Wang (Migration) - [2021] AATA 1333

Wang (Migration) [2021] AATA 1333 (12 March 2021)

DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANTS:  Mr Zhu Wang
Mrs Shaolin Zhao
Mr Zhubin Zhao
Miss Rui Zhao
CASE NUMBER:  1929535
DIBP REFERENCE(S): BCC2017/4207872 BCC2017/4517744
MEMBER:Peter Ranson
DATE:12 March 2021
PLACE OF DECISION:  Brisbane
DECISION:The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction the first named visa applicant meets the following criteria for a Subclass 890 (Business Owner) visa:
·cl.890.211(1) and cl.890.212 of Schedule 2 to the Regulations.

Statement made on 12 March 2021 at 4:18pm

CATCHWORDS
MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 890 (Business Owner) – ‘ownership interest’ – active operation of business – arm’s length customers – definition of ‘main business’ – continuous involvement in day-to-day management of business – value of net business assets – related party loans – lawful acquisition of assets – decision under review remitted

LEGISLATION
Migration Act 1958 (Cth), ss 65, 134
Migration Regulations 1994 (Cth), rr 1.11, 1.11A; Schedule 2, cl 890.211, 890.212

STATEMENT OF DECISION AND REASONS

Table of Contents

APPLICATION FOR REVIEW

CONSIDERATION OF CLAIMS AND EVIDENCE

Ownership interest in main business

Does the applicant have an ownership interest in each business relied on at all relevant times?
Was each business relied on actively operating at all relevant times?
Does each business relied on satisfy the ‘main business’ definition at all relevant points in time?

Adjusted net business assets

Shareholder loan of $180,000
Assets lawfully acquired

DECISION

ATTACHMENT B – Balance Sheets of IHome Group Pty Ltd

APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Immigration on 1 October 2019 to refuse to grant the visa applicants Business Skills (Residence) (Class DF) visas under s.65 of the Migration Act 1958 (the Act).
The delegate identified the applicants applied for the visas on 9 November 2017. Certain criteria must be satisfied during the two-year period ending immediately before the date of application, so for the purpose of this decision that is, 9 November 2015 to 8 November 2017 (the Relevant Period).
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 890 (Business Owner) visas, as set out in Part 890 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 890.2. The others need only to satisfy the secondary criteria set out in Subdivision 890.3.
The delegate in this case refused to grant the visas on the basis the first named visa applicant, Mr Zhu Wang, (the Applicant) did not satisfy the requirements of cl.890.212 of Schedule 2 to the Regulations because, by the delegate’s calculations, the net business assets of the Applicant and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] AATA 1333
Decision Date: 12 March 2021

CaseChat Overview and Summary

The Administrative Appeals Tribunal considered the case of Wang, an applicant for a Business Skills (Residence) (Class DF) visa, subclass 890 (Business Owner). The dispute concerned whether the applicant met the criteria for an "ownership interest" in an actively operating "main business" in Australia, specifically relating to the business IHome Flooring, conducted by IHome Group Pty Ltd. The Tribunal was tasked with reviewing the delegate's adverse finding regarding clause 890.212 of the Migration Regulations 1994, and also considered clause 890.211(1).

The primary legal issues before the Tribunal were to determine the nature of the applicant's interest in IHome Flooring, whether it constituted an actively operating "main business" for the requisite periods, and to verify the applicant's loan to the nominated business. The Tribunal was required to assess the applicant's ownership interest in the business, defined as a shareholder, partner, or sole proprietor, including indirect interests, and to ascertain if the business was actively operating and met the definition of a "main business" both two years prior to the visa application and at the time of the application.

The Tribunal reasoned that a business is an enterprise or undertaking, distinct from a legal entity, and therefore it was crucial to identify the specific business to which the definition of "main business" applied. It noted that ownership could be held through various structures, including companies, partnerships, or trusts, and that beneficial ownership could be considered if properly evidenced. The Tribunal also acknowledged that one business could be owned by multiple entities, and vice versa. The case was remitted for reconsideration, indicating that the delegate's adverse finding on clause 890.211(1) and potentially other criteria required further assessment.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

For the following reasons, the Tribunal has concluded the matter should be remitted for reconsideration. The issues in this case are the calculation of net business assets and verification of the Applicant’s loan to the nominated business. In accordance with the President’s Direction[3], the Tribunal will only address those elements of the criteria on which the delegate made an adverse finding, being the satisfaction of cl.890.212. In addition, the Tribunal has also considered cl.890.211(1).[3] Presidents Direction for Conducting Migration and Refugee Reviews dated 1 August 2018 Clause 890.211(1) requires 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.[4] No more than two businesses can be nominated for this purpose[5] and one or both businesses relied on to meet the time of application criterion can be relied on to meet the time of decision criterion.[6][4] cl.890.221(a)[5] r.1.11(2)[6] Yang v Minister for Immigration and Border Protection [2014] FCCA 1576 The business relied on by the applicant to satisfy these requirements is retail sales and installation of flooring materials known as IHome Flooring (IHome Flooring) conducted by IHome Group Pty Ltd ACN 167 852 575 (IHome Group). 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. Case law has established a business is not a legal entity but rather an enterprise or undertaking. It is therefore important for the Tribunal to identify the business to which the definition of main business must be applied. It is also important to note that one business can be owned by multiple entities and conversely, multiple businesses can be owned by one entity. For the avoidance of doubt, an Australian Business Number (ABN) attaches to an entity, not to a business. An ‘ownership interest’, in relation to a business, means an interest in the business as:(a)a shareholder in a company that carries on the business, or(b)a partner in a partnership that carries on the business, or(c)the sole proprietor of the business;including such an interest held indirectly through one or more interposed companies, partnerships or trusts.[7] Ownership for this purpose includes beneficial ownership if it is evidenced in accordance with the terms of r.1.11A of the Regulations, set out in the attachment to this decision: r.1.11A(1).[7] r.1.03 of the Regulations and s.134(10) of the Act In order to meet cl.890.211(1) the Tribunal must be satisfied the applicant had an interest of this kind in the relevant business or businesses both at the time of making that application and for the two years immediately before.