Delicate Roses Pty Ltd (Migration)

Delicate Roses Pty Ltd (Migration) [2018] AATA 4140 (4 September 2018)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Delicate Roses Pty Ltd
CASE NUMBER:  1621267
DIBP REFERENCE(S):  BCC2016/223145
MEMBER:Mr S Norman
DATE:4 September 2018
PLACE OF DECISION:  Sydney
DECISION:The Tribunal affirms the decision under review to refuse the nomination.

Statement made on 04 September 2018 at 11:55am
CATCHWORDS
MIGRATION – Employer nomination – approval of nomination – business activity statements – limited profitability of business – future profitability – competitive nature of business – experience in business management – decision under review affirmed
LEGISLATION
Migration Act 1958 (Cth),s 245AR
Migration Regulations 1994 (Cth), r 5.19
STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Immigration on 28 November 2016 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). The Department delegate’s decision was not lodged with the Tribunal.
The applicant (represented by Mrs Haleh Khatibi at hearing) applied for approval on 15 January 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).
In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Direct Entry Nomination stream. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(d) of the Regulations.
The applicant appeared before the Tribunal on 20 August 2018 to give evidence and present arguments. The Tribunal also received oral evidence from Mr Parviz Nasiri (Mrs Khatibi’s husband). The proposed second witness (Mr Nikan Nasiri) did not attend the Tribunal hearing and was said to be engaged in his ‘classes’ at the time of the Tribunal hearing. He was therefore unavailable to provide evidence at the hearing. The Tribunal did not request further evidence (given it was satisfied that a reasonable period of time had been provided to arrange for witnesses to attend). However, the Tribunal also said it would not finalise its decision until COB (5pm) Monday 26 August 2018, and that any information lodged with the Tribunal up to that time, must be considered by the Tribunal (discussed below). Upon receiving a further request, the Tribunal subsequently agreed not to finalise its decision until 3 September 2018 (as had been requested[1]).
[1] Tribunal – folio 167.
The Tribunal hearing was conducted without the assistance of an interpreter. After considering the evidence at hearing, the Tribunal was satisfied the applicant and witnesses were provided a meaningful opportunity to give evidence and submissions.
The applicant was represented in relation to the review by its registered migration agent.
For the following reasons, the Tribunal has decided to affirm the decision under review to refuse the nomination.
CONSIDERATION OF CLAIMS AND EVIDENCE
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 r.5.19(4), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.
The application is compliant: r.5.19(4)(a)
Regulation 5.19(4)(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 need for the nominator to employ a paid employee to work in the position under their direct control.
On 15 January 2016, Delicate Roses P/L (the ‘applicant’ or ‘nominator’) lodged a nomination application for approval for the position of Retail Manager (General) at Belconnen, ACT[2] - being under the Regional Sponsored Migration Program, Direct Entry Stream. After considering the evidence, the Tribunal accepts the online application was made on the approved form and was accompanied by the fee prescribed.
[2] Department – folio 228.
Next, for applications made from 14 December 2015 – they must also include a written certification stating whether the nominator has engaged in conduct in relation to the nomination that contravenes s.245AR(1). The written s.245AR(1) certificate was lodged with the Department;[3] and the Tribunal accepts this meets the s.245AR(1) requirement.
[3] Department – folio 127.
For nominations made before 1 July 2017, r.5.19(4)(a)(ii) requires that the application for approval ‘identifies a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control’. For reasons not elaborated herein, the Tribunal understands it is unclear whether this requirement is directed just at (first) a statement to this effect[4] or (second) something of a more qualitative nature.[5] The Tribunal proposes to accept that the first interpretation of r.5.19(4)(a)(ii), should be accepted in this case (though reasoning materially relating to a discussion of the second interpretation, is set out below). Therefore, the Tribunal accepts the nominator has identified a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control. The Tribunal notes this is contrary to the finding of the delegate.
[4] It may be argued that r.5.19(4)(a) as a whole is directed towards requirements for the application form / process of a more administrative nature, such that r.5.19(4)(a)(ii) could be met by a simple statement or certification of need.
[5] The wording ‘identifies a need’ arguably suggests more is required to meet this criterion than simply a statement or declaration that there is such a need. This appears to reflect Department policy (PAM3: Migration Regulations – Divisions – Div 5.3 – General > Approval of nominated positions (employer nomination) > Part C - Criteria applicable to Direct Entry stream nominations > Need for a paid employee > Applicability and overview (reissued 12/05/17 – last reissue prior to 1 July 2017).
Accordingly, the requirement in r.5.19(4)(a)(ii) is met.
Nominator is actively and lawfully operating a business in Australia: r.5.19(4)(b)
Regulation 5.19(4)(b) requires that applicant is actively, lawfully and directly operating a business in Australia. Based on the evidence before the Tribunal (including but not limited to the ASIC extract, ABN, bank statements, advertising, payslips, tax returns), I am satisfied the nominator actively and lawfully operates a business in Australia, and they directly operate that business.
Accordingly, the requirement in r.5.19(4)(b) is met.
Position is not labour-hire: r.5.19(4)(c)
Regulation 5.19(4)(c) applies to nominators whose business activities include those relating to labour hire to an unrelated business. In these cases, the nominated position must be within the business activities of the nominator. The Tribunal also understands that if the nominator’s business activities relate to the hiring of labour to other unrelated business, the position is within the business activities of the nominator and not for hire to other unrelated businesses.
That said, there is no evidence on the Department or Tribunal files, that the nominator’s business activities include those relating to labour hire to an unrelated business.
Accordingly, the requirement in r.5.19(4)(c) does not apply.
Term of employment of the visa holder: r.5.19(4)(d)
Regulation 5.19(4)(d) requires the nominee to be employed in the nominated position for at least 2 years full time, and the terms and conditions of that employment do not expressly exclude the possibility of an extension.
As noted above, on 15 January 2016, the applicant lodged a nomination application for approval for the position of Retail Manager (General) at Belconnen, ACT[6] - being under the Regional Sponsored Migration Program, Direct Entry Stream. The proposed salary for the position was to be $55,000 per annum. Amongst others, the applicant lodged the following documents with the Department:
·ABN
·ACN
·Company Constitution
·Market salary rate comparison
·Lease agreement
·Nominees Passport
·Position details as per ANZSCO guide
·Employer declaration.
[6] Department – folio 228.
Subsequent evidence lodged by the applicant included:
·Bank statements
·Advertising / promotional / marketing material
·Organisation Chart
·Financial statement 2016
·Tax return 2016
·Nominee’s payslips
·Photos of the applicant’s premises
·Employer’s statement as to the need for the nominee
·Evidence of advertisement for the position
·Lease agreement for the nominator’s business premise in Belconnen
·Receipt for application with the Regional Certifying Body (RCB)
Based on the evidence lodged, the delegate (whose decision was not lodged with the Tribunal) noted that the nominator’s business had commenced operating on 13 November 2015. The business was a grocery shop which specialised in Middle Eastern/Persian groceries and other goods. The application indicated the nominator’s business employed two Australian and two foreign employees (one full time and three casual staff) – (however, the more recent ‘Employee-Staff List’ lodged with the Tribunal identified one Australian citizen, one permanent resident, and four temporary residents).
The delegate (and now the Tribunal) noted the Financial statement for 2016 indicated the total income generated by the business was $66,014, less total cost of sales is $18,809, making a gross profit of $47,205. The delegate (and now the Tribunal) then noted that total operating expenses were shown as $45,154, making the net profit $2,053. The delegate (and now the Tribunal) also noted that wages and salaries listed under expenses was $20,002. The delegate (and now the Tribunal) further noted that the business had been running for just over six months as at 30 June 2016.
Next the business bank account statement for the period April 2016 to 30 June 2006, showed an opening balance of $507.81, and a closing balance of $314.14. The Business Activity Statement for the period October to December 2015 showed total sales as ‘zero dollars’, and salary and wages as ‘zero dollars’. The Business Activity Statement for the period January to March 2016 showed total sales of $34,260, and salary and wages of $9360. The delegate noted the business had not provided a letter from their accountant attesting to the financial position of the business and its capacity to meet employment obligations about employing the nominee for a period of at least two years. Further, after noting that RCB approval did not dictate the outcome of their decision, the delegate then noted that the RCB approval was still pending at the time of their decision. After considering all the evidence, the delegate was not satisfied the nominator’s business had the financial capacity to employ the nominee as a Retail Manager on a full-time basis for a period of two years at the base salary of $55,000 per annum. Therefore, the delegate was not satisfied that r.5.19(4)(d)(i) was met, and that the nominator had also not met r. 5.19(4) of the Regulations.
The delegate then noted that the applicant had only provided claims against r. 5.19(4); and that as insufficient evidence had been submitted against r 5.19(3), the applicant had not met that alternative sub-regulation.
By s.359(2) letter of 13 February 2018, the Tribunal requested further evidence from the applicant that may satisfy it they met the relevant criteria in r 5.19(2) & (4) of the Regulations. The applicant was requested to respond by 27 February 2018. However, on 26 February 2018, the applicant’s newly appointed migration agent requested an extension of time within which to respond. This was granted. By migration agent submission 14 March 2018,[7] further evidence was then lodged. This included:
[7] Tribunal – from folio 35.
·ASIC extract - indicating the company was registered on 13 November 2015[8]
[8] Tribunal – folio 79.
·ASIC current historical extract[9]
[9] Tribunal – folio 87.
·Information said to demonstrate that the applicant had been directly operating an active and lawful business in Australia and its financial position for “at least the last two years”.[10] This included:
[10] Tribunal – from folio 70 (reverse side).
·Business Activity Statements – period October 2015 to December 2017[11]
·Company Tax Return FY 2016 2017[12]
·Financial Statement FY 2016 to 2017
·Current Business Organisational Structure – as at March 2018[13]
·Job description and sample of work[14]
·Various references from the community and customers at the nominator’s business[15] (at hearing, it was explained that many of these persons were attending the Australian National University or Canberra University)
·Employment contract[16]
·Evidence seeking to demonstrate the need to employ a paid employee in the nominated occupation and the reason why the position could not be filled by an Australian citizen or permanent resident living in the local area. The agent also submitted that the nominee had been employed by the business since November 2015 and that the employment had been ongoing.
·It was also said the RCB, ACT had approved the position on 13 December 2016 – the letter of approval from the RCB was dated 9 December 2016[17] (and as conceded by the agent at hearing, the RCB approval related to an identified need and not whether the nominating business was financially viable).
[11] Tribunal – from folio 63.
[12] Tribunal – from folio 78.
[13] Tribunal – folio 44.
[14] Tribunal – folio 45.
[15] Tribunal – from folio 42.
[16] Tribunal – from folio 57.
[17] Tribunal – folio 43.
The Tribunal notes the Trading Income Statement for the year ended 30 June 2017, showed a total income of $107,753; but a total ‘net profit’ (a loss) of $25 (down from $2,053 at 30 June 2016[18]); and total wages and salary of $59,023. It also showed total liabilities as $30,770[19] (up from $3,680 at 30 June 2016[20]).
[18] Tribunal – folio 54.
[19] Tribunal – folio 49.
[20] Tribunal – folio 54 (reverse side).
By migration agent submissions dated 15 August 2018, further evidence was lodged. This included (but was not limited to):
·     A BAS statement for the period January 2018-March 2018.[21] This showed total sales as $54,841 and total salary, wages and other payments as $5,092
·     A BAS statement for the period April 2018-June 2018.[22] This showed total sales as $52,760 and total salary, wages and other payments as $10,503 (this appears to be less than the proposed salary to be paid to the nominee for a similar period)
·     A Trading, Profit and Loss Statement for year ending 30 June 2018.[23] This identified ‘profit from ordinary activities after income tax’ as $736.78 – and ‘retained profit at the beginning of the financial year’ as $1,146
·     Evidence of leasing expense[24]
·     An undated and unsigned ‘Licence’ document[25]
·     A document titled ‘Employee – Staff List’.[26] This indicated there were four causal staff (one citizen, one permanent resident, two temporary residents); and two full time staff (both temporary residents).
[21] Tribunal – folio 132.
[22] Tribunal – folio 131.
[23] Tribunal – from folio 129.
[24] Tribunal – from folio 126.
[25] Tribunal – from folio 123 (reverse side).
[26] Tribunal – folio 111.
At the Tribunal hearing, it was explained that the nominating business was operated by Ms Khatabi (also the nominee[27]). Ms Khatabi had travelled to Australia in 2014 and studied a Master of Nursing at Wollongong University. However, rather than seek to pass further tests to practise as a nurse in Australia, the Tribunal understands Ms Khatabi had commenced the nominating business.
[27] Tribunal – folio 87.
After then noting the above financial evidence (including the Trading, Profit and Loss Statement for year ending 30 June 2018,[28] identifying ‘profit from ordinary activities after income tax’ as $736.78 – and ‘retained profit at the beginning of the financial year’ as $1,146), the Tribunal put to the applicant (words to the effect) that given the apparently limited profitability of the nominator’s business, I may not be satisfied it had the capacity to ensure the nominee (also Ms Khatibi), would be paid the nominated salary ($$55,000 per annum) for a period of two years.
[28] Tribunal – from folio 129.
The applicant had referred to the support of the Iran community in Canberra (evidence on file), that the applicant was proposing to expand the business to other locations, that they would also be seeking to expand the business – including by creating a Halal butcher (though no corroborating evidence of same was provided, the Tribunal understands it was claimed their were ‘none’, or possibly ‘few’, such butchers in Canberra and or Belconnen), that the nominating business also proposed to possibly continue to expand its grocery, and to also offer Iranian handicrafts and or Persian books for sale (and otherwise engage the local community with the culture of Iran). However, it was then explained that after the Department refused to grant the nomination application (based on r.5.19(4)(d) of the Regulations), a decision had been made to limit the investment made in the nominator’s business, until they could be assured that money ‘would provide returns’; or at least be accessible by the applicant should she and her family have to return to Iran.
Next, it was said the nominating business wished to relocate to Westfield Belconnen but to do so they would have to sign a five year lease – and this could not be safely done given the nominator, and other visa applicants, were in Australia on Bridging visas. It was also claimed the nominating business could not purchase goods by instalments and had to pay by cash (as their lawful stay in Australia may cease at short notice). It was also claimed the nominator’s business was unable to pay full time staff – as they were unsure whether the approval application would be successful. It was also said that if the Tribunal decided to affirm the Department decision, they would have 28 days to depart Australia; and accordingly, they might be forced to attempt to liquidate as many assets as they could (in Australia), in order to recover some of their monies prior to departing. However, for the purposes of discussing the nominating business’ capacity to pay, it was claimed the visa applicant (also the operator of the nominating business), and her family were wealthy and the Tribunal presumed that a decision could be made to appeal the matter to the courts (presuming the Tribunal might affirm the decision). It was then said (words to the effect) judicial review might prove to be excessively expensive.
The applicant believed that should a visa be granted to her, she would be able to invest in the nominating business and the profitability of the business would improve. It was also claimed that many persons (including from India, Iran and other countries) successfully commence businesses in Australia and they constitute an important contribution to the Australian economy. The Tribunal accepts this to be correct. However, this does not mean that all such persons who commence business in Australia will be successful (particularly in what was described at hearing as the competitive retail market in Australia). The applicant’s child also wished to retain their Australian friends.

At hearing, the agent also said he had advised the applicants that it could not be guaranteed whether they would succeed in this nomination approval application (or their visa application). He said (rightly) that it would not be ethical for him to have done so. He also said they could not be certain which issue (in the nomination approval application) a constituted Tribunal may focus on. However, and though not lodged with the Tribunal, as conceded at hearing the basis for the Department delegate refusal was that r.5.19(4)(d) of the Regulations was not met. The Tribunal assumes it would be reasonable to accept this may also be considered on review.
After the Tribunal hearing, further evidence was lodged. This included evidence of certificates, Property Ownership Deed/s, references, an Order of Retirement for Mr Parviz Nasiri, employment reference, training certificate/s and other evidence. The Tribunal has not expressly referred to each herein, however, I have had regard to all evidence and submissions prior to finalising this decision. After considering such evidence, the Tribunal is not satisfied this, along with other evidence considered, is determinative of whether the nominee will be employed in the nominated position and paid the nominated salary for at least 2 years full time.
That being said, and while the Tribunal accepts the applicant (and her husband) may have had some business experience in Iran, and may have some experience in business management, based on the financial information before the Tribunal, I am not satisfied the nominating business has the capacity to pay the nominee the proposed salary, for two years. While speculating about the future profitability of a business can be relevant, after considering all the evidence in this case, including the nature of the nominating business (the agent referred to - words to the effect – the competitive nature of retail business in Australia), and given the financial information provided to the Department and Tribunal, I am not satisfied the nominating business would have the capacity to pay the nominee the proposed salary for two years.
Accordingly, the requirement in r.5.19(4)(d) is not met.
For the above reasons the Tribunal is not satisfied that the applicant meets the requirements of r.5.19(4). The applicant has not sought to satisfy the criteria in Temporary Residence Transition Nomination stream, and as such has not met the requirements in r.5.19(3). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.
DECISION
The Tribunal affirms the decision under review to refuse the nomination.
Mr S Norman
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)     both 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;
(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 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).

[2018] AATA 4140

4 September 2018

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Jurisdiction

Appeal