3 March 2011 with amount clearing on 17 March 2011;

·certified copy of account statement for Muhammad Pervaiz Chaudhry with Faysabank, Lahore, showing deposit received by ‘outward cheque’ of PKR 5,500,000 on 17 March 2011;

·certified copy of stamped document entitled ‘receipt (regarding loan amount receiving)’, signed and dated 16 March 2014, in which Muhammad Pervaiz Chaudhry states that he received PKR 5,500,000 from the applicant as an interest-free loan, which was returnable within 1 year or on the demand of the lender;

·certified copy of ANZ Business Cash Management statement for CH & Sons Pty Ltd showing withdrawal of $40,000 on 21 October 2011 and transfer on 9 November 2011 of $10,000 to Chaudhry Traders;

·certified copy of ANZ Business Classic Statement for Chaudhry Traders showing deposit on 21 October 2011 of $40,000 and receipt by transfer from CH & Sons Pty Ltd of $10,000 on 9 November 2011; and

·certified copy of ASIC company extract dated 20 February 2015 for CH & Sons Pty Ltd showing that it was registered in August 2009 and the directors are Muhammad Pervaiz Chaudhry and Nasir Pervaiz Chaudhry.

1. During the hearing, the applicant explained that the loan in March 2011 to his brother Muhammad Pervaiz Chaudhury was because his brother needed to pay for a business transaction.  The applicant said that his brother runs real estate and construction businesses in Pakistan, while the applicant ran a construction business of his own there prior to relocating to Australia with his family in mid-2011.  The applicant told the Tribunal that it was common practice for him to lend money to his brother, and vice versa, if one or other of them needed to make a purchase or close a business deal.  In March 2011, his brother needed cash to buy something for his business, and he asked the applicant for a short term loan. When asked why he would loan a reasonably significant sum of money to his brother shortly before he was due to move to Australia with his family to establish a new business, the applicant said that he had the cash in an account and his brother had proposed that the loan be repaid to the applicant in Australian dollars by the Australian company CH & Sons Pty Ltd, which had been established by Muhammad Pervaiz Chaudhry and his son Nasir Chaudhry (the applicant’s nephew), both of whom were directors of that company.  The applicant said that way, the funds did not have to be transferred by his brother from Pakistan, which would take longer and incur costs and possible losses due to currency fluctuations.

1. In response to the Tribunal’s query, the applicant said that at the time he made the loan to his brother, he and his family had received visas for Australia but they did not travel to Australia until June 2011, as his children had school exams in May 2011.  He had not purchased an Australian business at that stage but did so shortly after arriving in Australia.  The applicant explained that he elected to buy a milk bar business in September 2011, rather than go into the construction field (his previous background in Pakistan) as it seemed more prudent to buy an established business in Australia and run that for 2 years in order to maximise his prospects of satisfying the permanent residence requirements, and then potentially branch out into the construction industry in Australia.

2. The applicant emphasised that the loan to his brother was part of a common practice between them and their respective businesses both in Pakistan and Australia. He told the Tribunal that his brother established CH & Sons Pty Ltd in Australia with his son Nasir when the applicant’s brother held a subclass 163 visa with the intention of using that company to ultimately apply for permanent residence.  However, he did not end up applying for permanent residence as his businesses in Pakistan required his involvement so he was not in Australia long enough to satisfy the permanent residence requirements.  The applicant said that ultimately, his brother has elected to remain in Pakistan and continue to run his businesses there.  However, his nephew Nasir has remained in Australia to run CH & Sons Pty Ltd (which is a construction business) and now has permanent residence.

3. The applicant confirmed that the $50,000 (transferred in 2 transactions of $10,000 and $40,000) transferred from CH & Sons Pty Ltd therefore represented the repayment of his loan to his brother. The Tribunal noted that it had now been provided with documentary evidence of funds of PKR 5,500,000 transferred from the applicant’s Allied Bank account in Lahore on 17 March 2011 to his brother’s Faysabank account in Pakistan on the same date, but asked the applicant whether he could explain and/or provide his Allied Bank account statements for the period before this transaction occurred, as it was concerned as to whether the funds were genuinely the applicant’s to transfer, or whether they had been deposited in the applicant’s account shortly before the transfer to the applicant’s brother.  The applicant said that he had had the funds for some time in that account before loaning them to his brother.  He said that to the best of his memory, the funds that were the subject of the loan were largely from the proceeds of the sale of his family home in Lahore, which was sold to his cousin several months before the family migrated to Australia.  He indicated that he should be able to provide documentary evidence of his bank account in the period prior to the transfer and of the sale of his home.  The applicant said that he had several accounts with Allied Bank; one was his personal account (from which the loan was made) but he also had several business accounts.

4. The applicant confirmed at hearing that his brother repaid the loan on 21 October 2011 through 2 transactions from CH & Sons Pty Ltd.  One was a cheque for $40,000 which the applicant deposited into the account of Chaudhry Traders on that date, and the other was an electronic funds transfer between the 2 companies for $10,000 on the same date.  The applicant confirmed that he regarded the repayment of the loan to him by his brother as funds that he then loaned his business, Chaudhry Traders. To the best of his understanding, this amount was included in the calculation of the director’s loans to the company by Sky Accounting when the statements were prepared for the subclass 892 visa application.

5. The applicant clarified that he had used 3 different accounting firms since coming to Australia.  Initially he and the business used a firm called Top Accounting.  This accountant’s premises were near the applicant’s business in Broadmeadows and the principal was from Pakistan originally so they could communicate easily.  This accountant did the BAS and company and personal tax returns for the applicant.  However, when he approached this accountant to prepare the specific financial documents for the subclass 892 visa application, the accountant said that he had not done this before and could not assist him.  The applicant noted that the accountant had provided financial statements for the business previously using the usual financial year (June to July) for tax purposes, but was inexperienced in how to prepare this on a calendar year basis, which was what the applicant needed for the purposes of the subclass 892 visa application as the Department’s policy was that the evidence of his and the business’ financial position needed to be no more than 3 months old and he intended to apply for the visa in March 2014.

6. The applicant said that he then got a referral to another accountancy firm who were familiar with preparing financial statements for immigration purposes. This was Sky Accounting.  The applicant saw an accountant there called Damien, who charged $10,000 for working with the existing financial statements and preparing 2 statements to use for the visa application (one to 31 December 2012 and the other to 31 December 2013).  This was done, including calculating the director’s loans to the company for each of those calendar years, and the applicant said that his former migration agent, who was also an accountant, had checked them and was happy with them.  The applicant said that he had no reason to think they were not reliable and the subclass 892 visa application was lodged with them. 

7. However, he then received a request from the Department to explain further about how the director’s loans were calculated.  He went back to Sky Accounting but Damien had retired and sold the business to new owners.  The applicant said that he and his nephew Nasir consulted the new owner, who tried to clarify the Department’s queries by using the existing financial information but he had limited knowledge and material to work with concerning the applicant’s records.  After the subclass 892 visa application was rejected, the applicant changed accountants again to Mr Jamil of Accontax, his present accountant.  He said that he was happy with Mr Jamil, and he relied on Mr Jamil’s explanation of what start-up costs should be attributed to his director’s loans, as Mr Jamil had thoroughly reviewed the available information, recalculated the amounts involved and provided the documentary evidence to verify the expenditure claimed.  The applicant said his understanding was that any money he spent on behalf of the business from his private account, for which he was not reimbursed, legitimately formed part of his loan to the company, as it was money he had put into the company.  In response to the Tribunal’s query, the applicant stated that he wished the Tribunal to rely on the analysis provided by Mr Jamil in relation to what documented start-up costs for the company could legitimately be counted as part of his director’s loan to the company.

8. The Tribunal then took evidence from the applicant’s nephew, Mr Nasir Chaudhry. Mr Chaudhry confirmed that his father was Muhammad Pervaiz Chaudhry and that he and his father set up CH & Sons Pty Ltd in Australia.  Mr Chaudhry said that at the time they set up the company, it was his father’s intention was to ultimately apply for permanent residence in Australia but this did not happen and his father has decided to remain in Pakistan to run his businesses there.  However, Mr Nasir Chaudhry now runs CH & Sons Pty Ltd and is a permanent resident. Mr Chaudhry confirmed that his father transferred approximately $2 million into C H & Sons Pty Ltd on the basis that he would relocate permanently to Australia and that most of this money is still held by the Australian company.  Mr Chaudhry considers that this money is his father’s to deal with, and has transferred funds back to him in Pakistan when requested to do so.  He said that he did not have direct knowledge of the 2011 loan from the applicant to his father, but from his experience, the applicant and his brother frequently made loans to each other in Pakistan for business reasons, as they ran their own businesses in Pakistan and had at least one jointly-run business there.  He understood that the applicant had lent his father PKR 5,500,000 in early 2011 and later that year, his father instructed him to transfer $50,000 from C H & Sons Pty Ltd to the applicant’s company Chaudhry Traders as repayment of the loan.  He said that to his understanding, he was transferring his father’s funds, at his father’s directions, to the applicant via the applicant’s company in repayment of the loan.  When asked why his father did not transfer funds from Pakistan to the applicant to repay the loan, Mr Chaudhry said that he could not say for sure, but his understanding was that it would be easier to move funds between the Australian companies since the applicant was now residing in Australia and purchasing an Australian business.  They never anticipated that the Department would not accept this transaction as genuine. Mr Chaudhry said that the funds could have been transferred directly from his father in Pakistan to the applicant in Australia but it seemed unnecessary to do so when the relevant funds could be transferred in Australia without the need to deal with foreign exchange commissions and the like.  In relation to why his father would have needed to borrow money from the applicant in 2011, Mr Chaudhry said that he could not say for sure, as that was a matter between his father and his uncle, but he reiterated that it was common for them to advance funds to each other for particular transactions and for the other to later repay the loan.

9. In relation to the different accountants used by the applicant to provide information about his director’s loans to the company, Mr Chaudhry essentially confirmed the history provided by the applicant regarding first using Top Accounting, then Sky Accounting and finally Naveed Jamil of Accontex.  He said that he had assisted his uncle, the applicant, with purchasing the milk bar business and with preparing the subclass 892 visa application.  He said that both he and the applicant were aware of the financial requirements and they were both confident that the applicant met them.  However, there were difficulties because the applicant had to change accountants and not all transactions regarding the director’s loan account had been properly recorded by the original accountants.  Mr Chaudhry said that he believed the applicant met the net business and personal assets requirements and was operating a genuine business.

10. In relation to CH & Sons Pty Ltd, Mr Chaudhry confirmed that it is a construction business involved in building residential housing.  He worked in the family business in this capacity in Pakistan and has now registered as a builder in Australia.

11. The Tribunal noted that, depending on its conclusions about whether the $50,000 paid by CH & Sons Pty Ltd to Chaudhry Traders in October 2011 could be classified as a director’s loan, then the issue of what other company expenses paid by the applicant from his private account might be irrelevant as the $50,000 plus the already-recognised director’s loan of $56,000 and $3,000 would exceed the required $75,000.  The applicant’s agent submitted that she had suggested that the applicant get a formal valuation of the goodwill in the business (for which the applicant had paid $92,500 at the time of purchase) as this too could be counted as a business asset and would take the applicant’s total net assets in the business over the $75,000 threshold, but he had elected not to do so as he believed the loan repaid by his brother should be counted.

12. The Tribunal found the applicant and his nephew Mr Nasir Chaudhry to be credible witnesses who separately gave detailed and consistent evidence at the hearing.  It also finds that their evidence was largely consistent with the documentary evidence provided by the applicant.  The Tribunal notes that some understandable confusion has arisen due to the use of 3 accountants by the applicant to calculate his net assets in the business, but it accepts based on its assessment of the applicant and his nephew’s credibility that this was necessary due to the inability of the first 2 accountants to definitively calculate the applicant’s net assets in the business.  The Tribunal is satisfied that the most reliable source of information regarding the net assets of the business is the report of the third account, Mr Jamil.

13. The Tribunal is satisfied from the documentary evidence provided after the hearing that the applicant received PKR 5,500,000 in early March 2011 as the proceeds of selling his family home, and that these funds were transferred into his Allied Bank Account on 5 March 2011 before being lent to his brother via a debit cheque on 17 March 2011.  It accepts that this loan was repaid to the applicant by CH & Sons Pty Ltd in Australia on 21 October 2011 through 2 transactions, one being a cheque for $40,000 which the applicant deposited into the account of Chaudhry Traders on that date, and the other being electronic funds transfer between the 2 companies for $10,000 on the same date.  The Tribunal is satisfied from the documentary and oral evidence provided that the applicant’s brother is a director of CH & Sons Pty Ltd along with his son Mr Nasir Chaudhry, and it is satisfied that Mr Nasir Chaudhry acted on the instructions of his father in arranging these transactions as repayment of the March 2011 loan of PKR 5,500,000 from the applicant to his brother, Mr Nasir Chaudhry’s father.  The Tribunal is further satisfied that the applicant loaned these funds to the business, and that they should therefore be included in the calculation of his net assets in the business and his net personal assets for the purposes of cl.892.212(b) and (c).

14. The Tribunal accepts the delegate’s findings that the applicant had net assets in the business (without taking into account the $50,000 transferred between CH & Sons Pty Ltd and the applicant’s business in October 2011) of the following amounts:

    ·$60,065 as at 31 December 2012; and

    ·$65,328 as at 31 December 2013.

15. The Tribunal is satisfied that it is appropriate to add a further $50,000 to these amounts on the basis that it accepts that the applicant received a loan repayment from his brother of $50,000 in October 2011 and made those funds available to the business as a director’s loan.  When this additional loan is taken into account, the Tribunal is satisfied that the applicant’s net assets in the business were:

    ·$110,065 as at 31 December 2012; and

    ·$115,328 as at 31 December 2013.

16. The Tribunal therefore finds that the net assets in the applicant’s main business had a net value of at least $75,000 at the time of application and throughout the period of 12 months immediately before the application was made.  The Tribunal is further satisfied that these funds were lawfully acquired by the applicant, and that their source was the repayment of a loan by the applicant’s brother which the applicant then loaned his business in the manner described in paragraph 32 above.  Given the above, the Tribunal is satisfied that the applicant meets the requirements of cl.892.212(c).

17. Given the above findings, it is unnecessary for the Tribunal to consider what further loans by the applicant to his business might be counted.  However, it notes that the calculations made by the accountant Mr Jamil suggest that there may be further payments made by the applicant on the behalf of the business for which he was not reimbursed which could appropriately characterised as loans to the business.

18. In relation to cl.892.212(b), the Tribunal accepts the calculations of the net personal assets of the applicant and his wife (excluding their net assets in the business) as:

    ·   $142,174 as at 31 December 2012; and

    ·   $148,267 as at 31 December 2013.

19. The Tribunal is satisfied that this was mostly, if not completely, based on the value of their equity in their home in Australia.

20. To this, the Tribunal adds the net assets in the business at paragraph 34 above, and calculates their net personal and business assets in Australia in the relevant period as follows:

    ·$252,239 as at 31 December 2012; and

    ·$263,595 as at 31 December 2013.

21. The Tribunal therefore finds that the net business and personal assets of the applicant and his wife had a net value of at least $250,000 at the time of application and throughout the period of 12 months immediately before the application was made.  The Tribunal is further satisfied that these funds were lawfully acquired by the applicant and his wife.  Given the above, the Tribunal is satisfied that the applicant meets the requirements of cl.892.212(b).

22. Given the above findings that the applicant satisfies the requirements of cl.892.212(b) and cl.892.212(c), it follows that he meets cl.892.212 in its entirety. It is therefore appropriate to remit the application for reconsideration on that basis.  The Tribunal finds that as the second, third, fourth and fifth named applicants applied on the basis of being family unit members of the first named applicant, their applications will be determined by reference to the outcome of the first named applicant’s application on remittal to the Department for reconsideration.

    DECISION

23. The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named applicant meets the following criteria for a Subclass State/Territory Sponsored Business Owner (Residence) visa:

    ·cl.892.212 of Schedule 2 to the Regulations.

    Alison Mercer
    Member