1603101 (Migration)

[2016] AATA 4287

1603101 (Migration) [2016] AATA 4287 (29 August 2016)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Pioneer Glass Pty Ltd

CASE NUMBER:  1603101

DIBP REFERENCE(S):  BCC2014/1072099

MEMBER:Jennifer Ciantar

DATE:29 August 2016

PLACE OF DECISION:  Sydney

DECISION:The Tribunal affirms the decision not to approve the applicant as a standard business sponsor.

Statement made on 29 August 2016 at 3:26pm

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Immigration on 27 June 2014 not to approve the applicant as a standard business sponsor.

2. The applicant applied for approval as a standard business sponsor under s.140E of the Migration Act 1958 (the Act) and r.2.61 of the Regulations on 28 April 2014. The delegate decided not to approve the application on the basis that the applicant did not satisfy r.2.59(d) of the Migration Regulations 1994 (the Regulations) because the applicant had not provided evidence to show they meet either of the training benchmarks.

3. On 15 September 2014 the Migration Review Tribunal decided it did not have jurisdiction to review this decision. On 19 February 2016 the Federal Magistrates Court ordered that the matter be remitted to the Tribunal for reconsideration.

4. On 18 May 2016 the Tribunal wrote to the applicant and invited them to provide information to show that they meet the requirements of r.2.59 and 2.60S of the Regulations. An extension of time was granted.

5. The applicant provided the Tribunal with:

• Interim financial statements for MJ Chidiac Family Trust ABN 34 467 362 580 for the period 1 July 2015 to 31 March 2016. This statement shows that the wages expenditure was $40,202 and training expenses were$2,272.73. The net profit was $137,658.64. The trustee’s declaration indicates that Pioneer Glass Australia Pty Ltd is the trustee and the Directors of this entity are Marcell Chidiac and Jocelyne Chidiac.

• A beneficiaries profit distribution summary for the year ending 30 June 2015 for the MJ Chidiac Family Trust ABN 34 467 362 580.

• Financial statements for MJ Chidiac Family Trust for the year ending 30 June 2015 which shows expenditure of $125,000 on wages.

• BAS statements for MJ Chidiac Family Trust for the periods 1 July 2015 to 30 September 2015, 1 October 2015 to 31 December 2015 and 1 January 2016 to 31 March 2016.

• Financial statements for Pioneer Glass Pty Ltd ABN 65 127 585 657, for the year ending 30 June 2014, which show total wages of $203,500.

• Financial statements for Pioneer Glass Pty Ltd ABN 65 127 585 657, for the year ending 30 June 2013, which show total wages of $46,250,

• evidence of lodgement of business activity statements,  

• a letter dated 11 September 2015, addressed to Cheveux Bridal Hair from TAFE which refers to a training plan for an apprentice/trainee and an attestation.

• An email dated 3 June 2016 from PFS accountants which states that Marcell and Jocelyne Chidiac are the beneficiaries of the Trustee for MJ Chidiac Family Trust and do not draw a wage. Ms Park is paid $40,000 per annum. In the current financial year the business has spent an estimated $4000 on training.

1. In a letter dated 27 May 2016, Mr Charlie Chidiac, Senior Tax Consultant, writes that on 1 July 2015 the business restructured to a family trust for tax purposes and continues to work in the same manner as the last 6 years. In a separate letter (undated) Mr Charlie Chidiac, Senior Tax Consultant, writes that the business turnover is well over $500,000 and that the businesses, Pioneer Glass NSW and Jocelyne Chidiac Bridal Hair are owned by and trading under The Trustee for MJ Chidiac Family Trust.

2. The applicant, represented by Mr Chidiac, appeared before the Tribunal on 8 July 2016 to give evidence and present arguments. The Tribunal hearing was conducted with the assistance of an interpreter in the Arabic and English languages. The hearing was combined with that of the visa applicant (file number 1602184).  

3. The applicant stated that he had been refused approval as a standard business sponsor because the business did not employ an apprentice. The business, which is a hairdressing salon, has employed a number of trainees and apprentices but they never stay more than a month. Currently the business employs Ms Jessica Lahood as an apprentice. Her wages are the staff training item, $2272.73, in the interim financial statements provided to the Tribunal. The Tribunal put to the applicant that he has not provided specific evidence to show that the training benchmarks are met, despite having been invited to do so first by the Department and then by the Tribunal. The Department had also explained in its decision record that the information provided by the applicant was inadequate. Given that the applicant has had a number of years to provide the required information the Tribunal is reluctant to allow further time but will allow the applicant 2 weeks. The applicant said he may consider making a contribution to an industry training fund. The Tribunal referred the applicant to the training benchmarks set out in the relevant Notice which had been attached to the Tribunal’s letter.

4. The applicant stated that the original business name and applicant was Pioneer Glass Pty Ltd but this entity is no longer operating and the Trustee for the MJ Chidiac Family Trust is Pioneer Glass Australia Pty Ltd. The Tribunal put to the applicant that it seems that the legal entity that lodged the application is not operating and a different legal entity would be the employer, which may not meet the requirements of the Regulations. The applicant said he would provide information about the change of legal entity and the identity of the trustee. Even though there has been a change of name and ABN, the business itself has not changed. The applicant confirmed that he and his wife are the Directors of Pioneer Glass Australia Pty Ltd and they are also the beneficiaries of the Trust. Mrs Chidiac operates a hairdressing salon which had been called Cheveux hair but is now operating under her name, as a competitor was also called Cheveux. Mr Chidiac operates Pioneer Glass and he uses subcontractors, not employees.

5. The applicant stated that as far as he is aware, there is only one set of financial statements and it contains information about both businesses- the hairdressing salon and Pioneer Glass. The salary item refers to the salary paid to Ms Park, the visa applicant, who works in the hairdressing salon. The hairdressing business really relies on Ms Park as she serves about 70% of the salon’s clients. The applicant believes that the business might close if it lost Ms Park’s services. She has worked for the business for 12 months full time and 2 years part-time.

6. The Tribunal also noted that 2 BAS had been lodged for the October to December 2015 quarter. The applicant stated that this had occurred at a time when the accountant was changing firms but generally only 1 BAS is lodged each quarter.

7. After the hearing the applicant provided the Tribunal with:

• A Discretionary Trust deed for MJ Chidiac Family Trust which identifies Pioneer Glass Australia Pty Ltd CAN 167 108 563 as the Trustee.

• A letter from Charlie Chidiac, Senior Tax Consultant, PFS Accountants, which states that:

  We act on behalf of MJ Chidiac Family Trust, Pioneer Glass Pty Ltd, Marcell Chidiac and Jocelyn Chidiac. Their business has been in operation since 2008 under the company name Pioneer Glass Pty Ltd. Marcell Chidiac and Jocelyn Chidiac restructured for tax purposes to MJ Chidiac Family Trust. They have continued to work in the same manner as Pioneer Glass Pty Ltd. The directors and shareholders are Marcell Chidiac and Jocelyn Chidiac in Pioneer Glass Pty Ltd and they have become the main beneficiaries and directors of The Trustee for MJ Chidiac Family Trust. We have been Marcell and Jocelyne(s) accountants since 2004. The business turnover for the current financial year is well over $500,000. I can confirm that the businesses, Pioneer Glass NSW and Jocelyne Chidiac Bridal Hair are owned by and trading under The Trustee for MJ Chidiac Family Trust.

• A Receipt from Sydney Institute TAFE for $2600 for the Hairdressing and Beauty Scholarship Fund.   

1. On 4 August 2016 the Tribunal wrote to the applicants and the relevant part of the letter is as follows:

   In conducting the review, we are required by the Migration Act 1958 to invite Pioneer Glass Pty Ltd to comment on or respond to certain information which we consider would, subject to any comments or response it makes, be the reason, or a part of the reason, for affirming the decision under review.

   Please note, however, that we have not made up our mind about the information.

   The particulars of the information are as follows:

   The sponsor application form was lodged by Pioneer Glass Pty Ltd. No ACN was provided but the ASIC records indicate that the ACN was 127 585 657. The Balance Sheet and Profit and Loss Statement for July 2013 to September 2013 provided with the application refer to Pioneer Glass Pty Ltd T/as Pioneer Glass T/as Cheveux Hair & Beauty. You provided the Tribunal with Financial Statements for the year ended 30 June 2014 for Pioneer Glass Pty Ltd. No further financial statements or BAS have been provided for Pioneer Glass Pty Ltd.

   You told the Tribunal that although Pioneer Glass Pty Ltd continues to be registered, it is no longer operating and it does not lodge financial statements or BAS, as they are now lodged by the Trust. You told the Tribunal that there has been a restructure and the business now operates through the MJ Chidiac Family Trust. The sponsor declarations provided to the Tribunal were signed by Marcell Chidiac as a representative of MJ Chidiac Family Trust. Your accountant advised the Tribunal that on 1 July 2015 the business restructured to a family trust for tax purposes although it continues to work in the same manner as the last 6 years.

   A trust deed has been provided which states that the Trustee for the MJ Chidiac Family Trust is Pioneer Glass Australia Pty Ltd and ASIC records indicate that the ACN for Pioneer Glass Australia Pty Ltd is 167 108 563. However, your accountant Mr Charlie Chidiac, Senior Tax Consultant, PFS Accountants, stated in a letter to the Tribunal that:

   We act on behalf of MJ Chidiac Family Trust, Pioneer Glass Pty Ltd, Marcell
   Chidiac and Jocelyn Chidiac. Their business has been in operation since 2008
   under the company name Pioneer Glass Pty Ltd. Marcell Chidiac and Jocelyn
   Chidiac restructured for tax purposes to MJ Chidiac Family Trust. They have
   continued to work in the same manner as Pioneer Glass Pty Ltd. The directors
   and shareholders are Marcell Chidiac and Jocelyn Chidiac in Pioneer Glass
   Pty Ltd and they have become the main beneficiaries and directors of The
   Trustee for MJ Chidiac Family Trust. We have been Marcell and Jocelyne
   accountants since 2004. The business turnover for the current financial year is
   well over $500,000. I can confirm that the businesses, Pioneer Glass NSW and
   Jocelyne Chidiac Bridal Hair are owned by and trading under The Trustee for
   MJ Chidiac Family Trust.

   Mr Charlie Chidiac makes no reference to Pioneer Glass Australia Pty Ltd who is the Trustee for MJ Chidiac Family Trust, according to the trust deed provided to the Tribunal.

   The Australian Business Register extract for The Trustee for MJ Chidiac Family Trust states that the ABN status is active from 17 December 2013 and was registered for GST from 1 October 2014, which is some months after the business sponsorship visa application was lodged.

   This information is relevant as it may lead the Tribunal to find that the applicant for a business sponsorship visa was Pioneer Glass Pty Ltd but the legal entity which is now proposed as the standard business sponsor is The Trustee for MJ Chidiac Family Trust, and this is a different legal entity to Pioneer Glass Pty Ltd.

   The Tribunal might further find that although Pioneer Glass Pty Ltd is still registered, this legal entity, which is the applicant, is no longer operating, taking into account the oral and documentary evidence provided and the absence of any BAS or financial statements since the year ending 30 June 2014 for this entity. If the Tribunal makes this finding it may further find that Regulation 2.59(c), which requires that the applicant is lawfully operating a business either in or outside Australia, is not met.

   Pioneer Glass Pty Ltd is invited to give comments on or respond to the above information in writing.

2. The applicant responded on 11 August by stating that at the time that the application was lodged Pioneer Glass Pty Ltd was trading and continues as MJ Chidiac Family Trust, restructured, as advised by the accountant. Pioneer Glass Pty Ltd is the former name of the family trust and as stated by the accountant, it has the same beneficiaries and directors. Delays by the Department and the Tribunal led to the overlap of date as noted with the registration for GST from 1 October 2014.

3. For the following reasons, the Tribunal has decided to affirm the decision under review not to approve the applicant as a standard business sponsor.

   CONSIDERATION OF CLAIMS AND EVIDENCE

4. The issue in this case is whether the applicant meets the requirements for approval as a standard business sponsor in accordance with the criteria in r.2.59 and the additional criteria in r.2.60S, which must be satisfied regardless of when the application for approval was made. For the application to be approved, all the requirements must be met: s.140E(1).

   Lawfully operating business

5. Regulation 2.59(c) requires that the applicant is lawfully operating a business either in or outside Australia.

6. The applicant gave oral evidence that he and his wife operate 2 business activities. He has a glazing business and his wife has a hairdressing salon. The intention is to sponsor the nominee, Ms Park, who is employed as a hairdresser in the hairdressing salon.

7. The business sponsorship visa application lodged with the Department states that the legal name of the applicant is Pioneer Glass Pty Ltd and the Trading Name is Cheveaux Hair and Beauty. The structure of the business is a company. The ACN of Pioneer Glass Pty Ltd is  127 585 657. A BAS for this entity for the period 1 July 2013 to 30 September 2013 was provided, as were Financial Statements for the year ended 30 June 2013. The statements indicate that the Director was Marcell Chidiac and the principal activities were Glazing.

8. Although the hairdressing salon and the glazing activities continue, the oral and documentary evidence provided to the Tribunal is that there has been a restructure for tax purposes. The accountant’s letter of 3 June 2016 indicates that on 1 July 2015 the business restructured to a family trust for tax purposes although it continues to work in the same manner as the last 6 years. As discussed with the applicant, and as set out in the Tribunal’s letter, the Tribunal is of the view that the Trustee for MJ Chidiac Family Trust, is a different legal entity to the entity that made the application, Pioneer Glass Pty Ltd. The trustee of the MJ Chidiac Family Trust, Pioneer Glass Australia Pty Ltd., is also a different legal entity to the original applicant, Pioneer Glass Pty Ltd.

9. The accountant states that the businesses, Pioneer Glass NSW and Jocelyne Chidiac Bridal Hair are owned by and trading under The Trustee for MJ Chidiac Family Trust. However, the trust deed which has been provided indicates that the Trustee is Pioneer Glass Australia Pty Ltd (not Pioneer Glass NSW or Pioneer Glass Pty Ltd) and its ACN is 167 108 563. Marcell and Jocelyne Chidiac are the directors of Pioneer Glass Australia Pty Ltd and they are also the beneficiaries of the Trust. No evidence has been provided that Pioneer Glass NSW or Pioneer Glass Pty Ltd is the trustee of MJ Chidiac Family Trust or a related entity of MJ Chidiac Family Trust. The Tribunal has considered the ASIC records and accepts that the holder of the business name, Pioneer Glass NSW, is The Trustee for MJ Chidiac Family Trust. However, the Tribunal is not satisfied on the basis of the available evidence that Pioneer Glass Pty Ltd ACN 127 585 657, which is the applicant, is owned by and trading under The Trustee for MJ Chidiac Family Trust.

10. The Tribunal accepts that the hairdressing salon which employs the person who the applicant wants to sponsor is still operating but the Tribunal is of the view that the salon is now operated by a different legal entity being The Trustee for MJ Chidiac Family Trust. Furthermore, the Trustee of MJ Chidiac Family Trust is Pioneer Glass Australia Pty Ltd ACN 167 108 563.

11. The Tribunal has considered the Department’s policy concerning r.2.59(c) and notes that the Department does allow for amendments to the application where an incorrect ABN or incorrect registered name has been provided on the application form. However, in this instance, no request was made for any changes to the original application. The Tribunal is of the view that the evidence provided to the Tribunal is that as of 1 July 2015 the legal entity applying for approval as sponsor changed. The applicant who lodged the sponsor application was a company, Pioneer Glass Pty Ltd, but the oral evidence of the applicant is that although Pioneer Glass Pty Ltd continues to be registered, it is no longer operating and it does not lodge financial statements or BAS, as they are now lodged by the Trust. In response to the Tribunal’s invitation, the applicant provided a number of financial statements and BAS. The applicant gave oral evidence that as far as he is aware there is only one set of financial statements and it contains information about both businesses. The most recent financial statements for Pioneer Glass Pty Ltd, before the Tribunal, are for the year ended 30 June 2014. The financial statements and BAS from 1 July 2015 are in the name of MJ Chidiac Family Trust.

12. The Tribunal has considered the applicant’s response to its invitation of 4 August 2016. However, the Tribunal finds that the application was lodged by Pioneer Glass Pty Ltd, ACN  127 585 657. The Director of that company was Marcell Chidiac. The Tribunal accepts that there has been a restructure and the activities of Pioneer Glass Pty Ltd are now carried out by the Trustee of MJ Chidiac Family Trust, which is Pioneer Glass Australia Pty Ltd, and its ACN is 167 108 563.  The Directors are Marcell and Jocelyne Chidiac. The Tribunal finds that the Trustee of MJ Chidiac Family Trust is a different legal entity to Pioneer Glass Pty Ltd. The BAS and financial statements provided to the Tribunal indicate that MJ Chidiac Family Trust has a different ABN 34 467 362 580 to that of either Pioneer Glass Australia Pty Ltd or Pioneer Glass Pty Ltd.

13. Taking into account all the oral and documentary evidence regarding the restructure, despite its ongoing registration with ASIC, the Tribunal is not satisfied that Pioneer Glass Pty Ltd 127 585 657 is still operating as a business in Australia. Therefore, the Tribunal is not satisfied that the applicant is lawfully operating a business being Pioneer Glass Pty Ltd 127 585 657 in Australia.

14. Given the above findings, the requirement in r.2.59(c) is not met.

15. For the reasons given above, the Tribunal is not satisfied that the applicant meets the applicable criteria prescribed in the Regulations to be approved as a standard business sponsor. Accordingly, the Tribunal must affirm the decision under review.

    DECISION

16. The Tribunal affirms the decision not to approve the applicant as a standard business sponsor.

    Jennifer Ciantar
    Member

    
    

    ATTACHMENT - Extracts from the Migration Regulations 1994

    2.59      Criteria for approval as a standard business sponsor

    For subsection 140E (1) of the Act, the criterion that must be satisfied for the Minister to approve an application by a person (the applicant) for approval as a standard business sponsor is that the Minister is satisfied that:

    (a)the applicant has applied for approval as a standard business sponsor in accordance with the process set out in regulation 2.61; and

    (b)the applicant is not a standard business sponsor; and

    (c)the applicant is lawfully operating a business (whether in or outside Australia); and

    (d)if the applicant is lawfully operating a business in Australia, and has traded in Australia for 12 months or more — the applicant meets the benchmarks for the training of Australian citizens and Australian permanent residents specified in an instrument in writing made for this paragraph; and

    (e)if the applicant is lawfully operating a business in Australia, and has traded in Australia for less than 12 months — the applicant has an auditable plan to meet the benchmarks specified in the instrument, in writing, made for paragraph (d); and

    (f)if the applicant is lawfully operating a business in Australia:

    (i)   the applicant has attested, in writing, that the applicant has a strong record of, or a demonstrated commitment to, employing local labour; and

    (ii)  the applicant has declared, in writing, that the applicant will not engage in discriminatory recruitment practices; and

    (g)either:

    (i)       there is no adverse information known to Immigration about the applicant or a person associated with the applicant; or

    (ii)      it is reasonable to disregard any adverse information known to Immigration about the applicant or a person associated with the applicant; and.

    (h)if the applicant is lawfully operating a business outside Australia and does not lawfully operate a business in Australia – the applicant is seeking to be approved as a standard business sponsor in relation to a holder of, or an applicant or proposed applicant (the visa applicant) for a [Subclass 457 visa], and the applicant intends for the visa holder or visa applicant to:

    (i)       establish, or assist in establishing, on behalf of the applicant, a business operation in Australia with overseas connections; or

    (ii)      fulfil, or assist in fulfilling, a contractual obligation of the applicant.

    (i)the applicant has provided to the Minister the number of persons who the applicant proposes to nominate during the period of the applicant’s approval as a standard business sponsor, and:

    (i)       the proposed number is reasonable, having regard to the information provided to the Minister; or

    (ii)      if the Minister proposes another number of persons as part of considering the application — the applicant has agreed, in writing, to nominate no more than the other number of persons during the period of the applicant’s approval as a standard business sponsor; and

    (j)if the applicant has previously been a standard business sponsor:

    (i)       the applicant:

    (A)fulfilled any commitments the applicant made relating to meeting the applicant’s training requirements during the period of the applicant’s most recent approval as a standard business sponsor; and

    (B)complied with the applicable obligations under Division 2.19 relating to the applicant’s training requirements during the period of the applicant’s most recent approval as a standard business sponsor; or

    (ii)      it is reasonable to disregard subparagraph (i).

    [Note …]

    2.60S Additional criteria for all classes of sponsor — transfer, recovery and payment of costs

    (1)For subsection 140E(1) of the Act, the criteria in this regulation are in addition to the criteria in regulations 2.59 to 2.60M.

    (2)The criteria that must be satisfied for the Minister to approve an application by a person (the applicant) for approval as a sponsor mentioned in any of regulations 2.59 to 2.60M include a criterion that the Minister is satisfied that:

    (a)the applicant has not taken any action, and has not sought to take any action, that would result in the transfer to another person of some or all of the costs, including migration agent costs, associated with the applicant becoming an approved sponsor; and

    (b)the applicant has not taken any action, and has not sought to take any action, that would result in another person paying to a person some or all of the costs, including migration agent costs, associated with the applicant becoming an approved sponsor; and

    (c)the applicant has not taken any action, and has not sought to take any action, that would result in the transfer to another person of some or all of the costs, including migration agent costs, that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and

    (d)the applicant has not taken any action, and has not sought to take any action, that would result in another person paying to a person some or all of the costs, including migration agent costs, that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and

    (e)…

    (f)....

    (3)The criteria that must be satisfied for the Minister to approve an application by a person (the applicant) for approval as a sponsor mentioned in any of regulations 2.59 to 2.60M include a criterion that the Minister is satisfied that:

    (a)the applicant has not recovered from another person some or all of the costs, including migration agent costs:

    (i)       associated with the person becoming an approved sponsor; or

    (ii)      that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and

    (b)the applicant has not sought to recover from another person some or all of the costs, including migration agent costs:

    (i)       associated with the person becoming an approved sponsor; or

    (ii)      that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and

    (c)…

    (d)…

    (4)However, the Minister may disregard a criterion referred to in subregulation (2) or (3) if the Minister considers it reasonable to do so.

    NB:  the legislation extracted above does not include criteria directed at persons who are sponsoring a Subclass 402, 416 or 488 applicant.