Suo (Migration)

[2019] AATA 4448

Suo (Migration) [2019] AATA 4448 (25 September 2019)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Ms Yan Suo

CASE NUMBER:  1702720

DIBP REFERENCE(S):  BCC2015/3383390

MEMBER:Sean Baker

DATE:25 September 2019

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal remits the application for a Business Skills (Residence) (Class DF) visa for reconsideration, with the direction that the visa applicant meets the following criteria for a Subclass 892 (State/Territory Sponsored Business Owner) visa:

·cl.892.212 of Schedule 2 to the Regulations.

Statement made on 25 September 2019 at 12:22pm

CATCHWORDS

MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 892 (State/Territory Sponsored Business Owner) – business and personal assets – unsecured personal loan to an individual – Departmental policy – Australian Accounting Standards Board (AASB) standards – chose in action – probability of realisation of income – decision under review remitted

LEGISLATION
Migration Act 1958 (Cth), s 65
Migration Regulations 1994 (Cth), Schedule 2, cl 892.212

CASES
Bodenstein v MIAC [2009] FCA 50

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 2 February 2017 to refuse to grant the visa applicant a Business Skills (Residence) (Class DF) Subclass 892 visa under s.65 of the Migration Act 1958 (the Act).

2. The applicant applied for the visa on 17 November 2015. At the time of application, Class DF contained four subclasses: 890 (Business Owner), Subclass 891 (Investor), Subclass 892 (State/Territory Business Owner) and 893 (State/Territory Sponsored Investor). The applicant in this case is seeking to satisfy the criteria for the grant of a Subclass 892 (State/Territory Business Owner) visa, as set out in Part 892 of Schedule 2 to the Migration Regulations 1994 (the Regulations).

3. The delegate in this case refused to grant the visa on the basis that the visa applicant did not satisfy the requirements of cl.892.212 of Schedule 2 to the Regulations because the delegate found the applicant did not meet at least two of the requirements specified in cl.892.212.

4.    The applicant appeared before the Tribunal on 20 September 2019 to give evidence and present arguments. The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages. The applicant was represented in relation to the review by her registered migration agent. The representative attended the Tribunal hearing.

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 clause 892.212.

Requirements relating to applicant’s assets

7.    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:

a.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;

b.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;

c.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.

8.    There is no evidence before the Tribunal that the appropriate regional authority has 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 and / assets in the main business are met.

9.    The applicant provided to the Department evidence of her business and personal assets in order to satisfy cl.892.212(b) and (c).

1. To the Tribunal the applicant provided a number of further documents. She appeared at the hearing and explained the issue in dispute, namely the loan to Ms Li.

2. As did the delegate, I have assessed the applicant’s business and personal assets as at the time of visa application and throughout the period of 12 months immediately before the time of application.

Assessment of clause 892.212(b) at time of visa application

1. On the basis of the information before the delegate, as did the delegate, I accept that the applicant had business assets of AUD343, 333, according to the profit and loss statements and personal assets of AUD113, 500 of personal equity in her Melbourne property as at 30 September 2015. I find therefore, as did the delegate, that at the time of visa application, the net value of the business and personal assets in Australia of the applicant had a net value of at least AUD250, 000. There is no information before me to find that these were not lawfully acquired and I find that these assets were lawfully acquired.

Assessment of clause 892.212(b) in the 12 months prior to visa application

1. The delegate went on to assess the business and personal assets of the applicant as at 30 September 2014 and found that the demonstrated assets in the main business, Hua Yang Australia Pty Ltd as at that date totalled AUD81, 055, and that the demonstrated personal assets of the applicant in the Melbourne property were to the value of AUD113, 500.

2. The delegate did not accept the personal loan made by the applicant to Ms Li for mortgage repayments over the period 15 November 2010 to 16 January 2013, citing Departmental policy which specifies that ‘unsecured loans cannot be counted as a personal asset.’[1]

   [1] Departmental Policy - GenGuideM - Business visas - Visa application and related procedures - Loans - Source of funds and collateral

3. The applicant provided the delegate with a letter from a Chartered Professional Accountant (CPA) which quoted the Australian Accounting Standards Board (AASB) criteria for recognition of asset is: ‘An asset should be recognised in the statement of financial position when and only when: It is probable that the future economic benefit embodied in the asset will eventuate.’[2]

   [2] Df.143, see also Tf. 75 – 74, statement of accounting concepts.

4. The letter is also relevant because it indicates that the CPA acted for both the applicant and Ms Li, confirmed the details of the loan, and that the loan had been fully repaid by Ms Li in August 2015 (this is also supported by the applicant’s bank accounts). Taking this information into account, and on the criteria of the AASB, the CPA concluded that ‘According to above criteria, by the 16th of January 2013, the loan from Yan Suo to Yang Li shall be recognised as an asset, because it is probable that the future economic benefit embodied in the asset will eventuate, no matter if it is a secured or unsecured loan.’[3]

   [3] Df. 143.

5. On the Department file, and reproduced on the Tribunal file, are the bank accounts of the applicant and Ms Li which evidence the loan in the form of outgoings from the applicant’s account, and the repayment by Ms Li of the loan.

6. Before me the applicant explained that she had also had a written agreement with Ms Li which had been concluded in China on 22 October 2011.[4] She explained that she had not provided this earlier as she had understood that only documents from Australia would be acceptable. I accept this document established the loan between the applicant and Ms Li.

   [4] Tf. 74 – 72.

7. I note a view that the recovery of a debt, defined as a chose in action, may be considered an asset depending on the likelihood of recovery, and I note that this was considered in Bodenstein v MIAC[5], where the Court suggested that a chose in action could be an asset, although the Court was not required to decide on the matter. I have also had regard to AASB standard 137, which explains that a claim pursued through legal processes with an uncertain outcome is considered as a ‘contingent asset’ not recognised in financial statements to avoid recognition of income that may never be realised, but where the realisation of the income is probable it should be disclosed, and where it is ‘virtually certain’ it should be recognised as income in the financial statements.[6]

   [5] [2009] FCA 50.

   [6] AASB,  AASB Standard 137: Provisions, Contingent Liabilities and Contingent Assets, August 2015, 10-11.

8. I have considered the Departmental policy but I note firstly that policy cannot constrain decision makers to take no account of the relevant circumstances.[7] But further, I can find no clear intelligible justification in the policy for why an unsecured loan in all circumstances cannot be counted as a personal asset. It appears to me that this is an unnecessarily narrow interpretation of personal assets in cl.892.212(b). I find the AASB standards more compelling because they clearly set out when and how such a loan could and should be counted, and I am further persuaded by the Court’s comments in Bodenstein.

   [7] Re Drake and MIEA (No 2) (1979) 2 ALD 634.

9. Taking this approach, I have considered the loan. I have before me a document which provides the basis for the loan and agreement between the parties. This document states that there is redress for the applicant if Ms Li defaults – whilst there may be some difficulties with enforcement of this in the Australian jurisdiction, the applicant would have an equitable interest. I consider that this assists in establishing that the realisation of the income is probable. I have also placed weight on the letter from the CPA. I also have before me bank accounts of both parties which demonstrate that the loan was repaid to the applicant in August 2015. I find therefore that the loan is ‘virtually certain’ of being repaid, and taking into account all of the evidence before me, and the AASB standards I find that this personal loan, in this case, should be counted as an asset.

10. Having regard to the above, I find that the amount of the loan, AUD82, 000 is counted towards the applicant’s personal assets as a chose in action at the relevant date, being 12 months prior to the visa application. I have calculated the applicant’s business and personal assets at that time as AUD276, 555. This is above the required sum of AUD250, 000  business and personal assets.

11. On the basis of the above information and my findings on that information, I find that the applicant satisfies cl.892.212(b).

12. The delegate accepted, as do I, that the assets owned by the applicant in the main business had a net value of AUD81, 055 at 30 September 2014 and AUD343, 333 as at 30 September 2015 and the applicant therefore satisfies cl.892.212(c).

13. As the applicant has satisfied cl.892.212(b) and (c), the applicant satisfies cl.892.212.

14. . I note that the information before me indicates that the main business continues to operate. This information will be conveyed to the Department for their consideration.

Conclusion

1. Given the findings above, the Tribunal is satisfied that cl.892.212 is met. The appropriate course is to remit the matter to the Minister to consider the remaining criteria for the visa.

DECISION

1. The Tribunal remits the application for a Business Skills (Residence) (Class DF) visa for reconsideration, with the direction that the visa applicant meets the following criteria for a Subclass 892 (State/Territory Sponsored Business Owner) visa:

   ·cl.892.212 of Schedule 2 to the Regulations.

Sean Baker
Member