CYPRESS TYRES PTY LTD (Migration) - [2025] ARTA 1506

CYPRESS TYRES PTY LTD (Migration) [2025] ARTA 1506 (14 July 2025)
DECISION AND
REASONS FOR DECISION
Applicant:CYPRESS TYRES PTY LTD
Respondent: Minister for Immigration and Citizenship
Tribunal Number: 2318790

Tribunal:Bridget Cullen
Place:Brisbane
Date: 14 July 2025

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

Statement made on 14 July 2025 at 1:01pm
CATCHWORDS
MIGRATION – application for approval of nomination of position – direct entry stream – general accountant – adverse information known to department – nominator’s failure to satisfy sponsorship obligation and sponsorship bar – reasonable to disregard information – director at relevant time removed from position, and current director in home country due to COVID travel restrictions – decision under review affirmed
LEGISLATION
Migration Act 1958 (Cth), s 140M(1)(c), (d)
Migration Regulations 1994 (Cth), rr 1.13A, 1.13B, 5.19(3)(b), (4)(b)
STATEMENT OF REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a Delegate of the Minister on 1 November 2023 to reject the applicant’s application for approval of the nomination of a position under reg 5.19 of the Migration Regulations 1994 (Cth) (the Regulations).
The Applicant applied for approval on 11 August 2022. The requirements for the approval of the nomination of a position in Australia are found in reg 5.19 of the Regulations, which contains general requirements for approval and additional requirements for approval set out in three alternative streams: a Temporary Residence Transition stream, a Direct Entry stream and a Labour Agreement stream. If the application meets the requirements for approval then the application must be approved: reg 5.19(3)(a). If any of the requirements are not met then the application must be refused: reg 5.19(3)(b).
In this case, the Applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Direct Entry stream. The Applicant operates a wholesale tyre and autoparts distribution business, with branches in Brisbane, Sydney, and the Gold Coast. The Applicant seeks to nominate Mr Huan Feng in the role of Accountant (General) ANZSCO 221111.
The Delegate refused the application on the basis the Applicant’s nomination did not satisfy reg 5.19(4)(b) of the Regulations, which requires that either there is no adverse information known to the Department about the nominator or a person associated with the nominator, or it is reasonable to disregard the adverse information.
The Applicant appeared before the Tribunal on 20 June 2025 to give evidence and present arguments via Mr Biao Pan, Director. The Tribunal also received oral evidence from Mr Huan Feng, the visa nominee.
The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages. The Tribunal confirmed with the witnesses that they had understood the interpretation at various junctures during the hearing, as well as at the conclusion of the proceedings. The witnesses confirmed that they had understood the interpretation.
For the following reasons, the Tribunal has decided to affirm the decision under review to refuse the nomination.
CONSIDERATION OF CLAIMS AND EVIDENCE
No adverse information known to Immigration – reg 5.19(4)(b)
The issue in this case is whether the Applicant meets reg 5.19(4)(b), which requires that either there is no adverse information known to Immigration about the nominator or a person associated with the nominator, or it is reasonable to disregard any such information.
‘Adverse information’ is defined by reg 1.13A as any adverse information relevant to the person’s suitability as an approved sponsor or a nominator. Regulation 1.13A sets out a non-exhaustive list of examples of the kinds of information which meet this definition, including information that the person:
·has contravened a law of the Commonwealth, a State or a Territory, or
·is under investigation, subject to disciplinary action or subject to legal proceedings in relation to a contravention of such a law, or
·has been the subject of administrative action (including being issued with a warning) for a possible contravention of such a law by a Department or regulatory body that administers or enforces the law, or
·has become insolvent (within the meaning of s 95A of the Corporations Act 2001 (Cth)), or
·has given, or caused to be given, to the Minister, an officer, the Tribunal or an assessing authority a ‘bogus document’ (as defined in s 5(1) of the Act), or ‘information that is false or misleading in a material particular’ (as defined in reg 1.13A(4)).
The term ‘associated with’ is also given a non-exhaustive definition for the purposes of this requirement, in reg 1.13B. It provides that two persons are associated with each other in a wide range of relationships and situations, including if:
·they are or were spouses or de facto partners or members of the same immediate, blended or extended family, or have or had a family-like relationship, or belong or belonged to the same social group, unincorporated association or other body of persons, or have or had common friends or acquaintances, or
·one is or was a consultant, adviser, partner, representative on retainer, officer, employer, employee or member of the other or any corporation or other body in which the other is or was involved (including as an officer, employee or member), or
·a third person is or was a consultant, adviser, partner, representative on retainer, officer, employer, employee or member of both of them, or
·they are or were related bodies corporate (within the meaning of the Corporations Act 2001 (Cth)) or,
·one is or was able to exercise influence or control over the other, or
·a third person is or was able to exercise influence or control over the both of them.
Regulation 1.13B(2) provides that it does not matter if one of the persons mentioned has ceased to exist.
The adverse information before the Department was outlined in the Delegate’s decision record as follows:
On 25 August 2023, the applicant (nominator), CYPRESS TYRES PTY LTD, was notified by the department that, under section 140M(1) of the Act, the delegate had made a decision to bar the applicant until 1 March 2024 from sponsoring more people under the terms of the approved standard business sponsorship 140M(1)(c) and to bar the applicant until 22 August 2025 from making applications for approval as a standard business sponsor or temporary activities sponsor 140M(1)(d).
The start date of the sanction is 25 August 2023 and end date is 22 August 2025.
The identified circumstance was:
● Regulation 2.89 Failure to satisfy sponsorship obligation.
The identified breaches of the sponsorship obligations were:
● Regulation 2.84 Obligation to provide information to Immigration when certain events occur
● Regulation 2.86 Obligation to ensure primary sponsored person works or participates in nominated occupation, program or activity
Mr Biao Pan agreed that there was adverse information about the Applicant known to the Department, but said that it was reasonable to disregard the information. He explained to the Tribunal that the Applicant did not review the Department’s 25 August 2023 sponsorship bar decision for the reason that the matter was not being managed by him, but by a different Director, Zhiqiang Feng.
Mr Biao Pan has outlined his argument about why it is reasonable to disregard the adverse information in a letter dated 12 February 2025, filed in the Tribunal:
I am writing to support our company, Cypress Tyres Pty Ltd’s application. I understand there is adverse information associated with Cypress Tyres Pty Ltd. As the Director of the said entities, I wish to present a comprehensive perspective and hope that you can disregard the adverse information associated with Cypress Tyres Pty Ltd when assessing the current application.
First of all, it is essential to note that the impressive, yet rapid growth of Cypress Tyres by 100% in 5 years, while a testament to our business acumen, unfortunately led to certain operational oversights. The speed of this expansion inadvertently created challenges in ensuring a fully streamlined and compliant operational procedure. We are now heavily invested in rectifying these shortcomings.
Secondly, it is of paramount importance to highlight my minimal involvement and influence in the management decisions at Cypress Tyres, specifically the Brisbane operations, when the incident occurred. Contrary to any presumptions due to shared directorship, my awareness of the unfolding events at Cypress Tyres Pty Ltd was initiated only upon the actions taken by the ABF. Such nuances in influence and oversight within associated entities are not uncommon and should be considered when evaluating our specific situation.
Thirdly, we convened a director's meeting on the 4th and 5th of October 2023. This gathering was not merely a reactive gesture but a proactive forum to fortify our commitment to Australian laws. The meeting's minutes, which I've attached, delve into our discussions, resolutions, and the forward-looking measures we've adopted. To address the issues arising from operational oversights, we’ve made decisive organizational changes, evidenced by the removal of Mr. Zhiqiang Feng from directorship, and the appointment of me and Mr. Mujtaba Maqsudi as the Director of Cypress Tyres Pty Ltd, and all associated entities underscores our renewed dedication to stringent regulatory compliance.
Furthermore, we have recognized the need for external professional guidance. We have partnered with Consolid8, an esteemed accounting firm. Their role is pivotal in helping us reestablish clear contractual roles, set up robust system procedures, and ensure we remain compliant with all regulatory requirements.
In conclusion, I understand there is adverse information with Cypress Tyres Pty Ltd. However, we have taken effective measures to resolve the issues. Our commitment to upholding the highest standards, combined with our proactive approach and distinct governance, makes a compelling case for our entity to be viewed independently.
Mr Biao Pan has raised an argument that the Applicant has made changes to its company structure, which should give the Tribunal confidence that its processes are now being managed in a way that will prevent the issues that led to the Department’s adverse decision.
The ASIC information available to the Tribunal reflects that the Applicant has made several changes to its corporate structure. ASIC records before the Tribunal indicate that Mr Biao Pan has been a Director of the Applicant since 21 March 2017. Mr Biao Pan has also been Company Secretary since 7 April 2025.
As the time of the Delegate’s sponsorship bar decision on 25 August 2023, the Applicant had two additional Directors, in addition to Mr Biao Pan. These Directors were:
·Mujtaba Maqsudi
Appointment Date 24 October 2016
Cease Date 7 April 2025
·Zhiqiang Feng
Appointment Date 24 October 2016
Cease Date 1 November 2023
Between 24 October 2016 and 1 November 2023, Zhiqiang Feng served as Company Secretary. Mujtaba Maqsudi served as Company Secretary between 1 November 2023 and 7 April 2025, at which point Mr Biao Pan became sole Director and Secretary of the Applicant.
The current shareholders of the Applicant are Mr Biao Pan and Yuejie Chen. Mr Biao Pan holds 78 of the 100 shares issued (beneficially held), and Yuejie Chen holds the remaining 22 shares (beneficially held).
ASIC records reflect that Mujtaba Maqsudi and Zhiqiang Feng were previously shareholders. ASIC records confirm that on 15 November 2025 and 13 May 2025, the Applicant lodged separate Form 484s with ASIC to Change Company Details Changes to (Members) Share Holdings. The Applicant has, in post hearing submissions, provided the Tribunal with an agreement for share transfers, relevant to the arrangements made for Zhiqiang Feng’s departure from the Applicant company.
Mr Biao Pan explained to the Tribunal that he was offshore, in China, for an extended period of time during 2020 and 2021. The Tribunal has confirmed in Departmental movement records that Mr Biao Pan departed Australia on 21 January 2020 to travel to China. He was then stuck in China as a consequence of pandemic travel exclusions for 15 ½ months, ultimately returning to Australia on 1 April 2021. When he was eventually able to re-enter Australia, he underwent hotel quarantine in Sydney for an extended period.
The Tribunal canvassed with Mr Biao Pan that, as a Director, he was also responsible for the whole of the Applicant’s operations, not just his nominated zone of responsibility (supply). Mr Biao Pan acknowledged that this was the case in relation to his responsibilities as the Director of an Australian company.
Mr Biao Pan’s key points in response are that (1) his role in the company was to organise supply, while Zhiqiang Feng was responsible for day-to-day operations; and (2) once he became aware of the difficulties that were unfolding in the company, he took steps to remove Zhiqiang Feng from the company.
The Departmental file does reflect that the process leading to the Department’s 25 August 2023 decision had been managed by Zhiqiang Feng in his role as Director. In a 20 October 2023 letter sent to the Department by Zhiqiang Feng, the tension that existed between the Applicant’s Directors is revealed, in the following terms:
We are in a very critical time. After the NOD from ABF was received, the directors had different opinions about business structures, and we are postponing the plans of setting up branches in Western Australia and South Australia. The decision is now impacting the healthy development and expansion of the business within Australia.
Mr Biao Pan explained that, although he did try to remain involved during the period he was offshore during the COVID-19 pandemic, it was difficult to know what was happening on the ground. While the Tribunal accepts that Mr Biao Pan would have found it challenging to remain abreast of management issues while offshore, the Tribunal observes that he returned from China on 1 April 2021. The adverse decision made by the Department did not eventuate until 25 August 2023. Therefore, Mr Biao Pan’s absence from Australia does not explain his inability to be aware of the issues arising in management in the Applicant company, of which he was and remains a Director, during the period between 1 April 2021 and 25 August 2023.
The Tribunal has considered the evidence given by Mr Biao Pan that Zhiqiang Feng did not operate the local management particularly well, which Mr Biao Pan says led to the issues considered by the Department in the adverse decision. Mr Biao Pan says that he, and fellow Director Mujtaba Maqsudi were concerned about Zhiqiang Feng’s allegedly casual approach to management, and were also concerned after they became aware that Zhiqiang Feng had made unauthorised payments to his wife and mother from company funds.
Here, the Tribunal notes that it has not heard from Mr Zhiqiang Feng, and the Tribunal is not in a position to make any findings about whether the alleged unauthorised payments did or did not, in fact, happen. The Tribunal’s point in mentioning this allegation is that Mr Biao Pan’s evidence is that this alleged conduct, in conjunction with the management issues that led the Department to making the adverse decision, led to steps being taken to compel Zhiqiang Feng to exit the company. As the directorship has now changed, the Applicant asserts that this would support the Tribunal finding that it is reasonable to disregard the adverse information.
The Tribunal asked why it was not until relatively recently that action was taken to encourage Zhiqiang Feng to leave the Applicant company. Mr Biao Pan explained that while the Applicant company could take steps to cancel Zhiqiang Feng’s directorship, he (Zhiqiang Feng) was also a shareholder, and it took time to negotiate exit arrangements. Mr Biao Pan said that he consulted a lawyer, but as the funds allegedly transferred without authority by Mr Zhiqiang Feng had been dissipated, the Applicant chose not to expend funds on lawyers in circumstances where there were no funds to recover. Again, the Tribunal is not in a position to make any adverse findings in relation to the allegations levied against Mr Zhiqiang Feng.
The Tribunal explained to the Applicant at the end of the hearing that it had concerns that on the evidence available to it at the time of hearing, it was open to the Tribunal to determine that it was not reasonable to disregard the adverse information. The Tribunal explained to Mr Biao Pan that it would expect there to be some documentary evidence, in addition to ASIC records reflecting changes to the company structure, that would support Mr Biao Pan’s evidence about these directorship challenges. For example, accounting records, correspondence between the directors, or even legal correspondence (which the Tribunal acknowledges would require the Applicant to waive privilege in order to provide to the Tribunal).
The Tribunal provided the Applicant with a 2-week period following the hearing to provide supporting evidence. The Applicant provided an Organisational Chart, ASIC extract information, and a written submission. In the written submission, the Applicant re-emphasised the challenges in the directorship, and that the director responsible, Zhiqiang Feng, had departed.
The Applicant has not, in the Tribunal’s view, adequately explained why its current director, Mr Biao Pan, nor former Director, Mujtaba Maqsudi, did not intervene sooner in relation to the management issues that led to the Department’s adverse decision. The Tribunal accepts that it would have been more challenging for Mr Biao Pan, to be across “on the ground” matters whilst he was in China during the COVID-19 pandemic. However, he was still able to communicate remotely with other Directors and staff, and therefore should have been able to obtain key information.
The Tribunal also observes that Mr Baio Pan was present in Australia from 1 April 2021 – a period of more than 2-years prior to the Department’s 25 August 2023 decision (the adverse information). There is no satisfactory explanation for the Applicant’s inability to address these matters during that interval. The Tribunal does not think it reasonable to disregard the adverse information in circumstances where the Director, Mr Baio Pan, was also a Director during the period that the circumstances leading to the Department’s adverse decision transpired, and where there was a further Director, Mujtaba Maqsudi, also responsible for the Applicant’s operations.
Having considered the information before it, the Tribunal does not consider it reasonable to disregard the adverse information. Given the above findings, the Tribunal is not satisfied that reg 5.19(4)(b) is met.
As reg 5.19(4)(b) is not met, it follows that the Applicant does not meet reg 5.19(4).
For these reasons the Tribunal is not satisfied that the applicant meets the requirements of reg 5.19. Accordingly, reg 5.19(3)(b) requires that the nomination must be refused. The decision under review must be affirmed.
DECISION
The Tribunal affirms the decision under review to refuse the nomination.
Dates of hearing(s): 20 June 2025
ATTACHMENT – EXTRACTS FROM THE MIGRATION REGULATIONS 1994
5.19Approval of nominated positions—Subclass 186 (Employer Nomination Scheme) visa and Subclass 187 (Regional Sponsored Migration Scheme) visa
Application
(1)A person (the nominator) (including a partnership or unincorporated association) may apply to the Minister for approval of the nomination of a position in Australia.
(2)The application must:
(aa) if the application identifies a Subclass 187 (Regional Sponsored Migration Scheme) visa–be made before 16 November 2019 (subject to subclause (2A)); and
(a)be made in accordance with approved form 1395 (Internet); and
(b)identify the position; and
(c)identify a person (the identified person) in relation to the position; and
(d)identify an occupation in relation to the position; and
(e)identify the subclass and stream to which the nomination relates, which must be one of the following:
(i)a Subclass 186 (Employer Nomination Scheme) visa in the Temporary Residence Transition stream;
(ii)a Subclass 187 (Regional Sponsored Migration Scheme) visa in the Temporary Residence Transition stream;
(iii)a Subclass 186 (Employer Nomination Scheme) visa in the Direct Entry stream;
(iv)Subclass 187 (Regional Sponsored Migration Scheme) visa in the Direct Entry stream;
(v)a Subclass 186 (Employer Nomination Scheme) visa in the Labour Agreement stream; and
(f)be accompanied by the fee mentioned in regulation 5.37; and
(fa)be accompanied by any nomination training contribution charge the nominator is liable to pay in relation to the nomination; and
(fb)identify the annual turnover (within the meaning of the Migration (Skilling Australians Fund) Charges Regulations 2018) for the nomination; and
(g)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.
(2A)Paragraph (2)(aa) does not apply if:
(a) the application identifies a Subclass 187 (Regional Sponsored Migration Scheme) visa in the Temporary Residence Transition stream; and
(b) the identified person is a transitional 457 worker or transitional 482 worker at the time the application is made.
Approval of nomination
(3)The Minister must, in writing:
(a)approve the nomination if the Minister is satisfied that the requirements set out in subregulation (4) are met; or
(b)otherwise—refuse to approve the nomination.
Requirements for approval—general
(4)The requirements to be met for the nomination to be approved are as follows:
(a)the application is made in accordance with subregulation (2);
(b)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;
(c)if it is mandatory, in the State or Territory in which the position is located, for a person to:
(i)hold a licence of a particular kind; or
(ii)hold registration of a particular kind; or
(iii)be a member (or a member of a particular kind) of a particular professional body;
to perform tasks of the kind to be performed in the occupation, the identified person is, or is eligible to become, the holder of the licence, the holder of the registration, or a member of the body, at the time of application;
(d)the nominator has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the nominator operates a business and employs employees in the business, relating to employment;
(da)any debt due by the nominator as mentioned in section 140ZO of the Act (recovery of nomination training contribution charge and late payment penalty) has been paid in full;
(e)if the nomination relates to a visa in a Temporary Residence Transition stream—the requirements set out in subregulation (5) are met;
(f)if the nomination relates to a visa in a Direct Entry stream—the requirements set out in subregulation (9) are met;
(g)if the nomination relates to a visa in a Labour Agreement stream—the requirements set out in subregulation (14) are met.
…
Direct Entry stream—additional requirements for approval
(9)If the nomination relates to a visa in a Direct Entry stream, the following requirements must also be met:
(a)the nominator is actively and lawfully operating a business in Australia;
(b)if the nominator’s business activities include activities related 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;
(c)the application identifies a need for the identified person to be employed in the position, under the direct control of the nominator;
(d)there is a genuine need for the identified person to be employed in the position, under the direct control of the nominator;
(e)the identified person will be employed on a full‑time basis in the position for at least 2 years;
(f)the terms and conditions of the identified person’s employment will not include an express exclusion of the possibility of extending the period of employment;
(g)the nominator’s business has the capacity to employ the identified person for at least 2 years and to pay the person at least the annual market salary rate for the occupation each year;
(h)the requirements set out in subregulation 2.72(15) are met, applying subregulations 2.72(15) and (16) as if:
(i)paragraph 2.72(15)(a) did not apply; and
(ii)references to the nominee were references to the identified person; and
(iii)references to the person were references to the nominator;
(i)either:
(i)there is no information known to Immigration that indicates that the employment conditions (other than in relation to earnings) that will apply to the identified person are less favourable than those that apply, or would apply, to an Australian citizen or an Australian permanent resident performing equivalent work at the same location; or
(ii)it is reasonable to disregard any such information;
(j)the requirements set out in subregulation (10) or (12) are met.
Occupations for the Subclass 186 (Employer Nomination Scheme) visa in the Direct Entry stream
(10)The requirements of this subregulation are as follows:
(a)the tasks to be performed in the position will be performed in Australia and correspond to the tasks of an occupation specified in a legislative instrument:
(i)made under subregulation (11); and
(ii)in force at the time the application is made;
(b)the occupation applies to the identified person in accordance with that instrument.
(11)The Minister may, by legislative instrument, specify occupations for the purposes of subregulation (10) and, for each occupation, specify any matters for the purposes of determining whether the occupation applies to an identified person, including matters relating to any of the following:
(a)the nominator;
(b)the identified person;
(c)the occupation;
(d)the position in which the identified person is to work;
(e)the circumstances in which the occupation is undertaken;
(f)the circumstances in which the person is to be employed in the position.
Occupations for the Subclass 187 (Regional Sponsored Migration Scheme) visa in the Direct Entry stream
(12)The requirements of this subregulation are as follows:
(a)the position is located at a place in regional Australia;
(b)the business operated by the nominator is located at that place;
(c)the position cannot be filled by an Australian citizen or an Australian permanent resident who is living in, or would move to, the local area concerned;
(d)the tasks to be performed in the position correspond to the tasks of an occupation specified in a legislative instrument:
(i)made under subregulation (13); and
(ii)as in force at the time the application is made;
(e)the occupation applies to the identified person in accordance with that instrument;
(f)the Minister has been advised by a body that meets the requirements set out in paragraph (g) of this subregulation about matters relating to the following:
(i)whether the identified person would be paid at least the annual market salary rate for the occupation;
(ii)whether there is a genuine need for the identified person to be employed in the position, under the direct control of the nominator;
(iii)whether the position can be filled by an Australian citizen or an Australian permanent resident who is living in, or would move to, the local area concerned;
(g)the body must:
(i)be specified in a legislative instrument made by the Minister for the purposes of this paragraph; and
(ii)be located in the State or Territory in which the position is located; and
(iii)have responsibility for the local area in which the position is located.
(13)The Minister may, by legislative instrument, specify occupations for the purposes of subregulation (12) and, for each occupation, specify any matters for the purposes of determining whether the occupation applies to an identified person, including matters relating to any of the following:
(a)the nominator;
(b)the identified person;
(c)the occupation;
(d)the position in which the identified person is to work;
(e)the circumstances in which the occupation is undertaken;
(f)the circumstances in which the person is to be employed in the position.
…
Meaning of regional Australia
(16)In this regulation:
regional Australia means a part of Australia specified in legislative instrument made by the Minister for the purposes of this definition.