Specialist in Australian Immigration, Migration Consultant and Online Australian Visa Assessment Service.
Australian Immigration Specialists - Australian Immigration Consultants Online Australian Visa Assessments for immigration to Australia
  Research Home

Categories
Administrative Appeals Tribunal
Federal Court
Federal Magistrates Court
Full Federal Court
High Court
Migration Review Tribunal
Other Jurisdictions
Refugee Review Tribunal
Recently Added
Re Patterson; Ex parte Taylor [2001] HCA 51 (6 September 2001)
Singh v Commonwealth of Australia [2004] HCA 43 (9 September 2004)
Muin v Refugee Review Tribunal; Lie v Refugee Review Tribunal [2002] HCA 30

"Use the Migration Specialists that migration agents use"
Cases

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

A & K BEAUTY SALOON PTY LTD [2003] MRTA 4366 (26 June 2003)

A & K BEAUTY SALOON PTY LTD [2003] MRTA 4366 (26 June 2003)
Last Updated: 26 August 2003

[2003] MRTA 4366


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

REVIEW APPLICANT: A & K Beauty Saloon Pty Ltd trading as Cocom Hair News

TRIBUNAL: Migration Review Tribunal

PRESIDING MEMBER: Andrew Carson

MRT FILE NUMBER: N03/01532

DEPT FILE NUMBER: OPF2003/1476, CLF2001/65553

DATE OF DECISION: 26 June 2003

AT: Melbourne

DECISION: The Tribunal affirms the decision under review, finding that the review applicant does not meet the criteria for approval as a standard business sponsor.

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 & K Beauty Saloon Pty Ltd trading as Cocom Hair News (ACN 097 755 694) (the review applicant), applied for approval as a business sponsor on 28 January 2003. The delegate's decision to reject the sponsorship application for approval was made on 17 February 2003

JURISDICTION AND STANDING

2. The review applicant lodged a valid application for review with the Tribunal on 28 February 2003 (T1, f.20-25). 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. This part of 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, vary or set aside a decision to refuse to approve a business sponsorship.

6. The criteria and policy immediately relevant to this review are:

Legislation:

Regulations 1.20A - 1.20D of the Regulations

Policy:

PAM3: Division 1.4A - Temporary Business Entry: Sponsorship and Nomination

7. 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

8. The Tribunal has the following documents:

T1 - MRT case file N03/01532, folio numbered 1-129.

T2 - MRT case file N02/00502, folio numbered 1-89.

D1 - Departmental case file OPF2003/1476, folio numbered 1-72.

D2 - Departmental case file CLF2001/65553, folio numbered 1-27.

9. The review applicant was stated to operate a hairdressing salon under the trading name of Cocom Hair News. It applied for approval as a standard business sponsor (seeking entitlement to make one nomination of a business activity within a 12 month period). On 28 January 2003 an associated nomination application was lodged for Mi Ae CHO (Ms. Cho) on the basis that the review applicant proposed employing her as a hairdresser (MRT file number N02/00502). The applications for standard business sponsorship and nomination were refused on 17 February 2003.

10. The visa application lodged by Ms Cho was made on 25 June 2001 and sponsored by her then sponsor, Lee & Jay Group Pty Ltd (N02/00501). This visa application was refused by the delegate on 12 December 2001 and the Tribunal has made a decision in relation to the sponsorship application by Lee & Jay Group Pty Ltd.

11. Submitted with the primary application were documents including copies of the Certificate of Registration dated 7 August 2001 for the company, the Certificate of Registration of Business Name dated 21 August 2001 for Cocom Hair News showing the proprietor as the review applicant, documents in respect to Ms. Cho's experience and qualifications, two statements, each dated 25 October 2002, from POET Training, one referring to Kyung Mi MOON registering for a course in Information Technology (Software Applications) Certificate III and the other referring to XX registering for a Retail Operations (Certificate III) course, an organisation chart for Cocom Hair News and an unaudited financial statement for the year ended 30 June 2002.

12. The review applicant provided to the Tribunal with the application for review a copy of the delegate's Decision Record dated 17 February 2003. The delegate estimated that the review applicant would need a net asset of at least $50,000 or a source of equivalent finance in order to fulfil its sponsorship undertakings under form 1067 whereas the financial statement provided by the review applicant showed a "net asset" of $31,920 as at 30 June 2002. The delegate was not satisfied that the review applicant had the financial capacity to fulfil its sponsorship undertakings and so did not meet regulation 1.20(2)(f).

13. The review applicant stated when lodging the application for review that its financial position had changed since the business lodged the sponsorship application. The agent submitted in a letter dated 27 February 2003 that the accompanying financial statements for the period 1 July 2002 to 31 December 2002 showed "the net asset level is $59,584".

14. The Tribunal sent the review applicant a letter dated 7 April 2003 inviting additional information, including audited financial statements for the period ending 30 June 2002, profit and loss statement for the period July 2002 to March 2003, bank statements in the name of the company for the previous 6 months, Business Activity Statements, and evidence that the review applicant (i) will introduce to, or utilise or create in, Australia new or improved technology or business skills; or (ii) has a satisfactory record of, or a demonstrated commitment towards, training Australian citizens and Australian permanent residents in the business operations of the applicant in Australia, including evidence that employees of the company who are Australian citizens or permanent residents have or will be trained in the operations of the business. Also requested was evidence of the payment of superannuation for employees, evidence of the employment of Australian citizens or permanent residents and evidence that employment of the proposed holder of a subclass 457 visa under the sponsorship would contribute to:

(i) the creation or maintenance of employment for Australian citizens or Australian permanent residents; or

(ii) expansion of Australian trade in goods or services; or

(iii) the improvement of Australian business links with international markets; or

(iv) competitiveness within sectors of the Australian economy.

15. In response the review applicant's agent sent a letter dated 13 May 2003 containing submissions in respect to subregulation 1.20D(2)(a) criteria, together with copies of the following documents:

* Audited financial statements for the company for the year ending 30 June 2002;

* Interim financial statements for the 9 months ending 31 March 2003;

* Bank statements for the last 6 months;

* Certificate from POET Training in respect to training;

* Statements sent to the Taxation Office in relation to superannuation for the 2002 financial year;

* PAYG payment summaries issued for 2001/2002 financial year; and

* ASIC Historical extracts for the company.

16. A hearing was held on 11 June 2003 by video conference in which Andrew DICKSON (Mr. Dickson) and Ms. Cho gave evidence in the presence of their agent. Mr. Dickson confirmed that he is an Australian citizen and said that he is the owner of the business under the company name. He said that the company was registered in August 2001. He confirmed that he and his wife, Kyung Mi MOON, were initially both directors of the company but his wife ceased as a director in July 2002, and both remain as the sole shareholders in the company. He said that his wife has been working in the salon although she is not qualified as a hairdresser. He said that his wife is pregnant and so will not be working. He said that in 2001/2 there was a staff of 4 in the business consisting of the following: his wife, who is a permanent residence on a subclass 801 visa, manages the hairdressing salon full time; X who was employed under the sponsorship of the previous owner of the salon through to June 2002, upon which she returned to Korea. It was pointed out that the PAYG Payment Summaries submitted for 2001/2 did not include one for this person to which Mr. Dickson said that the previous sponsor was responsible for paying her; Y who he initially said started in June 2001, but then confirmed that she started in March 2002 and continues in the employment as a senior hairdresser on a full time basis. He said that this person holds a subclass 457 visa and is sponsored by the company on a salary of $38,000 and subject to the form 1067 undertakings; Z, who he said is an Australian citizen, works full time as a hairdresser on a salary of $600 per week gross, started the employment in mid-November 2001 but ceased work about July 2002. Mr. Dickson said that in 2001/2 there were no other employees. He was referred to a PAYG Payment Summary for the period ending 30 June 2002 which referred to a person, ZZ as employed from 5 November 2001 to 30 June 2002. At the time Mr. Dickson indicated that he was not sure if this person was the same person named on a copy of a passport as Z, but since the hearing the agent has submitted in a letter dated 12 June 2003 that ZZ was this person's maiden name which she used in the course of her employment with the company.

17. Mr. Dickson was asked to list the employees of the company in 2002/3 to date and named the following: Y who is employed full time on a salary of $40,000 per annum and is still under the sponsorship of the review applicant; his wife, Kyung Mi MOON, who he said has been on a salary of $600 gross per week but will finish work in early August 2003; XX, a permanent resident who started in July 2002 and works full time at $600 gross per week. Mr. Dickson said that he was not sure of the type of visa XX held. The agent stated that this person ceased employment in September 2002 and Mr. Dickson then agreed that this person is no longer an employee but worked as a hairdresser for 3 months on a pay of $420 gross per week; YY who he said is from New Zealand and started in August 2002 as a trainee apprentice. It was pointed out that this appeared unusual given his age, born in 1953, and Mr. Dickson was asked what was YY's previous experience, but Mr. Dickson indicated he did not know. He said that YY is training to be a hairdresser and he is to commence a TAFE course in August 2003 in "hairdressing techniques" which he described as a course for students and was the same course that his wife was doing. Mr. Dickson said that there was no one else employed to date during 2002/3.

18. In respect to proposed sponsorship of Ms. Cho, Mr. Dickson said that the pay will be $38,000 with payment of the superannuation guarantee levy amount on top of this. He said that the company would also pay for training and anything else required under the form 1067 commitment.

19. In respect to the profit and loss statement provided for the period 1 July 2002 to 31 March 2003 Mr. Dickson was asked why no expenditure was shown for vehicle expenses yet in 2001/2 $2,445 was claimed, to which he said that he expects about $500 in expenses. The agent added that the amount would be ascertained at the end of the financial year. The agent stated that the interim profit and loss statement does not show final amounts. It was also pointed out that the profit and loss statement showed no expenditure from 1 July 2002 to 31 March 2003 under the provision for staff training, to which Mr. Dickson said that the full fees were yet to be accounted for and referred to training through POET Training. When asked how the $3,402 claimed as staff training expenses in 2001/2 was expended he said that it was on TAFE course. It was pointed out that there was no expenditure recorded in 2001/2 as expended on superannuation to which the agent said that it was not payable until July 2003. It was also pointed out that no expenditure was recorded for 2001/2 or on the interim profit and loss statement for 2002/3 on WorkCover premiums, to which Mr. Dickson said that it was part of the expenditure of $1,955 in 2001/2 and $2,529 in 2002/3 to date recorded as insurance. This was questioned by the Tribunal and in response to this the agent has sent since the hearing a copy of documentation from the workers compensation insurer showing a basic premium of $1,108 for the period 1 August 2001 to 30 June 2002, based on wages of $49,700, and an amount of $1,416 payable for the period 30 June 2002 to 30 June 2003, based on wages of $52,612.

20. Mr. Dickson was asked about the bank statements submitted which did not have the name of the account holder shown. He said that the account is in the name of the company, care of himself and his wife. He said that this was the company's and business' only account. It was put to him that the statements did not appear to show wages/salary payments to which Mr. Dickson said that the wages are paid weekly in cash and paid out of takings.

21. Mr. Dickson was asked about the capacity of the company to meet the costs of a second sponsorship. He said that they wanted to retain employees longer which will enhance profitability. He said that he had drawn up a business plan. He said that he agreed that in 2001/2 if the cost of the proposed sponsorship was included there would be a loss. The Tribunal referred Mr. Dickson to the requirements under regulation 1.20D and said that in respect to subregulation 1.20D(2)(c)(i) that the business aims to appeal to both Western and Asian customers and they the business needs to be aware of its competitors and changes in equipment and be at the forefront of change. The agent later commented that Mr. Dickson was referring to existing technology and skills rather than new ones, to which Mr. Dickson agreed. In respect to training Mr. Dickson said that the retail operator's course at TAFE was undertaken by YY, having started Certificate III in March 2003. He said that his wife, Kyung Mi Moon, undertook a course in Information Applications but he asked that this be disregarded because it was not accepted by the Department of Training as relevant to hairdressing. When asked what other training has been undertaken, Mr. Dickson referred to a colouring product distributor, Funge, visiting every 2 or 3 weeks. He stated that they also get specialists to demonstrate techniques every 2 to 3 months. He also said that those of the staff who need to do so are also improving their English language skills.

22. Ms. Cho said that the previous sponsorship application made by Lee & Jay Group Pty Ltd, upon which she was to obtain her 457 visa, was unsuccessful.

23. As previously mentioned, since the hearing the agent has provided the Tribunal with a letter dated 12 June 2003, referring to the company's worker's compensation policy, clarifying that Z is the same person as ZZ and advising that Mr. Dickson and his wife are prepared to commit their personal assets to enable the company to fulfil its undertakings and that Ms. Cho is excepted to bring in 2.5 to 3 times her wages. The agent stated that Mr. Dickson has been setting up procedures and policies for the business while employed elsewhere and that most of the day to day operations in the business are now in the hands of his spouse and "hopefully assisted by Miss Cho in the near future". The agent also referred to a marketing plan, a copy of which was attached, together with other documentation.

FINDINGS

24. To be approved as a business sponsor, the review applicant must meet the criteria set out in regulation 1.20D, the relevant parts of which state:

Regulation 1.20D. Approval as business sponsors

(1) Subject to this regulation, the Minister may, in writing, approve or reject an application for approval as a pre-qualified business sponsor or as a standard business sponsor.

(2) The Minister must approve an application for approval as a pre-qualified business sponsor, or as a standard business sponsor, made in accordance with regulation 1.20C if:

(a) the Minister is satisfied that the applicant for approval is actively and lawfully operating in Australia a business in which the employment of the holder of a Subclass 457 (Business (Long Stay)) visa would contribute to:

(i) the creation or maintenance of employment for Australian citizens or Australian permanent residents; or

(ii) expansion of Australian trade in goods or services; or

(iii) the improvement of Australian business links with international markets; or

(iv) competitiveness within sectors of the Australian economy; and

(b) in respect of each visa applicant who seeks to satisfy the primary criteria for a Subclass 457 visa to be granted on the basis that:

(i) the applicant for approval is the employer referred to in subclause 457.223 (4) of Schedule 2 in relation to the visa application; and

(ii) the visa applicant satisfies the requirements of that subclause;

the Minister is satisfied that:

(iii) the applicant for approval proposes to be the direct employer in Australia of the visa applicant as the holder of the visa (in this subregulation called the visa holder); or

(iv) if the applicant for approval is a body corporate - the applicant for approval is, under section 50 of the Corporations Law, related to the body corporate that proposes to be the direct employer in Australia of the visa holder; and

(c) the Minister is satisfied that the applicant for approval:

(i) will introduce to, or utilise or create in, Australia new or improved technology or business skills; or

(ii) has a satisfactory record of, or a demonstrated commitment towards, training Australian citizens and Australian permanent residents in the business operations of the applicant in Australia; and

(d) the Minister is satisfied that nothing adverse is known to Immigration about the business background of:

(i) the applicant for approval; or

(ii) any officer of any of the entities that constitute the applicant for approval; or

(iii) any individual who is a member of a partnership that is 1 of the entities that constitute the applicant for approval; and

(e) the Minister is satisfied that where relevant, the applicant for approval has a satisfactory record of compliance with the immigration laws of Australia; and

(f) the Minister is satisfied that while there is in effect a Subclass 457 visa granted on the basis that:

(i) the applicant for approval is the employer referred to in subclause 457.223 (4) of Schedule 2 in relation to a visa application; and

(ii) the visa holder satisfies the requirements of that subclause;

the applicant for approval is able, in relation to each visa holder, to comply with the undertakings given by the applicant in accordance with form 1067.

(2A) In subparagraph (2) (d) (ii):

officer, for a corporation, means an officer of the corporation within the meaning of the Corporations Act 2001.

(3) An approval of a person as a standard business sponsor must specify the maximum number of nominations of business activities, being a number not exceeding the number proposed in the application for approval, that may be approved under regulation 1.20H in relation to the standard business sponsor while the approval is in effect.

25. Subregulation 1.20D(2)(f) requires, among other things, that the review applicant has the ability to meet the financial undertakings on Form 1067. These undertakings include: paying the visa applicant's wages, paying the repatriation costs for the visa applicant and accepting financial responsibility for medical and hospital costs for the visa applicant.

26. In respect to the criteria for approval as prescribed in regulation 1.20D(2)(f) the Tribunal found the evidence, especially the evidence in the hearing, was unconvincing in supporting a conclusion that the interim profit and loss statement reflected a capacity on the company's part to comply with the undertakings given in accordance with the form 1067. Departmental policy in relation to regulation 1.20D(2)(f) expects an applicant for approval as a business sponsor to demonstrate a level of proof, sufficient to satisfy the decision maker of its financial ability and commitment to meet its undertaking as specified in form 1067. Mr. Dickson claimed that in 2001/2 the business had the benefit of an employee up until June 2002 whose earnings were met by a previous sponsor, but that source of productivity at no cost has not, on Mr. Dickson's evidence been there since July 2002. On the evidence presented the Tribunal found that the interim statement failed to take account of all relevant items of expenditure. Further, the financial situation will not improve when Ms. Moon leaves to have the baby. The bank statements submitted, which were stated by Mr. Dickson to be in the name of the company and to be the business' only bank account, showed balances as low at times as $2,000 to $3,000. The Tribunal regards the last minute proposal submitted that Mr. Dickson and his wife are prepared to commit their personal assets should the company have insufficient funds to fulfil their undertakings, as not sufficiently convincing to find that this would adequately address the issue. On all the evidence presented the Tribunal is not satisfied that the review applicant is able to satisfy the requirements of subregulation 1.20D(2)(f).

27. Even if the Tribunal was to accept that the review applicant could satisfy this provision the Tribunal is not satisfied that the review applicant meets the further requirements under regulation 1.20D(2)(c). Given the nature of the review applicant's business, and having regard to all the evidence presented, the Tribunal finds that the review applicant does not meet the requirements of 1.20D(2)(c)(i) in relation to new technology or business skills. Departmental policy as outlined in PAM is that subregulation 1.20D(2)(c)(i) caters only for leading edge technology or business skills. The evidence does not support finding that the review applicant satisfies this provision.

28. The alternative requirement is under subregulation 1.20D(2)(c)(ii). At application, the agent for the review applicant indicated that the previous owners of the business had always been training their staff extensively and indicated that its present owners would continue to follow similar trends. The review applicant's agent had referred in his submissions to the Department to an `Induction Program', `Discussion program', on-the-job training and external training. The documentary evidence of training, however, refers to an Information Technology (Software Applications) Certificate III course for the director of the company, Ms. Moon which even Mr. Dickson agreed ought to be disregarded and a Retail Operations (Certificate III) course for XX whose status is only identified as New Zealand born. The reference in evidence to a colouring distributor providing training appears on the evidence to be no more than a promotional activity. On the evidence presented the Tribunal is not satisfied that the review applicant has a satisfactory record of or a demonstrated commitment towards, training Australian citizens and Australian permanent residents in its business operations. The Tribunal finds, therefore, that the requirements of subregulation 1.20D(2)(c)(ii) are not satisfied.

CONCLUSION

29. As the review applicant does not meet the criteria for approval as a business sponsor, the Tribunal must affirm the decision under review.

DECISION

30. The Tribunal affirms the decision under review, finding that the review applicant does not meet the criteria for approval as a standard business sponsor.
Australia Immigration Consultants and Online Australia Visa Assessments for immigration to Australia