Snyman v Minister for Immigration
[2015] FCCA 2791
•19 October 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SNYMAN & ANOR v MINISTER FOR IMMIGRATION & ANOR | [2015] FCCA 2791 |
| Catchwords: MIGRATION – Administrative Appeals Tribunal (Migration and Refugees Division) – Business Skilled (Residence) (Class DF) visa – whether the Tribunal failed to apply the correct test to the definition of ‘main business’ – jurisdictional error – application allowed. |
| Legislation: Migration Act 1958 (Cth), ss.134(10), 476 Migration Regulations 1994, r.1.11, cl.892.212(c) |
| Liang v Minister for Immigration and Citizenship (2009) 175 FCR 184 Nassif v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 129 FCR 448 |
| First Applicant: | GERT CHRISTOFFEL SNYMAN |
| Second Applicant: | MARALANE MARIA SNYMAN |
| First Respondent: | MINISTER FOR IMMIGRATION & BORDER PROTECTION |
| Second Respondent: | ADMINISTRATIVE APPEALS TRIBUNAL |
| File Number: | SYG 1519 of 2015 |
| Judgment of: | Judge Street |
| Hearing date: | 13 October 2015 |
| Date of Last Submission: | 13 October 2015 |
| Delivered at: | Sydney |
| Delivered on: | 19 October 2015 |
REPRESENTATION
| Solicitors for the Applicants: | Mr N. Dobbie Dobbie and Devine Immigration Lawyers Pty Ltd |
| Counsel for the First Respondent: | Mr P. Knowles |
| Solicitors for the First Respondent: | Australian Government Solicitors |
ORDERS
A writ of certiorari is issued calling up the record of the Tribunal and the decision of the Tribunal dated 12 May 2015 is quashed.
A writ of mandamus is directed to the second respondent to determine the applicant's application for a review according to law.
The first respondent to the pay the applicant's costs fixed in the amount of $6825.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1519 of 2015
| GERT CHRISTOFFEL SNYMAN |
First Applicant
| MARALANE MARIA SNYMAN |
Second Applicant
And
| MINISTER FOR IMMIGRATION & BORDER PROTECTION |
First Respondent
| ADMINISTRATIVE APPEALS TRIBUNAL |
Second Respondent
REASONS FOR JUDGMENT
This is an application for a Constitutional writ in respect of a decision of the Tribunal made on 12 May 2015 affirming a decision of the delegate not to grant the applicant a Business Skilled (Residence) Class DF visa. In the application initially lodged the first applicant contended that he had net assets that met the requirements for the grant of the visa through a corporate entity, Cutman Pty Ltd, being a 50 percent shareholder in that entity and the other shareholder being his son.
The first applicant identified that that entity carried on four different business activities, one being Christof's Hair Salon, now known as Styleworx, providing hairdressing services, the second being Vortik Fusion carrying on a business of supplying alcohol, the third being Status Engine Monitoring Systems which provided certain equipment in relation to monitoring systems, and the fourth being Fitzsimmons Meats, being a butcher's business.
All four business activities were conducted through and operated by the same entity albeit, for the purpose of the requirements under the regulations one of the enterprises, being Fitzsimmons Meats, only commenced its activity approximately six months before the application for the visa. The corporate entity prepared consolidated accounts for the four businesses it was running, all using the same ABN in respect of which the corporate entity lodged its BAS on the basis of the consolidated businesses.
The first applicant initially contended however that two of the business activities or enterprises, being Status Engine Monitoring Systems and Fitzsimmons Meats, operated by the corporate entity met the requirements of the regulations. However, due to the position of Fitzsimmons Meats only having been acquired six months before the application this enterprise could not satisfy the regulatory criteria. The value of Status Engine Monitoring Systems alone was insufficient to meet the statutory requirements. The first applicant contended before the delegate that the corporate entity conducted a main business as reflected by the consolidated accounts and that this was a main business which met the regulatory requirements.
The grounds of the amended application are as follows:
1. The Tribunal misinterpreted the applicable law; and or misapplied the law to the facts; and or took into account an irrelevant consideration
Particulars
(i) The Applicants lodged an application for a Business Skills (Residence) (Class OF) subclass 892 visa application on 2 January 2014 ('the visa application'). A delegate of the First Respondent refused the visa application and the Applicants sought review at the Tribunal. The Tribunal affirmed the delegate's decision on 12 May 2015.
(ii) The Tribunal found that the First Applicant did not satisfy subclause 892.212(c) of Schedule 2 of the Migration Regulations 1994 ('the regulations'). Subclause 892.212(c) relevantly provided:
892.212
Unless the appropriate regional authority has determined that there are exceptional circumstances, the applicant meets at least 2 of the following requirements:
(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.
(iii) The First Applicant relied on his ownership interest in a company, Cutman Pty Ltd ('Cutman'), as the main business for the purposes of meeting subclause 892.212(c). Cutman operated as a hairdresser (trading name of Styleworx), a butchery (trading name of Fitzsimmons), an importer and manufacturer (trading name of Status Engine Monitoring Systems) and an alcoholic beverages retailer and wholesaler (trading name of Vortik Fusion). Styleworx, Fitzsimmons, Status Engine Monitoring Systems and Vortik Fusion all used one ABN, being that assigned to Gutman.
(iv) For the purposes of subclause 892.212(c), r1 .11 provided:
r1.11
Main business
(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 perfo1mance 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.
(v) In seeking to meet subclause 892.212(c), the effect of r1.11 (2) is that an applicant must not nominate more than two qualifying businesses as main businesses. Regulation 1.03 provided:
r1.03
qualifying business means 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.
(vi) The First Applicant sought to rely on Cutman, as an enterprise operating as Styleworx, Fitzsimmons, Status Engine Monitoring Systems and Vortik Fusion, under the one ABN, as being one main business.
(vii) The Tribunal, after referring to the ASIC website and the Australian Business Register, formed the opinion that Cutman was not one main business; and that Styleworx, Fitzsimmons, Status Engine Monitoring Systems and Vortik Fusion were each separate main businesses for the purposes of r1.11. Once the Tribunal found that Styleworx, Fitzsimmons, Status Engine Monitoring Systems and Vortik Fusion were each separate main businesses, it considered them as such against subclause 892.212(c) and found the First Applicant did not satisfy that subclause, such that clause 892.212 was not satisfied.
(viii) 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 had 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 Register 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.
Subclause 892.212(c) of the Migration Regulations 1994 relevantly provides:
892.212
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 peri od 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.
Regulation 1.11 defines "main business" as follows:
'main business' is defined in r.1.11:
1.11 (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 AUD 400000;
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 AUD 400000;
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 I 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.
"Qualifying business" is defined in reg.1.03 as follows:
'qualifying business' is defined in r.1.03:
qualifying business means an enterprise that:
(a) is operated for the purpose of making profit through the provision of goods, services or goods and services Cather 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.
"Ownership interest" is defined in reg.1.03 and s.134(10) as follows:
'ownership interest' is defined r.1.03 and s.134(10):
"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;
Clause 892.211 provides:
890.211 (1) The applicant has had, and continues to have, an ownership interest in 1 or more actively operating main businesses in Australia for at least 2 years immediately before the application is made.
(2) For each business to which subclause (i) applies:
(a) an Australian Business Number has been obtained; and
(b) all Business Activity Statements required by the Australian Taxation Office (the ATO) for the period mentioned in subclause (1) have been submitted to the ATO and have been included in the application
In Nassif v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 129 FCR 448 at [455] the Court said:
31 In Re Australian Industrial Relations Commission; Ex parte Australian Transport Officers Federation (1990) 171 CLR 216 at 226 Mason CJ, Gaudron and McHugh JJ observed:
“ … [o]f all words, the word ‘business’ is notorious for taking its colour and its content from its surroundings … ”
(Citation omitted.)
32 In the present case the most relevant aspect of the surroundings of the word “business” is the definition of “main business” contained in r 1.11 (at [5] above). To understand the nature of a business that can be a “main business” it is necessary to give consideration to the definitions contained in s 134(10) of the Act and r 1.03 respectively of “ownership interest” and “qualifying business” (at [6] and [7] above). Each of these expressions is used in r 1.11.
33 It is convenient to consider first the definition of “qualifying business”. This is because a “main business” in relation to an application for a visa must be a “qualifying business” (see r 1.11(1)(d)). It is significant, in my view, that a “qualifying business” is defined to mean an “enterprise” of a particular kind (at [7] above). Each of the Oxford English Dictionary and the Macquarie Dictionary confirms that “enterprise” is a word of general meaning which is broadly synonymous with “undertaking”. Had it been intended that an “enterprise” within the meaning of r 1.03 was to be limited to the commercial activities of a single legal entity, whether a natural person, a partnership or a company, one would have expected the regulation to say so.
34 The inference to be drawn from the use in the definition of “qualifying business” of the word “enterprise” is strengthened by the use in the s 134(10) definition of “ownership interest” of the indefinite article in respect of the words “company” and “partnership” (at [6] above). It seems plainly to be intended that an “ownership interest” in relation to a business can derive from, for example, a shareholding in a company that carries on the business together with another entity. Were it not so intended, para (a) of the s 134(10) definition would presumably read: “a shareholder in the company that carries on the business.”
35 I conclude that it is not a necessary characteristic of a “main business” for the purpose of the criterion specified by cl 845.215 that the business be carried on by a single entity. I do not understand the respondent to have contended that, as a matter off construction of cl 845.215, a “main business” may not extend beyond the commercial activity of a single entity. Rather, as I understood the case of the respondent, it was argued that, by completing form 1138 in the way in which he did (at [12] above), the applicant limited his claim to be entitled to the business visa to a claim based on his interest in Holdmark. To this extent the respondent supported the approach adopted by the Tribunal.
In Liang v Minister for Immigration and Citizenship (2009) 175 FCR 184 at [193] the Court said:
29 The appellant also advanced the argument that the Tribunal's conclusion that, at the time of the application, GNI operated, as nominated, two “main businesses”, was erroneous, because those businesses “are in fact the same business”.
30 There was no error in the way in which the learned federal magistrate approached the meaning of the word “business” and its reach. As did Branson J in Nassif 129 FCR at 454-455), I gain assistance as to the meaning the word from standard dictionaries. The word undoubtedly has chameleon like qualities, taking its meaning from the context in which it is used. In both the Oxford English Dictionary and the Macquarie Dictionary the meaning of the word “business”, when used in a commercial sense, is “enterprise”. That is the sense in which it is used in the terms “main business” and “qualifying business” in the Regulations. That this is so is reinforced by its being treated, in the definition of “qualifying business”, as a synonym for “enterprise”.
31 So construed, there is nothing about the meaning of the word “business” as used in the context of the Regulations which carries with it the necessary corollary that a legal entity can only ever, on its true meaning, have or conduct but one “business”. Such a construction of the word “business” accords with common experience. It is by no means unusual for a legal entity to cease one particular field of commercial endeavour by the disposal of what is aptly termed a “business” without ceasing altogether to trade.
32 Given this meaning of the word, whether or not GNI had one or two “main businesses” was nothing more than a question of fact and one for the Tribunal alone. The learned federal magistrate well appreciated this (reasons for judgment, [44]). It is certainly not one this Court on subsequent appeal.
The delegate was prepared to treat the corporate entity as conducting a main business but found the evidence was insufficient to support the net value for the assets as required by the regulations. The Tribunal said in para.7:
7. The issue in the present case is whether the applicants can rely on Cutman as one main business for the purpose of satisfying cl.892.212(c), which requires the net value of the assets of the first named applicant in his main business was at least $75,000 for the period of 12 months immediately prior to the date of the visa application.
The language of ‘one main business’ appears to be that of the Tribunal and is a deflection on the correct criteria. The Tribunal noted that the applicant must meet two of the three alternative requirements in cl.892.212. In order to meet the requirements of cl.892.212 as a whole the Tribunal relevantly said:
9. It is not in question that the Queensland state government (as the appropriate regional authority) has not certified there are exceptional circumstances which would exempt the applicants from the need to satisfy cl.892.212. Therefore the first named applicant must satisfy two of the three alternate criteria in clause 892.212 in order to meet the requirements of cl.892.212 as a whole:
a. 892.212(a): It is not in question that the first named applicant has provided satisfactory evidence (pay records, identity documents) that he meets 892.212(a). Styleworx had the equivalent of more than one full-time Australian citizen or permanent resident employee for the relevant 12 month period. The Tribunal finds the first named applicant meets the requirements of cl.892.212(a).
b. 892.212(b): During the hearing, the first named applicant gave evidence that the net value of the personal and business assets of the first named applicant and the second named applicant in Australia during the relevant period did not amount to AUD$250,000. He explained the applicants had assets of that net value in Australia in December 2013, but not in December 2012. The Tribunal finds the first named applicant and/or the second named applicant did not have assets to the net value of AUD$250,000 in Australia for the relevant 12 month period. The Tribunal finds the first named applicant does not meet the requirements of cl.892.212(b).
c. 892.212(c): As noted above this is the key issue for the Tribunal to determine. Whether the net value of the assets of the first named applicant in his main business was at least $75,000 for the relevant period. It is not in question that the first named applicant is only able to demonstrate that net value of assets if he is permitted to rely on Cutman as one main business. The Tribunal considers this in more detail below.
The Tribunal identified that the key issue to determine was cl.892.212(c) and again made reference to the deflecting concept of ‘one main business’. The expression used in cl.892.212 refers to "the main business or main businesses in Australia". The Tribunal posed for itself the question as a heading "Does the First-named Applicant Have One Business or Four Businesses?" Under that heading the Tribunal then posited:
Whether the first named applicant has one business or four businesses is relevant to the definition of ‘main business’ and ‘qualifying business’.
This introduction in para.10 by the Tribunal suggests that the Tribunal understood its task as to determine whether there was one business or whether there were four businesses for the purpose of applying the definition of "main business" and "qualifying business". This focus by the Tribunal on the concept of one business or one main business was not correct. After referring to the definition of "main business" in reg.1.11, the Tribunal summarised the requirements as follows:
10. …Main business is defined in r.1.11, and the requirements include:
a. The first named applicant has an ‘ownership interest’ in the business;
b. The first named applicant has maintained a direct and continuous involvement in the management of the business from day to day and in making decisions affecting the overall direction and performance of the business;
c. The value of the ownership interest of the first named applicant and the second named applicant in the business was at least 10% of the total value of the business; and
d. The business is a ‘qualifying business’.
That summary by the Tribunal is a departure from the language of the definition of "main business" in reg.1.11. The definition in reg.1.11 materially refers to "a business is a main business". The departure from the Regulations means that the Tribunal did not focus on the correct issue. The Tribunal referred to the meaning of "ownership interest" and "qualifying business" and relevantly said:
14. 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.
The first sentence of para.14 does not correctly identify the case propounded by the applicants which the delegate accepted, namely, that the four businesses owned by Cutman were a main business. The Tribunal continued to focus on the concept of one main business rather than a main business. The Tribunal in the paragraph above referred to the ABN issued to Cutman that was operating those four businesses. The last sentence of para.14 identifies the Tribunal wrongly assuming that the applicants may only nominate two of their four businesses to be a main business.
That second last sentence of para.14 does not reflect a consideration of the correct issue of whether the four businesses operated by Cutman were a main business within the meaning of reg.1.11. Rather, the reasoning reflects an assumption by the Tribunal that the four businesses are each main businesses and that there is no other main business. That assumption deflects from the correct issue referred to above.
The Tribunal continued in that paragraph "they may not rely on all four businesses". That was a reference to the assumption by the Tribunal that reg.1.11(2) had application in respect of the four business activities operated by Cutman. That provision, reg.1.11(2), identifies that there may be an ownership interest in more than one qualifying business. The importance of that provision however is that, in relation to that ownership interest, the applicant must not nominate more than two of those qualifying businesses as main businesses.
In the present case the applicant's ownership interest was the shareholding in the corporate entity operating the four different business activities. There was no separate ownership interest that the applicant had in relation to the four different business activities. True it is that the reg.1.11 identifies a distinction between the entity that operates a business and the business itself.
That distinction does not diminish the fact that reg.1.11(2) was expanding the category of ownership interests in a qualifying business for the purpose of meeting the criteria. Regulation 1.11(2) does not in my opinion have application to the same ownership interest. The notion that the first applicant must not nominate more than two of businesses as a main business where it is the same ownership interest wrongly assumes that there is not a main business in the present case. The issue in the present case as to whether Cutman was operating a main business within the meaning of the regulations was not correctly identified or addressed in para.14 by the Tribunal.
In para.16 the Tribunal repeated the acknowledgment that the delegate was willing to accept Cutman as one main business which again was not the correct issue and is a deflection from ‘a main business’ following which the Tribunal said:
16. …The Tribunal noted that may be the case, but in its view, there was still an issue as to whether applicants had four main businesses, not one.
The reference to whether the applicant had four main businesses, not one, by the Tribunal again does not reflect a correct consideration of the question whether Cutman had a main business within the meaning of the regulation. The Tribunal continued in para.16 as follows:
16. … 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.
The fact that there were very different individual businesses is not determinative of itself of the correct question in the application of the criteria under reg.1.11. The Tribunal appears to have assumed that there must be a mutually exclusive application of the criteria by the regulation of either four separate businesses or one main business. That is not the work done by the regulation.
In para.17 the Tribunal said:
17. The Tribunal discussed with the applicants it had reviewed the frequently asked questions pages of the government webpages of ASIC and the Australian Business Register. Therein is readily available information it is permissible for a company to own more than one business and it is permissible for more than one business to operate under the same ABN. Having regard to that information, the Tribunal did not consider the argument regarding the ABN to be persuasive that Cutman was one main business.
The fact that a corporate entity may own and operate more than one business under the same ABN is clearly a relevant factor in the present case. The Tribunal's observation that the use of the same ABN was not persuasive that Cutman "was one main business" repeats the erroneous concept of singularity and reflects an incorrect approach that a main business must be mutually exclusive of other business activities or enterprises.
That mutually exclusive concept probably flows first from the Tribunal's identification of the summarised requirements of reg.1.11 by erroneously focusing upon the applicant's ownership in interest "in the business". "The business" was not the language of the definition in the regulations. Secondly, the error of mutually exclusive concepts of main business flows from the erroneous singularity concept and repeated preference to ‘one main business’.
In para.18 the Tribunal identified the discussion with the applicants in relation to the definitions and the case law meaning of "business". In para.19 the Tribunal characterised the submission advanced for the applicant was that Cutman is "one main business". The submissions that were set out at pp.498 to 501 do not, in fact, use the language of "one main business".
Whilst the Tribunal's reasons must be read as a whole and without a keen eye to error, the reference to "one main business" is clearly a reference to the Tribunal's own erroneous reasoning in its approach to the determination of the review. The correct question was not whether there was one main business but rather whether Cutman was operating a main business within the meaning of the regulation and then whether the criteria under cl.892.212(c) were met.
The Tribunal in para.19 summarised the submissions and responded as follows:
19. In the post hearing submissions, the migration agent submitted it was not only the preferable position, but also the correct position under law that Cutman is one main business. He raised several reasons for that:
a. He referred again to the July 2014 request for information in which the delegate indicated a willingness to consider Cutman as one main business. He referred to case notes of the delegate regarding internal advice querying the meaning of the word ‘business’ and that a business is to be regarded as the entity or entities sharing the same ABN. As correctly submitted by the migration agent the Tribunal is conducting a hearing de novo. For the reasons set out in this decision, it does not agree the use of one ABN means that Cutman is one main business.
b. He referred to departmental policy regarding accepting interrelated companies (one asset holding the other operational) as being one main business. That policy is not relevant to the circumstances of the applicants. There is only one company, Cutman. Elsewhere in that policy, it refers to: “the ABN will identify the single business to be considered the qualifying business.” Again, the Tribunal does not agree that the use of one ABN means that Cutman is one main business.
c. He referred to the case of Nassif 2 in which the court noted the use of ‘a business’ not ‘the business’ in the definition of ownership interest in s.134(10). He submitted the reasoning of the court that the legislature did not intend to limit the definition to a single entity supported the view different ventures conducted under the same ABN could be used to satisfy 892.211. He further submitted the policy explicitly excludes passive investments (although he later refers to speculative investments) from consideration as main businesses. If multiple ventures were also intended to be excluded, similar policy could also have been created. The Tribunal does not consider the court’s reasoning in Nasif to be relevant to the issue before it. The Tribunal accepts the first named applicant has an ownership interest in each of businesses. The question before the Tribunal is how many of those businesses can the first named applicant rely on to satisfy 892.212(c). The Tribunal too is not persuaded by the lack of policy regarding multiple businesses. The migration agent has overlooked the prohibition on passive/speculative investments is actually within the definition of ‘qualifying business’ in r.1.03. It is not a creature born of policy alone. As to the legislature’s intention regarding the number of main businesses an applicant may rely on, well that too is clearly legislated for in the definition of main business in r.1.11, imposing a limit of not more than two.
d. He referred to policy advice on the calculation of owner’s equity on director loans and again submitted the absence of explicit policy on using multiple ventures under the same ABN meant it was intended to be permissible. The Tribunal is not persuaded by that submission. There is no requirement for the policy to have regard to every possible permutation of business structure which may appear before it. Again, as noted above, the determinative issue before the Tribunal is how many main businesses the first named applicant has. Once that issue is resolved, it is only then calculations of ownership interest or director loans becomes relevant. It is therefore not surprising that the policy is silent regarding the question of multiple businesses using the same ABN.
e. Mr Snyman Jr was granted a subclass 892 visa relying on Cutman as his main business. The visa grant letter date February 2014 was provided as was a submission letter to the department from the migration agent of Mr Snyman Jr dated August 2013 noting Cutman operated two businesses, La Rotunda Café and Styleworx. The Tribunal notes Cutman sold La Rotunda Café before 7 December 2012. That submission letter makes reference to the (at that time) recent acquisition by Cutman of Cutman Liquor (which would appear to be Vortik Fusion) and Fitzsimmons. These were relied on for time of decision criteria, not to meet the requirements of 892.213. Thus on the evidence before it, the grant of Mr Snyman Jr’s visa would appear to have been on the basis of Cutman having two main businesses for the purpose of 892.213, La Rotunda and Styleworx – which is within the limitation of r.1.11.
f. The applicants were nominated by the Queensland State Government on the basis of having four businesses. The applicants’ application for sponsorship was provided detailing the four businesses. The Tribunal notes that application includes a declaration by the first named applicant which acknowledges the final decision to grant or refuse a visa is one made by the department. The Tribunal does not consider it incumbent on the Queensland state government to assess whether the applicant has one or four main businesses in assessing whether or not to nominate the applicants for the visa.
g. The activities of Cutman are regular, ongoing and of benefit to Australia. That may be the case. That does not mean Cutman is one main business.
The last paragraph, (g), again refers to the concept of "one main business" which for the reasons given is a deflection from the actual criteria that was required to be applied by the Tribunal under the regulations. That same concept of one main business is also referred to in the last sentence of paragraph (a) quoted above. Again, that is not the language of the regulation and is a deflection from the correct criteria.
The use of the indefinite article was the subject of focus in the submissions advanced to the Tribunal by the applicants, namely:
The different ventures undertaken by a corporation with an Australian business number is, in fact, compliant for purposes of 892.211 and if the legislature or policymakers intended to exclude it one would have expected it to be explicitly excluded in the way specific instruments were.
The force of the reasoning in Nassif v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 129 FCR 448 was the broader role given by use of the indefinite article rather than the definite article. In this case, it was not the task under the regulations of the Tribunal to determine whether there was one main business, as might be consistent with the use of the definite article.
The reasoning to which the applicants referred in submission to the Tribunal quoted above made reference to Nassif at [33] as follows:
33. It is convenient to consider first the definition of “qualifying business”. This is because a “main business” in relation to an application for a visa must be a “qualifying business” (see r 1.11(1)(d)). It is significant, in my view, that a “qualifying business” is defined to mean an “enterprise” of a particular kind (at [7] above). Each of the Oxford English Dictionary and the Macquarie Dictionary confirms that “enterprise” is a word of general meaning which is broadly synonymous with “undertaking”. Had it been intended that an “enterprise” within the meaning of r 1.03 was to be limited to the commercial activities of a single legal entity, whether a natural person, a partnership or a company, one would have expected the regulation to say so.
There is force in the applicant's contention that the logic identified in Nassif had application in the present case insofar as 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 observation that it did not consider the reasoning in Nassif to be relevant is consistent with the Tribunal not addressing the correct question in the present case.
The Tribunal then continued its reasoning by reference to the ASIC and ATO documents and relevantly said:
20. From the ASIC and ATO documents on the departmental file, the Tribunal accepts all four businesses are owned by Cutman and operate using the same ABN. From the operational documents on the departmental file and the evidence of the first named applicant and Mr Snyman Jr at the hearing, as well as the documents provided after the hearing particularly regarding the operations of SEMS and Vortik Fusion, the Tribunal is satisfied each of the first named applicant’s four businesses are qualifying businesses. Each is profit driven. Each provides goods and or services. Each is neither a passive nor a speculative investment.
The reference to all four businesses in the opening sentence reflects an assumption that there is no business being conducted by Cutman and does not reflect a correct assessment of the question required to be addressed as to whether Cutman was operating a main business within the meaning of the regulation.
The findings made by the Tribunal in the balance of para.20 are also not a correct application of the question that arises as identified. The Tribunal continued referring to its finding made in para.20 and said:
21. 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.
That explanation of the Tribunal's finding is consistent with the Tribunal incorrectly assuming that a main business being operated by Cutman is inconsistent with Cutman having four different business activities for the purpose of the regulations. There is no such inconsistency in a correct application of the regulations.
The Tribunal continued in para.21:
21. …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.
Whilst the above balance of para.21 does suggest the Tribunal was focusing upon whether Cutman operated a main business within the meaning of the criteria, the reasoning of the Tribunal to which I have referred above does not reflect an actual application of that question. In my opinion the erroneous approach of the Tribunal is highlighted by the second sentence in para.22, which is as follows:
22. The Tribunal finds the financial statements of Cutman for the relevant period that the applicants provided to the delegate are 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, Cutman is not a qualifying business and it follows therefore Cutman is not a main business. The first named applicant therefore cannot rely on the consolidated financial statements of Cutman to meet the requirements of cl.892.212(c).
The consolidation of the four different business activities into one set of accounts recognised by the Tribunal in the first sentence was again not determinative of the application of the criteria under the regulation as to whether Cutman was operating a main business. The second sentence is entirely consistent with the erroneous mutually exclusive assumption by the Tribunal that Cutman cannot both itself operate a main business and have four main business activities that it is operating.
Further it is 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. That second sentence in my opinion reinforces the same erroneous approach that was identified by para.14 in the reasoning of the Tribunal. This erroneous approach is consistent with the Tribunal's reasoning in the first sentence of para.23 which provides as follows:
23. It is open to the first named applicant to nominate up to two of his four businesses as his main businesses. From the evidence available to the Tribunal, Cutman did not own Fitzsimmons for the entire relevant 12 month period. It is unclear what the individual turnovers or the value of the first named applicant’s director loans in each of the four businesses was. It appears only Styleworx had sufficient employee numbers for the purpose of 892.212(a). At the hearing, the Tribunal indicated it had insufficient evidence before it to calculate whether one or more combinations of up to two of the four businesses could meet the visa criteria. The Tribunal invited the applicant to provide evidence after the hearing whether any combination of up to two of the four businesses is able to demonstrate he is able to meet the requirements of all of cl.892.212(a), 892.212(b) and 892.213 (regarding turnover). The post hearing submission is silent on that issue.
The first sentence, again, is consistent with an erroneous focus upon the four business activities being mutually exclusive of a main business being conducted by Cutman. I am satisfied that the Tribunal failed to apply the correct statutory test in relation to reg.1.11 in the context of the criteria under cl.892.212 by failing to determine whether Cutman operated a main business within the meaning of the regulation.
In circumstances where the four enterprises were consolidated into one accounting entity for the purpose of both business operation under the ABN as well as for tax purposes, this is clearly a case where it was 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. Whether in respect of that position the criteria could be met was then a matter for the Tribunal to determine if it found that Cutman was operating a main business.
Counsel for the first respondent submitted that on a fair reading of the Tribunal's decision as a whole the Tribunal had properly addressed the question of whether Cutman was operating a main business. For the reasons I have given I do not accept that submission and in my opinion the Tribunal deflected itself from the application of the requirements of reg.1.11 by its focus on "the business" and the concept of "one main business" and the assumption that the four business activities must be mutually exclusive from a main business conducted by Cutman to fall within the regulations.
I find that the Tribunal failed to correctly apply the statutory criteria in its review constituting a jurisdictional error.
I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of Judge Street
Associate:
Date: 19 October 2015
3
3