Kinn Niyom Pty Ltd (Migration)

Kinn Niyom Pty Ltd (Migration) [2021] AATA 4194 (27 October 2021)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Kinn Niyom Pty Ltd
CASE NUMBER:  1905048
HOME AFFAIRS REFERENCE(S):          OPF2018/12085
MEMBER:R. Skaros
DATE:27 October 2021
PLACE OF DECISION:  Sydney
DECISION:The Tribunal affirms the decision under review.

Statement made on 27 October 2021 at 11:55am
CATCHWORDS
MIGRATION – standard business sponsor – action in relation to sponsorship – cancellation of approval and bar for 12 months – prescribed criterion no longer met – adverse information about person associated with sponsor known to department – sanction on former owner – former owner incorporated new company then sold it and the business to brother-in-law – ongoing business relationship – remained as signatory to new company’s bank account and was identified to ABF by staff – new owner retained most staff, renovated and changed accounting software and procedures – impact on sponsored and other staff – false or misleading information in sponsorship application – relationship of former owner not declared – not a genuine arm’s-length transaction – limited evidence of current operations and future intentions – not reasonable to disregard information – bar period ended in any case – consent to decision without hearing – decision under review affirmed
LEGISLATION
Migration Act 1958 (Cth), ss 140E(1), 140L(1)(a), 140M(1), 375A
Migration Regulations 1994 (Cth), rr 1.13A(2)(e), 1.13B(1)(f), 2.59(g)(i), (ii), 2.91(2)
CASE
MIAC v Haneef (2007) FCAFC 203

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 Home Affairs to take an action under s 140M of the Migration Act 1958 (the Act) in relation to the applicant’s sponsorship.
The applicant was approved as a standard business sponsor on 16 July 2018 for a period of five years. On 12 February 2019, the delegate made a decision, under s 140M of the Act, to cancel the applicant’s approval as a standard business sponsor and to bar the applicant for a period of 12 months from making an application for approval as a standard business sponsor and temporary activities sponsor.
A copy of the delegate’s decision record was provided with the application for review. The Tribunal also received written submissions from the representative dated 11 February 2020, which were accompanied by various supporting documents.
On 16 August 2021 the Tribunal wrote to the review applicant advising that it had considered all the material before it relating to their application, but it was unable to make a favourable decision on that information alone. The Tribunal invited the applicant to give oral evidence and present arguments at a hearing on 2 September 2021. On 24 August 2021 the applicant advised the Tribunal that they did not wish to give oral evidence and consented to the Tribunal proceeding to make a decision on the review without taking any further action to allow or enable the applicant to appear before it. This matter has therefore been determined on the evidence available to the Tribunal.
The applicant was represented in relation to the review by its registered migration agent.
Purported certificate issued under s 375A of the Act
The Department’s file contains a non-disclosure certificate issued under s 375A of the Act. The Tribunal has considered the validity of the certificate, the relevance of the information covered by the certificate and whether the information, where relevant to the issues in the review, has been disclosed to the applicant.
The s 375A certificate provides that non-disclosure of the information contained in the below folios would be contrary to public interest because they contain internal information that refers to visa holder information, internal departmental referral, information from third parties and a recommendation report that has information gathered from various sources and is an internal document.
The Tribunal considers that the s 375A certificate is invalid as it merely describes the information/documents covered by the certificate and does not provide a valid public interest reason for the non-disclosure of the information. Having formed the view that the certificate is invalid, the Tribunal did not consider it necessary to provide a copy of it to the applicant and invite them to comment on its validity.
Importantly, however, the information in the folios covered by the certificate, in as far as it is relevant to the issues in the review, has been disclosed to the applicant in the Notice of Intention to Take Action (the NOITTA), which was also, in part, set out in the decision record that was provided to the Tribunal. The Tribunal also notes that the relevant information was also referred to in the representative’s written submission that was provided in response to the NOITTA and to the Tribunal on review. The relevance of the information and discussion of the issues are set out in detail below.
For the following reasons, the Tribunal has decided to affirm the decision under review.
CONSIDERATION OF CLAIMS AND EVIDENCE
Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances.
Under s 140M, if prescribed circumstances exist, the Minister (and the Tribunal on review) may take one or more of the following actions:
·cancelling the sponsorship approval in relation to a class to which the sponsor belongs;
·cancelling the sponsorship approval for all classes to which the sponsor belongs;
·barring the sponsor for a specified period from sponsoring more people under the terms of any existing approval; and
·barring the sponsor for a specified period from making future applications for sponsorship approval in relation to one or more classes of sponsor.
For these purposes, the circumstances are prescribed in regs 2.89–2.94B and include circumstances in which the Minister, or Tribunal on review, is satisfied there has been: a failure to satisfy a sponsorship obligation; provision of false or misleading information; sponsorship application or variation criteria no longer met; a contravention of the law; unapproved changes to a program; a failure to pay additional security; a failure to comply with certain terms of an agreement; or a failure to pay medical and hospital expenses.
Where a prescribed circumstance has been found to exist, the Regulations prescribe criteria that must be taken into account when determining what action, if any, to take: regs 2.89–2.94B. These criteria, as they relevantly apply to the circumstances of this case are set out in the attachment to this decision.
Does a circumstance for the taking of an action exist?
In the present case, the delegate found that the applicant no longer satisfied the prescribed criteria for approval as a standard business sponsor.
Criteria no longer met: reg 2.91
The Minister may take one or more of the actions in s 140M if the sponsor no longer satisfies the prescribed criteria for approval of the sponsorship or for variation of the terms of the sponsorship: reg 2.91(2).
The applicant was approved as a standard business sponsor on 16 July 2018. Following the approval, the Department received information which suggested that there may be ‘adverse information’, as defined in reg 1.13A, known to Immigration about the applicant or a person associated to the applicant. This is relevant to whether the applicant continued to meet the requirement in reg 2.59(g) for approval as a standard business sponsor.
The particulars of the circumstances for which action was being considered, as set out in the NOITTA issued to the applicant on 19 December 2018, are:
The following circumstance(s) prescribed in the Migration Regulations 1994 (the Regulations) for the purposes of under section 140L the Act in relation to which action is being considered, has been identified:
Regulation 2.91 Application or variation criteria no longer met
The sponsor no longer satisfies the criteria prescribed under section 140E(1) of the Act at the time they were approved as a sponsor, as they no longer meet the requirements under Regulation 2.59(g)(i), which states that there is no adverse information known to Immigration about the sponsor or a person associated with the sponsor.
Pursuant to regulation 1.13A, adverse information includes information that the person has been the subject of administrative action for a possible contravention of such a law by a Department or regulatory authority.
On 1 September 2017 ABF finalised monitoring of the standard business sponsor KINN CASTLE HILL PTY LTD. Monitoring identified that KINN CASTLE HILL PTY LTD had failed the following sponsorship obligations:
•Regulation 2.82 - Obligation to keep records
•Regulation 2.86 - Obligation to ensure primary sponsored person works or participates in nominated occupation, program or activity
Monitoring was finalised with the sponsor given a three-year bar from sponsoring more people and from making future applications for approval as a sponsor. The bar is due to end on 1 September 2020. Australian Securities and Investments Commission (ASIC) checks identified that at the time of monitoring the sole director, secretary and joint shareholder of KINN CASTLE HILL PTY LTD was Apichai Amphansup. In addition during the site visit to the sponsors business address on 20 March 2017, workers identified Apichai Amphansup as the person in charge.
On 20 November 2018 NSW SMU received information that KINN CASTLE HILL PTY LTD appeared to have phoenixed and the entity KINN NIYOM PTY LTD had taken over the business formerly operated by KINN CASTLE HILL PTY LTD.
Pursuant to Regulation 1.13B of the Migration Regulations 1994, circumstances exist to bar or cancel the sponsor due to adverse information known to Immigration about a person associated with the applicant due to the following reasons:
•The sole director of KINN NIYOM PTY LTD is SURIYA SAENGWANICH. SAENGWANICH and Apichai Amphansup are brothers in law and appear to reside at the same residential address.
•KINN CASTLE HILL PTY LTD was sanctioned on 1 September 2017 for breach of sponsorship obligations. The director and office holder responsible for the operations of the business was, and still is Apichai Amphansup.
•KINN NIYOM PTY LTD was incorporated on 28 September 2017, and the sole Director, secretary and shareholder was Apichai Amphansup. Around March 2018 Apichai Amphansup sold the company KINN NIYOM PTY LTD as well as the business that KINN CASTLE HILL PTY LTD was operating (Kinn Thai Restaurant) to SURIYA SAENGWANICH.
•SURIYA SAENGWANICH is now the sole director, secretary and shareholder of KINN NIYOM PTY LTD from 1 April 2018.
Apichai Amphansup appears to have phoenixed KINN CASTLE HILL PTY LTD to a new company to circumvent the administrative sanction imposed on KINN CASTLE HILL PTY LTD. Since the sanction was due to the sponsor's actions, and with knowledge of the director Apichai Amphansup, the movement of the business under a new entity with a clean immigration record appears an intentional action by Apichai Amphansup. It is noted that KINN NIYOM PTY LTD was incorporated 27 days after the sanction was applied to KINN CASTLE HILL PTY LTD.
On 9 July 2018 the sponsor provided a copy of the sponsor's business bank account to the Department in support of a nomination for cafe or restaurant manager. The bank statements were from the period 1 April 2018 to 26 June 2018 and were from a Commonwealth Bank account number [X032].
On 30 November 2018 the ABF received information from the Commonwealth Bank relating to the account signatories for the business account [X032] from the time the account was opened to present. The account signatories for the business account [X032] (company cheque account) and [X040] (company manager account) are:
•20 February 2018 to present: Apichai Amphansup
•26 March 2018 to present: Apichart Amphansab
On 18 December 2018 the ABF contacted the sponsor on their business number: X5669. Staff working at the restaurant did not know the name Suriya Saengwanich, but identified Apichai as the boss of the restaurant.
Assessment of information gathered during monitoring indicates that Apichai Amphansup still has control of the finances of KINN NIYOM PTY LTD and as such has a strong ongoing business relationship with the sponsor KINN NIYOM PTY LTD. As such, circumstance exists whereby a third person (Apichai Amphansup) is or was able to exercise influence or control over the other (1.13B(1)(f)). Given that KINN CASTLE HILL PTY LTD was sanctioned by the Department for breaches of their sponsorship obligations and given a significant bar, monitoring has identified that Apichai Amphansup has phoenixed that company to circumvent the sanction imposed.
On this basis the delegate considers that adverse information is known about a person associated with the sponsor.
Response to the NOITTA and the Tribunal’s consideration of the evidence before it
The applicant’s representative responded to the NOITTA by written submissions dated 21 January 2019, together with various supporting documents. The Tribunal also notes that the same submissions and supporting documents were provided to the Tribunal on review, which the representative stated would be sufficient to enable the Tribunal to make a favourable decision without the need for a hearing. However, as noted above, the Tribunal was unable to make a favourable finding on the evidence before it and invited the applicant to appear before it to give evidence and present arguments, but the applicant declined to appear before the Tribunal.
The supporting documents included evidence of company registration for Kinn Niyom Pty Ltd, including evidence of change of name, contract for the sale of the Thai restaurant business, bank account statement showing the receipt of funds by Kinn Castle Hill Pty Ltd which was stated to be for the sale of the business, registration and financial documents for Kinn Castle Hill Pty Ltd, change of authorisation for business account for Kinn Niyom Pty Ltd, letter from the accountant relevant to the signatories on the bank account of Kinn Niyom Pty Ltd, evidence of renovation of the restaurant, activity statement, accounting software subscription, statutory declaration from a staff member of Kinn Niyom Pty Ltd (Sumitra) and statutory declaration from Mr Suriya Saengwanich.
By way of background, the representative submitted that the applicant, Kinn Niyom Pty Ltd (ACN: 621 973 368), was incorporated on 28 September 2017 but did not begin operating until 5 May 2018, and that the company’s sole Director is Mr Suriya Saengwanich. It was noted that the company was originally known as Prapadang Pty Ltd and was registered by Mr Apichai Amphansup on 28 September 2017.
It was further submitted that Kinn Castle Hill Pty Ltd (ACN: 136 044 990) ceased trading as Kinn Thai Restaurant on 19 February 2018, being the Thai restaurant located at Castle Towers, Castle Hill, for which Mr Apichai Amphansup was the sole director and shareholder.
It was submitted that Mr Apichai Amphansup sold the Kinn Thai Restaurant business to Mr Suriya Saengwanich in March 2018 along with the 'shelf company', Kinn Niyom Pty Ltd (then known as Prapadang Pty Ltd), and that at the time the restaurant business was performing quite well. It was submitted that the sale of the business was a legitimate business decision as Mr Suriya Saengwanich saw potential in the restaurant and decided to take over the business. It was noted that Mr Suriya Saengwanich was appointed Director of Kinn Niyom Pty Ltd (then known as Prapadang) on 1 April 2018. It was noted that the sale of business was finalised on 26 April 2018.
It was noted that on 12 March 2018, the company name was changed to Kinn Niyom Pty Ltd and that Mr Suriya Saengwanich renovated the premises to ensure a fresh start. It was submitted that on 5 May 2018, the restaurant, now known as Kinn Niyom Dining and Bar, was reopened, and that most of the staff were retained and some changes were made to the menu.
It was noted that on 9 July 2018 the applicant was an approved Standard Business Sponsor and that the application for approval was made through the applicant’s previous migration agent. It was also submitted that a 482-nomination application was made by the applicant which was subsequently approved.
It was submitted that the applicant had fully informed their former migration agent that a sponsorship bar had been imposed on the former owner of the restaurant business and the involvement of Apichai as a former director of Kinn Niyom Pty Ltd. The representative submitted that they were engaged on 2 October 2018 to lodge further Subclass 482 nomination and visa applications, and that they had declared the potential adverse information in those applications and provided detailed legal submissions on the issue.
The representative referred to the requirements for approval as a standard business sponsor in reg 2.59(g), correctly noting that the provision has two limbs: firstly, whether ‘adverse information’, as defined in reg 1.13A, is known to Immigration about the applicant or a ‘person associated with’ the applicant, as defined in reg 1.13B; and secondly, whether it is reasonable to disregard that information.
It was submitted the applicant is a separate legal entity from its directors and shareholders, and as such there is no adverse information known to Immigration about the applicant. The Tribunal accepts that the applicant (Kinn Niyom Pty Ltd), at the time of the delegate’s consideration, had not contravened a law, was not under investigation for contravention of a law, had not been the subject of an administrative action or had become insolvent.
However, with respect to the reg 1.13A(2)(e), it appears that the applicant had, in relation to their application for approval as a standard business sponsor, given or caused to be given information that was false or misleading in a material particular when they did not declare that a former director of the applicant, namely Mr Apichai Amphansup, was also the director of Kinn Castle Hill Pty Ltd which had a bar imposed on it for breach of sponsorship obligations. The Tribunal acknowledges the representative’s submission that the applicant had fully informed their former migration agent that a sponsorship bar had been imposed on the former owners of the restaurant business, however, in the absence of other information to the contrary, the principles of agency would apply in this case and the actions of the former migration agent, whom the applicant had engaged to act on their behalf, would generally be considered those of the applicant and any consequences arising out of those actions would be borne by the applicant. As the applicant declined to appear before the Tribunal at the hearing, the Tribunal was unable to query them about the appointment of the former agent, the manner in which they informed the agent and what efforts they made, if any, to ensure that the information provided by the former agent on their behalf was true and correct. These factors would have all been relevant to the Tribunal’s consideration of whether to disregard the adverse information and what action, if any, should be taken.
The Tribunal also considers that the information about the former director (Mr Apichai Amphansup) and the previous sponsorship bar imposed on the entity (Kinn Castle Hill Pty Ltd) for which the former director was also a director, is information that is material because it was relevant to whether the applicant would have satisfied the requirement in reg 2.59(g) for approval as a standard business sponsor. Had the applicant appeared before the Tribunal at the scheduled hearing, the Tribunal would have raised this issue with them, and they would have had an opportunity to respond to the Tribunal’s concerns.

On the evidence before it, the Tribunal considers that there was adverse information, being false or misleading information in a material particular, about the applicant which became known to Immigration when the applicant lodged a subsequent 482-nomination in October 2018. The Tribunal notes that the adverse information became known to Immigration four months after the applicant was approved as a standard business sponsor.
Further to the above, the Tribunal also considers that there was adverse information that became known to Immigration about a person ‘associated with’ the applicant. The meaning of ‘associated with’ in reg 1.13B is non-exhaustive and relevantly provides that two persons are associated with each other if they are or were members of the same immediate, blended or extended family or have or had a family-like relationship. It also includes related body corporates or where one is able to exercise influence or control over the other. Information set out in the NOITTA and confirmed in the written submissions indicate that Mr Apichai Amphansup and Mr Suriya Saengwanich are brothers-in-law. Mr Apichai Amphansup was the director of Kinn Castle Hill Pty Ltd which operated the Thai restaurant business in Castle Hill at the time it was sanctioned. He was also the former director of the applicant, which subsequently purchased the Thai restaurant business. Given the adverse information known about Mr Apichai Amphansup, and given the family relationship between Mr Apichai Amphansup and Mr Suriya Saengwanich, which has not been disputed, the Tribunal considers that this establishes that there was adverse information that became known to Immigration about a person associated with the applicant.
For the above reasons, the Tribunal finds that there was ‘adverse information’ known to Immigration about the applicant or a person associated with the applicant. Therefore, the applicant, since the Department became aware of the ‘adverse information’, no longer satisfied reg 2.59(g)(i) for approval as standard business sponsor.
The Tribunal has next considered whether the applicant satisfies the alternative criterion in reg 2.59(g)(ii) as to whether it is reasonable to disregard the adverse information. In considering this, the Tribunal has had regard to the matters raised by the representative in the written submission and the relevant supporting documents.
The representative took issue with the delegate labelling the sale of the business as a ‘phoenix transaction’, stating that phoenix activity is when a company registers a new company to take-over the failed or insolvent business of a predecessor company. The representative correctly notes that this usually occurs when a company is failing (or entering into liquidation) and the directors decide to incorporate a new company to operate a similar business so as to deliberately avoid paying the company's creditors.
While the Tribunal has some concern about the transaction, namely the sale of the business between related parties within a short period after the sanction imposed by the Department, the Tribunal accepts that the transaction is not one which comes within the meaning of ‘phoenix activity’ as labelled by the delegate. There is nothing before the Tribunal which suggests that the transfer of the business from one entity to another was done for the purpose of the avoiding payments of outstanding debts.
It was submitted that the sale of the business was a proper legal transaction. A copy of the contract of sale of business was provided as well as bank statements showing progressive payments made from March 2018 to June 2018. It was also submitted that the sale of the business only occurred after Mr Suriya Saengwanich acquired the shares in the company and changed its name to Kinn Niyom Pty Ltd. It was further submitted that Mr Suriya Saengwanich had made a number of changes, including renovating the business, changing policies and the menu.
It was submitted, by reference to Mr Apichai Amphansup remaining a signatory for the applicant’s bank accounts, that the accountant had failed to advise the applicant’s director, as the new business owner, that the signatory had to be changed and that this was an innocent mistake. It was submitted that when Mr Apichai Amphansup had passed on the business to Mr Suriya Saengwanich, he taught him the use of COMMBIZ which utilises a token for code verification for each money transfer transaction, which he considered was safe given Mr Apichai Amphansup was residing in Thailand. The applicant provided a letter from the accountant, Mr Kenneth Yaw, dated 4 January 2019, in support of this claim. The Tribunal had regard to the content of the letter and notes that the accountant does not actually state that he had failed to advise the applicant to change the name on the account as suggested by the representative, but rather he states that in October 2017 he gave Mr Apichai Amphansup information about opening a business bank account for Prapadang Pty Ltd and that no transactions had occurred up to when the company changed to its current name to Kinn Niyon Pty Ltd. He stated that he had only ‘recently’ discovered that the new owner, Mr Suriya Saengwanich, was not authorised to operate the company’s bank account, after which he advised him to approach the bank and update his name as the main signatory. An updated signatory document for the cheque and manager accounts were provided, showing Mr Suriya Saengwanich as the signatory from 2 January 2019. There was nothing in Mr Yaw’s letter which suggested that he was involved in the sale of the business or that he had neglected (as part of his professional duty) to advise Mr Suriya Saengwanich about updating the signatories on the company’s bank accounts.
It was submitted by the representative that Mr Apichai Amphansup had no control or influence over the applicant’s business and that they had only dealt with Mr Suriya Saengwanich in relation to all the applicant’s migration matters.
In making submissions on whether it is reasonable to disregard the adverse information, the representative referred to case law regarding the approach that should be taken by decision makers when considering ‘reasonableness’. The representative also referred to a number of the penalty provisions in the Act and the liability of a body corporate. The submissions also referred to the Federal Court decision of Haneef,[1] which set out the test in determining the applicant's association with a person, group or organised body involved in criminal activities, which found that the test applied by the Minister was far too wide, as it did not take into account any sympathy, support for, or involvement in the criminal activity. It was submitted that the adverse information known about Mr Apichai Amphansup and Kinn Castle Hill Pty Ltd should not be blindly attributed to the applicant without looking at the impact, influence and degree of existing association between Mr Apichai Amphansup and the applicant. It was submitted that there was insufficient connection between the adverse information to implicate the applicant.
[1] Minister for Immigration & Citizenship v Haneef (2007) FCAFC 203 (Haneef)
The representative also referred to the Department’s policy and the factors that should be considered when considering whether it is reasonable to disregard the adverse information. The Tribunal summarises the representative’s submission as follows.
In relation to the nature and seriousness of the adverse information, it was noted that the contraventions of Kinn Castle Hill relate to not keeping proper records and not ensuring the sponsored person only participates in the nominated occupation/program. It was submitted that Kinn Niyom has one sponsored employee. It was also stated that since 11 July 2018, the company changed its accounting software to enable them to incorporate a payroll feature, including an automatic bank account payable transfer, which would keep an independent verifiable record of wage payments for all staff. It was submitted that while the nature of the contraventions can be considered serious, it is at the lower end of seriousness when compared to tax evasion or underpayment of staff.
In relation to keeping records and ensuring employees only perform the duties of their nominated occupation, it was submitted that this can be easily rectified and prevented in future by establishing proper procedures, policies, and protocols, and through management updating their knowledge about their obligations as a standard business sponsor.
It was submitted that Kinn Niyom acknowledges the contraventions of Kinn Castle Hill, are aware of the consequences of such contraventions, and that they have made efforts to rectify the issues inherited from Kinn Castle Hill to ensure future compliance. It was submitted that since commencement, the company has adopted new policies and practices to ensure proper records are kept. It was stated that management will draft policies, in writing, to ensure that all staff are equipped with the knowledge of sponsorship obligations and are aware of the proper procedures to follow.
It was submitted that Kinn Niyom has learnt from the mistakes of Kinn Castle Hill regarding making part cash and part deposit wage payments, which were not considered adequate to meet the obligations of keeping records, and that since commencement Kinn Niyom make all payments via automatic bank transfer using Xero Accounting Software to ensure verifiable records of wage payments are made to all their employees, including sponsored visa holders. It was submitted that initial changes have been made to procedures and that in the future the business will adopt policies and send management staff on training to ensure that all sponsorship obligations are met.
By reference to the letter of support, it was submitted that Kinn Niyom has maintained a similar customer base and staff numbers as Kinn Castle Hill. However, due to sponsorship limitations, a number of the sponsored skilled staff are not able to work for Kinn Niyom until a new nomination is approved. It was submitted that this has led to a staff shortage as they have not been able to find new suitable employees to fill these vacancies. It was stated that one of the vacancies relates to the position of Restaurant Manager, and that the inability to fill this position has placed pressure on the Director, Mr Suriya Saengwanich, who has been trying to focus on implementing policies and procedures to ensure compliance.
It was submitted that the efforts made by Kinn Niyom to develop new processes and procedures to ensure compliance, provides a basis for disregarding the adverse information.
It was submitted that Kinn Niyom is a new and separate business and that a legitimate business decision was made by Mr Suriya Saengwanich to purchase the Thai restaurant business as he believed he could increase its profits. It was submitted that the sale was not a phoenix transaction.
It was submitted that Mr Suriya Saengwanich and Kinn Niyom should not be punished for the activities of Kinn Castle Hill and Mr Apichai Amphansup, as they are two separate businesses and Mr Apichai Amphansup has no influence or control over Mr Suriya Saengwanich and Kinn Niyom. In support of this submission, the representative referred to the change in business name and the renovations that have been undertaken since the closure of Kinn Castle Hill in February 2018.
It was submitted that Kinn Niyom wanted to employ Kinn Castle Hill's previous 457 visa holders so as to minimise the impacts to the 457 visa holders who have been unfairly affected by the sudden closure of Kinn Castle Hill and previous non-compliance of Kinn Castle Hill. It was submitted that the staff have been working as a team in the same location and within the same context of a Thai restaurant, are extremely experienced, skilled and knowledgeable and are an asset to the business. It was submitted that this is a further reason to disregard the adverse information.
It was further submitted that Mr Apichai Amphansup has had no influence over any business activity of Kinn Niyom (or Prapadang Pty Ltd). The representative referred to the information set out in the NOITTA regarding the telephone interview conducted with staff at Kinn Niyom. It was submitted that the interview was conducted on a spontaneous occasion. It was contended that proper procedural fairness was not afforded as no interpreter was offered. It was stated that the staff who picked up the phone only had a basic level of English and that the contents of that interview cannot be properly admissible and relied on. It was stated that they had investigated with the staff member (Sumitra) what was discussed during this phone call, after which it realised that there had been some miscommunications including that Sumitra was unaware of who Mr Suriya was because the employees knew the boss through his nickname (P'Tong). It was stated that the staff member was unaware of the purpose of the call, as the Department had not properly explained why they were calling, and she was unaware of the consequences of providing answers that she was unsure of.
It was further stated that Sumitra mentioned ‘Apichart’ as the owner of the business, as she recalled this name from a letter received a very long time ago, possibly from when Kinn Castle Hill was still operating the restaurant business. It was submitted that most of Kinn Niyom's current employees are from Kinn Castle Hill, that the busines operates from the same location, albeit renovated, and that there was always a restaurant manager who dealt directly with the waiters, waitresses and cooks. It was submitted that the employees never had any direct access to or communication with the Director. It was stated that following the closure of Kinn Castle Hill, and the inability to recruit a suitable restaurant manager, either the Director or another senior employee had to step in to perform the restaurant manager role. It was submitted that it is not reasonable to expect an employee, especially a waitress of the restaurant, to be fully aware of the business operations including familiarity with the sale of business from Kinn Castle Hill and Kinn Niyom.
It was submitted that, as Sumitra had explained, she only knew of the current owner's nickname (P'Tong) and that she had mentioned the name ‘Apichart’ because this was one of the names she recalled seeing on correspondence from a supplier a long time ago. This was probably from when she was working for Kinn Castle Hill and Apichart was one of the owners of Kinn Castle Hill. It was further submitted that the officer had misunderstood Sumitra’s answer of Apichart for Apitchai, and that Apitchai was the previous owner/director of Kinn Niyom. It was stated that Sumitra had mentioned Apitchai as the owner's name, but the officer assumed that Mr Apitchai Amphansup remained involved in the business.
It was submitted that as Mr Apitchai Amphansup has no involvement or control over the business activities of Kinn Niyom and this would be a further basis for disregarding the adverse information.
It was further submitted that the nominations made by Kinn Niyom to nominate existing staff of Kinn Castle Hill was for the purpose of protecting the interests of those sponsored persons who were unfairly affected by the contraventions of Kinn Castle Hill, being a further reason to disregard the adverse information.
In considering whether it is reasonable to disregard the adverse information, as found above, the Tribunal has had regard to the submissions made by the representative and the supporting documents, some of which were referred to in the written submission.
As considered above, the Tribunal accepts that the sale of the Thai restaurant business in Castle Towers (Castle Hill) was not a phoenix transaction which, as noted above, is usually orchestrated for the purpose of avoiding payment of debts. However, the Tribunal has serious doubts about whether the sale of the business was a genuine arm’s length transaction.
Firstly, the Tribunal observes that the Contract for Sale of the business was signed on 26 April 2018, yet the payments for the sale of the business appear to have been made between 14 March 2018 and 25 June 2018. It is unclear why Mr Suriya Saengwanich would have made two payments totalling $140,000 for the purchase of the business prior to the contract of sale being signed. Furthermore, while the funds totalling $260,000 appear to have been deposited into the account of Kinn Castle Hill Pty Ltd with the description ‘transfer from Netbank/Commbank business sale’, the information does not indicate who actually deposited/transferred those funds into the account. No corresponding statements or records were provided, indicating that it was Mr Suriya Saengwanich who had deposited those funds for the purpose of purchasing the business.
Even if the Tribunal accepts that there was some other agreement between the parties, given their family relationship, that Mr Suriya Saengwanich would commence payments towards the purchase of the business prior to entering into the contract of sale, this raises the further concern about why Mr Apitchai Amphansup, on 26 March 2018, as the authorised signatory/Director for Kinn Niyom Pty Ltd, according to the Commonwealth Bank records, had added another person (Amphansab Apichart) as a new authorised signatory, to both the cheque and manager accounts for Kinn Niyom Pty Ltd. The Tribunal notes that this information, which was obtained directly by the Department from the Commonwealth bank, was set out in the NOITTA and responded to by applicant’s representative in the written submission.
The information relating to the signatories/authorised persons on the applicant’s bank accounts indicates that it was Mr Apichai Amphansup (and not Mr Suriya Saengwanich) who had financial control of the applicant’s business up until 2 January 2019. The Tribunal has considered the claim that the accountant had failed to notify the new owner that the signatory on the account had to be changed, however, this does not explain why there were other changes that had been authorised by Mr Apichai Amphansup, being an additional signatory, made on the account on 26 March 2018, which was some two weeks after two payments for the purchase of the business were deposited into the account of Kinn Castle Hill Pty Ltd.
The Tribunal does not consider credible that the reason the bank account signatories for Kinn Niyom Pty Ltd were not updated following the sale of the business (in April 2018) was due to a failure on the part of the accountant. There is nothing before the Tribunal which suggests that the accountant was involved in, or was aware of, the purchase or sale of the business and that he had neglected to notify the new owner about the need to change the signatory on the bank account upon completion of the purchase.
The Tribunal considers that if the sale of the business was a genuine arm’s length transaction, then Mr Apichai Amphansup, who had authorised another signatory in the preceding month, would have ensured that control of the accounts for Kinn Niyom Pty Ltd was updated to reflect the new owner (Mr Suriya Saengwanich) and, vice versa, Mr Suriya Saengwanich, would have ensured that he was the only authorised signatory on the business’ bank account. The Tribunal is not satisfied that Mr Suriya Saengwanich having access to the business account online, or that Mr Apichai Amphansup being overseas, overcomes the concern about why the signatories on the account were not updated upon completion of the purchase of the business, which the Tribunal considers to be an integral part of the process for changing ownership of the business.
The above concerns cast doubt over whether the sale of the business to Mr Suriya Saengwanich (via Kinn Niyom Pty Ltd) was a genuine arm’s length transaction between the parties. Had Mr Suriya Saengwanich appeared before the Tribunal at the hearing, the Tribunal would have raised all these concerns with him. It would have also queried why he chose to acquire shares in the company established by Mr Apichai Amphansup (Prapadang Pty Ltd which changed its name Kinn Niyom Pty Ltd) rather than register his own company through which he could have purchased the business. The Tribunal would have also queried Mr Suriya Saengwanich about his knowledge of the business, his claim to have been involved in the renovations, his involvement in the employment of staff, his knowledge of the business’ performance and his own background about operating and managing a restaurant business.

Of further concern, as set out in the NOITTA, is the evidence obtained by the Department on 18 December 2018 from a staff member who did not know Mr Suriya Saengwanich but identified Mr Apitchai as the boss of the restaurant. This evidence again suggests that up until December 2018, Mr Apichai Amphansup was considered by staff as the proprietor of the business. The Tribunal has had regard to the submission made by the representative, including that the staff member was interviewed spontaneously, that procedural fairness was not afforded, that the staff had basic English and that their evidence cannot be relied upon. The Tribunal has also had regard to the statement by the staff member (Sumitra) that the employees knew the boss through his nick name P’Tong, that she was unsure of the purpose of the call and that she mentioned Apichart as the owner because she recalled the name on a letter she had received a long time ago. The Tribunal has also had regard to the submission that the case officer may have misunderstood the answer ‘Apichart’ for ‘Apichai’, who was one of the previous owners of Kinn Castle Hill Pty Ltd.
The Tribunal does not consider that there is anything inherently unfair in the Department contacting the business spontaneously to obtain information from staff. The Tribunal is of the view that information which is obtained spontaneously is more likely to be accurate. The Tribunal finds it somewhat unusual that the staff member, even if she had basic English, when asked about the name of her boss, would choose to give the name of a former boss, be it Apichart or Apichai, instead of the current boss, even if she only knew him by his nickname. As the applicant did not appear at the hearing, the Tribunal was unable to query them further about the staff member’s level of English, how long she had been employed in the business, the nature of her role, how often she interacted with the owner and her knowledge about the change of business owners. Without further exploring these concerns with the applicant, the Tribunal is unable to be satisfied with the staff members explanation for why she did not identify Mr Suriya Saengwanich, whom she knew as P’Tong, as the owner of the business in December 2018.
Given all the above concerns, the Tribunal has some doubts about whether the sale of the business was a genuine arm’s length transaction between the parties. The Tribunal is concerned that the sale of the business may have been orchestrated to circumvent the sanction imposed on Kinn Castle Hill Pty Ltd, which had prevented them from sponsoring more people or making future applications for approval as a sponsor for a period of three years.
In relation to the other matters raised by the representative about the reasonableness to disregard, the Tribunal has considered the submissions made regarding the nature and seriousness of the adverse information, and while they appear to relate to the conduct of Kinn Castle Hill Pty Ltd which led to them being sanctioned, the Tribunal nevertheless gives some favourable weight to the steps taken by the applicant, including changing their accounting software and record keeping procedures, as detailed above, to ensure that they do not repeat the mistakes made by Kinn Castle Hill Pty Ltd.
The Tribunal has considered the submission regarding the adverse effect that the sanction on Kinn Castle Hill Pty Ltd had on sponsored employees, however, there is limited information before the Tribunal about the current circumstances of these employees, if any, and whether they have been subsequently sponsored by the applicant. There is also limited evidence about the circumstances of the persons, if any, sponsored by the applicant and the applicant’s intention with respect to sponsoring any more people in future.
While the Tribunal has considered the submissions made by the representative, the Tribunal notes that the submissions were made almost two years ago, and there is limited current evidence before the Tribunal about the circumstances of the business, the affects of COVID-19 on the operations of the business and the applicant’s future intentions in relation to the business.
For all the above reasons, and given the limited current evidence before it, the Tribunal has concluded that it is not reasonable to disregard the adverse information that became known to Immigration about the applicant or a person associated with the applicant. Therefore, the applicant does not satisfy reg 2.59(g)(ii).
As the Tribunal has found that the applicant no longer satisfies a requirement for approval as a standard business sponsor in reg 2.59(g), it follows that a prescribed circumstance in reg 2.91 exists for the purpose of s 140M of the Act.
Action to be taken
For these reasons, the Tribunal is satisfied that a relevant circumstance for s 140L(1)(a) exists. Accordingly, it is necessary to consider whether one or more of the actions mentioned in s 140M should be taken.
In considering what action to take, the Tribunal has had regard to the prescribed criteria, as extracted in the attachment to this decision.
Nature of the applicable sponsorship criteria
The relevant criterion for approval of the sponsorship is whether there is no ‘adverse information’ known to Immigration about the applicant or an associated person or that it is reasonable to disregard the adverse information.
The Tribunal accepts, as submitted by the representative, that there is some discretion involved in determining whether the applicant no longer satisfies the criterion in reg 2.59(g)(i) given the alternative requirement about whether it is reasonable to disregard the adverse information. The Tribunal has found that there was adverse information known to Immigration about the applicant or a person associated with the applicant. It has also concluded, after considering all the evidence before it, that it is not reasonable to disregard the adverse information.
The Tribunal considers that if the applicant had declared the adverse information in their application for approval as a standard business sponsor about the former director (who also has a family relationship with the applicant’s current director) having also been a director of a company that was sanctioned for a period of three years, until 1 September 2020, then the applicant may not have been approved as a standard business sponsor on 16 July 2018. The adverse information only came to the Department’s attention through a subsequent 482-nomination application that was lodged with the Department in October 2018.
Whether, and the extent to which, the failure to continue to satisfy the criteria for approval as a sponsor has had a direct or indirect impact on another person
The Tribunal considers that the applicant’s failure to continue to satisfy the criteria for approval as a sponsor may have a direct impact on any sponsored workers. It was submitted that there is nothing to indicate that the applicant has exploited any of their workers that are on Subclass 482 visas or that they have failed to meet their sponsorship obligations. The Tribunal notes that some time has passed since these submissions and there is no current evidence before the Tribunal about whether the sponsored employees have been impacted by the decision to impose a sanction on the applicant and whether any future visa application would also be impacted.
It was submitted that if the applicant could not secure the sponsorship for pending visa applicants then it could cause the failure of the business and the loss of employment for 20 employees. The Tribunal notes, however, that there is limited evidence before it about the current circumstances of the applicant’s business and current employees, including the effects of the COVID-19 pandemic and the recent restrictions placed on restaurant businesses in NSW.
The reason why the person no longer satisfies the sponsorship criteria including whether the failure was within the person's control
The Tribunal considers that it was well within he control of the applicant to declare that there was adverse information known about a person associated with the applicant, namely a former director and relative, who was also the director of a company (Kinn Castle Hill Pty Ltd) which had been sanctioned.
It was submitted that the applicant’s previous migration agent was fully aware of the history of Kinn Castle Hill Pty Ltd and Apichai Amphansup, and that the agent had failed to properly advise the applicant of the need to disclose this in all their applications as possible adverse information about a person associated with the applicant. The representative acknowledged that the applicant is ultimately responsible for what is submitted on their application form, but noted that they had engaged the services of a registered professional to ensure that everything was done correctly, but the representative was negligent in not providing proper advice.
As noted above, the applicant did not appear before the Tribunal and as such, the Tribunal is unable to query them about what information they had provided to their former migration agent, whether there was any supporting evidence of this and what efforts they had made, if any, to ensure that the information provided on their behalf was true and correct. Without this additional information, the Tribunal is unable to conclude with any confidence whether the failure to declare the adverse information was intentional, reckless or inadvertent.
The Tribunal acknowledges, as submitted by the representative, that the applicant had declared the adverse information in a later 482-nomination application and gives some favourable weight to this factor in its consideration.
The steps (if any) the person has taken to ensure that the person will satisfy the applicable criteria in the future
It was submitted that the applicant is now fully aware of the necessity to disclose all adverse information in relation to Kinn Castle Hill Pty Ltd and Apichai Amphansup in relation to all their applications. It was also submitted that the applicant has taken various steps to ensure that the failures of Kinn Castle Hill Pty Ltd in relation to their sponsorship obligation do not reoccur and that they are fully aware of the seriousness of the consequences should they be found to be in breach of those obligations.
Other relevant factors
The representative submitted that the cancelling the sponsorship would cause all existing 457/482 visa holders to be referred for visa cancellation as the company will no longer be an approved sponsor. It was submitted that this would be an undue pecuniary effect on the visa holders, as upon cancellation they will become unlawful non-citizens in Australia.
It was further submitted that the applicant is seeking to nominate a Restaurant Manager (Patchanee) who has experience working with the same team from Kinn Castle Hill Pty Ltd. It was submitted that Patchanee was previously sponsored by Kinn Castle Hill Pty Ltd but was adversely affected by the sanction imposed on Kinn Castle Hill Pty Ltd. It was submitted that the re-employment of Patchanee would ensure that her skills and experience, which are valuable, would be transferred to the restaurant business operated by the applicant.
It was further submitted that there has been no new adverse information which has arisen because of the applicant’s own actions and that it was based upon pre-existing adverse information relevant to another entity. The representative submitted that a formal warning in the circumstances would have the same deterrence effect upon the applicant.
The representative submitted that the failure was a minor one and made the following submissions in respect to the considerations set out in the policy.
It was submitted that the failure to continue to meet the ‘no adverse information’ criterion was based on previous information, has no further detrimental effect on the visa holder and would not preclude the Department from monitoring the sponsor for any breaches of obligations. It was submitted that the applicant would cooperate in any sponsorship monitoring.
It was submitted that the failure to continue to meet the adverse information sponsorship criteria does not negatively impact Australia or Australian citizens/permanent residents. Rather, a negative impact will be faced by Australia and Australian permanent residents/citizens should action be taken against the applicant as their business may no longer be able to continue.
It was submitted that upon professional advice, the applicant immediately rectified the failure through a subsequent disclosure of the adverse information in the applications lodged on their behalf.
It was submitted that the applicant’s failure to disclose the adverse information in the sponsorship application was caused by poor advice from their previous migration agent, and as such was unintentional.
In considering what action, if any, should be taken, the Tribunal has had regard to the submissions and supporting documents provided on behalf of the applicant. As noted above, there is limited current information before the Tribunal about the affect any sanction would have on sponsored persons, if any, currently employed by the applicant. There is also limited information about the current operations of the applicant’s business, the steps they have taken and will continue to take to ensure they satisfy applicable criteria in future and what efforts they made, if any, to ensure that their previous agent had provided correct information on their behalf when the sponsorship application was made. In the absence of this additional information, the Tribunal is unable to give much favourable weight to the matters submitted in favour of setting aside the decision to sanction the applicant.
The Tribunal considers significant that the applicant did not declare the ‘adverse information’ in their application for approval as a standard business sponsor, this failure resulted in the Department approving the sponsorship without further probing into the nature of the relationship between the previous company, Kinn Castle Hill Pty Ltd and Kinn Niyom, and the respective directors. This, in the Tribunal’s view, warrants some sanction being imposed on the applicant.
In this case, the Department decided to cancel the applicant’s approval as a standard business sponsor and bar the applicant for a period of 12 months from making an application for approval as a standard business sponsor and temporary activities sponsor. The Tribunal notes that the period of the bar ended on 12 February 2020, which was over 20 months ago, and there is nothing preventing the applicant from reapplying for approval as a standard business sponsor. While the decision to take any action under s 140M would be considered adverse information known to Immigration about the applicant, it is still open for the applicant to make submissions and provide evidence of their current circumstances for the Department to consider whether it is reasonable to disregard the adverse information in relation to any future sponsorship or nomination applications that they may wish to make.
In considering the totality of the circumstances, and having regard to the prescribed criteria, the Tribunal has decided that the action mentioned in s 140M(1) to cancel the applicant’s approval as a standard business sponsor and to bar the applicant from applying for approval as a standard business sponsor and temporary activities sponsor for a period of 12 months from the delegate’s decision of 12 February 2019, should be taken. The decision under review will therefore be affirmed.
DECISION
The Tribunal affirms the decision under review.
R. Skaros
Senior Member
ATTACHMENT – Extract from the Migration Regulations 1994
2.91   Application or variation criteria no longer met
…
(3) For paragraph 140L(1)(b) of the Act, the criteria that the Minister must take into account in determining what action (if any) to take under section 140M of the Act in relation to the circumstance mentioned in subregulation (2) are:
(a)    the nature of the applicable sponsorship criteria that the person no longer meets; and
(b)    whether, and the extent to which, the failure to continue to satisfy the criteria for approval as a work sponsor or family sponsor, or to continue to satisfy the criteria for approval of a variation, has had a direct or indirect impact on another person; and
(c)     the reason why the person no longer satisfies the applicable sponsorship criteria, including whether the failure to satisfy the criteria is within the person’s control; and
(d)    the steps (if any) the person has taken to ensure that the person will satisfy the applicable criteria in the future; and
(e)     any other relevant factors.
…

[2021] AATA 4194

27 October 2021

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