Residence Appeal No: 15204 [2007] NZRRB 112 (29 March 2007)

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RESIDENCE REVIEW BOARD NEW ZEALAND
AT WELLINGTON	RESIDENCE APPEAL NO: 15204
Before:	S Pearson (Member)
Representative for the Appellant:	H S Golian
Date of Appeal Decision:	29 March 2007
Category:	Business (Entrepreneur)
Decision Outcome:	Section 18D(1)(f)

[1] The appellant is a citizen of Nepal, aged in his mid-thirties. The application for residence includes his spouse, aged in her mid-twenties. The couple's two-year-old child is a New Zealand citizen by birth.

[2] This is an appeal against the decision of Immigration New Zealand (INZ) declining the application because the appellant failed to produce evidence that his business benefited New Zealand, and, in the absence of IELTS certificates, their English language did not reach the level of IELTS 5.0. The principal issue for the Board is whether INZ correctly determined the application on this basis and, if so, whether the appellant's special circumstances are such as to justify a recommendation to the Minister that he consider an exception to policy.

[3] The appellant arrived in New Zealand in July 1997 and has remained in this country on work permits ever since apart from a brief period in mid-1999 and again the next year when he successfully requested a work permit pursuant to section 35A. The appellant was on a visitor's visa for six months from mid-2002. He was out of New Zealand only for the three-month period from late January 2003 to late April 2003 when he returned to Nepal in order to marry. The appellant's spouse accompanied her husband on his return to New Zealand in April 2003.

[4] The appellant submitted a business plan with his application for an LTBV which was lodged on 21 May 2002. The details of the business plan disclosed that the appellant was a 25% shareholder in an Indian restaurant, [ABC] Limited, situated in [A] city in New Zealand. The appellant, as the head chef, was in charge of cooking, menu preparation and the day-to-day running of the business. The other director and 75% shareholder was [AA], who worked full-time in the real estate industry.

[5] The appellant's application for an LTBV was approved on 18 December 2002 and his work permit was granted initially to 16 March 2004, then his new passport was endorsed with the work permit expiry date of 13 January 2006.

[6] The appellant made an application for residence under the Entrepreneur category on 20 April 2005.

[7] Accompanying the appellant's application was a letter dated 19 April 2005 from his representative. The letter pointed out that the appellant's application for an LTBV was accepted for consideration on 21 May 2002 and claimed that at the relevant time, meeting a minimum standard of English was not a requirement. The representative stated that the appellant and his spouse had paid fees to sit an IELTS examination and the results would be forwarded in due course. It was contended that, in the event that they were unable to meet the minimum standard of English they should not be denied residence because the appellant had a legitimate expectation of obtaining residence in New Zealand if he met the other requirements of the Entrepreneur category.

[8] On 26 April 2006 INZ wrote to the appellant through his representative pointing out that he had not provided evidence to show that he met the minimum standard of English, and that an IELTS certificate showing an overall band score of at least 5.0, or evidence of an English-speaking background, or other evidence that met the minimum standard of English pursuant to the policy at BF2, was required.

[9] The letter observed that at the time of the lodgement of his application, the appellant and his spouse had been booked to sit IELTS examinations but had not yet provided the IELTS certificates. The appellant was informed that his spouse was able to purchase English language tuition but that option was not available to him.

[10] The appellant was invited to submit further evidence by 17 May 2006, regarding his English language ability (BF2) and that his business was trading profitably and satisfied the policy at BH4.10 in that it could be considered to benefit New Zealand. The appellant was asked to provide financial statements for the years ended March 2005 and 2006, GST returns and PAYE schedules since January 2005 as well as evidence that his business benefited New Zealand.

[11] The appellant's representative wrote to INZ on 12 May 2006 enclosing ten letters of support from customers of the restaurant and five from suppliers, many of whom commented specifically on his ability to speak and understand English.

[12] The representative's letter pointed out that the appellant had been working in New Zealand since mid-1997. He had been self-employed in his own business since he had been issued with an LTBV.

[13] The representative addressed the issue of the business benefit to New Zealand stating that the appellant was a specialist chef who had taken over a rundown restaurant which had now been refurbished and had a new menu. The representative provided a list of the employees who worked at the restaurant. Only the appellant's brother was employed full-time, and he was on a work permit. Of the part-time workers, his spouse worked 27 hours on a work permit and there were two waitresses whose hours are not specified. Another employee, apparently [AA], worked 15 hours per week, but as from 25 April 2006 he apparently intended to work full-time.

[14] Evidence was provided to show that the couple have a child who is a New Zealand citizen by birth. They have purchased a house, with the appellant's brother, in 2005.

[15] Photocopies of the New Zealand Companies Office record of [ABC] Limited showed that the business was incorporated in March 2001. The company's annual returns for 2002 to 2005 were supplied.

[16] A letter of 8 May 2006 from the company's accountant, [ABC] Financial Solutions, summarised the structure of the business and pointed out that [AA] was effectively a sleeping partner. The requested documentation concerning the company's finances was supplied. The financial statements showed an improving income and in 2006 the appellant was paid $12,000 as a director, in addition to his income as the head chef.

[17] The appellant's certificate in food hygiene dated May 2001 was provided as a photocopy along with [ABC] Limited's dine-in menu.

[18] The representative also enclosed photocopies of certificates of the appellant's attendance at English language courses, showing he had completed a four-month English language course in 2004, a 90-hour IELTS intensive ESOL course in June 2005 followed by a 27-hour, six-week IELTS ESOL course in September 2005.

[19] On 15 June 2006 the appellant's application was assessed and he was found not to satisfy the policy.

[20] In its letter of 15 June 2006, INZ set out the decision to decline the application (verbatim):

"Thank you for applying to Business Migration on 20 April 2005 for residence under the entrepreneur category. We have received your agent's letters of 12 May and 6 June 2006 and the additional information.

We have declined your application for residence under the entrepreneur category. We have carefully considered your application according to the Immigration New Zealand policy. I enclose the assessment report with the details of our decision.

We have also considered your application using the criteria for the other residence categories. However, based on the information in your application, you do not appear to meet the requirements of any other residence category."

[21] The INZ assessment which accompanied the decline letter follows (verbatim):

His LTBV was lodged on 21 May 2002, approved in principle on 18 December 2002, and work permit issued on 13 January 2003. This entrepreneur application was lodged on 20 April 2005.

Because the applicant was approved in principle for a long term business visa on or after 20 November 2002 the entrepreneur policy that is applicable to this application is that under policy BH.

[The appellant] has been a 25% owner and operator of [ABC] Ltd trading as [DEF] in [A city].

"BH4.1 Criteria for successfully establishing a business in New Zealand (20/11/2002)
A principal applicant* will be considered to have successfully established a business in New Zealand if:
a. they have established or purchased, or made a substantial investment* in a business operating in New Zealand; and
b. the principal applicant* has been self-employed* in New Zealand in that business for at least 2 years."

‹› Certificate of incorporation showing its registration in March 2001, and Companies Office documents

‹› PAYE schedules from July 2003 to February 2005 showing [the appellant], and his spouse except for the period April to September 2004 when their son was born

‹› Sample bank statements from January 2003 to March 2005 showing eftpos receipts

His son's birth certificate in April 2004 shows [the appellant's] occupation as chef.

He has been in New Zealand since July 1997 except for three months January to April 2003 when he was married in Nepal.

"BH4.10 Criteria for a business benefiting New Zealand (20/11/2002)
a. A business is considered to benefit New Zealand if it promotes New Zealand's economic growth by for example:

i introducing new, or enhancing existing, technology, management or technical skills, or
ii introducing new, or enhancing existing, products or services; or
iii creating new, or expanding existing, export markets; or
iv creating employment (other than for the principal applicant*) ; or
v revitalising an existing New Zealand business; and

b. the business is trading profitably on the date the application is lodged or a business immigration specialist is satisfied that it clearly has the potential to become profitable within the following 12 months."

On the basis of the information that he had provided I was not satisfied that he meets the requirement for benefit to New Zealand. I wrote to him giving him an opportunity to provide further information and he has now provided:

‹› A letter from his accountant. He states that [the appellant] handles all operational aspects of the business. The major shareholder is a full-time [worker in the] real estate [industry] and does not spend much time in [the] business.

‹› PAYE schedules from April 2005 to February 2006 and IRD PAYE statement of account

His agent claims that the business was in a run-down condition until he became involved in it. He has changed the menu and introduced new dishes. A copy of the menu has been provided.

Wages and salaries have increased from $52,643 in 2003, to $59,902 in 2004, $64,857 in 2005, and $77,234 (in addition to $12,000 to [the appellant] as director salaries) in 2006. His spouse and his brother work full-time in the restaurant. His agent states that a NZ resident has been employed part-time working 15 hours, but full-time from 25 April 2006. This was one day before I faxed my PPI letter to him, so this claim is not convincing. Other staff are part-time. I am not satisfied that he meets the benefit to New Zealand requirement by way of creating employment.

Sales have increased from $226,621 in 2003, to $254,272 in 2004, $258,765 in 2005, and $277,024 in 2006. This represents an increase of 22.2% over three years, or an average increase of 6.9% pa. This is not much more than the rate of inflation. It is insufficient to justify a revitalisation of the business.

He has purchased 25% of an existing business and his capital contribution is low. On the basis of the information that he has provided he has still not satisfied the requirement for benefit to New Zealand.

At the time of lodgement of his application [the appellant] and his spouse were booked to sit IELTS tests, but they have not provided IELTS certificates - ref agent's letter of 19 April 2005. They have requested that "even if they are unable to meet the minimum standard of English they should not be denied residence of New Zealand because the principal applicant had a legitimate expectation of getting residence of New Zealand if was able to meet other requirements of the Entrepreneur Category except for minimum standard of English."

I wrote to him on 26 April 2006 asking for their IELTS certificates. In his response they have still not provided them, so I have concluded that they did not reach IELTS 5. His agent has claimed that he is able to communicate well to run a successful Indian restaurant. He is an Indian chef. He has been in New Zealand since July 1997. He has provided:

‹› a certificate of attendance/achievement for a pre-intermediate English language course in May/August 2004

‹› a certificate of attendance/achievement for a 90-hour "IELTS Intensive" course in June 2005

‹› a certificate of attendance/achievement for 27-hour IELTS course in September 2005

The above documents are insufficient evidence for meeting IELTS 5. On the basis of the evidence that he has provided I am not satisfied that he meets the minimum standard of English required for approval of his application.

He has been in New Zealand since July 1997 and has apparently not achieved the minimum standard of English. Our letter of approval in principle for his long term business permit on 18 December 2002 advised that the Government's changes to Entrepreneur Policy would apply to him if he wished to apply for residence. He has had plenty of opportunity to reach the English standard and to provide the required evidence.

From the information provided in the application and that in AMS I am satisfied that their partnership is genuine and stable. They were married in Nepal in February 2003. INZ Delhi was satisfied as to the genuineness of their marriage. They arrived back in NZ together on 30 April 2003 and have not left. They had a son born in NZ in April 2004. His spouse has worked in his business except for six months at the time their son was born. [The appellant] and his spouse and brother jointly own a house in [A city].

I have verified the company information from the Companies Office website - genuine.

In view of the nature of the information provided, and its consistency, I am satisfied that the application is genuine, and have not carried out any other independent verification.

The applicant has not provided evidence of English language, so he does not qualify for residence under the Entrepreneur Category. He has also not satisfied the requirement for benefit to New Zealand.

I have assessed if the applicant meets any other residence category policy, which was valid at the time of application. Based on the documentation I am not satisfied that the principal applicant meets the requirements for approval under any other residence policy.

He has a son born in New Zealand in April 2004. I have considered Tavita in this regard but do not consider that this changes the outcome of this application.

"Where a visa officer or immigration officer has refused to grant any application for a residence visa or a residence permit, being an application lodged on or after the date of commencement of the Immigration Amendment Act 1991, the applicant may appeal against that refusal to the Residence Review Board on the grounds that -

(a) The refusal was not correct in terms of the Government residence policy applicable at the time the application for the visa or permit was made; or

(b) The special circumstances of the appellant are such that an exception to that Government residence policy should be considered."

[23] The appellant appeals on the ground that the decision of INZ was not correct in terms of the applicable Government residence policy and on the further ground that, if correct, his special circumstances are such that an exception to that policy should be considered.

[24] The representative provides submissions dated 6 July 2006. The following documents are produced:

2. A letter dated 1 July 2006 from [AA], the major shareholder in [ABC] Limited, who confirmed that the appellant was a 25% shareholder in the business which was dependent on his skills for its continued existence.

[25] The Board has been provided with the INZ files in relation to the appellant and has also considered the submissions and documents provided on appeal. An assessment as to whether the INZ decision to decline the appellant's application was correct in terms of the applicable Government residence policy is set out below. This is followed by consideration as to whether the appellant's special circumstances warrant consideration of an exception to policy.

[26] The application was made on 20 April 2005 under the Business (Entrepreneur) category of Government residence policy. The policy applicable to this application is the BH policy, effective 20 November 2002, unless otherwise stated.

[27] The appellant's LTBV was issued on 13 January 2003 after an assessment by INZ which accepted that the appellant had a 25% shareholding in the company where he was working as a chef. He had provided evidence that he had paid $15,000 towards his share of the business and that he had extensive experience as an ethnic Indian chef both in New Zealand and overseas. It was recognised by INZ that the appellant had worked in New Zealand in similar businesses for the last five years and while he did not have management experience he did have supervisory experience in a commercial kitchen.

[28] One of the reasons for the INZ decline of the appellant's application was the finding that he did not meet the requirement at clause BH4.10 of the INZ Operational Manual that his business benefited New Zealand. The relevant policy provides:

a. A business is considered to benefit New Zealand if it promotes New Zealand's economic growth by for example:

i introducing new, or enhancing existing, technology, management or technical skills, or

[29] INZ stated that it was not satisfied that the appellant met the policy at BH4.10. Because he had purchased an existing business it was considered necessary for him to show that he was employing more people than had been employed at the time he had purchased the business. To claim the employment "benefit" at BH4.10.a.iv of the policy the appellant needed to show he had created employment other than for himself.

[30] The appellant addressed this point in his letter of 12 May 2006. It was contended that he was a specialist chef who had created employment "both direct and indirect". The list of employees at the restaurant comprised the appellant's brother as a full-time worker, his fellow director as a part-time worker with a 15-hour commitment, and the appellant's spouse who worked 27 hours each week. In addition there were two part-time waitresses although no further details were provided about them. The representative also stated that the appellant's business partner intended to work full-time after 25 April 2006.

[31] On appeal [AA] explains that he continues to work in his real estate business and does not have any time to concentrate on the management of the company. He had offered the appellant a stake in the company as the head chef in charge of running the day-to-day business. Without the appellant, he anticipated the restaurant would be sold or closed as he was not able to maintain it with his current job commitments.

[32] The policy at BH4.10.a.iv does not require employees to be New Zealand citizens or residents, or to work full-time. The authority relied on by INZ that these were policy requirements is not stated.

[33] The Board notes that several categories of temporary permit policy allow non-residents to work lawfully in New Zealand. There is no discernible reason why the employment of the appellant's family members, who hold work permits, should not meet the policy requirement. Obviously, the appellant's business partner's employment would be unlikely to suffice because, as the co-owner of the business, he could be self-employed, rather than an employee.

[34] The requirement that employment be full-time is not only not a term of policy, it is also unrealistic particularly in light of the approval which had already been given to the appellant's business plan. Most restaurants are open for restricted hours, by the very nature of their trade, and the likelihood of most, if not all, staff being part-time must have been obvious to INZ from the outset.

[35] The Board finds the INZ decision to decline the appellant's application in respect of the failure to meet the policy requirements at BH4.10, was incorrect.

[36] The second reason for INZ declining the appellant's residence application was that he did not meet the minimum requirements in respect of English language competence. The policy relevantly provides:

a. Principal applicants* under the Long-Term Business Visa, Investor, Entrepreneur, and Employees of Relocating Businesses categories must meet a minimum standard of English to ensure their English language ability is sufficient to assist them to successfully settle in New Zealand.

b. Unless BF4 applies, applications under all categories of Business Immigration Policy must be declined if the principal applicant* has not met the minimum standard of English.

[37] Clause BF4 (which allows applicants to purchase ESOL tuition) was not relevant to the appellant's application because it only applies to persons who had been issued with a work visa or work permit pursuant to an LTBV prior to 20 November 2002. It is, in fact, unclear if the issue of a work visa would be sufficient because the policy is inconsistent with its own heading, stating:

"BF4 Transitional provisions for Entrepreneur applicants who held a work visa or permit granted under the Long Term Business Visa category prior to 20 November 2002 (that is, they were assessed under Entrepreneur policy listed at BD)

a. Principal applicants* under the Entrepreneur category who held a work permit granted under the Long-term Business Visa category prior to 20 November 2002, meet the minimum standard of English if:

i they provide a certificate (no more than 2 years old at the time their application under the Entrepreneur category is lodged*) from the International English Language Testing System (IELTS), which shows a minimum band score of 4 in each of the 4 components of the IELTS General or Academic Module, or

ii they provide evidence that they have an English-speaking background (see BF2.1) which is accepted by a visa or immigration officer as meeting the minimum standard of English; or

iii they provide other evidence which satisfies a visa or immigration officer that, taking account of that evidence and all the circumstances of the application, the person meets the minimum standard of English (see BF2.5), or

[38] However, that point need not be determined here, because the appellant held neither a work visa nor a work permit pursuant to his LTBV prior to 20 November 2002.

a. Unless BF4 applies, principal applicants* who lodge applications under all categories of Business Immigration Policy, meet the minimum standard of English if:

i they provide a certificate (no more than 2 years old at the time the application is lodged*) from the International English Language Testing System (IELTS), which shows an overall band score of at least 5 in the IELTS General or Academic Module, or

ii they provide evidence that they have an English-speaking background (see BF2.1) which is accepted by a visa or immigration officer as meeting the minimum standard of English; or

b. In any case under (a) (ii) or (iii), a visa or immigration officer may require an applicant to provide an IELTS certificate in terms of paragraph (a)(i). In such cases, the IELTS certificate will be used to determine whether the applicant meets the minimum standard of English.

Note: IELTS is an international organisation that provides an assessment of ability in English. Its General and Academic Modules provide band totals (test results) showing overall ability as well as performance in listening, reading, writing and speaking.

"BF2.5 Circumstances that may indicate a person otherwise meets the minimum standard of English

Circumstances that may indicate an applicant meets the minimum standard of English may include but are not limited to:

· whether members of the applicant's family speak any language other than English;

· the nature of the applicant's current or previous employment (if any) and whether it required or was likely to have required skill in English language;

· the nature of the applicant's qualifications (if any) and whether the obtaining of those qualifications was likely to have required skill in English language.

[40] The policy at BF1.b states that if a principal applicant has not met the minimum standard of English, the application must be declined. The appellant was required to submit an IELTS certificate showing an overall band score of at least 5.0 or provide evidence of an English-speaking background or other evidence that he met the minimum standard of English. Instead, he simply produced evidence of his attendance in English language courses described as IELTS intensives, most recently in mid and late 2005.

[41] A tax invoice receipt dated 31 March 2005 showed the appellant had paid the IELTS examination fees. However, no IELTS certificate was ever submitted. The representative has argued that if the appellant and his spouse were unable to meet the minimum standard of English they should not be denied residence because the appellant had a legitimate expectation of obtaining residence if he was able to meet all of the other requirements of the Entrepreneur category.

[42] That submission is rejected. The appellant's application for an LTBV was approved on 18 December 2002 and therefore he was caught by the provisions of the BH policy that were introduced a month earlier. The appellant could have no expectation that the tighter English language requirements would not apply to him.

[43] When the appellant was issued with an LTBV he was granted a work permit that enabled him to remain in New Zealand for three years in order to implement his business plan. A letter of 13 January 2003 that informed him of approval of his LTBV emphasised that this was a temporary situation and it should not be taken as an indication that a later residence application would be approved. Any application for residence would be assessed under the terms and conditions applicable at the time any such residence application was made.

[44] Instead of an IELTS test the appellant relied on the submission of 15 letters, many of which made a point of noting that his English language skills are very good. Ten of those letters were from customers of his restaurant and five are from service providers.

[45] Inevitably, these letters had been solicited in order to support the application. As such, they were not objective evidence. While the Board accepts that the appellant is able to communicate with his customers and business contacts and, indeed he has lived in this country since 1997, the evidence put forward was insufficient to establish that the appellant satisfied the requirements of BF2 or BF2.5. INZ was entitled, as a matter of policy, to require the appellant to provide an IELTS certificate. He failed to comply.

[46] The Board finds that the evidence submitted was insufficient to establish that the appellant met the required IELTS standard of an overall band score of at least 5.0 in the General or Academic Module and therefore, INZ was correct to determine that the appellant did not meet this aspect of Government residence policy.

[47] Notwithstanding the incorrect conclusion reached in respect of the 'benefit to New Zealand' requirement of policy, the application was correctly declined.

[48] The Board has power pursuant to section 18D(1)(f) of the Act to find, where it agrees with the decision of INZ, that there are special circumstances of an appellant that warrant consideration by the Minister of Immigration of an exception to policy.

[49] Whether an appellant has special circumstances will depend on the particular facts of each case. The Board balances relevant positive and negative factors in each case to determine whether the appellant's circumstances, when considered cumulatively, are special.

[50] The appellant is in his mid-thirties. He is a Nepalese citizen as is his 25-year-old spouse. The couple's child was born in 2004 and is therefore a New Zealand citizen by birth.

[51] The Board is reminded by the representative on appeal that the couple have a New Zealand-born child who holds New Zealand citizenship. The Board is mindful of the 1989 Convention on the Rights of the Child, and has considered the Court of Appeal decisions in Tavita v Minister of Immigration [1994] 2 NZLR 257, Puli'uvea v Removal Review Authority (1996)14 FRNZ 322 and most recently, Huang Xiao Qiong v Minister of Immigration [2006] NZHC 1149; [2007] NZAR 163. It is clear that the interests of children are a primary consideration that must be considered against all relevant considerations.

[52] It is apparent from the evidence submitted by the appellant that the restaurant business is providing employment for five people as a small, self-sustaining, ethnic restaurant. The appellant became a 25% shareholder in a restaurant business that was purchased in 2001. The major shareholder and fellow director has explained that he works full-time in the real estate industry and does not have much time to commit to the business. The appellant, therefore, has the day-to-day control and management of all aspects of the business and is an integral part of the entire operation of the restaurant.

[53] As noted above, the appellant's application under the Business (Entrepreneur) category of Government residence policy was declined because he did not provide evidence of his ability to meet the English language requirements.

[54] The appellant has submitted warm letters of support from ten of his regular customers who attest to the fact that he offers a good standard of Indian cuisine and is, at all times, an approachable and pleasant host. There are also letters of support from commercial suppliers who confirm the appellant's honesty and industry. These letters demonstrate that the appellant has a functional level of English that enables him to conduct his business, despite the fact that he has not produced evidence, in the form of an IELTS certificate, that he has attained the formal level of proficiency that would enable him to meet policy.

[55] It is also clear that the appellant has made considerable efforts to improve his English language skills. He has attended a pre-intermediate English language course in 2004 and followed this up with two courses aimed particularly at assisting people to achieve success in the IELTS examinations, in 2005.

[56] The appellant has impressed his customers and suppliers as being a hardworking chef and competent manager of the restaurant. While he has not submitted any evidence to show that he has exceptional skills in the food industry, he has a significant body of experience behind him as a chef and has upgraded and revitalised the restaurant, including the development of a new menu.

[57] It is noted that the appellant has been living in New Zealand for almost ten years and he has submitted clear character and health certificates for himself and his spouse.

[58] The Board notes that the appellant is committed to New Zealand. He has purchased a residential property with his brother and his spouse, notwithstanding the fact that all are on temporary permits in this country.

[59] When the appellant's particular circumstances are weighed, and in particular the fact that he has worked lawfully as a chef for almost ten years in New Zealand and is now well settled is considered, the Board finds that he has special circumstances such that warrant a recommendation to the Minister of Immigration that an exception to policy be considered. The Board notes that the appellant only failed to meet the policy because of the English language requirement, which changed after he had applied for an LTBV. He has made considerable efforts to improve his English language skills and clearly interacts successfully with his restaurant business providers and his customers.

[60] This appeal is determined pursuant to section 18D(1)(f) of the Immigration Act 1987. The Board confirms the decision of INZ as correct in terms of the applicable Government residence policy but considers there are special circumstances of this appellant that warrant consideration by the Minister as an exception to that policy.

[Pursuant to section 18E(5), on 9 April 2007, the Minister granted a residence permit to the appellant and his spouse.]

New Zealand Residence Review Board