Prassad and Migration Agents Registration Authority - [2001] AATA 942

DECISION AND REASONS FOR DECISION [2001] AATA 942

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2001/959

GENERAL ADMINISTRATIVE DIVISION          )
           Re      Narendra Prasad
  Applicant
           And    Migraton Agents Registration Authority
  Respondent

DECISION

Tribunal Mr R P Handley, Deputy President

Date15 November 2001
PlaceSydney

Decision      The Tribunal sets aside the decision under review and remits the matter to the Respondent with a direction that the Applicant's registration as a migration agent should not have been cancelled.
.
  ..............................................
  Mr R P Handley
  Deputy President
CATCHWORDS
MIGRATION – cancellation of registration of Migration Agent – where Applicant declared bankrupt -– whether Tribunal "comfortably satisfied" that Applicant "fit and proper person" and "person of integrity" to be a migration agent

Migration Act 1958: ss 303, 280, 276, 290(1), 306

Briginshaw v Briginshaw (1938) 44 ALR 334
De Vere and Migration Agents Registration Board (AAT 13278, 11 September 1998)
Re Hakaoro and Minister for Immigration and Multicultural Affairs (1998) 26 AAR 534
Re SRH and Comptroller-General of Customs (1995) 21 AAR 401
Sarkis and Migration Agents Registration Board (AAT 12331, 23 October 1997)

REASONS FOR DECISION

R P Handley

This is an application by Narendra Prasad ("the Applicant") for a review of decision of the Migration Agents Registration Authority ("the Respondent") made on 12 June 2001 to cancel the Applicant's registration as a migration agent pursuant to s 303(e) of the Migration Act 1958 ("the Act"), following the Applicant being declared bankrupt.
At the hearing, the Applicant was represented by Craig Colborne, of Counsel, and the Respondent was represented by Murray Allatt, Solicitor of the Australian Government Solicitor's office. The evidence before the Tribunal comprised the documents produced pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 ("the T documents"), together with the documents tendered by the parties. The Applicant gave evidence at the hearing. Both he and Anna Bregantic also gave evidence when the Applicant's application for a Stay Order was heard on 10 August 2001.

BACKGROUND

Mr Prasad was born on 5 November 1935 and is aged 66. Mr Prasad was born in Fiji and first came to Australia in about 1956, settling here in about 1960. He and Ms Bregantic married in 1976, but separated in 1990, although they continued living together in the same property. In 1993, Mr Prasad underwent heart surgery. In 1996, he provided financial advice to Joan Rogers who, in 1997, instituted proceedings against Mr Prasad and others in the Supreme Court of New South Wales. Mr Prasad was found to have acted outside the authority conferred on him by Mrs Rogers to act as her agent and, accordingly, was liable for damages in respect of any loss caused by his actions. On 3 November 1999, Mr Prasad was found liable to pay Mrs Rogers $740,000 by way of damages. On 4 August 2000, a sequestration order was made against Mr Prasad by the Federal Court. On 14 August 2000, Mr Prasad notified the Respondent of his bankruptcy.
In about 1997, Mr Prasad purchased an "off the shelf" proprietary limited company, Manifesto Services Pty Ltd and, on 15 October 1997, changed its name to Global Australian Immigration Services Pty Ltd. Mr Prasad's intention was to develop an immigration and education business, which Ms Bregantic agreed to finance with a view to her later working in the business if it proved to be successful. Ms Bregantic currently works as an information technology consultant for two software companies. Initially, Mr Prasad and Ms Bregantic were both directors. On 28 August 1998, the name of the company was changed to Global Australian Immigration and Education Services Pty Ltd ("Global"). Mr Prasad's plan for Global was to provide immigration assistance to clients and facilitate the provision of Australian education courses to overseas students. After Mr Prasad became bankrupt on 4 August 2000, and on that date, he resigned his directorship of Global. Ms Bregantic is now the sole director of and shareholder in Global.
On 26 July 1999, Mr Prasad was granted a disability support pension. Having turned 65 years of age on 5 November 2000, Mr Prasad is now receiving an age pension.
On 30 October 2000, the Respondent invited Mr Prasad to make a submission to it in relation to issues arising from his bankruptcy, and required that he provide copies of profit and loss statements and balance sheets from 19 June 1998 to 30 September 2000 and evidence of his holding professional indemnity insurance. The Respondent received Mr Prasad's written submissions on 24 November 2000. By letter dated 21 February 2001, the Respondent invited Mr Prasad to appear before it at a meeting to be held on 6 March 2001. By letter dated 26 April 2001, the Respondent sent Mr Prasad a transcript of his interview by the Respondent and asked him to satisfy himself that the transcript was correct.
On 12 June 2001, the Respondent decided to cancel Mr Prasad's registration as a migration agent, pursuant to s 303(e) of the Act, on the ground of Mr Prasad's bankruptcy. Mr Prasad was notified of this decision by letter dated 29 June 2001. On 6 July 2001 Mr Prasad lodged an application for a review of this decision by this Tribunal.
APPLICABLE LEGISLATION
Division 2 of Part 3 of the Act imposes restrictions on the giving of immigration assistance and the making of immigration representations. Under s 280(1), subject to limited exceptions, "a person who is not a registered agent, must not give immigration assistance". Immigration assistance is defined in s 276 as including the giving of advice and assistance and the making of representations in relation to visa applications. Division 3 of Part 3 provides for the registration of migration agents by the Respondent. Pursuant to section 290(1), a person must not be registered by the Respondent if the Respondent is satisfied that the person is not a fit and proper person to give immigration assistance, or is not a person of integrity, or is related by employment to an individual who is not person of integrity and the Applicant should not be registered because of that relationship. Registration by the Respondent is for a period of twelve months which is renewable on meeting certain continuing professional development requirements.
Section 303 provides for the cancellation or suspension of a person's registration in certain circumstances or for the Respondent to caution a person. The section relevantly states:
The Migration Agents Registration Authority may:
(a)cancel the registration of a registered agent by removing his or her name from the register; or
(b)       suspend his or her registration; or
(c)       caution him or her;
          if it becomes satisfied that:
(d)the agent's application for registration was known by the agent to be false or misleading in a material particular; or
(e)the agent becomes bankrupt; or
(f)the agent is not a person of integrity or is otherwise, not a fit and proper person to give immigration assistance; or
(g)an individual related by employment to the Agent is not a person of integrity; or
(h)the agent has not complied with the Code of Conduct prescribed under s 314.
Section 306 provides for a review of such decisions by the Tribunal. Since there is no dispute that Mr Prasad has been declared bankrupt, the question for the Tribunal to determine is whether to exercise the discretion to cancel, suspend or caution Mr Prasad.
DISCUSSION OF THE EVIDENCE
Mr Prasad's evidence is that from 1976 to about 1992 he was self-employed as an accountant and tax consultant. In April and May 1993, Mr Prasad suffered heart failure and, on 18 May 1993, was admitted to St. Vincent's Hospital for heart bypass surgery. The anaesthetic administered for the surgery was not totally effective, and Mr Prasad was aware of what was happening during the course of the surgery with the consequence that he suffered trauma and a number of minor strokes. Following his discharge from hospital on 25 May 1993, he developed chronic depression and memory problems. As a result, he was liable to become frustrated and angry. In 1995, Mr Prasad commenced counselling with a consultant psychiatrist, Dr Edgar Freed, who also prescribed various medications for Mr Prasad's condition.
In 1990, Mr Prasad's marriage to Ms Bregantic broke down and they separated. However, they remained friends and did not divorce, and Mr Prasad continued to live with Ms Bregantic in her apartment in Centennial Park. Ms Bregantic has also supported Mr Prasad financially when he has needed this.
Following Mr Prasad's discharge from hospital in May 1993, he was unable to work for a few years. In 1996, he undertook some limited accounting work for a film financing company as a result of which he was introduced to Mrs Rogers and provided her with some financial and taxation advice. In December 1996, Mr Prasad purchased a shelf company, Manifesto Services Pty Ltd which, in 1997, Mr Prasad decided to use as the vehicle for developing an immigration and education business. The name of the company underwent two changes becoming Global on 28 August 1998. The proceedings brought by Mrs Rogers against Mr Prasad and others commenced in the Supreme Court of New South Wales in October 1998. In his statement dated 14 October 2001 (A5), Mr Prasad stated he could not afford legal representation for these proceedings which caused him "a lot of stress and my blood pressure became difficult to control during the hearing in late 1988 [sic], I went haywire". In his judgment, Young J records the difficulty Mr Prasad had in giving evidence, that resulted in an adjournment and a medical report being tendered on the next day in which the doctor recommended that Mr Prasad not be regarded as a reliable witness in court. However, his Honour found that even though Mr Prasad acted outside the scope of his authority as Mrs Roger's agent, nevertheless, he may have thought that he was acting in her best interests (T 33, p125).
After the Court hearings in October 1998, Mr Prasad commenced a programme of yoga, meditation and exercise as a result of which his mental health improved steadily. He stopped consulting Dr. Freed in 1999 and, over a period of about four months, reduced and then stopped taking anti-depressants. However, Mr Prasad states he still sees his cardiologist for two monthly reviews and his general practitioner, Dr Clive Lovell, every few weeks.
Mr Prasad states that on approximately one day per month he is unable to work because of his arthritis, and on about one day per fortnight he cannot work because he is too tired. Otherwise, he works for about two hours in the morning and one to two hours in the afternoon, a total of 15 to 20 hours productive work per week. He states (A5):
I do not suffer from depression any more, but still have problems remembering dates and events or responding quickly to questions when under pressure. This does not effect my capacity to do migration work because I have the papers and time to formulate my advice and prepare documentation.

In a letter dated 21 September 2001 (A6), Dr Freed states:
There is now no depression and he has been depression free for 2 years and 9 months. This constituted the bulk of his previous difficulty in following with and coping with court proceedings. The slight slowness in the speed of processing information (but accurately) would be related to the previous brain changes that have been described as hypertension. As these brain changes would be found in the majority of people with hypertension and for most people will not significantly affect day to day functioning of their usual pursuits, including business occupation at Mr Prasad's age.
In the pursuit of his business activities as a Migration Agent Registration Authority [sic] he should be able to cope with all the requirements as there is no depression and there is no obvious cognitive impairment apart from slight slowness in processing information which should be of no consequence in the ordinary course of day to day business decisions. These business decisions require consideration and deliberation, and there would be no demand factor in having to give immediate answers such as under cross-examination in court.

Mr Prasad stated he was paid about $8,000 for the work he did for Mrs Rogers in 1996, but that, apart from this, he has not earned any income since 1993. After the heart surgery, he was supported by Ms Bregantic and his children. Ms Bregantic did not require him to pay rent after the surgery and she paid the "gap" between his medical expenses and the amount payable by her health fund. His children paid other expenses. This continued until Mr Prasad started to receive a disability support pension on 26 July 1999. Mr Prasad said Centrelink was aware that he was undertaking part-time unpaid work for Global. Since Global has been established, it has lent him approximately three to four thousands dollars for medical and dental expenses.
Mr Prasad stated he did not believe the Respondent had the right to see the profit and loss statements and balance sheets for Global. This was because paragraph 7.5 of the Code of Conduct only contains an obligation to produce details of the client account and each account into which money from clients was paid. Mr Prasad stated (A5):
I told MARA I could not produce the records it sought because I was not privy to them and because I was only a consultant. This was not true. The main reason I did not want to release this information was because Anna and I did not want other Migration Agents to learn the details of Global's business and Anna did not want to reveal her personal financial affairs.
I very much regret not being completely frank with MARA about the reasons for not producing the documents it sought. If a similar situation should arise again, I will either comply with the request or clearly express my objection. If MARA still insists, I will comply or have the matter clarified in Court.
Mr Prasad said that in his practise as a migration agent, where disbursements arise, he arranges for the client to pay the disbursement directly or to give him a cheque made out to the organisation or person to whom the disbursement is payable. Occasionally, he has paid the disbursement himself and obtained reimbursement from the client later. Where he charges fees, payment of those fees is not requested until the work has been completed. Fees charged are paid into Global's operating account at the St. George Bank. Between 1999 and February 2001, he has also occasionally undertaken accounting and taxation work on behalf of Global for which payments made have also been paid into Global's operating account.
Mr Prasad said since 1998, Ms Bregantic has lent money to Global which has been used to set up its office in Surry Hills and to meet operating expenses. To date, Global has operated at a tax loss, with Mr Bregantic meeting its financial obligations. However, as result of Mr Prasad's plans to provide Australian education courses to overseas students, which are at an advanced stage, he is optimistic that Global's current operating losses are temporary only, and that with the increase in migration and educational work, Global's income will increase significantly. Mr Prasad said it is important for Global's business that he maintains his registration as a migration agent.
Mr Prasad agreed that it was his idea to establish the migration business, with Ms Bregantic providing the required the financial support. He planned the direction of the business and ran it, engaging other casual employees for particular purposes as required. He is responsible for directing these casual employees' activities. Mr Prasad describes himself as a casual consultant for Global. He is not an employee. He uses the description "casual" because his health sometimes prevents him from working there, so that he is unable to work particular stipulated hours. Mr Prasad said he works voluntarily for Global in the sense that, currently, he is not paid for that work. He also has no shares or other professional interest in Global. However, he has an informal agreement with Ms Bregantic that if the business is successful, Ms Bregantic will allow him to buy shares in Global at a nominal price.
Mr Prasad acknowledged that some of the answers he gave at the hearing before the Respondent on 6 March 2001 were inconsistent. Because of the pressure he felt on being questioned by a panel of seven (sic), he was unable to remember all the relevant dates. Mr Prasad said his health problems will not affect his work as a migration agent. He can choose his own hours of work and will not work if he is unwell. He intends to concentrate on giving migration advice rather than filling out visa application forms which other clerks working for the business can do. However, he will supervise this work and make sure that everything has been completed correctly.
At the Stay Hearing, Ms Bregantic confirmed that Global's business was under Mr Prasad's control and direction. His role is to build the business with a view to its supporting both of them at a later date. She said he does not currently derive any income from the business because the business is still running at a loss. She confirmed that she provides Mr Prasad with financial support and that he lives in her home. In her statement (A1), she said that since 1998, she had lent Global about $179,000.00. This money has been used to establish Global's office in Surry Hills and to meet its operating expenses. Ms Bregantic confirmed Mr Prasad's evidence that, on some occasions, money has been deposited into Global's operating account in order to meet expenses, while, on other occasions, Ms Bregantic has paid Global's expenses directly. When she agreed to finance the development of the business, she was aware that it would incur a loss for the first few years. However, she envisages that if the business is successful, it will become busy and profitable.
APPLICATION OF THE LAW AND FINDINGS
As stated above, the question for the Tribunal to determine is whether pursuant to s 303 of the Act, to exercise the discretion to cancel Mr Prasad's registration as a migration agent. Since there is no dispute that Mr Prasad has been declared bankrupt, the issue is whether, notwithstanding his bankruptcy, Mr Prasad should be permitted to maintain his registration as a migration agent. In the Tribunal's view, this turns on whether the Tribunal, as decision-maker, is satisfied of s 303(f), namely whether Mr Prasad "is not a person of integrity or is otherwise not a fit and proper person to give immigration assistance".
The Tribunal had regard to the High Court decision in Briginshaw v Briginshaw (1938) 44 ALR 334 (cited by Deputy President Chappell in Sarkis and Migration Agents Registration Board (AAT 12331, 23 October 1997)) where Rich J, at 350, said of the obligation placed upon a court or a tribunal to satisfy itself:
The phrase "satisfy itself, so far as it reasonably can" obviously reflects the influence of the common expression "reasonable satisfaction"…The nature of the allegation requires as a matter of common sense and worldly wisdom the careful weighing of testimony, the close examination of facts proved as a basis of inference and a comfortable satisfaction that the tribunal has reached both a correct and just conclusion.

With regard to what is meant by the phrases "person of integrity" and "fit and proper person", the Tribunal had regard to the decision of Deputy President Forgie in Hakaoro and Minister for Immigration and Multicultural Affairs (1998) 26 AAR 534 at 540 to 544, where she concluded that she must have regard to the context in which the expression "fit and proper person" is used, namely the registration scheme for migration agents designed to improve and maintain standards of professional conduct and quality of service. Deputy President Forgie said that a further part of the context is the use of the expression "fit and proper person" in conjunction with the expression "person of integrity". She referred to discussion of the meaning of the word "integrity" by Purvis J in Re SRH and Comptroller-General of Customs (1995) 21 AAR 401, at 405, when he adopted the ordinary meaning of that word as indicating "soundness of moral principle and character; uprightness; honesty". He then went on to discuss the meaning of "fit and proper" within the meaning of the Income Tax Assessment Act which he said "encompasses integrity, honesty, diligence and professionalism; these are the qualities relevant to integrity".

Deputy President Forgie states:
It follows from these cases and their analyses of the expression "fit and proper" and from Purvis J's analysis on the word "integrity" that there can be some overlap in their meanings. In general, the words "integrity or is otherwise not a fit and proper person to give immigration assistance" would be considered together and an assessment made as a whole. In this case, however, I have sought to distinguish them as Mr Hakaora has argued, in effect, that the words "fit and proper" relate only to issues of integrity: to issues of honour, reliability, honesty and soundness of moral character. In the context of the registration scheme, it is not enough, however, to be a person of honour, reliability, honesty and soundness of moral character in his or her life generally. A person must be all those things and more. He or she must be a person who has knowledge of migration procedure. Unless he/she has that knowledge, he/she cannot be relied upon to give competent migration assistance as that assistance is described in s 276. Unless he/she has that knowledge, he/she cannot fulfil the functions and responsibilities of a migration agent.
I have focussed upon a person's knowledge but that is because it is the only issue in this case. In other cases, there will be other considerations which may not reflect upon a person's integrity as such but which may mean that a person is not "otherwise a fit and proper person to give immigration assistance".

See also the decision by Deputy President Forgie in De Vere and Migration Agents Registration Board [1998] AATA 767.

The Tribunal notes there has been only one complaint about Mr Prasad's work which was in relation to the advice that he gave Mrs Rogers in October 1996, which was not migration-related. Young J in the Supreme Court of New South Wales found that in acting beyond the authority given him by Mrs Rogers, nevertheless, he may well have thought that he was acting in her best interests. The comments made by Young J about Mr Prasad's evidence at the hearing, for example that "Mr Prasad's evidence was hard to accept" (T 33, p111), need to be seen in the context of Mr Prasad's ill health which Young J seems to have accepted as a factor. Evidence has emerged in the current proceedings as to Mr Prasad's mental state and his slight slowness in processing information (Dr. Freed, (A6)), which he attributes to the minor strokes he suffered during the course of heart surgery in May 1993. In the October 1998 Supreme Court proceedings, the fact that Mr Prasad was unrepresented, suffering from depression, and under significant stress, appears to have adversely affected his ability to participate in the proceedings. In the Tribunal's view, as a result of this new medical information, it would be unwise to place too much weight on how Mr Prasad presented at the Supreme Court proceedings, given the statement by Mr Prasad's psychiatrist, Dr Freed, that "Mr Prasad has recovered from the depression which played a significant part in his previous disability" (A6). Dr Freed states the slight slowness in processing information that Mr Prasad suffers will not significantly affect day to day functioning.
With regard to the hearing on 6 March 2001 when Mr Prasad was interviewed by the Respondent, Mr Prasad's evidence was that he felt under considerable pressure as a result of questions being fired at him by the six members of the Respondent present. However, he has also admitted that when he told the Respondent that he could not produce the profit and loss statements and balance sheets for Global because he was not privy to them, this was not true. The main reason he did not want to provide them this information was to keep details of Global's business and Ms Bregantic's financial affairs confidential. He did not believe that the Respondent had any right to that information by reference to the Code of Conduct. Mr Prasad said he now regrets not being frank with the Respondent about his reasons for not wanting to produce the documents. If a similar situation arises again, he will either comply with the request or explain the objection and, if the Respondent insists, seek clarification from a court. The Tribunal notes the Minutes of the meeting of the Respondent held on 12 June when the Respondent determined to cancel Mr Prasad's registration as a migration agent (R1):
Draft notice of decision provided with agenda papers is approved, subject to addition of:

reference to contradictions between agent's written statements, findings of the court, and statement by agent during appearance before the Authority indicating inconsistency and lack of credibility.
acknowledgment of agent's statement that cancellation would not affect his livelihood.

The Tribunal finds that Mr Prasad has been the principal driving force behind establishing Global and developing its business. Mr Prasad's relationship with the business was obviously complicated by his being declared bankrupt on 4 August 1990, on which date he resigned his directorship and transferred his one nominal share to Ms Bregantic. Mr Prasad has, however, continued to manage the company, subject to input from Ms Bregantic who is now the sole shareholder and director, and therefore, the owner and ultimate controller of the business. Mr Prasad's description of his relationship with Global as that of a casual consultant is, in the Tribunal's view, misleading, although the Tribunal accepts that the sense in which Mr Prasad uses the word "casual", is related to having no fixed hours of work, these being dependent upon the state of his health at the particular time. Nor, is it helpful to describe his working on behalf of Global as being "voluntary" since he is quite clearly committed to Global succeeding as a business. He acknowledged that he and Ms Bregantic have an arrangement whereby if the business succeeds, then, at some later date, she will allow him to buy shares in the company for a nominal amount. Although Global does employ others, including migration agents, to undertake work on its behalf from time to time, as Mr Prasad acknowledged in answer to a question from Mr Allatt at the Stay Hearing, he is in most respects a "one man band".
The Tribunal accepts that Mr Prasad has informed Centrelink of the work which he does on behalf of Global and that he has also revealed this to the Trustee in Bankruptcy. The Tribunal does not attach any great significance to the answer which Mr Prasad gave in Question 43 of the Statement of Affairs Form that he completed on his bankruptcy, in which he stated that he had not owned any shares in Global during the last five years and had no beneficial interest in any company. Mr Prasad said he answered this question in this way on the advice of the Trustee and overlooked that one share in Global was issued to him when he purchased the company. In any event, at the time he completed the Statement of Affairs Form, Global had no financial value and was entirely dependent on Ms Bregantic for its on-going financial survival.
Having made these findings, the Tribunal must consider whether it is "comfortably satisfied" on the basis of all the evidence before it, that Mr Prasad is not a person of integrity or is otherwise not a "fit and proper person to give immigration assistance". The Tribunal is not so satisfied. Having regard to the meaning of the word "integrity" and the expression "fit and proper" considered above, the Tribunal is not satisfied that Mr Prasad is not a person of honour, reliability, honesty and soundness of moral character. There is also no other evidence to show that he does not have the knowledge and cannot fulfil the functions and responsibilities of a migration agent. The Tribunal accepts that there have been some inconsistencies in what Mr Prasad told both the Supreme Court and the Respondent at the respective hearings. In the case of the Supreme Court hearing, these inconsistencies can be explained in part, at least, by the effects of the ill health from which Mr Prasad was suffering at the time. Some of the inconsistencies which the Respondent presumably took into account in making its decision to cancel Mr Prasad's registration, arose from the Supreme Court proceedings.
In the particular circumstances of the present matter, the Tribunal does not consider that Mr Prasad's bankruptcy of itself is sufficient to establish that he is not a person of integrity and is otherwise not a "fit and proper person to give immigration assistance". Clearly, Young J in the Supreme Court considered that Mr Prasad might have been acting in what he perceived to be in the best interests of Mrs Rogers, albeit that he was acting beyond his authority. Nor, in the Tribunal's view, is Mr Prasad's prevarication about producing the financial records for Global and his reluctance about revealing the nature of his relationship with Ms Bregantic and with the business, sufficient to persuade the Tribunal of these matters.
In conclusion, therefore, the Tribunal determines that the discretion in s 303(a) of the Act to cancel the registration of a person, should not be exercised in the case of Mr Prasad. Similarly, in the Tribunal's view neither the suspension of Mr Prasad's registration nor a caution are appropriate: De Vere, (supra). Thus, the Tribunal sets aside the decision under review and remits the matter to the Respondent with a direction that Mr Prasad's registration as a migration agent should not have been cancelled.
I certify that the 34 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R P Handley, Deputy President
Signed:         .....................................................................................
  Associate
Date of Hearing   15 October 2001
Date of Decision   15 November 2001
Counsel for the Applicant         Mr C Colborne
Solicitor for the Respondent    Mr M Allatt, Australian Government Solicitor