Shao (Migration)

[2023] AATA 2693

Shao (Migration) [2023] AATA 2693 (26 July 2023)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mr Shijun Shao
Ms Qin Huang

REPRESENTATIVE:  Mr Shu Bo Huang

CASE NUMBER:  2102474

HOME AFFAIRS REFERENCE(S):          BCC2019/1174903

MEMBER:Katie Malyon

DATE:26 July 2023

PLACE OF DECISION:  Sydney

DECISION:The Tribunal affirms the decision not to grant the visa applicants Business Skills (Provisional) (Class EB) visas.

Statement made on 26 July 2023 at 12:25 pm

CATCHWORDS
MIGRATION – Subclass 188 (Business Innovation and Investment (Provisional)) visa – Subclass 188 – applicant failed to respond to requested information – Investor stream – 6 properties listed in the application were not eligible investments – 2 properties in China is considered a passive investment – no current information to address the delegate’s reasons for refusing the visa – decision under review affirmed

LEGISLATION
Migration Act 1958, ss 65, 359, 360, 363
Migration Regulations 1994, r 1.03, Schedule 2, cl 188.243

CASES
Hasran v MIAC [2010] FCAFC 40

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Home Affairs on 10 February 2021 to refuse to grant the applicants Business Skills (Provisional) (Class EB) visas under s 65 of the Migration Act 1958 (Cth) (the Act).

2. The applicants, Chinese nationals Shijun Shao and Qin Huang, applied for the visas on 8 March 2019. Class EB contains Subclass 188 (Business Innovation and Investment (Provisional)). 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 Regulations).  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 7 streams.  In this case, the first named visa applicant, Mr Shao, applied for the visa in the Investor Stream.

   Background

3. The delegate in this case refused to grant the visas on the basis that Mr Shao did not satisfy the requirements of cl 188.243 of Schedule 2 to the Regulations. Clause 188.243 requires the applicant to demonstrate their direct involvement in managing a qualifying business or eligible investment. In his application, Mr Shao provided details of 6 properties to satisfy cl 188.243:

   1)Unit 141/10 Lachlan Street, Waterloo, NSW 2017 (the Waterloo property);

   2)Unit 1605/241 Oxford Street, Bondi Junction NSW 2022 (the Bondi Junction property);

   3)Unit 403/72F Macdonald Street, Erskineville NSW 2043 (the Erskineville property);

   4)Unit A2308/1 Network Place, North Ryde NSW 2113 (the North Ryde property);

   5)2901, Block SCA2, Aera IIA09, Qingshui Bay Resort, Yingzhou, Lingshui, Hainan, China (the Hainan property); and,

   6)1102 of Nos. 33 and Car Parking A173 on -1/F of Nos. 32, No. 88 Nong, Yangpu, Shanghai, China (the Shanghai property)

4. Mr Shao submitted a Summary of Management of Eligible Investments together with a Statutory Declaration of his direct involvement in managing these investments.  The delegate, although acknowledging the capital gains made from these properties, found that Mr Shao the Waterloo property and the Erskineville property were his residential properties and, therefore, could not be regarded as an eligible investment.  Further, Mr Shao’s North Ryde property was regarded as a passive investment and did not satisfy the definition of eligible investment as set out in cl 188.112 of the Regulations and explained in Department policy. As set out in policy, passive investments are money raising activities that, similar to collecting rent from rental properties, require little or no input from an applicant and might include monies earned from managed investment portfolios, capital gains from the purchase and sale of capital assets (for example houses) and beneficiaries of trust funds to play no other role in managing the assets of the trust.

5. Additionally, Mr Shao’s Bondi Junction property and the property is located in China (that is, the Hainan property and the Shanghai property) were also considered to be passive investments rather than investments that demonstrate a high level of management skill in relation to the eligible investments.

6. Inconsistent with cl 2.2 of the Tribunal’s COVID-19 Special Measures Practice Direction – Migration and Refugee Division dated 27 April 2020 and cl 5.1 of the its Migration and Refugee Matters Practice Direction dated 1 August 2018, the representative did not provide, an lodgement of the application for review all relevant evidence and a detailed submission setting out the applicants’ claims, or do so within 14 days.

   The Tribunal’s s 359(2) letter

7. On 11 July 2023, the Tribunal wrote to the applicants under s 359(2) of the Act inviting them to provide a submission and probative evidence to address the delegate’s reasons for refusal of their visa application. The Tribunal explained that, if information cannot be provided by the due date of 25 July 2023, then they may ask for an extension of time. The Tribunal noted that, if the information is not received within the period allowed, or as extended, then the Tribunal make a decision on the review without taking further action to obtain the information and that they will lose any entitlement they might otherwise have had under the Act to appear before the Tribunal in a hearing to give evidence and present arguments.

8. The Tribunal is satisfied that its s 359(2) letter was properly dispatched to the email address of the applicants’ appointed representative, immigration lawyer Mr Shu Bo Huang of L’Orient Legal. No response has been received from the applicants in response to the Tribunal’s
   s 359(2) letter and nor have they requested additional time to provide the information.

9. In these circumstances, s 359C of the Act applies and, pursuant to s360(3) of the Act, the applicants are not entitled to appear before the Tribunal. If a review applicant has no entitlement to a hearing, the effect of s 363A of the Act is that the Tribunal has no power to permit the applicant to appear: Hasran v MIAC [2010] FCAFC 40.

10. Although the applicants have not requested this, the Tribunal has considered whether it would be appropriate to adjourn the review under s 363(1)(b) of the Act to allow them additional time in which to provide evidence to support their review application. In this regard, the Tribunal has considered whether, in the circumstances of this case and having regard to the recent COVID-19 pandemic, evidence that the applicants meet all the relevant requirements of cl 188.243 of the Regulations is likely to be forthcoming, whether they have had a fair opportunity to provide the information or documents already, and the significance of the information or documents to the applicants. The Tribunal has taken into account the decisions in Huo v Minister for Immigration and Multicultural Affairs[1]and Manna v Minister for Immigration and Citizenship[2]where the Courts have held that the Tribunal is not required to indefinitely defer its decision-making processes.

    [1] [2002] FCA 617.

    [2] [2012] FMCA 28.

11. In the circumstances of this case, the Tribunal considers that the applicants have had sufficient time to provide the requested information and thereby address all of the issues arising on review. Accordingly, the Tribunal has decided not to exercise its discretion under s 363(1)(b) of the Act to adjourn the review any further. The Tribunal has determined to make a decision on the review without taking any further action to obtain the information in accordance with s 359C of the Act.

12. As noted above, the Tribunal wrote to the applicants under s 359(2) of the Act inviting them to provide information that addresses the delegate’s reasons for refusing the visa application. The applicants have failed to provide the requested information within the prescribed period or seek additional time in which to do so.

13. For the following reasons, the Tribunal has concluded that the decision under review must be affirmed.

    CONSIDERATION OF CLAIMS AND EVIDENCE

14. The applicants are seeking to satisfy the primary criteria for a Subclass 188 visa in the Investor stream which include the common criteria in Subdivision 188.21 and the criteria for the Investor stream in Subdivision 188.24 of Schedule 2 to the Regulations.

15. The issue in the present case is whether, as the primary applicant, Mr Shao meets cl 188.243 of Schedule 2 to the Regulations.

    History of successful investment or business activity, management experience and management skill – cl 188.243

16. Clause 188.243 requires the primary applicant to meet 3 requirements. The applicant must have:

    1)    overall had a successful record of eligible investment activity or qualifying business activity;

    2)    had a total of at least 3 years experience of direct involvement in managing one or more qualifying businesses or eligible investments; and,

    3)    demonstrated a high level of management skill in relation to the eligible investment or qualifying business activity.

17. Clause 188.112 provides that each of the following is an ‘eligible investment’ if a person owns it for the purpose of producing a return in the form of income or capital gain, and not for personal use:

    a)an ownership interest in a business;

    b)cash on deposit;

    c)stocks or bonds;

    d)real estate;

    e)gold or silver bullion. 

18. The term ‘ownership interest’ is defined in s 134(10) of the Act: reg 1.03 of the Regulations. As set out in s 134(10) of the Act, ‘ownership interest’ in relation to a business means an interest in the business as: a shareholder in a company that carries on the business; or a partner in a partnership that carries on the business; or the sole proprietor of the business including such an interest held indirectly through one or more interposed companies, partnerships or trusts. In addition, cl 188.113 states that a loan to a business is an ‘eligible investment’ if a person makes it for the purpose of producing a return in the form of income or capital gain.

19. Further, the term ‘qualifying business’ is defined in reg 1.03 of the Regulations to mean an enterprise that is:

    a)operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public; and,

    b)not operated primarily or substantially for the purpose of speculative or passive investment.

20. In this case, the eligible investment activity relied on by Mr Shao to satisfy the requirements in cl 188.243 of Schedule 2 to the Regulations is his claimed direct involvement in managing eligible investments. As noted above at para [3], Mr Shao claimed in his Subclass 188 visa application to have maintained direct involvement in managing the 6 identified properties as his eligible investments: 4 of the properties are located in Australia, one is in Hainan and one is in Shanghai.

21. The delegate in refusing to grant the Subclass 188 visa was not satisfied that the 6 properties listed in the application were eligible investments.  Consideration was given by the delegate to each of the 6 properties. 

22. In relation to the Waterloo property, the delegate acknowledged that Mr Shao had evidenced a capital gain of about AUD 85,000.  However, the Waterloo property was not considered to be an eligible investment because Mr Shao declared on his Form 80 that he resided at the apartment from June 2014 to 2016: as a result, the property is considered to be his residential property and it does not meet the definition of eligible investment.

23. Regarding the Bondi Junction property, the delegate acknowledged that a capital gain of AUD 90,000 had been made.  However, the Bondi Junction property is not considered to be an eligible vestment but, rather, a passive investment because it did not generate a return by way of income or through capital appreciation. 

24. In relation to the Erskineville property, the delegate acknowledged Mr Shao had made a capital gain of approximately AUD 60,000.  However, the Erskineville property is not considered to be an eligible investment because Mr Shao declared in his Form 80 Personal particulars for assessment including character assessment that he resided at this apartment from July 2016 to May 2018.  As a result, the property is considered to be his residential property and it does not meet the definition of an eligible investment.

25. Further, the North Ryde property was found by the delegate not to be an eligible investment because Mr Shao declared in his Form 80 that he resided at the North Ryde property since December 2018.  Consequently, that property is considered to be his residential property and it does not meet the definition of an eligible investment.

26. In relation to both of the properties in China (that is, the Hainan property and the Shanghai property), the delegate acknowledged that both of these properties are rented and have generated a return by way of rental income.  However, the delegate opined that the Chinese properties are a passive investments as they would not require a high level of management from Mr Shao given that, in his Form 80 lodged with the Department, he stated that he had never worked.  Mr Shao indicated that he had only undertaken studies in Australia for a Bachelor of Commerce at the University of New South Wales from March 2013 to April 2019.

27. Based on this assessment, the delegate concluded that Mr Shao’s involvement in the claimed investment properties in Australia is considered not to be an eligible investment and, further, the 2 properties in China is considered a passive investment rather than one which demonstrates a high level of management skill in relation to the eligible investments. 

28. As noted above, no documentation whatsoever was lodged with the review application to address the delegate’s findings. 

29. Subsequently, on 11 July 2023 the Tribunal invited Mr Shao under s 359(2) of the Act to provide a submissions addressing the delegate’s reasons for refusing the visa supported by probative evidence. No information has been received by the applicants in response to the Tribunal’s s 359(2) letter, and as such, there is no current information to address the delegate’s reasons for refusing the visa.

30. For these reasons, the Tribunal is not satisfied that Mr Shao meets cl 188.243(1) of the Regulations. Consequently, the Tribunal is not satisfied that cl 188.243 is met.

31. Given the above, the Tribunal finds that the criteria for the grant of a Subclass 188 (Business Innovation and Investment (Provisional)) visa are not met by Mr Shao.  Accordingly, the decision under review must be affirmed.

32. The application of the second named applicant, Ms Qin Huang, is based on her being a member of the family unit of a person who meets the primary criteria.  As Mr Shao does not meet the primary criteria, Ms Huang does not meet criteria for grant of the visa.  Accordingly, the delegate’s decision to refuse her application must also be affirmed.

    DECISION

33. The Tribunal affirms the decisions not to grant the visa applicants Business Skills (Provisional) (Class EB) visas.

    Katie Malyon

    Member