Classic Scissors Pty Ltd (Migration)

[2019] AATA 2615

Classic Scissors Pty Ltd (Migration) [2019] AATA 2615 (30 April 2019)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Classic Scissors Pty Ltd

CASE NUMBER:  1709821

DIBP REFERENCE(S):  BCC2016/3386003

MEMBER:Amanda Mendes Da Costa

DATE:30 April 2019

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal affirms the decision under review to refuse the nomination.

Statement made on 30 April 2019 at 9:59am

CATCHWORDS
MIGRATION – nomination of position – subclass 457 – Temporary Residence Transition nomination stream – financial capacity to provide full time employment for 2 years – Hairdresser ANZSCO 391111 – credibility issues – contrived evidence – not operating viable business – decision under review affirmed

LEGISLATION
Migration Act 1958 (Cth), s 65

Migration Regulations 1994, Schedule 2, r 5.19

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 April 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 October 2016. 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.

4. 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 that the applicant had demonstrated that the business had the financial viability and capacity to provide full-time employment to the nominee for a period of at least two years under the terms and conditions of the employment contract.

5. Mr Yogesh Kumar, director of the applicant appeared before the Tribunal on 13 February 2019 to give evidence and present arguments. The hearing was conducted as a joint hearing with the subclass 186 visa refusal review hearing of the nominee, Anand Rana.  Mr Rana gave evidence as a witness in the hearing. The Tribunal hearing was conducted with the assistance of an interpreter in the Punjabi and English languages.

6. The applicant was represented in relation to the review by its registered migration agent.

7. For the following reasons, the Tribunal has decided to affirm the decision under review to refuse the nomination.

   CONSIDERATION OF CLAIMS AND EVIDENCE

8. 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.

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

9. 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.

10. In its Employer Nomination application the applicant seeks approval for the position of Hairdresser ANZSCO 391111, with an annual base salary of $54,000.  Mr Anand Rana was identified as the nominee at the time of application.

11. On the application form, the applicant declared that the business which was established on 1 January 2013, had the registered Australian Business Number (ABN) 74161669245 and was located at 60 Newlands Road, Coburg North.  The applicant further declared that the business employed five employees (including the nominee) and the gross payroll expenditure in the previous 12 months was $100,464.

12. The nominee was granted a subclass 457 visa on 12 March 2013 valid to 12 March 2017, on the basis of an approved business nomination by the applicant who was a standard business sponsor.  The nomination was approved for the position of Hairdresser ANZSCO 391111 with a base salary of $52,000.

13. In her decision, the delegate noted that at the time of application the applicant’s employees included two employees (one of whom was the nominee) who were holders of subclass 457 visas.  These employees were each subject to employment contracts, which required the employee to be paid an annual wage of $52,000 and would therefore require wage payments of $104,000.

14. The delegate further noted that the financial documents provided by the applicant (including Business Activity Statements for the quarterly periods from 1 July 2015 to 30 June 2016; adraft company taxation return for year ended 30 June 2016; and Financial Reports for 2014,2015 and 2016) showed that the total wages for 2014, 2015 and 2016 were not sufficient to meet the agreed annual wages for the two subclass 457 visa holders, let alone the remaining employees

15. The delegate also noted that the rent paid in 2016 ($8,505) was $10,000 less than in 2015 but a copy of the lease provided by the applicant, indicated a commitment from 1 April 2016 of $14,575 per annum increasing 4% annually.  There was also no evidence of salaries or payment to the company’s directors and the company intended to increase the nominee’s annual wage to $54,000 per annum.  The delegate was not satisfied that the applicant would be able to meet this commitment.

16. The applicant provided the following documents to the Tribunal for the purpose of the review:

    ·Organisational chart for the applicant.

    ·Financial statements (including balance sheet and profit and loss statement) for the applicant for the year ended 30 June 2016.

    ·Business Activity Statements (BAS) for the applicant for the periods July–September 2017, January to March 2018, April–June 2018, July– September 2018 and October– December 2018.

    ·Australian Securities and Investment Commission details for the applicant.

    ·Taxation returns for the applicant for the years ended 30 June 2014, 30 June 2015, 30 June 2016, 30 June 2017 and 30 June 2018.

    ·Invoices for Training Benchmarks for 2017-2017.

    ·Nominee’s PAYG payment summaries, taxation returns and Notices of Assessment for the nominee for the years ended 30 June 2013, 30 June 2014, 30 June 2015, 30 June 2016 and 30 June 2017.

17. The documentation accompanying the applicant’s taxation returns shows that it was prepared by the company’s accountants.  However the markings on the taxation returns provided to the Tribunal indicate that they were to be lodged by the applicant and not its accountants.  The Tribunal notes that it has not been provided with an Assessment Notices issued by the ATO in respect of these returns or any other documentation which confirms that the returns were actually lodged by the applicant.

18. The BAS provided by the applicant show total sales for the company as follows:

    ·July-September 2017  -          $83,661;

    ·January-March 2018 -            $90,438;

    ·April-June 2018 -                   $96,328;

    ·July-September 2018 -          $98,688; and

    ·October-December 2018 -     $101,846

19. The Tribunal notes that although these figures show that the company’s income had been increasing over an 18 month period, the BAS provided do not show that the BAS were actually lodged through the ATO Business Portal or by its taxation agent.

20. No current lease agreement or documentation showing the leasing arrangements for the premises at which the applicant claims to be operating its business were provided to the Tribunal.  The Tribunal further notes that there is no documentary evidence that the applicant has paid Mr Kumar any salary since he became a director of the company and this is consistent with his oral evidence.

21. The rental expenses claimed in the applicant’s taxation returns for the years ended 30 June 2016, 2017 and 2018 are $15,530, $16,884 and $17,233 respectively. However there is no evidence which confirms that these amounts have been paid by the company.

22. The Tribunal notes that payroll advice documents generated by the applicant show the nominees salary payments for the period 1 April 2013 to 14 January 2019.  The information recorded in this documentation includes the nominee’s hourly pay rate, together with his weekly and annual salary. 

23. The documentation provided for the nominee, confirms that he lodged taxation returns for the years 2014 to 2018 and that the income declared was assessed by the Australian Taxation Office.  However, although these returns show that the nominee has declared income, it does not necessarily demonstrate that he is currently employed by the applicant in the nominated occupation of hairdresser ANZSCO 391111 and at the nominated address of 60 Newlands Road, Coburg North.

    Oral evidence of Yogesh Kumar

24. Mr Kumar told the Tribunal that he was one of two directors of the company and had invested in the business in June 2018 when he purchased the shareholding of Mr Tejinder Singh.  Mr Kumar was formerly a customer of the business and invested in it as an existing operating hairdressing salon.  He explained that both he and the other director had full time employment elsewhere.  Mr Kumar works for a Melbourne university and the other director owns and operates a 7 Eleven store.  Mr Kumar said that in future he would cease his university employment and manage the company’s hairdressing salon on a full time basis.  The two directors shared the management of the business, with Mr Kumar working on weekends and the other director also spending two to three days per week at the salon.

25. Mr Kumar explained that since he became a director of the business, the salon had continued to operate at the same address, 60 Newlands Road, Coburg North, which is situated in a mixed residential and industrial area. The salon was open six days per week and in addition to men’s and women’s hairdressing, provided beauty therapy such as facials, manicures and hair threading.  The company employed five employees including the nominee who was employed on a full time basis, working 37.5 to 40 hours per week.  One other employee was employed on a part-time basis, another was a contractor engaged for approximately 20 hours per week as required.  The remaining staff included a casual staff member working 10 to 15 hours per week and a volunteer obtaining work experience.

26. Mr Kumar said that he and the other director were not paid any salaries or other benefits and any profit has been re-invested in the business.   He said there had been significant changes in the business since he became involved in it and one of his new ideas for it, was to implement a free pick-up and return service, which would particularly assist its older customers.

    Oral evidence of Anand Rama

27. Mr Rama arrived in Australia in 2006 and had subsequently completed studies in salon and business management.  In 2013 he answered an advertisement on the website Seek and commenced employment with the applicant as a hairdresser and had continued to work in the capacity on a full time basis since that time.  The Tribunal notes that Mr Rana was granted a subclass 457 visa on 12 March 2013 to 12 March 2017 on the basis of his sponsorship by the applicant.

28. Mr Rana told the Tribunal that being a hairdresser was a big part of his life and that he loved his job with the applicant.

29. On 28 February 2019 the Tribunal wrote to the applicant pursuant to s.359A of the Act, inviting it to provide comments on information that it considered would be the reason or part of the reason for affirming the decision under review.

30. The particulars of that information which were given to the applicant were:

    • At the hearing on 13 February 2019 Mr Yogesh Kumar, director of the company told the Tribunal that there are two directors of Classic Scissors Pty Ltd. An Australian Securities and Investments Commission search shows that Mr Kumar is the only director of the company.
    • Mr Kumar further told the Tribunal that the company is operating a hairdressing business at the premises at 60 Newlands Road, Coburg North, Victoria and that the nominee is employed as a hairdresser at that address.   Mr Anand Rana also gave evidence to that effect.
    • A search of the website for Real Estate Agents Love & Co shows that the property at 60 Newlands Road, North Coburg is currently advertised for rent.
    • Photographs for the property on the Love & Co website show that the premises are currently vacant.

31. A copy of the advertisement (with photographs) from the Love & Co website was attached to the Tribunal’s letter.

32. The Tribunal advised the applicant that the information provided was relevant because the Tribunal may conclude that the company was not operating a business at the premises at 60 Newlands Road, Coburg North and that the nominee Mr Anand Rana was not employed as a hairdresser by the company at that address.  The Tribunal further advised that this information may also cause the Tribunal doubt the veracity of the evidence of Mr Kumar and the nominee.

33. On 18 March 2019 the applicant requested an extension of time in which to provide its response to the Tribunal’s s.359A letter.  On 19 March 2019 the Tribunal granted the applicant until 1 April 2019 to provide its response.

34. The applicant has not provided the comments within the prescribed period and no further extension has been granted.  In these circumstances the Tribunal considers that the applicant has been given sufficient time to provide its comments and has decided to proceed to decision without taking further steps to obtain such comments.

35. On 2 April 2019 the applicant wrote to the Tribunal seeking a further extension of time in which to provide its response to the Tribunal’s s.359A letter.  The applicant also stated it had being having issues with its landlord and had been doing its best to resolve the issue but it did not go well.  The applicant explained that it was not aware that the landlord and real estate agent had listed the shop for rent and was shocked when the Tribunal found out that the applicant’s shop had been available for rent since July. 

36. The applicant told the Tribunal that it was in search of a new place and would provide the Tribunal with a new place at the earliest date.  It told the Tribunal that the photo of the applicant’s rented premises at 60 Newlands Street, North Coburg was an old one and the applicant provided the Tribunal with another photo of the premises.  This showed the applicant’s name and a telephone number above the front entrance of the premises.  However, the Tribunal notes that the premises appeared shuttered and not operating as a business.

37. In relation to the directorship of the company, the applicant explained that Mr Yogesh Kumar had a verbal agreement with Ozzy (the ex-director of the company).  The applicant said that Ozzy was a silent partner of the company and was helping Mr Kumar to fully settle down in the business.  In his oral evidence, Mr Kumar mistakenly told the Tribunal that Ozzy was a second director of the applicant rather than a previous partner.

38. The applicant told the Tribunal that Mr Kumar was currently visiting his mother in India, due to her poor health.  He would be returning to Australia on 22 April 2019.  In Mr Kumar’s absence, Ozzy was trying to resolve the issue with the landlord and looking for another place to operate its business.

39. The applicant requested more time for Mr Kumar to provide all relevant documents to prove that the business is running and will keep running in future.  The applicant did not provide any information to the Tribunal about when such information would be provided to it.

40. The Tribunal considers that the applicant has been given sufficient time to provide comments on the information contained in the Tribunal’s s.359A letter or any further documentation and has decided to proceed to decision without taking further steps to obtain the comments from the applicant.

41. The Tribunal has considered the financial documentation provided by the applicant.  However, the Tribunal is not satisfied that that documentation shows that the applicant has the capacity to employ Mr Rana on a full-time basis in the nominated position for at least two years.  

42. Based on the evidence before it, the Tribunal is not satisfied that the applicant is of has been operating a hairdressing business at 60 Newlands Road, North Coburg.  The Tribunal accepts that the evidence contained in the Love & Co website shows that at the date of the s.359A letter the premises at 60 Newlands Road, Coburg North was vacant and available for rent.  The Tribunal notes that in its letter to the Tribunal dated 2 April 2019 the applicant admits that the premises is vacant and has been vacant for several months.

43. The applicant said in its letter that it was having issues with the landlord.  Although the applicant did its best to resolve the issue, it did not go well.  The company director was not aware that the landlord and real estate agent had listed the shop for rent and was shocked when the Tribunal found out that the shop had been listed for rent since July 2018.  The applicant further explained that the company was searching for new business premises and would provide a lease at the earliest possible date.  The Tribunal notes that the applicant has not provided any further leasing agreement for a new business premises.

44. Although the applicant told the Tribunal in its letter dated 2 April 2019 that it was shocked when the Tribunal had found out that the premises had been available for rent from July, it failed to explain the reason for Mr Kumar and Mr Rana telling the Tribunal during the hearing that the applicant had been operating a business at the premises since June 2018 and that Mr Rana and other employees were employed in that business.

45. The Tribunal finds that both Mr Kumar and Mr Rana were neither honest nor credible witnesses and it does not accept their oral evidence that the applicant is currently or has ever operated a business at the premises at 60 Newlands Road, Coburg North. Nor does the Tribunal accept the applicant’s explanation that it is currently looking for a new business premises as credible.  The Tribunal finds that Mr Kumar and Mr Rana deliberately sought to mislead the Tribunal about the applicant’s activities and contrived their evidence in an attempt to convince the Tribunal that the applicant was operating a viable business, evidence that can be inferred as false based on the real estate documents located by the Tribunal.

46. The applicant submitted in its letter dated 2 April 2018 that the photograph of the premises at 60 Newlands Road, Coburg North, which is contained on the Love & Co website is out of date.  It provided a copy of a photograph of the premises, which shows the name of the applicant on a board at the top of the front of the building.  However, the Tribunal notes that this photograph is undated and the shop front is closed and shuttered.  The Tribunal is not satisfied that this photograph demonstrates that the applicant is operating or has operated a business from the premises.

47. The Tribunal does not accept that Mr Kumar was mistaken in his evidence that there were two directors of the company.  The Tribunal considers that he was clear in his explanation at the hearing that the other director was involved in the day-to-day operation of the business and attended the premises during the week whilst Mr Kumar worked in the business on weekends.  The Tribunal finds that Mr Kumar deliberately contrived to create an impression that the size and viability of the business warranted the involvement of two directors.  The Tribunal further notes that whilst the applicant stated in its letter dated 2 April 2019 that Ozzy was a silent partner in the business, Mr Kumar told the Tribunal at the hearing that the other director was actively involved in the operation of the business.

1. The evidence before the Tribunal shows that the applicant’s business is not currently operating and has not done so for at least nine months.  Based on this evidence, the Tribunal is not satisfied that the nominee will be employed on a full-time basis for at least two years and that the terms and conditions of the nominee’s employment will not expressly exclude the possibility of extending the period of employment. 

2. The evidence before the Tribunal is not satisfied on the basis of the evidence that the nominee will be employed on a full-time basis for at least two years and that the terms and conditions of the nominee’s employment will not expressly exclude the possibility of extend the period of employment.

3. Given the above findings, the requirement in r.5.19(3)(d) is not met.

4. For the above reasons the Tribunal is not satisfied that the applicant meets the requirements of r.5.19(3). The applicant has not sought to satisfy the criteria in Direct Entry nomination stream, and as such has not met the requirements in r.5.19(4). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.

   DECISION

5. The Tribunal affirms the decision under review to refuse the nomination.

   Amanda Mendes Da Costa
   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.