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Cases

CATCHWORDS: Review of business sponsorship rejection - temporary business entry scheme

DECISION: The Tribunal sets aside the decision under review and substitutes a decision that the review applicant be approved as a standard business sponsor. The instrument of approval is attached to this statement.

A & F Drive Shaft P/L [2004] MRTA 2328 (14 April 2004)

[2004] MRTA 2328



CATCHWORDS: Review of business sponsorship rejection - temporary business entry scheme
REVIEW APPLICANT: A & F Drive Shaft Repairs Pty Ltd
TRIBUNAL: Migration Review Tribunal
PRESIDING MEMBER: Namoi Dougall
MRT FILE NUMBER: N03/01984
DIMIA FILE NUMBER: OPF2003/1513
DATE OF DECISION: 14 April 2004
AT: Sydney
DECISION: The Tribunal sets aside the decision under review and substitutes a decision that the review applicant be approved as a standard business sponsor. The instrument of approval is attached to this statement.



STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW
1. This is an application for review of a decision made by a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (the delegate). A & F Drive Shaft Repairs Pty Ltd (the review applicant), applied for approval as a business sponsor on 28 January 2003. The delegate�s decision to reject the application for approval was made on 20 February 2003 (T1, ff.1-4).
JURISDICTION AND STANDING
2. The review applicant lodged a valid application for review to the Migration Review Tribunal (the Tribunal) on 13 March 2003. The decision is reviewable by the Tribunal and the application for review has been validly made by a person with standing to apply for review.
LEGISLATION AND POLICY
3. The Migration Regulations 1994 (the Regulations), provide for approval of persons as business sponsors. This is part of a scheme called temporary business entry. The scheme involves three stages:
A person (the employer) seeking approval as a business sponsor.
An approved business sponsor seeking approval of a nomination of an activity in which an individual is proposed to be employed in Australia.
A person applying for a temporary visa (subclass 457) on the grounds that the visa applicant proposes to be employed by an approved business sponsor in an activity that is the subject of an approved business nomination.
4. In conducting a review, the Tribunal is bound by the Migration Act 1958 (the Act), the various Regulations made under the Act, and written directions issued by the Minister under section 499 of the Act. Some matters may be the subject of policy, as found in publications such as the Procedures Advice Manual 3 (PAM3) and the Migration Series Instructions (MSIs), produced by the Department of Immigration and Multicultural and Indigenous Affairs (the Department). The Tribunal is required to have regard to policy and apply it unless there are cogent reasons for departing from policy.
5. The Tribunal has the power to affirm a decision to refuse to approve a business sponsorship, or to set the decision aside and substitute another decision.
6. Regulation 1.20D contains the criteria for approving a person as a business sponsor, and there are guidelines set out in PAM3. The Tribunal generally has regard to the Regulations as they stood at the time of lodgement of an application for approval. However, subsequent amendments may apply in some circumstances.
EVIDENCE
7. The Tribunal has the following documents:
T1 � Tribunal case file N03/01984, folio numbered 1-320.
T2 � Tribunal case file N03/01995, folio numbered 1-60.
D1 � Department case file OPF2003/1513, folio numbered 1-189
D2 � Department case file CLF2003/7612, folio numbered 1-85
8. Evidence was given at the hearing on 13 February 2004 by Mr Charlie Yu, a director of the review applicant. A summary of the evidence on the files and the oral evidence follows.
9. On 28 January 2003 the review applicant lodged the application for approval as a business sponsor (seeking entitlement to make one nomination of business activity within a 12 month period). The review applicant claimed to be a leading importer, distributor, installer and repairer of vehicle constant velocity joints (CV) and drive shafts for various car makes and models. The main office is in Sydney and it has another office in Melbourne. The review applicant distributes its products to spare parts companies, repair shops, petrol stations and regional retailers in Sydney and Melbourne and surrounding areas (D1, f. 126). A separate application for review has been lodged with the Tribunal in connection with the related visa refusal of Ms. Hai Tao Gao (the visa applicant) (Tribunal case N03/01995) whom the review applicant nominated for the position of sales/marketing manager (D1, f. 175).
10. On 20 February 2003 the delegate refused to approve the review applicant as a business sponsor on the basis that the review applicant had not provided evidence to demonstrate that new or improved technology would be introduced or utilised or that it had a satisfactory record of training or a commitment towards training. The delegate, therefore, was not satisfied that the review applicant meet the criteria in paragraph 1.20D(2)(c).
11. On 13 March 2003 the application for review was lodged. The review applicant stated in the application that it provided in house training with invited senior professionals as the trainer and that it had showed its commitment by providing copies of its training programs, schemes and materials with the business sponsorship application.
12. On 11 November 2003 the review applicant was sent a letter (T1, ff.35-39) inviting the review applicant to provide additional information that is relevant to the review. That information included: financial, taxation and ASIC documents; the internal structure of the business; a training plan and how the business was and is currently training Australians; and a statement about how the proposed employment of a visa holder will create employment expand trade or develop international markets or improve competitiveness in Australia.
13. On 17 December 2003 the review applicant�s representative provided further information to the Tribunal. Included in the information was 2001 and 2002 BAS statements (T1, ff.104-117); financial statements for the periods ending 30 June 2001 and 30 June 2002 (T1, ff.56-103) and PAYG summaries for 2001 (T1, f.55). An organisational chart was also provided (T1, f.54).
14. The representative provided further information as to the review applicant�s training of employees (T1, ff.40-53). The information included a detailed document entitled Staff training and development, manuals used for training, as well as the presentations given in 2002 and 2003. Further, information was provided to the Tribunal on the review applicant�s commitment to training (T1, ff.129-138, 143-147) which included more training manuals and evidence that the review applicant arranged for 2 mechanical engineers to come out from AFT Constant Velocity Joint Manufacture Co Ltd for training sessions.
15. On 11 February 2004 the Tribunal was provided with a copy of the financial statements for the period ending 30 June 2003 and the review applicant�s tax return for 2003 (T1, ff.151-152).
16. On 13 February 2004 at the hearing the Tribunal gave the review applicant additional time to submit further information.
17. On 27 February 2004 and on 12 March 2004 the review applicant�s representative provided further information. Included in that information was PAYG Summaries for 2003 (T1, ff.247-275) and BAS and IAS statements for the period 1 July 2002 to 31 December 2003 (T1, ff.232-246, 301-318). Annual Returns of a Company as well as a ASIC Historical Company Extract were also provided (T1, ff.214-233).
18. Further evidence as to training was also provided (T1, ff.190-197) which included a training programme and certificates of attendance.
19. The review applicant also provided a statement as to the reasons why the visa applicant is sponsored (T1, ff.198-213) together with a business activity report. The review applicant states that between July 2003 and January 2004 the visa applicant contacted 70 companies in NSW with 50 companies placing orders. The statement also states that that the companies include ones in New Zealand and Fiji. Subsequently export documentation to New Zealand and Fiji was provided (T1, ff.286-300).
FINDINGS
20. The findings are based on the evidence contained in the files of the Tribunal and the Department and on the oral evidence given at the hearing on 13 February 2004.
21. To be approved as a business sponsor, the review applicant must meet the criteria set out in regulation 1.20D. They are addressed under the following headings.
Is the applicant for approval actively and lawfully operating in Australia?
22. A search of the Australian Securities and Investments Commission (ASIC) records indicates that review applicant is a registered business with an Australian Company Number (ACN) 055 344 986 (T1, f.17). The review applicant has provided copies of its financial statements and tax returns for the periods ending 30 June 2001, 30 June 2002 and 30 June 2003. PAYG summaries for 2003 and BAS and IAS statements for 1 July 2002 to 31 December 2003 have been provided as well as copies of lodged Annual Returns. On the evidence the Tribunal finds that the review applicant is actively and lawfully operating in Australia.
Would the proposed employment contribute to employment for Australian citizens and permanent residents, or contribute to expansion of Australian trade, or contribute to improvement of Australian business links, or contribute to competitiveness within sectors of the Australian economy?
23. The review applicant claimed in the application form 1067 (item 13) that all its employees, except the nominee, are either Australian citizens or permanent residents (D1, f. 178). Copies of PAYG summaries have been provided.
24. The review applicant subsequently supplied a statement as to why it was sponsoring the visa applicant. In it the review applicant stated that since July 2003 the visa applicant had 50 new customers place orders. To support this a business activity report was supplied (T1, ff. 198-213). Further evidence was provided to support the review applicant�s claims that some of the new customers were in New Zealand and Fiji (T1, ff.286-300).
25. In light of the subsequent evidence the tribunal finds that the employment a subclass 457 visa holder would contribute to the improvement of Australian business links with international markets.
Who will be the direct employer?
26. The application is made on the basis that the review applicant will be the direct employer. Department records indicate the review applicant will pay the visa holder�s annual salary (D1, ff.175-179). It also submitted provisional employment agreement signed by the review applicant and nominee that showed an annual salary of $40,040 (D1, f.155).
Will the applicant for approval introduce, utilise or create new or improved technology or business skills, or, alternatively, has the applicant for approval a satisfactory record or demonstrated commitment towards training Australian citizens and permanent residents?
27. Sponsorship application form 1067 (item 22) indicated that the review applicant would not introduce, utilise or create new or improved technology (D1, f. 178).
28. In form 1067 (training details- items 15 to 21) stated that the review applicant had 20 Australian (citizens and residents) employees of which 1 was an overseas foreign student, 11 were professionals and 9 were tradespersons. It further stated that it had gross wage expenditures of $592,094 and gross training expenditure of $3,650 for the recent financial year. The review applicant stated that it conducted on site training and it participated in industry organised seminars. The training was aimed at keeping current with industry developments, optimise its marketing activities and enhancing service standards (D1, f. 178). It appeared that copies of attendance to these seminars, seminar program or certificates of completion of seminar/ training were not provided. Unaudited (compiled) profit and loss statements for respective fiscal years ended 2000, 2001 and 2002 claimed workshop expenses of $58,344, 25,923 and $2,264. It appeared the statements did not provide accompanying notes to disclose the nature of workshop expenses (D1, ff.97, 115).
29. The review applicant further claimed on form 1067 that in respect to future training plans, it would provide opportunities for staff to update industry knowledge through on-site workshop training, study at TAFE/college/university studies and seminars (D1, f.178). Provided was an 11 page copy of the review applicant�s 2002-2003 training program with attached sample of a blank certificate of attendance and training handout for mechanics. The cover of the handout appeared to indicate that it was originally a German manual with English and Chinese translations. Texts to the diagrams and drawings were written in Chinese. The program stated the training objectives, date and duration, venue and what materials are required as well as the course content. John Bourne and Haitao Gao were identified as seminar organisers. There were 2 separate programs for mechanics and marketing staff (D1, ff.130-153).
30. Even further material was supplied to the Tribunal including training programmes and manuals, evidence that the review applicant arranged for 2 mechanical engineers to come out to Australia to conduct training sessions, and certificates of attendance (T1, ff.129-138, 143-147, 190-197). In light of the evidence the Tribunal finds that the review applicant has a satisfactory record of training Australian citizens and permanent residents in its business operations.
Is there any adverse information known about the business background of the applicant for approval or related persons?
31. There is no adverse information before the Tribunal.
Does the applicant for approval have a satisfactory record of compliance with immigration laws?
32. There is no adverse information before the Tribunal to suggest that the review applicant does not have a satisfactory record of compliance with immigration laws.
Is the applicant for approval able to comply with undertakings in respect to visa holders?
33. Forms 1067 and 1068 signed by the review applicant included financial undertakings that the review applicant has towards the visa applicant. This includes expenses such as the visa applicant�s medical insurance, repatriation costs, annual salary of $40,040, and an annual 7% superannuation contribution of $2,803 (D1, ff. 6, 102 & 155).
34. The review applicant has been registered as a business since 1992 (T1, f.17). The financial statements for the periods ending 30 June 2000, 2001 and 2002 indicate that the net assets were $1.684 million, $1.813 million, and $1.884 million. The gross profits at 30 June 2000, 2001 and 2002 were $234,520.45; $171,520.45; and $90,114.85 (T1, ff.56-103.
35. Tax returns for respective fiscal years 2001 and 2002 indicated taxable incomes of $159,830 and $87,444 (D1, ff. 66 & 79)
36. The financial statements for the period ending 30 June 2003 indicated that the gross profit was $415,652.46 and that net assets were $1.899 million.
37. On the evidence the Tribunal finds that the review applicant is able to comply with undertakings with respect of visa holders.
CONCLUSION
38. In light of the above findings and reasons the Tribunal further finds that the review applicant meets the relevant criteria for a business sponsor set out in regulation 1.20D.
DECISION
39. The Tribunal sets aside the decision under review and substitutes a decision that the review applicant be approved as a standard business sponsor. The instrument of approval is attached to this statement.
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