Pyjama Drama Pty Ltd ATF Plumridge Family Trust (Migration) - [2018] AATA 186

Pyjama Drama Pty Ltd ATF Plumridge Family Trust (Migration) [2018] AATA 186 (30 January 2018)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Pyjama Drama Pty Ltd ATF Plumridge Family Trust
CASE NUMBER:  1618033
DIBP REFERENCE(S):  BCC2016/201136
MEMBER:Antonio Dronjic
DATE:30 January 2018
PLACE OF DECISION:  Melbourne
DECISION:The Tribunal affirms the decision under review to refuse the nomination.
Statement made on 30 January 2018 at 12:28pm

CATCHWORDS
Migration – Nomination – Nominating business operated by husband – Nominee is spouse – Financial capacity – Employment of full-time staff – No regular monthly wages
LEGISLATION
Migration Act 1958, ss 359(2), 359AA, 376
Migration Regulations 1994, r 5.19
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 Immigration on 10 October 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).
The applicant applied for approval on 14 January 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 any of the requirements are not met then the application must be refused: r.5.19(5).
In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Direct Entry Nomination stream.
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 delegate was not satisfied on the evidence presented that the nominating business has financial capacity to be able to provide a full time permanent position for the nominee for at least two years.
The applicant applied to the tribunal on 28 October 2016 for review of the delegate’s decision and with the application submitted a copy of the primary decision.
On 17 October 2017, the tribunal wrote to the review applicant pursuant to s.359(2) of the Act. The tribunal letter advised that the applicant was required to meet the criteria in r.5.19(4) to the Regulations. The letter invited the applicant to provide information in writing that will demonstrate the applicant meet all of the requirements of r.5.19(4).
On 31 October 2017, the applicant’s representative submitted:
·Submissions;
·Employment Contract;
·Position Description;
·Evidence of Market Salary – Payscale and Open University salary reports;
·ABN lookup;
·ASIC Historical Extract;
·Company Change of Name Certificate;
·Financial Report for year ending 30 June 2017;
·Financial Report for year ending 30 June 2016;
·BAS Statements;
·Bank statements;
·2018 FY Forecast;
·Payslips and PAYG Summary;
·Organisational chart;
·Business Plan;
·Advertisement of position;
·Evidence of trying to find local labour to fill position; and
·RCB Certification.
On 13 November 2017, the Tribunal wrote to the applicant advising that it considered material before it and was unable to make a favourable decision on this material alone and invited the authorised person to appear before the Tribunal on behalf of the nominating business at a hearing on 13 December 2017.
On 6 December 2017, the applicant’s representative submitted:
·Letter from Ms Amanda Plumridge, the nominee, dated 3 December 2017, explaining the business operations;
·Copy Master Franchise Agreement; and
·Draft Franchise Agreements for the Australian franchisees.
Mr Steven Plumridge appeared before the Tribunal visa video link on behalf of the nominating business on 13 December 2017 to give evidence and present arguments. Its registered migration agent represented the applicant in relation to the review. The representative attended the Tribunal hearing by telephone conferencing.
In his evidence, Mr Plumridge stated that he is the sole director and shareholder of the nominating business registered in February 2015.He is neither employed nor he draws wages from the business. He is, and has been employed since August 2015, on a full time basis at WA Autism Society.
Pyjama Drama Pty Ltd was approved as a standard business sponsor in May 2015 and the nominee was granted subclass 457 visa on 29 June 2015 to remain valid until 29 June 2016. The witness was included in the visa application and was, together with their children, granted subclass 457 visa as a secondary applicant.
The nominee is his wife. Under the terms of SBS and Nomination approval, she was paid $55,000. During the initial four months, the business did not pay wages to Ms Plumridge as the business was not in a financial position to do so. She commenced receiving full amount of wages in August 2015. Her salary is paid on a monthly basis by direct deposit into her nominated bank account. Mr Plumridge stated that he and his wife operate a joint bank account with ANZ bank. I requested copy of the nominee’s bank account from July 2015 to date. He stated that this is the only account he and his wife operate in Australia.
I noted that the applicant provided Ms Plumridge’s payslips from July to October 2017 and requested additional payslips from January 2017. I further requested Business Account statements for past two years and evidence of payment of wages to Ms Plumridge from the sponsoring business account to her personal account
I noted that failure to pay wages to the nominee under terms and conditions of SBS and Nomination approval might potentially constitute the breach of sponsorship obligations. Mr Plumridge stated that his wife was paid the full amount of wages latter in the year.
The business currently employs only one person on a full time basis, his wife. The business retains services of ‘session leaders’. Ms Jenifer is currently on maternity leave. She was employed, on a casual basis in 2016, for a period of 6 to 8 months and paid $195 per week (depending on the number of classes held). Ms Cow will commence casual employment in January 2018. She will be paid $35.00 for 45 minutes session.
I informed Mr Plumridge that the department issued a Certificate and Notification regarding AAT’s discretion to disclose certain information under s.376 of Migration Act. I further informed Mr Plumridge that I have formed a view that this is a valid certificate as this information was given to the Department in confidence. The disclosure of this information may reveal the identity of the informer. I read the certificate and provided Mr Plumridge an opportunity to comment on its validity.
I explained to Mr Plumridge that the Tribunal has discretion in this case to disclose material contained in the document. As I find that the information is potentially relevant to the review application that is before me, I explained that I have an obligation under s.359AA of the Migration Act to disclose any information to you that may be adverse to the applicant’s case and would be reason or part of the reasons for affirming the decision under the review. I indicated that I would do that in the course of this hearing.
Mr Plumridge stated in his evidence that the nominating business sold four franchises in Australia. I requested signed copies of those four franchise agreements and evidence of payment received by the business. Mr Plumridge explained that three of the franchisees paid the fee of $20,000 by instalments.
I noted that according to Profit and Loss statements for 2016 provided to the tribunal by the applicant, the nominee was paid $53,151 in wages and the business traded with loss of some $18,300. The turnover in this financial year was approximately $62,000.
In 2017, the business turnover was approximately $146,000 and this amount includes money received buy the business from the sale of three franchises. The nominee was paid $55,500 in wages and the business traded with profit of $20,000. Mr Plumridge confirmed this to be correct and explained that the business is also generating income form franchisees as each franchisee is paying 8% of their turnover to Pyjama Drama Pty Ltd. The forecasted annual income to be generated from four franchises is approximately $20,000. At present, that income has not eventuated.
I noted that the business might be able to generate sufficient income in the future from its franchises either by way of selling additional franchises or by receiving 8% from their turnover. I explained that my job is to determine whether the nominating business is currently in position to employ a full time employee who will be paid $55,000 per year and provide this person with the minimum of 2 years of full time. In addition, according to his evidence, the business intends to employ another casual employee from January 2018. I expressed my concerns as to whether the business is able financial to support this.
I noted that is uncertain whether the business will be able to sell additional franchises and whether these franchises will be able to successfully operate and generate income for Pyjama Drama Pty Ltd.
I raised additional issue with the applicant. I observed that this is a self-sponsored application and that, as an owner of the business he is nominating his wife for the position in the business. Both he and his children are included in the visa application. The concern is that the application was made in order to secure the immigration outcome. I noted that the business currently does not employ any Australian citizens or permanent residents. Mr Plumridge stated that Pyjama Drama Pty Ltd has already given four business opportunities to Australian citizens.
I further expressed my concerns as to whether the nominating business would employ alternate person to Ms Plumridge at the nominated position considering that this business is owned and operated by Mr Plumridge and the fact that Ms Plumridge is his spouse.
The Tribunal’s Oral Invitation to Comment on or Respond to Information:
In accordance with s.359AA of the Act, I informed Mr Plumridge that there was information before me obtained from the Department that, if accepted, would be the reason or part of a reason for affirming the decision that is under review.
The information is that you and your wife have borrowed a substantial amount of cash from friends and family. You have used this cash to create false invoices pretending that you sold franchises of your business so you can show that the company is profitable.
I explained the relevancy of this information and consequences of tribunal relying on this information. I clarified with the applicant that he understood the information, its relevance to the Tribunal’s decision and consequences of the Tribunal relying on the information. I then invited Mr Plumridge to comment on or respond to the information and informed him that he could request additional time to do so.
Mr Plumridge informed the Tribunal that he did not want additional time to respond and stated that if I look at the company’s website I will see the names of the franchises.
He explained that the only person who has not started franchise at this time is Jackie Mc Duggal who is his friend. She bought Pyjama Drama franchise for her friend who since decided that he does not want to be involved in this business. This franchise was sold in March or April 2017. She paid $20,000 for the franchise and money was deposited into Pyjama Drama Pty Ltd account. Ms Mc Dougal is trying to find another person to run the business and if she does not succeed, Mr Plumridge will buy the franchise back. He will keep the deposit of $4,000 and equipment provided by Pyjama Drama Pty Ltd. He then stated that if the opportunity arises, they would sell her franchise to another person who may be interested in operating this business. In the short term, the business will not refund payment made by Ms Mc Dougall. He reiterated that he did not borrow any money from Ms Mc Dougal.
He stated that his mother gave him GBP 25,000 to purchase master franchise in UK and that apart from that he did not borrow any money from any other person. I inquired if he is receiving income from overseas. He stated that his mother has sent some money into his personal bank account.
I decided not to take evidence from the nominee, as this is a review of decision to refuse nomination application. I noted that he is the business director and as such, person authorised to represent the business in these proceedings. When asked about the relevancy of Ms Plumridge evidence, Mr Plumridge stated that she could explain what the Pyjama Drama is. I noted that his wife provided comprehensive statement dated 3 December 2017 that I would take into consideration in making my decision.
I requested further documentary evidence related to financial operations of the business. I also invited the applicant to provide submissions addressing the genuine need for the position.
Upon mu invitation, the applicant’s representative submitted that payments to Ms Jenifer were recorded in the Profit and Loss Statement as ‘subcontractors’ expense’ (the amount paid was $2,980). I noted that the evidence from Mr Plumridge was that Ms Jenifer was employed as a casual employee. I indicated that I accept this explanation. The representative agreed that there is no need to take evidence from Ms Plumridge and undertook to provide additional documentary evidence and submissions on or before 20 December 2017.
On 20 December 2017, the applicant’s representative submitted:
·Submissions stating the applicant’s understanding that the tribunal cannot take into consideration future earnings; that the nominating business is built on selling franchises, and with four already sold in the Perth region, it’s reasonable to consider more will be sold throughout Australia if this business is given a chance; submitting that the position was not created to secure a migration outcome, but rather bring a business the applicant is passionate about to Australia;
·Payslips for Mrs Plumridge for 2017;
·Personal bank statements from June 2015 – December 2017;
·Business Bank Statements from February 2016 – May 2016, and October 2017 until December 2017;
·Statutory Declaration from Steven Plumridge dated 19 December 2017, regarding various deposits into his bank account. He stated in his declaration that in February, March and July 2017 he transferred the amount of $93,330 into his and his wife’s bank account. He declared that this money was ‘equity remaining after the sale of house in UK’. He further declared that from February 2016 to January 2017, he received additional amounts from overseas totalling $45,502;
·Certified copies of signed franchise agreement;
·Receipt for franchise payments;
·Financials dated 30 November 2017;
·Profit and Loss comparison 2015-2018;
·Summary of beneficiary Accounts;
·Statutory Declaration from Jane Cooper (Accountant);
·Statutory Declaration from Mandy Plumridge regarding adverse information;
·Statutory Declaration from Steven Plumridge regarding adverse information;
·Statutory Declaration from Steven Plumridge regarding business;
·Statutory Declarations from Franchisee’s; and
·Client references
For the following reasons, the Tribunal has decided to affirm the decision under review to refuse the nomination.
CONSIDERATION OF CLAIMS AND EVIDENCE
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.
Term of employment of the visa holder: r.5.19(4)(d)
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 Tribunal notes the employment agreement between the nominating business and the nominee, dated 9 May 2015 stated that the ‘term of employment is for 4 years from the date of commencement which is to take place immediately after the grant of the temporary work visa by the DIBP’. The Tribunal accepts that an extension beyond 2 years employment is not expressly excluded.
The Tribunal has also considered whether the applicant has the financial capacity to provide the stated employment. The Tribunal has taken into account the applicant's financial position as set out in the financial information it provided to the Tribunal in support of its application. According to Profit and Loss Statements for 2016, the business traded with loss of some $18,300. The turnover in this financial year was approximately $62,000.
In 2017, the business turnover was approximately $146,000 and this amount included the amount of $60,000, being the amount received by the business from the sale of three franchises. The nominee was paid $55,500 in wages and the business traded with profit of $20,000.
As explained to the company’s representative at the hearing, it is uncertain if and/or when will nominating business be able to sell additional franchises. As of the time of this decision, the applicant provided evidence of one additional sale. According to receipts issued by the nominating business, it received two payments from Ms Cheryl Marron ($4,000 as deposit on 27 August 2017 and $18,000 on 30 October 2017 as a final payment for Pyjama Drama franchise).
It is equally uncertain whether the business will be able to generate sufficient turnover from collecting 8% of franchisees’ turnover. In his evidence, Mr Plumridge stated that the projected annual income from four franchises sold is about $20,000. According to Profit and Loss comparison 2015-2018 (Tribunal folio 175), ‘Franchise income’ as of 30 November 2017 was $576.00.
According to Profit and Loss comparison 2015-2018, sales generated by the business from its trade (not including income from sale of franchises or income generated by receiving percentage of turnover of the franchises sold) was:
·$2,745.00 in 2015;
·$62,000 in 2016;
·$86,000 in 2017 and
·$39,300 as of November 2017.
Based on this evidence I am not satisfied that the business is financially capable of employing a full time employee who will be paid $55,000 per year. I am not satisfied that the business is able to provide that person with the minimum of 2 years of full time without relying on potential and speculative income from further sales of franchises or by collecting 8% from their turnover.
It is possible that the business will be able to generate sufficient turnover sometime in the future either by way of selling additional franchises or by receiving percentage from their turnover. However, the Tribunal is required to determine whether the nominating business is currently in position to employ a full time employee and pay him/her $55,000 per year for the minimum period of 2 years.
As a result, the Tribunal is not satisfied that the applicant will be able to employ the nominee in the nominated position from the time of visa grant for at least 2 years full time. Accordingly, the requirement in r.5.19(4)(d) is not met.
I have concerns about the oral evidence received during the course of the hearing from Mr Plumridge. When questioned during the hearing if he received money into his Australian accounts from overseas, Mr Plumridge stated that his mother has sent him ‘some money’ into his personal bank account. However, in his statutory declaration of 19 December 2017, he stated that in February, March and July 2017 he transferred the amount of $93,330 from UK into his and his wife’s ANZ bank account in Australia. He declared that this money was ‘equity remaining after the sale of house in UK’. He further declared that from February 2016 to January 2017, he received additional amounts from overseas totalling $45,502.

I compared nominee’s payslips with ANZ Business Account statements and I observe that payments of her salary from the business account do not correspond to dates stated on the payslips. For instance, on 29 September 2016, the payment of $3,615 was made from the business bank account to the nominee’s personal account. The nominee’s payslip for the period from 1 September 2016 to 30 September 2016 indicate that her net pay was $2,200.
According to ANZ Business Account statements, there is no evidence of regular monthly wages being paid to the nominee from 29 June 2015 to 29 June 2016 when Ms Plumridge was holding 457 visa and was sponsored and nominated by the business.
Finally, the applicant has provided evidence that a number of personal expenses were paid from Plumridge Family Trust Bank account. (Tribunal folios 168-171). Mr Plumridge acknowledged in his Statutory Declaration of 18 December 2017 (Tribunal folio166) that he used both the business account and personal account for family expenses when needed and that his wife (the nominee) used the business account to purchase household items that were not business related.
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
The Tribunal affirms the decision under review to refuse the nomination.
Antonio Dronjic
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).