Clinica and Radovan Laski ordered to refund payments made by migrants and to pay penalties of $1.025 Million

24 March 2016

The Federal Court has found that Clinica Internationale Pty Ltd (Clinica) and Mr Radovan Montague Laski, a director and the sole shareholder of Clinica, made false or misleading representations and engaged in unconscionable conduct in relation to a program allegedly offering permanent residency, in breach of the Australian Consumer Law, in proceedings brought by the ACCC.

The Court ordered Clinica and Mr Laski to refund payments made by migrants and to pay penalties totalling $1.025 million ($700,000 and $325,000 respectively). Mr Laski was also disqualified from managing corporations for five years.

Clinica offered migrants training and sponsored employment in the cleaning industry under a program which it claimed would lead to permanent residency. Approximately 90 migrants paid fees totalling more than $760,000 to participate in the program, with many paying in excess of $10,000 each.

In most cases, they were newly arrived migrants on temporary visas with limited commercial experience who needed to obtain permanent residency within a short period of time in order to be permitted to stay in Australia.

“Clinica’s clients were vulnerable and had significantly weaker bargaining power. They were induced to pay significant sums of money on the basis of false or misleading representations and unconscionable conduct. The Court’s decision to order refunds and award significant penalties reflects the serious nature of the conduct by Clinica and Mr Laski,” ACCC Deputy Chair Delia Rickard said.

“Consumer protection issues impacting on vulnerable and disadvantaged consumers, with a particular focus on consumers who are newly arrived in Australia, is a current enforcement and compliance priority for the ACCC.”

Following admissions made by Clinica and Mr Laski, the Court held that:

  • Clinica made false or misleading representations, as Clinica never had any cleaning jobs available for its clients and, in any event, cleaning jobs would not have met the skill requirements necessary for permanent residency under the relevant visa requirements;
  • Clinica engaged in unconscionable conduct, by offering the program to vulnerable migrants in circumstances where it was on notice for a substantial period of the program about the lack of jobs and the inability of those jobs to lead to permanent residency; and
  • Mr Laski was the controlling mind of Clinica and was knowingly concerned in Clinica’s conduct.

In her judgment, Justice Mortimer held “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…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”.

On 4 August 2015, the Federal Court made an order freezing the proceeds from the sale of a property held on trust by a company associated with Mr Laski. The ACCC sought this order to preserve assets, so that it could apply to the Court for those funds to be used to refund Clinica clients if it was ultimately successful in the proceeding. The Court has now ordered that Mr Laski unconditionally direct that the frozen funds be used to refund the money paid by Clinica clients.

The Court also made other orders, including:

  • an order declaring each agreement signed between Clinica and its clients void;
  • permanent injunctions preventing Clinica and Mr Laski from carrying on a business or supplying services in connection with recruitment consulting or employee placement in connection with migration into Australia; and
  • costs orders against Clinica and Mr Laski.

Important note: In accordance with the Court orders, the ACCC will take steps to contact Clinica clients to determine whether clients may be eligible for a refund. Clinica clients who believe they may be eligible to receive a refund should contact the ACCC Infocentre on 1300 302 502.

Background

In 2002 Mr Laski was found to have engaged in misleading or deceptive conduct in relation to the sale and promotion of orange juice vending machines (see ACCC v Michigan Group Pty Ltd [2002] FCA 1439). The ACCC’s final media release dated 6 February 2003 is available here: Federal Court declares misleading and deceptive conduct in sale of orange juice machines

 

Release number: 
MR 35/16
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Media Team - 1300 138 917, media@accc.gov.au