SAPALA FOODS PTY LTD (Migration)

[2021] AATA 3272

SAPALA FOODS PTY LTD (Migration) [2021] AATA 3272 (24 August 2021)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Sapala Foods Pty Ltd

CASE NUMBER:  2005495

HOME AFFAIRS REFERENCE(S):          OPF2019/11929

MEMBER:John Cipolla

DATE:24 August 2021

PLACE OF DECISION:  Sydney

DECISION:The Tribunal sets aside the decision under review and substitutes a decision not to take one or more of the actions specified in s 140M of the Migration Act 1958.

Statement made on 24 August 2021 at 2:32pm

CATCHWORDS

MIGRATION – cancellation of approval as standard business sponsor – false and misleading information provided to department – business history and recruitment of staff –incorporation of new business entity, acquisition of existing businesses and continuing operation under existing trading names – no business relationship with previous owner, but knowledge of its financial difficulties – continuing employment of existing staff – details of open recruitment process provided to tribunal – difficulty in engaging and retaining suitable staff in regional area – sound business decisions – decision under review set aside

LEGISLATION

Migration Act 1958 (Cth), ss 140L(1)(a), 140M

Migration Regulations 1994 (Cth), r 2.90(2)

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 to take an action under s 140M of the Migration Act 1958 (the Act) in relation to the applicant’s sponsorship.

2. The applicant was approved as a standard business sponsor on 29 July 2019. On 18 March 2020, the delegate decided to cancel the approval as a standard business sponsor of Sapala Foods Pty Ltd under s 140M on the basis that the business had breached reg 2.90 as it had provided false and misleading information to the Department.

3. The applicant appeared before the Tribunal on 12 August 2021 to give evidence and present arguments.  

4. The applicant was represented in relation to the review by its registered migration agent. The applicant’s representative attended the review hearing.

5. For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision not to take one or more of the actions specified in s 140M.

   CONSIDERATION OF CLAIMS AND EVIDENCE

6. Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances. 

7. 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.

8. 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.

9. 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?

10. In the present case, the delegate found that the applicant had provided false and misleading information with regard to the continuity of the business and the business history and recruitment of staff.

    False or misleading information: reg 2.90

11. One or more of the actions in s 140M may be taken if the sponsor has provided false or misleading information to Immigration or the Tribunal: reg 2.90(2).

12. The applicant, Mr Dhamendra Sharma is a businessman and restaurateur who has run a large number of Indian restaurants from Melbourne to the Gold Coast. The applicant has also run successful restaurants in Canberra including Blu Ginger, which has been in Canberra for many years and for which the applicant has received many accolades. Apart from his restaurant business the applicant is also involved in a trucking company.

13. On 9 January 2020 the Department wrote to the applicant seeking the provision of a range of documents pertaining to the running of the business Sapala Foods Pty Ltd. Following this, the Department served the applicant with a Notice of Intention to Take Action (NOITTA).  The NOITTA identified circumstances for cancelling the approval of the standard business sponsor Sapala Foods Pty Ltd or for barring the sponsor from further use of the program. The identified circumstances were an identified breach of reg 2.90, namely, the provision of false and misleading information.

14. The issue for the Department was that Sapala Foods had not been honest about the relationship with the former owner of Grand Pavilion Restaurants and that false and misleading information had been provided in relation to the recruitment and business history. The concerns of the departmental delegate were that Sapala Foods was incorporated on 5 July 2019. Prior to this date the business registered the following business names, Grand Pavilion Terrigal, Grand Pavilion Sydney, Grand Pavilion Warners Bay and Grand Pavilion Ettalong.

15. The Grand Pavilion Restaurants ceased trading under the old entity of Adhie Anna Pty Ltd and Poongothai Pty Ltd on 30 June 2019. The old entity lodged a notification of application to wind up the company on 30 July 2019. Leases for these businesses were entered into by Sapala Foods from 1 July 2019. For the Terrigal premises, 3 July 2019; for the Ettalong premises, 1 July 2019; for the Warners Bay premises, 1 July 2019; and for the Sydney premises the lease was signed with no commencement date affixed.

16. The delegate noted that all workers sponsored by Sapala for Subclass 482 visas had work references from the former owner stating that they were employed until 30 June 2019. The Department noted that Sapala claimed that the businesses were abandoned by the former owner. The Department queried why the business names would be registered nine days before the alleged abandonment of the businesses by the previous owner. The Department was concerned that there was no gap between the alleged abandonment of the business sites on 30 June 2019 and the commencement of trading by Sapala Foods on 1 July 2019. The Department also questioned why all sponsored workers by Sapala Foods for Subclass 482 visas were employed until 30 June 2019 and how the business was able to hire previous staff, one as a restaurant manager and two chefs on identical salaries to those paid by the previous business owner.

17. The Department concluded that they were nominated with a false recruitment process without proper labour market testing, further to this that all the employees were working in the business before the nominations were approved.

18. The applicant was given an opportunity to comment on these concerns and the applicant provided a comprehensive response to the Department.

19. In response the applicant advised that he had successfully nominated a number of employees over the years and had never been previously the subject of adverse monitoring, he further advised that he responded in a timely manner to the Departmental requests to provide information. The applicant provided information to the Department stating that he had no links or relationship to the previous owner of the Grand Pavilion restaurants. The applicant also advised that he had not provided any false or misleading information to the Department and that the employment of employees of the previous business was conducted through an open recruitment process whereby they were the successful applicants for the respective positions. In addition to this the applicant stated that a number of former employees of the business remained in the business after it had been taken over by the applicant purely as a stopgap arrangement until the positions were able to be filled on a permanent full-time basis.

20. At the review hearing the applicant advised that he was a successful businessman that had run a number of companies over an extended period of time, with a focus on Indian restaurants, both fine dining and within food courts of major shopping centres.

21. The Tribunal discussed with the applicant how he learnt about the opportunity to acquire the leases for the Grand Pavilion restaurants in Terrigal, Ettalong and Warners Bay. The applicant advised the Tribunal that he had run restaurants in Sydney in a number of locations including Castle Hill, the Sydney business district and in Strathfield. The applicant stated that over an extended period of time he had been exploring business opportunities to acquire and run more regional restaurants. The applicant explained that the overheads and costs in Sydney were becoming prohibitively expensive and the running costs associated with regional restaurants were significantly less. The applicant stated that in the lead up to him taking over the leases of Grand Pavilion he had explored restaurant opportunities from the Central Coast of New South Wales through to Newcastle and areas that he had identified as suitable. Because of the applicant’s long history of running Indian restaurants the applicant advised that he had engaged staff that had worked across many different restaurants for different owners. He advised that through these staff he would hear anecdotal evidence about how particular restaurants were doing.

22. The applicant advised that to assist in his search for prospective business opportunities on the Central Coast that he had engaged with Ray Pitstock Real Estate, a commercial real estate agency based in Terrigal specialising in commercial property for both sale and lease. The applicant advised that he had engaged with this specialist business for an extended period as the business had an extensive knowledge of commercial property opportunities on the Central Coast of New South Wales. The applicant advised the agency that he was looking for restaurant opportunities and that the agency assisted him in this respect. The applicant stated that the Indian food area was close-knit. The applicant advised that he was made aware that the previous owners of the Grand Pavilion restaurants on the Central Coast of New South Wales were in financial trouble. The applicant advised that the Ray Pitstock Agency advised him that the previous business owners of the Grand Pavilion restaurants were struggling to meet their rental obligations and were significantly in arrears and that these existing restaurants presented a potential business opportunity for the applicant. They also advised that the lessor was wanting to sign a commercial lease agreement with a reputable business. The applicant advised that he had held commercial lease agreements with large companies such as Westfield and he had impeccable references due to his commercial letting history. The applicant further advised that within the close-knit Indian restaurant community business owners knew which restaurants were doing well and which restaurants were struggling. The applicant stated that Indian restaurants invariably use the same suppliers and you would also hear through suppliers about restaurants that were struggling.

23. The Tribunal discussed with the applicant the point at which he learnt that the Grand Pavilion restaurants on the Central Coast offered him a sound business opportunity. The applicant stated through the Ray Pistock Real Estate Agency in Terrigal, and also through commonly used wholesalers and suppliers. The applicant was made aware that the previous owner was struggling with the Grand Pavilion restaurants on the Central Coast. The applicant through Ray Pistock made direct contact with the owner/lessor of the property in Ettalong in which the Grand Pavilion restaurant was operating. The applicant stated that as he had very good references from the multiple commercial leases that he had entered into over the years and had many years of experience in running successful Indian restaurants, he was seen as a desirable lessee. The applicant advised that the lessors of the Ettalong property wanted to make sure that they had a good tenant because of the problems they had with the previous owner of Grand Pavilion in Ettalong. The applicant advised that he provided evidence from his accountant to support his credibility and financial capacity as a lessee. The applicant believed that the Department had formed an adverse view of Sapala Pty Ltd largely because of the activity of the previous company that had run Grand Pavilion.

24. The applicant advised the Tribunal that he had been monitored by immigration in the past and had always met his compliance obligations. The Tribunal discussed with the applicant at the review hearing whether he had or indeed maintained any relationship with the former owner of Grand Pavilion restaurants on the Central Coast. The applicant stated that he knew the previous owner of the company as he had employed him 10 to 12 years ago in his Canberra business. The applicant advised that the former owner had left his job in Canberra on bad terms and they had not maintained contact over the intervening years.

25. The applicant advised that when he was exploring prospective business opportunities on the Central Coast, he made a number of visits to the region to explore how businesses in this region appeared to be doing on a day-to-day basis.

26. The Tribunal discussed the sponsorship of previous employees of the Grand Pavilion restaurant business for Subclass 482 visas by the applicant to work in the positions of Restaurant Manager and Chef. The applicant stated that Indian restaurants are specialised businesses that require specialised staff. The applicant stated that it was very difficult to source specialised Indian chefs in regional areas. The applicant stated that the success of the restaurant was totally contingent on the quality of the chefs that they were able to secure to work in the restaurants. The applicant made reference to submissions provided in advance of the hearing by his representative which provided evidence of the open recruitment process that the applicant had engaged in to fill positions in the Grand Pavilion restaurants after he took over the leasehold of the three business premises from the former owner. The applicant advised that Mr Cheeran Jacob had worked extensively as a Restaurant Manager in Australia, the United States and India and was very well respected. The applicant stated that Mr Jacob applied for the position of Restaurant Manager in response to an open recruitment and competed against a number of other applicants. The applicant advised that Mr Jacobs’ Subclass 482 visa had been cancelled, as a consequence of the cancellation of the standard business sponsorship. The applicant stated that if the cancellation was set aside at review he would attempt to contact Mr Jacob to see whether he would be willing to return to the business in the capacity of Restaurant Manager.

27. The applicant advised that Matthew, who worked as a Chef at the Terrigal Grand Pavilion restaurant was highly regarded and an asset to the business. The applicant advised that in his view Matthew was one of the best Indian chefs he had employed over his many years of running Indian restaurants. The applicant advised that Singh who had also been successfully sponsored for Subclass 482 visa had, to his knowledge returned to India after the cancellation of the applicant’s standard business sponsorship. The applicant advised that Singh had excellent credentials and experience as a Chef at the Warners Bay outlet of Grand Pavilion.

28. The applicant advised that each of these candidates had been working for the previous business prior to his acquisition of the commercial leases. The applicant advised that each of these applicants competed against a field of candidates in an open recruitment process.  The Tribunal has been provided with details of the recruitment process including advertising and the details pertaining to the number and qualifications of candidates interviewed for each respective role.

29. The applicant added because of the collective skill set of these three employees, that as a businessman he would be “silly” not to hire them. The applicant stated that finding new people, particularly in regional areas, was extremely difficult. The applicant stated that fundamental to any restaurant business was the quality of the chef employed by the business and that businesses could not run without a quality chef. The applicant stated that he would rather hire somebody that is a known commodity and who has worked in Indian restaurants and has acquired a reputation and that this makes good business sense. The applicant stated that over the years the Grand Pavilion restaurants had been the subject of multiple awards and accolades.

30. The applicant advised that his absorption of the trading name of Grand Pavilion was available to him through ASIC and as the restaurant chain had been the subject of multiple awards and accolades, it made good business sense to retain these names after he took over the leasehold.

31. The Tribunal asked the applicant to outline why he believed the decision to cancel the standard business sponsorship was the wrong decision.  The applicant stated that he ran legitimate and successful businesses. The applicant advised that he heard of an opportunity to acquire a failing business and that like many businesses he took advantage of this opportunity. The applicant advised that the businesses had been operating at a significant profit and raising significant revenue. The Crown Pavilions provided employment to 40 employees and this consisted of considerable employment opportunities for people on the Central Coast. The applicant advised that apart from the profit, the business contributed to the local Central Coast community through the sponsorship of a local hockey team and the provision of redeemable vouchers to schools for use in fundraising by local schools. The applicant advised that the landscape had changed considerably because of COVID and the businesses had been able to pivot to meet these changes. The applicant advised because of the difficulty in engaging and retaining suitable staff he had been working extensively in the business.

32. The applicant advised that his businesses had a record of being able to retain staff for extended periods. The applicant advised he had a Chef with his restaurant Blu Ginger, in Canberra, who had been with the business for 20 years and stayed with the business after he was granted permanent residence. The applicant advised that he really needed the standard business sponsorship reinstated to enable him to run and indeed expand his business and attract the best qualified Indian Chefs to the business.

33. The Tribunal received a post hearing submission dated 13 August 2021 which it has duly considered.

34. The submission noted that the Tribunal’s focus at the review hearing was around two issues, namely: “how did the review applicant come to know about the business opportunity of taking over the Grand Pavilion Restaurants and whether he had any kind of business relationship with the previous owner” and “whether the review applicant recruited the nominees through a faux    recruitment process as alleged by the Department of Home Affairs”.

1. The submission made reference to previously provided submissions addressing these respective issues which were made to the Department in August 2020 along with statutory declarations of the applicant made to the Department in August 2020 and to the Tribunal in August 2021. As noted, the submission and the statutory declarations have been duly taken into consideration at review. The submission further notes the applicant’s reliance on the evidence he provided at the review hearing.

2. The submission notes the following with regard to the respective issues in review:

   We once again reiterate that the review applicant never had any business relationship or association with M/s Poongothai Pty Ltd. His company was simply the beneficiary of circumstances. As demonstrated by the evidence of Mr. Dharmendra Sharma, it was common knowledge in the industry that M/s Poongothai Pty Ltd was defaulting on its financial obligations to its suppliers. Since that company did not enjoy good market repute in terms of its financial commitments, it became increasingly likely that M/s Poongothai Pty Ltd could abandon the lease resulting in closure of the entire chain of Grand Pavilion restaurants. The source of this information primarily were suppliers (since most Indian restaurants use common suppliers) and some employees working at the restaurants. This commercial reality was completely ignored by the Department of Home Affairs.

   Since Mr. Sharma was already scouting for possible restaurant sites in regional New South Wales especially the Central Coast, he was also in touch with local estate agents dealing with commercial leases. These agents also notified him when M/s Poongothai Pty Ltd fell behind its rental payments and it became crystal clear that the restaurants under their current owner will not be able to survive as ongoing concerns. In this regard, Mr. Dharmendra Sharma’s evidence regarding the estate agent i.e. Ray Pitstock Real Estate at Terrigal is important to consider.

   We wish to add that thereafter, the review applicant was connected to the lessors of those sites through local estate agents and the leases were assigned to the review applicant after they were satisfied with the review applicant’s financial standing and ability to pay the monthly rent. The review applicant’s Director Mr. Dharmendra Sharma is a restauranteur and businessman with over twenty-five years of experience. His other company Blu Ginger Investments Pty Ltd is already an approved Standard Business Sponsor with the Department of Home Affairs for his restaurant in Canberra and has successfully undergone Business Monitoring by the Department of Home Affairs. Being already in the industry and having vast business experience meant that he was confident that he would be able to successfully operate the restaurants where the previous owner had failed.

   Mr. Dharmendra Sharma is of the view that the Department of Home Affairs by cancelling the Standard Business Sponsorship for Sapala Foods Pty Ltd had acted unreasonably and had unfairly connected his business to the previous owner based on mere suspicions and assumptions without considering the commercial realities.

   Attention of the Honourable Member is once again invited to the fact that even though the SMU made quite an intrusive check of all bank accounts of M/s Sapala Foods, no evidence of any payment or consideration from Sapala Foods Pty Ltd to Poongothai Pty Ltd or Adhi Anna Pty Ltd was discovered because there was no business transaction between the three entities. This crucial finding was conveniently ignored in the SMU’s decision record and is indicative of the fact that the Department approached the matter with a closed mind.

   At a time when COVID-19 is playing an absolute havoc with the local hospitality industry, especially in regional New South Wales, the approach of the Department of Home Affairs to cancel the Standard Business Sponsorship of the review applicant is not understandable. The regional economy needs such investments, and the review applicant has done exactly that by taking over abandoned businesses and making them successful once again. By not changing the names of the restaurants, the review applicant benefited from their names’ goodwill and saved money on changing their signage. The fact that the review applicant got registered the names a few days before it took over the leases was because he found the names available with ASIC and quickly got them registered in his own business name. At that time, he had already commenced planning to take over the restaurants. That does not in any way demonstrate existence of any business relationship between the review applicant and the previous business owner. Suppose if the review applicant had changed the names of the restaurants. Could the Department raise such an allegation then? The mere fact that the review applicant got registration of the existing names from ASIC meant that the Department formed its view of connecting the review applicant with the previous owner of the business. It is also worthwhile to recall from the evidence of Mr. Dharmendra Sharma that while he benefitted from both the name goodwill and savings costs on retaining the signage, his business did get approached several times by the creditors of the previous owner seeking payment of their monies. Like the Department, they might have also formed a prima facie view that the current business was a continuity of the previous business. That, however, does not mean that it was in reality a continuity of the previous business.

   The fact that all sponsored workers from Sapala Foods had previously been under the employment of M/s Poongothai Pty Ltd is not unusual. Most of these employees were already located in those areas and were familiar with the business operations of those restaurants. As Mr. Dharmendra Sharma said in his evidence, it made perfect sense for him to recruit them. That said, he followed a proper recruitment process as prescribed under the Migration Rules and found the recruited employees the most competent. It does not mean however, that he did not recruit any other staff. He could not possibly operate the three restaurants based on a total of four nominees. He hired staff locally from the local labour market who had never previously worked for the Grand Pavilion restaurants. It is also pertinent to note that at least two of the nominees i.e. Mr. Sinoj Cheeran Jacob and Mr. Gurpreet Sindh have already left working for the company. We understand that Mr. Gurpreet Sindh has even departed for India.

   Mr. Sam Vijo Mathew (Cook) was granted Subclass 482 visa on 11 September 2019 and it was valid until 11 September 2021. It was cancelled on 22 September 2020 consequent to the cancellation of the SBS. He remains employed as Cook at the company’s Terrigal restaurant. If the SBS cancellation is revoked by the AAT, the cancellation of 482 visa will have to be revoked and 482 visa will then be reinstated.

   The nomination application of Ms. Amandeep Kaur (Restaurant Manager) was approved on 23 September 2019 and her Subclass 482 visa was refused on  8 April 2021 consequent to the cancellation of the SBS. She is employed as Restaurant Manager at the company’s Warners Bay restaurant.

   Due to the cancellation of the Standard Business Sponsorship, it has greatly affected the future potential business of Sapala Foods Pty Ltd as the company wishes to be able to sponsor Cooks and Chefs, who have the ability to deliver world class service and food to the customers of Sapala Foods Pty Ltd. The restaurants operated by Sapala Foods Pty Ltd pride themselves in delivering high quality food items and as a result Sapala Foods Pty Ltd needs Cooks and Chefs who specialise in making Indian food items of a world class standard. In the wake of COVID-19, the skills shortages are becoming acute which is making life difficult for the businesses. The restaurants of Sapala Foods Pty Ltd, situated in regional areas of New South Wales are facing great difficulty in finding specialised Cooks and Chefs who are able to deliver world class Indian food to their customers.

   The fact that all sponsored workers from Sapala Foods had previously been under the employment of M/s Poongothai Pty Ltd is not unusual. Most of these  employees were already located in those areas and were familiar with the business operations of those restaurants. As Mr. Dharmendra Sharma said in his evidence, it made perfect sense for him to recruit them. That said, he followed a proper recruitment process as prescribed under the Migration Rules and found the recruited employees the most competent. It does not mean however, that he did not recruit any other staff. He could not possibly operate the three restaurants based on a total of four nominees. He hired staff locally from the local labour market who had never previously worked for the Grand Pavilion restaurants. It is also pertinent to note that at least two of the nominees i.e. Mr. Sinoj Cheeran Jacob and Mr. Gurpreet Singh have already left working for the company. We understand that Mr. Gurpreet Singh has even  departed for India.

   Mr. Sam Vijo Mathew (Cook) was granted Subclass 482 visa on 11 September 2019 and it was valid until 11 September 2021. It was cancelled on 22 September 2020 consequent to the cancellation of the SBS. He remains employed as Cook at the company’s Terrigal restaurant. If the SBS cancellation is revoked by the AAT, the cancellation of 482 visa will have to be revoked and 482 visa will then be reinstated.

   The nomination application of Ms. Amandeep Kaur (Restaurant Manager) was approved on 23 September 2019 and her Subclass 482 visa was refused on  8 April 2021 consequent to the cancellation of the SBS. She is employed as Restaurant Manager at the company’s Warners Bay restaurant.

   Due to the cancellation of the Standard Business Sponsorship, it has greatly affected the future potential business of Sapala Foods Pty Ltd as the company wishes to be able to sponsor Cooks and Chefs, who have the ability to deliver world class service and food to the customers of Sapala Foods Pty Ltd. The restaurants operated by Sapala Foods Pty Ltd pride themselves in delivering high quality food items and as a result Sapala Foods Pty Ltd needs Cooks and Chefs who specialise in making Indian food items of a world class standard. In the wake of COVID-19, the skills shortages are becoming acute which is making life difficult for the businesses. The restaurants of Sapala Foods Pty Ltd, situated in regional areas of New South Wales are facing great difficulty in finding specialised Cooks and Chefs who are able to deliver world class Indian food to their customers.

3. The evidence before the Tribunal indicates that the applicant business owner has run successful businesses in Australia over an extended period of time. One of these businesses Blu Ginger in Canberra has been operating for many years. The restaurant was initially established in Sydney in 2000. The restaurant has won a number of awards and accolades over the time it has been operating.  The evidence before the Tribunal indicates that the business Blu Ginger Investments Pty Ltd has been operating successfully. The business has sponsored a number of employees for temporary and permanent visas and has been the subject of monitoring by the Department and has been found to meets its sponsorship obligations.

4. The evidence before the Tribunal indicates that the applicant business owner of Sapala Foods Pty Ltd, as a successful restaurateur, had been exploring opportunities to run restaurants on the Central Coast of New South Wales. The applicant advised that the objective was to circumvent the exponential cost of commercial leases in Sydney and to tap into the growth that existed on the Central Coast of NSW due to increased population growth. To this end the applicant engaged with a commercial letting agent, Ray Pistock, who oversaw the commercial lease of The Grand Pavilion Restaurant in Ettalong under the previous owner of the business. The applicant was advised that the previous leaseholder of this business had been defaulting on his rental payments. The applicant was further advised that the lessors wanted to sign a commercial lease with an established and credible business owner that could meet their rental obligations. The applicant provided evidence which indicated that over the course of his business career he had held commercial leases with a large number of commercial landlords, including large corporate landlords, such as Westfield. As a consequence, the applicant was able to provide references from previous lessors pertaining to his established track record as a lessee of commercial premises.

5. The applicant also provided evidence to the Tribunal which indicated that the Indian Restaurant scene was a small market and that invariably because of the use of the same ingredients, the restaurants used the same wholesale suppliers. The applicant provided credible evidence that he was told by suppliers that the previous owner and lease holder of the Grand Pavilion Restaurants was defaulting on his payments to suppliers and appeared to be in significant financial difficulty. As a consequence of this, the applicant was further alerted through these sources to a potential business opportunity. The applicant had run restaurants successfully for a long period of time. The applicant formed a view that the Grand Pavilion Restaurants had a good name and reputation and the identified potential for future growth on the Central Coast. The applicant advised that in addition to these sources he also learnt of the trouble that the previous owner was experiencing in the running of the restaurants through wait staff and kitchen staff employed by the former owner, who had in the past worked for the applicant and kept in touch with him.

6. It is a commercial reality that businesses regularly look for new business opportunities that exist such as a failing business, that a prospective business owner believes can be turned around and yield a profit. Large corporate takeovers are opportunistic and enable a business to be purchased at a discount when it is faltering or failing.

7. The Tribunal finds that the applicant was a credible witness and provided evidence to the Tribunal in a direct and unembellished way. The Tribunal accepts that the applicant learnt about the opportunity to take over the leaseholds of the struggling Grand Pavilion Restaurants through the three sources identified by him. Firstly, through the commercial letting agent he had engaged with, Ray Pistock, through trade suppliers, and through employees of the struggling business.

8. The Tribunal has had regard to the evidence pertaining to the three previous employees of the Grand Pavilion Restaurants, who the applicant later successfully sponsored for Subclass 482 visas and the adverse findings made about this by the Department.

9. Evidence has been provided at merits review which indicates that the applicant engaged in an open and transparent recruitment pertaining to all three positions. The applicant has provided evidence which indicates that the applicant advertised the positions on a number of websites. The applicant has provided the details of the various applicants that applied for the respective positions, their employment backgrounds, and those applicants who were shortlisted for an interview.

10. The three successful applicants for the positions happened to be former employees of the previous business owner. One had considerable experience as a restaurant manager, not only in Australia for Grand Pavilion, but also experience obtained overseas in a number of countries. The applicant advised that this applicant had the requisite skills and ability for the role and outshone the other candidates on every measure. This candidate also had the requisite knowledge of Indian cuisine, the Grand Pavilion and its clientele. The applicant further advised that the two successful applicants for the positions of Chefs were also significantly better qualified for the critical roles of Chefs of Indian cuisine than the other candidates that applied. The applicant also advised that the most critical aspect of a restaurant’s operation is a very skilled Chef who is able to entice diners back again and again.

11. The decisions made by the applicant in this respect in the view of the Tribunal were sound business decisions. It is logical that a business of this nature would wish to ensure that the key roles of Restaurant Manager and Chefs are inhabited by the very best candidates for the positions, particularly where their respective skill sets are tried and proven.

12. Accordingly, the Tribunal is not satisfied that the prescribed circumstance in reg 2.90 exists for the purpose of s 140M of the Act.

    Action to be taken

13. As the Tribunal finds that none of the circumstances for s 140L(1)(a) exist, it follows that the power to take an action under s 140M does not arise.

    DECISION

14. The Tribunal sets aside the decision under review and substitutes a decision not to take one or more of the actions specified in s 140M of the Migration Act 1958.

    John Cipolla
    Senior Member

    
    

    ATTACHMENT – Extract from the Migration Regulations 1994

    2.90   Provision of false or misleading information

    …

    (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 purpose for which the information was provided; and

    (b)    the past and present conduct of the person in relation to Immigration; and

    (c)     the nature of the information; and

    (d)    whether, and the extent to which, the provision of false or misleading information has had a direct or indirect impact on another person; and

    (e)     whether the information was provided in good faith; and

    (f)     whether the person notified Immigration immediately upon discovering that the information was false or misleading; and

    (g)     any other relevant factors.

    …