SUMMER'S CAFEINE PTY LTD (Migration)

[2023] AATA 497

SUMMER'S CAFEINE PTY LTD (Migration) [2023] AATA 497 (9 March 2023)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  SUMMER'S CAFEINE PTY LTD

REPRESENTATIVE:  Mr Daniel Estrin

CASE NUMBER:  2200010

HOME AFFAIRS REFERENCE(S):          OPF2021/7084

MEMBER:Bridget Cullen

DATE:9 March 2023

PLACE OF DECISION:  Brisbane

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 (Cth).

Statement made on 9 March 2023 at 12.48pm

CATCHWORDS

MIGRATION – sponsorship cancellation or bar – ensuring the sponsored person worked in the nominated occupation – false or misleading information – termination of the business lease – operations transferred twice – impact of the COVID-19 pandemic – evidence of full-time employment – restructuring of operations – specified work performed offsite – power to take an action does not arise – decision under review set aside           

LEGISLATION

Migration Act 1958, s 140
Migration Regulations 1994, rr 2.86, 2.89-2.94

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.

1. The Applicant was approved as a Standard Business Sponsor on 7 March 2017. The current agreement was approved on 19 September 2019.

2. On 13 December 2021, the delegate decided to cancel the Applicant’s approval as a Standard Business Sponsor and bar the applicant from making applications for approval as a Standard Business Sponsor or Temporary Activities Sponsor under s 140M, for a two-year period. The reason for the bar was that the delegate found that the Applicant failed to satisfy its sponsorship obligation to ensure that the primary sponsored person worked in the nominated occupation; and further considered that the Applicant had provided false or misleading information in its response to the Department’s Notice of Intention to Take Action (NOITTA).

3. The Applicant operates in the hospitality sector. At the relevant points in time, the Applicant was operating Bellissimo Coffee Pty Ltd, from the University of the Sunshine Coast Campus at Petrie, Queensland. Relevantly, the Applicant sponsored Ms Ying Wang, a Chinese national, as a Café and Restaurant Manager (ANZSCO 141111).

   5.Ms Wang applied for a Subclass 457 visa in March of 2017, which was granted in February of 2018. In March of 2018, Ms Wang commenced full-time employment with the Applicant. In September of 2019, Ms Wang was granted a Temporary Skill Shortage (Subclass 482 visa) for the position of Café and Restaurant Manager (ANZSCO 141111). The Applicant then applied, in February of 2021, for a Subclass 186 (Employer Nomination Scheme) nomination in the Temporary Residence Transition stream for the position of Café and Restaurant Manager (ANZSCO 141111).

4. The Applicant’s Subclass 186 nomination application was refused on the grounds that the delegate was not satisfied that reg 5.19(4)(b) was met. The reason for this was that the “adverse information” that existed in relation to the Applicant following the decision to cancel the Applicant’s Standard Business Sponsorship agreement.

   7.Ms Wang’s related Subclass 186 visa was refused in September of 2022.

5. The hearing of this matter (involving the cancellation of the Applicant’s Standard Business Sponsor agreement and sponsorship bar) was heard together with the related nomination refusal.

6. The Applicant appeared before the Tribunal, in person, through Ms Shu “Summer” Zhang, Director of Summer’s Cafeine Pty Ltd. on 10 February 2023. Ms Zhang gave evidence to the Tribunal, assisted by her representative, Mr Daniel Estrin of Estrin and Saul Migration Representatives. Mr Estrin appeared remotely from Perth via Teams and made submissions  and presented arguments on behalf of the Applicant. The Tribunal also received oral evidence from the nominee, Café and Restaurant Manager Ms Wang.

   10.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

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

8. 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.

9. 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.

10. 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?

    15.In the present case, the delegate found that the applicant failed to satisfy a sponsorship obligation (reg 2.89) and provided false or misleading information (reg2.90). The concerns centred on whether Ms Wang, the primary sponsored person, was undertaking duties in line with her nominated occupation (reg2.86)

    16.Specifically, the delegate found that the Applicant failed to satisfy its sponsorship obligation to ensure that the primary sponsored person (Ms Wang) worked or participated in the nominated occupation, program or activity (Café or Restaurant Manager, ANZSCO 141111). The delegate also found that the Applicant provided false or misleading information to the Department in relation to Ms Wang working in the role of fulltime Café or Restaurant Manager, and in relation to the Applicant’s genuine need for that role.

    17.Specifically, the delegate found that Ms Wang was not working in the role of Café/Restaurant Manager on a full-time basis as approved at the time of nomination, and that there was therefore no genuine need for the nominated position.

    18.The applicant submitted the following information to the Department:

    ·Email dated 2 June 2021 – evidence of business relocation, new business name, new menu, statement from Applicant’s Director, Ms Zhang, photos of new restaurant, ABN lookup showing new business name;

    ·Email dated 2 June 2021 – evidencing that the Applicant had updated the Department that the business changed trading names and had moved to a new address;

    ·Letter dated 3 June 2021 from accountant Norman Dong confirming his role as the  accountant for the Applicant’s business and confirming the closure of its Konnigan’s Restaurant at Kelvin Grove, and the commencement of operations of the Bellissimo’s Coffee at Petrie on 17 May 2021;

    ·Letter dated 3 June 2021 from Robert Grealy from Australian Law Partners confirming termination of the Applicant’s lease in Kelvin Grove, from which Konnigan’s Restaurant operated, on 13 May 2021;

    ·Email from Ms Wang dated 28 July 2021, together with payslips dated 18 and 25 July 2021, Bellissimo Coffee roster dated 26 July 2021, employment contract for Ms Wang’s Subclass 186 visa nomination, employment contract for Ms Wang’s Subclass 482 visa; and

    ·Email from Ms Wang dated 30 July 2021, together with bank statements showing deposits of her wage from the Applicant, dated from 6 May 2021 to 29 July 2021; 8 payslips for the period 17 May 2021 to 11 July 2021; and and the roster for Bellissimo Coffee employees for the period 17 May 2021 to 14 June 2021.

    19.In response to the Department’s Notice of Intention to Take Action, the Applicant submitted:

    ·The contract for purchase of the Bellissimo Coffee Pty Ltd by the Applicant;

    ·19 payslips for Ms Wang, for the period 28 December 2020 to 26 July 2021;

    ·Bank statements from Ms Wang for the period 6 May 2021 and 29 July 2021, showing deposits labelled ‘Summer’s Cafeine Salary’;

    ·Emails dated 17 June 2021 and 24 July 2021 to Ms Wang relating to a catered dinner the Applicant was assisting with, together with a document titled Dietary Requirements for June Dinner;

    ·Email dated 22 September 2021 from a KeepCup Account Manager to Ms Zhang enquiring about potential business;

    ·Screenshots of messages between Ms Wang and others dated 20 May 2021 and 7 June 201, together with a list of visits made by Ms Wang to Bellissimo Coffee at Petrie between 13 September and 30 September 2021;

    ·Screenshot of pictures taken at Bellissimo Coffee at Petrie between 2 June 2021 and 16 August 2021, demonstrating that the business is operating;

    ·Letter from Mark Bignell, Director of the Bellissimo Coffee Corporate Office, confirming Ms Wang and Ms Zhang’s attendance at 3 training sessions on 18 May, 16 June and 17 August 2021. The training related to a range of issues including the transition arrangements between Bellissimo Coffee and the Applicant, branding, staffing, sales, coffee equipment, and staff training;

    ·Email dated 5 October 2021 regarding the Applicant’s intent to lease a new shop;

    ·Letter of intent to lease signed by Ms Zhang on 5 October 2021;

    ·Offer by Applicant to lease a Spring Hill café with lease commencement of 20 December 2021;

    ·Email dated 21 October 2021 from Alex McSweeney of All Assets Property Group requesting transfer of deposit by Applicant;

    ·Bank receipt from Summer’s Cafeine Pty Ltd with description of ‘2 months’ rent’ dated 21 October 2021;

    ·ASIC application for business name of Right Hand Café lodged by Applicant’s accountant, Norman Dong, dated 26 October 2021; and

    ·ASIC application to cancel business name Bellissimo Coffee Petrie lodged by Mr Dong dated 26 October 2021.

    The Applicant’s Business Activities

    20.The Applicant is now well-established in the café industry, having managed to survive the COVID-19 pandemic. The Applicant first established operations with its Konnigans Café and Restaurant in 2015. Ms Zhang became the Director of the Applicant in 2016. Ms Zhang first met Ms Wang when she was a customer at Konnigans Café, sharing a common bond and language as they are both Chinese.

    21.Ms Zhang explained that during these conversations, which took place in the restaurant, she became aware that Ms Wang had previous experience working in hospitality. Eventually, Ms Wang commenced working for the Applicant at Konnigans Café.

    22.When the Konnigans Café lease ended in May of 2021, the Applicant commenced operating Bellissimo Coffee at the University of the Sunshine Coast Petrie Campus just a few days later. In her role as Director, Ms Zhang had developed a relationship with Bellissimo Coffee Pty Ltd, a well-known coffee brand that supplies restaurants and cafes with coffee, in addition to owning multiple Bellissimo branded coffee outlets.

    23.As the lease for the Konnigans Café premises was coming to an end, Ms Zhang explained that she was looking for a new café opportunity, and the decision to operate the Bellissimo Petrie Campus café was made. At hearing, she gave evidence that she wanted to see how operations went first, before making a firm commitment to purchase the Bellissimo business. The contract between the Applicant and Bellissimo Coffee Pty Ltd reflects this arrangement. Ms Zhang is an accountant who has experience working in project management. With this professional background, the Tribunal accepts that she was well placed to make decisions about the structure of the Applicant’s business operations and wanted to take a cautious approach before making a more significant financial commitment to continued operations.

    24.The “Due Diligence” period, as reflected in the Special Conditions – Annexure F” annexed to the purchase contract, reflects the arrangements that both Ms Zhang and Ms Wang reported to the Department’s monitoring team. The arrangement between the Applicant and Bellissimo Coffee Pty Ltd was not a franchise arrangement, but rather gave the Applicant a 10-month period to assess whether it could operate the business profitably. The Applicant had the unilateral ability to determine whether it would proceed with the ultimate purchase, or alternatively give notice during the “Due Diligence” period that it wanted to terminate the contract.

    25.During her oral evidence at the hearing, Ms Wang referred to the “Due Diligence” period of time as being the “special time” for the Applicant. The arrangement between the Applicant and Bellissimo Coffee Pty Ltd during this period was one that lent itself to a number of challenges. These challenges are discussed further, below.

    26.Ultimately, the Applicant decided not to proceed with the contract to purchase the Bellissimo Coffee Petrie Campus operation. When the Applicant realised that it would not proceed with this business opportunity, it began to explore other opportunities. As at the time of decision, the Applicant operates two café businesses: (1) the Right Hand Café, located at 201 Wickham Terrace in Spring Hill, and (2) the Riverbend Café, located at 193 Oxford Street in Bulimba.

    27.At the time the Department commenced its monitoring of the Applicant, the challenges associated with the COVID-19 pandemic were in full swing. The Department conducted site visits, at the Bellissimo Coffee Petrie Campus location on 28 July 2021, and again on 17 August 2021.

    28.The evidence before the Tribunal establishes, and the Tribunal is aware of its own accord, that during this part of the pandemic:

    ·The border between Queensland and New South Wales was closed;

    ·There was a mask mandate in effect in Southeast Queensland;

    ·The local government area which the Applicant business was located in was in shutdown from 31 July 2021, initially for 3-days;

    ·This shutdown was extended until 8 August, but the mask mandate removed.

    29.The Tribunal accepts that the period of closures, lockdowns, and mask mandates posed challenges for many businesses, but particularly for hospitality businesses.

    Obligation to ensure primary sponsored person works or participates in nominated occupation, program or activity: reg 2.86

    30.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).

    31.In this case the Department were concerned from the information before them that Ms Wang was not working fulltime in her nominated occupation (r.2.86) as a Café and Restaurant Manager (ANZSCO 141111).

    32.Following compliance monitoring by the Department, the delegate found that Ms Wang only worked 3 days per week. In doing so, the delegate gave greater weight to the observations of the monitoring ABF officers, than to the evidence provided by the Applicant and Ms Wang.

    33.The Tribunal has had the opportunity to hear directly from both Ms Zhang and Ms Wang. The Tribunal questioned Ms Zhang and Ms Wang separately and considers the evidence they both gave to be consistent, and credible. Both women were open and forthcoming in their responses to the Tribunal’s questioning about the Bellissimo Café business, its operations and challenges, and the work performed by Ms Wang in her role as Café and Restaurant Manager.

    34.The Tribunal observes that Ms Wang’s payslips, and corresponding bank records, clearly demonstrate that the Applicant was paying her a full-time wage in accordance with its sponsorship obligations. This is significant given the widely publicised challenges faced by the hospitality industry generally during the monitoring period.

    35.It is clear that that the delegate placed some weight on statements that were made to ABF officers by members of what the Tribunal will broadly call the “Bellissimo Café Team”. During what Ms Wang referred to as the “special time”, the Bellissimo Café Team consisted of a mixed group of employees – those that came with the Applicant as part of the contract for purchase (including Ms Wang, and a chef), and those employees who were already working at the café, before the Applicant entered into the contract for purchase.

    36.The Tribunal has heard both Ms Zhang’s and Ms Wang’s evidence that this melding of disparate employee groups presented human resources challenges. The arrangement meant that Ms Wang was now the Café and Restaurant Manager. However, as the Special Conditions provided that the Applicant might ultimately not proceed with purchase, the Tribunal accepts that it would have been challenging for Ms Wang to establish authority with the pre-existing set of Bellissimo Café employees who may have felt that Ms Wang was a temporary interloper, and that all was running just fine prior to her arrival.

    37.The delegate found that the Applicant had failed to provide the Bellissimo Café Team with a structured roster that displayed consistent days of attendance that included working from home and working from the office arrangements for staff, particularly for Ms Wang. The delegate also found that there did not appear to be a set timetable indicating when Ms Wang worked at the café, citing the two unannounced visits by ABF officers on 17 July and 28 July 2021 when Ms Wang was not present.

    38.At the time of the ABF site visits, the second-in-charge employee, Lani, was unaware of Ms Wang’s whereabouts on both occasions. The delegate commented that it would be reasonable to assume that a Café or Restaurant Manager would be present, providing support to staff during operations. The delegate further commented that the Applicant had failed to provide satisfactory evidence of Ms Wang having work from home arrangements, in the context of a hospitality business. The delegate considered that there was limited evidence of the work that Ms Wang had completed at home. 

    39.The Tribunal observes that Lani was an employee who originated with Bellissimo Café. The Tribunal accepts Ms Zhang and Ms Wang’s evidence that during the “special period” of the Applicant considering whether it would proceed with final purchase, that the relationship between Lani and Ms Wang (who had been brought into the organisation above Lani) was difficult to manage.

    40.The delegate was concerned about the absence of a team structure that displayed consistent days of attendance identifying work from home and work from office arrangements, and also concerned that there was no set timetable of when Ms Wang was present at the Bellissimo Cafe.

    41.The Tribunal would expect that a Café or Restaurant Manager would spend time physically working from the restaurant; however the Tribunal also observes that there are many tasks within the ANZSCO job description for Café or Restaurant Manager (ANZSCO 141111) that can readily be done offsite. These include planning menus, arranging the purchase and pricing of goods according to budget, planning and organising special functions, maintaining records of stock levels and financial transactions. The evidence before the Tribunal readily establishes that Ms Wang performed all of these tasks.

    42.The delegate did not accept Ms Wang’s explanation about the limited time she spent working offsite (2 days per week at the height of the COVID-19 period in Brisbane) and instead formed a view that she was not working on these days.

    43.The Tribunal has reached a different conclusion in relation to Ms Wang’s work that was performed offsite. Firstly, the Tribunal considers it unreasonable to look at Ms Wang’s work from home pattern as being indicative of her overall pattern of work. Ms Wang commenced fulltime employment with the Applicant in March of 2018. The site visits on 28 July 2021 and 17 August 2021 took place at a period of time when Ms Wang had been working for 3-plus years, at the height of COVID-19 pandemic closures and work from home arrangements.

    44.Whilst not strictly relevant, the Tribunal is satisfied that the Applicant continues to be employed fulltime, as Ms Wang gave evidence about her role running not one, but two cafes (the Right Hand Café and Riverbend Café) for the Applicant. This suggests very strongly to the Tribunal that Ms Wang’s work from home arrangements were reasonably short lived, given the timing of the monitoring activity. The Tribunal also finds that, despite performing some work from home, or offsite, that Ms Wang continued to work on a full-time basis at all relevant times.

    45.Ms Zhang explained that it made more sense for her to earn an income as an Accountant/Project Manager, and to run her businesses as an investment rather than working directly in the business. Hence, the need for a Café or Restaurant Manager.

    46.During the hearing, the Tribunal was also able to obtain evidence explaining some of the concerns that the delegate had. Given the nature of this information, the Tribunal also accepts that the information provided at the hearing would not have been discussed with the Bellissimo Café team, including Lani. For example, the absence of a roster displaying Ms Wang’s hours is not particularly telling in the Tribunal’s view. Ms Wang needed to make sure that other staff were rostered to cover opening hours; however, as the manager, she did not need to reveal to the staff working exactly what hours she would be present for.

    47.Ms Wang was also doing catering work, including the planning of events and dinners, for the Applicant during the period in question. The Bellissimo staff would not have been aware of this work, as it was not being conducted through the Bellissimo Café business.

    48.It was also clear that the Applicant became aware, shortly after entering into the contract with Bellissimo Coffee Pty Ltd, that the arrangement may not work out. Consequently, the Applicant began making contingency plans. Ms Wang assisted Ms Zhang to locate new premises suitable for a new café during this period, conducting research and visiting premises. Ultimately, the Applicant opened two cafes, exercising the option to terminate the contract to purchase the Bellissimo Café business at the Petrie campus.

    49.The Tribunal finds the explanation for the work offsite to be entirely plausible and is satisfied that the preponderance of Ms Wang’s tasks were those described in the ANZSCO. When interviewed, Lani would not have been aware that Ms Wang was assisting the Applicant with any of these matters, as these matters did not relate to the operation of the Bellissimo Café.

    50.The Tribunal notes that the delegate was satisfied that Ms Wang was working three days per week onsite. The Tribunal has had the opportunity to obtain extensive oral evidence about the nature of the work generally, and on the days that Ms Wang was working offsite.

    51.The Tribunal finds that Ms Wang was working fulltime for the Applicant in the nominated occupation, program or activity, that being Café or Restaurant Manager (ANZSCO 141111). The Tribunal is also satisfied that the Applicant was being paid in accordance with her entitlements.

    52.Accordingly, the Tribunal is not satisfied that the prescribed circumstance in reg 2.89 exists for the purpose of s 140M of the Act.

    False or misleading information: reg 2.90

1. 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).

   54.Given the Tribunal’s finding that Ms Wang was working fulltime in her nominated occupation of Café or Restaurant Manager, it follows that the Tribunal also finds that the Applicant did not provide the Department with any false or misleading information in conjunction with the Applicant’s assertions that Ms Wang was employed fulltime, or in relation to the Applicant’s genuine need for a fulltime Café or Restaurant Manager.

   55.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

2. 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

   57.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 (Cth).

   Bridget Cullen
   Senior Member

   
   

   ATTACHMENT – Extract from the Migration Regulations 1994

   2.89   Failure to satisfy sponsorship obligation

   …

   (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 past and present conduct of the person in relation to Immigration; and
   (b)    the number of occasions on which the person has failed to satisfy the sponsorship obligation; and

   (c)     the nature and severity of the circumstances relating to the failure to satisfy the sponsorship obligation, including the period of time over which the failure has occurred; and

   (d)    the period of time over which the person has been an approved sponsor; and

   (e)     whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person; and

   (f)     whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent; and

   (g)     whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure; and

   (h)    the steps (if any) the person has taken to rectify the failure to satisfy the sponsorship obligation, including whether the steps were taken at the request of Immigration or otherwise; and

   (i)    the processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation; and

   (j)     the number of other sponsorship obligations that the person has failed to satisfy, and the number of occasions on which the person has failed to satisfy other sponsorship obligations; and

   (k)    any other relevant factors.

   …

   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.

   …