Warnakula Weerasuriya (Migration)

[2019] AATA 2500

Warnakula Weerasuriya (Migration) [2019] AATA 2500 (14 February 2019)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mr Sarath Jayatilake Warnakula Weerasuriya
Mrs Fatima Nilmini Jayatilake
Mr Samadi Shenal Jayatilake Warnakula Weerasuriya

CASE NUMBER:  1614715

DIBP REFERENCE(S):  BCC2015/3204998 BCC2015/3205102 BCC2015/3205103 BCC2016/2440643

MEMBER:Alison Mercer

DATE:14 February 2019

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal remits the application for Class DF subclass 892 (Business Skills) (Residence) visas for reconsideration, with the direction that the first named applicant meets the following criteria for a subclass 892 visa:

·cl.892.211(1) of Schedule 2 to the Regulations.

Statement made on 14 February 2019 at 6:52pm

CATCHWORDS

MIGRATION – Business Skills (Residence) (Class DF) – Subclass 892 (State/Territory Sponsored Business Owner) – ownership interest in 1 or more actively operating main business in Australia for at least 2 years before application – use of 3 entities – registered business operated for less than 2 years – main business operated consecutively through 3 entities for required timeframe – decision under review remitted

LEGISLATION

Migration Act 1958 (Cth), ss 65, 134(10)
Migration Regulations 1994 (Cth), Schedule 2 cl 892.211, rr 1.03, 1.11

CASES

Nassif v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 48

Yang v Minister of Immigration [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 Immigration on 2 September 2016 to refuse to grant the visa applicants Business Skills (Residence) (Class DF) subclass 892 visas under s.65 of the Migration Act 1958 (the Act).

2.       The visa applicants applied for the visa on 2 November 2015. The delegate refused to grant the visas on the basis that the first named applicant (the applicant) did not meet cl.892.211, which requires that the applicant had had, and continued to have, an ownership interest in 1 or more actively operating main businesses in Australia for at least 2 years immediately before the visa application was made. The delegate found that the applicant had nominated his main business as Chris Cleaning and Site Services WA Pty Ltd, but that this business only started actively operating on or about 1 July 2014.

3.       The applicant also refused to grant subclass 892 visas to the second and third named via applicants (the applicant’s wife and son) on the basis that they did not meet the secondary visa criteria to be members of the family unit of a person who held a subclass 892 visa, and there was no evidence that they met the primary visa criteria in their own right.

4.       The Tribunal received a review application from the applicants on 13 September 2016.  It was accompanied by a copy of the delegate’s decision and an authority by which the appointed a registered migration agent, Mr Lester Ong, as their representative and authorised recipient for correspondence.

5.       On 11 May 2017, the Tribunal received a submission with supporting documents from the applicants’ agent.

6.       On 16 October 2018, the matter was constituted to a Tribunal Member. On 19 October 2018, the Tribunal wrote to the applicants via their agent to invite them to attend a hearing on 7 December 2018.

7.       The first and third named applicants appeared before the Tribunal on 7 December 2018 to give evidence and present arguments. The Tribunal also received oral submissions from the applicants’ agent, and additional character references for the applicant.

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

CONSIDERATION OF LAW, CLAIMS AND EVIDENCE

9.       The issue in the present case is whether the applicant meets cl.892.211, which in turn requires consideration of the definitions in s.134(10) for ‘ownership interest’ and in r.1.11 for ‘main business.’  The relevant provisions are as follows:

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.

…

[1.11] (1)      For the purposes of these Regulations and subject to subregulation (2), a business is a main business in relation to an applicant for a visa if:

(a)      the applicant has, or has had, an ownership interest in the business; and

(b)      the applicant maintains, or has 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; and

(c)      the value of the applicant’s ownership interest, or the total value of the ownership interests of the applicant and the applicant’s spouse or de facto partner, in the business is or was:

(i)      if the business is operated by a publicly listed company — at least 10% of the total value of the business; or

(ii)      if:

(A)      the business is not operated by a publicly listed company; and

(B)      the annual turnover of the business is at least AUD400 000;

at least 30% of the total value of the business; or

(iii)      if:

(A)      the business is not operated by a publicly listed company; and

(B)      the annual turnover of the business is less than AUD400 000;

at least 51% of the total value of the business; and

(d)      the business is a qualifying business.

[1.11] (2)      If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses

…

s.134(10)

…

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;

…

10.    As per r.1.03, a ‘qualifying business’ is an enterprise that is (a) is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public; and (b) is not operated primarily or substantially for the purpose of speculative or passive investment.

11.    The delegate found (and the Tribunal concurs) that the relevant period for consideration is the 2 years immediately before 2 November 2015; that is 1 November 2013 to 1 November 2015.

12.    The delegate noted that although the applicant listed 1 main business in his form 1217, being Chris Cleaning and Site Services WA Pty Ltd (ABN 92600974883), in which he had a 100% ownership interest, some of the documentary evidence he provided appeared to relate to a another business with a different Australian Business Number (ABN), Chris Cleaning and Site Services (ABN 37687632633). The BAS provided for Chris Cleaning and Site Services WA Pty Ltd were from 1 July 2014 onwards, and therefore the delegate concluded that this business was only actively operating from that date, which was less than 2 years prior to the date of lodgment of the visa application.

13.    The delegate noted that the applicant indicated that he had essentially operated his cleaning business throughout the whole 2 year period before making the subclass 892 visa application, but that he initially operated it as a sole proprietor, then as a partnership before incorporating it as a registered company on or about 1 July 2014. However, the delegate found that as the applicant had not listed either of these 2 entities (being a sole trader business under the applicant’s name, and a partnership under the applicant and his wife’s name, each with a different ABN number to the nominated company), they could not be included as his main businesses for the purposes of cl.892.211.

14.    On 11 May 2017, the applicant’s agent made a detailed legal submission to the Tribunal disputing this finding and providing the context of the applicant’s business operations. The submission was accompanied by a range of supporting documents.

15.    In summary, the applicant’s agent made the following points:

·the applicant was a 62 year old citizen of Sri Lanka. Prior to migrating to Australia, he had built a successful business there known as ‘Chris’ Farm Products;’

·in or about 2007 , the applicant began exploring the possibility of migrating to Australia as a business, and in 2011, he and his family were granted subclass 163 provisional business skills visas. They arrived in Perth in November 2011. Shortly after arrival, the applicant decided to establish a cleaning business;

·he met with a migration agent, Graham Scarratt, to advise him of the relevant requirements. He commenced trading as a sole proprietor in or about April 2012 using the business name ‘Christ Cleaning’ under ABN 15 206 808 590 (the name was incorrectly registered as it should have been ‘Chris Cleaning’);

·on 18 December 2012, the applicant restructured the business into a family partnership, to include his wife and children as co-owners in the business, and registered the business name ‘Chris Cleaning and Site Services’ under the partnership, with ABN 37 687 632 633;

·the business continued to operate in much the same manner, using the same bank account and with the same clients. In or about July 2014, a potential business client, Cleanindustrial Pty Ltd, advised the applicant that the business could not tender for Cleanindustrial’s work because their insurance only covered subcontractors who were companies. The tendered job was worth over $100,000 per year and so to secure Cleanindustrial as a client, the applicant arranged to restructure the business as a company;

·on 31 May 2012, the partnership was discontinued and the business continued to trade through the company under ABN 92 600 974 883;

·because of the change in entity, the applicant had to establish a new bank account. He therefore directed to clients to pay into the new account;

·in or about November 2014, the applicant commenced the process to lodge his subclass 892 visa application. At the time, Mr Scarratt did not advise him that there could be an issue due to the fact that the applicant had conducted his business using 3 different entities;

·on 12 May 2015, the applicant received state nomination approval from the WA Small Business Development Corporation;

·when preparing the form 1217, the applicant was not told by Mr Scarratt that he had to list each business entity and so the applicant simply stated that he had conducted his business through ‘Chris Cleaning and Site Services WA Pty Ltd’ since May 2012;

·consistent with this, the applicant stated in his form 80 that he had been the owner of Chris Cleaning and Site Services WA Pty Ltd from June 2012. He lodged the subclass 892 visa application on 2 November 2015;

·r.1.11(2) provides that an applicant must not nominate more than 2 of the qualifying businesses as main businesses. R.1.03 defines a ‘qualifying business’ as an enterprise that is ‘operated for the purpose of making profit through the provision of goods, services or goods and services…’. The term ‘business’ was not specifically defined in the Act or Regulations, and it was submitted that therefore, the ordinary meaning applied;

·importantly, the Regulations did not require that a business be conducted through one entity only;

·the Department’s Procedures Advice Manual/PAM3 Gen Guide M states at paragraph 30 that ‘To be eligible for one of these visas [… subclass 892…] an applicant can nominate for consideration up to two main businesses that meet the specified requirements. The same business would then be assessed against all main business requirements…’ It was submitted that this did not specify how a main business was to be nominated, and neither did the Regulations;

·in fact, in the relevant period, the applicant had and continued to have an ownership interest in one or more actively operating main businesses in Australia;

·it was submitted that the delegate erred in failing to understand that (1) the meaning of the term ‘main business’ did not require the business to be conducted by one entity only, (2) even if it could be said that the businesses conducted by the sole proprietorship, partnership and company were separate businesses (which was denied), the partnership business and the company business (both of which were conducted in the relevant period) should be taken into account in assessing cl.892.211(2), and (3) that the delegate was not bound by what had been specified in form 1217 as being the nomination;

·it was submitted that it was open to a decision maker to find that the applicant had an ownership interest in, and conducted, one ‘main business’ despite conducting that the main business through 3 different entities. In Yang v Minister of Immigration [2014] FCCA 1576, Driver J state at paragraph [60] that ‘I am bound by the proposition that ownership structure is not necessarily irrelevant to the application of the main business criteria. The identification of ‘the business’ for those criteria is left to the Tribunal. Importantly, where an applicant claims a single ‘business’ is transacted through multiple entities, the Tribunal is entitled to consider the ownership structure of each entity at any time it thinks relevant in order to work out whether it accepts the applicant’s identification of the ‘business.’ Having identified the ‘business,’ the Tribunal is bound by the definition of ‘main business.’ The Tribunal is entitled to consider the ownership arrangements of any relevant entity at any time for the purpose of identifying the ‘business’ from part of the definition of the ‘main business;’

·the same approach was taken in Nassif v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 481, where Branson J held that the Tribunal had made a mistake by not considering that it was possible for the applicant who ran a construction business through up to 4 different entities could have, in effect, been conducting one ‘main business’ through these entities;

·the law is therefore clear that it is possible to have an ownership interest in a ‘main business’ through more than one entity;

·it was submitted that the cleaning business conducted by Chris Cleaning and Site Services WA Pty Ltd was one and the same business as the one (1) begun as a sole proprietorship in April 2012, and (2) conducted by the partnership from December 2012. This was evident from the fact that when the business transitioned from a sole proprietorship to a partnership, it continued to use the same bank account. A new bank account was only set up when the company was incorporated because it was a requirement of the bank itself. However, the old and new bank statements clearly showed payments by the same clients of the business;

·importantly, the business retained the same assets despite the changes in its legal entity, and its nature and operations remained the same throughout, as did its client base. The applicant believed it was the same business, as evidenced by his responses in the form 1217 and form 80. It was therefore submitted that the applicant conducted on or more main businesses through 3 different entities;

·even if the partnership and company were treated as separate businesses (which was not accepted), it was submitted that the decision maker ought to find cl.892.211 satisfied as the applicant had ownership interests in both of these businesses throughout the 24 month prior to the application;

·PAM3: Sch 2 Visa 892 states at paragraph 4.2 that ‘…the policy intention is that the 24 month period of ownership can be satisfied through consecutive ownership of businesses, where one main business may not have been owned for the full 24 month period…’ PAM3 therefore recognised the ability to combine the 2 main businesses which were operated sequentially. It was therefore submitted that even if the partnership and company were considered to be separate businesses, they ought to have both been assessed as ‘main businesses’ operated by the applicant in the relevant period;

·although the delegate found that the applicant had not nominated either the sole proprietorship or partnership in the form 1217, it was submitted that the applicant had used the form 1217 to nominate his ‘main business’, not the entity which carried on the business. Alternatively, the businesses were impliedly nominated in the form 1217, and there was no legal requirement that businesses had to be nominated using form 1217. Therefore, the fact that the applicant did not specify the partnership business in the form 1217 was immaterial;

·in Nassif’s case, the applicant completed a form 1138 for a subclass 845 visa by filling in the spaces provided for information concerning ‘main business one.’ He did not fill in the spaces provided for information concerning ‘main business two.’ The applicant wrote ‘Holdmark Pty Ltd’ in the space for the provision of business name. The Minister in that case argued that by completing the form 1138 in the way in which the applicant did, the applicant limited his claim to his interest in Holdmark Pty Ltd, but Branson J observed at paragraph [36] that : ‘There is reason to think that the way in which the applicant completed form 1138 was significantly influenced by the format of the form itself. In any event, the Tribunal… has an inquisitorial role… The Tribunal is required to respond to the case that the applicant before it actually advances…’ Given that the applicant had clearly not based his claim solely on his interest in Holdmark, the Court held that the Tribunal was bound to consider the other entities put forward by the applicant;

·at paragraph [45], Branson J stated: ‘I note further that it would seem to be desirable for the format of form 1138 to be reconsidered. Its present format has a tendency to lead an applicant to name a single business entity as the applicant’s ‘main business’ notwithstanding that it might not be appropriate to do so;’

·in the present case, the applicant clearly put forward the cleaning business for assessment, despite only writing the name of the company in the form 1217. The applicant referred to a business start date of 30 May 2012 (the approximate date the sole proprietorship began) and provided supporting documents with the application relating to the partnership, which he clearly intended the delegate to consider;

·therefore, the delegate erred in discounting the partnership business simply because it had not been specifically listed in the form 1217, and nothing in PAM3 suggests that the only means of nominating a business was through form 1217; and

·in light of the above, it was submitted that the applicant satisfied cl.892.211(1) and the matter should be remitted on that basis.

16.    The supporting documents included:

·a statutory declaration from the applicant dated 27 April 2017;

·payroll activity summary statement for Chris Cleaning and Site Services WA Pty Ltd for period 1 July 2015 to 30 June 2016;

·ABN registration for sole trader Mr Sarath Jayatilake Warnakula Weerasuriya (trading as Christ Cleaning), ABN 15 260 808 590, dated 10 April 2012;

·ABN registration for family partnership F Jayatilake & S S Warnakula Weerasuriya & S J Warnakula Weersuriya & S Warnakula Weerasooriya, ABN 37 687 632 633, dated 1 January 2013;

·documentation relating to the purchase of business vehicles by the applicant in 2012 and 2013;

·bank account in the name of the applicant and his wife for period 16 June 2012 to 15 June 2013;

·ABN records for Chris Cleaning and Site Services WA Pty Ltd, ABN 92 600 974 883, business name Chris Party Supplies and Event Planning (1 September 2016);

·email correspondence between the applicant and Cleanindustrial regarding the need for the applicant to incorporate a company to tender for a stripping and sealing subcontract, July 2014;

·business bank account for Chris Cleaning and Site Services WA Pty Ltd, 27 July 2015 to 30 September 2015;

·Form 949 lodged by the applicant on 30 May 2014 seeking state/territory sponsorship for his cleaning services business, approved by the WA Small Business Development Corporation on 12 November 2015; and

·copy of the applicant’s form 1217.

17.    In his statutory declaration, the applicant essentially provides greater detail about his life and business experience prior to migrating to Australia, and confirms the points made by his agent in the submission regarding the initial set up of his business as a sole proprietorship, its conversion to a partnership and, finally, its incorporation as a company under Australian law. He specifically states that even though he conducted his cleaning business through 3 different entities since arriving in Australia on his subclass 163 visa, it was one and the same business, and he did not intend the delegate only to consider the activities of Chris Cleaning and Site Services Pty Ltd in relation to his subclass 892 visa.

18.    Relevantly to the review, he stated as follows regarding the different entities utilised to run his cleaning business:

…

34. [Mr Scarratt] advised me early on regarding the targets that I had to meet so I was very conscious of the fact that my business had to turn over more than $200,000. I would carefully monitor the contracts that were coming in, so for example, if I had only $100,000 worth of contracts, I would then look for more contracts so that I could ensure that I would have a turnover of $100,000.

35. My wife, my son and I worked in the business initially, because I wanted to make sure that there was quality control and we had to build our reputation first. My philosophy was that we would do over and beyond what our clients expected, including cleaning in places that were not visible or above cupboards and cabinets so we would do a thorough job once and for all and would not be asked to go back to rectify our work.

36. When the business first started, my son as helping with the invoicing whilst he was finishing high school before he started studying a Bachelor of Science degree in Cyber Security… My wife supervised all the manpower and scheduling of the cleaning.

37. As the business grew, I was then required to put on more staff and now we employ 20 – 25 people on a casual basis in the business. They are equivalent to about 10 full-time workers…

38. Whilst my son deals with all the payments, I also have an external accountant by the name of Nadun Alwis, who handles our accounts.

The Sole Proprietorship: ABN 15 260 808 590

39. When I first started my business in or about April 2012, my accountant was [redacted]. [He] did not provide me with any advice about what structures I could run my business throgh and simply set me up as a sole trader…

40.The ABN for the sole proprietorship was 15 260 808 590. It has since been cancelled.

41. I believe that I did not receive proper guidance from Don for my finances so I had to change to a new accountant, namely Nadun Alwis. Nadun took over my accounts in October 2015.

42. When I started the business, my main client was Westralian Pty Ltd, which was a cleaning contractor, and we subcontracted under them.

43. As we provide exclusive cleaning service to:

(1) Liquorland and Dan Murphy stores;

(2) Red Dot stores;

(3) Perth Zoo;

(4) Local councils;

(5) offices;

(6) Qantas Domestic Terminal

We began employing employees and subcontractors after about 6 months.

The Partnership: ABN 37 687 632 633

45. Towards the end of 2012, I thought that we should show my wife and children are co-owners in the business so I can show Immigration Department that the whole family was involved in the business. Accordingly, I decided to run the business through a partnership instead of a sole trader.

46. When I asked [my then accountant] about this, he simply registered a partnership comprising of me, my wife, my son and my daughter and then registered an ABN against it…

47. The partnership ABN was 37 687 632 633. [The accountant] also registered the business name ‘Chris Cleaning and Site Services’ to the partnership. I included the name ‘Site Services’ since I wanted to do construction and building industry cleaning I thought I should highlight that in my business name.

48. The partnership started running the business from 18 December 2012.

49. As the business began to grow, from 2013 onwards, I began purchasing vehicles for use in the business… At that time, I wasn’t aware that it would be better to have all my vehicles under my business. Later on, upon my new accountant’s advice, all my renewed vehicles were purchased under my business.

50. By then I had four vehicles in the business plus cleaning equipment.

51. Whilst I was relying on [my accountant], he did not say anything about what had to be done in terms of transferring my assets from the sole proprietorship to the partnership. He did not provide any advice to me about the fact that the partnership and the sole proprietorship could be considered to be different businesses. Accordingly, I thought that they were one and the same business.

52. I continued doing what I had been doing all this time and the customers continued to pay monies into the same bank account…

53. Even though I was involved in business management in Saudi Arabia and Sri Lanak, the business structures were different and I did not understand that in Australia, changing structures would be a problem.

54. It was after [my accountant] submitted my tax returns and caused me a tax liability did I lose confidence in him as my accountant. That was when I appointed Nadun to replace him. This would have been in or about October 2015.

The Company: ABN 92 600 974 883

55. In or about July 2014, I decided to incorporate Chris Cleaning and Site Service WA Pty Ltd to run the business.

56. The ABN for the company is 92 600 974 883…

57. The reason for incorporation was because one of our potential customers, namely Cleanindustrial Pty Ltd, said that we could not tender for their work because their insurance only covered proprietary limited companies…

58. Because the job was worth over $100,000 per year, I thought it was critical to my business to be able to secure Cleanindustrial as a client and so I had to do what was necessary. They were also good paymasters and paid a good rate.

59. [Redacted] was still my accountant at the time. When I told him about using a company, he simply told me that I would have to pay his fees to incorporate the company… and he would then get it organised.

60. I paid [him] and he incorporated the company… and also registered the ABN. He also organised for the business name to be transferred.

61. He did not tell me anything about whether the business assets had to be transferred across to the new company.

62. The only difference now was that I had to set up a new bank account, which I did…

63. I subsequently directed clients to pay our invoices into our new account, rather than the old one (which was in the name of me and my wife). I didn’t think much about transferring the contracts and clients were quite happy to continue working with me, despite the change to the entity.

64. In any event, I considered that it was the same business as before, only that I was using a different entity to run it.

65. We were successful in our tender with Cleanindustrial.

66. After that, using the company, we were also able to get the contract for GJK Pty Ltd to provide cleaning services as the Perth International and Domestic Airports.

67. Now our business has been running for about 4 years and our turnover is between $300,000 and $350,000 per annum, with $100,000 to $150,000 in net profits.

68. In June 2015, I started another division of the business in the company known as ‘Chris Party Supplies and Event Planning.’

69. I invested $20,000 in undistributed profit from the company into purchasing marquees, tables, chairs, heaters, glasses and plates, which are now being kept in my backyard.

70. I advertised to rent these out for events at a price that was very competitive than what other people were charging for party supplies and within a week, we had already received a booking.

71. We are also now expanding into Sri Lankan food orders and now the business has at least 1 order a day for the next 2 weeks.

Submitting the Visa Application

72. I started getting ready for the visa application in November 2014.

73. When I formally appointed Graham to submit my application, he was aware that I had changed entities in running my business. However, he never brought this up as an issue that needed to be addressed, so I did not think much else of it.

74. When we finally came to submit the application, I told Graham that we had met the requirements in relation to turnover, assets and staff, and so Graham sent me a list of documents that I had to provide to him.

…

76. Even now, I continue to tender for new business because my goal was to set up a family-owned business which is successful and growing and which not only provides for my family now, but also for the next generation.

77. When I prepared the form 1217 and forwarded it to Graham, I specified ‘Chris Cleaning and Site Services WA Pty Ltd’ as the business I was using to meet migration requirements. In that form, I stated that I began the business on 30 May 2012 (in fact, the business started in April 2012). However, the company was only incorporated from 30 July 2014. In my mind, the business which began as a sole proprietorship continued even though it was now in a company…

78. Even in my form 80, I had stated, in relation to my work history, that I was the ‘owner’ of ‘Chris Cleaning and Site Services WA Pty Ltd’ from June 2012. (I realise now that I have been careless with the dates on the forms, but I confirm that the business started in April 2012 and it is one and the same business to this day)…

81. Having provided my documents to Graham, I thought that he would check the documents to see if there were any issues, but given that he hadn’t signalled any issues, I thought that the documents were in order.

82. I note that Graham also provided the Department… copies of all the BAS statements from the time of the sole proprietorship up to and including the time of the company.

83. Accordingly, to the extent that the businesses are thought to be separate, I claim all of them for the purposes of the assessment for my business visa. In all respects, the business ran the same way under my control and ownership.

84. The fact that the 3 entities had separate ABNs was immaterial to the ownership, day to day running and activities of the business.

85. Had I been made aware that the businesses were considered separate, I would have specified each of them as ‘main businesses’ in form 1217…

1. At the hearing on 7 December 2018, the applicant confirmed the contents of his statutory declaration regarding his and his family’s migration history to Australia, and his own business history in Sri Lanka, Saudi Arabia and Australia. He confirmed that when he and his family originally got their provisional visas to Australia, he took some time to research what business activity he should pursue, as he did not think that either of the fields of business he was involved in in Sri Lanka and Saudi Arabia would work in Australia. He secured employment as the Manager of a cleaning company and after 3 months, considered that he was in a position to start his own business in this field.  The applicant said that the accountant he had at that time suggested that he should start the business on a small scale, so he started it as a sole proprietor. Subsequently, he understood that he should make sure that all of his family members were involved in the business, so he changed to a partnership structure which included his wife, son and daughter as well as himself. His accountant advised him that this required a new ABN.  The applicant said that over time, his family members ceased their active involvement for a various reasons, and that now the business was operated by a company, he was currently the sole director and shareholder.

2. The applicant confirmed that the cleaning business continued to operate successfully and to expand, but that his status as a non-permanent resident did affect the business’ ability to secure contracts with government and council organisations. This was because these tenders were not able to be awarded to non-Australian citizens or permanent residents.

3. In relation to why he only put the company name on the form 1217, the applicant said that he intended to nominate the cleaning business which had operated from 2012, and that was currently operated by the company. He was unaware, and was not advised by his then-migration agent, that he should have listed the partnership and sole proprietorship as well. The applicant said that he thought that it was clear to the Department as he had included considerable documentation relating to the business going back to 2012. The applicant’s agent noted that this understanding was consistent with the applicant’s actions in stating that he had run the business since April 2012 in both the form 80 and form 1217, despite just listing the company name.

4. In response to the Tribunal’s query, the applicant confirmed that although he consulted with family members and his accountant about business decisions, he ran the business on a day to day basis and was responsible for its long term direction. He said that the business currently employed about 41 employees and that they were direct employees and not sub-contractors. The applicant estimated that about 15 of the staff were overseas students, while about 10 were Australians, and the remaining staff fluctuated depending on demand. The applicant said that he had picked the cleaning industry on the basis that there would always be a need for this service, and that this had proven correct.  He said that due to the high standards he set for the business, it continued to expand with significant contracts with Liquorland and various major banks.

5. The Tribunal discussed with the applicant and his agent the submissions made by the applicant’s agent, in particular his argument that the relevant case law supported taking a broad view of ‘main business’, and not confining consideration only to the legal entity put forward by an applicant. It also said that it would consider the agent’s alternative submission that if this were not accepted, then the Tribunal should consider that the applicant had 2 main businesses in the relevant period, being the partnership and the incorporated company (even though these both operated the same cleaning business), and that both of these could meet the relevant legal tests set out in cl.892.211.

   The nominated business(es) under review

6. Essentially, the delegate found that the applicant had nominated one main business, being Chris’ Cleaning and Site Service WA Pty Ltd, in his form 1217, although the delegate acknowledged that the applicant had also operated a sole proprietorship and a partnership, he had not listed these in the form 1217, so neither could be considered as a(nother) main business.

7. In contrast, the applicant and his agent have argued (in summary) that:

   ·the applicant operated the same business (the cleaning business) through 3 consecutive entities in the relevant period prior to making his visa application, being firstly a sole proprietorship, then a partnership and finally, the company listed in the form 1217;

   ·relevant case law indicated that decision-makers should look at the nature of the business, and not simply at the entity through which it was operated, and the case law also indicated that the same business could be operated through 1 or more entities;

   ·further, the case law indicated that what was put in the form 1217 was not determinative of this issue; and

   ·in this case, the applicant had clearly provided documentary evidence relating to the sole proprietorship and the partnership when he made his visa application, even if he had not listed them specifically in the form 1217, and it was clear that he was stating that he had run his main business since 2012, by implication including the time it was operated through the sole proprietorship and partnership, prior to the incorporation of the company listed in the form 1217.

8. The Tribunal has reviewed the case law cited by the applicant’s agent, notably Yang v Minister for Immigration [2014] FCCA 1576, and Nassif v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 481, to provide authority for the proposition that a person can operate a main business through more than 1 entity. The Tribunal is satisfied from the documentary evidence (such as the banking records of the business) and oral evidence of the applicant that he did operate the same business through 3 consecutive legal entities, and that this should be considered his main business, notwithstanding that there were different entities operating it in different periods. The Tribunal does not consider the fact that the applicant listed only the registered company in form 1217 to be fatal to this conclusion: as per Nassif’s case at [45], it is satisfied that the form is a starting point for a decision-maker determining what the applicant’s main business is, but is not in and of itself determinative (and should not be). In this case, the Tribunal considers that it is clear that the applicant was claiming to have operated the same business since 2012, and that he had provided documentary evidence relating to the partnership and sole proprietorship with the visa application, despite only listing the registered company in the form 1217. Taking the information he provided in its totality, the Tribunal is satisfied that the applicant was claiming the cleaning business (operated by 3 separate entities consecutively) as his main business.

9. The Tribunal is satisfied from the evidence provided by the applicant to the Department and to the Tribunal that the business operated by the applicant since 2012 was and is a cleaning business.  As such, the Tribunal is satisfied that the business is for the purpose of making profit through the provisions of goods and/or services and is not operated primarily or substantially for the purpose of speculative or passive investment.  The Tribunal finds that it is a qualifying business within the meaning of r.1.03 and r.1.11(d).

   Is the nominated business(es) a ‘main business’?

   The nature and value of the review applicant’s ownership interest

10. Based on the material provided to the Department and Tribunal (notably the applicant’s tax return for the 2012/13 year and BAS), the Tribunal is satisfied that the applicant operated his business as a sole proprietor between April and October 2012. It is further satisfied that a sole proprietorship is an ownership interest under s.134(10)(c).

11. Based on the material provided to the Department and Tribunal (including the applicant’s detailed oral evidence at hearing), the Tribunal is satisfied that from approximately December 2012 to July 2014, the applicant operated his business through a family partnership.  The Tribunal is further satisfied that this too is an ownership interest recognised in s.134(10)(b).

1. Based on the ASIC records on file before the Tribunal, the Tribunal is satisfied that from  July 2014 at least until the time of application, the applicant held 50% of shares in the nominated company and that his wife held 50% of shares from the same date. Therefore, pursuant to the definition of ownership interest set out in s.134(10)(a) of the Act, the Tribunal finds that the applicant has an ownership interest in the nominated company and the business therefore meets r.1.11(1)(a) of the definition of ‘main business’.

2. Furthermore, the Tribunal is satisfied that as the applicant and his spouse held 100% of the shares in the company from July 2014 to the time of application, the nominated company meets the definition of ‘main business’ set out in r.1.11(1)(c) and/or (d).

   Did the applicant maintain 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 from 1 November 2013 through to the date of application on 2 November 2015?

3. The Tribunal accepts, as it appears that the delegate did, that the above period essentially covers the financial years 2013/14 and 2014/15.

4. The Tribunal has taken into account the written submissions of the applicant and his agent, the supporting documentation they provided to the Tribunal and the applicant’s detailed oral evidence at his hearing on 7 December 2018.

5. Having considered evidence overall, the Tribunal is satisfied that during the relevant 2 year period, the applicant did maintain a 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. 

6. Accordingly, the Tribunal finds that the business of the applicant’s company meets the definition of main business in r.1.11(1)(b).

7. Based on its findings above, the Tribunal is satisfied that the business is a qualifying business, as per r.1.03, and thus r.1.11(1)(d) is also satisfied.

8. Based on the findings above, the Tribunal finds that the business nominated by the applicant as a ‘main business’ is a ‘main business’ as defined in r.1.11(1) of the Regulations.

9. Regulation 1.11(2) provides that if an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for that subregulations, be a main business in relation to the applicant, the applicant must not nominated more than 2 of those qualifying businesses as main businesses.  For the reasons set out above, the Tribunal finds that the applicant has only nominated 1 qualifying business as a main business and thus this subregulation does not apply in his case.  However, it concedes that the applicant’s agent raised an alternative argument, which appears could have been relied upon, which is that the applicant could have claimed that 1 main business was the company, while the other was the partnership, as these operated consecutively in the relevant period. For the reasons set out above, however, the Tribunal prefers the position that the underlying main business was a single one – the same cleaning business – albeit operated through 3 entities.

   Was the applicant’s main business actively operating in the relevant period?

10. As noted above, the delegate was not satisfied that the applicant’s main business was actively operating in the relevant period on the grounds that the applicant had only listed Chris Cleaning and Site Service WA Pty Ltd in the form 1217, and the delegate found that this company was only registered in mid-2014 and therefore was not active throughout the required 2 year period prior to his visa application on 2 November 2015.

11. For the reasons set out above, the Tribunal does not agree with this conclusion as it accepts that the applicant’s main business – the cleaning business - was operated consecutively through 3 entities from 2012 to date. It therefore accepts that it was actively operating for the whole of the relevant period, given the banking and other records provided.

12. Accordingly, the Tribunal finds that the applicant meets cl.892.211(1) and the appropriate course is to remit the matter to the Department for reconsideration in accordance with the Tribunal’s direction.

13. As the second and third named applicants applied on the basis of being members of the applicant’s family unit, it follows that their applications will be determined by reference to the outcome of the applicant’s application on remittal to the Department for reconsideration.

    DECISION

14. The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration, with the direction that the first named applicant meets:

    ·cl.892.211(1) of Schedule 2 to the Regulations.

    Alison Mercer
    Member