OZ OCEANIA TOURS PTY LTD (Migration)

[2018] AATA 3482

OZ OCEANIA TOURS PTY LTD (Migration) [2018] AATA 3482 (26 July 2018)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  OZ OCEANIA TOURS PTY LTD

CASE NUMBER:  1700859

DIBP REFERENCE(S):  BCC2016/1253304

MEMBER:Alan McMurran

DATE:26 July 2018

PLACE OF DECISION:  Sydney

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

Statement made on 26 July 2018 at 3:32pm

CATCHWORDS
Migration – Employer Nomination – Nomination of a position – Financial capacity – Traded at a significant loss – Loan agreement – Resorted to borrowing – No evidence of financial improvement – Significant salary – Decision under review affirmed

LEGISLATION
Migration Regulations 1994 (Cth), r 5.19

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 Immigration on 29 December 2016 to reject the applicant’s application for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).

2. The applicant applied for approval on 22 March 2016. The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Regulations, which contains two alternative streams: a Temporary Residence Transition nomination (r.5.19 (3)) stream and a Direct Entry nomination (r.5.19 (4)) stream. If the application is made in accordance with r.5.19 (2) and meets the requirements of either stream, then the application must be approved. If the applicant does not meet any of the requirements, then the application must be refused: r.5.19 (5).

3. In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Direct Entry Nomination stream.

4. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19 (4)(d)(i) of the Regulations, because the applicant had not demonstrated a financial capacity to be able to pay a full-time salary for the nominated position and therefore could not provide the employee with full-time employment for a minimum period of 2 years.

5. Its registered migration agent represented the applicant in relation to the review.

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

   Background

7. This application was lodged in the Tribunal on 17 January 2017. The applicant sought to nominate Myeong Sun Shin for the occupation of Travel Agency Manager, ANZSCO 142116.[1]

   [1] DIBP file BCC  2016/1253304 f 128

8. The Tribunal wrote to the applicant on 18 January 2017, including a request that “if you wish to provide material or written arguments for us to consider, you should do so as soon as possible.”

9. The applicant did not respond to that letter, and the Tribunal sent a follow-up letter on 12 February 2018. The letter set out 6 pages of information and requested the applicant to provide updated and current information addressing certain criteria set out in the letter. The applicant was requested to respond by 26 February 2018.

10. The Tribunal letter informed the applicant that it would lose any entitlement it might otherwise have to appear and give evidence and present arguments in the Tribunal, if the information was not received within the period allowed or in any extended period.

11. The applicant responded by email to the Tribunal one day late, on 27 February 2018 at 12:39 AM. The information included a copy of a current ASIC extract, and employment agreement dated 19 February 2016, a commercial lease of 12 pages, a consulting receipt, and position statement (undated).

12. On 12 March 2018, the Tribunal replied to the applicant and advised that as the Tribunal “did not receive the information by 26 February 2016, (the applicant) has lost its entitlement it might otherwise have had under the Migration Act 1958 to appear before us to give evidence and present arguments”.

13. The applicant’s representative telephoned the Tribunal on 14 March 2018 to enquire why the Tribunal was proceeding to a decision without a hearing, as documents were produced. The representative explained that she had been overseas and assumed her email was received before midnight on 26 February 2018 and if it was not received, then it was a mistake.

14. On 2 July 2018, the Tribunal sent a further letter to the applicant. The Tribunal letter referred the applicant to the Tribunal information request dated 12 February 2018, asking, “to include details of the nominator’s financial position, location and job advertisements”. The Tribunal granted an extension of time to 16 July 2018 in order to provide the applicant with an opportunity to provide further information.

15. The applicant was reminded it could ask for a further extension if it was unable to provide information by 16 July 2018. The applicant was also reminded that it would also lose any entitlement to appear to give evidence and present arguments if it failed to provide information within the further period allowed.

16. The applicant did not reply to the letter providing an extension of time, nor did it request a further extension. The Tribunal did not receive any further updated information by the due date of 16 July 2018. As a result, the applicant has lost its opportunity to appear at a hearing and to give evidence and present arguments[2], and the Tribunal has proceeded to deal with the matter on the information before it.

    [2] Section 360(3) of the Migration Act

17. The Tribunal has had regard to the information provided from a variety of sources including the Department file, the Tribunal’s case file, together with the additional submissions made by the applicant by email on 27 February 2018.

    CONSIDERATION OF CLAIMS AND EVIDENCE

18. The issue in this case is whether the applicant meets the requirements for approval of the nomination under the Direct Entry nomination stream set out in r.5.19(4), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.

19. In the event one or other of the criteria is not met, the Tribunal is not required to consider the remaining criteria.

    Term of employment of the visa holder: r.5.19(4)(d)

20. Regulation 5.19(4)(d) requires the nominee to be employed in the nominated position for at least 2 years full time, and the terms and conditions of that employment do not expressly exclude the possibility of an extension.

    The Information Presented

21. In order to consider the criterion, the Tribunal notes it does not have any updated or current financial information as to the business performance of the applicant, as at the time of the Tribunal’s decision.

22. The information initially available is contained in the application itself where the applicant refers to the nominee’s base rate of pay of $165,000 per annum and guaranteed annual earnings of $190,000 per annum.[3] That salary is said to be determined “based on the remuneration survey of the Australian travel agencies with the similar business structure”. No evidence of the survey was provided to support that statement.

    [3] DIBP file f 128

23. A review of the Department’s file shows that following receipt of the application on 22 March 2016, the Department sent an acknowledgement letter of that date. The applicant had not included any information with the application, other than answers to the questions in the template.

24. The Department’s acknowledgement letter of the same date refers to the provision of further documents and for additional information. It invites the applicant to “provide us with all the information you feel is relevant”.

25. On 12 October 2016, the applicant’s solicitor wrote to the Department requesting that it “finalise the assessment after 9 November 2016 once the applicant completes the submission by that date. The company wishes you to consider the new evidence especially in respect of their financial capacity including investment agreement, investor’s financial capacity and business expansion plan”.

26. The Department responded on 28 October 2016 requesting information and advising, “The Department will contact you in relation to the employer nomination”. The applicant did not complete submissions by 9 November 2016, as anticipated.

27. On 25 November 2016, the applicant’s solicitor requested an extension of 7 days “to submit the information requested (by the Department) on 28 October 2016”. The applicant advised that the director of the sponsoring company was in Korea on business and required “a few more days to finalise documents for the submission”.

28. On reviewing the Department file, it appears that between 28 November 2016 and 15 December 2016 the Department received the following information[4]: –

    [4] DIBP file ff 27-101

    ·BAS statement lodged to March 2016

    ·electronic lodgement by the applicant with the ATO of BAS statement for period 1 July 2016 to 30 September 2016

    ·submission from the director, Adrian Yoo, dated 28 November 2016

    ·company annual report dated 30 June 2015, including financial statements for that year

    ·depreciation schedule for the financial year ended 30 June 2015

    ·loan agreement between the director and the applicant dated 15 November 2016

    ·passport photo of Sang Goo Song

    ·Organisation chart

    ·passport photo of Dong Gi Lee

    ·applicant’s “Position Statement” dated 26 November 2016

    ·passport photo for Hee Jeong Chon

    ·financial statements for financial year ended 30 June 2016

    ·commercial lease dated 19 November 2015

    ·receipt for ETAL consulting dated 1 June 2016

    ·Applicant’s proposed plan for staff training, dated 26 November 2016.

29. The delegate proceeded to a decision on 29 December 2016 by reference to the information set out above. The delegate noted that the information indicated the applicant made a significant financial loss for the financial year 2016, in the sum of $265,918. The delegate drew attention to the fact that there was no information to show how the applicant would meet its employment obligations for the minimum period of 2 years.

30. The Tribunal notes that the applicant was made aware of those concerns in the delegate’s decision in December 2016, and that it was important for this review to provide updated and current financial information upon which the Tribunal might rely.

31. As set out above, the Tribunal has endeavoured to have the applicant provide that information for this review and to give it an opportunity to do so within a reasonable timeframe. The Tribunal’s most recent letter of  2 July 2018 has gone unanswered.

32. In its response 27 February 2018 the applicant included:

    ·an updated ASIC extract to show the company is still operating,

    ·the same employment agreement of 19 February 2016 previously provided,

    ·a further copy of the commercial lease, presumably to demonstrate that the applicant is still in business at the same premises,

    ·two further receipts from ETAL Consulting, dated 25 November 2016 and 19 May 2017

    ·a generic “Position Statement” for a travel agency manager.

33. No updated financial information was produced.

    Findings   

34. In order to determine whether the criterion that the nominee be employed in the nominated position for at least 2 years is satisfied, it is appropriate in this Tribunal’s view to have regard to the applicant’s financial performance. That is because if the applicant does not have the ability to pay the nominee’s salary, then the nominee will not be employed for the minimum period specified.

35. The Tribunal has taken the trouble to set out above the chronology concerning the requests for information and the opportunity provided to the applicant to update that information and specifically to answer the criterion as to payment of the nominee’s salary, based on up-to-date financial reports.

36. The only information available (as set out above) demonstrates that the applicant is trading at a significant loss (as at financial year ended June 2016). It is reasonable to assume that the applicant would have attempted to demonstrate more recently a capacity to employ the nominee. The proposed salary set out in the employment agreement[5] is for remuneration on a starting salary package in the first year of $190,000 plus superannuation, which includes a motor vehicle and accommodation allowance.

    [5] T file ff 37-39

37. In analysing the evidence, the Tribunal notes the agreement between Rosyd International Proprietary Ltd as “lender” and the applicant.[6] This agreement purports to be a loan agreement with no security, for an amount of $800,000 over a five-year period, commencing on or about 15 December 2016, with monthly instalments as repayments of $13,333.33. No information is provided about the lender.

    [6] DIBP \file ff 52-62

38. There is no evidence as to whether these instalment payments continue, or are paid, and whether the loan subsists, and why the applicant took out the loan. The conclusion is that the loan was necessary to cover the financial losses of the applicant, as demonstrated by the 2016 financial statements in evidence.

39. The loan agreement itself does not specify a specific purpose. The applicant’s director, Mr Yoo, has guaranteed it. In his submission[7], the director states that they have “obtained a one million-dollar business investment from Mr Sung Soo Kim, an Australian Business Angel Investor. In November 2016, we have secured another $800,000 business loan… Both of these entities clearly believe in the business achievements of the business to date and the future prospects of the business”.

    [7] DIBP file ff 33-37 AT F 34

40. It is neither satisfactory nor safe for the Tribunal to make assumptions about financial issues, particularly the importance of paying a nominee a significant and agreed salary package, and over a stipulated period for at least 2 years. It is incumbent upon the applicant to demonstrate a capacity to do so and with some assurance upon which the Tribunal could rely.

41. The Tribunal finds in this instance that the applicant has had to resort to borrowing from external sources and a “Business Angel” in order to meet its financial obligations, as it is unable to do so solely upon its trading performance. The Tribunal finds that information is not sufficient to demonstrate the financial capacity to pay the agreed salary package consistently for at least two years, or that further borrowings will be available to enable it to do so.

42. The Tribunal finds that despite requests made to have the applicant provide up-to-date financial information, thereby providing also an explanation for the issue raised by the delegate in the decision, and which remains a concern as to whether the criterion can be satisfied, the applicant has not attempted to do so. The Tribunal finds there is no information whether the financial performance of the applicant has indeed improved since financial year ending June 2016.

43. It follows that the Tribunal finds it cannot be satisfied that the applicant is in a sufficient financial situation to ensure the payment of the nominee’s salary. The Tribunal finds that the salary is significant and will be a large expense incurred by the applicant, and is not provided for in the applicant’s available financial resources as evidenced by the information currently provided.

44. Accordingly, the requirement in r.5.19 (4)(d) (i) is not met.

45. For the above reasons the Tribunal is not satisfied that the applicant meets the requirements of r.5.19 (4). The applicant has not sought to satisfy the criteria in Temporary Residence Transition Nomination stream, and as such has not met the requirements in r.5.19 (3). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.

    DECISION

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

    Alan McMurran
    Member

    
    

    ATTACHMENT -  EXTRACTS FROM THE MIGRATION REGULATIONS 1994

    5.19Approval of nominated positions (employer nomination)

    …

    (2)The application must:

    (a)be made in accordance with approved form 1395…; and

    (aa) include a written certification by the nominator stating whether or not the nominator has engaged in conduct, in relation to the nomination, that constitutes a contravention of subsection 245AR(1) of the Act; and

    (b)be accompanied by the fee mentioned in regulation 5.37.

    …

    Direct Entry nomination

    (4)The Minister must, in writing, approve a nomination if:

    (a)the application for approval:

    (i)       is made in accordance with subregulation (2); and

    (ii)      identifies a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control; and

    (b)the nominator:

    (i)       is actively and lawfully operating a business in Australia; and

    (ii)      directly operates the business; and

    (c)for a nominator whose business activities include activities relating to the hiring of labour to other unrelated businesses — the position is within the business activities of the nominator and not for hire to other unrelated businesses; and

    (d)both of the following apply:

    (i)       the employee will be employed on a full-time basis in the position for at least 2 years;

    (ii)      the terms and conditions of the employee’s employment will not include an express exclusion of the possibility of extending the period of employment; and

    (e)the terms and conditions of employment applicable to the position will be no less favourable than the terms and conditions that:

    (i)       are provided; or

    (ii)      would be provided;

    to an Australian citizen or an Australian permanent resident for performing equivalent work in the same workplace at the same location; and

    (f)either:

    (i)       there is no adverse information known to Immigration about the nominator or a person associated with the nominator; or

    (ii)      it is reasonable to disregard any adverse information known to Immigration about the nominator or a person associated with the nominator; and

    (g)the nominator has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations; and

    (h)either:

    (i)       both of the following apply:

    (A)the tasks to be performed in the position will be performed in Australia and correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;

    (AAA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;

    (B)either:

    (I)the nominator’s business has operated for at least 12 months, and the nominator meets the requirements for the training of Australian citizens and Australian permanent residents that are specified by the Minister in an instrument in writing for this sub-sub-subparagraph; or

    (II)the nominator’s business has operated for less than 12 months, and the nominator has an auditable plan for meeting the requirements specified in the instrument mentioned in sub-sub-subparagraph (I); or

    (ii)      all of the following apply:

    (A)the position is located in regional Australia;

    (B)there is a genuine need for the nominator to employ a paid employee to work in the position under the nominator’s direct control;

    (C)the position cannot be filled by an Australian citizen or an Australian permanent resident who is living in the same local area as that place;

    (D)the tasks to be performed in the position correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;

    (DA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;

    (E)the business operated by the nominator is located at that place;

    (F)a body that is:

    (I)specified by the Minister in an instrument in writing for this sub-subparagraph; and

    (II)located in the same State or Territory as the location of the position;

    has advised the Minister about the matters mentioned in paragraph (e) and sub-subparagraphs (B) and (C).