Nguyen (Migration)

Nguyen (Migration) [2017] AATA 866 (15 May 2017)
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DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANTS:  Mr Hoang Sang Nguyen
Ms Thi Dao Linh Tran
Ms Tran Hoang Phi Nguyen
Mr Tran Pai Khanh Nguyen
CASE NUMBER:  1513634
DIBP REFERENCE(S):  CLF2012/242407; CLF2013/255896; CLF2013/255897
MEMBER:Sue Raymond
DATE:15 May 2017
PLACE OF DECISION:  Adelaide
DECISION:The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named applicant meets the following criteria for a subclass 892 State/Territory Sponsored Business Owner (Residence) visa:
· cl. 892.212 of Schedule 2 of the Regulations.

Statement made on 15 May 2017 at 11:31am

CATCHWORDS
Migration – Business Skills (Residence) (Class DF) visa – Subclass 892 State/Territory Sponsored Business Owner (Residence) – Net assets – First tribunal review affirmed – Federal Court of Australia remittal – Business and personal assets of at least $250,000 – Assets in the main business have net value of at least $75,000
LEGISLATION
Migration Act 1958, s 348
Migration Regulations 1994, Schedule 2, cl 892.212
STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

The issues in this matter relate to the ownership and valuation of business and personal assets of the first named applicant and his spouse, the second named applicant. This matter has become very protracted as there are many items, some for small amounts, which are comprised in the list of business and personal assets. It is compounded by the fact that some cash money has been brought to Australia from Vietnam by the applicants and other relatives.
The intention of the provision in the Migration Regulations is for the applicants to demonstrate that they have, in Australia, assets of a particular value. In this case the Tribunal has ultimately accepted the evidence provided, but only after extensive oral and written evidence has been provided to the Tribunal.
The visa applicant applied for a Business Skills (Residence) (Class DF) Subclass 892 visa on 6 December 2012. The delegate refused to grant the visa on 12 February 2014 on the basis that cl.892.212 (b) was not satisfied. In particular, the delegate determined that a personal loan of $23,600 could not be included in the assets in the circumstances and also, the delegate was not satisfied about an amount claimed of $5688 in respect of jewellery. Consequently, with those two amounts removed, the net value of the combined assets as at 31 October 2011, was $239,834, which is less than the required $250,000 to meet the requirement of the particular regulation.
History of the application for review
The matter was originally heard and determined by a differently constituted Tribunal. A decision was issued on 4 September 2014 with the Tribunal affirming the decision not to grant the applicants the visas sought. The differently constituted Tribunal was not satisfied about the cash loan and found that there was insufficient evidence to support the amount of $8100 as a non-current personal asset. The Tribunal also found that there was insufficient evidence to support the claim of the goodwill in the business in the amount of $80,000. The Tribunal affirmed the decision under review.
The matter was the subject of an appeal to the Federal Circuit Court of Australia and a decision was made on 19 May 2015 dismissing the appeal.
However, the matter was further appealed to the Federal Court of Australia and was the subject of orders by consent, made on 24 September 2015, that the orders made by the primary judge be set aside and that the decision of the previously constituted Tribunal be quashed and “a writ of mandamus issue to require the second respondent [Administrative Appeals Tribunal] to conduct a review, under section 348 of the Migration Act of the decision of the first respondent [Minister for Immigration and Border Protection] in accordance with law”. There were also costs orders made.
Accompanying the formal court order were joint written submissions by the Australian Government Solicitor’s lawyer, acting for the Minister for Immigration and Border Protection, and the lawyer acting for the appellants. In the context of cl.892.212(c)(i) those submissions make reference to the fact that the Tribunal did not consider whether or not the ‘cash assets’ of $145,490 were assets the business and failed to consider the claimed inventories of $19,000 which were, on the face of it, clearly a business asset.[1] The submissions also indicate that the Tribunal did not make a specific finding as to the actual value (if any) of the goodwill of the business.
[1] paragraph 22 of the joint submissions
Consequently, the matter is now before the Tribunal to conduct merits review of the decision of the delegate of the Minister for Immigration and Border Protection to refuse the applicants Business Skills (Residence) (Class DF) Subclass 892 visas.
The first and second named applicants appeared before the Tribunal on 28 January 2016, 6 June 2016 and 15 December 2016 to give evidence and present arguments. On 15 December 2016, the Tribunal also received oral evidence from Ms Tran’s nephew, Mr Phong Thanh Tran. He gave his evidence via conference telephone as he resides in Victoria. The Tribunal hearings were each conducted with the assistance of an interpreter in the Vietnamese and English languages.
The applicants were represented in relation to the review by their registered migration agent. The representative attended the Tribunal hearings on each occasion.
After the first hearing the applicants were given the opportunity of providing further accounting evidence as to the valuation of the goodwill of the business. A valuation report of Philip Mann dated 16 March 2016 was provided to the Tribunal on 17 March 2016. That valuation report addressed the amount of $80,000 claimed as goodwill in the business. After examining the report together with the material already before the Tribunal, the Tribunal determined that a further hearing would be held. An invitation was issued on 17 May 2016 for a hearing on 6 June 2016.
In the hearing invitation for the second hearing the Tribunal indicated that at the next hearing the Senior Member would consider the issue of the valuation of business and personal items in Australia and in particular the items of the loan, inventories and jewellery would be raised by the Tribunal.
The final hearing was held on 15 December 2016.
The Tribunal has received a considerable amount of material and submissions, in addition to that before the Department and the previously constituted Tribunal. I approached the review by addressing the consideration of assets in order. I dealt with the issue of goodwill first, because if it had been valued at considerably less than $80,000 I would not need to proceed to deal with all the other assets if the $250,000 threshold could not be satisfied in any event.
For the following reasons, the Tribunal has concluded that the matter should be remitted for reconsideration.
Background
The first named applicant is a national of Vietnam and arrived in Australia on a subclass 163 visa in July 2009. He purchased a business, namely the “Quick and Friendly Super Deli”, for the sum of $110,000 in November 2009.
The first named applicant lodged a visa application for a Business Skills (Residence) (Class DF) Subclass 892 visa on 6 December 2012 in which he is nominated as the primary visa applicant and his wife and two children are the secondary applicants. In documents accompanying that application, the first named applicant indicated that he conducted the business as a sole proprietor and held 100% interest in the business. The activity of the business is that of a convenience store, snack bar and supermarket.
Another main business was nominated as part of the application process. The business name of that business is “Nguyen Sang Trading Company”. That business apparently began in May 2011 and was also run as a sole proprietorship. Mr Nguyen held 100% interest in the business and its main activity was described, in a document accompanying the visa application, as exporting wine to Vietnam[2]. It is not apparent to the Tribunal that any specific assets or income were claimed in relation to the second of the main businesses.
[2] Form 1217 at folio 2 of part one of the Departmental file
CONSIDERATION OF CLAIMS AND EVIDENCE
The issue in the present case is the net value of the business and personal assets in Australia, of the main applicant, Mr Hoang Sang Nguyen, and his spouse, the second-named applicant. The relevant period of time is throughout the period of 12 months ending immediately before lodgment of the visa application. As the visa application was lodged on 6 December 2012 the relevant 12 month period runs from 6 December 2011. The relevant criterion is cl.892.212 of Schedule 2 to the Migration Regulations.
Cl.892.212
Clause 892.212 is a criterion which must be satisfied at the time of the visa application, namely 6 December 2012. The clause has three components. The applicant must meet at least two of the three requirements, unless the appropriate regional authority has determined that there are exceptional circumstances. No such determination was made. I have had regard to the statement of the appropriate regional authority, namely the Department of Manufacturing, Innovation, Trade, Resources and Energy, which indicated that there are not exceptional circumstances in relation to this application.[3] At the second hearing the representative intimated that the Tribunal had a discretion related to the determination of “exceptional circumstances”. However, the wording of the provision is written in such a way that it is the appropriate regional authority which must make that determination and not any officer of the Department (or the Tribunal on review). Consequently, it is my view that I have no power to determine that the applicants meet any less than the required two out of the three requirements of clause 892.212.
[3] Part of folio 3 in part one of the Departmental file
Based on information before me, I am satisfied that the business did not employ the equivalent of a full-time employee who was an Australian citizen, Australian permanent resident or a New Zealand passport holder. This was not disputed by the applicants. Consequently, the requirements of subclause 892.212(a) are not met.
The applicable provisions in this case are 892.212(b) and 892.212(c).
The focus of the hearing, and of the review, was whether 892.212(b) is met. If that provision is met, I also need to determine whether the requirements of cl.892.212(c) are met at the relevant times.
Cl. 892.212(b)
I am mindful of the policy intention behind the provisions dealing with net asset value which is set out in the Departmental guidelines.[4] “The policy intention of the various ‘net value of assets in business’ criteria is to establish that the applicant has, by investing a substantial amount of money sourced from their own funds, a record of financial commitment to business through personal financial involvement and exposure to risk.”[5]
[4] PAM - GenGuideM - Business Skills visas - Visa application and related procedures
[5] at 34.1
The applicants helpfully provided a number of documents to the Tribunal, which bundles of documents have been marked A, B, C and D, respectively. In the bundle marked A, the applicants helpfully provided a comprehensive list of the business assets and the personal assets, as at 31 October 2011 in one column and as at 31 October 2012 in another.
Cl.892.212(b) requires that the business and personal assets have a total value of at least AU$250,000 throughout the period of 12 months ending immediately before the application is made. However, the policy of the Department is to accept a specified date within a three month period of that date, 6 December 2012. The Tribunal accepts that, for the purpose of providing appropriate financial documentation, this practice is appropriate.
The Tribunal accepts that the two dates of 31 October 2011 and 31 October 2012, are appropriate for the purpose of considering the issues under review.
The list of assets, provided to the Tribunal as at 31 October 2011, contains net business assets of $183,754 and personal assets as at that same date in the sum of $85,368. The total of those two amounts is a sum of $269,122.
In the same list of assets, as at 31 October 2012, the net business assets are shown as an amount of $190,768 and personal assets in the amount of $88,715. The total of those two amounts is an amount of $279,483[6].
Goodwill
[6] Folio 102 of the Tribunal file.
Business assets had been claimed including an amount of $80,000, representing goodwill in the business as at 31 October 2011 and 31 October 2012, respectively. On the basis of the information before the Tribunal, I accept that when the business was purchased in November 2009, $80,000 of the contract price was attributed to goodwill in the business. I was concerned as to whether any amortisation of that amount should be reflected in the value of the goodwill at the relevant times, due to the apparent downturn in the business. At the first hearing it was asserted that the $80,000 should be ascribed to this value, but there was no written valuation evidence to that effect. Following the first hearing I received a formal valuation report dated 16 March 2016. I am satisfied that the author of the report is an appropriately qualified professional who does not have any relationship with the applicants or the applicants’ adviser.
I rely on the opinion of the professional valuer, Mr Philip Mann, contained in his report. I note that he has indicated that he examined the profit and loss statements for the business, both before the applicant’s purchase of it and thereafter. He observed that the decline in revenue of the business may be seen as an indicator of impairment.
However, he noted that the sale of the business to the first named applicant was an arms length sale and that “multiples used to sell small takeaway food businesses have not changed significantly over the 3 years”. He observed that earnings have been static, if not improved, under the applicant’s control of the business. He stated that these three factors imply that “the value of the business, as commonly measured, has been static or increased”. Consequently, he concluded that the market value of the goodwill has remained at $80,000 or has increased. Consequently, having regard to the valuer’s professional opinion, I accept the valuation of goodwill as a business asset as at 31 October 2011 and 31 October 2012, respectively, in the amount of $80,000.
Cash Assets
Some amounts were claimed as cash amounts for business and also for personal assets. Westpac banking documentation was provided in relation to the business assets and ANZ banking documentation was provided as evidence of the cash personal assets. I accept the evidence provided as evidence of the amounts claimed which are set out hereunder.
Consequently, on the basis of the banking documentation supplied to the Tribunal, I find that:
·    a sum of $36,374 is a cash business asset in Westpac bank account (No***-*** **-5383) as at 31 October 2011.
·    a sum of $56,726 is a cash business asset in Westpac bank account number (***-*** **-6380) as at 31 October 2012.
·    a sum of $13,837 is a cash business asset in Westpac bank account number (No***-*** **-5383) as at 31 October 2012.
On the basis of the ANZ bank account documentation supplied to the Tribunal, I find that:
·    a sum of $47,810 is a cash personal asset in ANZ bank account in the name of the first-named visa applicant (No****-**587) as at 31 October 2011.
·    a sum of $152 is a cash personal asset in ANZ bank account in the name of the first-named visa applicant (No****-**004) as at 31 October 2011.
·    a sum of $ 68,616 is a cash personal asset in ANZ bank account in the name of the first-named visa applicant (No****-**587) as at 31 October 2012.
·    a sum of $44 is a cash personal asset in ANZ bank account in the name of the first-named visa applicant (No****-**004) as at 31 October 2012.
Inventories
The first named applicant has claimed as a business asset an amount of $19,000 for “Inventories” as at 31 October 2011 and 31 October 2012.
This claim represents the stock within the business as at those dates. Mr Nguyen indicated that these figures are estimates, and in the documents supplied to the Tribunal, he indicated that as a small business it is not required to apply a barcode to each item.
He provided details of a stocktake report, apparently conducted on 30 September 2012, in relation to the cigarettes component of the business, which he indicated is the main component of the business. That figure amounts to $13,753. Other items have been estimated, with the total amount of stock being $21,953. I note that various financial statements have been provided to the Tribunal, in which an amount of $19,000 has been included as stock. However the Tribunal also received, at my request, a copy of the first named applicant’s taxation return for the year ended 30 June 2012. In that taxation return the opening stock figure is shown as $11,000 and the closing stock, $19,000. Whilst the dates for this taxation return do not directly align with the dates under consideration for this visa, nevertheless I noted that a figure of $11,000 was attributed as at the beginning of July 2011 (or end of June 2011) and yet a figure of $19,000 is nominated four months later, as at 31 October 2011.
Further evidence and submissions were provided on 15 August 2016 addressing this issue.
It was asserted that as a sole trader the accounting rules do not require that a stocktake be performed. The stock amounts are based on an estimate. It is stated that a stocktake was conducted on the business on 30 September 2012 to generate the relevant data for the visa application.
The following information has assisted in me being satisfied that I should accept the claimed inventory amounts of $19,000.
Documentation related to the purchase of the business had indicated that the previous owners had valued the stock at $65,000 in 2007 and $60,000 in 2008.
The representative highlighted in the written submissions that Mr Nguyen’s business taxation returns and financial statements show the following financial information:
·June 2010 in the ATO taxation return  $23,000
·Oct 2010 in the financial statement to the Department         $21,000
·June 2011 in the ATO taxation return  $11,000
·Oct 2011 in the financial statement to the Department         $19,000
·June 2012 in the ATO taxation return  $19,000
·Oct 2012 in the financial statement to the Department         $19,000
My attention was drawn to the business’s yearly turnover of $297,547 in 2011 and $265,755 in 2012. At the beginning of the first-named applicant operating the business, following its purchase in November 2009, stock from the previous owners was transferred at a value of $23,318.
I had evidence before me about the roadworks carried out outside the shop which I accept affected the cashflow of the business.
A chart of stock level against sales was provided as part of the written submissions which supported the claim of $19,000 for the stock at both October 2011 and October 2012. Having regard to the totality of the oral and documentary evidence, I find that the business assets of the business include inventory amounts valued at $19,000 as 31 October 2011 and 31 October 2012, respectively. In the context of all the evidence I accept that this is a reasonable value.
Shop Equipment
Part of the claim for business assets are the sums of $17,891 as at 31 October 2011 and $13,361 as at 31 October 2012.
These amounts are claimed for the shop equipment. Such amounts should be reflected in depreciation schedules prepared as part of the financial documentation of the business.

I note that the depreciated value of the business plant and equipment is recorded in financial documentation which appears on the Department’s file and shows amounts as at 31 October 2011 and 31 October 2012. The amounts are shown in that documentation are $17,891, as at 31 October 2011 and $13,361, as at 31 October 2012.[7]The depreciation schedule for the year ended 31 October 2012 shows the values as $16,776 as at 31 October 2011 and $11,744 as at 31 October 2012. I adopt the figures in the depreciation schedule[8]. I accept that the depreciated value of the shop equipment is a business asset and that appropriate values are $16,776, as at 31 October 2011, and $11,744, as at 31 October 2012.
Cash on Hand
[7] Folio 92 of Departmental file CLF2013/255896
[8] Folio 155 of Departmental file CLF2013/255897
The applicant has included as business assets, amounts as cash on hand. These amounts are in addition to the amounts in the Westpac accounts described above. However the cash on hand is separately described and is claimed to be $26,058 as at 31 October 2011 and $6,266 as at 31 October 2012. At the hearing on 6 June 2016, I asked what evidence would support those claimed amounts.
I requested further information as to the source of these amounts. Further information was provided by submission dated 15 August 2016. Mr Nguyen’s oral evidence was to the effect that he physically counted the cash and recorded the total in a manner which could be recorded in the accountant’s records. In the representative’s submission dated 15 August 2016 the representative repeated a table of monthly sales showing cash in and out of the business. It was noted that approximately 75%-80% of customers of the business pay by cash and that the average monthly cash input is $20,000. The applicant had previously given evidence that he did not do any banking in September and October 2011, which is why the cash on hand balance is higher than other months. Given the level of detail in the table of monthly takings and my assessment that the first-named applicant records all details relating to money, I am prepared to accept and find that the business assets include cash amounts of $26,058 as at 31 October 2011 and $6266 as at 31 October 2012. Significantly, I note that the cash on hand amounts are recorded in the prepared financial statements for the year ended 31 October 2012.
The combined cash business assets covering those in bank accounts and in cash are $62,432 as at 31 October 2011 and $76,829 as at 31 October 2012. The combined cash personal assets are $47,962 as at 31 October 2011 and $68,661 as at 31 October 2012.
Total 2012 valuation of assets
The Tribunal observes that, in relation to 31 October 2012, the total valuations of cash assets-both business ($76,829) and personal ($68,616); together with goodwill ($80,000), shop equipment ($11,744) and the inventory ($19,000) add up to an amount of $256,189 thereby meeting the required threshold of $250,000.
Further consideration of items for the purpose of assessment of valuation as at 31 October 2011
The value of those above described items in relation to 31 October 2011 does not exceed $250,000 so I must examine other items claimed as business and personal items. The valuation of those above described items as at 31 October 2011 amounts to approximately $226,170-just under $24,000 of the required $250,000 threshold. ($80,000 goodwill; Cash assets at bank $36,374, $47,810 and $152; Inventory $19,000; Shop equipment $16,776 and Cash on hand $26,058).
Jewellery
Listed as a personal asset is an amount in respect of jewellery, amounting to $5668 as at 31 October 2011 and $5610 as at 31 October 2012. The issues for me to determine are the ownership of the jewellery and the value of it. Based on all the evidence before the Tribunal, I accept that the jewellery is owned by Mr Nguyen and Ms Tran and can be considered as a personal asset. Evidence was provided to the effect that this jewellery was a gift to the first named applicant’s wife for a tenth wedding anniversary present. The policy of the department would suggest that items such as the jewellery are not to be included as assets however, in principle, I accept that jewellery can amount to a personal asset. I hold the view that I should not restrict the ordinary meaning of the word “asset”.
I note that in the Departmental policy guidelines (PAM3[9]), in speaking about personal items in the context of net personal and business assets, the policy indicates that an item that is the result of past expense and is of future economic benefit is an asset. The policy further indicates that a personal asset that can be included is expected to be a tangible object for which ownership can be proven and that is capable of generating a monetary value that can be realised and can be readily converted to cash for business use and settlement in Australia. The policy further states that if ownership, recognition and valuation of an asset cannot be reasonably established, that that asset would not normally be considered for inclusion. The policy cites further examples, such as clothing and personal jewellery or household items, such as china, furniture, et cetera. The policy also states that personal asset items should be listed separately and that a valuation at market value from a licensed or specialised valuer must be included. The policy comments that officers must be reasonably satisfied that a genuine independent valuation has taken place.
[9] PAM3 Migration Regulations-Other>PAM-GenGuideM-Business visas-Visa application related procedures- valuation of assets
I accept that market valuation is the appropriate valuation in the context of assessing the personal assets. I regard that method as the fair and reasonable assessment of valuation for the purpose of the assets for this visa. I do not have a market valuation before me. This issue was raised at the hearing on 6 June 2016.
The valuation provided to the Tribunal from “Class A Jewellers”[10] indicates a valuation of two different items carried out on the 20 June 2014. The total valuation is expressed to be $15,260. For present purposes I accept that the valuation is carried out by someone with the appropriate expertise, but I note that the valuation is expressed to be for purpose described on the form as follows, “Retail Replacement Valuation For Insurance Purposes. This document represents our opinion of the value/s that the described item/s could be insured for and, if lost, be replaced at a retail jeweller within Australia at a normal retail price. The values indicated include GST.”
[10][10] folios 32 and 33 of the documents provided to the Tribunal marked “A”
I do not accept, for the purpose of the valuation of personal assets in the context of a business visa, that anything other than the market value of such goods is appropriate. The valuation totals $15,260 in respect of two items of jewellery being two gold bangles; one containing diamonds and the other bangle containing cubic zirconias. It is stated to be replacement value for insurance purposes. A value of only $5,668 is claimed as at 31 October 2011.
I note that further information was requested from the valuer of the jewellery by Mr Nguyen. The valuer’s response indicated that he could not give a market value, which could be a higher or lower value. He confirmed that he supplied a recommended retail insurance replacement value and suggested that a guide to achieve a second hand value is “anything from one third of the retail value”. On balance, and in light of that further information from the professional valuer, I accept the claimed amount of $5668, although with some hesitation, given that the valuation was provided some time after the relevant time in October 2011.
Motor vehicle
As for the motor vehicle, the documentation produced suggested a private sale took place in respect of a 1999 Honda Accord for which a sum of $6200 was paid. The contract is dated July 2010. The applicants claimed the value of the vehicle at 31 October 2011 as $5162. I note that this amount was included in the financial documentation prepared by the accountant. I accept that valuation of $5162 on information available to the Tribunal, including the valuation of second hand motor vehicle information available on the internet.
Loan
A considerable amount of time was occupied in the consideration of the loan. It was considered by the previously constituted Tribunal.
Some component of this claimed amount is required to satisfy the $250,000 requirement as at October 2011. The first named visa applicant has claimed, in his list of personal assets, a sum entitled “Receivable”. The figure included is a sum of $23,600 as at 31 October 2011 and a sum of $8,100 as at 31 October 2012. The details about the loan are contained in a statutory declaration of the first named visa applicant declared on 3 June 2016 and also a declaration of the applicant’s nephew declared on 1 June 2016. The loan apparently involves money given to the first applicant’s wife’s nephew, Tran Thanh Phong Nguyen by Mr Nguyen. His nephew’s mother is his wife’s sister. Since 2007 she has been the chief accountant of the first applicant’s embroidery business in Vietnam. That business is still operating in Ho Chi Minh City. Mr Nguyen describes that he is very close to his nephew, regarding him more like a son.
He declared that when his wife and he and his two children arrived in Adelaide in July 2009 he stayed with his nephew for over a year. They lived with his nephew from July 2009 until September 2010 when the first named visa applicant and his family moved into their own rental property. His nephew was generous with his time and support after their arrival in Australia. His nephew also helped him when he needed to get his driver’s licence. His nephew is now living in Melbourne with his own wife and daughter. His nephew’s brother and first named visa applicant’s daughter also lives with his nephew since the beginning of the year.
The evidence is that the following amounts, totalling $33,600, were lent to Mr Nguyen’s nephew:
·     on 25 October 2009     $15,000
·     on 28 January 2010     $10,000
·     on 15 March 2010       $3,600
·     on 29 July 2010           $5000
The declarations and other evidence before me suggest that the following repayments of the loan, in the total amount of $33,600, were made:
·     on 25 July 2011    $10,000
·     on 12 March 2012 $4000
·     on 9 April 2012     $5000
·     on 14 May 2012     $3000
·     on 25 September 2012 $3500
·     on 12 November 2012 $5000
·     on 15 January 2013 $3100
The loan amounts claimed as assets, as part of the visa application, represent the balance of the loan at the relevant times, namely, as at 31 October 2011 and as at 31 October 2012, respectively.
In support of this loan, I have before me a loan agreement dated 5 November 2009, and apparently signed by both parties on the 5 November and 7 November 2009, respectively. Mr Nguyen gave oral evidence at the hearing to the effect that the agreement was signed a few days after the first payment. This evidence was given in response to a question from the Tribunal asking whether it was signed at the time or signed later relating to events that occurred at an earlier point in time. The Tribunal also has copies of cash receipts which appear to represent the payment of the monies to Mr Nguyen’s nephew, Phong.
I note that the loan agreement was not provided to the Department of Immigration, although a debtor statement and the receipts were provided. Mr Nguyen gave evidence that he did not provide it as he thought the receipts were more important. I understood that it was not provided as it was not requested. However, I also note that the Department did not specifically request the receipts and yet they were provided.
The question for me is whether this loan can be regarded as an asset of the first named visa applicant (or his wife).
I had a number of concerns in relation to this claimed asset which were expressed at the hearing on 6 June 2016:
· Firstly, as to whether it constitutes a loan
· Secondly, how it is established that the funds provided by Mr Nguyen were in fact his funds [or that of his wife] and that the repayments were in fact paid by Mr Nguyen’s nephew, Phong, to Mr Nguyen.
It appears that the funds were paid by Mr Nguyen in cash and not withdrawn from any bank account in Australia.
At the third hearing it became apparent that there were in existence receipts covering the repayments of the loan amounts by Phong to Mr Nguyen. I was concerned as to the late production of these documents. It appears that Mr Nguyen has only produced items in relation to specific requests for documents.
I questioned both the first named applicant and Phong about the payments and the documentation associated with them, including the location where the money was paid or repaid. The evidence of the applicant and witness correlated to a significant degree. In his oral evidence Phong freely acknowledged that the loan documentation was unusual but he went along with it as it was what his uncle wanted. Mr Nguyen gave evidence that he prepared the loan agreement himself and downloaded it from the internet from a Family Law website. Whilst it was apparent that there had been contact between Mr Nguyen and Phong prior to the hearing (apparently so that Mr Nguyen could remind him about the agreement) at that time Mr Nguyen was not aware of the significance of the repayment receipts. Phong was questioned about whether any documents were given in relation to the repayment of the monies and he described the repayment receipts. I accept that the transactions occurred as described, both in relation to the payments to Phong and in the repayments to Mr Nguyen.
Ultimately, I accept that Mr Nguyen loaned to his nephew cash money and that it was lent on the condition that it would be repaid.
I also accept that the loan agreement was produced by Mr Nguyen shortly after the first payment. The nature of the agreement was such that it was not drawn by a lawyer or other professional but was prepared by Mr Nguyen. It anticipated several tranches of loan payments and a broad repayment schedule. I note that loan payments totalling $35,000 were contemplated and the repayment schedule seems to have only scheduled repayments amounting to $30,000. Despite these discrepancies in the document I accept that the amounts loaned to Phong were intended to be repaid. The stated security is expressed in an unorthodox way and it is ultimately to be sourced from Phong’s mother should Phong not repay the loan. There is no evidence of Phong’s mother’s agreement to this form of guarantee. Phong gave evidence that his understanding was that his mother would have to repay the money if he could not.
I have had three hearings in relation to this matter and my observations of Mr Nguyen are of someone who is particular, to a high degree, in documenting matters concerning money.
I accept that Mr Nguyen is a literal person and responded to specific requests and did not otherwise volunteer information. Such a trait could indicate dishonesty, but my assessment of Mr Nguyen is that he is a truthful witness and is trying his best to comply with legal requirements with which he is not familiar. His attempts to obtain the visa have been complicated by the cash money which effectively is relied upon in seeking this visa and also by his efforts to do things himself rather than seek professional assistance.
I have given considerable reflection to this loan and the fact that it is relied upon as an asset. I accept that it was the joint intention of Mr Nguyen and Phong that the amount loaned to Phong in the total amount of $33,600 was to be repaid to Mr Nguyen.
Of significance is the fact that most of the loan had been repaid by the time of the visa application—in fact $30,500 had been returned to Mr Nguyen by the time of the lodgement of visa application in December 2012. $10,000 of the loan monies were repaid by October 2011. That is money which does not appear in a bank account. It is money in addition to other property identified by the applicant in accounts or elsewhere.
The applicants should appreciate that they must satisfy the Department (and the Tribunal on review) as to the source of funds. People may choose to adopt customs which involve cash money (with the consequential lack of a paper trail) for the transfer of money but should recognise if those funds are required to be established as belonging to a particular person or persons that that will involve considerable, and sometimes insurmountable, difficulties.
Ultimately, I have accepted that the money amounted to a loan and that the source of the funds for the loan as attributable to the applicants. The reasons for my satisfaction is a combination of the following matters:
·my assessment of the first-applicant’s credibility;
·the high degree of documentation of the finances of the business maintained by the first-named applicant;
·the correlation of oral evidence and the receipts of payments and repayments;
·detailed information from the applicants as to the specific source of cash money (and who brought the money to Australia) coupled with the offer to provide further statutory declarations from those persons bringing the money to Australia,
·details of the applicants’ assets in Vietnam.
In addition, in this matter it would appear that a considerable amount of the loan money had been repaid by the time of the lodgement of the visa application so this has influenced me, in the sense that it has been repaid as asserted and supports the claim that it was a loan rather than a gift.
In any event, if that money was additional cash money held by the applicant it would be an asset in its own right. Even if I were to find against the applicants on the issue of the loan there is an amount of $10,000 which I accept was given back to Mr Nguyen by the commencement of the period on 31 October 2011, such that it should properly be considered as an asset in its own right.
In this case the applicants have provided documents to show that they have additional assets in Vietnam in the form of properties and also a business in Vietnam of which the first named applicant is the owner. This evidence and the restrictions in bringing money out of Vietnam are produced to show that had the applicants been able to, they would have brought more funds into Australia from Vietnam. I have ultimately accepted that cash brought from Vietnam is sourced from a legitimate source related to the applicants.
In summary, in relation to the loan, whilst I have some reservations about it given its unorthodoxy, I accept the money was provided as a loan and that the loan would be honoured in its repayment, having regard to the particular circumstances. Consequently, I accept the claimed amount of $23,600 as at 31 October 2011.
Summary
This case has proved far more difficult to determine by virtue of the cash money. A complicating feature is the number of assets.
I am satisfied of the following assets and valuations, totalling $260,600 as at 31 October 2011:
Business
·Goodwill $80,000
·Cash $36,374 (Westpac account)
·Cash on hand $26,058
·Inventory $19,000
·Shop equipment $16776
Personal
·Cash $47,810 (ANZ account)
·Cash $152 (different ANZ account)
·Jewellery $5668
·Car $5162
·Loan $23,600
In summary, in respect of the 31 October 2011, the Tribunal is ultimately satisfied of the valuation of the personal and business assets of the applicants are at least $250,000.
Other business assets
I accept that there are items showing in the financial accounts for trade creditors of $3475; the valuation of other intangible assets is $4709 and tax liabilities of $633. In addition, there are claimed small business items including a heater, furniture, a refrigerator with a total claimed value as at 31 October 2011 as $3830. (The total of these items is $12,647). I have not dealt with these matters in any detail as I do not need to do so to make a decision.
Smaller Personal Assets

I wish to remark on a number of smaller personal items: namely two computers, a mattress, a television and a washing machine. Some invoice documentation was available for these items.
I am of the view that market value of such items is appropriate for the purpose of this application and I am left unconvinced as to the market valuation of these smaller items. For example, I doubt that a second hand mattress has much value at all. I do not attribute any value to the small items described in paragraph 89 herein in the absence of a market valuation.
CONCLUSION
In relation to cl.892.212(b), I find that the business and personal assets in Australia of the applicant and his spouse together have a net value of at least $250,000 and had a net value of at least $250,000 throughout the period of 12 months ending immediately before the application was made and have been lawfully acquired by the applicant and his spouse.
In relation to cl.892.212(c), I find that the assets owned by the main applicant and the applicant’s spouse in the main business in Australia have a net value of at least $75,000 and had a net value of at least $75,000 throughout the period of 12 months ending immediately before the application was made and have been lawfully acquired by the applicant and his spouse.
DECISION
The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named applicant meets the following criteria for a subclass 892 State/Territory Sponsored Business Owner (Residence) visa:
·cl. 892.212 of Schedule 2 of the Regulations.
Sue Raymond
Senior Member

[2017] AATA 866

15 May 2017

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