Zeng and Shiao
[2007] FMCA 794
•25 May 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ZENG v SHIAO | [2007] FMCA 794 |
| TRADE PRACTICES – Misleading and deceptive conduct – aiding and abetting misleading and deceptive conduct – breach of contract – migration agents statement of services. |
| Migration Act 1958 (Cth) ss.5, 29, 276(1), 276(2), 313 Federal Magistrates Court Legislation Amendment Act 2006 (Cth) |
| Codelfa Construction Pty Ltd v. State Rail Authority of N.S.W. [1982] HCA 24; (1982) 149 CLR 337 Hartnett v Migration Agents Registration Authority [2004] FCAFC 269 |
| Applicant: | WANG LING ZENG |
| Respondent: | JASON SHIAO |
| File number: | MLG 247 of 2005 |
| Judgment of: | Phipps FM |
| Hearing dates: | 21 & 22 February 2007 |
| Date of last submission: | 22 February 2007 |
| Delivered at: | Melbourne |
| Delivered on: | 25 May 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr Keon-Cohen |
| Solicitors for the Applicant: | Jonathan Wong Lawyers |
| Counsel for the Respondent: | Mr Kuan |
| Solicitors for the Respondent: | Nevett Ford Lawyers |
ORDERS
The respondents pay the applicants the sum of $50,000.
The question of interest and costs are reserved.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 247 OF 2005
| WAN LING ZENG |
Applicant
And
| JASON SHIAO |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicants, Ms Zeng and Mr Zeng, are brother and sister. The first respondent, Mr Shiao, is a migration agent. The second respondent is a corporation through which Mr Shiao conducted his business in Australia.
In 2002, Mr Zeng, a Chinese citizen, was living in the Republic of China. His sister, originally from China, was living in Australia as a permanent resident. Their mother and Mr Zeng’s son were also living in Australia.
Mr Zeng had applied twice for a visa to come to Australia and been refused on both occasions. Ms Zeng paid Mr Shiao’s company, $50,000 to obtain a visa for Mr Zeng to visit Australia. Mr Zeng did not obtain a visa. Mr Shiao and his company say this is because Mr Zeng did not do what was necessary. Ms Zeng and Mr Zeng claim they are entitled to recover the $50,000.
The issues
The issues are:
a)what the agreement was between the parties, and within that;
i)whether the written agreement between Ms Zeng and Mr Zeng and the company contained a handwritten clause written on to it by a friend of Ms Zeng, Mr Liu;
ii)whether the agreement involved the obtaining by Mr Shiao and his company for Mr Zeng of a Malaysian passport, or whether it involved the obtaining of a Malaysian My Second Home visa and then a visa to visit Australia;
iii)whether Mr Shiao misrepresented what his company was intending to do.
b)whether s.313 of the Migration Act 1958 (Cth) required Mr Shiao and his company to give the applicants a statement of services;
c)The legal consequences following the resolution of these issues.
The agreement
Ms Zeng said that in August 2002 she saw an advertisement by the respondents about their ability to obtain visas. Her mother was unwell and she wanted her brother to visit. On 24 August 2002 she travelled to Sydney with her friend Mr Liu and met Mr Shiao. She said that he said he could definitely get a visa for her brother. It would require her brother to first obtain a passport from Malaysia.
Ms Zeng said she was confused as to why her brother required a Malaysian passport. She said Mr Shiao explained that her brother needed a Malaysian passport because Australia and Malaysia were Commonwealth nations, therefore it was easier to get a visa to Australia from Malaysia.
Mr Shiao said that he told Ms Zeng and her friend that her brother's best hope of obtaining a visa to Australia was to first obtain a Malaysia My Second Home Visa. This, he said, involved her brother travelling to Malaysia, depositing 150,000 ringitt in a Malaysian bank account and then making an application for a visa. Mr Shiao said he told Ms Zeng and her friend that having a Malaysia My Second Home Visa would make it easier for him to obtain a visa to visit Australia.
All agree that Mr Shiao said the fee was US$25,000, or AUD$50,000, and that would have to the paid before any work was done. She paid $50,000 in three separate amounts into the bank account nominated by Mr Shiao.
Ms Zeng said that later in August 2002 she telephoned Mr. Shiao and told him she had made the first payment and the rest of the money would be coming shortly. He told her he would fax the contract to her. She said he told her to strike out whatever terms she did not like and add what she wanted.
After she received the contract she consulted her friend Mr Liu and they added an addition under clause 6. She wrote it first, but then Mr Liu used whiteout and rewrote it because his Chinese script was better. The words added are "that if party B fails to properly handle all visa application procedures, Party B shall fully refund the Australian Dollars to Party A”. She then faxed the contract back from a local newsagent.
Mr Shiao denied there had been any discussions about changing the contract or that it had been changed. He annexed to his affidavit a copy of what he said was the contract as faxed by him, and already signed by him, and a copy of what he said was the contract as returned to him. It did not contain the handwritten addition.
Ms Zeng produced her copy of the contract with the handwritten addition and the transmission report after she posted it from her local newsagent. Her evidence, and Mr Liu’s evidence, is that the handwritten addition had been placed on it before it was faxed.
According to Mr Shiao, the two copies of the contract exhibited to his affidavit should be identical except for Ms Zeng's signature. They are not. The one which Mr Shiao says he received from Ms Zeng has marks on it identical to the top of the characters making up Mr Liu’s additions in the same position as in Ms Zeng's copy. Mr Shiao did not produce the original of the fax he said he received from Ms Zeng.
The clear conclusion is that Mr Shiao, or someone on his behalf, has attempted to make a copy of the document he received from Ms Zeng with her addition removed, but done so imperfectly. It shows that Ms Zeng's addition was made before the document was faxed to Mr Shiao and his company, and Mr Shiao’s evidence that the document he received was identical except for Ms Zeng's signature is not believable.
Ms Zeng said that Mr Shiao asked her for various details about her brother. She told her brother to send his passport to Mr Shiao’s agent in Shenzhen. Mr Zeng said he was contacted by Yuan Jiang Ai in China, who said he was Mr Shiao’s agent. He sent his Chinese passport to that office and received it back with a Malaysian visa. This happened in October 2002.
Ms Zeng arranged for Mr Liu to travel to Malaysia because her brother had never been to Malaysia, spoke no Malaysian and very little English. Mr. Zeng gave Yuan Jiang Ai the telephone number of relatives of Mr Liu. When Mr Zeng arrived in Malaysia he stayed with these relatives.
Mr Zeng and Mr Liu were contacted by telephone by a Mr Wong, who they described as Mr Shiao’s Malaysia agent. He told them to meet him in to Johor Bahru, a city near the border between Singapore and Malaysia. They did so and telephoned Mr Wong. Mr Wong took Mr Zeng to have four passport sized photographs taken and said he was going to obtain a Malaysian passport.
Mr Wong then returned with a Malaysian passport and gave it to Mr Zeng. Mr Zeng said there was no Australian visa in the Malayasian passport, but Mr Wong said he had already applied for an ETA and gave him a receipt which he said Mr Zeng was to show Australian Customs when he arrived in Australia.
Mr Wong then asked Zeng and Mr Liu for money to purchase airline tickets for Mr Zeng to return home to China, which Mr Zeng did. Mr Wong then purchased two airline tickets and told Mr Zeng to use his Chinese passport and one of the tickets to board the plane leaving Malaysia and his Malaysian passport and the other ticket when leaving the plane in China. Mr. Wong then told Mr Zeng to purchase a plane ticket in China that would pass through Korea before going to Australia and to use his Malayasian passport to leave China.
Mr. Zeng left Malaysia for China on 28 December 2002. He purchased a plane ticket to come to Australia and attempted to leave China from the Qingdao Airport using the Malaysian passport. He was told the passport was a fake, was detained for one evening and fined RMB $5,000. The passport was confiscated.
In early 2006 Ms Zeng retained another migration agent and Mr Zeng obtained a permanent residence visa for Australia. This is a contributory parent visa which was not available in 2002.
Mr Shiao and his employee Ms Tse claimed that both Ms Zeng and Mr Zeng were told that the first step in obtaining a visa was for Mr Zeng to travel to Malaysia and deposit 150,000 ringgit in a Malaysia bank account. They said he did not and so he could not obtain the visa they claimed they could obtain.
The description of events given by Mr Zeng and Mr Liu is detailed and consistent. For instance, it includes the production of the card on which they had written Mr Wong’s telephone numbers. The respondent’s case is that Mr Zeng travelled to Malaysia because he was told to do so to deposit 150,000 ringgit in a bank account, yet he did not have the money. The probabilities do not favour the respondents’ version. They favour the applicant’s version, that is, that Mr Zeng travelled to Malaysia and was given what appeared to be a Malaysian passport with some form of entry permission for Australia.
Consequently, I do not believe the version of events given by Mr Shiao and Ms Tse. Not only is Mr Shiao’s credibility damaged by the case claim that the agreement was not altered, but I reject his and Ms Tse’s version of what Ms. Zeng and Mr. Zeng were told about the purpose of travel to Malaysia, and about what occurred in Malaysia.
The Contract
Paragraph 6 of the contract document, with the addition by Mr Liu at Ms Zeng's request reads:
Party B shall bear the costs if the visa (visas) cannot be obtained due to causes from Party B; payment made by Party A shall not be refunded if the visa (visas) cannot be obtained due to liability of Party A. (Refer to clause 9 for liability of party A).
If Party B fails to properly handle all visa application procedures, Party B shall fully refunded the Australian Dollars to Party A.
Ms Zeng made three payments: $20,000 on 28 August 2002, $5,000 on 2 September 2002 and $25,000 on 14 October 2002. She received the form of contract signed by Mr Shiao on 29 August 2002 and sent it back altered and signed by her on 31 August 2002. The sending of the form of contract signed by Mr. Shiao constituted an offer by the company to enter into a contract. Its return, altered, was a counter offer by the applicants and the acceptance by the company of the subsequent payments constituted acceptance by conduct of this counter offer. The document as offered constitutes the contract. It is between Mr. Zeng and the company. Ms. Zeng obviously had Mr. Zeng’s authority to act as his agent in entering into the contract.
The conversation which Ms Zeng said took place between her and Mr Shiao on 29 August 2002 does not affect the making of the contract. Ms Zeng said that Mr Shiao told her she could cross out and add in, but that cannot be construed as binding the company to accept any change that was made. It does not matter because the company did accept the change.
Breach of the contract
The contract has these clauses:
Party A, based on his/her own requirements and on the 29th of August 2002, entrusted to party B to be agent to apply for multi-entry vis(s) to Australia from migration Malaysia and handle relevant procedures. Upon negotiation, both parties have reached the following agreement:
2.Party A shall provide relevant application materials required by party B.
4.Party B shall, upon the signing of this agreement by both parties, supplement, sort out and improve the application materials as well as lodge application(s) with the relevant Department of Immigration or embassy.
6.Party B shall bear the costs if the visa(visas) cannot be obtained due to causes from party B; payment made by Party A shall not be refunded if the visa(visas) cannot be obtained due to liability of party A. (Refer to clause 9 for liability of party A).
If Party B fails to properly handle all visa application procedures, Party B shall fully refund the Australian Dollars to Party A.
Party A is Mr Zeng and Party B is the company.
The respondent's case, based on the evidence of Mr Shiao and Ms Tse, is that Mr Zeng did not obtain a passport in Malaysia. I do not accept their evidence. I accept Mr Zeng's evidence that he was given what appeared to be a Malaysian passport.
The only evidence about the validity of the passport obtained for Mr Zeng is evidence of what happened when he attempted to leave China. I accept his evidence. He says that the authorities at the airport told him that the passport was a fake and confiscated it. He, of course, does not now have the passport. The applicants called no evidence about the validity of the passport, other than Mr Zeng. On the other hand, neither did the respondents.
I infer from the evidence by Mr Zeng of what occurred when he attempted to leave China that the passport was a fake. In the absence of any other evidence, I infer that the authorities at the airport were acting regularly, and that they had the ability to identify a fake Malaysian passport.
This finding means that the company failed completely to carry out its part of the contract. The contract required it to "apply for multi-entry visa(s) Australia from migration Malaysia". Whether that means obtaining a multi entry visa for Mr Zeng’s Chinese passport, or obtaining a Malaysian passport with visa is immaterial. Nor is it material that Mr Zeng probably could not obtain a Malaysian passport because he is not a Malaysian citizen. Mr Zeng was given a fake passport which is not a passport at all.
The words added by Ms Zeng and Mr Liu in the latter part of clause 6: "If Party B fails to properly handle all visa application procedures, Party B shall fully refund the Australian Dollars to Party A." Party B, the company, failed to properly handle all visa application procedures. Mr Zeng is entitled to payment of the $50,000 paid by Ms Zeng on behalf of Mr Zeng.
The applicant's amended statement of claim alleged a number of implied terms, some by reason of the code of conduct set out in schedule 2 of the Migration Agents Regulations 1998 (Cth) and alleged, in the statememt of claim, to be implied so as to give business efficacy to the agreement. Given the express term which deals with the company failing to properly handle all visa application procedures, implied terms which cover individual aspects of proper handling do not need to be implied. They do not contradict express term, but they are not necessary given the more general term. They are not necessary to give business efficacy to the contract (Codelfa Construction Pty. Ltd. v. State Rail Authority of N.S.W. [1982] HCA 24; (1982) 149 CLR 337).
The amended statement of claim alleges breaches of contractual terms implied by provisions of the Trade Practices Act 1975(Cth);
a)an implied term that the services would be rendered with due care and skill, implied by the operation of s.74(1);
b)an implied warranty that the services would be reasonably fit for the purpose of obtaining the visa, implied in the circumstances by the operation of s.74(2).
The company is a trading corporation and Mr Zeng a consumer. The company was carrying on the business of providing migration agent services. Consequently, the contract contains the implied terms. Both have been breached because providing a fake passport means that due care and skill has not been used, and that the services were not reasonably fit for the purpose of obtaining a visa. The damages are the $50,000 fee paid.
Misleading and Deceptive Conduct
The amended statement of claim alleges that Mr Shiao said to Ms. Zeng that;
a)it was possible for Mr Zeng to obtain a multiple entry visa which would permit him to enter Australia;
b)the company could provide immigration advice and assistance to Ms Zeng and Mr Zeng and arrange the multiple entry visa;
c)if Ms Zeng and Mr Zeng retained the services of the company it would definitely obtain a multiple entry visa for Mr Zeng.
The amended statement of claim alleges that these statements were representations upon which Ms Zeng and Mr Zeng relied. It alleges that the statements were representations as to future matters as described in s.51A of the Trade Practices Act 1975 (Cth). It then alleges that the representations were false and that Ms Zeng and Mr Zeng suffered loss, the $50,000 paid.
The amended statement of claim alleges that the conduct of the company was misleading or deceptive or likely to mislead or deceive in contravention of s.52 of the Trade Practices Act 1975 (Cth).
The findings I have made mean that I accept that Mr Shiao, in substance, made the statements which are alleged to constitute the misleading and deceptive conduct. Clearly he was acting on behalf of the company when he made those statements. He is the sole person in control of the company and he conducts his migration agent’s business through the company.
The only evidence that Mr Zeng could not obtain a multiple entry visa is the evidence that he had applied and been rejected. That is not sufficient evidence to make a finding that he would not have been able, at the end of 2002, to obtain a valid multiple entry visa. That means I cannot make a finding that either of the first two representations were false.
The third representation is false. The only inference that can be drawn from what happened is that Mr Shiao, and therefore the company, did not intend applying for a valid visa to visit Australia. Mr Shiao intended that only false documents would be attained.
Therefore, the representation is false. It was made by the company, which is a trading Corporation. Both Ms Zeng and Mr Zeng relied on that representation. They paid $50,000. Through relying on the representation they lost that $50,000, and so suffered damages. All the necessary elements for a claim for damages against the company under s.81 for a breach of s.52 are established.
The amended statement of claim alleges that Mr Shiao:
a)aided, abetted, counselled and procured; and
b)induced; and
c)was knowingly concerned in,
the contravention of s.52 by the company, so that Mr Shiao was a person involved in the contravention within the meaning of s.75B of the Trade Practices Act1975 (Cth).
The findings I have already made mean that Mr Shiao was the person who made the representation for the company, and he knew it was false. He had actual knowledge of the essential elements of the contravention and intentional participation in it (Yorke v Lucas (1985) 158 CLR 661 at 666-669). He was knowingly concerned in the contravention of s.52 and so liable for the same damages, $50,000.
The applicants have made a claim for unconscionable conduct in breach of ss.51AA and 51AB of the Trade Practices Act1975 (Cth). Since the application was instituted prior to the commencement of the Jurisdiction of the Federal Magistrates Court Legislation Amendment Act 2006 (Cth), probably the court does not have jurisdiction. The findings of breach of s.52 make it unnecessary to consider this claim anyway.
Migration Act s.313
The applicants claim that the respondents did not comply with s.313 of the Migration Act 1958, and so they are entitled to recover the $50,000 paid. Section 313, at the relevant time in 2002, provided:
Persons charged for services to be given detailed statement of
services
(1A) This section deals with fees and rewards for giving immigration assistance to a person (the assisted person) who is:
(a) a visa applicant; or
(b) a cancellation review applicant; or
(c) a person nominating (or seeking to nominate) a visa applicant for the purposes of the regulations; or
(d) a person sponsoring (or seeking to sponsor) a visa applicant for the purposes of the regulations.
(1) A registered agent is not entitled to be paid a fee or other reward for giving immigration assistance to an assisted person unless the agent gives the assisted person a statement of services.
(2) A statement of services must set out:
(a )particulars of each service performed; and
(b) the charge made in respect of each such service.
(3) An assisted person may recover the amount of a payment as a debt due to him or her if he or she:
(a) made the payment to a registered agent for giving immigration assistance; and
(b) did not receive a statement of services before making the payment; and
(c) 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 that the immigration assistance related to.
(4) This section does not apply to the giving of immigration legal assistance by a lawyer.
Section 276 defines "immigration assistance", for this case relevantly subsection (1):
Immigration assistance
(1)For the purposes of this Part, a person gives immigration assistance if the person uses, or purports to use, knowledge of, or experience in, migration procedure to assist a visa applicant or cancellation review applicant by:
(a)preparing, or helping to prepare, the visa application or cancellation review application; or
(b)advising the visa applicant or cancellation review applicant about the visa application or cancellation review application; or
(c)preparing for proceedings before a court or review authority in relation to the visa application or cancellation review application; or
(d)representing the visa applicant or cancellation review applicant in proceedings before a court or review authority in relation to the visa application or cancellation review application.
Section 275 says ‘"migration procedure" means the law, and administrative practice, relating to immigration.’ A combination of s.5 and s.29 defines a Visa as "a permission to travel and enter Australia."
In Hartnett v Migration Agents Registration Authority [2004] FCAFC 269, the Full Court of the Federal Court at [3] said of the definition of "immigration assistance" in s.276, that the term includes only "acting or assisting in a visa application", "acting or assisting in a cancellation review application", and "acting or assisting in nominating or sponsoring a visa applicant". The relevant words for this case are "acting or assisting in a visa application".
The respondents argue that because the contract between the parties was terminated before Mr Zeng had applied for an Australian visa, or simply because no application was made for an Australian visa, neither Mr Shiao nor the company provided immigration assistance. They did not act or assist in a visa application because there was no visa application.
The argument depends on interpreting the Full Court words in Hartnett as meaning immigration assistance can only be provided once a visa application is made. If that is correct, it means that if a migration agent prepares or helps prepare a visa application, or advises about a visa application, neither the migration agent nor the migration agent's client can know at that stage whether the obligations imposed on a migration agent in providing immigration assistance apply. If the argument is right, the obligations will apply if the visa application is eventually made, but will not apply if it is not made. That cannot be right.
Elsewhere, in [56] the Full Court in Hartnett refers to "conduct in connection with the applications identified in subs.276(1) and (2)". The Full Court’s words cannot be interpreted as meaning that the application must be made. The words of the section have to have to be looked at. Whatever was involved in Mr Zeng going to Malaysia, the contract in this case, and the discussions at the meeting between Ms Zeng and Mr Shiao in Sydney, contemplated an application for an Australian visa, that is a visa application as defined by the Migration Act 1958. At the very least the contract contemplated the respondents giving Ms Zeng and Mr Zeng advice about such a visa application, and that is what happened. That is enough to meet that part of the definition contained in s.276(2).
The applicants argued that when the agent in China obtained a Malaysian visa for Mr Zeng that came within s.276(2), preparing or to helping prepare a visa application. I do not consider that is correct. The connection with the making of a application for an Australian visa needs to the more direct.
Section 313(3) has cumulative requirements for recovery of a fee paid to a migration agent. They are that the client of the migration agent has:
a)made a payment to a registered agent for giving immigration assistance; and
b)not received a statement of services before making the payment; and
c)not received a statement of services within 28 days after a final decision is made about the visa application, cancellation review application, nomination or sponsorship that the immigration assistance related to.
The respondents argue that, apart from anything else, the third condition is not satisfied. For the third condition to be satisfied there must be a final decision about the visa application. There has not been a visa application therefore there has been no final decision.
The applicants argued that the grant of the Malaysian visa satisfied the requirements. That is not correct. Section 313 can only be referring to an application for a visa to enter Australia, that is an application made under the Migration Act1958.
This interpretation means that if a migration agent provides advice or does preparatory work, but no visa application is ever lodged, then the statutory remedy to recover the fee paid is not available, even if a statement of services is never given. That may not be consistent with what appears to be the purpose of the section, that is the protection of people who pay fees to migration agents, that the wording is clear, and so must prevail over any perceived intention.
While the applicants cannot recover the fee paid under s.313, the earlier findings mean that they are entitled to an order against each defendant for payment of $50,000, either because it is refundable under the terms of the contract or as damages.
I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of Phipps FM
Associate: Jan Smith
Date: 25 May 2007
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