Invest with Phoenix Pty Ltd v Agarwal

The plaintiff, Invest with Phoenix Pty Ltd (Phoenix), appeals against the judgment against it ordered by Atkinson LCM in the Local Court (the Court below) on 4 March 2025 in the sum of $103,444.06 ($91,000 plus interest under s 100 of the Civil Procedure Act 2005 (NSW)) plus costs. The judgment was in favour of Sanskar Agarwal, who was the plaintiff in the Court below and is the defendant in this Court. For clarity, the parties will be referred to by name.

In the Court below, Mr Agarwal sued Phoenix for the refund of monies ($33,000 and $58,000, totalling $91,000) which he had paid to Phoenix for the purchase of a business, which Phoenix was purporting to arrange for Mr Agarwal to enable him to qualify for an Australian subclass 188 business visa (the business visa).

Her Honour found that there was an agreement between Mr Agarwal and Phoenix which required Phoenix to identify suitable businesses for Mr Agarwal in return for the payment of a fee (J [46]). The Court below found that Mr Agarwal’s claim was made out on two independent bases: a right under the contract to have the monies paid refunded and a right to restitution of money had and received by Phoenix from Mr Agarwal. Her Honour said, at [58]:

The two invoices rendered by Phoenix to Mr Agarwal contained a statement that Mr Agarwal could obtain a refund of the monies paid from an Indian company, PHX Consulting Pvt Ltd (PHX). The effect of this statement is relevant to both grounds of appeal. Of this statement, her Honour found at [57]:

An appeal to this Court as of right from the Court below lies only on a question of law. By summons filed on 1 April 2025, Phoenix appeals against the judgment on two grounds (the remaining grounds having been abandoned):

Both of these grounds raise questions of law.

In order to address this ground, it is necessary to summarise, in part, what occurred in the hearing in the Court below.

By amended statement of claim filed in the Court below on 29 May 2024, Mr Agarwal alleged that on or about 3 February 2023 he entered into an agreement with Phoenix (which was defined as “the Agreement”) whereby, if PHX determined that he was eligible for a business visa, Phoenix would provide its professional services to identify and locate a suitable business for Mr Agarwal to acquire (in order to qualify for a business visa). The particulars to the agreement specified that the agreement was oral and was made between Mr Agarwal on his own behalf and Joshua Wilson and Kartikey Chauhan on behalf of Phoenix at Phoenix’s offices on William Street, Woolloomooloo.

Mr Agarwal pleaded “the Agreement” between himself and Phoenix as follows:

In paragraph 2(ii) of the pleading, Mr Agarwal alleged that the following were terms of “the Agreement”:

In relation to the work to be performed by PHX, Mr Agarwal alleged (in paragraph 2(iii) of the amended statement of claim):

Mr Agarwal also alleged that he paid Phoenix’s invoice dated 17 April 2023 in the sum of $33,000 into the account nominated by Phoenix (paragraph 2(iv)(b)); that, in the company of a representative of Phoenix, he inspected a business at Brookvale which Phoenix had recommended and agreed that Phoenix could conduct negotiations for the purchase of the business on his behalf (paragraph 2(iv)(c)); and that he paid into Phoenix’s nominated bank account a further amount of $58,000 which Phoenix had invoiced on 18 May 2023 as a deposit in respect of the Brookvale business, such deposit being refundable if the exchange of contracts was not effected by 30 June 2023 (paragraph 2(iv)(d)).

Mr Agarwal further alleged that contracts for the purchase of a business were not exchanged by 30 June 2023 and that on 10 July 2023 he requested that Phoenix refund the monies he had paid. He alleged that the monies became due and payable by no later than 10 July 2023. He also alleged that the failure to pay was a breach of contract and that he was entitled to return of the monies had and received by Phoenix (paragraphs 2(v)-(vii)).

In its amended defence filed 19 June 2024, Phoenix denied that Mr Agarwal was obliged to pay any money to Phoenix or that any money paid was refundable. It did, however, admit receipt of the two amounts ($33,000 and $58,000). Phoenix also admitted that there was a contract to which it and Mr Agarwal were parties. It alleged that the terms of the contract were that Mr Agarwal would pay it $58,000 by way of deposit which was only refundable prior to 30 June 2023 but was otherwise a fee retainable by Phoenix. Further, it alleged that Mr Agarwal would pay Phoenix a fee of $33,000 for sourcing a business opportunity for him and that it was entitled to retain that amount.

In the section of its amended defence covered by the prefatory words, “[f]urther and in answer to the whole of the [statement of claim]”, Phoenix alleged in paragraph 19:

This paragraph is significant for both grounds of appeal since it is evident from paragraph 19 of the amended defence that Phoenix accepted that, if the Court below found that there was a contract with Phoenix, the parties to the contract were Mr Agarwal and Phoenix and not PHX. That Phoenix specifically considered the question of parties is evident from its amendment to its original defence as filed to delete PHX as a party to the agreement between Mr Agarwal and Phoenix (as indicated from the words that are struck through in paragraph 19a).

Mr Davis, who appeared for Phoenix in the Court below and in this Court, submitted in this Court that this paragraph, and, in particular, this amendment, ought not be seen as a concession since it was couched in alternative terms. I do not accept that it could be understood in any other way than as a concession that if Phoenix was a party to a contract with Mr Agarwal, the only parties to that contract were Phoenix and Mr Agarwal and not PHX. It follows that, at least as far as the pleadings were concerned, there was no issue as to this matter.

Mr Agarwal’s affidavits were read in the proceedings and he was cross-examined.

Mr Agarwal deposed that on about 23 January 2023, he contacted PHX, which advertised that it could obtain business visas to Australia. He rang PHX’s office in India for that purpose and was told that PHX was the Indian office but that there was an Australian office. Mr Agarwal provided his contact details to PHX. He was contacted on 4 February 2023 by Mr Chauhan who said that his case would be handled by the “Sydney office” and that the best way of getting a business visa was to buy a “managed business”. There was an arrangement with PHX and Mr Agarwal (which was contemplated by the central agreement between Phoenix and Mr Agarwal), pursuant to which Mr Agarwal paid PHX INR 2,05,000 to assess his documents to determine whether he would be eligible for a business visa in Australia. Mr Agarwal did not claim reimbursement of this money as PHX performed the initial assessment and referred him to Phoenix.

On 27 March 2023, Mr Wilson contacted Mr Agarwal to inform him that he was a director of Phoenix and invited him to inspect a café in Manly as a possible business for him to purchase. As a consequence of this call, Mr Agarwal flew to Sydney and met with Mr Wilson.

The invoices for the two amounts paid were annexed to Mr Agarwal’s first affidavit. The first invoice, dated 17 April 2023, contained the following description:

The second invoice, dated 18 May 2023, contained the following description:

Each invoice contained the following statement:

Mr Darvall, who appeared for Mr Agarwal in the Court below and in this Court, pointed out the aspects of the invoices extracted above in his opening in the Court below. He also took the Court below to Mr Agarwal’s message requesting a refund and the correspondence received from Phoenix assuring him that the refund would be processed and apologising for the delay.

Mr Davis cross-examined Mr Agarwal about his contact with PHX. He put to Mr Agarwal that he appreciated that PHX would be handling his application for a business visa. Mr Agarwal said that, although PHX was initially involved when he was in India, he was referred to Phoenix in Sydney and that Phoenix became his main point of contact.

In his written submissions in this Court, Mr Davis extracted the following passages of his cross-examination of Mr Agarwal in the Court below:

In this Court, Mr Davis accepted that the sole forensic purpose of this part of his cross-examination of Mr Agarwal was to support a submission that the only entity from which he could obtain a refund was PHX. Although this was not pleaded in the amended defence, this part of Phoenix’s case was plain from the cross-examination.

Phoenix called only one witness, Manmouhit Singh, who was not involved in the transaction but whose affidavit annexed documents from Phoenix’s records.

The oral hearing on 29 October 2024 concluded at the end of Mr Singh’s oral evidence. Her Honour made directions which required the parties to file written submissions with the intention that the parties would appear on 3 February 2025, the day on which the matter was listed for judgment, so that her Honour could hear the parties on costs following delivery of reasons and making of orders. Mr Darvall filed his submissions in chief on 3 December 2024. As Mr Davis did not file his written submissions until 3 February 2025, the judgment date was adjourned.

Mr Davis, in written submissions filed on 3 February 2025, submitted in the Court below that Mr Agarwal’s agreement was with PHX and that he had failed to prove an agreement with Phoenix. He emphasised the statement on the invoice about the refund being provided by PHX. He also made submissions in the alternative that, if the agreement was made between Mr Agarwal and Phoenix, Mr Agarwal had failed to prove the terms of the agreement. In the alternative, he submitted that Phoenix had performed the services under the agreement which permitted it to retain the first amount invoiced and that it was entitled to retain the second amount invoiced because PHX was the party responsible (having regard to the statement on the invoices) for refunding the amount. He submitted further that no refund was payable because the “cooling off” period had expired on 30 June 2023, prior to Mr Agarwal’s request for a refund.

Mr Darvall relevantly answered Mr Davis’s submissions in his written submissions dated 14 February 2025 as follows:

The key passages from the reasons of the Court below have been extracted above.

Mr Davis submitted in this Court that Phoenix could not reasonably have anticipated that the Court below would use, adversely to Phoenix, the finding that there was no privity of contract between PHX and Mr Agarwal as a basis for finding that Mr Agarwal had a right to have the money he had paid to Phoenix refunded by Phoenix. He submitted that Phoenix’s attention ought to have been drawn to the fact that “privity of contract between Mr Agarwal and PHX was a critical factor upon which the … decision [of the Court below] was likely to turn.”

Mr Davis submitted in this Court that:

A denial of procedural fairness can arise in proceedings where one party is not on notice of a matter which turns out to be germane, if not central, to the decision-maker’s decision. It can occur when a court determines a matter on a basis that was not in issue or argued in the proceedings: Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145; [1986] HCA 54. It can also occur when evidence is used adversely to a party in circumstances where that party could not reasonably expect such use and has not been given an opportunity to respond: Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22 at [142] per McHugh J.

Matters which are already obvious do not require specific attention to be drawn to them because a party is taken to have appreciated obvious consequences of particular evidence or arguments: Kioa v West (1985) 159 CLR 550 at 633 (Deane J); [1985] HCA 81. In order to determine whether there has been such a denial, it is necessary to review what occurred in the hearing, including the pleadings, evidence and submissions (hence the summary of these matters above).

I am not persuaded that there has been any denial of procedural fairness. The question whether Mr Agarwal was entitled to a refund from Phoenix turned on, first, the terms of the agreement between him and Phoenix; and, second, the payments made by him to Phoenix for which Phoenix had not arranged a business for him to purchase to enable him to qualify for a business visa.

In his cross-examination of Mr Agarwal, Mr Davis sought, unsuccessfully, to obtain concessions from him with respect to the endorsement on the invoice which purported to impose an obligation on PHX to refund the monies paid by Mr Agarwal to Phoenix. The effect of such cross-examination was limited, in any event, by the objective theory of contract: the meaning of the contract is to be construed from the words used and the objective circumstances and not from the subjective intentions or beliefs of the parties: see, generally, Codelfa Construction Proprietary Limited v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352 (Mason J); [1982] HCA 24.

However, the ambit of the cross-examination demonstrated that the wording of the endorsement was within the matters raised at the hearing and could be expected to be taken into account and addressed in the reasons of the Court below. In the extracts of the cross-examination extracted above, Mr Davis put, in substance, to Mr Agarwal that he could get a refund from PHX (rather than Phoenix) because of the statement on the two invoices. This was not correct because, as Phoenix accepted in its amended defence, if there was a contract with Mr Agarwal to which it was a party, there were only two parties to that agreement. It followed from that conditional admission that PHX was not a party to that contract and, therefore, necessarily, there was no privity of contract between PHX and Mr Agarwal concerning the provision of services by Phoenix to Mr Agarwal. Further, PHX had not received the money (it was common ground that Phoenix had received and retained the money) and therefore there could be no claim in restitution against PHX.

Mr Agarwal was suing both on his contract with Phoenix, to which PHX was plainly not a party, and also on the basis of his claim in restitution for money had and received by Phoenix. The lack of privity of contract between PHX and Mr Agarwal with respect to the latter’s right to a refund was an obvious (and apparently uncontroversial) point made in Mr Agarwal’s written submissions in the Court below.

In any event, the case did not turn on the question of privity. There could be no rational suggestion that Mr Agarwal could only obtain a refund from PHX (and not from Phoenix). Such a submission would be at odds not only with the terms of the contract between Phoenix and Mr Agarwal (as found by the Court below) but also with the established fact that Mr Agarwal had made the payments to Phoenix, which continued to retain those funds. It would also go against the obvious conclusion (consistent with Phoenix’s amended defence) that PHX was not a party to the contract with Phoenix pursuant to which Mr Agarwal paid the $91,000.

Mr Darvall’s submission that, notwithstanding what the invoice said, Mr Agarwal could not obtain a refund from PHX as PHX was not a party to the contract (whereby he was to pay the amounts to Phoenix) was an obvious and unremarkable response to Mr Davis’s submission that Mr Agarwal only right to a refund was from PHX.

I am not persuaded that there has been any denial of procedural fairness to Phoenix. Further, Phoenix was unable to identify any “practical injustice” (in the sense used in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 at [38] (Gleeson CJ)) which it suffered from the finding of lack of privity between Mr Agarwal and PHX, which was, in any event, consistent with its own pleading. It could not be said that it was deprived of the opportunity of arguing that PHX was party to the contract (and therefore could have been sued for the money paid by Mr Agarwal to Phoenix) since such a submission was inconsistent with its pleading and the evidence.

For these reasons, I reject the first ground of appeal.

Mr Davis also sought to argue in this Court that Phoenix could not have been a party to the initial agreement because Mr Chauhan was associated with PHX but not Phoenix and therefore there was no one authorised by Phoenix when the agreement was made. The finding of the Court below as to this matter is a question of fact and does not give rise to a question of law for this Court’s consideration. Further, it falls outside the grounds of appeal. Accordingly, it need not be further considered.

This ground is limited to an alleged failure on the part of the Court below to give reasons for the finding that Mr Agarwal is not able to sue PHX for the money.

The Court below said that Mr Agarwal was not able to sue PHX for the money because there was no privity of contract between Mr Agarwal and PHX. While these reasons were brief, they were, in my view sufficient. Although Mr Agarwal and Phoenix contemplated PHX’s involvement, this was limited to PHX performing a preliminary assessment of Mr Agarwal’s documents to determine whether Mr Agarwal could otherwise qualify for the business visa, for which Mr Agarwal paid PHX INR 2,05,000. The purpose of this preliminary assessment was to ascertain whether it was worth Phoenix’s while sourcing a business for Mr Agarwal. As was made explicit in the amended statement of claim, Mr Agarwal did not claim reimbursement of this money. His case, which was accepted by the Court below, was that he entered into a contract with Phoenix (to which PHX was not a party) pursuant to which he paid a total amount of $91,000, which Phoenix was obliged to refund to him as it had not performed its part of the contract and still retained these funds.

Further, the Court below was entitled to be brief in the reasons on this point since it was apparent from the pleadings that it was common ground that PHX was not a party to the agreement between Mr Agarwal and Phoenix. It followed necessarily that there was no privity of contract between PHX and Mr Agarwal relating to the agreement whereby Phoenix was to provide services to Mr Agarwal.

For these reasons, the second ground of appeal has not been made out.

For the reasons given above, I make the following orders: