Patankar v Excom Education Pty Limited

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FEDERAL COURT OF AUSTRALIA

Patankar v Excom Education Pty Limited [2008] FCA 475

TRADE PRACTICES – allegation of breach of s 52 and s 53B Trade Practices Act 1974 (Cth) – allegation of misleading representation of legal capacity to sponsor holder of a subclass 457 visa – whether representations made – where representations not made – no breach

CONTRACT – alleged breach of contract of employment – clause too uncertain to create legal obligation – no evidentiary support for alleged oral term of contract or alleged warranty

NEGLIGENT MISSTATEMENT – reliance on alleged representations – where statement found not to be made – no negligence

HELD – application dismissed

Trade Practices Act 1974 (Cth) ss 52 53B, 75B, 82, 87

Bishop v Taylor (1968) 118 CLR 518 cited
Whitlock v Brew (1968) 118 CLR 445 cited

JAYANT PATANKAR v EXCOM EDUCATION PTY LIMITED, GRAEME NEWEY AND BETRAND BREGANZA

NSD 2504 OF 2006

BRANSON J
10 APRIL 2008
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 2504 OF 2006

BETWEEN:

JAYANT PATANKAR
Applicant

AND:

EXCOM EDUCATION PTY LIMITED
First Respondent

GRAEME NEWEY
Second Respondent

BETRAND BREGANZA
Third Respondent

JUDGE:

BRANSON J

DATE OF ORDER:

10 APRIL 2008

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The application be dismissed.

2.The applicant pay the respondents’ costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 2504 OF 2006

BETWEEN:

JAYANT PATANKAR
Applicant

AND:

EXCOM EDUCATION PTY LIMITED
First Respondent

GRAEME NEWEY
Second Respondent

BETRAND BREGANZA
Third Respondent

JUDGE:

BRANSON J

DATE:

10 APRIL 2008

PLACE:

SYDNEY

REASONS FOR JUDGMENT

INTRODUCTION

  1. The applicant (“Mr Patankar”), a citizen of India, is a qualified architect who is additionally skilled in information technology (“IT”).  In May 2001 Mr Patankar was granted a subclass 457 visa.  In February 2003 he was granted a fresh subclass 457 visa.  At the time that he received the second of these visas he was advised by the Department of Immigration and Multicultural Affairs (“DIMIA”) that if he wished to change his employer he was required to apply for a new subclass 457 visa.

  2. In June 2003 Mr Patankar became an employee in Australia of the first respondent (“Excom”) in circumstances that are in dispute but which resulted in a breach of the conditions of his visa.

  3. In this proceeding Mr Patankar makes claims under the Trade Practices Act 1974 (Cth) (“the TPA”), in the tort of negligent misstatement and for breach of contract for damage allegedly suffered by him as a result of the breach of the conditions of his visa. It is not in dispute that Mr Patankar has not held a visa authorising him to work in Australia since, at the latest, August 2003.

    BACKGROUND FACTS

  4. Mr Patankar spent approximately six months in Australia in 1998, and again in 2000, on each occasion having entered Australia on a tourist visa.  On 14 May 2001…

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Details
Case
[2008] FCA 475
Decision Date

CaseChat Overview and Summary

The Federal Court of Australia was presented with a case, Patankar v Excom Education Pty Limited, where Mr Patankar, an Indian national, sought relief under the Trade Practices Act 1974, for negligent misstatement, and for breach of contract due to a breach of his visa conditions. Mr Patankar had been granted a subclass 457 visa in May 2001, sponsored by Educom, which allowed him to work in Australia until May 2005. However, when Educom went into administration in late 2002, Mr Patankar was made redundant and sought employment with Consultants Exchange Australasia Pty Limited (CXC). After being advised by the Department of Immigration and Multicultural Affairs (DIMIA) that his application for a new visa had been approved, he commenced employment with Excom Education Pty Limited (Excom), with Excom acting as his new visa sponsor. Mr Patankar claimed that Excom breached its contractual obligations, namely, failing to assist him in achieving his potential, not executing a tripartite agreement with CXC, and breaching a warranty that it would remain an eligible sponsor for his visa.

The key legal issues that the court had to address were whether Excom breached the terms of the employment contract, including an alleged warranty that it would be eligible to sponsor Mr Patankar's visa at all times, and whether Excom was negligent in its advice regarding the transfer of visa sponsorship. The court needed to determine whether Excom's failure to execute a tripartite agreement with CXC constituted a breach of contract, and if the alleged warranty was supported by the evidence. Furthermore, the court had to consider whether Excom's actions led to the breach of Mr Patankar's visa condition 8107, which required him not to change employer or occupation without written permission from the Secretary.

The court found that Excom did not breach any contractual obligations or warranties. It was established that the alleged warranty was not supported by the evidence, and the court held that it was not the payment of the agreed remuneration that resulted in the breach of visa condition 8107; rather, it was the making of the contract of employment and the working thereunder that constituted the visa breach. The court dismissed Mr Patankar's application, finding that Excom was not liable for the breach of the visa condition, and the application was dismissed with costs awarded to Excom.

In conclusion, the Federal Court of Australia dismissed Mr Patankar's claims against Excom Education Pty Limited. The court ordered that the application be dismissed and that Mr Patankar pay the respondents' costs. The court held that Excom did not breach any contractual obligations, including an alleged warranty that it would be eligible to sponsor Mr Patankar's visa at all times, and that Excom's actions did not result in the breach of Mr Patankar's visa condition 8107. The dismissal of the application and the award of costs to Excom was based on the finding that Excom's failure to execute a tripartite agreement with CXC did not constitute a breach of contract, and that Excom's advice regarding the transfer of visa sponsorship did not amount to negligent misstatement.

Orders

Orders of the court

1. The application be dismissed.

2. The applicant pay the respondents’ costs.

Background

Background to the litigation

In this proceeding Mr Patankar makes claims under the Trade Practices Act 1974 (Cth) (“the TPA”), in the tort of negligent misstatement and for breach of contract for damage allegedly suffered by him as a result of the breach of the conditions of his visa. It is not in dispute that Mr Patankar has not held a visa authorising him to work in Australia since, at the latest, August 2003.BACKGROUND FACTS Mr Patankar spent approximately six months in Australia in 1998, and again in 2000, on each occasion having entered Australia on a tourist visa. On 14 May 2001 he received advice from the Australian Consulate General in Mumbai, India, that he had been granted a subclass 457 visa which permitted him to travel to, enter and remain in, Australia until 14 May 2005. He was further advised that his visa was subject to the condition that “[t]he holder must not change employer or occupation in Australia without the permission in writing of the Secretary” (visa condition 8107). The employer who had sponsored Mr Patankar for the purpose of his subclass 457 visa was Educom Australia (Educom). In late 2002 Educom went into administration and Mr Patankar was made redundant. In early 2003 he approached Consultants Exchange Australasia Pty Limited (“CXC”) to become his work visa sponsors. CXC was approved by the DIMIA as a subclass 457 visa sponsor. By a letter dated 20 February 2003 from DIMIA, Mr Patankar received advice that his application for a subclass 457 visa to work for CXC as an Information Technology Manager had been approved subject to the conditions that he must not:·cease to be employed by the sponsoring employer; or·work in a position or occupation inconsistent with the approved position or occupation; or·engage in work for another person or for himself while working for the sponsoring employer.The letter advised:If you wish to change employer, you must apply for a new subclass 457 visa and meet the requirements at that time…Failure to apply for a new visa may result in cancellation of your visa and removal from Australia of you and any family members.Mr Patankar gave evidence that when he received this letter he read and understood the conditions to which his visa was subject. CXC was a contractor management company; that is, it provided a corporate structure whereby third parties could engage the services of contractors while they remained on the payroll of CXC. CXC operated on the basis that it was each contractor’s own responsibility to find a third party who wished to engage his or her services. Once a contractor had identified a third party who required his or her services, a tripartite agreement was entered into between CXC, the third party and the consultant pursuant to which CXC received all payments made in respect of work undertaken by the consultant. It appears that the remuneration paid to the consultant by CXC was, in effect, the amount paid to CXC less a “management fee” of 4.5%. The standard tripartite agreement provided that upon receipt from the consultant of time-sheets approved and signed by the third party’s manager, CXC would submit to the third party invoices on which, unless otherwise agreed in writing, payment would be due in seven days from the date of the invoice.

Evidence

Evidence Before The Court

The pleaded particulars of alleged breach of contract are as follows:(a)The First Respondent failed to assist the Applicant [to] achieve his potential and goals agreed with the First Respondent in breach of clause 24 of the offer of employment pleaded in paragraphs 26 above;(b)The First Respondent failed to execute a tripartite agreement with cXc and the Applicant which was contrary to the condition pleaded at paragraph 27 above;(b)The First Respondent breached the term of warranty pleaded at paragraph 28 above in that the First Respondent was not at any time between 13 June 2003 and no earlier than 5 August 2003 an eligible sponsor employer for the Applicant for the purposes of sponsoring the Applicant on a Subclass 457 Visa;(c)The First Respondent breached the condition, term or warranty pleaded at paragraph 27 and 28 above by paying the Applicant a salary payment directly on or about 30 June 2003.EVIDENCE RE THE FIRST INTERVIEW Mr Newey gave evidence that, ahead of Mr Patankar’s first job interview, he had advised Mr Braganza that Excom was in the process of applying to DIMIA for visa sponsorship status approval and that Excom would be able to sponsor people when this process was complete. He also gave evidence that at this time he was handling all employment visa related matters and that Mr Braganza was accustomed to refer the discussion of such matters to him. He said that, while aware that Excom could enter into a tripartite agreement with another organisation that had sponsorship status approval, by June 2003 he had dismissed the option of using tripartite agreements for the following reasons:(1)the legal and administrative overheads of such arrangements had proven prohibitive in the past; and(2)to ensure that the distinctive culture of Excom was maintained, Excom preferred long term permanent employees to contractors – especially for positions of technical instructors. Mr Patankar gave affidavit evidence that at the first interview he and Mr Braganza had a conversation to the following effect:JP“Bertrand, I’m on a work visa sponsored by CXC. They bill the client for my services and then they pay me. A tripartite agreement executed between me, the company that wanted to avail of my services, and CXC makes this easily possible for any company to avail of my training services.”BB“You should be willing to work as an employee of Excom, and not as a contractor.”JP“Then my work visa sponsorship would have to be taken over by Excom, from CXC. It will involve both myself and Excom independently applying to DIMIA for sponsorship approval. At least, that has been my experience in the past.”BB“OK, Excom Education will sponsor your work visa. Our Melbourne office will handle your visa, so you should wait to hear from them before you write to DIMIA, OK?”JP“OK. Fine.”BB“However you should be willing to bear the expense of the work visa transfer application.”JP“I see. How much will that be?”BB“It shouldn’t be more than one thousand dollars (Australian).”JP“Well, OK. I should be able to pay that.”

Decision

Reasons for decision

BRANSON J
The pleaded allegation that Excom breached a warranty that it would at all times be eligible to sponsor Mr Patankar on a subclass 457 visa prior to commencing to pay him the agreed remuneration under the contract of employment fails for the same reasons as the allegation concerning an express verbal condition. First, the alleged warranty is not supported by the evidence. Secondly, it was not the payment of the agreed remuneration that resulted in the breach of visa condition 8107; it was the making of the contract of employment and the working thereunder that constituted the visa breach.CONCLUSION The application will be dismissed with costs.

Ratio Decidendi

Legal Principle Established

Established by: BRANSON J

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