Gunawan and Minister for Immigration and Citizenship

[2008] AATA 645

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 645

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/4709

GENERAL ADMINISTRATIVE DIVISION		)
Re		TEDDY GUNAWAN

Applicant

And MINISTER FOR IMMIGRATION AND CITIZENSHIP

Respondent

DECISION

Tribunal Senior Member Bernard J McCabe

Date23 July 2008

PlacePerth

Decision The Tribunal sets aside the decision under review. It decides in substitution that the applicant’s visa has not be cancelled  

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Senior Member

CATCHWORDS

IMMIGRATION AND CITIZENSHIP – Visa – Business Skills visa – Cancellation – Whether applicant utilising skills in actively participating in day-to-day management of business – Applicant actively participated in day-to-day management – Decision set aside – Substitutes visa not cancelled

Migration Act 1958 (Cth), s 134

Wong and Minister for Immigration and Multicultural Affairs [2006] AATA 277; (2006) 91 ALD 149

REASONS FOR DECISION

23 July 2008 Senior Member Bernard J McCabe         

1. Mr Teddy Gunawan is the applicant in these proceedings. He is an Indonesian businessman. He was granted a sub-class 127 business skills visa on 30 June 2004, which permitted him to live in this country. A delegate of the Minister has decided to cancel that visa pursuant to s 134 of the Migration Act 1958 (“the Act”). The Minister says Mr Gunawan did not actively participate in the senior management of an eligible business on a day-to-day basis during the period under review. There is no dispute that the applicant had invested in eligible businesses. The real issue is the extent to which he was involved in the management of those businesses.

2.      I am satisfied Mr Gunawan actively participated at a senior level in the day-to-day management of businesses in Australia. I have decided to set aside the decisions under review and permit Mr Gunawan to retain his visa. My reasons for doing so are set out in more detail below.

Background to the decision

3.      Mr Gunawan was granted a sub-class 127 visa on 30 June 2004. He first entered Australia on the visa on 10 July 2004. Records retained by the respondent’s department say the applicant visited Australia on three occasions for a total of 13 days before the visa was cancelled on 30 August 2007. (Mr Gunawan was not sure about that: he thought he might have visited on four or five occasions during the period in question. But there was no serious challenge to the accuracy of those records, and I accept them.) The secondary visas held by Mr Gunawan’s family members were also cancelled, although I am told no application was being made in respect of those decisions.

4.      The applicant owns and operates a textiles business in Indonesia. In the course of his oral evidence at the hearing, he said he spends at least 30 hours each week on the operation of the business. He said his commitments are such that he cannot move to Australia on a full-time business. He said he envisages a gradual move that would soon see him spending alternate fortnights in Australia and Indonesia. He expected that his brother would be in a position to take over from him, but the training process has taken longer than anticipated. In the meantime, the bulk of his personal income is still derived from his Indonesian business interests.

5.      Mr Gunawan does not speak or read or write in English. He gave evidence at the hearing through an interpreter.

6.      The respondent accepts Mr Gunawan holds or has held substantial ownership interests in a number of Australian companies that qualify as eligible businesses for the purposes of the Act. Those companies – Starwest Developments Pty Ltd, Starland Developments Pty Ltd and Westlink Developments Pty Ltd – are (or were during the life of the applicant’s visa) engaged in the business of property development and construction in and around Perth. I accept that concession was appropriately made in light of the evidence. It follows the applicant is able to satisfy the criterion in s 134(1)(a). The real question in this case is whether the applicant meets the criterion in s 134(1)(b). That provision requires the decision-maker to be satisfied the visa holder “is not utilising his or her skills in actively participating at a senior level in the day‑to‑day management of that business” before the discretion to cancel the visa is enlivened.

The applicant’s role in the senior management of the businesses

7.      The applicant came to be involved with property development when he went into business with Mr Yemmy Effendi, a property developer and promoter who resides in Perth. Mr Effendi said in his statement that he had been friends with Mr Gunawan since around 1991. Mr Effendi had been previously worked in the textiles business in Indonesia. He migrated to Australia in 1998 and set up his own business in 2003. His business is essentially that of a real estate developer and promoter: he identifies an opportunity and then sets up a company to undertake the development. Most of the development projects involve the construction of residential townhouses and apartments. He explained he has relationships with the builders and tradesmen who carry out the work. He also offers interests in each company to a pool of investors that includes people like Mr Gunawan. Mr Effendi said different investors might invest in different projects, and he agreed Mr Gunawan had participated in some opportunities and not others.

8.      I was left in no doubt that Mr Effendi is an accomplished property developer. He knows the property scene around Perth, and he understands the various aspects of the development process. He does not need management advice or assistance from any of the investors who become involved in the various projects. He just needs their money.

9.      Mr Gunawan says he came to Australia several times while his visa was current so that he could learn about the property development business from Mr Effendi. He visited the various projects when he was in Perth. He also accompanied Mr Effendi on visits to properties that might be acquired in the future. Given the limited amount of time that he was in Australia, he obviously had few opportunities to make his physical presence felt. But the applicant and Mr Effendi suggested Mr Gunawan played an increasingly active role in the management of the business of the various companies from overseas. The applicant spoke of what might be characterised as marketing activities: he attended showcase exhibitions in Jakarta hotels promoting the various projects to potential buyers and investors. He also spoke of encouraging his friends and associates to invest in projects or buy finished properties.

10.     Mr Effendi said he was careful to involve Mr Gunawan in a range of day-to-day management activities. Mr Effendi agreed he did so in part because he knew Mr Gunawan needed to satisfy the immigration authorities that he was involved in management. I do not think there is a problem with Mr Effendi’s motivation. Provided the activities were real, it does not matter that Mr Effendi consciously allowed Mr Gunawan a greater role in the various businesses in order to meet obligations under immigration laws.

11.     Most of these management activities were necessarily carried on remotely. Mr Gunawan gave evidence that he searched the internet looking for investment opportunities in Australia. He was in regular email, telephone and SMS contact with Mr Effendi. Sometimes Mr Gunawan would participate by teleconference in meetings held in Australia. Mr Effendi agreed he would visit Mr Gunawan whenever Mr Effendi was in Indonesia. That was said to occur on an almost monthly basis. Mr Effendi said the applicant asked a great many questions and was consulted in relation to a wide range of decisions, from the selection of potential projects through to the names of the companies established to undertake the developments. Mr Effendi said Mr Gunawan effectively had a veto over any decision; Mr Effendi gave examples of decisions that he declined to make without Mr Gunawan’s involvement. Mr Gunawan said Mr Effendi would bring brochures and samples to meetings of investors conducted over meals in Indonesia so that investors like Mr Gunawan would have the opportunity to offer their input into decisions about interior decoration and other matters.

12.     Exhibit One includes copies of correspondence between Mr Gunawan and Mr Effendi over a lengthy period. The applicant’s Statement of Facts and Contentions highlights and characterises many of the documents in Exhibit One. Mr Solomon, for the applicant, drew my attention to additional examples in the course of the hearing. I do not propose to set out all of the documents here. Suffice to say that a perusal of the correspondence and other documents suggests Mr Gunawan’s opinion and consent had been sought in relation to all manner of management decisions, including:

·The selection of company names (Exhibit One, at folios 607 and 609);

·The identity of appropriate designers and builders (Exhibit One, at folios 590 and 593);

·The location of appropriate properties for purchase and development (Exhibit One, at folios 607-609);

·The maximum acceptable purchase price for properties (Exhibit One, at folios 594-601); and

·The details of plans and specifications both for proposed and constructed properties (Exhibit One, at folios 562-572 and 579-582).

13.     Mr Gunawan and Mr Effendi also conducted regular and detailed correspondence in relation to arrangements for finance: see, for example, Exhibit One, at folios 504, 506 and 559. Mr Gunawan was also provided with financial records including bank statements and tax returns of the various companies in which he invested.

14.     Interestingly, all of the correspondence was conducted in English, although Mr Gunawan does not speak or write or read the language. The letters from Mr Gunawan note that they were translated.

15.     The applicant says his involvement in the business with Mr Effendi increased to the point he signed a management agreement with Starland Developments Pty Ltd on 30 November 2005. Under the terms of that agreement, which is set out in Exhibit One, at folios 227ff, he assumed the title “Assistant of Project Director”. He was not a member of the board of directors of the company at the time. Mr Gunawan explained he had been carrying out most of the activities referred to in the agreement for some time. The document merely formalised what had long been the practice.

16.     The documents presented in evidence suggest the applicant played an active role in the affairs of the company, notwithstanding the fact he remained overseas. The volume of letters and documents of that nature steadily increased over time, apparently reflecting a growing managerial role. One example of that involvement was referred to in the course of Mr Gunawan’s oral evidence. He spoke of correspondence from the Water Corporation that was addressed to him at Starland’s office in Perth. The correspondence, which appears in Exhibit One, at folio 714, corrects an error in a previous bill by crediting $14.05 to the company’s account with the utility. I note Mr Gunawan was a passive recipient of the letter; that is, his name is on the correspondence, but there is no evidence of any other involvement or action on his part (as opposed to action on the part of an administrative assistant or Mr Effendi in Perth). But the files are full of documents addressed to, or apparently emanating from, Mr Gunawan. A number of them allude to action on Mr Gunawan’s part; for example, Exhibit One, at folio 570, contains a letter from the applicant to Mr Effendi discussing delays in the project and noting Mr Gunawan had been in direct contact by SMS with the builder.

17.     The respondent argued that the documents suggest Mr Gunawan was simply seeking information about the operations of the business so that he could actively manage his financial investment in that business. Mr Thackrah, for the respondent, pointed out that managing a company and managing an investment one makes in the company is not the same thing. I agree that is so, but I accept Mr Gunawan did more than merely manage his financial investment.

18.     Viewed together, and taken at face value, the documents and the testimony of the applicant and Mr Effendi suggest Mr Gunawan actively and regularly participated in the senior management of the businesses prior to the cancellation of his visa. It is therefore necessary for me to decide whether the documents and the testimony should be taken at face value.

19.     I acknowledge that conclusion sits uncomfortably alongside my finding that Mr Effendi did not require any managerial assistance from Mr Gunawan who, by his own admission:

·knew nothing of the property business in Australia;

·lived in another country and rarely visited this country during the currency of the visa;

·did not speak English, the language in which the various companies conducted their business; and

·continued to conduct his textile business in Indonesia. His evidence suggested those responsibilities took many hours each week and accounted for the bulk of his income. 

20.     I accept that involving Mr Gunawan in the management of the Australian business was not necessary or even very practical in the circumstances. Yet Mr Effendi and the applicant insist that is what occurred. If I accept their evidence, I do not think it matters that the arrangements they devised were inefficient or cumbersome, so long as I am satisfied those arrangements were real. The legislation does not require the Minister and the Tribunal to act as management consultants; for present purposes, the statute merely requires a factual inquiry. I must therefore decide whether I believe the applicant’s story that he engaged in activity that meets the requirements of the legislation.

21.     I am not satisfied that these two individuals – and perhaps others – conspired to misrepresent Mr Gunawan’s role in the business. Mr Effendi appeared to be a credible witness who gave his evidence in a forthright way. His story withstood Mr Thackrah’s skilful cross-examination. Mr Gunawan’s evidence was harder to assess as he was assisted by an interpreter, but I was unable to identify a reason why his story should be doubted. I accept their evidence.

22.     The respondent is rightly sceptical of claims that a person can involve himself or herself in senior management of an Australian company without remaining in the country. That scepticism has been on the display in the Tribunal in a number of cases. But the authorities make it clear that each case must be considered on its merits: Wong and Minister for Immigration and Multicultural Affairs [2006] AATA 277; (2006) 91 ALD 149 at [38] per Deputy President Jarvis. Where, as here, the documents and oral testimony suggest extensive involvement in management, the applicant satisfies the requirements of the legislation. I think imposing an additional requirement that the applicant carry out those activities within Australia puts a gloss on the statute. I accept that it will often be difficult to discharge the managerial function without a regular presence in this country, even with the assistance of modern communication technology. But where the evidence establishes the business was managed in a way that accommodated the applicant’s physical absence, I do not think there is an issue.

Conclusion

23. There was no dispute that the applicant had invested in an eligible business in Australia. The dispute in this case revolved around the application of s 134(1)(b) of the Act, which requires that the applicant should utilise his skills in actively participating at a senior level in the day‑to‑day management of that business. I have concluded the applicant satisfies this requirement notwithstanding his lengthy absences from Australia throughout the life of the visa. I accept this was only possible because of the unusual and almost certainly inefficient arrangements that were put in place by Mr Effendi, the principal manager of the businesses concerned. The evidence suggests the applicant was gradually becoming more active in the business, and there is no reason to doubt he anticipated the business would continue into the future, and that he would continue to play a senior role. It follows I am satisfied the visa should not have been cancelled.

24. The decision under review is set aside. I find in substitution that the visa has not been cancelled pursuant to s 134(1) of the Act.

I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe

Signed: .....................................................................................
  Michael Buckingham, Associate

Dates of Hearing  12 May 2008
Date of Decision  23 July 2008
Counsel for the Applicant         Mr Solomon
Solicitor for the Applicant          Fiocco’s Lawyers           
Solicitor for the Respondent     Australian Government Solicitor