Koak (Migration) - [2019] AATA 5334

Koak (Migration) [2019] AATA 5334 (27 November 2019)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANTS:  Ms Jounglim Koak
Mr Jinpyung Kim
Miss Nahyun Kim
Master Suhong Kim
CASE NUMBER:  1613478
DIBP REFERENCE(S):  BCC2015/729633, BCC2015/4039347, BCC2015/4039366, BCC2016/1618064, BCC2016/3438249
MEMBER:Ian Berry
DATE:27 November 2019
PLACE OF DECISION:  Brisbane
DECISION:The Tribunal affirms the decision not to grant the visa applicant a Business Skills (Residence) (Class DF) visa.

Statement made on 27 November 2019 at 4:18pm

CATCHWORDS
MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 892 (State/Territory Business Owner) – ownership interest in actively operating main business for two years prior to application – ‘repetitive continuous and permanent’ business activity – employment of at least one full-time employee or equivalent part-time employees – business and personal assets – decision under review affirmed
LEGISLATION
Migration Act 1959 (Cth), ss 65, 134(10)
Migration Regulations 1994 (Cth), rr 1.03, 1.11(2), Schedule 2, cl 892.211(1), (2), 892.212, 892.214, 892.221(a)
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

This is an application for review of a decision made by a delegate of the Minister for Immigration on 8 August 2016 to refuse to grant the visa applicant a Business Skills (Residence) (Class DF) Subclass 892 visa under s.65 of the Migration Act 1958 (the Act).
The applicants applied for the visa on 6 March 2015. At the time of application, Class DF contained four subclasses: Subclass 890 (Business Owner), Subclass 891 (Investor), Subclass 892 (State/Territory Business Owner) and subclass 893 (State/Territory Sponsored Investor). The applicants in this case are seeking to satisfy the criteria for the grant of a Subclass 892 (State/Territory Business Owner) visa, 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 second, third and fourth applicants (the secondary applicants) need only to satisfy the secondary criteria set out in Subdivision 892.3.
The first named applicant (the applicant) appeared before the Tribunal on 12 April 2018 to give evidence and present arguments. The Tribunal received oral evidence only from the applicant.
The applicant was represented in relation to the review and at the hearing by her migration agent.
The delegate refused to grant the visa on the basis that the applicant did not satisfy the requirements of cl.892.211 because the applicant acquired a franchised interest in a cleaning business in partnership with Mr Choi. Without a written partnership agreement, the ownership of the partnership was considered to be equally shared. To comply with regulation 1.11(c)(ii), (to be a main business, the applicant must have an interest of more than 50% if the business’ annual turnover is less than $400,000. The business’ annual turnover is substantially less than $400,000.
The applicant appeared before the Tribunal on 12 April 2018 to give evidence…

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: [2019] AATA 5334
Decision Date: 27 November 2019

CaseChat Overview and Summary

This matter concerned an application for a Business Skills (Residence) (Class DF) visa, specifically the Subclass 892 (State/Territory Business Owner) visa. The applicant sought review of a decision to affirm the refusal of their visa application. The core dispute revolved around whether the applicant met the criteria relating to ownership interests in actively operating main businesses and the employment of staff.

The Tribunal was required to determine whether the applicant had satisfied the requirements of regulation 892.212(a), which mandates the employment of at least one full-time employee or the equivalent in part-time employees. If this criterion was not met, the Tribunal also had to consider whether the applicant satisfied at least two of the alternative criteria stipulated in regulation 892.212. Furthermore, the Tribunal had to assess the applicant's ownership interests in two nominated businesses, P&L Korea Mart Foodville and Jounglim Koak (K Cleaning), ensuring these businesses were actively operating main businesses for the requisite periods both prior to and at the time of the visa application, and continuing to satisfy these requirements at the time of the Tribunal's decision.

The Tribunal considered the applicant's ownership interests in P&L Australia Pty Ltd, the entity owning P&L Korea Mart Foodville, and as the sole proprietor of K Cleaning. It examined the definitions of "ownership interest," "main business," and "qualifying business" as set out in the relevant regulations. Ultimately, the Tribunal found that the applicant had not satisfied the criterion in clause 892.212(c), which relates to the employment of staff.

Consequently, the Tribunal affirmed the decision not to grant the applicant a Business Skills (Residence) (Class DF) visa.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

For the following reasons, the Tribunal has concluded that the decision under review should be affirmed.CONSIDERATION OF CLAIMS AND EVIDENCE The issues in this case is whether or not the applicant has employed one full-time employee or the equivalent part-time employees as required by regulation 892.212(a); if not, whether or not the applicant satisfies at least two of the criteria in regulation 892.212.Ownership Interests in each of the main businesses Clause 892.211(1) requires that the applicant have 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 continues 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. The applicant nominated two entities in her visa application. P&L Korea Mart Foodville is a grocery store predominately selling Asian grocery items and is owned by P&L Australia Pty Ltd (P&L). The second business is Jounglim Koak (K Cleaning) a home cleaning business where the applicant is the sole trader. The Tribunal must consider the nature of the applicant’s interest in these businesses, including whether the businesses were actively operating and whether they meet 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 on whether the applicant continues to satisfy cl.892.211(1).ISSUE ONEDoes 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.A shareholder in a company that carries on the business, orb.A partner in a partnership that carries on the business, orc.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(1). 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(1), the Tribunal must be satisfied that the applicant continues to satisfy this requirement at the time of the decision. The businesses relied on by the applicant to satisfy these requirements are P&L purchased by the applicant by acquiring two of the three shares (67%) issued by the owning entity P&L Entity. The applicant is the sole proprietor of K Cleaning. Accordingly, the Tribunal must consider the nature of the applicant’s interest in these businesses, whether the businesses were actively operating and whether they 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 the application. The Tribunal must also consider these issues as at the date of this decision and whether the applicant continues to satisfy cl.892.211(1).ISSUE TWOWas each business relied on actively operating at all relevant times?

Decision

Reasons for decision

Given the above findings, the Tribunal is not satisfied the applicant has met the criterion in clause 892.212(c)DECISION The tribunal affirms the decision not to grant the visa applicant a Business Skills (Residents) (Class DF) visaIan Berry MemberThe definitions which are relevant to the visa application under review are set out:Definition of main business1.11 Main 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.Definition of ownership interest:Subsection 134(10)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.Definition of qualifying business: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..Definition of Ownership for the purposes of certain Parts of Schedule 21.11A 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.

Ratio Decidendi

Legal Principle Established

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