KIM (Migration)

KIM (Migration) [2020] AATA 51 (7 January 2020)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANTS:
Mr Tae Gyum Kim

Ms Su Mi Joo

Miss Jane Kim

Mr Jaehee Kim
CASE NUMBER:  1820619
HOME AFFAIRS REFERENCE(S):          BCC2017/589199; BCC2017/623332
MEMBER:Wan Shum
DATE:7 January 2020
PLACE OF DECISION:  Sydney
DECISION:The Tribunal affirms the decision not to grant the visa applicants Business Skills (Residence) (Class DF) visas.

Statement made on 07 January 2020 at 11:46am

CATCHWORDS
MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 890 (Business Owner) – ownership interest in actively operating main business at time of decision – business sold after application and before decision – company through which business operated still owned and operating in different field – the business is the enterprise or undertaking, which may be separate from the legal entity owning it – decision under review affirmed
LEGISLATION
Migration Act 1958 (Cth), ss 65, 134(10)
Migration Regulations 1994 (Cth), r 1.11, Schedule 2, cls 890.211(1), 890.212, 890.221

CASES
Ibrahim v Minister for Immigration and Citizenship [2009] FCA 1328
Yang v Minister for Immigration and Border Protection [2014] FCCA 1576

STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Home Affairs on 3 July 2018 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 10 February 2017. 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 that the first named visa applicant did not satisfy the requirements of cl.890.212 of Schedule 2 to the Regulations. This was because the delegate was not satisfied that the business assets in Australia of the applicant and the applicant’s spouse in the nominated main business had a net value of at least AUD100,000 at the time of application and throughout the 12 months immediately before the application was made.
The applicants sought review of that decision and were represented in relation to the review by a registered migration agent.
The first named applicant appeared before the Tribunal on 3 December 2019 to give evidence and present arguments. The Tribunal hearing was conducted with the assistance of an interpreter in the Korean and English languages. The representative attended the Tribunal hearing. Mr Jonson Jungsun Yoo, accountant, was present as a witness.
For the following reasons, the Tribunal has decided that the decision under review should be affirmed.
CONSIDERATION OF CLAIMS AND EVIDENCE
The issue in this case is whether the first named applicant (the applicant) satisfies the requirements for the grant of a Subclass 890 visa, one of which relates to the ownership interest in the main business.
On the application form 1217, the applicant claimed to hold 100% ownership in Sushi Ever. At Q13 details were provided of one main business. The relevant details were provided as follows:
Business name: Sushi Ever
Address of business premises: MLC Building Shop 3, Ground Floor 105 Miller Street North Sydney NSW 2060
What was/is the major activity of this business: Sushi eat-in and take away shop
Under Part E – Net assets in main business(es) the business name was also given as ‘Sushi Ever’ and was completed with entries for the monetary value of the net assets in the main business(es) in Australia for the last 12 months.
However, at the hearing, the applicant told the Tribunal that he had sold Sushi Ever in April 2018, as the owner of the building had advised that the building would be renovated in January 2020. There was an interested party who wished to takeover the business, so he decided to sell. The Tribunal asked whether he was currently operating a business. The applicant said that he was, but in a different field. His cousin had a 5 year contract to carry out site maintenance for Goodman Property Group, and he was managing a site near the airport for his cousin. It was a verbal contract between himself and his cousin. Once his visa issue is sorted, he will be able to obtain a formal written contract and it would be for at least 5 years.
The Tribunal indicated that it had concerns that the activity described was a different business to Sushi Ever and that he may not satisfy cl.890.221, which relevantly requires that he continue to satisfy cl.890.211.
Ownership interest in main business
Clause 890.211(1) requires that 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: cl.890.221. 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.
On review, the Tribunal is to identify the main business nominated on the visa application, 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 must also consider these issues as at the date of this decision and whether the applicant continues to satisfy cl.890.221.
In order to satisfy the requirements of cl.890.211(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 890.221 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.
Firstly, the applicant must have or have had an ownership interest in the business. In considering this issue, the ownership interest does not need to be continuous or exist at a particular time: Ibrahim v Minister for Immigration and Citizenship [2009] FCA 1328 at [32], considering similarly worded criteria in cll.845.213 and 845.221. ‘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.
Secondly, 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.
Thirdly, 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.
Finally, 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.
Does the applicant have an ownership interest in each business relied on at all relevant times?
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 (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).
In order to meet cl.890.211(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.890.221 the Tribunal must be satisfied that the applicant continues to satisfy this requirement at the time of this decision. The main business nominated for the purposes of satisfying cl.890.211 must be the same used to satisfy the criteria in cl.890.221: Yang v Minister for Immigration and Border Protection [2014] FCCA 1576.
It is submitted on review that the business relied on by the applicant to satisfy these requirements is Ver-tex C Design Pty Ltd. However, the Tribunal considers that Sushi Ever was the business nominated at the time of application. Ver-tex C Design Pty Ltd is the company through which the applicant operated the business Sushi Ever. Sushi Ever was a sushi eat-in and takeaway business that the applicant was operating in North Sydney at the time of application. However, the applicant sold this business on or around April 2018. The applicant claims that he would have liked to have continued to operate this business, but that due to planned building work, he decided to sell to an interested party. He did not want to close but had no choice. He was going to set up another shop and run a similar business but because his visa was refused he could not do this.
Evidence has been provided that the company Ver-tex C Design Pty Ltd is currently still operating. However, the Tribunal is required to determine whether the visa criteria are met based on the main business which was nominated at the time of application. In this case, the business name was given as ‘Sushi Ever’ under Part D and E of the application form. The details provided of the ‘major activity’ was “Sushi eat-in and take away shop”. The Tribunal has also referred to Form 927 “State/Territory notification: Business skills class”, under Part A “Business details in Australia”, the response given to Q9 “Industry” was ‘sushi restaurant’. The business name on this form was given as “Ver-tex C Design Pty Ltd T/A Sushi Ever”.
Ver-tex C Design Pty Ltd is a proprietary company limited by shares and has been registered under the Corporations Act 2001. The ABN was registered on 22 January 2014. The business name of Sushi Ever was registered on 14 March 2015. The accountant has confirmed the applicant’s oral evidence that the retail business was disposed of in April 2018.
The applicant claims he is now assisting his cousin in an informal subcontracting arrangement to manage a site located near the airport. He has not provided any evidence in the form of a contract or similar.
The applicant’s accountant has provided a letter stating Ver-tex C Design Pty Ltd is very active and it has ‘continued to carry on business management services to provide, business consulting, management, and provision of labour’. However, while evidence has been provided of an interim financial report for 30 September 2019 and BAS of Ver-tex C Design Pty Ltd for 2018 and 2019, the Tribunal finds that Ver-tex C Design Pty Ltd is not the “main business” for the purposes of r.1.11. This is because the Tribunal considers that Sushi Ever wasthe “main business” based on the details provided at the time of application. When considering the ‘main business’ as defined in r.1.11, the ‘business’ is the enterprise or undertaking, which may be separate from the legal entity. Thus while the applicant has provided a letter from his accountant stating that the company’s main business activities are to provide business management services, the Tribunal finds, having regard to all the information provided at that time and subsequently, that the main business nominated by the applicant when the visa application was made was the sushi takeaway and eat in restaurant/shop business, Sushi Ever,and not Ver-tex C Design and its business management services. The restaurant/takeaway shop was a separate undertaking from the company registered by him and which he claimed 100% ownership at the time of application.
While the applicant’s intention was to continue operating Sushi Ever, he sold the business in April 2018. The applicant said it was not his choice, but was due to the impending building renovations, which the Tribunal considers understandable. However, the fact is that at the time of this decision, the applicant does not operate Sushi Ever or any other sushi restaurant/take-away shop and it cannot be said that he continues to have an ownership interest in that business.
The site management work which he claims to be undertaking for his cousin is not the same business. The activity of preparing and selling sushi from a physical location is distinct and different to that of providing site management services. There is no evidence, and the applicant does not claim, that he was carrying out site management services at the time of application. The Tribunal finds that, for the purposes of cl.890.211, at the time of application, the main business nominated was Sushi Ever. But while Sushi Ever appears to be still operating based on internet searches, at the time of this decision, the applicant does not have an ownership interest in Sushi Ever. Sushi Ever was the only business nominated at the time of application and it is no longer operated by the applicant. Accordingly, the Tribunal finds that the applicant no longer has an ownership interest in the main business nominated at the time of application.
Therefore, the Tribunal is not satisfied that the applicant continues to satisfy cl.890.211 as he does not have an ownership interest in the same main business. He thus does not satisfy cl.890.221.
Given the Tribunal’s findings above regarding the main business, it is not necessary to make findings about the issue before the delegate, cl.890.212. It appears that the applicant would not have satisfied cl.890.221 at the time of the delegate’s decision either, since he had sold the business prior to the decision being made but not informed the Department.
The applicant has only made claims to satisfy the criteria for the grant of a Subclass 890 visa. As one of the essential requirements for the visa is not met, the decision under review must be affirmed.
DECISION
The Tribunal affirms the decision not to grant the applicants Business Skills (Residence) (Class DF) visas.
Wan Shum
Member

ATTACHMENT - LEGISLATION
Migration Regulations 1994
1.03Definitions
In these Regulations, unless the contrary intention appears:
…
ownership interest has the meaning given to it in subsection 134(10) of the Act.
…
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.
…
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.
1.11A Ownership 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
….
(10)In this section:
….
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.

[2020] AATA 51

7 January 2020

Key Legal Topics

Areas of Law

Immigration

Statutory Interpretation

Legal Concepts

Judicial Review

Jurisdiction

Statutory Construction

Procedural Fairness