YIN (Migration)

[2021] AATA 4959

YIN (Migration) [2021] AATA 4959 (1 October 2021)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  YUCHENG YIN
JIANHONG LI
YIWEN YIN
YIXUAN LI

CASE NUMBER:  1731762

HOME AFFAIRS REFERENCE:                 BCC2015/613425

BCC2015/613743
BCC2015/613753
BCC2016/1995932
BCC2018/417560
BCC2018/419716

MEMBER:Lilly Mojsin

DATE:1 October 2021

PLACE OF DECISION:  Sydney

DECISION:The Tribunal affirms the decision under review.

Statement made on 1 October 2021 at 4.10 pm

CATCHWORDS
MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 890 (Business Owner) – history of involvement in unacceptable business activities – business activities in China – lack of taxation compliance – absence of taxation records for the applicants’ companies – lack of resolution of business debts – failed to repay loans of significant amount – decision under review affirmed

LEGISLATION
Migration Act 1958 (Cth), ss 65, 359, 359A, 376
Migration Regulations 1994 (Cth), Schedule 2, cl 890.216

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 30 November 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 24 February 2015. The delegate refused to grant the visa on the basis that cl.890.216 has not been met because the applicant has a history of involvement in business activities that are of a nature that is not generally acceptable in Australia.

3. 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.

4. The criteria for a Subclass 890 visa are set out in Part 890 of Schedule 2 to the Regulations. At least one member of the family unit must satisfy the primary criteria.

5. Neither the applicant nor his or her spouse has a history of involvement in business activities that are of a nature that is not generally acceptable in Australia: cl. 890.216.

6. At the time of the decision, the applicant must continue to satisfy the primary criteria in cl.890.211, 890.215 and 890.216 : cl.890.221.

7. The applicants appeared before the Tribunal on 21 November 2019 to give evidence and present arguments. The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages. The applicants were represented in relation to the review by their registered migration agent.

8. The applicant was directed, in a letter of 8 February 2021, sent to their Solicitor, to the Practice Direction COVID-19 Special Measure Practice Direction – Migration and Refugee Division (available at for further information and directions about the current procedures for the AAT.

9. On 22 February 2021 at 14.14 the applicants submitted documents and submissions to the Tribunal.  At the commencement of the adjourned hearing on 24 February 2021, the Tribunal explained it had received some 240 folios comprising of submissions and annexures less than 48 hours before the scheduled adjourned hearing. The Tribunal further explained that this timeframe was outside the President’s COVID Practice Directions that required applicants to submit all documents on which the applicants sought to rely 7 days before the hearing. The applicant’s adviser explained that there was a practical reality of insufficient time to prepare. The Tribunal adjourned the hearing.

10.   At the resumption of the adjourned the hearing to 14 April 2021, in light of a statutory declaration, that had been provided to the Tribunal by the Solicitor representing the applicant, Shuonan Zhao, purporting to be a witness in the proceedings, Mr Zhao was invited to provide submissions in relation to further conduct of the hearing in light of Rule 27 of Solicitors Conduct Rules 2015.

1. The applicant’s Solicitor responded that whilst it his view that the nature of the evidence adduced by the writer ought not necessarily preclude him from representations in the proceedings, the applicants have nevertheless elected to appoint another representative in order to facilitate the progress of these proceedings.

2. The 1^st applicant attended a hearing on 5 August 2021. The 2^nd applicant did not attend. No explanation was provided for her non-attendance. The Tribunal asked the applicant if he was able to give evidence to the Tribunal without his wife being present. He did not indicate he was not able to do so.

3. The 2^nd Tribunal hearing was held during COVID19 Lockdown, via Team Video. I am satisfied the applicants were given a fair opportunity to give evidence and present arguments. The applicant confirmed that he could hear and see and that he understood the interpreter. I was able to interact with the applicant and interpreter and with the 2^nd applicant when she gave evidence to the Tribunal. All parties were able to maintain appropriate communication throughout the proceedings. The applicants sought additional time during the course of these proceedings and additional time was granted. The applicants were also provided with an opportunity to provide further written submissions post-hearing. I am satisfied that the hearing provided a real opportunity to be heard.

   CONSIDERATION OF CLAIMS AND EVIDENCE

4. The delegate of the Department found that the applicants did not meet cl. 890.216 as both the applicant and his spouse had a history of unacceptable business practices that are generally not acceptable in Australia.

5. In assessing this clause, the Department received unfavourable information regarding the applicant’s ability to meet this requirement.  The information received by the Department was a copy of two Civil Affairs Verdicts against the applicant, Yucheng Yin [applicant], his spouse Jianhong Li [2^nd applicant], and the applicant’s company in China, Lianyungang Jiuchuang Trading Co. Ltd.

6. In the applicant’s subclass 163 application the applicant identifies himself as the Owner/General Manager and Director of Lianyungang Jiuchuang Trading Co., Ltd and provided the Business Licence for this company.  Jianhong Li [2^nd applicant] identifies herself as the Legal Representative/Financial Director of Lianyungang Jiuchuang Trading Co., Ltd.

7. The first litigation was brought against Lianyungang Jiuchuang Trading Co., Ltd. by Lianyugang Eastern Agricultural Business Bank Pty Ltd with the following verdicts:

   Verdict 1) Defendants repay: RMB 1,0114,615.32 (A$2 040 979).

8. The second litigation was brought against Lianyungang Jiuchuang Trading Co. Ltd. by Lianyungang Hongzhan Investment Sponsorship Pty Ltd with the following verdicts:

   Verdict 1) Defendant Lianyungang Jiuchuang Trading Co., Ltd repay RMB 2.4 million (A$484 808) and interest from 26/11/2012 until the Court confirmed repayment date.

   Verdict 2) Defendants LI Jianhong, YIN Yuncheng …….are jointly liable to verdict number 1.

9. In relation to the first litigation, the applicant denied that there is a verdict against his company to repay RMB 10 114 615 (AUD $2 040 979) to the Lianyungang Eastern Rural Commercial Bank Corporation Limited. The applicant claimed that the plaintiff withdrew the application and provided the following documents in support of his claims:

   §A copy of the court’s ruling from Lianyungang Intermediate People’s Court Jiangsu Province stating that the plaintiff withdrew their application.

   §A letter from the applicant’s lawyer in China showing that he has contacted the courts in Lianyungang and the matter was withdrawn on 22 September 2014.

   §A letter from a lawyer in NSW showing that he has contacted the courts in China by phone, and confirms that the case was withdrawn

10. In relation to the 2^nd litigation, the applicant stated that the court ruled in favour of the plaintiff Lianyungang Hongzhan Investment and Guarantee Corporation Limited and determined that the applicant and his spouse were liable to re-pay RMB 2 400 000 plus the interest accrued. The applicant claimed the court’s ruling was unfair because the alleged loan agreement was made on 24 and 25 May 2012 and he and his spouse transferred 100% of shares in March 2012. In support of his claims, the applicant provided the following documents:

    §A copy of the court’s ruling dated 27 March 2012.

    §A share transfer agreement showing that 100% of shares were transferred to Xiaohong Zhang on 27 March 2012, and business registration documents.

    §A statutory declaration from the applicant stating that the ruling was unfair and that he is appealing the decision.

    §Evidence of property valuation to pay back the debt and appointing a lawyer in China to undertake the task.

11. The delegate accepted that, in regard to the 1^st litigation, the plaintiff had withdrawn their application as this claim was well supported by the ruling provided from the Lianyungang Intermediate People’s Court, Jiangsu Province.

12. In regard to the 2^nd litigation, the delegate did not accept the applicant’s claim that he and his spouse were not aware that the company entered into a loan agreement after they sold their shares in March 2012. The delegate found that the company applied for a loan on 5 May 2011, when the applicant was still the owner of the company. The applicant and his spouse signed a loan agreement to be guarantors for the loan on 22 November 2011. Then later on 24 and 25 May 2012, the other parties signed the agreement. When the bank conducted a check on August 2012, it found that the business had shut down and was no longer in operation. Based on the evidence examined in court in China, the delegate found that the applicant’s company entered into a loan agreement on 5 May 2011, and the applicant and his spouse signed to be guarantors for the loan on 22 November 2011. This occurred approximately 12 months before the applicant and his spouse transferred their shares, as claimed. The delegate was not satisfied that the applicant and his spouse were not aware of the loan, and it was taken out after they transferred all shares in the company.

13. The delegate found that the company entered into the loan agreement on 5 May 2011 when the applicant and his spouse were still the legal representatives for the company. Furthermore, the applicant’s spouse was present at the court hearing and her line of defence was that she never received the claimed funds, and the company seal on the loan agreement was not notarised making the document unofficial. The court rejected her argument and ruled that she has personally signed other documents agreeing to the loan. Also, she did not mention to the court anything about selling her and her husband’s shares in the company prior to the loan being taken out. The applicant also claims that they have lodged an application to appeal the decision in January 2013. However, they provided no official evidence of an appeal application pending before the court or winning an appeal.

14. The delegate was satisfied that the applicant, through his company, entered into an agreement to take out a loan for RMB 3 000 000, and has failed to pay back the loan. The court ruled that the applicant, his spouse, and other parties involved were liable to repay a total of RMB 2 400 000 with accrued interest in January 2013. The applicant has not provided any evidence to demonstrate that he has paid back the loan or is making any arrangement to do so. Given that the amount of money is significant, the delegate found that the offence is an unacceptable business practice.

15. On 20 November 2019 the applicants provided the following documents to the Tribunal:

    §Statement of Jianhong Li dated 20 November 2019,

    §Reply to the survey letter of Jiangsu Ward Law Firm dated 27.07.16 from Economic Investigation Brigade of Lianyungang PSB responding to lawyers and advising they have investigated Chen Wang and Lin Cheng in 2012 and “upon investigation partial capitals involved are correlated to the loan of applicants’ company

    §Verdict of execution (2013) HZZ No 0515-4 from the Lianyungang Haizhou People’s Court dated 14.09.16 against the applicants and their company and others – finding by court case transferred for criminal investigation and civil judgement HSCZ 0786 is suspended

    §Chinese legal opinion regarding how to interpret “(2013) HZZ No 0515-4 Enforcement Ruling”- 28.10.19 by Lei Zhang with a Chinese identity card in Mandarin

    §Results of a Google search on Wang Chen and Cheng Lin

    §Appendix 5 news article downloaded from the Internet in Mandarin and its English translation.

16. The applicant’s spouse, the 2^nd applicant’s statement briefly stated:

    ·In early November 2011, her friend Cheng Lin told her she had a person in Zhangnong Shangcun Town Bank of Donghai County, and a friend is running a guarantee company and can help their company apply for a loan.

    ·Ten days later, she received a notice from Cheng Lin. The next day they signed the "Debt of Intent" at the bank and signed a counter-guarantee contract with the guarantee company but the loan amount at the bank was insufficient, and the application was fruitless.

    ·Wang Chen and Cheng Lin privately engraved her company's official seal, financial professional seal and legal person's seal, and applied for 3 million RMB acceptance bills (half-year period) to the bank.

    ·In early 2012, they decided to sell their business in China.

    ·Cheng Lin repeatedly asked her to sell the equity of their company to her. Since her offer is higher than other competitors, they sold the company's equity to Wang Chen on 31 March 2012, and Cheng Lin appointed Zhang Xiaohong (Lianyungang Industrial and Commercial Bureau company change documents) to be person-in-charge.

    ·At the end of March 2012, the applicant and his eldest son came to Australia looking for a business in Sydney. In May 2012, the 2^nd named applicant came with their second son to activate the subclass 163 visa and return to China a few days later. In December 2012, she returned with her son to Sydney to reunite with her family in Sydney.

    ·In August 2012 in China, when at her mother's house with her son, she received a call from her neighbour: two men were looking for her and left a number. She contacted the number and the person asked her about a loan at a certain bank. She was confused at the time. Looking back, she did go to a certain bank in November the previous year, but the information she got was that the loan was not approved. The next day, she rushed to the bank to check if there was any loan. But when the bank staff took out the information, she was very scared because she found that the official seal, the financial seal, and her private seal on all the loan information at the bank were all forged. The recipient of the ticket in this loan was Cheng Lin. She went a lawyer to respond.

    ·On May 25, 2012, due to the expiration of the draft, (the draft is for a six month period), Wang Chen and his team repaid the loan on time so that the loan can roll over to another 6 month term. On the same day, Zhang Xiaohong, the new legal representative of the company, Wang Chen and Cheng Lin's couple actually controlled Lianyungang Shida Plastic Co., Ltd. and Cheng Lin's sister Cheng Yuan as legal representatives of Nantong Dessert Water Products Co., Ltd. counter-guaranteed, once again successfully defrauded the loan. ("Civil Judgment of Lianyungang Haizhou District People's Court" 2012 Haishangchuzi No. 0786 (fourth page).

    ·In May 2012, Yin Yucheng was already in Sydney.

    ·On September 4, 2012, Hongzhan Company filed a complaint and asked the applicant to compensate for the loan of 2.4 million RMB

    ·On January 29, 2013, the court ruled on the case. The applicants disagreed with this judgment and decided to appeal. As the lawyer's letter was lost in the middle of the mailing process, the deadline for appeal was missed, which led to the entry of the case into the execution stage. At that time, their Chinese property of 400 square meters worth 2.4 million RMB was auctioned. As their business in Australia had just started, language difficulties, cultural differences and unfamiliar environments have made their business operations difficult.

    ·At the same time, they were struggling to deal with an extortion case in Australia. Their friend Xushu Zhou wanted to borrow money from them but they refused, and he commenced proceedings in NSW District Court.

    ·They focused their energy dealing with the court case in Australia and were unable to pursue the China Civil case. The case in Australia started in 2013 and ended in July 2015 when Xushu Zhou decided to discontinue the case.

    ·Once the Australian case was completed, they filed a protest with the local procuratorate in China. The procuratorate suggested they report to the Public Security Department (Police)[PSB].

    ·In June 2016, their lawyers reported the case to the local PSB on the grounds that Wang Chen and Cheng Lin were suspected of forging official seals and private seal fraud loans.

    ·On July 27, 2016, the Economic Reconnaissance Brigade of Lianyungang Public Security Bureau Haizhou Branch issued a document "Response on the Investigation Letter of Huade Law Firm", confirming that Wang Chen and Cheng Lin were suspected of loan fraud.

    ·The next day, their lawyer submitted the evidence to the local court.

17. A document from Zhang Lei, Solicitor, Jiangsu Mingliang Law Firm dated 28 October 2019 provided by the applicant states:

    The applicant and the applicant’s wife are all entitled to petition at Lianyungang Haizhou People's Court for the (2012) H.S.C.Z. No. 0786 Civil Judgement to be reviewed and apply for the judgement to be revoked.

    (4) Civil Procedure Law of the People's Republic of China Article 257 stipulates "Under any of the following circumstances, the people's court shall issue a ruling to terminate enforcement: (1) The applicant withdraws the application for enforcement. (2) The legal instrument on which enforcement is based has been revoked." According to this article, once Lianyungang Haizhou People's Court (2012) H.S.C.Z. No. 0786 Civil Judgement is revoked, the court will terminate enforcement of the case ruling.

    Based on the above-mentioned reasons, when the police arrest the fugitives, Wang Chen and Cheng Lin, it is undisputed that the court is going to convict them. Then it is undisputed that the court will revoke Lianyungang Haizhou People's Court (2012) H.S.C.Z. No. 0786 Civil Judgement.

    Tribunal hearing

18. The applicant said that he commenced his business in China in May 2006, he was a salesperson selling Shell lubricant. He was also an agent of another brand. He was the dealer of that company. He was in charge of sales in 2 cities. Later he also ran a business as an agent of air–compressors for industrial use.

19. He decided to come to Australia in 2010 as one of his wife’s friends suggested they obtain a 163 investment visa. He came to Australia as a visitor, first in July 2011 for a week. He returned at end March 2012. His wife came to Australia around May 2012. She brought their 2^nd son William to Australia to activate the 163 visas.

20. The applicant was looking for a business opportunity. In December 2012 he bought a petrol station in Leichhardt, Metro, a branded chain of petrol stations.

21. Initially the applicant intended to continue his business in China. His children and wife came to Australia to look at business opportunities. They decided to sell their business in China. They transferred all stock shares to Xiao Hong Zhang. The applicant was paid 80% being RMB 2.4 million to his bank account and RMB 600 000 to his wife’s bank account. He does not recall which bank as he had an account with Chinese Industry and Commerce Bank and Bank of Agriculture. Part was paid in cash as well.

1. Asked if he was required to repay any loans he had borrowed, he said he was not. When he started his business, he did not borrow any money. He subsequently borrowed money from the Eastern Bank RMB 6 or 7 million, he cannot clearly remember the date that he borrowed the money, but he repaid the loan around end 2011 or beginning 2012. He was not in charge of finance, his wife was.  He also borrowed from Jiangxu Bank RMB 2 million and it was paid back in 2011 and 2012. He borrowed again from Industry and Commerce Bank, it was RMB 5 million, he cannot remember it clearly and he did not pay it back as the buyer of his business was to pay it back. The buyer also took the liability for this debt.

2. Asked who looks after all the books and accounts, he said his wife. She is in charge of the cash account. They had another accountant who did all the accounting jobs, Xiao Ming Li and Ms Yang. The documents that are prepared to lodge tax returns are prepared on a cost accounting basis. He prepared, filed and lodged tax returns. Asked if he had to lodge details of loans with Tax Department, he said he did. Asked for copies of those tax returns he said that it was a long time ago. His accountant is still in business, some of his returns are there and some of them are not.  Asked if he has made enquiries about copies of returns, he said that he does not know. He does not know much about finances of the business as his wife was in charge.

3. The applicant’s wife said that they started a business in 2006 and she did the paperwork. In the beginning they borrowed RMB 5 million. They borrowed money in 2008, RMB 2 million. They did not repay the money to the bank, but it was not mature as the buyer bought the business with the debt. They also borrowed RMB 6 or 700 000 from Eastern Bank at end 2010 and they sold that debt when they sold the business. They borrowed RMB 5 million and, for example, when the buyer bought the business, the legal entity of the buyer paid back money. There was another loan from Industry and Commerce Bank, they borrowed  RMB 3 million in 2011 and the buyer bought the company including the debts. Asked why they needed to borrow so much money, she responded when they started the business, it was not so big, but it grew.

4. The applicant said that they borrowed so much money because they were the agents of branded lubricants and air compressors. When they bought the lubricants and equipment from supplier they have to pay in cash and when the supply of world oil is tight, they had to make the payment first and put 50% of the capital down. They had to take a full loan before they got those supplies. They sell the products to their customers as they are big buyers. Every order is about RMB 1-2 million and they take up to 5 months to be paid.

5. Asked why they did not seek a loan from same bank, she responded said that every bank has their credit limit. Asked when they sold the business if they had a lawyer or accountant to sell the business, she said they did not. It is different in China from Australia. In China if you run a business you do not need to get so many people involved. The paperwork for selling the business was to prepare a change of registration of Industry and Commerce registration and related stocks and collective and payable, equipment and fixed assets. They asked the accountant to prepare a list of collected and payable.

6. They signed a contract of sale with the buyer, prepared by the accountant. Asked what the bank required to accept the transfer of debt to the buyer. The husband said that if they sell the business to the other party, they check assets and transfer, but it is a share transfer.  After this the buyer accepted the assets and debts and will decide whether to accept. The buyer compares stocks equity and debt and checks sales of company. It included equity debt liability and stocks and they inform the bank. If he has liability with bank he will be informed. When they sold the business the Contract of Sale was RMB 3 million. Asked how much was owing to different banks at time of share transfer, she said RMB million. They received RMB 3 million.

7. Asked about when they borrow money in China if the bank required that they provide properties as collateral, she said they did, her residential property, office property and personal assets. A mortgage over their residential property was taken by Eastern Bank. Sometimes they put their brother’s or mother’s property as collateral. Asked what happened to the mortgages on their properties when they sold, she said that when the loan is matured a new legal entity will re-mortgage.

8. When they sold the business, the mortgage over their residential property was removed and  a mortgage was taken over their personal property. The new buyer mortgaged their own property. Asked who negotiated removal of the mortgage, she responded that it was when the other party bought the company.

9. The applicant said that the bank required the buyer to put a related company on the mortgage. Asked what documents were required to be signed at the bank, she said that the new company put new property, they have a procedure for that. Also, the companies and the buyer have to sign the mortgage document. Asked again what documents they were required to sign, she said no documents. It is only an exchange of mortgage property. Asked how the bank would know they are releasing property from the mortgage, she responded that they will go together with the buyer to the bank and tell them they will remove property and they will take another property. That is the reason why the bank will require the buyer to provide more related companies or enterprises.

10. Asked about their personal property and office property, she said there is an office under her name and she gave her property to her elder brother. She did that in August 2012, when she went back to China. She went back at end May and returned to Australia on 2 December. Asked what was involved in the transfer of property, she said that an unpleasant thing happened between them. Her brother has since sold it. Asked about the legal requirements she said that to legally transfer, one goes to the property office and also selling the deed of sale.  In regard to the office property, it is still in her name and it is rented out. Asked if they own any other assets in China, she said “no”.  Asked if they borrowed money from any other banks, she said “no”.

11. In 2011 her friend, Lin Cheng, approached her and said that she knew a bank in Donghai county. She said she could help her out with an increase in funds. She provided Lin Cheng with some copies of the company papers. About 10 days later she rang and said they have to go to the bank to sign some papers as preparation. She and her husband went there and they signed some papers. This was before they sold the business. She said they sold the business in March 2012. In 2011 she was interested in a loan, but they never took out the loan. They did not get the loan from the bank. She only signed the papers.

12. After they sold the business she found out about this loan. When she found out, she was asked to recall if there was a debt. The bank or company was with Donghai Agriculture and Business Township Bank. When they got documents from the bank, they noticed that all the stamps on the papers were those of her companies. She went to a lawyer to attend the court and the lawyer told her all the stamps are false.  The lawyer went to court and the evidence about the fabrication of the loan was not accepted by the court. The documents were forged in November 2011. Asked how they got hold of her company’s stamps, she said they were fabricated. Asked who she spoke to when she first applied for the loan, she said she signed the papers and Lin Chang told her to wait and she said that she was not told the loan was not approved.

13. The applicant said that when they went to the bank, they were told the money was taken out by Lin Cheng. The court judgement said that they must take the responsibility for the guarantee and they were requested to pay back the loan. A few days after the judgement was issued, they suggested all the stamps are fabricated and the loan was not taken out by any one from the company. They did not even look into that or make any investigation or take any evidence. It is a scam. They were only given 15 days to lodge an appeal after they received the judgement. They needed to get in touch with a lawyer in China and write a letter of attorney but they were both in Australia. So, the time was very tight. They got in touch with the applicant’s brother in China to transfer the attorney to the lawyer. His brother was intoxicated at the time and lost the attorney’s name. They missed the date to lodge the appeal and they did not appeal. Asked if there is still a judgement debt owing by them in China? He said “no”. His property in China was auctioned in early 2013 and his asset was sold to pay this debt.

14. The Tribunal asked the applicant if he owed any other monies in China. He said “no”.

15. The Tribunal discussed the non-disclosure documents and the applicant’s adviser requested that the information referred to be provided by s.359A. The Tribunal agreed.

16. The Tribunal wrote to the applicant pursuant to s.359A dated 20 October 2020 stating as follows:

    Information received by the Department and notified to the Tribunal as being covered by s375. The particulars of the information released by the Tribunal are:

    ·the applicants continue to owe money in China to Lianyungang Dongfang Rural Credit Union [DRCU] and Lianyungang HongZhan Investment Guarantee

    ·Jianhong Li is Director of Lianyungang Jiu Chuang Trading Company founded on 25.5.06. She obtained business loan of rmb 6.7 million from DRCU. Repayment date was 10.9.12. She did not pay, loan is outstanding.

    ·Yin Yucheng is director of Hai Bo Electrical Equipment Co founded on 8.6.10 and obtained business loan rmb 3 million from DRCU to purchase electrical equipment and machinery. Repayment date was 6.11.12. and it was not repaid on time.

    ·Lianyungang Orient Rural Commercial Bank advised the Department that the companies Lianyungang Jiu Chuang Trading Co and Hai Bo Electrical Equipment Co, the controllers of both being the applicants signed on 20 March 2013 6.7m rmb loan with the bank’s Xinpu branch.  On 30.11.11 Hai Bo Electrical Equipment Co signed 3 million rmb loan contracts with same branch. The 2 loans are overdue.

    ·Details of outstanding court actions against the applicants notified to the Department on 16.8.2016 are:

    1.   Bank of Communications – Case ID 2013 HaiZhou Commercial Court 534

    2.   China Construction Bank -  Case ID 2014 XinPu Commercial Court 0161

    3.   Xiaoming Li – Case ID 2012 HaiZhou Commercial Court 0634

    4.   Lianyungang DongFang Rural Commercial Bank Case ID 2014 HaiZhou Commercial Court 00784

    5.   Lianyungang HongZhan Investment Case ID 2012 HaiZhou Commercial Court 0786

    ·At the Tribunal hearing the applicant did not advise the Tribunal that monies had been borrowed from Lianyungang Orient Rural Commercial Bank, Bank of Communications, China Construction Bank, Xiaoming Li., Lianyungang DongFang Rural Commercial Bank, Lianyungang HongZhan Investment, Lianyungang Dongfang Rural Credit Union and Lianyungang HongZhan Investment Guarantee and monies are still owing.

    ·At the Tribunal hearing the applicants did not advise the Tribunal that the applicants were the controllers of Hai Bo Electrical Equipment Co.

    This information is relevant to the review because it may suggest that the applicants have not been truthful to the Tribunal and may suggest that they left China owing business debts.  If we rely on this information in making our decision, we may find that the applicants have been involved in unacceptable business activities and are unable to meet cl.890.216

17. Pursuant to s.359(2) the Tribunal invited the applicant to provide details of tax compliance for the last 2 years of trading by the applicants’ Chinese companies  

18. The applicant’s new advisers responded to the Notice on 3 November 2020 stating:

    First, we note that the invitation relates to 5 court judgments and other ancillary matters which were never identified, nor raised in the Department's original invitation for comments, nor in the Department's decision record to refuse the applicants' visas, nor in any of the Tribunal's correspondence prior to the first Tribunal hearing. We further note that the first time these matters were raised and particularised were in the invitation annexed herein.

    In the circumstances, we have been instructed that the applicants do not materially have sufficient time to prepare their necessary response within such a short period of time, as their responses would involve voluminous materials from the Chinese courts to properly substantiate their positions (discussed below).

    1) There had been two (2) fundamental translations errors during the hearing, namely: the interpreter had erroneously told the Presiding Member words to the effect that 'all the company seals used in the documents during the loan draw down had belonged to Jiuchuang', when the applicant had actually said words in Chinese to the effect that 'none of the company seals used in the documents during the loan draw down had belonged to Jiuchuang'; and the Presiding Member had misheard the interpreter's words when the interpreter said words to the effect that '[the applicant] can tell you that the loan had all been repaid', instead interpreting it as '[the applicant] couldn’t tell [her] if the loan had been repaid'.

    2) A significant amount of time of the first Tribunal hearing was spent on the applicant's various loans that were taken up in China during the course of the business. However, and by reference to Section 359AA of the Act, the applicant was neither put on notice of the Tribunal's interests in these matters, nor did the Presiding Member give to the applicant clear particulars of the information that the Tribunal considers would be the reason, or a part of the reason, for affirming the decision that is under review, nor did the Presiding Member ensure that the applicant understands why the information is relevant to the review, and the consequences of the information being relied on in affirming the decision that is under review, nor advise the applicant that he or she may seek additional time to comment on or respond to the information.

    3) The main issue of review, being the judgment for RMB2.4M against the applicants, was not heard in its entirety. In fact, the applicants had not even been given the opportunity to adduce evidence that the judgments have been set aside and stayed.

    In the circumstances of the above, we note that significant time is required for the applicant to address the interpretation issue (by engaging an accredited interpreter to put on evidence of the error); to address the issues of the loans (which overlaps with the Tribunal's current requests); and to adduce further evidence, by hearing or via written materials, addressing the RMB2.4M judgment, or the lack thereof.

    Thirdly, the applicant had just recently switched representatives in these matters, and it is our submission that it is in the best interests of justice to allow the applicant further time to prepare his response.

    Finally, and should the Tribunal is of the view that an extension should not be granted, we have been instructed to provide the following response to the Section 359 invitation:

    - The applicants do not owe money to Lianyungang Dongfang Rural Credit Union and Lianyungang HongZhan Investment guarantee. The relevant judgments, if any, have been set aside and stayed. We have been instructed that official documents and primary materials relating to these proceedings would be provided to the Tribunal once they have been prepared. Any proceedings, where applicable, were otherwise vexatiously commenced, and further evidence in the form of primary materials will be adduced in support of this.

    - the RMB6.7M loan taken up by Jiuchuang from DRCU is not outstanding. The relevant judgments, if any, have been set aside and stayed. We have been instructed that official documents and primary materials relating to these proceedings would be provided to the Tribunal once they have been prepared.  Any proceedings, where applicable, were otherwise vexatiously commenced, and further evidence in the form of primary materials will be adduced in support of this.

    - the RMB3M loan taken up by Hai Bo is not outstanding. The relevant judgments, if any, have been set aside and stayed. We have been instructed that official documents and primary materials relating to these proceedings would be provided to the Tribunal once they have been prepared. Any proceedings, where applicable, were otherwise vexatiously commenced, and further evidence in the form of primary materials will be adduced in support of this.

    - No loan documents were signed by any of the clients in 2013. Further, no loan is outstanding. The relevant judgments, if any, have been set aside and stayed. We have been instructed that official documents and primary materials relating to these proceedings would be provided to the Tribunal once they have been prepared. Any proceedings, where applicable, were otherwise vexatiously commenced, and further evidence in the form of primary materials will be adduced in support of this.

    - Of the various court actions identified in the invitations: the court actions from Bank of Communications and China Construction Bank arose as a result of the writs on the applicants' properties, which caused by the rest the vexatious court proceedings; Xiaoming LI is, in fact, Jianhong LI's elder brother, and that this proceeding was commenced as a result of internal family dispute that is not relevant to the present review; and the court actions commenced by Lianyungang DongFang Rural Commercial Bank and HongZhan Investment are, as set out above, set aside and stayed. In the circumstances, we note that there is no non-disclosure of information by the applicants to the Tribunal, albeit we confirm that these would need to be substantiated by evidence and to be tested at hearing, which the applicants are actively preparing.

    - In relation to Hai Bo, the applicants did advise the Tribunal that Hai Bo was one of their businesses, and that there was no non-disclosure of information relating to Hai Bo. Further, and by reference to the recording of the Tribunal hearing, the Presiding Member never put it to the applicant, nor invited to applicant to comment on whether he was a controller of HaiBo.

    Finally, and again by reference to Section 359AA of the Act, the applicant was neither put on notice of the Tribunal's interests in Hai Bo, nor did the Presiding Member give to the applicant clear particulars of the information that the Tribunal considers would be the reason, or a part of the reason, for affirming the decision that is under review, nor did the Presiding Member ensure that the applicant understands why the information relating to Hai Bo is relevant to the review, and the consequences of the information being relied on in affirming the decision that is under review, nor advise the applicant that he or she may seek additional time to comment on or respond to the information relating to Hai Bo.

    - in relation to the suggestion that the applicants left China owing business debts, we have been instructed to submit that the applicants do not, as a matter of fact, owe any business debts in China, albeit and again, the relevant materials, evidence and information are currently being prepared for the Tribunal's review.

    - in the entirety of the response above, we submit that there is no evidence before the Tribunal to suggest that the applicants had engaged in unacceptable business activities.

19. On 26 November 2020 the applicant’s Solicitor/advisor provided:

    §Shuonan Zhao, Solicitor, statutory declaration regarding conversation held with PSB,

    §Annie Wang, Solicitor, statutory declaration she was present during phone call

1. On 22 February 2021 the applicant’s Solicitor provided 2 submissions and the following documents that had not been provided previously:

   • Transcript of 21 November 2019 hearing
   • Statutory Declaration by interpreter regarding “interpreting errors”
   • Copy of letter in Mandarin accompanied with English translation from Xiaoming Li, cousin of 1^st applicant dated 14.01.21 that the debt to him is repaid
   • Second applicant’s statutory declaration 22.02.21, explaining their business model and alleging that DCRU bank [B4] lawyer contacted her and threatened to make their migration pathway difficult;
   • First applicant’s statutory declaration 5.12.20,
   • copies of media release in Mandarin accompanied with English translation - Lianyungang Dongfang Rural Commercial Bank profile, history, awards, and responsibility concept in Mandarin with its English translation
   • Article “Lianyungang Yuanzhoulv company boss suspected of loan fraud and runaway” –dated 2012.09.11 in Mandaring with its English translation;
   • Article “Owner of Lianyungang Private Enterprise ran away after failing in Real Estate investment, many banks were involved” – dated 24.07.19
   • “Jiangsu private company boss suspected of loan fraud and runaway, five state-owned banks and local banks involved” – copy of article dated 2012.09.10
   • Criminal Case Acceptance Registration Form against Chen Wang and Lin Cheng
   • Lianyungang city Haizhou District People’s Court – Enforcement Ruling dated 14.09.16;
   • Lianyungang city Haizhou District People’s Court Enforcement Decision dated 20.05.17
   • Lianyungang Haibo Mechanical and Electrical Equipment Co Ltd Equity Transfer Agreement  dated 27.02.12
   • Kiangsu Province Lianyungang Administration of Industry and commerce Notification of Approval of Change of Company Details dated 28.02.12; business licence dated 28.02.12;
   • Liangyungang City Haizhou District People’s Court, Civil Judgment dated 19.12.14
   • Civil Judgment 2016 in Mandarin with its English translation dated 29.03.14;
   • Civil Judgment 2018 in Mandarin with its English translation dated 25.04.18;
   • Share transfer agreement dated 08.02.21 with transferor Yucheng Yin dated 27.03.12;
   • Share transfer agreement dated 08.02.21 with transferor Jianhong Li dated 27.03.12;
   • Lianyungang administration for Industry and Commerce, Jiangsu Province Notice of Acceptance for Company Registration Variation dated 31.05.12,
   • Lianyungang Administration for Industry and Commerce, Notice of Granting Company Registration Variation dated 31.03.12
   • Business licence for Legal Entity
   • Lianyungang Intermediate People’s Court, Jiangsu Province Civil Ruling dated 03.03.16
   • Lianyungang city Haizhou District People’s Court Civil Judgment 2018  dated 31.07.18
   • Legal Complaint against 1^st applicant, 2^nd applicant and Lianyungang Guangkai Real Estate Development Co Ltd  by Lianyungang Branch of China Construction Bank Corporation dated 12.10.13
   • Notification of Completion of Case Enforcement 2017 dated 02.06.17
   • Haizhou District People’s Court Case Conclusion Form printed on 05.11.20
   • reply to the survey letter of Jiangsu Ward Law Firm by PSB
   • Legal advice by Yi Zhang of China Jiangsu Mingliang Law Firm, undated

2. On 13 April 2021 the applicant’s Solicitor/advisor provided:

   • Statutory Declaration of 1^st applicant dated 12 April 2021
   • Letter from Solicitor with further supplementary submissions about fresh evidence,
   • Summary of arguments
   • Guarantee contract dated 05.05.11
   • Fraudulent seals
   • 2011 already repaid
   • Yin and Li were not involved in the 2012 loan
   • Discovery Order, Investigation Order dated 30.03.21;
   • Repayment record, transfer cheque sealed on 25.05.12
   • Copy of Loan, Bank acceptance Bill Issuing Contract dated 25.11.11;
   • Copy of Loan, Bank acceptance Bill Issuing Contract dated 25.05.12;
   • Counter guarantee with Hong Zhan signed on 22.11.11

3. At a 2^nd Tribunal hearing held on 4 August 2021, the Tribunal requested the applicant’s adviser to explain the comments made in correspondence to the Tribunal, ‘the AAT’s procedural oversight in conducting the First Hearing’. The adviser responded that the submission was lodged by the applicant’s previous Solicitor. The Tribunal confirmed the previous Solicitor worked at the same legal firm. She said that she could not comment.

4. For clarity, the Tribunal drew to the adviser’s attention that a Tribunal hearing is inquisitorial and it is for the Tribunal to explore the applicants’ claims. The Tribunal explained that asking the applicant questions during a hearing was not necessarily adverse information and did not require the use of s.359AA.

5. The Tribunal asked the applicant if any of the documents provided were fraudulent, as DFAT has assessed that the prevalence of fraudulent documents in China is high in migration matters. He confirmed that the documents were not fraudulent.

6. The Tribunal put to the applicant that he has given guarantees to banks as his companies have borrowed from a number of different institutions. He said that he did not provide any guarantees, it is a 2 step thing. Since March 2011 he was operating 2 businesses. The Tribunal asked, in relation to each business, who he obtained the loans from. He said that he obtained loans for Lianyungang Jiuchuang Trading, this company was the applicant for a 163 visa in 2008. He borrowed RMB 2 millon from Jiuchuang in bank and he repaid the loan every year. In March 2011 he obtained a loan from DongFang bank of RMB 7 million. He also obtained another loan of RBM 3 million from ICBC and he repaid that loan, but he does not remember when he paid off the loan. Before he transferred the business in March 2012, he refinanced RMB 7 million loan in March 2011. During refinancing he paid RMB 0.3 million to the bank and the remaining loan is RMB 6.3 million. As for loan from Jiuchuang bank, when he transferred the business, that loan was due within the term of the loan. The other company is Heibo company and it has 3 loans, one loan was obtained from ICBC in April 2011 of RMB 5 million and from Jiuchuang bank in June 2011, the loan was RMB 5 million. Also, another loan of RMB 3 million was obtained in October 2011. Asked when the loans were paid out, he said he is not sure as he was not the one operating it and it was the new legal person who was doing this. As for the loan from Jiuchuang bank, he did the refinance and it was transferred in March 2012. He sold the Heibo company on 28 February 2012 and Jiuchuang company was sold end of March 2012.

7. Put to the applicant that at T1 hearing, the Tribunal had been concerned about  a lack of tax returns. He responded that because he already transferred the company to the new owners, he had given all the documents over. He said he does not have any tax record in China in first 2 years. He has been living in Australia since end of March 2012.  Put he should have lodged returns for himself and his companies. Put that the returns were requested was there some reason not provided, he said that he was not sure.  

8. Asked what tax records he lodged when in China. He responded that he does not know what has been lodged. It is individual payroll for company. Since 1990 he lodged tax returns. When he was in China his income was from the company. In China the personal income is from wages. Asked when he lodged income returns for his company, while he operated it was lodged since May 2006. His personal income did not reach the threshold. Asked if his company paid tax, he said that it did. He lodged a company tax return every year. Asked when the last time was that he lodged a return, he said that before he transferred the company before end March 2012 and end of February 2012. Asked when he paid the tax that was liable, he said that there were 2 main components VAT and other tax, he paid every month. Another component is income tax and it is paid yearly at the end of the year. When he transferred the companies, he gave the purchaser the tax file, he had paid the VAT for the month and the new owner paid the tax in the year of sale. Asked who prepared his taxation returns, he said that it was his accountant. Asked why he did not provide to Tribunal his tax returns he said that all the tax files at transfer were forwarded to purchaser. If he is required to obtain them, he will need to return to China to do so but last time he made the application as he was not legal person of company, he is not authorised to obtain that information.  Also, in letter from AAT it does not specify that the year was 2011 and 2012 so he thought it was 2018 and 2019 returns that were required, he misunderstood. Asked why he would misunderstand as he was not in China then, he responded yes that is why he misunderstood.

9. The adviser said that the company is still running and they though it was for last 2 years of trading and the company is still running. When they made enquiry for business registration the company has not been dismissed or cancelled.

10. The Tribunal asked the applicant how he knows the company is still running he said he does not know, it was put to him his adviser she just stated that the company was running. The applicant that said when they made enquiries for the company business registration, it showed that the company had not been dismissed or cancelled.

11. Discussing the fraud with the applicant, he said that Wang Chen and Cheng Lin defrauded him. He sold the company to them before he realised, they cheated him. It was put that he had sent copies of newspaper reports they had fled to USA. Asked why he would think that the company was continuing to trade, if they had gone to USA, as claimed. He said it is not claimed it is trading but he looked at business registration, he is not sure whether or nor it is operating or not.

12. The Tribunal explained that he was asked at first Tribunal hearing about the tax returns of his company and it would show the Tribunal who he had borrowed money from and what the financial situation of the company was for 2 years whilst he was in control of that company. The Tribunal put that he was aware of the Tribunals’ concern regarding the lack of taxation information about his company. The Tribunal explained the difficulty accepting that both he and his adviser presumed that the Tribunal was interested in the tax information of the company in 2018 and 2019 when he had nothing to do with the company. The Tribunal asked for the reason why he cannot provide taxation returns for the last 2 years that he was in control of that company. He responded that this company has been transferred to new legal persons. To obtain 2011 and 2012 the tax office will not give him the information as he is not the legal person of that company and he has no power or authority to get it. He gave the new owner all those documents including tax information prepared by his accountant. He does not know who is the legal person for these companies and he does not know where to find this information.

13. Asked if Chinese authorities do not give information about a person without their authority. He responded yes. The Tribunal that on that basis the police would also not give information about a person without their authority. He said he does not know if that is the case about police, but it is about tax.

14. When put to the applicant that neither he nor his wife had reported Cheng and Wang  to police until 2016 and asked who did report them, he said that he reported to police before 2016 when he received the court notice. At that time his wife was in China and she went to the bank to obtain loan information and then she discovered all stamps were fraudulent, she notified the business unit of police and was told it had nothing to do with them as the company was transferred. She listened to the police and then went home. When his wife made an enquiry for the company, she no longer was the legal person. In the court hearing the Chinese court did not accept their claim that it was fraudulent so they lost the case. They asked the prosecution to lodge an appeal. Prosecution advised them to report to police. Police found it is a fraud. The court stopped the execution of the court order against him.

15. The report made in 2016 to the police was made by a family member, with their authorisation. Asked when his wife was last in China, he said that he does not remember clearly.  Asked if his wife’s travel back to Australia in 2016 was via Vietnam, he said no it was Korea.  She went that way because she had a friend there and went to visit.

16. The Tribunal asked the applicant why he has not provided letters from any of the banks, on their letterhead, that he has repaid the loans. He said that he repaid loans, asked if he had made any enquiries to obtain letters from the banks, he said that he had repaid part of the loans.  

17. Asked if he has made any enquiries from the banks for correspondence that he does not owe them money. Asked if he received any correspondence or receipts. He said that there are no such requirements in China. He said that he did not obtain the confirmation. The Tribunal put to him the issue before the Tribunal is whether he has repaid loans and owes debts to banks. Asked if he made any enquiries from any banks to confirm that he does not owe them money. He said he did not obtain confirmation. In China it is decided by the court if he owes them money. It was put that Solicitors usually act on behalf of banks to get their money back. Asked if he has been contacted by any Solicitor about money he owed to banks.  He said a Solicitor contacted him through another person and threatened him. He  explained that they contacted his wife, not him and said if he does not pay the money, he will not have success in immigration as they will write to Immigration Department. Asked when this occurred, he said that it was in 2014, should be 2015 or 2016. Asked what they did about this, he said they just ignored them. Asked if he did not enquire about which debt it was alleged that he owed, he said that because he did not owe any money, they can sue him.

18. Put that when he stated in his declaration “when DRCU first commenced proceedings against us, their lawyer did contact me, and told me words to the effect that I should pay up, or they would make our migration pathway difficult.” It was put that this declaration was not truthful as he has stated to the Tribunal that they contacted his wife. He said to his understanding they are together, so that when they contacted his wife, it is contacting them because they are a family.

19. Asked how much he had invested in Australia from China when he first came to Australia.  He said that it should be RMB 5 million. Asked from which bank he had transferred the monies to invest in Australia, he said that he used different banks as there is a limit to transfer, it was $us50 000 per transfer so he used 3 or 4 banks. He used the Bank of China, Bank of Communication and Bank of Constructions.

20. Asked when he borrowed from ICBC [Industrial and Commercial Bank of China] he said that  from ICBC Jiuchuang  borrowed from them in 2011/2009 RMB 3 million. Haibo borrowed in April 2011 and it was RMB 5 million. When he transferred Haibo, this loan was transferred and it was to be paid back in April 2012. Asked if he repaid to himself any of the loan from ICBC, he said no. He repaid RMB 3 million loan of Jiuchang to ICBC when he owned the company.  The RMB 5 million loan of Haibo was transferred before the term of loan was to be paid. This loan should be due when the new legal person should be operating and he has heard the loan has been paid. He spoke to one of his clients who told him in small talk, it was at the end of 2013/2014 when they were sending new year greetings. Asked how the person had that information, he said that the person is the Deputy GM of the company Jiangsu Jiabao Pipe Manufacturer. He was also the one to help the applicant to obtain a loan from the bank. This loan was obtained when Haibo obtained an order for RMB 7.5 million. This company making the order did not want to pay the money in advance so they asked the manager Shen to help them to get a sponsor to obtain a loan from ICBC. To obtain a loan from ICBC, the bank required a sponsor company recognised by them to minimise risk. When the loan was due the amount of money was paid back to the bank.

21. Asked about when he borrowed from the Bank of China, he said that he did not borrow money from Bank of China. Asked if he or his company had borrowed from that bank or had an account in that bank, he said that he did not borrow from them, his company did not have an account. He then said he had an account with the Bank of China, but did not borrow any money from them.

22. The Tribunal asked if he knows any Public Security Bureau [PSB] officers. He said he does not. His wife should know some. In terms of loan from Bank of China when he purchased his car, he got a loan from Bank of China. In terms of knowing PSB officers he does not know nor does his wife know PSB officers. But after this incident and when they reported to police, they knew the officer in the business investigation and security team. It was officer Fu. He did not do anything and told him details and he authorised his relatives to report to police. Later another Officer Lee contacted them for information. He contacted them after the incident in 2016. He is not quite sure if he contacted his wife, but maybe it was in 2019. This officer is the new officer and he just wanted to see where the victims are.

23. Wang and Chen went to US in August 2012. They found out from the newspaper and internet. Asked if they were aware of any action taken, after August 2021, regarding Wang and Chen. He said they established the case and carried out the investigation. Asked when the case was, he said that he obtained the information from the court, he said that it was multiple times, last year and this year. The court cases involving Wang and Chen have not been finalised yet. The whole process and details of the fraud is still under investigation. He is not quite sure of that.

24. The Tribunal spoke to Xiaoming Li in China via telephone. Asked what he has been asked to tell the Tribunal he said that the applicants had a law case in the family, it was about domestic violence and it ended up with RMB 1.2 million owing.  It was the 2^nd applicant that owed him money. It was an inheritance dispute. They have now resolved it.   

25. The Tribunal provided a copy of s.376 certificate to the applicant’s adviser, who appeared not to have a copy of the certificate. The Tribunal discussed the s.376 certificates and s.359A letter. The Tribunal noted that the s.359A letter did not cover all the folios referred to in that certificate and advised the applicant that the Tribunal was of the view the certificate was valid but it intended to provide the gist of the information as follows:

    Documents at folios 7b-1a, 208 of BCC2018/417560 are documents in Chinese and  folios 214b-209a are repeat documents. As they are not translated the Tribunal cannot rely on them.

    Documents at folios 70b-67 of  BBC 2018/417560 are notification by the Department of a person of interest form and summarises the allegations. It also notes reasons for decision not to cancel the visa. Documents at folios 108b-108a of  BBC 2018/417560 refers to Department processes regarding finalisation of visas and are not relevant.

    Documents 138a-139b of BBC 2016/1995932 refer to Department internal processes and referral to Cancellation Division. These documents are not relevant to the Tribunal decision.

26. The Tribunal advised the applicant pursuant to s.359AA the following documents would be the reason or part of the reason for affirming the decision under review. The applicant was explained that he could seek an adjournment to respond, or respond in writing, or he could respond immediately. The Tribunal explained that documents 152b-139a of BBC 2016/1995932 are allegations that applicants owe ICBC Industrial and Commercial Bank of China and Bank of China millions RMB. Chinese courts have ordered them to return to China to face charges. They are banned from leaving China. The 2^nd applicant fled to Australia via Vietnam using different travel document. Lenders have issued legal letters to demand repayment. They have used borrowed funds and transferred them illegally to Australia and used them for personal benefit. The applicants were advised that the relevance of these documents are that they suggest that the applicants are dishonest in their business dealings, by utilising borrowed money from financial institutions, transferring the money to Australia and using the money for their own purposes in Australia. The Tribunal explained that such practices are not generally acceptable in Australia and the Tribunal may find that as a consequence the applicants do not meet the criteria for the visa.  

1. The applicant requested to respond in writing and the Tribunal granted additional time to do so.

2. A post-hearing submission by the applicant stated as follows:

   We refer to the hearing held on 05 August 2021. At the conclusion of the hearing, the Tribunal

   orally gave the Review Applicant the following particulars that may form part of the reason for

   affirming the decision under review and invited the Review Applicant to comment or respond to the following information:

   a. That there were allegation(s) (source unknown) that Ms Jianhong Li was subject to a Chinese court order restricting her departure from China and that she fled China to Australia through Vietnam using a different name;
   b. That there were allegations that she had existing debts with the Bank of China and the Industrial and Commercial Bank of China; and
   c. That as a result of the above allegations, the Tribunal Member has reason to believe that she took the funds borrowed from the above-mentioned banks for her own personal use.

   2. Should there be any further points which were put to the Review Applicant for comment orally that are not properly covered in paragraphs 1(a) to 1(c), we wish to request the Tribunal Member to provide a further invitation in writing to ensure that the Review Applicant is provided with a reasonable opportunity to respond to all false allegations.

   3. We remind the Tribunal Member of the obligation to ensure that clear particulars of any information are given to the Review Applicant and that the Tribunal should ensure, as reasonably practicable, that the Review Applicant understands why the information is relevant to the review. Thus, should there be any further allegations or points that were not properly conveyed or understood by our Review Applicant at the hearing, we request the Tribunal to issue a written request pursuant to s 359A of the Migration Act 1958.

   4. Such allegations can be easily verifiable via Ms Jianhong Li’s international movement records which the Tribunal Member may request from the Secretary of the Department of Home Affairs.

   5. Nonetheless, we have requested for Ms Jianhong Li and Mr Yucheng Yin’s international

   movement records from the Department of Home Affairs on 11 August 2021. As at the time of

   writing, such records have not yet been released to the Department.

   6. We trust that the records will clearly show the departure and arrivals of both the Review

   Applicants which would refute allegations that Ms Jianhong Li had fled China through Vietnam. Allegations that she had travelled to Australia using different names would also be easily disproved as doing so would result in the movement record only showing a departure and no official entry to Australia.

   7. Should such information not be readily made available to the Tribunal through the Secretary of the Department of Home Affairs, then we wish to request for an extension of time until we are able to furnish the necessary records to the Tribunal. It would be detrimental for the Tribunal to make a decision based on a baseless allegation where evidence could be reasonably made available to the Tribunal should an extension of time be provided. When balancing the detriments caused by giving an extension of time with the dangers of not providing an extension of time, it is clear that a decision not to grant the extension of time would be legally unreasonable as it would lack ‘evident and intelligible justification’ per the case of Minister for Immigration and Citizenship v Li [2013] HCA 18.

   8. To the best of the Review Applicants’ knowledge, they do not have any existing debts with any banks including the Bank of China and the Industrial and Commercial Bank of China.

   9. Once this issue was raised by the Tribunal Member at hearing, they immediately contacted both banks to enquire about the same on the same day. They were verbally advised that they did not have any outstanding nor overdue debts however to obtain written evidence would require the person in question to attend the branches in China in person. Please refer to the statutory declaration.

   10. Given the difficulty for international travel since March 2020 due to the COVID-19 pandemic, the Review Applicants have not been able to return to China since their last visit and it would be unreasonable to expect the Review Applicants to travel during this time to obtain such evidence as it would mean:

   a. They would have to suffer risks of exposure to the COVID-19 virus during the international travel;

   b. They would have to enter into quarantine;

   c. They would have to pay exorbitant fees for commercial flights;

   d. They would face uncertainties with any booked flights as many are cancelled or delayed;

   e. They would not be able to return to Australia for the foreseeable future until the

   Australian borders are open; and

   f. If they were unable to return to Australia for the foreseeable future, there would be no one to manage the business and other affairs in Australia on a day to day basis.

   11. The Review Applicants are open to returning to China to obtain such written evidence as soon as reasonably practicable or when the borders re-open.

   12. On the other hand, the Review Applicants have engaged their lawyer in China to make enquiries with the courts of China to see whether there are any outstanding court cases made against either of the Review Applicants by either banks.

   13. It can be confirmed from this enquiry that neither Review Applicants have existing court matters initiated by the Industrial and Commercial Bank of China Limited and Bank of China Limited.

   14. This in turn confirms that the Review Applicants do not have any existing debts with both banks as there would have been sufficient time for the banks to initiate any court cases to reclaim any debts the Review Applicants would have had with them (if any) given the Review Applicants have left China since approximately 2012.

   15. If the Tribunal Member is unable to make a favourable decision on the basis of the enquiries made by the lawyer in China then we wish to, similarly, request for an extension of time for the Review Applicants to return to China in person to obtain the written evidence from both banks. Given the extraordinary circumstances of the COVID-19 pandemic, we submit that it would be within reason to grant the extension of time to the Review Applicants to obtain such information required to completely refute the allegation before the Tribunal.

   16. We also note that this allegation was newly put before the Review Applicants at hearing and the they always had an understanding that they did not have any existing debts with either banks. The evidence submitted previously have also confirmed that any previous court cases involving    the Review Applicants and the banks have all been terminated.

   17. This allegation stems from the first two issues.

   18. However, as submitted above, the Review Applicants do not have any debts with either banks nor had the Review Applicants fled to Australia with funds borrowed.

   19. Furthermore, all bank loans were conducted as part of normal business practice in China as explained at hearing. These were either fully repaid whilst the Review Applicants were still in control of the business or properly transferred to purchasers of the business with full knowledge if they had not yet matured at the time they sold their business.

   20. The evidences previously submitted would also confirm that any loans of the companies

   previously owned by the Review Applicants had been repaid and court cases chasing debts were discontinued/terminated.

   21. We submit that the follow-up evidence we are in process of obtaining for Issue 1 and Issue 2 would be sufficient to clarify that the Review Applicants had not engaged in inappropriate business practices nor used funds borrowed for their personal use.

   22. As provided above, should the current evidence be insufficient for the Tribunal Member to make a favourable decision, then we wish to request for an extension of time to obtain and provide:

   a. International movement records; and

   b. Written confirmation from banks that there are no existing debts.

3. A statutory declaration, by the applicant, dated 17 August 2021 stated that the applicant , on 5 August 2021 had called the Bank of China and the Commercial Bank of China by telephone and was advised that in order to obtain a statement from the Bank that he did not have any outstanding debts he had to attend in person and produce his ID, despite being overseas.

4. A Letter from Jiangsu Mingliang Law Firm attesting to making enquires to the Bureau of Enforcement of Intermediate People's Court of Lianyungang Municipality, Jiangsu Province and the Bureau of Enforcement of Haizhou District People's Court of Lianyungang Municipality on August 05, 2021 in relation to cases of execution application by Industrial and Commercial Bank of China Limited and Bank of China Limited. No case was found.

5. An additional response was received stating as follows:

   Namely, with reference to the false allegations that Ms Li had fled China using different names through Vietnam:

   1.Stamps in the client’s passports shows that she left China on 28 March 2016 and entered Korea on 29 March 2016;

   2.The travel itinerary shows that Ms Li then travelled back to Australia on flights SQ609 and SQ241 with a stopover in Singapore on 30 March 2021.

   3.The movement record of the Department of Home Affairs then shows that she entered Australia through flight SQ241 on 31 March 2021.

   Clearly, based on the attached evidence, false allegations were made against Ms Li that she fled China using different names through Vietnam. All her past travels were on the same passport (G4709489) with records of stamps in the same passport.

   Nevertheless, should the Tribunal still have underlying concerns, we request that an extension of time be provided to the Review Applicants to provide written evidence from the named banks to confirm that they do not have any existing debts (or loans) with the banks. We also note that we are still awaiting Mr Yin’s movement record should that also be required.

   REASONS AND FINDINGS

6. The issue in the present review is whether the applicants meet the criteria in cl.890.216 of Schedule 2 to the Regulations. Clause 890.216 states:

   890.216      Neither the applicant nor his or her spouse or de facto partner (if any) has a history of involvement in business activities that are of a nature that is not generally acceptable in Australia.

7. In considering whether the applicants have a history of involvement in business activities that are of a nature that is not generally acceptable in Australia, the Tribunal has considered PAM 3 for guidance. Pam 3 states:

   This criterion should generally not be considered satisfied if the applicant (and/or their spouse or de‑facto partner) has been involved in business activities or business practices that are:

   ·    outside the generally accepted social or cultural norms of most persons in Australia

   ·    likely to be offensive to large segments of the Australian community or

   ·    otherwise likely to give rise to controversy were the applicant to enter Australia as the holder of a Business Skills Class of visa.

   Some examples of business activities or practices that may not be considered acceptable include:

   ·    contravention of government laws (for example, quarantine, tax evasion)

   ·    criminal convictions relating to business activities

   ·    serious disregard of industry, licensing and regulations

   ·    fraudulent trade practices

   ·    Foreign Investment Review Board violations or

   ·    not providing ‘fair pay’ for employment.

   The unacceptable business activity or practice should be more than a minor, one‑off event for such activities or practices to constitute ‘a history’.

8. The Tribunal accepts that vagueness or inconsistencies in recounting peripheral details should not impugn credibility. The Tribunal also accepts that there may be inconsistencies caused by interpreting problems, differences in business practices, cultural differences, etc. 

9. The issue in this review is whether or not the applicants, and or their companies of which they were Directors aka controllers, Lianyungang Jiuchuang Trading Co. Ltd [company 1] and Hai Bo Electrical Equipment Co [company 2], left China without paying their debts or were Directors of companies that did not pay their debts and/or defrauded banks in China.

10. In China, personal liability can be imposed on those who serve corporate roles in the company if such a company commits serious wrongdoings or illegal activities[1]. Therefore, I am of the view that were individuals, who are company Directors, to commit wrongdoings such as not repaying debts that fall due or contravene government laws such a taxation laws, despite the Corporate veil, such Directors’ activities are likely to be offensive to large segments of the Australian community or otherwise likely to give rise to controversy were an applicant to enter Australia as the holder of a Business Skills Class of visa.

    [1]

11. It is claimed that the applicants, either personally or through their companies, borrowed from the following financial institutions, some of whom the applicants claim were known by different names that are noted below:

    §Lianyungang Eastern Agricultural Business Bank Pty Ltd aka Lianyungang Eastern Rural Commercial Bank Pty Ltd

    §Lianyungang Hongzhan Investment Sponsorship Pty Ltd aka HongZhan Investment Guarantee aka LongZhan Investment aka HongZhan Investment Guarantee Co., Ltd

    §Jiangsu Donghaizhang Rural Commercial Village and Town Bank aka Village and Town Bank aka Donghai Agriculture and Business Township Bank.

    §Lianyungang Orient Rural Commercial Bank aka Lianyungang DongFang Rural Commercial Bank aka Lianyungang Dongfang Rural Credit Union [DRCU] or Dongfang

    §Bank of China

    §China Construction Bank

12. It is opined by the applicants, in a submission to the Tribunal, that company 2 was never utilized, in anyway whatsoever, for the applicants’ visa application. It has had never been a subject of interest for the Department, nor the AAT, until the invitation dated 22 October 2020. The applicant claims he did disclose his business interests in company 2, as company 2 is engaged in the business of air compressors. It is claims that company 2 does not owe any malicious debt whatsoever to anyone to warrant any form of disclosure to the Tribunal. The applicant provided information to the Department regarding company 2. The Tribunal has assessed the application before it, based on all the information it has received regarding the applicants’ business dealings in China. The Tribunal is satisfied that Company 2 is relevant in the overall assessment of the applicant’s business activities in China.

    Section 376 Certificate

13. At the first Tribunal hearing the applicant’s then advisor, discussing the s.376 Certificate, requested that the Tribunal provide the s.376 Certificate information to the applicant by s.359A invitation. The Tribunal did so. At a 2^nd hearing the Tribunal provided a copy of the s.376 certificate to the applicant’s new advisor. 

14. The s376 Certificate referred to Department files and folios

    §BCC2018/417560 folios 219b-216a, 215, 214b-209a, 208, 186b-174a, 172b-172a, 168b-168a, 108b-108a, 70b-67, 54, 53, 9, 8b-8a, 7b-1a

    §BBC 2016/1995932, folios 138b-130a, 152b-139a

15. Some of these folios are duplicates. The s.376 Certificate certified that the disclosure would be contrary to the public interest because the material pertains to an allegation of a criminal nature and may put the informant at risk.  The Certificate was signed and dated. The Tribunal finds that the certificate is valid.

16. The Tribunal has discretion under s.376 to disclose the information on the file. The Tribunal is of the view that  the s.376 Certificate contained a valid ground not to disclose the folios covered by the certificate ie that the document, the matter contained in the document, or the information was given to the Minister, or to an officer of the Department, in confidence under s.376(1)(b).

17. Documents 7b-1a, 208 of BCC 2018/417560 are documents in Chinese and appear to be duplicates of some documents provided. Documents under folios 214b-209a are duplicate documents.  As folios 70b-67 of  BBC 2018/417560 and folios 108b-108a of  BBC 2018/417560 refer to Department processes regarding finalisation of a visa, the Tribunal finds that none of these documents are relevant to this decision.  Documents held on folios 138a-139b of BBC 2016/1995932 referred to internal processes. The Tribunal also finds that none of these documents are relevant to the review.

18. The Tribunal provided adverse particulars of the information to the applicant, pursuant to s.359A and s.359AA. The adverse information so provided was covered under folios 8a-8b, 9, 53, 54, 1 68b-168a, 172b-172a, 1886b-174a, 215 and 219b-219a of BCC2018/417560. Documents 152b-139a of BBC 2016/1995932 are allegations that applicants owe ICBC [Industrial and Commercial Bank of China] and BOC [Bank of China] millions of rmb. It was claimed that Chinese courts have ordered the applicants to return to China to face charges. It was claimed they are banned from leaving China. It was also alleged that the 2^nd applicant fled to Australia via Vietnam using a different travel document. Lenders have issued legal letters to demand repayment. The applicants have used borrowed funds and transferred them illegally to Australia and used them for personal benefit.

19. The Tribunal put to the applicant the adverse information regarding the information covered by the s.376 Certificate by s.359A and s.359AA, as discussed below.

    Taxation Records

20. A tax return is a form or forms filed with a tax authority that reports income, expenses, and other pertinent tax information. In most countries, tax returns must be filed annually for an individual or business with reportable income, including wages, interest, dividends, capital gains, or other profits.  According to PWC[2] China's tax year runs from 1 January to 31 December, but tax filing is generally administered on a monthly basis. For unintentional errors (e.g. calculation errors) committed by the taxpayer/tax withholding agent in the tax filing, the statute of limitations is three years and extended to five years if the amount of tax underpaid is CNY 100,000 or more. There is no statute of limitations for tax evasion, refusal to pay tax, or defrauding of tax payment.

21. Enterprises[3] are required to file and pay provisional income taxes on a monthly or quarterly basis within 15 days following the end of each month/quarter, and file and settle their annual income tax return within five months after the end of the tax year, together with an audit certificate of a registered public accountant in China. Information on related-party transactions must be filed with the annual income tax return. Despite bringing to the applicant’s attention, at a Tribunal hearing in November 2019, the Tribunal’s concerns regarding the absence of taxation records for the applicants’ companies and a lack of response regarding a request for taxation information by s.359, the applicant has not provided any taxation information.

22. The applicant’s explanation for the absence of tax records or returns is that the applicant has sold his shares in the companies,, of which he was a Director/shareholder, and is unable to obtain those documents from China. The Tribunal accepts that the taxation authorities would not provide information to the applicants about any of the companies after the applicant’s ownership has been transferred. The Tribunal has no information before it to suggest that the Chinese Taxation Department would not provide information to the applicant or his accountant for copies of documents lodged whilst the applicants were Directors/controllers of the company. The applicant confirmed to the Tribunal that he had an accountant in China who prepared his taxation returns and he also claims that he submitted returns. He claims that he handed over all his taxation documents to the purchaser. He also advised that his accountant is still in business, some of his returns are there and some of them are not.  Asked if he has made enquiries about copies of returns, he said that he “does not know”. He does not know much about finances of the business as his wife was in charge. Whilst I accept that the 2^nd applicant was “in-charge” of the finances, I am of the view that it is an invention made in order to explain the lack of taxation records and especially as the applicant was able to discuss at length, at the 2^nd Tribunal hearing, details of loans for both companies suggesting that the applicant was well aware of finances involved with his business dealings in China.

1. At the 2^nd Tribunal hearing the applicant explained that he misunderstood the s.359 letter and thought that the Tribunal required the 2018 and 2019 company taxation returns. The s.359 request states:

   Details of tax compliance for the last 2 years of trading by the applicants’ Chinese companies

   [2]

   [3]

100.   The applicant said that the request did not ask for years 2011 and 2012 so he thought it was 2018 and 2019 returns that were required, he misunderstood. Asked how he could misunderstand, as he was not in China then, he responded “yes that is why he misunderstood”.

101.   The adviser explained that they thought the company was still running. The applicant, after some discussion, stated that he did not know that the company was trading, although he was aware that the business registration was still in effect. The Tribunal does not accept that the applicant or his Solicitor would have been of the belief that the Tribunal sought information about the applicant’s company taxation returns at a time when the applicant had no connection with the company, was in Australia and 2018/9 returns are not relevant to the criteria the Tribunal is assessing.  The Tribunal is of the view that it is a late invention made to overcome the lack of taxation records.

102.   The Tribunal was advised by the applicant that neither he nor anyone else could obtain bank confirmation regarding discharge of his company mortgages, without attending the banks in China personally. Also he could not obtain copies of his companies taxation returns from the taxation Department for the period when the company was under his direction and control as its Director.  It was claimed that neither his representatives nor his lawyers were able to do so either. Yet, the applicant’s lawyers were able to obtain a document from PSB [police] without the applicant attending personally and providing his ID. The Tribunal has no information before it to suggest that personal attendance only is required to obtain one’s personal information from Chinese financial institutions and government departments. The Tribunal does not accept the applicant’s explanation as plausible.

103.   The Tribunal also does not accept, as plausible, that the applicant or his accountant would not have copies of his financial documents, especially as the applicant stated at the 1^st Tribunal hearing that some of his returns were with his accountant and some of them are not. Therefore, the Tribunal rejects the applicant’s explanation that he needs to travel to China to personally show his ID to the taxation authorities in order to obtain taxation information. The Tribunal is of the view that it is a late invention, made in order to explain the lack of taxation information. The Tribunal places great weight on the lack of information regarding the applicant company’s taxation liabilities, especially as the applicant was put on notice by the Tribunal in November 2019 of its concerns regarding taxation records.  

Correspondence from Chinese Lawyers

104.    The applicant claims that he owes no debts and court actions have resolved that the applicants have no liability regarding debts of their companies to a number of banks.

105.   A letter from Zhang Lei, Solicitor of Jiangsu Mingliang Law Firm dated 28 October 2019 attests to making enquires to the Bureau of Enforcement of Intermediate People's Court of Lianyungang Municipality, Jiangsu Province and the Bureau of Enforcement of Haizhou District People's Court of Lianyungang Municipality on 5 August, 2021 in relation to cases of execution application by Industrial and Commercial Bank of China Limited and Bank of China Limited. No case was found. The letter does not contain the address or the contact details of the Solicitor nor does the Solicitor provide any information as to his qualifications or expertise. The Tribunal places no weight on this letter.

106.   The applicants have provided a Legal Opinion from a Zhang Lei Solicitor of Jiangsu Lingliang Law Firm entitled ‘Legal Opinions Regarding How to Interpret 2013 H.Z.Z. No. 0515-4 Enforcement Ruling’. The document purports to explain Chinese law and states the “when the police arrest the fugitives it is undisputed that the court is going to convict them. It is undisputed that the court will revoke Lianyngang Haizhou People’s Court (2012) HSCZ No 0786 Civil Judgement”.  As the fugitives have not been arrested or been before a court the comments made are mere speculation. The letter does not contain the address or the contact details of the Solicitor nor does the Solicitor provide any information as to his qualifications or expertise. The Tribunal places no weight on this letter.

107.   An advice by Yi Zhang of China Shanghai Fangben (Lianyungang) Law Firm, undated, advised that the applicants personally were joined by the Eastern Rural Commercial Bank to a legal action against their companies and the Bank had no legal basis to do so. Further, the court rejected the Bank’s commencement of proceedings. The advice alleges that the bank used civil proceedings to divert the attention away from its individual staff members who potentially committed crimes and the bank can carry out malicious lawsuits  to create obstacles for the applicants in the process of migration. They were of the view that any guarantees had no legally binding effect and the bank would be unsuccessful in litigation against the applicants personally. The undated letter does not contain the address or the contact details of the lawyer nor does the lawyer provide any information as to his qualifications or expertise. The Tribunal places no weight on this letter.

Loans no longer owing

108.   The 1^st applicant claimed, in his subclass 163 visa application, to be the Owner/General Manager and Director of Lianyungang Jiuchuang Trading Co. Ltd [company1].  The 2^nd applicant claimed, in her subclass 163 visa application, to be its Legal Representative/Financial Director.

109.   The delegate’s decision referred to the applicants being involved in 2 court actions. Litigation 1 was with the Lianyugang Eastern Agricultural Business Bank Pty Ltd [B1] who obtained a verdict against the company for over rmb 1 million. The applicants claimed and the Tribunal accepts, that litigation 1 was withdrawn. The Tribunal accepts that the loan was repaid.

110.   The Tribunal accepts that the debt the 2^nd applicant owed to her brother, Xiaoming Li has been repaid.

Actions by Fraudsters

111.   The applicant’s claim that they were victims of fraud perpetrated by Chen Wang and Lin Cheng [fraudsters].

112.   The applicants claim that they applied for a loan from Jiangsu Donghaizhang Rural Commercial Village and Town Bank aka Village and Town Bank aka Donghai Agriculture and Business Township Bank, but did not proceed with the loan.  Unbeknownst to them at the time, Wang Chen and Cheng Lin privately engraved their company's official seal, financial professional seal and legal person's seal on documents and applied for 3 million RMB acceptance bills (half-year period) from the lender.

113.   On 31 March 2012, the applicants sold their equity in the company 1 to Cheng Lin who appointed Zhang Xiaohong (Lianyungang Industrial and Commercial Bureau company change documents) to be the person-in-charge. In August 2012, the 2^nd applicant discovered that their company had an outstanding loan and the court ruled in favour of the lender against the company and the applicants. The applicants claim that they decided to appeal, their lawyer’s letter was lost and they missed the deadline for appeal. They filed a protest in 2015, after dealing with other litigation in Australia, and reported the fraud, by Wang Chen and Cheng Lin, in June 2016. 

114.   The applicants claim that on 27 July 2016, the PSB [Public Security Bureau] of Lianyungang confirmed that Wang Chen and Cheng Lin were suspected of loan fraud and on 14 September 2016 the court suspended enforcement against the applicants.

115.   The Tribunal has considered a document entitled ‘Reply to the Survey Letter of Jiangsu WARD Law Firm’ dated 27 July 2016 provided by the PSB.  It purports to advise that Chen Wang and Lin Cheng were investigated by the PSB for accusation of loan fraud, illegal absorbing public deposits in 2012 and they are at large. Upon investigation, it was stated that “partial capitals involved in the case are correlated to the loan of Lianyungang Jiuchuang Trading Co. Ltd”. The Tribunal presumes that this means Chen Wang and Lin Cheng were involved in the fraud of a bank loan entered into by the applicant’s company.

116.   The Tribunal has considered a statutory declaration by Shuonan Zhao, Solicitor, who attests to ringing the PSB, from Australia, and confirming the fraudsters were responsible for the loan. Annie Wang, Solicitor, attests to being present during that call. He further attests to obtaining the telephone number from his client and then, by his own research, confirming the genuineness of the number. No information has been provided as to the type of research conducted.

117.   The applicant attests to Chinese authorities and financial institutions requiring the personal presence of a person, with their ID, in order to be provided with any personal information. The applicant has provided a document from PSB that contains personal information that was not obtained personally by applicant but by the applicant’s lawyers in China. The Tribunal has considered this evidence and on balance is not persuaded that the PSB would provide documents to the applicants when their investigations, as claimed by the applicants were ongoing and were not provided to the applicants personally.   

118.   The Tribunal has considered a translated internet article provided by the applicant, dated 10-9-2012, that referred to Wang Chen who with his wife Cheng Lin fled China owing multiple bank loans.  Whilst the Tribunal accepts that these people fled China and were fraudsters in China, there is no information in the article regarding these people defrauding the applicants. The Tribunal places no weight on this document.  

119.   DFAT advises in its 2017 Background Report on China, that replaced its March 2015 Report and is relevant to the 2016 year,  that it is aware of sophisticated syndicates that provide targeted background stories to support fraudulent documents used in visa applications. When it was put to the applicant that the prevalence of fraudulent documents in China is high in migration matters, the applicant did not agree with the Tribunal’s view. 

120.   In light of the above information, the Tribunal is not satisfied, on balance, that Wang Chen and Cheng Lin have defrauded the applicants.

Mortgage debts owing to Banks by the applicants’ companies

121.   The Tribunal has considered information regarding the applicants’ claims that they do not owe any mortgage debts personally, as they were not guarantors and their companies, of which they were Directors/Controllers/Shareholders were sold and any liability the company owed was transferred to the new Directors/Controllers/Shareholders. The applicants provided court records confirming their claims. Further, it is claimed that the banks maliciously commenced unfounded legal proceedings against the applicants.

122.   The applicant’s response when put to the applicant, in August 2021, that no information had been provided from any of the Banks that the loan debts had been discharged, said that he did not obtain confirmation, and in China it is decided by a court if money is owed. The Tribunal has no information before it to suggest that in China only courts decide if money is owed to the mortgagee and that banks do not provide confirmation of discharge of debts to them. Asked if he had been contacted by a Solicitor that he owed money to a bank, he said that he had been contacted by a Solicitor, through another person who contacted his wife, and he was threatened. This was in 2014 or 2015 or 2016. The Tribunal accepts the applicant’s claim that he just ignored the bank’s Solicitors.

123.   Post Tribunal hearing the applicant advised the Tribunal that he had contacted the banks, by telephone, and was verbally advised that he did not have any outstanding debts but to obtain such information he would be required to personally attend the bank and this was not possible due to COVID. The Tribunal does not accept as plausible that the banks would provide him with any information over the telephone regarding his indebtedness of otherwise if, in fact, as claimed he had to attend the bank personally with his ID to obtain information. The applicant sought further time to return to China in person. The Tribunal has not consented to an adjournment for the applicant to return to China as the Tribunal is of the view that the applicants have had since 2017, when they lodged the application for review, to obtain all evidence required and have been on notice that the issue before the Tribunal was whether or not they and or their companies had discharged the financial liabilities of their companies to the banks from who they had borrowed large amounts of money.  

Conclusion

124.   The Department was informed that the applicants were banned from leaving China. The Tribunal has no evidence before it to support this claim and does not rely on this information in the assessment of the claims.

125.   The applicants have claimed that they have discharged all their legal liabilities to various banks when they sold their companies. When civil proceedings were commenced against the applicants, they were victims of fraud and the banks maliciously commenced unfounded legal proceedings against them. The Tribunal is not satisfied, as stated above that the applicants were defrauded by fraudsters.

126.   The applicants have been put on notice since the Department refusal of the visa in 2017 that repayment of their company’s debts and their own debts was a relevant issue in the assessment of the visa application.  The Tribunal has considered whether the provision of court decisions is sufficient evidence to persuade the Tribunal that the liability of the applicants and their companies have been discharged. The Tribunal places weight on the absence of any documentation whatsoever to evidence the claimed mortgage liabilities of the company, and the applicant’s personally, to various banks and also the discharge of those liabilities. Whilst the Tribunal has placed weight on the court  documents, in light of the Tribunal’s findings that the applicants were not defrauded by fraudsters and the lack of confirmation from the banks that debts to them have been repaid or resolved, on balance the Tribunal is not satisfied the applicants have discharged all their debts and liabilities in China.

127.   The Tribunal accepts that there is a corporate veil in China. But the Tribunal does not accept that this absolves the Directors/Controllers of a company from meeting financial and taxation obligations required.

128.   The Tribunal is not satisfied that the applicants’ companies, of which the applicants were Directors, have lodged the appropriate taxation returns and have met taxation compliance in China. The Tribunal places great weight on this lack of information.

129.   The Tribunal is satisfied that not lodging taxation documents and not resolving debts are unacceptable business activities or practice and the Tribunal is not persuaded that these business activities are a one-off event. The Tribunal is satisfied that it would constitute a 'history'.

130.   The Tribunal finds that the lack of taxation compliance and lack of resolution of business debts are activities that are outside the generally accepted social or cultural norms of most persons in Australia, and otherwise likely to give rise to controversy were the applicants to enter Australia as the holders of a Business Skills Class of visa.

131.   The Tribunal is therefore not satisfied that the applicants meet cl.890.216.

DECISION

132.   The Tribunal affirms the decision to refuse the applicants a Subclass 890 Business Owner visa.

Lilly Mojsin
Member

890.21—Criteria to be satisfied at time of application

890.211

(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.

890.212

The assets of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, in the main business or main businesses in Australia:

(a)  have a net value of at least AUD100 000; and

(b)  had a net value of at least AUD100 000 throughout the period of 12 months ending immediately before the application is made; and

(c)  have been lawfully acquired by the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together.

890.213

In the 12 months immediately before the application is made, the applicant’s main business in Australia, or main businesses in Australia together, had an annual turnover of at least AUD300 000.

890.214

In the period of 12 months ending immediately before the application is made, the main business in Australia, or main businesses in Australia, of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together:

(a)  provided an employee, or employees, with a total number of hours of employment at least equivalent to the total number of hours that would have been worked by 2 full‑time employees over that period of 12 months; and

(b)  provided those hours of employment to an employee, or employees, who:

(i)  were not the applicant or a member of the family unit of the applicant; and

(ii)  were Australian citizens, Australian permanent residents or New Zealand passport holders.

890.215

The net value of the business and personal assets in Australia of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, is, and has been throughout the 12 months immediately before the application is made, at least AUD250 000.

890.216

Neither the applicant nor his or her spouse or de facto partner (if any) has a history of involvement in business activities that are of a nature that is not generally acceptable in Australia.

890.217

The applicant has been in Australia as the holder of 1 of the visas mentioned in paragraph 1104B(3)(d) of Schedule 1 for a total of at least 1 year in the 2 years immediately before the application is made.

890.22—Criteria to be satisfied at time of decision

890.221

The applicant continues to satisfy the criteria in clauses 890.211, 890.215 and 890.216.

890.222

The applicant:

(a)  satisfies public interest criteria 4001, 4002, 4003, 4004, 4007, 4009, 4010, 4020 and 4021; and

(b)  if the applicant had turned 18 at the time of application—satisfies public interest criterion 4019.