Kraues v Honourable Michaelia Cash

Case [2022] FedCFamC2G 442

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Kraues v Honourable Michaelia Cash [2022] FedCFamC2G 442

File number(s): SYG 2482 of 2020
Judgment of: JUDGE MANOUSARIDIS
Date of judgment: 8 June 2022
Catchwords: CONSUMER LAW – Practice and procedure – application for summary dismissal – Assistant Minister for Immigration and Border Protection authorised a media release in relation to a decision of the Migration Agents Registration Authority cancelling the registration of the applicant as a migration agent – whether the applicant does not have reasonable prospects of successfully prosecuting his claim based on injurious falsehood – whether applicant does not have reasonable prospects of successfully prosecuting his claim based on a contravention of s 18(1) of the Australian Consumer Law – no reasonable prospects of success – proceeding dismissed.
Legislation:

Administrative Appeals Tribunal Act 1975 (Cth) s 44

Australian Consumer Law ss 18(1), 236

Competition and Consumer Act 2010 (Cth) ss 2A, 6, 82(1), 131(1), Sch 2

Federal Circuit Court of Australia Act 1999 (Cth) s 17A(2)

Federal Circuit Court Rules 2001 (Cth) r 13.10

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 143(2)

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 13.13(a)

Federal Court of Australia Act 1976 (Cth) s 31A

Federal Court Rules 2011 (Cth) rr 16.42, 16.43

Migration Act 1958 (Cth) ss 303(1), 305A(1), 305A(4)(c), 308, 309(2), 314

Migration Agents Regulations 1998 (Cth) reg 8, Sch 2, cls 2.1, 2.23, 5.2, 5.5, 7.1, 7.2, 7.4, 7.5

Migration (Migration Agents Code of Conduct) Regulation 2021 (Cth) Sch 2, Item 4

Trade Practices Act 1974 (Cth) s 52(1)
Cases cited:

Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2020] FCAFC 130

Balden v Shorter [1933] Ch 427, Ch D

Banque Commerciale SA (En Liq) v Akhil Holdings Ltd (1990) 169 CLR 279

Berry v CCL Services Pty Ltd [2020] HCA 27

Brown v Raphael [1958] Ch 636

Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60

Campbell v Backoffice Investments Pty Ltd [2009] HCA 25

Campomar Sociedad Limited v Nike International Limited [2000] HCA 12

Clarke v Meigher [1917] NSWStRp 72; (1917) 17 SR (NSW) 617

Clone Pty Ltd v Players Pty Ltd (In Liquidation) (Receivers & Managers Appointed) [2018] HCA 12

Communication, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union v Stanwell Corporation Ltd (No 2) [2014] FCA 593

Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594

Elna Australia Pty Ltd v International Computers (Aust) Pty Ltd (No 2) (1987) 16 FCR 410

Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39

Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82

Google Inc v Australian Competition and Consumer Commission [2013] HCA 1

Hamod v State of New South Wales and Anor [2011] NSWCA 375

Hearn v O’Rourke [2003] FCFCA 78

Houghton v Arms [2006] HCA 59

Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526

Jonesco v…

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AGLC
Kraues v Honourable Michaelia Cash [2022] FedCFamC2G 442
Case
[2022] FedCFamC2G 442
Decision Date

CaseChat Overview and Summary

The case of Kraues v Honourable Michaelia Cash involves Kurt Kraues, a former registered migration agent, and Michaelia Cash, the then Assistant Minister for Immigration and Border Protection. The dispute arose from the Minister’s media release on 14 November 2014, which stated that Kraues' registration was cancelled for misappropriating client funds and failing to refund fees to miners who lost their jobs. Kraues applied to the Administrative Appeals Tribunal (AAT) for a review of the Authority’s decision to cancel his registration, which was upheld by the AAT. Kraues subsequently appealed to the Federal Court, which was dismissed, followed by a further appeal to the Full Federal Court, which was also dismissed.

The legal issues in this case primarily revolve around the validity of the Minister’s media release and its implications on Kraues' reputation and professional standing. Kraues argued that the media release was misleading and defamatory, as it suggested he had acted unlawfully and posed a risk to consumers without providing him an opportunity to respond. The court had to determine whether the Minister’s actions were within the bounds of her authority and whether they were justified under the circumstances.

The court considered the authority and discretion granted to the Minister under the Migration Act 1958 (Cth) to issue media releases concerning the actions of registered migration agents. It found that the Minister had acted within her powers by issuing the media release as it was based on the Authority’s findings and aimed to warn other agents about the importance of complying with the regulatory framework. The court also noted that Kraues had multiple opportunities to challenge the Authority’s findings and that the media release accurately reflected those findings. Therefore, the court concluded that the Minister’s actions were justified and did not constitute an abuse of power.

The court dismissed Kraues' application, finding that he had no reasonable prospect of successfully prosecuting the proceeding. It held that the media release was an appropriate exercise of the Minister’s discretion, and there was no evidence of any unlawful or arbitrary action on her part.

Orders

Orders of the court

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Background

Background to the litigation

The principal question I consider in these reasons for judgment, therefore, is whether Mr Kraues has no reasonable prospect of successfully prosecuting the proceeding, or any part of the proceeding. I will begin by setting out the circumstances out of which the Minister issued the Media Release, and the terms of the Media Release. I will then set out the history of this proceeding, the affidavits Mr Kraues filed, and the matters that were discussed at the directions hearing on 1 April 2021. BACKGROUNDLodgement of complaints On 28 November 2012 a Mr K lodged a complaint with the Authority about Mr Kraues’ conduct as a migration agent. Mr K lodged that complaint on his own behalf, and on behalf of initially 20, but later 14, persons (the initial Miners).[3] The initial Miners are citizens of Papua New Guinea who held subclass 457 visas. The initial Miners alleged they had been sponsored by a recruitment company, Corestaff NT Pty Ltd (Corestaff), and that Mr Kraues advised Corestaff to deduct from their wages an initial payment of $825, and then $82.50 every week for the following 78 weeks. The initial Miners complained they had written to Mr Kraues demanding he refund the money that was deducted from their wages, but Mr Kraues neglected their demands.[3] Affidavit K H Kraues 04.11.2020, [2]; annexure “KHK-1”Authority seeks information from Mr Kraues On 15 January 2013 the Authority sent a letter to Mr Kraues under s 308 of the Act (first 308 notice) in which it summarised the initial Miners’ complaints as follows:[4](a)The initial Miners arrived in Australia on subclass 457 visas to work as miners. (b)The initial Miners had been sponsored by Corestaff, a recruitment company.(c)Mr Kraues was the agent for the initial Miners when applying for their 457 visas.(d)Mr Kraues advised Corestaff to make deductions to cover permanent residence applications, there being an initial payment of $825, followed by 78 weekly payments of $82.50.(e)The initial Miners terminated their agreements with Mr Kraues because they had no communication with Mr Kraues after they arrived in Australia.(f)The initial Miners wanted to organise a refund of the fees paid to Mr Kraues, but he ignored their attempts to contact him; and when he met the initial Miners, Mr Kraues refused to answer their questions.(g)The initial Miners’ sponsorships have been terminated, and they are seeking a refund of the money that had been deducted from their wages.[4] Affidavit K H Kraues 04.11.2020, [2]; annexure “KHK-2” After noting that Mr K had provided a copy of a retainer agreement between him and Mr Kraues dated 8 May 2012, the Authority stated as follows:Mr [K] has provided a copy of his retainer agreement, dated 8 May 2012, which is also attached. His agreement indicates that it is in relation to the provision of immigration assistance for a period of 24 months from the date that his subclass 457 visas [sic] was granted. In accordance with the agreement, he was required to pay $7,260 in total, by means of an initial instalment of $825 followed by 78 weekly payments of $82.50. These payments were to be deducted from his salary and paid into your Client Trust Account.The agreement appears to indicate that the total payment of $7,260 is for your availability to provide immigration assistance. However the agreement quotes additional hourly rates if a visa application is to be prepared.It is not clear what your arrangements with Mr [K] and the other miners were . . . In order to gain an understanding of your arrangements with the miners could you please provide answers to the questions below. . . .

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Mr Kraues applied to the Administrative Appeals Tribunal (AAT) for review of the Authority’s decision but, on 23 December 2016, the AAT affirmed the Authority’s decision.[37] The AAT concluded:[38]I am satisfied, on the information before me, that Mr Kraues is not a fit and proper person to give immigration assistance. In his dealings with [Mr K] and others, he has failed to act in the legitimate interests of his clients. He has demonstrated an apparent disregard for the professional ethics and conduct and the regulatory framework by which registered migration agent [sic] operate, and he had engaged in conduct contrary to the Code of Conduct in his dealings with the complainants in this matter and in the management of their monies. The nature and extent of his failure to comply with the Code of Conduct makes him, in my view, not a person of integrity and not a fit and proper person to give immigration assistance.[37] Kraues and Migration Agents Registration Authority [2016] AATA 1086[38] Kraues and Migration Agents Registration Authority [2016] AATA 1086, at [105]Mr Kraues applies for judicial review of AAT’s decision Mr Kraues filed an appeal to the Federal Court under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). Perry J dismissed the appeal on 11 May 2018 (FC proceeding).[39] Mr Kraues filed an appeal to the Full Federal Court against the orders of Perry J (FFC appeal) but, on 2 April 2019, the Full Federal Court dismissed the appeal (FFC Orders).[40][39] Kraues v Migration Agents Registration Authority [2018] FCA 664[40] Kraues v Office of Migration Agents Registration Authority [2019] FCAFC 52THE MEDIA RELEASE The Media Release, which the Minister released on 14 November 2014, is as follows:[41]Migration agents are being warned to act lawfully following the cancellation of the registration of a migration agent who refused to refund the fees of sacked foreign miners working in Western Australia, Assistant Minister for Immigration and Border Protection, Senator the Hon Michaelia Cash, said today.The Office of the Migration Agents Registration Authority (Office of the MARA) cancelled the registration of Kurt Kraues for the maximum of five years for misappropriating client’s money and failing to meet his financial obligations as a registered migration agent.The Authority found that Mr Kraues had entered into agreements involving substantial fees to 81 miners from Papua New Guinea, through their labour hire company, in an arrangement where they came to work in Australia on 457 visas.The miners complained that the company had told them they would be eligible for permanent residence after two years in Australia and Mr Kraues was recruited to assist them with their applications.However the miners lost their jobs after 5-6 months and, following unsuccessful attempts to have fees refunded that they had paid monthly to Mr Kraues, 15 of the miners lodged complaints with OMARA.Minister Cash said the migration agent had not only acted unlawfully in refusing refunds but also he had not provided any actual immigration assistance to the miners.‘If these agreements had run their full course, the agent would have received $588,000 in payment from the miners’, Minister Cash said. 'I have been advised that the 15 miners who lodged complaints are owed $13,680 and the figure could be as high as $160,000 for all the miners involved.‘His conduct fell well short of the standards set out under the Code of Conduct for registered migration agents and he posed a serious risk to consumers. This agent’s argument that the miners’ payments to him were a retainer, not a fee for service arrangement, were rightly rejected by OMARA,’ Minister Cash said.[41] Affidavit K H Kraues 04.11.2020, [9]; annexure “KHK-7”PROCEDURAL HISTORY

Ratio Decidendi

Legal Principle Established

On 14 October 2014 Mr Kraues’ lawyer sent an email to the Authority stating that he had given Mr Kraues “some advice concerning the purported exercise of power under section 309(2) and he has informed me that he intends to seek a judicial review of that decision to exercise those powers”. Mr Kraues’ lawyer requested an extension of time for Mr Kraues to respond to the 309 notice. The Authority granted Mr Kraues until 22 October 2014 to provide submissions. Mr Kraues did not provide submissions but instead, on 20 October 2014, his lawyer provided to the Authority an application in a case in a proceeding Mr Kraues had commenced in this Court.Authority cancels Mr Kraues’ registration as a migration agent On 24 October 2014 the Authority decided to cancel Mr Kraues’ registration as a migration agent, finding that Mr Kraues is not a person of integrity; is otherwise not a fit and proper person to give immigration assistance; and he did not comply “with multiple clauses of the Code”. The Authority made a number of findings or sets of findings. The first, and essential, finding related to the Authority’s rejection of Mr Kraues’ contention that the “Single Sum Fixed Fee” (retainer fee) payable for the “Retainer Agreement” did not relate to the provision of immigration assistance within the meaning of s 276 of the Act:[13]In his response to the second notice, the Agent confirmed that withdrawals had been made from the clients' account. The Agent has also confirmed that in substance the miners all had the same agreement. On that basis it is reasonable to conclude that withdrawals have been made under each miner's agreement. The Agent has stated that the withdrawals were made in accordance with the agreement. However, the Authority does not accept the Agent's interpretation of the agreement and relevantly considers the plain wording of the agreement at paragraph i(ii) where it states that the Agent was to provide immigration assistance services. (Please note that this is the second of two paragraphs that are referred to as i(ii).)[13] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 32-33, [66] The second set of findings related to those provisions of the Code that required a registered migration agent (agent) to:(a)keep separate accounts with a financial institution for the agent’s operating expenses, and for money paid by a client to the agent for fees and disbursements (clients’ account) (cl 7.1 of the Code); (b)hold in the clients’ account the amount of money paid by the client for an agreed block of work until the agent had completed the services that comprise the agreed block of work, and the agent issues an invoice for the services performed in accordance with the agreement for services and fees mentioned in cl 5.2 of the Code (5.2 agreement) showing each service provided, and the fee for each service (cl 7.2 of the Code); (c)keep records of the clients’ account, including (among other things) the date and amount of each deposit made to the clients’ account; the date and amount of each withdrawal made from the clients’ account; receipts for any payment made by the client; statements of services; and copies of invoices or accounts rendered in relation to the clients’ account (cl 7.4 of the Code); and (d)make available for inspection on request by the Authority the records of the clients’ account, and records of each account into which money has been paid by a client to the agent for fees and disbursements has been deposited (cl 7.5 of the Code).