Low (Migration)

Low (Migration) [2020] AATA 5715 (3 December 2020)

DECISION RECORD

DIVISION:Migration & Refugee Division
APPLICANTS:  Mr Eng Heng Low
Mrs Suet Lan Nyo
Mr Wei Hong Low
Mr Wei Yang Low
Ms Wei Wen Low
CASE NUMBER:  1816886
DIBP REFERENCE(S):  BCC2017/3172427 BCC2017/3394812 BCC2018/4074974
MEMBER:Susan Hoffman
DATE:3 December 2020
PLACE OF DECISION:  Perth
DECISION:The Tribunal remits the applications for Business Skills (Permanent) (class EC) visas for reconsideration, with the direction that the first-named applicant meets:
·     Cl.888.222 of Schedule 2 to the Regulations

Statement made on 03 December 2020 at 11:43am

CATCHWORDS

MIGRATION – Business Skills (Provisional) (Class EB) visa – Subclass 888 Business Innovation and Investment (Permanent) – direct and continuous involvement in the management of the main business – relevant period outside of Australia for family reasons – business management statements and correspondence – occasional remote management of the business operations – proposed shopping centre redevelopment – ownership interest – decision under review remitted

LEGISLATION

Migration Act 1958, s 65
Migration Regulations 1994, Schedule 2, cls 888.222, 888.311; rr 1.03, 1.11

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 21 May 2018 to refuse to grant the visa applicant a Business Skills (Permanent) Subclass 888 visa under s.65 of the Migration Act 1958 (the Act).
The visa applicants applied for the visas on 1 September 2017. The delegate refused to grant the visas on the basis that he was not satisfied that the primary applicant (hereafter referred to as the 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 a two-year period before the application was lodged.
Mr Eng Heng Low appeared before the Tribunal on 26 November 2020 to give evidence and present arguments. Mrs Suet Lan Nyo and Ms Wei Wen Low were also present but did not give evidence.
The applicants were represented in relation to the review by their registered migration agent. An interpreter in the Mandarin and English languages was present to assist but Mr Low said he would give evidence in English and call upon the interpreter if needed. As it transpired, the services of the interpreter were not needed.
Submissions were received prior to the hearing, on 21 September 2020 and 26 October 2020, and after the hearing on 3 December 2020.
For the following reasons, the Tribunal has concluded that the matter should be remitted for reconsideration.

CONSIDERATION OF CLAIMS AND EVIDENCE

The issue in the present case is whether or not the applicant satisfies the criteria set out in clause 888.222, as follows:

Clause 888.222

(1) The applicant (the current applicant):
(a)  had an ownership interest in at least one actively operating main business in Australia during the 2 years immediately before the application was made; and
(b)  continues to have the ownership interest in the actively operating main business.
(2)  If the current applicant acquired the ownership interest from another person who was an applicant for, or held, a Business Skills (Permanent) (Class EC) visa or a Business Skills (Residence) (Class DF) visa at the time of the acquisition, the current applicant must have held the ownership interest with that person as a joint interest for at least one year before the current applicant’s application was made.

The definition of ‘main business’ is set out in Regulation 1.11, which reads as follows:

Regulation 1.11

(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 interestin 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.

A qualifying business is defined in r.1.03 as 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.

10. As the visa applications were lodged on 1 September 2017, the two-year period preceding that is from 1 September 2015 to 31 August 2017 (the relevant period).

11. The applicant is the 100% owner of Bintangorose Pty Ltd which has operated a Jesters franchise pie shop since March 2015 in Carillon City, a shopping centre in central Perth, Western Australia. The Jesters pie shop is the nominated business for the purpose of this review.

12. The applicant submitted records from the Australian Securities and Investment Commission (ASIC), including records dated 21 September 2020, that show 200 shares in Bintangorose Pty Ltd were issued to, and continue to be held by, the applicant. The Tribunal is therefore satisfied that the applicant has an ownership interest in the business, as he owns it outright.

13. The issue of concern as identified by the delegate, is whether 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 (r1.11.(1)(b)). This has come into question because of the time the applicant has spent overseas.

14. According to departmental records (movement records), the applicant spent 328 of the 731 days of the relevant period outside of Australia. This is about ten months in total. The delegate noted, and the Tribunal agrees, the nature of the main business is not one that would warrant regular overseas travel.

15. During the relevant period (1 September 2015 to 31 August 2017), according to the Department’s movement records, the applicant was outside Australia between the following dates:

·     1 December 2015 to 23 April 2016   nearly five months (143 days)
·     25 September 2016 to 15 December 2016         nearly three months (80 days)
·     18 January 2017 to 20 February 2017                about one month (32 days)
·     30 April 2017 to 24 June 2017  nearly two months (54 days)
·     12 August 2017 to 31 August 2017  nearly three weeks (19 days)

16. The applicant said that he was not outside of Australia from December 2015 to April 2016 but said that the other periods recording he was overseas were correct.

17. In relation to the first period, the applicant said that he was overseas as follows:

·     1 December 2015 to 20 December 2015  20 days
·     4 February 2016 to 12 February 2016  9 days
·     End of March 2016 (not sure of the date) to 23 April 2016         say 30 days

18. After the hearing the applicant through his representative sent in a written submission in which he apologised, stating that he had indeed been out of Australia from 1 December 2015 to 23 April 2016. He explained that he had misread a plane ticket or tickets which recorded flights from and to Australia on 4 and 12 February 2016. He had assumed they were for him but they were in fact in his daughter’s name. The Tribunal accepts this was a genuine mistake by the applicant and draws no adverse inference from it.

19. The Tribunal asked the applicant why he went overseas as often as he did. He said that in October 2015 his mother had a stroke and that was why he went to see her in December 2015. His father was sick at the same time. He said that that he and his family went overseas in February 2016 and 2017 because of Chinese New Year. His evidence suggested that most of his overseas trips were to see his parents. He said that his mother recovered from her stroke but is not as she was before she had the stroke. His father is still unwell.

20. The delegate had invited the applicant to provide evidence to support his position that he was involved continually and directly in the management of the business, on a day to day basis during the relevant period.

21. Some of the documents provided by the applicant in response, that would support a claim of being involved in the management of the business on a day to day basis, pre- or post-dated the relevant period and were not considered by the delegate.

22. Only four documents were dated within the relevant period. These were as follows:

Correspondence from the City of Perth to the applicant dated 5 September 2016, 17 July 2017 and 14 August 2017.

A direct debit request authority from a supplier, New West Foods Pty Ltd, signed by the applicant on 16 November 2016.

23. Further evidence was submitted to the Tribunal including the following:

·     An email from Ms Maria Hall, CPA, to the applicant dated 26 August 2016 acknowledging payment and advising that a BAS return had been lodged.
·     Emails from Ms Hall to the applicant dated 23 and 24 February 2017 concerning the BAS for the quarter ended 31 December 2016.
·     An email dated 3 March 2017 from Ms Hall to the applicant concerning the 2016 company tax return.
·     An email dated 31 July 2017 from Ms Hall to the applicant about the BAS for the quarter ended 30 June 2017.
·     An email dated 8 September 2017 from Ms Hall to the applicant asking him to email bank statements for the period 1 April 2017 to 30 June 2017, and how much interest was earned on all bank accounts.

24. The content of these emails, which included detailed information and requested the applicant respond by making payments, or providing detailed information, indicate that on those dates at least, he was involved in the day to day management of the business.

25. The applicant also submitted correspondence with the management of Carillon City, the shopping centre in which his business is located. There were a number of emails dated August 2015, which indicate that the applicant was heavily involved in the day to day management of the business.

26. In November 2015 and May 2016, the Carillon City administrator emailed the applicant, requesting sales figures for the previous month. The applicant responded by email in May 2016. The applicant received a similar request in July 2016 for the June sales figures.

27. On 1 July 2016 the administrator requested information about public liability insurance and four minutes later the applicant responded by emailing details of the insurance agent.

28. An email dated 7 March 2017 requesting sales figures for the previous month was submitted. The applicant responded on the same date advising sales for February 2017 excluding GST were $18,063.53.

29. The applicant emailed Ms Amanda Wilson, of Jesters Franchising, on 29 September 2015, attaching a copy of a payment, and emailed her with a query on 2 October 2015, and a request for copy invoices on 20 October 2015.

30. There was clearly some dispute with Jesters Franchising concerning the price and condition of certain equipment. The applicant emailed Mr Paul Cutler about it on 28 and 29 October 2015.

31. The Tribunal looked at the various emails submitted as evidence, to see which fell into the periods when the applicant was outside Australia, according to the Department.

32. The Tribunal could not locate any emails dated between 12 and 31 August 2017, noting that the applicant returned to Australia on 1 September 2017. The Tribunal gives little weight to this as it was a relatively short period. Emails received and sent in the other periods are as follows:

1 December 2015 to 23 April 2016

·     On 19 December 2015 the applicant emailed Ms Amanda Wilson, of Jesters Franchising, about being charged for pest control when as far as he knew, no pest control or inspection had been done at his store.
·     On 18 December 2015, the applicant emailed a supplier to advise the store would be closed on 1 January 2016 and not to deliver on that date.
·     On 29 December 2015, the applicant emailed a Mr Gavin Suiter asking for a repair to be done to the fryer machine.
·     On 30 December 2015, the applicant emailed Mr Suiter to deliver a filter for the fryer machine.
·     On 4 January 2016 there was an exchange of emails between the applicant and Mr Suiter about getting a technician to fix the fryer machine.
·     On 6 January 2016, the applicant emailed a Mr Richard Kentwell with attachments showing images of doughnuts, and asking for better looking doughnuts.
·     On 7 January 2016, the applicant emailed again about the repair for the fryer machine and wrote that they had stopped selling chips from 25 December 2015.
·     Also on 7 January 2016, the applicant emailed Mr Kentwell with details of waste, iteming how many of nine products were waste. By way of example, the product list included vanilla slices and lamingtons.
·     On 20 January 2016, the applicant emailed Ms Wilson, querying why he was invoiced for a filter and asking for his account to be checked.
·     Also on 20 January 2016, the applicant emailed Ms Wilson to say he was returning the nutritional guide and not to charge his account for it.
·     On 8 February 2016, the applicant emailed Mr Suiter asking for the scanner to be fixed as it was not scanning some products and for others, it was showing the wrong price for staff purchases.
·     On the same date, the applicant sent a separate email to Mr Suiter saying that he could not read the daily sales report properly and needed the correct sales figures to prepare a report to lodge with the Australian Taxation Office.
·     On 11 February 2016, the applicant sent an image of an error message on the panel of the fryer machine to Mr Nathan Hornby. The applicant wrote that his staff had sent him the image. That is, he was forwarding it on for the problem to be addressed.
·     On 15 February 2016, the applicant emailed Ms Hall, saying that bank statements were attached.
·     On 15 February 2016, Ms Hall emailed the applicant requesting details of cost of stock purchases, wages and withheld PAYG.
·     On 18 February 2016, Ms Hall emailed the BAS return for the December 2015 quarter to the applicant, together with her invoice. She advised that the total tax payable was $1,915.
·     On 19 February 2016, Ms Hall emailed the applicant to advise that she had changed the BAS as requested and the total tax payable was now $439. She attached a payment slip for the tax to be paid.
·     On 26 February 2016, Mr Hornby emailed the applicant thanking him for payslips for December 2015, and requesting a copy of the applicant’s Instalment Activity Statement for December 2015. The applicant responded by sending Mr Hornby the BAS for the quarter ended 31 December 2015.
·     On 9 March 2016, the applicant emailed Mr Kentwell with an image showing the year of expiry for frozen goods he ordered the previous week was 2015.
·     On 14 March 2016, the applicant emailed Mr Hornby to ask for help in getting a technician to come to the store and repair the baine marie.
·     On 18 March 2016, the applicant emailed a payment receipt to Mr Hornby.
·     On 21 March 2016, the applicant emailed Ms Wilson asking to be sent the invoice dated 6 March 2016 for an advertising levy.
·     On 23 March 2016, the applicant sent a reminder to Ms Wilson for the invoice he requested two days earlier.
25 September 2016 to 15 December 2016
·     On 30 September 2016 the shopping centre administration emailed the applicant asking for the September sales figures to be provided by 7 October 2016.
·     A letter from the marketing coordinator at Carillon City to the applicant dated 6 October 2016 was about an audit of 2015/16 promotional fund.
·     On 10 October 2016 the shopping centre administration emailed the applicant to chase up the September sales figures.
·     On 17 October 2016, the applicant emailed Ms Wilson asking for invoices to be sent to him.
·     On 17 October 2016, Ms Wilson sent the applicant an email in which she wrote that all invoices/credit notes bar one had been sent to the applicant. She attached a document which she wrote would explain a credit amount of $412.13.
·     On 19 October 2016, the applicant responded by emailing Ms Wilson asking for the invoice for Shift 8 that was ‘debited from the bank account on 29.9.2016’.
·     On 27 and 28 October 2016, Ms Hall emailed the applicant referring to the BAS for quarter ended 30 September 2016, adjustments she had made, and the amount of tax payable.
·     On 1 November 2016 the shopping centre administration requested the October 2016 sales figures by 7 November 2016.
·     On 1 November 2016 the applicant emailed the sales figures for October 2016 to the shopping centre administration.
·     On 1 November 2016, Ms Hall emailed the applicant with an ASIC company statement attached and wrote that a renewal fee of $469 was due.
·     On 6 November 2016, the applicant emailed Ms Hall asking her to email to him an invoice from ASIC.
·     On 7 November 2016, Ms Hall emailed the applicant attaching the ASIC company renewal notice, and Ms Hall’s invoice.
·     On 16 November 2016, the applicant signed a direct debit request authority from a supplier, New West Foods Pty Ltd.
·     A letter from King and Wood Mallesons Solicitors to the applicant, dated 30 November 2016, informed him that the centre had been sold.
·     On 30 November 2016, the applicant emailed Ms Wilson about being charged for pest control when there was no evidence of the work being done.
·     On 7 December 2016, Ms Wilson emailed a document showing scheduled orders to Krispy Kreme stores, and asking for any adjustments to be notified to her by 1pm the next day.
·     The applicant responded on 8 December 2016 asking for additional stock.
·     On 14 December 2016, Ms Wilson responded to the pest control query by emailing that payments were cancelled and copies of the service sheets had been requested from Allpest.
18 January 2017 to 20 February 2017
·     On 14 February 2017, the applicant emailed Ms Wilson, writing that it was the second email he had sent her asking for an invoice for the advertising levy so he could lodge the previous quarter’s GST figures.
·     On 14 February 2017, the applicant emailed Ms Hall attaching details of expenses.
30 April 2017 to 24 June 2017
·     On 2 May 2017, the applicant emailed Ms Maher at Jesters about a problem with pastry.
·     On 3 May 2017, the centre’s administration emailed an invoice for May 2017 to the applicant.
·     On 6 May 2017, the applicant responded by an email with an attachment. It is unclear what the attachment was about.
·     On 2 June 2017, the applicant emailed the centre’s administration, attaching sales figures for the previous month.
·     Also on 2 June 2017, the applicant emailed the centre’s administration an attachment to do with a payment.
·     On 6 June 2017, the shopping centre emailed an invoice for June 2017 to the applicant, to which he responded on 28 June 2017.

· On 21 June 2017, the applicant emailed Mr Cutler about an invoice and whether it was for coffee beans, and if so, how many packs.
· On 22 June 2017, Ms Wilson emailed the applicant about scheduled deliveries and in response on the same date, the applicant emailed her to change the frequency of doughnut deliveries.

33. In a document provided to the Department, the applicant set out that he was the sole owner of Bintangorose Pty Ltd and that he and his wife were directors of the business. The business had employed local staff on a casual basis but he applied to the Western Australian state government for a waiver of this requirement and he and his wife work in the business.

34. The applicant submitted that he did the ordering, dealt with the franchisor and with the landlord’s property agent. He did the banking and staff recruitment, prepared pies for baking and assisted with the counter sales. His wife assisted him with the day to day minding of the shop. Together they make the management decisions for the business.

35. In a document detailing the applicant’s management role, he wrote that he has the total management responsibility for the business that he owns, being Jesters Carillon.

36. The applicant stated that he negotiated the lease for the business premises in late 2014, and took the shop over in February 2015. He then worked with contractors and supervised the fit-out.

37. The applicant wrote that he negotiated and obtained the franchise from Jesters Pie, negotiated and established suppliers and attended franchise meetings. He attends to all matters to do with the lease and has provided a personal guarantee in relation to the lease. He provided the capital for the business. His wife minded the shop front. With annual sales just over $300,000, it has to be a husband and wife team to make the business viable. There is little capacity to afford to employ other staff except for occasional relief staff. He is involved in all aspects of managing the business.

38. At the hearing, the applicant said that when he was overseas, the business remained open. His wife helped him by supervising employees. She checked the stock and told him if anything needed to be attended to, such as if there was broken equipment.

39. The lease agreement records that Bintangorose Pty Ltd is the lessee and the applicant and his wife are the guarantors. At the hearing the applicant said that was still the case.

40. The franchise agreement names Bintangorose Pty Ltd, and the applicant and his wife as follows. The franchisee is Bintangorose Pty Ltd. The applicant and his wife are the guarantors. The nominated manager is the applicant.

41. According to a submission to the Tribunal dated 26 October 2020, when he was outside of Australia the applicant continued placing orders online, although the paperwork to support that is not readily available. He communicated regularly with his wife, who would advise of any issues that might arise in the running of the business, including advising him when stocks were low. The applicant would give his wife instructions that she would implement. He regularly emailed with stakeholders.

42. At the hearing the applicant said that the ordering was done online, using a laptop rather than his phone. He said that they did not print anything out, it was all done online. The Tribunal understood from this, that was why there was no paperwork readily available to do with the online ordering.

43. The applicant had submitted a statutory declaration in which he wrote that there were occasions when he had to go to Malaysia. He wrote:

When I am in Malaysia, I usually remain in communication with my wife using WhatsApp. When I need to view something within the store, she would attend the call by video chat so that she can, for example, show me what the stock levels are looking like. I then made the decision to, for example, order more stock either by email or online. For the small number of products that cannot be ordered online, I then ask my wife to call and make the order.
On some occasions, when a decision has to be made very quickly and my wife is unable to get into contact with me, she might make that decision on an urgent basis. However this is not very common.

44. In relation to ordering supplies, the applicant wrote that the franchisor has a predetermined panel of suppliers. He liaises with his suppliers on a regular basis, at least once a week and sometimes three times a week during peak periods, for the purpose of ordering stock. This would be done via an online ordering system or via emails.

45. The applicant wrote that he might deal with the franchisor on a weekly basis, but when it was quiet, he might deal with them once a month.

46. The applicant wrote that during the first two years of the business, there were just the two employees, him and his wife. He was the managing director responsible for all the management decisions pertaining to the store. His wife assisted him with the operation of it.

47. The applicant wrote that since then, the business has grown which has meant hiring more staff. He decides how many staff to employ based on cashflow and the needs of the business. He wrote that he personally attends to the payroll, issuing payslips and superannuation. He liaises with the accountant in relation to BAS payments and financial reports.

48. The applicant stated that in about September or October 2018, the centre management advised tenants that they were intending to redevelop the shopping centre but had not at that time obtained the necessary approval.

49. A proposal was made such that if the applicant was prepared to surrender the lease in return for the rent being reduced each month. The applicant wrote that he agreed to this and the lease was varied such that it would end in August 2019. The tenancy has continued on a month to month basis since then. The future of the business is unclear because the franchise agreement is tied to the lease and the lease is subject to whether the landlord proceeds with the development of the shopping centre. In December 2019, the monthly lease was extended to April 2020. It continues on a month to month basis. The applicant asserted that he was still running the Jesters Pie store and continues to be in contact with the franchisor.

50. The applicant wrote that he had enquired from time to time about the progress of the proposed redevelopment of the shopping centre, but was told that approval had not yet been obtained.

51. The statutory declaration was made on 22 July 2020. At the hearing the applicant said that he understood that the shopping centre had now received planning permission for the redevelopment. He did not know for sure but thought it would be a few months before anything happened.

52. According to the Centre’s website as 26 November 2020, development approval had been received. The website included an artist’s impression of what was described as the proposed transformation of the Centre. There was no indication as to timing.[1]

[1] Dexus (2020) Cariilon City, Perth WA accessed 26 November 2020 at In light of the evidence set out above, the Tribunal is satisfied that the applicant maintains, and 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 that includes periods when the applicant was overseas. The Tribunal finds therefore that r.1.11(1)(b) is met.

54. As the applicant has had 100% ownership of the business since it started in March 2015, the Tribunal finds that r.1.11(a) and (c) are met.

55. There is no evidence to suggest that the business is not being operated to make a profit. Clearly it provides goods to the public, being mainly pies and doughnuts. The Tribunal is satisfied that it is a qualifying business, and r.1.11(d) is met.

56. There is no evidence to suggest that r.1.11(2), which is relevant if there is more than one qualifying business, applies in this case.

57. The Tribunal is therefore satisfied that the business – Jesters in Carillon City shopping centre – is a main business, as defined in r.1.11.

58. Returning to cl. 888.222, in light of the findings and evidence already set out, the Tribunal is satisfied that the applicant had an ownership interest in at least one actively operating main business in Australia during the 2 years immediately before the application was made.

59. The Tribunal is satisfied that the main business, being the Jesters pie shop which operates in Carillon City, is actively operating because of the evidence before the Tribunal and also because the Tribunal passes the pie shop from time to time. The Tribunal is also satisfied that the applicant continues to have an ownership interest in it, corroborated by the ASIC record submitted before the hearing.

60. There is no evidence that cl.888.222(2) applies in the case and the Tribunal will not consider it any further.

61. The Tribunal finds therefore that all criteria relevant to cl.888.222 have been met.

CONCLUSION

62. The Tribunal is satisfied therefore that cl. 888.222 of Schedule 2 to the Regulations is met. The appropriate decision in relation to the applicant is to remit this matter to the Minister to consider the remaining criteria for the grant of the visa.

63. As this means the other applicants may meet cl.888.311, the decision in relation to the other visa applicants is also remitted to the Minister to consider the remaining criteria for the grant of the visa.

DECISION

64. The Tribunal remits the applications for Business Skills (Permanent) (class EC) visas for reconsideration, with the direction that the first-named applicant meets:

·Cl.888.222 of Schedule 2 to the Regulations

Susan Hoffman
Member

Key Legal Topics

Areas of Law

Immigration
Administrative Law
Statutory Interpretation

Legal Concepts

Judicial Review
Procedural Fairness
Statutory Construction
Remedies
Jurisdiction

[2020] AATA 5715

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Remedies

Jurisdiction