Kazacos v Migration Agents Registration Authority [2007] FCA 1573

FEDERAL COURT OF AUSTRALIA

Kazacos v Migration Agents Registration Authority [2007] FCA 1573

PARRIS KAZACOS v MIGRATION AGENTS REGISTRATION AUTHORITY AND ADMINISTRATIVE APPEALS TRIBUNAL NSD 271 OF 2007

ALLSOP J

15 OCTOBER 2007

SYDNEY IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 271 OF 2007

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY

BETWEEN: PARRIS KAZACOS

Appellant

AND: MIGRATION AGENTS REGISTRATION AUTHORITY

First Respondent

ADMINISTRATIVE APPEALS TRIBUNAL

Second Respondent

JUDGE: ALLSOP J

DATE OF ORDER: 15 OCTOBER 2007

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

1. The application be dismissed 2. The applicant pay the respondents' costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 271 OF 2007

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY

BETWEEN: PARRIS KAZACOS

Appellant

AND: MIGRATION AGENTS REGISTRATION AUTHORITY

First Respondent

ADMINISTRATIVE APPEALS TRIBUNAL

Second Respondent

JUDGE: ALLSOP J

DATE: 15 OCTOBER 2007

PLACE: SYDNEY

REASONS FOR JUDGMENT

1 This is an appeal under s 44 of Administrative Appeals Tribunal Act 1975 (Cth) (the "AAT Act") raising questions of the proper construction of clauses of the Code of Conduct (the "Code") made under reg 8 of the Migration Agents Regulations 1998 made under the Migration Act 1958 (Cth). 2 The Administrative Appeals Tribunal (the "Tribunal") was exercising a review of a decision of the Migration Agents Registration Authority ("MARA"), under which the applicant had been suspended as a migration agent for a minimum of six months, and under which conditions had been imposed on the applicant that were required to be fulfilled before the lifting of the suspension. 3 The Tribunal dealt with complaints in respect of the affairs of three people: a Mr Williamson, a Mr MacDonald and a Ms Adams. The errors of law in the construction of the Code are said by the applicant to attend the Tribunal's approach to the complaints concerning Mr MacDonald and Ms Adams. 4 The Code has been amended from time to time since its initial promulgation. The general scheme of the Code, set against the background of the regulation of migration agents, is to regulate their conduct for the benefit and protection of the public. By the Migration Act, s 303, MARA is given the authority to discipline migration agents for, amongst other things, non-compliance with the Code. Of course, the approach to the construction of the delegated legislation should recognise the serious consequences for the migration agent of a finding of misconduct. In that sense the provisions can be described as penal: Hanna v Migration Agents Registration Authority (1999) 94 FCR 358 at 363. However, as I said in Australian Competition and Consumer Commission v Liquorland (Australia) Pty Ltd [2006] ATPR 42-123 at [45]-[48], the meaning of a penal provision is to be ascertained using the ordinary rules of statutory construction and interpretation, but recognising that if, as a matter of last resort after those rules are applied, the language of the statute remains ambiguous or doubtful, such ambiguity or doubt may be resolved in favour of the subject. What is to be rejected is an approach which, because the provision is penal, employs a literal analysis with an eye to the discernment of textual ambiguity through finely spun distinction: see also Pearce DC and Geddes RS, Statutory Interpretation in Australia (5th ed, Butterworths, 2001) at p 232 [9.8]. 5 Before turning to the provisions of the Code, a number of features of the Migration Act should be noted. First, only individuals may be registered as migration agents under Part 3 of the Migration Act: see s 286. Thus, the Code in its prescription of conduct is directed to people, not companies. 6 Secondly, the Migration Act does contemplate that a migration agent may work as an employee or officer of a corporation, or employee or partner of a partnership. The Migration Act, s 312 sets out the obligations of a migration agent to notify MARA of various events within 14 days of their occurrence, including the following in paragraph (f), (fa), (g) and (h): s 312 Notification obligations (1) A registered migration agent must notify the Migration Agents Registration Authority in writing within 14 days after any of the following events occurs: … (f) he or she becomes an employee, or becomes the employee of a new employer, and will give immigration assistance in that capacity; (fa) he or she becomes a member of a partnership and will give immigration assistance in that capacity; (g) if he or she is a member or an employee of a partnership and gives immigration assistance in that capacity--a member of the partnership becomes bankrupt; (h) if he or she is an executive officer or an employee of a corporation and gives immigration assistance in that capacity: (i) a receiver of its property or part of its property is appointed; (ii) it is placed under official management; (iii) it begins to be wound up. The phrase "immigration assistance" is defined in the Migration Act, s 276 to include a range of activity including the preparation of a visa applications, advice, preparing for court or review authority proceedings and using or purporting to use knowledge or experience in migration procedure, being the law and administrative practice relating to immigration. 7 The Migration Act, ss 280 and 281 provides for restrictions on the giving of immigration assistance and on charging fees for immigration assistance. With certain listed exceptions, a person who is not a registered migration agent must not give immigration assistance: s 280(1). The terms of s 281 are as follows: s 281 Restriction on charging fees for immigration assistance (1) Subject to subsection (3), a person who is not a registered migration agent must not ask for or receive any fee or other reward for giving immigration assistance. Penalty: Imprisonment for 10 years. (2) Subject to subsection (3), a person must not ask for or receive any fee or other reward for the giving of immigration assistance by another person who is not a registered migration agent. Penalty: Imprisonment for 10 years. (3) This section does not prohibit: (a) a lawyer from asking for or receiving a fee for giving immigration legal assistance; or (b) a person from asking for or receiving a fee for the giving of immigration legal assistance by a lawyer. (4) A person is not entitled to sue for, recover or set off any fee or other reward that the person must not ask for or receive because of subsection (1). 8 Section 281(1) prohibits the asking for or receiving a fee or other reward for giving (by the person or company) immigration assistance. That can be seen by the terms of s 281(2) which concern the asking for or receiving a fee or other reward for giving (by another – who must be a registered migration agent) immigration assistance. This is confirmed by the structure and content of s 281(3). So, it is lawful for a company to ask for or receive a fee or reward for the giving of immigration assistance by an employed migration agent. 9 Part 7 of the Code deals with financial duties of migration agents. As at 1 March 2003, Part 7 was comprised of clauses 7.1-7.7 which were in the following terms: 7.1 A migration agent must keep separate accounts with a financial institution for: (a) the agent's operating expenses (the operating account); and (b) money paid by clients to the agent for fees and disbursements (the clients' account). 7.2 A registered migration agent must hold, in the clients' account, an amount of money paid by a client for an agreed block of work until: (a) the agent has completed the services that comprise the block of work; and (b) an invoice has been issued to the client for the services. 7.3 The agent may, at any time, withdraw money from the clients' account for disbursements that are required to be paid to the Department, or any other agency, for the client. 7.4 A migration agent must keep records of the clients' account, including: (a) the date and amount of each deposit made to the clients' account, including an indication of the purpose of the deposit and the client on whose behalf the deposit is made; and (b) the date and amount of each withdrawal made in relation to an individual client, and the name of each recipient of money that was withdrawn; and (c) receipts for any payments made by the client to the agent; and (d) copies of invoices or accounts rendered in relation to the account. 7.5 A migration agent must make available for inspection on request by the Authority: (a) records of the clients' account; and (b) records of each account into which money paid by a client to the agent for fees and disbursements has been deposited. 7.6 If a migration agent provides a service to a client on the basis of a conditional refund policy, a 'no win, no fee' policy or an undertaking to similar effect: (a) the agent must have sufficient funds available to be able to cover any amount that the agent may become liable to pay to the client under the policy or undertaking; and (b) the agent must meet that obligation by: (i) keeping funds in the clients' account; or (ii) keeping a security bond; or (iii) maintaining adequate insurance. 7.7 Nothing in clause 7.1, 7.2, 7.3, 7.4 or 7.6 affects the duty of a migration agent, who is also a legal practitioner and who acts in that capacity, to deal with clients' funds in accordance with the relevant law relating to legal practitioners. 10 Amendments were made thereafter, but cl 7.2 remained the same in substance. 11 One can see that these obligations may or may not, in any given context, be relevant to a migration agent who works entirely as an employee. If such a person had no part in liaising with clients, with receiving funds, with the operation of the practice or with controlling the bank accounts, it may well be that such obligations do not affect the daily working professional life of such a person. 12 Equally, one can see a need for an express regime whereby the duties as are found in Part 7 are placed on persons (including companies) who employ migration agents and who (lawfully) ask for or receive fees or reward for the giving of immigration assistance by employed registered migration agents. 13 The interposition of the corporate form is at the centre of the applicant's arguments in this case. 14 Part 10 of the Code deals with the termination of services. Below is the form of Part 10 from March 2003 to May 2005 with two forms of cl 10.4 (one at March 2003 and another from at least July 2004) and with cll 10.1A and 10.1B (from at least May 2005): 10.1 A registered migration agent must complete services as instructed by a client unless: (a) the agent and client agree otherwise; or (b) the client terminates the agent's instructions; or (c) the agent terminates the contract for just cause and gives reasonable written notice to the client. 10.1A For paragraph 10.1(c), a written notice must state: (a) that the agent ceases to act for the client; and (b) the date from which the agent ceases to act; and (c) the terms of any arrangements made in respect of appointing another registered migration agent. 10.1B Within 7 days of giving the written notice, the agent must: (a) update the client's file to reflect the current status of each case or application undertaken by the agent for the client; and (b) deliver all documents to which the client is entitled to the client or to the appointed registered migration agent; and (c) ensure that all financial matters have been dealt with as specified in the contract. 10.2 A client is entitled to ask a registered migration agent (orally or in writing) to return any document that belongs to the client. The agent must return the document within 7 days after being asked. 10.3 Australian passports, and most foreign passports, are the property of the issuing Government and must not be withheld. 10.4 (at March 2003) A migration agent must not withhold a document that belongs to a client by claiming that the agent has a right to withhold a document by a lien over it. 10.4 (from July 2004) A registered migration agent must not withhold a document that belongs to a client, as part of a claim that the agent has a right to withhold a document by a lien over it, unless the agent holds a current legal practicing certificate issued by an Australian body authorised by law to issue it. 10.5 On completion of services, a registered migration agents must, if asked by the client, give to the client all the documents: (a) given to the agent by the client; or (b) for which the client has paid. 10.6 If the client terminates the instructions, a registered migration agent must take all reasonable steps to deliver all documents quickly to the client or any other persons nominated by the client in writing. If the agent claims a lien on any documents, the agent must take action to quantify the amount claimed and tell the client in a timely manner. Note 1Only registered migration agents who hold a current legal practising certificate issued by an Australian body authorised by law to issue it are able to claim a lien on any client documents. 15 Once again, in any given circumstances some of these clauses may not apply to an individual migration agent who does not act as a principal. 16 The applicant put the bald proposition that clauses 7.2, 10.2, 10.4 and 10.6 cannot apply a migration agent who is an employee. Such a broad proposition is not, in my view, able to be made. The individual facts and circumstances may make any one or more of them relevant to an agent's position. For this reason, it is necessary to examine the approach of the Tribunal to the facts before it. 17 The facts as found by the Tribunal were as follows: (1) The applicant was a registered migration agent. (2) On 1 February 2000, a company, Parris & Shah Pty Ltd was incorporated, with the applicant and one Hemang Shah as shareholders and directors. At the time of the Tribunal hearing, and at all relevant times, the applicant was the sole director and shareholder of the company. (3) The company has traded under two business names: Parris & Shah Migration Specialists and Australian Migration Specialists, using those names indiscriminately. (4) No finding was made by the Tribunal that the applicant was an employee of the company. No part of the reasons of the Tribunal rejects any submission that he was an employee. No complaint is made that any evidence or aspect of the facts was ignored by the Tribunal in this respect. (5) The Tribunal made a finding (see [16] of its reasons) that the Applicant was engaged by the complainants (at least Mr Wilkinson and Mr MacDonald) as their agent. Similarly [17] contains a finding that these persons wished to engage "his services" and "would be transferring the required fees". (6) The Tribunal recognised that the fees had been paid to the company, saying at [18] of its reasons: Similar comments can be made regarding the refusal to refund fees to Messrs Wilkinson and MacDonald. Although the Applicant sought primarily to rely upon the payment of fees to Parris & Shah Pty Ltd and not him personally, it seems to me that once the complainants had terminated the Applicant's engagement to act on their behalf they were no longer clients. This contains a finding of fact that Messrs Wilkinson and MacDonald had retained the applicant as agent. (7) The Tribunal addresses the question of the place of the company in [20] of its reasons: The attitude of the Applicant towards refunds to former clients is clearly set out in his letter to the Respondent dated 26 January 2006, referring to Mr Wilkinson's claim. He stated: "No refund. I personally have no power to offer a refund in this matter. A decision was taken by Parris & Shah Pty Ltd on the basis of the information before it not to offer a refund. There was a fundamental issue of Parris Kazacos having worked with Parris & Shah Pty Ltd for many years and the money grab for a refund by Mr Wilkinson. I do not wish to be held personally responsible for the decision not to refund. This is a purely commercial matter between Parris & Shah Pty Ltd and Mr Wilkinson that should be addressed elsewhere." This is of course quite ingenuous as at all relevant times the Applicant was the sole Director of and shareholder in Parris & Shah Pty Ltd. This paragraph contains the factual conclusion of complete identity of interest of the company and the applicant. (8) Though not directly in issue, the history of the creation of the retainer by Mr Wilkinson and its treatment by the Tribunal is important. It is clear from the passages to which I have earlier referred and [28] and [29] of the reasons that the Tribunal concluded that the retainer was made with the applicant, notwithstanding the involvement of the corporate form. That was a factual conclusion. (9) The Tribunal found Mr MacDonald to have retained the applicant, see the background of Mr Wilkinson found to be "similar": [31], the "relationship"; [36], "while acting for Mr MacDonald": [38]. (10) The Tribunal found that the applicant acted for Ms Adams: [44]. This was a finding that, as with Mr Wilkinson and Mr MacDonald, the retainer was between the client and the applicant. (11) The applicant being the person retained by the client (so found) requested the clients to pay fees to the company: [40]. This was not a finding contradictory to the finding that the retainer was of the applicant, but that he, as the migration agent retained by the client, requested that the fees due to him be paid to the company. 18 It is against the background of these facts that one must assess the asserted breaches of the Code.