FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (No 2) [2016] FCA 62

THE COURT ORDERS THAT:

1.    On or before 4.00pm on 23 February 2016, each of the parties is to file and serve any short submissions they wish to make on the orders proposed by the Court, including the form of any proposed amendments to those orders.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 (Cth).

REASONS FOR JUDGMENT

Mortimer J:

Introduction and summary

1    This proceeding is an application brought by the Australian Competition and Consumer Commission under the Competition and Consumer Act 2010 (Cth). It concerns conduct of the first respondent, Clinica Internationale Pty Ltd, in providing what was described as recruitment consulting services to individuals in Australia on temporary visas who were seeking to obtain permanent residence. The second respondent Mr Radovan Laski, the managing director of Clinica, is alleged to have been involved in that conduct and liable accordingly. The ACCC seeks declarations, injunctions, a disqualification order, non-party redress orders, pecuniary penalties, interest and costs in respect of contraventions by the respondents of ss 18, 21, 29 and 31 of the Australian Consumer Law (ACL). It also seeks an order for the purposes of s 137H of the Competition and Consumer Act.

2    The proceeding was commenced by the ACCC on 14 May 2015, and since 23 June 2015 had been set down for trial on all issues apart from relief for three days from 21 to 23 October 2015. The proceeding was actively defended until 12 October 2015, on which date the parties filed an agreed statement of facts containing admissions as to liability. At a subsequent pre-trial conference on 14 October 2015, the parties proposed orders listing the matter for hearing on all issues on those same trial dates and with minor variations those orders were made by the Court.

3    Broadly, the contraventions relate to representations and unconscionable conduct in relation to a program offered by Clinica. Clinica represented it would arrange for clients to complete a cleaning course (called the “Certificate III Asset Maintenance (Cleaning Operations)” course); that Clinica would find for the client a cleaning job in a regional area of Australia; that Clinica would instruct and liaise with a registered migration agent in relation to a permanent residence visa application and other immigration advice for the client; and that completion of the cleaning course and working in the cleaning job would qualify the client for permanent residence under the Subclass 187 visa – Regional Sponsored Migration Scheme (187 Visa).

4    It is now not disputed by the respondents that the cleaning course and cleaning work offered by Clinica could never have entitled its clients to apply for a 187 Visa. Moreover, the respondents now admit that Clinica did not have any cleaning jobs available for clients with sponsoring employers in regional areas and no clients who completed a cleaning course with Clinica were placed in cleaning jobs. I return in more detail below to the facts underlying the contraventions.

5    For the reasons that follow, I find that the ACCC has made out the contraventions alleged and that, in substance, the relief it seeks should be granted.

The course of this proceeding

6    After the initial case management hearing and during preparation for trial, on 4 August 2015, the ACCC sought and obtained an urgent ex parte freezing order with effect up to 12 August 2015. On that date, the matter returned before the Court for a further hearing in respect of the freezing order. When the parties appeared on 12 August 2015, counsel for the respondents informed the Court that by reason of the second respondent’s illness and recent absence from Australia, the respondents were not in a position to contest the freezing order on or near the scheduled return date. Accordingly, I extended the freezing order made on 4 August 2015 with effect up to and including the first day of trial on 21 October 2015, while reserving leave for the respondents to apply at any time prior to trial to vary or discharge that order if they wished to do so.

7    The respondents did seek variations but not a discharge of the freezing order, and the parties returned before the Court on 9 September 2015 to make submissions on the respondents’ proposed variations. On 10 September 2015, and after a contested hearing, I made orders varying the freezing order made on 4 August 2015 and extended on 12 August 2015 in order to allow the respondents to make additional payments including for legal and accounting fees, and for Mr Laski’s living expenses, and mortgage payments: see Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd [2015] FCA 1006.

8    The freezing order extended to two third party companies, Swishette Pty Ltd and Letore Pty Ltd, each of which on the evidence is associated with Mr Laski. Mr Laski is the sole director of both Swishette and Letore. Letore is the sole shareholder of Swishette. Swishette is also the sole shareholder of Letore. Mr Laski has deposed Swishette holds all its assets as trustee for the Second Rodney Laski Family Trust. Letore is one of named beneficiaries of that trust, as is Mr Laski and his former wife, Ms Tania Laski. As the ACCC later submitted, the circularity between the interests and shareholdings of Swishette and Letore was never clearly explained in the evidence.

9    The funds frozen included, in particular, proceeds from the sale of a four-bedroom house at 5 Maroona Road, Brighton. Swishette was the registered proprietor of the Brighton property. Mr Laski’s evidence was that the Brighton property was held on trust by Swishette for the beneficiaries of the trust. Mr Laski resided at the property until around the time of its sale. Pursuant to the freezing order, funds cleared from the sale of the property were paid into a trust account in the name of the ACCC’s solicitors, to be held until the hearing and determination of this proceeding or further order. Except to the extent that the orders made and varied by the Court allowed for making certain payments out of those funds, the proceeds of the sale of the Brighton home continue to be held on trust by the ACCC’s solicitors. The ACCC’s solicitor deposed the sum held in trust at the time of trial was approximately $750,000. Since judgment was reserved, that sum will have been affected by the various drawings authorised by the freezing order, but is likely still to be in excess of $660,000. As I set out below, Ms Laski is, perhaps was, a secured creditor with a charge over the Brighton property securing a loan of $215,000 and the ACCC did not dispute that she should be repaid that amount out of the frozen funds. I consider further at [85]-[86] below Ms Laski’s asserted charge over the property. Further, a former of acquaintance of Mr Laski, Ms Lauris Fahey, asserts a charge over the Brighton property securing a sum of $85,000. Ms Fahey’s asserted charge is currently the subject of proceedings before the Supreme Court of Victoria.

10    At hearing, the freezing order was continued by consent until the delivery of final judgment by the Court.

11    Written and oral submissions were made by both parties. I have taken those submissions into account in the findings I have made, and the legal conclusions I have reached. I refer to them below where I consider it necessary to do so.

Further developments after hearing

12    On 23 October 2015, the day after the hearing of this matter concluded, the ACCC sought a relisting for the purpose of seeking an urgent injunction, and the parties appeared before the Court on that day. Before addressing the substance of that application, counsel for the ACCC raised (by reference to the Full Court’s recent decision in Zhai v Luo [2015] FCAFC 144) the question whether the application should be heard by another judge of this Court lest there be any issue as to apprehended bias in circumstances where I had heard the trial but was reserved on final judgment.

13    In Zhai v Luo, the Full Court granted leave to appeal on the sole basis of reasonable apprehension of bias on the part of the primary judge. The complaint of apprehended bias related not to the conduct of the trial itself, but to the fact that the primary judge had entertained two applications while judgment was reserved following completion of trial and after final submissions had been filed. Dismissing the appeal, the Full Court stated:

32.    an urgent interlocutory hearing for freezing orders, whether pursued before, during or after a trial, necessarily invites the judge to form and express some view as to whether the applicant for the relief has established, on the interlocutory material, a sufficiently arguable case that there is a risk of dissipation of assets. Ordinarily, any such view will only be an interlocutory one arrived at on the basis of affidavit evidence led on the relevant application. This was not a case like Livesey v New South Wales Bar Association (1983) 151 CLR 288 which held that a fair minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of later proceedings in circumstances where the judge had previously found a state of affairs to exist or come to a clear view about a witness’ credit. There had been no such occurrence in this instance. Here, a fair minded lay observer would expect that, after hearing or receiving final submissions at the conclusion of the trial, the judge might well have formed some view on the credit of witnesses whom he had seen give oral evidence. But that cannot be equated to a perception of pre-judgment of the outcome of the trial by the judge. His Honour had not prejudged the trial; he had heard the trial and his task was to decide it on a final basis.

…

35.    The informed lay observer would be aware that professional judges hear questions that arise in the course of proceedings in which they are required to consider evidence and other material. Those questions can involve allegations, evidence, material or argument that may be prejudicial to, or critical of, a party or a witness. This observer would also be aware that, whether or not the same allegation, evidence, material or argument is before him or her in the substantive proceedings, which the judge has yet to decide, he or she will put that matter out of his or her consideration when making a decision of a final nature on the evidence and submissions relevant to that decision.

…

40.    Here, Ms Zhai’s argument amounts to the proposition that the fair minded lay observer might reasonably consider that the judge might be influenced in arriving at his decision in the substantive proceedings by not considering only the evidence and submissions that were relevant, but rather by extraneous factors that were before him in one or two interlocutory applications. In our opinion, there is no reasonable possibility that the informed fair minded lay observer might reasonably have formed a view that the primary judge might have prejudged, or not been impartial in his consideration of, the result of the final hearing in the circumstances of this case. The fair minded lay observer would have expected, we would interpolate, correctly, that, as a professional judge, his Honour would put out of his mind what he had heard or said on the interlocutory applications when he later came to decide the substantive case on which he had previously reserved his final decision.

14    I adjourned briefly so that counsel for the respondents could take instructions on whether her clients sought that the ACCC’s application be heard before a different judge. When the hearing resumed, counsel informed the Court that the respondents did not seek to have the matter heard before a different judge, nor did they oppose the orders sought by the ACCC. After hearing the application, I made further freezing orders under s 23 of the Federal Court of Australia Act 1976 (Cth) against Mr Laski and against his cousin Ms Tanya Hatch in order to preserve, until the final determination of this proceeding, the effectiveness and utility of the relief sought by the ACCC, and gave ex tempore reasons for doing so. The need for those orders arose because during the course of the trial a number of forms had been lodged with the Australian Securities and Investments Commission. These forms demonstrated that Mr Laski was seeking to cease being the director of, and had divested himself of shareholdings in, some of the companies relevant to this proceeding.

15    It is unnecessary to set out the background to those orders in any further detail because counsel for the ACCC, in commencing submissions on the application, emphasised those submissions which touched on Mr Laski’s conduct and credibility were made only with respect to the application and not to the substantive matter on which the Court was reserved. After hearing the application I afforded the parties an opportunity to make any written submissions on whether the conduct the subject of the application could or should be taken into account in the Court’s final determination of the proceeding. The ACCC filed submissions confirming its position that it did not seek that the Court have regard to that conduct in determining the proceeding. No submissions were filed by the respondents. In light of the ACCC’s position, I have not had regard to the submissions about that conduct nor the evidence tendered by the ACCC on the application in determining liability or relief in the substantive proceeding.

The High Court’s decision in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46

16    After judgment was reserved, the High Court delivered its decision in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46. In that case, the Court overruled the Full Court’s decision in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; 229 FCR 331 and held that the restrictions on the parties (in particular, the prosecution) making submissions as to sentence in criminal proceedings, as outlined by the Court in Barbaro v The Queen [2014] HCA 2; 253 CLR 58 applies only to criminal proceedings.. Consequently, nothing said in Barbaro is antithetical to continuing the practice of agreed penalty submissions in civil penalty proceedings: at [50] (French CJ, Kiefel, Bell, Nettle and Gordon JJ; Keane J agreeing). Gageler J joined in the orders of the Court, having taken a different position in Barbaro itself, where his Honour found that the prosecution was entitled and obliged to make submissions on appropriate sentence if a court requests such assistance or if the prosecutor perceives a significant risk the sentencing court would make an appealable error in the absence of such assistance: Barbaro at [62].

17    The plurality found that the accusatorial nature of criminal proceedings differentiated them from civil penalty proceedings. Relevantly to the relief sought in this proceeding, the plurality also held that civil penalty proceedings do not involve any notions of retribution or rehabilitation, but rather are primarily if not wholly protective in promoting the public interest in compliance with the law: at [55] (see also [59]). The plurality endorsed the decision of French J (as his Honour then was) in Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at 52,152 that:

Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]. ... The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.

18    Keane J, delivering a separate concurring opinion, at [102]-[103] characterised the roles of the parties in civil penalty proceedings in a way with which I respectfully agree:

The legislative choice to designate proceedings for the recovery of a civil penalty may not be ignored by a court. The legislature has explicitly decided that a claim by an eligible person for the recovery of a pecuniary penalty for the contravention of a civil penalty provision is to be brought as a civil proceeding; and within the paradigm of civil proceedings, a regulator who brings such proceedings is to be viewed (like any other eligible person) not as a prosecutor but as a plaintiff.

In proceedings under s 49 of the BCII Act, as indeed in any civil proceedings, it is the right and duty of the plaintiff to mark out the extent of its claim against the defendant. The plaintiff’s claim establishes the scope of the controversy to be resolved by the judgment of the court. When a plaintiff asserts a claim to the grant of a particular remedy, it is not proffering an opinion on a matter of fact or law; it is stating the basis on which a controversy between it and the defendant may be quelled by the exercise of judicial power. When a defendant agrees to a civil penalty in a particular amount, it is assenting to the grant of relief to that extent. And an agreement of the parties as to the basis on which they seek to resolve the controversy between them is not merely an opinion proffered by either or both of them as to how the proceedings should justly be resolved: it is a resolution of the controversy between them insofar as the quelling of that controversy is in their power.

(Citations omitted.)

19    At [78] Gageler J noted that, subject to the proposition in Australian Securities and Investments Commission v Hellicar [2012] HCA 17; 247 CLR 345 at [152] that a regulator conducting a proceeding is “subject to some form of duty ... that can be described as a duty to conduct litigation fairly” (which like the High Court in Hellicar his Honour accepted for the purpose of his reasoning, but did not expressly endorse), there otherwise was no effective analogy between a regulator and a prosecutor:

The regulator is not bound by the nature of the proceeding to be dispassionate in the relevant sense. Subject to its statutory charter, the regulator is permitted to advocate for a litigious outcome which the regulator considers to be in the public interest.

20    The parties in this proceeding were afforded an opportunity to make further submissions on the appropriate penalty, in the light of the High Court’s decision, and the ACCC did so. I deal with those submissions below. The respondents did not file any further submissions.

The evidence relied upon

21    The parties filed an agreed statement of facts pursuant to s 191 of the Evidence Act 1995 (Cth). In addition, there are before the Court a number of affidavits filed by both parties, annexing a range of documents relevant to this proceeding, and various documents tendered by the parties at hearing. I refer to that evidence as necessary below.

Witnesses for the ACCC

22    The following witnesses provided affidavits on behalf of the ACCC. None was required for cross-examination.

Ms Kimberley Lloyd

23    Ms Lloyd is the solicitor with conduct of this proceeding for the ACCC and has affirmed four affidavits in this proceeding. Her first two affidavits dealt with and exhibited a wide range of material in support of the ACCC’s freezing order application, including Clinica advertisements and emails obtained during the ACCC’s investigation. These affidavits were also read at hearing in support of the findings and final relief the ACCC sought, and I have had regard to the contents of those affidavits in making my findings.

24    Ms Lloyd’s most recent two affidavits dealt in some detail with the total amounts paid by Clinica clients, the nature of financial transactions historically made to and from the Clinica account and the accounts of Letore and Swishette, and the amount of funds from the proceeds of sale of the Brighton property. Exhibited to her third affidavit were the records of payment, obtained during the course of the ACCC’s investigation, for most but not all Clinica clients and a summary table she had caused to be prepared indicating that a total sum of $608,517.35 had been paid by 67 Clinica clients to Clinica for participation in the program it advertised and marketed. Ms Lloyd deposed that the ACCC was aware of at least 97 persons who were Clinica clients in respect of the Clinica program during the relevant period of August 2012 to July 2013, and on that basis she believed the actual amount of moneys paid by clients towards the Clinica program would likely exceed $800,000. I note that a small number of the entries for payment set out in Ms Lloyd’s summary table (11 entries totalling $74,000) pre-dated August 2012, which is the point in time from which the respondents are first alleged to have engaged in conduct contravening the ACL. I do not consider that discrepancy material to the findings I make in these reasons for judgment. In any event, Mr Laski agreed in a subsequent affidavit responding to Ms Lloyd that the receipts summarised in this table were all receipts relating to clients of the Clinica program. I infer from that concession that the Clinica program may have been running for at least a short period prior to August 2012, although the Court is not requested to make any findings in respect of that earlier period. Whether or not this has the effect that some of these earlier clients may be shut out from relief under the non-party redress orders is a matter on which submissions can be made, under the process I foreshadow at [86] below.

25    Ms Lloyd also set out the analysis she had undertaken of the bank statements of Clinica, Swishette and Letore for the period of 1 March 2012 to 8 April 2015, which were exhibited to her third affidavit together with a spreadsheet Ms Lloyd had caused to be prepared summarising the financial transactions appearing in those bank statements. Ms Lloyd deposed that those transactions appeared to show a routine pattern, whereby Mr Laski withdrew amounts from the Clinica account, deposited the same or a similar amount into the Letore account, and within the following days or weeks withdrew funds from the Letore account and deposited it into the Swishette cheque account, and within the next few days or weeks withdrew funds from the Swishette cheque account and deposited it into the Swishette home loan account for payment of the Brighton property mortgage.

26    That spreadsheet also set out the payments made from the Clinica account to the ANZ Letore credit card. Ms Lloyd deposed that an analysis of the transactions on the ANZ Letore credit card showed payments made for Mr Laski’s personal use, including medical and optometry expenses, clothing, food and alcohol, student union fees and veterinary clinic and pet store expenses. The transactions also related to various fees and charges paid in respect of proceedings in the Magistrates’ Court of Victoria. These included fees and charges incurred on the same day proceedings were instituted by Clinica against former Clinica client Mr Sourab Uppal, a witness in this proceeding. I refer to these Magistrates’ Court proceedings below.

27    As to the proceeds of the sale of the Brighton property, Ms Lloyd deposed that a total of $802,077.51 was paid into a trust account held by Ms Lloyd’s firm pursuant to the freezing order. Ms Lloyd deposed that as at 15 October 2015 those funds had been depleted to a total of $751,392.34 following drawings pursuant to the additional carve-outs from the freezing order in accordance with my reasons in Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd [2015] FCA 1006.

Ms Lauris Fahey

28    Ms Fahey was for some time in a relationship with Mr Laski. She has sworn two affidavits in this proceeding, on 28 July 2015 and 1 September 2015. The ACCC initially relied on her evidence in support of the ACCC’s freezing order application. She gave evidence that Mr Laski told her he operated a migration business under the names “Clinica” and “Pritchards Placements” placing migrants in jobs that assisted them to obtain visas, and that his business advertised for workers on the Gumtree website (which Mr Laski denied in a subsequent affidavit). In her second affidavit, Ms Fahey annexed a text message sent to her from Mr Laski which referred to placing an advertisement on Gumtree. She deposed that on one occasion Mr Laski boasted in front of her to a business acquaintance, Mr Stamatakos (to whom I refer in more detail below):

about how he took advantage of the migrants who were looking for jobs through his business, and also about how he (Rod) dealt with claims against him. Rod said that some former clients sued him in VCAT and he was using delay tactics so that the clients’ visas would run out, and they would have to leave Australia before they had a chance to finalise their claims.

29    Mr Laski denied that such an interaction had ever taken place, deposing that he had never been in the presence of Ms Fahey and Mr Stamatakos together and that since late 2013 he had only dealt with Mr Stamatakos through his solicitors.

Ms Lynn McKirdy

30    Ms McKirdy is the Assistant Director, Permanent Employer Sponsored Entry, at the Commonwealth Department of Immigration and Border Protection. In her affidavit sworn on 6 March 2015, she gave evidence about the direct entry stream of the Regional Sponsored Migration Scheme and the 187 Visa, the relevant provisions for which are set out at Item 1114C of Sch 1 and Item 187 of Sch 2 to the Migration Regulations 1994 (Cth). Ms McKirdy gave evidence that the Regional Sponsored Migration Scheme is predicated on a valid and acceptable employer nomination, and annexed to her affidavit a screenshot of a sample online employer nomination application form.

31    Ms McKirdy described the requirements of the Regional Sponsored Migration Scheme. A nominated position must correspond to the tasks or qualification for occupations of skill levels 1, 2 or 3 under the Australian and New Zealand Standard Classification of Occupations. Ms McKirdy gave evidence that a direct entry nomination in respect of an employee with a position as a cleaner or which gave an ANZSCO code starting with “81” (falling within a sub-major group “cleaners and laundry workers”) would be rejected by the Department because the tasks to be performed in the position did not correspond to skill levels 1, 2 or 3, regardless of whether the employee had obtained a Certificate III in “asset maintenance” or cleaning. She also deposed that any direct entry nomination by an employer under ANZSCO code 399999 (“technicians and trade workers not elsewhere classified”) would be scrutinised particularly carefully and if the position description or tasks involved were described as cleaning or asset maintenance, the application would be rejected for not corresponding to skill levels 1, 2 or 3 under ANZSCO, regardless of whether the employee had obtained a Certificate III in asset maintenance or cleaning.

Mr Sukhdev Singh Gill

32    Mr Gill is a former client of Clinica who participated in the Clinica program, for the purpose of obtaining a permanent residence visa. Mr Gill holds a Certificate III in Graphic Design (Pre-press printing), a Diploma in Business and a Certificate IV in Business. He gave evidence that his friend had seen an advertisement for Clinica and gave him a telephone number for Mr Laski. In October 2012, Mr Gill called that number and spoke with Mr George Stamatakos, who told him that Clinica was a recruitment company that would help him find a job and permanent residency.

33    Mr Laski’s evidence was that Mr Stamatakos undertook a significant role in the delivery of the Clinica program. Mr Laski deposed Mr Stamatakos was engaged by Clinica from around 2011, as a contractor to provide business development and marketing assistance to Clinica. There was no written agreement with Mr Stamatakos. When individuals responded to Clinica’s advertising and marketing about the Clinica program, Mr Laski deposed that it was either him, or Mr Stamatakos, who met the individuals and explained that Clinica had jobs available in the cleaning industry, and that they could get permanent residency by completing the Clinica program. With Mr Palmer, Mr Stamatakos organised a registered training organisation to deliver the cleaning course to Clinica clients. Mr Stamatakos was also involved, on Mr Laski’s evidence, in placing Clinica clients in the abattoir jobs to which I refer below.

34    Upon Mr Gill asking about the qualifications he already held in graphic design, Mr Stamatakos told Mr Gill that area was not in demand and that he would need to undertake an asset maintenance course to help him get a permanent job in a regional area, in order to secure permanent residency. A few days later, Mr Gill met with Mr Laski and Mr Stamatakos in person and was told by Mr Laski that Clinica would find him a job in asset maintenance with an employer who would sponsor him for an RSMS 187 Visa, and that he would start the job immediately after completing the asset maintenance course. Mr Laski also told him that Clinica had a migration agent, but in response to Mr Gill’s inquiry told him that he could not meet with the agent as the agent was away on holidays. Mr Gill deposed that he was told Clinica would not do anything for him unless he signed a contract and paid Clinica, which he did. The contract signed by Mr Gill on that day was annexed to his affidavit and included the following cl 3.1 on “Payment for Services”:

Applicant shall pay CLINICA INTERNATIONALE PTY LTD fees for the performance of the Services, as follows

(i)    $10,000 upon signing of this Agreement.

(ii)    $5000 within 3 months of the date of this agreement. A further $5000.00. on completing 3 months Employment.

(iii)    $5000 payable upon lodgement of 187 Regional Sponsorship Permanent Residence Unconditional Visa application.

(iv)    $5000 payable upon the required documents being lodged for permanent residence application for the Applicant. The final fee is $30,000.00. minimum, and may vary from time to time, but not exceed $40,000.00.

35    Mr Gill deposed that in total he paid Clinica almost $14,000. He completed a Certificate III in Asset Maintenance (Cleaning Operations) at the Complex Training Academy, arranged by Clinica. After completing the course, Mr Gill did not receive any telephone call from Clinica about a job, as he had expected. Instead, on 26 December 2012 he received an email from Mr Laski, stating:

After the 7th January you will be required to attend to help you get through your interview stages in order for you to be place in a full time position in regional area.

Clinica apologizes for the delay and any inconvenience it may have caused you, but as you are aware the jobs were available of the time of you doing your course.

John Ranieri and Robert Palmer were paid to provide the jobs and have failed to do so.

As a result we are issuing proceeding against them and having a judgment entered and monies received, we will then be able to provide you with some compensation.

Please be aware that this line of action takes time. Therefore please be patient and am confident things will work out.

36    In January 2013, Mr Laski contacted Mr Gill about an employer with a position available for an immediate start. Mr Gill accepted the position offered, along with about 10 other clients of Clinica. On commencing the position, Mr Gill discovered it was not a cleaning or asset maintenance position but was a meat packing job at JBS Australia Pty Ltd’s meat factory in Cobram, Victoria. In response to enquiries from Mr Gill, Mr Laski told Mr Gill he was going to lodge his file for permanent residence but first required a payment instalment of $5,000. Some time after, Mr Gill and other employees at JBS Australia Pty Ltd were informed by the plant manager that JBS was happy to give them jobs but would not be sponsoring them for permanent residence.

Mr Rajesh Azad

37    Mr Azad is also a former client of Clinica who completed a Master of Commerce (Professional Accounting) degree in Australia. He gave evidence that he called and spoke to Mr Laski in September 2012 after being shown a copy of a Clinica advertisement in the Indian Times newspaper and attended Clinica’s office the next day to meet with Mr Laski. Mr Azad deposed that, at this meeting, Mr Laski told him:

(a)    It will cost $50,000 to $60,000 to get permanent residency in accounting. It is very hard these days as no one is hiring accountants. It will take a very long time.

(b)    One easy process is for me to do a course in asset management. It takes nine months to get permanent residency although with his company, Clinica, it will take seven to eight months. It is cheaper than accounting because it will only cost $35,000.

(c)    Clinica has a migration agent, Arthur, who will help. He has an office here and he will take care of everything. If I want to meet him personally, they will charge me $250.

(d)    The documents I will need are International English Language Testing System band 6 scores, a certificate III, my passport, and my resume. I will need an employer but Clinica arranges that. I will be paid $700 to $800 in wages, weekly.

(e)    It will cost me $35,000 and initially I will need to pay $10,000 first and this includes a $4,000 course fee.

(f)    Clinica submits an application to the required authority. Then I pay $10,000 step by step. I can pay the last $10,000 after I get my permanent residency. For regional sponsorship I need to be in the countryside, somewhere like Bendigo or Ballarat.

(g)    After three months with my employer Rad will submit my application. OSSNET will help with my resume and the type of job I want.

I said that I would think about it. I then asked if I can meet Arthur. Rad said that Arthur is a very busy man, and if I have the money I can meet him. I said that I thought everything was included in the price but Rad said I can only meet him if I pay $250 per meeting. He also said that not many people know about this opportunity. It’s a rat race. Clinica have employers and they always put people in employment. Asset management is the only way right now. After three or four months I can leave the asset management job if I want to and Clinica will still be able to apply for permanent residency for me. He said that, if I work as an accountant, I would have to work for two years and the employer would not pay me. I would have to work for free and find other paid work on weekends so I can survive. With asset management, I don’t have to work hard to get permanent residency. It is legal and everything is fine.

38    A copy of notes made during that meeting were annexed to Mr Azad’s affidavit. Mr Azad deposed that he understood the asset management work described by Mr Laski related to some sort of management role or managing assets, and that he was not told that the work was cleaning work.

39    A few days later, Mr Azad returned to Clinica’s office and met with Mr Stamatakos. On asking about what kind of course the asset management course was, Mr Stamatakos said the course was in relation to management in schools or hospitals, and that doing asset management would lead to unconditional permanent residency. Mr Azad asked what would happen if Clinica could not provide the job, and was told that would not happen but if it did Clinica would provide a 60 per cent refund.

40    Mr Azad deposed that later in September 2012 he sought advice from a migration agent who told him he did not know anything about the asset management course or whether it was on the eligibility list. Mr Azad then called Mr Laski and asked why the agent did not know about the course. He deposed:

Rad said that there was a new rule that just came in in July and no one knows about this. He said that I should not go to other lawyers and talk about it because then people would start to know all about it. It would become popular and it would be harder to get jobs. He also said that maybe other companies cannot help people get jobs under this visa because they do not have links with other companies and jobs. Rad’s company have been doing this for thirty years. They have employers. They know employers.

41    Mr Azad signed a contract with Clinica on 27 September 2012, and a copy of that contract was exhibited to his affidavit. It did not set out any provision for the refund promised by Mr Stamatakos if no job eventuated. Mr Azad deposed to his understanding at the time that this was the first step to permanent residency and that he would obtain a job in asset management which would qualify him for permanent residency.

42    Mr Azad then started the asset maintenance course in November 2012. It was only on the first day that he discovered the course was not about managing or maintaining assets but about cleaning. He rang Clinica about this. He deposed that he was told, by either Mr Laski or Mr Stamatakos, “that it is a cleaning course, but I should not worry. I will get a job and get paid $800 a week. The cleaning course is on the list, I will get unconditional permanent residency in nine months.”

43    Like Mr Gill, Mr Azad did not hear from Clinica about any jobs after completing the course but instead received the same email on 26 December 2012 described at [35] above. On 7 January 2013 Mr Azad attended the Clinica office and demanded a refund as Clinica had failed to provide him a job. Mr Laski told him that there was nothing in the contract about refunds, and in fact Mr Azad was required to pay another $11,000. Mr Azad told Mr Laski he would go to the immigration authorities to tell them he was misleading people. Later that day, Mr Laski emailed him about a job available for an immediate start in Cobram, Victoria in a meat factory. Mr Azad then received a telephone call from Mr Laski:

He said I would be starting a new job in Cobram in a meat factory on Monday. I said that Rad had told me that I would get a job in an aged care rehab centre, at a school or a hospital, but not as a meatworker. He said that if I started in the meat factory, he would show to immigration in the documents that I had worked as a cleaner in a school or a hospital instead of a meat factory. He said that he knows the loopholes and I shouldn't worry about how he does the immigration papers as that’s his job.

44    Mr Azad did not accept the job. On 9 January 2013, he received a further email from Mr Laski which was annexed to his affidavit. In that email, Mr Laski stated:

You attended my office in company of Rohit Pandhi.

Now we started the meeting with you both saying that you wanted to pursue another Visa, not the 187 REGIONAL SPONSORSHIP.

You went on to say you wanted a full refund. (please have a look at your Contract) … You are in fact in breach of your contract, as we did not receive a payment from you on the 22nd 12.

We seek immediate payment of your Overdue Fees, if not received in 7 DAYS WE WILL ISSUE PROCEEDINGS WITHOUT FURTHER NOTICE.

That aside, you should not come in here and threaten me with…Going to the Media, Reporting Clinica to D.I.A.C. and generally going out to ruin my business.

I advise you to seek legal advice before you embark on the above, ask the question OF YOUR ADVISOR, what is the downside for me if I go down this track.

I am not fearful of your threats … the business has been going since 1973. We are well established, AND HAVE A GOOD TRACK RECORD IN FINDIND Jobs & Sponsors.

So bring it on.

…

Let us know in writing (EVEN THROUGH YOUR Legal Advisors) where you would like to go from here. Your file is suspended and will not progress until your fees are brought up to date.

45    Mr Azad did not respond. In March 2013, Mr Azad was served with a complaint filed on 8 March 2013 against him by Clinica in the Magistrates’ Court of Victoria. The Magistrates’ Court complaint was annexed to his affidavit. It sought payment of $11,150 said to be outstanding under the terms of Mr Azad’s regional sponsorship agreement with Clinica, together with legal costs. Mr Azad deposed he then received a lot of letters from debt collection companies, each stating he had to pay around $11,000.

46    In total and to the time of trial, Mr Azad had paid Clinica over $8,000.

Mr Sourab Uppal

47    Mr Uppal is also a former client of Clinica and had previously completed in Melbourne a Certificate III in Hospitality (Patisserie) and a Diploma of Hospitality Management. Mr Uppal deposed that in November 2012 he saw and took a photograph of an advertisement for Clinica on a Melbourne Metro train. A copy of that photograph was annexed to his affidavit. That advertisement stated:

Imagine…Permanent Residency in Just 9 Months

The Quick and Easy Way to Get P.R

We have

Sponsors Employers Jobs

CALL NOW xxxxxxxxxxxx

Clinica Internationale Pty Ltd

Recruitment & Placement Agents

info@clinica.com.au

48    Mr Uppal called the telephone number contained on the advertisement and arranged a meeting later that month with Mr Laski. At that meeting, Mr Uppal deposed Mr Laski told him:

(a)    He would not be able to get me a job as a baker, but could get me a job in asset maintenance;

(b)    He would need copies of my passport, International English Language Testing System results, and Certificate III;

(c)    I would need to do a 20 day asset maintenance course which costs $3,950 and then I would be placed in a job in regional area. The asset maintenance course is a management course. After three months working in a regional area, Rad would lodge my file with a regional certifying body to get regional sponsorship, then he would lodge my visa application. If these two were clear, I would get permanent residency in a total of nine months.

(d)    I would have to work for one employer and stay with that employer for two years. There was an opening for employment for students in regional areas, as no one likes working in a regional area because no one wants to live there.

(e)    Clinica had its own lawyer, so I did not need to hire a lawyer or migration agent to file a permanent residency application.

(f)    The Clinica program would cost about $35,500, paid in instalments. I would first pay $6,000, then 30 days later pay another $6,000. I would pay $3,950 for the asset maintenance course. After I got the Certificate III and had worked for three months Clinica would lodge a nomination with a regional certifying body. At this point I would pay $15,000. Clinica would then lodge the 187 visa application and I would pay $4,500.

(g)    The course fell under technicians and trades. It was on the internet as ‘asset maintenance course’ under technicians and trades, and it would lead to a permanent residency visa.

Rad did not tell me at this meeting that the asset maintenance course was a cleaning course. I found this out at my next meeting with Rad.

49    Mr Laski took notes during the meeting which were given to Mr Uppal, and those notes were annexed to Mr Uppal’s affidavit.

50    On 12 November 2012, Mr Uppal called the Department of Immigration and Citizenship (as it was then known) seeking information about the regional sponsorship scheme, in order to confirm the information provided by Mr Laski. Mr Uppal was given some general information by the Department, and sent an email with links to the relevant parts of the Department’s website. Mr Uppal deposed that on reviewing that information, it appeared to him to be consistent with what Mr Laski had said, including that he needed to get a job in an approved occupation and work for two years in a regional area. Mr Uppal saw that the list of approved occupations for a 187 Visa included “Technicians and Trade Workers” and deposed he was reassured by this as Mr Laski had told him that asset maintenance fell within that category. Mr Uppal made his first payment to Clinica of $2,000 on 19 November 2012. On 24 November 2012, Mr Uppal attended Clinica’s office and signed a contract with Clinica, a copy of which was annexed to his affidavit.

51    Mr Uppal attended the asset maintenance course in December 2012, having first quit his existing job as a courier in order to undertake the course. In January 2013, Mr Laski advised Mr Uppal that Clinica had found him a job with JBS Australia Pty Ltd at its meat processing plant. Mr Uppal accepted the position and commenced on 4 February 2013. It was only upon commencing at JBS that Mr Uppal discovered the work did not involve cleaning. He deposed:

To my horror, the work did not involve cleaning, but rather cutting off the legs of dead goats and sheep. I was working very close to the animals being slaughtered.

I am a Hindu and have been a vegetarian all my life. My experience at JBS was scary and I was very emotional and upset. I was crying during work but I could not stop and talk to management about it, as I was on a production line. When I stopped working for a moment or two, the whole line stopped and people would start yelling at me. The experience was a real shock to me. In our discussions, Rad had always told me that I would be working in asset maintenance, which he later explained was cleaning. He never told me that I would be working in the slaughter floor of an abattoir. I was not mentally prepared to deal with it.

After work that day, I and a group of five or six other clients of Clinica all telephoned Clinica together. We had the mobile on speaker-phone and we all stood around. We spoke to George and then Rad to complain and find out why we were not doing cleaning work. George said that there must have been some mix-up at JBS and that he would sort it out. Rad then said that he did not know what was going on. He promised that George would talk to JBS and get back to us as soon as possible. George did not call us back that day.

The next morning I went with the other men from Clinica to the front of JBS but I could not bring myself to go back inside the abattoir. I told the other men that I could not go back to JBS. No matter how much money I had spent and how much I wanted the permanent residency visa, I could not stand by observing the slaughter of animals. I caught the bus from Cobram and then a train and I went back home to Melbourne.

52    Mr Uppal then called Mr Laski:

I told him that this is not what he had promised me. He had told me that I would be working in the cleaning department. He had not told me that I would be cutting animals. He replied that he did not know anything about it. He said that he would talk to JBS and George about it and get back to me. I was angry and upset and again told him that he should have notified me about what I would be doing at JBS. I said that I had had to leave my wife at home for this job and I did not know when I was coming back. I had to give up my other job and I had already given Clinica all of my savings. I asked him how I was supposed to pay my rent and my bills as I had nothing left. I told him that he had not delivered what he promised. He told me to calm down and that he would find me a job, I just had to give him some time.

53    Instead, on 15 February 2013, Mr Laski emailed several clients including Mr Uppal stating they had behaved unprofessionally in leaving JBS and had “ruined your opportunity for Sponsorship”. Some email correspondence then followed in which Mr Laski offered them a “second chance” to return to work at the meat factory. On 26 February 2013 Mr Uppal declined that offer, stating “[a]s I have completed course in Cleaning as per the contract, I am expecting that you will find me a job in the same field”.

54    Mr Uppal deposed that over the next few weeks he telephoned Mr Laski several times and when he was able to reach him, asked for a refund, which Mr Laski refused. He also tried to call Mr Stamatakos but was unable to reach him. He deposed that on the last occasion he spoke with Mr Laski, in around March 2013:

he told me that I had promised to pay him $35,000 and I had to pay the balance. I told him that I had already paid him $10,000 and would not pay him any more because he did not get me a job. He then said that if I did not pay I would be voiding my contract. He would send a summons to my house and I would have to go to court. These words were very scary to hear. I was very worried that he would sue me.

55    On 17 March 2013, Mr Uppal received an email from Mr Laski. In the email, which was annexed to Mr Uppal’s affidavit, Mr Laski stated:

YOUR CONTRACT WITH CLINICA SIGNED 24TH NOVEMBER 2013 [sic], CLEARLY STATES YOUR PAYMENT SCHEDULE…WHICH YOU HAVE NOT ADHEARED TOO.

YOUR OUTSTANDING AMOUNTS ARE $4000.00. AS AT 27TH NOV 2012…A FURTHER $6000.00. BY FEB 10TH 2013…TOTAL $10,000.00.

If this is not paid by 25th March 2013. We will put a stop on your file for 7 days, after which it will be cancelled and a Summons will be taken out in the Magistrates Court To recover the $10000.00. owed to CLINICA INTERNATIONALE PTY LTD.

YOU ARE CURRENTLY IN BREACH OF YOUR CONTRACT FOR NON-PAYMENT AND ABANDONING YOUR POSITION IS AT JBS (JOB PROVIDED TO YOU) WITHOUT NOTICE.

BEST YOU ADDRESS THE ABOVE ISSUES AS A MATTER OF URGENCY.

56    Mr Uppal deposed he received in April 2013 a copy of a complaint filed against him by Clinica in the Magistrates’ Court of Victoria. The complaint was annexed to his affidavit. It sought payment of $10,000 alleged by Clinica to be outstanding under the regional sponsorship agreement, together with legal costs. Mr Uppal deposed he left Australia around this time as his bridging visa was about to expire.

57    In total, Mr Uppal had paid Clinica $10,000 in three instalments.

58    Each of Messrs Gill, Azad and Uppal gave evidence about the stress, frustration and disappointment which their experiences with Clinica had caused them. Both Mr Gill and Mr Azad had had to borrow significant amounts of money from friends in order to pay Clinica for its services. Mr Gill deposed that he had borrowed $5,000 from a friend, which had taken him a long time to repay and had weighed heavily upon him. Mr Gill described himself as being left very depressed by the whole situation with Clinica. Mr Azad deposed he still owed one friend $3,000, having repaid most of his other friends the money that he borrowed from them. He deposed that he has had a very difficult time financially and moved into a garage with a friend in order to save money, and that after receiving the Magistrates’ Court complaint and letters from debt collectors he has had credit card applications refused on the basis of his poor credit history. None of the men has been able to obtain the permanent residence visa which they had hoped they would secure through the Clinica program.

Witnesses for the respondents

Mr Radovan Laski

59    Mr Laski has made seven affidavits in this proceeding, six of which were read and relied on at hearing. Most of these affidavits were filed in respect of the freezing order, or as a consequence of it. Mr Laski was required for cross-examination, and was cross-examined extensively. I refer below to aspects of that cross-examination, and to specific parts of the evidence reflecting poorly on Mr Laski.

60    Two of the affidavits are expressly made on behalf of Clinica. Mr Laski is the sole director and shareholder of Clinica. In the first affidavit made on Clinica’s behalf, Mr Laski described how the Clinica program came about and the events that followed its commencement. Mr Laski stated that Clinica was established as a company by him in 1974 and from around 2008 he operated a recruitment service through Clinica. He deposed Clinica employed only two people: himself, as its “main employee”, and a secretary who assisted with administrative tasks but did not have any dealings with clients. Mr Laski stated he was the person responsible for day-to-day decision-making about Clinica’s business activities. In this affidavit Mr Laski described how Mr Stamatakos came to be involved in the Clinica program, as I have set out at [33] above.

61    Mr Laski’s evidence was that in late 2011 or early 2012, he met with one Mr Robert Palmer who told him Mr Palmer could get “a lot of jobs” through Mr Palmer’s business called OSSNET (Online Student Support Network). Annexed to his affidavit was a letter from Mr Palmer on OSSNET letterhead describing how the “OSSNET System” worked. That letter, like subsequent OSSNET letters annexed to Mr Laski’s affidavit, bore the following disclaimer:

PLEASE NOTE that OSSNET is not an Immigration Agent or a Job Placement Agency and does not act as an Immigration Agent or Job Placement Agency.

62    Mr Laski stated he agreed to sign Clinica clients up to OSSNET to access job opportunities, with Clinica paying fees to Mr Palmer on behalf of each applicant. He deposed that, however, after a few months, no jobs had been sourced. On 14 April 2012, Mr Palmer sent two letters to Mr Laski which were annexed to Mr Laski’s affidavit. Mr Palmer referred to difficulties in sourcing job placements, and in one letter stated:

I have been working closely with the newly-formed peak industry body CHCA – who represent the ten major employers in the cleaning industry. I have been promised upwards of 5,000 jobs for cleaners (The turnover period for the industry is approximately 24 weeks)

New areas under consideration for the Cleaning Industry include a security clearance and first aid/first responder qualifications.

I am now investigating ways to use employment opportunities in the cleaning area as a stepping stone to further employment in other areas. It may well be that people with other qualifications, say hairdressers, could have gap training/RPL processing to become qualified for work in the Cleaning Industry.

63    Mr Laski deposed that after receiving those letters he had a number of conversations with Mr Palmer in which Mr Palmer stated large cleaning contractors were looking for staff in regional areas and that Clinica clients would have to do a Certificate III in Asset Management and Maintenance. On 4 July 2012, Mr Laski emailed Mr Palmer:

For some time now you have been telling George and myself that there will be a new Category on the Govnments wanted list of skills.

The new category is to be..Cleaning & Maintenance.

You were 100% sure that it would be on the list,so applicants could be given a Cert.lll in it, then move on to a 187 Visa<which replaces the 857 and 119 Visas.

As late as yesterday when we met,I told you it was not listed on the MODL [the Department’s Migration Occupation in Demand List].

You assured me it was,and you had been in discussions with the cleaning industry and Simon Cream M.P.

Please explain the situation in an email to me.

64    Mr Laski deposed he received no response in writing, but instead Mr Palmer called him and stated the asset maintenance course had been approved and there was a special deal between the Government and CHCA that it would come under the ANZSCO classification of “399999 (Technicians and Trade Workers Not Elsewhere Classified)”.

65    Mr Laski deposed he ran this past a lawyer and migration consultant Mr Arthur Vasilopoulos who had an office on the same floor as Clinica, without ever seeking his formal advice. He was told “I don’t see why it wouldn’t work, but I’d need to look into it further”, and did not follow up further. I infer that Mr Arthur Vasilopoulos is the same “Arthur” that Mr Laski told Mr Azad about, in the conversation I have described at [37] of these reasons. What Mr Laski said to Mr Azad was, it seems to me, designed to discourage Mr Azad from contacting the migration agent directly, and designed to encourage Mr Azad to rely on what Mr Laski told him. Relevantly, this included that Arthur would “take care of everything” about the permanent residency application.

66    Mr Laski acknowledged he told prospective clients that Clinica had jobs available and that they could obtain permanent residence visas through the Clinica program. He deposed around September 2012 Mr Vasilopoulos spoke to him again about the Clinica program and said “Sydney reckon it won’t work, it’s not high skilled enough” and that Mr Vasilopoulos needed to review the modules in the asset maintenance course. Mr Laski understood “Sydney” to be a reference to someone in the visa department of the Department of Immigration in Sydney. He told Mr Vasilopoulos to speak to Mr Stamatakos about the course, as it was Mr Stamatakos who was organising it. On the evidence, it is not apparent Mr Laski followed up any further. Mr Laski deposed he did not give any further information about the course to Mr Vasilopoulos and was not aware whether Mr Stamatakos gave him any information. This negative advice from Mr Vasilopoulos did not stop Mr Laski making representations of the kind I have described him making to Mr Azad, nor did it cause Mr Laski to go back to people like Mr Azad and tell them the permanent residency plan apparently would not work.

67    Mr Laski deposed the first asset maintenance course commenced on 22 October 2012 and included 14 Clinica clients. He stated in total 88 Clinica clients completed the course, and annexed to his affidavit a list of those clients obtained from the course provider, the Complex Training Academy. I note this list itself describes each of the clients as having completed a Certificate III in “Cleaning Operations” and not asset maintenance or management.

68    Mr Laski deposed that by October 2012 he had begun to worry that Mr Palmer was not responding to his emails or phone calls following up about jobs for Clinica clients who were about to complete the course. On 11 October 2012, Mr Laski wrote to Mr Palmer and Mr John Ranieri (who had introduced Mr Palmer to Mr Laski) regarding the location of jobs, after jobs in North Sydney had been mentioned to him:

Just like to confirm that these jobs for the 187 Regional Sponsorship Visas must be in Regional Areas.

Also as discussed and made very clear to you, the employers must be agreeable to provide a 2 yr. work contract<out clause after 4 months>basic rates of pay for the skill..$800.00. per week gross plus 9%super ... overtime if available.

NORTH SHORE HOSPITAL IS NOT REGIONAL.

Please explain!!!

69    Later that day, Mr Laski and Mr Stamatakos met with Mr Palmer and Mr Ranieri and ultimately they agreed to try to place some Clinica clients at North Shore Hospital with a view to then transferring them to regional jobs. Mr Stamatakos emailed Mr Ranieri later that day, using Mr Laski’s email account, and a copy of that email was in evidence:

As per discussion today, moving forward we will work towards placing our applicants Regionally. This may mean that the 22nd Oct 12 course applicants go to North Shore Hospital with the view to place them regionally from there.

Confirming you will be speaking to Gordon Mar Monday the 15th October to see if we could possibly reposition our applicants regionally, and future applicants moving forward.

You also made some suggestion that Naz could possibly help on that front.

In order to assist you I have made some call myself to place some of these applicants. Looks quite positive, however your assistance and support is still paramount as we have many applicants.

70    Mr Laski deposed that he was informed by Mr Stamatakos around November 2012 that Mr Ranieri said to Mr Stamatakos that he and Mr Palmer would not conduct any further courses as they could not find jobs. Mr Laski wrote to Mr Palmer on 18 November 2012 in terms which make clear Mr Laski understood Clinica’s exposure to liability for failing to provide jobs to its clients:

Based on representations and statement made on Regional Job Placement.

We are now discovering that we have been misled. The sad part is that you have admitted that you were misled by Dr. Colin Benjamin.<WHOM WE HAD NO DIRECT DEALINGS WITH>

The representations were as follows.....

The candidates had to do a specific course, involving ‘LIFE BE IN IT.’ .. because it had to include First Aide .. (First Response)& Chronic Illnesses and Diseases being the employers requirement.

You had the Employers provided we met your requirements.

On completing the course the candidates would be given a Certificate 111 and then given a job in the Cleaning Industry ... 38 HOURS A WEEK & IN A Regional Area. They would be paid an average salary based on a 38 hour week of about $800.00.,the employer would sign a 2 year contract with a 90 day out clause. Our Registered Migration Agent would prepare the Contract in keeping with the Visa requirements.

The jobs were waiting to be filled; up to 5000 jobs available ... this is what was articulated.

The applicants could apply for a 187 Visa ... Permanent Residency. YOU WERE AWARE OF THIS ... And you are aware of the type of business we are in.

THE OUTCOME .....

We now find that there are no full time jobs in Regional Areas. That you don’t have a suitable Employer and basically it is a case of “So Be It”

The consequences ...... .

If 50 full time jobs are not found in Regional Areas in a very short space of time ... we can be liable for the Applicants loss of wages, until a job is found. If they elect to issue in the Supreme or County Courts, we will join you in the action.

The whole thing seems to be a repeat of the original OSSNET deal. Where you held Ossnet up as the credible entity to find positions for applicants.

As it turned out you were unable to place the Applicants ... giving a feeble excuse that the RTO’S they attended were not credible, and that you were unable to give further details as you would be sued for liable. To date I have paid out $80,000.00. in refunds .. please tell what you intend to do about it.

So Robert I’m putting you on notice, I want you to fix the problem ASAP.

71    Mr Laski clarified in cross-examination that the $80,000 referred to in this letter was not an accurate representation of the amount refunded to Clinica program clients who had undertaken the asset maintenance course, but related to other clients who came to Clinica seeking positions as hairdressers and the like. Mr Laski deposed in a separate affidavit in this proceeding to having issued refunds totalling $16,050 to four clients of the Clinica program (comprising a refund of $1,050 to one client and refunds of $5,000 each to three other clients) and that:

Clinica issued a number of other refunds to clients by cheque, but I can now no longer remember whether these were to clients of the Clinica Program, or to other clients of Clinica, and I did not keep any record that would enable me to identify which of the other client refunds related to the Clinica Program.

72    Mr Laski also emailed Mr Ranieri on 20 November 2012:

Wish to confirm your discussion with George on the 16th November 12, that you and Robert where not going to conduct any further courses at CTA through Life Be In It for the reasons of being unable to find the jobs to all the students through your Jobs Now Program.

Your commitment to place these students still stands and be aware that you and Robert could be looking at up to $800per applicant per week to compensate the applicants for loss of wages.

Just to refresh your memory, we went into this deal based on your undertakings:

1.     Whoever does the course get a job with ISS in a regional area.

2.     If they do not do this particular course they will not be employed by ISS. It looks on the surface that all your doing is creating business and an income for yourselves through running these course, but not been able to deliver the jobs.

3.     [sic]

We are presently trying to find jobs to fulfill our commitment to our clients.

I suggest that you do the same to elevate their losses.

73    He deposed, however, that:

I didn’t stop the Asset Maintenance Courses from running, or stop signing up clients at this time, because I thought Clinica would still be able to find jobs for them.

74    On 4 December 2012, Mr Laski again wrote to Mr Palmer. The email bore the subject line “lack of jobs” and threatened legal action:

Time is marching on. No jobs from you, what happened to the 5000 positions that you claimed were given to Life Be In It.

The main condition was that applicants had to do the Course you stipulated,otherwise they would not get jobs with I.S.S. <THEY HAVE FINISHED THE COURSE>

This course was taken by you ... in some subjects.

In order to Minimise the losses of the Applicants that YOU had promised jobs

for.

I have now been offered jobs for a payment of $3000.00. per position. 15 POSITIONS TO DATE.

The alternative is to pay each applicant $800.00.per week<for every week that they are out of work>.

GREAT CHOICES YOU HAVE LEFT ME WITH??? AND YOU GUYS GOT $1000.00. PER APPLICANT WHO DID THE COURSE.<$27000.00.>

We acted on your representations ... or should I be saying Roberts MISREPRESENTATIONS!!!

This is just to put you on Notice,as we intent to recover these costs from all of you

Once we have established the quantam,we will inform you,and issue a letter of demand.

If the moneies are not paid we will then issue proceedings.

75    What is notably absent from these communications is any acknowledgment of the ongoing damage being done to Clinica’s clients.

76    Mr Laski deposed he started making enquiries in December 2012 to seek to obtain jobs for Clinica clients. In late December 2012 or early January 2013, he met with the operators of the ICM Partnership, which he described as a private investigations company, and offered to pay them $3,000 for each client for whom they could find a regional job with a sponsoring employer. ICM put him in touch with representatives of MISS, a company recruiting for the JBS Australia Pty Ltd meat processing plant in Cobram and Mr Laski deposed:

When I met with MISS representatives, I was told that Clinica clients could get jobs at JBS and that they would be sponsored. I did not seek to confirm this directly with JBS, nor did Clinica or I enter into any written agreement regarding sponsorship of Clinica clients with JBS or with MISS.

77    Mr Laski deposed he then contacted around 10 Clinica clients who had completed an asset maintenance course about the job available at JBS, and that it was then Mr Stamatakos who worked with MISS to arrange the job placements for those clients. He deposed:

I do not recall speaking to Mr Uppal or any other Clinica clients as alleged in paragraphs 49 and 51 of his affidavit, however I do recall attending Cobram in around April or May 2013 and meeting with a group of Clinica clients who had been working at JBS. This occurred after they had contacted me and informed me that on speaking with one of JBS’s human resources officers, they had been told that they were not going to be sponsored for the purposes of obtaining a regional sponsored visa. I told them that I could offer them alternative employment in the meat processing industry in Western Australia with a different company who would sponsor them. They told me they would need to think about it, however I only ever heard back from one of the clients, who said he did not want to go to Western Australia.

Clinica did not provide jobs to any other clients, and none of my other enquiries produced any results in terms of available employment in the cleaning industry or otherwise.

78    Mr Laski acknowledged that he subsequently sought and obtained written legal advice from Visa Law Migration Lawyers, deposing that:

I received the advice from Visa Law dated 26 May 2013, which is annexed to the affidavit of Kimberley Anne Lloyd affirmed 3 August 2015 at annexure ‘KAL-14’, and I believe that I read it at the time. I do not recall what I thought about it at the time. In hindsight I would have sought advice and insisted that other third parties entered into agreements confirming what they had represented to me. I conducted my affairs in the 70s to 80s on the basis that a person’s word was their bond. I trusted Mr Palmer as he was a teacher and educator and had significant experience. I also put my trust in Mr Stamatakos to ensure that the course would be have the sufficient modules and would be CRICOS registered.

79    Ms Lloyd exhibited to one of her affidavits the legal advice by Visa Law dated 26 May 2013, which had been produced to the ACCC by the respondents in response to a notice under ss 155(1)(a) and (b) of the Competition and Consumer Act. The relevant part of its conclusion states:

It would appear to be highly unlikely that a position offered to a graduate of the course CPP3101 – Certificate III in Cleaning Operations could, in the absence of additional qualifications, be classified as that of a Technician or Trade Worker nec. It also seems unlikely that additional specialist qualifications in industrial cleaning or asset maintenance – however described – would be capable of ‘elevating’ the occupation into ANZSCO level 3. Even if such an ‘elevation’ were possible, it is liable to be expressly excluded from the RSMS program by DIAC policy, as is presently the case for ‘Senior Piggery Attendants’. Marketing the course as a way of obtaining permanent residence via the ordinary Direct Entry RSMS route would therefore appear to be inadvisable, as it might reasonably be viewed as misleading. On the other hand, if a labour agreement were in place, then the course might become a viable RSMS pathway.

80    Other affidavits filed by Mr Laski exhibited the financial statements of Clinica and other related companies. The financial statements for Clinica showed gross receipts of $742,818 in the financial year ending June 2013, with an operating profit before income tax of $183,006. Of the company’s expenses in that financial year, by far the largest expense was the line item “consultants fees” of $234,096. Mr Laski deposed that a significant amount of the funds received by Clinica were on-paid to Mr Stamatakos:

I agree that the receipts summarised in annexure KAL52 to the affidavit of Kimberley Lloyd affirmed 15 October 2015 are receipts relating to clients of the Clinica Program.

However, Clinica did not retain all of those funds for its own purposes, and in a number of instances did not receive the funds itself. A significant amount of the funds received by Clinica were on-paid to Mr Stamatakos, and a number of clients of the Clinica Program paid Mr Stamatakos directly. For example, in annexure KAL52, there are a number of notations in the final column that amounts were ‘Paid to Apollo’s Son’. This matches my recollection that many clients paid Mr Stamatakos directly for their course fees of $3,950.

The amounts on-paid to Mr Stamatakos by Clinica were by way of course fees, which was $3,950 per client, and commission, which was $1,000 per client as described in paragraph 23 of my affidavit sworn on 28 September 2015. Usually what would happen, during the time that Mr Stamatakos was assisting in the Clinica Program, was that he would send Clinica an invoice for the course fees or commission using his business name ‘Apollo’s Son’, and I would pay him by cheque. I do not know exactly how much was on-paid to Mr Stamatakos for the Clinica Program, but I estimate that it was well and truly in excess of $100,000.

Now shown to me and marked ‘RML-9’ is an invoice 16 December 2012 from Apollo’s Son to Clinica Internationale for ‘RTO Placement Asset Maintenance’ and ‘Asset Maintenance Course’ [for a sum of $47,000].

Now shown to me and marked ‘RML-10’ are photocopies of a number of cheque butts showing payments of $218,671 to Apollo’s Son during the period May 2012 to June 2013.

81    Annexure KAL52 referred to by Mr Laski is the spreadsheet which Ms Lloyd caused to be prepared summarising receipts relating to clients of the Clinica program to which I have referred at [25]-[26] above. By adding up the amounts in that spreadsheet annotated as being paid or transferred to Apollo’s Son, counsel for the respondents advanced a submission that a sum of $67,737.35 in course fees had been on-paid directly to Mr Stamatakos on top of the fees and commissions paid to him.

82    Mr Laski also deposed to the financial arrangements of Clinica, Swishette, Letore and other related companies, as well as to the assets and liabilities of the respondents and to the trust structures used by Mr Laski and his associates. I deal further with that evidence as relevant in my reasons below.

Ms Tania Laski

83    Ms Tania Laski was previously married to Mr Laski. She was not required for cross-examination. She has sworn one affidavit in this proceeding, in support of the respondents. In that affidavit, Ms Laski deposed to loans that she had made to Mr Laski from time to time in 2011, for use in his business operations. Annexed to her affidavit was a copy of a loan agreement dated 2 February 2011 entered into between herself, Mr Laski and Swishette, under which she agreed to lend $600,000 to Mr Laski, secured by way of a charge over the Brighton property with the proprietor Swishette acting as guarantor. This is a good example from the evidence of the mixing of Mr Laski’s interests with those of the corporate and trust entities he controls, and, it seems to me, Mr Laski causing Swishette to act in breach of its obligations as trustee.

84    Ms Laski deposed that over the last five years, she had lent to Mr Laski a total sum of $275,000 of which a total of $50,000 had been repaid. Annexed to her affidavit were records she said reflected some of these loaned amounts, including:

(1)    An extract from a bank statement, unmarked as to year, showing a withdrawal of $10,000 on 27 April, which Ms Laski deposed she had loaned to Mr Laski on 27 April 2010;

(2)    A record of a telegraphic bank transfer dated 1 October 2014 showing a transfer of $50,000 from Ms Laski to Letore. Ms Laski deposed that this was also a loan to Mr Laski, but without any explanation as to why the funds were received instead by Letore;

(3)    A record of a telegraphic bank transfer dated 10 February 2015 showing a transfer of $105,000 from Ms Laski to Cigmart Australia Pty Ltd. Ms Laski deposed that this was also a loan to Mr Laski, again without explanation as to why the funds were transferred to Cigmart;

(4)    A record of a telegraphic bank transfer dated 15 June 2015 showing a transfer of $50,000 from Ms Laski to Cigmart, said also to be a loan to Mr Laski. Ms Laski deposed that the $50,000 loan monies were needed urgently because tobacco goods were in storage and were incurring customs penalties.

85    Ms Laski deposed that on 9 June 2015 she lodged a caveat over the Brighton property, and, as the property had been sold, she required payment of the total amount outstanding. It was unclear from her evidence whether she alleged this amount was $215,000 (as she stated) or $225,000 (as her other evidence might suggest). Mr Franzese’s evidence, to which I refer below, also put the figure at $215,000. I proceed on the basis of the figure of $215,000. There was no evidence about the status of Ms Laski’s caveat at the time of trial – for example, whether it was discharged on settlement of the sale of the Brighton property, in an apparently arm’s length transaction on 8 September 2015. Whether Ms Laski can and should be recognised as having an equitable interest in the Brighton property, sufficient to support a caveat, was not a matter for determination in this proceeding. In my opinion, there is currently an insufficient evidentiary basis for the Court to be satisfied that Ms Laski should be paid $215,000 in preference to those funds being available to effect refunds to Clinica clients, particularly given that the only affidavit filed by Ms Laski in this proceeding (deposing to the sums she was owed) pre-dates the settlement of Brighton property. In addition, it seems to me there is real doubt about the lawfulness of the offering by Swishette of the Brighton property as security for loans by Ms Laski to Mr Laski. Finally, on the evidence some of the loans were not directly to Mr Laski, but to another corporate entity controlled by him (Cigmart).

86    The ACCC submitted that, given Ms Laski had not been heard in this proceeding, Ms Laski ought to be paid $215,000 out of the frozen funds. However, and despite Mr Laski offering to the Court an undertaking not to receive from Ms Laski any part of that $215,000, given the issues raised by the evidence (such as it is) I am not prepared to make such an order without hearing further from the parties and from Ms Laski because it would cause a significant depletion of the funds that I have decided should otherwise be made available to effect the non-party refunds I have found should be made, as explained in my reasons below. Accordingly, the orders I propose to make direct the parties to file and serve any further submissions and evidence as to the status of Ms Laski’s caveat and the basis of her asserted equitable interest in the Brighton property. The draft orders which the Court will provide to the parties for their consideration also propose that Ms Laski be served with a copy of these reasons and have leave to file any submissions and evidence on this issue.

Mr Prospero Franzese

87    Mr Franzese is the solicitor with carriage of this matter for the respondents and has sworn two affidavits in this proceeding. Mr Franzese was also the legal practitioner responsible for the sale and settlement of the Brighton property. He was not required for cross-examination.

88    In his evidence, he deposed to the sale of the Brighton property for the sum of $1,925,000 by contract dated 4 May 2015. He then deposed to proposals concerning settlement (which by the time of trial had in fact occurred) and his understanding of the proposed disbursement of the settlement monies to be paid to mortgagees and caveators, and in relation to various adjustments. As shown in the title search for the property exhibited to Ms Lloyd’s first affidavit, there were two registered mortgages over the property in favour of the Commonwealth Bank of Australia, securing loans to Swishette and to Clinica. He included in his evidence the claim by Ms Laski as caveator for the sum of $215,000.

Agreed statement of facts

89    The affidavit evidence must be read together with the agreed statement of facts. No submission was made by either party that any of the affidavit evidence was inconsistent with an agreed fact so as to be inadmissible: see s 191(2) of the Evidence Act. Nevertheless, there are certainly matters in Mr Laski’s evidence which might be seen to be inconsistent. Where those matters are relevant to my determination of contraventions, and of the consequential orders that should be made (including the imposition of penalties) I have adhered to the facts as stated in the agreed statement of facts. As I set out below at [158] and [185]-[186], I do not accept that part of Mr Laski’s evidence which attempts to exculpate or mitigate the nature and seriousness of the contravening conduct, or his role in it.

Relevant legislative provisions

90    Section 18 of the ACL imposes the following prohibition:

(1)     A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

(2)     Nothing in Part 3-1 (which is about unfair practices) limits by implication subsection (1).

Note:    For rules relating to representations as to the country of origin of goods, see Part 5-3.

91    Section 29(1)(g) provides that a person must not make a false or misleading representation about the benefits of goods or services:

(1)     A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:

…

(g)     make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; or

…

Note 1: A pecuniary penalty may be imposed for a contravention of this subsection.

Note 2:    For rules relating to representations as to the country of origin of goods, see Part 5-3.

…

92    Section 31 prohibits misleading conduct relating to employment:

A person must not, in relation to employment that is to be, or may be, offered by the person or by another person, engage in conduct that is liable to mislead persons seeking the employment as to:

(a)     the availability, nature, terms or conditions of the employment; or

(b)     any other matter relating to the employment.

Note 1: A pecuniary penalty may be imposed for a contravention of this section.

93    Section 4 of the ACL is relevant to whether a representation is misleading, where that representation deals with a future matter. Section 4 provides:

(1)     If:

(a)     a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act); and

(b)     the person does not have reasonable grounds for making the representation;

the representation is taken, for the purposes of this Schedule, to be misleading.

(2)     For the purposes of applying subsection (1) in relation to a proceeding concerning a representation made with respect to a future matter by:

(a)     a party to the proceeding; or

(b)     any other person;

the party or other person is taken not to have had reasonable grounds for making the representation, unless evidence is adduced to the contrary.

(3)     To avoid doubt, subsection (2) does not:

(a)     have the effect that, merely because such evidence to the contrary is adduced, the person who made the representation is taken to have had reasonable grounds for making the representation; or

(b)     have the effect of placing on any person an onus of proving that the person who made the representation had reasonable grounds for making the representation.

(4)     Subsection (1) does not limit by implication the meaning of a reference in this Schedule to:

(a)     a misleading representation; or

(b)     a representation that is misleading in a material particular; or

(c)     conduct that is misleading or is likely or liable to mislead;

and, in particular, does not imply that a representation that a person makes with respect to any future matter is not misleading merely because the person has reasonable grounds for making the representation.

94    Section 21 of the ACL is a penalty provision dealing with unconscionable conduct in connection with goods and services. It provides:

(1)    A person must not, in trade or commerce, in connection with:

(a)     the supply or possible supply of goods or services to a person (other than a listed public company); or

(b)     the acquisition or possible acquisition of goods or services from a person (other than a listed public company);

engage in conduct that is, in all the circumstances, unconscionable.

(2)    …

(3)     For the purpose of determining whether a person has contravened subsection (1):

(a)     the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

(b)    the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.

(4)    It is the intention of the Parliament that:

(a)    this section is not limited by the unwritten law relating to unconscionable conduct; and

(b)     this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and

(c)     in considering whether conduct to which a contract relates is unconscionable, a court’s consideration of the contract may include consideration of:

(i)     the terms of the contract; and

(ii)     the manner in which and the extent to which the contract is carried out;

and is not limited to consideration of the circumstances relating to formation of the contract.

95    The matters to which a court may have regard for the purposes of s 21 are set out under s 22, which provides:

(1)     Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened section 21 in connection with the supply or possible supply of goods or services to a person (the customer), the court may have regard to:

(a)     the relative strengths of the bargaining positions of the supplier and the customer; and

(b)     whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(c)     whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and

(d)     whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer or a person acting on behalf of the customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and

(e)     the amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier; and

(f)     the extent to which the supplier’s conduct towards the customer was consistent with the supplier’s conduct in similar transactions between the supplier and other like customers; and

(g)     the requirements of any applicable industry code; and

(h)     the requirements of any other industry code, if the customer acted on the reasonable belief that the supplier would comply with that code; and

(i)    the extent to which the supplier unreasonably failed to disclose to the customer:

(i)     any intended conduct of the supplier that might affect the interests of the customer; and

(ii)     any risks to the customer arising from the supplier’s intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and

(j)     if there is a contract between the supplier and the customer for the supply of the goods or services:

(i)     the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and

(ii)     the terms and conditions of the contract; and

(iii)     the conduct of the supplier and the customer in complying with the terms and conditions of the contract; and

(iv)     any conduct that the supplier or the customer engaged in, in connection with their commercial relationship, after they entered into the contract; and

(k)     without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the supply of the goods or services; and

(l)     the extent to which the supplier and the customer acted in good faith.

96    Section 224 of the ACL deals with pecuniary penalties in respect of contraventions of ss 21, 29 and 31. Relevantly, s 224 provides:

(1)     If a court is satisfied that a person:

(a)     has contravened any of the following provisions:

(i)     a provision of Part 2-2 (which is about unconscionable conduct);

(ii)     a provision of Part 3-1 (which is about unfair practices);

…

(c)     has aided, abetted, counselled or procured a person to contravene such a provision; or

…

(e)     has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision;

the court may order the person to pay to the Commonwealth, State or Territory, as the case may be, such pecuniary penalty, in respect of each act or omission by the person to which this section applies, as the court determines to be appropriate.

(2)     In determining the appropriate pecuniary penalty, the court must have regard to all relevant matters including:

(a)     the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission; and

(b)     the circumstances in which the act or omission took place; and

(c)     whether the person has previously been found by a court in proceedings under Chapter 4 or this Part to have engaged in any similar conduct.

…

(4)    If conduct constitutes a contravention of 2 or more provisions referred to in subsection (1)(a):

(a)     a proceeding may be instituted under this Schedule against a person in relation to the contravention of any one or more of the provisions; but

(b)     a person is not liable to more than one pecuniary penalty under this section in respect of the same conduct.

97    In respect of breaches of provisions of Pt 2-2 such as s 21 and of Pt 3-1 such as ss 29 and 31, s 224(3) provides for a maximum penalty of $1.1 million if the person is a body corporate or $220,000 if the person is not a body corporate.

98    Section 227 is relevant to the way in which orders must be expressed where both pecuniary penalty and compensation orders are made and the Court is satisfied the person against whom the orders are made does not have sufficient financial resources to pay both. It provides:

If a court considers that:

(a)     it is appropriate to order a person (the defendant) to pay a pecuniary penalty under section 224 in relation to:

(i)     a contravention of a provision referred to in subsection (1)(a) of that section; or

(ii)     conduct referred to in subsection (1)(b), (c), (d), (e) or (f) of that section that relates to a contravention [of] such a provision; and

(b)     it is appropriate to order the defendant to pay compensation to a person who has suffered loss or damage as result of that contravention or conduct; and

(c)     the defendant does not have sufficient financial resources to pay both the pecuniary penalty and the compensation;

the court must give preference to making an order for compensation.

99    The power to grant injunctions is set out in s 232:

(1)     A court may grant an injunction, in such terms as the court considers appropriate, if the court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute:

(a)     a contravention of a provision of Chapter 2, 3 or 4; or

(b)     attempting to contravene such a provision; or

(c)     aiding, abetting, counselling or procuring a person to contravene such a provision; or

(d)     inducing, or attempting to induce, whether by threats, promises or otherwise, a person to contravene such a provision; or

(e)     being in any way, directly or indirectly, knowingly concerned in, or party to, the contravention by a person of such a provision; or

(f)     conspiring with others to contravene such a provision.

(2)     The court may grant the injunction on application by the regulator or any other person.

(3)     Subsection (1) applies in relation to conduct constituted by applying or relying on, or purporting to apply or rely on, a term of a consumer contract that has been declared under section 250 to be an unfair term as if the conduct were a contravention of a provision of Chapter 2.

(4)     The power of the court to grant an injunction under subsection (1) restraining a person from engaging in conduct may be exercised:

(a)     whether or not it appears to the court that the person intends to engage again, or to continue to engage, in conduct of a kind referred to in that subsection; and

(b)     whether or not the person has previously engaged in conduct of that kind; and

(c)     whether or not there is an imminent danger of substantial damage to any other person if the person engages in conduct of that kind.

(5)     Without limiting subsection (1), the court may grant an injunction under that subsection restraining a person from carrying on a business or supplying goods or services (whether or not as part of, or incidental to, the carrying on of another business):

(a)     for a specified period; or

(b)     except on specified terms and conditions.

(6)     Without limiting subsection (1), the court may grant an injunction under that subsection requiring a person to do any of the following:

(a)     refund money;

(b)     transfer property;

(c)     honour a promise;

(d)     destroy or dispose of goods.

(7)     The power of the court to grant an injunction under subsection (1) requiring a person to do an act or thing may be exercised:

(a)     whether or not it appears to the court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; and

(b)     whether or not the person has previously refused or failed to do that act or thing; and

(c)     whether or not there is an imminent danger of substantial damage to any other person if the person refuses or fails to do that act or thing.

100    Subdivision B of Div 4 of Pt 5-2 of the ACL sets out a process whereby the Court may make orders to redress loss or damage suffered by non-party consumers. As s 241 demonstrates, the redress process is effectively an “opt-in” process for the affected non-party consumers.

101    Section 238 provides:

(1)    If a court finds, in a proceeding instituted under a provision of Chapter 4 or this Chapter (other than this section), that a person (the injured person) who is a party to the proceeding has suffered, or is likely to suffer, loss or damage because of the conduct of another person that:

(a)    was engaged in a contravention of a provision of Chapter 2, 3 or 4; or

(b)    constitutes applying or relying on, or purporting to apply or rely on, a term of a consumer contract that has been declared under section 250 to be an unfair term;

the court may make such order or orders as it thinks appropriate against the person who engaged in the conduct, or a person involved in that conduct.

Note: The orders that the court may make include all or any of the orders set out in section 243.

(2)    The order must be an order that the court considers will:

(a)    compensate the injured person in whole or in part for the loss or damage; or

(b)    prevent or reduce the loss or damage.

102    Sections 239, 240 and 241 provide:

239     Orders to redress etc. loss or damage suffered by non-party consumers

(1)     If:

(a)     a person:

(i)     engaged in conduct (the contravening conduct) in contravention of a provision of Chapter 2, Part 3-1, Division 2, 3 or 4 of Part 3-2 or Chapter 4; or

(ii)     is a party to a consumer contract who is advantaged by a term (the declared term) of the contract in relation to which a court has made a declaration under section 250; and

(b)     the contravening conduct or declared term caused, or is likely to cause, a class of persons to suffer loss or damage; and

(c)     the class includes persons who are non-party consumers in relation to the contravening conduct or declared term;

a court may, on the application of the regulator, make such order or orders (other than an award of damages) as the court thinks appropriate against a person referred to in subsection (2) of this section.

Note 1:    For applications for an order or orders under this subsection, see section 242.

Note 2: The orders that the court may make include all or any of the orders set out in section 243.

(2)     An order under subsection (1) may be made against:

(a)     if subsection (1)(a)(i) applies—the person who engaged in the contravening conduct, or a person involved in that conduct; or

(b)     if subsection (1)(a)(ii) applies—a party to the contract who is advantaged by the declared term.

(3)     The order must be an order that the court considers will:

(a)     redress, in whole or in part, the loss or damage suffered by the non-party consumers in relation to the contravening conduct or declared term; or

(b)     prevent or reduce the loss or damage suffered, or likely to be suffered, by the non-party consumers in relation to the contravening conduct or declared term.

(4)     An application under subsection (1) may be made at any time within 6 years after the day on which:

(a)     if subsection (1)(a)(i) applies—the cause of action that relates to the contravening conduct accrued; or

(b)     if subsection (1)(a)(ii) applies—the declaration is made.

240     Determining whether to make a redress order etc. for non-party consumers

(1)     In determining whether to make an order under section 239(1) against a person referred to in section 239(2)(a), the court may have regard to the conduct of the person, and of the non-party consumers in relation to the contravening conduct, since the contravention occurred.

(2)     In determining whether to make an order under section 239(1) against a person referred to in section 239(2)(b), the court may have regard to the conduct of the person, and of the non-party consumers in relation to the declared term, since the declaration was made.

(3)     In determining whether to make an order under section 239(1), the court need not make a finding about either of the following matters:

(a)     which persons are non-party consumers in relation to the contravening conduct or declared term;

(b)     the nature of the loss or damage suffered, or likely to be suffered, by such persons.

241     When a non-party consumer is bound by a redress order etc.

(1)     A non-party consumer is bound by an order made under section 239(1) against a person if:

(a)     the loss or damage suffered, or likely to be suffered, by the non-party consumer in relation to the contravening conduct, or the declared term, to which the order relates has been redressed, prevented or reduced in accordance with the order; and

(b)     the non-party consumer has accepted the redress, prevention or reduction.

(2)     Any other order made under section 239(1) that relates to that loss or damage has no effect in relation to the non-party consumer.

(3)     Despite any other provision of:

(a)     this Schedule; or

(b)     any other law of the Commonwealth, or a State or a Territory;

no claim, action or demand may be made or taken against the person by the non-party consumer in relation to that loss or damage.

103    Section 243 sets out examples of the kinds of orders that may be made under s 239(1):

Without limiting section 237(1), 238(1) or 239(1), the orders that a court may make under any of those sections against a person (the respondent) include all or any of the following:

(a)     an order declaring the whole or any part of a contract made between the respondent and a person (the injured person) who suffered, or is likely to suffer, the loss or damage referred to in that section, or of a collateral arrangement relating to such a contract:

(i)     to be void; and

(ii)     if the court thinks fit—to have been void ab initio or void at all times on and after such date as is specified in the order (which may be a date that is before the date on which the order is made);

(b)     an order:

(i)     varying such a contract or arrangement in such manner as is specified in the order; and

(ii)     if the court thinks fit—declaring the contract or arrangement to have had effect as so varied on and after such date as is specified in the order (which may be a date that is before the date on which the order is made);

(c)     an order refusing to enforce any or all of the provisions of such a contract or arrangement;

(d)     an order directing the respondent to refund money or return property to the injured person;

(e)     except if the order is to be made under section 239(1)—an order directing the respondent to pay the injured person the amount of the loss or damage;

(f)     an order directing the respondent, at his or her own expense, to repair, or provide parts for, goods that had been supplied by the respondent to the injured person;

(g)     an order directing the respondent, at his or her own expense, to supply specified services to the injured person;

(h)     an order, in relation to an instrument creating or transferring an interest in land, directing the respondent to execute an instrument that:

(i)     varies, or has the effect of varying, the first mentioned instrument; or

(ii)     terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the first mentioned instrument.

104    Disqualification orders are also available. Section 248 provides:

(1)     A court may, on application of the regulator, make an order disqualifying a person from managing corporations for a period that the court considers appropriate if:

(a)     the court is satisfied that the person has contravened, has attempted to contravene or has been involved in a contravention of any of the following provisions:

(i)     a provision of Part 2‑2 (which is about unconscionable conduct);

(ii)     a provision of Part 3‑1 (which is about unfair practices);

… and

(b)     the court is satisfied that the disqualification is justified.

Note:    Section 206EA of the Corporations Act 2001 provides that a person is disqualified from managing corporations if a court order is in force under this section. That Act contains various consequences for persons so disqualified.

(2)     In determining under subsection (1) whether the disqualification is justified, the court may have regard to:

(a)     the person’s conduct in relation to the management, business or property of any corporation; and

(b)     any other matters that the court considers appropriate.

(3)     If the court makes an order under subsection (1), the regulator must:

(a)     notify ASIC; and

(b)     give ASIC a copy of any such order.

Note:    ASIC must keep a register of persons who have been disqualified from managing corporations: see section 1274AA of the Corporations Act 2001.

(4)     For the purposes of this Schedule (other than this section or section 249), an order under this section is not a penalty.

105    The term “involved”, for the purposes of determining whether a person is “involved” in a contravention carries the following meaning set out in s 2 of the ACL:

involved: a person is involved, in a contravention of a provision of this Schedule or in conduct that constitutes such a contravention, if the person:

(a)     has aided, abetted, counselled or procured the contravention; or

(b)     has induced, whether by threats or promises or otherwise, the contravention; or

(c)     has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or

(d)     has conspired with others to effect the contravention.

106    It is unnecessary to set out the relevant provisions of the Migration Regulations as the parties are agreed on their relevance and effect. I refer to them below where necessary.

Conduct constituting the contraventions

107    The respondents have admitted contraventions by Clinica of ss 18, 29(1)(g) and 31 of the ACL in respect of the representations made by the respondents relating to permanent residency and the availability of regional cleaning jobs. The respondents have admitted Mr Laski’s involvement in those contraventions. The conduct to which the admissions relate is set out at paragraphs 6-7 and 9-13 of the agreed statement of facts. The respondents have also admitted unconscionable conduct in breach of s 21 in respect of those representations in a context where Clinica knew of its clients’ vulnerability and of the unavailability of regional cleaning jobs or permanent residence visas through the Clinica program. Mr Laski’s involvement in the unconscionable conduct is also admitted.

108    The conduct to which the admissions relate begins with the placing of advertisements by Clinica in Melbourne newspapers and on Melbourne Metro trains between approximately August 2012 and May 2013. Copies of those advertisements were in evidence, and included statements that:

    “We have sponsors and jobs available in Regional areas throughout Australia that will qualify you for Permanent Residency”;

    “You can achieve unconditional PR in 9 months”;

    “You need a Certificate III”;

    “Imagine … Permanent Residency in Just 9 Months. The Quick and Easy Way to get P.R.”

109    As the evidence of Messrs Azad, Uppal and Gill revealed, individuals contacted Clinica including in response to those advertisements, and met with either Mr Laski or Mr Stamatakos who was acting as an agent for Clinica, subject to Mr Laski’s oversight. During those meetings, additional representations were made by Mr Laski or Mr Stamatakos that Clinica had cleaning or “asset maintenance” jobs in regional areas lined up and available for clients, and if the client engaged Clinica as a recruitment consultant, completed the “Certificate III” cleaning course and worked in the cleaning job the client would qualify for permanent residence under a 187 Visa.

110    In total, approximately 90 clients signed up to the Clinica program by executing a “regional sponsorship agreement”. Examples of these agreements (which were in common form) were in evidence before me. They included the following terms and representations:

(1)    Clinica had the necessary expertise in the recruitment field and was a recruitment consultant (recitals);

(2)    Clinica had agreed to find the client an employer to sponsor the client under the regional sponsorship visa (subclass 187), with the intention that the client apply for permanent residence (recitals);

(3)    Clinica had agreed to provide the recruitment consultancy services and would procure a qualifying employer to employ the client under the regional sponsorship visa in accordance with the rules and regulations of the Department of Immigration and Citizenship (cl 1);

(4)    Clinica would assist the client to find employment in asset maintenance, alternatively to find employment, so that the client might qualify to apply for a 187 Visa (cl 2.1(a));

(5)    Clinica had agreed to provide the client employment for a period of two years in a regional area nominated by Clinica, as defined by the Department of Immigration and Citizenship (cl 2.1(b));

(6)    Clinica had agreed to instruct and liaise with a registered migration agent in relation to a regional sponsorship visa application or for any other immigration advice (cl 2.1(d));

(7)    in the event that the client cancelled their application, a $5,000 cancellation fee would be payable to Clinica (cl 2.1(g)), although I note this clause did not appear in all of the agreements in evidence before me; and

(8)    the client would pay Clinica fees in instalments for the provision of recruitment services, totalling between $30,000 and $40,000 (but in one case $47,500), which would include all migration agent fees, visa application fees, government charges and GST (cl 3.1).

111    Once they had signed their regional sponsorship agreements, Clinica’s clients then paid the fees set out in the agreements by instalments to Clinica. Some of the receipts were in evidence before me, and the receipting practice was subject to an agreed fact between the parties. The receipts described the services in respect of which the instalment had been paid in various ways, such as “Regional Sponsorship”; “Finding you employment in a Regional Area and finding you a Regional Sponsorship”; “Instructing a Registered Migration Agent on your behalf”; “Having all documentation processed and approved in conjunction with the Registered Migration Agent” and “Asset Maintenance Course”.

112    In common with some of the evidence given by Messrs Azad, Uppal and Gill about what they were told orally, the receipts also typically included notations stating that if payments were not made when due, the client’s file would be cancelled, and if the clients chose to cancel their application, a cancellation fee of $5,000 would be payable.

113    What happened bore little or no resemblance to what clients had been promised, and what they had paid for. It is fair to say that the evidence suggested most clients did have the opportunity to undertake an “asset management course” run by the Complex Training Academy for Clinica and Mr Laski. This was, in fact, a cleaning course. As the evidence from Messrs Azad, Uppal and Gill demonstrated, many Clinica clients were led to believe the course was something else altogether. Calling it an “asset maintenance course” was in itself misleading, and certainly led clients such as Mr Uppal to more readily accept one of the other misrepresentations: namely, that this was a course that would lead to an approved occupation in the 187 Visa category of “Technicians and Trade Workers”: see [50] above.

114    The evidence disclosed that between approximately April and December 2012 Mr Laski was in contact with Mr Palmer from OSSNET about the supply of cleaning jobs as the men had agreed. No such jobs eventuated; Mr Laski complained to Mr Palmer about this by email. Despite Mr Laski’s complaints, and his state of knowledge about the unavailability of any such jobs, he, through Clinica, continued to sign clients up to the regional sponsorship agreements, to enrol them in the cleaning course, and to make demands that they pay their instalment payments on time, and to accept those instalments, chasing defaulting clients with vigour and rudeness.

115    Instead of the work promised to them, Mr Laski secured for some of Clinica’s clients (approximately 10, including the three who gave evidence in this proceeding) jobs at an abattoir, where their employer would be JBS Australia Pty Ltd.

116    As I have noted at [24] above, Ms Lloyd’s evidence supports a finding that at least 97 individuals participated in the Clinica program and paid money to Clinica on the basis of misrepresentations made.

117    None of the Clinica clients who completed the cleaning course was placed in employment in the cleaning industry. None other than the approximately 10 individuals who were offered a job at the abattoir received any employment placement at all.

118    There was no basis in fact for the representation made that clients who completed the cleaning course would be placed in cleaning jobs after completing the course and as the start of their pathway to a 187 Visa. From the evidence, I am satisfied there was never any likelihood of such jobs being available at the time Clinica made the representation and entered into the regional sponsorship agreements. None of the emails between Mr Laski and Mr Palmer reveal anything but chaotic and half-hearted attempts to organise such employment.

119    Astonishingly, and a matter which I consider aggravates the contravening conduct, in around March and April 2013, Clinica commenced proceedings against six clients in the Magistrates’ Court of Victoria for breach of contract, claiming amounts of up to $11,700 plus costs and interest. Given the clients’ dire and precarious circumstances and lack of knowledge about Australian law and legal procedures, it is unsurprising (but deserving of opprobrium) that Clinica obtained default judgments in those proceedings.

120    I turn now to the abject failure, and falsity, of the migration aspects of this scheme.

121    On the evidence Mr Laski did not seek any migration advice about the scheme until December 2012. Prior to that, he had spoken only in a perfunctory way about the scheme in July or August 2012 with a neighbouring lawyer and migration consultant in his commercial building, Mr Vasilopoulos, from whom he acknowledged he did not seek any formal advice. As I have noted, the perfunctory conversation with Mr Vasilopoulos was however used by Mr Laski as part of his persuasive tactics with potential clients such as Mr Azad. About a month after the first advertisements were placed for the scheme, including content which made the representations responsible for drawing clients into the scheme in the first place, the prospect of permanent residency visas in Australia, Mr Vasilopoulos spoke again to Mr Laski, as I have outlined in [66] above, telling him in effect that the scheme was unlikely to work. There is no evidence of any further contact with Mr Vasilopoulos, and it does not appear he was ever formally retained to provide advice. In December 2012 Clinica contacted Visa Law Migration Lawyers, to see whether the cleaning course completed by Clinica’s clients could be used as the basis for skilled migration. It was an agreed fact that this was the first occasion on which Clinica had contacted a migration lawyer regarding the legal viability of the Clinica program. No advice was received at that time, although annexed to Ms Lloyd’s first affidavit was an email from the firm seeking payment of legal fees for the work by the end of January 2013. It is not apparent on the evidence whether Clinica paid Visa Law Migration Lawyers at that time. I infer Clinica did not, as a later email from Visa Law on 23 April 2013 acknowledges receipt of a cheque dated 17 April.

122    Therefore, at a time after many clients had signed the regional sponsorship agreements, paid various instalments, and undertaken the cleaning course, neither Clinica nor Mr Laski had sought any advice from appropriately qualified people that the Clinica clients would indeed be able to secure the visas they had been promised.

123    Finally in April 2013 (well after many clients had completed the course and paid several instalments to Clinica, but had not received the promised employment), Clinica again sought legal advice from Visa Law whether the cleaning course completed by Clinica’s clients could be used as the basis for skilled migration.

124    Written advice was received towards the end of May 2013, the substance of which was that Clinica’s scheme was “highly unlikely” to enable a person who did not have permanent residence status to qualify for permanent residence in Australia. Visa Law advised Clinica that marketing its program as a way of obtaining permanent residence therefore appeared to be “inadvisable”, as it “might reasonably be viewed as misleading”.

125    Mr Laski received that written advice and his evidence was that he believed that he read it at the time.

126    The advice did not deter Mr Laski from continuing Clinica’s advertising and marketing of the scheme, nor did it deter him, on behalf of Clinica, from executing or authorising the execution of further regional sponsorship agreements with unsuspecting new clients who wanted to find a pathway to permanent residence.

127    Visa Law’s advice was obviously correct. It was at all material times a criterion for a 187 Visa (see cl 187.233(1) of Sch 2 of the Migration Regulations) that the visa application relate to a position which meets the requirements of reg 5.19(4)(h)(ii) of the Migration Regulations. As Ms McKirdy’s evidence revealed, the nominated position must correspond to the tasks or qualification for occupations of skill levels 1, 2 or 3 under the Australian and New Zealand Standard Classification of Occupations. At all times, the occupation of a cleaner was classified in the ANZSCO as a skill level 5 occupation, and thus outside the criterion in the Regulations. Further, even if an application was made relying on the “catch all” of ANZSCO code 399999, Ms McKirdy’s evidence was that in accordance with the Department’s Procedures and Advice Manual, a nomination where the tasks to be performed related to asset maintenance or cleaning (regardless of the completion of a Certificate III asset maintenance or cleaning course) would be rejected.

128    Accordingly, Clinica’s advertised program did not entitle, and could never have entitled, its clients to apply for a 187 Visa.

Findings: Misleading and deceptive conduct and representations

129    I make the following findings based on the evidence before me.

130    Through advertisements between approximately August 2012 and May 2013 and in subsequent conversations with and documents provided to individuals who contacted Clinica, the respondents made several representations relating to the availability of permanent residence through 187 Visas to existing or potential Clinica clients, and other members of the public. Those representations were:

(1)    by engaging Clinica as a recruitment consultant, pursuant to its program, a person who did not have permanent residence status could obtain a job that would or could qualify him or her for permanent residence in Australia, or qualify him or her for permanent residence in Australia within nine months, under the 187 Visa;

(2)    by completing a cleaning course offered by Clinica, a person who did not have permanent residence status could obtain a job that would or could qualify him or her for permanent residence in Australia, under the 187 Visa; and

(3)    by working in a cleaning job pursuant to the program run by Clinica, or alternatively by working in a cleaning job, a person who did not have permanent residence status would or could qualify for permanent residence in Australia, or qualify for permanent residence in Australia within nine months, under the 187 Visa.

131    Each of the representations was false or misleading, because there were no jobs available through Clinica (whether directly or indirectly) that would or could qualify the client for permanent residence in Australia under the 187 Visa. Nor were there any such pathways which could be completed within nine months. But more importantly, there was no such pathway available at all, and no client was able to qualify for a permanent residence visa through any aspect of the Clinica program, for which clients had paid considerable amounts of money. No client who paid Clinica the fees it sought (or part thereof) qualified for permanent residence or obtained a visa through or because of the Clinica program.

132    Through advertisements between approximately August 2012 and May 2013 and in subsequent conversations and documents provided by Clinica, the respondents made several representations to existing or potential Clinica clients, and other members of the public, relating to the availability of regional cleaning jobs. Those representations were:

(1)    that Clinica had cleaning jobs, with sponsoring employers in regional areas, available for the clients that participated in the Clinica program; and

(2)    at the conclusion by the clients of the cleaning course, Clinica would have cleaning jobs, with sponsoring employers in regional areas, available for the clients that participated in the Clinica program and Clinica would place the clients in cleaning jobs.

133    In addition to the advertisements set out earlier in these reasons, examples of those representations appeared in emails from Mr Laski to clients tendered in evidence by the ACCC. In one such email sent on 24 September 2012, Mr Laski stated:

You have a place (one of twelve positions) in this course, however you must pay the course fee of $3,850 no later than the 8th October 2012. Once the course finishes you must be prepared to go to work, it will be on a 2 year contract at a minimum of about $800 per week (overtime will be available) for a 38 hour week.

The employer is a multinational company and has pre approval from the authority.

Initially the jobs will be available in Regional Victoria and New South Wales, we believe Victorian Regional areas will be rezoned, for example Dandenong may be considered regional.

This pathway will accelerate your Permanent Residency process, whereby decision ready could be as early as 7 month.

134    In another email, sent on 25 September 2012 in response to an inquiry from a client, Mr Laski stated:

3 weeks..in Melb. City. Start work a day after you finish the course…$800pw.

135    Each of the representations was false or misleading, because Clinica never had any cleaning jobs available for its clients, let alone sponsored positions in regional areas. It did not provide any cleaning jobs to any of the clients who signed a regional sponsorship agreement. At the most, to a small number of its clients, it offered a job in an abattoir for which the individuals had not been trained, and which (at least in one case) caused considerable distress by reason of what the client had to witness, and was expected to do, in that abattoir.

136    Clinica thereby engaged in conduct, in trade or commerce, that was misleading or deceptive, in contravention of s 18 of the ACL.

137    Each of the representations to which I have referred was made by Clinica in trade or commerce, in connection with the supply, possible supply, or promotion of the supply of services, and was false or misleading as to the existence of approval, performance characteristics, uses or benefits of the services, in contravention of s 29(1)(g) of the ACL.

138    Clinica thereby engaged in conduct, in relation to employment (namely, cleaning jobs), that was liable to mislead persons seeking the employment as to the availability of the employment and whether it would, or could, qualify the person for permanent residence in Australia, in contravention of s 31 of the ACL.

Findings: Unconscionable conduct

139    I have made findings about the contravening conduct at [107]-[128] above. In my opinion viewed in totality and having regard to the surrounding circumstances, which I set out below, that conduct is unconscionable within the meaning of s 21(1) of the ACL, read with the factors set out in s 22(1). The aspects of the conduct which should be especially emphasised in terms of its characterisation as unconscionable are the following.

140    Despite its knowledge about the unavailability of cleaning jobs, and the complete lack of certainty about the path to permanent residence, Clinica imposed a condition on those who signed regional sponsorship agreements that it would not continue to offer its services and would not provide a refund, if payments were not made when due. The contractual terms were harsh, typically including a condition that if a client cancelled, there was a $5,000 cancellation fee. Its dogged pursuit of financial advantage for itself extended to making threatening demands on clients who defaulted on payment of fees or instalments, including threatening to commence legal proceedings. In relation to this vulnerable client group, with the characteristics I have found at [32]-[58] above, that threat was especially pernicious. Even worse was the actual commencement of proceedings against individual clients, in circumstances where, as I have found, Clinica knew it could not, and did not, perform its own obligations under the regional sponsorship agreements. Added to this were the threats to report individuals to the Department of Immigration, which were no doubt calculated to cause particular alarm to this client group and force them to continue to pay Clinica and stay in the scheme.

141    I accept that there were at least three states of mind, or knowledge, relevant to this contravention. First Clinica knew the key characteristics of the potential and then actual individuals who would be interested in this program, and how those characteristics made them vulnerable. They were all non-citizens with uncertain migration status in Australia (on temporary visas) who were seeking to obtain more secure migration status through permanent residence visas. They needed to do this with some urgency, before their temporary visas expired. I infer that many were relatively young, none had English as a first language, at least some lacked any apparent commercial experience, none had any legal background or previous experience that would assist them in understanding contractual or other legal documents, and the vast majority were not offered, nor did they receive, any independent legal or other advice (including migration advice) about whether they should enter into the regional sponsorship agreements. I find that Clinica knew these people were in a substantially weaker bargaining position and vulnerable for that reason.

142    Second, for a smaller but substantial part of the August 2012 to July 2013 period Clinica had actual knowledge that it had no access to jobs the cleaning industry for the clients signing regional sponsorship agreements. Despite this, it did not stop advertising and marketing the program, nor signing on new clients or pressing existing clients for ongoing payments. Completely inadequate inquiries were made about where and how cleaning jobs might be secured, and no information to suggest such jobs were in fact available was ever obtained by Clinica. Any inadequate inquiries that were made occurred while Clinica continued to advertise the program, engage new clients and pressure existing clients.

143    Third, the findings I have made at [121]-[128] above about the migration advice (or lack of it) sought by Clinica makes it clear that from approximately September 2012 (that is, one month after Clinica began advertising the program and making contracts available to clients) Clinica was on notice that its proposed scheme wouldn’t work because the cleaning jobs were not high skilled enough. There is no evidence that anyone from Clinica or on its behalf provided further information to any migration agent, or followed up any inquiries to have this position clarified until April 2013. Then, in late May 2013, Clinica was made aware that its program would not qualify any of its clients, present or future, for permanent residence visas. Nevertheless, it continued offering the cleaning course, signing people up to regional sponsorship agreements, receiving monies, and demanding outstanding instalment payments – all for a program it knew, by May 2013, would not deliver for those clients what they had agreed to pay for.

144    In Australian Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90 at [23] Allsop CJ said:

The task of the Court is the evaluation of the facts by reference to a normative standard of conscience. That normative standard is permeated with accepted and acceptable community values. In some contexts, such values are contestable. Here, however, they can be seen to be honesty and fairness in the dealing with consumers. The content of those values is not solely governed by the legislature, but the legislature may illuminate, elaborate and develop those norms and values by the act of legislating, and thus standard setting. The existence of State legislation directed to elements of fairness is a fact to be taken into account. It assists the Court in appreciating some aspects of the publicly recognised content of fairness, without in any way constricting it. Values, norms and community expectations can develop and change over time. Customary morality develops “silently and unconsciously from one age to another”, shaping law and legal values: Cardozo, The Nature of the Judicial Process (Newhaven, Yale University Press, 1921) pp 104-105. These laws of the States and the operative provisions of the ACL reinforce the recognised societal values and expectations that consumers will be dealt with honestly, fairly and without deception or unfair pressure. These considerations are central to the evaluation of the facts by reference to the operative norm of required conscionable conduct.

145    Given the features of Clinica’s conduct which I have set out above, in no way can it be said there was any honesty or fairness by Clinica towards those who approached it and signed regional sponsorship agreements in the expectation of obtaining permanent residence after having paid over what were, to most of them, enormous sums of money that they had to gather in difficult circumstances. Instead, there was deception, duplicity, harassment and considerable undue pressure. Not only to pay further money where nothing like the services for which individuals had contracted had been provided, but also to report people to the Department of Immigration, to take legal proceedings against them and to pressure them into working in jobs in an abattoir which was in some circumstances completely contrary to their religious beliefs and sensitivities, and in all cases contrary to the representations made to them which induced them to enter into agreements with Clinica in the first place.

Findings: Mr Laski’s involvement

146    Recalling the meaning of “involved in” a contravention set out in s 2(1) of the ACL, there is no doubt whatsoever that Mr Laski’s conduct falls within this meaning. I am satisfied his conduct falls within ss 224(1)(c) and (e) and ss 232(1)(c) and (e) of the ACL.

147    Mr Laski was at all material times the managing director and controlling mind of Clinica. He ran the company, I find, for his own purposes and in the way he saw fit. There was no other person who had any material contribution into the way Clinica operated and the schemes or ventures it undertook. Mr Laski not only knew of Clinica’s conduct: he was almost entirely responsible for it and supervised and authorised the conduct of Mr Stamatakos on behalf of Clinica. He knew of all the circumstances which gave the conduct its misleading and unconscionable characteristics, because it was he who was attempting to see how cleaning jobs might be sourced, and it was he who decided whether or not to secure migration advice. See generally: Yorke v Lucas [1985] HCA 65; 158 CLR 661 at 667-671; Quinlivan v Australian Competition and Consumer Commission [2004] FCAFC 175; 160 FCR 1 at [9]. It was Mr Laski who was told in September 2012 that the migration agent he had consulted thought Clinica’s scheme wouldn’t work. He was the key participant in all of the conduct: see Sent v Jet Corporation of Australia Pty Ltd [1984] FCA 178; 2 FCR 201 at 207-8.

148    The respondents have admitted that from November 2012 Mr Laski had actual knowledge that Clinica did not have any cleaning jobs for clients and from at least 26 May 2013, Mr Laski had actual knowledge that the Clinica program could not enable a client to qualify for permanent residence in Australia.

149    Although I accept the applicant’s submissions that it is not necessary to prove that Mr Laski actually knew that Clinica’s conduct was misleading, false and unconscionable, I am satisfied that he did know that what Clinica was doing was misleading and deceptive. I doubt Mr Laski recognised it was unconscionable: I am not persuaded he is capable of recognising unconscionability in relation to his own conduct, or where his interests are affected. In anything related to his business dealings he considers he is entitled to act, in my opinion, in whatever way is necessary to advance the ends he seeks to achieve.

Conclusions on contraventions

150    This was a scheme aimed at vulnerable people, desperate to gain secure migration status in Australia. It was a scheme promoted, advertised and conducted on the basis that people would secure a permanent residence visa. That is why large sums of money could be charged, and were paid. That is why people such as Messrs Uppal, Azad and Gill begged and borrowed, and worked long hours, to put together the instalment payments. The prize which they had been led to believe awaited them was an Australian permanent residence visa. Conveying the value of that migration status to those in the Australian community fortunate enough never to have had to be concerned about not being able to stay in Australia is not an easy exercise. It is something most people take for granted. To those who do not have it, it is precious. The way Clinica and Mr Laski preyed on the dreams of people about obtaining secure and long term residency and employment in Australia, is one of the features of this scheme most deserving of the Court’s condemnation.

Relief sought and not contested

151    As part of the orders made at the pre-trial conference in this proceeding, the ACCC was to file a proposed form of order as to final relief, and the respondents had an opportunity to propose any amendments. Through that process, it became apparent in the lead-up to trial that, just as there was agreement as to certain contraventions, the scope of the parties’ dispute about appropriate relief had narrowed significantly. In particular:

(1)    The parties were agreed as to the form of declaratory relief sought from the Court;

(2)    The respondents agreed that injunctions under s 232 of the ACL should be made against both respondents, but contested the breadth of the conduct to be covered by that injunction, in particular as to how much of Mr Laski’s future conduct in respect of related companies can or should be the subject of interlocutory orders;

(3)    The respondents did not contest that Mr Laski should be disqualified under s 248 of the ACL from managing corporations, but submitted the disqualification period should be for three years and not five as was sought by the ACCC;

(4)    The respondents did not contest orders declaring each regional sponsorship agreement between Clinica and its clients void ab initio; requiring the respondents jointly and severally to refund to Clinica clients any moneys paid under, referable to or otherwise used in relation to those agreements, the Clinica program or the cleaning course; and requiring the respondents to discontinue all proceedings on foot against clients to recover such moneys;

(5)    The respondents contested that funds from the sale of the Brighton property, which were the subject of freezing orders made earlier in this proceeding, should be withdrawn and paid to effect refunds to Clinica clients who had made payments in respect of regional sponsorship agreements, and as a consequence opposed any orders setting out a mechanism by which the ACCC would establish a process for clients to claim refunds out of the Brighton property settlement funds held in the trust account of the ACCC’s solicitors; and

(6)    The respondents did not contest an order that pecuniary penalties be paid by each respondent to the Commonwealth, although in submissions the parties emphasised different factors relevant to the assessment of penalty. Consistent with the decision of the Full Court of this Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; 229 FCR 331 at the oral hearing the parties did not address the Court on any proposed figure or range for the quantum of penalty. The position has since changed, and the ACCC’s further submissions are set out below. The respondents did not file any further submissions as to penalty pursuant to the grant of leave by the Court to do so.

152    Thus, the real debate between the parties at hearing was restricted to:

(1)    the extent of the penalties which should be imposed on both respondents;

(2)    the breadth of the injunctions sought by the ACCC;

(3)    the length of the disqualification period to be imposed on Mr Laski;

(4)    whether orders should be made which will reach, and preserve access to, the (currently frozen) funds from the sale of the Brighton property so that they be available to non-party consumers to satisfy other orders made, or alternatively whether the freezing orders preserving those funds ought continue.

153    Accordingly I have made the declarations sought, with some minor variations from the form in which they were submitted by the ACCC and agreed to by the respondents. I am satisfied they are appropriately and adequately particularised in relation to each contravention of the ACL: see BMW Australia Ltd v Australian Competition and Consumer Commission [2004] FCAFC 167; 207 ALR 452 at [35], applying Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75; 216 CLR 53 at [90]. Declaratory relief is appropriate to inform consumers of the respondents’ contravening conduct: Australian Competition and Consumer Commission v The Construction, Forestry, Mining and Energy Union [2006] FCA 1730; ATPR 42-140 at [6]. I am also satisfied it is appropriate for each regional sponsorship agreement between Clinica and its clients to be declared void ab initio, and that orders should be made requiring the respondents jointly and severally to refund to those clients any moneys paid in relation to those agreements. I am further satisfied that the orders proposed in respect of proceedings for the recovery of moneys under the agreements or in relation to the Clinica program or cleaning course should be made. Such orders will, I consider, go at least some way to redressing the loss and damage suffered by Clinica’s clients, a matter about which I must be satisfied under s 239(3). I am also satisfied, for the purposes of s 239(3)(b), that declaring the agreements void will prevent or reduce any further loss and damage to Clinica clients which may be caused by currently unresolved debt proceedings in the Magistrates’ Court instituted by Clinica.

154    After the opportunity to make submissions on penalty as a consequence of the decision of the High Court in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, the ACCC submitted, by reference to its earlier submissions as to the seriousness of the admitted contraventions, that appropriate penalties were as follows:

(1)    in respect of Clinica, a total penalty of $800,000 comprising:

(a)    $200,000 in respect of the contravention of ss 29(1)(g) and 31 of the ACL relating to the representations about permanent residency;

(b)    $200,000 in respect of the contravention of ss 29(1)(g) and 31 of the ACL relating to the representations about the existence of jobs; and

(c)    $400,000 in respect of the contravention of s 21 of the ACL relating to unconscionable conduct; and

(2)    in respect of Mr Laski, a total penalty of $200,000 comprising:

(a)    $60,000 in respect of the contravention of ss 29(1)(g) and 31 of the ACL relating to the representations about permanent residency;

(b)    $60,000 in respect of the contravention of ss 29(1)(g) and 31 of the ACL relating to the representations about the existence of jobs; and

(c)    $80,000 in respect of the contravention of s 21 of the ACL relating to unconscionable conduct.

155    The ACCC submitted the most analogous penalties decision of this Court was that of Rangiah J in Australian Competition and Consumer Commission v Titan Marketing Pty Ltd [2014] FCA 913; ATPR 42-480, which involved allegations of false or misleading representations and unconscionable conduct towards a larger group of vulnerable consumers, who had suffered a lesser detriment (in terms of having paid over smaller sums of money to the respondent, and in terms of Clinica’s clients having wasted valuable time during the brief period in which their temporary residence visas remained in effect). Accordingly, the ACCC submitted that it was appropriate that the penalty awarded against Clinica exceed the $750,000 penalty awarded against the respondent in Titan, and that the penalty against Mr Laski also be significant.

Resolution of contested relief issues

156    While the parties were in agreement regarding the issues addressed in the preceding section, a number of issues relating to relief were contested at the hearing, as noted at [152] above. I turn to address those contested matters. First, the seriousness of the contravening conduct and the respondents’ submissions regarding mitigating factors. Second, whether the contravening conduct should be characterised as a single course of conduct or as several courses of conduct, each capable of giving rise to contraventions. Third, the manner in which Mr Laski has operated his businesses over a number of years, as relevant to the extent of penalties to be imposed upon him and the to the period of his disqualification as a director of companies. Fourth, the quantum of penalties to be imposed on each of Clinica and Mr Laski. Fifth, whether an order should be made under s 227 of the ACL giving preference to the compensation orders made against the respondents over the penalties imposed upon them. Sixth, the extent to which the funds that are currently held on trust by the applicant’s solicitors may be applied to satisfy the compensation and penalty orders in light of various interests that have been asserted in respect of the funds. Seventh, the breadth of the injunctions that should be made restraining the respondents from engaging in future conduct. Eighth, the period for which Mr Laski should be disqualified from managing companies. Finally, I address the orders I propose to make as a result of these reasons for judgment.

Further findings about the seriousness of the contravening conduct

157    I accept the ACCC’s submissions that there are aggravating circumstances attaching to the conduct of Clinica and Mr Laski. The scheme took advantage of the vulnerable nature of the prospective clients, and their desperation to secure employment as a pathway to a visa, surpassed only by their desire for a visa. Clinica, and Mr Laski, promised them these things, in conduct which was calculated and systematic.

158    In his cross-examination Mr Laski sought to cast blame on others – Mr Palmer in particular, but also Mr Stamatakos. Neither he nor Clinica can escape responsibility by blaming others. Clinica continued to promote the scheme, and sign up participants, without having secured any employment for its clients, let alone employment in the areas it held out they would be employed in. Similarly, it continued to promote the scheme, and sign up clients, on the basis they could obtain a 187 Visa, when there was no prospect at all of Clinica delivering that outcome to its clients, although that is what they paid for.

159    Some of Mr Laski’s evidence in this regard calls for specific comment. In cross-examination, he disputed the proposition that clients paid Clinica for the asset management course and said they paid Mr Stamatakos. That proposition is contrary to the clear words of the Clinica contract, which provides for clients to pay Clinica. It was, moreover, agreed between the parties that the receipts issued to clients on Clinica’s letterhead included receipts for payments characterised as payments referable to the entry “Asset Maintenance Course” and many such receipts were in evidence before the Court through Ms Lloyd’s affidavit made on 15 October 2015. This is in my opinion an apposite example of how Mr Laski sought in his evidence to distance himself, and Clinica, from some of the contravening conduct, although objective evidence was to the contrary.

160    Mr Laski also asserted in cross-examination that Mr Stamatakos did not act on behalf of Clinica. When put against other evidence before me, that statement is disingenuous. Evidence of Messrs Azad, Gill and Uppal makes it clear that Mr Stamatakos was the point of contact for individuals seeking to enrol on the Clinica program. As Mr Laski himself deposed, Mr Stamatakos made representations, in Clinica’s offices, to individuals about the program, and the inevitable conclusion is that he did so on behalf of Clinica.

161    The threats concerning the commencement of proceedings in the Magistrates’ Court of Victoria were particularly pernicious, aggravating the contravening conduct. Despite the representations made being false, and despite there being no prospect of employment or visas for these clients, Clinica continued to insist on its contractual right to payment – payment for services it knew it could not provide. Several examples of such demands were in evidence before me, including those made against Messrs Azad and Uppal which I have extracted above. Also in evidence were emails from Mr Laski to his solicitor instructing him to commence proceedings against four clients for amounts ranging from $4,000 to $8,000 and the complaints ultimately filed against Mr Uppal for $10,000 plus costs and Mr Azad for $11,150 plus costs.

162    Further, the threats to commence legal proceedings were on occasion coupled with the even more egregious and unfounded threat, against vulnerable persons whose migration status was temporary and prized, to use individuals’ alleged “debt” to Clinica as the basis for information Mr Laski would provide to the Department of Immigration. For example, on 16 May 2013, Mr Laski emailed a client stating:

Manish,

To open your file the fee was $10,000.

You only paid $5000.00.

The balance of $5000.00 is overdue.

You don’t respond to my messages and phone calls.

If payment is not received in 7 days, you file will be closed, Immigration will be informed and a Summons issued for the amounts outstanding.

Please let us know what you intend doing.

[emphasis added]

163    I consider that kind of threat to be particularly pernicious, given the characteristics of this vulnerable client group.

164    The loss and distress caused to the individual Clinica clients by this scheme is apparent from the affidavit material of Messrs Uppal, Gill and Azad.

165    Clinica’s accounts for the 2012/2013 year reveal Clinica received $742,818, with a profit of $183,006, which represents a very significant 25% profit margin. All, or almost all, of that income appears to have been derived from this scheme, in light of Ms Lloyd’s evidence as set out at [24] above that the records of payment identified by the ACCC as referable to the Clinica program totalled $608,517.35, and that the actual amount paid by clients toward the program likely exceeded $800,000 given the records of payment identified represented most but not all of the clients who participated in the Clinica program. Even taking into account the discrepancy to which I refer at [24] above it is a reasonable inference that Clinica’s income was substantially derived from this scheme, in the relevant financial year. Although there was some faint evidence that Clinica had, at an earlier time, been involved in other unsuccessful schemes to secure permanent residence for clients who would work as hairdressers, cooks or aged care workers, no attempt was made by the respondents to explain what portion of Clinica’s receipts might have been attributable to other work by Clinica not relevant to the contravening conduct admitted in this proceeding.

166    The accounts also show “consultants fees” of $234,096, which I infer were paid to Mr Stamatakos, and director’s fees of $50,000 paid to Mr Laski himself. In other words, Clinica used its funds to ensure that those promoting and peddling this unlawful scheme were paid, before any attempt to refund clients who did not receive the services or outcomes they were promised, and paid for. Although the accounts record refunds of $93,412, Mr Laski’s evidence was that some $83,000 to $85,000 in refunds was made by Clinica to individuals who paid for other services with Clinica, outside the Clinica program, and the only documentary evidence of refunds specifically to clients of the Clinica program reflected a total of $16,050 in refunds.

167    The respondents have admitted that:

Further, at all times since around September 2012, Mr Laski knew that:

(a)    by engaging Clinica as a recruitment consultant, pursuant to the Clinica Program a client could not obtain a job that would or could qualify the client for permanent residence in Australia within 9 months or at all, under the 187 Visa;

(b)    by completing a Cleaning Course, a client could not and would not obtain a job that would or could, qualify him or her for permanent residence in Australia, under the 187 Visa;

(c)    by working in a cleaning job, pursuant to the Clinica Program or otherwise, a client would not and could not qualify for permanent residence in Australia within 9 months or at all, under the 187 Visa;

(d)    clients would not and could not qualify for, or obtain, permanent residence in Australia through the Clinica Program.

168    This admission is relevant both against Mr Laski personally and against Clinica, given Mr Laski was at all material times the company’s controlling mind. The contraventions were, I find, entirely deliberate and conscious conduct designed to secure payments of $30,000 to $40,000 (and in some cases more) from vulnerable individuals irrespective of whether Clinica could make good on its representations to those individuals about what they would secure from the program.

169    In setting penalties, the ACCC urged the Court to take into account that the exploitation of foreign workers was a matter of national shame, and in support of that submission took the Court to an article appearing in the Sydney Morning Herald dated 6 June 2013 which referred to Clinica and Mr Laski, and interviewed a former client of Clinica (who did not provide affidavit evidence in this proceeding). I consider the seriousness of the contraventions appears sufficiently from the facts I have found above, and in making my findings and setting a penalty I am inclined to place more weight on the affidavit evidence by Messrs Singh, Azad and Uppal about the effects of the deception on them than on media coverage of other conduct against migrants, however widespread that coverage may be.

Mitigating factors

170    It is correct that the respondents ultimately admitted certain contraventions, and cooperated in the filing of an agreed statement of facts, facilitating findings by the Court as to contravention without the need for a contested trial on all issues. Some credit should be given for the respondents’ recognition of contraventions, for cooperation and for the avoidance of the expenditure of significant costs and resources by both the ACCC and the Court. Without those factors, I would have been persuaded to impose higher penalties on each of the respondents than I have.

171    Mr Laski’s evidence was that Clinica had paid refunds to four clients who had joined the Clinica program. The refunds totalled $16,050. There is no evidence about the circumstances of those refunds, nor why refunds were paid to those four particular clients. Ms Lloyd’s evidence is that the ACCC is aware of at least 97 clients who participated in the Clinica program, and based on the amounts recorded in Clinica’s accounts and financial documents as paid, the ACCC estimates over $800,000 was paid to Clinica by these clients. Mr Laski’s evidence is that over $100,000 of this was paid to Mr Stamatakos for his organisation and conduct of the cleaning course. That leaves approximately $700,000 which appears to have gone into the coffers of Clinica or other entities controlled by, or associated with, Mr Laski. I do not accept Mr Laski’s generalised assertion, unsupported by any documentary evidence, that there may have been other refunds to clients of the Clinica program. That assertion is not borne out by the other documentary evidence before me, which included an email exchange in which a client’s specific request for a refund was refused and indeed answered with a threat to commence legal proceedings for outstanding payments. On 28 February 2013, Mr Syed Shah answered the offer of a “second chance” to return to the abattoir in the following terms:

Thanks for your email but i am not interested any more in JBS job as my file has been cancelled and as per our agreement file cancel will cost $5000. as I have paid you $10000 i am expecting a return of $5000. Please look in to it and inform me.

172    The relevant part of Mr Laski’s response read:

From our end we have honoured our agreement and contract with you.

There will be no refund, furthermore looking at our records you still have an outstanding debt to clinica Internationale for the placement.

Please make arrangements for payment as soon as possible.

173    When Mr Shah again sought payment of the refund he was owed, Mr Laski responded simply:

We ask you to pay in 7 days or we will issue in the Magistrates Court.

174    The refund to four clients of the comparatively small amount of $16,050 provides little by way of mitigation, especially without any evidence about the context in which those repayments were made.

Should the contravening conduct be characterised as one or more courses of conduct?

175    In Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Limited [2015] FCA 330; ATPR 42-494, Allsop CJ observed that in cases involving sales of products, such as the one before his Honour in that case, the numbers of contraventions become huge and it is not possible to assess appropriate penalties simply by reference to such large numbers of contraventions. However, his Honour accepted the parties’ submission (at [18]) that:

the better approach was to determine the penalty assisted by understanding the extent to which there was a certain number of courses of conduct leading to potentially a huge number of contraventions.

176    The number of contraventions is not on the same scale as Coles Supermarkets, but there are a large number of contraventions on any view, and I consider the approach outlined by Allsop CJ is applicable. The ACCC submitted there were three courses of conduct, which could be identified by the different topics each course of conduct involved:

(1)    misleading or false representations about permanent residence (through a variety of media, and also the representations by Messrs Laski and Stamatakos to individual clients and potential clients);

(2)    misleading or false representations about the existence of jobs through the Clinica program (again, both through a variety of media, and also the representations by Messrs Laski and Stamatakos to individual clients and potential clients);

(3)    unconscionable conduct – beyond the representations themselves, the circumstances of vulnerability which the respondents exploited, the pressure imposed on clients to sign up, the threats made to influence them to pay monies outstanding, and the proceedings issued against existing clients.

177    I accept the submission that it is appropriate for the purposes of imposition of penalty to consider these three different aspects of the contraventions as three courses of conduct. Obviously, the first aspect in particular in fact involves a large number of contraventions of ss 18, 29 and 31 of the ACL because of the number of representations that can be found both in the advertising, in the discussions with clients and in the contractual documentation, multiplied by the number of clients (at least 97).

178    I also accept that it is appropriate to adopt the approach outlined by the High Court in Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 at [61], where the majority found that different advertising campaigns conducted through different media, and using different text, could be seen as separate courses of conduct. This kind of grouping was also adopted by Allsop CJ in Coles at [83]-[85].