1406948 (Migration)

1406948 (Migration) [2016] AATA 3327 (1 March 2016)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANTS:  Mrs Shaojuan Lin
Mr Fangshen Lin
CASE NUMBER:  1406948
DIBP REFERENCE(S):  CLF2013/136029 CLF2014/23586 CLF2014/5967
MEMBER:Dione Dimitriadis
DATE:1 March 2016
PLACE OF DECISION:  Sydney
DECISION:The Tribunal affirms the decision not to grant the applicants Business Skills (Residence) (Class DF) visas.

Statement made on 01 March 2016 at 3:24pm
STATEMENT 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 24 March 2014 to refuse to grant the applicants Business Skills (Residence) (Class DF) Subclass 890 visas under s.65 of the Migration Act 1958 (the Act).
The applicants applied for the visas on 18 June 2013. At the time the visa application was lodged, Class DF contained 4 subclasses: 890 (Business Owner); 891 (Investor); 892 (State/Territory Sponsored Business Owner) and 893 (State/Territory Sponsored Investor). In this case, claims have only been made in respect of Subclass 890. The applicants stated in the application (Form 47BU) that they were applying for Business Owner (Residence) visas.
The delegate refused to grant the visas on the basis that the first named applicant (the applicant) did not meet the requirements of cl.890.212 of Schedule 2 to the Migration Regulations 1994 (the Regulations).
The applicant appeared before the Tribunal on 5 August 2015 to give evidence and present arguments. The Tribunal also received oral evidence from Mr Qifeng Lin (also known as Kevin Lin) and Mr Qiming Lin.The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages.
The applicants were represented in relation to the review by their registered migration agent.
For the following reasons, the Tribunal has concluded that the decision under review should be affirmed.
CLAIMS AND EVIDENCE
When applying for the visa, the applicant nominated HEQS Furniture Pty Ltd and Iflow Network Pty Ltd as main businesses. The applicant’s percentage interest for the last 2 years was 62% in HEQS Furniture Pty Ltd in 2012 and 2013 and 52% in Iflow Network Pty Ltd in 2012 and 2013. The remaining shares in HEQS Furniture Pty Ltd are held by Qifeng Lin and Yuxian Lu (also known as Steven Lu). The remaining shares in Iflow Network Pty Ltd are held by Qifeng Lin. The applicant’s involvement in HEQS Furniture Pty Ltd began on 25 September 2009. Her involvement in Iflow Network Pty Ltd began on 12 October 2009.
The applicant stated that the net assets of the business, HEQS Furniture Pty Ltd, in the year 2012 was $97,885.22 and the ownership share of the applicant, or the applicant and her spouse or de facto partner, in the business was $60,688.84. The applicant stated that the net assets of the business, HEQS Furniture Pty Ltd, in the year 2013 was $113,798 and the ownership share of the applicant, or the applicant and her spouse or de facto partner, in the business was $70,554.76. The applicant stated that the balance of loans advanced to the business by the applicant, or by the applicant and her spouse or de facto partner in 2012 and 2013 was $40,495.85. The applicant stated that the net assets of the applicant, or of the applicant and her spouse or de facto partner, in the business in 2012 was $101,184.69 and in 2013 was $111,050.61.
The applicant stated that the net assets of the business of Iflow Network Pty Ltd, in the year 2012 was $8,168.96 and the ownership share of the applicant, or the applicant and her spouse or de facto partner, in the business was $4.247.86. The applicant stated that the net assets of the business, Iflow Network Pty Ltd, in the year 2013 was $60,945.93 and the ownership share of the applicant, or the applicant and her spouse or de facto partner, in the business was $31,691.88. The applicant stated that the balance of loans advanced to the business in 2012 and 2013 by the applicant, or by the applicant and her spouse or de facto partner, was $0. The applicant stated that the net assets of the applicant, or of the applicant and her spouse or de facto partner, in the business in 2012 was $4,247.86 and in 2013 was $31,691.88.
The applicant provided to the Department of Immigration (the Department) a number of documents including financial statements for HEQS Furniture Pty Ltd for the period 1 April 2012 to 31 March 2013, financial statements for Iflow Network Pty Ltd for the period 1 April 2012 to 31 March 2013, Business Transaction Account bank statements from the Commonwealth Bank in the name of Iflow Network Pty Ltd from 18 January 2011 to 17 April 2013, Business Transaction Account bank statements from the Commonwealth Bank in the name of HEQS Furniture Pty Ltd from 4 February 2011 to 24 April 2013, and summary table of net business assets. The financial statement for HEQS Furniture Pty Ltd indicated that in 2012 and 2013 there was a financial liability of $40,495.85 which was a loan from the applicant.
The applicant provided an undated statement about her business activities in Australia (folio 54 of Part 1 of the Department’s file). In 2009, she came to Australia and joined HEQS Furniture Pty Ltd and Iflow Network Pty Ltd. She holds 62% of shares of HEQS Furniture Pty Ltd and 52% of shares of Iflow Network Pty Ltd. The applicant stated that as the major shareholder and manager of the two companies, she is mainly responsible for the “companies (sic) supply chain, warehousing and financial control” while the other managers are mainly responsible for sales. Most of the companies’ products and materials are imported from China. Due to the applicant’s previous management experience in her factory in China, the applicant travelled frequently to China to supervise quality and efficiency of supplier chain.
The applicant stated that her duties included analysing “demand requirements” to identify production and supply and recommending actions for “resolution warehouse management”; evaluating, selecting and monitoring suppliers; directing “suppliers planning to ensure on time availability of products to fill customer orders and on time shipments”; and coordinating with sales department changes and updated requirements for purchased goods and materials.
The applicant stated that, in October 2009, she purchased an industrial warehouse in Chippendale to base their business. She provided a list of her duties in warehouse management. The applicant stated that she also helps provide staff with product knowledge, new procedures and policies and oversees the “financial, cash flow” (sic) and she authorises expenditure to ensure that all financial obligations are met. The applicant stated that their company is appointed as the contractor supplier for the Commonwealth of Australia and the University of Ballarat to supply furniture and electrical appliances. Their business set up an online order platform to help small businesses in Australia get solutions for furniture and electrical appliances. With this online platform, they are able to expand their business all over Australia. They have already set up a warehouse in Queensland and Western Australia.
In a letter received by the Department on 18 June 2013, the applicant’s former representative stated that the applicant is the major shareholder of HEQS Furniture Pty Ltd and Iflow Network Pty Ltd and she has a net value of over $100,000 in the main businesses throughout the 12 months before the application which was lodged in June 2013.
Information in the Department’s files is that on 15 January 2014 the Department requested further information including the general ledger for the applicant’s loan to HEQS Furniture Pty Ltd from the start of the loan, loan agreement between the applicant and HEQS Furniture Pty Ltd, bank statements for the applicant and the company showing transfer of funds, and evidence of the source of those funds lent to the business and copies of foreign funds transfers.
On 14 February 2014 the Department received a number of documents from the former representative including a general ledger (folio 89 of Part 3 of the Department’s files) for the applicant‘s loan to HEQS Furniture Pty Ltd “for the period from the start of the loan”. The ledger covers the period from 30 June 2009 to 31 March 2013. The representative stated (at folio 173 of Part 3 of the Department’s files) that the applicant “informs the loan from her to HEQS Furniture Pty Ltd is mainly her RMB payment in China to purchase the goods.” (sic)
The delegate refused the visas and was not satisfied that the applicant met cl.890.212. The delegate stated that the applicant, with an ownership of 62% in HEQS Furniture Pty Ltd, provided a balance sheet for this business as at 31 March 2012 and 31 March 2013 showing that the company net assets are as follows:
· as at 31 March 2012 - 62% - net assets are $60,688;
· as at 31 March 2013 - 62% - net assets are $70,554.
The delegate referred to the claimed loan to the business of $40,495.85 as at 31 March 2012 and 31 March 2013 and stated that except for the general ledger and short explanation from the applicant, no supporting evidence of the loan, such as bank statements showing transfer of funds between personal and business accounts, was provided by the applicant. The delegate was not satisfied that the loan of $40,495.85 was made to the business by the applicant and the delegate only accepted the net assets as at 31 March 2012 and 31 March 2013 of $60,688 and $70,554 respectively. The delegate stated that the net assets are below the required level of at least $100,000 and therefore cl.890.212 is not met.
The applicant applied to the Tribunal for review on 12 April 2014 and provided a copy of the delegate’s decision record.
On 9 April 2015 the Tribunal wrote to the applicants and invited them to a hearing on 3 June 2015.
On 27 May 2015 the Tribunal received from the representative a request for an adjournment of the hearing. The representative stated that the applicants’ former adviser appears to have simply advised that the applicant extended a loan of about $40,000 to her Australian company but did not provide any evidence of this with the visa application. The representative stated that the Department specifically asked for documents proving the company loan in their letter of 15 January 2014, including any loan as well as banking and other records to show the physical transfer of funds from the applicant to the Australian company.
The representative stated that, as far as he can see, the Department was never informed that the money was never physically transferred to the company in Australia and that instead funds remained in China and were applied by the applicant to pay suppliers on behalf of the Australian company, an issue that itself raises additional evidential issues.
The representative stated that this raised significant evidential issues including:
oMaterial showing the supplier in China providing products to the business in Australia and the purchase price for those goods;
oThe applicant paying the supplier in China on behalf of the Australian company;
oAn accounting reconciliation in Australia;
oEvidence explaining this payment structure.
The representative stated that the first of the three issues will rely primarily on documentary evidence and the fourth issue will be more reliant on oral testimony. The representative stated that there will be limited utility in holding the hearing unless the Tribunal is first provided with this documentary evidence as only then would the Presiding Member be in a position to properly assess the oral testimony.
The Tribunal carefully considered the request for an adjournment and agreed to adjourn the hearing to 5 August 2015.
On 5 August 2015 the Tribunal received a large number of documents and a submission from the representative who stated that it is only the witness statements which are directly relevant to the hearing. The representative stated that it is their suggestion that the primary issue is the oral evidence from the applicant and the witnesses on the question of whether the applicant paid suppliers in China for imports on behalf of HEQS Furniture Pty Ltd. The representative stated that, if this proposition is not accepted by the Tribunal, then the applicant will not succeed in this review. If the proposition is accepted, they will need to convince the Tribunal through documentary evidence that the amounts of the loans extended by the applicant are sufficient to meet the $30,000-$40,000 shortfall in the business assets identified by the Department.
The representative stated that the Department accepted only that the net business assets held by the applicant totalled $60,688 as at 31 March 2012 and $70,554 as at 31 March 2013. The representative stated that when this issue was raised with the applicant, her response was that she held additional business assets, being cash loans that she had extended to HEQS Furniture Pty Ltd but which had not been included in the company’s financial accounts. The representative stated that the practical difficulty with this case flows from the paucity of “traditional” documentation to evidence such loans. The representative stated that it is common for company directors and major shareholders to extend loans to their company from time to time and for wholly Australian based businesses these types of loans would commonly be evidenced by loan agreements between the company and individuals, evidence of funds being transferred from the person’s bank accounts to the company, and the loans being reflected as a liability on the company’s balance sheet.
The representative stated that unfortunately these types of documents largely do not exist. In the applicant’s case the applicant provided these loans in cash handed to her older son in China (Mr Qiming Lin) who then used those funds to pay suppliers of the purchased stock.
The representative submitted that they need to approach these loans through a process of elimination following these steps: establish the products imported from China (being the dates of the imports and the value of each export); eliminate those imports paid for directly by HEQS Furniture Pty Ltd through funds transfer from the bank account in Australia to the supplier; the imports “left” are those paid for directly by the applicant in China; deduct any loan repayments made by HEQS Furniture Pty Ltd to the applicant in the relevant periods; and the result of these calculations would be an additional net business asset held by the applicant.
The documents provided by the representative including the following:
·Statement dated 4 August 2015 from Qifeng Lin;
·Statement dated 3 August 2015 from the applicant;
·Statement dated 3 August 2015 from Qiming Lin;
·Statement dated 3 August 2015 from Yuxian Lu;
·Statements from Xujie Wang who translated the statements of Qiming Lin and the applicant;
·Payroll records for the applicant including PAYG payment summaries and payroll summaries;
·Import documentation from June 2011 to June 2012 and from June 2012 to June 2013 for Iflow Network Pty Ltd and HEQS Furniture Pty Ltd;
·Payments made for Chinese imports from 2011 to 2012;
·Loan repayments by HEQS Furniture Pty Ltd to the applicant from June 2011 to June 2012 and from June 2012 to June 2013;
·Money transfers from HEQS Furniture Pty Ltd to Qiming Lin;
·Money transfers from HEQS Furniture Pty Ltd to Qiming Lin (in a language other than English) (bank statements for Qiming Lin showing funds received);
·Documents from 2012 to 2013 “Qiming Lin paying suppliers in China” (in a language other than English);
·Bank statements;
·Trace request by ANZ bank regarding a transaction on 22 July 2013 for an amount of $8,800 from HEQS Furniture Pty Ltd to the account of the applicant and the second named applicant;
·Staff payroll details.
In a statement dated 3 August 2015, Mr Yuxian Lu stated that he and Qifeng Lin started HEQS Investment Pty Ltd together. Mr Lu holds shares in HEQS Furniture Pty Ltd and in HEQS Investment Pty Ltd. Mr Lu stated that in May 2012 HEQS Furniture Pty Ltd asked if they could borrow RMB 300,000 from him for help with purchasing goods in China. Mr Lu claimed that his brother transferred RMB 300,000 on 22 May 2012 to the bank account of Qifeng Lin’s older brother in China. The money was repaid three months later into the bank account of Mr Lu’s brother by Qiming Lin’s older brother, Qifeng Lin. Mr Lu’s brother has closed that bank account and they cannot obtain any bank statements from that period.
In a statement dated 3 August 2015, Mr Qiming Lin stated that he lives in his parents’ home in China. He has a manufacturing business in China. He developed an arm of the business which was involved with furniture manufacturing. His younger brother and the applicant started importing Chinese furniture into Australia in 2011 from other manufacturers. In 2012 they developed Mr Qiming Lin’s factory to manufacture metal beds in part to export to the Australian business. The business in Australia “will order from my business on a regular basis to maintain the Australian business’ stock level.” Mr Qiming Lin stated that normally the business in Australia would transfer money to his bank account in China. “HEQS has constantly exchanges AUD to RMB through Anying or Kunlun either on the spot or use pre-locked in exchange rate and then transfer money to my account (sic).” Mr Qiming Lin stated that sometimes he did not have enough of that money in his account to pay for suppliers and when that happened the applicant (his mother) gave him cash as needed for the purchase. If the applicant was in China at the time, she handed the money to him personally and he would take the money to the supplier. However if she was in Australia, she spoke to him on the telephone and directed him to take the money from their safe in the family home in China and take the money to the supplier. Mr Qiming Lin stated that where the applicant signed a contract with Chinese suppliers, he pays the full amount for the goods before the supplier ships the container to Australia directly and he is only involved in payment of the shipment. For suppliers where there are no contracts, Mr Qiming Lin pays the full amount before the supplier ships the goods to his factory in Shantou and then he coordinates the shipment to HEQS in Australia.
In a statement dated 4 August 2015, Mr Qifeng (Kevin) Lin stated that the applicant and he set up the business in Australia and there are three companies in HEQS Business Group’s operations. The total capital to establish the three companies was about $500,000, all of which was provided by his parents. Mr Qifeng Lin stated that his parents transferred some of the money between bank accounts but mostly they brought cash with them each time they visited Australia from China. The HEQS business paid money to suppliers in China in different ways. To suppliers of white goods, they transferred money from the HEQS bank account in Australia directly to the suppliers’ bank account in China and these transactions are shown on the HEQS bank accounts. If the goods are furniture, his older brother paid with RMB from his bank account or by money given to him by the applicant. Mr Qifeng Lin stated that HEQS “constantly exchanges AUD to RMB through Anying or Kunlun either on the spot or use pre-locked in exchange rate and then transfer money” to his older brother’s account in China when HEQS has excess cash and the exchange rate is favourable for the business. Sometimes they did not have enough money and when that happened, the applicant would give cash to Qifeng Lin’s brother as needed for the purchase. If the applicant was in China, she would hand him the money personally and he would take the money to the supplier. However, if she was in Australia, she would direct Qifeng Lin’s brother to take the money from the safe in his parents’ home in China and take the money to the supplier. Mr Qifeng Lin stated that if the applicant transfers her money from China to the company’s bank account in Australia, which then transfers the money to Mr Qifeng Lin’s brother in China, it will take longer, the exchange rate is unpredictable, the payment for goods are progress payments and this causes additional and expensive transfer costs. The applicant believes that her way of transferring the money was a more sensible business way to increase speed and keep costs low. Mr Qifeng Lin claimed that all the money that the applicant lent to HEQS has been repaid to the applicant.

In a statement dated 3 August 2015, the applicant stated Qifeng Lin (her son) set up the HEQS Business Group of which there are three companies including HEQS Furniture Pty Ltd and Iflow Network Pty Ltd. The total capital needed to establish the three companies was about $500,000 all of which was provided by the applicant and her husband. They transferred some of the money between bank accounts but mostly they brought cash with them each time they visited Australia from China. The applicant became a shareholder and director in HEQS Furniture Pty Ltd in September 2009. The applicant stated that the HEQS business paid money to suppliers in China in different ways. They transferred money from the HEQS bank account in Australia directly to the supplier’s bank account in China and these transactions are shown on the HEQS bank accounts. If the goods are furniture the money is paid by the applicant’s older son with RMB from his bank account or by money given to him by the applicant. HEQS “constantly exchanges AUD to RMB through Anying or Kunlun either on the spot or use pre-locked in exchange rate and then transfer money” to her older son’s account in China when HEQS has excess cash and the exchange rate is favourable for the business. Sometimes they did not have enough money with the applicant’s older son in China and when that happened, the applicant would give cash to her older son as needed for the purchase. If the applicant was in China at the time, she would hand him the money personally and he would take the money to the supplier. However, if she was in Australia, she would direct her older son to take the money from the safe in her home in China and take the money to the supplier. At the time, the applicant believed that her way of transferring this money was a more sensible business way to increase the speed and keep costs low. This was her money and her husband’s money and it did not matter to her if the money was in a safe in China, in their bank accounts in China, in her son’s bank accounts in China or Australia or in the HEQS company bank account. The applicant stated that all the money that she lent to HEQS has been repaid to her. The applicant stated that they have two types of purchases from China. Where a contract has been signed with Chinese suppliers, her older son will pay the full amount for the goods before the supplier ships the container to Australia directly. Where there are no contracts with suppliers, the applicant advises her older son which stock needs to be purchased and he searches for suppliers and purchases from them. The applicant’s older son will pay the full amount before the supplier ships the goods to her older son’s factory in Shantou and then he will coordinate the shipment to HEQS in Australia. The applicant stated that in late May 2012 HEQS Furniture Pty Ltd was short of RMB to purchase goods in China and the applicant and Qifeng Lin asked Stephen (Yuxian Lu) if the business could borrow RMB 300,000. Stephen’s brother in China transferred the money to the applicant’s older son in China. This amount was repaid three months later by being paid into Stephen’s brother’s bank account. The applicant’s older son in China, Mr Qiming Lin, transferred the money to the bank account of Stephen’s brother in China. The applicant stated that this was the only time that the business ever asked Stephen for help with the business.
The Tribunal hearing
The representative stated that the single issue for the Department was the net business assets. The Department accepted that there was $60,000 to $70,000 in net business assets but the legislative requirement is $100,000. The representative stated that the witnesses are here to give evidence that the practice of the applicant was to pay suppliers in China in cash from cash she held in her family safe. The applicant will give evidence of what she did with the money and Mr Lim, the older son in China, is the person to whom the cash was given and he paid the suppliers. The representative stated that there was only one time when a non-family member gave a loan to the business and that was Mr Yuxian Lu.
The Tribunal informed the applicant that she was refused the visa because she did not satisfy cl.890.212. The Tribunal informed the applicant of the requirements of cl.890.212.The Tribunal informed the applicant that the relevant period is from 18 June 2012 to 18 June 2013.
The Tribunal informed the applicant that she had provided a large submission about an hour before the hearing. The Tribunal informed the applicant that a request for a postponement was made in May 2015 because there was limited utility in holding the hearing unless the Tribunal was provided with documentary evidence because only then would the Member be in a position to assess the oral testimony. The Tribunal informed the applicant that a postponement was granted and the Tribunal had requested in the hearing invitation that the applicant provide documents by 22 July 2015. However, no documents were provided by that date. The representative stated that this is one of the most “documentary complicated cases” he has had in his entire practice and there have been months and months of diligent work by the family and by the representative.
The Tribunal brought to the applicant’s attention that the decision was made a year and five months before and they have known of the issues all this time.
The representative stated that it comes down to the proposition as to whether the Tribunal accepts that cash loans were extended to the business. If the Tribunal does not accept that there was a practice of cash loans, then this matter must fail. If the Tribunal does not accept that there were lawful cash loans extended to the business, then what is left is the quantification of net business assets identified by the Department and those amounts of $60,000 or $70,000, are insufficient.
The representative stated that, what they do not have, is the kind of documentation that you normally expect to see with a truly Australian based business. You would expect to see a loan agreement and money being transferred from one bank account to another. This would commonly be seen in the profit and loss sheet as a liability for the company. In this case it was not reflected in the profit and loss account at the time. That does not mean that it did not occur.
The representative stated that there are two types of imports, furniture and whitegoods. The whitegoods are paid for by transactions of cash from the Australian bank account of the business to the supplier. The furniture imports were paid by cash. They have import documentation, the bills of lading and the invoices, and they know the value of the goods. They know that the company did not pay the suppliers from the Australian bank account and if the company did not pay, someone else did. There are transactions where the company purchased goods, they were imported into Australia but there is no documentation to show who paid for the furniture in China. The representative stated that the applicant was paying for those transactions in cash.
The representative stated that there were two different scenarios. The Australian company is sensitive to foreign exchange movements. If the Australian dollar and the RMB exchange rates were favourable, it was routine practice to transfer money from the Australian company bank account to the applicant’s son in China and he would have that money in his bank account. It was an account to account transfer. There was a pool of money available to him in China to pay the suppliers. When this pool of money was not enough, if the applicant was in China, she got cash out of her own safe and gave it to her son who paid the supplier. The second version is that if the applicant was not in China, her son went to the safe, with the applicant’s permission, and took the money out.
The representative stated that the applicant claims that she paid for those supplies. The furniture came from the furniture factory of the applicant’s son or from other suppliers. It is common in China to accept cash.
The representative stated that there is no documentation trail to show that the applicant is the one providing money to the suppliers. The representative stated that if the Tribunal does not accept that evidence, there will be insufficient net business assets on the books in Australia. If this evidence is not accepted, they will not get to the $100,000 net business assets.
The applicant stated that she is the director of HEQS and is a shareholder of three companies, an investment company, a furniture company and a furniture wholesale company.
The applicant stated that that there is no loan agreement between herself and HEQS Furniture Pty Ltd. The Tribunal asked the applicant what evidence she has that there is a loan from her to HEQS Furniture Pty Ltd. The applicant stated that that she is supporting her son to set up a company and this is what it is like in China. It is a family business so it is not necessary.
The Tribunal asked the applicant again what evidence there is that there is a loan from her to HEQS Furniture Pty Ltd. The applicant stated that that their company imported a lot of products from mainland China and she paid in cash to mainland China for these products.
The Tribunal informed the applicant that it has to be satisfied that her assets in the main business have a net value of at least $100,000 and that it had a net value of at least $100,000 throughout the 12 months before the date of the application. The applicant stated that that their company does better and better each year. Previously they spent a lot of time in China and sorted out the assets in their children’s names and also the assets in the parents’ names. The boundary was clear. Now they realise that it was not good. She thought that if there was no money they would just use money to buy products and they would give the company the cash so that the company can have cash flow. They thought purchasing with cash was all right, so they do not have evidence.
The Tribunal brought to the applicant's attention that when she applied for the visa she stated in the Business Skill Profile form 1217 that the balance of the loan advanced to the business by her, or by her and her spouse was $40,495.85 and that was in the years 2012 and 2013. The applicant stated that when the visa was refused, that is where this figure comes from and they said they could not find this in the investment figures. The applicant stated that they put in much more than this figure.
The applicant confirmed that there is no loan agreement to HEQS Furniture Pty Ltd. The Tribunal informed the applicant that it has looked at the bank statements that the applicant provided to the Department and could see no evidence of a loan from her to HEQS Furniture Pty Ltd. The applicant stated “no”. The Tribunal informed the applicant that the financial statement for the year ending 31 March 2013 indicates that there was a loan from her for $40,495.85.
The representative apologised and stated that he forgot and he had said before that the loan was not reflected in the profit and loss statement. The Tribunal informed the applicant and representative that it is in the detailed balance sheet (folio 156 of Part 2 of the Department’s file). The Tribunal informed the applicant that it is stated in the financial statement, but there is no supporting evidence to show that the loan was made. The Tribunal asked the applicant if that is correct. The applicant stated that the actual figure was much more than that but they only used cash to purchase products.
The Tribunal brought to the applicant's attention that she provided a statement entitled ‘My business activities in Australia’ about her business activities in Australia (folio 54 Part 1 para 3 of the Department’s file). The Tribunal informed the applicant that she referred to her previous management experience in her factory in China and she stated that she made frequent travels to China and “organised to supervise quality and efficiency of supplier chain” and she listed her duties. The Tribunal brought to the applicant's attention that it cannot see in that statement that she has said that she paid for goods in China on behalf of the main business. The applicant stated that she asked the agent to do that, to lodge the documents. They provided the agent with a lot of documents but that person did not provide everything.
The Tribunal brought to the applicant's attention that if she had been paying for goods in China in cash on behalf of the main business here, it is surprising that she has not mentioned it in her own statement. The applicant stated that the description in the statement is not clear and she only realised that the description in those documents is extremely important only when the visa application was refused.
The Tribunal informed the applicant that she did not say in her signed statement that there was a loan to the company. The applicant stated that she thought that she pays money for products. It is a family business. It did not come to her mind that it is actually a loan. The actual investment is to keep putting money in so that the business can perform well.
The Tribunal brought to the applicant's attention that it has to be satisfied that her assets in the main business have a net value of at least $100,000 and that the assets had a net value of at least $100,000 throughout the 12 months before the date of the application. The Tribunal informed the applicant that it would need to see the trail. The Tribunal informed the applicant that she is asking the Tribunal to accept that she took money out of a safe but the Tribunal does not know how much money she took out or when she took the money out, or where the money went. The applicant stated that she thought she provided sufficient evidence. This company started from zero to the net figure now. It is a big company. That means that they have made a large investment. The money came from their efforts of investment from their business.
The applicant confirmed that this money that she claimed that she used to purchase furniture in China did not come out of a bank. That was cash from her home. That money did not come from a bank.
The applicant stated that the turnover started from $170,000. The next year it was $710,000, then $980,000 and it is now $1.48 million and that can also prove that they have made investments. The Tribunal informed the applicant that it is looking at whether she meets cl.890.212.
The Tribunal informed the applicant that if it is not satisfied that her assets had a net value of at least $100,000 throughout the period of 12 months immediately before the application was made, she will not meet cl.890.212. The applicant stated that nobody told her it is about assets. The Tribunal brought to the applicant's attention that it had read out the clause to her at the start of the hearing and she had received a copy of the delegate’s decision record and the issue is still the same.
The Tribunal informed the applicant that her former representative stated that she “informs the loan from her to HEQS Furniture Pty Ltd is mainly her RMB payment in China to purchase the goods (sic).” (Folio 173 of Part 3 of the Department’s file) The Tribunal asked the applicant what her representative meant by “mainly”. The applicant stated that this is the loan. She used the money to buy products. Previously she did not think of it as a loan. The money was in China for purchasing products.
The Tribunal informed the applicant that she has not provided documentary evidence, such as bank account statements, to demonstrate that the loans were actually made. The representative stated that there is a wealth of material but they do not have in the bundle any bank statement to show that the applicant directly paid.
The Tribunal informed the applicant that her representative, in his submission today, stated that there have been some repayments made. The Tribunal asked the applicant if she is able to direct the Tribunal to those repayments. The representative stated that money flowed from the Australian company to the applicant. Some of that was payroll in wages and salary. Those documents appear at Annexure D. They are not loan repayments. At Annexure D there are three payroll records for three fiscal periods 2011/2012, 2012/2013 and currently. They say that any other money that flows from the company to the applicant, they are characterising as a loan repayment (Annexure G).
The representative stated that what is missing in the bundle is the spreadsheet to track each transaction on this point. The first bank statement is from 2 May 2012 to 1 June 2012. The second page on 7 May is an entry for wages. That is consistent with wages coming into the account.
The Tribunal asked the applicant where the loan repayments are. The representative stated that he cannot answer that because it is on the spreadsheet which is not yet complete. The money that comes from the company is not salaries and wages so they characterise it as loan repayments. This reduces the outstanding loan. The representative stated that the Tribunal does not have the spreadsheet. It is the loan extended minus the repayments. Any payment from the company to the applicant which was not payroll is the company paying down the loan. The PAYG group certificates for the staff and the applicant appear at Annexure D.
The Tribunal asked why the applicant was paid wages several times on the one day as shown in the bank statement. The representative stated that he cannot recall this. The Tribunal referred the applicant to the bank statement in the name of HEQS Furniture Pty Ltd and informed the applicant that she was paid a wage of $791.54 on 14 June 2012 seven times (folio 73 reverse and folio 72 of Part 2 of the Department’s file) The applicant stated that the company paid her and she cannot remember.
The Tribunal informed the applicant that its concern is that there is little verifiable evidence about the loan. The Tribunal also informed the applicant that it has concerns about documents from China as fraudulent documents from China are prevalent and that is why the Tribunal looks at whether documents can be verified by bank statements.
The applicant stated that the documents and materials have explanations inside. The Tribunal informed the applicant that it may not be satisfied that the loans were actually made. The Tribunal informed the applicant that it will look at the documents after the hearing but it should have had them before the hearing.
The representative stated that the Australian documents show the imports coming into Australia. There are bills of lading and the documents show the goods imported, when they were imported, the origin of the goods, the Australian purchaser and the value of the goods. The dates of the documents are the 12 months from June 2012 to June 2013 and these documents appear in Part 3 of the material provided. The representative stated that they have also provided documents from the earlier fiscal period from June 2011 to June 2012. If there were loans outstanding at the end of that period, that asset in the applicant’s hands, existed at the start of the relevant 12 month period. They have documentation to show goods, dates and values. The second set of documents are international documents and are mainly produced by freight forwarding companies and shipping companies which are transporting the goods from China to Australia.
The representative stated that they have the Australian company paying from bank account to bank account for some of those imports, the whitegoods. That has got nothing to do with the loans claimed to be extended by the applicant. It is really what is left. They know that goods were purchased and someone must have paid. It was not the Australian company that paid. The representative stated that the Tribunal has to be satisfied that it was the applicant who paid. The son, Kevin, did not pay. This will be his oral testimony. The applicant is the one with the cash assets and she was the one who handed him the money. The applicant is the source of the finance for all the business ventures. The applicant is the one with the cash assets and she paid the money. The evidence of the older son in China was that his mother (the applicant) gave him the money or she told him to go to the safe and get the money out and he was acting as the gopher to deliver that money. The representative stated that it is an issue of credibility. Are they to be believed or not?

Mr Qifeng Lin gave evidence that he is a director and shareholder of HEQS Furniture Pty Ltd. He started the business, HEQS Investment, with Stephen Lu and did property rental. In 2012 they had big customer and had massive imports in 2011/2012. The applicant helped him procure the goods from China. Most of the funds and procurement are from the applicant. Most of this was in cash. Most of the purchases in China had to be in cash. To get the right quantity and quality, it had to be in cash. Products were purchased in China and the applicant or Mr Qifeng Lin’s brother went to examine the products which were dispatched to the brother’s factory in Shantou. They discovered that there were problems with quality so the applicant kept making investment into making metal beds. This was an investment in the factory of Mr Lin’s brother.
Mr Qifeng Lin stated that from 2013/2014 customers gave them large repayments so they gave the money to the applicant. About $42,000 was repaid by several transactions from the middle of 2013. The repayments were made through the bank.
The representative asked if Mr Lin could answer whether he had paid any of these suppliers in China from his own money personally. Mr Lin stated that he did. When he was in China he went to the spot to have a look at some samples and then he bought them and they were dispatched to Shantou. The earliest was in 2011. He has done that more than once. When he went back, if he saw them, he bought them. He used his own money. He was not sure whether those products would be well received. He needed to grab the opportunity. These goods were furniture and whitegoods. He paid for some of the whitegoods in China himself. Mr Lin stated that if he was in China, he always paid cash. The cash came from the applicant who gave him the cash.
The Tribunal brought to Mr Qifeng Lin’s attention that he said that it was his money. Mr Lin stated that he cannot use Australian dollars in China so he got the money from the applicant. It is the same. The Tribunal informed Mr Lin that it is not the same. The Tribunal asked the applicant if it was his money that paid for the furniture or the applicant’s money. Mr Lin stated that the applicant gave him the cash.
The Tribunal asked Mr Qifeng Lin why he did not take Australian dollars with him and convert them to Chinese yuan. Mr Lin stated that you cannot bring over $10,000. Also if he exchanges money with banks, they will charge him service fees. The Tribunal asked the applicant if he cannot transfer money to China through his bank account. Mr Lin stated “no” because in China there are limitations on the receiver so you cannot transfer money back directly.
The Tribunal informed the applicant it does not have documentary evidence that a loan has been made. The representative stated that this is correct and there is only oral testimony. The representative stated that he has been preparing a spreadsheet which is almost complete.
The Tribunal telephoned the witness, Mr Qiming Lin, who stated that he is the oldest son of the applicant. Recently they have had large transactions with Australia and they are making contributions to Australia. He lives in his parents’ property in China and when they come back to China they live with him. He works in the factory set up by his parents in 1983. Mr Lin took over the factory. He is the legal representative and the owner of the factory.
The representative stated that the only issue, which is of central import to the applicant, is that Mr Qiming Lin was being given cash directly or being directed to take money out of the cash and pay suppliers. Mr Qiming Lin stated that when their company needs to purchase products, normally money is transferred into his personal bank account from his mother’s account. When they need to buy products and he does not have enough money, the applicant transfers cash to him. When the applicant is in Australia, she asks him to go to the safe at home.
The Tribunal asked Mr Lin what he means by his statement that they need to buy products. Mr Lin stated that his younger brother’s company needs to import furniture from China, Mr Lin is in China and he helps him look for those suppliers. Also before the products are dispatched, Mr Lin has to pay the full amount. He gets cash from the safe. Also sometimes when his mother’s account has money, she transfers money into his personal bank account so that he can pay for the products. The Tribunal asked Mr Qiming Lin if his mother sometimes transfers cash into his bank account. Mr Lin stated “yes”. There are two options, either a bank transfer or he gets the cash from the home safe.
The Tribunal asked Mr Lin if he sometimes pays for goods in China on behalf of his brother’s and mother’s company. Mr Lin stated “yes”. Sometimes it is in cash and sometimes from his bank account. The Tribunal asked Mr Lin if, when his mother transfers money to him to his bank account, she transfers it from her bank account. Mr Lin stated “yes”. The transfer of funds comes from a bank account in China.
Mr Lin stated that his factory makes metal beds. He supplies to the public and to other retail outlets. He is normally paid in cash. If he is not paid in cash, he is paid by transfer between the companies. The Tribunal asked Mr Lin if he means that it is a bank transfer from one company to his company. Mr Liu stated “yes”. They transfer the money from their company’s account to his company’s account for the furniture.
The Tribunal asked the applicant if she wanted to say anything. The applicant stated “no”. The Tribunal informed the applicant that her son in China stated that money had been transferred from the applicant’s bank account in China to him. The applicant stated that it happens a lot. The Tribunal asked the applicant if it is not just cash that she gives him. The applicant stated that this is right and she also gives money to him through banks.
The Tribunal asked the relevance of the evidence from Stephen Yuxian Lu. The representative stated that he does not see the need for the Tribunal to speak to Stephen. The statement from him is a tidy up statement and is not of central importance to the discussions today. The Tribunal informed the applicant that it would therefore not take evidence from Mr Lu.
The representative stated that the purpose of the spreadsheet is to quantify amounts and dates, to make some sense of the documents which have been given. Even if the Tribunal accepts that loans have been given, the Tribunal has to be satisfied of the amount. The spreadsheet goes to dates and amounts and specifically ties into the documents. The spreadsheet directs the Tribunal to annexures. The representative requested more time to provide further documents. The Tribunal informed the applicant that it would allow until 12 August 2015 to provide anything further. The Tribunal informed the applicant that anything provided before a decision is made will be taken into consideration.
On 12 August 2015 the Tribunal received from the representative a number of documents including the following:
·Statements by the applicant and Qiming Lin dated 3 August 2015 together with translations by a NAATI accredited translator;
·Bank accounts in China in the name of the applicant (together with English translation). The representative stated that the purpose of this document is to confirm that a number of these transfers were made directly from the applicant’s personal accounts in China. The representative also stated that this confirms the evidence of the applicant and Mr Qiming Lin that in addition to cash amounts being handed to Mr Qiming Lin, there were also some occasions when the applicant transferred money to his account directly;
·Business licence for Chinese manufacturing factory in the name of Shantou Mutual Inductor Factory (together with English translation);
·Money transfers from HEQS Furniture Pty Ltd to Qiming Lin on 21 September 2012.
On 14 August 2015 the Tribunal received a number of documents from the applicant including the following:
oImport details from June 2011 to June 2012;
oSummary from June 2011 to 2012 of transfer of funds from HEQS Furniture Pty Ltd to Qiming Lin to purchase stock;
oSummary of import details from June 2012 to June 2013;
oSummary of transfer of funds from HEQS Furniture Pty Ltd to Qiming Lin to purchase stock from June 2012 to June 2013;
oSummary of transfer of funds from the applicant to Qiming Lin June 2012 to June 2013;
oSummary of payment of suppliers in China by Qiming Lin on behalf of HEQS Furniture Pty Ltd from June 2012 to June 2013;
oLoan repayments by HEQS Furniture Pty Ltd to the applicant;
oBank statements.
On 27 August 2015 the Tribunal received a submission from the representative who stated that, from the decision record of the Department, he has interpreted that the Department accepted that the applicant’s interest in the net assets of the Australian company as at 31 March 2012 was $60,688 (62%) with a shortfall of $39,312 and as at 31 March 2013, the applicant’s interest in the net assets was $70,554 (62%) with a shortfall of $29,446.
The representative stated that from June 2011 to June 2012 HEQS Furniture Pty Ltd imported products to the value of $337,590. It directly paid suppliers $200,691 and transferred funds of $154,563 from the company account in Australia to Qiming Lin in China. The representative stated that the sale of the imports paid directly by HEQS Furniture Pty Ltd and the funds transferred from the bank account of HEQS Furniture Pty Ltd to Qiming Lin total $355,254 which appears to meet all the cost of goods imported with a surplus of $17,664.
The representative stated that this “casual analysis would indicate that there was no need” for the applicant to extend loans to HEQS Furniture Pty Ltd in this period but this analysis would be incorrect. The representative stated that the first bank to bank funds transfer from HEQS Furniture Pty Ltd to Qiming Lin in this period occurred on 21 November 2011 and from 18 June 2011 to 21 November 2011, HEQS Furniture Pty Ltd imported four containers of stock for which the company did not pay directly. The representative referred to the spreadsheet summary to Annexure E and stated that the total amount for the four containers was $86,064. The representative stated that HEQS Furniture Pty Ltd did not pay for these four containers either directly or through funds being transferred to Qiming Lin by bank to bank transfer. The representative stated that their instructions are that the funds for these shipments were provided by applicant in the form of loans to the company.
The representative stated that from June 2012 to June 2013, HEQS Furniture Pty Ltd imported products to the value of $441,799. The surplus funds brought forward from the June 2011 to June 2012 period were $17,664. HEQS Furniture Pty Ltd paid suppliers directly the amount of $168,578 and transferred $113,000 from the company account in Australia to Qiming Lin in China. The representative stated that the total was $299,242 and the value of the goods imported ($441,799) less the sum of the three factors ($17,664, $168,578 and $113,000) leaves a shortfall of $142,557. The representative stated that they are instructed that the funds for these shipments were provided by the applicant in the form of loans to the company.
FINDINGS AND REASONS
The issue in the present case is whether the applicant meets cl.890.212, which provides:
890.212
The assets of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, in the main business or main businesses in Australia:
(a)have a net value of at least AUD100 000; and
(b)had a net value of at least AUD100 000 throughout the period of 12 months ending immediately before the application is made; and
(c)have been lawfully acquired by the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together.
The applicant did not provide documentary evidence, such as bank account statements, to demonstrate that the claimed loan of $40,495.85 was actually made to the business HEQS Furniture Pty Ltd. The Tribunal has considered all the evidence but is not satisfied that the loans have been verified. Whilst the unaudited balance sheet as at 31 March 2013 shows that in 2012 and 2013 there was a loan to HEQS Furniture Pty Ltd from the applicant of $40,495.85 there is no documentary evidence of a loan, or a number of loans, having been advanced to the company from the applicant.
The Tribunal has to be satisfied that the assets of the applicant and/or her spouse in the main business or main businesses in Australia have a net value of at least $100,000 and had a net value of at least $100,000 throughout the period of 12 months ending immediately before the application is made.
The delegate stated that the balance sheet for the main business, HEQS Furniture Pty Ltd, showed that applicant’s interest in the net assets as at 31 March 2012 were $60,688 (62%) and as at 31 March 2013, the applicant’s interest in the net assets were $70,554 (62%).
The representative has made submissions that this leaves a shortfall of $29,446 as at 31 March 2013 and a shortfall of $39,312 as at 31 March 2012. The submission is that there was a pool of money available to the applicant’s son in China to pay the suppliers but when this pool of money was not enough, if the applicant was in China, she got cash out of her own safe and gave it to her son who paid the supplier. If the applicant was not in China, her son went to the safe, with the applicant’s permission, and took the money out and paid the suppliers.
In deciding whether the applicant meets cl.890.212(b), the Tribunal has to look at a specific period. That period is the period throughout the 12 months ending immediately before the application is made. The application was lodged on 18 June 2013 and the 12 month period is from 18 June 2012 to 18 June 2013.
The applicant has claimed that she paid for goods in China by giving cash to her son, Mr Qiming Lin, who then paid for the goods to be sent to Australia. If the applicant was in Australia, she asked her son, Mr Qiming Lin, to go to her safe and take the money to pay for goods that were to be sent to Australia. The claim is that these funds provided by the applicant to her son, Mr Qiming Lin, were loans to the company, HEQS Furniture Pty Ltd.
There is no documentary evidence of the payment of goods in China amounting to the sum of $40,495.85 which was the amount that the applicant claimed she had provided as a loan to HEQS Furniture Pty Ltd other than the financial statement ending 31 March 2013 indicating that there was a loan from her for $40,495.85 in 2012 and 2013.
The claim is that the loans from the applicant to HEQS Furniture Pty Ltd are mainly her payment in Chinese RMB in China to purchase the goods. There were no bank withdrawals, transfers or deposits amounting to $40,495.85. The Tribunal has had regard to a ledger from 30 June 2009 to 31 March 2013 provided by the applicant to the Department but the amounts shown as cash loans on the ledger (some as small as $2) are not supported by verifiable bank statements.
Whilst the applicant gave evidence of the method used to pay for goods in China and this was confirmed by the witnesses, the Tribunal does not accept that the applicant provided a loan to the business, HEQS Furniture Pty Ltd, of $40,495.85. There was no supporting evidence of the loan such as bank statements which showed the transfer of funds between the applicant’s or the second named applicant’s personal accounts to the business account. The company bank account statement does not show transfer of funds as a loan to the company from the applicant or the second named applicant. There is no bank account statement in China evidencing the transfer of funds from the applicant to her son, Mr Qiming Lin, to pay suppliers for HEQS Furniture Pty Ltd or from the applicant directly to suppliers.
The representative’s submission is that the applicant extended cash loans to HEQS Furniture Pty Ltd but there is a paucity of “traditional” documentation to evidence such loans. The Tribunal has had regard to the representative’s submission that it is common for company directors and major shareholders to extend loans to their company from time to time and for wholly Australian based businesses these types of loans would commonly be evidenced by loan agreements between the company and the individuals, evidence of funds being transferred from the person’s bank accounts to the company, and the loans being reflected as a liability on the company’s balance sheet. However, there is little documentary evidence to show that a loan was made to HEQS Furniture Pty Ltd by the applicant, other than the financial statement ending 31 March 2013 indicating that there was a loan from the applicant for $40,495.85 in 2012 and 2013. There was no loan agreement and no evidence of funds being transferred from the applicant’s bank accounts to the company.

100. The Tribunal has considered the evidence from the applicant and the witnesses that the applicant paid suppliers in China for imports on behalf of HEQS Furniture Pty Ltd. The evidence was that the applicant gave cash to her son, Mr Qiming Lin, when she was in China to pay suppliers, or if she was not in China, she told him to go to the safe in her home, take out cash and pay suppliers. The submission is that in most cases, the applicant provided the loans in cash handed to her older son in China (Mr Qiming Lin) who then used those funds to pay suppliers of the purchased stock.
101. The Tribunal has significant concerns about accepting this evidence of a loan to the company, HEQS Furniture Pty Ltd, without verifiable evidence. The Tribunal has not been able to verify that the loan was made by the applicant. Whilst there is some evidence of repayments of a loan to the applicant by HEQS Furniture Pty Ltd including $10 on 25 June 2013, $8,800 and $8,200 on 22 July 2013 and $4,635.37 on 10 September 2013, there is no documentary evidence that the loan was made in the first place.
102. There is evidence of money transfers from HEQS Furniture Pty Ltd to Qiming Lin and of Qiming Lin paying suppliers in China. However, the Tribunal is not satisfied that this is evidence of a loan or loans from the applicant.
103. The Tribunal has had regard to the bank accounts in China in the name of the applicant. There is a list of accounts but there are no statements from these accounts showing transactions.
104. The issue before the Tribunal is whether the assets of the applicant, the applicant’s spouse, or the applicant and her spouse, in the main business or main businesses in Australia had a net value of at least $100,000 throughout the period of 12 months ending immediately before the application is made. Although the applicant claims that she provided cash loans to the business, there is no documentary evidence that a loan of $40,495.85 was provided to HEQS Furniture Pty Ltd. There is also no documentary evidence that a loan of $39,312 or $29,446 was provided to HEQS Furniture Pty Ltd. The Tribunal is not satisfied that the applicant and/or her spouse provided a loan or loans to HEQS Furniture Pty Ltd during the relevant period.
105. The applicant stated that that there is no loan agreement between herself and HEQS Furniture Pty Ltd. There were no copies of foreign fund transfers nor bank records evidencing a loan because the loan, according to the applicant, is made up of amounts of cash being used by the applicant or by her son, Mr Qiming Li, in China on her behalf to pay suppliers of goods to HEQS Furniture Pty Ltd.
106. The applicant stated she thought that if there was no money they would just use money to buy products and they would give the company the cash so that the company can have cash flow. They thought purchasing with cash was all right so they do not have evidence. The applicant may have chosen to pay for goods in cash, however the Tribunal has to be satisfied that the net assets of the applicant and/or her spouse in the main business have a net value of at least $100,000 throughout the period of 12 months ending immediately before the application is made. The applicant claimed that a loan of $40,495.85 was provided to HEQS Furniture Pty Ltd by her. The Tribunal is not satisfied that such a loan was provided.

107. The Tribunal brought to the applicant's attention that she provided a statement entitled ‘My business activities in Australia’ and referred to her previous management experience in her factory in China and stated that she travelled frequently to China. The Tribunal informed the applicant that she stated that she organised to supervise quality and efficiency of the supplier chain and she listed her duties, but she made no mention that she had paid for goods in China on behalf of the main business. The Tribunal informed the applicant that she also did not mention in that statement that she provided a loan to the company. The applicant’s evidence was that it is a family business and she thought that she pays money for products and it did not come to her mind that it is actually about a loan. The Tribunal acknowledges that the applicant stated in that statement that she oversees the “financial, cash flow” (sic) and she authorises expenditure to ensure that all financial obligations are met. However, she did not state that she provided a loan to the main business.
108. The Tribunal acknowledges that the detailed balance sheet as at 31 March 2013 for HEQS Furniture Pty Ltd indicated that in 2012 and 2013 there was a financial liability of $40,495.85 which was a loan from the applicant. However, there is no trail in the bank records to show that such a loan or several loans amounting to that amount were made. The Tribunal does not know how much money was taken out of the safe in China, when the money was taken out of the safe, or what the money was used for.
109. The Tribunal acknowledges the applicant’s evidence that the money came from their efforts of investment from their business. However, the Tribunal is not satisfied that the cash claimed to have been handed to the applicant’s son or which the applicant herself used to pay for goods in China amounted to $40,495.85 and was a loan to HEQS Furniture Pty Ltd.
110. After the hearing, the representative made submissions about payments provided by the applicant in the form of loans to the company. The Tribunal is not satisfied that the claim that HEQS Furniture Pty Ltd imported goods but in some cases did not pay for the goods directly or did not pay for the goods by bank to bank transfer to Qiming Lin, means that it was the applicant who paid for those goods by cash or by giving cash to her son, Qiming Lin, to pay for those goods. The lack of verifiable evidence leads the Tribunal to conclude that the applicant has not provided cash loans to the main business.
111. Whilst the applicant has claimed to have paid cash for products sent to Australia, the Tribunal is not satisfied that loans were made by the applicant to HEQS Furniture Pty Ltd amounting to $40,495.85. The Tribunal has significant concerns about accepting documentation from China that cannot be verified. The Tribunal has significant concerns about the genuineness of documentation from China including invoices.
112. The Tribunal has information before it that there is a high incidence of fraudulent documentation in China. In a May 2007 advice, the Department of Foreign Affairs and Trade (DFAT) stated there is a “high incidence of fraudulent documentation in China” (Department of Foreign Affairs and Trade 2007, DFAT Report No. 644 – RRT Information Request: CHN31695, 17 May – \\NTSSYD\REFER\Research\DFAT\chn31695.dfr.doc).
113. In September 2005 the Canadian Immigration and Refugee Board provided information on fraudulent documents in China. According to sources cited by the Board, fake documents are easy to obtain in China, including birth certificates, university diplomas and hospital documents. Procurement of fraudulent documents is facilitated by corrupt local officials (Immigration and Refugee Board of Canada 2005, CHN100510.E – China: The manufacture, procurement, distribution and use of fraudulent documents, including passports, hukou, resident identity cards and summonses; the situation in Guangdong and Fujian particularly (2001-2005), 8 September – - LPHit1http://immibelweh03/NXT/gateway.dll/cisnet_ogr/refinfo_id/doctype00000.htm/c).
114. DFAT also advised in October 2004 that:
As a general comment on the value of Chinese official documents, this embassy’s experience is that many official documents (especially identity documents) are forged and that irregular or improper issue of documents is widespread…(Department of Foreign Affairs and Trade 2004, DFAT Report No. 327 – RRT Information Request: CHN17017, 7 October – ).

115. Earlier DFAT advice, dated 5 June 2000, stated that:
As a general comment on the value of Chinese official documents, this embassy’s experience has shown that any official document can be either bought or forged in China. Irregular or improper issue of documentation is widespread. Thus, we would suggest that little evidentiary weight can be placed on any official Chinese document, including summonses as a general comment on the value of Chinese official documents, this embassy’s experience has shown that any official document can be either bought or forged in China. Irregular or improper issue of documentation is widespread. Thus, we would suggest that little evidentiary weight can be placed on any official Chinese document, including summonses (DIAC Country Information Service 2000, Country Information Report No. 301/00 – Summonses in China, (sourced from DFAT advice of 5 June 2000), 20 June – - LPHit1).

116. The representative submitted that they need to approach these loans by a process of elimination through the following steps: establish the products imported from China (being the dates of the imports and the value of each export); eliminate those imports paid for directly by HEQS Furniture Pty Ltd through funds transfer from the bank account in Australia to the supplier; the imports “left” are those paid for directly by the applicant in China; deduct any loan repayments made by HEQS Furniture Pty Ltd to the applicant in the relevant periods; and the result of these calculations would be an additional net business asset held by the applicant.
117. The Tribunal is not satisfied that the applicant has provided loans to the main business HEQS Furniture Pty Ltd by paying cash directly to suppliers or by giving cash to her son in China to pay suppliers. The Tribunal has had regard to the list of bank accounts held by the applicant in China. However, the Tribunal is not satisfied that this supports the claim that the applicant provided loans to HEQS Furniture Pty Ltd.
118. Whilst the applicant’s sons, Qiming Lin and Qifeng Lin, have supported the applicant’s evidence that money was handed to Mr Qiming Lin directly from the applicant or that he went to the applicant’s safe to obtain cash to pay suppliers in China, the Tribunal does not accept this evidence because it does not overcome the significant concerns the Tribunal has about the lack of verifiable evidence. The Tribunal also has concerns as to how Mr Qifeng Lin knew that, if the applicant was in China, she handed Mr Qiming Lin the money which he would take to the suppliers.
119. The Tribunal does not accept that the applicant provided a loan of $40,495.85 to the main business, HEQS Furniture Pty Ltd. The Tribunal does not accept that in 2012 and 2013 there was a financial liability of $40,495.85 which was a loan from the applicant to HEQS Furniture Pty Ltd.
120. The Tribunal has taken into account that the assets of the applicant and/or her husband in the main business, HEQS Furniture Pty Ltd, had a net value of $60,688 as at 31 March 2012 and a net value of $70,554 as at 31 March 2013. The Tribunal has taken into account that the assets of the applicant and/or her husband in the other main business, Iflow Network Pty Ltd, had a net value of $4,247.86 as at 31 March 2012 and a net value of $31,691.88 as at 31 March 2013.
121. Given the above, the Tribunal is not satisfied that the assets of the applicant and/or her spouse, in the main businesses in Australia had a net value of at least $100,000 throughout the period of 12 months ending immediately before the application is made. The Tribunal accordingly finds that the applicant does not meet cl.890.212(b) and therefore does not meet cl.890.212.
122. The Tribunal is not satisfied that the second named applicant meets cl.890.311 because he is not a member of the family unit of a person who satisfies the primary criteria in Subdivision 890.21. There has been no material submitted by the applicants, or which is otherwise available to the Tribunal, which would support a conclusion that the second named applicant meets the requirements of cl.890.212.
123. Neither has it been submitted, nor is there any material otherwise known to the Tribunal, which would support a conclusion that any applicant meets requirements prescribed at Parts 891, 892 or 893 of Schedule 2 to the Regulations. The Tribunal is not satisfied that any applicant meets essential prescribed criteria for any of the visas in Class DF.
DECISION
124. The Tribunal affirms the decision not to grant the applicants Business Skills (Residence) (Class DF) visas.
Dione Dimitriadis
Member

[2016] AATA 3327

1 March 2016

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