Tan (Migration)

[2020] AATA 1109

Tan (Migration) [2020] AATA 1109 (7 April 2020)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  

Ms Yuen Chun Tan

Mr Koon Wah Lim

Mr Syu Kuan Lim

Ms Si Xuan Lim

Ms Si Jie Joyce Lim

Mr Syu Yong Martin Lim

CASE NUMBER:  1822110

HOME AFFAIRS REFERENCE(S): BCC2017/952668 BCC2018/4195409

MEMBER:Susan Hoffman

DATE:7 April 2020

DECISION:The Tribunal makes no decision in respect of the following applicants as it has no jurisdiction to do so.

Mr Koon Wah Lim      

Mr Syu Kuan Lim

Ms Si Xuan Lim

The Tribunal affirms the decision not to grant the other visa applicants Business Skills (Residence) (Class DF) visas.

Statement made on 07 April 2020 at 1:28pm

CATCHWORDS
MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 892 (State/Territory Sponsored Business Owner) – jurisdictional issue – outside migration zone at time of review application – No jurisdiction – operation of main business for at least two years – ownership interest in main business – active operation during relevant period – no exporting activities – no sales income for more than one year – minimal expenses in BAS statements – decision under review affirmed

LEGISLATION
Migration Act 1958 (Cth), ss 65, 347
Migration Regulations 1994 (Cth), r 1.11; Schedule 2, cl 892.211

CASES
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

1. This is an application for review of a decision made by a delegate of the Minister for Home Affairs on 16 July 2018 to refuse to grant the visa applicants Business Skills (Residence) (Class DF) visas under s.65 of the Migration Act 1958 (the Act).

2. The applicants applied for the visas on 9 March 2017. 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 applicants in this case are seeking to satisfy the criteria for the grant of Subclass 892 (State/Territory Business Owner) visas, as set out in Part 892 of Schedule 2 to the Migration Regulations 1994 (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.

3. The delegate in this case refused to grant the visas on the basis that the first named visa applicant did not satisfy the requirements of cl.892.211 of Schedule 2 to the Regulations because he was not satisfied that the applicant was operating a main business in Australia for at least two years immediately before the application was made.

4.    The primary applicant (henceforth the applicant) and her husband, Mr Lim, appeared before the Tribunal on 27 February 2020 to give evidence and present arguments.   

5.    The applicants were represented in relation to the review by their registered migration agent who did not attend the hearing.

6.    For the following reasons, the Tribunal has decided that it has no jurisdiction to review the delegate’s decisions in relation to three of the applicants, and in relation to the other three applicants, the decisions under review should be affirmed.

CONSIDERATION OF CLAIMS AND EVIDENCE

Jurisdictional issue

7.    At the hearing the Tribunal drew the applicant’s attention to a jurisdictional issue with regard to review rights for her husband, Mr Koon Wah Lim, and two of their children, Mr Syu Kuan Lim and Ms Si Xuan Lim as they were not in Australia at the time the application for review was made (s. 347(3A) of the Act).

8.    In a post-hearing submission from her representative, the applicant conceded that they were out of the country at the relevant time. It was submitted that Mr Lim was required to be in Singapore at the time to attend to the business at the heart of this review; that he has played a crucial role in the business; and that he and the two children who do not have review rights would suffer great hardship if they were separated from the rest of the family because they were unable to reside in Australia.

9.    The applicant requested that the Tribunal did review the delegate’s decisions with regard to the three who do not have review rights. Unfortunately, this is not a matter in which the Tribunal has any discretion. As the three persons named in the preceding paragraph do not have review rights, the Tribunal cannot review the delegate’s decisions made for them.

Was the applicant operating a main business for at least two years in Australia immediately before the application was made?

1. The issue in this case is whether or not the applicant was operating a main business in Australia during the two years immediately prior to the application being made.

2. Clause 892.211(1) requires that the applicant had an ownership interest 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. The applicant must continue to satisfy this requirement at the time of this decision: cl.892.221(a). No more than two businesses can be nominated for this purpose (r.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.

3. The business relied on by the applicant to satisfy these requirements is Classic Ideas Lifestyle Pty Ltd. Accordingly, the Tribunal must consider the nature of the applicant’s interest in this business, whether the business was actively operating and whether it met the definition of ‘main business’ in the period commencing two years immediately prior to the date of application and as at the date of application. The Tribunal must also consider these issues as at the date of this decision and whether the applicant continues to satisfy cl.892.211(1).

4. According to the Australian Securities and Investments Commission (ASIC), the company was registered on 4 September 2012. Two shares were issued, both held by the applicant at that time and as at 30 January 2020. There was no record of them changing hands in the interim. The Tribunal is satisfied that the applicant meets the criteria with regard to her ownership interest.

5. The applicant provided the Department with a statement about the business as follows:

   Classic Ideas Lifestyle Pty Ltd established on 19 October 2013. It consists of home renovation and home improvement products (insect screens).

   My major responsibilities are as follows:

   1)    To provide overall business management and technical consultancy of marketing and fabrication of Australia insect screen to south east Asia, Singapore as regional overseas branch headquarters.

   2)    To liaise with supplier, Bunnings, to purchase insect screens raw materials and arrange the shipment from Fremantle port to Singapore.

   3)    In charge of overall management of business daily activities.

6. Accordingly, the Tribunal is satisfied that the applicant did have and does have an ownership interest in the nominated business at all relevant points in time.

7. In order to meet cl.892.211(1) the Tribunal must also 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.

8. 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’ during the relevant period, by actively seeking to generate business; by actually generating trade and custom; and by deriving some financial gain for its activities in the relevant period. (See Shahpari v Minister for Immigration and Border Protection [2016] FCCA 513 at [71].)

9. As the visa applications were lodged on 9 March 2017, the relevant two-year period – the application period - runs from 9 March 2015 to 8 March 2017.

10. Although the business was registered on 4 September 2012, according to ASIC records the ABN status was active from 19 October 2013, which was the same date it was registered for GST. The documents submitted by the applicants include documents dated September and November 2014 to do with shipping goods from Claremont (a Perth suburb) to Singapore. The goods were valued at AU$6,867 and described as ‘retractable screens’.

11. Based on Business Activity Statements (BAS), there was little to no business activity in the first year or so of the application period, as follows:

BAS quarter  Activity recorded

1 January to 31 March 2015          Non capital purchases             $224

1 April to 30 June 2015                Sales  $7,706  Non capital purchases                 $3,159

1 July to 30 September 2015          no activity

1 October to 31 December 2015     Non capital purchases             $727   Wages       $6,000

1 January to 31 March 2016          Non capital purchases            $4,236  Wages  $18,000  

1. In the following quarter, sales were recorded as $85,923 and wages as $18,000. From 1 April 2016, the figures in the BAS statement are indicative of a main business operating.

2. According to the BAS, the only sales income from 1 January 2015 to 31 March 2016 was $7,706 including GST in the 1 April to 30 June 2015 quarter. The profit and loss showed income to be $7,005 and it was described as ‘recipient’s contribution’. Adding 10% to $7,005 gives $7,706. The first applicant said that the money was her loan to the business, in which case it should not have been recorded as revenue in the profit and loss statement but as a balance sheet entry.

3. That means there was no income and certainly no sales income between 1 January 2015 and 31 March 2016, a period that covers more than a year of the two-year application period.

4. In a pre-hearing submission, the applicant contended that in April and May 2014, she and her husband negotiated a licence agreement with a supplier to be able to export flyscreens. They were being purchased from a Gold Coast company and exported to Singapore. The first two shipments were exported in August 2014 and October 2014. Throughout 2015, she and her husband travelled to make contacts and secure partner organisations overseas. In October 2015 they hit a problem and suspended shipments. The applicant had an accident in January 2016 which affected the business.

5. At hearing Ms Tan and Mr Lim spoke about what was involved in negotiating the license agreement and the Tribunal is satisfied that that required time and energy over a number of months. However those negotiations took place in 2014 which was before the application period.

6. The Tribunal enquired as to what was done with regard to the business during 2015, and particularly from March 2015. 

7. The documents show three agreements, each signed on 1 March 2015, between the applicant’s company and three Singaporean businesses; Classic Ideas Projects, Sun View Design and Hua Chong Plumbing and Renovation. The agreements stated that from 1 November 2015 a $9,000 loyalty fee was to be paid quarterly by each of the three Singaporean businesses. The Tribunal observed that the nominated business is Classic Ideas Lifestyle Pty Ltd and one of the agreements was made with a Singaporean business called Classic Ideas Projects. The Tribunal asked about the ownership of the latter. Mr Lim said that Classic Ideas Projects was owned by friends and family and people recommended by them who work in the renovation industry.  

8. The applicant said it took some time to arrange the agreements with the three Singaporean businesses, and the Tribunal accepts that would be the case. However, as the agreements were signed on 1 March 2015, the work involved in arranging them would have occurred before the start of the application period (9 March 2015).

9. With regard to what occurred between 1 March 2015 and when the first loyalty payment was to be paid on 1 November 2015, the second applicant said that during that period he passed on his technical knowledge about fitting the screens, and a marketing strategy was developed suitable for the Singaporean market. He explained that the screens were produced by cutting them to the size of a particular window and fit inside the window using the magnetic frame, which can be lifted at one edge to open and shut the window. The husband said that the insect screens were sold with 5 to 10 year warranties so had to be well made and it took time to train people to produce them from the raw materials and install them properly.

10. It is apparent from the documents that during June and July 2015, Ms Tan and/or Mr Lim were involved in developing brochures and leaflets to promote the flyscreens in Singapore. There was email correspondence between the applicant and another person regarding the artwork for them. Mr Lim said that they took Australian sales material with them to Singapore and the marketing materials developed in Singapore were based on them. These advertising materials were paid for by their Singaporean partners.

11. Mr Lim said that he commuted between Singapore and Australia twice a month and supervised what happened with the flyscreen product in Singapore. He said that his wife had the ideas and he did as she asked him to do. He said that there was a factory in Singapore owned by Classic Ideas Projects which was used to manufacture the screens from the materials sent from Australia.

12. Ms Tan said that she also travelled to Singapore, to help build relationships with potential partners and she scheduled what needed to be done, and her husband fitted in what he could when there was time. Mr Lim said that he had more technical knowledge than Ms Tan and would do demonstrations. He said that it was important that the partners signed the loyalty agreement in March 2015 before he showed them and passed on his knowledge about using the product. He had a video that he used to teach people about the product.

13. Mr Lim said that during 2015 they also looked into trading building materials, in addition to fly screens. Ms Tan confirmed that nothing was exported from Australia in 2015. She said that they were about to do that towards the end of 2015 but hit a problem with WA Business Migration Centre. The visa applied for is one that is sponsored by a state or territory. WA Business Migration Centre is the state agency responsible for approving nomination applications on behalf of the Government of Western Australia.

14. Ms Tan submitted emails from October and November 2015 between her and WA Business Migration Centre which showed they had a meeting on 16 November 2015.

15. In a statutory declaration dated 25 February 2020, Ms Tan wrote that their business plan had been rejected by WA Business Migration Centre, and as a result of this, shipments to their Singapore partners were suspended.

16. Ms Tan’s business was a WA-based business that had made an arrangement with a Gold Coast business and were exporting from the east coast of Australia. In her statutory declaration, Ms Tan explained that they were told they needed to change their business model such that they exported from Fremantle Port in WA rather than the Gold Coast.

17. Ms Tan submitted copies emails, quotations and receipts between the business and Bunnings in WA, showing that fly screen materials were purchased from June 2016 onwards.

18. In any event, nothing was exported during 2015. Ms Tan said, and has provided documents to support this, that she slipped in 13 January 2016 during a family holiday and injured herself badly. In her statutory declaration she wrote that she suffered a serious head injury, experienced severe headaches and nausea and was bedridden for several weeks after this accident.

19. Medical records show that she underwent a mini-craniotomy and washout on 29 February 2016. That and mention of SDH suggests she had a subdural haematoma. Invoices and other records indicate that she was treated at Sir Charles Gairdner Hospital between 28 February 2016 and 8 March 2016, and was an inpatient for four nights.

20. At hearing Ms Tan said that she was largely incapacitated from mid-January to early April 2016. She was not able to run the business at that time. Mr Lim said that he stayed in Australia to look after her and the children, and everything business-wise slowed down. They wanted to proceed with it but had to hold back.

21. Ms Tan also submitted brief minutes of meetings held with the Singaporean partners, Classic Ideas Lifestyles, as follows:

    ·     15 April 2015  attended by Ms Tan   

    ·     13 July 2015                   attended by Ms Tan               

    ·     5 October 2015                attended by Ms Tan

    ·     17 December 2015          attended by Ms Tan

    ·     19 January 2016              attended by Ms Tan

    ·     25 February 2016            attended by Mr Lim

22. Four were signed off by Ms Tan the day after the meeting and the last one was signed off by Mr Lim on 26 February 2016. These records are somewhat at odds with Ms Tan’s claim that she was bedridden for several weeks after the accident, which she claimed happened on 13 January 2016 yet she attended a meeting six days later. It may be that when the applicant wrote that she was bedridden for several weeks after the accident, she did not mean immediately after the accident, but that some time later she was bedridden because of it. The Tribunal will extend the benefit of the doubt on this point. The Tribunal accepts that Ms Tan attended meetings on the above dates, apart from 25 February 2016.

23. Returning to the agreements made with the three Singaporean businesses, these stated that from 1 November 2015 a $9,000 loyalty fee was to be paid quarterly by each of them. That would suggest that $27,000 in sales would show in the BAS statements for the business for the quarters ended 31 December 2015 and 31 March 2016, but each of these BAS statements shows nil sales.

24. Based on the BAS statements, it appears the first loyalty payments were made in the quarter from 1 April 2016 to 30 June 2016, five or six months later. The Tribunal asked why the delay in the loyalty payments being made as the signed letters said that they were to start from 1 November 2015. Mr Tan said that they gave them more time and that Ms Tan’s medical issue affected the delay.

25. The Tribunal asked if the business raised invoices for these items. Ms Tan said that she emailed the partners to remind them to pay. The Tribunal was not satisfied that this explanation was satisfactory, in particular the reference to Ms Tan’s medical issue. The first payment was due 1 November 2015 and she had her accident more than two months later, in mid-January 2016.

26. The minutes of the meeting held 5 October 2015 had as an agenda item “Highlight the commencement of the Loyalty fees payment”. The only action item recorded in the minutes was “Loyalty fees payments from 1 November 2015”.

27. The minutes from the meeting of 17 December 2015 had as an agenda item “Discuss the loyalty fees”. There was no action item listed to do with the loyalty fees.

28. The minutes of the 19 January 2016 and 25 February 2016 meetings both list agenda items “Update the Loyalty fees” but nothing under action items in relation to them.

29. The Tribunal was not satisfied that the explanation given for the delay in loyalty fees was adequate. Further the Tribunal is of the view that as there were signed agreements for these payments to be made on a particular date, if there was a delay agreed between the parties there would be a record of the agreed delay in the minutes or another document.

30. The Tribunal notes that the BAS statements show nil expenses for the quarter 1 July 2015 to 30 September 2015, and only $727 for the quarter 1 October 2015 to 31 December 2015. This is not consistent with a business that was operational during that period.

1. The Tribunal asked if the expenses incurred in travelling to Singapore had been charged to the company. Mr Lim said that were not. He said that he had his own construction company there, building houses and that was also why he commuted as much as he did between Australia and Singapore. He said that he employed less than 20 people, of whom about five were local people and the others were foreign workers.

2. The Tribunal referred to the requirement for Ms Tan as the main applicant to 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.

3. The Tribunal expressed its concern that there did not seem to have been enough that had happened to do with the nominated business from 9 March 2015 for the next nine or ten months that would require day to day management.

4. Mr Lim made the valid point that developing a business like this was not like running, for example, a café where a person has to be on site every day. He referred to the time taken to source supplies, establish relationships with suppliers, and develop and maintain relationships with prospective partners. He spoke about the time it had taken to develop a relationship with Freedom, the Gold Coast based company, who was the first supplier they had. However, establishing a relationship with Freedom occurred in 2014 and the agreements with the three partners were reached before the start of the application period on 9 March 2015.

5. Ms Tan referred to meetings she had with the business partners. She said those happened every two months and sometimes there were phone calls in between. Mr Lim said that it was Ms Tan who had the ideas and he would follow her direction. She was the one with ideas about the marketing material.

6. The second applicant directed the Tribunal’s attention to Shahpari[1] which considered the meaning of ‘actively operating’, a phrase that appears in cl. 892.211(1). That clause requires that the applicant had an ownership interest in one or more actively operating main businesses.

   [1] Shahpari v Minister for Immigration and Border Protection [2016] FCCA 513

7. The Tribunal is not satisfied that the main applicant has met that test during the application period as it is not satisfied that there was enough activity such that the business was actively operating during the first year of the application period, in particular the period of about ten months from 9 March 2015 to when the applicant had her accident.

8. The business model, according to the applicants, was to export fly screen material to Singapore. No exports occurred during 2015 and the first in 2016 was after the end of the first year of the application period.

9. There were no sales during 2015 or in the first quarter of 2016. The first applicant said that the wages recorded in the BAS statements for quarters ended 31 December 2015 and 31 March 2016 were paid to her. There were no expenses incurred during the quarter 1 July 2015 to 30 September 2015 and only $727 in expenses for the following quarter.

10. The business-related activities identified by the applicant that she engaged in from 9 March 2015 were as follows:

    ·     Attended a meeting   15 April 2015

    ·     Arranging for brochures and leaflets to be designed      June /July 2015

    ·     Attended a meeting   13 July 2015

    ·     Attended a meeting   5 October 2015

    ·     Emails/meeting with WA Business Migration Centre      October/November 2015

    ·     Attended a meeting   17 December 2015

    ·     Attended a meeting  19 January 2016

11. As BAS statements were completed and submitted, the Tribunal accepts that the first applicant also undertook general administrative work in relation to the business. She said that she also had meetings every two months and had phone calls in between.

12. The main applicant said that when she travelled to Singapore, as she did a number of times during the application period, she spoke to, for example, the business partners there. However it is apparent that the trips to Singapore were not just for purposes related to the nominated business. The applicants have property there where they stay when they are in Singapore. The second applicant has a construction business there which employs up to 20 people. The Tribunal accepts his evidence that when he was in Singapore during 2015, he did spend time with the business partners showing them how to put together the fly screens.

13. The Tribunal formed the view that the applicants were genuine in wanting to build the fly screen business and put a lot of time and energy into it in 2014. However during the first year of the application period in particular, the Tribunal is not satisfied that the applicant demonstrated activity in an enterprise of a repetitive, continuous and permanent nature. They made no sales. They had a relationship with three Singaporean businesses that had been established before the application period. Although payments from them were supposed to start in November 2015, none were made until after 1 April 2016. No goods were exported in 2015 and the first shipment in 2016 was after the end of the first year of the application period. The Tribunal accepts that advertising material was designed and produced and contact maintained with the three businesses. The Tribunal considers that the activity associated with the applicant’s business during the first year of the application period is better characterised as sporadic.

14. Further, the applicants acknowledged that the business was on hold from about mid- January 2016 to early April 2016 because of the main applicant’s accident.

15. The Tribunal delayed making its decision after the hearing to give the applicants opportunity to submit further evidence of their activities during the application period, and other evidence more focused on recent business activities.

16. The post-hearing submission was dated 24 March 2020. With regard to the application period, no new evidence was submitted. The Tribunal was referred to evidence submitted on 25 February 2020, which it has already covered in some detail.

17. The Tribunal is satisfied that the applicant has and continues to have an ownership interest in Classic Ideas Lifestyle Pty Ltd but is not satisfied that the business was actively operating for at least 2 years immediately before the application was made on 9 March 2017.

18. The Tribunal was not satisfied therefore that the criteria set out in cl. 892.211(1) were met.

CONCLUDING FINDINGS

1. The Tribunal has no jurisdiction to review the decisions made in respect of Mr Koon Wah Lim, Mr Syu Kuan Lim and Ms Si Xuan Lim

2. In relation to the primary applicant, Ms Tan, given the findings above, the Tribunal is not satisfied that cl.892.211(1) is met. As one of the essential requirements for the visa is not met, the decision under review must be affirmed.

3. With regards to the other two secondary applicants , Ms Si Jie Joyce Lim and Mr Syu Yong Martin Lim, they applied for Business Skills (Residence) (Class DF) Subclass 892 visas on the basis of being members of the same family unit as an applicant who meets the primary criteria for this visa.

4. There was no evidence before the Tribunal that any of the afore-mentioned two secondary applicants could meet the primary criteria in their own right. As the Tribunal has found that the primary applicant does not meet the primary criteria, the visa applications made by the secondary applicants cannot be granted.

DECISION

1. The Tribunal affirms the decision not to grant the applicants Business Skills (Residence) (Class DF) visas.

Susan Hoffman
Member

ATTACHMENT - LEGISLATION

Migration Regulations 1994

892.211

(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

892.221

The applicant:

(a)  continues to satisfy the criteria in clauses 892.211 and 892.214; and

(b)  if the applicant met the requirements of paragraph 892.212(b), continues to meet those requirements