—First in a series on the litigation legacy of the Business Innovation and Investment Program
This article was written by Nancy Wang Principal Solicitor at W & G Lawyers.
In March 2018, Yingna Yang transferred $3.5 million to an Australian company called Axis North Pty Ltd. Within seven days the money was gone — passed to a related company, and from there to the mother of the man who controlled both. Ms Yang did not get it back. In July 2025 the Federal Court dismissed her claim with costs. In April 2026 the Full Court dismissed her appeal, again with costs.
Those two judgments — Yang v Wong [2025] FCA 693 (Derrington J) and Yang v Wong [2026] FCAFC 39 (Charlesworth, Jackman and Needham JJ) — are usually read as insolvency cases. They are important ones: the Full Court settled that the definition of “transaction” in s 588FDA of the Corporations Act 2001 (Cth) is narrower than the general definition in s 9, and that a “payment” from one party to another requires a change in the legal rights between them, not merely a flow of value.
But read the primary judgment closely and a second story emerges, one the appeal never touches. It is a story about why a person would hand over $3.5 million on terms that a Federal Court judge described as furnishing her with little or no protection — and about what her lawyers were, and were not, doing at the time.
The agreement that protected nobody
Ms Yang’s loan to Axis North was documented. There was a written loan agreement dated 13 March 2018. There was an “Investment Framework Agreement” with a related company. There was a share sale agreement said to provide security. The paperwork existed.
Derrington J’s assessment of it was withering. The loan agreement’s terms were, he said, wholly imprudent from Ms Yang’s perspective; though clothed in legalese, they gave her little or no protection for her investment.
Consider what she actually signed.
The purpose clause was self-cancelling. Clause 3.1 warranted that the principal sum would be used for the borrower’s business operations, the development of the property — or any other purpose as determined by the borrower. The judge’s observation was that the clause masquerades as a warranty in her favour, while the final alternative left Axis North free to use the money however it pleased. This is not a drafting error. It is a clause that consumes itself, and anyone reading it commercially would have said so in a sentence.
The security was worth $80. Ms Yang’s “security” was the issue of 80 ordinary shares in a related group company, acquired for eighty dollars. The share sale agreement also required her to hand the shares back whenever the company asked. Derrington J’s verdict: as security for her loan, it was plainly illusory.
The economics ran one way. She lent $3.5 million for approximately seven years. No interest for the first two years. Then 2% on $1.6 million for the third year. Then 2% on the full amount. Total interest over the life of the loan: around $312,000 — under 1.3% per annum across the term, against an unsecured advance to a company with no revenue.
The borrower could not have repaid her. This is the finding that should trouble anyone advising in this space. As at 30 June 2018, Axis North’s current assets were $300 in cash and a motor vehicle. It recorded no revenue in the financial years ending 2017, 2018 or 2019. Its net asset position deteriorated continuously from incorporation. Within a week of receiving her money it had lent the entire sum onward, interest-free, unsecured, on no written terms, to a company controlled by the same two men.
Derrington J’s conclusion on Ms Yang’s prospects of repayment is the most quoted sentence in the judgment for good reason. Axis North’s only expectation of being able to repay her was, he found, the beneficent exercise of discretion by its two controllers to return money when the time came — in circumstances where both men stood to gain from refusing. That expectation, he said, was worthless.
The blind eye
Why does someone sign this?
The primary judgment answers the question in a single paragraph that the Full Court did not repeat. In or around 2017, Ms Yang wanted a residency visa. She understood her prospects would improve if she made a substantial investment in an Australian business. The Investment Framework Agreement she signed was largely predicated on her obtaining a subclass 132 Business Talent visa.
That reframes the transaction entirely. Ms Yang was not primarily buying a return on $3.5 million. She was buying a migration outcome, and the loan was the instrument. Once you understand the deal that way, the terms stop looking irrational and start looking predictable. Someone whose real objective is a visa has a systematically distorted attitude to commercial risk:
- The downside they fear is refusal, not loss of capital.
- The counterparty controls something they need — a nominated business, a qualifying structure, a compliance narrative for the Department — which makes walking away expensive in a way that has nothing to do with the money.
- The investment must be at risk to satisfy the programme’s logic, so protective terms can be presented as inconsistent with the visa itself.
- The timeline is set by the visa, not by due diligence.
The same dynamic recurs under subclass 188A, where a provisional visa holder must establish and operate a qualifying business before a subclass 888 can be granted. The applicant is not a free agent evaluating an opportunity. They are a captive with a deadline.
This is what “turning a blind eye” means in practice. It is rarely a conscious decision to ignore red flags. It is a rational reordering of priorities in which the commercial terms become secondary paperwork — right up until the company is wound up.
The advice that wasn’t given
The judgments never say Ms Yang lacked legal representation. She had solicitors for the litigation, and there is no finding about who advised her in 2018. But the pattern the documents disclose is one practitioners in this area will recognise immediately.
The documents are structured around the visa. The Investment Framework Agreement’s clauses are keyed to her obtaining the 132 visa. It refers to a compulsory investment of $1.9 million said to be required by the state government, an obligation whose origin, Derrington J noted, was never explained. The migration architecture is elaborate. The commercial architecture is absent.
That asymmetry is the tell. In business migration matters the client’s relationship is typically with a migration agent or an immigration lawyer. That adviser is competent, often highly so, at what they are engaged to do: eligibility, nomination, state criteria, evidentiary requirements, the subclass 888 pathway. What they are not engaged to do — and frequently not qualified to do — is assess whether the counterparty is solvent, whether the security is real, whether the purpose clause has teeth, or whether the borrower has any capacity to repay.
The consequences are structural rather than individual:
Nobody owns the commercial risk. The migration adviser reasonably assumes someone else is checking the deal. The client assumes the adviser who reviewed the documents reviewed all of them. Often nobody reviewed the loan agreement as a loan agreement.
The introducer is frequently the counterparty’s contact. When the developer, the agent and the documents all arrive as a package, the client has no independent adviser in the chain at all.
Language and structure compound. A clause like 3.1 requires a reader who understands that the final limb defeats the first two. That is an ordinary commercial reading, but it is not obvious to a non-lawyer in a second language.
Security gets confused with paperwork. Ms Yang received a share certificate. Share certificates look like security. Eighty dollars of shares in an unlisted company, returnable on demand, are not security in any sense that matters.
There is a further detail worth recording. Ms Yang pleaded in her Reply that she had been misled into entering the transactions. Derrington J noted the allegation made the evidence technically relevant, and even observed that if the funds had been obtained by misleading conduct that might bear on the reasonableness of the payments. But nothing substantial was made of the point at trial, and he placed no further weight on it. The court expressly declined to make findings about it. That is a second missed argument in a case that ultimately failed because a third argument — that the payments were made “for the benefit of” Ms Wong — was never pleaded either.
How many others?
The honest answer is that nobody knows, and the litigated cases are close to useless as a measure.
There is no public register of business visa applicants who lost their capital. Reported judgments capture only the residue: disputes where the investor had money left to litigate, where a defendant was still solvent, and where somebody was prepared to spend years and a substantial costs exposure on the attempt. Ms Yang is now facing two adverse costs orders and has recovered nothing.
Several factors suppress the visible caseload well below the real one:
- The counterparty is usually insolvent by the time the problem is discovered, so there is nothing to sue for. Axis North was wound up in 2022; Ms Yang had to buy the liquidators’ cause of action to bring her claim at all.
- Complaint carries visa risk. An applicant mid-pathway who reports that their qualifying business was a sham is reporting a problem with their own application.
- Confidential settlement is the norm where any money remains.
- The loss is often characterised as commercial misfortune, because on paper the investor knowingly took an equity or unsecured lending position.
What is documented is the scale of the cohort and its dissatisfaction. By 2022 the queue for business investment visas exceeded 30,000 people. Processing times for permanent business visas blew out to nearly three years. In 2023, Chinese migrants protested in Sydney over delays in a scheme they had already paid into. Against that population, a handful of reported Federal Court decisions plainly represents a fraction.
Why the programme ended — and what it doesn’t fix
The Business Innovation and Investment Program closed to new applications on 31 July 2024. Subclass 132 had already closed. Refunds of the visa application charge were offered from September 2024 to applicants who withdrew. The National Innovation Visa (subclass 858) took its place.
The stated reasons were economic, not protective. A March 2023 government review found BIIP migrants contributed less to the economy than the average Australian, estimating their lifetime economic contribution at around $600,000 against $1.6 million for Australians generally — the cohort tended to be older and to earn lower incomes from passive investment returns. The Grattan Institute had campaigned for abolition, noting that seven in ten business investment visas were issued under the innovation stream rather than the significant investor stream, that the businesses involved were typically small retail and hospitality operations, and that there was little sign the visas financed projects that would not otherwise have occurred. The Home Affairs Minister put it bluntly in 2022, saying she could not see many reasons to keep it.
Investor harm was not the headline argument. But it is not unrelated. A programme that requires capital to be placed in Australian ventures, sets a queue long enough that applicants become desperate, and makes the investment a precondition of the migration outcome, creates an obvious market for people willing to accept that capital on terms nobody would otherwise sign. The economic underperformance the review measured and the vulnerability the courts keep encountering are two readings of the same design.
Closing the programme stops new entrants. It does nothing for the people already inside it. Applications lodged before 31 July 2024 continue to be processed. Money advanced in 2018, 2019 and 2020 is still sitting in structures like Axis North. The litigation from this cohort has years to run, and the limitation periods are running with it — as Yang v Wong demonstrates with painful precision. Ms Yang’s winding-up application was filed on 14 March 2022; the four-year clawback window under s 588FE(6A) opened on 15 March 2018, the exact date of the first transfer out. One day’s delay and the earliest payments would have fallen outside the window entirely.
The vocabulary of illusion
What lingers about Derrington J’s judgment is its language. Across the reasons he returns repeatedly to the gap between what a document appears to give and what it actually gives.
The security was plainly illusory. The purpose clause masquerades as a warranty. The benefits of the transaction were minimal, if not illusory. Axis North’s right to recover its loan was practically worthless. Ms Yang’s prospect of repayment rested on nothing more than the beneficent exercise of discretion by the very men who profited from refusing, and that expectation was worthless.
He went further than the case required in one passage. Describing the practice of using a treasury company with little or no assets that accumulates the group’s debts and is sacrificed when the development strikes trouble, he observed that experienced lenders demand real property security and less informed persons do not — and that courts should not endorse the use of sacrificial companies as having any connection with ordinary commercial practice.
That is a judge who saw exactly what the structure was for, and said so on the record even though it made no difference to the result.
The uncomfortable conclusion is that Ms Yang lost twice over. She lost the $3.5 million because the documents she signed were built to fail her. She lost the litigation because of how the claim was pleaded — the judge found the transaction commercially indefensible and said in terms that he would have ordered repayment of $2.8 million had the payment element been made out. Both losses were avoidable, and both trace back to the same root: at every stage, the commercial question was somebody else’s problem.
This article discusses two published Federal Court judgments and the findings made in them on the evidence before the Court. In Yang v Wong [2025] FCA 693 the Court expressly declined to determine allegations of misleading conduct, and noted that related proceedings between the parties’ associates remained on foot. Nothing here is legal advice. Anyone in a comparable position should obtain independent commercial and insolvency advice promptly, as limitation periods in this area are short and unforgiving.
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