Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (No 2)

[2016] FCA 62

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (No 2) [2016] FCA 62

File number:

VID 252 of 2015

Judge:

MORTIMER J

Date of judgment:

9 February 2016

Catchwords:

CONSUMER LAW – contraventions of ss 18, 21, 29 and 31 of the Australian Consumer Law admitted – undertakings, declaratory relief, injunctions, disqualification order, non-party redress orders and pecuniary penalties sought in large part without contest

CONSUMER LAW – non-party redress orders – refunds to clients who suffered loss or damage – whether second respondent had effective control over funds held in discretionary trust such that they should be made available to effect refunds

Legislation:

Acts Interpretation Act 1901 (Cth) s 15AD

Competition and Consumer Act 2010 (Cth) Sch 2, Australian Consumer Law, ss 2, 4, 18, 21, 22, 29(1)(g), 137H, 224, 227, 232, 238, 239, 240, 241, 243, 248

Corporations Act 2001 (Cth) s 1323

Evidence Act 1995 (Cth) s 191

Federal Court of Australia Act 1976 (Cth) s 23

Migration Regulations 1994 (Cth) reg 5.19(4)(h)(ii), Sch 1, Item 1114C, Sch 2, Item 187

Trade Practices Amendment (Australian Consumer Law) Act (No 1) 2010 (Cth)

Cases cited:

Australian Competition and Consumer Commission v ACN 117 372 915 Pty Limited (in liq) (formerly Advanced Medical Institute Pty Limited) [2015] FCA 368

Australian Competition and Consumer Commission v AGL South Australia Pty Ltd [2015] FCA 399

Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd [2015] FCA 1006

Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Limited [2015] FCA 330; ATPR 42-494

Australian Competition and Consumer Commission vExcite Mobile Pty Ltd (No 2) [2013] FCA 1267; ATPR 42-454

Australian Competition and Consumer Commission v Homeopathy Plus! Australia Pty Limited (No 2) [2015] FCA 1090
Australian Competition and Consumer Commission v Breast Check Pty Ltd (No 2) [2014] FCA 1068

Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90

Australian Competition and Consumer Commission v Lux Distributors Pty Ltd (No 2) [2015] FCA 903; ATPR 42-510

Australian Competition and Consumer Commissionv Michigan Group Pty Ltd [2002] FCA 1439

Australian Competition and Consumer Commission vReebok Australia Pty Ltd [2015] FCA 83; ATPR 42-501

Australian Competition and Consumer Commission vReebok Australia Pty Ltd [2015] FCA 83; ATPR 42-501

Australian Competition and Consumer Commission v South East Melbourne Cleaning Pty Ltd (in liq)(formerly known as Coverall Cleaning Concepts South East Melbourne Pty Ltd)(No 2) [2015] FCA 257; ATPR 42-492

Australian Competition and Consumer Commissionv The Construction, Forestry, Mining and Energy Union [2006] FCA 1730; ATPR 42-140

Australian Competition and Consumer Commissionv Titan Marketing Pty Ltd [2014] FCA 913; ATPR 42-480

Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640

Australian Competition and Consumer Commissionv Yellow Page Marketing BV (No 2) [2011] FCA 352; 195 FCR 1

Australian Securities and Investments Commission v Carey (No 6) [2006] FCA 814; 153 FCR 509

Australian Securities and Investments Commission v Hellicar [2012] HCA 17; 247 CLR 345

Barbaro v The Queen [2014] HCA 2; 253 CLR 58

BMW Australia Ltd v Australian Competition and Consumer Commission [2004] FCAFC 167; 207 ALR 452

Commissioner of Taxation v Vasiliades [2014] FCA 1250; 323 ALR 59

Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46

Coshott v Prentice [2014] FCAFC 88; 221 FCR 450

De Santis v Aravanis [2014] FCA 1243; 227 FCR 404

Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; 229 FCR 331

Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471

Federal Commissioner of Taxation v Vegners [1989] FCA 480; 90 ALR 547

In the Marriage of Ashton [1986] FamCA 20; 11 Fam LR 457

Kennon v Spry [2008] HCA 56: 238 CLR 366

Lewis v Condon [2013] NSWCA 204; 85 NSWLR 99

Medibank Private Ltd v Cassidy [2002] FCAFC 290; 124 FCR 40

Normandy Finance Pty Ltd v Commissioner of Taxation [2015] FCA 1420

Prime Wheat Association Ltd (ACN 000 245 269) v Chief Commissioner of Stamp Duties (1997) 42 NSWLR 505

Public Trustee v Smith [2008] NSWSC 397

Quinlivan v Australian Competition and Consumer Commission [2004] FCAFC 175; 160 FCR 1

Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75; 216 CLR 53

Saini v Clinica Internationale Pty Ltd (Revised) (Civil Claims) [2014] VCAT 901 (17 July 2014)

Scott v Commissioner of Taxation (Cth) (No 2) (1966) 40 ALJR 265

Sent v Jet Corporation of Australia Pty Ltd [1984] FCA 178; 2 FCR 201

Trade Practices Commission v CSR Ltd (1991) ATPR 41-076

Treiser v Michigan Investments Pty Ltd [2000] VSC 301

Yorke v Lucas [1985] HCA 65; 158 CLR 661

Zhai v Luo [2015] FCAFC 144

Date of hearing:

21 to 22 October 2015

Date of last submissions:

22 December 2015

Division:

General Division

Registry: 

Victoria

National Practice Area:

Commercial and Corporations

Sub-area

Regulator and Consumer Protection

Category:

Catchwords

Number of paragraphs:

319

Counsel for the Applicant:

Dr O Bigos

Solicitor for the Applicant:

Thomson Geer

Counsel for the Respondents:

Ms F R Cameron

Solicitor for the Respondents:

Franzese & Associates

orders

VID 252 of 2015

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant

AND:

CLINICA INTERNATIONALE PTY LTD ACN 004 979 882
First Respondent

RADOVAN MONTAGUE LASKI
Second Respondent

JUDGE:	MORTIMER J
DATE OF ORDER:	9 February 2016

THE COURT ORDERS THAT:

1.On or before 4.00pm on 23 February 2016, each of the parties is to file and serve any short submissions they wish to make on the orders proposed by the Court, including the form of any proposed amendments to those orders.

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

REASONS FOR JUDGMENT

INTRODUCTION AND SUMMARY	[1]
THE COURSE OF THIS PROCEEDING	[6]
FURTHER DEVELOPMENTS AFTER HEARING	[12]
THE HIGH COURT’S DECISION IN COMMONWEALTH V DIRECTOR, FAIR WORK BUILDING INDUSTRY INSPECTORATE [2015] HCA 46	[16]
THE EVIDENCE RELIED UPON	[21]
Witnesses for the ACCC	[22]
Ms Kimberley Lloyd	[23]
Ms Lauris Fahey	[28]
Ms Lynn McKirdy	[30]
Mr Sukhdev Singh Gill	[32]
Mr Rajesh Azad	[37]
Mr Sourab Uppal	[47]
Witnesses for the respondents	[59]
Mr Radovan Laski	[59]
Ms Tania Laski	[83]
Mr Prospero Franzese	[87]
Agreed statement of facts	[89]
RELEVANT LEGISLATIVE PROVISIONS	[90]
CONDUCT CONSTITUTING THE CONTRAVENTIONS	[107]
Findings: Misleading and deceptive conduct and representations	[129]
Findings: Unconscionable conduct	[139]
Findings: Mr Laski’s involvement	[146]
CONCLUSIONS ON CONTRAVENTIONS	[150]
RELIEF SOUGHT AND NOT CONTESTED	[151]
RESOLUTION OF CONTESTED RELIEF ISSUES	[156]
Further findings about the seriousness of the contravening conduct	[157]
Mitigating factors	[170]
Should the contravening conduct be characterised as one or more courses of conduct?	[175]
Findings concerning Mr Laski personally	[181]
Penalties against Clinica	[211]
Penalties against Mr Laski	[231]
The operation of s 227 of the ACL	[244]
Use of funds currently frozen by the Court’s orders	[256]
Breadth of injunctions	[301]
Period of disqualification for Mr Laski	[309]
Continuation of freezing orders	[317]
Orders in relation to findings of fact	[318]
CONCLUSION	[319]

MORTIMER J:

INTRODUCTION AND SUMMARY

1. This proceeding is an application brought by the Australian Competition and Consumer Commission under the Competition and Consumer Act 2010 (Cth). It concerns conduct of the first respondent, Clinica Internationale Pty Ltd, in providing what was described as recruitment consulting services to individuals in Australia on temporary visas who were seeking to obtain permanent residence. The second respondent Mr Radovan Laski, the managing director of Clinica, is alleged to have been involved in that conduct and liable accordingly. The ACCC seeks declarations, injunctions, a disqualification order, non-party redress orders, pecuniary penalties, interest and costs in respect of contraventions by the respondents of ss 18, 21, 29 and 31 of the Australian Consumer Law (ACL). It also seeks an order for the purposes of s 137H of the Competition and Consumer Act.

2. The proceeding was commenced by the ACCC on 14 May 2015, and since 23 June 2015 had been set down for trial on all issues apart from relief for three days from 21 to 23 October 2015. The proceeding was actively defended until 12 October 2015, on which date the parties filed an agreed statement of facts containing admissions as to liability. At a subsequent pre-trial conference on 14 October 2015, the parties proposed orders listing the matter for hearing on all issues on those same trial dates and with minor variations those orders were made by the Court.

3. Broadly, the contraventions relate to representations and unconscionable conduct in relation to a program offered by Clinica. Clinica represented it would arrange for clients to complete a cleaning course (called the “Certificate III Asset Maintenance (Cleaning Operations)” course); that Clinica would find for the client a cleaning job in a regional area of Australia; that Clinica would instruct and liaise with a registered migration agent in relation to a permanent residence visa application and other immigration advice for the client; and that completion of the cleaning course and working in the cleaning job would qualify the client for permanent residence under the Subclass 187 visa – Regional Sponsored Migration Scheme (187 Visa).

4. It is now not disputed by the respondents that the cleaning course and cleaning work offered by Clinica could never have entitled its clients to apply for a 187 Visa. Moreover, the respondents now admit that Clinica did not have any cleaning jobs available for clients with sponsoring employers in regional areas and no clients who completed a cleaning course with Clinica were placed in cleaning jobs. I return in more detail below to the facts underlying the contraventions.

5. For the reasons that follow, I find that the ACCC has made out the contraventions alleged and that, in substance, the relief it seeks should be granted.

   THE COURSE OF THIS PROCEEDING

6. After the initial case management hearing and during preparation for trial, on 4 August 2015, the ACCC sought and obtained an urgent ex parte freezing order with effect up to 12 August 2015. On that date, the matter returned before the Court for a further hearing in respect of the freezing order. When the parties appeared on 12 August 2015, counsel for the respondents informed the Court that by reason of the second respondent’s illness and recent absence from Australia, the respondents were not in a position to contest the freezing order on or near the scheduled return date. Accordingly, I extended the freezing order made on 4 August 2015 with effect up to and including the first day of trial on 21 October 2015, while reserving leave for the respondents to apply at any time prior to trial to vary or discharge that order if they wished to do so.

7. The respondents did seek variations but not a discharge of the freezing order, and the parties returned before the Court on 9 September 2015 to make submissions on the respondents’ proposed variations. On 10 September 2015, and after a contested hearing, I made orders varying the freezing order made on 4 August 2015 and extended on 12 August 2015 in order to allow the respondents to make additional payments including for legal and accounting fees, and for Mr Laski’s living expenses, and mortgage payments: see Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd [2015] FCA 1006.

8. The freezing order extended to two third party companies, Swishette Pty Ltd and Letore Pty Ltd, each of which on the evidence is associated with Mr Laski. Mr Laski is the sole director of both Swishette and Letore. Letore is the sole shareholder of Swishette. Swishette is also the sole shareholder of Letore. Mr Laski has deposed Swishette holds all its assets as trustee for the Second Rodney Laski Family Trust. Letore is one of named beneficiaries of that trust, as is Mr Laski and his former wife, Ms Tania Laski. As the ACCC later submitted, the circularity between the interests and shareholdings of Swishette and Letore was never clearly explained in the evidence.

9. The funds frozen included, in particular, proceeds from the sale of a four-bedroom house at 5 Maroona Road, Brighton. Swishette was the registered proprietor of the Brighton property. Mr Laski’s evidence was that the Brighton property was held on trust by Swishette for the beneficiaries of the trust. Mr Laski resided at the property until around the time of its sale. Pursuant to the freezing order, funds cleared from the sale of the property were paid into a trust account in the name of the ACCC’s solicitors, to be held until the hearing and determination of this proceeding or further order. Except to the extent that the orders made and varied by the Court allowed for making certain payments out of those funds, the proceeds of the sale of the Brighton home continue to be held on trust by the ACCC’s solicitors. The ACCC’s solicitor deposed the sum held in trust at the time of trial was approximately $750,000. Since judgment was reserved, that sum will have been affected by the various drawings authorised by the freezing order, but is likely still to be in excess of $660,000. As I set out below, Ms Laski is, perhaps was, a secured creditor with a charge over the Brighton property securing a loan of $215,000 and the ACCC did not dispute that she should be repaid that amount out of the frozen funds. I consider further at [85]-[86] below Ms Laski’s asserted charge over the property. Further, a former of acquaintance of Mr Laski, Ms Lauris Fahey, asserts a charge over the Brighton property securing a sum of $85,000. Ms Fahey’s asserted charge is currently the subject of proceedings before the Supreme Court of Victoria.

10. At hearing, the freezing order was continued by consent until the delivery of final judgment by the Court.

11. Written and oral submissions were made by both parties. I have taken those submissions into account in the findings I have made, and the legal conclusions I have reached. I refer to them below where I consider it necessary to do so.

    FURTHER DEVELOPMENTS AFTER HEARING

12. On 23 October 2015, the day after the hearing of this matter concluded, the ACCC sought a relisting for the purpose of seeking an urgent injunction, and the parties appeared before the Court on that day. Before addressing the substance of that application, counsel for the ACCC raised (by reference to the Full Court’s recent decision in Zhai v Luo [2015] FCAFC 144) the question whether the application should be heard by another judge of this Court lest there be any issue as to apprehended bias in circumstances where I had heard the trial but was reserved on final judgment.

13. In Zhai v Luo, the Full Court granted leave to appeal on the sole basis of reasonable apprehension of bias on the part of the primary judge. The complaint of apprehended bias related not to the conduct of the trial itself, but to the fact that the primary judge had entertained two applications while judgment was reserved following completion of trial and after final submissions had been filed. Dismissing the appeal, the Full Court stated:

    32.an urgent interlocutory hearing for freezing orders, whether pursued before, during or after a trial, necessarily invites the judge to form and express some view as to whether the applicant for the relief has established, on the interlocutory material, a sufficiently arguable case that there is a risk of dissipation of assets. Ordinarily, any such view will only be an interlocutory one arrived at on the basis of affidavit evidence led on the relevant application. This was not a case like Livesey v New South Wales Bar Association (1983) 151 CLR 288 which held that a fair minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of later proceedings in circumstances where the judge had previously found a state of affairs to exist or come to a clear view about a witness’ credit. There had been no such occurrence in this instance. Here, a fair minded lay observer would expect that, after hearing or receiving final submissions at the conclusion of the trial, the judge might well have formed some view on the credit of witnesses whom he had seen give oral evidence. But that cannot be equated to a perception of pre-judgment of the outcome of the trial by the judge. His Honour had not prejudged the trial; he had heard the trial and his task was to decide it on a final basis.

    …

    35.The informed lay observer would be aware that professional judges hear questions that arise in the course of proceedings in which they are required to consider evidence and other material. Those questions can involve allegations, evidence, material or argument that may be prejudicial to, or critical of, a party or a witness. This observer would also be aware that, whether or not the same allegation, evidence, material or argument is before him or her in the substantive proceedings, which the judge has yet to decide, he or she will put that matter out of his or her consideration when making a decision of a final nature on the evidence and submissions relevant to that decision.

    …

    40.Here, Ms Zhai’s argument amounts to the proposition that the fair minded lay observer might reasonably consider that the judge might be influenced in arriving at his decision in the substantive proceedings by not considering only the evidence and submissions that were relevant, but rather by extraneous factors that were before him in one or two interlocutory applications. In our opinion, there is no reasonable possibility that the informed fair minded lay observer might reasonably have formed a view that the primary judge might have prejudged, or not been impartial in his consideration of, the result of the final hearing in the circumstances of this case. The fair minded lay observer would have expected, we would interpolate, correctly, that, as a professional judge, his Honour would put out of his mind what he had heard or said on the interlocutory applications when he later came to decide the substantive case on which he had previously reserved his final decision.

14. I adjourned briefly so that counsel for the respondents could take instructions on whether her clients sought that the ACCC’s application be heard before a different judge. When the hearing resumed, counsel informed the Court that the respondents did not seek to have the matter heard before a different judge, nor did they oppose the orders sought by the ACCC. After hearing the application, I made further freezing orders under s 23 of the Federal Court of Australia Act 1976 (Cth) against Mr Laski and against his cousin Ms Tanya Hatch in order to preserve, until the final determination of this proceeding, the effectiveness and utility of the relief sought by the ACCC, and gave ex tempore reasons for doing so. The need for those orders arose because during the course of the trial a number of forms had been lodged with the Australian Securities and Investments Commission. These forms demonstrated that Mr Laski was seeking to cease being the director of, and had divested himself of shareholdings in, some of the companies relevant to this proceeding.

1. It is unnecessary to set out the background to those orders in any further detail because counsel for the ACCC, in commencing submissions on the application, emphasised those submissions which touched on Mr Laski’s conduct and credibility were made only with respect to the application and not to the substantive matter on which the Court was reserved. After hearing the application I afforded the parties an opportunity to make any written submissions on whether the conduct the subject of the application could or should be taken into account in the Court’s final determination of the proceeding. The ACCC filed submissions confirming its position that it did not seek that the Court have regard to that conduct in determining the proceeding. No submissions were filed by the respondents. In light of the ACCC’s position, I have not had regard to the submissions about that conduct nor the evidence tendered by the ACCC on the application in determining liability or relief in the substantive proceeding.

   THE HIGH COURT’S DECISION IN COMMONWEALTH V DIRECTOR, FAIR WORK BUILDING INDUSTRY INSPECTORATE [2015] HCA 46

2. After judgment was reserved, the High Court delivered its decision in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46. In that case, the Court overruled the Full Court’s decision in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; 229 FCR 331 and held that the restrictions on the parties (in particular, the prosecution) making submissions as to sentence in criminal proceedings, as outlined by the Court in Barbaro v The Queen [2014] HCA 2; 253 CLR 58 applies only to criminal proceedings.. Consequently, nothing said in Barbaro is antithetical to continuing the practice of agreed penalty submissions in civil penalty proceedings: at [50] (French CJ, Kiefel, Bell, Nettle and Gordon JJ; Keane J agreeing). Gageler J joined in the orders of the Court, having taken a different position in Barbaro itself, where his Honour found that the prosecution was entitled and obliged to make submissions on appropriate sentence if a court requests such assistance or if the prosecutor perceives a significant risk the sentencing court would make an appealable error in the absence of such assistance: Barbaro at [62].

3. The plurality found that the accusatorial nature of criminal proceedings differentiated them from civil penalty proceedings. Relevantly to the relief sought in this proceeding, the plurality also held that civil penalty proceedings do not involve any notions of retribution or rehabilitation, but rather are primarily if not wholly protective in promoting the public interest in compliance with the law: at [55] (see also [59]). The plurality endorsed the decision of French J (as his Honour then was) in Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at 52,152 that:

   Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]. ... The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.

4. Keane J, delivering a separate concurring opinion, at [102]-[103] characterised the roles of the parties in civil penalty proceedings in a way with which I respectfully agree:

   The legislative choice to designate proceedings for the recovery of a civil penalty may not be ignored by a court. The legislature has explicitly decided that a claim by an eligible person for the recovery of a pecuniary penalty for the contravention of a civil penalty provision is to be brought as a civil proceeding; and within the paradigm of civil proceedings, a regulator who brings such proceedings is to be viewed (like any other eligible person) not as a prosecutor but as a plaintiff.

   In proceedings under s 49 of the BCII Act, as indeed in any civil proceedings, it is the right and duty of the plaintiff to mark out the extent of its claim against the defendant. The plaintiff’s claim establishes the scope of the controversy to be resolved by the judgment of the court. When a plaintiff asserts a claim to the grant of a particular remedy, it is not proffering an opinion on a matter of fact or law; it is stating the basis on which a controversy between it and the defendant may be quelled by the exercise of judicial power. When a defendant agrees to a civil penalty in a particular amount, it is assenting to the grant of relief to that extent. And an agreement of the parties as to the basis on which they seek to resolve the controversy between them is not merely an opinion proffered by either or both of them as to how the proceedings should justly be resolved: it is a resolution of the controversy between them insofar as the quelling of that controversy is in their power.

   (Citations omitted.)

5. At [78] Gageler J noted that, subject to the proposition in Australian Securities and Investments Commission v Hellicar [2012] HCA 17; 247 CLR 345 at [152] that a regulator conducting a proceeding is “subject to some form of duty ... that can be described as a duty to conduct litigation fairly” (which like the High Court in Hellicar his Honour accepted for the purpose of his reasoning, but did not expressly endorse), there otherwise was no effective analogy between a regulator and a prosecutor:

   The regulator is not bound by the nature of the proceeding to be dispassionate in the relevant sense. Subject to its statutory charter, the regulator is permitted to advocate for a litigious outcome which the regulator considers to be in the public interest.

6. The parties in this proceeding were afforded an opportunity to make further submissions on the appropriate penalty, in the light of the High Court’s decision, and the ACCC did so. I deal with those submissions below. The respondents did not file any further submissions.

   THE EVIDENCE RELIED UPON

7. The parties filed an agreed statement of facts pursuant to s 191 of the Evidence Act 1995 (Cth). In addition, there are before the Court a number of affidavits filed by both parties, annexing a range of documents relevant to this proceeding, and various documents tendered by the parties at hearing. I refer to that evidence as necessary below.

   Witnesses for the ACCC

8. The following witnesses provided affidavits on behalf of the ACCC. None was required for cross-examination.

   Ms Kimberley Lloyd

9. Ms Lloyd is the solicitor with conduct of this proceeding for the ACCC and has affirmed four affidavits in this proceeding. Her first two affidavits dealt with and exhibited a wide range of material in support of the ACCC’s freezing order application, including Clinica advertisements and emails obtained during the ACCC’s investigation. These affidavits were also read at hearing in support of the findings and final relief the ACCC sought, and I have had regard to the contents of those affidavits in making my findings.

10. Ms Lloyd’s most recent two affidavits dealt in some detail with the total amounts paid by Clinica clients, the nature of financial transactions historically made to and from the Clinica account and the accounts of Letore and Swishette, and the amount of funds from the proceeds of sale of the Brighton property. Exhibited to her third affidavit were the records of payment, obtained during the course of the ACCC’s investigation, for most but not all Clinica clients and a summary table she had caused to be prepared indicating that a total sum of $608,517.35 had been paid by 67 Clinica clients to Clinica for participation in the program it advertised and marketed. Ms Lloyd deposed that the ACCC was aware of at least 97 persons who were Clinica clients in respect of the Clinica program during the relevant period of August 2012 to July 2013, and on that basis she believed the actual amount of moneys paid by clients towards the Clinica program would likely exceed $800,000. I note that a small number of the entries for payment set out in Ms Lloyd’s summary table (11 entries totalling $74,000) pre-dated August 2012, which is the point in time from which the respondents are first alleged to have engaged in conduct contravening the ACL. I do not consider that discrepancy material to the findings I make in these reasons for judgment. In any event, Mr Laski agreed in a subsequent affidavit responding to Ms Lloyd that the receipts summarised in this table were all receipts relating to clients of the Clinica program. I infer from that concession that the Clinica program may have been running for at least a short period prior to August 2012, although the Court is not requested to make any findings in respect of that earlier period. Whether or not this has the effect that some of these earlier clients may be shut out from relief under the non-party redress orders is a matter on which submissions can be made, under the process I foreshadow at [86] below.

11. Ms Lloyd also set out the analysis she had undertaken of the bank statements of Clinica, Swishette and Letore for the period of 1 March 2012 to 8 April 2015, which were exhibited to her third affidavit together with a spreadsheet Ms Lloyd had caused to be prepared summarising the financial transactions appearing in those bank statements. Ms Lloyd deposed that those transactions appeared to show a routine pattern, whereby Mr Laski withdrew amounts from the Clinica account, deposited the same or a similar amount into the Letore account, and within the following days or weeks withdrew funds from the Letore account and deposited it into the Swishette cheque account, and within the next few days or weeks withdrew funds from the Swishette cheque account and deposited it into the Swishette home loan account for payment of the Brighton property mortgage.

12. That spreadsheet also set out the payments made from the Clinica account to the ANZ Letore credit card. Ms Lloyd deposed that an analysis of the transactions on the ANZ Letore credit card showed payments made for Mr Laski’s personal use, including medical and optometry expenses, clothing, food and alcohol, student union fees and veterinary clinic and pet store expenses. The transactions also related to various fees and charges paid in respect of proceedings in the Magistrates’ Court of Victoria. These included fees and charges incurred on the same day proceedings were instituted by Clinica against former Clinica client Mr Sourab Uppal, a witness in this proceeding. I refer to these Magistrates’ Court proceedings below.

13. As to the proceeds of the sale of the Brighton property, Ms Lloyd deposed that a total of $802,077.51 was paid into a trust account held by Ms Lloyd’s firm pursuant to the freezing order. Ms Lloyd deposed that as at 15 October 2015 those funds had been depleted to a total of $751,392.34 following drawings pursuant to the additional carve-outs from the freezing order in accordance with my reasons in Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd [2015] FCA 1006.

    Ms Lauris Fahey

14. Ms Fahey was for some time in a relationship with Mr Laski. She has sworn two affidavits in this proceeding, on 28 July 2015 and 1 September 2015. The ACCC initially relied on her evidence in support of the ACCC’s freezing order application. She gave evidence that Mr Laski told her he operated a migration business under the names “Clinica” and “Pritchards Placements” placing migrants in jobs that assisted them to obtain visas, and that his business advertised for workers on the Gumtree website (which Mr Laski denied in a subsequent affidavit). In her second affidavit, Ms Fahey annexed a text message sent to her from Mr Laski which referred to placing an advertisement on Gumtree. She deposed that on one occasion Mr Laski boasted in front of her to a business acquaintance, Mr Stamatakos (to whom I refer in more detail below):

    about how he took advantage of the migrants who were looking for jobs through his business, and also about how he (Rod) dealt with claims against him. Rod said that some former clients sued him in VCAT and he was using delay tactics so that the clients’ visas would run out, and they would have to leave Australia before they had a chance to finalise their claims.

15. Mr Laski denied that such an interaction had ever taken place, deposing that he had never been in the presence of Ms Fahey and Mr Stamatakos together and that since late 2013 he had only dealt with Mr Stamatakos through his solicitors.

    Ms Lynn McKirdy

16. Ms McKirdy is the Assistant Director, Permanent Employer Sponsored Entry, at the Commonwealth Department of Immigration and Border Protection. In her affidavit sworn on 6 March 2015, she gave evidence about the direct entry stream of the Regional Sponsored Migration Scheme and the 187 Visa, the relevant provisions for which are set out at Item 1114C of Sch 1 and Item 187 of Sch 2 to the Migration Regulations 1994 (Cth). Ms McKirdy gave evidence that the Regional Sponsored Migration Scheme is predicated on a valid and acceptable employer nomination, and annexed to her affidavit a screenshot of a sample online employer nomination application form.

17. Ms McKirdy described the requirements of the Regional Sponsored Migration Scheme. A nominated position must correspond to the tasks or qualification for occupations of skill levels 1, 2 or 3 under the Australian and New Zealand Standard Classification of Occupations. Ms McKirdy gave evidence that a direct entry nomination in respect of an employee with a position as a cleaner or which gave an ANZSCO code starting with “81” (falling within a sub-major group “cleaners and laundry workers”) would be rejected by the Department because the tasks to be performed in the position did not correspond to skill levels 1, 2 or 3, regardless of whether the employee had obtained a Certificate III in “asset maintenance” or cleaning. She also deposed that any direct entry nomination by an employer under ANZSCO code 399999 (“technicians and trade workers not elsewhere classified”) would be scrutinised particularly carefully and if the position description or tasks involved were described as cleaning or asset maintenance, the application would be rejected for not corresponding to skill levels 1, 2 or 3 under ANZSCO, regardless of whether the employee had obtained a Certificate III in asset maintenance or cleaning.

    Mr Sukhdev Singh Gill

18. Mr Gill is a former client of Clinica who participated in the Clinica program, for the purpose of obtaining a permanent residence visa. Mr Gill holds a Certificate III in Graphic Design (Pre-press printing), a Diploma in Business and a Certificate IV in Business. He gave evidence that his friend had seen an advertisement for Clinica and gave him a telephone number for Mr Laski. In October 2012, Mr Gill called that number and spoke with Mr George Stamatakos, who told him that Clinica was a recruitment company that would help him find a job and permanent residency.

19. Mr Laski’s evidence was that Mr Stamatakos undertook a significant role in the delivery of the Clinica program. Mr Laski deposed Mr Stamatakos was engaged by Clinica from around 2011, as a contractor to provide business development and marketing assistance to Clinica. There was no written agreement with Mr Stamatakos. When individuals responded to Clinica’s advertising and marketing about the Clinica program, Mr Laski deposed that it was either him, or Mr Stamatakos, who met the individuals and explained that Clinica had jobs available in the cleaning industry, and that they could get permanent residency by completing the Clinica program. With Mr Palmer, Mr Stamatakos organised a registered training organisation to deliver the cleaning course to Clinica clients. Mr Stamatakos was also involved, on Mr Laski’s evidence, in placing Clinica clients in the abattoir jobs to which I refer below.

20. Upon Mr Gill asking about the qualifications he already held in graphic design, Mr Stamatakos told Mr Gill that area was not in demand and that he would need to undertake an asset maintenance course to help him get a permanent job in a regional area, in order to secure permanent residency. A few days later, Mr Gill met with Mr Laski and Mr Stamatakos in person and was told by Mr Laski that Clinica would find him a job in asset maintenance with an employer who would sponsor him for an RSMS 187 Visa, and that he would start the job immediately after completing the asset maintenance course. Mr Laski also told him that Clinica had a migration agent, but in response to Mr Gill’s inquiry told him that he could not meet with the agent as the agent was away on holidays. Mr Gill deposed that he was told Clinica would not do anything for him unless he signed a contract and paid Clinica, which he did. The contract signed by Mr Gill on that day was annexed to his affidavit and included the following cl 3.1 on “Payment for Services”:

    Applicant shall pay CLINICA INTERNATIONALE PTY LTD fees for the performance of the Services, as follows

    (i)       $10,000 upon signing of this Agreement.

    (ii)$5000 within 3 months of the date of this agreement. A further $5000.00. on completing 3 months Employment.

    (iii)$5000 payable upon lodgement of 187 Regional Sponsorship Permanent Residence Unconditional Visa application.

    (iv)$5000 payable upon the required documents being lodged for permanent residence application for the Applicant. The final fee is $30,000.00. minimum, and may vary from time to time, but not exceed $40,000.00.

21. Mr Gill deposed that in total he paid Clinica almost $14,000. He completed a Certificate III in Asset Maintenance (Cleaning Operations) at the Complex Training Academy, arranged by Clinica. After completing the course, Mr Gill did not receive any telephone call from Clinica about a job, as he had expected. Instead, on 26 December 2012 he received an email from Mr Laski, stating:

    After the 7th January you will be required to attend to help you get through your interview stages in order for you to be place in a full time position in regional area.

    Clinica apologizes for the delay and any inconvenience it may have caused you, but as you are aware the jobs were available of the time of you doing your course.

    John Ranieri and Robert Palmer were paid to provide the jobs and have failed to do so.

    As a result we are issuing proceeding against them and having a judgment entered and monies received, we will then be able to provide you with some compensation.

    Please be aware that this line of action takes time. Therefore please be patient and am confident things will work out.

22. In January 2013, Mr Laski contacted Mr Gill about an employer with a position available for an immediate start. Mr Gill accepted the position offered, along with about 10 other clients of Clinica. On commencing the position, Mr Gill discovered it was not a cleaning or asset maintenance position but was a meat packing job at JBS Australia Pty Ltd’s meat factory in Cobram, Victoria. In response to enquiries from Mr Gill, Mr Laski told Mr Gill he was going to lodge his file for permanent residence but first required a payment instalment of $5,000. Some time after, Mr Gill and other employees at JBS Australia Pty Ltd were informed by the plant manager that JBS was happy to give them jobs but would not be sponsoring them for permanent residence.

    Mr Rajesh Azad

23. Mr Azad is also a former client of Clinica who completed a Master of Commerce (Professional Accounting) degree in Australia. He gave evidence that he called and spoke to Mr Laski in September 2012 after being shown a copy of a Clinica advertisement in the Indian Times newspaper and attended Clinica’s office the next day to meet with Mr Laski. Mr Azad deposed that, at this meeting, Mr Laski told him:

    (a)It will cost $50,000 to $60,000 to get permanent residency in accounting. It is very hard these days as no one is hiring accountants. It will take a very long time.

    (b)One easy process is for me to do a course in asset management. It takes nine months to get permanent residency although with his company, Clinica, it will take seven to eight months. It is cheaper than accounting because it will only cost $35,000.

    (c)Clinica has a migration agent, Arthur, who will help. He has an office here and he will take care of everything. If I want to meet him personally, they will charge me $250.

    (d)The documents I will need are International English Language Testing System band 6 scores, a certificate III, my passport, and my resume. I will need an employer but Clinica arranges that. I will be paid $700 to $800 in wages, weekly.

    (e)It will cost me $35,000 and initially I will need to pay $10,000 first and this includes a $4,000 course fee.

    (f)Clinica submits an application to the required authority. Then I pay $10,000 step by step. I can pay the last $10,000 after I get my permanent residency. For regional sponsorship I need to be in the countryside, somewhere like Bendigo or Ballarat.

    (g)After three months with my employer Rad will submit my application. OSSNET will help with my resume and the type of job I want.

    I said that I would think about it. I then asked if I can meet Arthur. Rad said that Arthur is a very busy man, and if I have the money I can meet him. I said that I thought everything was included in the price but Rad said I can only meet him if I pay $250 per meeting. He also said that not many people know about this opportunity. It’s a rat race. Clinica have employers and they always put people in employment. Asset management is the only way right now. After three or four months I can leave the asset management job if I want to and Clinica will still be able to apply for permanent residency for me. He said that, if I work as an accountant, I would have to work for two years and the employer would not pay me. I would have to work for free and find other paid work on weekends so I can survive. With asset management, I don’t have to work hard to get permanent residency. It is legal and everything is fine.

1. A copy of notes made during that meeting were annexed to Mr Azad’s affidavit. Mr Azad deposed that he understood the asset management work described by Mr Laski related to some sort of management role or managing assets, and that he was not told that the work was cleaning work.

2. A few days later, Mr Azad returned to Clinica’s office and met with Mr Stamatakos. On asking about what kind of course the asset management course was, Mr Stamatakos said the course was in relation to management in schools or hospitals, and that doing asset management would lead to unconditional permanent residency. Mr Azad asked what would happen if Clinica could not provide the job, and was told that would not happen but if it did Clinica would provide a 60 per cent refund.

3. Mr Azad deposed that later in September 2012 he sought advice from a migration agent who told him he did not know anything about the asset management course or whether it was on the eligibility list. Mr Azad then called Mr Laski and asked why the agent did not know about the course. He deposed:

   Rad said that there was a new rule that just came in in July and no one knows about this. He said that I should not go to other lawyers and talk about it because then people would start to know all about it. It would become popular and it would be harder to get jobs. He also said that maybe other companies cannot help people get jobs under this visa because they do not have links with other companies and jobs. Rad’s company have been doing this for thirty years. They have employers. They know employers.

4. Mr Azad signed a contract with Clinica on 27 September 2012, and a copy of that contract was exhibited to his affidavit. It did not set out any provision for the refund promised by Mr Stamatakos if no job eventuated. Mr Azad deposed to his understanding at the time that this was the first step to permanent residency and that he would obtain a job in asset management which would qualify him for permanent residency.

5. Mr Azad then started the asset maintenance course in November 2012. It was only on the first day that he discovered the course was not about managing or maintaining assets but about cleaning. He rang Clinica about this. He deposed that he was told, by either Mr Laski or Mr Stamatakos, “that it is a cleaning course, but I should not worry. I will get a job and get paid $800 a week. The cleaning course is on the list, I will get unconditional permanent residency in nine months.”

6. Like Mr Gill, Mr Azad did not hear from Clinica about any jobs after completing the course but instead received the same email on 26 December 2012 described at [35] above. On 7 January 2013 Mr Azad attended the Clinica office and demanded a refund as Clinica had failed to provide him a job. Mr Laski told him that there was nothing in the contract about refunds, and in fact Mr Azad was required to pay another $11,000. Mr Azad told Mr Laski he would go to the immigration authorities to tell them he was misleading people. Later that day, Mr Laski emailed him about a job available for an immediate start in Cobram, Victoria in a meat factory. Mr Azad then received a telephone call from Mr Laski:

   He said I would be starting a new job in Cobram in a meat factory on Monday. I said that Rad had told me that I would get a job in an aged care rehab centre, at a school or a hospital, but not as a meatworker. He said that if I started in the meat factory, he would show to immigration in the documents that I had worked as a cleaner in a school or a hospital instead of a meat factory. He said that he knows the loopholes and I shouldn't worry about how he does the immigration papers as that’s his job.

7. Mr Azad did not accept the job. On 9 January 2013, he received a further email from Mr Laski which was annexed to his affidavit. In that email, Mr Laski stated:

   You attended my office in company of Rohit Pandhi.

   Now we started the meeting with you both saying that you wanted to pursue another Visa, not the 187 REGIONAL SPONSORSHIP.

   You went on to say you wanted a full refund. (please have a look at your Contract) … You are in fact in breach of your contract, as we did not receive a payment from you on the 22nd 12.

   We seek immediate payment of your Overdue Fees, if not received in 7 DAYS WE WILL ISSUE PROCEEDINGS WITHOUT FURTHER NOTICE.

   That aside, you should not come in here and threaten me with…Going to the Media, Reporting Clinica to D.I.A.C. and generally going out to ruin my business.

   I advise you to seek legal advice before you embark on the above, ask the question OF YOUR ADVISOR, what is the downside for me if I go down this track.

   I am not fearful of your threats … the business has been going since 1973. We are well established, AND HAVE A GOOD TRACK RECORD IN FINDIND Jobs & Sponsors.

   So bring it on.

   …

   Let us know in writing (EVEN THROUGH YOUR Legal Advisors) where you would like to go from here. Your file is suspended and will not progress until your fees are brought up to date.

8. Mr Azad did not respond. In March 2013, Mr Azad was served with a complaint filed on 8 March 2013 against him by Clinica in the Magistrates’ Court of Victoria. The Magistrates’ Court complaint was annexed to his affidavit. It sought payment of $11,150 said to be outstanding under the terms of Mr Azad’s regional sponsorship agreement with Clinica, together with legal costs. Mr Azad deposed he then received a lot of letters from debt collection companies, each stating he had to pay around $11,000.

9. In total and to the time of trial, Mr Azad had paid Clinica over $8,000.

   Mr Sourab Uppal

10. Mr Uppal is also a former client of Clinica and had previously completed in Melbourne a Certificate III in Hospitality (Patisserie) and a Diploma of Hospitality Management. Mr Uppal deposed that in November 2012 he saw and took a photograph of an advertisement for Clinica on a Melbourne Metro train. A copy of that photograph was annexed to his affidavit. That advertisement stated:

    Imagine…Permanent Residency in Just 9 Months

    The Quick and Easy Way to Get P.R

    We have

    Sponsors  Employers  Jobs

    CALL NOW xxxxxxxxxxxx

    Clinica Internationale Pty Ltd

    Recruitment & Placement Agents

    [email protected]

11. Mr Uppal called the telephone number contained on the advertisement and arranged a meeting later that month with Mr Laski. At that meeting, Mr Uppal deposed Mr Laski told him:

    (a)He would not be able to get me a job as a baker, but could get me a job in asset maintenance;

    (b)He would need copies of my passport, International English Language Testing System results, and Certificate III;

    (c)I would need to do a 20 day asset maintenance course which costs $3,950 and then I would be placed in a job in regional area. The asset maintenance course is a management course. After three months working in a regional area, Rad would lodge my file with a regional certifying body to get regional sponsorship, then he would lodge my visa application. If these two were clear, I would get permanent residency in a total of nine months.

    (d)I would have to work for one employer and stay with that employer for two years. There was an opening for employment for students in regional areas, as no one likes working in a regional area because no one wants to live there.

    (e)Clinica had its own lawyer, so I did not need to hire a lawyer or migration agent to file a permanent residency application.

    (f)The Clinica program would cost about $35,500, paid in instalments. I would first pay $6,000, then 30 days later pay another $6,000. I would pay $3,950 for the asset maintenance course. After I got the Certificate III and had worked for three months Clinica would lodge a nomination with a regional certifying body. At this point I would pay $15,000. Clinica would then lodge the 187 visa application and I would pay $4,500.

    (g)The course fell under technicians and trades. It was on the internet as ‘asset maintenance course’ under technicians and trades, and it would lead to a permanent residency visa.

    Rad did not tell me at this meeting that the asset maintenance course was a cleaning course. I found this out at my next meeting with Rad.

12. Mr Laski took notes during the meeting which were given to Mr Uppal, and those notes were annexed to Mr Uppal’s affidavit.

13. On 12 November 2012, Mr Uppal called the Department of Immigration and Citizenship (as it was then known) seeking information about the regional sponsorship scheme, in order to confirm the information provided by Mr Laski. Mr Uppal was given some general information by the Department, and sent an email with links to the relevant parts of the Department’s website. Mr Uppal deposed that on reviewing that information, it appeared to him to be consistent with what Mr Laski had said, including that he needed to get a job in an approved occupation and work for two years in a regional area. Mr Uppal saw that the list of approved occupations for a 187 Visa included “Technicians and Trade Workers” and deposed he was reassured by this as Mr Laski had told him that asset maintenance fell within that category. Mr Uppal made his first payment to Clinica of $2,000 on 19 November 2012. On 24 November 2012, Mr Uppal attended Clinica’s office and signed a contract with Clinica, a copy of which was annexed to his affidavit.

14. Mr Uppal attended the asset maintenance course in December 2012, having first quit his existing job as a courier in order to undertake the course. In January 2013, Mr Laski advised Mr Uppal that Clinica had found him a job with JBS Australia Pty Ltd at its meat processing plant. Mr Uppal accepted the position and commenced on 4 February 2013. It was only upon commencing at JBS that Mr Uppal discovered the work did not involve cleaning. He deposed:

    To my horror, the work did not involve cleaning, but rather cutting off the legs of dead goats and sheep. I was working very close to the animals being slaughtered.

    I am a Hindu and have been a vegetarian all my life. My experience at JBS was scary and I was very emotional and upset. I was crying during work but I could not stop and talk to management about it, as I was on a production line. When I stopped working for a moment or two, the whole line stopped and people would start yelling at me. The experience was a real shock to me. In our discussions, Rad had always told me that I would be working in asset maintenance, which he later explained was cleaning. He never told me that I would be working in the slaughter floor of an abattoir. I was not mentally prepared to deal with it.

    After work that day, I and a group of five or six other clients of Clinica all telephoned Clinica together. We had the mobile on speaker-phone and we all stood around. We spoke to George and then Rad to complain and find out why we were not doing cleaning work. George said that there must have been some mix-up at JBS and that he would sort it out. Rad then said that he did not know what was going on. He promised that George would talk to JBS and get back to us as soon as possible. George did not call us back that day.

    The next morning I went with the other men from Clinica to the front of JBS but I could not bring myself to go back inside the abattoir. I told the other men that I could not go back to JBS. No matter how much money I had spent and how much I wanted the permanent residency visa, I could not stand by observing the slaughter of animals. I caught the bus from Cobram and then a train and I went back home to Melbourne.

15. Mr Uppal then called Mr Laski:

    I told him that this is not what he had promised me. He had told me that I would be working in the cleaning department. He had not told me that I would be cutting animals. He replied that he did not know anything about it. He said that he would talk to JBS and George about it and get back to me. I was angry and upset and again told him that he should have notified me about what I would be doing at JBS. I said that I had had to leave my wife at home for this job and I did not know when I was coming back. I had to give up my other job and I had already given Clinica all of my savings. I asked him how I was supposed to pay my rent and my bills as I had nothing left. I told him that he had not delivered what he promised. He told me to calm down and that he would find me a job, I just had to give him some time.

16. Instead, on 15 February 2013, Mr Laski emailed several clients including Mr Uppal stating they had behaved unprofessionally in leaving JBS and had “ruined your opportunity for Sponsorship”. Some email correspondence then followed in which Mr Laski offered them a “second chance” to return to work at the meat factory. On 26 February 2013 Mr Uppal declined that offer, stating “[a]s I have completed course in Cleaning as per the contract, I am expecting that you will find me a job in the same field”.

17. Mr Uppal deposed that over the next few weeks he telephoned Mr Laski several times and when he was able to reach him, asked for a refund, which Mr Laski refused. He also tried to call Mr Stamatakos but was unable to reach him. He deposed that on the last occasion he spoke with Mr Laski, in around March 2013:

    he told me that I had promised to pay him $35,000 and I had to pay the balance. I told him that I had already paid him $10,000 and would not pay him any more because he did not get me a job. He then said that if I did not pay I would be voiding my contract. He would send a summons to my house and I would have to go to court. These words were very scary to hear. I was very worried that he would sue me.

18. On 17 March 2013, Mr Uppal received an email from Mr Laski. In the email, which was annexed to Mr Uppal’s affidavit, Mr Laski stated:

    YOUR CONTRACT WITH CLINICA SIGNED 24^TH NOVEMBER 2013 [sic], CLEARLY STATES YOUR PAYMENT SCHEDULE…WHICH YOU HAVE NOT ADHEARED TOO.

    YOUR OUTSTANDING AMOUNTS ARE $4000.00. AS AT 27^TH NOV 2012…A FURTHER $6000.00. BY FEB 10^TH 2013…TOTAL $10,000.00.

    If this is not paid by 25^th March 2013. We will put a stop on your file for 7 days, after which it will be cancelled and a Summons will be taken out in the Magistrates Court To recover the $10000.00. owed to CLINICA INTERNATIONALE PTY LTD.

    YOU ARE CURRENTLY IN BREACH OF YOUR CONTRACT FOR NON-PAYMENT AND ABANDONING YOUR POSITION IS AT JBS (JOB PROVIDED TO YOU) WITHOUT NOTICE.

    BEST YOU ADDRESS THE ABOVE ISSUES AS A MATTER OF URGENCY.

19. Mr Uppal deposed he received in April 2013 a copy of a complaint filed against him by Clinica in the Magistrates’ Court of Victoria. The complaint was annexed to his affidavit. It sought payment of $10,000 alleged by Clinica to be outstanding under the regional sponsorship agreement, together with legal costs. Mr Uppal deposed he left Australia around this time as his bridging visa was about to expire.

20. In total, Mr Uppal had paid Clinica $10,000 in three instalments.

21. Each of Messrs Gill, Azad and Uppal gave evidence about the stress, frustration and disappointment which their experiences with Clinica had caused them. Both Mr Gill and Mr Azad had had to borrow significant amounts of money from friends in order to pay Clinica for its services. Mr Gill deposed that he had borrowed $5,000 from a friend, which had taken him a long time to repay and had weighed heavily upon him. Mr Gill described himself as being left very depressed by the whole situation with Clinica. Mr Azad deposed he still owed one friend $3,000, having repaid most of his other friends the money that he borrowed from them. He deposed that he has had a very difficult time financially and moved into a garage with a friend in order to save money, and that after receiving the Magistrates’ Court complaint and letters from debt collectors he has had credit card applications refused on the basis of his poor credit history. None of the men has been able to obtain the permanent residence visa which they had hoped they would secure through the Clinica program.

    Witnesses for the respondents

    Mr Radovan Laski

22. Mr Laski has made seven affidavits in this proceeding, six of which were read and relied on at hearing. Most of these affidavits were filed in respect of the freezing order, or as a consequence of it. Mr Laski was required for cross-examination, and was cross-examined extensively. I refer below to aspects of that cross-examination, and to specific parts of the evidence reflecting poorly on Mr Laski.

23. Two of the affidavits are expressly made on behalf of Clinica. Mr Laski is the sole director and shareholder of Clinica. In the first affidavit made on Clinica’s behalf, Mr Laski described how the Clinica program came about and the events that followed its commencement. Mr Laski stated that Clinica was established as a company by him in 1974 and from around 2008 he operated a recruitment service through Clinica. He deposed Clinica employed only two people: himself, as its “main employee”, and a secretary who assisted with administrative tasks but did not have any dealings with clients. Mr Laski stated he was the person responsible for day-to-day decision-making about Clinica’s business activities. In this affidavit Mr Laski described how Mr Stamatakos came to be involved in the Clinica program, as I have set out at [33] above.

24. Mr Laski’s evidence was that in late 2011 or early 2012, he met with one Mr Robert Palmer who told him Mr Palmer could get “a lot of jobs” through Mr Palmer’s business called OSSNET (Online Student Support Network). Annexed to his affidavit was a letter from Mr Palmer on OSSNET letterhead describing how the “OSSNET System” worked. That letter, like subsequent OSSNET letters annexed to Mr Laski’s affidavit, bore the following disclaimer:

    PLEASE NOTE that OSSNET is not an Immigration Agent or a Job Placement Agency and does not act as an Immigration Agent or Job Placement Agency.

25. Mr Laski stated he agreed to sign Clinica clients up to OSSNET to access job opportunities, with Clinica paying fees to Mr Palmer on behalf of each applicant. He deposed that, however, after a few months, no jobs had been sourced. On 14 April 2012, Mr Palmer sent two letters to Mr Laski which were annexed to Mr Laski’s affidavit. Mr Palmer referred to difficulties in sourcing job placements, and in one letter stated:

    I have been working closely with the newly-formed peak industry body CHCA – who represent the ten major employers in the cleaning industry. I have been promised upwards of 5,000 jobs for cleaners (The turnover period for the industry is approximately 24 weeks)

    New areas under consideration for the Cleaning Industry include a security clearance and first aid/first responder qualifications.

    I am now investigating ways to use employment opportunities in the cleaning area as a stepping stone to further employment in other areas. It may well be that people with other qualifications, say hairdressers, could have gap training/RPL processing to become qualified for work in the Cleaning Industry.

26. Mr Laski deposed that after receiving those letters he had a number of conversations with Mr Palmer in which Mr Palmer stated large cleaning contractors were looking for staff in regional areas and that Clinica clients would have to do a Certificate III in Asset Management and Maintenance. On 4 July 2012, Mr Laski emailed Mr Palmer:

    For some time now you have been telling George and myself that there will be a new Category on the Govnments wanted list of skills.

    The new category is to be..Cleaning & Maintenance.

    You were 100% sure that it would be on the list,so applicants could be given a Cert.lll in it, then move on to a 187 Visa<which replaces the 857 and 119 Visas.

    As late as yesterday when we met,I told you it was not listed on the MODL [the Department’s Migration Occupation in Demand List].

    You assured me it was,and you had been in discussions with the cleaning industry and Simon Cream M.P.

    Please explain the situation in an email to me.

27. Mr Laski deposed he received no response in writing, but instead Mr Palmer called him and stated the asset maintenance course had been approved and there was a special deal between the Government and CHCA that it would come under the ANZSCO classification of “399999 (Technicians and Trade Workers Not Elsewhere Classified)”.

1. Mr Laski deposed he ran this past a lawyer and migration consultant Mr Arthur Vasilopoulos who had an office on the same floor as Clinica, without ever seeking his formal advice. He was told “I don’t see why it wouldn’t work, but I’d need to look into it further”, and did not follow up further. I infer that Mr Arthur Vasilopoulos is the same “Arthur” that Mr Laski told Mr Azad about, in the conversation I have described at [37] of these reasons. What Mr Laski said to Mr Azad was, it seems to me, designed to discourage Mr Azad from contacting the migration agent directly, and designed to encourage Mr Azad to rely on what Mr Laski told him. Relevantly, this included that Arthur would “take care of everything” about the permanent residency application.

2. Mr Laski acknowledged he told prospective clients that Clinica had jobs available and that they could obtain permanent residence visas through the Clinica program. He deposed around September 2012 Mr Vasilopoulos spoke to him again about the Clinica program and said “Sydney reckon it won’t work, it’s not high skilled enough” and that Mr Vasilopoulos needed to review the modules in the asset maintenance course. Mr Laski understood “Sydney” to be a reference to someone in the visa department of the Department of Immigration in Sydney. He told Mr Vasilopoulos to speak to Mr Stamatakos about the course, as it was Mr Stamatakos who was organising it. On the evidence, it is not apparent Mr Laski followed up any further. Mr Laski deposed he did not give any further information about the course to Mr Vasilopoulos and was not aware whether Mr Stamatakos gave him any information. This negative advice from Mr Vasilopoulos did not stop Mr Laski making representations of the kind I have described him making to Mr Azad, nor did it cause Mr Laski to go back to people like Mr Azad and tell them the permanent residency plan apparently would not work.

3. Mr Laski deposed the first asset maintenance course commenced on 22 October 2012 and included 14 Clinica clients. He stated in total 88 Clinica clients completed the course, and annexed to his affidavit a list of those clients obtained from the course provider, the Complex Training Academy. I note this list itself describes each of the clients as having completed a Certificate III in “Cleaning Operations” and not asset maintenance or management.

4. Mr Laski deposed that by October 2012 he had begun to worry that Mr Palmer was not responding to his emails or phone calls following up about jobs for Clinica clients who were about to complete the course. On 11 October 2012, Mr Laski wrote to Mr Palmer and Mr John Ranieri (who had introduced Mr Palmer to Mr Laski) regarding the location of jobs, after jobs in North Sydney had been mentioned to him:

   Just like to confirm that these jobs for the 187 Regional Sponsorship Visas must be in Regional Areas.

   Also as discussed and made very clear to you, the employers must be agreeable to provide a 2 yr. work contract<out clause after 4 months>basic rates of pay for the skill..$800.00. per week gross plus 9%super ... overtime if available.

   NORTH SHORE HOSPITAL IS NOT REGIONAL.

   Please explain!!!

5. Later that day, Mr Laski and Mr Stamatakos met with Mr Palmer and Mr Ranieri and ultimately they agreed to try to place some Clinica clients at North Shore Hospital with a view to then transferring them to regional jobs. Mr Stamatakos emailed Mr Ranieri later that day, using Mr Laski’s email account, and a copy of that email was in evidence:

   As per discussion today, moving forward we will work towards placing our applicants Regionally. This may mean that the 22nd Oct 12 course applicants go to North Shore Hospital with the view to place them regionally from there.

   Confirming you will be speaking to Gordon Mar Monday the 15th October to see if we could possibly reposition our applicants regionally, and future applicants moving forward.

   You also made some suggestion that Naz could possibly help on that front.

   In order to assist you I have made some call myself to place some of these applicants. Looks quite positive, however your assistance and support is still paramount as we have many applicants.

6. Mr Laski deposed that he was informed by Mr Stamatakos around November 2012 that Mr Ranieri said to Mr Stamatakos that he and Mr Palmer would not conduct any further courses as they could not find jobs. Mr Laski wrote to Mr Palmer on 18 November 2012 in terms which make clear Mr Laski understood Clinica’s exposure to liability for failing to provide jobs to its clients:

   Based on representations and statement made on Regional Job Placement.

   We are now discovering that we have been misled. The sad part is that you have admitted that you were misled by Dr. Colin Benjamin.<WHOM WE HAD NO DIRECT DEALINGS WITH>

   The representations were as follows.....

   The candidates had to do a specific course, involving ‘LIFE BE IN IT.’ .. because it had to include First Aide .. (First Response)& Chronic Illnesses and Diseases being the employers requirement.

   You had the Employers provided we met your requirements.

   On completing the course the candidates would be given a Certificate 111 and then given a job in the Cleaning Industry ... 38 HOURS A WEEK & IN A Regional Area. They would be paid an average salary based on a 38 hour week of about $800.00.,the employer would sign a 2 year contract with a 90 day out clause. Our Registered Migration Agent would prepare the Contract in keeping with the Visa requirements.

   The jobs were waiting to be filled; up to 5000 jobs available ... this is what was articulated.

   The applicants could apply for a 187 Visa ... Permanent Residency. YOU WERE AWARE OF THIS ... And you are aware of the type of business we are in.

   THE OUTCOME .....

   We now find that there are no full time jobs in Regional Areas. That you don’t have a suitable Employer and basically it is a case of “So Be It”

   The consequences ...... .

   If 50 full time jobs are not found in Regional Areas in a very short space of time ... we can be liable for the Applicants loss of wages, until a job is found. If they elect to issue in the Supreme or County Courts, we will join you in the action.

   The whole thing seems to be a repeat of the original OSSNET deal. Where you held Ossnet up as the credible entity to find positions for applicants.

   As it turned out you were unable to place the Applicants ... giving a feeble excuse that the RTO’S they attended were not credible, and that you were unable to give further details as you would be sued for liable. To date I have paid out $80,000.00. in refunds .. please tell what you intend to do about it.

   So Robert I’m putting you on notice, I want you to fix the problem ASAP.

7. Mr Laski clarified in cross-examination that the $80,000 referred to in this letter was not an accurate representation of the amount refunded to Clinica program clients who had undertaken the asset maintenance course, but related to other clients who came to Clinica seeking positions as hairdressers and the like. Mr Laski deposed in a separate affidavit in this proceeding to having issued refunds totalling $16,050 to four clients of the Clinica program (comprising a refund of $1,050 to one client and refunds of $5,000 each to three other clients) and that:

   Clinica issued a number of other refunds to clients by cheque, but I can now no longer remember whether these were to clients of the Clinica Program, or to other clients of Clinica, and I did not keep any record that would enable me to identify which of the other client refunds related to the Clinica Program.

8. Mr Laski also emailed Mr Ranieri on 20 November 2012:

   Wish to confirm your discussion with George on the 16th November 12, that you and Robert where not going to conduct any further courses at CTA through Life Be In It for the reasons of being unable to find the jobs to all the students through your Jobs Now Program.

   Your commitment to place these students still stands and be aware that you and Robert could be looking at up to $800per applicant per week to compensate the applicants for loss of wages.

   Just to refresh your memory, we went into this deal based on your undertakings:

   1.        Whoever does the course get a job with ISS in a regional area.

   2. If they do not do this particular course they will not be employed by ISS. It looks on the surface that all your doing is creating business and an income for yourselves through running these course, but not been able to deliver the jobs.

   3.        [sic]

   We are presently trying to find jobs to fulfill our commitment to our clients.

   I suggest that you do the same to elevate their losses.

9. He deposed, however, that:

   I didn’t stop the Asset Maintenance Courses from running, or stop signing up clients at this time, because I thought Clinica would still be able to find jobs for them.

10. On 4 December 2012, Mr Laski again wrote to Mr Palmer. The email bore the subject line “lack of jobs” and threatened legal action:

    Time is marching on. No jobs from you, what happened to the 5000 positions that you claimed were given to Life Be In It.

    The main condition was that applicants had to do the Course you stipulated,otherwise they would not get jobs with I.S.S. <THEY HAVE FINISHED THE COURSE>

    This course was taken by you ... in some subjects.

    In order to Minimise the losses of the Applicants that YOU had promised jobs
    for.

    I have now been offered jobs for a payment of $3000.00. per position. 15 POSITIONS TO DATE.

    The alternative is to pay each applicant $800.00.per week<for every week that they are out of work>.

    GREAT CHOICES YOU HAVE LEFT ME WITH??? AND YOU GUYS GOT $1000.00. PER APPLICANT WHO DID THE COURSE.<$27000.00.>

    We acted on your representations ... or should I be saying Roberts MISREPRESENTATIONS!!!

    This is just to put you on Notice,as we intent to recover these costs from all of you

    Once we have established the quantam,we will inform you,and issue a letter of demand.

    If the moneies are not paid we will then issue proceedings.

11. What is notably absent from these communications is any acknowledgment of the ongoing damage being done to Clinica’s clients.

12. Mr Laski deposed he started making enquiries in December 2012 to seek to obtain jobs for Clinica clients. In late December 2012 or early January 2013, he met with the operators of the ICM Partnership, which he described as a private investigations company, and offered to pay them $3,000 for each client for whom they could find a regional job with a sponsoring employer. ICM put him in touch with representatives of MISS, a company recruiting for the JBS Australia Pty Ltd meat processing plant in Cobram and Mr Laski deposed:

    When I met with MISS representatives, I was told that Clinica clients could get jobs at JBS and that they would be sponsored. I did not seek to confirm this directly with JBS, nor did Clinica or I enter into any written agreement regarding sponsorship of Clinica clients with JBS or with MISS.

13. Mr Laski deposed he then contacted around 10 Clinica clients who had completed an asset maintenance course about the job available at JBS, and that it was then Mr Stamatakos who worked with MISS to arrange the job placements for those clients. He deposed:

    I do not recall speaking to Mr Uppal or any other Clinica clients as alleged in paragraphs 49 and 51 of his affidavit, however I do recall attending Cobram in around April or May 2013 and meeting with a group of Clinica clients who had been working at JBS. This occurred after they had contacted me and informed me that on speaking with one of JBS’s human resources officers, they had been told that they were not going to be sponsored for the purposes of obtaining a regional sponsored visa. I told them that I could offer them alternative employment in the meat processing industry in Western Australia with a different company who would sponsor them. They told me they would need to think about it, however I only ever heard back from one of the clients, who said he did not want to go to Western Australia.

    Clinica did not provide jobs to any other clients, and none of my other enquiries produced any results in terms of available employment in the cleaning industry or otherwise.

14. Mr Laski acknowledged that he subsequently sought and obtained written legal advice from Visa Law Migration Lawyers, deposing that:

    I received the advice from Visa Law dated 26 May 2013, which is annexed to the affidavit of Kimberley Anne Lloyd affirmed 3 August 2015 at annexure ‘KAL-14’, and I believe that I read it at the time. I do not recall what I thought about it at the time. In hindsight I would have sought advice and insisted that other third parties entered into agreements confirming what they had represented to me. I conducted my affairs in the 70s to 80s on the basis that a person’s word was their bond. I trusted Mr Palmer as he was a teacher and educator and had significant experience. I also put my trust in Mr Stamatakos to ensure that the course would be have the sufficient modules and would be CRICOS registered.

15. Ms Lloyd exhibited to one of her affidavits the legal advice by Visa Law dated 26 May 2013, which had been produced to the ACCC by the respondents in response to a notice under ss 155(1)(a) and (b) of the Competition and Consumer Act. The relevant part of its conclusion states:

    It would appear to be highly unlikely that a position offered to a graduate of the course CPP3101 – Certificate III in Cleaning Operations could, in the absence of additional qualifications, be classified as that of a Technician or Trade Worker nec. It also seems unlikely that additional specialist qualifications in industrial cleaning or asset maintenance – however described – would be capable of ‘elevating’ the occupation into ANZSCO level 3. Even if such an ‘elevation’ were possible, it is liable to be expressly excluded from the RSMS program by DIAC policy, as is presently the case for ‘Senior Piggery Attendants’. Marketing the course as a way of obtaining permanent residence via the ordinary Direct Entry RSMS route would therefore appear to be inadvisable, as it might reasonably be viewed as misleading. On the other hand, if a labour agreement were in place, then the course might become a viable RSMS pathway.

16. Other affidavits filed by Mr Laski exhibited the financial statements of Clinica and other related companies. The financial statements for Clinica showed gross receipts of $742,818 in the financial year ending June 2013, with an operating profit before income tax of $183,006. Of the company’s expenses in that financial year, by far the largest expense was the line item “consultants fees” of $234,096. Mr Laski deposed that a significant amount of the funds received by Clinica were on-paid to Mr Stamatakos:

    I agree that the receipts summarised in annexure KAL52 to the affidavit of Kimberley Lloyd affirmed 15 October 2015 are receipts relating to clients of the Clinica Program.

    However, Clinica did not retain all of those funds for its own purposes, and in a number of instances did not receive the funds itself. A significant amount of the funds received by Clinica were on-paid to Mr Stamatakos, and a number of clients of the Clinica Program paid Mr Stamatakos directly. For example, in annexure KAL52, there are a number of notations in the final column that amounts were ‘Paid to Apollo’s Son’. This matches my recollection that many clients paid Mr Stamatakos directly for their course fees of $3,950.

    The amounts on-paid to Mr Stamatakos by Clinica were by way of course fees, which was $3,950 per client, and commission, which was $1,000 per client as described in paragraph 23 of my affidavit sworn on 28 September 2015. Usually what would happen, during the time that Mr Stamatakos was assisting in the Clinica Program, was that he would send Clinica an invoice for the course fees or commission using his business name ‘Apollo’s Son’, and I would pay him by cheque. I do not know exactly how much was on-paid to Mr Stamatakos for the Clinica Program, but I estimate that it was well and truly in excess of $100,000.

    Now shown to me and marked ‘RML-9’ is an invoice 16 December 2012 from Apollo’s Son to Clinica Internationale for ‘RTO Placement Asset Maintenance’ and ‘Asset Maintenance Course’ [for a sum of $47,000].

    Now shown to me and marked ‘RML-10’ are photocopies of a number of cheque butts showing payments of $218,671 to Apollo’s Son during the period May 2012 to June 2013.

17. Annexure KAL52 referred to by Mr Laski is the spreadsheet which Ms Lloyd caused to be prepared summarising receipts relating to clients of the Clinica program to which I have referred at [25]-[26] above. By adding up the amounts in that spreadsheet annotated as being paid or transferred to Apollo’s Son, counsel for the respondents advanced a submission that a sum of $67,737.35 in course fees had been on-paid directly to Mr Stamatakos on top of the fees and commissions paid to him.

18. Mr Laski also deposed to the financial arrangements of Clinica, Swishette, Letore and other related companies, as well as to the assets and liabilities of the respondents and to the trust structures used by Mr Laski and his associates. I deal further with that evidence as relevant in my reasons below.

    Ms Tania Laski

19. Ms Tania Laski was previously married to Mr Laski. She was not required for cross-examination. She has sworn one affidavit in this proceeding, in support of the respondents. In that affidavit, Ms Laski deposed to loans that she had made to Mr Laski from time to time in 2011, for use in his business operations. Annexed to her affidavit was a copy of a loan agreement dated 2 February 2011 entered into between herself, Mr Laski and Swishette, under which she agreed to lend $600,000 to Mr Laski, secured by way of a charge over the Brighton property with the proprietor Swishette acting as guarantor. This is a good example from the evidence of the mixing of Mr Laski’s interests with those of the corporate and trust entities he controls, and, it seems to me, Mr Laski causing Swishette to act in breach of its obligations as trustee.

20. Ms Laski deposed that over the last five years, she had lent to Mr Laski a total sum of $275,000 of which a total of $50,000 had been repaid. Annexed to her affidavit were records she said reflected some of these loaned amounts, including:

    (1)An extract from a bank statement, unmarked as to year, showing a withdrawal of $10,000 on 27 April, which Ms Laski deposed she had loaned to Mr Laski on 27 April 2010;

    (2)A record of a telegraphic bank transfer dated 1 October 2014 showing a transfer of $50,000 from Ms Laski to Letore. Ms Laski deposed that this was also a loan to Mr Laski, but without any explanation as to why the funds were received instead by Letore;

    (3)A record of a telegraphic bank transfer dated 10 February 2015 showing a transfer of $105,000 from Ms Laski to Cigmart Australia Pty Ltd. Ms Laski deposed that this was also a loan to Mr Laski, again without explanation as to why the funds were transferred to Cigmart;

    (4)A record of a telegraphic bank transfer dated 15 June 2015 showing a transfer of $50,000 from Ms Laski to Cigmart, said also to be a loan to Mr Laski. Ms Laski deposed that the $50,000 loan monies were needed urgently because tobacco goods were in storage and were incurring customs penalties.

21. Ms Laski deposed that on 9 June 2015 she lodged a caveat over the Brighton property, and, as the property had been sold, she required payment of the total amount outstanding. It was unclear from her evidence whether she alleged this amount was $215,000 (as she stated) or $225,000 (as her other evidence might suggest). Mr Franzese’s evidence, to which I refer below, also put the figure at $215,000. I proceed on the basis of the figure of $215,000. There was no evidence about the status of Ms Laski’s caveat at the time of trial – for example, whether it was discharged on settlement of the sale of the Brighton property, in an apparently arm’s length transaction on 8 September 2015. Whether Ms Laski can and should be recognised as having an equitable interest in the Brighton property, sufficient to support a caveat, was not a matter for determination in this proceeding. In my opinion, there is currently an insufficient evidentiary basis for the Court to be satisfied that Ms Laski should be paid $215,000 in preference to those funds being available to effect refunds to Clinica clients, particularly given that the only affidavit filed by Ms Laski in this proceeding (deposing to the sums she was owed) pre-dates the settlement of Brighton property. In addition, it seems to me there is real doubt about the lawfulness of the offering by Swishette of the Brighton property as security for loans by Ms Laski to Mr Laski. Finally, on the evidence some of the loans were not directly to Mr Laski, but to another corporate entity controlled by him (Cigmart).

1. In the context of the issue before White J, his Honour did not consider that any such approach could be taken, to effectively “transmute” (see [109]) the terms of the trust. White J said (at [109]):

   In my view, such reasoning confuses power on the one hand and the disposition of property through exercise of power on the other. In my view, the argument is inconsistent with the recognition that the trust deed is not a sham, that is, that it was intended to operate according to its tenor. That is because on the tenor of the trust deed the property of the trust is vested in the trustee and the beneficiaries become entitled to the income or capital of the trust only upon the exercise of the favourable discretion by the trustee.

2. What Public Trustee v Smith makes clear is that the context in which the characterisation of a person’s interests occurs is all important. I turn therefore to the current context concerning Mr Laski.

3. The original trust deed was in evidence. Mr Laski is nominated as the appointor. Mr Laski and Ms Tania Laski are specified as the primary beneficiaries, together with any children they may have, or any other spouses they may have, and any of their descendants. Mr Laski, Ms Tania Laski and Letore are specified as the general beneficiaries, together with relatives (such as cousins) and descendants of Mr and Ms Laski. The classes of beneficiaries are therefore open: Kennon v Spry [2008] HCA 56: 238 CLR 366 at [47]. Mr Laski has given evidence that Ms Tania Hatch is his cousin, and Ms Hatch has been referred to in the respondents’ submissions as one of the beneficiaries of the trust.

4. The deed of appointment of Swishette as trustee of the Second Rodney Laski Family Trust was also in evidence. It is dated 21 February 2006. The retiring trustee was a company called Jay Bobo Pty Ltd, whose place of business was given as 5 Maroona Road Brighton, being the Brighton property. The evidence shows that Jay Bobo was another of Mr Laski’s corporate vehicles, of which he was a director and shareholder.

5. As appointor of the trust, Mr Laski replaced one of the corporations of which he was a director (Jay Bobo) with another (Swishette) as trustee. Mr Laski is the sole director of Swishette, as he was of Jay Bobo. Therefore, not only does Mr Laski have, as appointor of the trust, control over appointment of the trustee, he also controls the exercise of the trustee’s powers in his capacity as sole director of Swishette.

6. I am satisfied on the evidence that, to adopt and adapt the terminology of White J, the trust property of the Second Rodney Laski Family Trust can and should be regarded as the property “of” Mr Laski, provided that (as White J observed) something short of ownership provides the necessary connection between the person and the property denoted by the word “of”. The answer to that question, as White J observed, will depend on the statutory context, and statutory text. The question of power will be answered, one way or the other, by reference to the statute.

7. The power in s 239(1) in relation to non-party redress orders is conferred in wide terms, and empowers the Court to make such order or orders (other than an award of damages) as the Court thinks appropriate against a person who engaged in the contravening conduct, or was involved in it. That is, the power in s 239 is exercisable against a person, rather than against (for example) property owned by that person, or even property “of” that person. The power must be exercised in a way which the Court considers will achieve the purposes set out (relevantly to the current circumstances) in s 239(3): namely, to redress, in whole or in part, the loss or damage suffered by the non-party consumers.

8. There is no limit or requirement in the power conferred by s 239 that restricts the orders the Court can make to assets, or property, that is “owned” legally or beneficially by the person responsible for the contravention. Indeed, on the evidence in this case, without an order of the kind set out in paragraph 9, the Court could not be satisfied that the remaining orders will achieve the redress, in whole or in part, of the loss and damage suffered because it is plain there will be no available funds to make any repayments to Clinica clients.

9. Section 239 is a remedial power. It is designed to allow the Court to undo damage to third parties caused by contravening conduct. The manner in which damage caused might need to be undone will inevitably need to be tailored to the circumstances of the contravening conduct, to the loss or damage suffered, and to the circumstances of the contravener and those involved in the contravention. There are no boundaries drawn in express terms in the way the power is conferred. The terms of s 243 provide examples of the way power might be exercised but should not be construed as confining s 239: Acts Interpretation Act 1901 (Cth), s 15AD. Rather, the use of the standard of appropriateness is a clear indicator that the legislature intends the Court to be able to fashion orders to suit the circumstances of a given case. It is precisely the kind of power where what is important is to look at the “reality” of the financial circumstances of the contraveners, and those involved in the contravention.

10. While it may be acknowledged that Mr Laski, as a beneficiary of the discretionary trust over the Brighton property, did not have a legal or beneficial proprietary interest in that property but rather something the nature of a mere expectancy, in my opinion in exercising a power of the kind conferred by s 239, the Court is able to address the reality of Mr Laski’s financial circumstances and access to the assets of corporate vehicles he controls. That reality includes the fact that he is in effective control of the proceeds of sale from the Brighton property, through his role as appointor of the Trust and sole director of Swishette.

11. That being the case, those funds should be preserved and made available to remedy and redress the loss which has been caused entirely by the conduct and decision-making of Mr Laski, whether directly or through the corporate vehicles he has chosen to employ. Based on the evidence in this proceeding and the dim view I have formed of him, I have no doubt whatsoever that unless orders are made to preclude him from doing so, Mr Laski will take whatever action he can to dissipate the funds from the sale of the Brighton property which are currently frozen, and seek to put them out of reach of creditors of the corporation he controls, and out of the reach of any of his own creditors. In other words, as he has done to date, he will pursue his own interests at the expense of those he has misled.

12. I have considered the submissions made by the respondents about the effects of these orders on the interests of Ms Laski and Ms Hatch. However, as the respondents’ own submissions pointed out in relation to Mr Laski, those individuals have nothing more than a contingent interest at best. It is true that on the evidence the accounts of the Second Rodney Laski Family Trust for the year ended 30 June 2015 and as at 30 September 2015 record apparently new unsecured financial liabilities to Ms Laski and Ms Hatch, each to the sum of $155,856 in the accounts. The accounts further record a significant unsecured financial liability to Letore of $758,033. Mr Laski agreed with the proposition put by counsel in cross-examination that these amounts purport to represent distributions made by the trust from the settlement proceeds which had not at that stage been paid. How the sums of $155,856 to each of Ms Hatch and Ms Laski come to be calculated is unexplained as is the basis for the trustee’s liability to them. There is no evidence that either of Ms Laski or Ms Hatch in fact received those sums of money prior to the freezing orders made on 4 August 2015 (when settlement had not yet occurred) and obviously they have been unable to receive them after orders were made. There is no evidence of any similar sums in the past by way of distributions: the trust accounts for the year ended 30 June 2013 show instead unsecured financial liabilities to companies controlled by Mr Laski, such as to Letore for $682,434 and to Clinica for $340,792. None of those accounts record any profit distribution. In contrast, the trust accounts for the year ended 30 June 2014 do include a beneficiaries’ profit distribution summary. That summary records only a distribution to Mr Laski of $24,355 in 2013 and to Letore of $30,704 in 2014 (as well as the “physical distribution” to which I earlier referred). Given that the cross-examination of Mr Laski established that many of the entries in the accounts of his companies were frankly described by him as effectively “book entries”, I am not satisfied on the balance of probabilities that either Ms Laski or Ms Hatch have ever in fact received any sums of money in their capacities as beneficiaries of the Second Rodney Laski Family Trust. Further, given the other evidence to which I have referred earlier in these reasons concerning Mr Laski’s preparedness to use Ms Laski, and Ms Hatch, to further his own business activities and financial interests, I am also satisfied on the balance of probabilities that even if (contrary to my findings) those individuals were in fact to receive any funds by way of distribution to them, those funds are likely in whole or in part to be passed on to Mr Laski, or applied for his benefit. I am also satisfied neither Ms Laski nor Ms Hatch would seek to enforce any payment recorded in the trust’s accounts as a distribution to them.

13. Accordingly, I do not consider there is an evidentiary basis to see Ms Laski and Ms Hatch as having contingent interests in the trust which are in any real sense separate or independent of Mr Laski, so as to persuade the Court as a matter of discretion that it would be inappropriate to make the orders in paragraph 9 because of the potential harm to their contingent interest. Alternatively, even if one looks at the evidence as establishing nothing more than their enjoyment of a mere expectancy in terms of future distributions, then their interest is not adversely affected by orders in the nature of those proposed by the ACCC.

14. It will be apparent that in reaching these conclusions, I reject the alternative submissions put on behalf of the respondents that if the funds from the sale of the Brighton property are to be covered by the Court’s orders, such coverage should be limited to the amount which the Court finds can be traced to profits made by the Clinica program. That appeared to be, in counsel’s submission, approximately $88,305. The flaw in this contention is that it imports a premise or requirement into the power in s 239(1) that is not present. Non-party redress orders are not, in their coercive expression, required to correlate to the person or entity who can be identified as the source or destination of money taken from people who suffered loss or damage in relation to the contravening conduct. It is clear that in some circumstances it will not be possible to identify where monies taken from victims of contravening conduct have in fact gone. Section 239 requires that orders be made against contraveners, but the ACCC’s orders are consistent with this requirement because paragraph 9 is directed to Mr Laski. There is nothing in the text or context of s 239 to indicate that the Court’s powers could not be exercised in such a circumstance by reference to other assets or funds to which the contravener has access. The purpose of s 239 orders is to have those responsible for the contravention make good the past loss they have caused, without extending that to the payment of general damages. In order to do that, orders may have to reach funds held by or on behalf of third parties, especially where those third parties are controlled by a contravenor.

15. The ACCC submitted, in the alternative, that if the Court was not prepared to make an order in the terms of paragraph 9, then the current freezing orders should be continued as final orders, or until further order. It submitted that the evidence suggested that, even without orders against it in this proceeding, Clinica was highly likely to be placed in liquidation. It submitted it was also likely that Mr Laski would be made bankrupt again. If either or both these events occurred, the ACCC submitted that the funds which are currently held pursuant to the freezing orders should remain available for liquidators and Mr Laski’s trustee in bankruptcy to assess and investigate. Otherwise, the ACCC submitted, the evidence supported the inference that as soon as he was able, Mr Laski would dissipate the funds and attempt to put them out of the reach of creditors of Clinica, and of himself.

16. In terms of what is likely to occur without further restraining orders, I accept those submissions. If the other orders in this proceeding were made, the creditors of Clinica should be seen to include the Clinica clients who were misled and deceived by the contravening conduct and whose contracts have been declared void as part of the orders made in this proceeding. Given the orders made under s 137H, it is likely there is also sufficient factual foundation for causes of action against Mr Laski personally so that Clinica clients could well be potential creditors in respect of Mr Laski personally.

    Breadth of injunctions

17. The respondents submitted that the form proposed in paragraphs 4 and 5 of the ACCC’s proposed order for final relief is unnecessarily broad in its terms. The ACCC proposed the following form of injunctions:

    4Clinica, whether by itself, its officers, servants, agents or howsoever otherwise, be permanently restrained, in trade or commerce, from carrying on a business or supplying services in connection with recruitment consulting or employee placement and/or in connection with migration into Australia, or otherwise being involved in any capacity with any such business activities on its own behalf or on behalf of any other person.

    5Mr Laski, whether by himself, his servants, agents or howsoever otherwise, be permanently restrained, in trade or commerce, from being in any way directly or indirectly knowingly concerned in, or a party to, or aiding and abetting, counselling or procuring, conduct of any person or corporation of the kind restrained in paragraph 4 above.

18. The debate is over the kind of future conduct to be prohibited. The respondents submitted proscribing them from engaging in services “in connection with recruitment consulting or employee placement and/or in connection with migration into Australia” goes beyond the contraventions.

19. The purpose of an injunction in these circumstances is to prevent the respondents from engaging in the same kind of conduct which has caused them to breach provisions of the ACL. It is towards that conduct that the terms of the injunctions ought to be directed, rather than some broader category. The respondents submitted that there were two critical, and inseparable elements to the contravening conduct: misleading statements as to the availability and nature of employment an applicant could gain through Clinica, in order to secure certain migration consequences. Accordingly the respondents submitted the terms of the injunction should be modified to provide that the respondents be restrained from providing “services in connection with recruitment consulting or employee placement in connection with migration into Australia”.

20. The ACCC submitted there was a real prospect of repetition of the conduct, given previous findings against Mr Laski in relation to misleading or deceptive conduct: see [232]-[234] above. It submitted that both fields of activity should, independently of each other, be out of bounds to Mr Laski.

21. I accept the ACCC’s submissions, although it is the injunction against Mr Laski which in my opinion is more significant. Clinica is, as I have noted above, but one in a long line of corporate vehicles used by Mr Laski and, even taking into account other orders I have made, is unlikely to be the last. Given the history of Mr Laski’s contraventions, his way of operating through successive corporate vehicles as and when it suits his needs and interests, and his willingness to take advantage of people in positions of vulnerability, I consider it is appropriate to restrain him from operating in the area of recruitment and employment consulting generally, not simply when it is linked to migration status or outcomes. In my opinion to avoid the real possibility of Mr Laski engaging in similar conduct in the future in relation to people looking for work more generally I consider such restraint is required. The way in which he sought out and placed up to 10 of Clinica’s clients in an abattoir shows that he has connections in the wider employer community, which he will use when it suits him, to further schemes he creates for his own profit. In particular, his conduct, through Clinica, of offering jobs where jobs did not in fact exist is enough to justify him being shut out of the labour hire/recruitment field altogether.

22. Restraints of this kind do not mean Mr Laski will be deprived of a livelihood or the capacity to earn an income. Mr Laski gave evidence about his work as a private investigator. The injunctions will not preclude him undertaking that work, although the disqualification means he will not be able to use a corporate vehicle managed by him to do so.

23. I am satisfied the grant of injunctions in this proceeding reinforces to would-be operators the importance of ongoing compliance with consumer laws. It also reinforces in the minds of the community that commercial behaviour targeting vulnerable consumers from non-English speaking backgrounds who wish to secure their migration status in Australia, will be prohibited on an ongoing basis where it is likely to contravene Australian law. See Australian Competition and Consumer Commission v Homeopathy Plus! Australia Pty Limited (No 2) [2015] FCA 1090 at [13] (Perry J) and Australian Competition and Consumer Commission v Breast Check Pty Ltd (No 2) [2014] FCA 1068 at [44] (Barker J).

24. In my opinion, injunctions of this kind are necessary and appropriate in addition to the disqualification I impose on Mr Laski because the evidence demonstrates he is capable of acting, and minded to act, indirectly through others to operate his business interests.

    Period of disqualification for Mr Laski

25. The ACCC sought a period of disqualification of five years for Mr Laski under s 248 of the ACL. I am satisfied Mr Laski has been involved in contraventions of Pts 2-2 and 3-1 of the ACL: see s 248(1)(a). The Court must also be satisfied a disqualification order is justified (see s 248(1)(b)), and in determining whether that is so, may have regard to the person’s conduct in relation to the management of any corporation, or in relation to the business and property of any corporation, as well as considering any other matters the Court considers appropriate (see s 248(2)). This provision entitles the Court to examine the whole of Mr Laski’s conduct as a director of corporations, past and present.

26. At least two kinds of objectives are at work with disqualification orders. First, their effect is to deprive an individual of the privilege of conducting business though a corporate entity, with the legal protections and advantages which accompany the conduct of business in that way. With access to such legal protections and advantages come a series of legal responsibilities, and if a court is satisfied an individual is unlikely to perform those responsibilities in accordance with law, then it may determine that a person should not have access to the benefits of conducting a business though an incorporated entity, but should shoulder any burden of running a business more directly, and more personally.

27. Second, operating as they do into the future, because of but separately from contraventions in the past, disqualification orders are intended to protect consumers and other members of the public from being subjected to fresh activities of an individual through corporate entities, where the Court perceives there is a risk of similar contravening behaviour occurring again, in new circumstances.

1. In Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 at [24], the plurality gave the following description of statutory regulatory regimes which in my respectful opinion is applicable to the ACL:

   In essence, civil penalty provisions are included as part of a statutory regime involving a specialist industry or activity regulator or a department or Minister of State of the Commonwealth (“the regulator”) with the statutory function of securing compliance with provisions of the regime that have the statutory purpose of protecting or advancing particular aspects of the public interest. Typically, the legislation provides for a range of enforcement mechanisms, including injunctions, compensation orders, disqualification orders and civil penalties, with or, as in the BCII Act, without criminal offences. That necessitates the regulator choosing the enforcement mechanism or mechanisms which the regulator considers to be most conducive to securing compliance with the regulatory regime. In turn, that requires the regulator to balance the competing considerations of compensation, prevention and deterrence. And, finally, it requires the regulator, having made those choices, to pursue the chosen option or options as a civil litigant in civil proceedings.

2. The ACCC submits that Mr Laski was the controlling mind of Clinica, as well as being its managing director. The contravening conduct of both Clinica and Mr Laski is serious, and was inflicted on people who were vulnerable and desperate to obtain Australian permanent residence. I have accepted those submissions, and they are relevant to the making of a disqualification order. Further, as the ACCC submitted and I have outlined above, Mr Laski has been involved in contravening commercial conduct before. On both previous occasions he also conducted himself through corporate entities.

3. Mr Laski’s evidence in this proceeding gives me no confidence that he will abstain from conduct which may contravene the ACL. In my opinion he will continue to be on the lookout for schemes that he considers may be profitable, and into which he can inveigle vulnerable consumers or unsuspecting and naive individuals he convinces to participate in business ventures with him. Ms Fahey’s evidence is an example of the latter. Mr Laski’s method hinges on the use of corporations and it is that behaviour which, in my opinion, the disqualification order will go some way to preventing. This will serve both of the purposes I have outlined at [310] above.

4. The period of disqualification should in my opinion be sufficiently long to compel Mr Laski to establish new patterns of business behaviour, without relying on corporate vehicles as he has in the past. Too short a period may, in my opinion, simply provide a temporary hiatus in his activities.

5. I propose to impose a disqualification period of five years. I have seriously considered whether to impose a substantially longer period. However I also took account of Mr Laski’s age and apparent health issues, together with the level of cooperation he has demonstrated, eventually, in this proceeding. I have determined five years’ disqualification is appropriate.

   Continuation of freezing orders

6. The freezing orders (and their exemptions) will continue pending the making of final orders and, in the form of orders I propose, for a short time thereafter until Mr Laski’s disqualification takes effect. They will then be discharged.

   Orders in relation to findings of fact

7. The ACCC seeks orders that a copy of these reasons for judgment, together with the Court’s orders, with the seal of the Court thereon, be retained in the Court for the purposes of s 137H of the Competition and Consumer Act. Section 137H authorises the Court’s findings to be prima facie evidence of the facts as found in subsequent proceedings which may be brought under ss 236 and 237 of the ACL. I am satisfied it is appropriate to make such orders in this proceeding. Despite the making of non-party redress orders, I accept the ACCC’s submissions that some clients may prefer to bring their own claims against Clinica or Mr Laski, and some clients may wish to rely on the Court’s findings in relation to Magistrates’ Court judgments entered against them by Clinica. The ACCC accepts it has not been able to identify each and every person who was a Clinica client, so that the Court’s orders concerning non-party redress may not reach each Clinica client. In those circumstances, the s 137H order sought is appropriate and will be made.

   CONCLUSION

8. The Court’s proposed orders will be made available to the parties for their consideration, in accordance with these reasons for judgment. The parties will have an opportunity to file and serve submissions on the proposed orders and the proposed orders as to costs. The parties will also be directed to file and serve any submissions and evidence they wish to provide as to the status of Ms Laski’s caveat.

I certify that the preceding three hundred and nineteen (319) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer.

Associate:

Dated:       9 February 2016