Australian Immigration Daily News

The case that is the subject of this article involves a “Business Skilled” (Residence) visa – Subclass 892. 

Before I present my analysis of this case – Snyman & Anor v Minister for Immigraiton & Anor (2015) FCCA 2791 (19 October 2015) – I would like to invite readers to discuss their experiences with this kind of visa in the “comments” section.  What has been your experience in dealing with this kind of visa?

What kinds of issues have been raised by the Department during the processing of the application? Have any of your applications for this visa been refused?  If so, on what grounds?  Have you been able to overcome a refusal through an application for merits review to the AAT, or through judicial review proceedings? 

I am really curious to learn about how other RMAs and applicants have navigated with these types of visa applications, so I do look forward to your contributions in the comments section and hope that they will be lively and informative! 

Turning now to the Snyman case:  The issue in the case was how the term “main business” should be interpreted for the purposes of subclause 892.212(c) of Schedule 2 of the Regulations. 

By way of background, clause 8992.212 relevantly requires that an applicant must show the she or he meets 2 of the 3  following criteria: 

1. In the 12 months before the application is made, the applicant’s main business provided an employee who is an Australian citizen, permanent resident or New Zealand passport holder with a total number of hours of employment equivalent to that of a full time employee; 

2. The business and personal assets of the applicant, of the applicant’s spouse or de facto partner, or of the applicant and her/his spouse or de facto partner together, had a net value of at least $250,000 throughout the 12 month period ending immediately before the application is made; and  - critically for this case: 

3. The assets owned by the applicant, the applicant’s spouse or de facto partner, or by the applicant and her/his spouse or de facto partner together in their main business or businesses in Australia must have had a net value of at least $75,000 throughout the 12 month period immediately before the application was made. 

The key question in Snyman was whether the applicant satisfied this third criterion – did the assets that he held in his “main business” have a net value of at least $75,000 for the full year before he filed his application?  

In order to answer this question, it was, in turn, necessary to determine what the applicant’s “main business” was. 

The case came before the Federal Circuit Court because the Migration Review Tribunal had interpreted the term “main business” in a way that was adverse to the applicant, and in a way that had caused the MRT to affirm the Department’s refusal of the application.  So the task for the Federal Circuit Court was to determine whether the MRT had properly applied the term “main business”. 

The issue arose because of the way that the applicant had “structured” his business affairs.  He was a 50% shareholder of a corporate entity that went by the name of “Cutman Pty Ltd”.  This corporate entity in turn was engaged in 4 different business activities, as follows: 1) “Styleworks”, which provided “hairdressing services”; 2) “Vortik Fusion”, which was in the business of “supplying alcohol”; 3) “Status Engine Monitoring Systems”. Which “provided certain equipment in relation to monitoring systems”; and 4) “Fitzsimmons Meats”, a “butcher’s business". 

The corporate entity, Cutman, prepared consolidated accounts for all 4 businesses, using the same “Australian Business Number” for all 4 lines of business activities, and lodging “Business Activity Statements" with the Australian Taxation Office under the same ABN for all 4 activities, all under the name of “Cutman Pty Ltd”. 

This is where the difficulty and controversy in the Snyman case arose:  The applicant sought to rely on the assets held by Cutman Pty Ltd in the 4 separate business activities to meet the asset test of clause 892.212.  However, the Tribunal had concluded that the applicant could not rely on all 4 of the businesses that were operated by Cutman to satisfy the test. 

Instead, the Tribunal had ruled that the applicant was required to nominate only 2 out of the 4 business activities.  In reaching this conclusion, the Tribunal had regard to the definition of the term “main business” in Regulation 1.11.  This Regulation provides, in essence, that where an applicant has an ownership interest in more than 1 “business”, the applicant may not nominate more than 2 of those businesses as a “main business”. 

So, to boil down the question in this seemingly complicated case:  If an applicant is involved in several different types of business activities which are owned under the “umbrella” of a single corporate entity, can the applicant rely on the assets of the corporate entity as a whole (in other words, on the assets of all the separate businesses that are conducted under the name and ABN of the corporate entity), or is the applicant limited to relying on only 2 of the businesses?

The conclusion of the Court was that it was appropriate to characterize the corporate entity as the applicant’s main business.  Therefore, it was the Court’s holding that the applicant was entitled to rely on the assets of all 4 businesses that were being conducted under the “corporate umbrella”.  He was not limited to nominating only 2 of the businesses that operated under the corporate umbrella.  It did not matter that the 4 businesses that operated under the corporate umbrella were engaged in totally unrelated kinds of business activities. 

The Court’s determination on this issue was buttressed by the decision of the Federal Court in the case of Liang v Minister for Immigration and Citizenship (2009) FCA 189, where it was held that: “…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 endeavor by the disposal of what is aptly termed a “business” without ceasing altogether to trade”. 

In Snyman, the Court found that the Tribunal had taken an “incorrect approach” by determining that a “main business” must be “mutually exclusive of other business activities or enterprises”. In other words, the Court found that it was error for the Tribunal to conclude that a “main business” could not be composed of a single corporate entity, with 4 entirely different kinds of business activities operating under the one corporate umbrella and being “consolidated” for accounting and tax purposes. 

Speaking for myself, I can say that this ruling is very welcome! I have a case pending before the Department that is very similar, in that my client has several different businesses that are engaged in very unrelated types of activities.  Under the decision in Snyman, it is clear that my client can rely on the assets held by the corporate entity to meet the “asset threshold” for the visa. He will not be forced to “nominate” only 2 of the separate “business activities” that operate under the corporate umbrella. 

So now it’s your turn: Have you come across an issue like this, or any other issues with respect to this type of visa, that you would like to share? 

Concordia Pacific , Email: This email address is being protected from spambots. You need JavaScript enabled to view it. , Tel: (02) 8068 8837