Maranzan (Migration)

[2019] AATA 939

Maranzan (Migration) [2019] AATA 939 (15 April 2019)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mr Loris Maranzan
Ms Grazia Antonia Cavallin
Mr Giulio Maranzan
Mr Vittorio Gianfranco Maranzan

CASE NUMBER:  1514935

DIBP REFERENCE(S):  BCC2014/3171704 BCC2014/3171838 BCC2015/2156893

MEMBER:Robyn Anderson

DATE:15 April 2019

PLACE OF DECISION:  Melbourne

DECISION:    

The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the applicant meets the following criteria for a Subclass State/Territory Sponsored Business Owner (Residence) visa:

·Clause 892.212 of Schedule 2 to the Migration Regulations 1994

Statement made on 15 April 2019 at 8.32am

CATCHWORDS

MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 892 State/Territory Sponsored Business Owner (Residence) visa – financial requirements – Australian business and personal assets at least AUD250,000 – assets held 12 months before the application – involvement of a director for administrative purposes – loan repayment from the applicant’s brother – decision under review remitted   

LEGISLATION

Migration Act 1958, s 65
Migration Regulations 1994, Schedule 2 cl 892.212

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Immigration on 29 October 2015 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).

2. The visa applicant applied for the visa on 24 November 2014. The delegate refused to grant the visa on the basis that the first-named applicant (Mr Maranzan) did not meet the financial requirements set out under subclause 892.212(c) of Schedule 2 to the Migration Regulations 1994 (the Regulations). Consequently, clause 892.212 was found not to be met.

3. The applicants were represented in relation to the review by their registered migration agent.

4. For the following reasons, the Tribunal has concluded that the matter should be remitted for reconsideration.

   CONSIDERATION OF CLAIMS AND EVIDENCE

5. There is no evidence before the Tribunal to suggest that there is an exceptional circumstance determination by an appropriate regional authority in this case. Therefore, clause 892.212 requires the applicant, the applicant’s spouse, or the applicant and his spouse, together in the main business or main businesses in Australia to meet at least two of the three requirements under subclauses 892.212(a), 892.212(b) or 892.212(c) of Schedule 2 to the Regulations.

6. Subclause 892.212(a) relates to the Business providing employment to a person/s that is not a family member and is also an Australian citizen or Australian permanent resident or a New Zealand passport holder. It is clear from the documents that Mr Maranzan has conceded that he does not meet subclause 892.212(a). Rather, he is relying on meeting the requirements as set out in subclauses 892.212(b) and 892.212(c) of Schedule 2 to the Regulations.

7. Both subclauses 892.212(b) and 892.212(c) relate to the financial assets held in Australia by the applicant, the applicant’s spouse, or the applicant and his spouse together.  Herein lays the central issue in this case.  That is, firstly whether the applicant, the applicant’s spouse, or the applicant and his spouse together, held business and personal assets in Australia at the time of application that have a net value of at least AUD250,000, and had a net value of at least AUD250,000 throughout the period of 12 months ending immediately before the application was made, and that these assets were legally acquired.  Secondly, whether the applicant, the applicant’s spouse, or the applicant and his spouse, held assets in the main business in Australia at the time of application that have a net value of at least AUD75,000, and had a net value of at least AUD75,000 throughout the period of 12 months ending immediately before the application was made, and that these assets were legally acquired.

8. The meaning of ‘main business’ is set out in regulation 1.11(1) of the Regulations (as defined in regulation 1.03). It is common ground that Italian Design Pty Ltd (the Business) meets the criteria under regulation 1.11(1).

9. The application was lodged on 24 November 2014. As such, the 12 months ending immediately before the application was made, as referred to in both subclauses noted above, is taken to mean 24 November 2013 to 23 November 2014, the relevant period.

10. Under policy, the term ‘immediately before the application is made’ is interpreted as the three month period prior to the date the visa application was received by the Department. The Tribunal observes that the delegate assessed the applicant’s financial position at two particular points in time, being 30 September 2013 and 30 September 2014. This is because the applicant chose 30 September 2014 as the most relevant date for this purpose during the relevant three-month window prior to the lodgement of the visa application on 24 November 2014.

11. The Tribunal notes that whilst PAM3 policy may provide guidance, it is not bound to follow it. In particular, the Courts have held that the PAM3 guidelines constitute no more than an administrative advisory guide to decision makers in relation to the application of the Act and Regulations, and that they are incapable of being elevated into legally necessary or relevant considerations. Nevertheless, the Tribunal considers the approach set out in the policy guidelines to be a reasonable starting point for the purposes of applying clause 892.212 of Schedule 2 to the Regulations.

12. The first step for the Tribunal is to ascertain the applicant’s owner’s equity, or net assets, in the Business. It is undisputed that Mr Maranzan is the sole shareholder in the Business, holding 100% of the issued shares, as evidenced in ASIC documents before the Tribunal.  This position has not changed since incorporation of the Business on 22 July 2009.

13. It is noteworthy that the delegate was concerned in regard to the relationship of Mr John Petsas to the Business.  ASIC records clearly indicate that he was a director only between 22 July 2009 and 9 August 2012.  A statutory declaration from Mr Petsas, dated 11 July 2016, was before the Tribunal, in which he declares that his purpose as a co-director of the Business initially was solely to assist Mr Maranzan in the setting up of the Business with ASIC while he was dealing with the migration process.  He further states that he has not and did not ever have a claim to any part of the €345,000 deposit made to the Business in October 2010, discussed below. It is clear that following the granting of the Subclass 163 visa in late 2011, Mr Petsas was removed as co-director.  It is also evident from ASIC records that Mr Petsas was not a shareholder in the Business and therefore had no legal right to any of the assets or profits of the Business. Furthermore, evidence from Westpac Bank dated 1 April 2016 indicates that Mr Maranzan has been the sole signatory on the foreign currency Euro account held by the Business from commencement in October 2010 until closure.  The Tribunal accepts that the involvement of Mr Petsas in the Business for a relatively short time at the outset was purely for administrative purposes. As such, Mr Maranzan is attributable with 100% of the equity of the Business and the Tribunal finds accordingly.

    Subclause 892.212(c) – Net Business Assets

14. In relation to the calculation of the net business assets, or equity for a privately incorporated business such as the Business, PAM3 sets out a formula in relation to calculation of net business assets. Such a formula is notably absent from the Regulations. Of particular relevance in this case is the treatment of a director’s loan advanced to the Business, in that it should be added to the net equity of the Business (net assets) as recorded in the balance sheet. 

15. It is evident from the balance sheet of the Business that the director’s loan was AUD285,013 at 30 September 2013 and AUD125,457 at 30 September 2014. The general ledger account of the Directors Loan account from inception on 26 October 2010 to 31 December 2018 was before the Tribunal. The initial entry consisted of a deposit of AUD486,186, being €345,000, transferred directly from Mr Giovanni Moruzzi, the remainder of the transactions being largely transfers or repayments of the loan to Mr Maranzan’s personal Westpac account and allocation of director’s fees. The delegate was not satisfied that the deposit was rightfully attributed to Mr Maranzan and therefore refused to allow the director’s loan to be included in the assets of the Business. As such, Mr Maranzan was unable to meet the criteria under subclauses 892.212(a) or 892.212(b) of Schedule 2 to the Regulations.

16. Mr Maranzan submits that the initial deposit of €345,000 represented partial payment of the sale of property in Chia, Italy on 29 November 2010.  The Chia property was owned by Niagara Immobiliare Di Maranzan Loris & C. S. N. C, a registered Company in Vicenza, Italy, and sold to Mr Giovanni Moruzzi and Ms Maria Luisa Maccalli for €600,000.

17. A Company Registration Report from Chamber of Commerce, Industry, Handicrafts and Agriculture of Vicenza, dated 11 March 2016, records that the Company was registered on 27 November 2001 and has been in the business of ‘renting and operating of own or leased real estate’ since 1 July 2004.  The document goes on to record that Mr Maranzan and his brother, Mr David Maranzan, are equal shareholders.  Furthermore, a certified copy of the deed lodged with the Taxation Office in Milan on 3 December 2010 detailed the purchase of the Chia property by Niagara Immobiliare Di Maranzan Loris & C. S. N. C. on 15 March 2004 and the later sale of the same property to Mr Giovanni Moruzzi and Ms Maria Luisa Maccalli, finalised on 29 November 2010.  A letter from Mr Simone Chiantini, a Notary Public in Milan, dated 29 March 2016, confirmed the sale price of €600,000.

18. The Tribunal requested financial statements of Niagara Immobiliare Di Maranzan Loris & C. S. N. C. in respect of the financial years ending 31 December 2009 and 31 December 2010.  While only a simplified accounting method of reporting is required, the significant reduction in stock, being the properties available to rent, clearly reflected the sale of the Chia property in late 2010.

19. In respect of the transfer of €345,000 to the Westpac Euro account of the Business on 26 October 2010, a statement from Mr Giovanni Moruzzi, accompanied by a copy of his passport, dated 19 August 2015, confirmed the transfer of €345,000 as partial payment of his purchase of the Chia property from Niagara Immobiliare Di Maranzan Loris & C. S. N. C.  However, Mr Maranzan’s 50% legal share of the proceeds of sale is only €300,000.  A certified statutory declaration from Mr David Maranzan, dated 13 July 2016 in Vicenza, Italy was before the Tribunal.  Therein, Mr David Maranzan explains that the additional €45,000 paid to Mr Maranzan represented full payment of an existing loan between the brothers.

20. The Tribunal is satisfied that Mr Maranzan and his brother were equal shareholders in Niagara Immobiliare Di Maranzan Loris & C. S. N. C. and therefore Mr Maranzan had a legal right to 50% of the sale proceeds in regard to the Chia property, being €300,000. The Tribunal then considered the remaining €45,000 or AUD63,425.53 (based on the OZForex exchange rate on 26 October 2010).

21. The Tribunal accepts the written evidence from Mr David Maranzan and consequently, finds that the director’s loan balances in the Business should be fully attributed to Mr Maranzan.

22. The Tribunal examined the financial statements in respect of the Business for the periods ending 30 September 2013 and 30 September 2014 and noted that they were unremarkable. The Tribunal also notes that regardless of the items in the General Pool, the values at 30 September 2013 and 30 September 2014 of AUD5,705 and AUD2,710 have no impact on the outcome under subclauses 892.212(b) or 892.212(c). 

23. Accordingly, the Tribunal calculates that Mr Maranzan held the following total net business assets in Australia during the period 24 November 2013 to 23 November 2014 as set out below.  As noted above, policy allows loans by directors and shareholders to be taken into consideration, recognising that it is common for businesses to initially be financed by loans from the owner/s that represent liabilities to the business that are later repaid. Accordingly, the Tribunal has added the value of the director’s loans to its calculation of the net assets of the Business.

Business Assets	Ownership	Date	AUD	Date	AUD
Net assets of Business	100%	30/09/13	5,591	30/09/14	19,497
Directors Loan balance	100%	30/09/13	285,013	30/09/14	125,457
Total	100%	30/09/13	290,604	30/09/14	144,954

1. Clearly, Mr Maranzan held net assets in the main business in Australia during the relevant period that have a net value of at least AUD75,000. The Tribunal finds accordingly.

2. As already discussed above, the Tribunal is satisfied that Mr Maranzan had a legal entitlement to 50% of the sale price of the Chia property equating to €300,000.  The Tribunal is also satisfied that the additional €45,000 paid into the Business from the sale of the Chia property, represented fulfilment of an existing loan advanced to his brother, Mr David Maranzan.  As the other 50% shareholder in Niagara Immobiliare Di Maranzan Loris & C. S. N. C., it follows that a portion of Mr David Maranzan’s entitlement from sale of the Chia property to Mr Maranzan to eradicate his existing debt also represents a lawfully acquired asset.  Therefore, the Tribunal finds that the requirement under subclause 892.212(c) is met.

   Subclause 892.212(b) – Business and Personal Assets

3. In regard to the personal assets of Mr Maranzan and his spouse, evidence in respect of personal bank account balances and ownership of silver and gold bullions were before the Tribunal.   Purchase invoices and declarations from Guardian Vaults, the provider of safe deposit boxes holding the silver and gold bullions were also provided, together with valuations from Guardian Vaults.  Accordingly, the Tribunal calculates that Mr Maranzan, together with his spouse, held the following total personal assets in Australia during the period 24 November 2013 to 23 November 2014 as set out below. Based on the evidence provided, there is no question that the personal assets below have been lawfully acquired.

Personal Assets	Ownership	Date	AUD	Date	AUD
8 x 1oz gold bullion coins (Kangaroo) purchased 28/03/13	Mr Maranzan	30/09/13	11,506.40	30/09/14	10,773.36
60 x 1kg PAMP silver bars purchased 23/05/12	Mr Maranzan	30/09/13	45,004.80	30/09/14	39,526.20
60 x 1kg PAMP silver bars purchased 16/01/14 and 31/03/14	Mr Maranzan	30/09/13	0	30/09/14	39,526.20
500 x 1oz Austrian Philharmonic silver coins purchased 25/04/13	Mr Maranzan	30/09/13	11,665.00	30/09/14	10,245.00
Westpac Choice 67-4848	Mr Maranzan and Ms Cavallin	30/09/13	7,782.50	30/09/14	9,991.88
Westpac eSaver 37-7184	Mr Maranzan and Ms Cavallin	30/09/13	0	30/09/14	40,366.24
Total	30/09/13	75,958.70	30/09/14	150,428.88

1. While the Tribunal acknowledges that the loan advanced to the Business by Mr Maranzan is a personal asset, it is also cognisant of ‘double counting’ for the purposes of meeting the criterion under subclause 892.212(b) of Schedule 2 to the Regulations. The issue of avoiding double counting is noted in PAM3. Whilst the Tribunal notes that it is not bound to follow PAM3 regarding ‘double counting’, it sees no cogent reason to depart from the Departmental policy guidelines in this respect, given that Mr Maranzan has had the benefit of the directors' loans in the calculation of his net business assets. Accordingly, the Tribunal has not included the loan advanced to the Business in the personal assets of Mr Maranzan and his spouse.

2. Therefore, the combined net business and personal assets of Mr Maranzan and his spouse at 30 September 2013 total AUD366,562 (AUD290,604 + AUD75,958). The combined net business and personal assets of Mr Maranzan and his spouse at 30 September 2014 total AUD295,383 (AUD144,954 + AUD150,429).  Therefore, the Tribunal finds that the combined business and personal assets of Mr Maranzan and his spouse exceed AUD250,000 throughout the relevant period.

3. The Tribunal has found above that the business and personal assets of Mr Maranzan and his spouse have been lawfully acquired. Therefore, the Tribunal finds that the requirement under subclause 892.212(b) is met.

   Conclusion

4. As the Tribunal has found that subclause 892.212(b) and subclause 892.212(c) have been met, it follows that two of the requisite three subclauses in 892.212 of Schedule 2 to the Regulations are met by the applicant. It is therefore appropriate for the Tribunal to remit the matter to the Department to consider the remaining criteria for the grant of the Subclass 892 visa.

5. The Tribunal finds that as the second, third, and fourth named applicants applied on the basis of being family unit members of the first named applicant, their applications will be determined by reference to the outcome of the first named applicant's application on remittal to the Department for reconsideration.

   DECISION

   The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the applicant meets the following criteria for a Subclass State/Territory Sponsored Business Owner (Residence) visa:

   ·Clause 892.212 of Schedule 2 to the Migration Regulations 1994.

   Robyn Anderson
   Member