Modern Holdings (WA) Pty Ltd ATF Modern Unit Trust (Migration)

[2023] AATA 1671

Modern Holdings (WA) Pty Ltd ATF Modern Unit Trust (Migration) [2023] AATA 1671 (6 June 2023)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Modern Holdings (WA) Pty Ltd ATF Modern Unit Trust

REPRESENTATIVE:  Mr Peter Watt (MARN: 0742076)

CASE NUMBER:  1923990

HOME AFFAIRS REFERENCE(S):          BCC2017/3368379

MEMBER:Wan Shum

DATE:6 June 2023

PLACE OF DECISION:  Sydney

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

Statement made on 06 June 2023 at 4:15pm

CATCHWORDS
MIGRATION – application for approval of nomination of position – direct entry nomination stream – retail manager – need to employ nominee – currently active business – extended halt in trading activities – COVID restrictions and ongoing litigation against landlord – decision under review affirmed

LEGISLATION
Migration Regulations 1994 (Cth), r 5.19(4)(a)(ii), (b)

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 15 August 2019 to reject an 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 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 application for approval of a nomination was made by Modern Holdings (WA) Pty Ltd ATF Modern Unit Trust (the nominator) on 15 September 2017 for the position and occupation of Retail Manager (General) under the Direct Entry nomination stream. Mr Alaaudden Ahmad Mohammad ALKHATIB was identified as the person the nominator wished to employ for the position of Retail Manager. He is one of the Directors of Modern Holdings (WA) Pty Ltd which is a trustee of the Trust. Mr Alkhatib lodged a Subclass 187 visa application in respect of this nomination and included the other named applicants as members of his family unit.

4. The delegate did not approve the application on the basis that the nomination did not satisfy reg 5.19(4)(a)(ii) of the Regulations because the nominator had not demonstrated a need to employ Mr Alkhatib as a paid employee to work in the nominated position under the nominator’s direct control. As a consequence, Mr Alkhatib and his family’s visas were refused because there was no approved nomination.

5. The nominator and Mr Alkhatib have sought review of these decisions. Both parties are represented in relation to the review by the same registered migration agent named on the cover sheet.

6. Mr Alkhatib and Mr Mohannad Hammad Abdel Qader, the Directors, appeared on behalf of the nominator by videoconference using Microsoft Teams at a hearing on 18 April 2023 to give evidence and present arguments in relation to this application. The representative was present throughout the Tribunal hearing.

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

   CONSIDERATION OF CLAIMS AND EVIDENCE

8. 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 reg 5.19(4), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.

9. The application for the nomination the subject of this review was made under the Direct Entry nomination stream. The completed application form identified: the work location as having the postcode of 6210; the position to be filled as Retail Manager; the occupation as ‘Retail Manager (General)’, which corresponds with ANZSCO code 142111; and the industry as “Retail Trade”. The trading name entered on the form was: Skewerz Mandurah.

10. The nominator claimed at that time to operate 5 Fast Food Outlets as follows:

    ·Skewerz Kebabz – Mandurah Forum Shopping Centre

    ·Skewerz Kebabz – Westfield Carousel Shopping Centre.

    ·Mochachos Mexican Chicken – Westfield Whitford City Shopping Centre

    ·Gourmet Kitchen – Westfield Carousel Shopping Centre

    ·Mochachos Mexican Chicken – Mandurah Forum Shopping Centre

11. However, while the application was being considered by the Department, 3 of the outlets ceased operating due to various reasons including issues with the Centre management and parking policy and one of the remaining outlets was listed for sale. Having considered the nominator’s response to a natural justice letter, the delegate was of the opinion that the nominator had not demonstrated a genuine need to appoint the nominee in the capacity of Retail Manager under the direct control of the nominator and found that the nominator has not met reg 5.19(4)(h)(ii)(B). The delegate also did not consider that the nominator had demonstrated that 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. The delegate found that the nominator had not met reg 5.19 (4)(h)(ii)(C).

12. A large volume of documents was provided to the Tribunal in November 2022 in response to a request for updated and current information, including a copy of the Trust Deed, the 2019 tax return of the nominator, ASIC current and historical extracts for Modern Holdings (WA) Pty Ltd and Italian Gourmet Kitchen Pty Ltd, a future organisation chart, and a statutory declaration from Mr Alkhatib outlining his immigration history. While the ASIC current and historical extract for Modern Holdings (WA) Pty Ltd reflects that the business is registered, the other information provided such as the Business Activity Statements of the nominator, suggest that the nominator is not currently operating any businesses. In response to a request for further information as part of the hearing invitation, the representative reiterated that the nominator “has been and continues to be involved in ongoing litigation with the landlord and for this reason took the decision to put a temporary halt on its trading activities”. This was said to be the reason why the company was not able to provide financial documents for the past 2 financial years.

13. The representative provided the following additional documentation:

    ·A summary letter covering the two franchise agreements in place. The franchise agreement between Mochachos Brands and Modern Holdings (WA) Pty Ltd, covering the Mandurah outlet, was signed on the 23 May 2017, covered a ten-year period, and remains valid;

    ·Full franchise agreement covering the Whitford outlet;

    ·Update on litigation from the company's solicitor;

    ·Update on litigation from the Supreme Court of WA;

    ·Confirmation of additional solicitor being engaged;

    ·Documentation covering the initial LMT undertaken;

    ·CV summaries of the applicants for the vacancy of retail manager;

    ·Updated ASIC historical summary for Modern Holdings (WA) Pty Ltd;

    ·Updated ASIC historical summary for Italian Gourmet Kitchen Pty Ltd.

14. During the hearing, Mr Alkatib and Mr Qader confirmed that there has been no trading since COVID-19 pandemic, so for around 3 years. The decided to stop trading temporarily because of the lockdown in mid-2020, and they had been having issues with the shopping centre, all of which was out of their control. They maintained that the ASIC registration has remained active until now. They claimed that once the legal actions were successful, they plan to invest in opening shops as they did not currently have the finances to do so. When asked about the GST registration having ceased, they initially claimed that they were registered, but then said that it was disabled temporarily based on advice from their Accountant. It was confirmed that the last Business Activity Statement of the nominator that had been submitted to the ATO occurred in respect of the second quarter of 2020.

15. In respect of the litigation, the Tribunal was provided with a letter from TGC Lawyers acting for Modern Holdings (WA) Pty Ltd and the directors which outlined the 4 matters which the Trustee and the Directors were in litigation with 3 shopping centres for various alleged statutory and common law breaches of duty by the owner landlords. It was stated that: “[a]ll cases have been to mediation and settlement offers have been made. The cases are expected to be settled at mediation in the not too distant future as the solicitors representing the owners/landlords have recently sought further mediation between the parties with a view to setting the cases.” Mr Alkatib and Mr Qader advised that the value of the claim against the shopping centres was $6.5 million and that the latest update was that the matter was going to mediation with a court mediation date set for 30 May 2023. The Tribunal considered it appropriate to wait for the outcome, as Mr Alkatib and Mr Qader were confident that the matter would be resolved and that they would then be able to commence and reactivate the business upon receiving a payout in settlement of the matter. The nominator was to provide the information by 2 June 2023.

16. The Tribunal was informed on 6 June 2023 that the mediation failed and that the matter will go to trial. The representative asked the Tribunal to proceed on the information provided.

17. The Tribunal considers that it is appropriate to proceed to a decision in the circumstances. On the information before it, the Tribunal acknowledges that the nominator did operate a number of fast food outlets around the time the nomination was made. It accepts that the franchise agreements with Mochachos Brands remain in force and that Modern Holdings (WA) Pty Ltd (the Trustee) is still currently registered with ASIC. However, the evidence given for the nominator by the Directors of the Trustee is that there has been no trading since Quarter 2, 2020. The Tribunal finds that the nominator has not been operating a business for the past 3 years and is not currently actively and lawfully operating a business in Australia. It acknowledges that there has been an intention of the Directors to operate fast food outlets but for a variety of reasons this is not currently happening. However, as the requirement in reg 5.19(4)(b) is not met at the time of this decision, the Tribunal is not satisfied that the applicant meets the requirements of reg 5.19(4) that apply for a Direct Entry nomination.

18. The applicant has not sought to satisfy the criteria in Temporary Residence Transition Nomination stream, and as such has not met the requirements in reg 5.19(3). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.

    DECISION

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

    Wan Shum
    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 an identified person, as  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)       all 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;

    (AA)there is a genuine need for the nominator to employ the person identified under subparagraph (a)(ii), as a paid employee, to work in the position under the nominator’s direct control;

    (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 the person identified under subparagraph (a)(ii), as 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).