SITU (Migration)
[2018] AATA 1873
•26 March 2018
SITU (Migration) [2018] AATA 1873 (26 March 2018)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANTS: Mr Jianlin Situ
Ms Jianli Shan
Miss Yingqi Situ
Mr Haohua Situ
Mr Junming SituCASE NUMBER: 1514353
DIBP REFERENCE(S): BCC2014/3403704, BCC2014/3417175, BCC2015/2577476, BCC2016/490523, BCC2016/491034
MEMBER:Katie Malyon
DATE:26 March 2018
PLACE OF DECISION: Sydney
DECISION:The Tribunal affirms the decision not to grant the applicants Business Skills (Residence) (Class DF) visas.
Statement made on 26 March 2018 at 5:46 pm
CATCHWORDS
Migration – Business Skills (Residence) (Class DF) visa – Subclass 892 – Net Assets requirement not met – Decision under review affirmedLEGISLATION
Migration Act 1958, ss 65, 359, 360, 362B
Migration Regulations 1994, Schedule 2, cl 892.212CASES
Hasran v MIAC [2010] FCAFC 40
Kaur v Minister for Immigration & Anor [2013] FCCA 1641
MZZGY v Minister for Immigration and Border Protection [2014] FCA 488
Singh v Minister for Immigration & Anor [2014] FCCA 2537STATEMENT 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 on 8 October 2015 to refuse to grant the visa applicants a Business Skills (Residence) (Class DF) Subclass 892 visas under s.65 of the Migration Act 1958 (the Act).
The visa applicants applied for the visa on 10 December 2014. The delegate refused to grant the visa on the basis that the first named applicant, Mr Jianlin Situ, did not meet 2 of the 3 alternative requirements in cl.892.212 of Schedule 2 to the Migration Regulations 1994 (the Regulations). A copy of the delegate’s decision was provided to the Tribunal. Set out in the Attachment to this decision is an extract of key provisions of the Regulations referred to in this decision.
Background
Mr Situ applied for the visa on the basis of his 100% shareholding of the 100 shares issued in his business, Rong Sen Group (Australia) Pty Ltd (Rong Sen). The second, third, fourth and fifth named applicants applied for the visas on the basis of their being members of the family unit of Mr Situ. Based on information in the Department’s file, Rong Sen is an export trading company, specialising in the export of wool.
After reviewing documentation lodged in support of his application for a Subclass 892 visa, the Department requested assorted documentation on 30 July 2015 including:
·
Tax Agent Portal generated Integrated Client Account summary for the period from
1 December 2012;
·evidence of loans to Rong Sen including loan ledger showing exact dates on which funds were transferred to the company and bank statements for Mr Situ and Rong Sen confirming bank loans;
·title deeds for Mr Situ’s apartment in Chatswood, settlement statement and mortgage statements;
·evidence to demonstrate decision-making and management of Rong Sen having regard to evidence that, amongst other things, the website for the Australian Securities & Investment Commission (ASIC) had a ‘Notice of proposed deregistration – ASIC initiated’ published on 6 August 2013 and Mr Situ had spent 300 days (10 months) overseas during the relevant 12 month period prior to lodgement of the visa application; and,
·PAYG Payment Summaries for the nominated Australian citizen or permanent resident employee for the year ending 30 June 2015 and evidence of payment of superannuation.
On 3 September 2015 and 6 October 2015, Mr Situ’s then representative provided various documents to the Department. Based on documentation provided, the delegate was satisfied that Mr Situ meets the employee criteria in cl.892.212(a) of Schedule 2 to the Regulations. However, the delegate was not satisfied there was sufficient evidence that the business and personal assets of Mr Situ and his wife had net business and personal assets that have a value of at least AUD 250,000 throughout the 12 months immediately ending before the application was made (as required by cl.892.212(b) of Schedule 2 to the Regulations) or that the assets of Mr Situ in Rong Sen have a net value of value of at least AUD 75,000 throughout the 12 months immediately ending before the application was made (as required by cl.892.212(c) of Schedule 2 to the Regulations). Specifically, the delegate decided that there was insufficient evidence regarding 4 loan transactions to demonstrate that the funds belonged to Mr Situ (or his wife) and that the amounts represent loans to Rong Sen. Based on the information provided, the delegate valued Mr Situ’s net assets in Rong Sen as follows:
Assets in AUD 30/09/2014 30/09/2013 Net Assets (Liabilities) (61,913.97) (270,359.65) Director’s loan 83,907.64 295,381.19 Total 21,993.67 25,021.54
As a result, the delegate found that the assets owned by Mr Situ (and his wife) in Rong Sen did not have a net value of at least AUD 75,000 throughout the period of 12 months ending immediately before the application was made on 10 December 2014. Therefore, Mr Situ did not meet the criteria in cl.892.212 of Schedule 2 to the Regulations.
Since the delegate found that Mr Situ did not meet the criteria for grant of the visa, the applications of the second, third, fourth and fifth named applicants were refused as they were not members of the family unit of a person who met the primary criteria.
The Tribunal hearing
No documentation was provided to the Tribunal with the application for review by Mr Situ’s new representative, apart from the delegate’s decision.
On 23 June 2017, the Tribunal wrote to the applicants and stated that it has considered the material before it but was unable to make a favourable decision on this information alone. It invited the applicants to attend a hearing on 17 July 2017. On 11 July 2017, the applicants’ representative requested a postponement of the hearing on the basis that Mr Situ had sustained a spinal injury during his stay in China and is consequently unable to travel back to Australia to attend the hearing. A medical certificate in Mandarin and English dated 4 July 2017 was provided from Foshan Hospital of Traditional Chinese Medicine stating that Mr Situ has a ‘protrusion of lumbar intervertebral disc’ for which treatment is ‘(S)uggest to rest in bed, and to avoid sitting or walking for a long time‘.
The Tribunal notes that, under s.362B(1) of the Act, it has a discretion - confirmed by s.362B(2) of the Act - to reschedule the applicants’ appearance before it, or to delay its decision on the review, in order to enable their appearance to be rescheduled. Accordingly, the Tribunal considered whether it would be appropriate to exercise this discretion in the applicants’ favour having regard to the medical certificate before it in relation to Mr Situ. In doing so, the Tribunal had regard to the decisions in Kaur v Minister for Immigration & Anor[1], Singh v Minister for Immigration & Anor[2] and MZZGY v Minister for Immigration and Border Protection[3] where the Courts have held that a medical certificate which merely indicates an applicant is unfit for work for a period will not necessarily constitute a firm basis for a scheduled hearing to be postponed in all circumstances.
[1] [2013] FCCA 1641 (16 September 2013) at [7] – [11]
[2] [2014] FCCA 2537 (Simpson J, 14 October 2014)
[3] (2014) FCA 488 at [7] – [11]
The medical certificate provided by the applicants’ representative does not set out why Mr Situ could not participate in a hearing to give oral evidence before the Tribunal by way of tele-conference from China. In considering this matter, the Tribunal had regard to the history of the application before it. Accordingly, pursuant to s.362B of the Act, on 13 July 2017 the Tribunal responded to the requested postponement noting that the certificate does not say that Mr Situ cannot participate in a telephone call and that the hearing will proceed as scheduled.
Following the Tribunal’s decision to proceed with the hearing on 17 July 2017, the applicants’ representative forwarded a further certificate from Foshan Hospital’s Acupuncture Clinic dated 13 July 2017. The medical certificate dated 13 July 2017 states Mr Situ’s has ‘lower back pain, left lower limb has been suffering from extreme radiating pain for one month’ and he has been diagnosed by 2 doctors with ‘lumbar spine intervertebral protrusion’ and Traditional Chinese Medicine diagnosed ‘partial paralysis’. The treatment suggested is ‘hospitalisation’ with ‘two type (sic) Chinese herbal medicine: 1. Paracetamol and dihydrocodeine tablets; and, 2. Oxalic acid phthalate tablets”. The Tribunal agreed to postpone the hearing.
On 17 July 2017, the Tribunal wrote to the applicants inviting them to a hearing to be held on 20 July 2017. On 19 July 2017, the applicants’ representative indicated that they had declined to attend the hearing due to Mr Situ’s health and attached a medical certificate from Foshan Hospital of Traditional Chinese Medicine dated 19 July 2017, in Mandarin and English. The certificate states as follows:
“Major Complaint: Pain in the lower back and radiating pain in the left lower limb for one month.
Subsequent visit. Summary: the patient has been suffering from pain in the lower back and radiating pain in the left lower limb after moving heavy objects in June this year. He has come for a subsequent visit today. The patient is still experiencing severe pain. He is very anxious. His conditions aggregate (sic) when standing and walking on the ground. X-ray of the lower back shows: Degenerative change of the lower back. Degeneration of intervertebral disc 4/5. Calcification in the right lower abdomen. Further examination recommended.
..
Treatment Principle: recommended to be hospitalised for treatment.”
In addition, the Tribunal was provided with a Certificate of Diagnosis of Disease dated 19 July 2017 which states that Mr Situ has a prolapse of lumbar intervertebral disc and it is suggested he ‘rest in bed for one month’ and continue with the treatment.
The Tribunal notes that none of the documentation provided by the applicants’ representative provides the contact details of the Foshan Hospital of Traditional Chinese Medicine: no address or telephone number is provided and there is no reference to the hospital’s website. These omissions raised doubts in the mind of the Tribunal regarding probity of the documents provided. Furthermore, despite the certificate of 13 July 2017 suggesting Mr Situ be hospitalised, the certificate provided 19 July 2017 notes that he has made ‘a subsequent visit’, that further examination is recommended and, relevantly, it is recommended he be hospitalised for treatment. In the circumstances, it is clear he was not hospitalised on 13 July 2017. None of the medical certificates provided explain in any detail why, if resting in bed (in hospital or otherwise) and on medication for his pain, Mr Situ could not attend a hearing by way of teleconference from China to give oral evidence.
In the circumstances, the Tribunal proceeded with a short hearing of 6 minutes duration on 20 July 2017. The Tribunal noted at the outset that it has just a couple of questions for Mr Situ in relation to when documentation would be provided. Mr Situ said the Tribunal’s call was inconvenient because he was receiving acupuncture and referred the Tribunal to his representative for responses to any questions it might have. The hearing was concluded.
Documentation received after the hearing
Following the brief hearing, and arising from Mr Situ’s request that the Tribunal direct any questions to his representative, the Tribunal wrote to the applicants on 11 August 2017 pursuant to s.359(2) of the Act and requested the following information be provided by
25 August 2017:
·Information to show that you continue to have an ownership interest in the main business, Rong Sen Group (Australia) Pty Ltd, and that this main business is still actively operating in Australia; and,
·Information to show that the assets owned by you, your partner, or you and your partner together in the main business:
(i) have a net value of at least AUD 75,000; and,
(ii) had a net value of at least AUD 75,000 throughout the of 12 months ending immediately before the application was made on 10 December 2014; and,
(iii) have been lawfully acquired by you, your partner, or you and your partner together.
The Tribunal’s letter of 11 August 2017 also informed the applicants that, if it does not receive the information within the period allowed or as extended, it may make a decision on the review without taking any further action to obtain the information. The letter also confirmed that the applicants would lose any entitlement they might otherwise have had under the Act to appear before the Tribunal to give evidence and present arguments.
Some documentation was provided to the Tribunal on 28 August 2017, that is, 3 days after the prescribed period. No extension had been requested. In these circumstances, s.359C of the Act applies and pursuant to s.360(3) of the Act the review applicants are not entitled to appear before the Tribunal. The effect of s.363A of the Act is that, if a review applicant has no entitlement to a hearing, the Tribunal has no power to permit him or her to appear: Hasran v MIAC [2010] FCAFC 40. Accordingly, the Tribunal must proceed to decision without a hearing and, in the circumstances, the Tribunal has decided not to take any further steps to obtain the information.
For the following reasons, the Tribunal has concluded that the decision under review should be affirmed.
CONSIDERATION OF CLAIMS AND EVIDENCE
The issue in the present case is whether the primary applicant meets the criteria in cl.892.212 of Schedule 2 to the Regulations. This provision states:
Unless the appropriate regional authority has determined that there are exceptional circumstances, the applicant meets at least 2 of the following requirements:
(a) in the period of 12 months ending immediately before the application is made, the main business in Australia, or main businesses in Australia, of the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together:
(i) 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 1 full-time employee over that period of 12 months; and
(ii) provided those hours of employment to an employee, or employees, who:
(A) were not the applicant or a member of the family unit of the applicant; and
(B) were Australian citizens, Australian permanent residents or New Zealand passport holders;
(b) the business and personal assets in Australia of the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together:
(i) have a net value of at least AUD 250 000; and
(ii) had a net value of at least AUD 250 000 throughout the period of 12 months ending immediately before the application is made; and
(iii) have been lawfully acquired by the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together;
(c) the assets owed by the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, in the main business or main businesses in Australia:
(i) have a net value of at least AUD 75 000; and
(ii) had a net value of at least AUD 75 000 throughout the period of 12 months ending immediately before the application is made; and
(iii) have been lawfully acquired by the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together.
In response to the Tribunal’s request for information, Mr Situ’s representative provided the following documentation on 28 August 2017, that is, 3 days after the timeframe provided by the Tribunal in its letter of 11 August 2017:
1)Ownership Interest - ASIC extract; financial statements ended 30 June 2014, 2015 and 2016; Tax Return 2016; Business Activity Statements (BAS) 1 July 2015 to 30 June 2016 and 1 July 2016 to 30 June 2017; Bank Statements 2016/2017; and,
2)Assets Ownership - letter from an Accountant to verify the assets owned by Mr Situ in the business.
As noted above, there was no request for an extension of time to provide this information to the Tribunal.
The Tribunal has considered the information and documentation provided by Mr Situ’s representative, both to the Tribunal and the Department.
There is no evidence before the Tribunal that an appropriate regional authority has determined there are exceptional circumstances in relation to this case. Accordingly, Mr Situ is required to meet 2 of the 3 criteria in cl.892 212 of Schedule 2 to the Regulations.
Local employee for 12 months prior to application: cl.892.212(a)
Clause 892.212(a) requires that, in the period of 12 months before the application is made, Rong Sen employed at least 1 full-time employee who is an Australian citizen, a permanent resident or New Zealand passport holder.
Evidence in the Department’s file confirms that Rong Sen employed Australian citizen Jingzhong Liu and that Mr Liu commenced employment with Rong Sen on 1 December 2012, that is, in the 12 months prior to lodgement of the application on 10 December 2014. Departmental records confirm Mr Liu became an Australian citizen on 27 April 2006.
Accordingly, the Tribunal finds that the requirement in cl.892.212(a) of Schedule 2 to the Regulations is met.
Business and personal assets in Australia with a net value of at least $250,000 for 12 months prior to lodgement of the application: cl.892.212(b)
Clause 892.212(b) requires that in the period of 12 months before the application is made Mr Situ and his wife had net assets (personal and business) of at least $250,000 and which have been lawfully acquired.
In his response to Q.16 in the Form 1217 Business Skills profile: Business Owner (Residence) Mr Situ states that, 12 months prior to lodgement of the application (that is, in December 2013), the couple’s net personal assets in Australia was $0 and their net business assets were $28,938.27. At the time of lodgement of the Subclass 892 visa application on 10 December 2014, Mr Situ states the couple’s net personal assets in Australia were $267,500 and there net business assets were $293,707.97.
Evidence in the Department’s file confirms that Mr Situ (alone) signed a Contract for the Sale of Land on 3 May 2014 to purchase an apartment in Help Street, Chatswood for $955,000. Settlement was effected on 19 June 2014 with a loan from the Bank of China for $668,500. However, as his apartment was not owned by Mr Situ for the full 12 months prior to lodgement of his application on 10 December 2014, the Tribunal cannot have regard to this asset. This is consistent with Mr Situ’s answer to Q.16 on his Form 1217. The Department was not advised that Mr Situ and his wife had any other personal assets in Australia.
In the circumstances, the Tribunal finds that whether or not it is satisfied Mr Situ and his wife meet the requirements in cl.892.212(b) of Schedule 2 to the Regulations regarding the net value of their business and personal assets in Australia throughout the 12 months ending immediately before the application was made, is dependent on the Tribunal’s findings in relation regarding cl.892.212(c) of Schedule 2 to the Regulations regarding their net assets in the business Rong Sen.
Assets in the business with a net value of at least $75,000 for 12 months prior to lodgement of the application: cl.892.212(c)
Clause 892.212(c) requires that, in the period of 12 months before the application is made, Mr Situ and his wife had net assets in the business of Rong Sen of at least $75,000.
As noted above, the delegate refused the application on the basis of not being satisfied the net value of assets of Mr Situ and his wife owned in Rong Sen on 30 September 2013 and 30 September 2014 was more than $75,000. In his response to Q.14 in the Form 1217, Mr Situ indicated that for the year 2013, he had net assets in Rong Sen of $28,938.27 and, in the following year, $293,707.97. After the delegate requested further documentation, these amounts were revised by Mr Situ.
In response to the delegate’s requests for additional documentation, the applicants’ then representative provided a Financial Report for Rong Sen the year ended 30 September 2014.[4] This is consistent with Departmental policy that applicants be required to demonstrate the net value of their personal and business assets on any one date in the 3 month period immediately before the visa application.[5] In exercising its power on review, the Tribunal should have regard to policy as a relevant consideration. However, policy is not binding on the Tribunal.[6] The overarching principle is that the Tribunal must make an independent assessment of the material before it with a view to reaching the correct or (in the base of the exercise of a discretionary power, not relevant to this case) the preferable decision.[7] The Tribunal accepts it is appropriate that in respect of a Subclass 890 visa application lodged on 10 December 2014 that the applicants be requested to provide financial records to 30 September 2014. The applicants complied with this request from the Department.
[4] f216 BCC 2014/3417175
[5] Re Drake v MIEA (No 2) (1979) 2 ALD 634; Qiao v MIAC [2008] FMCA 380
[7] See Hneidi v MIAC [2010] FCAFC 20 (Spender, Emmett and Jaocobson JJ) at [34]
The balance sheet for Rong Sen for the 12 months ended 30 September 2014 shows the following:
Assets 30/09/2014 30/09/2013 Net Assets (Liabilities) (61,913.79) (270,359.65) Director Loan 213,793.64 363,091.19
For context, the Tribunal has set out below an extract from the delegate’s decision, a copy of which was provided to the Tribunal:
Based on the information set out in the balance sheet for Rong Sen as at 30 September 2013 - 14, the applicants rely on investing a substantial amount of money sourced from their own funds to meet the net business asset requirement.
On 30 July and 30 September 2015 this office requested additional information to verify the applicant’s loan claims. Among other things, the applicant was asked to provide additional evidence relating to nine loan transactions for which insufficient documentation had been provided. While the applicant was able to satisfactorily evidence five of these loan claims, the following four loan transactions have not been adequately evidenced by the applicant on the day I made my decision:
Date Amount in AUD 09/08/2012 15,000 18/07/2013 52,710 11/10/2013 50,927 19/12/2013 11,249 Total 129,886
The company’s general ledger shows an amount of $14,870.93 and the date associated with this entry is 30 June 2013. The applicant’s accountant clarified in a letter dated 22 September 2015 that this amount was incorrectly recorded and that the actual figure is $15,000. The applicant provided a Bank of China statement in support of his claims, which shows that $15,000 was deposited on 9 August 2012. However, the bank statement does not show the account holder/s or account number. As this bank statement does not have any identifiers to link to the applicant or Rong Sen, I am not satisfied that the applicant has demonstrated that he (or the applicant’s spouse) loaned $15,000 to Rong Sen.
The applicant provided two Bank of China remittance advices in support of his loan claims relating two fund’s transfers of $52,710 and $50,927 on 18 July 2013 and 11 October 2013, respectively. The earlier remittance advice shows Dan Yungxing as remitter and Rong Sen as the beneficiary. The second transfer advice lists Shan Ji Ke as remitter and Rong Sen as the beneficiary. It is observed that these funds were not remitted by the applicant or his spouse. The applicant’s accountant advised that due to restrictions on overseas money transfers in China, some of the transactions were made by the applicant’s friends. While I am aware of these restrictions, the applicant has offered no evidence that these funds belong to him (or his spouse) and are loans to the company. I therefore find that the applicant has not adequately demonstrated that he made shareholder loans to Rong Sen to the value of $52,710 and $50,927.
The applicant claims to have made a loan of $11,249 to his company on 19 December 2013. The applicant submits in his transaction summary table that he transferred
$US10,000 from Rong Sen’s USD account to the company’s AUD account. However, I do not accept that this transaction constitutes a loan that the applicant made to Rong Sen. It is noted that this transaction was merely a transfer between two company accounts and did not involve the movement of funds from the applicant (or his spouse) to Rong Sen. Therefore, I find that the applicant did not make a loan of $11,249 to his nominated main business.Based on the above findings, I have calculated the value of the net business assets owned by the applicants on 30 September 2013 and 2014 by excluding the four transactions discussed above. Accordingly, I am satisfied the net value of the assets the applicant and his spouse owned in Rong Sen on 30 September 2013 and 30 September 2014 were:
Assets in AUD 30/09/2014 30/09/2013 Net Assets (Liabilities) (61,913.97) (270,359.65) Director’s Loan 83,907.64 295,381.19 Total 21,993.67 25,021.54
The totals are below the required level of at least $75,000 at both points in time and therefore throughout the relevant 12-month period. Consequently, I am not satisfied that the applicant meets the financial requirements set out under subclause 892.212(c).
As noted above, in response to the Tribunal’s request of 11 August 2017 pursuant to s.359(2) of the Act, the applicants’ representative provided assorted financial statements including for the year ended 30 June 2014.[8] The Financial Report for the year ended 30 June 2014 provided to the Tribunal is identical to that provided by the applicants’ former representative to the Department – apart, significantly, from the fact that Mr Situ’s signature has been removed - and was signed by the company’s former CPA on 1 September 2014.[9] The Tribunal notes, however, that the Financial Report for Rong Sen as at 30 June 2014, and which has been signed by the company’s former CPA, contains the standard disclaimer that “the director is solely responsible for the information contained in the special purpose financial statements”. The CPA’s disclaimer also states that their role does “not include verification or validation procedures. No audit or review has been performed and accordingly no assurance is expressed“. The disclaimer concludes that the “special purpose financial statements were prepared exclusively for the director” and the CPA does ”not accept responsibility to any other person for the content of the special purpose financial statements.“
[8] ff 62 – 66 AAT 1514353
[9] ff 89 – 98 BCC 2014/3417175
Mr Situ’s current representative also provided to the Tribunal a letter from Rong Sen’s current CPA dated 24 August 2017. The representative states that the CPA’s letter addresses asset ownership in response to the Tribunal’s request pursuant to s.359(2) of the Act. Rong Sen’s new CPA states, relevantly, that:
“The assets owned by Mr Situ in the company is more than AUD 75,000 and (sic) represented as Director Loan in company (sic) financial account.
Please see the following table for Director loan account details:
Financial year Director Loan Account (AUD) 2014 348,030.97 ….
We also certified (sic) that the assets owned by Mr Jianlin Situ had the (sic) net value over AUD 75,000 throughout the period of 12 months ending immediately before the application was made on 10 December 2014.”
The Tribunal notes that, consistent with Tribunal’s request for information, it would have been appropriate for Rong Sen’s new CPA to provide an opinion in relation to Mr Situ’s net assets in the business as at 30 September 2014, rather than as at the end of the 2014 financial year on 30 June 2014. It appears to the Tribunal that Rong Sen’s current CPA has based his opinion regarding the value of Mr Situ’s loans to the company on his examination of the Balance Sheet in the Financial Report prepared by Rong Sen’s former CPA for the year ended 30 June 2014.[10] Furthermore, as noted above, the Financial Reports submitted to the Department and the Tribunal signed by Rong Sen’s former CPA on 1 September 2014 clearly state that the “director is solely responsible for the information contained in the special purpose financial statements” and that information has not been verified or validated’ by the former CPA. In providing the more recent opinion from Rong Sen’s current CPA, no qualification has been expressed in relation to the reliability, accuracy and completeness of the information of the financial reports provided to the Tribunal, including the financial report for the year ended 30 June 2014. Moreover, Mr Situ current CPA makes no reference in his opinion letter regarding the documentation upon which he has based his opinion. In the circumstances, the Tribunal gives the Accountant’s letter of 24 August 2017 little weight.
[10] ff 95 BCC 2014/3417175
The Tribunal accepts that, based on the financial reports provided to both the Department and the Tribunal, Mr Situ has made loans to Rong Sen. However, it is a requirement of cl.892.212(c)(iii) of Schedule 2 to the Regulations that an applicant demonstrate to the satisfaction of the decision-maker (in this case, the Tribunal), that the funds have been lawfully acquired. Relevant to the issue to be determined by the Tribunal in this case, no evidence has been provided in relation to the 4 loans referred to in the delegate’s decision extracted above.
Having reviewed documentation in the Department’s file, the Tribunal accepts that Mr Situ has, at all times since Rong Sen was established on 18 May 2011, been the company’s sole shareholder. However, based on documentation provided, the Tribunal is not satisfied that Mr Situ had net assets in the business of at least $75,000 on 30 September 2013 and 30 September 2014 respectively. No attempt has been made to address the issues raised by the delegate in the decision of 8 October 2015 regarding the funds loaned by Mr Situ to Rong Sen. Accordingly, the Tribunal concurs with the delegate that, based on evidence provided, the net value of assets of Mr Situ (and his wife) owned in Rong Sen on 30 September 2013 and 30 September 2014 were, respectively, $25,021.54 and $21,993.67.
In passing, the Tribunal notes its concerns that, although Mr Situ has provided the Tribunal with evidence that he continues to have an ‘ownership interest’ in Rong Sen, as at the date of this decision he has provided only limited evidence that the business is still actively operating. In this regard, Mr Situ has provided the Tribunal with BAS for FY 2015/16 reporting cash receipts of $0 and, for FY2016/17, cash receipts of $50,000 (including GST). In this 24 month period, no export sales were reported. This compares with cash sales of $746,754 reported in BAS for the 12 months to 30 September 2014, of which 99.9% represent export sales. This raises doubts in the mind of the Tribunal as to whether Mr Situ genuinely continues to operate the business. The Tribunal acknowledges that Mr Situ’s new CPA has provided a signed Financial Report as well as a Company Tax Return for the year ended 30 June 2016 reporting revenue, on an accruals basis, of $89,063.85 (and a loss of $134,413.07). This makes the financial year ended 30 June 2016 the fourth consecutive year in which Rong Sen has reported a loss: in the year to 30 June 2013, the loss was $51,850.52; in the year to 30 June 2014, the loss was $54,423; and, in the year to 30 June 2015, the loss was $89,941.40. In each of these years, the company reports negative equity. The financial performance of Rong Sen as reported in the financial statements provided to the Tribunal raises doubts in the mind of the Tribunal as to whether the company has been established merely to achieve a migration outcome for Mr Situ and his family.
Conclusion
Based on evidence provided, the Tribunal is not satisfied that the assets of the applicant and his spouse in Rong Sen have a net value of at least $75,000 at the time of application and throughout the period of 12 months ending immediately before the application was made on 14 December 2014. Accordingly, the Tribunal finds that the criteria in cl.892.212(c) of Schedule 2 are not met. Arising from the Tribunal’s comments in para [31] above and having regard to the Tribunal’s findings in relation to cl.892.212(c) not being met, the Tribunal also is also not satisfied Mr Situ and his wife meet the requirements in cl.892.212(b) of Schedule 2 to the Regulations in relation to the net value of their business and personal assets in Australia throughout the 12 months ending immediately before the application.
Accordingly, the Tribunal finds the criteria in cl.892.212 of Schedule 2 are not met by Mr Situ.
As the primary applicant does not meet the criteria for grant of the visa, the second, third, fourth and fifth named visa applicants are not members of the family unit of a person who meets the primary criteria. Therefore, the decision to refuse their applications must also be affirmed.
DECISION
The Tribunal affirms the decision not to grant the applicants Business Skills (Residence) (Class DF) visas.
DECISION
Katie Malyon
MemberATTACHMENT - Extract from the Migration Regulations 1994
SUBCLASS 892 -- STATE/TERRITORY SPONSORED BUSINESS OWNER892.1 - Interpretation
Note 1: appropriate regional authority , AUD , ownership interest and qualifying business are defined in regulation 1.03 and main business is defined in regulation 1.11.
Note 2: As to beneficial ownership of an asset or ownership interest, see regulation 1.11A.
Note 3: Regulation 1.03 provides that member of the family unit has the meaning set out in regulation 1.12. Subregulations 1.12(2) and (5) are relevant for applicants for a Business Skills (Residence) (Class DF) visa.
Note 4: There are no interpretation provisions specific to this Part.
892.2 - Primary criteria
Note: The primary criteria must be satisfied by at least 1 member of a family unit. The other members of the family unit who are applicants for a visa of this subclass need satisfy only the secondary criteria.
892.21 - Criteria to be satisfied at time of application892.211 (1) The applicant has had, and continues to have, an ownership interest in 1 or more actively operating main businesses in Australia for at least 2 years immediately before the application is made.
(2) For each business to which subclause (1) applies:
(a) an Australian Business Number has been obtained; and
(b) all Business Activity Statements required by the Australian Taxation Office (the ATO ) for the period mentioned in subclause (1) have been submitted to the ATO and have been included in the application.
892.212 Unless the appropriate regional authority has determined that there are exceptional circumstances, the applicant meets at least 2 of the following requirements:
(a) in the period of 12 months ending immediately before the application is made, the main business in Australia, or main businesses in Australia, of the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together:
(i) 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 1 full-time employee over that period of 12 months; and
(ii) provided those hours of employment to an employee, or employees, who:
(A) were not the applicant or a member of the family unit of the applicant; and
(B) were Australian citizens, Australian permanent residents or New Zealand passport holders;
(b) the business and personal assets in Australia of the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together:
(i) have a net value of at least AUD 250 000; and
(ii) had a net value of at least AUD 250 000 throughout the period of 12 months ending immediately before the application is made; and
(iii) have been lawfully acquired by the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together;
(c) the assets owned by the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, in the main business or main businesses in Australia:
(i) have a net value of at least AUD 75 000; and
(ii) had a net value of at least AUD 75 000 throughout the period of 12 months ending immediately before the application is made; and
(iii) have been lawfully acquired by the applicant, the applicant's spouse or de facto partner, or the applicant and his or her spouse or de facto partner together.
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