Wei (Migration)

[2023] AATA 908

Wei (Migration) [2023] AATA 908 (22 February 2023)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mr Yong Wei
Mrs Yan Gao

REPRESENTATIVE:  Mr Zhuang John (MARN: 9359571)

CASE NUMBER:  1927833

HOME AFFAIRS REFERENCE(S):          BCC2018/3763462

MEMBER:Wan Shum

DATE:22 February 2023

PLACE OF DECISION:  Sydney

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

Statement made on 22 February 2023 at 11:45am

CATCHWORDS
MIGRATION – Business Skills (Provisional) (Class EB) visa – Subclass 188 (Business Innovation and Investment (Provisional)) – history of involvement in business activities that are of a nature that is not generally acceptable in Australia – false/removed/falsely applied trade mark – fake luxury goods – decision under review affirmed

LEGISLATION
Migration Act 1958 (Cth), s 65
Migration Regulations 1994 (Cth), Schedule 2, cl 188.211
Trade Marks Act 1995 (Cth), s 148

CASES
Wong (Migration) [2020] AATA 475

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 20 September 2019 to refuse to grant Business Skills (Provisional) Subclass 188 visa to the applicants under s 65 of the Migration Act 1958 (Cth) (the Act).

2. The applicants applied for the visa on 14 June 2018. The delegate refused to grant the visa finding that the second named applicant, as the spouse of the first named applicant, did have a history of involvement in business or investment activities of a nature that is not generally acceptable in Australia and that the applicant did not satisfy cl 188.211 of Schedule 2 to the Migration Regulations 1994 (the Regulations).

3. The applicants sought review of that decision and were represented in relation to the review.

4. The applicants appeared before the Tribunal on 15 September 2022 to give evidence and present arguments by video conference using Microsoft Teams. The representative was present throughout as was Ms Zhang Yi Kai (who is the applicants’ second representative). The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages.

5. For the following reasons, the Tribunal has concluded that the decision under review should be affirmed.

   CONSIDERATION OF CLAIMS AND EVIDENCE

6. The issue in the present case is whether the first named applicant and his spouse have a history of involvement in business activities that are of a nature that is not generally acceptable in Australia: cl 188.211.

7. According to the Australian Federal Police (AFP) National Police Certificate dated 17 July 2018 of the first named applicant, he was charged and released on entering into good behaviour bond for “driving on road etc while licence suspended” on 9 December 2010 and then convicted of three charges of ‘expose goods with false/removed/falsely applied trade mark’; four charges of ‘possess goods with false/removed/falsely applied trade mark’ and ‘goods in possession for trade/manf. With false/removed/falsely applied Tm’ on 12 April 2011. The court results at Downing Centre Local Court recorded on 12 April 2011 were as follows: “Convicted. Released on entering recognizance $100 to be of good behaviour for 12 months.” and for each of ‘possess’ and ‘expose’ charges the outcome was “on each charge convicted. Fined $25.” The same court results ‘expose goods with false/removed/falsely applied trade mark’ are recorded on 6 July 2011 at Downing Centre District Court and for the other offences, the first named applicant was charged on all convictions but the fines for four charges of goods in possession was increased to $100 and for three charges of ‘expose goods for sale’ was increased to $75.

8. The applicants only provided to the Tribunal page 1 of 2 of the AFP National Police Certificate dated 17 July 2018 in respect of the second named applicant. This reflects that on 9 September 2011, she was charged with the offences of ‘expose goods with false/removed/falsely applied trade mark’ and ‘possess goods with false/removed/falsely applied trade mark’, for which the Court Result at Downing Centre Local Court is recorded as “Fined $1,500” against each. Then on 24 October 2011, at the Downing Centre District Court, the result recorded against ‘expose goods with false/removed/falsely applied trade mark (3 charges)’ is: “On all charges convicted. Fined $4,500.” There thus appears to have been a third charge before the Local Court which is not listed on page 1 but was related to the expose/possess goods with false trade marks. It is then recorded that on 16 May 2014 she was again before the Downing Centre Local Court for the two offences of ‘expose goods with false/removed/falsely applied trade mark’ and ‘possess goods with false/removed/falsely applied trade mark’, where the court results against each charge was: “To perform 200 hours of community service work”.

9. Following consideration of the offences listed on the AFP National Police Certificates of each applicant, the delegate was of the view that the offences recorded against the second named applicant reflected that she had a history of involvement in business or investment activities of a nature that is not generally acceptable in Australia.

10. Before the Tribunal, it was submitted that the applicant and the second named applicant’s record should be considered separately as they were not married at the time. However, the Tribunal does not accept that there is any such limitation on cl 188.211. While the clause uses “the applicant, and the applicant’s spouse…”, it does not state that the business or investment activities need to have occurred when both parties were spouses. In the Tribunal’s view, the clause refers to the activities when the parties were not spouses (or de facto) as well as when they were spouses.

11. In addition, a reference was made to Wong (Migration) [2020] AATA 475 (23 January 2020) in respect of a similar provision for the Subclass 892 visa in the submissions of 1 September 2022. The extract refers to the Departmental guidelines and the guidelines specific to the Subclass 188 visa were also highlighted in the submissions of 21 September 2022. The Tribunal has considered the guidelines and the submissions in relation to this matter.

12. In considering their convictions, the first named applicant gave evidence that he had sold jewellery and other items with logos of high-end luxury brands, such as Chanel and Louis Vuitton, for between $10 to $20 a piece at a market stall that he operated at Dixon Street as part of the night markets in Chinatown. While there is no further information from the Court before the Tribunal about the circumstances, it accepts that the offences related to items of small value given the penalty and fines amounted to $175 after appealing to the District Court plus an additional $100 for good behaviour. He states in his statutory declaration of 2 September 2022 that he and his wife’s records of trading false trade marks was unintentional and claimed that it was “negligence in quality control”. When asked at the hearing why he had sold fake goods, the first named applicant denied being aware that the items bore the trademark of luxury brands. The Tribunal has significant doubts about this and is of the view that he was aware that the jewellery he sold used the logos of luxury brands but that he did not consider that selling the pieces as fakes to members of the public was problematic behaviour and was not deterred by the illegality of doing so.

13. In respect of the second named applicant’s offences, on review, it was submitted that the offences were minor and did not constitute “an elaborate, prolonged and constituent [sic] period of conduct in activities. The circumstances between the two incidents are quite different and should not be regarded as of repetitive nature.”

14. The circumstances as described by the second named applicant in her statutory declaration of 2 September 2022 and at the hearing were that the first charges in April 2011 were in respect of a business that she had bought earlier in 2011 which was located at Wynyard Station and sold handbags. She claimed that she had purchased the business including the goods from the previous owner and only became aware that the handbags contained false trademarks after inspectors came to the premises. The second named applicant claimed that she closed the shop shortly after. In respect of the second occasion on which she was charged with the same type of offences and appeared before the Local Court on 16 May 2014, it was claimed that she had been charged because she had presented goods for sale as luxury second-hand goods that turned out to be fakes. It was claimed that she had believed that they were luxury goods, having been tricked by a person named “Susu” whom she had regarded as a friend, and had not known that the items were fakes.

15. In terms of the submission that these incidents were different and therefore not indicative of repetitive conduct, it was submitted that the 2011 incident involved not being able to recognise trademarks and was more accurately described as “negligence in quality control of her stock, rather than a planned fraudulent trading activity”, whereas the 2014 incident was because she lacked the professional appraisal skills to identify fake luxury items. In respect of the former, it was submitted that she did not have any intention to present the products as genuine luxury products and closing the shop demonstrated that she did not intend to “repeatedly commit such business conducts after she knew the seriousness of this issue”. It was submitted in respect of the latter that she did not intentionally “strive for supply of fraudulent products and is actually a victim of this scam activity as she had paid the second-hand luxury trade-in process for those fraudulent products”.

16. The Tribunal is willing to accept that the second named applicant was somewhat naïve at the time of the first incident, being 21 years of age, and opening her first business. However, the fines of $4,500 reflect in the Tribunal’s view that the Local and District Courts in NSW considered the matter to be relatively serious in nature compared to the $100 fine imposed on the first named applicant for the same type and number of charges. The penalty imposed by the Local Court in 2014 was for 200 hours of community service work for each offence which again reflects a degree of seriousness. The second named applicant claimed that she had been told by her lawyer at the time that it was the best outcome she could expect in the circumstances but expressed doubts that the lawyer properly advised her on this matter.

17. In order to understand the seriousness of the offences and the nature of the activities, the Tribunal requested additional information regarding the Court proceedings for the second named applicant’s offences. The second named applicant claimed at the hearing that she was unable to locate any relevant documents or additional information as she had been represented by a lawyer at the time who she has been unable to locate.

18. The Tribunal notes that the 2014 charges in the AFP National Police check of 17 September 2022 refer to the conviction against s 20AB of the Crimes Act1914 (Cth) and has also had regard to the Commonwealth Acts relevant to the offences, specifically the Trade Marks Act 1995 (Cth) and the Australian Consumer Law[1] for guidance on offences and penalties relevant to the charges as well as information from the NSW Local Court Benchbook for generalised information regarding the offences and penalties imposed. Pursuant to s 148 of the Trade Marks Act, offences relating to goods with false trade marks can be either indicatable or summary offences, with the difference between an indicatable offence and a summary offence besides the penalty, is the fault element of negligence for certain summary offences. It appears then based on the convictions that the 2011 and 2014 charges in the second named applicant’s case were both treated as summary offences. The Tribunal accepts that the fault element of negligence is lower than recklessness, where there must be intention or flagrant disregard. However, the charges made against the applicant appear under s 148(1)(a) and s 148(2)(a) and not (2)(b) or (c) under the heading ‘summary offence’ which is where the fault element of negligence is specified: s 148(3). Given the operation of s 148(3), it did not appear to the Tribunal that the Court necessarily accepted that the applicant was negligent as submitted. The maximum penalty for a summary offence for breach of s 148 of the Trade Marks Act is 12 months imprisonment or 60 penalty units or both. According to section [18-080] ‘Sentencing policy’ of the NSW Local Court Benchbook, imprisonment is a sentence of last resort: s 17A(1) and under section [16-320] ‘Community Correction Order (CCO)’, the maximum term of a CCO is 3 years: s 85(2). Clause 14(1) Crimes (Sentencing Procedure) Regulation 2017 prescribes the maximum number of hours that may be specified for community service work in an additional condition of a CCO is 200 hours for offences for which the maximum term of imprisonment provided by law exceeds 6 months but does not exceed 1 year. Therefore, for a summary offence under s 148 of the Trade Marks Act, it appeared to the Tribunal that the Court in May 2014 convicted the second named applicant for the maximum number of hours for that offence.

    [1] Schedule 2 of the Competition and Consumer Act 2010 (previously known as the Trade Practices Act 1974)

19. The Tribunal sought to obtain a copy of the hearing transcript from the Local Court for the offences after the Tribunal hearing and later requested the applicant obtain the transcripts. The only transcript which was made available was for the 2014 charge, and the Tribunal understands that this is because a transcript was not available as more than 10 years have passed since the 2011 charge so it could no longer be transcribed because the digital records no longer exist.

20. When providing a copy of the Court transcript for the 2014 charge to the Tribunal, the applicants also provided additional submissions and a further statutory declaration from the second named applicant which the Tribunal has taken into account. Having read the Court transcript, the Tribunal considers that the Magistrate made it clear that the second named applicant had engaged in repeated criminal behaviour of the same nature, which was taken into account with the imposition of a Community Service Order, stating that for “[e]very hour that [the second named applicant] spend[s] working in the community [the second named applicant] can think about the deceit and dishonesty that [the second named applicant] engaged in in this conduct for a second occasion, not just once”. The transcript reflects the following exchange:

    HIS HONOUR: Ms Gao, when I look at this and look at your record, I am just left to ponder what will it take before you stop engaging in the type of criminal behaviour that you have behaved in. You were brought before the Court in 2011. A substantial fine was imposed upon you in the Local Court. You lodged an appeal and your appeal resulted in a reduction in the penalty that would otherwise have been available to the Court. Perhaps you were emboldened by the reduction in the penalty you received on appeal and recommenced your criminal behaviour.

    It is simply unacceptable to fraudulently affix trademarks to items and pass them off as your own, particularly when they are - well any of them. I think it's particularly aggravated when you're passing off items as being items which are high-end designer-type labels. See here Alexander v The Queen who I think is a designer from London, if I'm not mistaken. Apple, Chanel, Gucci, Prada, Yves Saint Laurent, well-known designers and you're affixing trademarks to these things and those trademarks to items which should not have them and selling them to unsuspecting members of the public. Not only are you ripping off members of the public, you're ripping off the designers. That's why there are such significant penalties for this offence.

    PROSECUTOR: Your Honour, five year's gaol and/or 550 penalty units.

    HIS HONOUR: Yeah, I saw that. Five year's gaol. I can't give you five year's gaol but if it was dealt with on indictment, I could, a Court could. There will come a point, if you continue to do this, when you will be sent to prison. Do you understand that? It must end.

21. Having regard to the transcript, the Tribunal does not agree that a 200 hour community sentence is minor as submitted and notes from the transcript that she was sentenced to perform 200 hours for each offence to be served concurrently. The Tribunal understands from the submissions accompanying the transcript that, as the main items of concern in 2014 according to the second named applicant were the fake luxury handbags, if the second named applicant’s version of events had been put forward by her lawyer to the Court, particularly regarding the involvement of “Susu” who she had believed had given her genuine second-hand handbags to sell, the sentence may have been lesser.

22. In considering this submission, there is limited information before the Tribunal as to the items which were the subject of the offences other than the Court transcript as it does not have a copy of the full pre-sentence report or list of fake items connected to the 2014 (or 2011) charges. The Court transcript reflects that the offences in 2014 related to not only the fake designer handbags but also the cheaper priced items bearing the Apple logo and the shoes that she had retained from 2011, which she confirms in her statutory declaration of 9 February 2023.

23. While it does appear from the transcript that the Magistrate considered that the offence was aggravated by the sale of high-end-designer labels falsely appearing on goods, the second named applicant appears to acknowledge that there is no evidence other than her own assertions as to how she came to sell fake luxury goods on a second occasion. Additionally, the Magistrate expressed the view that it was unacceptable to fraudulently affix trademarks to any items and pass them off as genuine so it is unclear whether the sentence was higher because of the high-end-designer labels or the Magistrate being troubled by the second named applicant having acted deceitfully on an earlier occasion or a combination of both. The second named applicant seeks to lessen her culpability by explaining that she had mistakenly thought that items such as earrings which had Apple shapes and shoes that had Toyota car design buckles were not counterfeits and had not violated the interests of the original products as it was common knowledge that Apple sells computers and Toyota sells cars. But the Tribunal notes that the second named applicant also admits that she had told her lawyer that she had received some warning letters in the past on selling these items. The transcript reflects that the applicant’s lawyer attempted to put an argument before the Court that the applicant was oblivious to the nature of the offending but the Magistrate did not accept the lawyer’s submissions and expressed the view that she just made a conscious decision to ignore it. Given the receipt of warning letters regarding these items, the Tribunal is of the view that the second named applicant was clearly on notice that selling such goods was a breach of trade mark laws but disregarded these and continued to expose such goods for sale.

24. It is difficult to know whether the sentence would have been lesser if her version of events was put before the Court, as she did not provide any evidence to substantiate her claims then or before the Department or Tribunal. But in any case, the applicant was before the Court at the time to address the issues arising in respect of the convictions, and the issue before the Tribunal is whether the applicants have a history of involvement in business activities that are of a nature that is generally unacceptable in Australia. There is no dispute that the 2014 offences as listed on her AFP National Police Checks are the same as the earlier 2011 incident, but it was submitted that the circumstances that led to the applicant being convicted in 2014 where completely different. The Tribunal does not accept these submissions that the convictions for the same offences could not be described as a history. This is because, while there were two different occasions on which she was found to have ‘expose goods with false/removed/falsely applied trade mark’ and ‘possess goods with false/removed/falsely applied trade mark’, the two incidents were not completely different in nature as both involved the selling of goods in a retail store which were fakes in the sense that the trade mark appearing on the product was not genuine. Furthermore, the Tribunal notes that the applicant’s claim that the goods sold in 2014 were different to those she sold in 2011, but that the Court transcript reflects that the second named applicant had sold the same goods in 2014 that were the subject of the charges in 2011. The second named applicant has only admitted after providing the transcript from 2014, that she was selling some of the same stock from 2011 such as Apple earrings and shoes with Toyota buckles; however, claims that it was the handbags from “Susu” that she believed were luxury items that were the main items of concern in 2014. So, despite the second named applicant’s claim to have changed her business to sell second-hand luxury items, she had continued to sell some of the same stock she sold when she was previously convicted. Given this, even if she had changed some of the stock sold to focus on second-hand luxury items, the Tribunal does not accept that her business activities were completely different. In terms of the second named applicant’s evidence that the goods sold in the first store, which were said to range from $10 to $400, would not have necessarily misled consumers into believing that they were genuine products because Apple do not sell jewellery and Toyota does not sell shoes, both incidents in the Tribunal’s view involved a false or misleading representation of the origin and potentially the quality of the goods to consumers as they were not genuinely of the trade mark appearing on the product she was selling.

1. The Tribunal has considered whether there is a difference in perception of acceptable business activities which involve selling fake goods as genuine; selling counterfeit goods such as Louis Vuitton necklaces or Chanel bracelets for cheap prices; and selling goods that the second named applicant claimed were obviously not produced by the company whose logo appeared on the product.

2. In respect of selling fake goods as genuine to unsuspecting members of the public, the Tribunal considers that this would be perceived by large segments of the Australian community as deceptive conduct. It was considered by the Local Court in 2014 as a serious breach of trade mark laws, which protect the designers and provide a level of consumer protection. The Tribunal is of the view that such conduct is of a nature that is not generally acceptable in Australia.

3. In respect of selling counterfeit goods such as Louis Vuitton necklaces or Chanel bracelets for cheap prices, which appear similar to the types of items the first named applicant claims he sold at the market, it seems to the Tribunal that the majority of the consumers would have realised they were fakes because of the low prices of these items. In these circumstances, it might be argued that selling fake goods as fakes at these prices may not be perceived in the same way by the Australian community given that there are some consumers who seek out fake goods on the black market. The Tribunal acknowledges that while there have been concerted attempts and measures to crackdown on the rise of fake goods,[2] such sales are known to occur, and it appears there are pockets of the community which would proceed with the purchase knowing that they are buying fake goods. However, notwithstanding that there are consumers who purchase fake goods, it is still unlawful to sell goods with false/removed/falsely applied trademarks in Australia, and penalties apply if the seller is caught, albeit the Court may apply lesser fines. Given the illegality of this conduct in Australia, regardless of whether they are obviously fake because of the price, in the Tribunal’s view such conduct or behaviour would also be considered by segments of the Australian public as deceptive and/or unfair to the designer whose trade mark has been applied. The Tribunal also considers that the selling of goods as fakes is an activity that is not generally acceptable in Australia.

   [2] For example, ‘Counterfeit goods’ published on on 03 September 2014 reported that “[t]he value of counterfeit products intercepted in Australia reached an all-time high last year, with Australian Customs seizing more than 700,000 counterfeit products with a total estimated value of $48.5m (based on the equivalent value of genuine goods).” While some of these products are unwittingly purchased by consumers believing they have purchased a genuine product, ‘The Australian Border Force war on counterfeit goods’ published a year ago refers to “[b]uying cheap knockoffs at bargain prices may seem harmless to those of us spending lockdown shopping online” which reflects that this purchasing products on the black market is an activity that members of the public knowingly engage in.

4. In respect of goods that the second named applicant claimed were obviously not produced by the company whose logo appeared on the product, the Tribunal has considered whether it would be generally acceptable, having regard to whether consumers would be aware that the product was not made by the company. The second named applicant claims that they were cheap items which arguably make it more obvious to the consumer that they are not genuine products. This again is unlawful, as made clear by the Court, and resulted in warnings issued to the second named applicant. The Tribunal considers that the selling of such goods is not generally acceptable in Australia.

5. The issue that then arises is whether the applicants’ conduct demonstrates ‘a history’ of involvement in business activities that are not acceptable for the purposes of the relevant provision. While the circumstances in each were different, there have been two occasions on which the second named applicant has been convicted of the same type of offences being the sale of, and possession of, goods that have been falsely labelled as being the product of a particular designer or luxury brand. In terms of her claim that she herself was tricked by “Susu” into believing that the handbags were designer goods in respect of the 2014 convictions, there is no evidence other than her own claims regarding this. But, regardless of whether her version is true or not, there was still two convictions for which the penalty was 200 hours of community service for each conviction to be served concurrently. The mere existence of the convictions is, in the Tribunal’s view, persuasive of the presence of a history of involvement in generally unacceptable business activities. The first named applicant himself was also convicted of the same offences in 2011.

6. It was submitted that the applicants have sought to reduce the chances of again misrepresenting goods for sale that have been falsely branded, and that they have sought to improve their skills and knowledge to appraise goods and identify and recognise fake luxury items. The evidence in support of this claim included certificates reflecting that they had undertaken relevant courses. It was submitted that they provide a service to persons seeking an appraisal of purchased items at their shop and that the first named applicant now provides training to others to undertake such appraisals. It was also submitted, and the Tribunal accepts, that the last of these incidents occurred nearly 9 years ago and that there have not been any other charges or convictions since that time. The second named applicant also claims that she was 8 weeks’ pregnant at the time and was not feeling well which the representative submits should be viewed as a strong compassionate factor; that she had not been properly represented by the lawyer and that since that time they have built a new business and that Australians would suffer if their business operations were affected. She adds that “the scale of business activity in [sic] very small and can be disregarded, considering that there's no one really harmed by these occurrences (other than my spouse and I) and how I have sought for remedies in time by undertaken further training and studies into this field”. However, while the Tribunal accepts that no further convictions for these offences have occurred, the last point appears to reflect to the Tribunal that the second named applicant is still failing to realise that both the consumers and designers are adversely impacted by the sale of goods which bear a falsely applied trademark.

7. In any case, the Tribunal is assessing whether the applicants have a history of involvement in business which is of a nature that is not generally acceptable in Australia and does not consider that the circumstances presented by the applicants, including her pregnancy, alter the history of involvement in business activities which are not generally acceptable in Australia. These are set out in the police records of the applicants.

8. As there were two occasions on which the second named applicant was convicted and one occasion on which the first named applicant was convicted for the same type of offence, the Tribunal is of the view that the applicant and his spouse have a history of involvement in business activities that are not generally acceptable in Australia. Given this, the Tribunal finds that cl 188.211 is not satisfied and affirms the decision under review.

   DECISION

9. The Tribunal affirms the decision not to grant the visas.

   Wan Shum
   Member