Wang (Migration)

[2020] AATA 217

Wang (Migration) [2020] AATA 217 (31 January 2020)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mrs Yeming Wang
Ms Jiaxin Cui
Mr Yudong Cui
Mr Zhiwei Cui
Miss Shuhan Wang

CASE NUMBER:  1732319

DIBP REFERENCE(S):  BCC2016/2590921 BCC2016/399263

MEMBER:Bridget Cullen

DATE:31 January 2020

PLACE OF DECISION:  Brisbane

DECISION:The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration with the direction that the first named applicant meets the following criteria for a Business Skills (Residence) (Class DF) Subclass 890 visa:

· cl.890.211(1) of Schedule 2 to the Regulations

The Tribunal has no jurisdiction in relation to the application of the fourth named applicant.

Statement made on 31 January 2020 at 10:11am

CATCHWORDS
MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 890 (Business Owner) – ownership interest in active operating ‘main business’ – continuous involvement in management and decision making activities – day-to-day tasks performed by applicant in managerial role – documentary evidence required – sourcing and researching business opportunities – commercial value of goods exported – decision under review remitted

LEGISLATION
Migration Act 1958 (Cth), s 65
Migration Regulations 1994 (Cth), r 1.11; Schedule 2, cl 890.211

CASES
1414821 (Migration) [2015] AATA 3954
Lobo v Minister of Immigration and Multicultural Affairs (2003) 132 FCR 93

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 Immigration on 5 December 2017 to refuse to grant the visa applicant a Business Skills (Residence) (Class DF) Subclass 890 visa under s.65 of the Migration Act 1958 (the Act).

2. The visa applicant applied for the visa on 3 August 2017. The delegate refused to grant the visa on the basis that the first named applicant did not satisfy cl.890.211(1) of Schedule 2 to the Migration Regulations 1994 (the Regulations) because she failed to provide the Department with evidence of her continuous involvement in the management and decision making activities of a business over a two year period. As a consequence, the delegate found that the applicants did not meet the requirements of regulation 1.11(1)(b).

3. The first named applicant appeared before the Tribunal on 15 August 2019 to give evidence and present arguments. The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages.

4. The applicants were represented in relation to the review by their Registered Migration Agent, Peter Lee of Rostron Carlyle Lawyers (MARN 0427478). The representative attended the Tribunal hearing. The Tribunal has had the benefit of well-organised legal submissions, supported by documentary evidence for the factual propositions asserted by the applicant.  When the Tribunal has organised, lucid, directly relevant material, it enhances the Tribunal’s ability to understand an applicant’s case. 

5. The Tribunal notes that the representative who appeared at the hearing was not the representative at the time of lodgement with the Department.  The Department did not have the benefit of the assistance that has been given to the Tribunal by the current representative.

6. The Tribunal does not seek to blame or cast dispersions upon the former agent – the Tribunal is not privy to the arrangements between the applicant and the former agent.  However, the Tribunal does observe that it is a frequent feature of Tribunal reviews that the Tribunal is privy to far greater information, and submissions, than that which was before the Department.  It is not uncommon for the Tribunal to see Departmental files where the Department has been confronted with a stack of information, unlabelled, and mostly devoid of explanation, leaving the Department in the unenviable position of having to try to work out what is relevant, if it can actually determine what the documents purport to be in the first place. Whilst this is understandable in circumstances where a self-represented applicant has made application, it is concerning where an applicant has engaged a representative.

7. Although the Department did afford the applicant considerable procedural fairness in this matter, it is no surprise that the Department had concerns given the paucity of information available to it. Effective, organised, professional representation has the potential to improve outcomes for genuine applicants, and to reduce the cost of managing matters both in the Department, and in the Tribunal. 

8. For the following reasons, the Tribunal has concluded that the matter should be remitted for reconsideration.

JURISDICTION TO REVIEW THE FOURTH NAMED APPLICANT’S APPLICATION

1. There is a threshold issue in relation to the application of the fourth named applicant, Mr Zhiwei Cui. On 23 January 2018, the applicants’ representative contacted the Tribunal, and sought to withdraw Mr Zhiwei Cui’s application, acknowledging that the Tribunal does not have jurisdiction, given that he was offshore at the time the Department made the decision to refuse his visa.

2. The Tribunal agrees that there is no jurisdiction in relation to a review by Mr Zhiwei Cui, but cannot permit the withdrawal, as only an application with jurisdiction can be withdrawn.

3. The Tribunal finds that there is no jurisdiction in relation to the review by the fourth named applicant, as he was not in the migration zone at the time of the decision to refuse his Business Skills (Residence) (Class DF) visa.

CONSIDERATION OF CLAIMS AND EVIDENCE

1. At the time the visa application was lodged, the Business Skills (Residence) Class DF visa contained four subclasses: Subclass 890 (Business Owner), Subclass 891 (Investor), Subclass 892 (State/Territory Sponsored Business Owner) and Subclass 893 (State/Territory Sponsored Investor). The visa applicants have made claims only in relation to Subclass 890.

2. The issue in the present case is whether the first named applicant maintained direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business.

3. The Criteria for the visa are set out in Part 890 of Schedule 2 to the regulations. Clause 890.211 of Schedule 2 of the Regulations requires the following to be satisfied at the time of application:

   (1)    The applicant has had, and continues to have, an ownership interest in 1 or more actively operating main businesses in Australia for at least 2 years immediately before the application is made.

   (2)    For each business to which subclause (1) applies:

   (a)    an Australian Business Number has been obtained; and

   (b)    all Business Activity Statements required by the Australian Taxation Office (the ATO ) for the period mentioned in subclause (1) have been submitted to the ATO and have been included in the application.

4. Main Business is defined by r.1.11 of the Regulations as such:

   (1)    For the purposes of these Regulations and subject to subregulation (2), a business is a main business in relation to an applicant for a visa if:

   (a)    the applicant has, or has had, an ownership interest in the business; and

   (b)    the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business; and

   (c)    the value of the applicant’s ownership interest, or the total value of the ownership interests of the applicant and the applicant’s spouse or de facto partner, in the business is or was:

   (i)if the business is operated by a publicly listed company — at least 10% of the total value of the business; or

   (ii)if:

   (A)the business is not operated by a publicly listed company; and

   (B)the annual turnover of the business is at least AUD400,000; at least 30% of the total value of the business; or

   (iii)      if:

   (A)the business is not operated by a publicly listed company; and

   (B)the annual turnover of the business is less than AUD 400,000; at least 51% of the total value of the business; and

   (d) the business is a qualifying business.

   (2)If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses.

5. As the application was lodged on 3 August 2016, the two year period immediately before the application with the Department, for the purposes of cl.890.211(1) is 3 August 2014 to 2 August 2016.

6. The Applicant lodged their application with the Department, and indicated only one main business for the purposes of meeting cl.890.211(1) – Crosstrade QLD Pty Ltd (‘Crosstrade’). Crosstrade was formed in September of 2013.

Regulation 1.11(1)(a); 1.11(1)(c); and 1.11(1)(d) are met

1. The Tribunal agrees with the representative in relation to their submissions in relation to r.1.11(1)(a), r.1.11(1)(c) and r.1.11(1)(d).

2. At the time of visa application, the applicant claimed and provided evidence that she owned sixty percent of the business. The other forty percent is owed by the applicant’s husband.  The applicant has been the sole director of Crosstrade since it was established on 20 September 2013.  The BAS statements provided by the applicant for the period 1 October 2015 to 30 June 2016 reveal turnover of $573,108.00, in the 12-months preceding the application.  The Tribunal accepts that the applicant owns sixty percent of the business and finds that the requirements of cl.1.11(1)(a) are met.  The Tribunal accepts that the applicant has acted as sole director, and that the value of the ownership interest meets the requirements of cl.1.11(1)(c).

3. The business was established as a trading company focussed on exports to the Chinese market, and operates for profit.  The Tribunal therefore finds that the requirements of cl.1.11(1)(d) are met.

Does the applicant meet r.1.11(1)(b)?

1. The delegate had minimal evidence before them to assess the applicant’s management of Crosstrade. As a result, on 25 July 2017, the Department requested further evidence. On 23 August 2017, the applicant provided the department with several documents.

2. This information concerned the delegate, as reflected in the delegate’s decision record, as it indicated that the business made only 3 exports in the 2-year period. This, in conjunction with the other evidence of the applicant’s activities did not, in the delegate’s view, constitute direct and continuous day-to-day involvement in the management and future direction of the business.

3. The applicant was provided with the opportunity to comment on the delegate’s concerns on 29 August 2017. The Applicant responded on 26 September 2017, with further evidence of Crosstrade’s cow hide exports in the relevant period. The delegate’s concerns were not dismissed by the evidence provided, resulting in the delegate finding that Crosstrade did not meet the definition of main business per r.1.11.

4. The applicant was invited to hearing on 26 July 2019. On 9 August 2019, the Tribunal received submissions from the applicant’s representatives and the following 29 attachments:

   ·Passport – Yeming Wang;

   ·Passport – Jiaxin Cui;

   ·Passport – Yudong Cui;

   ·Birth Certificate – Shuhan Wang;

   ·ABN Extract;

   ·ASIC Extract;

   ·Company Statement 20/09/2015;

   ·Company Statement 21/09/2014;

   ·Table of Shipments;

   ·BAS Statements from relevant period;

   ·2016 financial statements;

   ·2017 financial statements;

   ·2018 financial statements;

   ·Loan Documents

   ·House contract;

   ·Cowhide Shipment 1;

   ·Cowhide Shipment 2;

   ·Cowhide Shipment 3;

   ·Evidence of continued business activity;

   ·Café fitout plan;

   ·Café construction receipt;

   ·Journal

   ·Email correspondence and certificate of relationship;

   ·Documents addressed to and signed by applicant;

   ·Letters from suppliers;

   ·Letter of support – Du Weike;

   ·Evidence of employees in the business;

   ·Westpac Bank Confirmation; and

   ·Statutory Declaration of Yeming Wang.

5. The representative submits that the profitability of Crosstrade was the direct result of the significant funds, time and effort that the applicant invested into the company.

6. The representative’s submissions in relation to r.1.11(1)(b) state that they disagree with the refusal decision for two reasons: (1) The representative submits that the delegate took too narrow an interpretation of the law and policy; and did not look holistically at the operation of Crosstrade; and (2) the delegate did not give the evidence an appropriate amount of weight.

7. At the hearing, the Tribunal asked the applicant to explain how she maintains, or has maintained, direct and continuous involvement in management of Crosstrade from day-to-day and in making decisions affecting the overall direction and performance of the business. In particular, the Tribunal asked how much time was involved in the role, given that the applicant’s evidence was that there were three container loads of shipments sent during the relevant period, which could appear minimal.

The number of exports made by Crosstrade QLD Pty Ltd in relevant period

1. The delegate’s decision record reflects concerns about the shipments themselves. The applicant provided a Sea Waybill of lading for one shipment, with Hapag-Lloyd, with a shipping date of 4 August 2014, for 1176 cases of Australian wine. The buyer is recorded as “Shijiazhuang haoqian import and export trading co. ltd.”, located in Changan District, Shijiazhuang, China.  The total dollar value of the shipment is listed as $96,518.00 AUD. This shipment took place one day before the relevant period commenced.

2. The delegate indicated that a search of the Customs’ database revealed only two exports during the relevant period where Crosstrade was a party – the 4 August 2014 Hapag-Lloyd wine shipment, and a second export of cow hides on 29 August 2014. 

3. The August 2014 shipment was purchased from supplier “H.J. Hides & Skins Australia (Qld) Pty Ltd”, and the shipment was to be made to Hebeiaosheng Leather Manufacturing Pty Ltd for $231,510.50 AUD, payable to Crosstrade. 

4. Following a request by the Department to the applicant, the applicant provided evidence of two further cow hide exports, one in October 2015, and then again in March 2016, to the same Chinese buyer as the 29 August 2014 shipment, Hebeiaosheng Leather Manufacturing Pty Ltd, located in Wuji, Shijiazhuang, China. 

5. The Seller is reflected on the “Official Short Form Contract” for the October 2015 shipment as “Southern Hide Exports Pty Ltd (ABN 21 003 833 136)” located in Sydney, and Crosstrade is listed as the buyer. The shipment was to be made to Hebeiaosheng Leather Manufacturing Pty Ltd for $250,846.68 AUD, payable to Crosstrade. 

6. The March 2016 shipment was for 4 container loads of cattle hides, with a purchase price of $200,035.15 AUD.  The “Official Short Form Contract” referable to the March 2016 purchase reflects the seller “Ryffel Pelli SA from Manno Switzerland,” and the buyer as Crosstrade. The shipment was to be made by the “AA Company Pty Ltd,” located in Newstead, Queensland on behalf of Ryffel Pelli SA.  The consignee is listed as the Tianjin Bonhai Supply Chain Management Co. Ltd., located in Tianjin China. 

7. The Tribunal accepts that the applicant exported three shipments of cowhides during the relevant period, with a commercial value of $682,392.32. Having been provided with copies of the contracts for purchase and shipping bills of lading, the Tribunal accepts the applicant’s explanation that not all of the shipments were reflected in the Customs database for the reason that Crosstrade QLD Pty Ltd was the “middle man” in the transactions, and not the “seller” on the Customs’ documentation.

8. The applicant explained that although there were only three container loads of cow hides in the relevant period, the value of the consignments was significant and required considerable effort on her part to secure.  The Tribunal asked the applicant to explain what she did on a day-to-day basis in order to secure the shipments of wine and cattle hides. 

9. At the hearing, and in the applicant’s written submissions filed on 9 August 2019, further detail has been provided about the tasks performed by the applicant in her management role.  These include:

1. Receive enquiry from customer;

2. Searching for suppliers and comparing the prices;

3. Decide the final supplier and discussing about the product exporting;

4. Negotiate contract with supplier and request the contract to be issued by supplier;

5. Checking the terms in the contract;

6. Make amendments if required;

7. Signing the final contract and scan back;

8. Paying the first deposit;

9. Checking the receipt;

10. Contact customers in China;

11. Negotiate with customer about contract and price;

12. Issue contracts;

13. Collecting first deposit from customers;

14. Issuing tax invoice to customer;

15. Sending receipt to customer;

16. Waiting for response from supplier as to when they can start to package their products;

17. Confirm the time frame about delivering the products;

18. Checking the products when it arrives at Australian port and matching it to contracts;

19. If there are any missing products, either get it re-delivered before shipment or liaise with customer with other solutions such as re-shipping or adjusting Invoice;

20. Asking shipping information and following up;

21. Arrange the final payments to supplier;

22. Asking customer to pay the balance;

23. Passing shipping information to customer;

24. Arrange documents and pass to customers;

25. Assisting buyer to custom clearance;

26. Send receipt to buyer; and

27. Recoding the transaction in our database.

1. The applicant gave evidence at the hearing, which is supported by her documentary evidence, indicating that she was involved in work to try and secure further export opportunities for Crosstrade, and in reviewing problems that existed with exports made.  For example, the applicant tried to enter the honey export market, and had to address issues with wine quality.

2. The Tribunal explained that it still considered it had limited documentary information before it, such as business letters, text messages, or emails, which would facilitate the Tribunal’s understanding of the applicant’s involvement in the business. In other words, although the applicant had provided supporting evidence, the Tribunal had a concern that there should be a greater volume of supporting evidence available to the applicant and therefore to the Tribunal.

3. Following the hearing, the applicant was provided until 30 August 2019 to provide further submissions and evidence in support of the application.

4. On 29 August 2019, the applicant, through her representative, provided further submissions, and the following attachments:

   ·Mobile Phone receipts;

   ·WeChat and QQ messages 2014 – 2016;

   ·Emails dated between 2014 – 2016;

   ·Customer Correspondence / Letters;

   ·Statutory Declaration of Joanna Chen; and

   ·Statutory Declaration of Yeming Wang.

5. The representative’s submissions expressed concern that the Tribunal had focused on the amount of documentary evidence expected to show that the applicant was managing their business on a day to day business.

6. The first attachment was provided to the Tribunal as evidence of the applicant’s inability to provide some WeChat messages due to their mobile phone requiring replacement, and losing the message history. The second attachment was what could be recovered using third party software.

7. The representative’s submissions stated that whilst there may have been only three container loads of exports over the relevant period that the significant size of the consignments meant that they required the applicant’s active and continuous management.  She also explained that although she could have made more frequent, smaller shipments, that this would not have been economical given the economies of scale that exist with shipment of full containers.

1. The message history, informally translated, was provided to the Tribunal to display that the applicant was consistently seeking new customers and suppliers, and that they showed attempts to make active business decisions for the purpose of making the business profitable, despite their struggles in securing new leads. The Tribunal accepts that the messages reveal efforts on her part to engage in the development of the business.

2. Further submissions were made in reference to the day-to-day management, and various emails in the relevant period were provided in support of the applicant’s managerial role in the business, and further provided letters of support from their customers for people that the applicant had, and has dealings with.

3. The statutory declaration from the former employee, Joanna Chen, expanded on Ms Chen’s previously filed unsworn supporting evidence. In short, the statutory declaration from Ms Chen outlined the day-to-day running of the business by the applicant, and indicated that Ms Chen had resigned from the business to start a family.

4. The representative highlighted to the Tribunal the case of Lobo v Minister of Immigration and Multicultural Affairs (2003) 132 FCR 93 (‘Lobo’), wherein the Full Federal Court held that there were a variety of ways in which a person might maintain direct and continuous involvement in the management of a business, and in making decisions affecting its overall direction and performance.

5. The representative’s submissions about the case highlight that a narrow approach to the policy requirement of day to day evidence to satisfy the ‘direct and continuous involvement’ requirement, did not align with the judgement in Lobo. The Tribunal respects the binding nature of a Full Federal Court decision upon its decision making processes in similar circumstances.

6. Reference was also made to a 2015 Tribunal case, 1414821 (Migration) [2015], where the Tribunal’s application of cl.890.211(1) and r.1.11(1)(b) was consistent with Lobo. The Tribunal interpreted r.1.11(1)(b) and the impact of PAM 3 at [39]:

   “Departmental guidelines (PAM3) state that, to meet the requirement for direct and continuous involvement in management the applicant must demonstrate that they have been actively managing and operating the business, which requires that the business be ongoing and for the applicant to consistently spend a significant portion of their time managing the business on an ongoing basis. Management involves planning, organising, directing and controlling the resources of the business. PAM3 provides further details as to what is meant by the terms “planning”, “organising”, “directing” and “controlling” and also provides various examples of the types of decisions that may affect the overall direction and performance of the business.[2] The Tribunal acknowledges that the guidelines should not be raised to the level of legislative requirement and its findings have been in consideration of the terms of r.1.11(1)(b). In this context the Tribunal has had regard to the individual circumstances of the applicant, the documentary and oral evidence provided, the submissions made and to relevant case law.”  

7. The evidence before the Tribunal demonstrates that the applicant was directly and consistently involved in sourcing and researching business opportunities for Crosstrade during the relevant period.  The commercial value of the goods exported in the relevant 2-year period is considerable, and it is reasonable to anticipate that there would be a reasonable level of negotiation involved to secure trade with a commercial value of $682,392.32.  The applicant’s own evidence is supporting by evidence from her trading partners, and staff.

8. The Tribunal has also had regard to the nature and size of the business, and accepts the evidence of the applicant that it is more cost effective to ship large container load of goods less frequently, in order to benefit from economies of scale in both purchasing goods and reducing shipping costs.

9. After assessing all the evidence, including the applicant's oral evidence at the hearing, the Tribunal is satisfied that the applicant maintained direct and continuous involvement in the management of the business from day-to-day and in making decisions affecting the overall direction and performance of the business in the relevant period. Therefore, the Tribunal finds that r.1.11(1)(b) is met.

10. The Tribunal is satisfied that the applicant has had and continues to have an ownership interest in an actively operating main business in Australia for at least 2-years immediately before the application for the visa was made on 3 August 2016. Therefore, the Tribunal finds that cl.890.211(1) is met.

DECISION

1. The Tribunal remits the applications for Business Skills (Residence) (Class DF) visas for reconsideration with the direction that the first named applicant meets the following criteria for a Business Skills (Residence) (Class DF) Subclass 890 visa:

   ·cl.890.211(1) of Schedule 2 to the Regulations.

2. The Tribunal has no jurisdiction in relation to the application of the fourth named applicant.

Bridget Cullen
Member