SANJEEVARAJ (Migration)

[2017] AATA 2454

SANJEEVARAJ (Migration) [2017] AATA 2454 (26 October 2017)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mrs Subhashini Sanjeevaraj
Mr Sanjeewaraj Thamotharampillai
Master Avinesh Sanjeewaraj
Miss Akshara Sanjeewaraj

CASE NUMBER:  1514621

DIBP REFERENCE(S):  BCC2015/348333 BCC2016/574604

MEMBER:John Cipolla

DATE:26 October 2017

PLACE OF DECISION:  Sydney

DECISION:The Tribunal affirms the decision not to grant the applicant a Business Skills (Residence) (Class DF) visa.

Statement made on 27 October 2017 at 3:08pm

CATCHWORDS

Migration – Business Skills (Residence) (Class DF) visa – Subclass 890 (Business Owner) – Requirement to have an ownership interest in one or more main businesses in 2 years proceeding application – Ownership interest in first nominated business outside of relevant period – Requirement for applicant to maintain direct and continuous involvement in management of the business – Applicant relied on direction of others in running of second nominated business – Applicant did not maintain direct and continuous involvement in management of second nominated business

LEGISLATION

Migration Act 1958, ss 65, 134

Migration Regulations 1994, r 1.03, r 1.11, Schedule 2, cl 890.211, 890.221

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 8 October 2015 to refuse to grant the primary visa applicant (hereinafter referred to as the applicant) a Business Skills (Residence) (Class DF) Subclass 890 visa under s.65 of the Migration Act 1958 (the Act).

2. The applicant applied for the visa on 30 January 2015. The delegate refused to grant the visa on the basis that the applicant was unable to meet time of application criteria relevant to the grant of the visa namely cl.890.211.

3. The applicant appeared before the Tribunal on 10 October 2017 to give evidence and present arguments. The Tribunal also received oral evidence from the applicant’s husband.  The Tribunal hearing was conducted with the assistance of an interpreter in the Tamil (Sri Lankan) and English languages.

4. The applicants were represented in relation to the review by a registered migration agent. The representative did not attend the Tribunal hearing.

5. For the following reasons, the Tribunal has concluded that the decision under review should be affirmed.

   ISSUE

6. The issue in the present case is whether at the time of decision (that is the Tribunal’s decision) the applicant meets the requirements in cl. 890.221 of Schedule 2 to the Regulations. Essentially, this requires that the applicant continue to meet cl.890.211 by having an ‘ownership interest’ in 1 or more actively operating ‘main businesses’ in Australia.

   RELEVANT LAW

7. At the time the visa application was lodged, the Business Skills (Residence) Class DF visa contained 4 subclasses: Subclass 890 (Business Owner); Subclass 891 (Investor); Subclass 892 (State/Territory Sponsored Business Owner); and, Subclass 893 (State/Territory Sponsored Investor).  The visa applicants have made claims in relation to Subclass 890 only.

8. The criteria for a Subclass 890 visa are set out in Part 890 of Schedule 2 to the Regulations. At least one member of the family unit must satisfy the primary criteria. The primary criteria require the following at time of application:

   ·The applicant has had, and continues to have, an ‘ownership interest’ in one or more actively operating main businesses in Australia for at least 2 years immediately before the application is made: cl.890.211(1).

   ·The net value of the assets of the applicant, of his or her spouse or of the applicant and the spouse together in the ‘main business’ or main businesses in Australia is, and has been throughout the 12 months immediately before the application is made, at least $100,000: cl.890.212.

   ·In the 12 months immediately before the application is made, the main business or main businesses had a turnover of at least $300,000: cl.890.213.

   ·Throughout the 12 months immediately before the application is made the main business or main businesses, first, provided an employee or employees with a total number of hours of employment at least equivalent to the total number of hours that would have been worked by 2 full-time employees over that period of 12 months and, second, provided those hours of employment to an employee or employees who were not the applicant or a member of the applicant’s family unit and were Australian citizens, Australian permanent residents or New Zealand passport holders: cl.890.214.

   ·The net value of the business and personal assets in Australia of the applicant, of his or her spouse or of the applicant and the spouse together is and has been throughout the 12 months immediately before the application is made at least $250,000: cl.890.215.

   ·Neither the applicant nor his or her spouse has a history of involvement in business activities that are of a nature that is not generally acceptable in Australia: cl.890.216.

   ·The applicant has been in Australia as the holder of one of the visas mentioned in paragraph 1104B(3)(d) of Schedule 1 for a total of at least one year in the 2 years immediately before the application is made: cl.890.217.

9. At the time of the decision, the applicant must continue to satisfy the primary criteria in cl.890.211, 890.215 and 890.216: cl.890.221 890 of Schedule 2 to the Regulations.

10. Regulation 1.03 provides that the term ownership interest has the meaning given to it in s.134(10) of the Act. That subsection provides that an ownership interest, in relation to a business, means an interest in the business as:

    (a)   a shareholder in a company that carries on the business; or

    (b)   a partner in a partnership that carries on the business; or

    (c)   the sole proprietor of the business;

    including such an interest held indirectly through one or more interposed companies, partnerships or trusts.

11. The term main business is defined in r.1.11 of the Regulations as follows:

    (1)For the purposes of these Regulations and subject to subregulation (2), a business is a main business in relation to an applicant for a visa if:

    (a) the applicant has, or has had, an ownership interest in the business; and

    (b) the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business; and

    (c) the value of the applicant's ownership interest, or the total value of the ownership interests of the applicant and the applicant's spouse, in the business is or was at least 10% of the total value of the business; and

    (d) the business is a qualifying business.

    (2) If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses.

12. The term qualifying business is defined in r.1.03 of the Regulations as an enterprise that:

    (a)   is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public; and

    (b)   is not operated primarily or substantially for the purpose of speculative or passive investment.

    CONSIDERATION OF CLAIMS AND EVIDENCE

13. Recourse to the Departmental delegate’s decision record indicates as follows. For the purposes of the application for the visa that is the subject of this review the applicant nominated 2 main businesses on the form 1217. Those businesses were SAAS Sydney Pty Ltd and Sri Radha Ambika Pty Ltd.  The delegate noted that the applicant was required to establish that she had an ownership interest in one or more actively operating main businesses in Australia for at least 2 years immediately before the application was made. The delegate noted that the application was lodged on 30 January 2015 and thus the relevant period was 30 January 2013 to 30 January 2015.

14. With regard to Sri Radha Ambika Pty Ltd the delegate noted that this business was a proprietary company in which the applicant claimed to have a 30% ownership in 2013 and 2014. The applicant began to invest in the company in April 2013 and became the managing partner in August 2013. In support of the application the applicant submitted minutes of a meeting of directors of this business dated 31 July 2013 which indicated that the applicant was first issued shares in the business in August 2013. Based on this evidence the delegate concluded that the applicant did not have an ownership interest in this business for at least 2 years immediately before the application was made because the transfer of shares occurred in August 2013.

15. With regard to SAAS Sydney Pty Ltd the delegate noted that the applicant claimed to be a partner of this business and claimed to have a 50% interest in the business in 2010 and 50% in 2011 and the delegate concluded that as 2010 and 2011 were outside the relevant period they had not considered this business further. Based on this evidence the delegate went on to find that the applicant did not meet the requirements of cl.890.211.

16. The applicant lodged a review application with the Tribunal on 29 October 2015. 

17. On 31 July 2017 the Tribunal wrote to the applicant inviting the applicant to comment on adverse information and provide further information to it. The Tribunal noted that the applicant had applied for the visa that is the subject of this review on 30 January 2015 and that the operation of cl.890.211(1) required that the applicant has had, and continues to have, an ownership interest in one or more actively operating main businesses in Australia for at least 2 years immediately before the application is made. The letter made reference to ‘ownership interest’ as defined in the Migration Act and also made reference to the definition of ‘main business’ found in the Migration Regulations. The letter noted that the evidence before the Tribunal suggested that the applicant was unable to meet the requirements of cl.890.211(1). The Tribunal invited the applicant to provide any evidence which established that she was able to meet the requirements of cl.890.211.

18. The Tribunal received a response from the applicant’s migration agent on 14 August 2017 which it has duly considered. Annexed to the submission were a number of documents. Firstly documents pertaining to the business Sri Radha Ambika Pty Ltd, namely a copy of business registration, end of year financials for 2013, 2014 and 2015 and the share certificate establishing the applicant’s 33% ownership in the business. Secondly documents with regard to SAAS Sydney Pty Ltd, namely a copy of business registration, the front page of a historical details report from ASIC, some bank statements and an accountant’s letter.

19. The Tribunal conducted a hearing on 10 October 2017. The applicant attended the hearing along with her husband and her 2 children. As noted the applicant and her husband gave evidence to the Tribunal, evidence provided through the accredited Sri Lankan interpreter.

20. At the outset of the review hearing the Tribunal made extensive reference to the Departmental delegate’s decision record and the fact that the delegate in the decision record had actively considered 2 main businesses nominated by the applicant, Sri Radha Ambika Pty Ltd and SAAS Sydney Pty Ltd. The Tribunal also noted that for the purpose of completeness the delegate had also considered a third business, Pyramid Travels, however the delegate noted that this business was only registered on 4 December 2013, 14 months prior to the lodgement of the application for the visa, and outside the requisite 2 year period envisaged by the Migration Regulations. The Tribunal noted that the delegate concluded after engaging with the evidence before them that the applicant was incapable of meeting the requirements of cl.890.211.

21. The Tribunal made reference to the letter it had sent to the applicant through a representative dated 31 July 2017. The Tribunal noted that it had received the response from the applicant’s migration agent dated 14 August 2017 and duly considered this response. The Tribunal noted that based on this response it was not able to make a decision in the applicant’s favour, and for this reason the Tribunal had scheduled the hearing.

22. The Tribunal explained to the applicant the process of merits review and the evidence that the Tribunal had engaged with in preparation for the review and noted that it would have regard to the evidence provided by the applicant and her husband at hearing.

23. The Tribunal explained in detail the relevant regulatory requirements that the applicant needed to satisfy at both time of application and time of decision pertaining to the grant of the visa that is the subject of the review.  The Tribunal noted that the application for the visa that is the subject of this review was made on 30 January 2015 and that the applicant needed to establish that between 30 January 2013 and 30 January 2015 that she has had, and continues to have, an ownership interest in one or more actively operating main businesses in Australia for at least 2 years immediately before the application was made. The Tribunal further noted that it needed to be satisfied that the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day-to-day and in making decisions affecting the overall direction and performance of the business.

24. The Tribunal noted that the evidence before it indicated that the applicant had only acquired 30% ownership in the business Sri Radha Ambika Pty Ltd in August 2013 which was outside the requisite 2 year period. The applicant conceded this. The applicant advised that she was relying on the second main business SAAS Sydney Pty Ltd. 

25. The Tribunal noted that for the purposes of the review it had obtained an historical company extract for SAAS Sydney Pty Ltd which indicated that the company had not been actively operating since 2010 and the Tribunal provided the applicant with a copy of the extract for her consideration.

26. The applicant advised that tax was paid since the establishment of the business. The applicant advised that as she was new to Australia, tax had not been paid on time. The applicant advised that SAAS Sydney Pty Ltd was an import/export business, exporting from Germany, Singapore and Japan and predominantly dealing with the Sri Lankan ports authority. The Tribunal asked the applicant what the company exported and she advised materials for maintaining ports.

27. The Tribunal asked the applicant whether she was able to provide company tax returns for SAAS Sydney Pty Ltd for the past 5 years and the applicant stated that she would need her husband to do that because he paid the tax and would be able to locate the relevant documents. The Tribunal advised the applicant that it would pursue this when the applicant’s husband was giving evidence.

28. The Tribunal asked the applicant what her husband’s role in the business was. The applicant advised that he directed her with regard to what she needs to do and that she was mainly involved in the travel side of the business. The applicant stated that she was involved in accounts payable.

29. The Tribunal noted that if it was to be satisfied that the applicant had been and continued to be involved in an actively operating main business in Australia that it required substantial detail from the applicant about the business and its operations. The applicant advised that the business was a marine company. The Tribunal asked the applicant to explain what the company was all about. The applicant stated that the business provided heavy machinery for ports and ships. The Tribunal asked the applicant where the machinery was imported from and the applicant stated that it dealt with spare parts. The Tribunal asked the applicant what spare parts it dealt with and she advised spare parts required by the Sri Lankan Port authority. The Tribunal asked what sort of spare parts the company engaged with and she advised cables and cranes. The Tribunal asked the applicant where she sourced these goods from and she advised it depended on the Sri Lankan Port authority. The Tribunal re-asked the question and asked the applicant where she obtained the cranes and cables from and she advised mostly from Singapore but also from Japan and Germany.

30. Once again the Tribunal made reference to the company’s historical extract which the Tribunal had obtained and which suggested that the company had not been actively operating since its creation in 2010. The Tribunal noted that the document indicated the cancellation of the businesses ABN status which suggested there had been no remittal of BAS statements or GST. The applicant noted that the company extract indicated that mail had been returned to ASIC and she advised that the business had changed address and that ASIC had been sending letters to the old address. The Tribunal noted that this suggested that there had been no interaction between the business and ASIC as the business had failed to notify the change of address. The applicant was invited to comment on this. The applicant stated that the business was active but there had been some setbacks in the operation of the business. Once again the applicant reiterated that as she was new to the country there were some initial teething problems with the business. The applicant stated that the business was doing better now. She advised that SAAS Sydney Pty Ltd was a good business and had improved since 2015.

31. The Tribunal asked the applicant to describe the operation of the business between 2010 and 2015 and she advised that progress was not good during the initial years after the business was established. The Tribunal asked the applicant whether the business was making a loss during that period and the applicant stated that the Tribunal would need to ask her husband. She advised that she was not sure about this.

32. The Tribunal noted that the applicant’s responses strongly suggested that she had not been actively involved in the running of the business.  The Tribunal asked the applicant whether in the initial years of the establishment of the business, the business was making a profit or a loss and the applicant advised it was making a loss. The applicant stated that this started to turn around in about 2014.

33. The Tribunal took evidence from the applicant’s husband. The Tribunal asked the applicant’s husband when his wife established SAAS Sydney Pty Ltd and he advised in 2011. At this point the applicant interjected and advised her husband this was incorrect and she established it in 2010. The Tribunal cautioned the applicant about answering on behalf of her husband and advised that her husband needed to answer the questions on his own.

34. The Tribunal asked the witness about his involvement in the business and he advised that he was a director of the business. The Tribunal made reference to the historical company extract which it had obtained on 9 October 2017 which suggested that the business had not been actively operating since 2010. That Tribunal provided the witness with the company extract for him to peruse. The Tribunal indicated that this document suggested that the business had no interaction with ASIC since 2010. The applicant stated that the business was predominantly involved in government tenders and during certain periods the business was not actively trading. The Tribunal noted that it did not have company tax returns, profit and loss statements or any audited accounts for the business since its establishment in 2010 to date. The Tribunal asked the witness whether he was able to provide company tax returns and other financial documents for the past 5 years such as profit and loss statements and the witness advised that these documents would be able to be provided within a week of the hearing.

1. The Tribunal asked the witness what his wife’s involvement in the business was and he advised that she managed the accounts side of the business. The Tribunal asked the witness what the purpose of the business was and he advised it was a government tendering business providing machinery to the Sri Lankan Ports authority and the Sri Lankan Petroleum Corporation such as crane parts and cables. The Tribunal asked the witness where these goods were sourced from and he advised from America, London, the Netherlands, Germany, Japan, Australia and Singapore.

2. The Tribunal asked the witness what his role in the business was. The witness stated that when goods were provided they obtained a commission and they acted as a brokerage and once again he stated that he was a director of the business.

3. The Tribunal noted that when it had asked the applicant about the running of the business that she had advised in her evidence that the witness predominantly ran the business. The witness was invited to comment on this. The witness advised the Tribunal that his wife did not have much experience in the business and that he is mainly running the business. He advised that his wife looked after the accounts and she looked after another arm of the business, SAAS Travel.  The Tribunal asked the witness what percentage of the business was involved in export/import and what percentage was involved in travel. The witness stated that the business received a 3 to 5% brokering commission. Once again the Tribunal asked the witness if it was to look at the annual profit of the business what percentage of the profit would be derived from the travel arm of the business and what percentage of profit would be derived from the shipping arm of the business. The witness stated that his accountant would know more about this.

4. The Tribunal asked the applicant whether there was any further evidence that she wanted to provide. She advised the Tribunal that the travel arm of SAAS Sydney Pty Ltd had the same ABN number. The Tribunal asked the applicant whether both arms of the business were separately audited and she advised that they were not. The Tribunal asked the applicant about the travel arm of the business and she advised that it was involved in the provision of air tickets, travel insurance through Allianz and tour packages all over the world. The applicant advised the Tribunal that since 1 September 2017 she had obtained additional employment with a migration business called Migration Planet which helped with the overseas student market.

5. The Tribunal asked the applicant whether there was any further evidence that she wanted the Tribunal to consider. The applicant stated that the business suffered setbacks at the commencement of the business. She advised that her husband was not in Australia at that time and that he travelled between Australia and Sri Lanka. She advised that in the initial years of the business she was a single mother and could not be extensively involved in the business but she had taken on more control in recent times. The hearing concluded.

6. The Tribunal received a post hearing submission from the applicant which included a range of financial information including Commonwealth bank statements; letters from the Sri Lankan ports authority; company tax returns and evidence of electronic taxation lodgements.  The response also included a letter from the applicant’s accountant dated 11 August 2017 indicating that the applicant received directors fees from the business SAAS Sydney Pty Ltd for the financial years ended 2013, 2014 and 2015 a gross amount of $20,000 each year and that there was no tax liability for those years.

   CONCLUSIONS

7. Overall the Tribunal considers the applicant’s oral evidence pertaining to her involvement in the management of SAAS Sydney Pty Ltd to be unpersuasive and not reflective of a person who has been maintaining direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business.  The evidence before the Tribunal indicates that the applicant’s husband oversaw the running of the business and the evidence before the Tribunal indicates that the applicant was totally reliant on her husband’s direction with regard to the day-to-day running and overall direction of the business. The evidence indicates that the applicant’s involvement was predominantly in the area of accounts payable and with regard to the travel arm of the business. The Tribunal is not satisfied that the applicant is involved in the management of the business and undertaking the duties claimed in the visa application.

8. The Tribunal accepts the business SAAS Sydney Pty Ltd is involved in the export and import of products related to petroleum, marine, port, workshop machinery, off-road tyres and laboratory medical equipment and has a primary contract with the Sri Lankan Ports Authority. The evidence before the Tribunal indicates that the applicant was not cognisant of the main operating functions of the business given her claim to be actively involved in the day-to-day management of the business and to regularly attending management meetings. The applicant displayed a complete lack of knowledge of tax related matters pertaining to the business and business turnover in any detail. The Tribunal finds that from the time that the applicant acquired an ownership interest in the business it would be reasonable to expect that the applicant would be familiar with the both the operational and financial aspects of the business.  The Tribunal does not accept that the applicant has maintained direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business. The Tribunal finds that the applicant’s involvement in the business is minimal and that the business has largely been overseen and run by her husband. The Tribunal is not satisfied that the applicant’s involvement in the business has been direct and continuous and that it is not from day to day as required.  

9. On the evidence before it, the Tribunal is not satisfied, at the time of application and decision, that the applicant maintains direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business as required by r.1.11(1)(b). The Tribunal therefore finds the applicant does not meet the r.1.11(1)(b) and therefore she does not satisfy the ‘main business’ requirement in r.1.11 for the period 30 January 2013 and 30 January 2015, at the time of application or at the current time.

10. The Tribunal therefore finds that the applicant did not have, and did not continue to have, an ownership interest in 1 or more actively operating main businesses in Australia for at least 2 years immediately preceding the making of the application or at the time of application. Therefore, the Tribunal finds the applicant does not meet cl.890.211 at the time of application.

11. The Tribunal is not satisfied that the applicant continues to have an ownership interest in one or more actively operating main businesses in Australia at the time of the Tribunal’s decision. Therefore the applicant does not continue to satisfy the criterion in cl.890.211 and she fails to meet cl.890.221 at the time of decision.

12. The applicant has made claims in relation to Subclass 890. The applicant has not made claims against the criteria of Subclasses 891, 892, or 893. The Tribunal finds on the material before it that the applicant does not satisfy the requirements of the other subclasses in Class DF.

    DECISION

13. The Tribunal affirms the decision not to grant the applicant a Business Skills (Residence) (Class DF) visa.

    John Cipolla

    
    

    Senior Member