Country Cauldron Pty Ltd (Migration)

[2021] AATA 3761

Country Cauldron Pty Ltd (Migration) [2021] AATA 3761 (15 September 2021)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Country Cauldron Pty Ltd

CASE NUMBER:  1837292

HOME AFFAIRS REFERENCE(S):          BCC2017/3810998

MEMBER:Terrence Baxter

DATE:15 September 2021

PLACE OF DECISION:  Brisbane

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

Statement made on 15 September 2021 at 1:39pm

CATCHWORDS
MIGRATION – nomination –Direct Entry nomination stream – applicant has failed to provide any contemporary evidence regarding its current trading status – position associated with the occupation is not genuine –financial capacity to pay the nominated full-time salary for the nominated position– decision under review affirmed

LEGISLATION
Migration Act 1958, ss 65, 140GB, 359, 360, 363
Migration Regulations 1994, r 5.19

CASES

Hasran v MIAC [2010] FCAFC 40

Huo v Minister for Immigration and Multicultural Affairs [2002] FCA 617
Manna v Minister for Immigration and Citizenship [2012] FMCA 28
MIBP v Jayshree Enterprises Pty Ltd [2017] FCA 264

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 Home Affairs on 29 November 2018 to reject the applicant’s application for approval of the nomination of a position in Australia under reg 5.19 of the Migration Regulations 1994 (Cth) (the Regulations).

2. The applicant, Country Cauldron Pty Ltd, applied for approval on 17 October 2017. The applicant nominated Mr Kulwinder Singh (the nominee) in the position of Retail Manager. The requirements for the approval of the nomination of a position in Australia are found in reg 5.19 of the Regulations which contains two alternative streams: a Temporary Residence Transition nomination stream (reg 5.19(3)) and a Direct Entry nomination stream (reg 5.19(4)). If the application is made in accordance with reg 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: reg 5.19(5).

3. In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Direct Entry nomination stream.

4. The delegate refused the application on the basis that the applicant’s nomination did not satisfy reg 5.19(4)(h)(ii)(D) of the Regulations because the delegate found that the tasks to be performed by the nominee in the position do not correspond with the tasks of an occupation specified by the Minister in an instrument in writing.

5. The applicant lodged an application for review of the delegate’s decision with the Tribunal on 19 December 2018.

6. On 5 August 2021, the Tribunal wrote to the applicant pursuant to s 359(2) of the Migration Act 1958 (Cth) (the Act) inviting it to provide current information addressing the relevant criteria under reg 5.19(2) and (4) of the Regulations. The Tribunal is satisfied that this invitation was properly dispatched to the applicant’s email address. The invitation notified the applicant that the requested information should be received by the Tribunal by 19 August 2021. The invitation also notified the applicant that if it could not provide the information by 19 August 2021, the applicant could apply for an extension of time in which to provide the information. The Tribunal notified the applicant that if an extension of time request was made, it must be received by the Tribunal before 19 August 2021.

7. The applicant was initially represented in relation to the review by Ms Mateja Rautner of Migration Plus, 15 Lake Street, Cairns, Queensland. From 20 January 2021, the applicant was represented in relation to the review by Mr Andy Arora of (according to the Appointment form) E–Help Migration and Education Services of 116 Adelaide Street, Brisbane, Queensland.

8. On 20 August 2021, Kym Handberg, Migration Manager of E–Help Education and Migration, 116 Adelaide Street, Brisbane contacted the Tribunal requesting a 14-day extension to respond to the Tribunal’s invitation of 5 August 2021.

9. On 23 August 2021, the Tribunal notified the applicant’s representative that the request for an extension of time was not received by the Tribunal until 20 August 2021. The Tribunal’s notification, referring to the invitation of 5 August 2021, contained the following advice:

   We also advised that if we did not receive the information within the period allowed or as extended, we may make a decision on the review without taking any further action to obtain the information, and the applicant would lose any entitlement they might otherwise have had under the Migration Act 1958 to appear before us to give evidence and present arguments. As you did not provide the information or request an extension of time to provide the information by 19/08/2021, the applicant appears to have lost their right to a hearing, however, this will need to be determined by the
   Member who is constituted this matter.

   If the Member determines that the applicant has lost their right to a hearing, the Tribunal may make a decision on the review and will have regard to all the information that is before it at the time the decision is made. If you wish to provide
   the information and any other material in support of this review, you should do so by no later than 3/09/2021. The Tribunal may proceed to decision at any time after 3/09/2021.

10. The applicant failed to provide the information within the time for responding to the invitation or the date specified for the provision of information in the Tribunal’s notification of 23 August 2021, namely 3 September 2021. No response to that invitation has been received by the Tribunal at the time of this decision apart from the request for extension of time previously referred to.

11. Where a review applicant is invited to provide further information in accordance with s 359(2) of the Act, and fails to do so within the prescribed period, the Tribunal may make a decision on the review without taking any further action to obtain the information, according to s 359C(1) of the Act. In these circumstances, the review applicant is not entitled to appear before the Tribunal in accordance with s 360(3) of the Act. Of note, the effect of s 363A of the Act is that if a review applicant has no entitlement to a hearing, the Tribunal has no power to permit the review applicant to appear before it as outlined in the Full Federal Court authority in the matter of Hasran v MIAC [2010] FCAFC 40.

12. Although the applicant has not requested this, the Tribunal has also considered whether it would be appropriate to adjourn the application for review under s 363(1)(b) of the Act to allow the applicant additional time in which to provide evidence to support its application for review. In doing so, it has paid careful regard to the guidance in the decisions of Huo v Minister for Immigration and Multicultural Affairs [2002] FCA 617 and Manna v Minister for Immigration and Citizenship [2012] FMCA 28 where the Courts held that the Tribunal is not required to indefinitely defer its decision-making process.

13. The Tribunal has taken into account that the applicant has been aware since 29 November 2018 of the reasons for the nomination application being refused and also that the implications of not providing the information requested in the invitation from the Tribunal of 5 August 2021 were set out in that correspondence and the Tribunal’s notification of 23 August 2021.

14. In these circumstances, the Tribunal considers that the applicant has had sufficient time in which to address the central issues arising in the application for review. Accordingly, the Tribunal has decided not to exercise its discretion under s 363(1)(b) of the Act to adjourn the review any further to allow the applicant more time in which to demonstrate that it meets the relevant criteria under reg 5.19(2) and (4) of the Regulations.

15. Following careful consideration, the Tribunal has decided to proceed to make a decision on this review without taking any further action to obtain the information referred to in the aforementioned invitation and having due regard to the documentary material before it.

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

    CONSIDERATION OF CLAIMS AND EVIDENCE

17. The issue in this case is whether the applicant meets the requirements for approval of the nomination under the Direct Entry nomination stream set out in reg 5.19(4), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.

    Evidence presented to the Department

18. The applicant produced to the Department of Immigration and Border Protection (now the Department of Home Affairs) (the Department) the following documents:

    a.Undated employment contracts of the nominee.

    b.An ASIC company extract of the applicant.

    c.Activity statements for the period from January to June 2017.

    d.A profit and loss statement of June 2017.

    e.Activity statement payment slips issued by the Australian Taxation Office (ATO).

    f.An undated 12-month projection of profits of Shell Service Station – Aratula.

    g.Correspondence dated 28 December 2017 and a Form 1404 issued by the Regional Certifying Body (RCB), Chamber of Commerce and Industry Queensland, Toowoomba dated 8 February 2018.

    h.An extract from the General Retail Industry Award 2010.

    i.An extract from the Fair Work Ombudsman Retail Employee Level 8 pay rate summary.

    j.A position description.

    k.Job advertisements for the position.

    l.Market salary evidence.

    m.A submission addressed to the RCB regarding recruitment efforts, dated 19 October 2017.

    n.Evidence of an audit undertaken by the owner of the business on 12 April 2016.

    o.An organisational chart.

    p.Profit and loss statements for the 2017 and 2018 financial years.

    q.A balance sheet for the 2018 financial year with 2017 comparative figures.

    Evidence presented to the Tribunal

19. The applicant produced to the Tribunal a copy of the delegate’s decision record.

    Term of employment of the visa holder: reg 5.19(4)(d)

20. Regulation 5.19(4)(d) requires the nominee to be employed in the nominated position for at least two years full-time, and the terms and conditions of that employment do not expressly exclude the possibility of an extension.

21. According to the Employment Agreement submitted by the applicant to the Department, the applicant is to employ the nominee in the full-time position of Retail Manager for two years (renewable) from the grant of the nominee’s Subclass 187 visa.

22. However, it is also open to the Tribunal to consider whether the applicant’s business has the financial resources to meet the wages costs for the nominee over the employment period (MIBP v Jayshree Enterprises Pty Ltd [2017] FCA 264).

23. The salary payable to the nominee is to be $56,500 per annum plus superannuation. Based on the current superannuation guarantee contribution of 10% of ordinary earnings, this represents a total salary package of $62,150 per annum.

24. The applicant provided to the Department profit and loss statements and balance sheets for the 2017 and 2018 financial years. The profit and loss statements provide the following information regarding the applicant’s trading history:

Financial year	2017	2018
Total income	$3,539,071.97	$15,403,363.73
Cost of sales	$3,284,991.98	$13,939,801.19
Gross profit	$254,079.99	$1,463,562.54
Operating expenses	$386,018.31	$1,559,448.66
Loss	$131,938.32	$95,886.12

1. The applicant’s assets, according to the balance sheets, were as follows:

Financial year	2017	2018
Bank accounts	$103,642	$66,284
Other current assets	$217,769	$293,789
Depreciated plant and equipment	$4,999	$5,797
Total assets	$326,870	$365,870

1. The applicant’s liabilities, according to the balance sheets, were as follows:

Financial year	2017	2018
Income tax, GST and PAYG withholding	$35,429	$121,457
Superannuation payable	$15,091	$29,189
Accounts payable	$211,131	$172,859
Associated loans	$132,955	$154,725
Other liabilities	$63,443	$115,164
Total liabilities	$458,049	$593,394

1. The applicant had a surplus of liabilities over assets of $131,638 at the conclusion of the 2017 financial year and $227,524 at the conclusion of the 2018 financial year.

2. The financial statements reveal that, although the applicant recorded significant sales in the periods referred to in those statements and that in fact the applicant’s sales increased substantially in the 2018 financial year, the applicant recorded trading losses totalling $227,824.44 over the two-year period. Based on the financial documents provided by the applicant, the Tribunal has serious concerns regarding the applicant’s capacity to employ the nominee in the nominated position for at least two years at the time covered by the financial statements.

3. The applicant produced to the Department a separate profit and loss account for the month of June 2017 together with activity statements for the period from 1 January 2017 to 30 June 2017. The one-month profit and loss account records a net profit of $5,120.89. The Tribunal has considered those documents. However, the Tribunal considers that the annual profit and loss accounts provide a more accurate record of the trading history of the applicant for the 2017 and 2018 financial years.

4. The applicant produced to the Department a ‘12 month projection’ for the Shell Service Station – Aratula. The projection is undated and does not identify the 12-month period referred to in the document which projects a net profit of $372,901 for the period which is the subject of the projection. The nature of the income referred to in this document is limited to fuel commissions, diner sales and convenience store sales. There is no reference to income from fuel sales which were recorded as $3,038,751.44 in the 2017 profit and loss account and $12,740,585.91 in the 2018 profit and loss account. No explanation has been provided as to the methodology for the calculation of the profit projection. In the absence of any such explanation and, having regard to its inconsistency with the annual profit and loss statements, the Tribunal places no weight on this document.

5. The applicant has failed to provide any contemporary evidence to the Tribunal regarding its current trading status. The most recent activity statements which have been provided by the applicant are now over four years old and the most recent financial statement is over three years old. In its invitation of 5 August 2021, the Tribunal advised the applicant that, for the nomination of the position to be approved, the Tribunal must be satisfied that all of the relevant criteria in reg 5.19 of the Regulations are met at the time of the Tribunal’s decision. The applicant was invited to provide updated and current information addressing those criteria, including copies of the applicant’s lodged tax returns for the last two full financial years, business activity statements lodged with the ATO for the last 24 months and financial statements prepared in accordance with Australian accounting standards including profit and loss statements and balance sheets for the two most recent financial years. The applicant failed to produce any of those documents.

6. Having regard to the lack of any such contemporary evidence, bearing in mind that the applicant was advised that all relevant criteria in reg 5.19 are to be met and that the applicant has failed to respond to the invitation issued pursuant to s 359(2) of the Act, the Tribunal is not satisfied that at the time of this decision the applicant has the financial capacity to pay the nominee’s full-time salary package for at least two years and that the nominee will be employed on a full-time basis in the position for at least two years. Accordingly, the requirement in reg 5.19(4)(d)(i) is not met.

7. Accordingly, the requirement in reg 5.19(4)(d) is not met.

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

   DECISION

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

   Terrence Baxter
   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.

   …

   Direct Entry nomination

   (4)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 need for the nominator to employ a paid employee to work in the position under the nominator’s direct control; and

   (b)the nominator:

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

   (ii)      directly operates the business; and

   (c)for a nominator whose business activities include activities relating to the hiring of labour to other unrelated businesses — the position is within the business activities of the nominator and not for hire to other unrelated businesses; and

   (d)both of the following apply:

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

   (ii)      the terms and conditions of the employee’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)       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

   (g)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; and

   (h)either:

   (i)       all of the following apply:

   (A)the tasks to be performed in the position will be performed in Australia and correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;

   (AA)there is a genuine need for the nominator to employ the person identified under subparagraph (a)(ii), as a paid employee, to work in the position under the nominator’s direct control;

   (AAA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;

   (B)either:

   (I)the nominator’s business has operated for at least 12 months, and the nominator meets the requirements for the training of Australian citizens and Australian permanent residents that are specified by the Minister in an instrument in writing for this sub-sub-subparagraph; or

   (II)the nominator’s business has operated for less than 12 months, and the nominator has an auditable plan for meeting the requirements specified in the instrument mentioned in sub-sub-subparagraph (I); or

   (ii)      all of the following apply:

   (A)the position is located in regional Australia;

   (B)there is a genuine need for the nominator to employ the person identified under subparagraph (a)(ii), as a paid employee, to work in the position under the nominator’s direct control;

   (C)the position cannot be filled by an Australian citizen or an Australian permanent resident who is living in the same local area as that place;

   (D)the tasks to be performed in the position correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;

   (DA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;

   (E)the business operated by the nominator is located at that place;

   (F)a body that is:

   (I)specified by the Minister in an instrument in writing for this sub-subparagraph; and

   (II)located in the same State or Territory as the location of the position;

   has advised the Minister about the matters mentioned in paragraph (e) and sub-subparagraphs (B) and (C).