Sarsavadia (Migration) - [2025] ARTA 149

SARSAVADIA (MIGRATION) [2025] ARTA 149 (31 JANUARY 2025)
DECISION AND
REASONS FOR DECISION
Applicants:Mr Pratik Asharam Sarsavadia
Mrs Kavisha Rameshchandra Patel
Miss Zivah Sarsavadia
Respondent:  Minister for Immigration and Multicultural Affairs
Tribunal Number:  2318935

Tribunal:General Member R Anderson
Place:Melbourne
Date: 31 January 2025
Decision:The Tribunal affirms the decision not to grant the applicants Business Skills (Permanent) Subclass 888 visas.
Statement made on 31 January 2025 at 4.15am.

CATCHWORDS
MIGRATION – Business Skills (Permanent) visa – Subclass 888 – applicant has had no ownership interest in any entity since bankruptcy in 2021 – ownership interest no longer existed at the time of decision – decision under review affirmed
LEGISLATION
Migration Act 1958, ss 41, 65, 134
Migration Regulations 1994, rr 1.11, 1.03, Schedule 2, cl 888.222

STATEMENT OF REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Home Affairs on 16 November 2023 to refuse to grant the visa applicants Business Skills (Permanent) Subclass 888 visas under s 65 of the Migration Act 1958 (Cth) (the Act).
The visa applicants applied for the visa on 4 August 2020. On 16 November 2023, the delegate refused to grant the visa on the basis that Mr Sarsavadia, the primary applicant (the applicant), did not meet the requirements under cl 888.222 of Schedule 2 to the Migration Regulations 1994 (Cth) (the Regulations) in relation to the second limb, requiring the applicant to continue to have an ownership interest in an actively operating main business at the time of decision. This decision was made on the basis that the nominated main business, FKS Investments (Vic) Pty Ltd (the Company) had gone into liquidation on 14 May 2021, the Australian Business Number (ABN) was cancelled on 17 October 2022 and the Company was deregistered by ASIC on 25 December 2022. Furthermore, the primary applicant became bankrupt on 29 April 2021.
The visa applicants applied to the Administrative Appeals Tribunal (AAT) on 21 November 2023, requesting an independent review of the delegate’s decision.
From 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT. This decision and statement of reasons is made by the Tribunal.
The matter was constituted to a Tribunal Member on 20 November 2024. On 4 December 2024, the Tribunal wrote to the applicants and invited them to attend an in-person hearing on 15 January 2025. The Tribunal received submissions from the applicants’ representative on 2 January 2025 and 13 January 2025.
The applicants appeared before the Tribunal on 15 January 2025 to give sworn oral evidence and presented arguments. The applicants were represented in relation to the review.
On 15 January 2025, the Tribunal deferred finalising a decision in this matter to allow additional submissions to be provided by the applicants. On 23 January 2025, the applicant, via his representative, requested that the Tribunal proceed to finalise the decision, based on the evidence already provided.
For the following reasons, the Tribunal has concluded that the decision under review should be affirmed.
CONSIDERATION OF CLAIMS AND EVIDENCE
The submissions from the applicants’ representative prior to hearing raised two issues. The first was in relation to waiving of the requirement to meet cl 888.222(1)(b) due to compelling and compassionate circumstances in accordance with subsection 41(2A) of the Act. As discussed at hearing, this section of the Act relates only to specified conditions placed on a visa. Condition is defined in reg 1.03 of the Regulations as follows:
“means a condition set out in a clause of Schedule 8, and a reference to a condition by number is a reference to the condition set out in the clause so numbered in that Schedule.”
There is only one condition that applies to a Subclass 888 visa, as set out in cl 888.611 of Schedule 2 to the Regulations. This condition relates to circumstances where the applicant is outside of Australia when the visa is granted. This condition is not applicable in this case. Consequently, it is not open to the Tribunal to consider any waiver of cl 888.222 (1)(b) under section 41(2A) of the Act.
The second issue raised was in relation to the applicants not being afforded procedural fairness by the delegate because of personal bias, thus rendering the decision to be invalid. It was submitted that the applicant had not been afforded procedural fairness in respect to the Bias Rule because the delegate had not considered the detrimental impact of COVID-19 on the downturn, and eventual demise, of the applicant’s business.
As discussed at hearing, the Tribunal provides a merits-based review, not a judicial review. A merits-based review requires the Tribunal to consider the facts of the case and the law and policy underlying the original decision afresh. The Tribunal has no authority to review the behaviour or processes of the delegate and/or the department. The hearing before the Tribunal affords the applicant a fresh opportunity to be heard on all relevant aspects of the decision under review.
Therefore, the issue in the present case is whether the applicant meets the requirement under cl 888.222(1)(b) of Schedule 2 to the Migration Regulations (the Regulations). That is, whether he continues to have the ownership interest in the same actively operating main business that was relied on to meet the same criterion in the two years immediately before the application was made. In this case, as the applicants submitted the application for a Subclass 888 visa on 4 August 2020, the relevant two-year period is 4 August 2018 to 3 August 2020 (the relevant period).
The applicant gave oral evidence to the Tribunal that the Company operated Quest Apartments as a franchisee in Launceston. He was the “hands on” shareholder and the other 50% shareholder, Mr Patel, resided in Melbourne and was a silent partner. The applicant and Mr Patel were also joint shareholders in a property development business in Victoria, involving four residential properties. In this case it was the applicant who was the silent partner while residing in Launceston.
The applicant told the Tribunal that at the time of lodging the application for a Subclass 888 visa, the Company was operating a profitable business and on track to meet occupancy rates of around 80% in the coming years. The financial statements for the year ending 31 March 2020 recorded a turnover in excess of $1,000,000 and a net profit of more than $60,000.
The applicant explained that with the onset of COVID-19 and the corresponding travel restrictions, the occupancy rate declined significantly. It declined to such an extent that he was no longer able to meet the rental payments. He approached the 29 individual landlords for rent relief with only a few offering any relief. After months of negotiation attempts and with no assistance from the franchisor, the existing building management body was replaced. The new organisation took on an advocacy role for the landlords. The legal consequence was that an application was lodged to the court to wind up the Company. In turn, the applicant was also forced into bankruptcy. A letter from PKF Melbourne, dated 15 February 2023 confirms the bankruptcy of the applicant, due to be automatically discharged 18 May 2024.
The applicant gave oral evidence that he was also involved in the partial ownership of three hotels in Tasmania through BG Edge Hotels Pty Ltd and a resort in Philip Island. In addition to his role overseeing Quest apartments in Launceston, he also managed the hotels in Launceston, Hobart and St Helens, including staff and human resources.
The applicant gave oral evidence that as Mr Patel was also forced into bankruptcy, the properties discussed above were all seized by the liquidator. The applicant told the Tribunal that he and Mr Patel had also purchased two properties in Tasmania through FKS Investments (Vic) Trust. One of the properties was sold in early 2021. The second property was unable to be sold to an independent party and has since been purchased by the applicant’s wife via the liquidator.
As noted above, the nominated main business was the Company. The meaning of “main business” is set out in r.1.11(1) of the Regulations (as defined in r.1.03). The four criteria are not mutually exclusive and must all be met before a nominated business can be considered as the “main business”.
Main business
(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 or   de   facto   partner, in the business is or was:
(i)  if the business is operated by a publicly listed company--at least 10% of the total value of the business; or
(ii)  if:
(A)  the business is not operated by a publicly listed company; and
(B)  the annual turnover of the business is at least AUD400   000;
at least 30% of the total value of the business; or
(iii)  if:
(A)  the business is not operated by a publicly listed company; and
(B)  the annual turnover of the business is less than AUD400   000;
at least 51% 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.
Regulation 1.03 provides that ownership interest has the meaning given to it in s 134(10) of the Act. The definition of ownership interest in relation to a business as relevantly defined in s 134(10) of the Act means, “a shareholder in the company that carries on the business”.
According to ASIC records, the applicant was joint director of the Company from the time of incorporation on 20 March 2014 until 20 April 2021 and 50% shareholder from 20 March 2014 until 11 May 2021, a few days before liquidators, Jirsch and Sutherland, were appointed by the Court.
Based on the evidence before the Tribunal, it is undisputed that the Company met the four criteria to be a “main business” in the relevant period, that the applicant had a 50% ownership interest in the Company throughout the relevant period and that the Company was actively operating. Therefore, the Tribunal finds that the first limb of cl 888.222(1) of Schedule 2 to the Regulations is met.
The Tribunal then turned its mind to whether the second limb of cl 888.222(1) of Schedule 2 to the Regulations is met at the time of decision, being the present day.
The Tribunal notes that an applicant can nominate up to two main businesses (reg 1.11(2)). The Tribunal considered whether the applicant could possibly meet the criteria under cl 888.222 by nominating one of the other entities discussed above, in addition to the Company. However, based on the applicant’s own evidence he has had no ownership interest in any entity since bankruptcy in 2021. As his ownership interest no longer existed at the time of decision in relation to the other entities noted above, it was a fruitless exercise to explore whether or not any of them satisfied the main business criteria at the relevant times.
It is undisputed that the applicant’s ownership interest in all of the entities discussed above, including his nominated main business, the Company, has ceased. As he has not had an ownership interest in the Company since 2021, the Tribunal finds that he cannot continue to meet the requirement to have an ownership interest in the same actively operating main business that was relied on to meet the first limb of the requirement under cl 888.222(1) of Schedule 2 to the Regulations at the time of decision by the Tribunal.
The legislation provides for some COVID-19 concessions. However, the only concession that applies to a Subclass 888 visa was in relation to the time an applicant has spent inside of Australia. This issue did not impact on the applicants. It was submitted that, “a reasonable person would expect that there needs to be a consideration for a COVID-19 concession for cl 888.222(1)(b), as the applicant is unable to continue to have the ownership interest in the actively operating main business, if their business is forced into closure as a result of COVID-19”.
While the Tribunal is sympathetic to the difficult circumstances that effected the applicants as a result of COVID-19, through no fault of their own, the Tribunal is bound by the legislation. It is not open to the Tribunal to introduce additional COVID -19 concessions in relation to cl 888.222 of Schedule 2 to the Regulations.
The Tribunal acknowledges the successful business operations of the Company prior to the impact of COVID-19 and the unfortunate result of the applicant being forced into bankruptcy and the Company deregistered. The Tribunal also notes that at the time of application in August 2020, the applicant continued to meet the criterion under cl 888.222 (1)(b) of Schedule 2 to the Regulations. The delay by the department in processing the application, also impacted by COVID-19, has regrettably negatively impacted the applicant. However, as found above, the applicant does not have an ownership interest in the Company at the time of decision. Therefore, he is unable to meet the criterion under cl 888.222 (1)(b) of Schedule 2 to the Regulations.
As one of the essential requirements for the visa is not met, the decision under review must be affirmed.
Further, because the applicant is unable to satisfy cl 888.222 of Schedule 2 to the Regulations, the second, and third named applicants are also unable to satisfy cl 888.311 of Schedule 2 to the Regulations because they are not members of a family unit of a person who holds a Subclass 888 visa granted on the basis of satisfying the primary criteria for the grant of the visa. Therefore, the decision in relation to the secondary applicants must also be affirmed.
DECISION
The Tribunal affirms the decision not to grant the applicants Business Skills (Permanent) Subclass 888 visas.
Date(s) of hearing: 15 January 2025
Representative for the Applicant: Mr Phillip William Knell (MARN: 1173015)