Sefat (Migration) - [2021] AATA 2984

Sefat (Migration) [2021] AATA 2984 (19 July 2021)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANTS:
Mr Mohammad Ali Sefat

Mr Alireza Sefat

Mr Amir Mohammad Sefat

Miss Najmeh Sefat

Mrs Nasrin Mozaffari
CASE NUMBER:  2006918
HOME AFFAIRS REFERENCE(S):          CLF2013/178024 CLF2014/58910
MEMBER:R. Skaros
DATE:19 July 2021
PLACE OF DECISION:  Sydney
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) visa:
·cl 892.211 of Schedule 2 to the Regulations;
·cl 892.212 of Schedule 2 to the Regulations;
·cl 892.213 of Schedule 2 to the Regulations;
·cl 892.214 of Schedule 2 to the Regulations;
·cl 892.221 of Schedule 2 to the Regulations.

Statement made on 19 July 2021 at 12:36pm

CATCHWORDS
MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 892 (State/Territory Business Owner) visa – Federal Circuit Court remittal – main business – ownership interest in the main business – co-trustee in a trust which operates the businesses – appointor, trustee and beneficiary – sole proprietor – consideration of the trust deed – appointor’s power to remove co-trustee – day-to-day management of the business – business was actively operating – business and personal assets – annual turnover – decision under review remitted
LEGISLATION
Migration Act 1958, ss 65, 134
Migration Regulations 1994, Schedule 2, cls 892.211, 892.212, 892.213, 892.214, 892.221; rr 1.03, 1.11
CASES
Campbell v MIAC (2011) 122 ALD 560
Ibrahim v Minister for Immigration and Citizenship [2009] FCA 1328
Sefat v MIBP [2016] FCCA 2501
Sefat v MIBP (No.2) [2020] FCCA 456
Shahpari v Minister for Immigration and Border Protection [2016] FCCA 513
Yang v Minister for Immigration and Border Protection [2014] FCCA 1576
STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Immigration and Border Protection on 29 September 2014 to refuse to grant the visa applicants Business Skills (Residence) (Class DF) visas under s 65 of the Migration Act 1958 (Cth) (the Act).
The applicants applied for the visas on 19 July 2013. At the time of application, Class DF contained four subclasses: Subclass 890 (Business Owner), Subclass 891 (Investor), Subclass 892 (State/Territory Sponsored Business Owner) and Subclass 893 (State/Territory Sponsored Investor).
The applicants in this case are seeking to satisfy the criteria for the grant of Subclass 892 (State/Territory Sponsored Business Owner) visas, as set out in Part 892 of Schedule 2 to the Migration Regulations 1994 (Cth) (the Regulations). At least one member of the family unit must satisfy the primary criteria set out in Subdivision 892.2. The others need only to satisfy the secondary criteria set out in Subdivision 892.3.
The delegate in this case refused to grant the visas on the basis that the first named visa applicant (the applicant) did not satisfy the requirements of cl 892.211(1) of Schedule 2 to the Regulations because the delegate was not satisfied that the applicant had provided sufficient evidence to demonstrate his ownership interest in the nominated businesses.
The applicant provided a copy of the delegate’s decision record to the Tribunal.
On 23 July 2015 the Tribunal, differently constituted, affirmed the Department’s decision not to grant the visas. The applicant applied for judicial review of that decision. On 29 September 2016, by judgement,[1] the Federal Circuit Court of Australia (FCCA) quashed the Tribunal’s decision and the matter was remitted for redetermination according to law.
[1] Sefat v MIBP [2016] FCCA 2501 (Sefat 1)
On 22 May 2017 the Tribunal, differently constituted, again affirmed the decision not to grant the visas. The applicants applied for judicial review of the second Tribunal’s decision. On 3 March 2020, by judgment,[2] the second Tribunal’s decision was again quashed and remitted to the Tribunal for redetermination according to law.
[2] Sefat v MIBP (No.2) [2020] FCCA 456 (Sefat 2)
The applicants appeared before the present Tribunal on 23 March 2021 to give evidence and present arguments. The Tribunal hearing was conducted with the assistance of an interpreter in the Persian and English languages.
For the following reasons, the Tribunal has decided that the matter should be remitted for reconsideration.
CONSIDERATION OF CLAIMS AND EVIDENCE
The issue in this case is whether the applicant had an ownership interest, as defined in s 134(10) of the Act, in one or more actively operating main businesses in Australia for at least two years immediately before the visa application was made and continued to have that interest at the time the visa application was made: cl 892.211(1).
The applicant must continue to satisfy the requirement in cl 892.211(1) at the time of this decision: cl 892.221(a). No more than two businesses can be nominated for this purpose (reg 1.11(2)) and only one or both of the businesses relied on to meet the time of application criterion can be relied on to meet the time of decision criterion: Yang v Minister for Immigration and Border Protection [2014] FCCA 1576.
The businesses relied on by the applicant to satisfy the requirements of the visa are the Sefat Family Trust trading as Cozy Shoes and Gaptel Australia. Cozy Shoes is a retail business located in Adelaide that is involved in selling footwear. Gaptel Australia is involved in providing voice over internet protocol (VOIP) services. The applicant and his spouse are co‑trustees of the Sefat Family Trust. In submissions to the Department, the applicant stated that he purchased the footwear business, which was then named Best Shoes, for $10,000, and the VOIP business from Gaptel Inc., which is based in Canada, for $80,000. The applicant provided to the Department certificates evidencing the registration of business names which note the applicant and his spouse as proprietors. The certificates, which were issued by the Government of South Australia, indicate that Cozy Shoes was registered on 11 March 2010 and Gaptel Australia was registered on 18 November 2008.
The delegate was not satisfied that the applicant had provided sufficient evidence to demonstrate that he, or he and his spouse, had acquired an ownership interest in the nominated businesses. The delegate was concerned that there was no evidence of a purchase contract or payments for the businesses. This concern was not shared by the previously constituted Tribunals or the present Tribunal. The Tribunal is satisfied on the documentary and oral evidence before it that the businesses were purchased and operated in Australia.
Does the applicant have an ownership interest in the businesses?
An ‘ownership interest’, in relation to a business, means an interest in the business as:
·a shareholder in a company that carries on the business; or
·a partner in a partnership that carries on the business; or
·the sole proprietor of the business;
including such an interest held indirectly through one or more interposed companies, partnerships or trusts (reg 1.03 of the Regulations and s 134(10) of the Act). Ownership for this purpose includes beneficial ownership if it is evidenced in accordance with the terms of reg 1.11A of the Regulations, set out in the attachment to this decision: reg 1.11A(1).
As noted above, the applicant and his spouse are trustees of the Sefat Family Trust which operated the two businesses. In applying Campbell v MIAC (2011) 122 ALD 560 (Campbell), the first Tribunal found that the applicant did not have an ownership interest in the businesses because a co-trustee in a trust that carries on a business does not have an ownership interest as defined s 134(10) either as a sole proprietor or a partner in a partnership, even if those persons were husband and wife.
In Sefat 1, counsel for the applicants contended that the Tribunal misinterpreted s 134(10) and erred in finding that Campbell was determinative of the question of whether a co‑trustee could have an ownership interest. It was contended that the applicant’s role both as trustee and most significantly as appointor under the trust deed, with the power to appoint and remove trustees, gave the applicant ultimate control of the business, including the power to operate it entirely for his own benefit.
Counsel for the Minister submitted that, following Campbell, where there are multiple co‑trustees, it is not possible for any of them to be regarded as the ‘sole proprietor’ for the purposes of s 134(10), and that this was not affected by the applicant being appointor under the trust deed.
Counsel for the applicants, in relying on authorities decided in a different context, argued that it was the applicant’s ultimate control by virtue of his positions as appointor, trustee and one of the beneficiaries, that made him ‘sole proprietor’ within the meaning of s 134(10)(c). It was contended that, by ignoring the implications of the first applicant’s position as appointor, the Tribunal had either ignored relevant material or asked itself the wrong question when considering ‘ownership interest’, and for that reason had fallen into jurisdictional error.
The Court was persuaded by the submissions made by counsel for the applicant and considered that, given the clear intention of the legislature in having expanded the concept of ownership interest for the purposes of the business visa scheme by virtue of s 134(10), it was necessary for the Tribunal to look at the state of affairs created by the trust deed itself.
The Court found that the Tribunal had erred as a matter of law in its approach to the meaning of the term ‘sole proprietor’ as provided for in the definition of ‘ownership interest’ in s 134(10). It noted that the Tribunal, in considering whether the applicant had an ‘ownership interest’ as a ‘sole proprietor’, was required to include in its consideration “such an interest held indirectly through one or more interposed companies, partnerships or trusts.” It noted that the words “such an interest” suggest that the Tribunal was required to have regard to the nature of the interests actually created by the trust deed.
The Court distinguished the facts of the present case from those in Campbell, noting that the interest identified in Campbell’s case was the applicant’s role as a co-trustee and beneficiary and nothing more. The Court noted that the role of appointor, and the significance this had for the ability of the applicant to run the affairs of the company, meant that in the context of the relationships established by this trust deed, it was at least arguable that the applicant was a ‘sole proprietor’ as defined in s 134(10). It was held that the Tribunal had erred in concluding that Campbell stood for the proposition that a co-trustee of a trust cannot be considered a ‘sole proprietor’.
On remittal, the Tribunal did have regard to the terms of the trust deed but considered the relevant provisions in the context of the legislative framework as determinative. The Tribunal applied Campbell and found that, while s 134(10) expands the concept of ‘ownership interest’, the ordinary usage of the term ‘sole proprietor’ could not be expanded to stretch the meaning of the words beyond their ordinary meaning. The Tribunal again affirmed the decision under review.
In Sefat 2, the Court found that the Tribunal on remittal had erred by not having regard to the nature and implications of the interests actually created by the trust deed, as it was required to do by virtue of the decision in Sefat 1, when considering whether the applicant had an ‘ownership interest’ under s 134(10) as it related to a ‘sole proprietor’ holding their interest indirectly.
At [35]–[40], the Court considered that the ratio in Campbell was the rejection of the submission that s 134(10)(c) can also mean ‘a’ sole proprietor, that ‘sole proprietor’ can be a number of co-trustees, and that each of such co-trustee is ‘a’ sole proprietor. It was observed that the Court in Campbell did not doubt that it was necessary to consider the particular facts and implications of the business arrangements when considering the types of ownership interest defined by s 134(10), and it was in the context of the factual circumstances in Campbell that the Court described the notion that there could be two sole proprietors of a business as defying ‘both common sense and the plain meaning of the word’. It was noted that this did not mean that the term ‘sole proprietor’ under s 134(10) did not have an expanded meaning because the words ‘including such an interest held indirectly through one or more interposed companies, partnerships or trusts’ suggests that the sole proprietorship of a business was not excluded from being held indirectly through an interposed trust.
At [45] and [46], the Court considered that it was not sufficient for the Tribunal to simply accept that the situation in the present case was different from the facts in Campbell. The Court noted that since the decision in Campbell, Sefat 1 distinguished that decision and added to the judicial consideration of the definition of ‘ownership interest’ under s 134(10), in so far as it encompassed ‘the sole proprietor’.
The Tribunal has considered the evidence before it in light of the Court’s considerations in Sefat 1 and Sefat 2. The Tribunal considers that Sefat 1 expanded the ‘sole proprietor’ considerations in circumstances where a person is a co-trustee of a trust. While the Court in Sefat 2 acknowledged, as held in Campbell, that it was not within the existing parameters of s 134(10)(c) that there could be more than one sole proprietor, it observed that the Court in Campbell did not make a final determination as to what the existing parameters of ‘ownership interest’ under s 134(10) actually were.
In considering whether the applicant has an ownership interest in the businesses as a sole proprietor, including indirectly through a trust, the Tribunal has had regard to the state of affairs created by the trust deed itself and the practical reality of the applicant’s control and management of the business. As guided by the Court in Sefat 1, the Tribunal has considered the interest and roles created by the trust instrument, the context of the relationships established by the trust deed, the role of appointer and the significance this has had on the applicant’s ability to run the affairs of the business, the power of the appointer and how that affects their interest and, in particular, whether another trustee has an equal interest.
The Deed for the Sefat Family Trust was settled on 20 August 2008 and stamped by Revenue SA on 21 August 2008. The applicant and his spouse are joint trustees. The applicant, his spouse and their three children are all beneficiaries. The applicant is the appointor.
As trustee, the applicant holds the assets of the trust and the net income thereof for the beneficiaries. Clause 2.1 of the Deed gives the trustee absolute discretion to distribute the trust’s net income to any one or more of the beneficiaries at any time and on as many occasions in any year. The trustee also has the power to set aside the net income of the trust fund and accumulate it. The trustee also has absolute discretion to invest the accumulated income. As beneficiary, the applicant has an interest in the trust funds, and technically, as trustee, could choose to allocate the whole of the trust’s net income to himself. The Tribunal notes, however, that the applicant is a co-trustee with his spouse. Being a co‑trustee and a beneficiary, as noted in Sefat 1 by reference to Campbell, does not of itself establish that the applicant has an ownership interest in the business as a sole proprietor. What distinguishes this case from the facts in Campbell is that the applicant in this case is the appointor under the trust deed. Clause 13 of the Deed bestows upon the applicant the power to remove and appoint trustees. The Tribunal accepts that as appointor, the applicant has the power to remove his co-trustee and deal with the trust’s assets and income in any way he chooses. The applicant can effectively take full control of the business, and for this reason the Tribunal does not consider that the applicant’s spouse has an equal interest to that of the applicant.
In addition to the above, the Tribunal has also considered the practical reality of the applicant’s control and management of the business for the purpose of determining whether, under the expanded definition of ‘ownership interest’, he can be considered the sole proprietor of the business. The Tribunal has substantial documentary and oral evidence which demonstrates that the applicant was the person who negotiated and purchased the businesses which form part of the trust’s assets. The evidence before the Tribunal also indicates that the applicant is responsible for conducting the day to day affairs of the businesses, including making decisions about the location, purchases, sales and ongoing negotiations.
In considering the evidence as a whole, including the powers and interests created by the trust deed and the applicant being effectively responsible for all aspects of the business, the Tribunal is satisfied that in the particular circumstances of this case, the applicant has an ownership interest in the business as the sole proprietor held indirectly through the Sefat Family Trust.
The trust deed was stamped by the relevant authority in South Australia on 21 August 2008 and the Tribunal is satisfied on this basis that the applicant’s beneficial ownership interest has been evidenced in accordance with reg 1.11A(2).
The application for the visa was made on 19 July 2013, and the Tribunal is accordingly satisfied that the applicant had and an ownership interest in the nominated businesses at the time of making the application and for the two years immediately before. The current evidence before the Tribunal also indicates that at the time of this decision, the applicant continues to have an interest in the nominated businesses.
Was each business relied on actively operating at all points in time?
In order to meet cl 892.211(1), the Tribunal must be satisfied that the relevant business or businesses were actively operating both at the time of making the visa application and during the two years immediately before. In order to meet cl 892.221(a), the applicant must continue to satisfy this requirement at the time of this decision.
The term ‘actively operating’ is not defined in the Act or Regulations. In considering whether this requirement is met, the Tribunal may consider whether the business exhibited activity of a ‘repetitive, continuous and permanent character’ at the relevant times in which the business actively sought to generate business, in fact generated trade and custom, and derived some financial gain for its activities in the relevant period: Shahpari v Minister for Immigration and Border Protection [2016] FCCA 513 at [71].
The Tribunal has before it evidence, including business activity statements, lease agreements, purchase and payment receipts, business insurance policy documents, business bank statements and other business documents, which demonstrate that the nominated businesses were actively operating at the time the application was made and for at least the two years immediately before.
At the hearing, the applicant gave evidence about the establishment of the businesses and their current operations. The evidence before the Tribunal indicates that on 1 September 2008, the applicant entered into a franchise and resale agreement with Gaptel Inc. Canada for the rights and licence to register “Gaptel Australia” and operate the VOIP business in Australia. The purchase price for the VOIP business was $80,000, payable in two instalments. The agreement indicates that further payments were to be made after the first six months of sales. Evidence was provided indicating the transfer of funds to Gaptel Inc. on 10 September 2008 and 23 September 2008 for payments totalling $80,000. Further smaller payments were made to Gaptel Inc. in 2009 and 2012. Gaptel Australia was registered in Australia on 18 November 2008.

In relation to the business Cozy Shoes, the evidence before the Tribunal indicates that on 17 January 2010 the applicant purchased from Mr Ahmad Lagroodi a footwear business known as Best Shoes which operated from the Brickworks Market. The applicant registered the business Cozy Shoes on 11 March 2010. The business initially operated from Brickworks Market until the applicant secured a lease for retail premises at the Sefton Park shops. The Tribunal has before it copies of the lease agreement, including subsequent renewals, which indicate that the business continues to actively operate from this location.
The Tribunal also has before it copies of the lease agreement entered into by the applicant on behalf of Cozy Shoes on 15 May 2013 for a second shop at Marden Shopping Centre.
At the hearing, the applicant confirmed that he continues to operate the footwear retail business Cozy Shoes, though only from the Sefton Park location. The applicant indicated that while they experienced a slowdown in sales during the lockdown periods due to COVID‑19, they were nevertheless able to remain open for business and sales in the last two quarters had significantly improved.
As the hearing was conducted by MS Teams video and the applicant was participating in the hearing from his office at the back of the store, the applicant took the opportunity to show the Tribunal around his office, pointing out folders he has kept since the establishment of the business in which he kept all the records relating to the business, such as lease documents, bank statements, purchase receipts, payments of invoices, sales records and other information. The applicant also showed the Tribunal the shop, which the Tribunal observed was quite a large shop floor which had a large variety of footwear on display. The applicant also showed the Tribunal an adjoining space to his shop from which his daughter Najmeh, a registered podiatrist, operates a podiatry clinic.
In relation to the VOIP services business, Gaptel Australia, it was indicated despite the applicant’s efforts to develop this business, which had done extremely well in North America, it did not result in much of a return for the applicant, and that while the business still exists, it has limited operations.
The Tribunal is satisfied on the totality of the evidence before it that, at the time of this decision, at least one of the nominated businesses relied on at the time of application, which operated for at least two years before the application was made, continues to actively operate at the time of this decision.
Does each business relied on satisfy the definition of ‘main business’ at all relevant points in time?
In order to satisfy the requirements of cl 892.211(1), the business or businesses relied on by the applicant must meet the definition of ‘main business’ at the time of application and during the two years immediately before. Clause 892.221(a) requires that the applicant continues to satisfy this requirement at the time of decision. The term ‘main business’ is defined in reg 1.11 of the Regulations and is set out in full in the attachment to this decision. There are four elements to the definition, each of which must be satisfied for a business to be a main business.
Firstly, the applicant must have or have had an ownership interest in the business. In considering this issue, the ownership interest does not need to be continuous or exist at a particular time: Ibrahim v Minister for Immigration and Citizenship [2009] FCA 1328 at [32], considering similarly worded criteria in cls 845.213 and 845.221. ‘Ownership interest’ is defined in s 134(10) of the Act: reg 1.03. If a beneficial interest is relied on for these purposes, certain evidentiary requirements must also be met: reg 1.11A. These provisions are set out in full in the attachment to this decision.
The Tribunal has found, as above, that the applicant has an ownership interest in the nominated businesses as a ‘sole proprietor’ held indirectly through an interposed family trust.
Secondly, the applicant must maintain or have 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 is satisfied on the documentary and oral evidence before it that the applicant has maintained, and continues to maintain, direct and continuous involvement in the management of the businesses, in particular Cozy Shoes, for which the applicant has been entirely responsible, including the making of decisions that influence the performance of the business, such as purchase of stock and opening a second retail shop.
Thirdly, 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 must meet certain thresholds:
·if the business is operated by a publicly listed company, the value of the ownership interest must be at least 10% of the total value of the business;
·if the business is not operated by a publicly listed company and the annual turnover of the business is at least AUD400,000, the value of the ownership interest must be at least 30% of the total value of the business;
·if the business is not operated by a publicly listed company and the annual turnover of the business is less than AUD400,000, the value of the ownership interest must be at least 51% of the total value of the business.
In this case, the businesses are not operated by a publicly listed company and, at the time of application, the turnover was less than AUD400,000. As the applicant has been found to have an ownership interest as the sole proprietor in the business, the applicant is entitled to 100% of the total value of the business. It follows that the value of the applicant’s ownership interest of the business is at least 51%.
Finally, the business must be a qualifying business. ‘Qualifying business’ is defined as an enterprise that 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 is not operated primarily or substantially for the purpose of speculative or passive investment: reg 1.03.
The Tribunal is satisfied on the evidence before it that Gaptel Australia and Cozy Shoes have been operated for the purpose of making a profit through the provision of goods (footwear) in the case of Cozy Shoes and telecommunication services in the case of Gaptel Australia. The businesses are not operated for the purpose of speculative investment. The Tribunal is accordingly satisfied that the businesses nominated by the applicant are qualifying businesses.
Accordingly, the Tribunal is satisfied that the nominated businesses meet the definition of main business in relation to the applicant.
Given the findings above, the Tribunal is satisfied that cl 892.211(1) is met.
Other primary criteria
Given the significant delays in the processing of this application, including the fact that this matter has been remitted by Court on two occasions, the Tribunal considers it in the interest of administrative efficiency to consider whether the applicant satisfies some of the other primary criteria for the Subclass 892 visa.
Australian Business Number and Business Activity Statements
Clause 892.211(2) must be satisfied as at the time of visa application. It requires that for each business to which cl 892.211(1) applies:
·an Australian Business Number has been obtained; and
·all Business Activity Statements required by the Australian Taxation Office (ATO) for the two years immediately before the visa application was made have been submitted to the ATO and have been included in the application.
As noted above, the applicant nominated the Sefat Family Trust trading as Gaptel Australia and Cozy Shoes. The businesses trade under one Australian Business Number (49 938 270 490) which was obtained by the Trustee for the Sefat Family Trust on 15 September 2008.
The Department’s file indicates that the applicant provided copies of the quarterly business activity statements required by the ATO for the complete eight quarters in the two years immediately before the application was made.
The Tribunal observed that the activity statements provided to the Department were only for Gaptel Australia. When this was discussed with the applicant at hearing, he explained that their accountant had reported the sales from both businesses under Gaptel Australia and it was only when they got a new accountant in 2014 that they realised the error.
After the hearing, the Tribunal received a letter dated 20 April 2021 from the applicant’s current accountant explaining that the activity statements for the 2012 and 2013 financial years were submitted to the ATO under one GST branching name (Gaptel Australia) despite the Trust having two active businesses. It was noted that all the sales from Cozy Shoes and Gaptel Australia were reported quarterly under one account. It was further noted that while the amounts reported, including sales and GST, would remain the same as both businesses were under one ABN, there should have been two GST branches for reporting purposes. It also noted that from July 2014, when the applicant changed their accountant and received advice that they should have separate reporting, two separate GST rolls were active with the ATO which remain active to date. The Tribunal received amended activity statements for each quarter from 1 July 2011 to 30 June 2013. The amended activity statements were lodged with the ATO on 30 June 2015 and 1 July 2015. The figures reported on the revised statements are relevant to other criteria which have been assessed by the Tribunal further below.
For the purposes of cl 892.211(2), the Tribunal is satisfied that the requirements relating to obtaining an ABN and providing the required business activity statements have been met.
Given the findings above, the Tribunal is satisfied that cl 892.211(2) is met.
As the applicant satisfies cl 892.211(1) and cl 892.211(2), it follows that the applicant meets the whole of cl 892.211.
Requirements relating to applicant’s assets
Clause 892.212 requires the applicant to meet certain requirements broadly relating to their assets. This provision does not need to be met if the appropriate regional authority has determined that there are exceptional circumstances. Otherwise, at least two of the following three criteria must be met:
·Australian employment (cl 892.212(a)): in the 12 months ending immediately before the visa application was made, the main business(es) in Australia of the applicant, the applicant’s spouse or de facto partner, or the applicant and spouse or de facto partner together employed at least one full time employee over that 12 month period (or employed a number of employees for a total number of hours equivalent to that which would have been worked by one full time employee) who is not the applicant or a member of their family unit and who is an Australian citizen, Australian permanent resident or New Zealand passport holder;
·Business & personal assets (cl 892.212(b)): at the time of visa application and throughout the period of 12 months immediately before the time of application, the net value of the business and personal assets in Australia of the applicant, or the applicant’s spouse or de facto partner or their assets combined had a net value of at least AUD250,000. Further, these assets must have been lawfully acquired;
·Assets in main business (cl 892.212(c)): at the time of visa application and in the 12 months immediately before the time of application, the total value of the net assets in the main business(es) in Australia of the applicant, or the applicant’s spouse or de facto partner, or the applicant and his spouse or de facto partner together have a net value of at least AUD75,000. Further, these assets must have been lawfully acquired.
The appropriate regional authority has not determined that there are exceptional circumstances in this case. Accordingly, the Tribunal has considered whether the substantive requirements of this criterion are met. The applicant has submitted that the requirements concerning business and personal assets, as provided for in cl 892.212(b), and assets in the main business, as provided for in cl 892.212(c), have been met.
In relation to the applicant’s business and personal assets, the Tribunal has before it the financial statements for the Sefat Family Trust for the financial years ended 30 June 2012 and 30 June 2013. It has also received the amended trust tax returns, on which the updated financial reports are based, for the corresponding financial years detailing the breakdown of the sales, expenses and net income in respect of each business operated by the applicant.
The Tribunal has also been provided with evidence of purchase of properties by the applicant and his spouse, bank account statements, mortgage documents and home loan balance as at various dates. Based on the documentary evidence provided, the Tribunal has calculated the net value of the applicant and his spouse’s assets as follows:

Business Assets 30 June 2013 30 June 2012

Current/Non-current Assets:

Total of:
Cash and cash equivalents
Inventories
Trade and other receivables
Property, plant and equipment
Intangible assets
Total assets:

3,384
40,000
15,000
74,785
80,000
213,169

7,328
41,627
15,000
32,189
80,000
176,144

Less:

Trade and other payables
Current Borrowings
Non-current Borrowings
Total liabilities

Net Assets

Add:

Unpaid trust distributions
(See beneficiaries’ account: Note 8 of 2012/2013 comparative financial report)
Total beneficiary funds

TOTAL NET ASSETS IN THE BUSINESS

4,388
8,169
52,510
65,067

148,102

Applicant:                  74,045
Spouse:  74,045

148,090

296,192

   -501
-
15,831
16,332

159,812

79,900
79,900

158,800

318,612

On the above calculations, the applicant satisfies the requirements of cl 892.212(b) and (c). For the sake of completeness, however, the Tribunal has also calculated the applicant and his spouse’s net personal assets. The Tribunal has only had regard to the applicant and his spouse’s real property as that was relatively easy to ascertain. The Tribunal has not included in its calculations items such as home contents, jewellery and rugs that were claimed by the applicants given the difficulty in independently ascertaining ownership and verifying the market value of these items as at the relevant dates:

Personal Assets –
Real Property 30 June 2013 30 June 2012

Morphet Vale property:
Purchased August 2011
Sold October 2012
+350,000
-272,835
Equity: 77,165

Hillcrest property
Purchased October 2012
Still owned +539,000
-489,609
Equity: 49,391

Total net business and net personal assets

345,583

395,777

Give the above, the Tribunal is satisfied that at the time of application, and for the period of 12 months immediately before the application was made, the combined business and personal assets in Australia of the applicant and his spouse had a net value of at least AUD250,000.
At the hearing, the applicant gave evidence that he had a business in Iran through which he accumulated his wealth. The Tribunal also has evidence before it of the transfer of funds from Iran to Australia which the applicant used to acquire assets in Australia. The Tribunal is satisfied that the assets have been lawfully acquired. On this basis, the Tribunal finds that the requirements in cl 892.212(b) are met.
The Tribunal is also satisfied, on the basis of the above calculations, that at the time of application and in the 12 months immediately before the time of application, the total value of the net assets in the main businesses in Australia of the applicant was at least AUD75,000. The Tribunal is satisfied that those assets were lawfully acquired. On this basis, the Tribunal finds that the requirements in cl 892.212(c) are met.
As the requirements in cl 892.212(b) and (c) have been satisfied, it follows that the applicant meets the whole of cl 892.212.
Value of business and personal assets at time of decision
If an applicant satisfies the requirements in cl 892.212(b), relating to their business and personal assets, as in this case, then cl 892.221(b) must also be satisfied at the time of decision.
Clause 892.221(b) requires that the applicant continues to satisfy cl 892.212(b) at the time of decision.
The applicant has provided to the Tribunal current information regarding the value of their business and personal assets. The evidence provided in relation to his and his spouse’s personal assets include bank statements as at 15 June 2021, evidence of continued ownership and current valuation of the Hillcrest property and outstanding loans against the Hillcrest property. The applicants also provided evidence of the value of personal items such as jewellery, home contents, rugs and a motor vehicle. In relation to the value of the business assets, the Tribunal received financial statements for the Sefat Family Trust for the year ended 30 June 2020. Following a request for updated information, the Tribunal received an interim balance sheet as at 15 June 2021, which was accompanied by a letter from the accountant pertaining to the items in the balance sheet.
On the evidence before it, the Tribunal has calculated the current value of the applicant and his spouse’s net personal and business assets as follows:

Business Assets 15 June 2021

Current/Non-current Assets:

Total of:
Cash and cash equivalents
Inventories (stock on hand)
Trade and other receivables (securing bond Sefton Park)
Leasehold improvements (less accumulated amortisation)
Office equipment (less accumulated depreciation)
Intangible assets*

Total assets:

4,137
47,000
15,000

14,310

119

92,312*

80,556

Less liabilities:

GST payable

Net Assets

Add:

Unpaid trust distributions:

Loans to the business made by the applicant and his spouse

TOTAL NET ASSETS IN THE BUSINESS

1,269

79,297

2,228

169,381

250,906

*excluded from calculation

Personal Assets – Real Property 15 June 2021

Hillcrest property
Current Market Valuation

Loan outstanding as at 15/6/21

Other loans against the property:

$740,000 - $760,000

-443,861

-45,370
-61,149

Equity: 189,620

Total net business and net personal assets

440,526 - $460,526

The Tribunal notes that it had some concern about including the current amount claimed for intangible assets, being the total funds paid to Gaptel Inc. for Gaptel Australia, given the limited activity of the VOIP business at this time. The Tribunal considers that the value of the intangible asset is likely to have been impaired since the purchase from Gaptel Inc. In any case, given the net value of the applicant and his spouse’s net business and personal assets have well exceeded the required amount of $250,000, it is not necessary to make an assessment of the current value of the intangible asset as the applicant does not need to rely on it. Nor is it necessary for the applicant to rely on the amounts claimed regarding the value of his and his spouse’s home contents, cars, jewellery and rugs.
Give the above, the Tribunal is satisfied that, at the time of this decision, the combined business and personal assets in Australia of the applicant and his spouse have a net value of at least AUD250,000. The requirement in cl 892.221(b) is therefore met.
Turnover
Clause 892.213 requires that unless the appropriate regional authority has determined that there are exceptional circumstances, the main businesses in Australia, together, in the 12 months immediately before the application is made, had an annual turnover of at least AUD200,000.

The Tribunal is satisfied on the basis of the evidence before it, including the activity statements for businesses for the period from 1 July 2012 to 30 June 2013, the comparative financial report for the year ended 30 June 2013 and the amended trust tax returns, that the businesses nominated by the applicant achieved total sales of AUD309,000 exclusive of GST.
On the evidence before it, the Tribunal is accordingly satisfied that the annual turnover of the nominated businesses in the 12 months immediately before the application was made was at least AUD200,000.
Given the above, the Tribunal finds that the applicant meets cl 892.213.
Business activities
Clause 892.214 requires that, at the time of the visa application, neither the applicant nor his or her spouse or de facto partner (if any) has a history of involvement in business activities that are of a nature that is not generally acceptable in Australia.
The Tribunal has had regard to information in the Department’s files and to current Departmental electronic records, none of which reveal any adverse information about the applicant or his spouse. There is no evidence before the Tribunal from any other sources which suggest that the applicant or his spouse have a history of involvement in unacceptable business activities.
For the above reasons, the Tribunal is satisfied that cl 892.214 is met.
Continued ownership interest in an actively operating main business
Clause 892.221(a) requires that at the time of this decision, the applicant continues to satisfy the criteria in cls 892.211 and 892.214.
In relation to cl 892.211, the Tribunal is satisfied on the basis of the evidence before it, including recent business activity statements, current ASIC statement detailing the ownership of the business name, letter from the accountant, financial report, photographs of the premises for Cozy Shoes and the oral evidence of the applicant at hearing, that the applicant continues to have an ownership interest in at least one actively operating main business in Australia at the time of decision: cl 892.221(a).
In relation to cl 892.214, the Tribunal notes that there is no information currently before it which suggests that either the applicant or his spouse have been involved in business activities that are of a nature that is not generally acceptable in Australia. The applicant therefore continues to satisfy cl 892.214 for the purposes of the time of decision requirements in cl 892.221(a).
Given the findings above, the Tribunal is satisfied that the applicant continues to satisfy the criteria in both cl 892.211 and cl 892.214 at the time of this decision. Accordingly, the Tribunal is satisfied cl 892.221(a) is met.
Conclusion
Given the findings above, the appropriate course is to remit the matter to the Minister to consider the remaining criteria for the visa.
In relation to the secondary applicants, they applied for the visas on the basis of being a member of the family unit of the primary visa applicant. In relation to the applicant’s children, the Tribunal notes that given the passage of time all the children are now adults, however, given the provisions in the definition of member of the family unit in respect of applicants who held a Class UR visa at the time of the application for the Class DF visa, the applicant’s children may still be considered members of his family unit as provided for in reg 1.12(5). In any case, this is a matter that will be considered by the Department upon remittal of this case.
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 visa:
·cl 892.211 of Schedule 2 to the Regulations;
·cl 892.212 of Schedule 2 to the Regulations;
·cl 892.213 of Schedule 2 to the Regulations;
·cl 892.214 of Schedule 2 to the Regulations;
·cl 892.221 of Schedule 2 to the Regulations.
R. Skaros
Senior Member

ATTACHMENT - LEGISLATION
Migration Regulations 1994
1.03Definitions
In these Regulations, unless the contrary intention appears:
…
ownership interest has the meaning given to it in subsection 134(10) of the Act.
…
qualifying business means 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.
…
1.11Main 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.
1.11A Ownership for the purposes of certain Parts of Schedule 2
(1)Subject to subregulation (4), for Parts 132, 188, 888, 890, 891, 892 and 893 of Schedule 2, ownership by an applicant, or the applicant’s spouse or de facto partner, of an asset, an eligible investment or an ownership interest, includes beneficial ownership only if the beneficial ownership is evidenced in accordance with subregulation (2).
(2)To evidence beneficial ownership of an asset, eligible investment or ownership interest, the applicant must show to the Minister:
(a)a trust instrument; or
(b)a contract; or
(c)any other document capable of being used to enforce the rights of the applicant, or the applicant’s spouse or de facto partner, as the case requires, in relation to the asset, eligible investment or ownership interest;
stamped or registered by an appropriate authority under the law of the jurisdiction where the asset, eligible investment or ownership interest is located.
(3)A document shown under subregulation (2) does not evidence beneficial ownership, for subregulation (1), for any period earlier than the date of registration or stamping by the appropriate authority.
(4)Beneficial ownership is not required to be evidenced in accordance with subregulation (2) if the person who has legal ownership of the asset, eligible investment or ownership interest in relation to which the applicant, or the applicant’s spouse or de facto partner, has beneficial ownership:
(a)is a dependent child of the applicant; and
(b)made a combined application with the applicant; and
(c)has not reached the age at which, in the jurisdiction where the asset, eligible investment or ownership interest is located, he or she can claim the benefits of ownership of the asset, eligible investment or ownership interest.
Migration Act 1958
134Cancellation of business visas
….
(10)In this section:
….
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.

Personal Assets – Real Property	30 June 2013	30 June 2012
Morphet Vale property: Purchased August 2011 Sold October 2012	+350,000 -272,835 Equity: 77,165
Hillcrest property Purchased October 2012 Still owned	+539,000 -489,609 Equity: 49,391
Total net business and net personal assets	345,583	395,777