Phua v Minister for Immigration
[2008] FMCA 1737
•8 October 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PHUA v MINISTER FOR IMMIGRATION & ANOR | [2008] FMCA 1737 |
| MIGRATION – Migration Review Tribunal – business skills (established business) (residence) (class BH) visa – requirement that applicant owned total net business assets of $100,000 – whether finding of amount of equity in company implicitly determined applicant’s net business assets – application dismissed. |
| Migration Regulations 1994, cl.857.215 (Schedule 2) |
| Applicant: | BENG SWEE PHUA |
| First Respondent: | MINISTER FOR IMMIGRATION & CITIZENSHIP |
| Second Respondent: | MIGRATION REVIEW TRIBUNAL |
| File Number: | MLG 674 of 2008 |
| Judgment of: | Riley FM |
| Hearing date: | 8 October 2008 |
| Date of Last Submission: | 8 October 2008 |
| Delivered at: | Melbourne |
| Delivered on: | 8 October 2008 |
REPRESENTATION
| Counsel for the Applicant: | Murray Gerkens |
| Solicitors for the Applicant: | FCG Legal Pty Ltd |
| Counsel for the Respondents: | Guy Gilbert |
| Solicitors for the Respondents: | DLA Phillips Fox |
ORDERS
The application is dismissed.
The applicant pay the first respondent's costs fixed in the sum of $5,000.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 674 of 2008
| BENG SWEE PHUA |
Applicant
And
| MINISTER FOR IMMIGRATION & CITIZENSHIP |
First Respondent
| MIGRATION REVIEW TRIBUNAL |
Second Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
This is an application for a review of a decision of the Migration Review Tribunal concerning a business skills (established business) (residence) (class BH) visa. Relevantly, the applicant needed to satisfy clause 845.215 of schedule 2 to the Migration Regulations 1984. That clause required, relevantly, that the applicant owned total net business assets of $100,000 throughout the 12 months preceding the visa application. The applicant applied for the visa in question on 30 July 2003 so the relevant period was 30 July 2002 to 30 July 2003.
The applicant submitted a good many documents, which included financial statements of the Lee Restaurant Pty Ltd for the years ended 30 June 2001 to 30 June 2003, and amended accounts for the years ended 30 June 2001, 30 June 2002 and 30 June 2003. The applicant also submitted a letter from Professor Anderson from Victoria University, which said as follows:
I have been requested by Ms Phua’s lawyers, FCG Legal Pty Ltd, to provide a review of the accounts of Lee Restaurant Pty Ltd trading as Orchids Garden.
My initial review identified a number of discrepancies in the financial accounts of Lee Restaurant Pty Ltd provided to me by FCG Legal Pty Ltd along with the accompanying documentation. At a meeting with the accountant, Philip Jones, I raised these concerns specifically in regard to the accuracy of these financial statements and the need for them to be amended to correctly show the worth of the business to the owner.
Mr Jones has now amended these accounts and a review shows that they more correctly establish the financial position of the company for the years 2002 and 2003.
Based on this information, I am now able to verify that the financial statements for 2002 and 2003 show a true and fair view of the financial position of the company trading as Orchids Garden and that Beng Swee Phua had net assets in the business of at least $100,000 at July 2003 and for the preceding twelve months.
For the information of the Tribunal, I advise that accounting errors of this nature can happen from time to time, especially in circumstances where there is a change of accountant. I note that Mr Jones will submit the amended accounts to the appropriate statutory authorities.
Please contact me if you require further information.
The Tribunal rejected that evidence on the basis that the professor did not explain how or why he reached his conclusion. The Tribunal concluded that the amended balance sheets for 2002 and 2003 did not reflect the true position regarding the applicant's purchase of shares in Lee Restaurant Pty Ltd.
The Tribunal did not accept that the applicant had made a capital contribution to the company of $99,490 in October 2001. She told the Tribunal on two occasions that she had paid $195,000 for 98 out of 100 shares in the company in February 2005, although she had in fact contracted to buy them in October 2001. Consequently, the Tribunal considered that any contribution made by the applicant in 2005 should not have been recorded in the accounts of the company for 2002 and 2003 retrospectively. Moreover, the Tribunal noted that the original balance sheets for 2002 and 2003 showed paid-up capital of $50 rather than the $99,540 dollars as was later claimed. The Tribunal did not accept that the figure of $99,540 represented a capital contribution by the applicant or anyone else to the company.
The Tribunal accepted that the retained earnings of the company were as shown in the balance sheets but did not accept the figures for the issued capital as being accurate. The Tribunal found that the equity in the company as at 30 June 2002 was comprised of issued capital of $50 or $100 and retained earnings of $38,458. The Tribunal found that the equity in the company as at 30 June 2003 was issued capital of $50 or $100 and retained earnings of $62,711. As these figures for the relevant period total considerably less than $100,000, the Tribunal concluded that the total net value of the applicant's 98 per cent shareholding in the company was worth less than $100,000 at all material times. The Tribunal proceeded to affirm the decision under review.
The applicant contends that the Tribunal made a jurisdictional error in misconstruing the relevant provision and in failing to take into account a relevant consideration, namely, the net assets of the company. More specifically, the applicant says that the Tribunal made a jurisdictional error in treating the equity of the company as determinative of the issue of the value of the total net assets of the company owned by the applicant and in failing to consider the various components of the net assets of the company such as cash and intangibles. More particularly, the applicant says the Tribunal misunderstood the balance sheets by assuming that the $99,490 was paid-up capital when it was merely a cash equivalent. However, note 13 to the balance sheets clearly shows that amount as issued and paid-up capital.
Moreover, it was implicit in the Tribunal's reasons that the net assets were equal to the equity. If the equity was less than $100,000 then by implication so were the net assets. Having held that the equity in the company was not as asserted in the balance sheet it was unnecessary, in my view, for the Tribunal to specify in what respect the figure for net assets was inaccurate. It may have been that the figures for cash, or cash equivalents, or intangibles were inflated, or the figure for liabilities may have been understated. However, it was not for the Tribunal to prove which of these possibilities was the truth. It was enough for the Tribunal to conclude on a reasonable basis that the applicant's equity in the company was less than $100,000.
The applicant says that the Tribunal impermissibly jumped from that conclusion to the conclusion that the net assets of the applicant must have been less than $100,000. However, the equity figure in the balance sheet by definition represents the ownership in the company. The question for the Tribunal was what did the applicant own in the company and what was the value of the net assets that the applicant owned in the company. In considering the amount of the equity in the company the Tribunal necessarily, in my view, dealt with and answered that question.
For these reasons, I do not consider that the Tribunal failed to take into account a relevant consideration. I do not accept that the Tribunal misconstrued the relevant provisions. In all the circumstances, I consider that the Tribunal's conclusions were reasonably open to it and the application must be dismissed with costs.
I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Riley FM
Associate: Alexandra Sidoti
Date: 16 February 2009
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