Kraues v Honourable Michaelia Cash
[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 Beard [1930] AC 298
Kraues and Migration Agents Registration Authority [2016] AATA 1086
Kraues v Migration Agents Registration Authority [2018] FCA 664
Kraues v Office of Migration Agents Registration Authority [2019] FCAFC 52
March v E & MH Stramare Pty Ltd (1991) 171 CLR 506
McKellar v Container Terminal Management Services Ltd [1999] FCA 1101; (1999) 165 ALR 409
Palmer-Bruyn and Parker Pty Ltd v Parsons [2001] HCA 69
Phillip Morris (Australia) Ltd v Nixon [2000] FCA 229
Przybylowski v Australian Human Rights Commission (No 2) [2018] FCA 473
Ratcliffe v Evans [1892] 2 QB 524
Spiteri v Nine Network Australia Pty Ltd [2008] FCA 905
Wallingford v Mutual Society (1880) 5 App Cas 685
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
White v Mellin [1895] AC 154
Williams v Pisano [2015] NSWCA 177
Division: General Number of paragraphs: 135 Date of last submission/s: 29 April 2022 Date of hearing: 1 June 2021 Place: Sydney Solicitor for the Applicant: Mr A Joel of Adrian Joel & Co. Solicitors Counsel for the Respondents: Ms I Sekler Solicitor for the Respondents: Australian Government Solicitor ORDERS
SYG 2482 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: KURT HEINZ KRAUES
Applicant
AND: THE HONOURABLE MICHAELIA CASH
First Respondent
THE COMMONWEALTH OF AUSTRALIA
Second Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
8 JUNE 2022
THE COURT ORDERS THAT:
1.The proceeding is dismissed pursuant to s 143(2) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) and r 13.13(a) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
2.Subject to order 3 the applicant pay the respondents’ costs of the proceeding as agreed or as taxed.
3.The parties have liberty to apply within 28 days after the day on which these orders are pronounced to vary or discharge order 2.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
This proceeding arises out of, and is directed to, a media release (Media Release) issued on 14 November 2014 on behalf of the first respondent, the then Assistant Minister for Immigration and Border Protection (Minister). The Media Release was issued in relation to a decision the Migration Agents Registration Authority (Authority) made on 24 October 2014 pursuant to s 303(1) of the Migration Act 1958 (Cth) (Act) to cancel the registration of the applicant, Mr Kraues, as a migration agent. Mr Kraues claims that by authorising the issue of the Media Release the Minister and, through her, the second respondent, the Commonwealth of Australia, committed the tort of injurious falsehood,[1] and engaged in conduct in trade or commerce that was misleading or deceptive, contrary to s 18(1) of Schedule 2 (ACL) to the Competition and Consumer Act 2010 (Cth) (CC Act).
[1] “Injurious falsehood” is also known by the name of “malicious falsehood” - see Palmer-Bruyn and Parker Pty Ltd v Parsons [2001] HCA 69, at [58], [108]
Mr Kraues commenced this proceeding on 3 November 2020. After the proceeding had twice come before me for directions, on 1 April 2021 I ordered that it be listed on 1 June 2021 for the purpose of Mr Kraues showing cause why the proceeding should not be dismissed because he does not have reasonable prospects of succeeding on any of his claims for relief. On 1 June 2021 I received evidence and heard submissions on whether Mr Kraues has no reasonable prospect of successfully prosecuting the proceeding or any part of the proceeding.
The order I made on 1 April 2021 assumes that it would be for Mr Kraues to show he has reasonable prospects of successfully prosecuting the proceeding or any part of the proceeding. I do not, however, propose to approach that question on the assumption that Mr Kraues bears an onus to show he has such reasonable prospects. Instead, I propose to determine that question on the basis that it is for the respondents to demonstrate that Mr Kraues has no reasonable prospect of successfully prosecuting the proceeding or any part of the proceeding. That is how the hearing on 1 June 2021 was conducted by the parties’ legal representatives, with the respondents submitting that the proceeding should be dismissed under r 13.10 of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) and s 17A(2) of the Federal Circuit Court of Australia Act 1999 (Cth) (FCC Act).[2]
[2] Now r 13.13 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), and s 143(2) of the Federal Circuit and Family Court of Australia Act 2021 (Cth).
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.
BACKGROUND
Lodgement 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. . . .
Mr Kraues responded by letter dated 27 January 2013.[5] Mr Kraues said that the purpose of his agreement with Mr K was for Mr Kraues to be available to provide immigration assistance, but that a separate contract would be required if a visa application were to be lodged.
[5] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 19, [8]
It would be convenient to describe at this point the form of agreement Mr Kraues entered into with each of the initial Miners.[6]
[6] A copy of the form of agreement appears in different parts of the evidence, and there appear to be at least three forms of the agreement. In these reasons I refer to the form of agreement that is annexure “KHK-10” to the affidavit of K H Kraues 04.11.2020. Another two versions are annexure “APJ-5” to the Federal Court affidavit of A P Joel 01.12.2020, [23], at pages 67 and 68. The three forms of agreement are substantially the same. The differences are not material to any issue I consider in these reasons.
Form of agreement between Mr Kraues and the initial Miners
The agreement is titled “Terms And Schedule Of Fees: Migration Agent Regulations (1998)”. Clause 1 is headed “Agreement And Fee Type”, and provided as follows:
a. Retainer Agreement – Single Sum Fixed Fee
b.Immigration Assistance – Hourly Fee calculated in accordance with the fee rate published in the table below.
Clause 2 provided that “Part 5 of the Code”, being the Migration Agents Code of Conduct (Code) that was prescribed by reg 8 of the Migration Agents Regulations 1998 (Cth),[7] “requires Registered Migration Agents to set and charge a fee that is reasonable in the circumstances”. It then provided as follows:
c.Retainer Agreement to be available to provide Immigration Assistance.
d. Single Sum Fixed Fee: $7,260 including 10% GST (where applicable).
e.This Retainer Agreement expires twenty (24) months after the primary applicants 457 visa grant date.
f.DIAC Visa Application Charges to be advised at time of lodgment.
[7] The Code of Conduct was prescribed by reg 8 of the Migration Agents Regulations 1998 (Cth) for the purposes of s 314 of the Act. Regulation 8 was repealed by Item 4 of Schedule 2 to the Migration (Migration Agents Code of Conduct) Regulation 2021 (Cth).
Clause 3 provided for the following structure and method of payment:
Payment Method: Salary Deduction
Frequency Period: Weekly – Fixed Date
Total Number of Instalments: (79)
Date of First Instalment: 01/05/2012
Initial Instalment (1): $825
Weekly Instalments (78): $82.50
Deduction Details: Deducted from Corestaff Salary and transferred into:
Name: Kraues Law Client Trust Account
BSB: . . . .
Account number: . . . .
Bank: . . . .
PAYMENT DATE DUE BLOCK OF WORK TO WHICH PAYMENT RELATES FOR THE RETAINER AGREEMENT SINGLE SUM FIXED FEE OF $7,260 $7,260 01/05/2012 Commencement of Retainer Agreement; the retainer makes available the services of Kraues Law to provide immigration assistance. Upon Invoice Immigration Assistance Hourly Fees: Specialist Administrative Support related to a visa application two hundred and twenty five dollars: Professional Migration Law and Regulations four hundred and fifty dollars; Any other work that does not require professional or specialist migration law and procedural knowledge eighty five dollars. Upon Invoice Any Disbursement Upon Invoice All Government charges g.(i) The Agent will hold all non-retainer agreement fees paid in advance in the clients’ trust account. (ii) After the Agent has completed each block of work and issued an invoice which sets out the particulars and charge made of each service performed the Agent will be entitled to withdraw the fees relating to that block from the clients’ trust account.
Clause 4(i)(ii) provided:
The client has appointed Kraues Law as its agent. (ii) For as long as circumstances permit at any given time, the clients [sic] responsible agent . . . is to provide immigration assistance services pursuant to the terms of this agreement.
Authority seeks further information from Mr Kraues
On 12 February 2013 the Authority informed Mr Kraues that the circumstances raised in the complaints did not relate to the provision of immigration assistance and, for that reason, the complaints were outside the Authority’s jurisdiction.[8] By letter dated 19 June 2013 (second 308 notice), however, the Authority informed Mr Kraues that it considered the circumstances did relate to the provision of immigration assistance.[9]
[8] Affidavit K H Kraues 04.11.2020, [4]; annexure “KHK-3”
[9] Affidavit K H Kraues 04.11.2020, [4]; annexure “KHK-3”
In the second 308 notice the Authority said the initial Miners had claimed they had formed an intention to apply for permanent residence in Australia, and had engaged Mr Kraues’ services as a migration agent with that aim in mind. After setting out the main points of the complaints the initial Miners had made, the second 308 notice required Mr Kraues to explain his contractual relationship with Corestaff in relation to the initial Miners; explain the type of account into which the initial Miners paid money to Mr Kraues; identify the current status of each of the initial Miners’ money in that account; and state whether any money had been withdrawn from the account or accounts into which the initial Miners’ money had been paid.
Mr Kraues responded to the second 308 notice by letter dated 11 December 2013.[10] He did so after requesting, and being given, five extensions of time.[11] Mr Kraues said that each of the Authority’s first three questions was based on a premise that “is not applicable to the retainer agreement”. In response to the fourth question Mr Kraues said that “retainer payments have been withdrawn in accordance with the terms of the [initial Miners’] retainer agreement”. Mr Kraues provided what he described as “Client Account statements for each [of the initial Miners]”; “Consolidated Account Transaction Detail up to the 22/10/2012”, and “Payroll deductions up to the 30/09/2012”. Mr Kraues also provided “Statements of Accounts” dated 11 December 2012 for each of the initial Miners which he submitted “illuminate the outstanding balance owed by the [initial Miners] pursuant to the terms of the retainer agreement and varies for each [of the initial Miners]”. Mr Kraues also made the following submissions:
(a)The terms of the retainer agreement provided that the initial Miners would retain Mr Kraues’ services as a migration agent “to be available” to provide immigration services, but did not relate to “the actual provision” of assistance. The retainer agreements Mr Kraues entered with the initial Miners, therefore, “do not relate to the provision of immigration assistance and brings into question the jurisdiction of [the Authority] to re-open the complaint”.
(b)The initial Miners provided Corestaff with signed written payroll deduction authorities.
(c)The initial Miners gave notice of their intention to terminate their agreements with Corestaff after Corestaff gave notice to the initial Miners that their employment would be terminated.
(d)Mr Kraues attended two lengthy meetings with the initial Miners in Perth “to discuss their situation”.
(e)The terms of each retainer agreement distinguish between the type of money that may be paid by “a client as a fee for service or retainer”; that “monies other than a retainer payment must be held in the client account”; and the money each of the initial Miners paid was for “a retainer”.
[10] Affidavit K H Kraues 04.11.2020, [5]; annexure “KHK-5”
[11] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 20, [16]
By letter dated 21 February 2014 (third 308 notice) the Authority informed Mr Kraues that it considered Mr Kraues had not provided an adequate response to the second 308 notice, and the documents Mr Kraues provided to the Authority were not sufficient to satisfy the requirements of cl 5.5 and cl 7.1 of the Code. The Authority expanded the scope of the second 308 notice by including some other miners so that there were 81 miners including the initial Miners (Miners), and it asked Mr Kraues the same information about all the Miners as it previously had asked in relation to the initial Miners.
On 17 April 2014 Mr Kraues sent an email to the Authority stating he attached a response to the third 308 notice; but nothing was attached to his email. The Authority informed Mr Kraues of this, but Mr Kraues did not respond; instead he filed an application in this Court (then known as the Federal Circuit Court of Australia) in which he challenged the validity of the third 308 notice. In an affidavit he filed in that proceeding Mr Kraues said that the response he intended to attach to the email he sent to the Authority on 17 April 2014 “was an earlier draft of this affidavit and a copy of an application to the” Court.[12]
[12] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 23, [29]
On 16 September 2014 the Authority issued to Mr Kraues a notice under s 309(2) of the Act (309 notice) in which the Authority stated it was considering cautioning Mr Kraues, or suspending or cancelling his registration as a migration agent, under s 303 of the Act on the ground that Mr Kraues may have breached a provision or provisions of the Code. The 309 notice identified a number of provisions of the Code the Authority considered it was open to it to be satisfied Mr Kraues breached, and the grounds on which it may be so satisfied. The 309 notice invited Mr Kraues to provide written submissions on the matter by no later than 14 October 2014.
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).
The Authority made the following findings and observations:
(a)Corestaff made deductions from the Miners’ wages, and the amounts it deducted were deposited into Mr Kraues’ clients’ account for the purpose of Mr Kraues providing services to the Miners. The money should have been held in the clients’ account until an agreed block of work had been completed, at which point an invoice should have been issued detailing the services performed, and the fee for each service.[14]
(b)The Miners terminated their retainer agreements with Mr Kraues, as a consequence of which Mr Kraues should have issued to the Miners a final statement of services as required by cl 5.5 of the Code (as to which see below). Mr Kraues provided no evidence the Miners received any services from him. Any statement of service, therefore, should have stated the amount of the fees to be refunded.[15]
(c)For the Miners whose agreements had not been terminated, Mr Kraues should also have held in the clients’ account the money they paid until services had been provided.[16]
(d)The Authority had requested Mr Kraues to provide all financial records, receipts for payments the Miners made to Mr Kraues’ clients’ account, all final statements of service in relation to agreements that had been terminated, noting any refunds made, and copies of invoices to each of the Miners relevant to withdrawals made from the clients’ account.[17] The only documents Mr Kraues provided to the Authority were documents titled “Statement of Account” in relation to the initial Miners dated 11 December 2013, each acknowledging the agreement had been terminated, and setting out the fees that had been paid, and the balance owing;[18] and a “payroll deduction statement for each miner”.[19]
(e)In relation to the agreements that had been terminated, Mr Kraues should have issued final statements of service. The statements of account Mr Kraues provided to the Authority could not be considered final statements of service because they did not detail the services Mr Kraues provided, or the charges for any services Mr Kraues provided. Further, if Mr Kraues had provided no services, “a refund amount should have been stated”.[20] The payroll deduction statements appeared to record the amount each of the initial Miners had paid to Mr Kraues.[21]
(f)In his response dated 11 December 2013 Mr Kraues confirmed that withdrawals had been made from the clients’ account but, although he was asked to provide details of those withdrawals, and the services to which they related, as well as provide invoices, Mr Kraues did not provide any further details.[22]
[14] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 30, [54]
[15] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 30, [55]
[16] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 30, [56]
[17] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 31, [58]
[18] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 31, [59]
[19] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 31, [62]
[20] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 31, [61]
[21] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 31, [62]
[22] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 31, [62]
In the absence of any relevant evidence provided by Mr Kraues, the Authority was satisfied that:[23]
(a)the money the Miners paid to Mr Kraues was not held in Mr Kraues’ clients’ account;
(b)Mr Kraues did not issue receipts to the Miners for the payments they made to him;
(c)Mr Kraues did not issue a final statement of services to the Miners whose agreements were terminated;
(d)Mr Kraues did not keep records of the clients’ account or had made them available to the Authority; and,
(e)for these reasons, Mr Kraues breached his obligations under cl 7.1, cl 7.2, cl 7.4, and cl 7.5 of the Code.
[23] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 32, [64], [65]
The third set of findings the Authority made related to provisions contained in Part 5 of the Code.
(a)Paragraph (a) of cl 5.5 provided that an agent is not entitled to be paid a fee or other reward for giving immigration assistance to a client unless the agent gives the client a statement of services that is consistent with the services, fees and disbursements mentioned in the 5.2 agreement the agent made with the client.
(b)Under cl 5.5(b) of the Code a statement of services had to set out particulars of each service performed, and the charge for each such service.
(c)Paragraph (c) of cl 5.5 provided that a client is entitled to recover the amount of a payment made to an agent for the purpose of the agent giving immigration assistance if the client did not receive a statement of services before making the payment, and the client does not receive a statement of services within 28 days after a final decision is made about the visa application, cancellation review application, nomination, or sponsorship to which the immigration assistance related.
After noting Mr Kraues had acknowledged that he had made withdrawals from the clients’ account; that in substance the Miners had the same agreement with Mr Kraues, and, for that reason, it was reasonable to conclude the withdrawals were made under each agreement; that it did not accept Mr Kraues’ interpretation of the agreements, noting that the agreements stated that Mr Kraues was to provide immigration assistance services; and that it was apparent Mr Kraues had not provided services to any of the Miners and, for that reason, the withdrawals Mr Kraues made were in clear breach of the agreements,[24] the Authority was satisfied that:[25]
(a)Mr Kraues made withdrawals from the clients’ account without providing any related services or making appropriate disbursements;
(b)Mr Kraues did not issue statements of services for the withdrawals he made; and
(c)“the withdrawn funds were inappropriately used for [Mr Kraues’] own purposes”.
[24] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, pages 32-33, [66], [67]
[25] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 33, [68]
The Authority’s noting that the agreements Mr Kraues made with the Miners stated Mr Kraues was to provide immigration services was a reference to cl 4(i)(ii) of the retainer agreement,[26] which provides:[27]
The client has appointed Kraues Law as its agent. (ii) For as long as circumstances permit at any given time, the clients [sic] responsible agent . . . is to provide immigration assistance services pursuant to the terms of this agreement.
[26] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 33, [66]
[27] Federal Court affidavit K Kraues 08.12.2020, page 114
Given these findings the Authority concluded Mr Kraues had breached cl 5.5 of the Code.[28]
[28] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 33], [69]
The fourth set of findings the Authority made related to cl 2.1 and cl 2.23 of the Code. Clause 2.1 required an agent to act “in accordance with the law and the legitimate interests of his or her client”, and “deal with his or her client competently, diligently and fairly”. Clause 2.23 of the Code provided that an agent “must take all reasonable steps to maintain the reputation and integrity of the migration advice profession”. The Authority was satisfied Mr Kraues breached cl 2.1 of the Code because of the following matters:
(a)One of the Miners, Mr K, told the Authority that Corestaff gave the agreements to the Miners to sign; Corestaff told the Miners that Mr Kraues would be their migration agent; and that Corestaff would be making fortnightly deductions from their wages to be deposited into Mr Kraues’ account until they reached the required amount for a permanent residence application.[29]
(b)Mr K said that he first met Mr Kraues when Mr Kraues attended a meeting with the Miners one week after their contracts with Corestaff had been terminated. Mr Kraues did not explain the purpose of the agreement they made; Mr K stated the Miners thought they were making payments towards a permanent visa application. Mr Kraues, however, confirmed to the Authority that the Miners needed to enter into a new contract with Mr Kraues if a visa application were to be lodged, and the Miners would have to pay additional fees.[30]
(c)Mr Kraues stated to the Authority that the purpose of the agreements he entered into with the Miners was for him to make himself available to provide immigration assistance, rather than to actually provide such assistance. The Authority found it difficult to accept that the Miners would have willingly entered into an agreement as interpreted by Mr Kraues.[31]
(d)On Mr Kraues’ interpretation of the agreements he made with the Miners, he was entitled to fees without any obligation on his part to provide any services for those fees, or even to provide immigration assistance services. The Authority found that that “cannot be construed as acting in the legitimate interests of clients or dealing with his clients competently, diligently and fairly”.[32]
(e)Mr Kraues made withdrawals from the clients’ account, possibly in relation to each Miner, but he did not provide any services. Mr Kraues’ withdrawal of money from the clients’ account “are in clear breach of the agreement to provide immigration assistance”.[33]
[29] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 34, [74]
[30] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 34, [75]
[31] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 34, [76]
[32] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 34, [77]
[33] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 35, [79]
The Authority was also satisfied Mr Kraues’ conduct adversely affected the reputation and integrity of the migration advice profession. The Authority relied on the following findings:[34]
The agreement signed by the miners’ [sic] was for a fixed sum of $7260 for a period of 24 months. If the agreements for all of the 81 miners had run their course the miners would have paid [Mr Kraues] $588,060 in total without [Mr Kraues] providing any services for them.
[34] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 35, [82]
Under the heading “Seriousness of behaviour” the Authority stated as follows:[35]
I consider [Mr Kraues’] behaviour in this matter is of a serious nature.
I am satisfied that [Mr Kraues] had demonstrated:
a.a blatant disregard of the interests of his clients in this case who are most vulnerable (PNG miners) having no knowledge of visa regulatory requirements of Australian law;
b.a blatant disregard for the law and his professional obligations as a registered migration agent.
I consider [Mr Kraues’] conduct to be most serious in that he has breached the trust placed in him by his clients and he has breached the law by misappropriating clients’ monies. [Mr Kraues’] behaviour is not acceptable or to be tolerated within the migration advice profession. [Mr Kraues’] behaviour is not only unlawful and unethical but would be viewed with contempt by other registered migration agents.
[35] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 38, [100]-[102]
Under the heading “Consumer Protection” the Authority said:[36]
The behaviour demonstrated by [Mr Kraues] falls short of the reasonably expected standards of a registered agent. I consider that [Mr Kraues] poses a serious risk to consumers. I am satisfied that if [Mr Kraues] were to continue to practice as a registered migration agent, [Mr Kraues] would not demonstrate the requisite skills expected of a registered migration agent. . . .
[36] Affidavit of V L McGlynn 28.05.2021, [10]; exhibit VLM-1, page 40, [115]
Mr Kraues applies to the AAT for review
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 52
THE 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
Mr Kraues commenced this proceeding on 3 November 2020 by filing an application and a statement of claim.
The statement of claim
The statement of claim begins with a section titled “Background Facts”, and is as follows:
On 14th November 2014 the then Assistant Minister for Immigration and Border Protection (now Dept. of Home Affairs) in her own behalf and on behalf of the Commonwealth maliciously and falsely published of and concerning the Applicant to the hurt and damage of his professional standing as a business consultant, successful political lobbyist at Federal and State levels of government and migration agent, by issuing to the public a national Media Release representing that the Plaintiff [sic] was involved in unlawful acts, including misappropriation of client money - and the intentional illegal use of funds. The Applicant was also described as a serious risk to consumers. The media release of the Respondents was extensively released throughout Australia and re-published by numerous media outlets whereby the Applicant has suffered extensive loss and damage.
The statement of claim then makes two sets of allegations. The first appear under the heading “Injurious Falsehood”; and are as follows:
(a)The representation alleged in the “Background Facts” was presented in a nationally circulated Media Release issued by the Minister; and the representation was to the effect that Mr Kraues had acted unlawfully, had misappropriated client monies, and was a serious risk to consumers.
(b)The “Claims made were as to criminality”.
(c)“Media Reports about this media release included description of the Applicant as “a rogue””.
(d)“Material has been used to convince members of the Australian public that the Applicant is a criminal”.
(e)The “[r]epresentations were made in the course and the execution of the duties of the” Minister.
(f)The representation was, at the time it was made, erroneous and false and that at no material time did Mr Kraues act unlawfully or misappropriate money.
(g)The statements contained in the Media Release were made for the purpose of immediately and permanently destroying all current and future businesses or any prospect of employment ever, regardless of the outcome of administrative or judicial review.
(h)Each statement in the Media Release was made with reckless disregard and indifference to the truth or in believing the truth of such statements, the motive being to immediately destroy all businesses associated with Mr Kraues.
(i)There was a failure to make obvious and available inquiries that would have established the falsity of the representations.
(j)The respondents caused Mr Kraues immediate and permanent destruction of his business and future business. In particular, the statements made in the Media Release destroyed Mr Kraues’ business as a consultant, migration agent and lobbyist; and they caused him to be excluded from employment and from being able to earn income anywhere.
The second set of allegations is one based on misleading or deceptive conduct as follows:
[Mr Kraues] will further contend that the conduct complained of by the Respondents as set forth above also comprised misleading and deceptive conduct in breach of the Australian Consumer Law section 18 thereby causing loss and damage to [Mr Kraues] under sections 236, 237 and 243.
Affidavits filed with statement of claim
Mr Kraues filed two affidavits with the application and statement of claim. One was an affidavit made by Mr Kraues on 4 November 2020, in which Mr Kraues:
(a)refers to and annexes the first and second 308 notices, Mr Kraues’ letter to the Authority dated 11 December 2013, the 309 notice, and the Media Release;[42]
(b)under the heading “Falsity of Claim” makes assertions and submissions in support of the claim that “[s]ubsequent to the refusal of [Mr Kraues’] Appeal to the Administrative Appeals Tribunal and Federal Court applications [Mr Kraues] did not believe the factual pattern which had been accepted, establishing that [Mr Kraues] was without integrity and in the view of the Assistant Minister, a criminal”;[43]
(c)says he is about to commence an “Interlocutory Application” seeking “urgent review of the Decision made by the Full Bench of the Federal Court” in the FFC appeal; and that Mr Kraues had been “advised that that request for review may be considered before this application”;[44]
(d)asserts that, had the Authority, or the Minister, or members of the Department of Home Affairs (then known as the Department of Immigration and Border Protection) (Department) investigated “the complaint (or investigated the claims at all) the falsity of the claims could have been discovered”;[45]
(e)refers to an affidavit to be filed in the FFC appeal on the basis of which he asserts that the claims made in the Media Release are false “and currently known to be false”;[46]
(f)asserts that the basis of the matters stated in paragraph 50 of the Authority’s decision record do not “provide a basis for the claims”; do not support the conclusion Mr Kraues is a criminal; and the Minister was recklessly indifferent to whether the matters stated in the Media Release were true;[47] and
(g)asserts matters relating to the losses Mr Kraues claims he suffered.[48]
[42] Affidavit K H Kraues 04.11.2020, [2]-[9]
[43] Affidavit K H Kraues 04.11.2020, [11]-[17]
[44] Affidavit K H Kraues 04.11.2020, [17]
[45] Affidavit K H Kraues 04.11.2020, [18]
[46] Affidavit K H Kraues 04.11.2020, [19]-[23]; annexure “KHK-12”
[47] Affidavit K H Kraues 04.11.2020, [24]-[25]
[48] Affidavit K H Kraues 04.11.2020, [26]-[29]
The second affidavit Mr Kraues filed when he filed his application and statement of claim with this Court is one made by his lawyer, Mr Joel, on 2 November 2020. Mr Joel deposes, among other things, to his having represented Mr Kraues in the FC proceeding and the FFC appeal, and that he was about to “file an Interlocutory Application seeking review of this decision”.[49] Mr Joel deposes that “during the conduct of the AAT and Judicial review” he did not believe or accept “the factual pattern advocated by the” Department.[50] Mr Joel also deposes to attempts he has made to interview “members of the PNG Group”.[51]
[49] Affidavit of A P Joel 02.11.2020, [5]
[50] Affidavit of A P Joel 02.11.2020, [8]
[51] Affidavit of A P Joel 02.11.2020, [10], [11]
Directions hearings
The proceeding came before me for a first court date on 24 November 2020. Mr Joel, who appeared for Mr Kraues, said he expected Mr Kraues would be applying for a three-month adjournment because the matter was scheduled to come before the Full Federal Court. I adjourned the proceeding for directions to 16 December 2020. On that day I listed the matter for directions on 2 April 2021, which was later changed to 1 April 2021.
At the directions hearing on 1 April 2021 Mr Joel submitted that it is “absolutely imperative to the conduct of the injurious falsehood to have this Federal Court matter resolved prior to hearing”. That was so because Mr Kraues intended to apply to set aside the FFC Orders on the ground of third party fraud, and have Mr Kraues’ application for review of the Authority’s decision returned to the AAT. Mr Joel applied for an order that the proceeding before me stand over generally “until such time as the matter is recommenced in the Federal Court so as to deal with the factual pattern which has comprised the basis of the media release relevant to the injurious falsehood”.[52] Mr Joel, however, said that the Federal Court Registry had refused to accept an application, even though “we have filed on multiple occasions with the Federal Court to have the matter recommenced”.[53]
[52] 01.04.2021 T3.20
[53] 01.04.2021 T3.30
After some discussion the following passed between me and the legal representatives of the parties:[54]
[54] 01.04.2021 T6.45-T9.30
HIS HONOUR: Look, I think the matter’s been drifting in a way that is not of any benefit to anyone, I don’t think. What I’m minded to do is somehow or other bring everything before me. It might well be that at the very least I have - I might have jurisdiction myself to entertain a claim for fraud in relation to an order made by the Federal Court. When somebody complains about a judgment having been procured by fraud, the usual way that that’s challenged is by fresh action. That’s point number 1.
. . . . I think, subject to submissions from you, what I really propose to do is to list the matter before me at a time that’s convenient to both of you, and for the purpose of the applicant showing cause why the proceedings shouldn’t be dismissed on the ground that it’s hopeless. I’m not saying that it is hopeless, but at least, that way, the parties, and particularly the applicant, will be forced to state what the case is and I will have an opportunity to look at it and then make a decision whether there is a case or there isn’t a case. If there is a case, then it will be identified in some way in reasons for judgment that I will deliver or, if not, the matter will be dismissed. Otherwise, I fear that if we come back in six weeks, the same thing will happen.
It appears that there is some fundamental problem in the Federal Court if you can’t even mange [sic] to – I’m not saying that by way of a criticism. I’m saying if a proceeding can’t even be filed in the Federal Court, that indicates that there is some fundamental difficulty which doesn’t appear can be overcome. So that’s what I propose to do, subject to being persuaded otherwise. Now, Ms McGlynn, do you have a position on what I'm proposing?
MS McGLYNN: No, your Honour. That sounds like a suitable option.
HIS HONOUR: And as I said, either the hearing will demonstrate there’s no case or it will demonstrate there is some case and it will be identified in some way in my reasons for judgment, and from that point on, some order can be imposed on the shape of the proceeding. Mr Joel, what do you say?
MR JOEL: Your Honour, I mean, the other difficulty that I have is that I haven’t definitely got a counsel at this stage and my client is without funds. Counsel who has assisted has been fantastic in terms of the Federal Court matter, but a line has to be drawn somewhere. So I can only assume I can get counsel. I will put that aside. So am I to assume the next appearance is like a show cause and do submissions - - -
HIS HONOUR: Correct. I will explain it - - -
MR JOEL: So to regard it as a show cause?
HIS HONOUR: Well, it’s really, in effect, the court on its own motion, that is, me on my own motion before it.
MR JOEL: Yes.
HIS HONOUR: And unless the parties tell me I haven’t got power, the court has got power to control its own processes and that, at the very least, includes power to ensure that a claim that has been brought before it is something that is sufficiently arguable for it to be heard. So it’s as if the respondent has filed an application to strike out. The only difference will be is the way I propose to do it is I will expect at the hearing for you, or for whoever is going to represent your client, to tell me what the case [is] and to demonstrate that there’s an arguable case to be entertained.
MR JOEL: And then, if such application is successful, your Honour may consider an adjournment until the resolution of the Federal Court matter. Otherwise, there would be issues regarding quantification of damage relevant to materiality.
HIS HONOUR: Well, look, what I have in mind- and that's why I'm suggesting this is - - -
MR JOEL: Yes.
HIS HONOUR: It might even [be] the respondent will say, “Yes, you've got an arguable case.” If that’s it, then there’s very little to be done apart from making directions. But one of the other benefits I’m hoping to obtain from this process is for me to get a handle on what the relationship is between the claims you bring in this proceeding and the orders that have been made by the Federal Court and your attempts to reopen those orders based on fraud. Now, that’s something that you will need to articulate at the hearing, and it may well be that I form a view that the orders are not relevant, or I might form the view that the orders are relevant. I might form the view that, if they are relevant, I, myself, might have jurisdiction to deal with a fraud claim. But, you see - -
MR JOEL: Well, yes.
HIS HONOUR: - - - even there -I mean, if you’re going to be alleging fraud, and I don’t know what material you have put - - -
MR JOEL: Yes.
HIS HONOUR: - - - there’s a, as you will know, heavy burden on any party who alleges fraud.
MR JOEL: Yes, indeed.
HIS HONOUR: So the expectation will be that - if fraud is going to be part of your case, either here or in relation to the Federal Court, the expectation will be that you will be able to plead it with a degree of particularity, that plea.
MR JOEL: Yes, indeed. Yes, indeed.
HIS HONOUR: So they're the - so - - -
MR JOEL: So - sorry.
HIS HONOUR: It won’t-you know, the matter [of] form will be flawed, but the substance ought not to be flawed. So that’s the idea. So on a hearing to show cause - and, basically, what I mean by show cause is it’s for you to demonstrate you’ve got an arguable case. And as I’ve said, what you will need to do is establish how the Federal Court orders are relevant to the claim you’ve brought here and how a claim for fraud to set aside those orders is also relevant. And, thirdly, whether you actually have got a claim for fraud. And as I’ve said, on my current understanding of the law, there would be [a] basis for me to entertain a fresh action for fraud, if there is one there, to set aside a judgment. Now, they're not view[s] that I express other than to say that they're possibilities and things about which I invite parties to make submissions.
MR JOEL: Yes.
HIS HONOUR: So what I propose to do is to set the matter down for hearing, say, in about 8 weeks. I will give a date. I will give the parties liberty to apply if that date is not suitable to counsel, but you must communicate with each other about that before you come to me. But it must be done within a few days, if that date doesn’t suit, and there's another date. And in the meantime, I will make some directions for the filing - I think I will require . . . evidence and, principally, submissions. It’s not going to be a final hearing. It’s really a question of assessing whether there’s an arguable case, and the important thing will be whether it has been articulated and particularised appropriate[ly]
MR JOEL: Yes, your Honour. Thank you.
HIS HONOUR: So I’m just going to formulate some orders.
ADDITIONAL AFFIDAVITS FILED AFTER 1 APRIL 2021
Pursuant to the directions I made on 1 April 2021 Mr Kraues filed an affidavit made by Mr Joel on 4 May 2021. Mr Joel deposes that for a “period of approximately four months” he had been seeking to relist the FFC appeal, but the Registry “has not been prepared to allow filing upon the basis of jurisdiction”. Mr Joel annexed an affidavit he made on 1 December 2020, and an affidavit Mr Kraues made on 8 December 2020.[55] These appear to have been made for filing in the FFC appeal in support of Mr Kraues’ applying to set aside the FFC Orders for fraud.
[55] Mr Joel also annexed an affidavit he made on 21 January 2021 for the purposes of the FFC Appeal which annexes a document that was omitted from Mr Kraues’ affidavit made on 8 December 2020.
Federal Court affidavit of Mr Joel
In his affidavit made on 1 December 2020 Mr Joel deposes as follows:
(a)At the time of the hearings before the AAT and the Federal Court Mr Joel had concerns that the factual pattern on which the Authority had relied for cancelling Mr Kraues’ registration was “contaminated by third party fraud”, that it was possible Mr Kraues “was being framed”, and that “this possibly had subverted and “stultified”” the AAT’s statutory role and function. Mr Joel, however, considered he did not have sufficient evidence “to advocate such grave allegations at that time”. Mr Joel therefore advocated the matter before the Tribunal on the basis that Mr Kraues “exercise his right to silence”, and that it was for the Department and the Authority to “present evidence and prove its case”.[56]
(b)Had Mr Joel “been aware of the material facts unknown to” him and to Mr Kraues at the time set out later in his affidavit, Mr Joel would have advocated Mr Kraues’ case on the basis, first, that each retainer agreement with each Miner required more than Mr Kraues being merely retained and doing nothing; that each retainer agreement in fact involved Mr Kraues “offering to provide many beneficial services and outcomes for the benefit of” the Miners as set out in Mr Kraues’ affidavit of 8 December 2020; and, second, on the basis of Mr Kraues giving evidence “rather than having his character judged on the basis of inferences drawn from silence in response to justifiable suspicion of fraud and on the actual basis that had he known the true position he would not have entered into any agreement with Corestaff at all”.[57]
[56] Federal Court affidavit A P Joel 01.12.2020, [2], [3]
[57] Federal Court affidavit A P Joel 01.12.2020, [4]
Mr Joel also deposes to matters that reveal what he submits is a fraud of which Mr Kraues was not made aware until after the FFC Orders were made (Asserted Fraud). The basis of the Asserted Fraud are the following asserted matters.
(a)Corestaff first retained Mr Kraues in 2011 to act as a migration agent for a large group of tradespersons who are nationals of Papua New Guinea.[58]
[58] Federal Court affidavit A P Joel 01.12.2020, [5]
(b)In April 2012 Corestaff entered into a “work agreement” with the Commonwealth of Australia (WA) within the meaning of the Act.[59] The WA authorised Corestaff to “recruit, employ or engage the services of people who are intended to be employed or engaged by the Approved Sponsor as holders of Subclass 457 (Business (Long Stay)) visas”.[60]
[59] Federal Court affidavit A P Joel 01.12.2020, [7]; annexure “APJ-1”. Mr Joel refers to this work agreement as an “On Hire Agreement”.
[60] Federal Court affidavit A P Joel 01.12.2020, [7]; annexure “APJ-1”, recital B (page 34)
(c)Item 6 to the WA allowed Corestaff to engage in “on-hire” which was defined in cl 1.3 of the WA to mean “a person’s business activities which include activities relating to either or both of: (a) the recruitment of labour for supply to other unrelated businesses (the person’s client organisations); and (b) the hiring of labour to other unrelated businesses (again, client organisations)”.
(d)Item 2 to schedule 4 to the WA required, among other things, that Corestaff would pay wages and salary directly; the primary sponsored persons must be employed in on-going full-time employment; and the primary sponsored person must be paid the market salary rate.
(e)Shortly after Corestaff entered into the WA, Mr S, an officer of Corestaff, instructed Mr Kraues “to process the nominations and visa applications for the PNG miners in compliance with it”.[61] Mr Kraues prepared three classes of documents:
(i)A nomination in relation to each of the Miners. There is annexed to Mr Joel’s affidavit a “Business Nomination Visa” in relation to a Ms D.[62]
(ii)A document titled “Information Relating to Subclass 457 (Business Long Stay) Nomination Application” which was attached to each nomination.[63]
(iii)An application for a 457 visa for each Miner.[64]
(f)The documents referred to in (e) were submitted to the Department together with offers of employment from Corestaff to each of the Miners who accepted the offers before they entered Australia.[65]
(g)After the Miners arrived in Australia they each signed a “Written Employee Authority – Financial Deduction from Salary”, and a “Retainer Agreement”.[66] Mr Joel annexed a copy of one signed retainer agreement dated 5 June 2012.[67]
(h)According to a defence filed by Corestaff in a class action brought by the Miners, after the Miners entered Australia Corestaff entered into a further contract of employment, which Mr Joel referred to as the “Australian Employment Contract”.[68] The Australian Employment Contract was not authorised by the WA, and was contrary to the contract of employment that arose when each Miner accepted in Papua New Guinea Corestaff’s offer of employment.[69]
(i)Mr Joel was unaware of the Australian Employment Contract at the time he represented Mr Kraues before the AAT and the Federal Court; and if he had been aware, he would not have conducted his representation of Mr Kraues in the manner that he did.[70] Mr Joel would have asserted that the complaint the initial Miners made “included fraudulent information and the inferences drawn were false to the knowledge of the Sponsor/Nominator, Corestaff NT, Corestaff WA and that [Mr Kraues] had been misled both by Corestaff NT (in particular Mr S) and unknowingly, the PNG tradespersons”.[71]
[61] Federal Court affidavit A P Joel 01.12.2020, [12]
[62] Federal Court affidavit A P Joel 01.12.2020, [12]; annexure “APJ-2”
[63] Federal Court affidavit A P Joel 01.12.2020, [14]; annexure “APJ-3”
[64] Federal Court affidavit A P Joel 01.12.2020, [17]
[65] Federal Court affidavit A P Joel 01.12.2020, [15], [16]; annexure “APJ-4”
[66] Federal Court affidavit A P Joel 01.12.2020, [19]-[23]
[67] Federal Court affidavit A P Joel 01.12.2020, [23]; annexure “APJ-5”
[68] Federal Court affidavit A P Joel 01.12.2020, [26]
[69] Federal Court affidavit A P Joel 01.12.2020, [31], [33], [47], [48]
[70] Federal Court affidavit A P Joel 01.12.2020, [34]
[71] Federal Court affidavit A P Joel 01.12.2020, [35]
Mr Joel identifies a number of steps or arguments he says he would have taken and raised before the Tribunal had he been aware of the Australian Employment Contract.[72] It is unnecessary to set out all of these steps or arguments except the following:[73]
Had the fraud of Corestaff NT in switching the offshore employment contract given to the Commonwealth with the onshore contract entered into by Corestaff WA in Perth been known to the Tribunal at the time of [Mr Kraues’] application to reverse his agents’ cancellation it could and would have made a difference to the result before the Tribunal. I would have advised [Mr Kraues] to give evidence and to explain what he knew and what he did not knew [sic] and what he did. I am informed there was substantive evidence of multiple procedures adopted in attempting to provide immediate assistance to the PNG Group [that is, the Miners] as listed below.
[72] Federal Court affidavit A P Joel 01.12.2020, [51], [52], [62], [63], [65], [66]
[73] Federal Court affidavit A P Joel 01.12.2020, [71]
Mr Joel says he would have challenged the claim Mr Kraues was not a fit and proper person to provide immigration assistance by presenting evidence that, on 16 October 2012, a Departmental officer contacted Mr Kraues in response to which Mr Kraues “prepared a formal complaint and submission on behalf of the PNG Group” raising issues that “included breach of sponsorship obligations”, and “prejudice caused to residency position”.[74] The document Mr Joel deposes constituted the “formal complaint and submission on behalf of the PNG Group” is an email Mr Kraues sent to the Migration Agent Section of the Department on 24 December 2012.[75] It includes the following:
Re: Formal Complaint – Unregistered Practice – [Ms P] of Corestaff (WA) Pty Ltd
1.It is alleged that [Ms P], International Coordinator at Corestaff (WA) Pty Ltd, provided unregistered immigration assistance, to sixty seven (67) 457 visa holders, in the period between 16th of October and 16th of November 2012, in contravention of the Migration Agent Regulatory Scheme.
2.Corestaff (WA) Pty Ltd is a recruitment company, located on. . . Perth. Its head office, Corestaff (NT) Pty Ltd, is an approved sponsor and party to a Commonwealth On-Hire Labour Agreement Number . . .
. . . .
5.It is alleged that [Ms P], provided immigration assistance, that in substance, was materially different and unrelated to, the employment relationship between the employer Corestaff, and its employees, the 457 visa holders.
6.It is alleged that [Ms P], provided immigration assistance to the Corestaff 457 visa workforce about their eligibility for permanent residence; their families’ eligibility for permanent residence and generally assisted the employees with non-employment related immigration matters.
[74] Federal Court affidavit A P Joel 01.12.2020, [72]
[75] Federal Court affidavit A P Joel 01.12.2020, [72(b)]; annexure “APJ-17”
Federal Court affidavit of Mr Kraues
In his affidavit made on 8 December 2020 Mr Kraues repeats the substance of what Mr Joel says in his affidavit about Mr Kraues’ role in relation to the WA, the nominations, and Corestaff’s offers of employment. Mr Kraues also deposes to his being unaware of the Australian Employment Contract until Mr Joel made its existence known to Mr Kraues. Mr Kraues deposes that he would have done or not done a number of things, had he become aware of the Australian Employment Contract. These include the following:
(a)Mr Kraues would never have contemplated or allowed conditions for “the PNG Group which were subject to a further agreement such as the Australian Employment contract the terms of which were to be advised only after the visa holders’ arrival in Australia”.[76]
[76] Federal Court affidavit K Kraues 08.12.2020, [11]
(b)Mr Kraues would never have entered into any “contractual agreement with Corestaff”, or have been involved in the preparation of any documents or procedures that facilitated the issue of visas, or enter into any retainer agreement, noting that “when acting for Corestaff or with Corestaff [Mr Kraues] received [his] instruction from [Mr S] on behalf of Corestaff”.[77]
[77] Federal Court affidavit K Kraues 08.12.2020, [17]
(c)Mr Kraues would have conducted his “defence in the” AAT “in a totally different way”.[78] Mr Kraues would have (among other things):
(i)“defended” himself before the AAT “as to the character and breach of the code charges against” Mr Kraues; Mr Kraues would “not have chosen to be silent in the face of deceit”;[79]
(ii)“demonstrated that Corestaff by [Mr S] intentionally and knowingly: [a]uthorised the commission of serious offences” in connection with the hiring of the “PNG Group”, and wilfully used Mr Kraues “as stooge or dupe to facilitate and maintain the scheme to improperly recruit the PNG Group and then, after their arrival in Australia, to present them with different conditions of employment, whilst informing them they could transition to permanent residence”;[80]
(iii)submitted the retainer agreements were not valid and could not be enforced;[81]
(iv)provided detailed particulars of the services he offered to “protect the interests of the PNG Group”;[82]
(v)asserted that, “given the fraud and the services offered” Mr Kraues was not a person without integrity nor fit and proper to hold a licence, and explained that had he known of the fraud perpetrated on him he would not have acted for Corestaff in any manner;[83]
(vi)not have exercised, as he did, his “right to silence”, which Mr Kraues exercised “as a consequence of [his] justifiable concern that [he] was being framed, that is improperly entrapped as a result of the concealed fraud undertaken by Corestaff NT”;[84]
(vii)submitted that the terms and conditions of the retainer agreements were unworkable and impossible to maintain; and[85]
(viii)submitted the money was deducted from the Miners wages in accordance with the terms of the Australian Employment Contract, which offered casual employment, and not in accordance with the retainer agreements.[86]
[78] Federal Court affidavit K Kraues 08.12.2020, [20]
[79] Federal Court affidavit K Kraues 08.12.2020, [26]
[80] Federal Court affidavit K Kraues 08.12.2020, [26]
[81] Federal Court affidavit K Kraues 08.12.2020, [34]
[82] Federal Court affidavit K Kraues 08.12.2020, [34(a)]
[83] Federal Court affidavit K Kraues 08.12.2020, [34]
[84] Federal Court affidavit K Kraues 08.12.2020, [37], [39]
[85] Federal Court affidavit K Kraues 08.12.2020, [50(c)]
[86] Federal Court affidavit K Kraues 08.12.2020, [50(d)]
Further affidavits
Mr Joel made an affidavit on 13 May 2021 to which he annexed a draft affidavit of Mr Kraues in which Mr Kraues states that, at the time the Media Release was published, he was the director of a successful company called Paris Walter Pty Ltd which was listed on the “Department of Prime Minister and Cabinet’s Register of Lobbyists”. Mr Kraues further states that he had successfully acted for a number of businesses and a major government entity; subsequent to the publication of the Media Release “the business was irreparably destroyed, considering the claims made”; but Mr Kraues “cannot fully quantify actual financial loss in respect to Paris Walter Advisory” because of illness.
Mr Joel also made an affidavit on 30 May 2021 to which he annexed an affidavit he made on 21 May 2021 which he attempted to file in the Full Federal Court in support of Mr Kraues’ intention to apply to set aside the FFC Orders. The affidavit sets out matters Mr Joel deposes show the Full Federal Court has jurisdiction to hear Mr Kraues’ application to set aside the FFC Orders. Mr Joel annexes a draft statement of claim alleging a fraud “upon the Commonwealth”, and deceit of Mr Kraues and the Miners. The statement of claim repeats the substance of the Asserted Fraud Mr Kraues alleges in his affidavit of 8 December 2020.
It appears that the fraud the draft statement of claim alleges is directed to the AAT’s exercise of jurisdiction in relation to Mr Kraues’ application for review of the Authority’s decision. That is apparent from paragraph 16 of the draft statement of claim which alleges that “[t]he facts referred to herein stultified and/or misled the Tribunal into appraising [Mr Kraues’] character in the absence of the knowledge of the true facts and as the consequence of [Mr Kraues’] claim to exercise his right to silence before the Tribunal”. This paragraph of the draft statement of claim further alleges:
Had the Tribunal been able to consider the concealed material facts alleged herein, and the true nature of the case against [Mr Kraues] transparently, consideration as to appraisal of his character should and could have been undertaken at least in part upon the following bases but which did not occur:
i.The view of the Tribunal as affirmed by the Courts as to the meaning of the Retainer Agreement being for “doing nothing” was demonstrably capable of being challenged.
ii.He would not have exercised his right [to] silence but would have given evidence permitting appraisal as to the procedures he adopted and the steps he would have taken in response to the alleged fraud under and in accordance with the terms of the Retainer Agreement including his sound record of dealing with Australian Government agencies and with trades unions;
iii.The character of the services immediately offered by [Mr Kraues] could or may have had the effect of preserving a pathway for permanent residency, enabling the discovery of the existence and terms of the Australian Employment Contract, and to precipitate compensation claims involving millions of dollars and facilitate Fair Work and trades unions response;
iv.Enabling the provision of expert testimony regarding the efficacy and effectiveness of the services offered and whether the offer of such immediate service[s] which were refused presupposed that [Mr Kraues] was without character.
Affidavits filed without leave after 1 June 2021
In addition to these affidavits, Mr Joel, without the leave of the Court, filed two further affidavits after I reserved judgment. The first is an affidavit made on 23 January 2022. Mr Joel deposes that in November 2021 he became aware of allegations that a number of AAT members had been paid over a protracted period “to not do anything – that is receive payment for the provision of no service”, as a consequence of which he arranged to obtain a report by a Mr Hughes, a chartered accountant (Hughes Report).[87]
[87] Affidavit A P Joel 23.01.2022, annexure “APJ-2”
Mr Hughes expresses an opinion on what a retainer fee and retainer agreement are; and he expresses a number of other opinions, including the following:
(a)The suggestion that the retainer fee was “a fee for doing nothing . . . demonstrates a complete lack of understanding of the nature of this specific fee”.[88] The basis of this opinion appears to be the opinion Mr Hughes expresses earlier in his report, namely, that “[w]hen a professional undertakes to be available, that professional is undertaking NOT to be available to others”.[89]
(b)The Authority’s finding that Mr Kraues could not hide behind his failure to provide any service or account for money withdrawn simply because his arrangement with the Miners was stated to be a retainer agreement was based on the (incorrect) assumption that “being available is of no value”, but the Miners “got what they contracted for, Mr Kraues’s [sic] availability”.[90]
(c)Mr Kraues could not perform immigration services in return for the retainer fees because that was not what Mr Kraues agreed to do for the retainer fees. He agreed to be available when the Miners required it.[91]
(d)As for the “fee for service” sections of the retainer agreements, Mr Kraues did not perform immigration services, but that was because the situation the Miners anticipated and sought, being eligible to apply for permanent Australian residence, could not be achieved because their employment status had been converted from permanent to casual, and their employment was terminated.[92]
(e)By analogy to Mr Hughes’ awareness of trust account requirements for a legal practitioner in New South Wales, Mr Kraues was not required to hold on trust the money the Miners paid to him on account of the retainer fees payable under the retainer agreements.[93]
[88] Affidavit A P Joel 23.01.2022, annexure “APJ-2”, Hughes Report, at [7.2.1]
[89] Affidavit A P Joel 23.01.2022, annexure “APJ-2”, Hughes Report, at [5.2.4]
[90] Affidavit A P Joel 23.01.2022, annexure “APJ-2”, Hughes Report, at [7.2.3]
[91] Affidavit A P Joel 23.01.2022, annexure “APJ-2”, Hughes Report, at [7.2.6]
[92] Affidavit A P Joel 23.01.2022, annexure “APJ-2”, Hughes Report, at [7.2.8]
[93] Affidavit A P Joel 23.01.2022, annexure “APJ-2”, Hughes Report, at [8]
It is apparent that these opinions are directed to findings made by the AAT. They are not directed to the findings the Authority made.
The second affidavit is that made by Mr Joel on 29 April 2022. Mr Joel annexes orders made by the Federal Court approving the settlement of the class action the Miners brought against Corestaff under which Corestaff agreed to settle the class action for $6.4 million, less funding and commission costs. Mr Joel deposes that the damages the Miners’ claimed they suffered should have included the amounts that were deducted from their wages and paid to Mr Kraues. Mr Joel further deposes that:
Accordingly, the compromise may recognise that [Mr Kraues]
-did not act illegally in terms of any act of criminal conversion of client money and
-did not commit any wrongful act as described in the Media Release issued by the [Minister]
PARTIES’ SUBMISSIONS
In their written submissions the respondents submit that Mr Kraues’ statement of claim is deficient to the extent that it cannot be rectified by repleading. The respondents also submit that the materials on which Mr Kraues relies do not disclose any reasonable basis for “the serious and inherently unlikely allegations” the statement of claim makes against the respondents; and, for that reason, the proceedings should be summarily dismissed under r 13.10 of the FCC Rules and s 17A(2)(b) of the FCC Act.[94]
[94] Now r 13.13 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), and s 143(2) of the Federal Circuit and Family Court of Australia Act 2021 (Cth).
The respondents also rely on s 305A(4)(c) of the Act, which provides that “[n]o action or other proceeding for damages lies against a person for publishing in good faith . . . a summary of . . . a statement under this section”. A “statement under this section” is the statement referred to in s 305A(1) of the Act, which provides:
If a registered migration agent is given notice of a decision under section 303, then the Migration Agents Registration Authority:
(a) must as soon as possible make available in the prescribed way a statement that sets out the decision and specifies the grounds for the decision; and
(b) may prepare a statement about the decision and make it available to one or more groups of persons, or to one or more persons, in any way the Authority thinks fit.
By Mr Joel’s written submissions, Mr Kraues accepts the statement of claim is deficient, but submits that “objections as to form of the pleading can and ought be addressed by the leave of the Court, appropriate in the present case, to review and amend the pleading having regard to the objections now received”. Mr Kraues submits that “none of the choses in action sued upon by [Mr Kraues] are fanciful or so lacking in substance as ought be dismissed”.[95]
[95] [Applicant’s] Submission, [3]-[4] referring to Spencer v Commonwealth of Australia [2010] HCA 28
Mr Kraues also submits that it is plainly arguable that the Media Release is not protected by s 305A(4)(c) of the Act because it conveys that Mr Kraues’ conduct was criminal when the Authority found that Mr Kraues’ conduct was unlawful,[96] and the Authority, in any extent, does not have jurisdiction to determine whether Mr Kraues’ conduct was criminal.[97] Mr Kraues further submits:[98]
An argument as to malice can be raised, given subjective appraisal by such a sophisticated, legally qualified person as the Minister could not or should not conclude that the [Authority’s] Decision was unlawful in such circumstance. The Minister arguably exhibited a manifest reckless indifference in not considering such issue.
[96] [Applicant’s] Submission, [8]-[15]
[97] [Applicant’s] Submission, [16]-[27]
[98] [Applicant’s] Submission, [28]
It is not entirely clear what Mr Kraues intends to convey in this paragraph. I will take it to be a submission that, having authorised the publication of the Media Release which, Mr Kraues alleges, represented Mr Kraues had been found to have engaged in criminal conduct, the Minister was indifferent about whether the Authority did in fact find that Mr Kraues had engaged in criminal conduct.
In his oral submissions Mr Joel repeated the effect of these submissions; but he made the following additional submissions.
(a)It is arguable that the Minister should not have issued the Media Release because “it’s overwhelming[ly] arguable that the consequence of publication would have a disastrous effect”, and it is “inconceivable that the Attorney General wouldn’t have known this as a consequence”.[99]
(b)Throughout the time Mr Joel has represented Mr Kraues it had become “overwhelmingly apparent to both” Mr Joel and Mr Kraues that Mr Kraues “was being framed”, that Mr Joel’s “instruction was under no circumstances would [Mr Kraues] be placed in the witness box or give evidence when we were absolutely certain but could not prove that he was being framed”, with the consequence that Mr Kraues “exercised the entitlement to silence”.[100]
(c)The FFC Orders and Mr Kraues’ application to set them aside for fraud are relevant to the question of damages.[101]
[99] 01.06.2021 T11.30
[100] 01.06.2021 T12.30
[101] 01.06.2021 T14.25
PRINCIPLES AND APPROACH IN RELATION TO SUMMARY DISMISSAL
The question I must determine is whether Mr Kraues “has no reasonable prospect of successfully prosecuting the proceeding or claim” within the meaning of r 13.13(a) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules), or s 143(2)(b) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFC Act).[102]
[102] The FCFC Act and the GFL Rules came into effect on 1 September 2021, replacing the FCC Act and the FCC Rules.
Paragraph (b) of s 143(2)(b) of the FCFC Act is in substantially the same terms as s 31A of the Federal Court of Australia Act 1976 (Cth); and the principles governing the exercise of the power conferred by s 31A were set out by Perry J in Przybylowski v Australian Human Rights Commission(No 2):[103]
[103] Przybylowski v Australian Human Rights Commission(No 2) [2018] FCA 473, at [7]
The principles governing the application of s 31A are well established and can be summarised as follows:
(1)The respondent as the moving party bears the onus of persuading the Court that the application has no reasonable prospects of succeeding: Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256 (Cassimatis) at 271 [45] (Reeves J).
(2)With respect to the scope of s 31A, French CJ and Gummow J explained in Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 (Spencer) at [22], that the section:
… will apply to the case in which the pleadings disclose no reasonable cause of action and their deficiency is incurable. It will include the case in which there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and any case which might be propounded by permissible amendment. It will include the class of case in the long-standing category of cases which are “frivolous or vexatious or an abuse of process”. The application of s 31A is not, in terms, limited to those categories.
(3)Section 31A sets a lower threshold than the previous test for summary dismissal which required that the claim be “manifestly groundless” or “hopeless”: Spencer at [52]-[53] (Hayne, Crennan, Kiefel and Bell JJ). Nonetheless, the discretion must still be exercised with caution (Spencer at [24] (French CJ and Gummow J) and [60] (Hayne, Crennan, Kiefel and Bell JJ)).
(4)An assessment of whether a proceeding has no reasonable prospects of success for the purposes of s 31A involves the making of value judgments in the absence of a full and complete factual matrix and argument, with the result that the provision vests a discretion in the Court: Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 178 FCR 401 (Kowalski) at [28] (the Court).
(5) Consistently with this, Reeves J in Cassimatis explained at [46] that:
…the determination of a summary dismissal application therefore does not require a mini-trial based upon incomplete evidence to decide whether the proceedings are likely to succeed or fail at trial. Instead, it requires a critical examination of the available materials to determine whether there is a real question of law or fact that should be decided at trial. Each application for summary judgment or summary dismissal has to be determined according to its particular circumstances. What is required is a practical judgment of the case at hand. The relevant circumstances will partly depend upon the stage which the proceedings have reached. Among other things, this will affect the materials available to the Court considering the application, for example, whether pleadings have been exchanged, or discovery of documents has occurred.
(6)To illustrate the application of these principles, Reeves J explained at [47] that the moving party is more likely to succeed if she or he demonstrates that the applicant’s success relies on a question of fact that is fanciful, trifling, implausible, improbable, tenuous, or contradicted by all the available documents or evidence. Conversely, his Honour explained that, as a general principle, such an application is unlikely to succeed where, on a critical examination of all the available materials, the Court is satisfied that there appears to be a real question of fact to be determined. The latter, in his Honour’s view, is more likely to be the case where the available materials include pleadings that raise factual disputes that can truly be described as significant, substantial, plausible or weighty.
APPROACH
Third, even if the opinions expressed in the Hughes Report are capable of supporting a finding to the effect that the Miners’ money was not paid for the purpose of Mr Kraues providing immigration assistance services, it is not arguable that the opinions would mean that the Authority’s finding to the contrary was not open to it. At most, the opinions expressed in the Hughes Report would go to the merits of the Authority’s findings and, for that reason, could not arguably disclose the Authority so found because of any jurisdictional error.
In these circumstances Mr Kraues has no reasonable prospects of succeeding on that element of his cause of action based on injurious falsehood that the representation he acted unlawfully was false.
Relevance of Asserted Fraud
Mr Kraues relies on the Asserted Fraud in support of his claim that the representation he acted unlawfully was false. The core of the Asserted Fraud is the allegation that Corestaff employed the Miners in Australia on terms that were different from those Corestaff had represented to the Miners in Papua New Guinea before they entered Australia. There are a number of observations that may be made about Mr Kraues’ reliance on the Asserted Fraud. First, Mr Kraues has not alleged facts, or identified evidence, on the basis of which it is reasonably open to him to allege the fraud he asserts. For that reason alone Mr Kraues does not have any reasonable prospects of establishing the Asserted Fraud.
Second, even if Mr Kraues had stated sufficient facts to permit him to allege the Asserted Fraud, he does not allege any facts, and he has adduced no evidence on the basis of which it could reasonably be found, that the Asserted Fraud had any causal connection with the conduct the Authority found Mr Kraues had engaged in, and on the basis of which the Authority found Mr Kraues had breached provisions of the Code and, for that reason, had acted unlawfully. In particular, even if the Miners had been induced by the fraud of Corestaff to agree to money being deducted from their wages and paid to Mr Kraues, and Mr Kraues was unaware of such fraud, Mr Kraues does not allege he did not know that money had been deducted from the wages of Miners and paid to Mr Kraues; Mr Kraues does not allege that the money that was so paid to him was for a purpose other than the provision of immigration assistance services or to make himself available to provide such services; and he does not allege, at least not expressly, that, assuming the existence of the Asserted Fraud, those provisions of the Code the Authority found Mr Kraues had breached did not apply to the money that was deducted from the Miners’ wages and paid to Mr Kraues.
It is the case that in his Federal Court affidavit made on 1 December 2020 Mr Joel asserts that, were it not for the Asserted Fraud, Mr Kraues would have given evidence to the AAT which would have showed that Mr Kraues’ retainer with the Miners involved Mr Kraues “offering to provide many beneficial services and outcomes for the benefit of” the Miners; [146] and in his Federal Court affidavit made on 8 December 2020 Mr Kraues, too, asserts that if it were not for the Asserted Fraud he would have given detailed particulars of the services he offered to “protect the interests of the PNG Group”.[147] Neither Mr Joel nor Mr Kraues, however, identify the services Mr Kraues provided, or, if Mr Kraues did provide those services, he otherwise complied with those provisions of the Code the Authority found Mr Kraues had breached.
[146] Federal Court affidavit A P Joel 01.12.2020, [4]
[147] Federal Court affidavit K Kraues 08.12.2020, [34(a)]
It may be that Mr Kraues implicitly relies on a contention to the effect that those provisions of the Code that regulate a migration agent’s handling of client money do not apply where the client has paid the money under the inducement of a fraud of which the agent is not aware. Such contention, however, would be untenable. The obligations the Code imposes on migration agents in relation to money a client pays for the purpose of being provided immigration assistance services would apply as soon as the migration agent receives the client’s money for the purpose of providing immigration assistance services. That would remain the case even if the client were induced by fraud to pay a migration agent money to receive immigration assistance services. In particular, it is not reasonably arguable that a client’s having been induced by the fraud of a third party to pay money to a migration agent for the purpose of the migration agent providing immigration assistance services would alter the migration agent’s obligations under the Code to:
(a)pay the client’s money into a clients’ account;
(b)hold in the clients’ account the money the client paid for an agreed block of time 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 5.2 agreement showing each service provided, and the fee for each service;
(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 account; and
(d)make available to the Authority for inspection on request 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.
The matters I identify in paragraphs 105 and 106 by themselves afford an additional reason for concluding that Mr Kraues has no reasonable prospects of succeeding on the claim that the representation to the effect that he acted unlawfully is false.
The third observation that may be made about Mr Kraues’ reliance on the Asserted Fraud is his contention that, had he been aware of the fraud, he would have conducted differently his application for review before the AAT, and in the FC proceeding and the FFC appeal. Even if, however, that were accepted, Mr Kraues does not say that the Asserted Fraud induced him not to provide to the Authority any of the documents the Authority identified it had requested Mr Kraues provide to it but which he did not provide; or to the extent Mr Kraues alleges he was so induced, he has or had in his possession documents that would show he had complied with the requirements of the Code in relation to the money he received from the Miners.
The fourth observation is that, even if Mr Kraues were to succeed in setting aside the FFC Orders, Mr Kraues would have no reasonable prospects of succeeding in showing that the AAT would make different findings to those the Authority made; and that is because, as I have already found, Mr Kraues has not alleged facts, and has not adduced evidence that is reasonably capable of supporting findings that Mr Kraues did comply with the provisions of the Code the Authority found Mr Kraues did not comply with.
The final observation relates to Mr Kraues’ assertion that he suspected a fraud, that he believed he was being set up, and, because of that suspicion, he elected to exercise his right to silence before the AAT. Given these admissions, it is difficult to see how Mr Kraues could have any reasonable prospects of succeeding in the contention that he acted in the way he did because he was not aware of the Asserted Fraud.
Mr Kraues had misappropriated client monies
Mr Kraues does not contend that, on the basis of the facts it found, the Authority was incorrect in concluding that Mr Kraues misappropriated the Miners’ money; and he would have no reasonable prospects of succeeding on such contention. The Authority found Mr Kraues received money from the Miners, purportedly for the purpose of providing immigration assistance services; and he applied the money to himself without abiding by the provisions of the Code in relation to that money. It is not arguable that these facts cannot reasonably be characterised as the misappropriation of money by Mr Kraues.
As I have noted, Mr Kraues appears to rely on the opinions expressed in the Hughes Report to challenge the Authority’s finding that the Miners’ money was paid for the purpose of Mr Kraues providing immigration assistance services. For the reasons I have already given, however, the opinions expressed in the Hughes Report are incapable of supporting a finding that the Miners’ money was not paid for the purpose of Mr Kraues providing immigration assistance services; and the opinions are in any event incapable of showing the Authority made any jurisdictional error in finding that the money was paid for such purpose. Mr Kraues has not otherwise alleged facts, or provided evidence that is reasonably capable of supporting findings, that Mr Kraues received money from the Miners and that he dealt with that money as required by the Code, contrary to what the Authority had found.
Mr Kraues, therefore, does not have reasonable prospects of succeeding in establishing as false the representation that Mr Kraues had misappropriated client moneys. That would be so even if Mr Kraues were to succeed in establishing the Asserted Fraud. As I have already noted, Mr Kraues does not allege he did not receive money from the Miners; and, for the reasons I have already given, it is not reasonably arguable that Mr Kraues’ obligations under the Code in relation to the Miners’ money would have been different to those the Authority had found bound Mr Kraues, and which it found Mr Kraues breached, only because the Miners would have paid money into Mr Kraues’ trust account under the inducement of third party fraud.
Mr Kraues’ actions were criminal
Assuming it is reasonably arguable that the Media Release conveyed a representation to the effect that Mr Kraues engaged in criminal conduct, Mr Kraues does not have reasonable prospects of establishing that the conduct of Mr Kraues the Media Release identified as unlawful was not criminal; and that would be because I have found Mr Kraues has no reasonable prospects of showing that he did not agree to provide immigration assistance services, and Mr Kraues has not otherwise alleged facts, and has not adduced evidence that is reasonably capable of supporting findings, on the basis of which the criminality or innocence of Mr Kraues’ conduct could be assessed. That would be so even if Mr Kraues were to succeed in establishing the Asserted Fraud; and that is because the matters in relation to which Mr Kraues relies on the Asserted Fraud do not include allegations or evidence that show what Mr Kraues did with the money he received from the Miners, or the records, if any, he created or maintained in relation to the money he received from the Miners, or the services, if any, he provided to the Miners.
Mr Kraues intentionally and illegally used funds
Assuming it is reasonably arguable that the Media Release conveyed a representation to the effect that Mr Kraues intentionally and illegally used funds, Mr Kraues does not have reasonable prospects of establishing that the conduct of Mr Kraues the Media Release identified as unlawful did not constitute Mr Kraues intentionally and illegally using funds. I have found Mr Kraues has no reasonable prospects of showing that he did not agree to provide immigration assistance services, and Mr Kraues has otherwise not alleged facts, and has not adduced evidence that is reasonably capable of supporting findings, on the basis of which the illegality or legality of Mr Kraues’ conduct could be assessed. That would be so even if Mr Kraues were to succeed in establishing the Asserted Fraud; and that is because the matters in relation to which Mr Kraues relies on the Asserted Fraud do not include allegations or evidence that show what Mr Kraues did with the money he received from the Miners, or the records, if any, he created or maintained in relation to the money he received from the Miners, or the services, if any, he provided to the Miners.
Mr Kraues was a serious risk to consumers
The representation that Mr Kraues is a serious risk to consumers is a representation of opinion; and it can only be false if the opinion was not genuinely held. Although Mr Kraues alleges the Minister made each of the alleged representations maliciously, Mr Kraues does not allege facts, and he has not adduced any evidence on the basis of which it could reasonably be found, that the Minister did not hold the opinion that Mr Kraues was a serious risk to consumers; or that the Minister did not, in forming such opinion, have regard to the statements contained in the Media Release or the findings the Authority made.
For these reasons Mr Kraues does not have reasonable prospects of succeeding in a claim that the opinion that Mr Kraues was a serious risk to consumers was false.
Malice
In this section of my reasons I assume the Minister made one or more of the alleged representations, and that one or more of the alleged representations was or were false. The next question is whether Mr Kraues does not have reasonable prospects of succeeding on his claim that the Minister made the alleged representations maliciously; and in particular whether the Minister made them with the object of injuring Mr Kraues, or with knowledge of the falsity of the alleged representations; or with reckless indifference about whether the alleged representations were true; or for some indirect or dishonest motive. That question must be answered in the affirmative: Mr Kraues does not have reasonable prospects of succeeding on his claims that, to the extent the Minister made any one or more of the alleged representations, the Minister did so with malice.
Mr Kraues does not allege facts, or adduce evidence that is reasonably capable of supporting findings that:
(a)there are facts that rendered untrue any one or more of the alleged representations;
(b)to the extent the evidence is reasonably capable of supporting findings of the sort referred to in (a), the Minister was aware of any such facts, or that the Minister wilfully or even negligently ignored such facts, or other matters that would or ought reasonably have alerted the Minister to the existence of facts of the sort referred to in (a);
(c)the Minister was aware of the alleged facts and matters Mr Kraues contends constituted the Asserted Fraud, or that the Minister wilfully or even negligently ignored such alleged facts, or other matters that would or ought reasonably have alerted the Minister to the existence of such alleged facts; or
(d)the Minister intended to injure Mr Kraues by making the alleged representations.
Nor does Mr Kraues allege the Minister had any indirect or dishonest motive in making the alleged representations conveyed by the Media Release.
Damage
It may be accepted that the Authority’s decision to cancel Mr Kraues’ registration as a migration agent caused Mr Kraues to suffer damage in the form of his not being able to conduct the business of a registered migration agent. Mr Kraues, however, has not alleged facts, or adduced evidence on the basis of which it may reasonably be found, that the alleged representations the Minister made by publishing the Media Release, separately from the Authority’s decision to cancel Mr Kraues’ registration as a migration agent, caused or otherwise contributed or could have contributed to Mr Kraues’ inability to conduct a business of a registered migration agent.
Mr Kraues also alleges that he conducted a business as a consultant and lobbyist; and these allegations are the subject of the assertions made in his draft Federal Court affidavit annexed to Mr Joel’s affidavit made on 13 May 2021; but Mr Kraues does not allege facts, or adduce evidence that is reasonably capable of showing, the nature of these businesses, and how the publication of the Media Report, separately from the publication of the Authority’s decision to cancel Mr Kraues’ registration as a migration agent, caused or contributed to any losses Mr Kraues suffered in the conduct of any business he carried on as a consultant or lobbyist.
Finally, Mr Kraues contends that the alleged representations the Minister made by authorising the publication of the Media Release caused Mr Kraues to be excluded from employment, and prevented him from earning an income anywhere; these allegations are the subject of the assertions made in his draft Federal Court affidavit annexed to Mr Joel’s affidavit made on 13 May 2021. Mr Kraues, however, has not alleged facts, or adduced evidence that is reasonably capable of supporting findings that identify the employment (other than that as a registered migration agent) from which he has been excluded or work he has been unable to obtain, and how the publication of the Media Report, separately from the publication of the Authority’s decision to cancel Mr Kraues’ registration as a migration agent, caused or contributed to Mr Kraues being excluded from employment, or being unable to obtain any employment.
For these reasons, I am satisfied that, even if Mr Kraues has a reasonably arguable case that the Minister made the alleged representations, the alleged representations were false, and the Minister maliciously made the alleged representations, Mr Kraues does not have any reasonable prospects of succeeding in the claim that the damage he suffered was the “direct and natural result”, or the “natural and probable consequence” of, the publication of any of the alleged representations.[148]
[148] Palmer-Bruyn and Parker Pty Ltd v Parsons [2001] HCA 69, at [76]
In his oral submissions Mr Joel submitted that Mr Kraues’ application to set aside the FFC Orders is relevant to damages. There are three things to say about that. First, Mr Kraues has not demonstrated any arguable basis on which he could succeed in his application to set aside the FFC Orders for fraud.[149] Second, even if Mr Kraues were to succeed in setting aside the FFC orders, the matter would be remitted to the AAT. Mr Kraues has not, however, alleged facts or adduced evidence that is reasonably capable of showing that on review Mr Kraues would be in a position to show that, contrary to what the Authority had found, he did comply with the Code in relation to the money the Miners paid him. Third, even if the AAT were to find Mr Kraues had complied with his obligations, that could not alter the fact that any loss Mr Kraues suffered because he was unable to act as a migration agent was caused by the Authority’s decision, and Mr Kraues would still not have reasonable prospects of successfully claiming that such losses were the direct and natural result, or the natural and probable consequence, of the publication of the Media Release.
[149] Clone Pty Ltd v Players Pty Ltd (In Liquidation) (Receivers & Managers Appointed) [2018] HCA 12, at [55]-[68]
Conclusion
Mr Kraues does not have reasonable prospects of succeeding on his claims against the respondents based on injurious falsehood.
CAUSE OF ACTION BASED ON MISLEADING OR DECEPTIVE CONDUCT
Application of ACL to the respondents
Subsection 18(1) of the ACL applies to the Crown in right of the Commonwealth, but only in so far as the Crown in right of the Commonwealth carries on a business, either directly or by an authority of the Commonwealth. Mr Kraues, however, has not alleged facts, or adduced evidence on the basis of which it is reasonably open to find, that the Minister acted as an agent of the Crown in right of the Commonwealth or, if she did, the Minister authorised the publication of the Media Release in so far as the Crown in right of the Commonwealth was carrying on a business. I am therefore satisfied Mr Kraues has no reasonable prospects of showing that s 2A of the CC Act applies to the Commonwealth and, for that reason, it cannot be liable under s 18(1) of the ACL for any contravening conduct the Minister might be found to have engaged in.
I am also satisfied Mr Kraues has no reasonable prospects of showing that the Minister’s having authorised the publication of the Media Release, or the publication of the Media Release itself, is conduct in trade or commerce because it is not reasonably arguable that these activities, of their nature, bore any trading or commercial character. It is not reasonably arguable that the Minister’s purpose in authorising the Media Release went beyond conveying to migration agents, and those who have or propose to have dealings with them, of the need for migration agents to act lawfully, and the potential consequences of migration agents’ not acting lawfully.
Thus, I am satisfied the applicant has no reasonable prospects of establishing that the Minister’s authorising the publication of the Media Release, and its publication, constituted conduct that occurred in trade or commerce and, therefore, is conduct that was capable of contravening s 18(1) of the ACL.
Conduct
The conduct Mr Kraues alleged is misleading or deceptive is the same conduct Mr Kraues alleges in relation to his cause of action based on injurious falsehood; and that conduct is the making of the alleged representations I have already considered. Thus, assuming the Minister’s conduct in publishing the Media Release occurred in trade or commerce, Mr Kraues has no reasonable prospects of succeeding on his claims that by publishing the Media Release the Minister made any of the alleged representations, other than a representation to the effect that Mr Kraues acted unlawfully because he refused refunds to the Miners and because he had not provided any actual immigration assistance to the Miners; and a representation to the effect that Mr Kraues posed a serious risk to consumers.
Misleading or deceptive conduct
Assuming the Minister’s conduct in publishing the Media Release occurred in trade or commerce, and by doing so conveyed the alleged representations, Mr Kraues does not have reasonable prospects of showing any of the alleged representations were misleading or deceptive; and I so find for the reasons on which I have relied in finding Mr Kraues does not have reasonable prospects of succeeding on his claim that any of the alleged representations were false.
Damage
Assuming the Minister’s conduct in publishing the Media Release occurred in trade or commerce, and by doing so she engaged in misleading or deceptive conduct, I am satisfied Mr Kraues would have no reasonable prospects of succeeding on his claim that he suffered loss or damage because of such conduct; and I so find for the reasons I have found Mr Kraues does not have reasonable prospects of succeeding on his claim that the damage he claimed he suffered was the direct and natural result, or the natural and probable consequence of, the publication of any of the alleged representations.
CONCLUSION
Mr Kraues does not have reasonable prospects of successfully prosecuting his claims based on injurious falsehood or on a contravention of s 18(1) of the ACL.
The core reason Mr Kraues does not have any reasonable prospects of successfully prosecuting his claims is that Mr Kraues has not alleged facts, or adduced evidence, that is reasonably capable of showing that, contrary to the Authority’s findings, the money that was deducted from the Miners’ wages and paid to Mr Kraues had not been paid to Mr Kraues for the purpose of his providing immigration assistance services. That means Mr Kraues has no reasonably arguable basis for establishing facts contrary to those the Authority found on the basis of Mr Kraues’ failing to produce documents the Code required Mr Kraues to create and keep in relation to the money the Miners paid to Mr Kraues. The Authority inferred from Mr Kraues’ failure to produce documents that he did not create and keep any such documents; and the Authority further inferred that Mr Kraues used the money the Miners paid to him for purposes and in a manner not authorised by the Code.
DISPOSITION
I propose to order that the application be dismissed. There is no reason why costs should not follow the event, and I propose to order that Mr Kraues pay the respondents costs. I will, however, reserve to the parties liberty to apply to vary or discharge the order for costs I will make, such liberty to be exercised within 28 days after I pronounce my orders.
I certify that the preceding one hundred and thirty-five (135) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 8 June 2022
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