Shoolin Consultancy Pty Ltd (Migration) - [2024] AATA 2261

Shoolin Consultancy Pty Ltd (Migration) [2024] AATA 2261 (3 May 2024)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Shoolin Consultancy Pty Ltd
REPRESENTATIVE:  Mr Ashish Sethi
CASE NUMBER:  2300041
HOME AFFAIRS REFERENCE:               OPF2022/9921
MEMBER:R. Skaros
DATE:3 May 2024
PLACE OF DECISION:  Sydney
DECISION:The Tribunal sets aside the decision under review and substitutes a decision to bar the applicant for a period of six months (from the date of the delegate’s decision) from sponsoring more people under the terms of the existing approval as a standard business sponsor.

Statement made on 03 May 2024 at 5:03pm

CATCHWORDS
MIGRATION – cancellation – sponsorship cancellation – applicant had failed to comply with the sponsorship obligation – sponsored persons were not working for the applicant who had nominated them –– five sponsored employees were incorrectly nominated via the SBS instead of the OHLA – acted promptly to mitigate the impact of their failure – applicant has made efforts to implement updated processes and procedures to ensure future compliance with sponsorship obligations – it was not the applicant’s intention to deliberately breach their sponsorship obligations – substitutes a decision to bar the applicant for a period of six months – decision under review set aside
LEGISLATION
Migration Act 1958, s 140
Migration Regulations 1994, rr 1.13, 2.72, 2.82, 2.83, 2.86, Schedule 2
CASES
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27
CIC Insurance Ltd v Bankstown Football Club Limited (1997) 187 CLR 384
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 (Cth) (the Act) in relation to the applicant’s sponsorship.

The applicant[1] was approved as a standard business sponsor. On 14 December 2022, the delegate decided to cancel that approval under s 140M of the Act on the basis that the applicant had failed to comply with the sponsorship obligation in reg 2.86. A copy of the delegate’s decision record was provided to the Tribunal.
[1] Referred to interchangeably as ‘Shoolin’ or ‘the sponsor’ throughout this decision.
The applicant’s director, Ms Archana Sisodia, appeared before the Tribunal on 20 February 2024 to give evidence and present arguments.
The applicant was represented in relation to the review by Mr Ashish Sethi. The representative attended the hearing. Also present at the hearing to assist the applicant was Mr Martin Hildebrand, an Accredited Specialist Lawyer from Philip Yip & Associates.
5.For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision to bar the applicant for a period of six months from the date of the delegate’s decision from sponsoring more people under the terms of the existing approval as a standard business sponsor.
CONSIDERATION OF CLAIMS AND EVIDENCE
Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] AATA 2261
Decision Date: 3 May 2024

CaseChat Overview and Summary

The Administrative Appeals Tribunal reviewed a decision by a delegate of the Minister to cancel Shoolin Consultancy Pty Ltd's approval as a standard business sponsor. The dispute arose from the applicant's failure to comply with its sponsorship obligations under regulation 2.86 of the Migration Regulations 1994, specifically concerning the requirement that sponsored persons work in the nominated occupation and be employed by the applicant or an associated entity, and that the applicant not engage in recruiting and on-hiring sponsored persons to unrelated businesses.

The Tribunal was required to determine whether a prescribed circumstance existed for taking action against the applicant under section 140M of the Migration Act 1958, and if so, what action was appropriate. The delegate had found that the applicant failed to satisfy its sponsorship obligations because the sponsored persons were not working for the applicant in the nominated occupation and were incorrectly nominated via the Skilled Employer Sponsored Regional (Provisional) visa (subclass 494) stream instead of the Health Workforce Australia (HWA) stream.

The Tribunal found that while a failure to satisfy sponsorship obligations had occurred, it was not the applicant's intention to deliberately breach these obligations. The failure was attributed to an operational error by overseas staff who did not appreciate the significance of initiating onboarding procedures under the correct agreement. The Tribunal accepted that the applicant acted promptly to mitigate the impact of the failure, was cooperative with the Department, and had made admissions upon discovering the error. Furthermore, the applicant had demonstrated a commitment to future compliance by implementing substantive changes to internal processes and procedures and providing staff training. The Tribunal also acknowledged the significant adverse consequences for the applicant, including potential future difficulties in obtaining sponsorship approval due to the cancellation being considered adverse information.

Consequently, the Tribunal set aside the delegate's decision to cancel the applicant's approval as a standard business sponsor and substituted a decision to bar the applicant for a period of six months from the date of the delegate's decision from sponsoring more people under the terms of its existing approval.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

The applicant was represented in relation to the review by Mr Ashish Sethi. The representative attended the hearing. Also present at the hearing to assist the applicant was Mr Martin Hildebrand, an Accredited Specialist Lawyer from Philip Yip & Associates. 5.For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision to bar the applicant for a period of six months from the date of the delegate’s decision from sponsoring more people under the terms of the existing approval as a standard business sponsor.CONSIDERATION OF CLAIMS AND EVIDENCE Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances. Under s 140M, if prescribed circumstances exist, the Minister (and the Tribunal on review) may take one or more of the following actions:· cancelling the sponsorship approval in relation to a class to which the sponsor belongs;· cancelling the sponsorship approval for all classes to which the sponsor belongs;· barring the sponsor for a specified period from sponsoring more people under the terms of any existing approval; and· barring the sponsor for a specified period from making future applications for sponsorship approval in relation to one or more classes of sponsor. For these purposes, the circumstances are prescribed in regs 2.89–2.94B and include circumstances in which the Minister, or Tribunal on review, is satisfied there has been: a failure to satisfy a sponsorship obligation; provision of false or misleading information; sponsorship application or variation criteria no longer met; a contravention of the law; unapproved changes to a program; a failure to pay additional security; a failure to comply with certain terms of an agreement; or a failure to pay medical and hospital expenses. Where a prescribed circumstance has been found to exist, the regulations prescribe criteria that must be taken into account when determining what action, if any, to take: regs 2.89–2.94B. These criteria, as they relevantly apply to the circumstances of this case, are set out in the attachment to this decision.Does a circumstance for the taking of an action exist?10.In the present case, the delegate found that the applicant failed to satisfy a sponsorship obligation. Failure to satisfy a sponsorship obligation: reg 2.89 The Minister may take one or more of the actions in s 140M if satisfied the sponsor has failed to satisfy a sponsorship obligation referred to in Division 2.19 of the Regulations: reg 2.89(2). The delegate considered that the applicant had failed to satisfy the sponsorship obligations in reg 2.86 based on a finding that the sponsored persons were not working for the applicant who had nominated them. Obligation to ensure the primary sponsored person works in the nominated occupation The sponsorship obligations in reg 2.86, as it applied to the applicant, relevantly required the applicant to:·ensure that a primary sponsored person works in the nominated occupation and does not work in an occupation unless; (i) the occupation was nominated by the applicant under s 140GB(1) of the Act; and (ii) the nomination was approved under s 140GB(2) of the Act: reg 2.86(2). ·ensure that the primary sponsored person is engaged only as (i) an employee of the applicant; or (ii) an employee of an associated entity of the applicant: reg 2.86(2A)(c). ·ensure that (a) the primary sponsored person is employed under a contract of employment; and (b)(i) the applicant does not engage in activities that relate to the recruitment of a sponsored person for the purpose of supplying them to a business that is not associated with the applicant, and (ii) the applicant does not engage in activities that relate to the hire of a sponsored person to a business that is not associated with the applicant: regs 2.86(2AA)(a) and (b).

Decision

Reasons for decision

In addition to the above, the Tribunal has also had regard to the post-hearing submissions in which it was submitted that the decision to cancel the applicant’s approval as a standard business sponsor constitutes ‘adverse information’ under reg 1.13A. It was further noted that departmental policy provides that, in relation to any future applications for approval as a sponsor or for approval of a nomination, it is unlikely to be reasonable to disregard adverse information in circumstances where an applicant has had the sponsorship approval cancelled by the ABF in the preceding five years.[13] This suggests that the applicant is unlikely to be approved as a sponsor or have a nomination approved by the Department until after 14 December 2027, being five years from the date of the sponsorship cancellation. The Tribunal accepts that this would be a significant adverse consequence for the applicant. [13] Policy – Migration Regulations – Divisions – Adverse information – Regulation 1.13A and 1.13B, 3.4.2.3 Circumstances in which it is unlikely to be reasonable to disregard adverse information. Conclusion The applicant’s approval as a standard business sponsor was in effect until 30 August 2026. The Department decided to cancel the approval on the basis of a failure to comply with the sponsorship obligation in reg 2.86. The purpose of that obligation is to ensure that sponsored persons work in the occupation for which they have been nominated in a position in the business of the applicant or in a business of an associated entity of the applicant. It is also an obligation that sponsors do not recruit persons and on-hire them to a business that is not associated with (or an associated entity of) the applicant. The applicant’s director understood these obligations and had previously complied with them. The Tribunal is satisfied that it was not the applicant’s intention to deliberately breach their sponsorship obligations. The Tribunal accepts that the failure to comply with the obligations in reg 2.86 was due to an operation error made by the applicant’s overseas staff who failed to appreciate the significance of ensuring the onboarding procedures were initiated under the correct agreement. It is indeed unfortunate that this error was not identified by the applicant’s director or legal representative before the nominations were lodged with the Department. The Tribunal has found that the applicant’s failure has had an impact on the sponsored persons, who would have found themselves in breach of the mandatory work condition 8607 imposed on their Subclass 482 visa. This could potentially impact future visa applications made by the sponsored individuals. The Tribunal, nevertheless, accepts that the applicant acted promptly to mitigate the impact of the failure. The applicant’s director was co-operative with the Department and made admissions of the failure upon discovering that the sponsored persons had been nominated under the wrong agreement. The failures occurred over much shorter periods than those found by the delegate. The Tribunal considers that the applicant’s director is genuinely remorseful for the failure, which the Tribunal accepts has come at a significant cost to her by way financial losses, reputational damage and personal stress. Ms Sisodia has demonstrated a commitment to ensuring future compliance with sponsorship obligations and the Tribunal gives favourable weight to the efforts made by the applicant to train their staff and implement substantive changes to their internal processes and procedures.

Ratio Decidendi

Legal Principle Established

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