Liu (Migration)
[2025] ARTA 331
•26 February 2025
Liu (Migration) [2025] ARTA 331 (26 February 2025)
DIVISION:Migration & Refugee Division
APPLICANTS: Mr Yigeng Liu
Ms Lingyun Zheng
Miss Ziyi Liu
Miss Zihan LiuREPRESENTATIVE: Mr Hua He (MARN: 1572790)
CASE NUMBER: 2305714
HOME AFFAIRS REFERENCE(S): BCC2021/604693
MEMBER:General Member P Ranson
DATE:26 February 2025
PLACE OF DECISION: Brisbane
DECISION:The Tribunal affirms the decision not to grant the visa applicants Business Skills (Provisional) (Class EB) visas.
Statement made on 26 February 2025 at 12:25pm
CATCHWORDS
MIGRATION – Subclass 188 (Business Innovation and Investment (Provisional)) visa – Subclass 188 – Investor stream – applicants did not have business and personal assets with a net value of at least $2,250,000 for the two fiscal years immediately before the time of invitation to apply for the visa – decision under review affirmed
LEGISLATION
Migration Act 1958, s 65
Migration Regulations 1994, r 1.03, Schedule 2, cls 188.245, 188.311
Statement of Reasons
BACKGROUND
Mr Liu was invited to apply for a Subclass 188 visa on 17 June 2021 and he did so on 29 June 2021. No supporting documents were submitted with the application and even after the delegate wrote on 3 February 2023 requesting the relevant information nothing was provided even though a 28-day extension of time to lodge was provided.
Mr Liu and his family applied for the visas on 29 June 2021. Class EB contains Subclass 188 (Business Innovation and Investment (Provisional)). The criteria for the grant of a Subclass 188 (Business Innovation and Investment (Provisional)) visa are set out in Part 188 of Schedule 2 to the Migration Regulations 1994 (Cth). The primary criteria must be satisfied by at least one applicant. Other members of the family unit who are applicants for the visa need satisfy only the secondary criteria. The primary criteria include common criteria, and criteria set out in streams.
Mr Liu applied for the visa in the Investor stream, which include the criteria in Subdivisions 188.21 and 188.24 of Schedule 2 to the Regulations. On 18 April 2023, a delegate of the Minister for Home Affairs refused to grant the applicants Business Skills (Provisional) (Class EB) visas under s 65 of the Migration Act 1958 (Cth). Mr Liu applied to the Administrative Appeals Tribunal (AAT) for a review of that decision on 24 April 2023. The case was heard by the Administrative Review Tribunal (Tribunal) on 10 December 2024.
The delegate refused to grant the visas on the basis that Mr Liu did not satisfy the requirements of cl 188.245 of Schedule 2 to the Regulations because no information was provided with the application or subsequently with which to assess the application.
The issue before the Tribunal is whether Mr Liu and Ms Zheng together had business and personal assets with a net value of at least $2,250,000 for the two fiscal years immediately before the time of invitation to apply for the visa, that is, before 17 June 2021.
For the following reasons, the Tribunal has concluded the decision under review should be affirmed.
NET VALUE OF ASSETS – CL.188.245
Clause 188.245 requires that for the two fiscal years immediately before the time of invitation to apply for the visa, the business and personal 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, had a net value of at least $2,250,000 (if the time of invitation was before 1 July 2021); or at least $2,500,000 (if the time of invitation was on or after 1 July 2021). As the invitation was 17 June 2021, the lower threshold of $2,250,000 applies.
‘Fiscal year’, in relation to a business or investment, means, if there is applicable to the business or investment by law an accounting period of 12 months – that period; or in any other case – a period of 12 months approved by the Minister in writing for that business or investment: reg 1.03. The fiscal year end in China is 31 December so the two fiscal years immediately before the time of invitation end on 31 December 2019 and 31 December 2020. That means the period covered is 1 January 2019 to 31 December 2020.
In his post-hearing submission dated 8 January 2025, Mr He says under the heading ‘Assets to Meet the Criteria’:
The review applicant seeks to rely on the following assets to satisfy the asset requirements:
1.Property located at No. 52B, Ronghui Shanhui Area, Fuzhou City, Fujian Province
· Referred to as "No. 52B."
2.Property located at Unit 101, Building 3-6, Meizhiguo Garden Community, Fuzhou City, Fujian Province
· Referred to as "No. 101."
3.Shares held in CITIC Securities
On page two of his submission, Mr He discusses the value of the above assets:
At the end of 2018, the net value of the assets mentioned in this submission is AUD 3,200,000.
At the end of 2019, the net value of the assets mentioned in this submission is AUD 3,558,281.
At the end of 2020, the net value of the assets mentioned in this submission is AUD 2,897,305.
PROPERTY NO 52B
A valuation dated 31 December 2024 prepared by M&L Surveyors of Hong Kong was provided for this property. The owner is shown as Mr Liu based on Fuzhou Certificate of Real Estate Ownership Min 2020 Fuzhou Real Estate Di No. 9083220. It values this property and identifies a loan outstanding on it from China Agricultural Bank Co., Ltd.
The valuation identifies encumbrances on the property as:
Pursuant to the Bank Letter, the Property is subject to a mortgage in favor of China Agricultural Bank Co., Ltd. Minqing County Branch to an extent of RMB 3,600,000.00 from 7th September 2018 to 6th September 2021.
The valuation goes on to say according to the Fuzhou Real Estate Purchase and Sale Agreement, the property was sold and transferred on 1 August 2021. The contract for the sale of the property shows the sale price is RMB7,800,00 and deposit of RMB500,000 was to be paid. The date of signing is 1 August 2021, and the contract appears to be silent on the date of settlement. The submission by Mr He also says the sale of this property occurred in August 2021. That means it was on hand on 31 December 2020.
The valuation shows the loan balance on 30 September 2020 even though the loan is described as having an end date of 6 September 2021. That may be a typographical error or an error in translation. Adopting a conservative approach to the ownership and net value of this property to Mr Liu, the Tribunal finds the loan was outstanding until 6 September 2021 because that is soon after the date of signing of the sale contract and is possibly the settlement date, and how it is described in the valuation.
Given the sale price on 1 August 2021 was RMB7,800,000 compared with the amounts shown in the valuation, which are higher, the Tribunal will adopt a conservative approach and rely on the lower value given that was derived from an arm’s length transaction rather than a valuation conducted over three years later.
The net values are shown below:
Date
Valuation
Loan outstanding
Net Value
1 January 2019
7,800,000
3,600,000
4,200,000
31 December 2019
7,800,000
3,600,000
4,200,000
31 December 2020
7,800,000
3,600,000
4,200,000
The Tribunal accepts the net value of Property No 52 as shown above.
PROPERTY NO 101
A valuation dated 31 December 2024 prepared by M&L Surveyors of Hong Kong was provided for this property. It values this property and identifies a loan outstanding on it from China Agricultural Bank Co., Ltd.
The valuation identifies encumbrances on the property as:
Pursuant to the Bank Mortgage Loan Contract, the Property is subject to a mortgage in favor of China Construction Bank Co., Ltd. Fuzhou Chengbei Branch to an extent of RMB 7,500,000.00 from 8th December 2015 to 8th December 2035.The net values are shown below:
The valuation goes on to say according to the Fuzhou Real Estate Purchase and Sale Agreement, the property was sold and transferred on 22 October 2020. The contract for the sale of the property shows the sale price is RMB22,000,00 and there is no mention of a deposit to be paid. The date of signing is 22 October 2020, and like the contract for the sales of Property 52B the contract appears to be silent on the date of settlement. The submission by Mr He also says the sale of this property occurred in October 2020. That means it was not on hand on 31 December 2020.
The net values are shown below:
Date
Valuation
Loan outstanding
Net Value
1 January 2019
18,360,000
7,500,000
10,860,000
31 December 2019
19,930,000
7,500,000
12,430,000
22 October 2020
22,000,000
7,500,000
14,500,000
The Tribunal accepts the net value of Property No 101 as shown above.
SHARES
The evidence supporting the shares asserted to be assets of Ms Zheng includes a Declaration Letter dated 27 December 2024 from Ms Meihua Zhang (Declaration Letter), and another titled Inquiry of Historical Reconciliation otherwise described as ‘Balance Confirmation’ from CITIC Securities Co., Ltd.[1]
[1] CITIC Securities
the Tribunal notes the Declaration Letter was not created at or around the time of the sale of Property 101 in October 2020, rather on 27 December 2024, which appears to be for the purpose of the visa application. It is largely reproduced below:
The declarant Zhang Meihua is the mother of the nominee Zheng Lingyun. Due to personal arrangements made by the nominee Zheng Lingyun, some assets have been entrusted to the declarant Zhang Meihua for holding. This statement clarifies the following facts;
The Declaration Letter then lists the five stocks said to be held at CITIC and continues:
Proxy held assets: including but not limited to financial assets such as stocks, securities, bank deposits, etc. formed by proxy held funds.
Proxy relationship: This statement confirms that all proxy funds and assets belong to the nominee, and I only act as the temporary manager of the assets and do not have any ownership or disposal rights over the funds and assets.
The CITIC Balance Confirmation lists the same five stocks as the Declaration Letter and their values.
The Tribunal had concerns about these documents and questioned their validity because:
·There is no explanation as to why the shares are held by Ms Meihua Zhang rather than directly held by Ms Lingyun Zheng (or Mr Liu since it was his property that was sold and funds said to be used for the shares), nor the legal standing for what is described as a ‘Proxy holding’. Further, the document entitled ‘Inquiry of Historical Reconciliation’ does not acknowledge the so-called trust or proxy arrangement.
·The translated and the untranslated versions of the Balance Confirmation do not bear any evidence of a logo or similar identification of the provider nor the address and contact details other than a branch name (Futian).
On 17 January 2025, the Tribunal wrote to Mr Liu seeking submissions about these issues advising this information is relevant to the review because if the Tribunal relies on it, as it stands, in making its decision, it may, subject to his submissions, be the reason, or a part of the reason, for affirming the decision under review.
The Tribunal requested an explanation of the legal standing of the proxy arrangement. In his response dated 24 February 2024 (Mr He’s Response), Mr He says this about the proxy holding:
In relation to the notorised declaration letter [of Ms Meihua Zhang dated 27 December 2024], it proves that the Ms. Meihua ZHANG who held the asset, acknowledges and confirms that the asset was held on Ms. Lingyun ZHENG’s behalf. The fact that this declaration has been notarised means that it has undergone stringent verification of the identities of the parties involved and the document’s authenticity. In Chinese law, notarised documents carry significant legal weight and are presumed to be accurate and reliable.
Mr He’s Response does not explain the legal standing of the so-called proxy arrangement. A legal opinion from a lawyer in China explaining the legal standing would have been useful. It was not provided. Instead, Mr He’s Response relies on the notarisation of the Declaration Letter as evidence of the document’s authenticity. The Declaration Letter is notarised, and the Notary says:
This is to certify that Zhang Meihua signed the foregoing Declaration Letter on December 27, 2024 in the presence of me, the notary public.
The notarisation does no more than confirm the document was signed in the presence of the notary. It offers no comment on the legal standing of the Declaration Letter or its authenticity. The Tribunal notes the Declaration Letter is only signed by Ms Meihua Zhang and not also by Ms Lingyun Zheng even though the former is said to be the holder of the listed assets on behalf of the latter. The Tribunal expects a trust or proxy agreement, as this is said to be, would be signed by all parties.
Mr Liu says in his letter dated 24 February 2025 (Mr Liu’s Response) the funds from the sale of Property 101 were transferred to the (pre-existing) account of his mother-in-law (Ms Meihua Zhang) because he and his family were preparing to move to Australia and it would be difficult if not impossible to manage the share trading account from outside of China, that is, it was more convenient and secure to have a close family member hold the account on their behalf.
The Tribunal accepts the explanation in Mr Liu’s Response about the rationale of the so-called proxy arrangement. Returning to the wording of cl.188.245, it says in part: ‘the business and personal 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’. The Tribunal considers the words ‘of the applicant’ to mean the assets are belonging to or in the possession of the applicant.
A statement of CITIC account number E056759089 was provided by Mr He. It shows transactions from 25 May 2020 to 31 December 2020 (CITIC statement). There are transactions dated up to 24 September 2020 and the next transaction is dated 26 November 2020. The sale price of Property 101 was RMB22,000,00, which is a significant amount, yet no such amount, or any amount that could be regarded as the sale proceeds of Property 101, shows as a deposit around October 2020. The transactions that occur on 26 November 2020 begin with the sale of six securities followed by the purchase of eight securities and then multiple transaction described as ‘Financing’.
The CITIC share trading account of Ms Meihua Zhang was already in existence when Property 101 was sold. Therefore, it was not created to receive the funds. The account is in the name of Ms Meihua Zhang alone with no mention of the proxy arrangement, which is understandable given the account was opened before the sale proceeds were available.
Mr He provided a statement from China Merchants Bank for account number 6214836005318007 in the name of Ms Meihua Zhang. It shows transactions from 14 May 2020 to 1 August 2022. There is a deposit of RMB3,000,000 on 29 October 2020 showing the counterparty as Mr Liu, which the Tribunal accepts may be part the proceeds of the sale of Property 101, albeit those proceeds were RMB22,000,000 so this deposit is not quite 14% of the total.
The Tribunal does not accept the so-called proxy arrangement for the holding of the share portfolio because it does not establish ownership of it by either Mr Liu or Ms Zheng, together or separately. The Tribunal views this as a private arrangement for the convenience of Mr Liu as he was not in China to manage the portfolio personally.
That being the case, the Tribunal ascribes a nil value to the share portfolio for the purpose of establishing the net business and personal assets of Mr Liu and Ms Zheng.
Based on these findings, the Tribunal concludes the assets relied on to satisfy cl.188.245 are:
Asset 01-01-2019 31-12-2019 31-12-2020 Property No 52B 4,200,000 4,200,000 4,200,000 Property No 101 10,000,000 10,860,000 0 Shares 0 0 0 Total RMB 14,200,000 15,060,000 4,200,000 Exchange rate[2] 4.8548 4.8876 5.0298 Total AUD 2,924,940 3,081,266 835,023 [2] Sourced from the Reserve Bank of Australia.
Absent the value of the share portfolio, the Tribunal finds Mr Liu and Ms Zheng did not have business and personal assets with a net value of at least $2,250,000 for the two fiscal years immediately before the time of invitation to apply for the visa.
For these reasons, the Tribunal is not satisfied that Mr Liu meets cl.188.245.
OVERALL CONCLUSION
Given the above findings, the Tribunal finds that the criteria for the grant of a Subclass 188 (Business Innovation and Investment (Provisional)) visa are not met. Accordingly, the decision under review must be affirmed.
The Tribunal must also affirm the decision not to grant the secondary applicants Subclass 188 visas as they do not meet the secondary visa criterion (cl.188.311) requiring them to be members of the family unit of a person who holds a Subclass 188 visa, and there is no evidence they meet the primary visa criteria for this subclass.
The Tribunal notes it is open to Mr Liu to apply for Ministerial Intervention if he considers his circumstances meet the relevant guidelines.
DECISION
The Tribunal affirms the decisions not to grant the visa applicants Business Skills (Provisional) (Class EB) visas.
| Date of hearing: | 10 December 2024 |
| Type of hearing: | Teams video |
| Date of final submissions: | 24 February 2025 |
| Representation for the Applicant: | Mr Hua He |
| Interpreter: | Mandarin and English |
| Witnesses: | None |
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