Zhang (Migration)

[2023] AATA 3451

Zhang (Migration) [2023] AATA 3451 (15 September 2023)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mr Weijian Zhang
Mrs Xiaofan Zhai
Mr Jiayu Zhang

REPRESENTATIVE:  Ms Shouyi Wu (MARN: 1575315)

CASE NUMBER:  2014863

HOME AFFAIRS REFERENCE(S):          BCC2018/2630631

MEMBER:Bridget Cullen

DATE:15 September 2023

PLACE OF DECISION:  Brisbane

DECISION:The Tribunal remits the applications for Business Skills - Business Talent (Permanent) (Class EA) Subclass 132 visas for reconsideration, with the direction that the first named Applicant meets the following criteria:

·Regulation 1.11 and;

·cl.132.225 of Schedule 2 to the Regulations.

Statement made on 15 September 2023 at 1.50pm

CATCHWORDS
MIGRATION – Business Skills - Business Talent (Permanent) (Class EA) – Subclass 132– applicant has a 34.28% ownership interest – it is a qualifying business – applicant has demonstrated an involvement in the day-to-day management of BFV – decision under review remitted

LEGISLATION
Migration Act 1958, s 65
Migration Regulations 1994, rr 1.03, 1.11, Schedule 2, cl 132.225

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Home Affairs on 16 September 2020 to refuse to grant the Visa Applicant a Business Skills - Business Talent (Permanent) Subclass 132 visa under s 65 of the Migration Act 1958 (Cth) (the Act).

2. The Visa Applicant (“Applicant”) applied for the visa on 13 July 2018. A letter requesting the Applicant submit documents in support of their application was sent to the Applicant on 2 April 2020. The Applicant provided documents in response to this request on 28 April 2020. A request for additional information was sent to the Applicant’s registered migration agent on 4 May 2020, asking for further evidence of the Applicant’s management role in the Company. On 15 June 2020, the Applicant provided a number of documents in support of his argument that he was as evidence of his day-to-day management of the Company in the nominated years. 

3. The delegate refused to grant the visa on the basis that the Company did not meet the definition of main business as described in reg 1.11. Therefore, the delegate was not satisfied that the Applicant satisfied cl 132.225, in maintaining direct and continuous involvement in management of a business (with an annual turnover of at least AUD 3 000 000) for at least 2 of the 4 fiscal years immediately before the time of invitation to apply for the visa.

4. The Applicants appeared before the Tribunal on 17 May 2023 to give evidence and present arguments. The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages.

5. The Applicants were represented in relation to the review. The Representative appeared via Microsoft Teams for the hearing, and made submissions on behalf of the Applicants.

6. For the following reasons, the Tribunal has concluded that the decision under review should be remitted for reconsideration.

   CONSIDERATION OF CLAIMS AND EVIDENCE

7. The issue in the present case is whether the Applicant had maintained direct and continuous involvement in the management of his main business from day to day and in making decisions affecting the overall direction and performance of the business for at least 2 of the 4 fiscal years immediately before the time of invitation to apply for the visa, which were 2016 and 2017.  

8. The Tribunal has before it the following documents which were submitted by the Applicant to the Department:

   ·Bundle of identity documents for the Applicants, including passports, citizen identity cards, resident identity cards, birth certificates, household register, registration cards for permanent residents and marriage certificate, translated into English and certified.

   ·Source of Fund Statement by the first-named Applicant, translated into English, signed, undated.

   ·Beijing Fineter Vessel Co., Ltd Review Report for the quarters ending 31 December 2015, 2016, and 2017, and 31 March 2018, translated into English.

   ·Statement of Assets and Liabilities Position as at 31 March 2018.

   ·Valuation Report for first-named Applicant’s property, dated 22 January 2020.

   ·Organisation Chart for Beijing Fineter Vessel Co., Ltd, translated into English.

   ·Bundle of documents including 4 employment contracts signed by Applicant on behalf of the company, dated 1 July 2015, 1 July 2015, 10 March 2016 and 16 March 2016, 4 Sales Contracts dated 23 January 2015, 20 October 2015 and 26 January 2016, 4 May 2016, signed by the Applicant, 4 Price Lists dated 27 May 2015, 20 June 2015, 25 March 2016, and 10 July 2016, approved by the Applicant; Financial Control System, approved by the Applicant, translated into English.  

   ·Bundles of documents titled Appendices A to M.

   ·Applicant’s response to Departmental request for further information.

   ·Meeting minutes, dated 9 March 2015, 5 June 2015, 16 October 2015, 5 May 2016, 21 September 2016, 12 November 2016, and 4 December 2016, translated into English.

   ·Bundle of documents including 2 Training Records supervised by the Applicant, dated 20 June 2016 and 13 September 2017; Balance sheet dated 31 December 2015, 2 Income Statements dated 31 December 2015 and 2016; Certificate of Shareholding for the Applicant dated 21 May 2020; Various letters of support from Beijing Fineter Vessel Co., Ltd, dated 27 May 2020; Real Estate Registration Information Query Records, Application to the Government of South Australia by the Applicant.

   ·Bundle of documents titled Explanations about Management Participation.

   ·Bundle of documents titled Personal Statement of Successful Business Career, dated 29 May 2020.

   ·Special Purpose Report of Factual Findings for the years ended 31 December 2015, 2016, and 2017.

9. The Applicant submitted the following documents to the Tribunal before the hearing:

   ·Submission from the Applicant’s representative, undated, signed.

   ·Statement by lawyer in China at Allbright Law Offices, undated, signed.

   ·Statement titled Applicant’s Job description in Beijing Fineter Vessel Co. Ltd, in English and Chinese, undated, unsigned.

   ·Statement titled Explanations about Not Conducting Online Marketing Due to Our Company’s Business Nature, in English and Chinese, undated, unsigned.

   ·Beijing Fineter Vessel Co., Ltd Minutes of Shareholders’ Meeting, in English and Chinese, dated 20 October 2017 and 10 June 2016.

   ·4 Appointment letters approved by the Applicant, in English and Chinese, dated 15 January 2015, 20 January 2015, 25 November 2015, and 1 December 2015.

   ·3 Beijing Fineter Vessel Co., Ltd Candidate Interview Records approved by the Applicant, in English and Chinese, undated, signed.

   ·Document titled Incentive Policy for Salesperson approved by the Applicant, in English and Chinese, dated 25 February 2015, signed by the Applicant, translated into English.

   ·Letter of support from Beijing Jingtianbao Stainless Steel Co., Ltd, certified by Lin Zongyi, in English and Chinese, undated.

   ·Letter of support from Beigin Chengxin Shunxing Gas Feedstock Sales Co., Ltd, certified by Yang Zhanjun, in English and Chinese, undated.

   ·Notification of Contract Modifications approved by Applicant, dated 26 April 2015, signed.

   ·3 Product Quality Feedback forms approved by Applicant, in English and Chinese, undated, dated 5 July 2016, and 8 January 2015.

   ·Quarterly Sales Reports approved by the Applicant, in English and Chinese, dated 8 April 2015, 12 July 2015, 15 October 2015, 12 January 2016, 8 April 2016, 5 July 2016, 10 October 2016, and 9 January 2017.

   ·5 Records of Storage Conditions for Welding Consumables signed by the Applicant, in English and Chinese, from 2 February 2015 to 17 August 2016.

   ·8 quarterly Sales Performance reviews approved and signed by the Applicant, in English and Chinese dated 8 April 2015, 10 July 2015, 12 October 2015, 31 December 2015, 12 April 2016, 5 July 2016, 12 October 2016, and 30 December 2016.

   ·8 Warehouse Inventory Lists approved and signed by the Applicant, in English and Chinese, dated 30 March 2015, 30 June 2015, 25 September 2015, 30 December 2015, 31 March 2016, 28 June 2016, 30 September 2016, and 29 December 2016.

   ·Annual Training Programs 2015 and 2016 approved and signed by the Applicant, in English and Chinese.

   ·6 Training Records signed by the Applicant, in English and Chinese, dated 12 January 2016, 20 March 2015, 15 January 2015, 18 November 2016, 16 October 2015, and 8 April 2016.

   ·Statement from Zhao Dongsheng, in English and Chinese, signed, undated.

10. The Applicant submitted the following information post-hearing:

    ·     Statement from the Applicant titled Differences in Business Practice, unsigned and undated.

    ·     Applicant’s Personal Income Tax Payment Certificate, Beijing Tax Bureau, dated Records from Tax Bureau, in English and Chinese, for 2015-2018.

    ·     Applicant’s Personal Interests Record of Beijing Social Security from January 2013 to July 2018, in English and Chinese.

    ·     News article titled During Pandemic Outbreak, Beijing Fineter Vessel Co., Ltd Focuses on Medical Waste Disposal, dated 5 March 2021, in English and Chinese.

    ·     Certificate from Longwan Corporation Chamber of Commerce in Beijing, dated 22 May 2023, in English and Chinese.

    ·     4 letters from suppliers and customers, in English and Chinese.

    ·     4 sales contracts listing the Applicant as legal representative, in English and Chinese, dated 23 January 2015, 20 October 2015, 4 May 2016 and 26 January 2016.

    ·     4 quotations approved by the Applicant, in English and Chinese, dated 27 May 2015, 20 June 2015, 25 March 2016 and 10 July 2016.

    ·     4 employment contracts signed by the Applicant, in English and Chinese, dated 1 July 2015, 1 July 2015, 10 March 2016, and 16 March 2016.

    DECISION

11. The Applicant is a Chinese national, born in 1983, who last arrived in Australia on 10 July 2018, on a Class FA (Subclass 600) Visitor visa. On 13 July 2018, the applicant applied for the Business Skills - Business Talent (Permanent) Subclass 132 visa in the Significant Business History stream that is the subject of the review before this Tribunal.

12. The issue in the present case is whether the Applicant had maintained direct and continuous involvement in the management of his main business from day to day and in making decisions affecting the overall direction and performance of the business for at least 2 of the 4 fiscal years immediately before the time of invitation to apply for the visa.

13. At review the Tribunal is assessing cl.132.225. This subclause states as follows:

    132.225
    For at least 2 of the 4 fiscal years immediately before the time of invitation to apply for the visa, the applicant’s main business, or the applicant’s main businesses together, had an annual turnover of at least AUD 3 000 000.

14. The Applicant nominated the 2016 and 2017 fiscal years as the 2 of the 4 fiscal years immediately before the time of invitation to apply for the visa.

15. These fiscal years related to the Chinese fiscal years ending on 31 December 2016 and 2017.

16. ‘Main Business’ is defined in r.1.11 of the Regulations. The current definition of ‘main business’ applies to visa applications made on or after 19 April 2010 (except in certain limited circumstances). Regulation 1.11 provides that a business is a ‘main business’ in relation to a visa applicant if:

    ·the applicant has, or has had, an ownership interest in the business[1]; and

    ·the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business[2]; and

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

    – if the business is operated by a publicly listed company – at least 10% of the total value of the business[3]; or

    – if the business is not operated by a publicly listed company and the annual turnover of the business is at least AUD400,000 – at least 30% of the total value of the business[4]; or

    – if the business is not operated by a publicly listed company and the annual turnover of the business is less than AUD400,000 – at least 51% of the total value of the business[5]; and

    ·the business is a qualifying business.

    [1] r. 1.11(1)(a)

    [2] r. 1.11(1)(b)

    [3] r. 1.11(1)(c)(i).

    [4] r. 1.11(1)(c)(ii).

    [5] r. 1.11(1)(c)(iii)

    Does BFV satisfy the definition of ‘main business’?

17. To be a ‘main business’, the business must be a ‘qualifying business’. ‘Qualifying business’ is defined in r.1.03 to mean ‘an enterprise that is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public; and is not operated primarily or substantially for the purpose of speculative or passive investment.’

18. The business relied on by the Applicant to satisfy the main business test is Beijing Fineter Vessel Co., Ltd. (BFV). BFV is said to be in the business of designing and manufacturing precision chemical equipment and storage tanks.

19. The Applicant has submitted evidence relating to business activities of BFV to both the Department and the Tribunal. Amongst this evidence is an internet media article, dated 5 March 2021, which has been translated by a Certified Translator. The media article reports:

    Beijing Fineter Vessel Co., Ltd was established in December 2004. It primarily engages in the business of environmental protection equipment, filtration and purification equipment, pressure vessels, and customized equipment. It is a national-level high-tech enterprise. Our newspaper had the opportunity to visit and report on Beijing Fineter Vessel Co., Ltd. in the early years we had a brief discussion with Mr. Zhang Weijian, the Vice General Manager of the company. At that time, Beijing Fineter Vessel Co., Ltd. was just starting its medical waste disposal system. Over the years, the company has undergone significant changes in various aspects. Therefore, in the context of the current pandemic, we are looking forward to conducting an interview and report on Beijing Fineter Vessel Co., Ltd.

20. At the hearing, the Applicant explained that BFV’s products include large, pressurised equipment, such as oil containers and oxygen bottles, and gave evidence about the nature BFV’s specialised equipment manufacturing, explaining that a license is required to produce this equipment. BFV serves a nice market, consisting of business factories, and relies upon referrals from customers to expand its business. The Applicant said that given BFV’s target customer base, it does not maintain a large internet presence. The Tribunal is satisfied based on the evidence that BFV is a qualifying business as defined in r.1.03 and for the purposes of satisfying r.1.11(1)(d).

    Does the Applicant have an ownership interest in BFV?

21. As the Tribunal has identified the business and that it is a qualifying business, the next question in determining whether the Applicant meets the definition of ‘main business’ is whether the Applicant has, or has had, an ownership interest in the business as required by reg 1.11(1)(a).

22. Regulation 1.03 provides that ownership interest has the meaning given to it in s.134(10) of the Act. The definition of ownership interest in relation to a business as defined in s.134(10) of the Act means an interest in the business as:

    ·a shareholder in a company that carries on the business, or

    ·a partner in a partnership that carries on the business, or

    ·the sole proprietor of the business;

    including such an interest held indirectly through one or more interposed companies, partnerships or trusts.

23. BFV was formed as a company in May of 2005. In August of 2009, BFV’s registered capital was increased to RMB 11.18 million, at which point the Applicant became a 4.29% shareholder of BFV. Then in September of 2009, the Applicant transferred the entirety of his shareholdings elsewhere. In November of 2014, the Applicant again became a shareholder in BFV, with a 34.28% shareholding. The remaining shareholdings were split equally between the General Manager Mr Dongsheng, and the other Vice General Manager, Mr Qiuming.

24. The Tribunal observes that the delegate accepted that the Applicant has a 34.28% ownership interest in BFV, based upon the translated financial documentation. There is no basis on which the Tribunal would find otherwise, and therefore concludes that r.1.11(1)(a) is satisfied.

    Direct and continuous involvement in management

25. The Applicant must maintain, or have maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business. A mere passive shareholder in a company that carries on the business would not satisfy reg 1.11(1)(b), nor would a silent partner in a partnership that carries on the business.[6] Similarly, an applicant’s presence in another country may impact on his or her ability to satisfy a decision maker that this requirement is satisfied.

    [6] MIAC v Hart (2009) 179 FCR 212 at [17].

26. There are a variety of ways in which a person might maintain direct and continuous involvement in the management of a business and in making decisions affecting its overall direction and performance.[7]

    [7] Lobo v MIMA (2003) 132 FCR 93 at [63].

27. The question of whether an applicant has demonstrated an involvement in the management of that business from day to day and in making decisions that affected the overall direction and performance of that business, is a matter of fact for the Tribunal. The factors which the decision-maker is bound to consider are not expressly stated and must be determined by implication from the subject matter.[8]

    [8] Ibid.

28. The documentary evidence before the Department did not satisfy the delegate that the Applicant maintained direct and continuous involvement in management of BFV from day-to-day and in making decisions affecting the overall direction and performance of the business in the years nominated for consideration (2016 and 2017).

29. The Applicant has provided evidence to the Tribunal that was not before the delegate, as set out above, and has given evidence explaining his involvement in BFV on a day-to-day basis.

30. The Applicant says that he was the Vice General Manager of Beijing Fineter Vessel Co., Ltd. (BFV) between November of 2014 and July of 2018. In this role, the Applicant says that he was responsible for the overall management of the Company, which had 101 staff.

31. The organisational chart provided to the Department indicates that, at the top of BFV’s management structure was the General Manager (Zhao Dongsheng). The Applicant and a Zhao Qiuming served underneath the General Manager, in the capacity of Vice General Managers. Excluding the General Manager, and both Vice General Managers, the reporting line for the remaining 98 staff was:

    • 87 staff worked under Deputy General Manager (also referred to as the Vice General Manager), Zhao Qiuming; and
    • 11 staff worked under the Applicant (also Deputy General/Vice General Manager).

32. The Applicant has provided the Tribunal with a Certified Translation of a letter from the Longwan Corporation Chamber of Commerce in Beijing, which says that:

    This is to certify that Mr. Zhang Weijian (ID card no: 330304198308040039) was a registered member enterprise in Longwan Corporation Chamber of Commerce in Beijing between 2014 and 2018. According to our record, information registered for his enterprise was: Beijing Fineter Vessel Co., Ltd and his position was: Vice General Manager of Beijing Fineter Vessel Co.,Ltd.

1. The Applicant has provided several sales contracts, as well as letters from suppliers and customers, as evidence of his involvement in BFV. The letters, which have been translated by a NAATI Certified Translator from the original Chinese documents, are from the following entities:

   ·Langfang Best Crown Packing Machinery Co., Ltd;

   ·Polida Science & Trade Co., Ltd;

   ·Beijing Jingtianbao Stainless Steel Co., Ltd; and

   ·Beijing Chengxin Shunxing Gas Feedstock Sales Co., Ltd.

2. The Applicant’s evidence is that he was extensively involved in management of the:

   • Sales Department;
   • Finance Department;
   • Human Resources Department; and
   • BFV’s warehouse.

3. The Applicant gave evidence that his responsibilities included setting sales targets and plans; reviewing quotations and customer contracts; liaising with customers; approving expenses; managing cash flow and receivables; controlling inventory; and human resources functions such as conducting job interviews and approving leave. As the other Deputy/Vice General Manager, Mr Qiuming, was involved in running another company, he was not involved in the running of BFV.

4. The Applicant explained that the General Manager, Mr Dongsheng, was responsible for BFV’s strategic and operational plans; as well as all of the external engagement; and the product development. The Applicant explained that most of BFV’s employees were involved in the technical aspects of product development, and as Mr Dongsheng had relevant qualifications, he was best suited to this aspect of BFV’s enterprise.

5. The Tribunal acknowledges the delegate’s concern that apart from being a shareholder, that there was no public facing information evidencing a connection between the Applicant and BFV, observing that:

   “I note from the historical changes of the Company listed on the official website
   of the State Administration of Industry and Commerce that you were never listed as one of the high level management personnel of the Company.”

6. However, there is now more objective evidence before the Tribunal, as well as a common-sense explanation from the Applicant about this issue. The nature of BFV’s operations do not lend themselves as readily to internet marketing, given the niche industry of BFV’s operations. The Tribunal accepts the oral evidence given by the Applicant about the nature and scope of his duties.

7. Further, there is no reasonable basis on which the Tribunal could find that the documentary evidence now before it is not of a genuine nature. The Tribunal places some weight on the NAATI Certified Translations, which indicates that the translator cited the original Chinese documentation. The BFV customer letters filed in the Tribunal by the Applicant corroborate the Applicant’s evidence about the level and nature of his involvement in BFV.

8. The Tribunal has obtained the Applicant’s Australian “movement records” outlining his travel to and from Australia. The Applicant did travel to Australia during the nominated 2016 and 2017 years – he arrived on 18 January 2017 and departed on 9 February 2017; and then arrived on 28 October 2017 and departed on 3 November 2017. Both of these visits are of a short holiday duration, consistent with the purpose of the Subclass 600 visitor visa then held by the Applicant. These visits do not cause the Tribunal to be concerned that the Applicant’s time in Australia was a distraction from his ability to be involved in the day-to-day management of BFV.

9. The Tribunal has considered the evidence cumulatively and has formed the view the applicant has demonstrated an involvement in the day-to-day management of BFV and in making decisions that affected the overall direction and performance of that business, in both 2016 and 2017, and more broadly during the rest of the Applicant’s time employed with BFV. The Tribunal is therefore satisfied that r.1.11(1)(b) is met.

   Ownership interest - Regulation 1.11(1)(c)

10. Next, the value of the Applicant’s ownership interest, or the total value of the ownership interests of the Applicant and the Applicant’s spouse or de facto partner, in the business must meet certain thresholds:

    ·if the business is operated by a publicly listed company, the value of the ownership interest must be at least 10% of the total value of the business[9]; or

    ·if the business is not operated by a publicly listed company and the annual turnover of the business is at least A$400,000, the value of the ownership interest must be at least 30% of the total value of the business[10]; or

    ·If the business is not operated by a publicly listed company and the annual turnover of the business is less than A$400,000, the value of the ownership interest must be at least 51% of the total value of the business.[11]

    [9] r. 1.11(1)(c)(i)

    [10] r. 1.11(1)(c)(ii)

    [11] r. 1.11(1)(c)(iii)

11. Financial statements for the nominated years of 2016 and 2017 reveal a reported 2016 turnover of RMB 21.66m (AUD 4.31 million) and a reported 2017 turnover of RMB 28.98m (AUD 5.7 million). The financial statements have been prepared by Count on Me Financial Group Pty Ltd, which is a registered company tax agent in good standing with the Australian Tax Practitioners Board.

12. As per the findings in paragraph [23] – [24], above, the Tribunal is satisfied that the Applicant has maintained a continuous a share holding of 34.28%. Furthermore, the Applicant provided copies of BFV’s financial statements for the Chinese fiscal years ending 31 December 2015; 31 December 2016; and 31 December 2017. The Tribunal is satisfied that these financial statements, prepared by Count on Me Financial Group Pty Ltd, cover 2 of 4 fiscal years immediately before the time of invitation to apply for the visa. The Tribunal is further satisfied that in both nominated fiscal years (2016 and 2017), BFV had an annual turnover of at least AUD 3,000,000. In 2016, BFV’s annual turnover was $4,314,229 and in 2017 the annual turnover was $5,704,064.

13. Based on the Applicant’s shareholding, along with the turnover of the business, the Tribunal is satisfied that r.1.11(1)(c)(ii) is met.

    CONCLUSION

14. The Tribunal has found that all relevant subclauses in r.1.11 are met.

15. Additionally, the Tribunal is satisfied that cl.132.225 of Schedule 2 of the Migration Regulations are met by the Applicant, it is therefore appropriate for the Tribunal to remit the matter to the Department to consider the remaining criteria for the grant of the subclass 132 visa.

16. The Tribunal finds that as the second and third named Applicants applied based on being a member of the family unit of the first named Applicant, their applications will be determined by reference to the outcome of the first named Applicant's application on remittal to the Department for reconsideration.

    DECISION

17. The Tribunal remits the applications for Business Skills - Business Talent (Permanent) (Class EA) Subclass 132 visas for reconsideration, with the direction that the first named Applicant meets the following criteria:

    ·Regulation 1.11 and;

    ·cl.132.225 of Schedule 2 to the Regulations.

    Bridget Cullen
    Senior Member