Weerathunga (Migration)
[2020] AATA 5629
Weerathunga (Migration) [2020] AATA 5629 (23 November 2020)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT: Mr Yehan Sanjaya Weerathunga
CASE NUMBER: 1732737
DIBP REFERENCE(S): BCC2017/1790026
MEMBER:Robyn Anderson
DATE:23 November 2020
PLACE OF DECISION: Melbourne
DECISION:The Tribunal affirms the decision not to grant the applicant’s Business Skills (Provisional) Subclass 188 visa.
Statement made on 23 November 2020 at 11.39am.
CATCHWORDS
MIGRATION – Business Skills (Provisional) (Class EB) visa – Subclass 188 Business Innovation and Investment (Provisional) – business and personal assets of at least AUD800,000 – ownership evidence of three Sri Lankan properties – direct and continuous involvement in the management of the main business – remote management of the business operations from Australia – main business was sold – decision under review affirmed
LEGISLATION
Migration Act 1958, ss 65, 360
Migration Regulations 1994, Schedule 2, cls 188.225, 188.226, 188.228; rr 1.03, 1.11CASES
Hui v Minister for Immigration and Citizenship [2011] FMCA 486
Jin v Minister for Immigration and Citizenship [2009] FMCA 540
Sun v MIBP [2015] FCCA 1266STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW
This is an application for review of a decision made by a delegate of the Minister for Immigration on 20 December 2017 to refuse to grant the visa applicant a Business Skills (Provisional) Subclass 188 visa under s.65 of the Migration Act 1958 (the Act).
The visa applicant, Mr Weerathunga, applied for the visa on 19 May 2017, following an invitation to apply on 29 March 2017. The delegate refused to grant the visa on the basis that the applicant did not satisfy cl.188.226 of Schedule 2 to the Migration Regulations 1994 (the Regulations). This required the applicant to hold business and personal assets with a net value of at least AUD800,000 at the time of application that are available to apply to the establishment or conduct of a business in Australia. The Tribunal notes that relevant evidence provided by the applicant was not received by the delegate prior to making the decision.
The Tribunal received a review application from the applicant on 22 December 2017. The matter was constituted to a Tribunal Member on 16 June 2020. The Tribunal wrote to the applicant on 29 June 2020 requesting further financial information. On 13 July 2020, the Tribunal received a submission from the applicant’s agent with the following accompanying documents:
·Deed of Gift in respect of two properties in Sri Lanka;
·Valuation reports in respect of two Sri Lankan properties in proximity of the date of invitation;
·Valuation report in respect of the Beveridge property in proximity of the date of invitation;
·Power of Attorney dated 25 September 2009 by which the applicant’s father was appointed as his attorney (signed and witnessed in Melbourne, Australia);
·Final financial statements at 5 August 2016 of W.A. Premanath & Son No.201/D (the Business); and
·An explanatory letter from the Sri Lankan accountant.
The Tribunal wrote to the applicant on 20 July 2020, requesting further information. On 30 July 2020, the Tribunal received a submission from the applicant’s agent with the following accompanying documents:
·Valuation reports in respect of two Sri Lankan properties dated 21 July 2020;
·Valuation report in respect of the Beveridge property dated 23 July 2020;
·Title in respect of the Beveridge property;
·Subaru invoice; and
·Bank statements.
On 4 August 2020, the Tribunal wrote to the applicant to invite him to attend a hearing on 28 August 2020. The Tribunal exercised its discretion to hold the hearing by telephone. The hearing was held during the COVID-19 pandemic. The Tribunal determined it was reasonable to hold a hearing by telephone, having regard to the nature of this matter and the individual circumstances of the applicant. The Tribunal also had regard to the Tribunal’s objective of providing a mechanism of review that is fair, just, economical and quick, and the delay to the matter if the hearing was not to be conducted by telephone.
The applicant appeared before the Tribunal by conference telephone on 28 August 2020 to give evidence and present arguments. The applicant was represented in relation to the review by his registered migration agent, Ms Smart, of Sky Legal. Ms Smart participated in the Tribunal hearing by conference telephone and made legal submissions.
At hearing, the Tribunal highlighted missing information in respect of the three different properties identified as being owned by the applicant in Sri Lanka. While a Deed of Gift No. 10216 corresponded to the valuation in respect of the property identified as Lot 1 Plan 1361, a Deed of Gift No.10219 referenced a property at Plan No. 1363 to which no valuation had been submitted. Furthermore, a valuation in respect of a property identified as Lot A Plan 1914 had no corresponding ownership evidence submitted to the Tribunal.
At hearing, a further issue came to light in respect of the applicant meeting the required criteria under cl.188.225 of Schedule 2 to the Regulations. The Tribunal raised its concerns in respect of the nominated main business, the Business, satisfying the four “main business” criteria as set out in r.1.11(1) of the Regulations (as defined in r.1.03). The four criteria are not mutually exclusive and must all be met before a nominated business can be considered as the “main business”. Of particular concern to the Tribunal was the applicant’s ability to satisfy the criteria under r.1.11(1)(b) whereby the applicant must maintain or have maintained direct and continuous involvement in the management of the Business from day‑to‑day and in making decisions affecting the overall direction and performance of the Business. Ms Smart indicated at hearing that a list of the duties performed would likely assist the Tribunal.
Therefore, on 28 August 2020, the Tribunal deferred making a decision in this matter to enable the applicant to provide the missing information in respect of the Sri Lankan properties to the Tribunal and to also provide further submissions as to the involvement of the applicant in maintaining direct and continuous involvement in the day-to-day management of the Business.
Further submissions and additional evidence was received by the Tribunal on 11 September 2020, 30 September 2020, 19 October 2020 and 3 November 2020.
For the following reasons, the Tribunal has concluded that the decision under review should be affirmed.
CONSIDERATION OF CLAIMS AND EVIDENCE
The Tribunal is cognisant that the issue upon which the delegate refused the applicant’s application was whether Mr Weerathunga held business and personal assets with a net value of at least AUD800,000 at the time of application that are available to apply to the establishment or conduct of a business in Australia (cl.188.226 of Schedule 2 to the Regulations). The Tribunal is empowered to determine an application by reference to a specified criterion which has not been addressed by the primary decision maker. If the Tribunal is not satisfied that a criterion is met, and it is a necessary prerequisite for the grant of a visa, then the Tribunal will sufficiently exercise its jurisdiction by affirming the delegate’s decision on that basis: Hui v Minister for Immigration and Citizenship [2011] FMCA 486; Jin v Minister for Immigration and Citizenship [2009] FMCA 540.
The Tribunal’s concerns in respect of cl.188.225 of Schedule 2 to the Regulations centred on the “main business” criteria. Clause 188.225 requires Mr Weerathunga to have had an ownership interest in one or more established main businesses with an annual turnover of at least AUD500,000 for two of the four fiscal years immediately before the time of invitation, which in this case is 29 March 2017. The Business (nominated as the main business) was a joint business between the applicant and his parents, akin to a partnership. A translated copy of the joint business agreement, dated 24 November 2011, was before the Tribunal. It was evident that it was a joint business involving three parties, being the applicant, the applicant’s father, Mr Premanath, and the applicant’s mother, Ms Pathberiya. The nature of the Business is listed as being “storage, distribution and sale of all types of products of fuel and lubricants supplied wholesale by the Ceylon Petroleum Corporation”.
For the purposes of meeting the criteria under cl.188.225 of Schedule 2 to the Regulations, Mr Weerathunga selected the two fiscal years ending 31 March 2014 and 31 March 2015 (the relevant period). Therefore, the Tribunal must firstly be satisfied that the Business meets the definition of main business, as set out in r.1.11 of the Regulations (defined in r.1.03 of the Regulations) throughout the relevant period.
As noted above, the four criteria are not mutually exclusive and must all be met before a nominated business can be considered as the “main business”.
The second criteria under r.1.11(1)(b) requires that the applicant must maintain or have maintained direct and continuous involvement in the management of the Business from day‑to‑day and in making decisions affecting the overall direction and performance of the Business.
Mr Weerathunga gave oral evidence that the association with Ceylon Petroleum dated back to his grandparents and was eventually inherited by his father. There were many problems in relation to theft and robberies during wartime. Consequently, Mr Weerathunga’s father relocated the family to the U.S.A. and placed a friend in a management role at the Business in around 1999. Mr Weerathunga gave oral evidence that he completed Year 5 in Sri Lanka and the remainder of his education was completed overseas. Mr Weerathunga’s father returned to operate the Business in 2002, while Mr Weerathunga and his mother returned a year or so later. Mr Weerathunga gave oral evidence that his preference was not to remain in Sri Lanka and he subsequently returned to study in the U.S.A., graduating from high school in 2007. In a compromise with his parents, Mr Weerathunga commenced a Diploma in Tourism and Hospitality Management in Singapore, completing it in late 2008 before relocating to Australia in 2009 where he commenced a Bachelor of Business in Tourism and Hospitality Management at La Trobe University. In response to a question from the Tribunal, Mr Weerathunga stated that while at University he worked in various casual positions, such as a chef at a bakery, McDonald’s, a cleaner and the like.
Prior to 2011, Mr Weerathunga’s father had continued to operate the Business on his own, with the assistance of a “business manager” to allow him to have a more relaxed lifestyle. While he continued to open up at 0600 and close at 2200, he spent time at home during the middle of the day. Mr Weerathunga stated that his father retained control of the banking and cashflow and also liaised with the accountant on a bimonthly basis. The business manager processed the oil orders upon direction from Mr Weerathunga’s father, received the invoices, prepared the cash for banking and organised the staff breaks. Four to five employees pumped petrol. Mr Weerathunga further stated that it was essentially a cash business and it was necessary to oversee the staff carefully and have a physical presence to avoid problems of theft. Preparation of the wages was shared by Mr Weerathunga’s father and the business manager.
Mr Weerathunga told the Tribunal that the Business had supplied petroleum and various types of oil for Ceylon Petroleum, which was a Government-owned supplier. Unlike the process in Australia, the Business was required to place an order and pay the invoice prior to delivery of the product. The pricing was controlled by the Government. This meant that at any given time, the products on hand at the Business premises were owned solely by the Business. Mr Weerathunga also explained that other types of oils and lubricants, such as those required by “tuk-tuks”, are sourced from other suppliers, generally on consignment, with the supplier managing the stock levels. The sales are limited to the petroleum/oil products, unlike in Australia where it is also common to have mini-mart type of sales.
In 2011, Mr Weerathunga’s father unfortunately experienced a traumatic event in Sri Lanka which resulted in hospitalisation for approximately three years. Mr Weerathunga continued his studies in Australia. Prior to this point in time, his mother had not been involved in the Business. At this time, she had to take on a role at the Business. She struggled to care for her husband and also keep control of the Business. Mr Weerathunga gave oral evidence that the family’s focus was on the health of his father. As such, the theft that seemed to be increasing in the Business could not be the priority. Ultimately, the decision was made by Mr Weerathunga and his mother in 2012 to replace the business manager with a relative, who had worked with his father in his younger years. He remained in that position until sale of the Business in mid-2016, working seven days per week. Mr Weerathunga stated that this appointment provided a trustworthy presence who was able to assist his mother in “looking after the Business” while the applicant was studying in Australia.
In a statutory declaration provided to the Department, dated 18 October 2017, Mr Weerathunga submits that he maintained management of the Business between 24 November 2011 and 31 July 2016 remotely from Australia through the use of technology enabling him to engage in the day-to-day management of the Business and to maintain control over the strategic management of the Business. A submission from Ms Smart to the Department, dated 18 October 2017, further clarified that the employees of the Business were a business manager, who was at all times responsible for ensuring the day‑to‑day management of some aspects of the business operations, a cashier, responsible for handling the cash, and several others employed to pump petrol. However, it was submitted that Mr Weerathunga performed the overall management role despite his physical absence.
Mr Weerathunga told the Tribunal that he was in constant contact with his mother via the Viber network as his knowledge enabled him to guide her. Unfortunately, Viber does not maintain call records and consequently he is unable to provide documents in support of his claims. Ms Smart’s submission to the Department contended that Mr Weerathunga, in consultation with his mother, was responsible for recruitment of staff, business development and expansion, renovations and improvements to the site, compliance with the regulations of Ceylon Petroleum and all taxation obligations and business processes to improve business efficiency. On behalf of the applicant, Ms Smart submitted that it is “archaic and unreasonable” to assume that business owners need to be physically present at all times to effectively manage a business. Furthermore, requiring a physical presence within the Business is seen as being contrary to the spirit of the legislation, as “such an expectation is both unrealistic and unfounded.”
Following the hearing, a submission from Ms Smart, dated 11 September 2020, noted the following in relation to the applicant’s “management” role in the Business:
·The Business has a high turnover, largely in cash transactions. It is therefore necessary to have a “hands on” management style to avoid losses caused by theft and negligence of staff;
·Due to pre-purchasing of petroleum, cash management was crucial and daily stock checks were required;
·The applicant’s mother supported him in management of the Business;
·Phone contact enabled the applicant to be involved in the day-to-day management of the Business;
·The applicant made specific long-term and strategic decisions including major renovations, termination of staff, employment of new staff and the sale of the Business.
Mr Weerathunga gave oral evidence at the hearing that pricing of the petroleum products is controlled by the Government. That is, if the price increases the Business made a profit, and if it decreased it made a loss. While Ms Smart’s submission to the Department of 18 October 2017 referenced Government control of pricing and supply of petroleum, Mr Weerathunga told the Tribunal that quantities for orders needed to be determined on a regular basis. In response to a question from the Tribunal, Mr Weerathunga stated that he provided guidance to his mother on a daily basis in response to her input of what was occurring in the Business. However, he encountered some issues in regard to future development of the Business as he felt that given his young age that his ideas were not taken seriously by his parents. The cultural differences between Sri Lanka and Australia were also an issue. For example, Mr Weerathunga stated that he was fully aware of the staff taking advantage of his mother and wanted to install an electronic control system for him to access from his laptop. However, he was unable to implement his ideas as his parents saw no benefit in such an implementation. Although he was technically a 60% stakeholder in the Business, Mr Weerathunga stated that it remained a family business and it was complicated. His parents didn’t want any change in the Business, they simply wanted the Business to continue to operate as it always had done in the past. As a result of his inability to gain approval from his family to “westernise” the Business, it was ultimately agreed to liquidate the Business, which occurred in mid‑2016. The intention was for this to enable Mr Weerathunga to operate a business in Australia where he could implement his own ideas as he wished.
The Tribunal notes that at clause 8 of the joint business agreement of 24 November 2011, Mr Premanath, the applicant’s father, is recorded as the managing director of the joint business. Prior to the hearing, the Tribunal raised its concerns in writing to the applicant in respect of the fact that neither the applicant’s name nor signature appear on the Agreement to Sell, despite him being a 60% stakeholder and the requirement under clause 10 that all legal documents and cheques of the joint business have to be signed by the third party (the applicant) and one of the other two parties. In response, Ms Smart submitted that the applicant’s father has a power of attorney to sign on his behalf. Mr Weerathunga told the Tribunal that he gave the power to his parents to process payments as he was in Australia and therefore it made no sense for him to have that control.
The fact remains that the sale contract is between the applicant’s parents and the purchaser. Neither the applicant’s name nor his signature (or his father’s signature on his behalf) appear on the document.
Five letters from referees were submitted to the Department in support of Mr Weerathunga’s involvement in management of the Business. The letters were from various customers who state that the Business is the preferred filling station of their establishments. Except for one, all the letters reference with identical wording the opportunity to deal with the applicant since November 2011 “on a day-to-day basis with relation to customer service, maintaining customer relationship, managing credit sales, etc.” A letter from Ceylon Petroleum Corporation also references dealing with the applicant on a day-to-day basis with relation to operational matters pertaining between a dealer and a principal.
According to departmental records, Mr Weerathunga was in Australia for 1,665 days between 12 November 2011 and 3 April 2017, equating to approximately 85% of the time (1,665/1967 days). Mr Weerathunga told the Tribunal that he completed his degree at La Trobe University in 2014 and then commenced a master’s degree in business at Adelaide towards the latter part of 2014 and worked on a casual basis with Tourism Holdings. He did not complete his studies and he preferred the lifestyle in Melbourne. Consequently, he did some travelling from March 2015 in Sri Lanka and the U.S.A. and returned to Australia in mid‑2015.
It is particularly noteworthy that according to departmental records, in the relevant period between 1 April 2013 and 31 March 2015, Mr Weerathunga was in Australia for 703 days, which equates to around 96% of the time (703/730 days). Having returned to Australia on 7 January 2013, he did not depart again until 5 March 2015. Given the oral evidence of Mr Weerathunga that he travelled throughout the U.S.A. and also visited Sri Lanka between March and July 2015, it is unclear whether he was in fact in Sri Lanka at all during the relevant period. Therefore, he was physically present in Sri Lanka for a maximum of 4% of the time during the relevant period.
In response to a question from the Tribunal, Mr Weerathunga stated that as the only child, his family was concerned for his safety if he returned to Sri Lanka, and consequently he did not return during an extended period between 2013 and 2015. It is not possible to rely on police protection in Sri Lanka as it is in Australia. He further stated that during that time, he needed to focus on his studies due to regular interruptions around the time of his father’s kidnapping in 2011. While the Tribunal accepts that safety issues existed, given the small amount of time that Mr Weerathunga has spent in Sri Lanka, it is difficult to accept that the referees were dealing with him on a day-to-day basis, as stated in the letters provided to the Department. This in turn leaves the Tribunal in a position to place little weight on the letters. In response to a question from the Tribunal, Mr Weerathunga stated that the referees have known him since he was a young child and know the family business. The Tribunal also notes Mr Weerathunga’s oral evidence that he has been living outside of Sri Lanka on his own since the age of 16 years. As Mr Weerathunga was in Sri Lanka for two weeks in November 2011, the Tribunal accepts that he liaised with the contractor regarding a cladding and retrofitting project at the premises of the Business in November 2011. However, this is not within the relevant period.
The departmental guidelines, PAM3 GenGuide M – Business Visas (PAM3), to which the Tribunal may have regard in appropriate cases, sets out detailed guidance as to the meaning of maintaining direct and continuous involvement in the management of the Business from day-to-day. While the Tribunal is not bound by policy, in Drake and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60, the Full Federal Court held that a Tribunal should take into account relevant Government policy which is not inconsistent with the provisions or objects of the legislation. It is also noteworthy that there is judicial authority to the effect that the policy guidelines in PAM3 cannot go beyond the wording of the legislation, even where they are favourable to an applicant. In this case, the Tribunal regards the policy as a useful guide to applying the legislation.
Essentially, after taking into account all of the circumstances of the case, the Tribunal must be satisfied that the applicant has been actively managing and operating the Business by consistently spending a significant portion of his time managing the Business on an ongoing basis and making decisions affecting its overall direction and performance. Management involves planning, organising, directing and controlling the resources of a business. Departmental policy provides further details as to the meaning of planning and organising involving the setting of goals and strategies in relation to the future of a business and allocating resources and assigning tasks to enable those goals and strategies to be achieved. Directing and controlling the resources of a business involves the supervision of workers and the setting of appropriate standards for those workers to attain. In a high‑level cash economy, the Tribunal considers it reasonable that control over resources of the Business would also likely include strict control over the cash environment.
PAM3 also highlights the difference in the management role depending on the size of the business. The smaller the business, the higher the expectation that the applicant would hold a dominant role and level of responsibility in relation to most facets of business operations, as opposed to significant delegation in a larger business. The policy goes on to state that, “an applicant is expected to consistently spend a significant portion of their time managing the business on an ongoing basis from day-to-day. For a business to be considered a ‘main business’, it is intended that the visa applicant would be involved in actively exercising their claimed management role.”
While it is generally accepted that in the case of a larger business an applicant may not be directly involved in all facets of a business, the Tribunal is satisfied that this case is distinguished from such cases in that it is not a large organisation. It has a small number of employees with only basic duties delegated to them, an uncomplicated purchasing/consignment process with suppliers and an all cash transactional process with customers requiring a “hands on” management style. Furthermore, PAM3 suggests that continual involvement means the absence of frequent and/or significant gaps.
Ms Smart submitted that day-to-day roles in the Business were delegated to employees and it was the strategic direction of the Business that was important for the partners in the Business. Following the hearing, Ms Smart clarified in a submission that the business manager’s role was merely a supervisory role in coordinating the employees working the petrol pumps and other minor administrative duties, which attracted low remuneration. It was contended that he had a limited role which fell well short of what one would expect a business manager’s role to be in Australia. The Tribunal accepts that this was so.
Ms Smart’s submission went on to list the duties outside of the scope of the business manager which would fall on the shoulders of the manager/owner of the Business as determining the amount of petrol to order on a daily basis, payment of wages and other bills, banking matters, repairs and maintenance to pumps, attending to accounting and taxation issues, maintaining the goodwill of the customers and monitoring the market for competition. It was submitted that the applicant’s involvement in such day-to-day management duties was enabled by speaking with his mother and the employees over the phone.
The Tribunal is cognisant that Mr Weerathunga has been residing out of Sri Lanka since his pre-high school years and as such has not grown up around the business operations. Nevertheless, he has clearly assisted his mother to the best of his ability from Australia. The question is whether his assistance equates to him maintaining direct and continuous involvement in the management of the Business from day-to-day and in making decisions affecting the overall direction and performance of the Business.
The Tribunal accepts the oral and written evidence of the applicant that he received the financial reports of the Business via email on a monthly basis and was in contact with the accountant in respect of end-of-year compliance and taxes. However, in response to a question from the Tribunal, Mr Weerathunga stated that the distribution of the profits on an annual basis had been determined between his father and the accountant. The Tribunal is satisfied that Mr Weerathunga had the capability of attending to the accounting and taxation issues of the Business from Australia. The ways in which he could monitor the market for competition was not addressed in the submission. However, given the limited use of technology within the Business, as evidenced by the applicant, the Tribunal observes that it is unlikely that the technology was available to enable Mr Weerathunga to access information in relation to monitoring the market for competition while residing in Australia.
In regard to making decisions affecting the overall direction and performance of the Business, the Tribunal accepts that Mr Weerathunga was involved in discussions with his parents relating to such decisions. Ms Smart submitted after the hearing that examples of the applicant’s long-term decision making involved major renovations carried out to the Business, termination and employment of staff and the sale of the Business. The Tribunal accepts that discussions between the applicant and his mother resulted in staffing decisions. However, based on his own evidence, it was apparent that Mr Weerathunga had limited influence on the ongoing future direction of the Business, as his suggestions and ideas were not readily accepted by the remaining partners who were set in their old ways in relation to the operation of the Business. Mr Weerathunga told the Tribunal that it was this issue that ultimately led to him initiating the sale of the Business, albeit according to the Agreement to Sell, the applicant was not a party to the contract.
Given the cash economy of the Business, the Tribunal is satisfied that banking matters and payment of wages and bills are not duties that Mr Weerathunga is capable of performing from Australia. Mr Weerathunga stated that it was for this reason that the power of attorney existed. He also gave oral evidence that banking is required numerous times a day on account of the high level of cash takings. Lack of a physical presence by Mr Weerathunga also excludes the possibility of him contributing to the goodwill of the customers and attending to repair and maintenance of the pumps. The Tribunal accepts that Mr Weerathunga was supportive of his mother and assisted her in understanding how to determine the required petroleum orders on a daily basis and in managing the Business. He further stated that without his guidance, his mother would have struggled and the Business likely collapsed. However, in the circumstances of a cash business with few employees, such as in this case, the Tribunal is not persuaded that Mr Weerathunga’s guidance role equates to continual and day-to-day management of the Business. Furthermore, given that Mr Weerathunga was studying full-time and also working in casual employment throughout most of the relevant period, it is difficult to accept that he allocated a significant portion of his daily time to managing the Business on an ongoing basis from day-to-day.
The Tribunal notes the case of Sun v MIBP [2015] FCCA 1266 (Sun) in which the applicant claimed to have maintained direct and continuous involvement in the management of a taxi business from day-to-day and in making decisions that affected the overall direction and performance of the business. The taxi business operated in Australia, yet it was apparent that the applicant had spent 25% of the relevant period (six months) in China. While the applicant contended that she continued to attend to the management of the taxi business while in China by discussions with her husband through the use of email and telephone, a differently constituted Tribunal found that the majority of the management tasks identified by the applicant were unable to be performed outside of Australia and were in fact performed by the applicant’s husband during her absence. While accepting that a degree of involvement in the business existed, as demonstrated by the email correspondence, ultimately it was found that such involvement was not direct and was not continuous from day-to-day. It was further stated that to suggest otherwise does not accord with common sense. Simpson J. concluded that based on the evidence, it was open to the Tribunal to make such findings.
In this case, the applicant was absent from the place of business operations in Sri Lanka for at least 96% of the time during the relevant period, which far exceeds the 25% period of absence in the case of Sun. Similarly, during his absence, Mr Weerathunga maintained connection with his mother largely through Viber and to a lesser degree by email. Mr Weerathunga asserts that he played a managerial role in the Business, supported by his mother. At hearing, Mr Weerathunga referenced several times the importance of a physical presence in the Business to maintain control over the staff and the cash. This is in contrast to the submission of Ms Smart to the Department on 18 October 2017 in which she contended that the requirement of a physical presence at all times was “archaic and unreasonable”.
Based on the oral and written evidence provided, the Tribunal concludes that rather than Mr Weerathunga’s mother supporting him, it was Mr Weerathunga providing a supporting role to his mother, who having the physical presence on site was the one who was carrying out the majority of the management role duties with the assistance of the employed business manager. The Tribunal is not satisfied that Mr Weerathunga could manage to perform the majority of the managerial tasks identified while physically present in Australia.
While the Tribunal accepts that Mr Weerathunga was involved in discussions in relation to the overall direction and performance of the Business, it is clear that it was his parents who had the final say, and the Tribunal so finds. Furthermore, overall the Tribunal finds that while a degree of involvement certainly existed, Mr Weerathunga did not maintain direct and continuous involvement in the management of the Business from day-to-day throughout the relevant period. Accordingly, the requirement under r.1.11(1)(b) is not met.
As the Business does not meet one of the four criteria under r.1.11, it is unable to meet all of the eligibility requirements to be considered a “main business” during the relevant period and it is unnecessary for the Tribunal to consider the remaining three criteria under r.1.11. Consequently, as the nominated Business is not a “main business”, the Tribunal finds that Mr Weerathunga is unable to satisfy cl.188.225(1) of Schedule 2 to the Regulations.
As noted above, the issue upon which the delegate refused the applicant’s application was whether Mr Weerathunga held business and personal assets with a net value of at least AUD800,000 at the time of invitation that are available to apply to the establishment or conduct of a business in Australia (cl.188.226 of Schedule 2 to the Regulations).
In the context of this case, it is open to the Tribunal to make findings in relation to cl.188.225 of Schedule 2 to the Regulations and on the basis of those findings affirm the decision under review. The Tribunal gave the applicant an opportunity to give evidence and present arguments as it is required to do under s.360 of the Act. As set out above, Mr Weerathunga gave oral evidence and his agent provided legal submissions in relation to cl.188.226 and cl.188.225 of Schedule 2 to the Regulations. Additional documentary evidence was also provided to the Tribunal following the hearing. The Tribunal has taken all of the available evidence into account in making its decision.
For the reasons set out below, the Tribunal was unable to be satisfied that the criteria under cl.188.226 of Schedule 2 to the Regulations was met. Mr Weerathunga confirmed at hearing that given that the Business was sold in mid-2016, there are no business assets to be considered in relation to cl.188.226 of Schedule 2 to the Regulations. He is relying on personal assets to meet the AUD800,000 threshold.
A submission from Ms Smart dated 13 July 2020 set out the personal assets of Mr Weerathunga at 29 March 2017 as set out below, supported by various “Deed of Gift” certificates, titles and valuations:
Asset
Sri Lankan Rs.
AUD
Real property in Sri Lanka – Lot 1 Plan 1361
(Vacant land)
20,000,000
174,518
Real property in Sri Lanka – Lot A Plan 1914
(House and land)
31,500,000
274,866
Real property in Australia – 1 Grace Court, Beveridge
(House and land)
N/A
500,000
Commonwealth Bank of Australia account …5612
N/A
700.18
Commonwealth Bank of Australia account …3040
N/A
146.72
Total assets
950,230.90
While evidence clearly supported the assets held in the Commonwealth Bank accounts and the Beveridge property, their combined value of AUD500,846 was not sufficient to meet cl.188.226 of Schedule 2 to the Regulations without the Sri Lankan properties. However, the evidence in relation to the Sri Lankan properties was not as persuasive.
At hearing, the Tribunal raised the issue of the Deed of Gift No.10219 not corresponding to the valuation document provided in respect of Lot A Plan 1914. Rather, the Deed of Gift No. 10219 referred to property identified as Plan 1363. The Deed of Gift No.10219 was signed and dated on 14 November 2006 and stamped by the Land Register of Homogama on 20 November 2006. It is apparent that Mr Weerathunga was gifted the property from his father, Weerathungha Arachchige Premanath. The translated Deed of Gift No. 10219 also refers to the gift being subject to a life interest of Weerathungha Arachchige Premanath and Nirupa Chandani Pathberiya, being Mr Weerathunga’s parents.
The Deed of Gift No. 10216, in relation to Lot 1 Plan 1361, corresponded to the identification of the land on the valuation report. The translated “Deed of Gift No. 10216” document is in respect of Lot 1 Plan 1361 property in Sri Lanka and is signed and dated on 14 November 2006 and stamped by the Land Register of Homogama on 20 November 2006. It is apparent that Mr Weerathunga was gifted the property from his father. The Deed of Gift No. 10216 also refers to the gift being subject to a life interest of Mr Weerathunga’s parents.
The valuation of the property in Sri Lanka identified as Lot 1 Plan 1361 has been valued by H.S.C. Jayasekara, incorporated valuer. The property is identified as “commercial” and consists of land and a single storied commercial building. The market value of the property has been estimated at 13 April 2007 at the equivalent of AUD174,518 (Rs.20,155,000).
Ms Smart acknowledged the discrepancy noted in paragraph 51 and agreed to rectify the problem after the hearing. A further Deed of Gift was provided after the hearing. However, it was No. 10216, a replicate of the Deed of Gift already provided in respect of Lot 1 Plan 1361, albeit the translation is dated 3 September 2020. This left the Tribunal with a Deed of Gift No. 10219 in relation to property identified as Plan 1363 to which there was no corresponding valuation and a valuation in respect of the property identified as Lot A Plan 1914 with no corresponding Deed of Gift.
Subsequently, a further Deed of Gift No. 15603 was provided to the Tribunal in respect of Lot A Plan 1914 property in Sri Lanka and is signed and dated 22 March 2017 and stamped by the Land Register of Homogama on 27 March 2017. It is apparent that Mr Weerathunga was gifted the property from his mother. The Deed of Gift No. 15603 also refers to the gift being subject to a life interest of Weerathunga Arachchige Premanath, Mr Weerathunga’s father.
The valuation of the property in Sri Lanka identified as Lot A Plan 1914 has been valued by H.S.C. Jayasekara, incorporated valuer. Although in a commercial area, the property is identified as consisting of land and a two-storey residence, currently occupied by the applicant’s parents. The market value of the property has been estimated at 13 April 2007 at the equivalent of AUD274,866 (Rs.30,600,000). Mr Weerathunga confirmed at hearing that his parents continue to reside in the property identified as Plan A Lot 1914.
The Tribunal notes that the market valuations in respect of the properties identified as Lot 1 Plan 1361 and Lot A Plan 1914 make no mention of the impact of the life interest attributed to Mr Weerathunga’s parents. There was no evidence to suggest that the respective Deed of Gifts are not legally enforceable documents, having been appropriately stamped by the Land Registrar. There was also no indication that the valuations had recognised the existence of life interests and the possible impact on those valuations. As such, the Tribunal wrote to the applicant and requested revised valuations at the time of invitation and currently, whereby it was clear that the life interests over the properties had been considered by the valuer, including a valuation in respect of the property identified as Plan 1363. In addition, submissions on the impact of the life interests over the properties on the applicant’s ability to meet the criteria under cl.188.226 and also cl.188.228(b) of Schedule 2 to the Regulations were requested.
Clause 188.228(b) of Schedule 2 to the Regulations requires the applicant to be able to transfer his personal assets to Australia within two years after the grant of a Subclass 188 visa. This ability was questionable in respect of the Sri Lankan properties when they were all subject to a legally enforceable life interest. On 19 October 2020, the Tribunal received copies of Deeds of Revocation of Life Interest documents dated 7 October 2020 in respect of the properties referenced as Lot 1 Plan 1361 and Lot A Plan 1914. The documents were registered and stamped by the Land Registrar of Homogama. Revised valuations in respect of the same said properties at 14 October 2020 remained unaltered other than the impact of the more recent foreign exchange rate and acknowledgement of the Deeds of Revocation of Life Interest, despite the previous valuation being completed prior to the formal revocation of the life interests. There was no explanation as to why the valuations remained unaltered.
No valuation was provided in respect of the property referenced as Plan No. 1363 at the time of invitation or currently, nor was a Deed of Revocation of Life Interest provided in respect of the property at Plan No. 1363. The submission informed the Tribunal that the property was agricultural land and requested confirmation as to whether the valuation was necessary.
The evidence before the Tribunal remained insufficient to enable an accurate calculation of the value of the three Sri Lankan properties. Therefore, the Tribunal wrote again to the applicant, via his representative, and advised as such, giving the applicant a further opportunity to provide revised valuations at the time of invitation in respect of the properties referenced as Lot 1 Plan 1361 and Lot A Plan 1914 and valuations in respect of the property referenced as Plan No. 1363.
On 3 November 2020, the Tribunal was provided with a letter from Mr Jayasekara, a chartered valuer, dated 31 October 2020, in which he confirmed that Mr Weerathunga’s legal interests in the properties Lot 1 Plan 1361 and Lot A Plan 1914 in 2017 were subject to the life interests of Weerathungha Arachchige Premanath and/or Nirupa Chandani Pathberiya and that these life interests were taken into account in determining the value of the properties. Again, there was no explanation as to why the valuations were unaltered.
In such circumstances, the Tribunal was unable to be satisfied of the valuations of the property assets held by Mr Weerathunga in Sri Lanka at the time of invitation for the purposes of assessing cl.188.226 of Schedule 2 to the Regulations. This was on account of the lack of impact on the values of the properties after revocation of the life interests. In the absence of an explanation otherwise, it would be expected that the valuations prior to revocation of the life interests would be lower.
DECISION
The Tribunal affirms the decision not to grant the applicant’s Business Skills (Provisional) Subclass 188 visa.
Robyn Anderson
Member
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