ZHANG (Migration)

[2020] AATA 5622

ZHANG (Migration) [2020] AATA 5622 (20 May 2020)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  

Mr Wenying ZHANG

Ms Xuerou ZHANG

Ms Linjing NING

CASE NUMBER:  1604484

HOME AFFAIRS REFERENCE(S): BCC2015/1242557 BCC2015/1242779 BCC2015/1242781 BCC2016/1769100

MEMBER:Amanda Mendes Da Costa

DATE:20 May 2020

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal affirms the decision not to grant the visa applicants Business Skills (Residence) (Class DF) visas.

Statement made on 20 May 2020 at 12.56pm

CATCHWORDS
MIGRATION – Business Skills (Residence) (Class DF) visa – Subclass 892 (State/Territory Sponsored Business Owner) – net assets in nominated main business – ownership interest in main business – active operation for at least two years before application –  ‘time of decision’ requirement – applicant ceased being a director – business ceased to operate –established a different business subsequently – decision under review affirmed

LEGISLATION
Migration Act 1958 (Cth), ss 65, 347
Migration Regulations 1994 (Cth), Schedule 2, cls 892.211, 892.212

CASES
Yang v Minister for Immigration and Border Protection [2014] FCCA 1576

Any references appearing in square brackets indicate that information has been omitted from this decision pursuant to section 378 of the Migration Act 1958 and replaced with generic information.

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 and Border Protection on 22 March 2016 to refuse to grant the visa applicants Business Skills (Residence) (Class DF) visas under s.65 of the Migration Act 1958 (the Act).

2. The applicants applied for the visas on 27 April 2015. At the time of application, Class DF contained four subclasses: 890 (Business Owner), Subclass 891 (Investor), Subclass 892 (State/Territory Business Owner) and 893 (State/Territory Sponsored Investor). The applicants in this case 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 (the Regulations). At least one member of the family unit must satisfy the primary criteria set out in Subdivision 892.2. The others need only to satisfy the secondary criteria set out in Subdivision 892.3.

3. The delegate in this case refused to grant the visas on the basis that the first named visa applicant did not satisfy the requirements of cl.892.212(b) and (c) of Schedule 2 to the Regulations because the delegate was not satisfied that the applicants had provided sufficient evidence to support either the applicants’ business assets claim or that the applicant’s main business had a net value of at least $250,000.00 and had that value throughout the period of 12 month ending before the visa application was made.

4. The applicants appeared before the Tribunal on 30 January 2020 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 Tribunal has considered the documentation in both the files of the Department and the Tribunal’s own file.

6. The applicants were represented in relation to the review by their registered migration agent.

7. For the following reasons, the Tribunal has decided that the decision under review should be affirmed.

CONSIDERATION OF CLAIMS AND EVIDENCE

1. The issue in this case is whether the applicant meets the requirements of cls.892.211 and 892.221.

Evidence of the first named applicant

1. J & J Projects Pty Ltd (J & J Projects) established its business in 2011, providing building design services and building materials to its customers.  The first named applicant became involved in the business in 2013 when he purchased a share in the business and became a director of the company.  At that stage the business had seven employees and its activities were focused on assisting clients to finance, design and construct apartment buildings in Australia and to project manage that construction.  It was also involved in building and selling apartments in its own right.  The Tribunal questioned the first named applicant about any particular projects in which the company was involved whilst it was one of its directors.  However, he was unable to recall the names or locations of any of these buildings as they all used English names and the first named applicant was not proficient in this language.

2. The first named applicant invested approximately $160,000.00 in the business.  There were two other directors of the company, both involved in the day to day management of the company.  The first named applicant’s role was to source and engage clients from China and supervise the finance and project management of projects. When the Tribunal asked the first named applicant whether the business had worked in collaboration with any particular builder, he said he had referred clients to Simmons Builders.

3. The first named applicant explained that the business of J & J Projects was no longer operating and ceased to operate in 2019.  The Tribunal asked him about whether any order for winding up of the company or the appointment of a liquidator had been made.  The first named applicant said that he had not been involved in any winding up of the company as he withdrew his involvement in the business in 2016 (and ceased being a director) when it was still operating.  He withdrew his involvement in the business after his visa application was refused and he started his own company which was a separate business from J & J Projects.  When he ceased his involvement with J & J Projects, the market was not good.  He didn’t receive any of the money he invested in J & J Projects after he ceased his involvement and directorship in the company in 2016 and was still chasing the other directors for his money.  He thought the company had been wound up but was not sure of the particulars.

4. The first named applicant’s current business is Australia Horizon Adventure Pty Ltd (Australian Horizon Adventure) which was registered in February 2016.   He is the sole director of the company.  At the time of the hearing, the business was focusing on adventure tourism in Australia, with clients from China.  The business provided services, including planning itineraries and provided guided tours to its clients.  The business had no employees but engaged tour guides, drivers and other staff as contractors.  The business did not have a website and located its clients through another company (providing similar services in China) which was also operated by the first named applicant.  This business was operated from his home and its principal assets were two off-road vehicles costing approximately $80,000.00.

5. Apart from his investment in Australia Horizon Adventure, the first named applicant’s assets in Australia are a residential property located in Clyde North and an apartment in Southbank, both in Victoria.  Whilst the first named applicant said he was the sole owner of the Clyde North property, he was unable to recall whether he was the sole or joint owner of the apartment in Southbank.

6. The first named applicant told the Tribunal that he considered that at the time of the delegate’s decision he met the assets and investment requirements for the grant of a Subclass 892 visa.  This included personal assets of $400,000.00 and an investment in J & J Projects of $160,000.00.  He was also aware that another director of the company whose application for a Subclass 892 visa was originally refused and had subsequently made a successful application for review of that decision to this Tribunal.  The Tribunals decision in that case was made in 2017.  The first named applicant said that he felt aggrieved because whilst the other director had his matter determined in 2017, he (the applicant) had been forced to wait four years for the Tribunal to hear and determine his application for review.

7. Although the second named applicant (the daughter of the first and second named applicants) did not give evidence at the hearing but indicated to the Tribunal her support for the evidence of her parents.

Evidence of third named applicant

1. The third named applicant is the wife of the first named applicant.  She adopted the evidence of her husband and explained that as they had made a significant contribution to business and the Australian community, they had met the requirements for the grant of a Subclass 892 visa.

Section 359A invitation

1. On 3 February 2020 the Tribunal invited the applicants (pursuant to s.359A of the Act) to comment on or respond in writing to information regarding the first named applicant’s main business in Australia and whether it was still actively operating, together with information from the Department of Home Affairs Movement Records which showed that the third named applicant was not in the migration zone at the time both the visa and review applications were lodged.  The Tribunal advised the applicants of the relevance of such information and that their comments and/or response was due by 27 February 2020.

2. On 17 February 2020 the applicants sought an extension of time in which to provide written comments and/or response to the Tribunal’s invitation.  This application was granted and they were given until 16 March 2020 to provide the information sought.

3. The material provided to the Tribunal on 13 and 16 March 2020 in response to its s.359A invitation includes:

   ·     statement of Wenying Zhang (unsigned) dated 11 March 2020;

   ·     statement of Xuerou Zhang (unsigned) dated 11 March 2020;

   ·     statement of Linjing Ning (unsigned) dated 11 March 2020;

   ·     certificate of registration, Australia Horizon Adventure Pty Ltd;

   ·     photographs of June 2019 Melbourne – Cape York round trip;

   ·     Account Balance Summary, National Bank of Australia for account in name of J & J Projects Pty Ltd;

   ·     financial documents for J & J Projects (including Directors report) for the period ended 31 March 2015;

   ·     ASIC Current and Historical Extract for J & J Projects, generated on 28 January 2020.

   ·     letter, Kee G. Saw (accountant for J & J Projects) dated 9 September 2019;

   ·     organization chart for J & J Projects;

   ·     contract of sale for Renault bus, dated 11 August 2017; and

   ·     written submissions.

4. In his statement dated 11 March 2020, the first named applicant attests to the following:

   ·Prior to arriving in Australia in 2013 he was a prominent miner in Yunnan and the managing director of the Wan Fang Industry and Trading Company located in Kunming.

   ·His decision to relocate to Australia was motivated by his desire to be with his daughter and his intention to explore business opportunities in Australia.

   ·On 1 January 2013 he purchased shares in J & J Projects and was subsequently appointed as the company’s executive director.  In this role he was in overall charge of the company’s profit, senior management recruitments and implementation of board approved investment policies.

   ·His business assets in J & J Projects as at 31 March 2015 totalled $269,343.50.  These consisted of a director’s loan of $167,077.00, 60,000 fully paid shares and 45.79% net share of the company’s equity totalling $42,265.50.

   ·His personal assets as at 31 March 2015 totalled $416,929.40 consisting of properties at [Address 1], Clyde North; [Address 2], Cranbourne North; [Address 3], Melbourne and [Address 4], Southbank, all in the State of Victoria.

   ·On 30 June 2016 he resigned as the director of J & J Projects due to discord between himself and the company’s management team.  This was a difficult decision for him to make, given his investment in the company but he considered he needed to explore better business opportunities for the sake of his family.  The director’s loan of $140,000.00 which he advanced to the company remains outstanding.

   ·He subsequently decided to focus on a new business operation which he established on 17 February 2016 – Australia Horizon Adventure.  He is actively operating this company through providing travel services to tourist groups from China.  The company’s bank account records show that the account balance as at 3 February 2020 was $52,146.64 and the net assets as at 31 December 2019 amounted to $80,727.00.

   ·There was no time gap between his management of J & J Projects and his subsequent assumption of the management of Australia Horizon Adventure.

   ·His application for review of the delegate’s decision has taken almost four years to be determined. This lengthy review process had placed strain on his family and his wife had been dividing her time between China and Australia for the sake of the family.

   ·The statements made by him at the hearing on 30 January 2020 lacked specificity as the relinquishment of his directorship of J & J Projects did not occur until three months after the delegate’s decision.  This has been addressed in the written submissions made by his migration agent.

5. The second named applicant’s statement dated 11 March 2020, includes the following:

   ·She moved to Australia on her own ages 12 years.  It was difficult for her to be away from her family in China and she missed her parents.

   ·After completion of a language program she commenced her studies in Australia in Year 9 at Firbank Grammar School

   ·Her father (the first named applicant) relocated to Australia when she was undertaking her Year 10 studies.  He mother (the third named applicant) remained in China to manage the family business in China in order to fund the expenses of her father and herself in Australia.

   ·After completing her secondary studies, she enrolled as a student at Deakin University.  Her substantial fees as an international student were a considerable financial burden for her parents.

   ·She intends to remain in Australia to complete her studies and gain employment.

   ·If she was forced to return to China at this stage, life would be difficult for her as she has been living in Australia for more than 10 years and she has no friends in China.  The “huge culture shock” in returning to live in China may cause her a mental breakdown.

6. The third named applicant’s statement dated 11 March 2020 includes the following:

   ·     Whilst her husband lives in Australia, she divides her time between China and Australia.  This is due to her commitments in managing her family business in China.  The time she has spent away from her husband and daughter since 2010 has been a mental challenge and she misses them terribly.

   ·     She makes several visits each year to her husband and daughter.

   ·     She and her husband have made significant financial and personal sacrifices to gain permanent residency in Australia.  They have made a significant investment in both time and money to provide their daughter with a better life in Australia.

   ·     Their daughter would suffer if she was not able to remain in Australia.

7. The Tribunal notes that whilst the third named applicant concedes in her statement that she has travelled between China and Melbourne since 2010, she does not provide any direct comments regarding her absence from the migration zone at the time the visa application was made and when the review application was lodged.

8. The financial documents for J & J Projects (including the Directors report)indicate that there were three directors (including the first named applicant), that the principal activity of the company was the provision of construction and project management services and the export of design services to China, and the net profit of the company for the financial period before tax amounted to $101,535.00.

9. The balance sheet for J & J Projects (as at 31 March 2015) shows net assets $134,110.00 and total equity of $134,110.00.

10. In his letter Mr Saw attests to his role as the accountant and tax agent for J & J Projects.  In that capacity he notes that on the basis of discussions with the directors of the company and the information provided by them to him, the first named applicant invested $60,000.00 as an equity stake in J & J Projects since 16 August 2013, made a direct loan to the company of $140,000.00 and paid $27,077.00 for company expenses.  Thus, the total amount invested by the first named applicant in the company is $227,077.00 as at 31 March 2015.

11. The various NAB Account Balance Summaries for Australia Horizon Adventure show that the account balances commence on 23 May 2016 with an account balance of $5,000.00 and concludes on 3 February 2020 with closing balance of $52,46.00.

12. The ASIC Current and Historical Extract for J & J Projects dated 28 January 2020 indicates that the company was registered in 2011, the first named applicant ceased being a director on 30 June 2016 and at the date the extract was generated he was no longer a shareholder in the company.

13. The Federal Court order made 16 March 2018 indicates that an order was made for the winding up of J & J Projects and that a liquidator be appointed to the company.

14. The Company Registration certificate for Australia Horizon Adventure demonstrates that it was registered on 17 February 2016.  

15. The documentation regarding the June 2019 itinerary for a Cape York Round Trip consists of photographs of various destinations with captions regarding destinations and travel times.

16. The contract of sale for Ford ranger all-wheel drive motor vehicle indicates that the purchase price was AUD65,000 (inclusive of stamp duty).

Oral and written submissions

1. The submissions made by the applicants included the following:

   ·     The first and third named applicants had met the asset requirements for the grant of a Subclass 892 visa, at the time of the delegate’s decision.

   ·     The family had been living in Australia for the past 10 years and the second named applicant had received a significant part of her education in Australia.

   ·     The first and third named applicants had sacrificed a great deal in China to relocate to Australia to enable their children to be educated here and they wanted to remain in Australia and grow the first named applicants adventure tourism business.

   ·     The first named applicant held an ownership interest in J & J Projects for two years immediately prior to his visa application on 27 April 2015 as required by cl.892.211(1) of the Regulations.  The ASIC company extract for J & J Projects shows that the commencement of the first named applicant’s ownership interest in the company commenced on 1 January 2013 and ceased on 30 June 2016.  Accordingly, the period of the first named applicant’s ownership in the company complied with the requirements of cl.892.211(1).

   ·     The first named applicant continued to satisfy the requirements of cl.892.211(a) as his ownership interest in J & J Projects remained at the date of decision, being the delegate’s decision on 22 March 2016.  His interest in the business ceased on 30 June 2016 when he was deregistered as a director.  This was more than three months after the decision of the delegate, which is the relevant decision date for the purpose of cl.892.211(a).

   ·     An ASIC extract for J & J Projects shows that on 16 March 2018 an order was made by the Federal Court of Australia to wind up J & J Projects and to appoint a liquidator of the company.

   ·     On 17 February 2016 the first named applicant registered his company Australian Horizon Adventure in which he has a 100% shareholding.  This business is a travel and tour operator which is a qualifying business in accordance with the requirements of r.1.03 of the Regulations.  Pursuant to cl.892.221() the first named applicant continues to hold an ownership interest in an actively operating business, being Australia Horizon Adventure.

   ·     After his resignation as a director of J & J Projects in June 2016, the first named applicant continued to operate his own business as a director of Australian Horizon Adventure since July 2016.  This business has continued to generate business and financial gain through the provision of tour and travel services.

Ownership interest in main business

1. Clause 892.211(1) requires that 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: cl.892.221(a). No more than two businesses can be nominated for this purpose (r.1.11(2)) and only one or both of the businesses relied on to meet the time of application criterion can be relied on to meet the time of decision criterion: Yang v Minister for Immigration and Border Protection [2014] FCCA 1576.

2. The business relied on by the applicant to satisfy these requirements is J & J Projects.  Accordingly, the Tribunal must consider the nature of the applicant’s interest if this business, whether the business was actively operating and whether it met the definition of ‘main business’ 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).

Does the applicant have an ownership interest in each business relied on at all relevant times?

1. 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;

   including such an interest held indirectly through one or more interposed companies, partnerships or trusts (r.1.03 of the Regulations and s.134(10) of the Act). Ownership for this purpose includes beneficial ownership if it is evidenced in accordance with the terms of r.1.11A of the Regulations, set out in the attachment to this decision: r.1.11A(1).

2. In order to meet cl.892.211(1) the Tribunal must be satisfied that the applicant had an interest of this kind in the relevant business or businesses both at the time of making that application and for the two years immediately before. In order to meet cl.892.221(a) the Tribunal must be satisfied that the applicant continues to satisfy this requirement at the time of its decision. During the hearing, the Tribunal discussed with the first named applicant his ability to meet the requirements of both cl.892.211 and cl.892.221, particularly in circumstances where he was no longer a shareholder in or a director of J & J Projects.

3. On the basis of the ASIC Current and Historical Extract for J & J Projects (dated 28 January 2020) and the oral evidence of the first named applicant, the Tribunal is satisfied that at the time of making the visa application in April 2015, and for the two years immediately beforehand, the first named applicant was a shareholder in the company that carried on the business and thus satisfies cls.892.211 and 892.221.

4. However, that evidence also indicates that at the time of this decision, the first named applicant is no longer a shareholder in J & J Projects.  His interest in the company ceased with his shareholding and directorship of J & J Projects in 2016.  The Tribunal is further satisfied that J & J Projects is no longer trading and that on 16 March 2018 an order was made by the Federal Court of Australia to wind up the company and appoint a liquidator.

5. The Tribunal does not accept the applicant’s submission that the ‘time of decision’ requirements in cl.892.221(a) refer to the time of the delegates decision (i.e. 22 March 2016). Given that the Tribunals role is to conduct a merits-based review on a de novo basis, the reference to the ‘time of decision’ requirements is a reference to the time of the Tribunals and not the delegates decision.

6. The Tribunal accepts that the applicant has established a further business (Australia Horizon Adventure) in which at the time of this decision, he is a shareholder and has an ‘ownership interest’ as defined by s.134(1) of the Act.  However, he did not hold this ownership interest for at least two years immediately before the visa application was made.  The Tribunal considers that although the applicant to a Subclass 892 visa may nominate one or two actively operating businesses for the purpose of cls.892.211 and 892.221, it is necessary for any such interest in a business to be present at all points of time.  The first named applicant’s reliance on an interest in two separate businesses at different points of time does not satisfy the requirements of cl.892.211 and 892.221.

7. Accordingly, the Tribunal finds that the first named applicant does not meet the requirements of cl.892.221(a).  As one of the requirements is not met, it is not necessary to consider the remaining criteria for the grant of the visa.

8. On the basis of the ASIC Current and Historical Extract for J & J Projects (dated 28 January 2020) and the oral evidence of the first named applicant, the Tribunal is satisfied that the time of making the visa application in April 2015, and for the two years immediately before this, the first named applicant was a shareholder in the company that carried on the business and thus satisfied cl.892.211.  However, that evidence also indicates that at the time of this decision, the first named applicant is no longer a shareholder in J & J Projects, such shareholding ceasing when he also ceased his direct involvement in the management and directorship of the company in 2016.

9. Based on the above, the Tribunal finds that the first named applicant does not meet the requirements of cl.892.221(a).  

10. Accordingly, the Tribunal is not satisfied that the applicant did have and does have an ownership interest in the nominated business at all relevant points in time.

11. As one of the requirements is not met, it is not necessary for the Tribunal to consider the remaining criteria for the grant of the visa.

12. Given the above findings, the decision under review must be affirmed.

13. As the Tribunal has found that the first named applicant does not satisfy the primary criteria for the grant of a Subclass 892 visa, it considers that the second named applicant is unable to meet the criteria for a Subclass 892 visa as a member of the family unit of a person who has satisfied the primary criteria for the grant of the visa.

14. The Tribunal has received information from the Department of Home Affairs Movement Records for the third named applicant.  These show that the third named applicant was not in the migration zone at the time of lodgement of the application for review with the Tribunal on 1 April 2016.

15. The Tribunal finds that the application for review in relation to the third named applicant is not valid because s.347(3A) requires, for a decision covered by s.338(7A), that a non-citizen who is the subject of the decision under review, be physically present in the migration zone when the application for review is made.

16. Given the third named applicant was not in the migration zone at the time the application for review was lodged, the Tribunal finds that the decision to refuse the third named applicant a Subclass 892 visa is not a reviewable decision.

DECISION

1. The Tribunal affirms the decision not to grant the first and second named applicants Business Skills (Residence) (Class DF) visas.

2. The Tribunal does not have jurisdiction in relation to the third named applicant.

Amanda Mendes Da Costa
Member

ATTACHMENT - LEGISLATION

Migration Regulations 1994

1.03Definitions

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.

…

1.11Main 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

1. Cancellation of business visas

….

1. 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.