Nguyen (Migration)

[2017] AATA 262

Nguyen (Migration) [2017] AATA 262 (17 February 2017)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mr Dien Thanh Nguyen
Mrs Kim Anh Truong
Ms Elaine Truong Nguyen
Mr Brian Truong Nguyen

CASE NUMBER:  1501909

DIBP REFERENCE(S):  BCC2014/2483014 BCC2015/351881 BCC2015/535325

MEMBERS:Alison Mercer (Presiding Member)

Robyn Anderson

DATE:17 February 2017

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal remits the decisions for reconsideration with the direction that the first named applicant meets the following criterion for a Class EC (Business Skills) subclass (Business Innovation and Investment) visa:

·cl.888.225(2) of Schedule 2 to the Migration Regulations 1994.

Statement made on 17 February 2017 at 9:37am

CATCHWORDS

Migration – Class EC (Business Skills) subclass (Business Innovation and Investment) visa – Subclass 888 – Net assets – Two businesses – Director’s loans to businesses – Loans calculated in net assets

LEGISLATION

Migration Act 1958, ss 65, 359(2)
Migration Regulations 1994, r 1.11(1), cl 888.225

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 5 February 2015 to refuse to grant the applicants Business Skills (Permanent) subclass 888 visas under s.65 of the Migration Act 1958 (the Act).

2. The applicants applied for the visas on 30 September 2014. The first named applicant was the primary applicant and the second, third and fourth named applicants were included as members of his family unit (as his wife and children). The delegate refused to grant the visas on the basis that the applicant did not meet primary visa criterion cl.888.225(2) and thus did not meet cl.888.225 as a whole. In reaching this conclusion, the delegate noted that cl.888.225(2) required that the assets owned by the applicant and/or his spouse in the main business(es) in Australia (a) had net value of at least $200,000 throughout the 12 months immediately before the visa application was made, (b) continued to have assets in the main business(es) of at least that net value at the time of decision, and (c) those assets had been lawfully acquired. The delegate found that the applicant’s nominated main businesses were Be Food Pty Ltd (trading as New Watervale Fish & Chips) and H S Melbourne Castings Pty Ltd. According to the financial statements provided:

   ·for the 2012/13 financial year, Be Food Pty Ltd had net liabilities of $3,863 and H S Melbourne Castings Pty Ltd had net liabilities of $11,871; and

   ·for the 2013/14 financial year, Be Food Pty Ltd had net liabilities of $2,286 and H S Melbourne Castings Pty Ltd had net liabilities of $19,078.

3. The delegate noted that the applicant claimed to have made director’s loans to both companies in the relevant years ($179,058 to Be Food Pty Ltd and $41,411 to H S Melbourne Castings Pty Ltd in 2012/13 and $109,589 to Be Food Pty Ltd and $95,113 to H S Melbourne Castings Pty Ltd in 2013/14) and that he had provided various documents, such as bank statements, ledgers and financial statements in relation to H S Melbourne Castings Pty Ltd but had not provided any documentary evidence to substantiate the loans to Be Food Pty Ltd. Accordingly, the delegate was not satisfied that the claimed director’s loans to Be Food Pty Ltd could be counted in the calculation of the applicant’s net assets in the business. Disregarding the Be Food Pty Ltd director’s loans meant that the applicant’s assets in his main businesses in Australia in the 2 year period before the visa application were less than $200,000 and thus he could not satisfy cl.888.225(2).

4. The delegate refused visas to the second, third and fourth named applicants on the basis that they did not meet the secondary visa criteria to be members of the family unit of a person who met the primary criteria, and there was no evidence that they met the primary visa criteria in their own right.

5. The Tribunal received a review application from the applicants on 9 February 2015.  It was accompanied by a copy of the delegate’s decision and an authority by which they appointed a registered migration agent, Mr Hoang Vu Nguyen, to be their representative and authorised recipient for correspondence for the purposes of the review.

6. The matter was constituted to a Tribunal Member on 27 January 2016. On 27 June 2016, the Tribunal wrote to the applicants via their agent pursuant to s.359(2) of the Act. The Tribunal set out cl.888.225(2) in full and invited the applicants to provide information:

   ·demonstrating how and when the loan(s) to Be Food Pty Ltd were made by the director(s), such as loan account ledger with corresponding bank statements verifying transfers into the business by the director(s) in the period prior to 29 September 2013;

   ·information that confirmed that the applicant had maintained net assets in his main businesses of at least $200,000 from 30 September 2014 to date; and

   ·information that confirmed that he acquired any net assets in the business(es) lawfully.

7. The Tribunal requested that this information be provided by 11 July 2016.  On 4 July 2016, the applicant’s agent requested an extension of time to respond.  This was granted until 25 July 2016 (the prescribed period).

8. On 25 July 2016, the applicants’ agent provided the following:

   ·in relation to Be Food Pty Ltd:

   ogeneral loan ledger as at 30 June 2014;

   obalance sheet as at 30 June 2013 (showing unsecured director’s loan of $179,058);

   obalance sheet as at 30 September 2013 (showing unsecured loans from shareholders of $202,939);

   obalance sheet as at 30 September 2014 (showing unsecured loans from shareholders of $91,724.50);

   obalance sheet as at 30 September 2015 (showing unsecured shareholders’ loan of $113,877) ;

   obalance sheet as at 30 June 2016 (showing unsecured loans from shareholders $81,327)

   ·in relation to H S Melbourne Castings Pty Ltd:

   ogeneral loan ledger as at 30 September 2014;

   obalance sheet as at 30 June 2013;

   obalance sheet as at 30 September 2013 (showing the following: unsecured loan by Henry Nguyen of $50,000, unsecured loan by the applicant of $50,000, shareholder’s loan from Henry Nguyen of $71,412 and shareholder’s loan from the applicant of $71,412);

   obalance sheet as at 30 September 2014 (showing unsecured loans from Henry Nguyen of $50,000 and from the applicant of $50,000, and unsecured shareholders’ loans of $95,113 from Henry Nguyen and $95,113 from the applicant);

   obalance sheet as at 30 September 2015 (showing unsecured loans from Henry Nguyen of $50,000 and from the applicant of $50,000, and unsecured shareholders’ loans of $95,245 from Henry Nguyen and $94,480 from the applicant); and

   obalance sheet as at 30 June 2016 (showing unsecured loans from Henry Nguyen of $50,000 and from the applicant of $50,000 and unsecured shareholders’ loans from Henry Nguyen of $101,638 and from the applicant of $101,638)

9. The applicants’ agent stated that he would shortly provide the Tribunal with detailed submissions and clarification.

10. On 17 August 2016, the Tribunal wrote to the applicants via their agent to advise that it had reviewed the material provided but noted that the agent had stated additional material was to be provided, which had not yet been received by the Tribunal.  The Tribunal asked for clarification of when these might be expected, and noted that it would otherwise shortly set the matter down for hearing as the material before it presently was not sufficient for it to be able to make a favourable decision on the papers.

11. On 23 August 2016, the applicants’ agent advised by email that he had recently been provided with additional documents by the applicants which he wished to review before providing them to the Tribunal. Accordingly, he indicated that he anticipated providing the material and any further submissions to the Tribunal by 31 August 2016.

12. As no further submissions or material was received, the Tribunal invited the applicants by letter dated 8 September 2016 to attend a hearing on 13 October 2016 at 10am.  They were further requested to provide any additional documents or information they wished to rely upon by 6 October 2016. The Tribunal noted that it would assist it to be able to take evidence from the applicants’ accountant and Mr Henry Nguyen at the hearing.

13. On 30 September 2016, the applicants’ agent provided a hearing response indicating that he, the applicant, the applicants’ accountant Hanh Pham, and Henry Nguyen would also attend.

14. On the evening of 12 October 2016, the Tribunal received a set of financial statements for Be Food Pty Ltd for the 2013/14 financial year (showing shareholder loans of $215,339), and for the 2015/16 financial year (showing shareholder loans of $122,871), and a ledger for the shareholders’ loans for Be Food Pty Ltd for the period 1 July 2012 to 30 June 2016 by email from the applicant’s agent, who stated that he had only received them from the accountant that day and therefore would not be in a position to make submissions in relation to the material before the hearing.  A further email from the agent was received at approximately 8am the morning of the hearing attaching a table stated to show the applicant had total net assets in the 2 main businesses (H S Melbourne Casting Pty Ltd and Be Food Ltd) since 30 September 2013 to 30 June 2016 in excess of the required threshold of $200,000.  The agent stated that the table was tabulated using the information in the balance sheets and loan ledgers provided on 25 July 2016 and 12 October 2016.

15. As this material was only made available to the Presiding Member on the morning of the hearing at approximately 9.30am, the Presiding Member elected to reschedule the hearing in order to properly review the material provided.

16. The table provided by the applicant’s agent on 13 October 2016 indicates the following in relation to the applicant’s net assets in the business:

as at 30/9/13			as at 30/9/14			as at 30/9/15			as at 30/6/16
HS Melb		Be Food PL	HS Melb		Be Food PL	HS Melb		Be Food PL	HS Melb		Be Food PL
1.    Net assets	-$34,312		-$62,241.10	- $34,513		$3,492	$21,901		-    $33,452.22	$33,829		$1,050.33
2.    % ownership in the business	49%		100%	49%		100%	49%		100%	49%		100%
3.    (1) x (2)	-$16,812.88		-$62,241.10	-$16,911.37		$3,492	$10,731.49		-$33,452.22	$16,576.21		$1,050.33
4.    Loans to business	$121,412		$217,298.99	$155,113		$211,385.39	$144,480		$167,893.41	$101,638		$122,871.67
5.    Loans from business	NIL		NIL	NIL		NIL	NIL		NIL	NIL		NIL
6.    Loans to finance investment	NIL		NIL	NIL		NIL	NIL		NIL	NIL		NIL
NET BUSINESS ASSETS	$104,599.12		$155,057.89	$138,201.63		$214,878.22	$155,211.49		$134,441.19	$118,214.21		$123,922
TOTAL	$259,657.01	$353,079.85	$289,652.68	$242,136.21

1. On 7 November 2016, the Tribunal wrote to applicants via their agent to invite them to a rescheduled hearing on 9 December 2016. The Tribunal noted that it would assist the Tribunal if Mr Henry Nguyen and the companies’ accountant(s) attended the hearing to give evidence as witnesses.  The Tribunal requested that any additional material to be submitted be provided to the Tribunal by 2 December 2016.

2. On 16 November 2016, the matter was constituted to an additional Tribunal Member who is a qualified accountant.  On 21 November 2016, the Tribunal requested specific additional information from the applicants to be provided by 2 December 2016; being the depreciation schedule for H S Melbourne Castings Pty Ltd from its inception to date, and the general ledger for the loan account for that company for the period 1 July 2014 to date.

3. The applicants’ agent provided the above information to the Tribunal on 6 December 2016 and confirmed that in addition to himself and the applicant, Mr Henry Nguyen and Mr Trung Tran (accountant) would attend the hearing.

4. The applicant appeared before the Tribunal on 9 December 2016 to give evidence and present arguments. The Tribunal also received oral evidence from Mr Henry Nguyen and Mr Trung Tran, the accountant for both main businesses.  The Tribunal also received submissions from the applicant’s agent.  The Tribunal was assisted by the services of an interpreter in the Vietnamese and English languages.

5. The applicant told the Tribunal that he came to Australia in 2007 to look for business opportunities.  At that time, he and his family had been living in New Zealand since 1989, where he owned a fish and chip shop.  The applicant said that he looked at a number of different businesses in Australia but ultimately decided to invest in a business with which he was familiar. He established Be Food Pty Ltd (trading as New Watervale Fish & Chips) in 2010.  The funds he put into this business came from the sale of his New Zealand business for NZ $200,000 and the sale of the family’s New Zealand home (NZ $720,000, minus pay out of the mortgage of NZ $100,000, leaving profit of NZ $620,000). The applicant said that when he and his family relocated to Australia, they therefore had approximately NZ $820,000.  Initially, they rented a home in Springvale but then bought land in Caroline Springs for AUD $170,000, on which they built a home for AUD $310,000 in 2010. 

6. The Watervale Fish & Chips business is located nearby to Caroline Springs.  The applicant said that he and his wife operate this business, with the assistance of 1 part time employee. He and his wife did everything in the business and it was open from 11.30am to 8pm, 6 days per week.  In response to the Tribunal’s query, the applicant said that Be Food Pty Ltd repaid him $100,000 in the 2013/14 financial year so that he could buy land in Taylor’s Hill for $290,000, which they hope to build on at a future date.  This property is subject to a mortgage with Westpac and the applicant put $65,000 into its purchase.

7. The Tribunal asked the applicant about his association with Henry Nguyen. The applicant told the Tribunal that he and his wife hired Mr Nguyen to work with them in the fish and chip shop.  Mr Nguyen was looking for work. The applicant clarified that Mr Nguyen was not related to the applicant or his wife. They initially hired him on a part-time basis, then he became a full-time employee. Subsequently, he and Mr Nguyen set up H S Melbourne Castings Pty Ltd together. Its main business activity is jewellery making, as Mr Nguyen is a jeweller by trade. The business is located in the building in 220 Collins Street in the Melbourne CBD. The applicant said that although the registered shareholdings for H S Melbourne Castings Pty Ltd show that he is a 49% shareholder and Mr Nguyen holds the remaining 51% of shares, in reality they are 50/50 owners and shareholders.  The applicant told the Tribunal that when the company was originally established, it was intended that the applicant would have an investor role only, and Mr Nguyen would run the business.  However, once the company was up and running, they both recognised that Mr Nguyen’s level of English was not good enough to deal with all of the business’ clients and activities, which led to the applicant taking on a more active role. This is why he and Mr Nguyen agreed that, in reality, they had a 50% interest each, rather than 49% to the applicant and 51% to Mr Nguyen.

8. When asked how he combined working for the 2 main businesses, the applicant said that he worked at H S Melbourne Castings Pty Ltd from 8am to 1pm for 5 days per week as the manager, during which time his wife looked after the fish and chip shop.  He would typically deal with customers and paperwork for H S Melbourne Castings Pty Ltd on a daily basis during the working week mornings, while Mr Nguyen did the jewellery making work, which he continued to do into the afternoons.

9. In response to the Tribunal’s query, the applicant said that Van Vo is Mr Nguyen’s brother-in-law, who lent him $25,000 when they set up H S Melbourne Castings Pty Ltd. The applicant confirmed that he and Mr Nguyen paid back Van Vo the $25,000 in October 2015.  He recalled that he paid Van Vo $15,000 and Mr Nguyen paid Van Vo $10,000.  When asked why the entire repayment of $25,000 to Van Vo appears in the loan ledger for H S Melbourne Castings Pty Ltd allocated as a loan repayment by Mr Nguyen only (rather than being allocated between the applicant and Mr Nguyen), the applicant said that he was not sure and it would be better to ask the accountant for the company, Mr Tran.  Similarly, when asked why the loan from Mr Van Vo to the company was not listed separately in the ledger as a loan from a third party, the applicant said that he was not sure and that it would be something that the company’s accountant may be able to answer.  In response to the Tribunal observing that repayment of the loan to Van Vo appeared to have been prioritised over repayment of other loans to the company, the applicant again referred the Tribunal to the company’s accountant and/or Mr Nguyen for further explanation of this.  He indicated that from his perspective, he understood that he and Mr Nguyen needed to repay Van Vo $25,000 and had done so.  The applicant’s agent indicated that Mr Tran is the accountant for both the company and Mr Nguyen personally, so the entries relating to Mr Nguyen repaying Van Vo in the loan ledger for H S Melbourne Castings Pty Ltd might have been an attempt by the accountant to reconcile Mr Nguyen’s tax liability.

10. When asked about the current situation for H S Melbourne Castings Pty Ltd, the applicant said that he wanted to keep his director’s loan in the company to finance the purchase of more machinery.  He said that he just took payment of $200 to $300 per week from the business, as his main source of income was New Watervale Fish & Chips (operated by Be Foods Pty Ltd). Mr Nguyen drew a salary of $603 per week (gross) from H S Melbourne Castings Pty Ltd, which was his sole income.  The applicant said that as he and Mr Nguyen are still building the business of H S Melbourne Castings Pty Ltd, they do not have current plans for the company to repay the directors’ loans or to increase payments to either of them yet.

11. The Tribunal then took evidence from Mr Henry Nguyen. Mr Nguyen was not present when the Tribunal took evidence from the applicant.

12. Mr Nguyen told the Tribunal that he lost his job as a jewellery maker in 2011 and was therefore looking for work.  He was taken on by the applicant and his wife at their fish and chip shop.  He worked there for about 3 to 6 months, and while he was there, he told the applicant about his former work as a jewellery maker.  Mr Nguyen said that it was a long story, but essentially, he came to be unemployed after he was forced out of a family jewellery making business he was involved in with with his brothers.  He took the job at the fish and chips shop as a last resort.  Mr Nguyen said that when the applicant came to know Mr Nguyen’s background and history, he encouraged him to work again as a jewellery maker and suggested that they go into business together.  Mr Nguyen said that he was not interested in this proposition at first, as he had no experience in running a business (he had been the technical expert in his family’s business) and was nervous about re-entering this field.  However, the applicant encouraged him to consider this venture. The applicant also undertook research into the equipment that would be needed and decided to purchase some Japanese equipment.  He also arranged for the lease on the premises at 220 Collins Street.  Mr Nguyen said that he is the technical expert and jewellery maker in the business, as he has 30 years of trade experience, while the applicant has better management and English skills and thus has taken on the management and administration side of the business.

1. The Tribunal asked the applicant about the respective shareholdings for him and the applicant in H S Melbourne Castings Pty Ltd.  Mr Nguyen confirmed that they are registered as 51% to him and 49% to the applicant, but in reality, they are 50/50 in the business and always have been.  The formal registration of 51% to him and 49% to the applicant was  agreed on to address the concerns Mr Nguyen had that arose from his past experience of being forced out of the family business.  As a 51% shareholder, he could not be forced out of H S Castings Melbourne Pty Ltd.

2. In response to the Tribunal’s query, Mr Nguyen said that the source of the $50,000 he lent the company came from a combination of his personal savings, funds drawn down from his mortgage and funds borrowed from friends.  He confirmed that this is why there is a loan ledger entry for ‘friends in the US.’ 

3. In relation to the company loan ledger entry indicating that he has repaid a loan from Van Vo of $25,000, Mr Nguyen confirmed Van Vo is his brother-in-law and did provide $25,000 to the business, but Mr Nguyen said that he had not repaid this money to Van Vo yet.  The Tribunal noted that the loan ledger indicated that in October 2015, he and the applicant repaid $25,000 in total to Van Vo.  The applicant said that he would need to check with his wife as she keeps such records.  He confirmed that his wife is Ngung Thi Vo.  The Tribunal queried whether she had also made a loan to the company as the ledger indicated that she had made a loan of $57,000 to the company in May 2016.  Mr Nguyen said that his wife works part-time in the company. She assists him and does the cleaning.  He said that he bought a new machine for the business recently for $157,000 and drew down on his mortgage to do so, although he was not sure exactly how much was drawn down. His wife is in charge of their finances.  In relation to the Tribunal’s query about whether the loan from Van Vo of $25,000 was to him personally or to the company, Mr Nguyen said that Van Vo lent him $25,000, which he put into the business. Although there was no specific repayment date, it was understood that he should be repaid as soon as they could do so.  Payments made by the business require agreement by both him and the applicant, and they must both sign company cheques.  In response to the Tribunal observing that the company prioritised repayment of the loan to Van Vo over other loan repayments (such as the shareholders’ loans made by himself and the applicant), Mr Nguyen said that they discussed this and decided that this should be a priority.

4. The Tribunal then took evidence from Mr Trung Tran, the accountant for both H S Melbourne Castings Pty Ltd and Mr Nguyen.  He gave evidence without having heard the evidence of the applicant or Mr Nguyen.

5. In response to the Tribunal’s query, Mr Tran confirmed that Mr Nguyen and the applicant both contributed $50,000 each to establish the company. In relation to the funds contributed by Mr Nguyen, he recalled that he was told that it came from friends of Mr Nguyen’s in the US, hence he described it thus in the company loan ledger. He did not have any other details about the source of Mr Nguyen’s funds.

6. Mr Tran confirmed that Van Vo lent the company $25,000 in total (in 2 separate transactions, one of $20,000 and one of $5,000) and that this was repaid in October 2015 by Mr Nguyen ($10,000) and the applicant ($15,000). When asked why the repayment was entirely attributed to Mr Nguyen in the loan ledger, Mr Tran said originally, the loans were attributed on a 50/50 basis.  He was unable to explain why the loan from Van Vo had been attributed solely to Mr Nguyen when it was in fact repaid by contributions from both Mr Nguyen and the applicant.

7. In relation to the RAV4 repayments, Mr Tran said that the vehicle had been paid for in full in November 2016. Prior to that, the company made the vehicle repayments.  Mr Nguyen said that he put money to make the repayments into the company’s business account and then cheques were drawn by the business to make the vehicle repayments.

8. Mr Tran told the Tribunal that H S Melbourne Castings Pty Ltd is a relatively small company so the accounting practices and standards are a bit more flexible and/or informal than those for a large company.  There might be some anomalies in the loan ledgers but these were inadvertent and not deliberate.

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

   CONSIDERATION OF CLAIMS AND EVIDENCE

10. The issue in the present case is whether the applicant satisfies cl.885.225(2), which provides as follows (Tribunal’s emphasis):

    888.225

    (1) If the nominating State or Territory government agency has not determined that there are exceptional circumstances:

    (a)      the requirements in at least 2 of subclauses (2) to (4) are met; and

    (b)      the requirement in subclause (5) is met.

    (2) The assets owned by the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, in the main business or main businesses in Australia:

    (a)      had a net value of at least AUD200 000 throughout the period of 12 months immediately before the application was made; and

    (b)      continue to have a net value of at least AUD200 000; and

    (c)      were lawfully acquired.

    (3) In the period of 12 months immediately before the application was made:

    (a)      the main business in Australia, or main businesses in Australia, of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together provided employment in Australia to 2 or more employees for a total number of hours that was at least the total number of hours that would have been worked by 2 full-time employees; and

    (b)      each employee whose employment is used to work out that total number of hours:

    (i)      was not the applicant or a member of the family unit of the applicant during that period; and

    (ii)      was an Australian citizen, an Australian permanent resident or the holder of a valid New Zealand passport during that period.

    (4) The business and personal assets in Australia of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together:

    (a)      had a net value of at least AUD600 000 in the period of 12 months ending immediately before the application was made; and

    (b)      continue to have a net value of at least AUD600 000; and

    (c)      were lawfully acquired.

    (5) The main business in Australia, or main businesses in Australia, of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, had an annual turnover of at least AUD300 000 in the 12 months immediately before the application was made.

11. It is not disputed that the nominating State or Territory government agency has not determined that there are exceptional circumstances in the applicant’s case, and he must therefore meet 2 of the above subparagraphs.  The one in dispute before the Tribunal is his ability to meet cl.885.225(2).

    Main businesses

12. The applicant is a citizen of New Zealand. He lodged the application on 30 September 2014 and nominated the following two main businesses:

    ·Be Food Pty Ltd (trading as New Watervale Fish & Chips); and

    ·H S Melbourne Castings Pty Ltd.

13. The Tribunal has had regard to the Australian Securities and Investment Commission (ASIC) historical business name extracts and finds that Be Food Pty Ltd was first registered in October 2008 and that the applicant is a director and 100% shareholder. The Tribunal is satisfied that this is an acceptable value of an ownership interest as per r.1.11(1)(c)(ii) and (iii).

14. The ASIC records indicate that H S Melbourne Castings Pty Ltd was first registered in April 2013. The applicant and Mr Henry Nguyen (no relation) are directors of the company. The applicant holds 49% of the company shares while Mr Nguyen holds 51% of the company shares. The Tribunal is satisfied from the 2013/14 financial statements provided to the Department for this company that its turnover for that financial year was $489,538.  As its turnover exceeded $400,000 in that period, and is not a publicly listed country, the applicant is required to have an ownership interest valued at 30% or more.  The Tribunal is satisfied that his interest is 49% and that this meets r.1.11(1)(c)(iii).

15. Having questioned the applicant in detail at the hearing, the Tribunal found that the applicant was able to confidently explain to the Tribunal his role in the day to day management and control of both businesses. The Tribunal finds that the applicant has maintained direct and continuous involvement in the management of the businesses from day to day and in making decisions affecting the overall direction and performance of the main businesses. This meets r.1.11(1)(b).

16. Having regard to the applicant's evidence and the business records located on the Department's file the Tribunal finds that Be Food Pty Ltd and H S Melbourne Castings Pty Ltd are both qualifying businesses in that they operate for the purpose of making a profit by providing goods and services to the public. The Tribunal finds that the businesses are not operated primarily or substantially for the purpose of speculative or passive investment.  Accordingly, it finds that r.1.11(1)(d) is met.

17. Having considered the applicant's evidence and supporting documents located on the Department's file, the Tribunal finds that both H S Melbourne Castings Pty Ltd and Be Food Pty Ltd trading as New Watervale Fish & Chips meet the definition of main business in r.1.11(1). Having regard to the ASIC records, the Tribunal is satisfied that the applicant meets the definition of ownership interest in r.1.03 in respect of both businesses. Further, the applicant has nominated only 2 main businesses, as required by r.1.11(2).

    Relevant period(s)

18. The visa application was lodged on 30 September 2014, so the relevant 12 month period for the purposes of cl.888.225(2)(a) is 29 September 2013 to 29 September 2014. The Tribunal considers that this is essentially the 2013/14 financial year, and that it is appropriate to take into account the 2013/14 financial statements for both main businesses in assessing the net assets in this period, noting that the applicant also provided balance sheets as at 30 September 2013 and 30 September 2014.

19. The relevant period in relation to cl.885.225(2)(b) is from 30 September 2014 to date.  Accordingly, the Tribunal considers that it is appropriate to take into account the 2014/15 and 2015/16 financial years in assessing this requirement.

    Net assets – loans

20. The applicant relies on loans made by him to his main businesses, Be Food Pty Ltd and H S Melbourne Castings Pty Ltd.  The Tribunal is satisfied from the information provided to the Department that the applicant is a director and shareholder of both companies.

21. The Department’s Procedures Advice Manual (PAM3) Generic Guide M on Business Visas indicates that loans to a main business may be included in the calculation of an applicant’s net assets in the business, deducting any loans made by the business to the applicant and the value of any other loans taken out by the applicant to finance his or her investment in the business that are not based on personal assets pledged as collateral.

22. The Tribunal has had regard to the financial statements provided for Be Food Pty Ltd and H S Melbourne Castings Pty Ltd for 2013/14, 2014/15 and 2015/16 and the loan ledgers for both companies, as well as the detailed oral evidence given at hearing by the applicant, Mr Henry Nguyen and Mr Tran.  The Tribunal is satisfied that neither main business has made loans to the applicant, and that the applicant has not borrowed money from another source to make his loans to the main businesses.

    2013/14 financial year

23. Based on the available evidence, the Tribunal is satisfied that in relation to Be Food Pty Ltd, of which the applicant is the 100% shareholder, the net assets for the business consisted of a loss $3,863 and the applicant’s loan of $179,058, resulting in total net assets of $175,195.

24. In relation to H S Castings Melbourne Pty Ltd, the Tribunal is satisfied that the net assets were a loss of $24,227, of which 49% is attributable to the applicant, reflecting his registered shareholding. This gives a loss of $11,871 to him, offset by his loan of $41,412 and an unsecured loan by him of $50,000.  The Tribunal therefore calculates the applicant’s net assets as $91,412 - $11,871, being $79,541.

25. Accordingly, the Tribunal calculates the applicant’s net assets in both businesses for 2013/14 as $175,195 plus $79,541, being $254,736. 

26. As noted above, the applicant also provided balance sheets and loan ledgers up to 30 September 2013 and 30 September 2014.  From these, the Tribunal is satisfied that the applicant’s net assets in Be Food Pty Ltd as at 30 September 2013 were a loss of $62,241 and his loan of $202,939, totalling of $140,698.  For H S Melbourne Castings Pty Ltd, the net assets as at 30 September 2013 were a loss of $34,312, of which 49% is attributable to the applicant, being $16,813, plus his loan of $121,412, making a total of $104,599.  The Tribunal is satisfied that as at 30 September 2013, the applicant’s total net assets in both main businesses were $245,297.

27. As at 30 September 2014, the Tribunal is satisfied that the applicant’s net assets in Be Food Pty Ltd were net assets of $3,492, and his loan of $91,724, totalling $95,216.  For H S Melbourne Castings Pty Ltd, the applicant’s net assets were 49% of a loss of $34,513, being a loss of $16,911, plus his loan of $145,113, making total net assets attributable to him of $128,202 in that business.  Accordingly, the Tribunal is satisfied that as at 30 September 2014, the applicant’s net assets in his 2 main businesses were $95,216 plus $128,202, being $223,418.

28. Based on the above, the Tribunal finds that, at all relevant times, the applicant’s net assets in his main businesses exceeded $200,000, and he thus satisfies cl.888.225(2)(a).

    2014/15 financial year

29. Based on the available evidence, the Tribunal finds that the applicant’s net assets in Be Food Pty Ltd were net assets of $1,050 plus his loan of $87,579, resulting in total net assets of $88,629.  His net assets in H S Melbourne Castings Pty Ltd were 49% of net assets of $5,658, being $2,772, to which must be added his loan of $144,480, giving total net assets of $147,252.  Adding these 2 figures together, the Tribunal is satisfied that the applicant’s net assets in both main businesses for 2014/15 were $235,881.

    2015/16 financial year

30. Based on the available evidence, the Tribunal is satisfied that the applicant’s net assets in Be Food Pty Ltd were $1,050 to which must be added his loan of $81,327, giving total net assets of $82,377.  The Tribunal is satisfied that the applicant’s net assets in H S Melbourne Castings Pty Ltd were 49% of net assets of $33,829, being $16,576. The Tribunal again adds the applicant’s loan of $151,638 to this and reaches a total net assets figure of $168,214 for the applicant.

31. The Tribunal is satisfied that the applicant’s net assets in both main businesses for 2015/16 were $82,377 plus $168,214, being $250,591.

32. While the Tribunal’s findings above in respect of the applicant’s net assets differ somewhat from those provided by the applicant’s agent in his spread sheet dated 13 October 2016, the Tribunal is satisfied that the applicant continues to have net assets in his 2 main businesses in excess of $200,000 and thus finds that he meets cl.888.225(b).

    Lawfully acquired

33. The Tribunal is satisfied from the applicant’s evidence at hearing that the funds he used to make his loans to both main businesses came from the sale of his business and home in New Zealand prior to coming to Australia. The Tribunal is satisfied that these funds were lawfully acquired and the applicant therefore satisfies cl.888.225(c).

    Conclusion

34. The Tribunal is satisfied that the applicant meets cl.888.225(2)(a), (b) and (c) and thus meets cl.888.225(2) as a whole.

35. Having found that the applicant meets cl.888.225(2), the appropriate course of action is to remit the application for the visa to the Minister to consider the remaining criteria for a subclass 888 visa. As the second, third and fourth named applicants (the spouse and children of the applicant) applied for visas on the basis of being members of the family unit of the applicant, their applications for review will be determined by reference to the outcome of the applicant’s application upon remittal to the Department for reconsideration.

    DECISION

36. The Tribunal remits the decisions for reconsideration with the direction that the first named applicant meets the following criterion for a Class EC (Business Skills) subclass (Business Innovation and Investment) visa:

    ·cl.888.225(2) of Schedule 2 to the Migration Regulations 1994.

    Alison Mercer
    Member