Haloluwa Arachchige (Migration)

[2019] AATA 842

Haloluwa Arachchige (Migration) [2019] AATA 842 (23 January 2019)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mr Ranga Dilip Sanjaya Haloluwa Arachchige
Mrs Harshani Ringika Senarathne
Miss Inuki Lisara Haloluwa Arachchige
Miss Thenuki Viyara Haloluwa Arachchige

CASE NUMBER:  1714587

HOME AFFAIRS REFERENCE(S):          BCC2016/2667527

MEMBER:Bridget Cullen

DATE:23 January 2019

PLACE OF DECISION:  Brisbane

DECISION:The Tribunal affirms the decision to cancel the first named applicant’s Subclass 457 (Business (Long Stay)) visa.

The Tribunal has no jurisdiction with respect to the other applicants.

Statement made on 23 January 2019 at 1:37pm

CATCHWORDS
MIGRATION – cancellation – Temporary Business Entry (Class UC) visa – Subclass 457 (Business (Long Stay)) – ground for cancellation – ceased employment with sponsor – position in an associated entity of the sponsor – “phoenix” type of arrangement – consideration of discretion – purpose of a Subclass 457 visa – inability to secure another approved nomination – decision under review  affirmed

LEGISLATION
Migration Act 1958 (Cth), ss 116, 140, 348
Migration Regulations 1994 (Cth), Schedule 8, Condition 8107

CASES
Rani & Ors v MIMA (1997) 80 FCR 379
Tien & Ors v MIMA (1998) 89 FCR 80

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision dated 30 June 2017 made by a delegate of the Minister for Immigration and Border Protection to cancel the first named applicant’s (the applicant) Subclass 457 (Business (Long Stay)) visa under s.116 of the Migration Act 1958 (the Act).

2. The delegate cancelled the visa under s.116(1)(b) on the basis that the primary applicant ceased work with his sponsor, Sirus International Pty Ltd, on 30 October 2016 and has not since been approved to work for any other sponsor. As the primary applicant had ceased work for a period of time in excess of 90 consecutive days, the delegate found that the applicant failed to comply with the requirements of condition 8107(3)(b) attached to his Class UC Subclass 457 Temporary Work visa. The issue in the present case is whether that ground for cancellation is made out, and if so, whether the visa should be cancelled.

3. For the purposes of the Tribunal’s jurisdiction under s.348 of the Act, the only decision that is before the Tribunal is the decision with respect to the first named applicant. The other applicants’ visas were automatically cancelled as a consequence of that cancellation, not by a decision but by force of the operation of s.140(1) of the Act which made the cancellation of those other visas self-executing on the cancellation of the first named applicant’s visa: see Rani & Ors v MIMA (1997) 80 FCR 379 at 385, 393, 400; Tien & Ors v MIMA (1998) 89 FCR 80 at 96. As no decision was involved in the visa cancellation under s.140(1), the Tribunal has no jurisdiction with respect to them.

4. The applicants appeared before the Tribunal on 10 September 2018 to give evidence and present arguments.

5. The applicants were represented in relation to the review by their registered migration agent. The representative attended the Tribunal hearing.

6. For the following reasons, the Tribunal has concluded that the decision to cancel the applicant’s visa should be affirmed.

   CONSIDERATION OF CLAIMS AND EVIDENCE

7. Under s.116 of the Act, the Minister may cancel a visa if he or she is satisfied that certain grounds specified in that provision are made out. Relevantly, to this case, these include the ground set out in s.116(1)(b). If satisfied that the ground for cancellation is made out, the decision maker must proceed to consider whether the visa should be cancelled, having regard to all the relevant circumstances, which may include matters of government policy.

   Does the ground for cancellation exist?

8. A visa may be cancelled under s.116(1)(b) if the Minister is satisfied that the holder did not comply with a condition of their visa. In this instance condition 8107(3)(b) attached to the applicant’s visa. This condition requires that 'if the holder ceases employment – the period during which the holder ceases employment must not exceed 90 consecutive days'.

9. The applicant was granted a Subclass 457 visa on 5 November 2013 on the basis of an approved nomination by a standard business sponsor, Sirus International Pty Ltd in the position of Sales and Marketing Manager.

10. Following Departmental monitoring of the sponsor, Sirus International Pty Ltd, on 15 March 2016, a Departmental delegate decided the sponsor had failed in some of its obligations, and sanctioned the sponsor, barring them from making future applications for approval as a standard business sponsor until 14 March 2018.

11. The applicant, in response to a request by the Department on 19 October 2016, indicated that he continued to be employed by Sirus International Pty Ltd as at that date, but might conclude his employment on 30 October 2016.

12. On 28 October 2016, the Department again wrote to the applicant, and acknowledged that he had provided pay slips from Sirus International Pty Ltd for the months on August 2016 and September 2016. 

13. On 5 November 2016, the applicant lodged a new nomination application with the Department, seeking to work for a new sponsor, The Trustee for the State Facility Management Discretionary Trust, in the position of Sales and Marketing Manager.  On 19 May 2017, a Departmental delegate decided that The Trustee for the State Facility Management Discretionary Trust did not meet the requirements to be approved as a standard business sponsor, and refused the applicant’s nomination application.

14. In response to queries by the Department, the applicant confirmed, on 2 June 2017, that his employment with Sirus International Pty Ltd ended on 30 October 2016.  He provided payslips for payments made to him by Trustee for the State Facility Management Trust. 

15. On 1 June 2017, the applicant lodged a further nomination application with the Department, in which he was again nominated to be a Sales and Marketing Manager for The Trustee for the State Facility Management Discretionary Trust. On 14 June 2017, a Departmental delegate again decided that The Trustee for the State Facility Management Discretionary Trust did not meet the requirements to be approved as a standard business sponsor, and refused the applicant’s nomination application.

16. On 14 June 2017, yet another nomination application was lodged with the Department, in which the applicant was again nominated to be a Sales and Marketing Manager for The Trustee for the State Facility Management Discretionary Trust. The application remains pending in the Department.

17. These matters are not in dispute. Before the Tribunal, the applicant has raised a legal argument that was not before the delegate at the time of decision.  The applicant submits that Condition 8107 is met as he began working for an associated entity of the sponsor and his position remained unchanged. The applicant asserts that The Trustee for the State Facility Management Discretionary Trust is an associate entity of Sirus International Pty Ltd.

18. Pursuant to visa condition 8107(3)(a)(ii)(B) a primary subclass 457 holder must work, if their sponsor is, or was, a standard business sponsor who lawfully operated a business in Australia at the time of their sponsorship approval, or at the time of the last approval of a variation to the sponsor’s terms of approval as a standard business sponsor - only in a position in the business of the sponsor or an associated entity of the sponsor.

19. Under the standard 457 programme, a new nomination must be approved for a subclass 457 visa holder before they can work for a new employer unless 8107(3)(a)(ii)(B) applies.

20. The term associated entity includes an entity within the meaning of s.9 of the Corporations Act 2001 and a body of the Commonwealth, a State or a Territory: r.1.13B(4). ‘Associated entity’ is further defined in r.1.03 as having the same meaning in s.50AAA of Corporations Act 2001.

21. The departmental policy guidelines for assessing “Related and associated entities under the Corporations Act” provide:

    Related and associated entities under the Corporations Act

    Entities are considered ‘related’ if a relationship may be established between them under section 50 of the Corporations Act and are considered ‘associated’ if the relationship is established under s50AAA of the Corporations Act.

    Section 50 of the Corporations Act provides that, if a body corporate is:

    ·            a holding company of another body corporate

    ·            a subsidiary of another body corporate, or

    ·            a subsidiary of a holding company of another body corporate

    the 2 bodies are related to each other.

    Section 9 of the Corporations Act defines a holding company:

    ·     ‘a holding company in relation to a body corporate means a body corporate of which the first body corporate is a subsidiary’.

    Section 46 of the Corporations Act provides that a body corporate (“the first body”) is a subsidiary of another body corporate if, and only if:

    ·     the first body is a subsidiary of a subsidiary of the other body

    or

    ·     the other body:

    ocontrols the composition of the first body’s board

    ois in a position to cast, or control the casting of, more than half the maximum number of votes that might be cast at a general meeting of the first body or

    oholds more than half the issued share capital of the first body (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).

    Although the Corporations Act does not define this, “the other body” (which controls the subsidiary) is commonly referred to as the “parent” company.

    Section 50 relationships, where the parent owns more than 50% of the shares in a subsidiary, may be easily established based on information recorded with ASIC (as evidenced in an ASIC Extract for the subsidiary). Where claimed, the nominator should be asked to provide an ASIC extract for the appropriate entity. If the subsidiary of a subsidiary is involved, ASIC extracts should be obtained for both subsidiary entities.

    Note:

    ·     Section 50AAA of the Corporations Act is interpreted as including government agencies. As such, if the standard business sponsor was a government agency (e.g. Department of Health), but the TSS visa holder undertook some work for an entity related to that government agency (e.g. National Blood Authority), this period of work may be counted.

    ·     A section 50 relationship can exist only between companies incorporated under the Corporations Act 2001. Other entities (such as sole proprietorships, partnerships, businesses operating under trust arrangements) cannot have such a relationship with a company or between themselves.

    ·     The definition of an associated entity in s50AAA of the Corporations Act is complex. Where there are concerns, delegates may wish to request nominators source a legal opinion from a qualified corporations lawyer and submit this as evidence of a relationship with an associated entity under s50AAA of the Corporations Act.

22. The applicant submits that the Organisational Chart lodged in the Tribunal is evidence of the associated entity relationship, as it demonstrates that the Director of Sirus International Pty Ltd is currently the Head General Manager of The Trustee for State Facility Management Discretionary Trust.  The applicant submits that both companies have the same employees, and the same business structure.  The applicant gave evidence to the Tribunal that his position was unchanged in the transition from Sirus International Pty Ltd, and that the company (which is a commercial cleaning company) is utilising the same employees, subcontractors and equipment to service the same customers.

23. Whilst the Tribunal accepts the evidence of the applicant about the nature of his duties performed, and further accepts that the evidence provided about the Director of Sirus International Pty Ltd being the Head General Manager of the Trustee for State Facility Management Discretionary Trust, the Tribunal does not accept that the companies are associated entities in the manner described in the Corporations Act.

24. Common directorship alone is not sufficient to satisfy the test. It is clear that there is no “holding company” or “subsidiary relationship” between the two companies. The companies are therefore not “related” in accordance with s50 of the Corporations Act 2001.

25. The definition of an associated entity in s.50AAA of the Corporations Act 2001 is as follows:

    Associated entities

    (1)  One entity (the associate ) is an associated entity of another entity (the principal ) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.

    (2)  This subsection is satisfied if the associate and the principal are related bodies corporate.

    (3)  This subsection is satisfied if the principal controls the associate.

    (4)  This subsection is satisfied if:

    (a)  the associate controls the principal; and

    (b)  the operations, resources or affairs of the principal are material to the associate.

    (5)  This subsection is satisfied if:

    (a)  the associate has a qualifying investment (see subsection (8)) in the principal; and

    (b)  the associate has significant influence over the principal; and

    (c)  the interest is material to the associate.

    (6)  This subsection is satisfied if:

    (a)  the principal has a qualifying investment (see subsection (8)) in the associate; and

    (b)  the principal has significant influence over the associate; and

    (c)  the interest is material to the principal.

    (7)  This subsection is satisfied if:

    (a)  an entity (the third entity) controls both the principal and the associate; and

    (b)  the operations, resources or affairs of the principal and the associate are both material to the third entity.

    (8)  For the purposes of this section, one entity (the first entity) has a qualifying investment in another entity (the second entity) if the first entity:

    (a)  has an asset that is an investment in the second entity; or

    (b)  has an asset that is the beneficial interest in an investment in the second entity and has control over that asset.

26. The applicant relies on subsection (4) of s50AAA of the Corporations Act 2001. The applicant does not explain which company is the associate and which is the principal.  The applicant does not explain how the associate controls the principal.  These are essential matters to a finding that the entities are associated, and there is no explanation provided by the applicant.

27. The applicant relies on ASIC Current & Historical Company Extracts for both Sirus International Pty Ltd State Facility Management Pty Ltd.  State Facility Management Pty Ltd was registered on 21 August 2016.  This is after the Department had monitored Sirus International Pty Ltd, and after 15 March 2016 decision to bar Sirus from making future applications for approval as a standard business sponsor.

28. The Tribunal does not have information in front of it that would support a finding that the companies are associated in the way that the applicant contends.  Rather, the arrangement looks like a “phoenix” type of arrangement where operations were shifted from Sirus International Pty Ltd to The Trustee for State Facility Management Discretionary Trust in order to try and avoid the impact of the sponsorship bar.

29. The Tribunal finds that the Sirus International Pty Ltd and the Trustee for State Facility Management Discretionary Trust are not related or associated entities under the Corporations Law 2001.

30. As a consequence, the Tribunal finds that Condition 8107(3)(a)(ii)(B) is not applicable.  The Tribunal finds that the applicant ceased employment with Sirus International Pty Ltd on 30 October 2016.  He does not have an approved nomination, and as the period in which the applicant ceased employment has exceeded 90-days, he has breached condition 8107(3)(b).

31. For these reasons, the Tribunal is satisfied that the ground for cancellation in s.116(1)(b) exists. As that ground does not require mandatory cancellation under s.116(3), the Tribunal must proceed to consider whether the visa should be cancelled.

    Consideration of discretion

32. There are no matters specified in the Act or Regulations that must be considered in the exercise of this discretion. The Tribunal has had regard to the circumstances of this case, including matters raised by the applicant, and matters in the Department’s Procedures Advice Manual (PAM3) ‘General visa cancellation powers’.

33. The Tribunal has first considered the purpose of the applicant's travel to and stay in Australia. The evidence before the Tribunal indicates that the purpose of the applicant's travel to and stay in Australia was to engage in temporary employment for an Australian business, Sirus International Pty Ltd, in the position of Sales and Marketing Manager from 5 November 2013 until 5 November 2017. The applicant applied offshore for a class UC subclass 457 Temporary Work visa on 25 June 2013. 

34. On 5 November 2013, the applicant was granted the class UC subclass 457 Temporary Work visa that is the subject of this decision. The evidence indicates that the applicant worked for the sponsoring employer from his arrival in Australia on 10 December 2013 until 30 October 2016, and that since that time he has not become the subject of an approved sponsorship/nomination.

35. The purpose of the 457 visa is for an applicant to work on a temporary basis (usually for 4 years) for an approved sponsor in an approved occupation and that since ceasing employment with Sirus International Pty Ltd ATF on 30 October 2016, the applicant has not been able to secure another nomination. The Tribunal notes that the objectives of the Temporary Skilled Migration program was to fill skills shortages as listed on the skilled occupation list; and that if an applicant had been unable to secure an approved nomination, then this meant the applicant was not able to fulfil the purpose of the 457 visa. The Tribunal considers that this weighs strongly in favour of cancelling the visa.

36. The Tribunal has had regard to the evidence and submissions made by the applicant. The Tribunal considers that the purpose for which the applicant was granted his most recent 457 visa was to work in the occupation of Sales and Marketing Manager for Sirus International Pty Ltd, that purpose ended on 30 October 2016 when the applicant ceased working for that company. The evidence indicates that the applicant has not been able to find another sponsor. It has now been over 2 years and 2 months since the applicant ceased working for his approved sponsor and to date the applicant has not been able to secure another approved nomination, under the 457 visa programme, or otherwise.

37. Having regard to the purpose of the 457 visa, the Tribunal considers that the above circumstances, particularly the length of time that has passed since the applicant worked for his approved sponsor and his inability to secure another approved nomination since that time, weigh in favour of cancelling the 457 visa.

38. The Tribunal has considered the applicant's compliance with visa conditions and is satisfied that other than condition 8107(3)(b), the applicant has complied with visa conditions.

39. The Tribunal has also considered the circumstances in which the ground for cancellation arose. In this case, the ground for cancellation arose 90 days consecutive after the applicant ceased employment with the sponsor as he was unable to secure another nomination within the 90 day period. The Tribunal notes the applicant's assertions that he has made efforts to secure another nomination, but the applicant has not been successful in these efforts. The Tribunal finds that these circumstances weigh in favour of cancelling the applicant's visa.

40. The Tribunal has also considered the hardship that may be experienced if the visa is cancelled. The applicant also has a wife, and two children, who are secondary applicants on his 457 visa, and the decision will impact them. The Tribunal notes that had the visa not been cancelled, it would have expired on 5 November 2017. It is now more than a year and 2 months past the time that the visa would have expired but for the cancellation.

1. The Tribunal has also had regard to the mandatory legal consequences of cancellation. The applicant currently holds a Bridging E visa and will only be subject to detention if he does not continue to hold visas to remain lawfully in Australia or refuses to depart voluntarily. In relation to consideration regarding international obligations, there is no evidence provided to the Department or before the Tribunal, and the applicant has not claimed, that any international obligations would be breached as a result of the cancellation.

2. The Tribunal has considered and weighed up all of the relevant circumstances in this case. The Tribunal acknowledges that the applicant may experience hardship, including financial and emotional hardship, if the visa is cancelled. The Tribunal also accepts that the applicant on the basis of the evidence before it has generally complied with visa conditions. While these circumstances weigh in favour of the applicant, the Tribunal gives more weight to the purpose of the 457 visa and the fact that the applicant has been unable to secure another approved nomination since ceasing work with the sponsor more than 26 months ago.

3. Considering the circumstances as a whole, the Tribunal concludes that the visa should be cancelled.

   DECISION

4. The Tribunal affirms the decision to cancel the first named applicant’s Subclass 457 (Business (Long Stay)) visa.

5. The Tribunal has no jurisdiction with respect to the other applicants.

   Bridget Cullen
   Member