Ali (Migration)

[2019] AATA 6739

Ali (Migration) [2019] AATA 6739 (9 December 2019)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Walid Mahmood Ali ALI

Bushra Oraibi Hameid AL SAMERAIE

Anas Waleed Mahmood MAHMOOD

Jumana Walid Mahmood MAHMOOD

Bilal Waleed Mahmood MAHMOOD

Ahmed Waleed Mahmood MAHMOOD

CASE NUMBER:  1706105

HOME AFFAIRS REFERENCE(S): BCC2015/2879517

BCC2015/3079551

BCC2016/3121312

BCC2016/3121417

BCC2016/3121527

BCC2016/3121619

MEMBER:Mr S Norman

DATE:9 December 2019

PLACE OF DECISION:  Sydney

DECISION:The Tribunal has decided to remit the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named visa applicant meets the following criteria for a Subclass 892 (State/Territory Sponsored Business Owner) visa:

·cl.892.211(1) of Schedule 2 to the Regulations

and:

·in relation to the secondary applicants, the appropriate course of action is to also remit their applications to the Department for reconsideration in light of the finding that the first named applicant now satisfies cl.892.211(1)

Statement made on 09 December 2019 at 10:42am

CATCHWORDS

MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 892 (State/Territory Business Owner) visa – continuous ownership interest of main business – business was actively operating at all relevant times – diverse range of business activities – design and development project postponed – trading goods from several other countries – some unprofitable business operations ceased – qualifying business – direct and continuous involvement in the management – decision under review remitted       

LEGISLATION

Migration Act 1958, ss 65, 134
Migration Regulations 1994, Schedule 2, cls 892.211, 892.221; rr 1.03, 1.11

CASES

Shahpari v Minister for Border Protection [2016] FCCA 513
Yang v Minister for Immigration and Border Protection [2014] FCCA 1576

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 22 March 2017 to refuse to grant the visa applicants Business Skills (Residence) (Class DF) visas under s.65 of the Migration Act 1958 (the Act). The Department delegate’s decision was lodged with the Tribunal.

2. The applicants applied for the visas on 21 September 2015. At the time of application, Class DF contained four subclasses: 890 (Business Owner), Subclass 891 (Investor), Subclass 892 (State/Territory Business Owner) and 893 (State/Territory Sponsored Investor). The applicants in this case are seeking to satisfy the criteria for the grant of Subclass 892 (State/Territory Business Owner) visas, as set out in Part 892 of Schedule 2 to the Migration Regulations 1994 (the Regulations). At least one member of the family unit must satisfy the primary criteria set out in Subdivision 892.2. The others need only to satisfy the secondary criteria set out in Subdivision 892.3.

3. The delegate in this case refused to grant the visas on the basis that the first named visa applicant (‘the applicant’) did not satisfy the requirements of cl.892.211(1) of Schedule 2 to the Regulations.

4. The first named applicant (the applicant) appeared before the Tribunal on 27 November 2019 to give evidence and present arguments. The applicant was represented in relation to the review.

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

CONSIDERATION OF CLAIMS AND EVIDENCE

1. Clause 892.211 stated:

892.211

(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.
(2)      For each business to which subclause (1) applies:

(a)      an Australian Business Number has been obtained; and
(b)      all Business Activity Statements required by the Australian Taxation Office (the ATO) for the period mentioned in subclause (1) have been submitted to the ATO and have been included in the application 

Ownership interest in main business

1. Clause 892.211(1) requires that the applicant (also referred to as Dr Ali herein) had an ownership interest in one or more actively operating main businesses in Australia for at least two years immediately before the visa application was made and continued to have that interest at the time the visa application was made. The applicant must continue to satisfy this requirement at the time of this decision: cl.892.221(a). No more than two businesses can be nominated for this purpose (r.1.11(2)) and only one or both of the businesses relied on to meet the time of application criterion can be relied on to meet the time of decision criterion: Yang v Minister for Immigration and Border Protection [2014] FCCA 1576.

2. The business relied on by the applicant to satisfy these requirements is Gienah Investment Pty Ltd[1] (ASIC – registration dated 11/04/2011) Accordingly, the Tribunal must consider the nature of the applicant’s interest in this business, whether the business was actively operating and whether it met the definition of ‘main business’ in the period commencing two years immediately prior to the date of application and as at the date of application. The Tribunal may also consider these issues as at the date of this decision and whether the applicant continues to satisfy cl.892.211(1).

   [1] BCC2015/2879517 – folio 29A.

   Does the applicant have an ownership interest in each business relied on at all relevant times?

3. An ‘ownership interest’, in relation to a business, means an interest in the business as:

   ·a shareholder in a company that carries on the business, or

   ·a partner in a partnership that carries on the business, or

   ·the sole proprietor of the business (100 shareholder[2])

   including such an interest held indirectly through one or more interposed companies, partnerships or trusts: r.1.03 of the Regulations and s.134(10) of the Act. Ownership for this purpose includes beneficial ownership if it is evidenced in accordance with the terms of r.1.11A of the Regulations, set out in the attachment to this decision: r.1.11A(1).

   [2] BCC2015/2879517 – folio 28A.

4. In order to meet cl.892.211(1) the Tribunal must be satisfied that the applicant had an interest of this kind in the relevant business or businesses both at the time of making that application and for the two years immediately before. In order to meet cl.892.221(a) the Tribunal must be satisfied that the applicant continues to satisfy this requirement at the time of this decision.

5. For the purposes of the application, the first named applicant (the applicant) had nominated one main business (Gienah Investment P/L - ABN: 34 150 371 547). The Australian Securities and Investment Commission (ASIC) current and historical extract stated the applicant had been the 100% shareholder in the company since 11 April 2011.[3]

   [3] BCC2015/2879517 – folio 28A.

6. The applicant’s ‘main business’, engaged in a number of business enterprises, some of which have ceased (ie the trolley collection business at the supermarket), and some of which do not readily fit into what the Tribunal accepts is the main business (je the marketing for the gas exploration company, the stroller or childrens products and the import/export activities).

7. That being said, and as discussed below, the Tribunal was satisfied the main business of Gienah Investment Pty Ltd, was at all relevant times, broadly defined as a food distribution business (evidenced by the trolley collection at the supermarket, the fruit/vegetable delivery business, and the purchase of the fruit market).

8. The applicant also provided evidence of his involvement in another business (Time Spices P/L); though the applicant did not own this business until around October 2017.

9. Attached to the migration agent submissions dated 12 October 2019 was an accountant letter dated 11 October 2019. That provided the following advice: 

10. Based on the evidence before the Tribunal, I am satisfied the applicant held an ownership interest in the main business (being Gienah Investment P/L), and throughout the two years immediately prior to the date of the visa application.  

11. Accordingly, the Tribunal is satisfied the applicant had a relevant interest in the main business at the time of making the visa application and for the two years immediately before.

    Was each business relied on actively operating at all relevant times?

12. In order to meet cl.892.211(1) the Tribunal must be satisfied that the relevant business or businesses were actively operating both at the time of making the visa application and during the two years immediately before. In order to meet cl.892.221(a) the applicant must continue to satisfy this requirement at the time of this decision.

13. The term ‘actively operating’ is not defined in the Act or Regulations. In considering whether this requirement is met, the Tribunal may consider whether the business exhibited activity of a ‘repetitive, continuous and permanent character’ at the relevant times, in which the business actively sought to generate business, in fact generated trade and custom and derived some financial gain for its activities in the relevant period: Shahpari v Minister for Border Protection [2016] FCCA 513 at [71].

14. Form 1217[4] provided with the visa application stated that the major activities of the main business included:

    ·     product development and marketing of a children’s stroller

    ·     supervising and managing trolley collection services

    ·     developing a food manufacturing and distribution business

    ·     foreign trade

    ·     fruit market

    [4] BCC2015/2879517 – folio 29B.

15. In an undated statement,[5] it was claimed the main business is involved in a diverse range of business activities. These included:

    ·     collecting shopping trolleys on a daily basis at Hypermarket in Hurstville Shopping Centre - tractors, trailers and a utility truck had been purchased by the business for this purpose

    ·     developing and marketing children’s products, including strollers which were intended for Middle Eastern countries; liaising with manufacturers in China had been engaged in for this purpose; as was liaising with banks in relation to arranging finance. However, it was claimed the business had been forced to defer the production and marketing of the strollers ‘at this time’

    ·     the business is developing international trading activities; these activities were summarised in a spreadsheet; they involved identifying and communicating with potential clients, arranging for the import of various types of products including jewellery and accessories, copper wire, poultry feed, hotel furniture, tiles; this business will be engaged in between various countries including China, Jordan, Iraq, Turkey and Australia (other business dealings are referred to in migration agent submissions dated 17 September 2019)

    ·     The company is also engaged with marketing for technology that had been developed for oil and gas exploration by a business partner (Magnetrate).

    ·     The company also owns and operates a fruit shop and (a since sold) butcher shop at the Miller Shopping Centre in Miller NSW.

    [5] BCC2016/3121619

16. A statement provided by the applicant declared (in part) the following:

    ·     the company had initiated a stroller design and development project, however this business plan did not result in sales in Australia

    ·     the company signed a contract to manage collecting trolleys with Hypermarket premises. This service required the company to invest in machinery such as tractors, trailers and a pickup truck

    ·     the company has strong connections with potential clients in the Middle East, specifically in Jordan. The applicant had made arrangements to outsource certain products based on client specifications and export them

    ·     the applicant’s wife had established a business in which he had invested time to start and operate that business and set up an appropriate distribution method (though this was not part of the main business)

17. The applicant also lodged:

    ·     Balance Sheet Statement – year ended 30 June 2015[6]

    [6] BCC2015/2879517 – from folio 111.

    ·     Balance Sheet Statement – year ended 30 June 2014[7]

    [7] BCC2015/2879517 – from folio 121; and BCC2015/3079551 – from folio 113. 

    ·     BAS Statements

    ·     Profit and Loss Statements

    ·Year ended 30 June 2016 – profit before income tax $7,572[8]

    [8] BCC2016/3121527

    ·Income Statement – year ended 30 June 2016 – profit $148,446[9]

    ·Year ended 30 June 2015 – profit before income tax $91,006

    ·Year ended 30 June 2014 – profit before income tax $78,762[10]

    ·     Balance sheet year ended 30 June 2015 – intangible assets $97,163[11]

    ·     Financial Statement for year ended 30 June 2016 – intangible assets $97,163[12]

    ·     Letter from Westfields to applicant dated 3 April 2014 (rent agreement offer[13] - which offer was not proceeded with)

    ·     Lease agreement dated 8 July 2016[14]

    ·     A report titled “South Annajma Oil Field, Pilot Project – Detailed Results Report”, Aug 2015[15] (Canada)

    ·     Amongst others, Invoice 5/10/2013 $3745.25 to 25/06/2014 $4873.21

    ·     An undated employee list (6 - part and full time – for Gienah Investment P/L / and 13 – part time – for Time Spices P/L)   

    [9] BCC2016/3121527

    [10] BCC2015/3079551 – folio 124

    [11] BCC2015/3079551 – folio 134.

    [12] BCC2016/3121527

    [13] BCC2016/3121312

    [14] BCC2016/3121527

    [15] BCC2016/3121619

18. After considering the applicant’s response, the delegate was not satisfied the applicant met cl.892.211(1). That was because of the following.

19. The delegate referred to the clamed import/exports – a spreadsheet was provided summarising the international trading activities carried out by the company in the two years immediately before the date of application. It was also stated by the agent that “not all involve exports to and from Australia, but rather, in some instances, involved the trading of goods from one country other than Australia to a second foreign country”.  

20. The table provided in support of the above statements said there were nine transactions dated from 23 June 2014 to 15 May 2015. Out of the nine transactions, seven of them involved trading goods from countries other than Australia. Therefore, the delegate was not satisfied those seven transactions were supplying goods and/or services connected with Australia.

21. In the aforementioned table, transaction number two provided evidence of USD3,402 worth of jewellery being delivered to Australia from China, however no evidence of the jewellery being purchased by an Australian buyer. Therefore, the delegate was not satisfied this transaction was supplying goods and/or services connected with Australia. However, at hearing the applicant lodged evidence of hiring a stall at a three day market at Liverpool, where he said the jewellery was sold to persons attending the market stall. The Tribunal proposes to accept this is plausible.

22. The delegate was willing to accept that transaction number six dated 7 November 2015, related to supplying goods connected with Australia as the tax invoice to the value of AUD24,723 showed that goods were sold on 15 January 2015 to an Australian company. After considering the evidence, the Tribunal accepts this to be correct.

23. Based on the submission and supporting documents above, the delegate identified only one transaction (dated 7 November 2014), that they accepted met the definition of a main business actively operating “in Australia”. However, the delegate was not satisfied that sufficient evidence from 21 September 2013 to 7 November 2014 had been provided.

24. In migration agent submissions dated 17 September 2019, it was said the applicant conducted (amongst others) an import and export business and “successfully conducted a number of transactions in the field of import and export including”:

    ·Women’s jewellery and accessories from China to Australia. Imported from Dastane Trading Company.

    ·Soft drink from USA to Australia. Imported from Cas International Global.

    ·Food processing machineries and equipment from Taiwan to Australia. Imported from Anko Food Machines Co Ltd.

    ·Women’s jewellery and accessories from China to Jordan. Imported from Dastane Trading Company.

    ·Wire copper from Turkey to Jordan. Imported from Basak Metal.

    ·Poultry feed for broiler from Iraq to Jordan. Imported from Erbil Feed Company.

    ·Hotel furniture from China to UK. Imported from Foshan Luxin Hotel Furniture.

    ·Tiles from China to UK. Imported from Zhuojia Co. Ltd.

25. When discussed at hearing, the applicant said he travelled to generate business activity relating to imports and exports. And though only nine transactions arose in the period of two years prior to the lodging of the visa application on 21 September 2015, the money  made from the import export, was paid into the Gienah Investment account, and tax was paid on same.

26. Other business pursuits were also engaged in during these travels. For instance, in migration agent submissions dated 17 September 2019, it was said inter alia that Dr Ali had engaged in oil and gas exploration (Magnetrate Service Inc). It was said that Dr Ali made “a lot of effort to secure contracts to implement new technology”. This work involved extensive travel throughout the Middle East. It was said that until he is granted a permanent visa Dr Ali is unable to spend significant time on this project, though it remains ongoing.  Gienah Investment was said to have engaged in or around 2013/14 with Magnatrate (a Canadian company seeking to extract oil). That work had not generated profits (or any money) for Gienah Investment at this time, but Gienah Investment had arranged for a contract to provide marketing (and possibly investors) for the gas business. Be that as it may, the Tribunal was not satisfied this constituted the main business of the company.

27. A fairly detailed timeline (detailing the applicant’s work) was provided at hearing which covered the two year period prior to the visa application being lodged. After then considering all the evidence, and in spite of the limited business activity, the Tribunal will accept that Gienah Investment was engaged in import/export pursuits, and the gas exploration business, in the two years prior to the visa being lodged. However, the Tribunal was not satisfied these were the main business of the company.

28. Next, regarding the product development of strollers – the applicant had provided emails as evidence for the product development of strollers. However, it was declared by the applicant and the agent that the production of the strollers had been postponed.[16] Based on this new submission, there were no sales of the strollers and as such there was no supply of goods and/or services connected with Australia. In migration agent submissions dated 17 September 2019, after providing reasons why the stroller business did not proceed, it was said inter alia ‘this project represents a future opportunity.’

    [16] BCC2015/2879517 – folio 134.

29. At hearing, the applicant lodged evidence of substantial design and development of goods for children (including strollers). The applicant explained that when he commenced this business (his intended main business when he travelled to Australia), he wished to sell the strollers (etc) in North Africa and the Middle East. However, with the start of the Arab spring, the stability of the region was not conducive to future business opportunities, and though the work remains ongoing, no material efforts have been made to market the strollers at this time. After considering the country information, the Tribunal accepts this is plausible.

30. Next, regarding the trolley collection business – a service agreement dated 12 February 2013 was provided. This stated that the first party (Enge Trolley Service P/L – the head contractor) had been awarded contracts to collect trolleys from Hypermarket premises and return them to their designated areas. The second party (Gienah Investment P/L), being the applicant’s business, was to provide all equipment, machinery and labour related to trolley collecting. As per the terms and requirements of Hypermarket, remuneration included that the first party would pay the applicant’s company $22.50 per hour per employee.

1. In addition to the service agreement, certificates of conditional registrations of various vehicles were provided dated 11 November 2014 onwards. Also provided was a tax invoice from Enge Trolley Services P/L referring to the tractors, trailers and utes - worth $60,000. The same conditional (or limited) vehicle registrations were provided at the hearing and these indicated the vehicles had limited use and were for the purpose of collecting the trolleys in and around the market. 

2. The Department requested the applicant provide a reference letter from Hypermarkets and evidence of where the vehicles were stored; however, these were not provided. The delegate continued that they were not satisfied that a tax invoice is sufficient evidence of payment for the aforementioned vehicles. Further, no evidence of recruitment of employees had been provided, nor any evidence of payment from the first party for any labour. Based on the above documents and findings, the delegate was not satisfied the applicant’s company provided material services to Enge Trolley Services P/L or to Hypermarkets during the required two-year period (being 22 September 2013 to 21 September 2015).

3. The agent had subsequently referred to errors in the delegate’s decision; including that the delegate did not consider as relevant the business activities of the visa applicant (as it was said that r.1.03 does not require a qualifying business to operate only in Australia); that the delegate did not understand the nature of the trolley collection business (being a trolley collection service); and the delegate was said to have made various other areas which the Tribunal has had regard to prior to finalising this decision.

4. The delegate had also been unable to locate a current ABN registration for Enge Trolley Services P/L. The Tribunal notes that Enge Trolley Services P/L was de-registered in 2014. When discussed, the applicant said that after Enge Trolley Services had been de-registered, an ongoing arrangement had been agreed and that further payments had been made by ‘Rokdale Fruit shop service’[17] (sic) to the applicant’s business for the work done (ie the collection of trolleys). After considering the evidence and discussing this with the applicant at hearing, I accept this is plausible.  

   [17] BCC2016/3121619

5. When discussed at hearing, the applicant also said he had commenced the trolley business in 2013. An income statement for the year ending 30 June 2014 & 2015, indicated that profit for the business (Gienah Investment) was $143,145 (2015); and $76,945 (2014). During this period, the trolley business appears to have been the main income generator for Gienah Investment. The Tribunal accepts this was part of the main business activity of the applicant.

6. The trolley business ceased around 2016 (after the visa application was lodged). In migration agent submissions dated 17 September 2019, it was said inter alia the ‘contract [for the trolley business] was not renewed in 2016 because Dr Ali did not have enough time to operate this business while running the other business’ However, Gienah Investment had continued to operate, including with the fruit/vegetable distribution business, and the fruit market (discussed below).

7. Regarding domestic trade (the fruit/vegetable distribution business), in migration agent submissions dated 17 September 2019, it was said inter alia that in early 2013,[18] Dr Ali commenced a wholesale trading business supplying goods to retail outlets. Some “main local suppliers and shops” were referred to and it was said that bulk purchases from GCN Distributors P/L totalled $34,805 (amongst others - copies of GCN Distributors P/L tax invoices were lodged). Reference was also made to the purchase of goods through Coca-Cola amongst others. It was claimed the business was “conducted on a small turnover of about $150,000” but the “experience was extremely useful”.  

   [18] Tribunal – folio 98.

8. The applicant explained he would purchase goods wholesale (including from Woolworths) and distribute them to retailers. It was claimed that between October 2013 and May 2014, Gienah Investment on-sold $34,805 in goods (invoices lodged). After considering the lodged evidence, the Tribunal accepts this to be correct. The Tribunal also accepts this was part of the main business activity of the applicant.

9. Next, the delegate noted the agent’s submission that the applicant’s company began to operate a fruit shop (the Fruit market) and butchery business after the close of the financial year 30 June 2015. On the documents provided, the delegate accepted the applicant’s business was providing goods and services after this date. However, the delegate continued that these businesses were only providing goods and services in Australia for less than the last three months during the required two-year period prior to the visa application being lodged (from 22 September 2013 to 21 September 2015).

10. In migration agent submissions dated 17 September 2019, it was said inter alia a butcher shop was established in June 2016 (the only halal butcher shop in Miller). However, though the visa applicant leased the business, as it was not profitable, the lease was subsequently sold. It was said this indicates the applicant is responsive to market demands and prepared to cease engaging in unprofitable activities. The Tribunal has not accepted the butcher shop was part of the main business activity of the applicant.

11. In the migration agent submissions dated 17 September 2019, it was also said inter alia the visa applicant commenced in (purchased) the Fruit Shop at Miller Shopping Centre, which was purchased in August 2015. The purchase price was said to be $450,000 and a further $150,000 was spent on renovations.

12. Regarding the sale of fruit, there was an invoice dated 5 March 2014 and addressed to Enge Trolley Services P/L for the amount of $990 per week (for the period 10 February 2014 to 9 March 2014). The company (Gienah Investment) bank account statement listed six deposits of $990, however, all of these deposits showed Internet transfer repayments the following day of $850. As there was no reference from Enge Trolley Services P/L on the company bank account statement, the delegate was not satisfied the deposits were from this company.  When discussed at hearing, the applicant explained this $850 was a fee he took for his services in the business (an accountant letter dated 5 June 2017 and lodged at hearing, corroborated this claim). After considering all the evidence herein, the Tribunal proposes to accept this is correct.

13. At hearing, the applicant also said the fruit shop business was presently the main income generator for Gienah Investment (though a new business, not related to this visa application – Time Spice – of which the applicant owned around 66%, was currently more profitable).

14. Be that as it may, the Income Statement for Year Ended 30 June 2018 and 2019 was lodged at hearing. This indicated a loss of $197,828 for 2018; and a loss of $142,260 for 2019. When discussed, the applicant explained that substantial money was lost when the butcher shop ceased, and that Gienah Investment was working through that loss (which is why the loss was substantially less for 2019). However, the Income Statement also identified ‘Revenue’ generated in 2018 was $1,732,199; and $1,499,927 for 2019. Therefore, though the fruit business was purchased in August 2015, it continues to operate, and is evidence of business activity, up to the time of this decision.

15. The following is a summary of businesses operated by Gienah Investment and the period of operation:

    ·     Trolley collection- February 2013 until 2016 (evidence for same was provided at the time of the visa application)

    ·     The wholesale retail business – early 2013 up until the fruit shop was purchased

    ·     Fruit shop – August 2015 up to the present date

    The following businesses were not considered to be part of the main business:

    ·     Import/export – for some time prior to the visa application being lodged

    ·     Providing marketing services for the gas exploration company – though not generating any income for Gienah Investment, 2013 up to the present date

    ·     Stroller and goods for children – though not generating any income for Gienah Investment, 2013 up to the present date

16. Therefore, the Tribunal is satisfied the main business was actively operating both at the time of making the visa application and during the two years immediately before.

Does each business relied on satisfy the definition of ‘main business’ at all relevant points in time?

1. In order to satisfy the requirements of cl.892.211(1), the business or businesses relied on by the applicant must meet the definition of ‘main business’ at the time of application and during the two years immediately before. Clause 892.221(1) requires that the applicant continues to satisfy this requirement at the time of decision. The term ‘main business’ is defined in r.1.11 of the Regulations and is set out in full in the attachment to this decision. There are four elements to the definition, each of which must be satisfied for a business to be a main business.

2. First, the applicant must have or have had an ownership interest in the business. ‘Ownership interest’ is defined in s.134(10) of the Act: r.1.03.  If a beneficial interest is relied on for these purposes, certain evidentiary requirements must also be met: r.1.11A. These provisions are set out in full in the attachment to this decision.

3. Based on the evidence above, the Tribunal accepts the applicant has a relevant ownership interest in the businesses of Gienah Investment at all material times.  

4. Next, 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 must meet certain thresholds:

   ·if the business is operated by a publicly listed company, the value of the ownership interest must be at least 10% of the total value of the business;

   ·if the businesses is not operated by a publicly listed company and the annual turnover of the business is at least AUD400 000, the value of the ownership interest must be at least 30% of the total value of the business;

   ·If the business is not operated by a publicly listed company and the annual turnover of the business is less than AUD400 000; the value of the ownership interest must be at least 51% of the total value of the business.

5. Again, based on the evidence before the Tribunal, I am satisfied the applicant has an ownership interest of Gienah Investment in excess of 51%.

6. Next, the business must be a qualifying business. ‘Qualifying business’ is defined as an enterprise that 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 is not operated primarily or substantially for the purpose of speculative or passive investment: r.1.03 (demonstrate that they have had direct and continuous involvement).

7. Based on the evidence before the Tribunal, the prosperity of Gienah Investment has fluctuated since its commencement. However, it appears clearly to have been operated for the purpose of making profit; principally through the food distribution businesses conducted by the company.  

8. Next, the applicant must maintain or have 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.

9. The delegate noted the applicant had been outside Australia for 248 days in the two years prior to lodging the visa application. When asked to comment, the applicant provided a detailed statement (see the Timeline lodged at hearing) identifying many meetings with offshore clients about possible business opportunities, but not all of these resulted in the applicant’s business supplying goods and/or services connected with Australia. However, the evidence does indicate business activity during all relevant periods; and that activity was for the benefit of the applicant’s main business.

10. It was also claimed that Dr Ali used Egypt as a base and travelled throughout the Middle East. He obtained a one year visa in September 2013 with permission to work - reference was then made to an expired Canadian passport (copy of the face-page lodged). Per migration agent submission dated 17 September 2019, it was also stated ‘Management involves planning, organising, directing and controlling the resources of the business:

• planning includes setting the goals of the business, developing strategies for achieving the goals and determining the standards, or level of quality, that need to be met in completing tasks and includes:

• strategic planning - the setting of long-range goals for the business

• tactical or short range planning - the process of developing detailed strategies about what needs to be done, who should do it and how it should be done and

• contingency planning - allows for alternative courses of action when the primary plans that have been developed do not achieve the goals of the organisation

• organising refers to the way the business allocates resources, assigns tasks, and goes about meeting its goals. In the process of organising, managers arrange a framework that links all workers, tasks and resources together so the business goals can be achieved

• directing is supervising or leading workers to accomplish the goals of the business

• controlling is the process of determining if the goals and objectives of the business are being met, setting performance standards for workers and monitoring their performance against standards.

1. When discussed at hearing, the applicant explained his sons assisted in the trolley collection, wholesale businesses and fruit market, but that he was in constant contact with them by phone or video link, in order to fix any problems (when travelling). It was also explained the nature of the businesses did not require him to actually be present at the workplaces on a day to day basis. This does not mean he was not materially engaged with the management of the businesses. After discussing same at hearing, the Tribunal accepts this to be correct.

2. After having discussed this at hearing, the Tribunal is also satisfied the applicant has maintained a direct and continuous involvement in management of the main business (Gienah Investment) from day to day, and in making decisions affecting the overall direction and performance of the business. This is not to suggest that he acted in the capacity of a line manager in the businesses he managed. However, all material decisions relating to the goals and direction of the business, amongst others, were the responsibility of the applicant.

3. Accordingly, the Tribunal is satisfied that the Gienah Investment does meet the definition of main business.

4. Given the findings above, the Tribunal is satisfied the main business relied on by the applicant has met the definition of ‘main business’ at the time of the visa application and during the two years immediately before.

DECISION

1. The Tribunal has decided to remit the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named visa applicant meets the following criteria for a Subclass 892 (State/Territory Sponsored Business Owner) visa:

   ·cl.892.211(1) of Schedule 2 to the Regulations

   and:

   ·in relation to the secondary applicants, the appropriate course of action is to also remit their applications to the Department for reconsideration in light of the finding that the first named applicant now satisfies cl.892.211(1)

Mr S Norman
Member

ATTACHMENT - LEGISLATION

Migration Regulations 1994

1.03Definitions

In these Regulations, unless the contrary intention appears:

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ownership interest has the meaning given to it in subsection 134(10) of the Act.

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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.

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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.

1.11AOwnership for the purposes of certain Parts of Schedule 2

(1)Subject to subregulation (4), for Parts 132, 188, 888, 890, 891, 892 and 893 of Schedule 2, ownership by an applicant, or the applicant’s spouse or de facto partner, of an asset, an eligible investment or an ownership interest, includes beneficial ownership only if the beneficial ownership is evidenced in accordance with subregulation (2).

(2)To evidence beneficial ownership of an asset, eligible investment or ownership interest, the applicant must show to the Minister:

(a)a trust instrument; or

(b)a contract; or

(c)any other document capable of being used to enforce the rights of the applicant, or the applicant’s spouse or de facto partner, as the case requires, in relation to the asset, eligible investment or ownership interest;

stamped or registered by an appropriate authority under the law of the jurisdiction where the asset, eligible investment or ownership interest is located.

(3)A document shown under subregulation (2) does not evidence beneficial ownership, for subregulation (1), for any period earlier than the date of registration or stamping by the appropriate authority.

(4)Beneficial ownership is not required to be evidenced in accordance with subregulation (2) if the person who has legal ownership of the asset, eligible investment or ownership interest in relation to which the applicant, or the applicant’s spouse or de facto partner, has beneficial ownership:

(a)is a dependent child of the applicant; and

(b)made a combined application with the applicant; and

(c)has not reached the age at which, in the jurisdiction where the asset, eligible investment or ownership interest is located, he or she can claim the benefits of ownership of the asset, eligible investment or ownership interest.

Migration Act 1958

134Cancellation of business visas

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1. In this section:

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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.