Li (Migration) - [2020] AATA 5241

Li (Migration) [2020] AATA 5241 (17 August 2020)

DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT: Ms Xiaoru Li
Mr Xujie Guo

CASE NUMBER: 1927998
HOME AFFAIRS REFERENCE(S): BCC2017/3297658 BCC2017/3412752
MEMBER:P Ranson
DATE:17 August 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 cl.890.212 of Schedule 2 to the Regulations.

Statement made on 17 September 2020 at 9:46am

CATCHWORDS
MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 890 (Business Owner) visa – net business assets of the Applicant have been lawfully acquired – Applicant’s share of the net business assets exceeds the threshold – decision under review remitted

LEGISLATION
Migration Act 1958, ss 65, 134
Migration Regulations 1994, r 1.11, Schedule 2, cls 890.211, 890.212

STATEMENT OF DECISION AND REASONS

Table of Contents

APPLICATION FOR REVIEW

CONSIDERATION OF CLAIMS AND EVIDENCE

Ownership interest in main business

West End Massage & Beauty
QL Interior Lining Pty Ltd

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 Sheets of ACN

APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Immigration on 1 October 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 8 September 2017. Certain criteria must be satisfied during the two years immediately before the application is made, that is, 8 September 2015 to 7 September 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 Xiaoru Li, (the Applicant) did not satisfy the requirements of cl.890.212 of Schedule 2 to the Regulations because in their assessment, the net…

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 5241
Decision Date: 17 August 2020

CaseChat Overview and Summary

This matter concerned an application for a Business Skills (Residence) (Class DF) visa, subclass 890 (Business Owner), brought by the Applicant, Ms Li. The core dispute revolved around whether the Applicant's net business assets had been lawfully acquired and whether they exceeded the required threshold. The Administrative Appeals Tribunal (AAT) was tasked with reviewing the delegate's decision.

The Tribunal was required to determine two primary legal issues. Firstly, whether a loan made by the Applicant's business to its former director, Ms Xin Liu, could be included in the calculation of net business assets. Secondly, if so, what was the correct value of the Applicant’s net business assets. In addition to these, the Tribunal also considered whether the Applicant satisfied the requirements of clause 890.211 of the Migration Regulations 1994, which pertains to having an ownership interest in an actively operating main business in Australia for a specified period.

The Tribunal noted that the Applicant relied on a massage therapy and beauty salon, operated by A.C.N. 162 531 151 Pty. Ltd. (ACN), as the business to satisfy the criteria. The Tribunal considered submissions indicating that ACN had invested in QL Interior Lining Pty Ltd, trading as Successo Cabinets, and that the Applicant indirectly held a 30% share in this new business. However, the Tribunal found that the information provided regarding the loan to Ms Liu and the precise valuation of the Applicant's net business assets was insufficient to make a conclusive determination.

Consequently, the Tribunal concluded that the matter should be remitted to the delegate for reconsideration. This remittal was necessary to allow for a proper assessment of the loan's impact on the net business assets and to ensure all relevant criteria under the Migration Regulations were fully satisfied.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Full text does not contain this section.

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 loan from the business to the former director, Ms Xin Liu, can be included in the calculation of net business assets and if so, what is the correct value of the Applicant’s net business assets. In accordance with the President’s Direction[2], the Tribunal will address those elements of the criteria on which the delegate made an adverse finding, being the satisfaction of cl 890.212. In addition, the Tribunal has also considered cl 890.211. [2] 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[3]. No more than two businesses can be nominated for this purpose[4] 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[5]. The business relied on by the Applicant to satisfy these requirements is a massage therapy and beauty salon (the Business) operated by A.C.N. 162 531 151 Pty. Ltd. (ACN) trading as West End Massage & Beauty[6]. ACN also traded as West End Beauty and Health[7].[6] West End Massage & Beauty was a business name registered with ASIC from 25 February 2013 until cancellation on 11 July 2019.[7] West End Beauty and Health was a business name registered with ASIC from 5 April 2013 until cancelled on 16 August 2018. Accordingly, the Tribunal must 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’ during the Application Period and as at the date of application. The Representative made a submission to the Tribunal dated 30 June 2020 (the 30 June 2020 Representative’s Submission), which states on page 7: ‘From 1st of July 2019, since the lease of the operational premise for West End Massage and Beauty has expired, and the review applicant was not able to find a [sic – an] ideal place to operate the business immediately, as such, A.C.N. 162 531 151 Pty. Ltd. invested in QL INTERIOR LINING PTY LTD, trading as Successo Cabinets. A.C.N. 162 531 151 Pty. Ltd. holds 30% shares of the business, as the review applicant has 100% of the company A.C.N. 162 531 151 Pty. Ltd., as such, she has 30% of QL INTERIOR LINING PTY LTD indirectly.’ The Representative’s 30 June 2020 Submission included a Current & Historical Company Extract for QL Interior Lining Pty Ltd ACN 604 656 957 (QL) obtained on 30 June 2020 from the Australian Securities & Investments Commission (ASIC). It shows QL was registered in Queensland on 10 March 2015 and on 9 September 2016 ASIC Form 6010 Application for Voluntary Deregistration of a Company was lodged. It seems deregistration did not proceed as the company changed its share structure on 15 November 2016 and has continued thereafter.