1511254 (Migration) - [2016] AATA 3721

1511254 (Migration) [2016] AATA 3721 (7 April 2016)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANTS:  Mr Suk Ha Yoon
Ms Jeonghwa Lee
Master Yeogwang Yoon
Miss Chaeyeong Yoon
CASE NUMBER:  1511254
DIBP REFERENCE(S):  BCC2014/2483830; BCC2015/2039463
MEMBER:Bruce Henry
DATE:7 April 2016
PLACE OF DECISION:  Brisbane
DECISION:The Tribunal affirms the decision not to grant the applicants Business Skills (Residence) (Class DF) visas.

Statement made on 07 April 2016 at 9:14am

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 3 August 2015 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 applicant applied for the visa on 30 September 2014. The delegate refused to grant the visa on the basis that cl.892.211(1) of Schedule 2 to the Migration Regulations 1994 (the Regulations) was not met by the applicant because there was insufficient evidence that the business on which the visa applicant relied, Futurecourse Pty Ltd (Futurecourse), was a ‘qualifying business’ as defined in r.1.11(1)(d).
The delegate also found that the visa applicant did not meet r.1.11(1)(b) because the evidence did not establish that he had a direct and continuous role in the management of the business Futurecourse.
The first named applicant, Mr Yoon, appeared before the Tribunal on 29 February 2016 to give evidence and present arguments. The Tribunal also received oral evidence from Mr Hugh Ritchie, a representative of Futurecourse. The Tribunal hearing was conducted with the assistance of an interpreter in the Korean and English languages.
The applicants were represented in relation to the review by their registered migration agent.
For the following reasons, the Tribunal has concluded that the decision under review should be affirmed.
Background
The applicant applied for the grant of a State/ Territory Sponsored Business Owner (Subclass 892) visa on the basis of claims in relation to one nominated main business, Futurecourse Pty Ltd. On Form 1217, the applicant has described the main activities of the main business as “education courses for domestic and international students”.
Australian Securities and Investments Commission (ASIC) records provided to the Department by the applicants show that the shareholding in Futurecourse is owned 51% by Mr Yoon 49% by the Union Institute of Languages (UIL), and the directors are Mr Ritchie and the applicant.
Included with the application was a statement headed ‘Futurecourse and UIL – Working Relationship Statement’ which said:
The intention is for Futurecourse, to look with a new view on a range of international education fields that will grow both Futurecourse and in turn UIL possible due to its close strategic and ownership relationship. This was to particularly target students from Korea and China coming to Australia for study tours and longer term English programs in addition to targeting the new and exciting tech opportunities in education to be available to students of all ages internationally. A…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] AATA 3721
Decision Date: 7 April 2016

CaseChat Overview and Summary

The case under review involves the applicant who applied for a State/Territory Sponsored Business Owner (Subclass 892) visa based on the ownership of the nominated main business, Futurecourse Pty Ltd. Futurecourse, described as providing education courses for domestic and international students, is partly owned by the applicant and partly by the Union Institute of Languages (UIL). The application included a working relationship statement between Futurecourse and UIL, highlighting their strategic and ownership ties, and their collaboration in targeting international education opportunities. The Tribunal was tasked with determining whether the applicant had an ownership interest in one or more established main businesses in Australia in the two years preceding the visa application and whether the applicant continues to have such an interest at the time of the Tribunal's decision.

The legal issues at the heart of this case revolve around the interpretation of the term "qualifying business" as defined in regulation 1.03, which specifies that a qualifying business is an enterprise operated for profit, excluding rental properties, and not primarily for speculative or passive investment. The central question was whether Futurecourse, which operates closely with UIL, constitutes a qualifying business and, by extension, a main business under the visa regulations. The Tribunal had to assess the ownership structure and operational ties between Futurecourse and UIL to determine if they collectively form a qualifying business.

The Tribunal concluded that Futurecourse did not meet the criteria of a qualifying business because it operates almost entirely in conjunction with UIL, a company not owned by the applicant. The Tribunal reasoned that the close operational relationship between Futurecourse and UIL, without the applicant holding a significant ownership stake in UIL, did not satisfy the regulatory definition of a qualifying business. Furthermore, the Tribunal found that the applicant did not possess a qualifying business in the two years prior to the visa application, affirming the decision not to grant the applicants' Business Skills (Residence) (Class DF) visas.

The Tribunal's decision was upheld on appeal, affirming that the Tribunal's interpretation of the regulatory requirements and the relationship between Futurecourse and UIL was correct. The Tribunal's findings that Futurecourse was not a qualifying business and that the applicant did not meet the criteria for the visa were consistent with the applicable regulations and case law. The decision to affirm the refusal of the visa application was thus upheld.

Orders

Orders of the court

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Background

Background to the litigation

For the following reasons, the Tribunal has concluded that the decision under review should be affirmed.Background The applicant applied for the grant of a State/ Territory Sponsored Business Owner (Subclass 892) visa on the basis of claims in relation to one nominated main business, Futurecourse Pty Ltd. On Form 1217, the applicant has described the main activities of the main business as “education courses for domestic and international students”. Australian Securities and Investments Commission (ASIC) records provided to the Department by the applicants show that the shareholding in Futurecourse is owned 51% by Mr Yoon 49% by the Union Institute of Languages (UIL), and the directors are Mr Ritchie and the applicant. Included with the application was a statement headed ‘Futurecourse and UIL – Working Relationship Statement’ which said:The intention is for Futurecourse, to look with a new view on a range of international education fields that will grow both Futurecourse and in turn UIL possible due to its close strategic and ownership relationship. This was to particularly target students from Korea and China coming to Australia for study tours and longer term English programs in addition to targeting the new and exciting tech opportunities in education to be available to students of all ages internationally. A positive thing about the Futurecourse working with UIL was that it did not need any particular licences or registrations to facilitate its business. Study tours only come to Australia for short periods of time so students come on visitor's visas and if the students are coming for longer term study, UIL provides the registered teaching facilities and courses allowing student visas to be issued.Futurecourse has day to day business operations of facilitating study tours, activity provision and coordination coupled with trying to build new education opportunities abroad with student flow to Australia. In addition it has the product development part of the business creating new and customised study tour products and activities and diversifying into new areas of education facilitation such as online teaching.In relation to online education programs, a number of Australian Universities are currently trying to develop and achieve excellence in products in this space. My partnership with UIL is aiming also this technology, adapting services for easy reach of targeting markets.To allow Futurecourse to take advantage of this opportunity, UIL at the beginning of the business relationship licenced Futurecourse to have access to UIL's curriculum to develop new programs including an online English language program. Futurecourse pays UIL $125,000 for this right. In early June 2012 it was agreed by all parties that I would be able to develop new products, programs and services outside the Futurecourse entity also in incubator companies allowing the outsource of a broad range of business associates in both Australia, Korea and China to develop new and exciting products, programs and services that could then be licenced back to Futurecourse to commercialise. This agreement allowed Futurecourse and UIL through its shareholding to take advantage of a broader range of business opportunities without exposing themselves to the cost or required investment by having to do this themselves.One example of these developments is the classes online using Korean open social communities' websites, providing quick and simplified access to English language studies utilising a media widely used by young students. The classes were facilitated by a business I funded called S&P Wisemen (S&P UniEdu), which worked in the period from June 2012 to 11 September 2013 in conjunction with Futurecourse and UIL, targeting specifically Korean students. Our educational services and management were to meet the specific needs of each student as well as our cooperative companies, and to offer reliable education including cultural experiences while learning. Nevertheless, due to my interest in a broader Asian market and to focus on the solid partnership with Ult., I decided to discontinue S&P UniEdu activities in Australia and concentrate on the growth of Futurecourse.At present I continue to manage Futurecourse together with UIL as the 2 major shareholders. Together we will continue to build Futurecourse and explore developing and incorporating new products, programs and services into the Futurecourse business while still maintaining its core study tour and activities business.

Evidence

Evidence Before The Court

‘Qualifying business’ is defined in r.1.03: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.CONSIDERATION OF CLAIMS AND EVIDENCE The issue in this case is whether the applicant had an ownership interest in one or more established main businesses in Australia in the 2 years immediately before the application was made (cl.892.211) and continues to have an interest of that kind at the time of the Tribunal’s decision (cl.892.221). As the visa application was lodged on 30 September 2014, the relevant 2 year period immediately before the application is 30 September 2012 to 29 September 2014. The applicants’ main business The evidence in this case is that the nominated business Futurecourse deals almost entirely with UIL, a company which is owned by one of the directors and shareholders of Futurecourse, but not by the applicant, who has no ownership interest in UIL. At the hearing the applicant and his representative referred to other businesses, including the (claimed) associated companies S & P Wiseman Pty Ltd and T & L Academy Pty Ltd, however the representative advised the Tribunal that the applicant had not sought to include these businesses as ‘main businesses’ for the purposes of the application. In Nassif v MIMIA (2003) 129 FCR 448, at [33], Branson J considered it significant that a ‘qualifying business’ is defined to mean an enterprise of a particular kind. Her Honour concluded that it is not a necessary characteristic of a ‘main business’ that the business be carried on by a single entity.[1] While the fact that there may be more than one legal entity is not determinative, where an applicant claims a single ‘business’ is transacted through multiple entities, the decision-maker is entitled to consider the ownership structure of each entity at any relevant time in order to decide whether they constitute ‘the business’.[2][1] Nassif v MIMIA (2003) 129 FCR 448, at [35]. See also Lu v MIAC (2009) 112 ALD 125 at [40], considering the meaning of “business” in the context of the definition of “eligible business” in s.134(10) in relation to a decision to cancel a visa under s.134(1)(a).[2] Ibrahim v MIAC [2009] FCA 1328 (Jagot J, 18 November 2009) at [32]. The Court on appeal upheld the Tribunal’s reasoning. The Tribunal accepted that two businesses claimed by the first appellant were very similar, but did not accept they were the same business on the basis that there must have been a benefit to the first appellant from the winding up of one entity and setting up another entity as a “new business” and that the different ownership arrangements between the two entities were inconsistent with the claim that they were the same business. The Court held these factors were not irrelevant considerations to determining whether multiple entities were the same ‘business’.

Decision

Reasons for decision

The Tribunal finds that Futurecourse is not a qualifying business as that term is defined in r.1.03, and is therefore not a main business as defined in r.1.11. Clause 892.211 is therefore not satisfied, and the Tribunal must affirm the decision under review.DECISION The Tribunal affirms the decision not to grant the applicants Business Skills (Residence) (Class DF) visas.Bruce HenryMember

Ratio Decidendi

Legal Principle Established

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