1503293 (Migration)

1503293 (Migration) [2016] AATA 4248 (9 August 2016)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Mr Shuai Zheng
CASE NUMBER:  1503293
DIBP REFERENCE(S):  CLF2012/105591 CLF2012/105626 CLF2012/105628 CLF2015/3887
MEMBER:Antonio Dronjic
DATE:9 August 2016
PLACE OF DECISION:  Melbourne
DECISION:The tribunal remits the application for a Business Skills — Established Business (Residence) (Class BH) visa for reconsideration, with the direction that the applicant meets the following criteria for a Subclass 845 visa:
·cl.845.221.
Statement made on 09 August 2016 at 12:27pm

STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Immigration on 18 February 2015 to refuse to grant the applicant a Business Skills – Established Business (Residence)(Class BH) visa under s.65 of the Migration Act 1958 (the Act).
The applicant applied for the visa on 24 May 2012 claiming an ownership interest in one or more established businesses in Australia. At the time the visa application was lodged, Class BH contained two subclasses: 845, and 846. In this case, claims have only been made in respect of Subclass 845.
The criteria for the grant of a Subclass 845 visa are set out in Part 845 of Schedule 2 to the Migration Regulations 1994 (the Regulations). The primary criteria must be satisfied by at least one applicant. Other members of the family unit, if any, who are applicants for the visa need satisfy only the secondary criteria.
The application was initially refused by the department on 11 October 2012 because the delegate was not satisfied that the applicant satisfied cl.845.213 of Schedule 2 to the Regulations. In summary, the delegate concluded that whilst the documents provided indicated that the applicant have had some involvement in the running of the nominated business, it did not support the applicant’s claims that his involvement was direct and continuous from day-to-day and that he was involved in decision-making affecting the overall direction and performance of the business. The applicant lodged the review application to this tribunal (differently constituted) on 23 October 2012.
On 17 October 2014, the tribunal remitted the application to the department with the direction that the applicant meets cl.845.213 to the Regulations. The tribunal made the following findings:
·The applicant has identified Cosmo Trading and Investments Pty Ltd (thereafter the Cosmo) as a relevant ‘main business’. The company was registered on 23 June 2009 and the directors and shareholders at that time were Saiyan Wu (the applicant’s mother) and Mr Zhenyu Wang. The applicant was appointed as a company director and acquired a 60% shareholding on 7 May 2010 from Ms Wu. Ms Wu resigned as a director on 7 June 2010. The applicant obtained the balance of shares in the company from Mr Zhenyu Wang on 25 November 2010. Mr Wang remained as a director until 1 July 2011, when he resigned, leaving the applicant as sole director and shareholder.
·The relevant 18 month period immediately before the application was made commenced on 23 November 2010 and ran until 23 May 2012. The date of application was 24 May 2012.
·The applicant had an ownership interest in Cosmo for the period of 18 months immediately preceding the making of the application and continued to have an interest of that kind as at the time of visa application.
·The Cosmo was found to be a qualifying business within the meaning of r.1.03.
·tribunal was satisfied that during the relevant 18 month period, the applicant did maintain a 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.
·The tribunal found that the business of the applicant’s company meets the definition of main business in r.1.11(1) and (2).
On 18 February 2015 the delegate refused the application for the second time on the basis that the applicant did not meet cl.845.221. This clause requires that the applicant continues to satisfy the criteria in clauses 845.213 to 845.218 at the time of decision.
The delegate was not satisfied on the evidence that the applicant maintained his involvement in management of the business from day to day, and in making decisions affecting the overall direction and performance of the business from May 2012 until the time of the second decision (18 February 2015). The delegate concluded that the applicant failed to meet r.1.11 (b) and as a consequence, cl.845.221.
The tribunal received a review application from the applicant on 6 March 2015. It was accompanied by a copy of the delegate’s decision.
By its letter dated 12 February 2016, the tribunal invited the applicant, pursuant to s.359(2) of the Act to provide information in writing that he meets cl.845.221 of the Regulations (the relevant regulation was attached to the tribunal’s letter)
On 11 March 2016, the applicant’s representative submitted the following documents:
·Legal submissions stating that the applicant meets cl.845.221 as he maintained a 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; that throughout the period of 12 months ending immediately before the application is made he had and continues to have a net value of at least AUD250 000 and that these assets have been lawfully acquired by the applicant; that the that the assets owned by the applicant in the main business or main businesses in Australia have a net value of at least AUD100 000; and had a net value of at least AUD100 000 throughout the period of 12 months ending immediately before the application is made and have been lawfully acquired by the applicant. He further submitted that the applicant has overall had a successful business career and does not have a history of involvement in business or investment activities of a nature that is not generally acceptable in Australia;
·Cosmo Company extract from ASIC dated 23 June 2016;
·Certificate of registration of Trademark for Bubble Grape Juice;
·BAS statements from 1 July 2012 to 31 December 2015;
·Cosmo Financial reports for years 2012 to 2015;
·The applicant’s Westpac Bank Account summary;
·Contract of sale related to the applicant’s purchase of the property at Bourke Street Melbourne;
·Rates & Valuation notice related to the applicant’s property ownership at Glen Waverley Melbourne;
·Rates notice related to the applicant’s property located in Queensland; and
·Various correspondence, contracts and financial documents signed by the applicant as evidence of his 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.
On 22 March 2016, the tribunal wrote to the applicant advising that it had considered all the material before it relating to the application but that it was unable to make a favourable decision on that information alone. The tribunal invited the applicant to give oral evidence and present arguments at a hearing scheduled for 10 May 2016. As the applicant failed to appear at the scheduled hearing, the tribunal dismissed the application under s.362(B)(1A)(b) of the Act.
On 12 May 2016, the tribunal received a request for reinstatement. On 23 May 2016, the applicant’s representative submitted the BAS statement for the period from 1 January 2016 to 31 March 2016.
On 26 May 2016 the tribunal made decision to reinstate the application pursuant to s.362(B)(1C)(a) of the Act. The new hearing was scheduled for 5 July 2016.
On 4 July 2016, the applicant’s representative submitted further documentary evidence relevant to the applicant’s continuous involvement in management of the business together with a copy of several Trademarks approvals issued to Cosmo related to the products the Company is exporting from Australia.
The tribunal Hearing
The applicant appeared before the tribunal on 5 July 2016 to give evidence and present arguments. The tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages. The applicant was represented in relation to the review by his registered migration agent.
At the commencement of the hearing the applicant’s representative submitted unaudited financial report for Cosmo for the most recent financial year indicating revenue of more than AUD2, 000,000 together with photographs of some of the product the business is exporting to China.
The tribunal began the hearing by explaining the role of the tribunal and the purpose of the tribunal hearing. The tribunal then explained to the applicant how it would consider the claims and evidence before it, as well as explaining how the hearing would proceed. The applicant confirmed that he was having no difficulty in understanding the interpreter.
The tribunal informed the review applicant that the reason why the delegate refused to grant the visa was because that delegate was not satisfied that the review applicant met cl.845.221 of Schedule 2 to the Regulations. According to the primary decision record submitted by the applicant with the review application, it appears that the delegate was not satisfied on the evidence that the applicant maintained and continue to maintain, 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 from May 2012.
The tribunal noted that this visa application was lodged in May 2012 and that the first decision made by the department was remitted by this tribunal in October 2014.
In his evidence, the applicant stated that in May 2010 he become the Managing Director and the sole shareholder of the company. He confirmed that that he maintained his ownership and the position in the company until present time. The company’s turnover for the most recent financial year exceeded two millions dollars. Most of the revenue is coming for exporting the Australian wine and health food. The company owns several trademarks including Bubble Grape Juice, Royal Ferntree and San Barossa. The products are manufactured in Australia and exported to China. The company retains services of Australian manufacturers to produce bottles and labels. The company also exports Australian chocolates and milk products. Major suppliers are Campbell’s and Devondale.
The business is renting a warehouse in Melbourne. In 2015, the applicant purchased an office space at Melbourne CBD together with his business partner. In addition, the applicant secured warehouses at duty free zone in China which are designed to serve the Australian business.
He stated that he invested money in Cosmo by way of director’s loan. The current loan balance is $388,939. In June 2015, the applicant invested $600, 000 into ERE Group where he acquired 40% shareholding. He stated that this money was given to him by his parents from China.
The company currently employs only one casual employee, Ms Vicky Gao. She is the applicant’s personal assistant and is paid approximately AUD30, 000 per year. The company retrains the services of an external accountant. He acknowledged that in the past, some of the BAS statements were not lodged in time with the ATO but this has now been rectified.
The applicant stated that he had maintained direct and continuous involvement in the management of the business since 2012. He continues to be the person making decisions affecting the day to day operations of the business and overall direction and performance of the company. He stated that the company is planning to expand its exports of Australian health food and wine to China. He is currently in the process of acquiring shares of an Australian business involved with production of honey.
The tribunal invited the applicant to provide additional submissions and documentary evidence relevant to the question whether the applicant meets the requirements of cl.845.222 of Schedule 2 to the Regulations. The tribunal explained to the review applicant the requirements of cl.892.222 and the operation of a ‘points test’.
The applicant was granted additional time until 26 July 2016 to submit additional documentary evidence and submissions.
On 25 July 2016, the applicant’s representative submitted the following documents:
·PAYG Payment summaries related to the employees of the busies during the period of 1`2 months before lodgement of the visa application;
·Legal submissions addressing the criteria set out in cl.845.222 and the ‘points test’. The representative submitted that the applicant is entitled to 105 points based on his age at the time of visa application, his English language proficiency, value of his net assets and business attributes.
For the following reasons, the tribunal has concluded that the matter should be remitted for reconsideration.
CONSIDERATION OF CLAIMS AND EVIDENCE
The issue in the present case is whether the applicant meets cl.845.221 which requires that the applicant continues to satisfy the criteria in clauses 845.213 to 845.218.
The expression ‘continues to satisfy’ has been judicially considered in different contexts, with the Courts emphasising that the meaning to be attributed to the phrase will depend upon the particular statutory context in which it appears.[1] The common construction of the ‘continues to satisfy’ requirement in the content of cl.845.221[2] suggests that the relevant criteria must be satisfied at all relevant times from the date of application through to the date of decision without interruption.
[1] See for example Opoku-Ware v MIBP [2015] FCCA 1638; and Liang v MIAC (2009) 175 FCR 184 at [47].
[2] Liang v MIAC (2009) 175 FCR 184 (Logan J, 3 March 2009).
Where a time of decision criterion requires an applicant to continue to satisfy a number of times of application criteria, it may be necessary to determine whether each time of application requirement must continue to be satisfied at the time of decision. Some requirements (e.g. those requiring an applicant to have done something prior to the visa application) will by default continue to be satisfied at the time of decision because they are not capable of varying over time.
Whether certain facts or circumstances must exist for a period leading up to and including the relevant time will depend on the wording of the particular criterion. To that extent, it is necessary, as a starting point, to have regard to the criterion or criteria to which the phrase is directed.
Clause 845.213 requires that the applicant has had an ownership interest in 1 or more established main businesses in Australia for the period of 18 months immediately preceding the making of the application and continues to have an interest of that kind. Also relevant to such a consideration is whether the activities of the applicant satisfied the definition of ‘main business’ in r.1.11. Subregulation 1.11(1)(b) required that the applicant had maintained direct and continuous involvement in the management of the business from day to day and in making decisions affecting the overall direction and performance of the business during the relevant period.
Based on the ASIC records on file before the tribunal and pursuant to the definition of ownership interest set out in s.134(10)(a) of the Act, I am satisfied that the applicant has an ownership interest in the nominated company and the business therefore meets r.1.11(1)(a) of the definition of ‘main business’.
I have taken into account the written submissions of the applicant and his agent, the supporting documentation he provided to the tribunal and the applicant’s oral evidence at hearing on 5 July 2016. I had the benefit of receiving additional material to that which was before the delegate, and also the opportunity to take oral evidence from the applicant at the hearing. I found the applicant to be credible and genuine in his evidence, and that he displayed an ability to describe in detail various business ventures, decisions and structures associated with the company.
Having considered the claims and evidence overall, I am satisfied that that the applicant did maintain a 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 that he continues to do so. Accordingly, I find that the business of the applicant’s company meets the definition of main business in r.1.11(1)(b)
I am satisfied from the documentary evidence before me that Cosmo Trading and Investments Pty Ltd is not a publicly listed company and that the applicant held and is still holds at least 51% of shares in the company. Therefore he meets the requirements set out in r.1.11(1)(c).
I am satisfied from the evidence provided by the applicant to the Department and to the tribunal that the business operated by Cosmo Trading and Investments Pty Ltd is for the purpose of making profit through the provisions of goods and services and is not operated primarily or substantially for the purpose of speculative or passive investment. I find that it is a qualifying business within the meaning of r.1.03. It follows that r.1.11(1)(d) is also satisfied.
Based on the findings above, the tribunal finds that the business nominated by the applicant as a ‘main business’ is a ‘main business’ as defined in r.1.11(1) of the Regulations.
Based on the evidence before me, I am satisfied that the applicant has had an ownership interest in 1 or more established main businesses in Australia for the period of 18 months immediately preceding the making of the application and continues to have an interest of that kind. Accordingly, I find that the applicant continues to satisfy the criteria in cl.845.213
Clause 845.214 requires that the applicant’s assets in Australia have a net value of at least AUD250 000; and had a net value of at least AUD250 000 throughout the period of 12 months ending immediately before the application is made; and have been lawfully acquired by the applicant.
The applicant presented evidence of having $268,454 in net personal assets. He owns two properties in in Melbourne and one in Queensland. I accept that these assets were lawfully acquired by the applicant. Accordingly, the applicant meets cl.845.214.
Clause 845.215 requires that the assets owned by the applicant in the main business or main businesses in Australia have a net value of at least AUD100 000; and had a net value of at least AUD100 000 throughout the period of 12 months ending immediately before the application is made; and have been lawfully acquired by the applicant.
Based on the evidence before me (Department file 3 folios 298-300) I am satisfied that the balance of the director’s loan advanced by the applicant to Cosmo Trading and Investments Pty Ltd as at 31 March 2012 was $457,061. According to Financial statements for 2015 financial year (tribunal folio 130-131), the balance of applicant’s loan was $388,939. Based on the evidence before me am satisfied that the applicant meets Clause 845.215.
Clause 845.216 requires that In the 12 months immediately preceding the making of the application, the applicant, as the owner of an interest in a main business or main businesses in Australia, maintained direct and continuous involvement in the management of that business or those businesses from day to day and in making decisions that affected the overall direction and performance of that business or those businesses. This requirement (e.g. requiring an applicant to have done something prior to the visa application) will by default continue to be satisfied at the time of decision because they are not capable of varying over time.

Clause 845.217 requires that the applicant has had overall a successful business career and cl. 845.218 that the applicant does not have a history of involvement in business or investment activities of a nature that is not generally acceptable in Australia.
The applicant is operating a successful business in Australia. The latest turnover exceeded two million dollars. Most of the revenue is coming for exporting the Australian wine and health food. The company owns several trademarks. The products are manufactured in Australia and exported to China. I am satisfied that the applicant has had overall a successful business career and therefore meets cl.845.217
There is no evidence before me that the applicant has a history of involvement in business or investment activities of a nature that is not generally acceptable in Australia. Accordingly I find that he meets cl.845.218.
Given the findings above, the appropriate course is to remit the application for the visa to the Minister to consider the remaining criteria.
DECISION
The tribunal remits the application for a Business Skills — Established Business (Residence) (Class BH) visa for reconsideration, with the direction that the applicant meets the following criteria for a Subclass 845 visa:
·cl.845.221 Schedule 2 to the Regulations.
Antonio Dronjic
Member

ATTACHMENT – Relevant Legislation
Migration Act 1958
134Cancellation of business visas
…
(10)In this section:
…
ownership interest, in relation to a business, means an interest in the business as:
(a)a shareholder in a company that carries on the business; or
(b)a partner in a partnership that carries on the business; or
(c)the sole proprietor of the business;
including such an interest held indirectly through one or more interposed companies, partnerships or trusts;
…
Migration Regulations 1994
1.03Definitions
…
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.
…
1.11Main business
(1)For the purposes 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.
(2)If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses.

[2016] AATA 4248

9 August 2016

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Immigration

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