Minister for Immigration and Border Protection v Snyman

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.

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.