Chen (Migration) - [2020] AATA 4017

Chen (Migration) [2020] AATA 4017 (4 September 2020)

DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANTS: Zhonghua CHEN
Dadi XIAO

CASE NUMBER: 1921833
HOME AFFAIRS REFERENCE(S): BCC20173312536
MEMBER:Peter Ranson
DATE:4 September 2020
PLACE OF DECISION: Brisbane
DECISION:The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction the first named visa Applicant meets the following criteria for a Subclass 890 (Business Owner) visa:
·cl.890.211 and 890.212 of Schedule 2 to the Regulations.

Statement made on 04 September 2020 at 1:58pm

CATCHWORDS
MIGRATION – Business Skills (Residence) (Class DF) – Subclass 890 (Business Owner) – net assets of the nominated main business – more than A$100,000 at each balance date 12 months before application – 100% ownership of business trading in Australia – decision under review remitted

LEGISLATION
Migration Act 1958 (Cth), ss 65, 134(10)
Migration Regulations 1994 (Cth), Schedule 2, cls 890.211(1), 890.211(2), 890.212 r 1.11A

STATEMENT OF DECISION AND REASONS

Table of Contents

APPLICATION FOR REVIEW

CONSIDERATION OF CLAIMS AND EVIDENCE

Ownership interest in main business

Does the Applicant have an ownership interest in each business relied on at all relevant times?
Was each business relied on actively operating at all relevant times?
Does each business relied on satisfy the definition of ‘main business’, at all relevant points in time?

Australian Business Number and Business Activity Statements

Requirements relating to Applicant’s assets

DECISION

ATTACHMENT A - LEGISLATION

Migration Regulations 1994

1.03 Definitions
1.11 Main business
1.11A Ownership for the purposes of certain Parts of Schedule 2

Migration Act 1958

134 Cancellation of business visas

ATTACHMENT B – Balance Sheet of ZLA

APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Immigration on 17 July 2019 to refuse to grant the visa Applicants Business Skills (Residence) (Class DF) visas under s.65 of the Migration Act 1958 (the Act).
The applicants applied for the visas on 1 September 2017. Certain criteria must be satisfied during the two years immediately before the application is made, that is, 1 September 2015 to 31 August 2017 (the Application Period).
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 890 (Business Owner) visas, as set out in Part 890 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 890.2. The others need only to satisfy the secondary criteria set out in Subdivision 890.3.
The delegate in this case refused to grant the visas on the basis the first named visa applicant, Ms Zhonghua Chen, (the Applicant) did not satisfy the requirements of cl.890.212 of Schedule 2 to the Regulations because the net assets of the nominated main business did not reach the…

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: [2020] AATA 4017
Decision Date: 4 September 2020

CaseChat Overview and Summary

The Administrative Appeals Tribunal considered the case of Chen (Migration), where the applicant sought review of a decision concerning a Business Skills (Residence) visa subclass 890. The core dispute revolved around whether the applicant's main business in Australia met the net asset threshold of A$100,000 at relevant times. The Tribunal was tasked with determining the applicant's eligibility for the visa, specifically focusing on the criteria related to her ownership and the operational status of her nominated business.

The legal issues before the Tribunal included whether the applicant held the requisite ownership interest in her main business, Zhong Lian Australia Pty Ltd (ZLA), for at least two years prior to her visa application and continued to hold that interest at the time of the application and decision. The Tribunal also needed to assess whether ZLA was an actively operating business and if it qualified as a "main business" for the purposes of the visa criteria. Furthermore, the Tribunal was required to determine if the net assets of ZLA met the specified threshold of A$100,000.

The Tribunal reasoned that to satisfy clause 890.211(1) of the Migration Regulations 1994, the applicant must demonstrate an ownership interest in an actively operating main business in Australia for the specified periods. An ownership interest was defined to include being a shareholder in a company carrying on the business. The Tribunal noted that ZLA was incorporated in November 2013, and the applicant was appointed a director on that date. ASIC records indicated that the company was initially established with 100 founder's shares, which later became ordinary shares, with an additional 99,900 ordinary shares allotted in August 2015. The Tribunal's analysis focused on the applicant's shareholding in ZLA to establish her ownership interest.

Given the findings regarding the applicant's ownership interest and the operational status of the business, the Tribunal concluded that the matter should be remitted for reconsideration. This indicates that the Tribunal found an issue with the original decision, likely concerning the assessment of the net assets or other aspects of the business criteria, necessitating a further review by the delegate.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

For the following reasons, the Tribunal has concluded the matter should be remitted for reconsideration. The issue in this case is whether the net assets of the Applicant’s main business meet the required threshold of A$100,000. In accordance with the President’s Direction[3], the Tribunal will only address those elements of the criteria on which the delegate made an adverse finding and will first determine whether the Applicant meets the main business test as required by 890.211(1) before determining whether the net assets reach the required level.[3] Presidents Direction for Conducting Migration and Refugee Reviews dated 1 August 2018 Clause 890.211(1) requires the Applicant 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[4]. No more than two businesses can be nominated for this purpose[5] and one or both businesses relied on to meet the time of application criterion can be relied on to meet the time of decision criterion[6].[4] cl.890.221[5] r.1.11(2)[6] Yang v Minister for Immigration and Border Protection [2014] FCCA 1576 The business relied on by the Applicant to satisfy these requirements is sales of hardware and building materials (the Business) conducted by Zhong Lian Australia Pty Ltd ACN 166 821 361 (ZLA). Accordingly, the Tribunal must consider the nature of the Applicant’s interest in this business, by assessing her ownership interest in ZLA, whether the business was actively operating and whether it met the definition of ‘main business’ during the Application Period and as at the date of application. 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;including such an interest held indirectly through one or more interposed companies, partnerships or trusts[7] 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[8].[7] r.1.03[8] r.1.11A(1) In order to meet cl.890.211(1) the Tribunal must be satisfied the Applicant had an interest of this kind in the relevant business or businesses for at least two years immediately before the application was made, that is, during the whole of the Application Period. On 11 August 2020, the Tribunal conducted a search of the Australian Securities & Investments Commission (ASIC) records of ZLA. That search reveals ZLA was registered in New South Wales (NSW) on 18 November 2013 and the Applicant was appointed a director that day and remains so today. Her husband, Mr Dadi Xiao, (the Second Visa Applicant) was also appointed a director of ZLA on 18 November 2013 and resigned on 18 August 2015. The company was established with 100 founder’s shares. The founder’s shares became ordinary shares and on 20 August 2015 an additional 99,900 ordinary shares were allotted. The shareholders of ZLA are as follows: