CHAMI & ADA REAL ESTATE PTY LTD (Migration)

[2020] AATA 3103

CHAMI & ADA REAL ESTATE PTY LTD (Migration) [2020] AATA 3103 (8 June 2020)

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DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  CHAMI & ADA REAL ESTATE PTY LTD

CASE NUMBER:  1727554

DIBP REFERENCE(S):  BCC2017/1081197 BCC2017/972274

MEMBER:Alan McMurran

DATE:8 June 2020

PLACE OF DECISION:  Sydney

DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

Statement made on 08 June 2020 at 12:04pm

CATCHWORDS
MIGRATION – Employer Nomination – approval of nominated position – Temporary Residence Transition nomination stream – Contract Administrator – real estate agency – oversee project development sales contracts – financial capacity to maintain visa holder’s employment – decision under review set aside

LEGISLATION
Migration Regulations 1994 (Cth), r 5.19

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application lodged 8 November 2017 for review of a decision made by a delegate of the Minister for Immigration on 20 October 2017 to reject the applicant’s application for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).

2. The applicant applied for approval on 12 March 2017. The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Regulations which contains two alternative streams: A Temporary Residence Transition nomination (r.5.19(3)) stream and a Direct Entry nomination (r.5.19(4)) stream. If the application is made in accordance with r.5.19(2) and meets the requirements of either stream, then the application must be approved. If any of the requirements are not met, then the application must be refused: r.5.19(5).

3. In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Temporary Residence Transition nomination stream. The nominee, Ms Shelly Shelly, has a related visa application[1] for review in the Tribunal, for the nominated position of Contract Administrator ANZSCO 511111.

   Background

   [1] 1732344

4. The applicant is a registered corporation trading in the Parramatta district of Sydney as a real estate agency. It is a general real estate business which includes property management and residential sales from project development. The business commenced in 2012 as a partnership between Gihad Chami and Shane Ada, who each contributed approximately $60,000 for capital start-up.

5. The business is currently still operating, although things have changed since this application was lodged in March 2017. The business has restructured, and the partner, Mr Ada, left the business and sold his half interest to Mr Chami in 2017 for $130,000. Mr Chami is now the sole director and proprietor. The nominee commenced maternity leave in about January 2018 and has yet to return to the business. The nominee will return on a full-time basis, if her visa is approved.

6. The applicant is also looking to employ a property manager, as well as continuing the employment of the nominee. The business has focused on property management since about 2017 but is now looking to re-engage and develop the project development side of the business and related residential sales. The owner sees himself as playing the major role in re-orienting the business while engaging the property manager to take over the role he has largely been performing himself. The nominee will be required to oversee the project development side of the business, and compliance issues for project contracts. The business intends to keep growing the property management portfolio which is described as the “backbone” for the real estate business.

7. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(3)(d)(i) of the Regulations because the delegate was not satisfied on the evidence then presented that the applicant had demonstrated the financial capacity to pay the nominee’s full-time salary for at least the next 2 years.

8. On 7 April 2020, the Tribunal requested the applicant by letter to provide information. The applicant’s representative responded within time on 20 April 2020 and 27 April 2020, providing documents for consideration. The Tribunal was not satisfied on the information provided to favourably conclude the matter and proceeded to a hearing.

9. The applicant’s director, Mr Chami, appeared for a hearing before the Tribunal on 5 June 2020 by telephone, in line with the Tribunal’s pandemic practice direction, to give evidence and present arguments. The applicant’s representative did not appear. The applicant was otherwise represented in relation to the review by its registered migration agent.

10. For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision approving the nomination.

    CONSIDERATION OF CLAIMS AND EVIDENCE

11. The issue in this case is whether the applicant meets the requirements for approval of the nomination under the Temporary Residence Transition nomination stream set out in r.5.19(3), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.

12. The issue for consideration was the financial capacity of the business to meet its employment obligations and salary commitments in respect of the nominee, and for a continuous period of at least 2 years following approval of the nomination, and the issue of a visa to the nominee by the Department.

    The Director’s evidence

13. The Tribunal explained to the director the purpose of the hearing, and consideration afresh of the information provided in support of the application. This included the recent documentation produced for the Tribunal by the representative on 20 April 2020 and 27 April 2020, and in response to the Tribunal’s request made by letter on 7 April 2020.

14. The director was asked if any further information was to be submitted and the director confirmed that the representative has “provided everything” as far as he was aware. The Tribunal also has regard to the oral evidence and discussion at the hearing. The director did not seek any adjournment or extension of time to raise any further matters for consideration.

15. The director explained the applicant’s background. He described the business and the changes that have occurred over the years since the application was filed. He said he was principally experienced on the property management side but looking to move back into sales from project developments. He said he was looking to employ a property manager to take over his workload, and to free him to grow the business and manage project development sales. The applicant employs one other sales representative who works with the director on commission, a receptionist, and a part-time office administration manager who comes in 3 days a week.

16. He said he had spoken to the nominee about 2 weeks ago, confirming the position as contract administrator was still available to her, and that the nominee will be required to oversee project development sales contracts. The director said that project compliance is now much more “stringent”, and ensuring contract details are correct and compliant is a key part of the business. He said the nominee wants to resume her employment and is ready to do so, if her visa is approved. The director was asked if he still needed the contract administrator for the role nominated, which the director confirmed saying he would not be able to grow the business otherwise, as he could not oversee everything on his own.

17. The Tribunal had a discussion principally about the financial performance of the business. The Tribunal drew attention to the reasons provided by the delegate, and the figures provided for 2015 and 2016 financial years which were not accepted, and the other apparent discrepancies with the organisational chart and number of employees.

18. The director confirmed that to the best of his recollection that the financial statements for 2015 and 2016 were correct. The Tribunal notes that those figures, which had not been confirmed as lodged with the ATO at that time, have since been confirmed through the production of receipts confirming online lodgement with the ATO. Confirmation of lodgement was an issue for the delegate, which has now been resolved. The figures are consistent with those set out in the delegate’s decision, which show financial results covering the period for the financial years ending June 2016 and June 2017. The Tribunal accepts those figures as provided and correctly recorded by the delegate, as accurate. Those figures have been supplemented with the most recent financials (ATO returns) made available.

19. The figures show a modest profit for each of the years 2015-2018. The following financial year, ending June 2019, shows a loss of $77,188. The Tribunal noted that this loss occurred in a period when the nominee was on maternity leave, and her annual salary (including superannuation) amounting to $62,000 per annum was not included in the gross wages. The director was asked to explain. The director said that in (he thought late) 2017 he bought out the interest of Mr Ada for $130,000. He paid the sum over a 6 to 9-month period towards the end of 2018. He said it was a large sum to absorb and he had paid some from business income, and some from personal assets. Otherwise, he noted and agreed that the business income in the same period (FYE 2019) was recorded by the ATO at $447,000, which was a significant increase on the previous year. The director said that things had taken a “downturn” for his business in the real estate sector in 2017 but had started to improve in 2018/19.

20. Other than the dislocation caused by dissolving the partnership, the business performance had been relatively consistent, but for the downturn in 2017. The director said this was confirmed by the expenses, which remained more or less consistent from 2015 to 2017, then reduced in 2018 (after the nominee left on maternity leave) but then significantly increased again (FYE 2019) when he drew on funds from the business to assist in the buyout of his business partner.

21. The Tribunal notes the recent submission in April 2020 from the representative which includes copies of the lodged taxation returns for the company and submitted business activity statements for the company (BAS), covering the periods from March 2018 to December 2019. The BAS and the tax returns for 2018/19 have been acknowledged and receipted by the ATO and are accepted as correct.

22. The Tribunal asked questions about the buyout of the business partner, and how the sale figure of $130,000 was arrived at. The director said he negotiated with his partner based on the recorded value of the interest, which the financial reports showed was approximately $122,000. He said his partner wanted more, but he paid him what he believed was the appropriate value according to the industry standard. Although no independent evidence was provided of the sale of the business interest to the business partner, the Tribunal found no reason not to accept the evidence given on oath as true and correct, particularly in light of the recent financial figures which supported the director’s explanation as drawings from the business to help pay out the partner, and from the ASIC record.

23. The Tribunal finds after hearing the director’s evidence that there is no reason on the available information to doubt the accuracy of the financial information produced.

    The application must be compliant: r.5.19(3)(a)

24. Regulation 5.19(3)(a) requires that the application for approval must be in the approved form, must be accompanied by the prescribed fee and, where applicable, must include the required written certification relating to conduct that contravenes s.245AR(1). The application must also identify a relevant person and occupation.

25. The Tribunal is satisfied on the available information that the application was made on the form 1395 (Internet) for post 23 March 2013 applications and accompanied by the fee prescribed in r.5.37.

26. The Tribunal further finds that the application includes a written certification confirming the nominator has not engaged in conduct in relation to the nomination that contravenes s. 245AR(1).

27. The Tribunal is satisfied the application identifies the nominee as a person who held a subclass 457 visa, granted based on satisfying cl.457.223(4).

28. The Tribunal finds on the information from the Department’s file that the applicant has identified the occupation of contract administrator in relation to the position that is listed in ANZSCO, and has the same 6 digit code (511111) as the occupation carried out by the Subclass 457 visa holder.

29. Given the above findings, the requirement in r.5.19(3)(a) is met.

    Status of the nominator: r.5.19(3)(b)

30. Regulation 5.19(3)(b) requires the nominator to be or have been the relevant standard business sponsor who is actively and lawfully operating a business in Australia. In addition, the nominator, as that standard business sponsor, must not have met certain criteria relating to the operation of a business overseas, in the most recent sponsorship approval.

31. The Tribunal is satisfied on the available information that:

    ·    the applicant/nominator is the standard business sponsor who last identified the holder of the Subclass 457 visa (the nominee) in a nomination made on 12 March 2017, under s.140GB of the Act; and

    ·    is actively and lawfully operating a business in Australia; and

    ·    was not granted the most recent business sponsorship based on meeting either r.1.20DA, r.2.59(h) or r.2.68(i).

32. Given the above, the requirement in r.5.19(3)(b) is met.

    Previous employment of the nominee: r.5.19(3)(c)

33. Broadly speaking, to meet the requirement in r.5.19(3)(c), either:

    ·     the nominee must have been employed full time in Australia in the position for which he or she holds a Subclass 457 visa for at least 2 of the 3 years preceding the nomination application; or

    ·     the nominee holds a Subclass 457 visa on the basis that she was identified in a nomination of a specified occupation for that visa, the nominator nominated the occupation, and the nominee has been employed in that occupation for at least 2 years in the 3 years immediately before the application.

34. The Tribunal notes the ASIC records produced to the Department and more recently the current ASIC registration details produced in April 2020. Those documents show the applicant is a current entity trading in New South Wales as a retail real estate business.

35. The Tribunal has had regard to the employment agreements dated March 2014 and November 2017 provided by the applicant. Those records disclose that the employee was engaged in 2014 as a contract administrator. The director’s evidence revealed the nominee has been on maternity leave since January 2018 but is now ready to return to the workforce. The Tribunal notes from the pay records produced by the applicant, and the nominee’s bank statements and records, that the applicant correctly paid the nominee’s salary for the 3 years from November 2014 to December 2017 while the nominee was a full-time employee. This was the period during which the applicant held her 457 visa.

36. Given the above findings, the requirement in r.5.19(3)(c) is met.

    Future employment of the visa holder: r.5.19(3)(d)

37. Regulation 5.19(3)(d) only applies to certain nominees (those described in r.5.19(3)(c)(i)). For this class of person, the Regulations require that the nominee will be employed on a full-time basis for at least 2 years on terms that do not expressly preclude the possibility of an extension.

38. This was the issue raised for concern by the delegate and considered at length by the Tribunal and at the hearing.

39. The Tribunal has carefully considered the financial evidence produced. The Tribunal has discussed the matter at length with the director. The Tribunal finds on the director’s evidence that the retail business is continuing and seeking to expand its project development portfolio. The Tribunal is satisfied the nominee has been identified as the person best suited to assist the applicant in conducting its project development business, which involves administering residential sales contracts for accuracy and compliance.

40. The applicant has been trading successfully since 2012. The financial loss sustained recently has been explained. The Tribunal finds on the available evidence that there is no reason to find the business will not continue to trade in the Parramatta district of Sydney, which is a busy residential and commercial hub. The director has committed substantial financial investment in the business. The Tribunal is satisfied the applicant will continue to engage the nominee in the role specified, upon her return from maternity leave. The question of financial capacity which troubled the delegate and caused the Tribunal to request further information, concerns principally whether the proposed salary of $62,000 per annum for the nominee is affordable.

41. The Tribunal finds on the basis of the discussion at hearing set out above that it is satisfied the applicant has the financial capacity and trading history to ensure continuing employment of the nominee for a period of not less than 2 years from the date of the visa approval, and that the terms and conditions of employment do not expressly exclude the possibility of extending the period.

42. Given the above findings, the requirement in r.5.19(3)(d) is met.

    No less favourable terms and conditions of employment: r.5.19(3)(e

43. Regulation 5.19(3)(e) requires that the terms and conditions of employment applicable to the nominated position will be no less favourable than those that are, or would be, provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location.

44. The Tribunal has had regard to the employment agreements produced and the employment history outlined by the director at the hearing. The Tribunal finds it is satisfied that the terms and conditions of employment are no less favourable than those that would be provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location at Parramatta in Sydney.

45. Accordingly, the requirement in r.5.19(3)(e) is met.

    Training commitments and obligations: r.5.19(3)(f)

46. Regulation 5.19(3)(f) requires the applicant to have fulfilled any commitments made relating to meeting training requirements, and complied with applicable obligations relating to training requirements, during the period of the applicant’s most recent sponsorship approval.  These requirements may be disregarded if it is reasonable to do so.

47. The Tribunal is satisfied on the available information that the period of the applicant’s most recent sponsorship approval was from 4 July 2014 until 4 July 2017.The Tribunal is required to have regard to the training benchmarks applicable during this time. Compliance is assessed on an annual basis. Where the business has been operating for more than 12 months in the period of the sponsorship agreement, it must satisfy the criteria by maintaining the level of training expenditure throughout each year of the agreement. If the sponsor fails to do so, the Tribunal may then consider whether it is reasonable to disregard the requirement. The applicant needs to maintain records of the expenditure.

48. The training requirements as specified by the Minister in the relevant instrument require that the business demonstrate expenditure of at least the equivalent of 2% of payroll in payments allocated to a training fund operating in the same or related industry (training benchmark A). Alternatively, the business demonstrates recent expenditure by the business to the equivalent of at least 1% of the payroll and that the provision of the training is related to the business purpose (training benchmark B).

49. The Tribunal has had regard to the information provided to the Department, which remains unchanged. That information discloses that for the 2014 year, the applicant spent $2000 training Australian citizens in a course of administrative support and organisational skills relevant to the real estate business. In 2015, the applicant spent $2100 on training Australian citizens in business acumen and ethics, skills relevant to the business. In 2016, the applicant expended $3000 on training Australian citizens in personal productivity and awareness, relevant to managing the business. The expenditure in each instance was evidenced with details of the citizenship, wage records for payroll for the periods and receipts from the training entity.

1. The Tribunal finds accordingly it is satisfied the applicant has met the requirements for benchmark B, having expended at least 1% of payroll for each of the years as a standard business sponsor on training relevant Australian citizens in the applicant’s employ.

2. Accordingly, the requirement in r.5.19(3)(f) is met.

   No adverse information known to Immigration: r.5.19(3)(g)

3. Regulation 5.19(3)(g) requires that there is no adverse information known to Immigration about the nominator or person associated with the nominator; or it is reasonable to disregard any such information. For these purposes, ‘adverse information’ and ‘associated with’ have the meaning given in rr.1.13A and 1.13B. 

4. The Tribunal finds on the available information, that there is no adverse information known to immigration about the nominator or person associated with the nominator; or it is reasonable to disregard any such information. For these purposes, ‘adverse information’ and ‘associated with’ have the meaning given in rr.1.13A and 1.13B

5. The Tribunal accepts from the Department’s file that there has been no concern raised about the activities of the nominator or any person associated with the nominator by monitoring or audit or otherwise, and the director himself was unaware of any such activity.

6. Accordingly, the Tribunal is satisfied the requirement in r.5.19(3)(g) is met.

   Satisfactory compliance with workplace relations laws: r.5.19(3)(h)

7. Regulation 5.19(3)(h) requires the applicant to have a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations.

8. The Tribunal is satisfied on the available information that the applicant has a satisfactory record of compliance with the laws of the Commonwealth, and in New South Wales where the applicant operates its business, relating to workplace relations.

9. Accordingly, the requirement in r.5.19(3)(h) is met.

   Summary

10. Based on the findings above, the Tribunal is satisfied that the applicant meets the requirements of r.5.19 for approval of the nomination of the position in Australia.

    DECISION

11. The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

    Alan McMurran
    Member

    
    

    ATTACHMENT  -  EXTRACTS FROM THE MIGRATION REGULATIONS 1994

    5.19Approval of nominated positions (employer nomination)

    …

    (2)The application must:

    (a)be made in accordance with approved form 1395…; and

    (aa) include a written certification by the nominator stating whether or not the nominator has engaged in conduct, in relation to the nomination, that constitutes a contravention of subsection 245AR(1) of the Act; and

    (b)be accompanied by the fee mentioned in regulation 5.37.

    Temporary Residence Transition nomination

    (3)The Minister must, in writing, approve a nomination if:

    (a)the application for approval:

    (i)       is made in accordance with subregulation (2); and

    (ii)      identifies a person who holds a Subclass 457 … visa granted on the basis that the person satisfied the criterion in subclause 457.223(4) of Schedule 2; and

    (iii)     identifies an occupation, in relation to the position, that:

    (A)is listed in ANZSCO; and

    (B)has the same 4-digit occupation unit group code as the occupation carried  out by the holder of the Subclass 457 … visa; and

    (b)the nominator:

    (i)       is, or was, the standard business sponsor who last identified the holder of the Subclass 457 … visa in a nomination made under section 140GB of the Act or under regulation 1.20G or 1.20GA as in force immediately before 14 September 2009; and

    (ii)      is actively and lawfully operating a business in Australia; and

    (iii)     did not, as that standard business sponsor, meet regulation 1.20DA, or paragraph 2.59(h) or 2.68(i), in the most recent approval as a standard business sponsor; and

    (c)either:

    (i)       both of the following apply:

    (A)in the period of 3 years immediately before the nominator made the application, the holder of the Subclass 457 …visa identified in subparagraph (a) (ii) has:    

    (I)held one or more Subclass 457 visas for a total period of at least 2 years; and

    (II)been employed in the position in respect of which the person holds the Subclass 457 … visa for a total period of at least 2 years (not including any period of unpaid leave);

    (B)the employment in the position has been full-time, and undertaken in Australia; or

    (ii)      all of the following apply:

    (A)the person holds the Subclass 457 … visa on the basis that the person was identified in a nomination of an occupation mentioned in sub-subparagraph 2.72(10)(d)(iii)(B) or sub-subparagraph 2.72(10)(e)(iii)(B);

    (B)the nominator nominated the occupation;

    (C)the person has been employed, in the occupation in respect of which the person holds the Subclass 457 … visa, for a total period of at least 2 years in the period of 3 years immediately before the nominator made the application; and

    (d)for a person to whom subparagraph (c)(i) applies:

    (i)       the person will be employed on a full-time basis in the position for at least 2 years; and

    (ii)      the terms and conditions of the person’s employment will not include an express exclusion of the possibility of extending the period of employment; and

    (e)the terms and conditions of employment applicable to the position will be no less favourable than the terms and conditions that:

    (i)are provided; or

    (ii)would be provided;

    to an Australian citizen or an Australian permanent resident for performing equivalent work in the same workplace at the same location; and

    (f)either:

    (i)       the nominator:

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

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

    (ii)      it is reasonable to disregard subparagraph (i); and

    Note Different training requirements apply depending on whether the application for approval as a standard business sponsor was made before 14 September 2009 or on or after that date.

    (g)either:

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

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

    (h)the nominator has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations.