Yew (Migration)

[2019] AATA 1540

Yew (Migration) [2019] AATA 1540 (4 January 2019)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Ms Foong Sin Yew
Mr Wing Fook Goh
Mr Chinq Loong Goh
Mr Chinq Heei Goh
Miss Chinq Leing Goh

CASE NUMBER:  1716629

DIBP REFERENCE(S):  BCC2015/3049259 BCC2017/2826436 BCC2017/2826445

MEMBER:Robyn Anderson

DATE:4 January 2019

PLACE OF DECISION:  Melbourne

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

·Sub-clause 892.211(1) of Schedule 2 to the Regulations.

Statement made on 04 January 2019 at 4.00pm

CATCHWORDS

MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 892 State/Territory Sponsored Business Owner (Residence) visa – formal share ownership in the main business – operating a café in regional Australia – all shares owned by the applicant’s spouse – ASIC records amended for the relevant period – half shareholdings held beneficially for the applicant – business operated for the provision of goods and services – decision under review remitted          

LEGISLATION

Corporations Act 2001
Migration Act 1958, s 65
Migration Regulations 1994, Schedule 2, cl 892.211 rr 1.03, 1.11

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

2. The visa applicants applied for the visa on 19 October 2015. The delegate refused to grant the visas on the basis that the first named applicant (Ms Yew) did not satisfy sub-clause 892.211(1) of Schedule 2 to the Migration Regulations 1994 (the Regulations). The delegate was not satisfied that Ms Yew held any formal share ownership in the main business, being Yuwee Enterprise Pty Ltd.

3.  The applicants appeared before the Tribunal on 4 December 2018.  Ms Yew and Mr Goh gave oral evidence and presented their arguments. The Tribunal also received oral evidence from Mr Alvin Peterson, Mr Roy Roderick and Mr Michael McDonald.

4.  The applicants were represented in relation to the review by their registered migration agent.

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

CONSIDERATION OF CLAIMS AND EVIDENCE

6.   Prior to their arrival in Australia in January 2011, Ms Yew and her family resided in Malaysia.  While Ms Yew was employed as a legal secretary, Mr Goh operated his own business in the construction industry.  Ms Yew told the tribunal that things were complicated in Malaysia in a political sense and they were concerned in respect of their future rights.  She and her husband decided that a move to Australia would be in the best interest of the family, enabling the children to receive a good education and the family to establish itself in the Australian community.  

7.   Ms Yew further stated that as she had previous experience in the operation of a café with her parents, the decision was made to open a café in Ballarat. Ms Yew has always taken responsibility for the daily operation of the café, while Mr Goh initially took on a more administrative role, such as dealing with the accountant to set up a company. Furthermore, he continued to operate his business in Malaysia while based in Australia.   

8.   Mr Goh gave oral evidence that after the first 12 months it became evident that the business in Malaysia was quickly declining.  Given the costs in respect of the children’s upcoming university education in Australia, the decision was made that he would return to Malaysia in the interim to ‘kick-start’ his business once more. It was clear that the café was not at a level where it was possible for it to meet the costs of the household and the education costs of the children. Since that time, Mr Goh has sent money back to Australia to meet such costs, as is evidenced by various bank statements and the shareholders loan general ledger account of Yuwee Enterprise Pty Ltd.

9.   Clause 892.211 of the Regulations sets out two main criteria.  The first, under sub-clause 892.211(1) is of relevance in respect of this review.  It requires the applicant, for at least two years immediately before the application was made, to have an ownership interest in the main business. In this case the application was made on 19 October 2015.  As such, the two years immediately before is from 19 October 2013 to 18 October 2015, being the relevant period.

10.  The applicant nominated Yuwee Enterprise Pty Ltd as ‘the main business’. In order for a business to be considered a ‘main business’, Regulation 1.11(1) sets out four criteria.  The criteria are not mutually exclusive and must all be met before a nominated business can be considered as the ‘main business’. 

11.  The first of the criteria under Regulation 1.11(1)(a) requires that the applicant have an ownership interest. It was this first criterion that the Department decided had failed to be met, as ASIC records at 14 July 2017 reflected that 100% of the shares in Yuwee Enterprise Pty Ltd were held beneficially by the applicant’s spouse, Mr Goh.

12.  ‘Ownership interest’ in respect of a company is defined, relevantly, in subparagraph 134(10)(a) of the Act as a shareholder in a company that carries on the business. The tribunal is satisfied that no indirect interest is held through an interposed company, partnership or trust. As discussed at hearing, this criterion requires nothing more than Ms Yew to beneficially hold at least one share in Yuwee Enterprise Pty Ltd.

13. Regulation 1.11A goes on to state, relevantly, that in respect of Part 892 of Schedule 2 of the Regulations, evidence of a beneficial ownership in a Company is to be stamped or registered by the appropriate authority under the law of jurisdiction where the ownership interest is held. The tribunal is satisfied that in the case of a company, ASIC is the appropriate authority.

14.  While ASIC records available to the Department at the time of their decision in July 2017 reflected sole beneficial ownership of the shares in Yuwee Enterprise Pty Ltd by Mr Goh, in the period between the Department’s decision and the Tribunal’s hearing, action was taken to correct the records.  Current ASIC records before the Tribunal reflect that 50% of the shares held in Yuwee Enterprise Pty Ltd are held beneficially by Mr Goh and 50% are held non-beneficially by Mr Goh.  While the processing date was 14 September 2017, the date of effect is recorded as 1 April 2011, the date of incorporation.

15.  Clearly ASIC, as Australia’s corporate regulator, have deemed the applicant’s explanation as sufficient to amend the register of shareholdings to reflect that Mr Goh beneficially holds 50% of the shareholding, while the remaining 50% are held by him non-beneficially.  However, ASIC does not require information in respect of for whom the shares are held.  The tribunal subsequently considered the original intention of the applicants in respect of the shareholdings so as to be satisfied that the correction made in September 2017 was not merely a manipulative decision made at a much later date in order to comply with the Regulations.

16.  A statutory declaration signed by Mr Goh on 1 September 2017 outlines his understanding that he held 50% of the shares in Yuwee Enterprise Pty Ltd non-beneficially on behalf of Ms Yew from the outset.  Ms Yew reiterated the same understanding in respect of the shareholdings in a written submission to the tribunal. She further stated that their cultural belief is that assets are jointly owned by a married couple and noted that neither she nor her husband had an understanding of the migration legislation. The tribunal noted with some concern that Mr Goh’s reference in the statutory declaration of having made his wife a director when he returned to Malaysia in 2012 has not yet been recorded by ASIC.  According to the most recent ASIC records, Mr Goh remains as the sole director of Yuwee Enterprise Pty Ltd, retaining all of the legal obligations.

17.  In response to a question from the tribunal, Mr Goh stated that they have not sighted the Company Register, which has always been held by their accountant, upon his advice.  The tribunal accepts that this is a common occurrence.  Mr Goh further stated that upon arrival in Australia he and Ms Yew simply wanted to get a business up and running.  He did not look into the details, he did not understand the law and instead relied on his accountant.

18.  Clearly, the shareholding issue has now been rectified through ASIC backdating the shareholding details.  In the tribunal’s view, if ASIC, in administering the laws under the Corporations Act 2001 have deemed the applicant’s explanation as sufficient to amend the register of shareholdings to reflect he holds a 50% beneficial and a 50% non-beneficial shareholding from 1 April 2011, the Tribunal will accept this on face value and not look behind the document. The issue then becomes whether the tribunal is satisfied that the shares have always been held non-beneficially by Mr Goh for Ms Yew.

19.  A letter from Mr Darren Whitford of the City of Ballarat included copies of letters lodged with the Council in May 2011, and June 2012.  Both letters clearly outlined the transfer of all responsibilities in respect of the café operated through Yuwee Enterprises Pty Ltd to Ms Yew, including purchasing and employment matters. 

20.  The tribunal had before it a plethora of support letters from customers of the café, a local councillor, the director of Ballarat regional Tourism, chief executive officer of Commerce Ballarat and the Waubra Catholic Church community.  Ms Yew was able to explain in minute detail the operation of the business and it was clear from the letters provided from various suppliers and customers that it is and always has been she who is the face of the café, both front-of-house and also behind the scenes. 

21.  The tribunal received oral evidence from three café customers and long-time friends of the family.  It was evident that Ms Yew is a hard-working and much-loved businesswoman in Ballarat.  The family as a whole appear to be highly respected by the local community who are also appreciative of Ms Yew’s efforts in respect of her participation with unemployed youth in the local area, training them in the hospitality industry.

22.  While the letters submitted to Ballarat Council in May 2011 and June 2012 fall short of any legal standing, the tribunal accepts that the intention of the applicants has always been that Ms Yew would be responsible for the day-to-day operations of the café upon Mr Goh’s return to Malaysia in 2012.  However, the management of the business does not necessarily equate to ownership, nor is the question of directorship an issue in this review.  It is the shareholding that is the central issue. 

23.  In response to a question by the Tribunal, Ms Yew explained that she and her eldest son completed the application forms while liaising with their then migration agent, recording her shareholding at 0%.  She further stated that given her understanding that as a married couple she and her husband jointly held assets, she was not concerned that her shareholding was recorded at 0%.  Furthermore, her mind was always on the café.  In hindsight, she stated that she should have concentrated more on the application and recognises that it was a mistake not to ensure that the ASIC records accurately reflected the actual positions held by her and her husband in Yuwee Enterprise Pty Ltd. 

24.  The Tribunal examined the general ledger account in respect of the balance sheet item, Shareholders Loan, in the period 25 July 2011 to 30 September 2016.  It was evident that loans to Yuwee Enterprises Pty Ltd came from both Mr Goh and Ms Yew, both being treated as shareholders by the accountant.   

25.  The Tribunal carefully considered the oral and written submissions before it.  It is clear that the applicants had no understanding of the legal requirements in respect of their visa application and quickly took the necessary steps to correct the problem when they were alerted to it by the Department.  The Tribunal noted the applicant’s lack of understanding in respect of the formal ASIC requirements and Australian migration law.  The Tribunal concludes that it was always the intention of the applicants to satisfy the shareholding requirements and not be caught out on a technicality. Furthermore, based on the cultural beliefs of Mr Goh and Ms Yew, the Tribunal also accepts that Mr Goh’s non-beneficially held shares have always been held on behalf of Ms Yew.  As such, the tribunal finds that the first criterion under Regulation 1.11(1)(a) is met. 

26.  The second criterion under Regulation 1.11(1)(b) requires that Ms Yew maintains or has maintained direct and continuous involvement in the management of the business.  This includes day-to-day operations and decisions affecting the overall direction of the business. 

27.  The Tribunal is satisfied that Mr Goh has had limited involvement in the management of the business and related decision-making since his return to Malaysia in 2012.  This is largely due to the time he is required to devote to his business in Malaysia and the short periods of time he is present at the café.  As already discussed, there is an abundance of evidence in support of Ms Yew’s submission that she is the manager of the business in all respects. Ms Yew explained the initial business plan to the tribunal and also relayed her future plans for renovations and provision of evening take-away meals and catering services.  Therefore, the Tribunal finds that the second criterion under Regulation 1.11(1)(b) is also met.

28.  The third criterion requires, relevantly, that the combined shareholding of Ms Yew and Mr Goh in a private company with an annual turnover of less than $400,000 is at least 51%.  As the tribunal is satisfied that 50% of the shares held non-beneficially by Mr Goh are held on behalf of Ms Yew, it follows that the ASIC records indicate the combined shareholding of Ms Yew and Mr Goh in Yuwee Enterprise Pty Ltd is 100%.  Therefore, the tribunal finds that the third criterion under Regulaton 1.11(1)(c)(iii)(B) is also met.

29.  The fourth criterion requires the business to meet the definition of a ‘qualifying business’.  Qualifying business is defined in Regulation 1.03 as an enterprise that is operated for the purpose of making a profit through the provision of goods and services to the public and is not operated for the purpose of speculative or passive investment.

30.  The tribunal is satisfied that in operating a café, Yuwee Enterprise Pty Ltd provides goods and services to the public and has at no time been operated for speculative or passive purposes.  The tribunal considered the financial statements to 30 June 2016 and noted that the café is yet to turn a profit since commencement of operations in the 2011/2012 year. However, it is also evident that the losses are reducing over time. 

31.  The departmental guidelines (PAM3), to which the Tribunal may have regard in appropriate cases, states that it is not necessary for a business to have operated at a profit to be considered a qualifying business, only that it is being operated for the purpose of making a profit. The tribunal is satisfied that this is so and therefore finds that the fourth criterion under Regulation 1.11(c) is also satisfied.  As all four criteria under Regulation 1.11 are met, it follows that Yuwee Enterprise Pty Ltd is a main business for the purposes of clause 892.211.

32.  Ownership interest in respect of Yuwee Enterprise Pty Ltd is discussed in detail above.    As the tribunal has already found above that Ms Yew has had an ownership interest in the main business through Mr Goh holding 50% of the shares non-beneficially on her behalf during the relevant period and continues to have such an interest, sub-clause 892.211(1) is satisfactorily met.

33.  It is therefore appropriate for the Tribunal to remit the matter to the Department to consider the remaining criteria for the grant of the subclass 892 visa. The Tribunal finds that as the second, third, fourth and fifth named applicants applied on the basis of being family unit members of the first named applicant, their applications will be determined by reference to the outcome of the first named applicant’s application on remittal to the Department for reconsideration.

DECISION

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

• Sub-clause 892.211(1) of Schedule 2 to the Regulations.

Robyn Anderson
Member