Dhull Freightline Pty Ltd (Migration)

[2021] AATA 3154

Dhull Freightline Pty Ltd (Migration) [2021] AATA 3154 (17 August 2021)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Dhull Freightline Pty Ltd

CASE NUMBER:  1826796

HOME AFFAIRS REFERENCE(S):          BCC2017/896760

MEMBER:Peter Emmerton

DATE:17 August 2021

PLACE OF DECISION:  Adelaide

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

Statement made on 17 August 2021 at 1:33pm

CATCHWORDS
MIGRATION – application for approval of nomination of position – direct entry nomination stream – financial capacity to employ nominee for two years – financial records show company operating at loss – effect of COVID-19 restrictions – substantial discrepancies between documents – tax obligations, wages and payment of suppliers – projections for current financial year – decision under review affirmed

LEGISLATION
Migration Act 1958 (Cth), s 359(2)
Migration Regulations 1994 (Cth), r 5.19(4)(d)(i)

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 30 August 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 applied for approval on 7 March 2017. 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 the applicant’s nomination did not satisfy r.5.19(4)(d)(i) of the Regulations because they were not satisfied that it had not been demonstrated that the nominator had the financial capacity to ensure that the employee would be employed on a full time basis in the position for at least two years.

5. A letter was sent to the applicant pursuant to s.359(2) on 9 April 2021, requesting information.

   ‘INVITATION TO PROVIDE INFORMATION – DHULL FREIGHTLINE PTY LTD

   I am writing on instruction from the Member conducting your review, about the
   application for review made by Dhull Freightline Pty Ltd (“the applicant”) in respect of a
   decision to refuse their application for approval of a nominated position under r.5.19 of
   the Migration Regulations 1994 (the Regulations).

   In order for the nomination of a position to be approved, the Tribunal must be satisfied
   that all of the relevant criteria in r.5.19 of the Regulations are met at the time of its
   decision. As the application for nomination was made under the Direct Entry
   nomination stream, the relevant criteria are in rr.5.19(2) and (4) of the Regulations.

   The Tribunal now requires updated and current information addressing these
   criteria. Accordingly, and without limiting the information that may be given, you or
   another person authorised by the applicant are invited to give the following information
   in writing. We have given examples of the type of information you could provide:

   1. Information about the identity of any person authorised to speak and make
   decisions on behalf of the applicant;

   ·    If the applicant is a company or registered business, an ASIC company or

   business name extract ( If the applicant is a company or registered business, current and historical
   information about its owners or office holders’ registration details;

   ·    An ASIC current and historical extract ( Information about the applicant directly operating an active and lawful business in
   Australia, including its financial circumstances;

   ·    The applicant’s lodged tax returns for the last two full financial years,

   business activity statements that have been 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 most recent two financial years.

   4. Information about the applicant’s current organisational structure and where the
   nominated position sits in relation to that structure;

   ·    An organisational structure chart that includes all of the applicant’s

   current and proposed employees, their position title/duties and their
              immigration status (i.e. Australian citizen, permanent resident or temporary
              visa holder).

   5. Information about the roles and duties of the nominated position and how they
   correspond to the nominated occupation’s position description in ANZSCO;

   ·    Job descriptions, work samples, emails, correspondence and other

   examples of the daily tasks performed in the nominated position, and also
              the nominated occupation’s position description in ANZSCO (go to
               and type the nominated
              occupation’s 6 digit ANZSCO code number into the ‘Search’ function).

   6. Information about the terms and conditions of employment in the nominated
   position, including whether they are more or less favourable than those provided
   for an Australian citizen or permanent residence performing equivalent work in the
   same workplace at the same location, and whether the nominee will be employed
   on a full time basis for at least 2 years with terms and conditions not expressly
   excluding the possibility of extension;

   ·    A current employment contract in respect of the nominee or letter of

   engagement that complies with relevant awards for the nominated position
              (if any).

   7. If the nominated position is not located in regional Australia and the applicant has
   paid the non-regional position application fee, information about:

   a. the need to employ the nominee in the nominated position; AND

   b. the applicant’s business operating for at least 12 months and its recent training
   expenditure; OR

   c. the applicant’s business operating for less than 12 months and its plan for future
   training expenditure

   ·    Invoices or contracts for employee training, a training program that

   includes a course outline, attendance and identifies increased work
              competencies, or records of investment in certain industry training funds
              or recognised industry bodies

   8. If the nominated position is located in regional Australia, information about:

   a. the need to employ the nominee in the nominated position and why the position
   cannot be filled by an Australian citizen or permanent resident living in the same local area; and

   b. whether a specified Regional Certifying Body located in the same State or
   Territory as the nominated position has provided advice that:

   i. the terms and conditions of employment are no less favourable than those
   provided to Australian citizens or permanent residents performing
   equivalent work in the same workplace; and

   ii. there is a genuine need to employ the nominated person as a paid
   employee to work in the nominated position under the applicant’s direct
   control; and

   iii. the position cannot be filled by an Australian citizen or permanent resident
   living in the same area.

   ·    Local job advertisements for the nominated position that were not

   successfully filled, and the Regional Certifying Body’s certificate issued to
              the applicant in respect of this position.

   9. Information about whether the applicant has been subject to monitoring by the
   Department and, if relevant, the outcome of the monitoring audit;

   10. Information about whether the applicant has been the subject of any investigation
   about a possible contravention of the law.

   This information, in writing, should be received by 23 April 2021. If the information
   is in a language other than English, it must be accompanied by an English translation
   from an accredited translator.

   If you or another person authorised by the applicant cannot provide the information by
   23 April 2021, you or another person authorised by the applicant may ask us for
   an extension of time in which to provide the information. If an extension of time
   request is made, it must be received by us before 23 April 2021 and it must state
   the reason why the extension of time is required.

   We will carefully consider any request for an extension of time and will advise whether
   or not the extension has been granted.

   If we do 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. The applicant will also lose any entitlement it might otherwise have
   had under the Migration Act to appear before us to give evidence and present
   arguments.’

6. The applicant requested an extension of time to provide the information. This was granted and the applicant provided the information within the new, extended prescribed period which was 21 May 2021.

7. The applicant represented by Mr Sunil Hooda, Director, Dhull Freightline Pty Ltd, appeared before the Tribunal on 17 August 2021 via video in a combined hearing with MRT file reference 1830579 to give evidence and present arguments. The Tribunal also received oral evidence from Ms Monica, the visa applicant.  

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

9. The hearing was conducted with the assistance of an interpreter fluent in the Hindi and English languages.

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

    CONSIDERATION OF CLAIMS AND EVIDENCE

11. The issue in this case is whether the applicant meets the requirements for approval of the nomination under the 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.

12. In determining the applicant’s claims the Tribunal must first make findings of fact on material matters in dispute. This may involve an assessment of credibility and in so doing, the Tribunal is aware of the need and importance of being sensitive to the circumstances and the difficulties applicants often face before the Tribunal in their individual circumstances.

13. The applicants rely on the evidence given before the Tribunal together with written submissions and supporting evidence provided to the Tribunal and previously to the department.

14. The Tribunal notes that the delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(d)(i) of the Regulations because they were not satisfied that the nominator had demonstrated the capacity to be able to pay the full-time salary for the nominated position for at least 2 years. Therefore, they had not demonstrated that the appointment would provide the employee with full-time employment for at least 2 years.

15. Financial Statements and correlating ATO Tax Returns provided by the applicant on 19 May 2021, showed that for Financial Year 2019 the business made a loss before Tax of $25,456. Financial Statements and correlating ATO Tax Returns provided by the applicant on 19 May 2021 showed that for Financial Year 2020 the business made a loss before Tax of $100,077. The ATO Tax Returns, Financial Statements and corresponding BAS documents for Financial Year 2021 were provided to the Tribunal the night before the hearing. They showed a loss of $8,238. The Tribunal accepts this as an accurate representation of the financial outcomes for those 3 most recent years of trading. This was confirmed by the nominator during the hearing.

16. Prior to the hearing the Tribunal was given the BAS documents for Calendar Years 2019 and 2020, (19 May 2021). The 6 months of BAS documents relating to the last 6 months of the FY 2020 results correlated with the other financial documents and ATO Tax Return for FY 2020. The Tribunal accepts that part of the reason for the poor result in 2020 can be attributed to the Covid-19 pandemic. This is in-line with the observed circumstances experienced by many similar businesses. The Tribunal takes a view that the analysis of the financial viability of an organisation should not rest solely upon the impacts of the Covid-19 containment measures undertaken by Government during the Last 6 months of FY 2020. The Tribunal accepts that the revenues, received during this period, totalling approximately $130,000 are not inline with the results recorded on either side of this anomalous period.

17. The first 2 Quarters of FY 2021 from 1 July 2020–31 December 2020 showed a loss of $16,280 according to the written Financial Statements provided by the nominator’s accountants on 18 May 2021. The 3^rd Quarter for FY 2021 which ended 31 March 2021, showed a loss of $5,123 according to the fore mentioned documentation. These 3 Quarters results came from revenues that were stable according to the documents provided, ($215,150 for Q1 and Q2 combined, averaging approximately $107,500 per Quarter, Q3 $110,554). Under questioning during the hearing, the nominator agreed that the documents which had been provided to the Tribunal showed a loss of approximately $5,000 for Q3 FY 2021 which he agreed was correct.

18. BAS documents were supplied for all 4 quarters of FY 2021, in the late evening of 16 August 2021, immediately prior to the hearing on 17 August. When questioned why each of the first 3 Quarters results according to the BAS documentation presented to the Tribunal were substantially different to the original claimed financial results presented in May 2021, also provided by his accountant, the nominator was unable to offer an explanation, as he claimed to not have seen the figures prior to the accountants sending them to the Tribunal. The Tribunal explained that it was his responsibility to ensure the accuracy of materials presented to it. The BAS documents showed an increase in total revenues of approximately 10% in the first 3 Quarters of FY 2021 greater than originally reported. This has caused the Tribunal to question the accuracy of financial information provided to it.

19. The accountants reported in May 2021 that a series of management decisions being applied to the business in May 2021 would result in an increase in revenue of approximately 45% in the final Quarter of FY 2021, (April1-June 30). This was expected to give a profit before tax of $23,015 for Q4 from predicted revenues of $160,568. Resulting in an overall profit before tax of $1,612 for FY 2021. The Tribunal accepted that the management decisions may in part be successful but to predict such an improvement in such a short time span, part way through the final quarter for FY 2021 was in its’ view somewhat optimistic.

20. The Tribunal notes the highly “qualified” statement pertaining to the nominator’s estimated business financial circumstances provide on 18 May 2021 in which the following is stated.

    ‘We estimate, net profit of $1,612 for Dhull Freightline Pty Ltd should for 2020-2021 financial year. For the expenses, we have factored in the increase in wages due to increase in trading hours for wages and salaries, administrative expenses are taken as per our quarterly records of the expenses.
    Going forward, our client has developed future and strategies to improve the overall sales of the business. They are currently working on the menu to add Indian cuisine along with their Italian cuisine for their dinner menu. Along with this, management is also considering organizing weekend events of Bollywood nights to entertain and increase their customer base.
    Similarly, we estimate net profit of $11,890.99 for Dhull Freightline Pty Ltd for 2021-2022 financial year.

    These estimates are on the basis of information and explanation provided to us and assuming there would not be major adverse event and no extreme changes to the business circumstances like extended lockdown due to COVID 19 in near future.’

21. The results provided in the form of the FY 2021 Profit and Loss Statement, relevant BAS documents and the ATO Taxation Return show revenue for Q4 FY 2021 was $154,000. This resulted in a loss before tax for FY 2021 of $8,238, which the nominator agreed when questioned during the hearing was correct. The Tribunal is unsure of the methodology applied to predict FY 2022 results.

22. The Tribunal is satisfied that the nominator with the assistance of his Manager is attempting to turn the business around to a profitable operation. However, there is insufficient substantiated evidence provided to show that this will be the case, to the extent needed, to guarantee a stable profitable ongoing result, other than supposition and assurances made by the nominator coupled with the accountant’s statements made on their behalf.

23. In summary, Financial Statements and correlating ATO Tax Returns provided by the applicant, showed that for Financial Year 2019 the business made a loss before Tax of $25,456. Financial Statements and correlating ATO Tax Returns showed that for Financial Year 2020 the business made a loss before Tax of $100,077. The Financial Statements and ATO Tax Returns provided by the applicant for FY 2021 show the business made a loss before tax of $8,238. The losses before taxation for the last 3 financial years total $133,771. The Tribunal accepts this as an accurate representation of the financial outcomes for those 3 years of trading.

24. The nominator confirmed at the hearing that these figures were an accurate representation of their financial results. He also confirmed that the losses were being covered by his other restaurant business.

25. The Nominator, when questioned acknowledged that some of his taxation obligations have not been met on time and he is currently on a payment plan with the Australian Taxation Office.

26. The Tribunal asked the visa applicant if all their suppliers were always paid on time. She acknowledged that this was usually the case but occasionally cash flows had not allowed for this to take place.

27. The Tribunal also asked the visa applicant if she was always paid her wages on time. She replied that was usually the case however on rare occasions it had been transferred to her bank account 1 or 2 days late by the accountants. Late payment of wages is never acceptable in the eyes of the Tribunal, regardless of the reason.

28. The Tribunal is not satisfied that the nominator has the capacity to pay the salary of the visa applicant for a minimum of 2 years. It is not satisfied that the employee will be employed, on a full-time basis in the position for at least 2 years. Therefore 5.19(4)(d)(i) is not met.

29. For the above reasons the Tribunal is not satisfied that the applicant meets the requirements of r.5.19(4).

30. 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 r.5.19(3). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.

    DECISION

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

    Peter Emmerton
    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).