Arunasalam (Migration)

[2018] AATA 1598

Arunasalam (Migration) [2018] AATA 1598 (3 April 2018)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mrs Parvathi Arunasalam
Mr Balakrishnan Vengadachalam
Mr Sivakumar Balakrishnan
Mr Dharaneesh Balakrishnan

CASE NUMBER:  1722390

DIBP REFERENCE(S):  BCC2016/1463227 BCC2017/3895002

MEMBER:Kate Millar

DATE:3 April 2018

PLACE OF DECISION:  Adelaide

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

·cl.892.211 of Schedule 2 to the Regulations.

Statement made on 03 April 2018 at 3:53pm

CATCHWORDS
Migration – Business Skills (Residence) (Class DF) visa – Subclass 892 (State/Territory Sponsored Business Owner) – Whether the applicant has an ownership interest in a particular business – Sole ownership maintained for relevant period - Whether the applicant has direct and continuous involvement in the business – Whether other requirements are met – Decision remitted with direction

LEGISLATION
Migration Act 1958 (Cth), ss 65, 134(10)
Migration Regulations 1994 (Cth), rr 1.03, 1.11, Schedule 2, cl 892.211

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. Mrs Arunasalam, her husband Mr Vengadachalam and their children came to Australia from Singapore on a Business Skills (Provisional) visa in 2012.  On 15 April 2016 they applied for Business Skills (Residence) (Class DF) Subclass 892 visas, with Mrs Arunasalam being the primary applicant for the visa.  In applying for the visa, Mrs Arunasalam relied on the business she runs through a company, Surabi Holdings Pty Ltd (Surabi).  Mrs Arunasalam says this company provides transport and logistic services, and is also involved in trading in milk products. 

2. The visa applications were refused because a delegate of the Minister was not satisfied that Mrs Arunasalam met the requirement that she has had, and continues to have, an ownership interest of one or more actively operating main businesses in Australia for at least two years immediately before the application was made.

3. In particular, the delegate made reference to the transfer of shares between Mr Arunasalam and her husband, and whether Mrs Arunasalam had maintained direct and continuous involvement of the management of the business from day to day and in making decisions affecting the overall directions and performance of the business.    

4. Mrs Arunasalam and Mr Vengadachalam appeared before the Tribunal on 29 March 2018 to give evidence and present arguments. The Tribunal also received oral evidence from Mr Bradley Westphal, an employee of Surabi.

5. The applicants were represented in relation to the review by their registered migration agent.

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

   MRS ARUNASALAM’S BUSINESS

7. Mrs Arunasalam said the business involves transport and logistics, and they provide services predominantly to Trustee for the A & C Global Trust t/a Packaging R Us (Packaging R Us).  She said she was introduced to the owner of Packaging R Us by her business consultant. Surabi employs a driver who delivers for Packaging R Us.  He works from the Packaging R Us site in Canningham, and uses a vehicle owned by packaging R Us. 

8. Mrs Arunasalam says she also undertakes delivery for LRY, who produces advertising pamphlets and that she uses her own car for delivery work as the items are small.   Surabi’s third client is Annalaksmi, a restaurant, and they deliver meals and food orders.

9. Mrs Arunasalam says she also acts as the “middle man” and trades in milk process.  Her supplier is Promac and she sells to Ampro Pte Ltd in Singapore. 

   CONSIDERATION OF CLAIMS AND EVIDENCE

10. This is an application for review of a decision made by a delegate of the Minister for Immigration on 1 September 2017 to refuse to grant the visa applicants under s.65 of the Migration Act 1958 (the Act).

11. The visa applicants applied for the visa on 15 April 2016. At the time they applied for the visas Business Skills (Residence) (Class DF) contained Subclass 892. The criteria for the grant of a Subclass 892 visa are set out in Part 892 of Schedule 2 of the Migration Regulations 1994.

12. The delegate refused to grant the visa on the basis that cl.892.211 was not met. This requires at cl.892.211(1) that the applicant has, or has had, an ownership interest in one or more actively operating main businesses in Australia for at least 2 years immediately before the application is made.

13. The period under consideration in this matter is 14 April 2014 to 15 April 2016 (the relevant period). 

    Does Mrs Arunasalam have an ownership interest in the business?

14. The term “ownership interest” in this context includes, among other things, an interest in the business as a shareholder (r.1.03 of the Regulations and s.134(10) of the Act). In this case, the shareholding in Saliba has changed. A search of the ASIC databased shows Mrs Arunasalam was issued 10 ordinary shares and was the sole shareholder on the incorporation of the company. On 15 February 2015, 7500 Class A shares were created and were held by Mr Vengadachalam. On 16 March 2017 Mrs Arunasalam’s 10 ordinary shares were transferred to Mr Vengadachalam and on 28 April 2017 they were transferred back to Mrs Arunasalam.

15. Mrs Arunasalam gave evidence that she has held the 10 ordinary shares from the incorporation of the company until she transferred these shares to Mr Vengadachalam on 16 March 2017.  She says these shares were transferred as they have two sons who were wondering why she held all of the business and that culturally the shares would be held by the husband.  She says she asked her previous migration agent for advice about transferring he shares to her husband and was told this should be alright, but then this advice changed as the matter was proceeding towards a decision so they transferred the shares back to being in her name.

16. Mrs Arunasalam said the 7500 Class A shares were created on the advice of their accountant.

17. What is relevant to the decision for the purpose of deciding if Mrs Arunasalam meets cl.8982.211 is whether she had interest in the business as a shareholder in the two years immediately before the day the visa application was made, being the period 14 April 2014 to 15 April 2016.  As Mrs Arunasalam held the 10 ordinary shares in this period of time, this requirement is met.  

    Is the business actively operating?

18. In the relevant period, Mrs Arunasalam provided bank account statements showing transfers to the business bank account from packaging R Us and invoices for work conducted for Packaging R Us.  At hearing she also provided delivery run sheets for the relevant period. 

19. Pay records for the sole employee of the company, Mr Bradley Westphal were provided, together with an employment contract with a date to commence employment of 1 July 2013. 

20. The Tribunal called Mr Westphal in the course of the hearing.  Mr Westphal confirmed that he worked for Surabi and gave evidence about his general working arrangements that was generally consistent with that of Mrs Arunasalam in that he said that he works from packaging R Us, he works for Surabi and that Mrs Arunasalam attends daily to discuss his work.  He described his work as including that of a storeman and that he operates the forklift to pick stock at the warehouse and prepare orders.  He could not name other clients, and said if he was on leave an employee form Packaging R Us did his duties. 

    Is the business a “main business”

21. The term “main business” has the expanded meaning given to it by r.1.11 and requires that:

    o   The applicant has an ownership interest in the business

    o   The applicant maintains 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;

    o   The value of the ownership interest of the applicant and his or her spouse is at least 10% of the business; and

    o The business is a qualifying business as defined in r.1.03. This requires that it is operated for the purpose of making a profit through the provision of goods, service or goods and services (other than the provision of rental property) to the public and it is not operated primarily or substantially for the purpose of speculative or passive investment.

22. In this case, Mrs Arunasalam has an ownership interest in the business, being a shareholder since the incorporation of the business. 

23. She gave evidence that she attends the warehouse daily and goes through the running sheet with Mr Westphal.  She returns home around lunch time and attends to other aspects of her business such as the trading in milk products.

24. Mr Westphal also said she attends the business daily and provides instruction.  While Mrs Arunasalam said that he also undertook other tasks for her with other clients, Mr Westphal was not aware of other clients.   Mr Westphal said Mrs Arunasalam has a separate business form Packaging R Us.

25. Mrs Arunasalam provide letters from Ms Yenley Hartono, the Director of Packing R Us stating they have engaged Surabi to assist with logistics and deal with Mrs Arunasalam. 

26. Mrs Arunasalam describes two other clients LRY and Annalakshmi.  She provided letters form he Managing Director of LRY Group of Companies Pty Ltd which states engage the services of Surabi in logistics, freight and transportation.  Annalakshmi states it uses the services of Surabi for lunch box deliveries as and when necessary.  Both state they deal with Mrs Arunasalam.

27. The accountant for Surabi, M Consulting, provided a letter stating they deal directly with Mrs Arunasalam to prepare the 2014 to 2017 financial statements and tax returns.  Surabi’s book-keeper, Top Class Bookkeepers also states it deals directly with Mrs Arunasalam. She is confirmed to be a signatory to the company bank accounts by Westpac Bank and the Commonwealth Bank.

28. In light of this evidence, I am satisfied Mrs Arunasalam maintains direct and continuous involvement in the business from day to day and in making decisions affecting he overall direction and performance of the business. 

29. Mrs Arunasalam and her husband have maintained 100% ownership of the business since it incorporation. 

30. In this case, the business offers services, with the majority of the service being to one client and with the sole employee based at the client’s premises.  Whether this is offering “services to the public” in this situation is open to question, particularly in light of Mr Westphal’s lack of knowledge of other clients.  However, information has been proceed that Surabi also provides services to tother clients, albeit on a far more limited basis and as a result offers services to the public. 

    Does it operate in Australia?

31. The term “in Australia” is defined by r.1.03 as the migration zone. Surabi operates in Australia as defined.

    Are the other requirements in cl.892.211 met?

32. To meet the requirements of r.8.211, Mrs Arunasalam must also meet r.892.211(2).  This requires:

    ·For each business an Australian Business Number has been obtained; and

    ·All Business Activity Statements (BAS) required by the Australian Taxation Office (ATO) have been submitted to the ATO.

33. Mrs Arunasalam provided business activity statements for Surabi with the application that show it has obtained an Australian Business Number and has submitted its business activity statements. 

    Conclusion

34. As Mrs Arunasalam had an ownership interest in an actively operating main business in Australia for at least two years immediately before the application is made, the business has an Australian Business Number and the Business Activity Statements have been submitted to the Australian Taxation Office and included in the application, Mrs Arunasalam meets cl.892.211, and the appropriate decision in relation to her is to remit this matter tot eh Minister to consider the remaining criteria for the grant of the visa.

35. As this means the other visa applicants may meet cl.892.311, the decision in relation to the other visa applicants is also remitted to the Minister to consider the remaining criteria for the grant of the visa. 

    DECISION

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

    ·cl.892.211 of Schedule 2 to the Regulations.

    Kate Millar
    Member