Zhang (Migration)
[2023] AATA 2750
•10 August 2023
Zhang (Migration) [2023] AATA 2750 (10 August 2023)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANTS: Mr Hui Zhang
Mrs Fang Qi
Mr Pei Zhang
Miss Qixin ZhangCASE NUMBER: 2015648
HOME AFFAIRS REFERENCE(S): BCC2016/2490288 BCC2017/3556513
MEMBER:Peter Ranson
DATE:10 August 2023
PLACE OF DECISION: Brisbane
DECISION:The Tribunal affirms the decision not to grant the visa applicants Business Skills (Residence) (Class DF) visas.
Statement made on 10 August 2023 at 3:46pm
CATCHWORDS
MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 892 (State/Territory Business Owner) visa – ownership interest in the main business – net business and personal assets over $250,000 – business was actively operating – day-to-day management of the business – qualifying business – Business Activity Statements included in the application – property assets – time of decision criterion – decision under review affirmed
LEGISLATION
Administrative Appeals Tribunal Act 1975, s 2A
Migration Act 1958, ss 65, 134
Migration Regulations 1994, Schedule 2, cls 892.211, 892.212, 892.213, 892.214, 892.221, 892.321; rr 1.03, 1.11
CASES
Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Fernando v Minister for Immigration and Multicultural Affairs (2000) 97 FCR 407
Ibrahim v Minister for Immigration and Citizenship [2009] FCA 1328
Lee v Minister for Immigration and Citizenship [2009] FCA 977
Minister for Immigration and Citizenship v SZNVW [2010] FCAFC 41
Minister for Immigration and Citizenship v Le [2007] FCA 1318
Nasirzadeh & Ors v Minister for Immigration & Anor [2019] FCCA 1115
Shahpari v Minister for Immigration and Border Protection [2016] FCCA 513
Yang v Minister for Immigration and Border Protection [2014] FCCA 1576
STATEMENT OF DECISION AND REASONS
Contents
APPLICATION FOR REVIEW
CONSIDERATION OF CLAIMS AND EVIDENCE
A note about policy
Why did the delegate refuse the application?
Ownership interest in main business
Does Henry have an ownership interest in the auto parts business at all relevant times?
Was the auto parts business actively operating at all relevant times?
Does the auto parts business satisfy the ‘main business’ definition?
Australian Business Number and Business Activity Statements
Business activities
Requirements relating to assets and employment
Net business and personal assets
UDA Motion Parts Pty Ltd
Cash assets
Property assets
Investments
CONCLUSION
DECISION
ATTACHMENT - LEGISLATION
Migration Regulations 1994
1.03 Definitions
1.11 Main business
1.11A Ownership for the purposes of certain Parts of Schedule 2
Migration Act 1958
134 Cancellation of business visas
APPLICATION FOR REVIEW
Mr Hui Zhang, known as Henry, and his family are from China. They came to Australia in October 2012. Henry has an auto parts business there and he set up a similar business operated by his company UDA Motion Parts Pty Ltd when they came to Australia.
Henry and his family are seeking to satisfy the criteria for the grant of Subclass 892 (State/Territory Business Owner) visas, as set out in Part 892 of Schedule 2 to the Migration Regulations 1994 (Cth). At least one member of the family unit must satisfy the primary criteria set out in Subdivision 892.2. Henry is the primary visa applicant. The others need only to satisfy the secondary criteria set out in Subdivision 892.3. The secondary applicants applied based on being members of Henry’s family unit.
The applicants applied for the visas on 29 July 2016. Their application was refused for failure to satisfy cl.892.212(c), that is, their net business assets were found to be less than $75,000 at the required time. On 8 May 2019, the Tribunal, differently constituted, found that requirement was met. The delegate accepts that finding so this decision will not retest that criterion.
On 1 October 2020, a delegate of the Minister for Home Affairs to refused for a second time to grant the visa applicants Business Skills (Residence) (Class DF) visas under s 65 of the Migration Act 1958 (Cth) because Henry did not satisfy the requirements of cl.892.212(b) of Schedule 2 to the Regulations as the evidence provided showed the net business and personal assets were less than $250,000 at the required time. Henry then applied for review of that decision.
The delegate again found the secondary applicants could not be granted Subclass 892 visas, as they did not meet the primary criteria, nor did they meet the secondary visa criterion (cl.892.321) requiring them to be members of the family unit of a person who met the primary visa criteria.
A number of witnesses appeared at the hearings and provided favourable character references for Henry and his family however none were able to provide evidence about their business or assets.
For the following reasons, the Tribunal has decided that the decision under review should be affirmed.
CONSIDERATION OF CLAIMS AND EVIDENCE
A note about policy
Where a general policy exists to guide the decision maker in exercising its powers, the Tribunal “will ordinarily apply that policy in reviewing the decision, unless the policy is unlawful or unless its application tends to produce an unjust decision … cogent reasons will have to be shown against its application”.[1]
[1] Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, 645 (Brennan J).
To the extent the Tribunal has considered policy in this case, it has not applied it inflexibly and has only considered it to the extent the policy is consistent with the requirements as set out in the legislation as it would be an error of law for the Tribunal to state it must (emphasis added) follow what policy says concerning the scope or meaning of a provision in the Act or Regulations.
Why did the delegate refuse the application?
UDA Motion Parts Pty Ltd operates an auto parts business. UDA also traded for a short time under the business name ‘UDA Fresh’ however that business never eventuated and does not form part of this decision. Henry has held a 100% ownership interest in UDA with his wife since 03 October 2012.
The department considered and was not satisfied cl.892.212 was met. That criterion has three parts to it. The first part is about employment, and Henry does not seek to satisfy that sub-clause. That leaves net business assets of $75,000, and net business and personal assets of $250,000, all of which must have been held for at least 12 months before the application was made and lawfully acquired. This Tribunal has previously found Henry satisfied cl.892.212(c) concerning net business assets, so only cl.892.212(b) will be tested in this review.
The delegate concluded Henry’s net business and personal assets were less than $250,000 as required. As one of the necessary criteria for the visa was not met, the delegate refused to grant the visa.
The issue in this case is whether the net business and personal assets were at least $250,000 for the 12 months from 26 July 2015 to 25 July 2016 and at the time of this decision.
Given this application was lodged seven years ago and has once before been considered and remitted by this Tribunal, this review will first test cl.892.211, including whether the business activity statements were included in the application, then cl.892.212(b) then cl.892.213 then cl.892.214. Clause 892.221 will also be tested.
Ownership interest in main business
Clause 892.211(1) requires the applicant had an ownership interest in one or more actively operating main businesses in Australia for at least two years immediately before the visa application was made and continued to have that interest at the time the visa application was made. The applicant must continue to satisfy this requirement at the time of this decision.[2] No more than two businesses can be nominated for this purpose.[3] One or both businesses relied on to meet the time of application criterion can be relied on to meet the time of decision criterion.[4]
[2] cl 892.221(a).
[3] reg 1.11(2).
[4] Yang v Minister for Immigration and Border Protection [2014] FCCA 1576.
Case law has established a business is not a legal entity but rather an enterprise or undertaking.[5] It is therefore important for the Tribunal to identify the business to which the definition of main business must be applied. It is also important to note that one business can be owned by multiple entities and conversely, multiple businesses can be owned by one entity. For the avoidance of doubt, an Australian Business Number attaches to an entity, not to a business.
[5] Ibrahim v MIAC [2009] FCA 1328 at [30].
The business relied on by Henry to satisfy these requirements is an auto parts wholesaler and retailer operated by UDA Motion Parts Pty Ltd (ACN 160 609 067). Accordingly, the Tribunal must consider the nature of Henry’s interest in the auto parts business, whether it was actively operating and whether it met the ‘main business’ definition in the period commencing two years immediately prior to the date of application and as at the date of application. The Tribunal must also consider these issues as at the date of this decision and whether the applicant continues to satisfy cl.892.211(1).
As the application was lodged on 29 July 2016, the relevant period, being the two years immediately before the application was lodged, is 29 July 2014 to 28 July 2016.
Does Henry have an ownership interest in the auto parts business at all relevant times?
An ‘ownership interest’, in relation to a business, 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.
Ownership interest includes an interest held indirectly through one or more interposed companies, partnerships or trusts.[6] Ownership for this purpose includes beneficial ownership if it is evidenced in accordance with the terms of reg 1.11A of the Regulations, set out in the attachment to this decision.[7]
[6] reg 1.03 of the Regulations and s 134(10) of the Act.
[7] reg 1.11A(1).
To meet cl.892.211(1) the Tribunal must be satisfied Henry had an interest of this kind in the auto parts business at the time of making his application and for the two years immediately before. To meet cl.892.221(a) the Tribunal must be satisfied Henry continues to satisfy this requirement at the time of this decision.
It is uncontroversial Henry has held a 90% interest in UDA from registration on 3 October 2012. The other 10% was originally held by his late wife and now by his current wife, Ms Qi, known as Jenny. He gave evidence at the hearing he started the auto parts business based on a similar business he owns in China. That is, he did not purchase the business.
Accordingly, the Tribunal is satisfied Henry did have and does have an ownership interest in the auto parts business at all relevant points in time because of his ownership of UDA.
Was the auto parts business actively operating at all relevant times?
To meet cl.892.211(1) the Tribunal must be satisfied the auto parts business was actively operating both at the time of making the visa application and during the two years immediately before. To meet cl.892.221(a) the auto parts business must continue to be operating at the time of this decision.
The term ‘actively operating’ is not defined in the Act or Regulations. In considering whether this requirement is met, the Tribunal may consider whether the business exhibited activity of a ‘repetitive, continuous and permanent character’ at the relevant times, in which the business actively sought to generate business, in fact generated trade and custom and derived some financial gain for its activities in the relevant period.[8]
[8] Shahpari v Minister for Immigration and Border Protection [2016] FCCA 513 at [71].
Given the application was lodged on 29 July 2016, the best evidence of actively operating are the financial statements for the year ended 30 June 2016 and the comparatives for the year ended 30 June 2015. Henry said the financial statements provided with the application were later found to be incorrect. Amended financial statements were prepared by PG Accountants Pty Ltd of Box Hill in Melbourne who describe themselves as Certified Practicing Accountants. Given the professional obligations placed on members of the accountancy bodies, the Tribunal is prepared to accept at face value the amended financial statements.
Those financial statements reveal the following trading results:
30 June 2016 30 June 2015 Sales 213,609 29,276 Cost of sales 149,645 20,562 Gross profit 63,965 8,714 Other income 8,203 8,174 Expenses (26,839) (25,586) Net profit 51,227 (11,213)
Part 1 of the department file includes several photos of Henry and Jenny meeting with customers and prospective customers, stock in the warehouse they rented, and attendance at trade shows, such as the Australia Auto Aftermarket Expo. UDA leased commercial premises in Thomastown in Victoria for three years with a further term of three years available at their option. Products were shipped using Couriers Please and AirRoad, which is a logistics business. This was confirmed by Henry in a statement dated 2 May 2016 included in the application.
Henry explained at the hearing he owns an auto parts business in China called Qingdao USN Control System Co Ltd. USN is owned by Henry and his late wife and whilst there is some conjecture as to the ongoing operations of USN due to family conflict in China, nonetheless Henry is the majority shareholder in it. He arranged an export agreement whereby USN would supply auto parts to UDA. This agreement is verbal and ongoing, which is common between businesses owned by the same person.
On 25 June 2019, Henry wrote to the delegate about the ongoing operation of the auto parts business and said:
‘We continue to do auto parts business after we apply for 892 visa on Aug.16 Please see the attached of sale invoices and business emails. During 16-17 financial year our customers sell inventory and do not need to import more auto parts. During 17-18 financial year we are planned to import more than $180,000 the same as 15-16 financial year if our situation is normal. But our visa of 163 are due on 28/June/2017 and Refusal notification is received on 25/Aug./2017. Auto parts are high quality in Australia market.
We should often travel to China for organizing production and check quality before shipment to Australia. We have to suspend importing auto parts during 17-18 financial year.
The Brisbane house was bought on Jan. 16. Our warehouse is in Melbourne. We often travel to Melbourne to deal with business after then.
The business is successful. We would develop and import auto parts for servicing customers in future.’
The Tribunal finds the auto parts business was actively operating during the two years immediately before the application was made because sales were made from leased commercial premises, plus the product supply agreement with USN.
After the second refusal of his application on 1 October 2020, Henry suspended the auto parts business temporarily. By then COVID-19 lockdowns in both China and Australia were fully implemented and business conditions deteriorated substantially. Sales ground to a halt and the GST registration was cancelled to remove the requirement to prepare and lodge BAS each quarter.
The presence of sales is an obvious and compelling indicator of an actively operating business however the absence of sales is not in and of itself conclusive a business is not actively operating. The business has an active website ( and whilst it is basic, it nonetheless demonstrates the business is open to the public. The leased commercial premises in Thomastown were vacated once the Brisbane residence was purchased as it has a large garage which is used as the storeroom for the business. Further, the export agreement between USN and UDA remains in place.
The Tribunal finds the auto parts business remains actively operating because it has a warehouse facility and an active website.
Accordingly, the Tribunal is satisfied the auto parts business was and is actively operating at all relevant points in time.
Does the auto parts business satisfy the ‘main business’ definition?
To satisfy the requirements of cl.892.211(1), the auto parts business relied on by Henry must meet the ‘main business’ definition at the time of application and during the two years immediately before. Clause 892.221(a) requires Henry to continue to satisfy this requirement at the time of decision. The term ‘main business’ is defined in reg 1.11 of the Regulations and is set out in full in the attachment to this decision. There are four elements to the definition, each of which must be satisfied for a business to be a main business.
Firstly, the applicant must have or have had an ownership interest in the business. In considering this issue, the ownership interest does not need to be continuous or exist at a particular time.[9] ‘Ownership interest’ is defined in s 134(10) of the Act.[10] If a beneficial interest is relied on for these purposes, certain evidentiary requirements must also be met.[11] These provisions are set out in full in the attachment to this decision.
[9] Ibrahim v Minister for Immigration and Citizenship [2009] FCA 1328 at [32], considering similarly worded criteria in cls 845.213 and 845.221.
[10] reg 1.03
[11] reg 1.11A.
Secondly, 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.
Thirdly, 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.
·if the business is not operated by a publicly listed company and the annual turnover of the business is at least $400,000, the value of the ownership interest must be at least 30% of the total value of the business.
·If the business is not operated by a publicly listed company and the annual turnover of the business is less than $400,000; the value of the ownership interest must be at least 51% of the total value of the business.
Finally, the business must be a qualifying business. ‘Qualifying business’ is defined as 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.[12]
[12] reg 1.03.
The Tribunal has already established Henry has a 90% interest in the auto parts business and with Jenny they hold 100% of it. On that basis, the first and third elements of the main business definition are met.
Henry explained in his submissions and at the hearing he is the managing director of UDA responsible for making sales and buying stock, including from USN. Jenny runs the warehouse, picks and packs the orders and arranges delivery. Only Henry and Jenny work in the business, which is confirmed by the financial statements which show no wages expense. Accordingly, the Tribunal is satisfied the second element of the main business definition is met as Henry 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.
As shown above, the auto parts business was profitable in the 2016 financial year. We know it sells its products to the public, mainly wholesale to auto parts stores, and the balance sheet shows no investments or property assets. The Tribunal finds the auto parts business is a qualifying business.
Accordingly, the Tribunal is satisfied the auto parts business does meet the main business definition at all relevant points in time.
Given the findings above, the Tribunal is satisfied cl.892.211(1) is met. The Tribunal has also considered cl.892.211(2).
Australian Business Number and Business Activity Statements
Clause 892.211(2) must be satisfied as at the time of visa application. It requires that, for each business to which cl.892.211(1) applies:
·an Australian Business Number has been obtained, and
·all Business Activity Statements required by the Australian Taxation Office for the two years immediately before the visa application was made have been submitted to the ATO and have been included in the application.
On 17 July 2023, the Tribunal conducted a search of ABN 16 160 609 067 on the Australian Business Register and confirmed the entity is UDA Motion Parts Pty Ltd. The ABN has been current since 3 October 2012 and Goods & Service Tax registration was current from 3 October 2012 until it was cancelled on 2 January 2021. Having regard to these findings, the Tribunal is satisfied Henry satisfies cl.892.211(2)(a).
The Regulations do not provide a definition of the words ‘included in the application’ as used in cl.892.211(2)(b). Departmental policy about BAS states inter alia:
‘… certified copies of original BAS or printed copies of the online version from the ATO portal that cover at least 2 years before the application is made must be provided to the department before a visa can be granted.’
In Nasirzadeh & Ors v Minister for Immigration & Anor [2019] FCCA 1115 at [45] Judge Driver said in relation to cl.892.211(2):
‘… clause 892.221(2) [should be 892.211(2)] imposes a “time of application” criterion requiring, among other things, that BAS “have been included in the application”. This, too, imports an “objective temporal test”.
The objective temporal test referred to in Nasirzadeh means for a time of application criterion there must be a close connection in time between the action required by the criterion and the time of application.
The textual aspects of cl.892.211(2)(b), point strongly to the conclusion an application will be unsuccessful if it fails to contain evidence:
(a) each BAS required by the Australian Taxation Office during the two years immediately before the application was made had been submitted to the ATO, and
(b) copies of those BAS had been included in the application.
The requirements in cl.892.211(2)(b) for an application for a Subclass 892 visa are expressed in imperative or obligatory terms. The regulation specifies the BAS had been lodged with the Australian Taxation Office and included in the application. The use of the imperative ‘have been’ naturally indicates the requirements to which they relate are necessary constituent elements of a Subclass 892 visa application. In the ordinary course, the natural meaning of the words ‘have been’ means the matter to which they relate are obligatory. So much was recognised in cognate circumstances in Fernando v Minister for Immigration and Multicultural Affairs (2000) 97 FCR 407, 419 [50] where Finkelstein J said:
‘Then there is the language of s 412 itself. An application for review “must” be given to the Tribunal within the prescribed period. If one adopts, as it is sometimes necessary to do, the maxim that Parliament says what it means and means what it says, the language adopted by the legislature strongly suggests that an application given to the Tribunal after the relevant period has elapsed is invalid.’
Clause 892.211(2)(b) is not expressed in indeterminate language rather it imposes a requirement which can be easily identified and applied. Where BAS are not included in the application [for a Subclass 892 visa] and are first provided at some later time the regulation is not satisfied, and the application cannot succeed.
That is not to say an application which did not contain copies of the required BAS as lodged could be perfected provided there is a close connection in time between the action required by the criterion and the time of application. The courts have identified a period of more than five months as outside the scope of a close temporal connection for this purpose.
Henry is adamant the BAS were included in the application and after the second hearing provided evidence more suggestive the BAS had been lodged by the time of the application, which is only part of the test. The BAS must be lodged, and they must be included in the application.
The department file includes copies of requests for further information. Earlier requests, such as on 26 June 2017, say the BAS were not included in the application and insist copies downloaded from the ATO online services portal be provided. However, the request on 28 July 2020, which was a copy of an earlier request, appears to contradict this and says under a heading ‘BUSINESS ACTIVITY STATEMENTS (BAS)’:
‘You are required to provide copies from the Australian Taxation Office (ATO) Online Services of all BAS lodged during the 2 years preceding application lodgment. BAS during the required period has been received by this office (emphasis added by the Tribunal). However, ATO Online Services copies of the BAS Activity Statement Account (itemized account) are required to demonstrate that each BAS has been lodged with the ATO, please provide a copy of this document dated from 1 July 2014 to date.’
The test in cl.892.211(2)(b) does not require the BAS to be obtained from the ATO online services portal. The requirements are for the BAS to have been submitted to the ATO and included in the application. Copies of BAS downloaded from the ATO online services portal is one way of establishing the BAS have been lodged. It is not the only way. The copies of the BAS on the department file bear the Commonwealth Coat of Arms thereby signifying they were lodged.
Given the apparent contradiction about whether the BAS were included in the application and relying on the above quote, the Tribunal is satisfied the BAS were included in the application.
Given the findings above, the Tribunal is satisfied that cl.892.211(2) is met. The Tribunal has also considered cl.892.214.
Business activities
At the time of the visa application, cl.892.214 requires that neither the applicant nor his or her spouse or de facto partner (if any) has a history of involvement in business activities of a nature not generally acceptable in Australia.
Clause 892.221(a) requires the Applicant continues to satisfy the criteria in clauses 892.211 and 892.214 at the time of this decision. Accordingly, the Tribunal considered whether Henry continues to meet the requirement that neither he nor Jenny has a history of involvement in business activities of a nature not generally acceptable in Australia.
It is important to consider the elements of this criterion which are:
· history
· involvement in business activities
· not generally acceptable in Australia.
The courts have concluded a history of involvement in business activities means an elaborate, prolonged and consistent period of conduct in activities which are likely to be offensive to a large section of the Australian population.[13]
[13] Lee v Minister for Immigration and Citizenship [2009] FCA 977, [39].
Departmental policy 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
· likely to give rise to controversy were the applicant to enter Australia as the holder of a Business Skills Class of visa.
The unacceptable business activity or practice should be more than a minor, one-off event for such activities or practices to constitute ‘a history’. Some examples of business activities or practices that may not be considered acceptable include:
· contravention of government laws (for example, quarantine or tax evasion).
· criminal convictions relating to business activities.
· serious disregard of industry, licensing and regulations.
· fraudulent trade practices.
· Foreign Investment Review Board violations.
· not providing ‘fair pay’ for employment.
UDA has lodged with the ATO and paid all necessary BAS and income tax returns at all relevant times. There is no evidence before the Tribunal to indicate Henry and Jenny have any history of involvement in business activities of a nature generally not acceptable in Australia either at the time of application or at the time of decision.
Given the findings above, the Tribunal is satisfied cl.892.214 is met and the Applicant continues to satisfy the criteria in both cl.892.211 and cl.892.214 at the time of this decision. Accordingly, the Tribunal is satisfied cl.892.221(a) is met. The Tribunal has also considered cl.892.212.
Requirements relating to assets and employment
Clause 892.212 requires the applicant to meet certain requirements broadly relating to their assets and employment in Australia. At least two of the three criteria must be met. If the appropriate regional authority has determined there are exceptional circumstances this provision does not need to be met. There is no evidence before the Tribunal the appropriate regional authority has determined there are exceptional circumstances in this case.
Henry submits the requirements concerning business and personal assets and assets in the main business are met therefore cl.892.212(a) is not relevant.
·Business & personal assets (cl.892.212(b)): at the time of visa application and throughout the period of 12 months immediately before the time of application, the net value of the business and personal assets in Australia of the applicant, or the applicant’s spouse or de facto partner or their assets combined had a net value of at least $250,000. Further, these assets must have been lawfully acquired.
·Assets in main business (cl.892.212(c)): at the time of visa application and in the 12 months immediately before the time of application, the total value of the net assets in the main business(es) in Australia of the applicant, or the applicant’s spouse or de facto partner, or the applicant and his spouse or de facto partner together have a net value of at least $75,000. Further, these assets must have been lawfully acquired.
Accordingly, the Tribunal has considered whether the substantive requirements of this criterion are met.
Net business and personal assets
This Tribunal, previously constituted, found the net business assets were at least $75,000 in the twelve months immediately before the time of application. That calculation has been remade and the Tribunal has found the net business assets are as shown below. Where necessary, foreign exchange rates are obtained from the Reserve Bank of Australia and the rates for CNY to AUD for the dates shown below are included in the table. Henry claims his business and personal assets are as follows:
30-06-2015 30-06-2016 30-04-2023 CNY to AUD 4.7661 4.9344 4.5709 Business: UDA Motion Parts Pty Ltd 124,046 81,302 30,000 Personal: CBA #9368 (business account) 80,514 3,792 0 WBC #4058 24,563 0 0 ANZ #0795 0 58,361 0 ANZ #6167 0 0 105,299 Investment – Alipay 0 0 30,660 Property – Greensborough, Vic 128,200 0 0 Property – Box Hill, Vic 105,000 0 0 Property – Windaroo, Qld 0 140,000 0 Property – Capital Airport Int’l Center 84,361 Cryptocurrency – Dig-Exchange 0 0 20,639 Quichun Qi in trust for Fang Qi 79,800 Total $462,323 $283,455 $350,759
UDA Motion Parts Pty Ltd
Net business assets include the business bank accounts (CBA #9368) and motor vehicle (Toyota Kluger), which are excluded from net personal assets.
The Tribunal has already established the value of the net business assets on 30 June 2015 and 2016. The amount shown on 30 April 2023 of $30,000 is a Toyota Kluger motor vehicle owned by the company and used in the business. Its written down value at each financial year end is included in the financial statements provided and has been incorporated in the calculation of net business assets on 30 June 2015 and 2016. As to its current value, the Tribunal has conducted research at redbook.com.au and ascertained the likely value of this vehicle to be in the range of $11,600 to $17,600 for a private sale. Absent an independent valuation of this vehicle, which was not provided, the Tribunal ascribes $17,600 to this asset.
Cash assets
CBA #9368: This account is in the name of UDA Motion Parts Pty Ltd. The copy of the bank statement provided as support shows the balance on 2 July 2015 after Henry deposited $80,000. This account does not form part of net personal assets.
WBC #4058: The copy of the statement provided shows this account is a home loan. The associated deposit account is #4557. The amount ascribed by Henry of $24,563 is the amount of interest debited to the home loan and not a credit balance as he asserts. The Tribunal ascribes a nil value to this account.
ANZ #0795: The evidence provided is a copy of a statement overview for the period 24 June 2016 to 25 July 2016 and shows an opening balance of $70,076 and a closing balance of $58,361. Whilst the balance on 30 June 2016 is not shown the Tribunal accepts the closing balance of $58,361 as a reasonable approximation of it.
ANZ #6167: Agreed to a copy of a statement for this account showing a balance of $105,299 in March 2023. Whilst the actual balance on 30 April 2023 is not identified, the average balance of this account from June 2022 to March 2023 exceeds $104,000. On that basis, the Tribunal accepts $105,299 as the balance on 30 April 2023.
Property assets
Greensborough: Henry signed a contract on 24 March 2014 to purchase a property at 11 Patrick Close, Greensborough Victoria for $641,000. Settlement was due on 26 June 2014. Henry borrowed $512,800 from the Westpac Bank to complete the purchase. He sold the property by contract dated 12 December 2015 however the sale price, which would have established its value at that time, is not shown on the extract of the sale contract provided.
Given the property had been held for 15 months by 30 June 2015, the Tribunal accepts the purchase price of this property as the value on 30 June 2015 and the net value for this decision was $128,200 being $641,000 less $512,800.
Box Hill: On 17 February 2015, Jenny signed a contract to purchase Apartment 807, 1 Elland Avenue, Box Hill, Victoria. The brief extract of the contract provided with the submissions reveals the purchase price was $525,000. A notation suggests a deposit of $105,000 was provided and the balance of the purchase price was borrowed although the identity of the lender and the amount borrowed was not provided.
There is no evidence whether settlement took place or when, nor the source of the deposit and whether any of it was borrowed. Based on the evidence provided, the Tribunal is unable to ascribe any value to this asset.
Windaroo: The evidence provided for this asset is a brief extract of a contract dated 14 October 2015. The address is not identified, although it is implied as 38 Riverside Terrace, Windaroo Qld, nor is the purchaser, and the purchase price is shown as $700,000. Also provided is a copy of a title deed search showing Jenny as the owner of Lot 28 on survey plan 149400 in the local government area of Logan however that real property description does not indicate the street address. A copy of a letter dated 17 December 2015 from the ANZ Bank addressed to Henry and Jenny confirms a home loan of $560,000, the implication being this loan was used to finance the purchase of the Windaroo property. This property has since been sold and was not an asset of Henry and Jenny on 30 April 2023.
Given the property had been held for seven months by 30 June 2016, the Tribunal accepts the purchase price of this property as the value on 30 June 2016 and the net value for this decision was $140,000 being the deposit paid.
Capital Airport International Center: This refers to the purchase of 220 lots, representing one house, in this development by Henry’s late wife Ms Jingzhou Guo. The purchase price was CNY401,720 and Ms Guo paid a deposit of CNY201,720. A translated copy of the purchase contract was provided and the date of it cannot be identified although in other translated documents the contract date is said to be 18 August 2012. Given the purchaser was Ms Guo it must predate 14 September 2013 as that is when she died.
According to a translated copy of a Civil Judgment of the People’s Court of Shinan District, Ms Guo borrowed CNY200,000 to complete the purchase. Ms Guo appears to have died intestate. Henry inherited the property on her death when the only other potential beneficiaries renounced their inheritance. He was required to pay the balance of the loan of CNY132,319 plus interest and legal fees associated with the litigation.
Henry’s submission suggests he has paid the debt and he attached a certificate he says confirms that. There is a translated receipt attached to the submission, which bears the serial number 8484413 and is dated 1 August 2018. The amount paid is CNY159,090 to Qingdao Branch of Shanghai Pudong Development Bank Co., Ltd and the payer is Henry. This certificate establishes Henry paid that amount that day. It does not establish he has unencumbered ownership of this property.
Apart from the question of whether the debt on this property has been paid, there is limited information on which to ascertain its current value. There is no external valuation of the property as recommended by departmental policy. Henry relies on the original purchase price of CNY401,720 from 2012, which converts to A$87,886 on 30 April 2023. There is also a screen shot dated 11 May 2021 from qingdao.anjuke.com, which says the existing houses of the Capital Airport International Centre project are on sale. It goes on to suggest sale prices based on the area of each house and concludes by saying: ‘The above information is for information only.’
The submission provided by Henry is inadequate to ascertain the independent value of the property for the purpose of this decision, or whether the amount paid on 1 August 2018 discharged the encumbrance on the property. Accordingly, the Tribunal ascribes a nil value to this asset.
Investments
Alipay: Agreed to a copy of a translated copy of a Balance & Assets Certificate in the name of Fang Qi showing CNY145,999 on 30 April 2023. This equates to A$31,941, which the Tribunal accepts is the value on that date.
Cryptocurrency – Dig-Exchange: Henry provided screen shots from Dig-Exchange which he says provides evidence of holdings of cryptocurrency for Jenny and himself. The balances shown are CNY30,712 and CNY67570 however the screen shot contains no date to ascertain when the balance shown existed or who the account holders are. The second page of the screen shot shows the names of Zhang, Hui and Fang, Qi as having passed verification audit however that does not establish who holds which balance or any balance. Accordingly, the Tribunal ascribes a nil value to this asset.
Quichun Qi in trust for Fang Qi: Jenny claims she entrusted her father Guichun, Qi to invest funds on her behalf. The evidence provided is a screen shot of details of an account at Industrial and Commercial Bank of China. The balance shown if CNY383,400 however the date of the balance is not shown nor is the account holder. Even if the funds belong to Jenny and are held in trust for her by her father, there is no evidence of the source of the funds nor any documentary evidence of the asserted trust relationship. The Tribunal cannot accept this as an asset of Jenny and places a nil value on in for this decision.
Based on the above analysis the Tribunal has assessed the net business and personal assets of Henry and Jenny as follows:
30-06-2015 30-06-2016 30-04-2023 CNY to AUD 4.7661 4.9344 4.5709 Business: UDA Motion Parts Pty Ltd 124,046 81,302 17,600 Personal: 0 0 0 CBA #9368 (Company account) 0 0 0 WBC #4058 0 0 0 ANZ #0795 0 58,361 0 ANZ #6167 0 0 105,299 Investment – Alipay 0 0 31,941 Property – Greensborough, Vic 128,200 0 0 Property – Box Hill, Vic 0 0 0 Property – Windaroo, Qld 0 140,000 0 Property – Capital Airport Int’l Center 0 0 0 Cryptocurrency – Dig-Exchange 0 0 0 Quichun Qi in trust for Fang Qi 0 0 0 Total $252,246 $279,663 $154,840
The above table shows the net business and personal assets of Henry and Jenny were more than $250,000 on 30 June 2015 and 30 June 2016 however they were less than $250,000 on 30 April 2023.
Given the findings above, the Tribunal is satisfied cl.892.212 is met however cl.892.221(b) is not met. As one of the essential requirements for the visa is not met, the decision under review must be affirmed.
The Tribunal must also affirm the decision not to grant the secondary applicants Subclass 892 visas as they do not meet the secondary visa criterion (cl.892.321) requiring them to be members of the family unit of a person who holds a Subclass 892 visa, and there is no evidence they meet the primary visa criteria for this subclass.
CONCLUSION
The Tribunal has found Henry met some criteria for a Subclass 892 visa. They are clauses 892.211, 892.212, 892.213, 892.214 and 892.221(a). However, due to a lack of useful evidence, the Tribunal is not satisfied cl.892.221(b) has been met.
In carrying out its functions, the Tribunal must pursue the objective of providing a mechanism of review that is accessible, fair, just, economical and quick, and which is proportionate to the importance and complexity of the matter and promotes public trust and confidence in the decision-making of the Tribunal.[14]
[14] Section 2A of the Administrative Appeals Tribunal Act 1975.
However, as Kenny J said in Minister for Immigration and Citizenship v Le [2007] FCA 1318 at [60]:
‘… the Tribunal has no general obligation to initiate enquiries or to make out an applicant's case for [them] …’.
Then, as Keane CJ, Emmett and Perram JJ said in Minister for Immigration and Citizenship v SZNVW [2010] FCAFC 41 at [49]:
‘The Tribunal was not obliged to conduct an inquiry to discover whether the Visa Applicant might have been able to put his case better or support it with other evidence.’
That said, the Tribunal provided two hearings for Henry and his family on 18 April 2023 and 23 May 2023. At those hearings the Tribunal offered considerable assistance to them to understand what is required to satisfy the criteria for a Subclass 892 visa. Even after post-hearing submissions were received the Tribunal responded and sought clarification by e-mails on 18 and 27 July 2023 and 8 August 2023.
To further assist Henry and his family, they were asked to complete a Form 1139A (ignoring the references to Subclass 188 visas) at three relevant points in time. The instructions on page one of that form are clear, especially the section entitled ‘Acceptable documentation for each type of asset is as follows.’ Supporting documentation was provided however, as discussed above, often that supporting documentation was a screen shot from a website where the account holder and relevant date could not be ascertained. No independent property valuations were provided. Brief extracts of contracts for the purchase and sale of property were provided rather than full copies with settlement statements. Detailed bank statements of loans associated with those properties were not provided.
Henry originally engaged the services of a migration agent and was disappointed with the advice he received. He then chose to be self-represented in this review, which he is entitled to do. However, the obligation to provide suitable evidence in support of his claims remains with him. The Tribunal has found his evidence in support of his assets on 30 April 2023 did not enable a finding that his net business and personal assets were at least $250,000 on that date.
The Tribunal is mindful of its obligation to be accessible, fair, just, economical and quick, and provide a review which is proportionate to the importance and complexity of the matter. The Tribunal is satisfied it has provided procedural fairness to Henry throughout this review. It is unable to provide any more time or assistance in this case and has made its decision based on the evidence before it.
The Tribunal notes Henry was sponsored for a Subclass 892 visa by the state government of Victoria.[15] He now resides in Queensland, which was raised in the previous decision of the Tribunal.[16] There is no evidence before the Tribunal to indicate he has addressed this issue.
[15] Form 949 dated 8 July 2016.
[16] Paragraph 27 of the decision dated 6 May 2019 of the Tribunal.
The Tribunal also notes it is open to Henry to apply for Ministerial Intervention if he considers he meets the requirements for that.
DECISION
The Tribunal affirms the decision not to grant the applicants Business Skills (Residence) (Class DF) visas.
Peter Ranson
Member
| Date(s) of hearing: | 18 April 2023 (in person) 23 May 2023 (Teams video) |
| Representation for the Applicant: | Self-represented |
| Interpreter: | Mandarin and English languages |
| Witnesses: | Mr Sammy Hui, Mr Ricky Yu, Mr Yang Xie, Ms Dejun Yang, Mr Gium Ong |
ATTACHMENT - LEGISLATION
Migration Regulations 1994
1.03 Definitions
In these Regulations, unless the contrary intention appears:
…
ownership interest has the meaning given to it in subsection 134(10) of the Act.
…
qualifying business means an enterprise that:
(a) 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
(b) is not operated primarily or substantially for the purpose of speculative or passive investment.
…
1.11 Main business
(1)For the purposes of these Regulations and subject to subregulation (2), a business is a main business in relation to an applicant for a visa if:
(a)the applicant has, or has had, an ownership interest in the business; and
(b)the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business; and
(c)the value of the applicant’s ownership interest, or the total value of the ownership interests of the applicant and the applicant’s spouse or de facto partner, in the business is or was:
(i)if the business is operated by a publicly listed company—at least 10% of the total value of the business; or
(ii)if:
(A)the business is not operated by a publicly listed company; and
(B)the annual turnover of the business is at least AUD400 000;
at least 30% of the total value of the business; or
(iii)if:
(A)the business is not operated by a publicly listed company; and
(B)the annual turnover of the business is less than AUD400 000;
at least 51% of the total value of the business; and
(d)the business is a qualifying business.
(2)If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses.
1.11A Ownership for the purposes of certain Parts of Schedule 2
(1)Subject to subregulation (4), for Parts 132, 188, 888, 890, 891, 892 and 893 of Schedule 2, ownership by an applicant, or the applicant’s spouse or de facto partner, of an asset, an eligible investment or an ownership interest, includes beneficial ownership only if the beneficial ownership is evidenced in accordance with subregulation (2).
(2)To evidence beneficial ownership of an asset, eligible investment or ownership interest, the applicant must show to the Minister:
(a)a trust instrument; or
(b)a contract; or
(c)any other document capable of being used to enforce the rights of the applicant, or the applicant’s spouse or de facto partner, as the case requires, in relation to the asset, eligible investment or ownership interest;
stamped or registered by an appropriate authority under the law of the jurisdiction where the asset, eligible investment or ownership interest is located.
(3)A document shown under subregulation (2) does not evidence beneficial ownership, for subregulation (1), for any period earlier than the date of registration or stamping by the appropriate authority.
(4)Beneficial ownership is not required to be evidenced in accordance with subregulation (2) if the person who has legal ownership of the asset, eligible investment or ownership interest in relation to which the applicant, or the applicant’s spouse or de facto partner, has beneficial ownership:
(a)is a dependent child of the applicant; and
(b)made a combined application with the applicant; and
(c)has not reached the age at which, in the jurisdiction where the asset, eligible investment or ownership interest is located, he or she can claim the benefits of ownership of the asset, eligible investment or ownership interest.
Migration Act 1958
Cancellation of business visas
….
In this section:
….
ownership interest, in relation to a business, means an interest in the business as:
(a) a shareholder in a company that carries on the business; or
(b) a partner in a partnership that carries on the business; or
(c) the sole proprietor of the business;
including such an interest held indirectly through one or more interposed companies, partnerships or trusts.
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