Kraues and Migration Agents Registration Authority

Case [2016] AATA 1086

Kraues and Migration Agents Registration Authority [2016] AATA 1086 (23 December 2016)

Division

GENERAL DIVISION

File Number

2014/5722

Re

Kurt Kraues

APPLICANT

And

Migration Agents Registration Authority

RESPONDENT

DECISION

Tribunal

Senior Member J F Toohey

Date 23 December 2016
Place Sydney

The Tribunal affirms the decision under review.

.........................[sgd]...............................................

Senior Member J F Toohey

CATCHWORDS

PRACTICE AND PROCEDURE – jurisdiction to review decision to cancel registration as migration agent – whether Tribunal has power to make declaration of invalidity – whether

applicant denied procedural fairness - onus of proof in administrative proceedings  

IMMIGRATION AND CITIZENSHIP – migration agent – cancellation of registration –whether applicant not a person of integrity or otherwise not a fit and proper person to give immigration assistance decision – whether applicant had not complied with the Code of Conduct – immigration assistance – decision under review affirmed

LEGISLATION

Administrative Appeals Tribunal Act 1975, ss 28, 33, 43(1)

Migration Act 1958, ss 276, 303, 308, 309, 314, 317

Migration Agents Regulations 1998, Sch 2, reg. 8

CASES

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321

Brackenreg v Comcare (2010) 187 FCR 209
Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd [1979] FCA 21; (1979) 24 ALR 307
Comcare v Power [2015] FCA 1502
Issa and Migration Agents Registration Authority [2015] AATA 451
McDonald v Director-General of Social Security [1984] FCA 57; (1984) 1 FCR 354

Zubair and Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 248

SECONDARY MATERIALS

Code of Conduct for migration agents, clauses 2.1, 2.23, 5.1, 5.5, 7.1, 7.2, 7.4 and 7.5

REASONS FOR DECISION

Senior Member J F Toohey

23 December 2016

Background

  1. This decision concerns an application by Mr Kurt Kraues for review of a decision by the Migration Agents Registration Authority (the Authority) to cancel his registration as a migration agent.

  2. On 24 October 2014, following an investigation into a complaint that Mr Kraues had failed to perform services for which the complainants had paid him approximately $200,000 in professional fees, the Authority cancelled his registration in accordance with s 303(1) of the Migration Act 1958 (the Act). The Authority found that Mr Kraues was not a person of integrity or was otherwise not a fit and proper person to give immigration assistance, and that he had not complied with multiple clauses of the Code of Conduct for migration agents, in contravention of ss 303(1)(f) and (h) of the Act.

  3. This matter has a long history which it is necessary to set out in some detail.

    The complaint

  4. On 28 November 2012, the Authority received a complaint by Mr Mark Karu and 14 others who had been employed by Corestaff Pty Limited (Corestaff), a labour hire firm, to work for one of its clients in Australia.  The complainants had been recruited in Papua New Guinea and came to Australia in May 2012 as holders of Temporary Work (Skilled), subclass 457 visas (subclass 457 visas).  They alleged they had paid Mr Kraues for assistance…

Continue reading Kraues and Migration Agents Registration Authority

Sign in free to access the full text

Details
AGLC
Kraues and Migration Agents Registration Authority [2016] AATA 1086
Case
[2016] AATA 1086
Decision Date

CaseChat Overview and Summary

This matter concerned an appeal by Mr. Kraues against a decision by the Migration Agents Registration Authority (the Authority) to cancel his registration as a migration agent. The Authority had found that Mr. Kraues was not a person of integrity or otherwise a fit and proper person to give immigration assistance, and that he had failed to comply with the Code of Conduct. The dispute arose from arrangements Mr. Kraues made with a group of miners from Papua New Guinea concerning their permanent residency applications in Australia.

The court was required to determine whether Mr. Kraues was a fit and proper person to give immigration assistance and whether he had complied with the relevant provisions of the Code of Conduct. Specifically, the court considered whether Mr. Kraues had acted in the legitimate interests of his clients, managed client monies appropriately, issued receipts and financial statements, kept proper financial records, and maintained the reputation and integrity of the migration agent profession. The court also examined whether the fees charged by Mr. Kraues were reasonable and whether he had provided adequate statements of services.

The court found that Mr. Kraues had not acted in the legitimate interests of his clients, nor had he managed client monies appropriately. Evidence indicated that Mr. Kraues had made withdrawals from client accounts without providing related services or making appropriate disbursements, and had inappropriately used withdrawn funds for his own purposes. The court was satisfied that statements made during the interview process suggested that assistance would be available for permanent residency applications, and that the miners understood they were paying for this assistance. The court rejected the argument that the substantial fees were for mere "availability," particularly when payment was required even after services could no longer be rendered. The court concluded that Mr. Kraues had failed to provide any service or account for money withdrawn from the trust account, and that his conduct had not maintained the reputation and integrity of the migration agent profession.

The court affirmed the Authority's decision to cancel Mr. Kraues' registration as a migration agent.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Mr Ushorof gave evidence that, while in Papua New Guinea, Mr Siegel told the miners “on a number of occasions” they would have the opportunity of applying for permanent residency in Australia. Mr Ushorof said he formed the view they would not have come to Australia without the prospect of obtaining permanent residency. He claimed Mr Siegel made similar statements after the miners arrived in Australia. Although I had difficulty with some aspects of Mr Ushorof’s evidence, I think it more probable than not that, even if Mr Siegel did not tell the miners directly that they would be able to apply for permanent residency, he said enough for them to believe they would have that opportunity. Mr Siegel’s evidence Mr Siegel disputed Mr Ushorof’s account. He said Corestaff engaged Mr Kraues to obtain subclass 457 visas for the workers but that, when they asked in Papua New Guinea about their prospects for permanent residency, they were told that Corestaff were not migration agents but they would be given a “welcome pack” on arrival in Australia with relevant information and contact details for the Department. Mr Siegel maintained that, when the miners raised the question again on arrival in Australia, Corestaff reiterated they could not give financial or immigration advice and referred them to the information in their “welcome packs”. Mr Siegel maintained that Corestaff “did not directly introduce” Mr Kraues to the miners but provided them with his “contact information” along with a list of other migration agents in Western Australia. Mr Siegel’s evidence was, in my view, somewhat disingenuous in that Corestaff made a meeting room available for Mr Kraues’ use when he was in Perth because he did not have his own office there, and each miner’s “welcome pack” contained a copy of the retainer agreement complete with Mr Kraues’ bank account details and the name of each miner filled in, ready for the miner’s signature. Mr Siegel gave evidence that Mr Kraues “entered into arrangements” with some of the Papua New Guinea employees “in relation to their obtaining of permanent residency” and Mr Kraues asked if Corestaff would be prepared to make deductions from their pay for the migration work he would be doing for them. Corestaff “agreed to facilitate this” for Mr Kraues as long as the employees agreed to sign the necessary authorisation. Mr Kraues prepared the agreement and met with the individuals in the meeting room provided for him by Corestaff. Mr Siegel gave evidence that some of the miners asked him whether they were “doing the right thing” engaging Mr Kraues and his response was always that Corestaff was not a migration agent and he could not give advice other than to say that, personally, he would “shop around for the best price”. Again, I found Mr Siegel’s evidence about this somewhat disingenuous, given the relationship between Corestaff and Mr Kraues. It is apparent that Corestaff was not at arms’ length as Mr Siegel suggested, and they had an arrangement dating back to well before Mr Karu was engaged. By email dated 31 October 2011 to Mr Siegel, Mr Kraues attached “new agreement and deduction” forms and said:… once I (sic) receive the currently signed pfd agreements i (sic) will delete and replace each one hopefully we can get this done today. txs k (sic)

Decision

Reasons for decision

On 13 November 2014, Mr Kraues was granted leave to file a Notice of Discontinuance in the Federal Circuit Court.The Authority’s decision By subsection s 303(1) of the Act, the Authority may cancel or suspend an agent’s registration, or caution him or her, if it becomes satisfied that:(d)the agent's application for registration was known by the agent to be false or misleading in a material particular; or (e)the agent becomes bankrupt; or (f)the agent is not a person of integrity or is otherwise not a fit and proper person to give immigration assistance; or (g)an individual related by employment to the agent is not a person of integrity; or (h)the agent has not complied with the Code of Conduct prescribed under section 314. The Code of Conduct is prescribed in schedule 2, in accordance with regulation 8 of the Migration Agents Regulations 1998. On 24 October 2014, the Authority determined that Mr Kraues had engaged in conduct in breach of his obligations under clauses 2.1, 2.23, 5.1, 5.5, 7.1, 7.2, 7.4 and 7.5 of the Code of Conduct, and was not a person of integrity or otherwise not a fit and proper person to give immigration assistance within the meaning of s 303(1)(f) of the Act, and cancelled his registration. In a 25-page decision, the Authority detailed the allegations against Mr Kraues and its reasons for finding that he had:·failed to act in the legitimate interests of clients;·failed to manage client monies in accordance with his financial obligations;·failed to issue receipts and financial statements of accounts;·failed to keep proper financial records; and·his conduct had not maintained the reputation and integrity of the migration agent profession. In particular, the Authority was satisfied that Mr Kraues:·made withdrawals from the clients’ account without providing any related services or making appropriate disbursements;·did not issue statements of services for the withdrawals that he made; and·had inappropriately used withdrawn funds for his own purposes.The Code of Conduct The Code of Conduct is “intended to regulate the conduct of registered migration agents”: cl 1.1. It imposes on a registered agent “the overriding duty to act at all times in the lawful interests of the agent’s client”. Any conduct “falling short of that standard” renders an agent liable to cancellation of registration: cl 1.12. Part 2 concerns standards of professional conduct. Relevant to this decision, an agent must:·always act according to law and the legitimate interests of his or her client, and deal with the client competently, diligently and fairly: cl 2.1; and·take all reasonable steps to maintain the reputation and integrity of the migration advice profession: cl 2.23. Part 5 concerns fees and charges. Relevant to this decision, an agent must:·set and charge a fee that is reasonable in the circumstances of the case: cl 5.1; and·be aware of the effect of s 313 of the Act, by which an agent is not entitled to be paid a fee or other reward for immigration assistance unless a statement of services is given to the person, and that statement must be consistent with the Agreement for Services and Fees which the agent must give the client: cl 5.5.

Ratio Decidendi

Legal Principle Established

Whether or not Mr Karu had the authority of the other complainants is not relevant for present purposes. A complaint is merely a means by which an investigation by the Authority may be triggered. There may be questions as to whether a migration agent’s conduct failed in respect of particular complainants but that goes essentially to the extent of failings; a single complaint would be sufficient. Consideration For the following reasons, I am satisfied on the information before me that Mr Kraues is not a fit and proper person to give immigration assistance and that he has not complied with the Code of Conduct. I have only had the benefit of hearing from Mr Karu who formulated the complaint against Mr Kraues, but I am satisfied that the arrangement for payroll deductions and payment to the Kraues Law Client Trust Account went well beyond Mr Karu. He gave evidence that he witnessed the signatures of the other miners who complained with him. I accept his evidence. I am satisfied that the other complainants had the same dealings with Mr Kraues. Copies of the “Retainer Agreements” signed by them and of Mr Kraues’ letters to them after they were terminated are before the Tribunal together with documents showing payroll deductions and payments to Kraues Law Client Trust Account. The evidence also shows that, more probably than not, the arrangement extended well beyond the complainants, to up to 70 miners in all. I am satisfied that Mr Karu and the miners who complained with him understood they were paying money to Mr Kraues in relation to their permanent residency applications. I think it probable that statements were made during the interview process that suggested that assistance would be available to help with permanent residency applications. Indeed, it was a matter of some interest to Mr McKenzie so that he could plan for future training and “upskilling” of the employees. Mr Kraues can have been in little doubt that is what the miners thought they would receive in return for substantial ongoing payments. It is improbable that they would have paid those amounts for nothing more than his “availability”. I accept Mr Karu’s evidence that he did not meet Mr Kraues until his employment was terminated, several months after he arrived in Australia. There is no evidence that Mr Kraues took any steps to explain to the miners the nature of the agreement they were signing, to contact them at any point to ask whether they required his services. Mr Levo’s repeated plaintiff emails demonstrate Mr Kraues’ failure to respond. I accept that, when the miners contacted him after their employment was terminated, he initially failed to respond but then met with them and, when he did, that his response was wholly unsatisfactory. Mr Kraues cannot, in effect, hide behind his failure to provide any service, or to account to the miners for money withdrawn from the trust account, simply because the arrangement is stated to be a “retainer agreement”. It is true that a close reading of the document shows that the fee of $7,260 was for “being available”, and that “immigration assistance” would incur an additional fee. However, it is difficult to see how $7,260 for nothing more than “being available” can be said to be “a fee that is reasonable in the circumstances”, especially when payment is required even after the miners could no longer make use of his services. As the Authority has pointed out, had the agreements for all of the 81 miners involved run their course, they would have paid Mr Kraues in total $588,060 without him providing any service.