Sun (Migration)

[2017] AATA 617

Sun (Migration) [2017] AATA 617 (19 April 2017)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mr Hongzhi Sun
Mrs Yunxian Liang
Master Yuhao Sun
Master Yuxiang Sun

CASE NUMBER:  1513948

DIBP REFERENCE(S):  BCC2014/2506191 BCC2016/690080

MEMBER:Jennifer Ciantar

DATE:19 April 2017

PLACE OF DECISION:  Sydney

DECISION: The Tribunal remits the application for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named applicant meets the following criteria for a Subclass 890 (Business Owner) visa:

· cl.890.212 of Schedule 2 to the Regulations.

Statement made on 19 April 2017 at 2:07pm

CATCHWORDS
Migration – Business Skills (Residence) (Class DF) visa – Subclass 890 (Business Owner) – Additional evidence to Tribunal not available to delegate – Net value of assets at least $100 000 – Funds lawfully acquired 

LEGISLATION

Migration Act 1958, s 65

Migration Regulations 1994, Schedule 2 – cl.890.212

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Immigration on 28 September 2015 to refuse to grant the visa applicant a Business Skills (Residence) (Class DF) Subclass 890 visa under s.65 of the Migration Act 1958 (the Act).

2. The visa applicant applied for the visa on 1 October 2014. The delegate refused to grant the visa on the basis that that the first named applicant (the applicant) did not satisfied cl.890.212 of Schedule 2 to the Migration Regulations 1994 (the Regulations) because the delegate was not satisfied that the net value of the applicant’s assets in the main business were at least $100,000 throughout the 12 month period immediately before the application was made or at the time of application.

3. The applicants appeared before the Tribunal on 14 March 2017 to give evidence and present arguments. The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages.

4. The applicants were represented in relation to the review by their registered migration agent.

5. For the following reasons, the Tribunal has concluded that the matter should be remitted for reconsideration.

   CONSIDERATION OF CLAIMS AND EVIDENCE

6. The issue in the present case is whether the applicant meets the requirements in cl.890.212, which provides:

   890.212

   The assets of 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:

   (a)      have a net value of at least AUD100 000; and

   (b)      had a net value of at least AUD100 000 throughout the period of 12 months ending immediately before the application is made; and

   (c)      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.

7. The main business is Happy Family Fruits & Vegetables Pty Ltd. The applicant gave evidence at the hearing that he has held and continues to hold 100% of the shares in that business. The relevant period ending immediately before the application is made is 1 October 2013 to 30 September 2014.

8. Financial statements ending 30 June 2013 and 30 June 2014 for the main business were provided to the Department and indicated the net assets of the business and loans by the applicant to the business as follows:

   30 June 2013              30 June 2014

   Business: net assets                  $   6302.52                $ 15,046.03
   Shareholder loans                    $224,862.88               $254,862.88

9. The delegate took into account that on Form 1217, the applicant claimed loans to the business totalling $231,165 on 30 June 2013 and $269,908 on 30 June 2014. On 13 April 2015 the Department asked the applicant to provide bank statements showing the loan amounts deposited into the business bank account. In response, the applicant stated that due to the nature of the agricultural business, most of the business transactions are made using cash. Therefore the loan provided by the applicant was not deposited into the company’s account. Instead, the applicant used the loan to pay suppliers and purchase equipment directly with cash. A cash expense summary provided by the company’s accountant listed all the cash expenses for the period March 2012 to 30 June 2014 but only a selection of paid invoices was highlighted in the cash summary although more invoices can be provided upon request.

10. The delegate concluded that it is not possible to verify from the documents provided that the applicant made loans to the business as he claims. Even if the delegate accepted that the applicant made loans to business, the delegate could not be satisfied that the loans are in the amount the applicant is claiming or that all the claimed cash payments were used to fund the activities of the business.

11. The applicant provided the Tribunal with additional documents including profit and loss statements for the year ending 30 June 2015, BAS for the 2016 calendar year, invoices, bank statements and remittance advices.

12. At hearing, the Tribunal explained that it has to consider whether the applicant had assets in the main business with a net value of at least $100,000 at the time of application and during the 12 months immediately before the application was lodged, from 30 September 2013.

13. The applicant stated that in 2012, about a year after he came to Australia, he decided to invest in a business which is a market garden. Initially he leased 10 acres but has since expanded the business twice and it is now 75 acres. The income from the business has increased each year but the company tax return for the 2016 financial year has not yet been completed. The applicant stated that he has consistently lent money to the company since 2012. He has done so by purchasing equipment for the company using funds from his and his wife’s personal bank account held with the Bank of China, in China. The money in this account was accumulated through savings prior to the applicant coming to Australia. The applicant stated that rather than transferring a lump sum of money from China into the Australian business account, he makes purchases from his account in China because much of the equipment he has purchased for the market garden was sourced from China and had to be paid for in American dollars. The applicant would have lost money twice through the conversion process if he had transferred lump sums to Australia prior to purchasing goods from China and when the payment had to be made in American dollars.

14. The applicant confirmed that he also holds an account with the Bank of China in Australia. He had approached his local branch of the Bank of China a few times in order to request bank statements from the branch in China, for 2012. However, the staff in Australia told the applicant that the Bank of China in Australia has quite different administrative systems to the Bank of China located in China, particularly as the applicant’s branch in China is located in a province and the branch in Sydney relates to the bank’s head office in Beijing. Although the applicant has access to Internet banking, he can only access statements for the last six months. He was unable to provide the Department with statements because he had to approach the Bank of China personally in China to obtain statements from 2012. At the time that the Department requested extra evidence, when the applicant was in China he discovered that his access card had expired and it would take two weeks to obtain a new card but he had to depart for Australia before the end of the two-week period.

15. The applicant and his representative confirmed that only two documents have been provided which summarise the invoices which the applicant claims to have paid. The summary of invoices paid between 13 February 2012 and 19 November 2012 total AUD $109,934. However, there is no explanation about the items that were purchased and most of the invoices are not translated. The invoices for the period 10 April 2012 to 30 June 2012 only total $38,750 and are not cross-referenced to bank statements. Neither of these summaries adds up to the totals in the profit and loss statement, which are identified as loans by the owner to the business.

16. When asked what information had been provided to the accountant so that they could determine the amount of the loan, the applicant stated that he had provided the accountant with many documents including contracts he had signed for the purchase of equipment in China each year. He had also asked a second accountant to check the work of the first accountant. The applicant stated that in the 2012 financial year he had loaned the company $79,447 and by 2013 the loan had increased to $224,862. The loan has not been repaid to the applicant.

17. When asked about the purchases he had made in China, the applicant stated that his purchases had included sprinklers, which were quite a big investment, 12 tractors, also a large investment, and he constructed 20 greenhouses and purchased all the materials for the construction from China. He cannot recall the exact date of the purchases but can provide documents including contracts, tax paid to the Australian customs and delivery dates.

18. The applicant stated that he had also used his overseas account to purchase items in Australia. For example, he purchased the trucks used by the business in Australia because they needed to be left-hand drive. He purchased a forklift from Germany. Although he purchased the sprinklers that are on top of the greenhouses in Australia, he bought the pump from China.

19. The applicant undertook to provide more information regarding the summary of invoices which totals $109,934. He would also provide some other documents to show that he continued to lend money to the company after 2012. He would also provide translated extracts for the bank statements and the invoices.

20. The representative also referred to documents provided by the accountant to the Department which show how the loan accumulated over a three-year period. The tribunal indicated that the loan needs to be supported by cross-referenced invoices and bank statements.

21. On 27 March 2017 the applicant provided the Tribunal with additional documents. The documents included invoices and evidence of payment for 31 items purchased by the applicant for the business between 13 February 2012 and 19 November 2012 including tractors, front loader, rotary tiller, pumps, pesticide sprayer, T-type steel column, cold storage equipment, vegetable seeds, water pipes, irrigation equipment. The items total the equivalent of $109,934.

22. The Tribunal has had the benefit of a large number of additional documents including invoices and bank remittances. The Tribunal is satisfied that during the 2012 calendar year the applicant lent the business at least the equivalent of $109,934 for the purchase of equipment and vegetable seeds and this loan has not only been maintained but increased during the 12 months prior to the lodgement of the visa application. The Tribunal accepts that the applicant has continued to use his savings held in the Bank of China in China to purchase equipment for the business in Australia. The Tribunal accepts on the basis of the balance sheets provided to the Tribunal that the loans have not been repaid. 

23. The Tribunal is satisfied on the evidence before it that the applicant has made loans to the business of at least $254,862 in the period prior to 30 June 2014. On this basis the Tribunal has calculated the applicant’s net assets in the main business for the relevant period as follows:

    30 June 2013              30 June 2014

    Business: net assets                   $    6,302                  $ 15,046
    Shareholder loans   $224,862                   $254,862
    Total net assets in business         $231,164                   $269,908

24. Based on the above, the Tribunal finds that the applicant’s net assets in the business, given he is 100% shareholder, was $269,908 as at 30 June 2014 and at least $231,164 in the 12 months prior. The application was lodged on 1 October 2014, 3 months into the 2015 financial year. The balance sheet for the year ending 30 June 2015 indicates that the loans from shareholders increased to $263,082 in the 2015 financial year. The Tribunal is accordingly satisfied that the assets of the applicant in the main business had a net value of at least $100 000 at the time of application and throughout the period of 12 months ending immediately before the application was made. The Tribunal is also satisfied on the evidence before it that the funds were from the accumulated savings of the applicant and his spouse which have been lawfully acquired by them.

25. Given the above, the Tribunal finds that the applicant meets all the requirements of cl.890.212.

26. As the Tribunal has found that that the applicant has met cl.890.212, the application will be remitted to the Department for reconsideration.

    DECISION

27. The Tribunal remits the application for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named applicant meets the following criteria for a Subclass 890 (Business Owner) visa:

    ·cl.890.212 of Schedule 2 to the Regulations.

    Jennifer Ciantar
    Member