Fraud Liability for an Unlicensed Immigration Consultant

The Dispute

A newcomer to Canada paid a business adviser a six-figure sum in US dollars to help her family become permanent residents, trusting he had the experience and connections to handle the process himself. His plan for her application committed her to hiring several full-time staff and investing a set amount within a fixed deadline. When that deadline came under threat, she hired a registered consultant to take over and stopped paying him. He sued her company for money he said it still owed him; she sued him back for what she had already paid.

The Parties’ Positions

The client contended that at their first meeting, the adviser said he had personally helped over a hundred people immigrate to Canada over two decades, and that he would personally handle her immigration matters rather than direct her to a lawyer or a registered consultant. She testified that she spoke no English and had no familiarity with Canadian immigration procedure, and relied on him for that reason. She said the business plan he prepared and filed with her application required her to build a business from scratch, invest a sum she came to find unrealistic, and hire a fixed number of full-time staff within a set period, conditions she said proved impossible to meet in the time allowed. Two of the adviser’s former clients gave similar fact evidence that he had represented himself to them the same way.

The adviser maintained that he never told the client he was a lawyer or a registered immigration consultant, and that he confined his own role to touring newcomers, offering business training, and helping them set up businesses, while immigration matters were handled by qualified professionals he said he retained on her behalf. He argued the client had received genuine value from the tours, training and business assistance provided under their arrangement, and that the business plan’s figures were projections only. He resisted treating him and his company as one, submitting it was properly incorporated for legitimate purposes separate from him personally.

The Court’s Decision

The court preferred the client’s evidence, finding the adviser not reliable and noting he had repeatedly reshaped his evidence at trial. It held every element of fraudulent misrepresentation was made out: the adviser represented he was qualified to handle the application when a federal statute barred him from doing so, he knew this when he made the representation, and the client relied on it to her detriment. The court lifted the veil between the adviser and his immigration services company, finding he dominated and controlled it, and held him personally liable alongside it. It ordered the return of the client’s fees, plus sums owed for equipment and a personal loan, set aside a later profit-sharing agreement as unconscionable, dismissed the counterclaims, and awarded punitive damages, finding his conduct high-handed toward a client he knew to be vulnerable. As the successful party in the Supreme Court of British Columbia action, the client is entitled to costs.

Key Lessons for Immigration Applicants and Service Providers

• Confirm in writing whether an adviser is a lawyer or a registered immigration consultant before signing an agreement for immigration services. Section 91 of the Immigration and Refugee Protection Act restricts who may charge for that advice, and an unregistered adviser cannot lawfully provide it regardless of what the agreement calls it.
• Read every commitment in a business or performance plan before it is filed with a government program, and confirm each condition can realistically be met within the stated deadline. The court found the plan committed the client to a hiring target and an investment figure that proved unworkable, and that the adviser had not read the completed document before it was submitted.
• Keep dated records distinguishing regulated advice from any ancillary services bundled into one engagement. The court found no net benefit to the client because the parties disputed how much of a single payment covered immigration advice as opposed to training, and resolved the ambiguity against the party who had drafted the arrangement.
• Treat a request to restructure ownership or share a company’s profit as its own bargain, standing on its own consideration. The court found a later agreement requiring the client to give up half her company’s shares and profit was unconscionable, because it exchanged nothing she was not already owed, and voided it.

The outcome of this trial turned on the evidence the court heard on credibility and on the terms of the agreements before it. A similar dispute may resolve differently.

ATAC LAW acts for claimants and respondents in commercial disputes, including claims involving fraud, misrepresentation and director liability.

This matter was conducted by Rodolfo Assinger, Associate Lawyer at ATAC LAW, who acted for the adviser and his companies at trial.