FEDERAL COURT OF AUSTRALIA

Minister for Immigration and Border Protection v Snyman [2016] FCA 242

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The orders of the Federal Circuit Court be set aside and, in their place, the following orders made:

(a)    the application be dismissed; and

(b)    the applicants pay the first respondent's costs fixed in the sum of $6,825 (being the amount prescribed in Sch 1 to the Federal Circuit Court Rules 2001 (Cth)).

3.    The first and second respondents pay the costs of the appeal, to be taxed if not agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BARKER J:

1    Mr Gert Christoffel Snyman and Mrs Maralane Maria Snyman, the first and second respondents, are husband and wife and citizens of South Africa who entered Australia on 19 October 2009, pursuant to Business Skills (Provisional) Subclass 163 visas granted on 3 February 2009.

2    Mr Snyman is one of two shareholders and owns 50% of the shares in Cutman Pty Ltd (ABN 76 140 284 859), a company incorporated by him and his son, Mr Rudi Hans Snyman, on 29 October 2009. Since its incorporation, Cutman has operated five businesses in Australia: Styleworx Hair Design & Beauty (formerly Christof’s Hair Salon); Fitzsimmons Meats; Vortik Fusion; Status Engine Monitoring Systems (or SEMS); and La Rotunda Café. All businesses use or have used a single Australian Business Number (ABN) registered in the name of Cutman.

3    On 2 January 2014, Mr and Mrs Snyman made an application for Business Skills (Residence) (Class DF) Subclass 892 visas and in doing so relied on Cutman as “a main business” for the purposes of satisfying the requirements in cl 892.212 in Sch 2 of the Migration Regulations 1994 (Cth).

4    Clause 892.212 requires an applicant for this visa category to satisfy the following requirements:

Unless the appropriate regional authority has determined that there are exceptional circumstances, the applicant meets at least 2 of the following requirements:

(a)    in the period of 12 months ending immediately before the application is made, the main business in Australia, or main businesses in Australia, of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together:

(i)    provided an employee, or employees, with a total number of hours of employment at least equivalent to the total number of hours that would have been worked by 1 full-time employee over that period of 12 months; and

(ii)    provided those hours of employment to an employee, or employees, who:

(A)    were not the applicant or a member of the family unit of the applicant; and

(B)    were Australian citizens, Australian permanent residents or New Zealand passport holders;

(b)    the business and personal assets in Australia of the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together:

(i)    have a net value of at least AUD250 000; and

(ii)    had a net value of at least AUD250 000 throughout the period of 12 months ending immediately before the application is made; and

(iii)    have been lawfully acquired by the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together;

(c)    the assets owned by the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together, in the main business or main businesses in Australia:

(i)    have a net value of at least AUD75 000; and

(ii)    had a net value of at least AUD75 000 throughout the period of 12 months ending immediately before the application is made; and

(iii)    have been lawfully acquired by the applicant, the applicant’s spouse or de facto partner, or the applicant and his or her spouse or de facto partner together.

5    A “main business” is defined in reg 1.11 of the Regulations as follows:

(1)    For the purposes of these Regulations and subject to subregulation (2), a business is a main business in relation to an applicant for a visa if:

(a)    the applicant has, or has had, an ownership interest in the business; and

(b)    the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business; and

(c)    the value of the applicant’s ownership interest, or the total value of the ownership interests of the applicant and the applicant’s spouse or de facto partner, in the business is or was:

(i)    if the business is operated by a publicly listed company—at least 10% of the total value of the business; or

(ii)    if:

(A)    the business is not operated by a publicly listed company; and

(B)    the annual turnover of the business is at least AUD400 000;

at least 30% of the total value of the business; or

(iii)    if:

(A)    the business is not operated by a publicly listed company; and

(B)    the annual turnover of the business is less than AUD400 000;

at least 51% of the total value of the business; and

(d)    the business is a qualifying business.

(2)    If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses.

6    “Ownership interest”, for the purposes of reg 1.11(1)(a), is defined in reg 1.03 by reference to the definition in s 134(10) of the Migration Act 1958 (Cth). That section provides:

ownership interest, in relation to a business, means an interest in the business as:

(a)    a shareholder in a company that carries on the business; or

(b)    a partner in a partnership that carries on the business; or

(c)    the sole proprietor of the business;

including such an interest held indirectly through one or more interposed companies, partnerships or trusts.

7    A “qualifying business”, for the purposes of reg 1.11(1)(d), is defined in reg 1.03 to mean:

an enterprise that:

(a)    is operated for the purpose of making profit through the provision of goods, services or goods and services (other than the provision of rental property) to the public; and

(b)    is not operated primarily or substantially for the purpose of speculative or passive investment.

8    On 20 May 2014, an officer of the Department of Immigration and Border Protection wrote to Mr Snyman, inviting him to comment on the officer’s assessment that Mr Snyman’s net business assets in Australia did not meet the $75,000 threshold as at 7 December 2012. The officer suggested that, pursuant to the Department’s policy guidelines, his net interest in only two nominated businesses - Styleworx and Fitzsimmons - could be considered when determining his ability to meet the threshold.

9    Mr Snyman, by his migration agent, submitted on 17 June 2014, that only one main business had been nominated for the purposes of the application, namely Cutman, which had conducted five separate business activities since its incorporation, as opposed to five different businesses. (La Rotunda Café was not included in the application financials, as it had since been sold.)

10    Mr Snyman’s migration agent provided further submissions on 4 July 2014, enclosing statements and documents in support of Mr Snyman’s managing role in Cutman, in relation to the asserted various business activities, as well as originals of Mr and Mrs Snyman’s South African police clearances.

11    On 18 July 2014, an officer of the Department wrote to Mr Snyman, requesting further information by 15 August 2014. Mr Snyman’s migration agent was further advised by email dated 12 August 2014 that the Department would consider any documents submitted prior to 24 August 2014. The Department was not supplied with any further information.

12    On 11 September 2014, a delegate of the Minister for Immigration and Border Protection refused the visa application on the basis that Mr Snyman had provided insufficient evidence to support the claimed net value of his assets in Cutman. Consequently, the delegate determined that he, and consequently Mrs Snyman, did not satisfy the requirements of cl 892.212(c) and so, in the circumstances, did not satisfy two of the three requirements in cl 892.212.

13    Mr and Mrs Snyman sought review of this decision by the Migration Review Tribunal (as it was then known). The Tribunal affirmed the delegate’s decision on 12 May 2015. They then sought judicial review in the Federal Circuit Court of Australia claiming that the Minister had misconstrued the Act and the requirements of cl 892.212 in relation to the two businesses requirement.

14    On 19 October 2015, the Federal Circuit Court of Australia issued a writ of certiorari calling up the record of the Tribunal and quashing its decision dated 12 May 2015, and directed a writ of mandamus at the Tribunal to determine Mr and Mrs Snyman’s application for review in the Tribunal according to law. See Snyman & Anor v Minister for Immigration & Anor [2015] FCCA 2791.

15    The Department now appeals to this Court from the Federal Circuit Court’s decision by way of a notice of appeal filed 9 November 2015. The grounds of appeal are set out below, but first the reasons for the Tribunal’s decision should be mentioned.

THE TRIBUNAL’S DECISION

16    The Tribunal held that Mr and Mrs Snyman only satisfied cl 892.212(a) of the Regulations, and so did not meet the requirements of cl 892.212 overall.

17    The Tribunal accepted that Mr Snyman had a 50% ownership interest, as defined in reg 1.03 and s 134(10) of the Act, in Cutman.

18    The Tribunal further accepted that the four businesses relied on for the purposes of the application were owned by Cutman and operated using the same ABN. It appeared to do this however, not on the basis that each was a business activity, as Mr and Mrs Snyman’s migration agent had submitted, but on the basis each was a separate, relevant business. It was also satisfied that each such business was a qualifying business as each was profit driven; provided goods and services; and was neither a passive nor speculative investment.

19    In the Tribunal’s view, despite the delegate’s earlier apparent willingness to accept Cutman as “one main business” in his correspondence of 18 July 2014, that was before the Tribunal, the number of main businesses owned by Mr Snyman was still in issue as the Tribunal was conducting a hearing de novo. The Tribunal appeared to reject Mr and Mrs Snyman’s submission that the four businesses owned by Cutman from 7 December 2012 to 7 December 2013, being the 12 months immediately prior to the date of the application and so the relevant 12 month period for the purposes of cl 892.212(c)(ii), were separate activities comprising but the one business and so could be treated as “one main business” for the purposes of cl 892.212.

20    In doing so, the Tribunal referred to the websites of the Australian Securities and Investments Commission (ASIC) and the Australian Business Register which provided that a company may own more than one business and more than one business may operate under the same ABN.

21    The Tribunal considered the Department’s policy, that equated the identity of a main business to a single ABN, to be irrelevant. It considered that whether or not a business was a main business or a qualifying business was to be determined by applying the circumstances of Cutman to the definitions of “main business” and “qualifying business” in the Regulations. In doing so, it noted the “very different” and “individual” nature of the businesses that Mr and Mrs Snyman relied on.

22    In circumstances where Cutman was the only company, the Tribunal considered the Department’s policy to accept interrelated companies as “one main business” to also be irrelevant.

23    The Tribunal rejected Mr and Mrs Snyman’s submission that the reasoning of the Court in Nassif v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 129 FCR 448; [2003] FCA 481, in respect of the phrase “a business” in the definition of “ownership interest” in s 134(10) of the Act, supported the view that different ventures conducted under the same ABN could be used to satisfy cl 892.212. In circumstances where the Tribunal accepted that Mr Snyman had an ownership interest in each of the businesses, it considered the relevant question was how many of those businesses he could rely on to satisfy cl 891.212(c). It considered Nassif to be irrelevant in this regard.

24    The Tribunal was not persuaded by Mr and Mrs Snyman’s submission that if the legislature intended multiple ventures to be excluded from consideration as main businesses, “the policy” would provide an explicit exclusion to this effect, as it did for passive investments. It noted that the explicit exclusion of passive or speculative investments was not a “creature born of policy alone”, as it was contained in the definition of “qualifying business” in reg 1.03. The Tribunal further held that the definition of “main business” in reg 1.11 clearly indicated the legislature’s intention as to the number of main businesses an applicant could rely on, namely no more than two.

25    Similarly, the Tribunal was not persuaded that the absence of explicit policy on using multiple ventures under the same ABN for the calculation of owner’s equity on director loans evinced an intention that it be permissible. It considered there was no requirement for the policy to have regard to every possible permutation of business structure which may appear before it. Further, it held that the absence of such policy could be explained by the fact that the calculation of ownership interest or director loans only becomes relevant after the number of main businesses is ascertained.

26    The Tribunal held that, on the evidence before the Department, the Business Skills (Residence) (Class DF) Subclass 892 visa granted to Mr and Mrs Snyman’s son in reliance on Cutman as a main business, appeared to have been on the basis of Cutman having two main businesses, namely La Rotunda Café and Styleworx. The Tribunal noted that Cutman sold La Rotunda Café prior to 7 December 2012, being the beginning of the 12 month period relevant to Mr and Mrs Snyman’s application.

27    The Tribunal did not consider it incumbent on the Queensland State Government to assess Mr and Mrs Snyman’s number of main businesses in assessing whether or not to nominate them for the visa. It noted that such a decision is one made by the Department. Consequently, the Tribunal appeared to treat the State Government’s nomination of Mr and Mrs Snyman on the basis of having four businesses as inconclusive.

28    Even if, as was submitted by Mr and Mrs Snyman, Cutman’s activities were regular, ongoing and of benefit to Australia, the Tribunal did not consider that to mean Cutman was “one main business”.

29    The Tribunal held that Mr Snyman could not rely on the consolidated financial statements of Cutman to meet the requirements of cl 892.212(c), as Cutman did not fall within the definition of a qualifying business nor, therefore, of a main business. The Tribunal found the financial statements of Cutman to in effect be a consolidation of the activities of the four businesses. Consequently, it considered Cutman to be the “interposed legal entity that owned the four businesses, rather than an enterprise that operated for profit through the provision of goods or services”.

30    The Tribunal noted it was open to Mr Snyman to nominate up to two of his four businesses as main businesses. On the evidence, the Tribunal held that Cutman did not own Fitzsimmons for the entire relevant 12 month period. It also considered it was unclear what the individual turnovers or the value of Mr Snyman’s director loans in each of the four businesses was.

31    At the hearing on 22 April 2015, the Tribunal indicated that it had insufficient evidence to calculate whether one or more combinations of up to two of the four businesses could meet the visa criteria, and invited Mr Snyman to provide evidence in this regard. The Tribunal noted that Mr and Mrs Snyman’s post hearing submission dated 29 April 2015, and received on 5 May 2015, was silent as to the issue.

32    For those reasons, the Tribunal was not satisfied that the net value of Mr Snyman’s assets in his business or businesses for the relevant 12 month period was not less than $75,000, meaning that he did not meet the requirements of cl 892.212(c).

33    Being satisfied Mrs Snyman was a member of Mr Snyman’s family, and having affirmed the decision in respect of him, the Tribunal held that Mrs Snyman was unable to meet the secondary criteria, and so affirmed the delegate’s decision in respect of Mrs Snyman.

34    The Tribunal decided not to refer the matter for consideration by the Minister pursuant to s 351 of the Act, which allows the Minister to substitute a decision of the Tribunal with another decision that is more favourable to an applicant, if the Minister thinks that it is in the public interest to do so. The Tribunal did so despite the sympathy it expressed for the circumstances of Mr and Mrs Snyman, and its acceptance of Mr Snyman’s evidence that he would have structured his businesses differently had he received better advice with regard to relying on one ABN to make Cutman a single main business. The Tribunal noted that it was open to Mr and Mrs Snyman to make a request directly to the Minister.

JUDICIAL REVIEW IN THE FEDERAL CIRCUIT COURT OF AUSTRALIA

35    Mr and Mrs Snyman, as noted above, then applied for judicial review in the Federal Circuit Court on the basis that the Tribunal “misinterpreted the application; and or misapplied the law to the facts; and or took account an irrelevant consideration”. They asserted four particularised grounds on which the Tribunal committed jurisdictional error:

(a)     by finding that Cutman (operating as Styleworx, Fitzsimmons, Status Engine Monitoring Systems and Vortik Fusion) was not one main business; and or

(b)     by finding Styleworx, Fitzsimmons, Status Engine Monitoring Systems and Vortik Fusion was not collectively one undertaking or enterprise in which the First Applicant held an ownership interest via his shareholding in Cutman, and relevant for the purposes of the ‘main business’ criterion referred to in subclause 892.212(c); and or

(c)     by relying on information relating to businesses on the ASIC website and the Australian Business Registrar to exclude the possibility that Styleworx, Fitzsimmons, Status Engine Monitoring Systems and Vortik Fusion was one enterprise in which the First Applicant had an ownership interest via his shareholding in Cutman, when that information was not relevant to the ‘main business’ finding required by subclause 892.212(c); and

(d)     by finding that subclause 892.212(c) was not satisfied.

(As in original.)

36    The primary judge delivered judgment on 19 October 2015.

37    His Honour found that the Tribunal failed to correctly apply the statutory criteria in its review, and so committed jurisdictional error.

38    His Honour considered that the Tribunal’s repeated reference to “one main business” evinced a departure from the statutory criteria. Having identified cl 892.212(c) as the key issue to be determined, the Tribunal posed the question “Does the First-named Applicant Have One Business or Four Businesses?”, which it considered relevant to the definition of “main business” and “qualifying business”. His Honour considered this focus on the concept of one business or “one main business” was not correct. Further, in summarising the definition of “main business” in reg 1.11, he considered the Tribunal departed from the statutory language of “a business is a main business”. His Honour considered that the Tribunal’s continued focus on “one main business” rather than “a main business” failed to correctly identify the issue: namely, whether the four businesses owned by Cutman were a main business within the meaning of reg 1.11.

39    His Honour noted that, in concluding that Mr and Mrs Snyman could not rely on all four businesses, the Tribunal assumed that reg 1.11(2) applied in respect of the four businesses. In his Honour’s view, reg 1.11(2) did not apply to the same ownership interest and, on the facts, Mr Snyman’s sole ownership interest was the shareholding in Cutman, which was operating the four business activities. Consequently, in considering that he must not nominate more than two businesses as a main business where the same ownership interest was concerned, the Tribunal wrongly assumed there was no main business.

40    To the extent the Tribunal assumed that the application of the criteria in reg 1.11 must be mutually exclusive of either four separate businesses or “one main business”, his Honour held the Tribunal was in error.

41    His Honour held that the information on the ASIC and Australian Business Registrar websites that the Tribunal relied on was clearly relevant. However, his Honour considered that the conclusion reached in reliance on that information, namely, that the use of the same ABN was not persuasive on the issue of whether Cutman was “one main business”, erroneously repeated the assumption that a main business must be mutually exclusive of other business activities.

42    The same erroneous approach was further held by his Honour to have caused the Tribunal’s conclusion that Cutman was not carrying on an enterprise operated for profit through the provision of goods and services.

43    His Honour further considered there to be force in Mr and Mrs Snyman’s contention that, pursuant to the reasoning in Nassif at [30], if it was intended that a legal entity operating a number of commercial activities was to be excluded from being a main business, the regulation could easily have said so. The Tribunal’s conclusion as to the irrelevance of Nassif was considered to be premised on its failure to identify the correct issue.

44    In those circumstances, his Honour considered it was clearly open to the Tribunal, correctly applying the criteria under cl 892.212 and reg 1.11, to find that Cutman was operating a main business.

APPEAL TO THIS COURT

45    The Minister’s notice of appeal filed 9 November 2015 identifies one ground of appeal, namely, that the “Court below erred in finding that the Tribunal misconstrued, or misapplied, regulation 1.11 of the Migration Regulations 1994 (Cth)”.

46    The Minister’s submissions assert that the primary judge identified three errors in the approach taken by the Tribunal:

(1)    The primary judge repeatedly said that the Tribunal erred by characterising the issue as whether Cutman operated “one main business” instead of “a main business”. This was said to be a deflection from the statutory criteria. It would appear his Honour’s concern was that the Tribunal approached the question on the basis that the question was whether Cutman operated four businesses or one business. On his Honour’s approach, the issue was not binary – that is, the Tribunal failed to consider whether it was possible that Cutman was a main business as well as the owner of the four separate enterprises that were also main businesses.

(2)    It was held that the Tribunal misconstrued reg 1.11(2) because that sub-regulation had no application in a case where there was a single “ownership interest” (for example, a shareholding in a single company operating multiple enterprises).

(3)    It was said that the Tribunal was clearly wrong to say that Cutman was not an entity that was carrying on an enterprise operated for profit through the provision of goods and services.

47    With regard to the first error identified by the primary judge, the Minister submits that, in circumstances where Mr and Mrs Snyman argued that Cutman operated a single main business, the question to be determined on the facts was whether there were four businesses or a single main business. Consequently, the Minister submits, the Tribunal’s repeated reference to “one main business” answered this factual question.

48    To the extent the primary judge seemed to consider that the operations of Styleworx, Fitzsimmons, SEMS and Vortik could simultaneously be characterised as individual enterprises and operations of Cutman, the Minister contends that the primary judge’s approach was contrary to the statutory scheme. In doing so, the Minister notes the distinction between a business and the entity that carries on the business in both reg 1.11 and the definition of “ownership interest” in s 134(10) of the Act.

49    The Minister notes that there was no evidence that Cutman performed any business functions separate to those four operations, apart from their consolidated accounting. He contends that Cutman’s accounting function could not, of itself, qualify as a “business” because it did not involve the supply of goods and/or services to the public, as required by reg 1.03. The Minister therefore submits that the Tribunal correctly addressed the issue in terms of whether the four enterprises constituted a single business.

50    Finally, with regard to the first identified error, the Minister submits that the primary judge misunderstood the effect of Branson J’s finding in Nassif, at [34], that the reference to “a business” in the definition of “ownership interest” in s 134(10) of the Act indicated that a business could be conducted by more than one entity. The Minister says that, in circumstances where Mr and Mrs Snyman contended that the four operations of Cutman were a single business, it does not follow that the Tribunal’s characterisation of the issue as whether there was “one main business” was in error.

51    The Minister cites this Court’s decision in SZGIZ v Minister for Immigration and Citizenship (2013) 212 FCR 235; [2013] FCAFC 71 at [30], as authority for the proposition that reg 1.11(2) should be construed by “reading into” the text the definition of “ownership interest” in reg 1.03, making adjustments for any consequential “linguistic, logical or grammatical infelicities”. Pursuant to this approach, the Minister asserts that reg 1.11(2) should be read as follows:

If an applicant has, or has had [an interest in the business as a shareholder in a company that carries on the business] in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses.

52    On this approach, the Minister contends that reg 1.11(2) has the effect that, where a visa applicant has ownership interests in more than one qualifying business, he or she can only nominate two businesses as main businesses, regardless of whether the businesses are operated by different entities or the same entities. That is, reg 1.11(2) operates where a visa applicant has an interest or interests in more than one business, and does not depend on whether there is more than one ownership interest.

53    Consequently, the Minister says that the second error identified by the primary judge erroneously conflates the distinction between a business and the entity conducting the business. Further, contrary to the primary judge’s finding at [22], the Minister contends that reg 1.11(2) does not expand the category of ownership interests capable of satisfying the statutory criteria, but instead limits the visa applicant to relying upon a maximum of two businesses.

54    As to the third error identified by the primary judge, the Minister argues that the primary judge’s finding, at [44], that the Tribunal was “clearly wrong to say that Cutman was not an entity that was carrying on an enterprise operated for profit through the provision of goods and services”, misstates the Tribunal’s conclusions.

55    The Minister notes that, at [22], the Tribunal in fact held that “Cutman itself is not an enterprise that is operated for profit through providing goods and services” (emphasis in original submission). He contends that the Tribunal’s use of the term “enterprise” is important where, in this context, it is synonymous with the term “business”. Consequently, in the absence of evidence that Cutman performed any business operations separate to Styleworx, Fitzsimmons, SEMS and Vortik, it was open to the Tribunal to find that Cutman was not itself an enterprise or business. The Minister submits that this finding is consistent with the distinction between a business and the entity that conducts the business in existing authorities.

56    In their submissions, Mr and Mrs Snyman submit that the primary judge in fact identified two errors in the approach taken by the Tribunal:

(1)    The Tribunal erred by proceeding on the basis that a main business could not engage in more than one business activity, as this did not reflect the statutory definition of “main business” in reg 1.11.

(2)    The Tribunal failed to apply applicable law by not applying the Court’s reasoning in Nassif.

57    With regard to the first error, they submit that the primary judge, in reaching this conclusion, carefully examined the relevant legislation, authorities, evidence, and the Tribunal’s decision.

58    They attempt to rebut the Minister’s submission that the primary judge’s conclusions were “contrary to the statutory scheme” on four grounds.

59    First, Mr and Mrs Snyman contend that the Minister did not accurately summarise the primary judge’s reasoning in his alleged submission that the primary judge required the Tribunal to have considered the possibility that four separate main businesses were also “one main business”. Instead, they submit that the primary judge required the Tribunal to have considered whether Cutman was a “main business” that engaged in four business activities.

60    Secondly, they submit that it is not correct to say that the primary judge’s reasoning is contrary to the legislative scheme in circumstances where the scheme contains no suggestion that a main business cannot engage in more than one business activity or that each business activity is to be treated as a business.

61    Thirdly, Mr and Mrs Snyman argue that, contrary to “common experience”, the Minister’s argument reflects a limited view of how a business operates and the possible range of activities a business might engage in as part of its enterprise. Consequently, they contend, there is no inherent reason why a business engaged in multiple activities should be regarded as multiple businesses rather than a single enterprise.

62    Finally, with regard to the Minister’s submission that the primary judge’s conclusions were “contrary to the statutory scheme”, they submit that existing authority suggests that the definition of a “main business” in reg 1.11 is a broad concept and requires careful examination as to the particular circumstances of the business in question, rather than the application of an assumption that separate business activities denote separate main businesses. In this regard, they cite Branson J’s reasoning in Nassif at [28]-[34].

63    Accordingly, Mr and Mrs Snyman submit there is no apparent error in the primary judge’s conclusion that the Tribunal adopted an erroneous assumption in purporting to apply reg 1.11.

64    They further submit that the three errors the Minister alleges the primary judge identified in the Tribunal’s decision are related to limited aspects of the primary judge’s reasoning, rather than the “more substantive errors” that the primary judge identified.

65    With regard to the first alleged error, they contend that the primary judge’s finding that the Tribunal erred by characterising the issue as whether Cutman operated “one main business” or “a main business”, merely supported the “more substantive” error identified. Namely, the Tribunal’s assumption that Cutman was not a main business because it engaged in four business activities.

66    Mr and Mrs Snyman submit that the second alleged error concerns a minor, discrete issue and does not affect the “validity” of the primary judge’s substantive reasoning. Further, they submit that the primary judge found the imposition of the requirement in reg 1.11(2), that no more than two main businesses be nominated, was erroneous because it wrongly assumed there was not a main business in the present case. Put another way, the error identified by the primary judge was the adoption of this wrongful assumption. Consequently, they submit that the primary judge did not conflate the distinction between a business and the entity conducting the business, as alleged by the Minister.

67    Finally, they contend that the primary judge’s summary of the Tribunal’s conclusion was accurate and not, as alleged, misstated. Even if the Minister’s submission in this regard were correct, they submit that this would not gainsay the primary judge’s substantive finding that the Tribunal erred by adopting an assumption that revealed a misconstruction of the applicable law.

Consideration

68    In most respects, at the hearing of the appeal, the issue in contention between the parties, as pursued by counsel for the parties, was whether the Tribunal had regarded relevant evidence and, having regard to the merits of the application, formed the conclusion that there were four individual businesses and not a single main business comprised of a number of separate activities or ventures.

69    Counsel for Mr and Mrs Snyman, for example, commenced his oral submissions by drawing attention to the business activity statements (BAS) of Cutman and the fact that reporting was done on a consolidated basis for all business activities operated by the company, which were before the Tribunal. He made the point that there was no distinction, apart from having the same ABN, in respect of the reporting of profit and loss and the payment of GST. He emphasised that the financial statements of Cutman were provided to the delegate in the first instance and were before the Tribunal.

70    Counsel sought to emphasise that the profit and loss statement was also prepared on a consolidated basis so that the profit from trading across various business activities was reported singularly and the expenditure was likewise set out in that manner.

71    He further drew attention to the balance sheet of Cutman in which stock on hand was separated out within the current assets, and trade debtors were reported on together.

72    He also noted that two cheque accounts were identified.

73    In summary, he submitted that, by and large, the assets and liabilities of Cutman were identified on a consolidated basis for the company.

74    So far as the management of Cutman was concerned, counsel drew attention to the fact that Mr Snyman and his son, Rudi Snyman, were jointly responsible for the strategic management of the various business activities operated by the company and that Mr Snyman had stated that he acted as the financial manager in relation to all business activities. In other words, the business of Cutman, counsel submitted, was centrally managed. The evidence did not disclose that there was a separate running of each business necessarily.

75    Consequently, counsel for Mr and Mrs Snyman submitted that there was more before the Tribunal than merely the use by the different business enterprises of the single company ABN and consolidated accounts.

76    Counsel thereby submitted that a very distinct submission was put to the Tribunal that there was a business enterprise that conducted a number of different business activities. When pressed, counsel submitted that the single undertaking of Cutman was one that engaged in multiple business activities for the generation of profit for its shareholders. Thus, it should have been regarded as one undertaking.

77    Counsel submitted that in order to resolve whether there were one or four enterprises, one would need to descend to this level of detail, but there is no suggestion, having regard to its reasons, that that is what the Tribunal did here.

78    Instead, counsel submitted, when properly analysed, the decision of the Tribunal shows the Tribunal assumed that the different business activities were all separate businesses for the purposes of cl 892.212 in this matter. He submitted, for example, that the Tribunal nowhere used the word “activity” in its reasons. Counsel submitted that the reasons for judgment of the primary judge were based on that same appreciation, namely, that the Tribunal had, in effect, failed to regard the evidence going to the primary factual question to be determined before it, that is, whether in light of the evidence there were a number of business activities conducted by Cutman as one single business or enterprise, and assumed one ABN could not facilitate four separate businesses for cl 892.212 purposes.

79    Counsel for the Minister submitted, however, that when properly analysed, without an eye finely attuned to error, it was apparent that the Tribunal made no such assumption and did regard the evidence to which Mr and Mrs Snyman referred, including about the consolidated accounts prepared by Cutman and the evidence of Mr Snyman’s management role, but as a matter of fact concluded that there were four businesses operated by Cutman, not a single main business; and in the light of that finding – which cannot be faulted on judicial review, because it was one fairly open to the decision-maker – it was not open to the primary judge to reverse that finding of fact.

80    It is appropriate then to consider more closely the detailed decision-making of the Tribunal, an outline of which has been provided above.

81    In [3] of the reasons for decision, the Tribunal stated that the migration agent, who assisted Mr and Mrs Snyman with the visa application, submitted that “because all of the businesses are owned by Cutman and use the same ABN, Cutman should be considered one main business”. This suggests that the Tribunal was invited to focus simply on an argument that because there was only one ABN, there could only be the one main business; or that the Tribunal saw the issue in these terms.

82    At [4], the Tribunal noted that it received oral evidence from Mr and Mrs Snyman and their son, Rudi Snyman. This clearly permits an inference to be drawn that the Tribunal regarded the evidence to which Mr and Mrs Snyman then drew attention, and that the question to be determined was not just whether a number of businesses could exist and operate under the same ABN.

83    Immediately before [10], the Tribunal asked the question, “Does the first named applicant have one business or four business?”; which plainly suggests the Tribunal was intending to ask the question the parties say is central.

84    At [10], the Tribunal said this question was important because of the definitions of “main business” and “qualifying business” in the Regulations (which have been set out above at [5] and [7]). The definition of “qualifying business” in turn refers to “an enterprise” operated for profit in the circumstances described.

85    The Tribunal, at [11], said that reg 1.11(2) restricted Mr and Mrs Snyman to nominating no more than two qualifying businesses as main businesses to satisfy the criteria for this visa category. Regulation 1.11(2) provides:

(2)    If an applicant has, or has had, an ownership interest in more than 1 qualifying business that would, except for this subregulation, be a main business in relation to the applicant, the applicant must not nominate more than 2 of those qualifying businesses as main businesses.

86    The Tribunal then, at [12] and [13], referred to the meaning of “ownership interest”; and the definition of a “qualifying business” which, accurately, included the requirement that a business operate for the purpose of making a profit through the provision of goods and/or services and is not a speculative or passive investment.

87    At [14], the Tribunal stated:

The applicants contend they are entitled to consider all four businesses owned by Cutman as one main business. Before the Delegate, they argued this is because the four businesses are operated under the same ABN, issued to Cutman. The Tribunal put to the applicants at the hearing it appeared to the Tribunal that they may only nominate two of their four businesses to be main businesses to satisfy the visa criteria. They may not rely on all four businesses.

88    By this statement it may be argued that the Tribunal assumed there were four separate businesses, and the real question was simply whether they were, in a sense, converted into a “main business”, as described in reg 1.11, if operating under the single ABN. On the other hand, the statement may be said to indicate that the parties accepted there were four separate businesses, and the only question was whether, because they all utilised a common ABN, this resulted in there being but a single main business.

89    But going on, the Tribunal noted, at [15], that Mr Snyman told the Tribunal that, had he received better advice, he would have structured things differently for his business. The Tribunal recounted how it had been Mr Snyman’s initial intention to rely primarily on SEMS as his main business, but it had taken longer than he had planned for it to grow in Australia, having initially developed it in South Africa. It was for that reason, concerned about achieving sufficient turnover to meet the criteria in cl 892.213, that Mr Snyman had purchased Fitzsimmons, but Fitzsimmons had dominated his time making it even harder to grow SEMS.

90    At [16], the Tribunal noted that, at the hearing, Mr and Mrs Snyman’s migration agent submitted that it had appeared from the correspondence that the delegate in July 2014 was “willing to accept Cutman as one main business”. But the Tribunal observed that, in its view, there was “still an issue as to whether applicants had four main businesses, not one”. This statement indicates it was still a live issue for the Tribunal whether, the ABN aside, there were four separate businesses, or one main business. The Tribunal added:

The Tribunal was mindful there were situations where perhaps it was arguable four separate businesses could be considered one main business. It gave the example of a company owning four hairdressers at four different locations, which all operated under the same name and business system. However, in the circumstances of the applicants, they had four very different, very individual businesses.

[Emphasis added.]

91    At [17], the Tribunal then said that it had discussed with Mr and Mrs Snyman that it had reviewed the frequently asked questions pages of the websites of ASIC and the Australian Business Register, which conveyed that it was “permissible for a company to own more than one business and is permissible for more than one business to operate under the same ABN”. The Tribunal said that, having regard to that information, it did not consider the argument regarding the ABN to be persuasive that Cutman was one main business.

92    At [18], the Tribunal added that it had discussed with Mr and Mrs Snyman too that there were definitions of “main business” and “qualifying business” in the Regulations, but no definition of the word “business”. It stated that other case law identified indicators of a business to include continuity and repetition of trading activity over a reasonable period as a relevant consideration in determining whether an entity is a “business” in the sense of a going concern.

93    Then, at [19], the Tribunal set out in detail the various aspects of the submission made by the migration agent for Mr and Mrs Snyman, that it was not only the preferable position, but also the correct position under the law, that Cutman was one main business. Those submissions included the following propositions:

(a)    That the delegate had indicated a willingness to consider Cutman as one main business.

(b)    That the delegate had referred to departmental policy regarding accepting interrelated companies as being one main business.

(c)    That the case of Nassif (to which the parties’ submissions above relate) had drawn attention to the use of the expression “a business” not “the business” in the definition of “ownership interest” in s l34(10) of the Act. Thus it should be seen the legislature did not intend to limit the definition to a single entity and supported the view that different ventures conducted under the same ABN could be used to satisfy cl 892.211 of the Regulations.

(d)    The policy advice on the calculation of an owner's equity on director loans and the absence of explicit policy on using multiple ventures under the same ABN meant that it was intended to be permissible.

(e)    Rudi Snyman was granted a Business Skills (Residence) (Class DF) Subclass 892 visa relying on Cutman as his main business.

(f)    Mr and Mrs Snyman were nominated by the Queensland State Government on the basis of having four businesses.

(g)    The activities of Cutman were “regular, ongoing and of benefit to Australia”.

94    The Tribunal in identifying each of these propositions responded to and rejected each as supporting the conclusion that there was only one “business”.

95    In dealing with para (d) of [19], the Tribunal stated that the determinative issue before it was “how many main businesses the first named applicant has”.

96    Then the Tribunal, at [20], accepted that all “four businesses” were owned by Cutman and operated using the same ABN. It accepted that each was a qualifying business given that it was profit driven and provided goods and services and was neither a passive nor a speculative investment.

97    The Tribunal, at [21], stated:

In reaching its finding, the Tribunal is mindful of the four businesses operating under the same ABN, but on the basis of the information on the ASIC and ABR websites that a company may own more than one business and more than one business may operate under the same ABN, the Tribunal is not persuaded the use of one ABN makes Cutman a main business. For the same reasons, the Tribunal does not consider relevant any departmental policy which equates the identity of a main business to a single ABN. Whether or not a business is a main business or a qualifying business is a question answered by applying the circumstances of the Cutman to the definition of main business and qualifying business in the regulations.

[Emphasis added.]

98    At [22], the Tribunal found that:

    the financial statements of Cutman for the relevant period were in effect a consolidation of the activities of the four businesses;

    “Cutman itself is not an enterprise that is operated for profit through providing goods or services”;

    Cutman “is the interposed legal entity which owns the four businesses”. For that reason it was not a qualifying business and it followed it was not a main business;

    Cutman therefore could not rely on the consolidated financial statements to meet the requirements of cl 892.212(c).

99    The Tribunal, at [23], said it was open to Mr Snyman to nominate up to two of his four businesses as his main businesses. The Tribunal made the point that from the evidence available, Cutman did not own Fitzsimmons for the entire 12 month period, so ultimately the applicant did not provide evidence to demonstrate that he was able to meet the requirements of all of (a) and (b) of cl 892.212 or cl 892.213 (regarding turnover).

100    In my view, the Tribunal, reading its reasons as a whole and fairly, without an eye tuned to error, actually did decide, as a matter of fact, that there were four discrete businesses operated by Cutman, and thereby rejected Mr and Mrs Snyman’s competing submission that the businesses should be viewed as separate “activities” that were part of a main business operated by Cutman. The Tribunal’s process of reasoning set out above shows that the Tribunal considered “the circumstances” of the company, being the fact that the four activities were “very different, very individual businesses”. In the result, the consolidated statements did not compel a different finding. It should not be overlooked, in its process of analysis, that the Tribunal itself referred to Mr Snyman’s explanation as to the circumstances in which he acquired the business of Fitzsimmons. He did so because of the concern expressed in [15] of the Tribunal’s reasons, that that was necessary to meet the turnover criteria in cl 892.213. While that proposition on its own does not deny the possibility of there being a single main business operated by Cutman, the fact that a very particular business was acquired in order to help meet the turnover requirement, is another factor that was plainly before the Tribunal.

101    While counsel for Mr and Mrs Snyman submits that the example given by the Tribunal, at [16], of “four separate businesses” being considered “one main business” – four hairdressers at four different locations operated by a company under the one ABN – suggests the Tribunal simply did not countenance any other examples, in my view the use of the example highlights the fact that the Tribunal in fact did regard the question put before it, namely whether the particular activities of Cutman should be construed as separate businesses for the purposes of the question to be decided, or as indicating the operation of a single main business. Instead, the Tribunal considered the differences to be persuasive, and the common ABN and consolidated accounts not determinative of the issue.

102    In my view, the Tribunal considered that question of fact and rejected the submissions to the contrary made on behalf of Mr and Mrs Snyman.

103    In those circumstances, I do not consider that it was open to the primary judge to find that the Tribunal had misconstrued the relevant statutory criteria.

104    Despite the careful endeavour of counsel for Mr and Mrs Snyman to explain how the primary judge had reasonably detected error in the decision of the Tribunal, I am satisfied the primary judge erred in his analysis of the statutory scheme and construction of relevant provisions and, in particular, overlooked the finding of fact made by the Tribunal.

105    I accept the submissions made on the behalf of the Minister that the three errors that the primary judge considered the Tribunal made, cannot be sustained.

106    The three errors identified are:

(1)    The Tribunal had erred by characterising the issue as whether Cutman operated “one main business” instead of “a main business”.

(2)    The Tribunal misconstrued reg 1.11(2) because it had no application in a case where there was a “single ownership interest”, such as a shareholding in a single company operating multiple enterprises.

(3)    The Tribunal was clearly wrong to say that Cutman was not itself an enterprise that was operated for profit through providing goods and services to the public.

107    As to the first stated error, the Tribunal found, as a matter of fact, that there were four businesses, not a single main business, and so the Tribunal did not make any relevant error.

108    I also accept the Minister’s submission that in Nassif, at [34], the reference to “a business” in the definition of “ownership interest” in s 134(10) of the Act, upon which the primary judge placed emphasis, indicated that a business could be conducted by more than one entity, and so the reasoning of the primary judge concerning the difference between “a” business and “the” business in that regard did not fully acknowledge the particular factual and statutory context in which Branson J made her finding in that paragraph.

109    I accept the Minister’s submission too that, in circumstances where Mr and Mrs Snyman contended that the four activities of Cutman were a main business, it does not follow that the Tribunal’s characterisation of the issue as whether there was “one main business” was, in the circumstances, an error.

110    I also accept the Minister’s submission that reg 1.11(2) should be construed so that, where a visa applicant has ownership interests in more than one qualifying business, he or she can only nominate two businesses as main businesses, regardless of whether the businesses are operated by different entities or the same entity.

111    I accept, as a result, the Minister’s submission that the second error identified by the primary judge erroneously conflates the distinction between a business and the entity conducting the business and that, contrary to the primary judge’s finding at [22], reg 1.11(2) does not expand the category of ownership interests capable of satisfying the statutory criteria, but instead limits the visa applicant to rely upon a maximum of two businesses.

112    I also consider, in relation to the third error identified by the primary judge, that on a fair reading of the Tribunal’s reasons as a whole, the Tribunal’s statement that Cutman itself was not carrying on an enterprise operated for profit through the provision of goods and services, has the effect of misstating the Tribunal’s conclusions. What the Tribunal in fact held was that “Cutman itself is not an enterprise that is operated for profit through providing goods and services” (emphasis supplied). In circumstances where it was not unreasonable for the Tribunal to find that the individual activities were each a separate business, it was open to the Tribunal to express its conclusions in terms that the company, Cutman, was not itself an enterprise operated for profit. While perhaps imprecise legally, the Tribunal was simply making the point that while each of the four businesses used Cutman’s ABN to carry on business, that fact did not lead to the conclusion, or alter the finding, on the material before the Tribunal, that there were four businesses for the purposes of the review application, not one main business.

Conclusion and orders

113    For these reasons, the appeal should be allowed.

114    The following orders should be made:

(1)    The appeal be allowed.

(2)    The orders of the Federal Circuit Court be set aside and, in their place, the following orders made:

(a)    the application be dismissed; and

(b)    the applicants pay the first respondent’s costs fixed in the sum of $6,825 (being the amount prescribed in Sch 1 to the Federal Circuit Court Rules 2001 (Cth)).

(3)    The first and second respondents pay the costs of the appeal, to be taxed if not agreed.

Associate:

Dated:    11 March 2016