Thanks for your question.
As it stands, you have two options:
An Appeal under Section 84(1)(c) is limited to human rights grounds. In order to be successful, you have to establish that the decision of the UKBA will breach one of your fundamental human rights. In addition, you also have to prove that you meet the requirements of the rules.
At present, all decisions issued after 19th December will have to pay a fee of £140.00 when submitting the Appeal.
2. Fresh Application
If you submit a fresh application, you will need to address the points raised in the previous UKBA refusal decision.
From the information you have provided above, I would suggest that you Appeal and you request your Sponsor to attend the Appeal and provide evidence.
In order to Appeal, you will need to complete Form IAFT-2 and submit this within 28 days of receipt of the decision.
Once the Appeal Hearing date has been issued, you will also be provided with Directions. These are normally that you will submit any documentation that you intend to rely upon no later than 5 working days before the Hearing.
If you wish to discuss, please feel free to ask further questions.