LJZX and Minister for Immigration and Multicultural Affairs (Citizenship)
[2025] ARTA 272
•25 March 2025
LJZX and Minister for Immigration and Multicultural Affairs (Citizenship) [2025] ARTA 272 (25 March 2025)
Applicants:LJZX (2024/4386)
YYPV (2024/10388)
FRHK (2024/10389)
Tribunal number: 2024/4386, 2024/10388, 2024/10389
Respondent: Minister for Immigration and Multicultural Affairs
Tribunal:General Member K. Thornton
Place:Melbourne
Date:25 March 2025
Decision:In respect of each of the applications, the Tribunal affirms the decisions under review.
.................................[SGD].......................................
General Member K. Thornton
Catchwords
CITIZENSHIP – application for conferral of Australian citizenship of father and two children – citizens of China – where delegate cancelled approval given in all three matters – significant debt in China – significant debt in Australia – Tribunal not satisfied Applicant is of good character at time of its decision – decisions in all three applications affirmed
Legislation
Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (Cth)
Australian Citizenship Act 2007 (Cth)Cases
Irving v Minister for Immigration, Local Government and Ethnic Affairs (1996) 68 FCR 422
Prasad and Minister for Immigration and Ethnic Affairs [1994] AATA 326
Re Drake and Minister for Immigration and Multicultural and Ethnic Affairs (No 2) (1979) 2 ALD 634Secondary Materials
Department of Home Affairs, Citizenship Procedural Instructions 4 – Australian Citizenship by Conferral – Person under 18 (reissued 21 October 2021)
Department of Home Affairs, Citizenship Procedural Instructions 10 – Cancellation of Approval and Delay Making the Pledge (reissued 28 January 2022)
Department of Home Affairs, Citizenship Procedural Instructions 12 – Assessing significant hardship, disadvantage or detriment for the purposes of Australian citizenship (issued 10 April 2019)
Department of Home Affairs, Citizenship Procedural Instructions 13 – Best Interest of Child Assessments (issued 10 April 2019)
Department of Home Affairs, Citizenship Procedural Instructions 15 – Assessing Good Character under the Citizenship Act (reissued 26 February 2021).
Statement of Reasons
INTRODUCTION
The Applicant seeks review of a decision of a delegate of the Respondent to cancel the approval of the Applicant’s application for Australian citizenship under s 25(1)(b) of the Australian Citizenship Act 2007 (Cth) (‘the Act’). The delegate was satisfied that, at the time of cancellation, the Applicant was not of good character pursuant to s 25(2)(b)(iii) of the Act. The children (YYPV and FRHK) were Applicants on their father’s application. Their citizenship approvals were also cancelled because the approval given to each responsible parent’s application had been cancelled (referred to collectively as the ‘decisions under review’).[1]
[1] Section 25(4) of the Act.
The Applicant requested a confidentiality order be applied to these proceedings as the Applicant has family residing in China. The Respondent did not oppose the making of the Order. The Tribunal agreed to the making of the confidentiality order given the unique factual circumstances of this case.
The hearing was conducted in person in the Melbourne registry of the Administrative Review Tribunal (‘the Tribunal’) on 12 and 13 December 2024. The Applicant was represented by Ms Kylie McInnes of counsel, instructed by Prima Legal. The Respondent was represented by Mr Jonathan Barrington of counsel, instructed by Sparke Helmore Lawyers.
For the following reasons, the Tribunal affirms each of the decisions under review.
BACKGROUND
The Applicant is a 50-year-old citizen of China. The Applicant is married with two children, all of whom are Chinese citizens. The Applicant first arrived in Australia in 2014 with his wife and two children on a temporary Business Owner (Subclass 163) visa.[2] He was granted a permanent Business Owner (Subclass 892) visa on 11 September 2020.[3]
[2] Exhibit R2, 14.
[3] Ibid.
In November 2021, the Applicant applied for Australian citizenship by conferral.[4] The two children (then aged 14 years and 10 years respectively) were also listed as Applicants on this application. The Applicant’s wife also applied for citizenship on that date via a separate application.
[4] Ibid 24-52.
On 12 December 2022, the Minister approved the Applicant’s citizenship application and that of his two children under s 24(1) of the Act.[5] The wife’s application had been approved earlier on 28 September 2022. The family’s citizenship ceremony was due to take place on 27 February 2023.
[5] Ibid 92-3.
On 24 February 2023, the Department of Home Affairs (‘the Department’) issued the Applicant and the two children with a Notice of intention to consider making a determination to delay the making of a pledge of commitment.[6] The Applicant’s wife also received the same notification.
[6] Ibid 94-5.
This Notice was issued on the basis that the Department had information to suggest that the Applicant had provided incorrect information in his Business Skills – S/T Sponsored Business Owner (DF 892) application.[7] The Applicant was invited to make submissions in response within 28 days. The correspondence also stated that his citizenship ceremony and that of his children which was scheduled to take place on 27 February 2023 had been cancelled.[8] The Applicant was advised not to attend the ceremony ‘as you are not on the ceremony list and will therefore not be conferred as an Australian citizen.’[9]
[7] Ibid 96.
[8] Ibid 94.
[9] Ibid.
Despite this, the Applicant and his wife still attempted to attend the ceremony on 27 February but were refused entry.[10]
[10] Ibid 19.
On 9 March 2023, the Applicant responded to the Department’s Notice by email and provided a detailed history of his business background both in China and Australia.[11] He detailed the effect the COVID-19 pandemic had on his businesses in Australia, which he reported cost him nearly one million dollars. The Applicant stated he was subject to cyber bullying during 2021 and 2022 and suffered poor mental health as a result. He reported selling his house to pay staff salaries. He reported that the ‘cyber attacks and defamation intensified’ at around the same time he received notice his citizenship ceremony was cancelled. The Applicant attached numerous photographs, medical reports and letters to this email.[12]
[11] Ibid 100-8.
[12] The attachments are provided at Exhibit R2, 109-29.
On 13 April 2023, the Department advised the Applicant that it had made a determination that he and his children could not make the pledge of commitment before 13 April 2024 pursuant to s 26(3) of the Act.[13] This was said to be on the same basis as the previous Notice, that is, that the Department had information to suggest that the Applicant had provided incorrect information on his Business Skills visa application.[14] The Applicant was also advised that his permanent visa was also being considered for cancellation on this basis.[15]
[13] Ibid 131-6.
[14] Ibid 134.
[15] Ibid.
On 30 October 2023, the Department issued the Applicant with a Notice of intention to cancel the approval of his application for conferral of Australian citizenship (the Notice).[16] The Notice advised the Applicant that the Department was considering exercising the discretion under s 25(2) of the Act to cancel the approval of his application for conferral of Australian citizenship on the basis that he was not a person of good character.[17] The Notice also advised that the citizenship approvals for the Applicant’s two children may also be cancelled under s 25(4) of the Act.[18]
[16] Ibid 137-145.
[17] Ibid 140.
[18] Ibid 138.
The Notice advised that the Department had received information from the Gansu Province Lan Zhou City Intermediate People’s Court in China (the Court) as follows:
·The Applicant and his wife failed to meet their financial obligations under a business contract they entered into with a third party in China which had an execution target of RMB15,433,643 (being approximately AUD3.2 million).[19]
·During the execution process, the Applicant and his wife failed to fulfill their obligations as determined by the legal documents, and in accordance with ‘the Several Provisions of the Supreme People’s Court on Restricting High Consumption and Related Consumption by the Executed Persons’, the Court took measures to restrict high consumption by the Applicant and his wife on 28 August 2022.[20] The restriction period was said to begin from the date of the issuance of the consumption order and will end on the date when the persons subject to the order have fulfilled their obligations.[21]
·A payment of RMB13,311,184.30 was still outstanding.[22]
·Should the Applicant and his wife engage in concealment, transfer, or withdrawal of funds and assets in order to avoid fulfilling their debts, they will be held legally responsible in accordance with the laws of the People’s Republic of China.[23]
·The Applicant and his wife are on the National Restricted High Consumption List in China.[24]
[19] Ibid 139, Exhibit R1 [10].
[20] Ibid 139.
[21] Ibid 140.
[22] Ibid.
[23] Ibid.
[24] Ibid.
The delegate was satisfied that the Applicant has a significant outstanding debt in another country, and that he failed to abide by a court direction to repay that debt.[25] The delegate advised that ‘(t)his raises concerns that you have not been financially responsible’ and the delegate considered that ‘a person of good character would not fail to follow a court mandate to repay an outstanding debt.’[26]
[25] Ibid.
[26] Ibid.
The Applicant was invited to comment and give a written response to the Department within 28 days as to why the approval of his application for Australian citizenship should not be cancelled.[27]
[27] Ibid 140-1.
On 8 November 2023, the Applicant responded to the Notice and provided the following material:[28]
(a)‘Statutory Declaration’ document dated 7 November 2023;
(b)Computer Software Copyright Registration Certificate;
(c)Investment Cooperation Agreement;
(d)Termination Agreement;
(e)‘Notarial Certificate’ certifying that the Applicant has no criminal record in China up to 8 August 2019;
(f)National Police Certificate certifying that the Applicant has no criminal record in Australia as at 11 October 2023;
(g)Various letters of support from his GP, neighbours and business acquaintances;
(h)Letter of reference from his employer.
[28] Ibid 146-179.
On 3 June 2024, the Applicant was advised that the approval of his application for Australian citizenship by conferral had been cancelled because the Applicant was not of good character for the purposes of s 25(2)(b)(iii) of the Act (‘the cancellation decision’).[29]
[29] Ibid 20.
The Applicant was also advised that the approval of his children’s application was also cancelled because s 25(4) of the Act applied.[30] The Applicant was advised that under s 25(5) of the Act, the effect of this cancellation decision is that the approval is taken never to have been given.[31] The Applicant was advised that he will need to make another application and meet all the requirements if he wishes to become an Australian citizen.[32] The same decision was taken in respect of the Applicant’s wife.
[30] Ibid 20-1.
[31] Ibid 21.
[32] Ibid.
On 28 June 2024, the Applicant (and his wife filing separately) applied to the then Administrative Appeals Tribunal for review of the cancellation decision.[33] The children were joined as Applicants to their father’s proceedings and an extension of time order was granted in respect of each of their applications.
[33] Ibid 1-9.
On 14 October 2024, the Administrative Appeals Tribunal (AAT) became the Administrative Review Tribunal. Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), proceedings in the AAT that were not finalised before 14 October 2024 are to be continued and finalised by the Tribunal. Anything done in relation to the proceeding before 14 October 2024 is taken to have been done by the Tribunal.
TRIBUNAL HEARING
The Tribunal jointly heard the applications of the Applicant, his wife and children. The Tribunal received into evidence the following material:
(a)Exhibit A1: Applicant’s Statement of Facts, Issues and Contentions dated 25 October 2024 (SOFIC);
(b)Exhibit A2: Applicant’s Reply Statement of Facts, Issues and Contentions dated 29 November 2024 (Reply SOFIC);
(c)Exhibit A3: Statement of the two children and attachments;
(d)Exhibit A4: Statement of Mr Guo dated 18 October 2024;
(e)Exhibit A5: Statement of the Applicated dated 25 October 2024;
(f)Exhibit A6: Attachments to the Applicant’s statement;
(g)Exhibit R1: Respondent’s Statement of Facts, Issues and Contentions dated 22 November 2024; and
(h)Exhibit R2: T-documents comprising 246 pages.
The Applicant gave evidence through the assistance of an interpreter. The Applicant indicated through his counsel that he had been advised about his privilege against self‑incrimination and that he understood this privilege.
Despite the applications being heard jointly, the Tribunal has considered the Applicant’s and his children’s materials separately to that of the wife’s application and has applied the relevant law and policy to the facts and circumstances of their applications.
ISSUES TO BE DETERMINED
The issues to be determined by the Tribunal are:
(a)Whether it is satisfied that, at the time of its decision, the Applicant is not of good character under s 25(2)(b)(iii) of the Act;
(b)If the Tribunal is satisfied of the first issue, whether the Tribunal should exercise the discretion under s 25(1) to cancel the approval given to the Applicant under s 24(1) of the Act; and
(c)Whether the approvals given to the Applicant’s children have been cancelled.
Applicant’s contentions
The Applicant contends he is of good character. It is contended that he has been unlucky in business in both Australia and China, but these challenges do not reflect a flaw in his character.[34] The Applicant submits his conduct has been consistently honest, diligent and responsible.[35] He states that his inability to repay the debt is not a reflection of unwillingness but rather a consequence of the financial challenges he has faced.[36]
[34] Exhibit A1 [8].
[35] Ibid.
[36] Ibid [9].
The Applicant submits he is a valued and contributing member of the Australian community and has acted in good faith and with integrity, and never dishonestly or irresponsibly.[37]
[37] Ibid [10]-[11].
It is further contended that even if the ground for cancellation is made out, the discretion to cancel his citizenship application should not be exercised, as that would not be in the best interests of his children.
Respondent’s contentions
The Respondent contends that the Applicant is not of good character and the decision under review should be affirmed.[38] The Respondent invites the Tribunal to accept the proposition that the Applicant was responsible for incurring very significant debts to the third party (Mr Zhang) as part of his business dealings in China.[39] It is noted that the Applicant has not willingly repaid anything to Mr Zhang, other than proceeds from the forced sale of property owned by the Applicant’s wife which was sold after mortgage default.[40] The Respondent also notes that the Applicant’s businesses in Australia also owe significant tax debts which were not paid on time.[41] This is notwithstanding the Applicant’s claims to the Department in November 2023 that his company had an annual revenue of nearly AUD2 million.[42]
[38] Exhibit R1 [3].
[39] Ibid [18].
[40] Ibid.
[41] Ibid [18], [22]-[23].
[42] Ibid [21].
The Respondent submits that the discretion favours cancelling the approval, and that it otherwise remains open for the children to apply for citizenship in their own right.[43] Any additional cost or inconvenience by having the children apply for citizenship does not outweigh the undesirability of approving a person’s citizenship in circumstances where the person is not of good character.[44]
[43] Ibid [25].
[44] Ibid.
LEGISLATIVE FRAMEWORK
Section 21(1) of the Act provides that a person may apply to the Minister to become an Australian citizen. Section 24(1) provides that if a person makes an application under s 21, the Minister must, by writing, approve or refuse to approve the person becoming an Australian citizen. Section 20 provides that a person becomes an Australian citizen if the Minister decides under s 24(1) to approve the person becoming an Australian citizen and (if the person is required to make a pledge of commitment to become an Australian citizen) the person makes that pledge.[45]
[45] Sections 26 and 27 outline the circumstances under which a person make a pledge of commitment and the pledge of commitment is to be made.
Section 25 of the Act provides that the Minister may cancel an approval:
(1)The Minister may, by writing, cancel an approval given to a person under section 24 if:
(a)the person has not become an Australian citizen under section 28; and
(b)either of the following 2 situations apply.
Eligibility criteria not met
(2)The first situation applies if:
(a)the person is covered by subsection 21(2), (3) or (4); and
(b)the Minister is satisfied that, at the time the Minister proposes to cancel the approval, the person is:
(i) not a permanent resident; or
(ii) not likely to reside, or to continue to reside, in Australia or to maintain a close and continuing association with Australia; or
(iii) not of good character.
Failure to make pledge of commitment
(3)The second situation applies if:
(a)the person has failed to make a pledge of commitment within 12 months after the day on which the person received notice of the approval; and
(b)the person’s reason for the failure is not one that is prescribed by the regulations for the purposes of this subsection.
Cancellation of child’s approval
(4)If:
(a)a child aged under 16 makes an application under section 21 at a particular time; and
(b)1 or more responsible parents of the child make applications under section 21 at that time; and
(c)the Minister decides under section 24 to approve the child and 1 or more of the responsible parents becoming Australian citizens; and
(d)the Minister cancels the approval given to each responsible parent;
the Minister must, by writing, cancel the approval given to the child.
Effect of cancellation
(5)If the Minister cancels an approval given to a person, the approval is taken never to have been given.
Note: A person cannot become an Australian citizen under this Subdivision unless the Minister approves the person becoming an Australian citizen. This subsection has the effect that the person will need to make another application if the person wants to become an Australian citizen.
Section 52(1)(c) provides that an application may be made to the Tribunal for review of a decision under s 25 to cancel an approval given to a person under s 24.
Revised Citizenship Procedural Instructions
The Revised Citizenship Procedural Instructions (‘CPIs’) provide guidance to decision‑makers exercising powers and discharging their functions under the Act. Decision‑makers undertaking merits review should have regard to such policy unless there are cogent reasons to not do so.[46]
[46] Re Drake and Minister for Immigration and Multicultural and Ethnic Affairs (No 2) (1979) 2 ALD 634, 645.
The Tribunal was directed to the following relevant CPIs:
(a)CPI 4 – Australian Citizenship by Conferral – Person under 18 (reissued 21 October 2021);
(b)CPI 10 – Cancellation of Approval and Delay Making the Pledge (reissued 28 January 2022);
(c)CPI 12 – Assessing significant hardship, disadvantage or detriment for the purposes of Australian citizenship (issued 10 April 2019);
(d)CPI 13 – Best Interest of Child Assessments (issued 10 April 2019); and
(e)CPI 15 – Assessing Good Character under the Citizenship Act (reissued 26 February 2021).
The Tribunal has had regard to and applied the relevant CPIs, there being no cogent reason not to do so.
Good character
CPI 15 notes that the term ‘good character’ is not defined in the Act. It notes that most Federal Court and Tribunal decisions have adopted the definition from the Full Federal Court’s decision in Irving v Minister for Immigration, Local Government and Ethnic Affairs:[47]
Unless the terms of the Act and regulations require some other meaning be applied, the words “good character” should be taken to be used in their ordinary sense, namely, a reference to the enduring moral qualities of a person, and not the good standing, fame or repute of that person in the community. The former is an objective assessment apt to be proved as a fact while the latter is a review of subjective public opinion… A person who has been convicted of a serious crime and thereafter held in contempt in the community, nonetheless may show that he or she has reformed and is of good character… Conversely, a person of good repute may be shown by objective assessment to be a person of bad character.
[47] (1996) 68 FCR 422, 431-432.
Clause 3.3 of CPI 15 states that the phrase “enduring moral qualities” encompasses the following concepts:
·characteristics which have endured over a long period of time;
·distinguishing right from wrong; and
·behaving in an ethical manner, conforming to the rules and values of Australian society.
CPI 15 also provides that ‘good character necessitates consideration of an applicant viewed in a holistic way; that is, all aspects of his/her life may be relevant to consideration of character.’ It also provides that a ‘decision-maker can be satisfied that an applicant is of good character if the applicant has demonstrated good enduring/lasting moral qualities that are evident before their visa application and throughout the time the applicant held a visa, and during the time their citizenship application was lodged and processed.’
Clause 4 of CPI 15 states that, as a general proposition, a person who is of good character would:
·respect and abide by the law in Australia and other countries;
·be honest and financially responsible (for example, pay tax, not be in dishonest receipt of public funds, pay debts to the Commonwealth);
·not practise deception or fraud in dealings with the Australian Government or other organisations, for example:
ointentionally providing false personal information (such as fraudulent work experience or qualification documents) or other material deception during visa and citizenship applications;
oevading immigration control at the border or living unlawfully in the community after their visa ceased, or assisting others to do so, or involvement in people smuggling or trafficking;
oknowingly entering into a bogus marriage or pretending to be a de facto partner of another person;
oconcealing criminal convictions;
ofraud against the Commonwealth such as tax fraud or Centrelink fraud;
ogiving false names and/or addresses to police;
·not be the subject of any extradition order or other international arrest warrant;
·not be violent, involved in illegal drugs or unlawful sexual activity, and not cause harm to others through their conduct (for example multiple and/or repeated instances of recklessness exhibited by negligent or drink driving, excessive speeding or driving without a licence);
·not associate with persons who are involved in anti-social or criminal behaviour, or who do not uphold and obey the laws of Australia, such as organisations involved in war crimes, criminal gangs, OMCGs or youth gangs;
·not have committed, or been involved in, or associated with war crimes, crimes against humanity or genocide;
·not be involved in terrorist organisations or acts of terrorism overseas or in Australia.
Clause 4 of CPI 15 further provides that:
Application of these principles should be considered in the light of the facts of the particular case and should not be applied rigidly or inflexibly. The above examples are intended only to provide broad guidance to decision-makers about the types of behaviours which might support an adverse conclusion about a person’s character. Ultimately a decision-maker must exercise any statutory discretion bearing in mind the facts of any particular case.
It is also necessary to consider any other information that is relevant to a person’s character such as information provided by an applicant about his/her family life; for example, raising children, being in a stable home environment, being responsibly employed, paying taxes, any community work undertaken, and any other matter that is relevant to an assessment of character in the circumstances of a particular case. This would include expressions of genuine remorse for past wrong-doing and the time that has elapsed since the wrong-doing. Ultimately, a decision-maker should weigh up all the factors relevant to an assessment of an applicant’s character, which might include a number of factors some of which support reaching an adverse conclusion about a person’s character and some of which support reaching a positive conclusion about a person’s character.
Clause 14.2 of CPI 15 provides that decision-makers must weigh up all of the relevant evidence in determining whether or not the person is of good character at the time of decision. The CPI contains an extract from a decision of Prasad and Minister for Immigration and Ethnic Affairs where it was held that:[48]
a decision about whether a person is of good character requires the consideration of an aggregate of qualities. It is true to say, however, that, despite the many good qualities possessed by a person, those qualities can be outweighed by a single adverse incident if it is of sufficient weight and seriousness.
[48] [1994] AATA 326 [7].
Clause 14.2 also provides that a ‘decision-maker needs to look holistically at an applicant’s behaviour over time. The amount of time depends on the merits of each case, but in most cases will go back prior to any visa application if the person is applying for citizenship by conferral.’
Cancellation of approval and best interests considerations
The Tribunal also needs to have regard to the other relevant CPIs dealing with cancellation of approval. Included in this is a consideration of the best interests of any children who may be affected by the decision.
CPI 10 provides policy guidance when dealing with the cancellation of approval and delay in making the pledge. Clause 3 deals with the circumstances under which the eligibility criteria are not met in regard to s 25(2) of the Act. The CPI notes that this ‘is a discretionary power and it is expected that delegates will make a fair and reasonable decision based on the merits of the individual case.’[49]
[49] Ibid 220.
Clause 5.2 deals with cancellation of a child’s approval under s 25(4) of the Act. This clause directs decision-makers to consider the best interests of any child who may be affected by the decision by reference to CPI 13 – Best Interest of Child Assessments.
Finally, decision-makers must also have regard to CPI 12 – Assessing significant hardship, disadvantage or detriment for the purposes of Australian citizenship if a person would suffer significant hardship, disadvantage or detriment in relation to a decision under the Act.
ANALYSIS OF ISSUES
Is the Applicant of good character?
The Department’s decision record extracted the relevant factual circumstances as provided to them by the Gansu Province Lanzhou City Intermediate People’s Court in China.[50] The Applicant has provided the Tribunal with a statement setting out his version of events with regard to the judgment debt.[51] The Applicant’s version and the circumstances he submits are relevant are summarised below.
[50] Ibid 15.
[51] Exhibit A5.
The Applicant had ‘big plans’ to grow his business and entered into a number of business deals with other people.[52] One of these people was Mr Zhang, who wanted to invest RMB1 billion in the Applicant’s company in October 2016.[53]
[52] Ibid [9].
[53] Ibid.
In May 2017, the Applicant signed a contract with Mr Zhang. The Applicant reports that Mr Zhang invested a small amount of money and, according to the Applicant, he realised that Mr Zhang was not interested in developing his business, but rather abused his position and acted in a way that was detrimental to the Applicant’s business.[54]
[54] Ibid [10].
In May 2018, the Applicant was asked to assist with an investigation at the police station.[55] The questions were focused on the Applicant’s relationship with Mr Zhang and the source of the investment funds. The Applicant responded to these questions and advised that his wife was not involved in this matter. The police officer then requested the Applicant’s wife to write an ‘Application for Lifting Exit Restrictions’, which she completed and signed. The Applicant reports that his wife was then allowed to leave China and return to Australia. The Applicant does not have any copy of the documents to substantiate this as he was not provided with any copies.[56] The Applicant stated that to the best of his knowledge, the matter with the police did not go any further and there were never any criminal charges laid against him or his wife.[57]
[55] Ibid [11].
[56] Ibid.
[57] Ibid [13].
The Applicant reported that Mr Zhang took away the computer servers containing his patented software code and had transferred the company’s funds out of his control.[58] The Applicant said he felt pressure to return to Australia to care for his children who at that stage were being cared for by his mother. He stated that he needed to sort his ‘problem’ with Mr Zhang quickly.[59]
[58] Ibid [14].
[59] Ibid.
On 3 July 2018, the Applicant entered into a new contract with Mr Zhang.[60] The Applicant reports that the contract was not favourable to him, but he felt he had no other choice.[61] The Applicant understood the contract involved Mr Zhang seeking to extract his investment by converting his equity in the company into debt owed to him. The contract also required the Applicant to sell his only home in China to repay the debt.[62]
[60] Ibid [15].
[61] Ibid.
[62] Ibid.
The day after the Applicant signed the contract, Mr Zhang called the company accountant, who asked the Applicant if he agreed to pay 50,000 yuan.[63] The Applicant reports he had no choice but to agree. The Applicant repaid the initial 50,000 yuan as stipulated in the contract. The Applicant then departed China and returned to Australia on 21 July 2018. After that, the Applicant travelled back and forth between China and Australia for business until January 2019, after which he has not returned to China.[64]
[63] Ibid [16].
[64] Ibid.
The Applicant states that the contract with Mr Zhang required him to repay the remainder of the amount due under the contract in monthly instalments.[65] The Applicant states that he intended to repay the rest of the money from another company, but once he left China, he lost control of that company and 10,000,000 yuan disappeared from the accounts.[66]
[65] Ibid [17].
[66] Ibid.
On 18 March 2020, the Lanzhou Intermediate People’s Court in Gansu Province issued a judgment in which the Applicant, his wife and company were named as defendants.[67] The judgement required the Applicant and his wife to pay Mr Zhang 15,332,000 yuan within fifteen days after the judgment took effect. The Applicant understands that once fees were added in, the full amount was 15,433,643 yuan.[68]
[67] Ibid [18].
[68] Ibid.
The Applicant states that his legal representative at the time was Mr Guo. However, the Applicant believed that Mr Guo may not have known about the court case, and the court documents may have been sent to the old house he lived in, which was demolished.[69] The Applicant believes this is the reason why he did not receive the court documents.[70] The Applicant also denied receiving any summons from the Court and was unaware of the case at the time. The Applicant states that had he been aware of the case, he would have taken steps to defend himself.[71]
[69] Ibid [19].
[70] Ibid.
[71] Ibid [20].
The Applicant reports that he first became aware of the judgment on 1 April 2020 from his lawyer in China (Mr Chen).[72] The Applicant was advised by Mr Chen that appealing the decision would be a difficult and lengthy process. After receiving this advice, the Applicant decided to not pursue the matter further.[73] The Applicant states he received this advice orally and he did not receive written advice at the time.[74] The Applicant has since contacted the lawyer by email and has attached those emails to his statement.[75] The email from Mr Chen to the Applicant states (in part) the following:[76]
I remember you consulted me after you learned a Civil Judgment was issued by Lanzhou Intermediate People’s Court in relation to the case. Through communication, it has been understood that there is evidence in this matter that (Mr Zhang) made an investment and that both parties later signed an agreement to convert (Mr Zhang’s) investment into creditor rights, with a specified repayment amount and deadline. The facts and evidence are unfavourable to you, and the court’s Civil Judgment was made based on factual and legal grounds. Even if you appeal, the chances of winning are very slim, and the cost of the appeal will be substantial.
[72] Ibid [21].
[73] Ibid [22].
[74] Ibid [23].
[75] Exhibit A6, 10-12.
[76] Ibid 10-11 (as translated).
The Applicant writes in his statement that although he feels aggrieved by not being able to defend himself, he accepts he is now liable to pay the judgment debt.[77]
[77] Exhibit A5 [24].
The Applicant also provided details of the difficulties he encountered in repaying the debt. The Applicant states he was the victim of embezzlement from an employee. He states that this was reported to police by his wife, but the police never responded to their enquiry.[78]
[78] Ibid [27].
The Applicant also stated that they sold a property under his wife’s name to pay debts they owed Mr Zhang and the bank for mortgage default.[79] Mr Zhang was to receive 1,326,184.30 yuan from the sale of that property in June 2022.[80]
[79] Ibid [28].
[80] Ibid.
The Applicant states he was unable to use more money from his Australian businesses to repay the judgment debt because from April 2020, the pandemic resulted in financial problems. He reports his business was also affected by rumours about him, and that he had many jobs cancelled because of this.[81]
[81] Ibid [29].
The Applicant otherwise states he is not in a position to repay the debt and that his money in China has either already been put towards the debt, is frozen or was stolen.[82] The Applicant also reports that his Australian companies are at risk of collapse and had to enter restructuring which required giving up a significant amount of equity.[83] After restructuring, the companies have a repayment plan with the ATO to pay tax liabilities and about ten other creditors.[84] The Applicant annexed the Restructuring Practitioner’s Report to his statement, as well as a transaction list from his bank which show that the Applicant’s companies have been making payments as required under the restructuring.[85] The Report shows the companies have significant debts with the ATO.[86]
[82] Ibid [32].
[83] Ibid [35].
[84] Ibid [36].
[85] Exhibit A6, 27-158.
[86] For example, one company is said to owe the ATO the sum of $123,915 (Exhibit A6, 36).
The Applicant states that it is not the case that he has not paid the debt in China because he doesn’t want to. He states he has every intention of repaying the debt, so he can return to China one day and visit family.[87] He says he can’t pay the debt right now but is working towards doing so. He states he is in a difficult position with competing priorities of debts to Mr Zhang and the ATO and other creditors (as well as ensuring that he is able to pay for his and his family’s living expenses).[88] He further states that his priorities are with his family and the Australian businesses, but he does intend to pay off his debt in China once he is able to.[89] Once he has money, he plans to engage with his lawyer in China and deal with the outstanding debts.[90]
[87] Exhibit A5 [37].
[88] Ibid [38].
[89] Ibid [39].
[90] Ibid.
With regard to his attendance at the citizenship ceremony, he said he and his wife attended because he was very concerned about scam emails and wanted to attend the ceremony to find out if the email was genuine.[91] The Applicant reports they were very polite to the staff the whole time.[92]
[91] Ibid [41].
[92] Ibid [42].
The Applicant also expressed the impact of the cancellation decision on him personally. He states that his mental health was on the verge of collapse, and he has been in a constant state of anxiety and self-blame.[93] He would like do things to improve his business, such as further study and pursuing a career in government or public sector positions, which he believes he may be ineligible for without citizenship.[94]
[93] Ibid [45].
[94] Ibid [46].
With regard to the impact on his children, the Applicant reports that his son is very skilled at maths and sports and would like to represent Australia, which he does not think he can do if he is not a citizen.[95] The Applicant’s daughter is nearing the end of secondary schooling and is undertaking an International Baccalaureate with the hope she can study at university overseas. The Applicant states that her opportunities to study at foreign universities will be affected if she is unable to apply as an Australian citizen.[96]
[95] Ibid [49]
[96] Ibid [50].
The Applicant also addressed the personal references he provided the Department in November 2023, namely that the authors of these letters did not reveal knowledge of the Applicant’s judgment debt. The Applicant confirmed that he did not inform them about his financial circumstances in China, as he regarded such details as private and not something typically shared. He therefore did not disclose his financial situation in China or Australia to them as he prefers to keep this information confidential.[97]
[97] Ibid [51].
It is of note that during the Applicant’s evidence-in-chief to the Tribunal, the Applicant gave a different version of events with regard to the circumstances that led him to sign the agreement with Mr Zhang. He told the Tribunal that the police invited him to a hotel room, and when he arrived there were around 15 to 16 people present. The Applicant said they ‘looked like gangsters’ and they all had tattoos. He said they asked him to sign the agreement with Mr Zhang against his will. He said after he signed the agreement he was allowed to leave.
When questioned about why he didn’t provide this account in his written statement to the Tribunal, the Applicant said he didn’t want his wife to know and worry her. He said he wasn’t aware of the terms of agreement and wasn’t allowed to read the document. The Applicant said that he wasn’t aware that his wife’s house was used as a guarantee for the loan. He said he didn’t tell his wife about this because he simply didn’t know her house was used as collateral. He said he hasn’t discussed this with his wife even today as he didn’t want her to worry.
Another version of events was provided for in the Applicant’s ‘Statutory Declaration’ to the Department dated 7 November 2023.[98] The Applicant stated that that Mr Zhang was using ‘special tactics’ which plunged him into endless anxiety and fear.[99] He stated that he was forced to sign the agreement under pressure and against his will. He said his wife was included in the agreement even though she had no knowledge of it and did not sign it.[100] The Applicant stated that for his own sake and for that of his family, he had no choice but to give up everything in China and stay in Australia. He also stated that his ‘only wish was for a clean slate’, and upon his return to Australia he chose to start a second business.[101] He stated he is proud of the fact that the company has grown to an annual revenue of nearly $2m AUD with more than a dozen full-time employees.[102]
[98] Exhibit R2, 148-152.
[99] Ibid 150.
[100] Ibid.
[101] Ibid 151.
[102] Ibid.
The Tribunal has considered the Applicant’s version of events told to the Tribunal. The Tribunal does not consider the Applicant’s oral evidence to the Tribunal in regard to the circumstances of signing the Agreement as truthful. A copy of the Agreement was provided by the Applicant to the Department in November 2023.[103] The document has been translated into English. The Agreement appeared to be signed by both parties and the Applicant’s company seal was applied. The sale of the Applicant’s wife’s house was included in the Agreement ‘to reduce the repayment pressure of Party B’ (being the Applicant).[104]
[103] Ibid 146-7, 164-6.
[104] Ibid 165.
The Respondent contends that despite the existence of a Court order in relation to the debt, the Applicant has not willingly made any repayments to Mr Zhang.[105] Further, the Applicant appeared to obstruct the sale of the property, which was eventually sold by the bank after a mortgage default.[106] The Respondent contends that the Applicant’s conduct is not financially responsible and does not reflect a person with good character.[107] The Tribunal agrees with this assessment.
[105] Exhibit R1 [18].
[106] Ibid [19].
[107] Ibid [20].
The Tribunal has considered the Applicant’s evidence and the guidance provided in the relevant CPIs. The Tribunal considers that the existence of a debt does not necessarily mean that a person is not of good character, but the size of this debt and the circumstances in which it was incurred is plainly relevant to the question of character.
The Tribunal does not consider the Applicant’s oral evidence in regard to the circumstances of signing the Agreement, in which he alleged he was taken to a hotel room and forced to sign the Agreement against his will while surrounded by 15 to 16 ‘gangsters’, is credible. This is new evidence that was not previously provided in any of the Applicant’s written statements to the Department or the Tribunal. The Applicant’s ‘Statutory Declaration’ does allege that, under pressure, he was ‘forced’ to sign the Agreement against his will; however, it does not mention the existence of ‘gangsters’ or being forced to a hotel room.[108] In the Tribunal’s view, the Applicant was under financial pressure given the Applicant’s failed business dealings in China. The Tribunal also does not consider to be credible the Applicant’s explanation that he never mentioned this prior to giving evidence because he didn’t want to upset his wife. The Applicant has been forthright in providing material to the Department and to the Tribunal in regard to the judgment debt and the Agreement with Mr Zhang. In none of that material did the Applicant mention that he was pressured into signing the Agreement because he was forced into a hotel room and surrounded by ‘gangsters’. The Tribunal considers that if that had of occurred, the Applicant would have mentioned it earlier than during examination-in-chief.
[108] Exhibit R2, 150.
The Respondent further relies on the fact that in Australia the Applicant’s companies owe significant tax debts which were not paid on time.[109] The Applicant provided evidence of the restructuring of these debts in order to cover the repayments.[110] Paragraph 11.1 of CPI 15 provides, as an example, a decision by a person not to prioritise the repayment of debt does not necessarily reflect on a person’s overall character.[111] The CPI provides examples where there might be an acceptable explanation for a failure to make arrangements to repay a debt to the Commonwealth, say in the circumstances of financial stress because of unemployment, rent or childcare.[112] With respect to the Applicant’s circumstances, these examples do not apply. On the Applicant’s own evidence, his company has a turnover of nearly $2m and more than a dozen full-time employees.[113] This evidence was given in a ‘Statutory Declaration’ dated 7 November 2023.[114] According to materials provided by the Applicant, the Applicant’s companies each entered restructuring in January 2024.[115] Again, there appears to be inconsistencies with regard to the Applicant’s true financial circumstances. These inconsistencies reflect negatively on the Applicant’s character. It is not clear on the evidence that the companies were performing as well in Australia as the Applicant states. This combination of inconsistencies in the Applicant’s version of events in regard to the circumstances in which he incurred the judgment debt in China and the true financial state of his companies in Australia poorly reflects on the Applicant’s character. The Tribunal notes the Applicant’s own evidence that he wanted to move to Australia for a ‘clean slate’ and to start his business ventures again.[116] The Tribunal considers that is exactly what the Applicant wanted to do – that is, move to Australia, for a clean slate, and leave behind the significant judgment debt he incurred in China. The Tribunal considers that a person who has such a significant debt in another country and has left that country to seemingly avoid paying that debt is not a person of good character. Even considering the Applicant’s character in a holistic way necessarily requires consideration of the debts he owes in Australia. In the Tribunal’s view, the fact that the Applicant has these significant debts both overseas and in Australia demonstrates that the Applicant is not a person of good character for the purposes of the Act.
[109] Exhibit R1 [20].
[110] Exhibit A6, 27-151.
[111] Exhibit R2, 221.
[112] Ibid.
[113] Ibid 151.
[114] Ibid 148.
[115] Exhibit A6, 27, 56, 87, 120
[116] Exhibit R2, 151.
The Tribunal also notes that the Applicant attended the citizenship ceremony despite being directed not to attend. The Tribunal does not consider the Applicant’s attendance is reflective of bad character. It is noted that the Applicant received an email directing him not to attend late on a Friday before the ceremony was due to take place on a Monday. Attending the ceremony to speak to someone about the reasons why that occurred is reasonable in all the circumstances.
The Tribunal is therefore satisfied that the Applicant is not of good character. Having been satisfied that the Applicant is not of good character, the Tribunal needs to consider whether the discretion in s 25(1) should be exercised to cancel the approval of citizenship.
If satisfied the Applicant is not of good character, should be the discretion be exercised?
The Applicant relies on the same reasons as advanced in his wife’s application before the Tribunal as to why the discretion to cancel the approval of citizenship should not be exercised.[117]
[117] Exhibit A1 [12].
Those reasons concern the best interest of the Applicant’s children, whom it is argued have a close connection with the Australian community. The Applicant also notes that the children’s citizenship is important as they move towards higher education in Australia and advance their respective interests in sports.
The Respondent submits that the direction should be exercised also for the same reasons as advanced in its submissions in the Applicant’s wife’s matter.[118] The Respondent submitted in that matter that it remains open to the children to apply for Australian citizenship in their own right. The Respondent also submitted the inability to access government‑funded financial assistance such has HECS is not a strong discretionary feature in exercising the discretion in the Applicant’s favour.
[118] Exhibit R1 [25].
The Respondent further submits that any additional cost or delay that may be occasioned by the children applying separately for citizenship does not outweigh the desirability of giving a person who does not have good character the privilege of Australian citizenship.[119]
[119] Ibid.
The Tribunal has considered the arguments of each party and the relevant considerations in CPI 10 and CPI 13 with regard to the best interest of the child in citizenship decisions. The Tribunal considers that although the best interests of the children in this case is a relevant factor to be taken into account, the Tribunal notes that the children, as permanent residents, will be able to access tertiary study. Paragraph 3.2 of CPI 12 specifically addresses claims that the person will suffer significant hardship, disadvantage or detriment if they are unable to afford the higher fees imposed on some non-citizens. As noted in the policy, Australian citizenship is not a requirement to study in Australia. Further, permanent residents are eligible for Commonwealth supported places, where available. The Applicant’s children are permanent residents.
The Tribunal is persuaded by the Respondent’s argument that any additional cost or delay incurred by the children applying separately does not outweigh the desirability of approving the Applicant’s citizenship in circumstances where it has been found he is not of good character. The Tribunal finds that the best interest of the children will only be slightly affected by a decision to cancel the approval of the Applicant’s citizenship on the basis of the relevant policy guidance as set out in CPI 13. This does not outweigh the considerations in favour of exercising the discretion to cancel the approval of citizenship.
The Tribunal concludes that the discretion should be exercised, and the approval given to the Applicant should be cancelled.
The citizenship applications of the children
The Applicant has helpfully set out the mandatory cancellation power as set out in s 54(4) of the Act in respect of each child Applicant.[120] The Applicant correctly points out that if the Tribunal sets aside the delegates’ decisions regarding the Applicant and his wife, then the Tribunal will not have cancelled the approval given to each responsible parent. Section 25(4)(d) will not be satisfied, and the Tribunal will have no power to affirm the delegate’s decision with regard to each of the children. In those circumstances, it would follow that the decision with respect to each of the children must be set aside, and the Tribunal retains no residual discretion to cancel the approval of their citizenship.
[120] Exhibit A1 [13]-[15].
Conversely, if the delegates’ decisions regarding the Applicant and his wife are affirmed, then it must follow from s 25(4) that the decisions regarding each of the children must be affirmed.
The Respondent agrees that the above position as stated by the Applicant is correct.[121]
[121] Exhibit R1 [26]
The Tribunal has found that the discretion should be exercised, and the approval given to the Applicant should be cancelled and the decision affirmed. Therefore, the Tribunal affirms the cancellation decision in respect of each of the children.
CONCLUSION
The Tribunal is satisfied that the Applicant is not of good character.
Having been so satisfied, the Tribunal was required to consider whether to exercise the discretion to cancel the approval given to the Applicant under s 24. The Tribunal has carefully weighed the competing evidence, submissions and applicable policy guidance. The Tribunal has determined that the discretion should be exercised in this case, and the approval given to the Applicant under s 24 should be cancelled.
The Tribunal is cognisant of the fact that an adverse decision under s 24(1) means that the approval given to the children must also be cancelled (s 24(4)). The Tribunal has weighed this consideration against exercising the discretion to cancel the approval given to the Applicant. The Tribunal is of the view that it is not desirable to refuse to exercise the discretion in circumstances where it is found that the Applicant is not of good character.
The Tribunal has therefore determined that the discretion should be exercised, and the approval given to the Applicant under s 24 should be cancelled. It follows that the approval given to both children must also be cancelled pursuant to s 24(4).
DECISION
The decisions under review with regard to the Applicant and the two children are affirmed.
I certify that the preceding 94 (ninety-four) paragraphs are a true copy of the reasons for the decision herein of General Member K. Thornton
............................[sgd]............................................
Associate
Dated: 25 March 2025
Dates of hearing:
12 and 13 December 2024
Counsel for the Applicant:
Ms Kylie McInnes
Solicitors for the Applicant:
Prima Legal
Counsel for the Respondent:
Mr Jonathan Barrington
Solicitors for the Respondent:
Sparke Helmore Lawyers
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