Yang and Ors and Minister for Immigration and Citizenship

[2008] AATA 1171

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 1171

ADMINISTRATIVE APPEALS TRIBUNAL      )

)       No 2007/5075, 2007/5076,
)       2007/5077, 2007/5078,
)       2007/5079

GENERAL ADMINISTRATIVE  DIVISION		)
Re		YANG TIANDING, LI MIN'E, YANG XIAOHONG, YANG SHOADONG, YANG DONGFA

Applicant

And MINISTER FOR IMMIGRATION AND CITIZENSHIP

Respondent

DECISION

Tribunal Mr S. Webb, Member

Date24 December 2008

PlaceCanberra

Decision The decisions under review are set aside and in place thereof the Tribunal decides that the visas of Yang Tianding, Li Min’e, Yang Xiaohong, Yang Shaodong and Yang Dongfa are reinstated.

.............[Signed].................................

Mr S. Webb, Member

CATCHWORDS

IMMIGRATION - business skills visa - substantial ownership - business not recurrent and continuous activity for profit in Australia - minimal participation in the day-to-day management of business - efforts not 'genuine effort' - residual discretion - reasonable explanation for delay - litigation and frozen assets - genuine intention - decision set aside - secondary visa cancellations set aside

Migration Act 1958 s 116, 119, 134, 135

Hope v Bathurst City Council [1980] HCA 16.

Re Wong and Minister for Immigration and Indigenous and Multicultural Affairs [2002] AATA 54.

Hospital Benefit Fund of Western Australia v Minister for Health (1992) 111 ALR .

Re Bhyat and Minister for Immigration and Indigenous and Multicultural Affairs [2003] AATA 1051.

Re Tansari and Sulysto and Minister for Immigration [2008] AATA 400.

Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31.

Re Burg and Minister for Immigration and Citizenship [2007] AATA 1630.

Re Philp and Minister for Immigration and Citizenship [2007] AATA 2092

REASONS FOR DECISION

24 December 2008 Mr S. Webb, Member         

1.      Yang Tianding is a Chinese businessman. He applied for a business skills visa. Visas were granted to Mr Yang, his wife, Li Min’e, and their three children, Xiaohong, Shaodong and Dongfa. A delegate of the Minister for Immigration and Citizenship decided that Mr Yang had not complied with the requirements of his visa and cancelled the visas of Mr Yang and his family members. Unhappy with the decision, Mr Yang has applied for review.

2.      The issues for determination are:

(a)Did Mr Yang obtain a substantial ownership interest in an eligible business in Australia? If so, did he utilise his skills in actively participating at a senior level in the day-to-day management of that business?

(b)Did My Yang make a genuine effort to obtain or manage an eligible business in Australia?

(c)In all of the circumstances are there sufficient grounds to decide Mr Yang’s visa should not be cancelled?

(d)If the visas of Mr Yang’s children are cancelled, will they experience extreme hardship?

3.      I note that there is no dispute concerning issues of notice. I am satisfied that no such issues arise and I will proceed on that basis.

4.      Before moving to address each of these issues, it is convenient to set out the facts as found.

5.      Mr Yang travelled to Australia, activating his business skills visa, on 6 August 2004.[1] He spent a total of 39 days in Australia in the three years thereafter.

[1] T22 folio 256.

6.      On 25 August 2004 Mr Yang and his wife purchased a property at 79 Hurstville Road, Hurstville for $1,058,000.[2] The property is a two storey house. The lower storey contains office accommodation, purportedly used by the regional manager of Mr Yang’s business interests in Australia, Mr Simon Li. The upper storey provides accommodation for Mr Yang and his family members, principally his three children who are enrolled at the University of Wollongong.

[2] See Exhibit A6.

7.      I note in passing that Mr Li was called to give evidence. He gave evidence by telephone from China, coincidentally on the eve of his wedding. Mr Li gave evidence in chief, albeit with some difficulty as a result of a poor telephone connection. During his cross-examination the telephone connection deteriorated. Repeated attempts to re-establish a viable connection were not successful. I was informed that Mr Li would not be available to give evidence until the end of his honeymoon in February 2009. This is a most unsatisfactory situation. Ample forewarning had been given at first hearing that Mr Li would be required to give evidence. Mr Li’s evidence may have shed light on aspects of this case that are otherwise unable to be clearly discerned. The Minister opposed any further adjournment. Weighing the desirability of completing and properly testing Mr Li’s evidence and the need for a lengthy adjournment if that course is adopted, I decided that no further adjournment would be granted and the matter will proceed on the basis that I will have regard to Mr Li’s untested evidence, carefully determining the weight it will carry in reference to other evidence.

8.      On 16 November 2004 Mr Yang registered a company in Australia: YTD Developments Pty Ltd, ACN 111814281 (“YTD Australia”).[3]

[3] T18 folios 198 to 201.

9.      Mr Yang operates four companies and related businesses in China: Kangti (a health centre business); Xiong Jiang (an investment company); Xintian Shi Dai (an investment company) and Easy Done Trading Company (a trading company) (also known as YTD Easy Done Trading Company and Shenzhen Easy Done Trading Company). These companies and related businesses are located in Shenzhen at a number of premises. It appears that Easy Done is located in premises at East Wing, 12/F, Xinhua Insurance Building, Mintian Road, Futian District, Shenzhen. Mr Yang’s other companies and businesses are located elsewhere, at 7/F, Fuxing Building, Fuxing Road, Futian District, Shenzhen, for example. Mr Yang gave evidence that he and his wife control each of these companies and businesses. On Mr Yang’s oral evidence it appears that he adopts a fluid approach to managing cash flows within and between his companies and businesses. Mr Yang explained that money generated in one business may be applied to meet the cash requirements of another business: money that is required for a business transaction in one business may be transferred from another business account. This fluid approach appears to apply equally to profits and the distribution of funds for the personal use of Mr Yang and his family members. It also appears, nevertheless, that annual statements of financial accounts are prepared and finalised.[4] No such statements are in evidence for YTD Australia, the Easy Done Trading Company or the purported ‘YTD Development Pty Ltd’ company in China.

[4] See Financial Account Statements for Xiong Jiang Investment Development Company Ltd at T5 folios 81 to 105.

10.     On Mr Yang’s evidence ‘YTD Development Pty Ltd’ has a board of directors and shareholders in China; documents purporting to be minutes of Board meetings for this entity are in evidence.[5] These directors and shareholders do not appear in the register for YTD Australia. Mr Yang gave evidence that the YTD Development in China is a subsidiary of YTD Australia. No evidence has been filed concerning the establishment and registration of YTD Development in China, in the form of share registers for example. I am not persuaded on the present evidence that Chinese YTD Development is a subsidiary of YTD Australia. Mr Yang gave evidence that Chinese YTD Development has a different name than YTD Australia. He also gave evidence that he operates only four companies in China.[6] On Mr Yang’s evidence, as it appears to me, either ‘YTD Development Pty Ltd’ does not exist as a properly established company in China, despite the reference to such a company in the purported Board meeting minutes, or references to ‘YTD Development Pty Ltd’ in China, or ‘YTD Development Shenzhen office’, are references to Mr Yang’s Easy Done Trading Company. The purported minutes of Board meetings of ‘YTD Development Pty Ltd’ in China refer to matters concerning the distribution of wine, for example, that were undertaken, on Mr Yang’s evidence, by the Easy Done Trading Company.

[5] T18 folios 206 to 209 and Exhibit A1.

[6] See paragraph 5 of these reasons.

11.     The registration number for Easy Done Trading Company in China is in all likelihood [2007] 8503606. This number appears on documents in evidence, including bills of lading for wine shipped by YTD Australia to Easy Done Trading Company.[7] The number also appears on the Goonawarra Winery website in reference to Shenzhen Easy Done Trading Company Ltd.[8] The fact that the same number appears in other documents in relation to ‘YTD Development Pty Ltd’[9] and ‘YTD Development Pty Ltd Shenzhen Office’[10]  is further evidence that these names are used in reference to Easy Done Trading Company.

[7] See Exhibit A2.

[8] Exhibit R2.

[9] See tax invoices in Exhibit A2.

[10] See T18 folio 210.

12.     On 23 October 2005 YTD Australia purchased decorative concrete products to the value of $55,105.[11] It appears that Mr Yang transferred money to YTD Australia’s Westpac business cheque account (number 36-6287), via Hong Kong, from his Chinese operations for this purpose.[12] The concrete products were exported to China.[13] On Mr Yang’s evidence the concrete products were not on-sold and were used by his companies in Shenzhen.

[11] See tax invoice at T18 folio 252.

[12] Exhibit A4.

[13] See Bill of Lading at T18 folio 251.

13.     On 21 January 2006 Mr Yang executed an employment agreement between YTD Australia and Mr Simon Li.[14]

[14] T18 folios 242 to 250.

14.     On 3 August 2006 and 20 November 2006 Department of Immigration and Citizenship officers wrote to Mr Yang requesting him to complete and return a 24 month survey form.[15] A completed 24 month survey form was received by the Department on 18 December 2006.[16] In response to the question ‘What are the main reasons you have not yet engaged in business in Australia?’ Mr Yang responded by ticking ‘Still managing business in home country’.[17] A request, in writing, for further information was made by a departmental officer on 12 February 2007.[18] Mr Yang was asked to provide further information by 30 May 2007.[19] On 19 June Mr Yang was sent formal notice of intention to cancel his business visa.[20] On 24 July 2007 Mr Yang appointed Mr G. Santucci of Snedden Hall Gallop as his migration agent and Mr Santucci made submissions concerning the intention to cancel Mr Yang’s visa.[21]

[15] T11 and T13.

[16] T14.

[17] T14 folio 176.

[18] T15.

[19] T15.

[20] T17.

[21] T18 folios 195-197.

15.     On 9 March 2007 Mr Yang executed an exclusive distribution agreement between Goona Warra Vineyard Pty Ltd and ‘YTD Development PTY Ltd Shenzhen Office’.[22]

[22] T18 folios 210 to 236.

16.     On 17 May 2007 and 19 October 2007 YTD Australia purchased wine from Goona Warra Vineyard Pty Ltd to the value of $103,813 and $137,992 respectively.[23] Once again, it appears likely that Mr Yang transferred money to YTD Australia to cover the cost of these purchases. The wine was exported to Easy Done Trading Company in China.[24] On Mr Yang’s evidence it appears that the wine was distributed and sold to retailers by Easy Done Trading Company, and that profits from those sales were retained by Easy Done Trading Company for distribution by Mr Yang to shareholders, or to one or more of his companies and businesses, as required. There is no evidence that any profits were retained by or returned to YTD Australia from these transactions.

[23] See tax invoices at Exhibit A2.

[24] See Bills of Lading in Exhibit A2.

17.     On 26 September 2007 the Minister’s delegate cancelled Mr Yang’s business skills visa.[25]

[25] T2.

Did Mr Yang obtain a substantial ownership interest in an eligible business in Australia?

18. Mr Yang says that he obtained a substantial ownership interest in an eligible business in Australia. In Mr Yang’s submission YTD Australia is within the meaning of ‘eligible business’ at subsection 134(10) of the Migration Act 1958 (‘the Act’); satisfying parts (a), (b), (c) and (f) of that definition. Mr Yang asserts that he established YTD Australia and that the company is wholly owned by him and his wife. Mr Yang points to business transactions undertaken by YTD Australia since registration on 16 November 2004, including the export of shipments of concrete products and wine. Furthermore, he says, YTD Australia has employed a regional manager in Australia, Mr Simon Li, and operates from premises at 79 Hurstville Road, Hurstville in New South Wales. Mr Yang asserts that he has transferred substantial amounts of money to bank accounts in Australia for the business purposes of YTD Australia. In Mr Yang’s submission he has been constrained and impeded in expanding the business of YTD Australia by ongoing and onerous litigation in China, in relation to which certain of his assets have been preserved by the court. This, he says, has delayed the development and expansion of business opportunities for YTD Australia. Delay of this nature, however, in his submission, does not and should not place YTD Australia outside the defined meaning of ‘eligible business’ for the purposes of the Act.

19.     As will appear, I do not agree.

20. The word ‘business’ is not given particular meaning under the Act, whereas the term ‘eligible business’ is defined.[26] There is no basis on which to conclude that ‘business’ has any meaning other than that in common usage. In settled cases it has been accepted that a ‘business’ for the purposes of s 134 of the Act connotes “a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis”, even though those activities may be carried on in a small way.[27] It is the ownership interest that must be ‘substantial’, not the scale of the business concern.

[26] Migration Act 1958 s 134(10).

[27] Hope v Bathurst City Council [1980] HCA 16 at [14] to [17].

21.     I must direct attention to the state of affairs pertaining at the date Mr Yang’s visa was cancelled, that is 26 September 2007, and address the same question that was before the Minister’s delegate.[28] I will only consider evidence concerning subsequent actions or events if those occurrences relate to actions taken prior to the date of visa cancellation.[29]

[28] Re Wong and Minister for Immigration and Indigenous and Multicultural Affairs [2002] AATA 54; Hospital Benefit Fund of Western Australia v Minister for Health (1992) 111 ALR 1 at [11].

[29] Re Bhyat and Minister for Immigration and Indigenous and Multicultural Affairs [2003] AATA 1051 at [37].

22. I am reasonably satisfied that YTD Australia did not conduct activities for profit in Australia on a repetitive and continuing basis prior to 26 September 2007. There is no evidence that any profit was retained from the two export transactions completed prior to that date. All that can be said is that YTD Australia was an organ of Mr Yang’s business interests in China and, alone, YTD Australia was not at that time a business within the meaning of ‘eligible business’ for the purposes of s 134 of the Act. Considering the evidence concerning subsequent events, in which one further export of wine occurred in October 2007 and another is alleged by Mr Yang in 2008, it appears to me that YTD Australia’s activities are not yet consistent with those of a ‘business’ operating for profit in Australia. Thus, the evidence concerning events after the date on which Mr Yang’s visa was cancelled does not propel me to conclude that events were in train as of 26 September 2007 that would satisfy the business requirements of section 134 (1) and (10).

23.     As it appears to me YTD Australia is an entity that may form the basis of Mr Yang’s future business plans in Australia. On the present evidence YTD Australia has been involved in three or possibly four export transactions. There is no evidence that YTD Australia retained any profit from these transactions. I note that Mr Yang estimated that YTD Australia made a profit in the order of $200,000 in the year to 30 June 2008. The basis of that assertion is not clear and Mr Yang could not provide any detailed explanation, other than pointing to the possibility, he thought, of one further export of wine to China. No documentary evidence was tendered in support of these propositions.

24.     I accept that YTD Australia employed Mr Li in January 2006 and that Mr Li undertook some preliminary work concerning the purchase of wine for export and a business promotion conference.[30] The minutes of a purported Board meeting of ‘YTD Development Pty Ltd’ in China on 16 December 2005 clearly set out the company’s intentions concerning the development of business “importing healthy foods from Australia”.[31] It appears that wine was the only ‘food’ product imported. The minutes of a purported Board meeting of ‘YTD Development Pty Ltd’ in China on 22 June 2007 indicate that “the company has been rocketing in its wine business and has sold nearly 2,000 cartons of wine” and decided to appoint regional sales agents in various places. It is curious to note that on 22 June 2007 only 850 cartons of red wine had been landed in China (shipped from Australia on 27 May 2007).[32] The source of the remaining 1,000 odd cartons of wine to which the Board referred remains opaque; there is no evidence that YTD Australia was involved in supplying these cartons at this time. The present evidence reveals that YTD Australia shipped a further 920 cartons of wine from Australia to the Easy Done Trading Company in China on 19 October 2007.[33] Considering the evidence, it appears to me that the minutes of the purported Board meeting on 22 June 2007 are not accurate or reliable evidence of the matters set out therein. On the present evidence I cannot determine with reasonable certainty whether additional wine was sourced without the involvement of YTD Australia, as the purported minutes suggest, or whether the purported minutes were created retrospectively for the purposes of these proceedings. In either case, the purported minutes do not assist Mr Yang’s case.

[30] T18 folios 202 to 209 and Exhibit A3.

[31] T18 folio 206.

[32] See Bill of Lading in Exhibit A2.

[33] See Bill of Lading in Exhibit A2.

Did My Yang make a genuine effort to obtain or manage an eligible business in Australia?

25. There is no limit on the relevant matters than may be taken into account when determining whether “genuine effort” of the kind referred to in section 134(2) of the Act has been made, as exemplified by section 134(3).

26.     Mr Yang says that he maintained regular contact with Mr Li, regional manager of YTD Australia, concerning the day-to-day management and development of that business. The evidence of Mr Yang is that he and Mr Li conducted weekly telephone conversations of between 2 minutes and 15 minutes duration. There was no contact by email, as Mr Yang does not use a computer. There was no contact by letter, as Mr Yang does not write letters. There was one contact by facsimile transmission,[34] although Mr Yang gave evidence that he does not use a facsimile machine, preferring to conduct his business by telephone.

[34] See for example Exhibit A3.

27.     Mr Yang spent a total of 39 days in Australia during the period his business visa was on foot.

28. Mr Yang was not able to provide any material evidence of research he had undertaken or business plans he had developed in pursuit of his stated intentions in relation to developing business in Australia. It can readily be accepted that Mr Yang is a busy man with high level business responsibilities and interests in China. In order to establish that Mr Yang made a genuine effort to obtain a substantial ownership interest in an eligible business in Australia, or to utilise his skills in the management of that business it is not necessary for him to establish that he spent many hours of each day in communication with Mr Li, dealing with the minutiae of daily management and administration. It is necessary, however, to consider the extent to which Mr Yang engaged in activities consistent with the development of an eligible business. Those matters include those set out at subsection 134(3) of the Act.

29.     It can be accepted that Mr Yang and his wife transferred substantial amounts of money, probably in excess of $AUD2million during the period his visa was on foot. There is evidence of substantial funds held in term deposit account with the HSBC Bank by Mrs Li, although it is far from clear whether these funds were intended for use in business or by YTD Australia.[35] There is no evidence those monies were used in that manner. A substantial proportion of the transferred funds, however, were used to purchase the property at 79 Hurstville Road, Hurstville ($AUD1.058 million).[36] I accept that approximately $AUD150,000 was transferred to YTD Australia’s Westpac Bank account to cover the cost of purchasing and shipping concrete products in October 2005 and wine in May 2007. I accept that further amounts were transferred to cover costs associated with a shipment of wine in October 2007. I note in passing that many of the transactions in the bank statements for the YTD Australia account are not explained by the present evidence. Mr Yang explained that he would make or authorise withdrawals for personal use, in relation to his children, for example.

[35] See for example Exhibit A5.

[36] See for example Exhibit A5 and A6.

30.     Plainly enough Mr Yang utilised his skills at a senior level managing and directing his business interests in China, including those concerned with the importation and distribution of wine. His own evidence concerning activities he undertook in relation to YTD Australia was minimal or very little. There are two difficulties for Mr Yang. First, it is not established that he made vigorous and determined efforts on a sustained and continuous basis that are consistent with the making of a ‘genuine effort’.[37] The second is that YTD Australia was not a going concern in the terms of a business undertaking repetitive and continuing activity for profit in Australia during the period his visa was on foot.

[37] Re Tansari and Sulysto and Minister for Immigration [2008] AATA 400 at [138].

31.     I accept Mr Yang’s explanation that he could not develop the YTD Australia business or additional business opportunities in Australia because he was caught up in litigation in China that required his presence and that precluded him from realising and transferring his assets to Australia.[38]

[38] Exhibits A8 and A9.

32.     Considering all of the evidence, I am not persuaded that Mr Yang made genuine efforts to comply with the obligations attaching to his business visa prior to 26 September 2007.  That is the test to be applied.  I find that Mr Yang does not come within the terms of subsection 134(2). On the material before me, Mr Yang has not made a genuine effort to obtain a substantial ownership interest in an eligible business and manage such a business on a day to day basis; even though he may intend to make an effort to develop or acquire a business in Australia in the future.

33. That being so, there are sufficient grounds to cancel Mr Yang’s business visa pursuant to subsection 134(1) of the Act. That is not the end of the matter, however. It is necessary to consider whether there are sufficient grounds to warrant exercising the residual discretion not to cancel his visa.[39]

In all of the circumstances are there sufficient grounds to decide Mr Yang’s visa should not be cancelled?

[39] Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31 at pars 19 to 21.

34.     The Minister asserts that there are no issues that would warrant exercise of the residual discretion not to cancel Mr Yang’s visa.

35.     I do not agree.

36. The discretion is broad, and exercise must be considered through the lens of the statutory context of the Act relating to business skills visas[40]; the broader frame of business migration policy as expressed in Departmental guidelines, for example, may also be a relevant consideration.[41] The residual discretion is not to be exercised lightly; it is to be exercised in circumstances that are sufficiently worthy to warrant continuation of the visa that would otherwise be cancelled. Those circumstances are likely to be most unusual, even exceptional. As Keiffel J (as she then was) said, nevertheless, in Kim’s case at [21]:[42]

“The Minister might be satisfied of the matters referred to in subs (1) and not be satisfied as to the efforts made as referred to in subs (2) but nevertheless consider in a particular case that further time should be given to the visa holder to undertake what was required of them. An explanation satisfactory to the Minister, of inaction up to the point of assessment, might be given. The nature of the power to cancel is a continuing one. There is no apparent purpose to be achieved by requiring cancellation whenever the Minister is undertaking an assessment of what has been undertaken by a visa holder. The Minister retains the right to cancellation under s 134(1) at all times.”

[40] See Re Burg and Minister for Immigration and Citizenship [2007] AATA 1630 at [52] and [53] for example.

[41] Re Philp and Minister for Immigration and Citizenship [2007] AATA 2092 at [95] to [126].

[42] Kim v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 31 at [21].

37. The power to cancel a business visa under subsection 134(1) is conditioned by subsection 134(9) and section 135, with the effect that the power to cancel a visa under subsection 134(1) does not continue indefinitely. The ongoing power to cancel a business visa outside the initial three year frame contemplated by sections 134 and 135 is expressed, however, in the general power to cancel a visa under section 116 of the Act; in circumstances in which the visa holder has failed to comply with a condition of the visa, for example. Thus, exercising the residual discretion not to cancel a visa under subsection 134(1) should not be taken to mean that the visa may not be cancelled in the future under section 116 if the visa conditions are not satisfied. I note that the respective powers to cancel visas at sections 116 and 134 do not limit or affect each other.[43]

[43] Section 119 of the Act.

38.     I find that Mr Yang’s explanations are credible, reasonable and sufficient to warrant exercise of the residual discretion not to cancel his business skills visa. This is not a matter to be lightly entertained, and I am satisfied that Mr Yang’s circumstances are unusual and exceptional.

39.     As it appears to me, Mr Yang has given a satisfactory explanation for the delay in achieving the requirements of his visa in the particular circumstances. The litigation in which he has been involved concerning breach of contract commenced soon after he activated his business skills visa by entering Australia on 6 August 2004.[44] This was not a matter within his power to control. Essentially, a large amount of money owing to Mr Yang on completion of a particular construction project was not paid and he was forced to commence proceedings to recover those funds. Litigation escalated, involving several parties lodging claims and counter claims. At the date of Mr Yang’s visa cancellation the various proceedings had not been concluded. Mr Yang presently holds a judgement in his favour by the Guandong People’s Supreme Court.[45] He faces further difficulties, however. As I understand it, he is prosecuting the sale of other parties’ assets in order to realise the debt owing to him and he has an application to the Court presently on foot for that purpose. Mr Yang informed me that the matter is expected to be finalised in 2009. He also informed me that his Household Registration extension will expire in or about July 2009. The extension to Mr Yang’s Household Registration was granted in order to permit him to finalise the litigation in which he was involved. Household Registration in China is foregone in the event of migration, under an Australian business skills permanent residence visa for example.  For this reason Mr Yang’s children no longer hold Household Registration in China. Mr Yang strenuously asserted his intention to relocate to Australia once the litigation is finalised, transferring his assets in order to pursue business ambitions in this country with his family.

[44] Exhibits A8 and A9.

[45] Exhibit A8.

40.     I am satisfied that Mr Yang’s intentions concerning his relocation to Australia are genuine and tangible. He has purchased a substantial property in Hurstville and maintains large cash deposits in HSBC term deposit accounts in his wife’s name. His three children live and study in Australia on a full time and ongoing basis, with no intention to return to China. Mr Yang has initiated and established a corporate entity for the purposes of developing business in the future in Australia. YTD Australia, while not yet a going concern or business, employs one employee, Mr Li. The company has undertaken a low level of export activity, albeit to the benefit of Mr Yang’s present businesses in China. While it is plain enough that Mr Yang has substantial and ongoing business interests in China, I accept his sworn evidence that he has been winding down his businesses in China and arranging his affairs in order to relocate to Australia on completion of the litigation in which he is currently involved. Considering the evidence concerning Mr Yang’s commitment to development of a business in Australia since 2004, including his dealings with Mr Li from January 2006 and the funds he has transferred into Australia for business purposes, I am satisfied that he has demonstrated a sustained commitment, albeit impeded by the unusual circumstances that arose in September 2004.

41.     Mr Yang’s explanation for delay in complying with his visa obligations has two limbs. The first limb concerns Mr Yang’s brief attendances in Australia since the activation of his business skills visa. Mr Yang explained that he has been reluctant to leave China since the commencement of the litigation, especially since the lodgement of counter claims against him or companies in which he is involved. The reason given for this is that by relocating to Australia he would lose Household Registration and attendant rights in China. This, in Mr Yang’s submission, would jeopardise and impede his capacity to successfully prosecute his claim and defend the counter-claims made against him. He says that his absence from China would limit his ability to comply with Court requirements and would constrain his interaction with his retained lawyers. Furthermore, Mr Yang asserts that the legal system in China is unpredictable and he has been required to respond to Court requirements at short notice from time to time. For this reason, he says, he has been reluctant to leave China for lengthy periods while the litigation remains on foot.

42.     The second limb of Mr Yang’s explanation goes to his financial capacity. He asserts that his personal assets in China are tied up as a result of the ongoing litigation. The amounts of money in dispute are substantial, in sum in excess of RMB 100,000,000. It can be seen from (2004) Shen Zhong Fa Li Cai Zi No.270 that Mr Yang provided all of his properties and equities as guarantee for the case. Mr Yang pointed to the recent Civil Judgement and Property Seal-Up Notice of the Shenzhen Intermediate People’s Court of Guandong Province in (2008) Shen Zhong Fa Min Wu Chu Zi No.10.[46] As can be seen, Mr Yang’s properties at 1033-1038 Huangcheng Plaza, Futian District are preserved by order of the Court until 29 November 2009. I accept that Mr Yang has not been in a position to realise all of his assets in China since 27 September 2004, the date on which application was first made to the Court. This restraint occurred after the date on which Mr Yang’s Australian business skills visa was activated on 6 August 2004. I accept that this difficulty has contributed to the delay in Mr Yang complying with his visa obligations. Furthermore, as can be seen, the assets of the plaintiff are also preserved by the Court Property Seal-Up Notice. I accept, therefore, that Mr Yang is not able to recover the debts owing to him without a further order from the Court authorising the sale of the plaintiff’s assets. Mr Yang’s evidence is that application has been made for such an order.

[46] Exhibit A8.

43.     Thus, in sum, Mr Yang‘s movements outside China have been impeded, limiting the time he has spent in Australia since the activation of his visa. His financial capacity has been adversely affected by breach of contract; the large debts owing to him have not yet been fully recovered. His ability to realise personal assets has been constrained by guarantees provided to the relevant Courts since 2004 and by operation of the Property Seal-Up Notice issued by the Guandong Intermediate People’s Court on 29 November 2007, which remains in force. These factors, in my opinion, provide a well founded and satisfactory explanation for Mr Yang’s delay in honouring his visa obligations and undertakings.

44. That being so, I am satisfied that this is a case in which it is appropriate and desirable to give Mr Yang more time to comply with his visa requirements and to exercise the residual discretion not to cancel his visa pursuant to section 134(1). It follows that his business skills visa remains valid and in force. That being so, the secondary visas of Li Min’e, Yang Xiaohong, Yang,Shaodong and Yang Dongfa also remain valid and in force.

conclusion

45. Mr Yang is a successful businessman who operates and substantially owns investment and development businesses in China. Mr Yang has commenced development of a business model based on the export of Australian wine to China. This nascent enterprise is essentially run from China; YTD Australia is the Australian entity Mr Yang established for the purposes of this new enterprise. YTD Australia, however, has not yet achieved the status of a business, conducting repetitive and continuing activities for profit in Australia. As owner, Mr Yang has retained any profit from YTD Australia export transactions in China. For this reason I have found that Mr Yang has not obtained a substantial ownership interest in an eligible business in Australia. Mr Yang has made only minimal efforts to develop business in Australia, through YTD Australia or otherwise since the grant of his visa. He has not made genuine efforts of the kind and character contemplated by section 134(2) of the Act. There is, however, a reasonable and satisfactory explanation why he has failed to achieve these requirements of his business skills visa. That explanation involves complex and ongoing litigation in China that has required his presence and has tied up his personal assets since September 2004. These circumstances are apart from the usual course; they were unforeseen when Mr Yang applied for and was granted his business skills visa and they have adversely impacted upon his capacity to satisfy his visa requirements. I have found that Mr Yang’s explanation is reasonable, supported by satisfactory and reliable evidence. Mr Yang’s particular circumstances since September 2004 are exceptional. On balance, this is sufficient to warrant Mr Yang being given more time in which to comply with his visa obligations. For that reason the discretion not to cancel his visa will be exercised and his visa and the secondary visas held by his immediate family members will be reinstated.

46.     It should be noted, however, that if Mr Yang fails to comply with the conditions of his visa in the future the general power to cancel his visa may be exercised. That, of course, is a not a matter that can properly be dealt with now. It will be for the Minister to consider in the future, if it is necessary or desirable to do so in the particular circumstances.

47.     The decisions under review are set aside and in place thereof the Tribunal decides that the visas of Yang Tianding, Li Min’e, Yang Xiaohong, Yang,Shaodong and Yang Dongfa are reinstated.

I certify that the 47 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S Webb, Member.

Signed: ............[Signed].................................
  Demelza-Rose Gale           
  Associate

Date of Hearing  26 September 2008

15-16 December 2008

Date of Decision  24 December 2008

Solicitor for the Applicant:           Mr G. Santucci

Snedden Hall & Gallop

Solicitor for the Respondent:      Ms B. McNeil

Clayton Utz