JIANG v Minister for Immigration
[2018] FCCA 929
•17 April 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| JIANG & ORS v MINISTER FOR IMMIGRATION & ANOR | [2018] FCCA 929 |
| Catchwords: MIGRATION – Administrative Appeals Tribunal – application for Business Skills (Residence) (Class DF) visas – whether the Tribunal misconstrued the requirements of “main business” to be met under regulation 1.11(b) and 1.11(d) of the Migration Regulations 1994 – no jurisdictional error identified – amended application dismissed. |
| Legislation: Migration Act 1958 (Cth), ss.134, 476 Migration Regulations 1994, reg.1.03, 1.11, cl 892.211, 892.221 of Schedule 2 |
| First Applicant: | WEIMING JIANG |
| Second Applicant: | DONG CHU |
| Third Applicant: | JIAQI CHU |
| Fourth Applicant: | JIAYU CHU |
| First Respondent: | MINISTER FOR IMMIGRATION & BORDER PROTECTION |
| Second Respondent: | ADMINISTRATIVE APPEALS TRIBUNAL |
| File Number: | SYG 1198 of 2016 |
| Judgment of: | Judge Street |
| Hearing date: | 6 March 2018 |
| Date of Last Submission: | 6 March 2018 |
| Delivered at: | Sydney |
| Delivered on: | 17 April 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr N Poynder |
| Solicitors for the Applicant: | Diamond Conway Lawyers |
| Counsel for the Respondents: | Ms R Francois |
| Solicitors for the Respondents: | Clayton Utz |
ORDERS
The amended application is dismissed.
The first, second and third applicants pay the first respondent’s costs fixed in the amount of $6,825.00.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1198 of 2016
| WEIMING JIANG |
First Applicant
| DONG CHU |
Second Applicant
| JIAQI CHU |
Third Applicant
| JIAYU CHU |
Fourth Applicant
And
| MINISTER FOR IMMIGRATION & BORDER PROTECTION |
First Respondent
| ADMINISTRATIVE APPEALS TRIBUNAL |
Second Respondent
REASONS FOR JUDGMENT
Background
This is an application for a Constitutional writ within the Court’s jurisdiction under s 476 of the Migration Act 1958 (Cth) (“the Act”) in respect of a decision of the Administrative Appeals Tribunal (“the Tribunal”) made on 13 April 2016 affirming the decision of the delegate not to grant the applicants Business Skills (Residence) (Class DF) visas.
The first applicant’s visa was refused on the basis that the first applicant did not meet cl 892.211 of schedule 2 to the Migration Regulations 1994 (“the Regulations”). The delegate referred to the first applicant’s claim that she was involved in the management and direction of the business (dealing in wine export), based on emails to and from the first applicant to a small selection of third parties. The delegate was not satisfied in respect of Invoice 13043 dated 6 November 2011, which showed the exporter as Malesco Import and Export Pty Ltd (“Malesco”) and the consignee as Anqi Investments Pty Ltd (“Anqi”), that this wine was exported or that it was an export transaction undertaken by the first applicant. The delegate noted that there were no supporting documents for the invoice and no Bill of Lading.
The delegate took into account that the first applicant was outside Australia for a total period of over eight months during the relevant two year period, and was outside Australia for over five months during the first year of the relevant two year period. The delegate noted that the evidence showed that the first applicant had very little involvement in the business during her absence from Australia.
The delegate was not satisfied that the first applicant 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 first applicant’s absence from Australia. The delegate was also not satisfied that the first applicant demonstrated 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 periods of time the first applicant was in Australia.
The delegate referred to the four Business Activity Statements (“BAS”) from 1 July 2010 to 30 June 2011 where sales during that period were recorded as zero. The delegate referred to the claim by the first applicant that she initially contacted D.J. Batchen Pty Ltd (“Batchen”) with the intention of purchasing LPG dispensing equipment for sale in China and that during July 2009, the first applicant purchased via her business, four LPG dispensers which she then sold to Hui Tong Gas Company in Yantai.
The delegate also noted that during the relevant two year period, the first applicant only provided evidence of two transactions for the export of wine, and the delegate was not satisfied that the first applicant was actively involved in the business of sourcing, purchasing and exporting wine. The delegate found that the evidence of the business activity was ad hoc and inconsistent with that of an actively operating business.
The delegate was not satisfied that Anqi was an actively operating business during the relevant period. The delegate found that Anqi was only actively operating for short periods around the time of the exports, but that there was little business activity at other times. The delegate also found that the business did not meet the definition of a qualifying business during the relevant time.
Before the Tribunal
The applicant applied for review of the delegate’s decision on 3 February 2014. The applicant was invited to appear before the Tribunal on 14 January 2016. The applicant appeared on that date to give evidence and present arguments.
Post-hearing submissions
Further submissions were also provided to the Tribunal after the hearing date. Those submissions expressly addressed the requirements of cl 892.211(1) of Schedule 2 to the Regulations, and in particular whether the applicant was actively operating the business as well as whether the applicant had direct and continuous involvement.
The submissions noted it was conceded that a portion of the dealings between the first applicant and Batchen occurred outside the relevant period. It was submitted that those dealings nonetheless reflected the genuineness of an attempt to introduce Batchen to Chinese manufacturers who would be able to manufacture its highly technical products, which would then be commercially exploited by means of a joint venture between Anqi and Batchen.
It was submitted that the joint efforts of Batchen and the first applicant must be regarded as a period of research and development and that there is nothing in the definition of a qualifying business which precludes genuine attempts to enter into a business which has the purpose of ultimately making profit through the provision of goods. The submissions claimed that the first applicant’s genuine effort did not have the desired outcome and did not result in regular sales was irrelevant. Reference was also made to the first applicant’s intent to purchase LPG dispensing equipment from Batchen for sale to China and that during July 2009 the first applicant purchased four LPG dispensers, which were onsold to a company in Yantai.
The submissions referred to the first applicant arranging for Mr James Batchen, the managing director of DJ Batchen Pty Ltd to run a training course in China for Chinese end users in 2010 and to the first applicant paying for Mr Batchen’s travel and accommodation. Reference was also made to correspondence and a draft business plan for China in 2010, drafted by Mr Batchen and the first applicant, for additional components to be shipped to China in October 2010. The submissions referred to the Chinese company’s construction of a new dispenser containing these components, which it shipped to Batchen and that the freight costs were met by the first applicant.
The submissions then referred to May 2011 and December 2011 when Anqi purchased nozzles from Batchen for shipment to China. The submissions referred to the first applicant arranging for Mr Batchen to travel to China in October 2011 to meet a representative of a Chinese company to discuss development of technical components for a dispenser. The submissions referred to correspondence reflecting the situation that the first applicant and Batchen were developing a joint venture pursuant to which Batchen components were to be either manufactured in China or in Australia or both.
It was submitted that the business arrangements could not be viewed as a simple arrangement of vendor and purchaser, nor could such arrangement be expected to produce turnover within a short period of time. It was also submitted that the activities of the first applicant and Anqi are clearly those of an actively operating business. It was submitted these activities continued into the relevant period and must be taken into account as forming part of the business activities of the applicant/Anqi during the relevant period. Reference was also made to additional purchases in relation to LPG dispenser samples, valves, nozzles and other parts.
The submissions then referred to the wine business in respect of which, the initial contact between Anqi and the supplier of wine Malesco took place in early May 2011. It was submitted that the correspondence established that the first applicant was actively involved in the business of sourcing, purchasing and exporting wine for that period. It was submitted that the correspondence did not reflect the contact that the first applicant had with respect to purchasers of wine during the period prior to May 2011 when the first applicant was in the process of ascertaining whether or not a market existed for wine.
The submissions made reference to the first applicant having made all of Anqi’s decisions as she was the only person operating Anqi and that she was assisted when overseas by her accountant, as described in the accountant’s letter which was handed up at the hearing before the Tribunal. It was submitted that the nature of the business would dictate the nature of the involvement in each business and that the first applicant had located a source of supply in the form of wine and was making every attempt to build up its business by breaking into the Chinese market.
The submissions then addressed continued involvement and reference was made to the accountant’s letter, and it was submitted that the evidence supported the fact that the first applicant is making every effort to increase the size of the business and would continue to do so in the future. It was submitted that the evidence established that the first applicant maintained direct and continuous involvement in the management of the business from day to day and in the making of decisions affecting the overall direction and performance of the business. It was submitted that the first applicant, via Anqi who had all the contact with Batchen, purchased various components from the company and was negotiating the proposed venture.
The submissions also referred to the first applicant who instructed the accountant when necessary in relation to the business. It was submitted that taking into account the nature of the business performed by Anqi, the first applicant made and implemented all of the management decisions necessary to either attempt to develop the business in the case of Batchen, or to commence the wine trade during the relevant period, and which is today ongoing.
Accountant’s letter dated 14 Jnuary 2016
In support of the submissions, the first applicant provided an accountant’s letter dated 14 January 2016 identifying that the firm had prepared the financial statements of expert sales of $60,000.00 as being recorded in 2011 financial statements, but that the company’s previous accountant had lodged nil for all business activity statements before the lengthy handover was completed.
The accountant noted that the principal decided not to amend the business activity statements because the expert sales did not change the company’s GST position. Reference was made to the small business classification of Anqi and that the company reports quarterly business activity statement to the ATO on a cash basis to comply with its GST registration. It was noted that export sales are exempt from GST, but that it still follows the cash accounting basis for reporting.
Letter from Mr Batchen dated 24 August 2012 3
The Tribunal also received evidence from Mr Batchen, who provided a letter dated 24 August 2012 which referred to the first applicant approaching Mr Batchen in about May 2009 concerning the possibility of selling his company’s products to China. Reference was made to the purchase of LPG dispensers in July 2009, and an invitation to travel to China in July 2010 to run a training course for Chinese end users. Mr Batchen identified that Anqi paid his travel and accommodation expenses and organised lecture facilities including an interpreter.
Mr Batchen made reference to representatives from Chinese companies attending the course located in the city of Zi Bo and in Shandong province and that the representatives were from a company known as Yaohua, which is an LPG dispenser manufacturer. Mr Batchen referred to subsequently being contacted by Yaohua representatives and entering into three part discussions with Yaohua and Anqi concerning the possibility of sourcing components to be manufactured in China according to the specifications and/or to supply Batchen components to China.
Reference was also made to Batchen and shipping via Anqi, a fully functional set of hydraulics in September 2010, and then in April the manufacturer, Yaohua shipped, a fully-functional frame and electronics for evaluation. It was submitted that Mr Batchen was regularly in contact by phone or email with the first applicant as well as Yahua representatives. Mr Batchen submitted that it was understood that all parties were in a development stage and in the process of product development which would take some years to complete.
The Tribunal’s Reasons
The Tribunal in its reasons delivered on 13 April 2016 to the background to the application for review and correctly identified that the issue in the present case was whether the applicant had and continues to have an ownership interest in one or more actively operating main businesses in Australia for at least two years immediately before the application is made under cl 892.211 of Schedule 2 to the Regulations, and that the first applicant continues to have an interest of that kind at the time of the Tribunal’s decision under cl 892.221 of Schedule 2 to the Regulations.
The Tribunal found that the relevant two year period immediately before the making of the application on 24 September 2012 is the period from 24 September 2010 to 23 September 2012. The Tribunal set out the requirements of cl 892.211 of Schedule 2 to the Regulations which is relevantly as follows:
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.
The Tribunal identified the definition of “ownership interest” in reg 1.03 of the Regulations relevantly having the meaning given by s 134 (10) of the Act as follows:
“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.
The Tribunal identified the requirements of “main business” in reg 1.03 of the Regulations set out in reg. 1.11 of the Regulations as follows:
(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.
The Tribunal then identified the requirements of “qualifying business” in reg 1.03 of the Regulations set relevantly as follows:
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.
The Tribunal summarised the first applicant’s evidence in relation to her interest in Anqi in which she became involved as an owner or part owner on 28 July 2008. The Tribunal referred to the first applicant nominating Anqi as a main business and stated that her interest in the business in 2011 and 2012 was 100%. The Tribunal referred to the major activities of the business, being machinery import and export and wine export.
The Tribunal referred to documents provided showing the trading, profit and loss statements for the period 1 September 2011 to 31 August 2012. The Tribunal referred to business records in relation to trading profit and loss statements and made reference to the BAS statements provided, and in particular that from the period 1 July 2010 to 30 June 2010, the BAS disclosed zero dollar sales. The Tribunal identified the sales figures for the periods post 30 June 2011. The Tribunal also made reference to the trading, profit and loss statement for the period post 1 September 2011 to 31 August 2012 sales for 2011 being shown as $60,000.00 for machines and no sales for wines. The Tribunal also made reference to the reduced sales of machines in 2012 and the increased sales of wine in 2012.
The Tribunal identified the large amount of evidence that was provided as well as the adverse findings made by the delegate. The Tribunal identified further material provided by the first applicant and summarised what occurred at the hearing. The Tribunal identified having given the first applicant an opportunity to address the concerns raised by the delegate, to describe her involvement in the operation and management of the business, and to comment on the concerns raised by her evidence.
The Tribunal referred to informing the first applicant as to the requirements of cl 829.211 of Schedule 2 to the Regulations and cl 892.221 of Schedule 2 to the Regulations at the time of decision.
The Tribunal made reference to where the first applicant was operating a business from and asked the first applicant if she was operating the business from her home. The first applicant responded that the Tribunal could put it that way, and that the registered business address is the address of the accountant, and that the accountant receives mail on her behalf when she is not present. The evidence also alleged the accountant contacts the first applicant.
When the Tribunal asked the first applicant if she had a separate office for her company, the Tribunal noted the first applicant stated that if she has an appointment with an important client she will make an appointment at that specific site. The Tribunal brought to the first applicant’s attention the BAS activity statements at the time of application and that in the first four BAS statements which covered the period 1 July 2010 to 30 June 2011 there were not sales, and that the first four BAS showed sales of zero dollars.
The Tribunal noted that the first applicant stated the company was established in 2008 and that the first transaction was in 2009, and that the first applicant alleged during that period of time she did the business transaction in aural equipment and then she acted as an LPG dispenser. The Tribunal noted the first applicant asserted that on 16 July 2009, she started the first business transaction as an LPG dispenser and exported some machines to China and purchased four machines as a sample. The first applicant alleged the machines were very good quality but the price was too high and was not suitable for long-term sales and that the first applicant had embarked on reducing the cost of the machines. The first applicant alleged during that period of time until 2010, that during the nine months, she shuffled between manufacturing factories in China and Batchen.
The first applicant made reference to introducing Batchen to China for training sessions to use the machines and that the first applicant helped reassemble the machines so that the function of the machines can be optimised. The Tribunal also made reference to the first applicant during this time approaching manufacturing factors in Shandong Province and other cities such as Zi Bo. The Tribunal noted the first applicant stated that an LPG dispenser is a very risky and high pressure measurement equipment and common factories cannot produce this sort of equipment. The Tribunal also noted that managers are concerned about safety and that the first applicant invited them to visit many times and even invited them to visit Yangzhou to look at the machine which she purchased from overseas.
The Tribunal made reference to informing the first applicant about making sales of zero dollars over the four quarters and that if she wished to make comment in relation to the very specific two year period. The Tribunal made reference to the first applicant’s assertions that everyone had the opportunity to look at the machine and had very good communication, and that the first applicant acted as the bridge between persons and that they developed new equipment by using major accessories of LPG dispensers.
The first applicant made reference to taking a long time to get qualifications for the machine and that this meant the whole sale was in suspension. The Tribunal referred to the fact that this is what the first applicant did and that it was the reason why the sales were nil but three parties made great effort to do that. The Tribunal referred to the fact that the first applicant continued to operate with LPG dispensers and sometimes they have customers who want good quality accessories from this company, and that the evidence supported the business activity was continuing.
The Tribunal also referred to raising with the first applicant concerns as to whether during the first year of the two year period it was a qualifying business. The Tribunal referred to the profit and loss statement for the year 31 August 2012, and that it says that they sold no wines during the 2011 year but they sold machinery of $60,000.00. The Tribunal raised the issue of where the evidence of that was with the first applicant and brought to the first applicant’s attention to the fact that the delegate raised this issue in the decision record and that the Tribunal had not been able to find it either. It was in that regard the first applicant said she could find it in a folder, and the Tribunal asked the first applicant to show the evidence to the Tribunal. The first applicant made reference to the purchase of the machines in July 2009, and that as the samples were for a trial they were reluctant to pay and that she could find the receipts in relation to the purchase of the equipment and when the machines were sold.
The Tribunal raised with the first applicant that the Bill of Lading did not refer to the first applicant’s company and was issued on 14 August 2009. The Tribunal noted referring the first applicant to the figure of $60,000.00 for machinery and informed her that the Tribunal had concerns as to whether she made any sales in the first year of the relevant period, and, indeed, the Business Activity Statements indicated that she made no sales. Reference was made by the first applicant to her not cooperating with the accounting company at that time.
The Tribunal explored with the first applicant the Business Activity Statements and who prepared the same for the period 1 July 2010 to 30 June 2012, and made reference to the first applicant stating that she had a new accounting company. The Tribunal again made reference to informing the first applicant that the Business Activity Statements in the relevant two year period showed there were no sales and that it concerned the Tribunal that the profit and loss statement indicated that a sale of $60,000.00 was made but that there was no reference to it in the Business Activity Statements.
The Tribunal also made reference to the absence of sales of wine in 2011 and the first applicant saying she had no idea about exact details but that she could find the evidence in her file. The Tribunal made reference to the first applicant saying they were looking for new opportunities and that was why the correspondence was reduced.
The Tribunal made reference to the evidence of Mr Batchen, and in particular that they tried to develop a business relationship with the first applicant over many years, which the first applicant said was attested by the email correspondence. The Tribunal referred to the first applicant stating that they made a couple of small sales but that this did not change the essential nature of the business they were trying to conduct.
The Tribunal referred to having concerns about the $60,000.00. not appearing in the first four BAS statements and about having concerns about that figure because it was not in the BAS statements for the 2011 year, with the first applicant stating that she had no idea what was done by the accountant, that she was just the manager, that she did what she had to do and that the transaction did happen.
The Tribunal referred to the first applicant stating that in 2012 she and Mr Batchen maintained constant correspondence. The Tribunal also referred to asking the first applicant why it was not in the BAS statements that she was paid in 2011, and that the Tribunal asked the first applicant why it said zero dollars in the BAS statements. The Tribunal made reference to the first applicant alleging that she received payment on 3 June 2011 and had no idea what the accountant did. The Tribunal then made reference to the first applicant confirming she was outside Australia for over eight months during the relevant two year period, and the Tribunal informed the first applicant that in the first year of the relevant two year period she was outside Australia for five months.
The Tribunal made reference to the first applicant saying she could not remember exactly because she came to Australia alone and that in the first few years she travelled back to China very often and started the business herself. The Tribunal also made reference to the first applicant stating that she needed to go back to China to find business opportunities and that the emails show the effort she made during that period.
The Tribunal informed the first applicant that as there were no sales for the four quarters according to the business activity statements, this might lead the Tribunal to conclude that the business during that period was not being operated for the purpose of making a profit through the provision of goods and services to the public. The Tribunal made reference to also informing the first applicant that her absence from Australia for those periods might lead the Tribunal to conclude that she did not maintain 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.
The Tribunal identified the first applicant’s response that she travelled back to China often during the first few years because she was trying to develop business in China. The Tribunal observed that it appears the first applicant was not involved in the daily management of the business but appointed an accounting company to operate the business.
The Tribunal referred in detail to the submissions made on behalf of the first applicant, and the representative’s submission that a previous accountant had lodged a nil turnover in BAS statements, which although incorrect, had no effect on the business and no transactions attracted GST.
The Tribunal found that the first applicant had the relevant ownership interests in the business, and turned to the requirements of reg 1.11(1)(b) of the Regulations. The Tribunal observed that there were two requirements in that regard. First, that the first applicant maintain direct and continuous involvement in the management of the business from day to day and secondly, that the first applicant maintain direct and continuous involvement in making decisions that affected the overall direction and performance of the business.
The Tribunal made express reference to the requirements of the Departmental Guidelines (PAM3) that to meet the requirement for direct and continuous involvement in the management, the first applicant must demonstrate that she has exercised responsibility within the business in terms of decision-making authority and in setting strategic direction of the business, such responsibility has been exercised on a continuous and daily basis as opposed to occasional, and that the skills have been fundamental to or have exerted direct influence on the operation of the business, and they have a specific and identifiable role in the business. The Tribunal noted that the PAM3 guidelines was not a legislative requirement, and that focus was required on reg 1.11(1)(b) of the Regulations.
The Tribunal expressly accepted that there are various ways in which a person might maintain direct and continuous involvement in the management of a business, and in making decisions affecting its overall direction and performance. The Tribunal also noted that the person involved in the management of the business does not necessarily have to manage the whole of the business, and that the Tribunal must have regard to all the circumstances and requirements of the individual business.
It was in this context that the Tribunal identified, in considering whether the first applicant maintained direct and continuous involvement in the management of business from day to day, the Tribunal had regard to the first applicant’s travels outside Australia. The Tribunal found that the first applicant was outside Australia for a significant period of time during the relevant two year period. The Tribunal made reference to the first applicant’s claim of direct and continuous involvement in the management of the business from day to day, and in the making of decisions affecting the overall direction and performance of the business during the relevant two year period. The Tribunal identified having concerns about this evidence because there is little evidence that the first applicant was involved continuously in the management of the business from day to day during the first year of the relevant two year period.
The Tribunal found there was little evidence of continuous involvement and found not only that there was little evidence of continuous involvement, but there was also little evidence that the first applicant 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.
The Tribunal made reference to the first applicant’s evidence that most of the business transactions happened online, and that the accountant received mail on her behalf when she is not present. The Tribunal noted the first applicant claimed the accountant would contact the person to deal with something that the first applicant cannot explain, and that the accountant deals with some cheques. The Tribunal noted the first applicant claimed that when she went back to China, all calls coming to her mobile phone were switched to the accounting company.
The Tribunal identified having concerns about the evidence from the accountants. The Tribunal referred to the BAS statement, and the $60,000 claim received in June 2011. The Tribunal, having considered the evidence, did not accept that the first applicant maintained or has 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 in the relevant two year period. The Tribunal referred to the accountant stating the first applicant gave instructions on a daily basis by email and by telephone, and no documentary evidence other than the accountant’s statement had been provided. The Tribunal also observed there was no documentary evidence before the Tribunal of the communications with the accountant looking after the first applicant’s business such as liaising with suppliers, placing orders and coordinating shipments during the relevant two year period.
The Tribunal also considered the first applicant’s evidence that she had an office address of her accountants. The Tribunal was not satisfied the first applicant has an office there, and found that no documentary evidence on an office was provided. The Tribunal found the first applicant basically runs her business online, and is able to do this from her home. The Tribunal made reference to the business activity and sales from 1 July 2011 to 30 June 2012, and that except from 1 January 2012 to 31 March 2012, there were no sales at all from 1 July 2010 to 30 June 2011. The Tribunal referred to the BAS statements for the period 1 July 2010 starting before the two-year period, but including seven days of the relevant two year period.
The Tribunal found based on the business activity statements from the period 24 September 2010 to 30 June 2011, there were no sales in that period. The Tribunal found that even if it were to accept there was a bank deposit of $59,982.61 on 3 June 2011 that was a sale by the business that in fact took place in 2009, the first applicant made no sales from 24 September 2010 to 2 June 2011.
The Tribunal referred to the letter from the accountant but was not satisfied that the first applicant 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. The Tribunal made reference to the accountant’s letter not explaining the zero sales in the first four BAS statements of the relevant two year period.
The Tribunal made reference to the alleged sale in 2009 and had significant concerns about the claim that there were sales of $60,000.00 of machines in the 2011 year, even though that is mentioned in the trading, profit and loss statement for the period 1 September 2011 to 31 August 2012 because there is no reference to this large sale in any of the BAS for the relevant two year period and not in the BAS statements period for 1 April 2011 to 30 June 2011.
The Tribunal made reference to the evidence of Mr Batchen that there was a sale of an LPG nozzle on 20 May 2011, and found on the evidence that the business made no sales from 24 September 2010 to 2 June 2011. The Tribunal made reference to the proposition that even if it were to accept that Malesco exported wine on behalf of Anqi in November 2011, this took place after the first year of the relevant two year period, and that in the first year of the relevant two year period of the business activity statement, the business activity statements indicated there were no sales.
The Tribunal made reference to the email communications and was not satisfied the first applicant has 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. The Tribunal found the first applicant was outside Australia for five months in the first year of the relevant two year period, and that there were no sales according to the first four BAS statements in the relevant two year period.
The Tribunal accepted the first applicant’s evidence that she was building up a company, and that she travelled between China and Australia to develop contacts and customers, and to increase her company’s business, and that during the nine months until 2010, she shuffled between factories. The Tribunal had regard to the evidence of Mr Batchen about the business relationship with the first applicant and Anqi. The Tribunal was not however, satisfied that during the relevant two year period, the first applicant 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. It was in those circumstances the Tribunal found the applicant failed to meet the requirements of reg 1.11(1)(b) of the Regulations.
The Tribunal also made reference to the first applicant having achieved sales in three of the eight quarters of the relevant two years, and that there were no sales achieved in five of the eight quarters. The Tribunal was not satisfied that Anqi was a qualifying business for the relevant two year period, and was not satisfied the first applicant met reg 1.11(1)(d) of the Regulations.
The Tribunal found on the evidence before it, at the time of application, that it was not satisfied the first applicant maintains or has 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 as required by reg 1.11(1)(b) of the Regulations. The Tribunal found that the first applicant did not meet the requirements of reg 1.11(1)(b) of the Regulations.
The Tribunal made reference to not being satisfied that the business is a qualifying business, as the Tribunal was not satisfied the first applicant’s business was operated for the purpose of making a profit through the provisions of goods and services or goods or services to the public during the relevant two year period of 24 September 2010 to 23 September 2012. The Tribunal found the first applicant failed to meet the requirements of reg 1.11(c) as well as reg 1.11(b) of the Regulations.
The Tribunal found the first applicant has not had and does not continue to have an ownership interest in one or more actively operating main businesses in Australia for at least two years immediately before the application was made, and the Tribunal found the first applicant did not meet the requirements of cl 892.211 of Schedule 2 to the Regulations at the time of application.
The Tribunal was not satisfied the first applicant continues to have an ownership interest in one or more actively operating main business in Australia at the time of the Tribunal’s decision, and therefore found the first applicant did not satisfy criterion cl 892.211 of Schedule 2 to the Regulations and did not meet cl 892.221 of Schedule 2 to the Regulations.
The Tribunal found the second, third and fourth applicants did not satisfy cl 892.321 of Schedule 2 to the Regulations because they are not members of the family unit or a person who had satisfied the primary criteria for the holder of a subclass 892 visa and affirmed the decision under review.
Before this Court
Leave was granted to the first applicant to file an amended application correcting the names of the third and fourth applicants. The ground in the amended application is as follows:
1. The second respondent misconstrued the requirements to be met by an applicant under the definition of "main business" in reg. 1.11 (1)(b) and (d) of the Migration Regulations 1994 (Cth).
Particulars
The second respondent failed to appreciate that the activities of a person who claims to have a relevant interest in a “main business" may not necessarily be directed primarily to the immediate sales activity of the business. The second respondent allowed itself to be diverted by an undue emphasis on the absence of actual sates by the first applicant's business in certain periods, and failed to appreciate that other non-sales activity during these periods, including the exploration and development of possible business opportunities, will also amount to activities to be considered when assessing whether a business is a “main business".
Mr Poynder of counsel for the applicants submitted that the Tribunal had misconstrued the requirements in relation to the definition of “main business” in reg 1.11(1)(b) and 1.11(1)(d) of the Regulations by reason of an alleged over focus on sales rather than taking into account all the circumstances. Mr Poynder took the Court to authorities identifying the need for consideration of all the circumstances and that there can be carrying on of business even though in a small way.
Mr Poynder submitted that the repeated reference to the actual sales in the first year being zero from the BAS statements, deflected the Tribunal from the proper consideration of all the circumstances, including exploration and development of possible business opportunities that would support the applicant meeting the criteria under reg 1.11(1)(b) and 1.11(1)(d) of the Regulations. Mr Poynder accepted that the real issue was whether on a fair reading of the Tribunal’s reasons, the Tribunal had been deflected by an over focus upon the absence of sales in the first year in determining whether the applicant met, irrespective of criteria, reg 1.11(1)(b) and 1.11(1)(d) of the Regulations.
I do not accept on a fair reading, that there was an over focus on the part of the Tribunal on the absence of sales in the first period that deflected the Tribunal from considering all the circumstances. The absence of sales in the first year was obviously relevant to the Tribunal’s consideration of the requirements of reg 1.11(1)(b) and 1.11(1)(d) of the Regulations.
The Tribunal on the face of its reasons, took into account the findings and reasons summarised above, which reflects a focus consistent with the requirements identified at paragraph 106 of the Tribunal’s reasons upon all the circumstances and requirements of the individual business, in the context of whether the first applicant met the requirements of reg 1.11(1)(b) of the Regulations and taking into account the substantial periods of time spent overseas by the applicant.
The Tribunal made express reference to and took into account, the accountant’s evidence and the evidence of Mr Batchen in considering whether or not the first applicant met the criteria under reg 1.11(1)(b) of the Regulations. It was appropriate for the Tribunal to make findings in respect of the BAS statements and the reference to there being no sales in the first year of the relevant two year period should not on a fair reading of the Tribunal’s reasons, be treated as having deflected the Tribunal from its task, which was correctly identified by the Tribunal at paragraph 106 of its reasons.
Mr Poynder accepted that the Tribunal had correctly identified the relevant law at paragraph 106 of the Tribunal’s reasons but maintained that the Tribunal had failed to correctly apply the same by reason of the over focus on sales. A fair reading of the Tribunal’s reasons does not support this conclusion.
The Tribunal’s reasons expressly referred to the first applicant’s assertions of building up the business as well as referring to the evidence of Mr Batchen about the business relationship. The Tribunal made an adverse finding in relation to reg 1.11(1)(b) of the Regulations that was open to the Tribunal for the reasons given by the Tribunal as summarised above. Those reasons do not reflect a misconstruction of the requirements of main business in reg 1.11(1)(b) and 1.11(1)(d) of the Regulations.
The Tribunal was not diverted by giving an undue emphasis to the absence of actual sales in determining whether or not the first applicant met the criteria under reg 1.11(1)(b) and reg 1.11(1)(d) of the Regulations. No jurisdictional error as alleged in ground 1 of the amended application is made out.
As the amended application fails to make out any jurisdictional error, the amended application is dismissed.
I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of Judge Street
Associate:
Date: 17 April 2018
2
0
3