Decision concerning amount of refund due following NZQA finding – complaint upheld

Friday, April 28, 2017
S V P [2017] ISC Apr 2017

Summary of Complaint

  1. This decision relates to a complaint lodged by “the Student” against their former Education Provider, (“the Provider”).
  2. The Student enrolled in a 36 week, full-time course with the Provider in May 2015, paying the full year’s fee prior to the course commencement. 
  3. The Student lodged a complaint with NZQA in January 2016, about the staffing and quality of the course and applied to the Provider for a partial refund of her course fees. 
  4. During negotiations, including an in-person meeting between the Student and Provider, the Student wrote a figure of $23,000 on a piece of paper and provided her bank account details to the Provider.
  1. There was no signed agreement between the parties. Subsequently, the Provider deposited $23,000 to the Student and requested receipt and an acknowledgment that the amount was to be considered a full and final settlement of the complaint.
  2. The Student acknowledged receipt of the $23,000, however, there was no express acknowledgment that the Student considered the amount to be a full and final settlement.
  1. The Student does not believe this refund to be a fair or satisfactory remedy and has made a complaint to the International Student Contract Dispute Resolution Scheme on 17 January, 2017.
  2. A mediation was undertaken in March, 2017, from which a resolution could not be reached. I now proceed to issue an adjudicated decision on the complaint. 

Outcome

  1. In accordance with the well-established principles of satisfaction and accord, the agreement reached at the 21 June, 2016, meeting does not amount to a full and final agreement between the parties. As such, the Student’s complaint is upheld. 
  2. I must then consider whether the amount of $23,000 is a sufficient remedy to the breaches upheld by NZQA. I find that although the calculations made by both Student and Provider are different, both show that the amount refunded to date is fair and reasonable.
  3. My preliminary decision was that the Student’s complaint is upheld but no further award is made in this matter.
  4. I was then directed to the NZQA outcome letter regarding this matter, and on reflection I do not consider it reasonable to charge the student for the second and third part of the course or any related costs when it was found that the program had been altered without approval. 
  5. The final decision of the International Student Contract Dispute Resolution Scheme is that the Student’s complaint is upheld and an award of $5,100 granted. 

Background

  1. In May 2015, the Student accepted an offer to study with the Provider. The acceptance form records a start date of 27 July 2015. The offer of place form indicates that the length of programme is 36 weeks and that it is full time study.
  2. The course that the Student enrolled for was to be completed in three parts. The first part was IELTS Preparation. This was completed by the Student on 29 August, 2015, and she has received a certificate confirming the completion.
  3. The second part of the course was MCQ Preparation. The Student raised multiple concerns throughout the remaining parts of the course that relate primarily to staffing. The first of which was on 14 October, 2015, when the Student emailed the Provider requesting: “…an appointment with you on Thursday this week? It is important and any time would be convenient for me.”
  4. This was followed by a further email on 16 October, 2015, outlining the Student’s expectations in terms of class duration and frequency, referring to the MCQ preparation handbook. 
  5. The Provider appointed a second tutor to replace the first on 23 October, 2015, and advised the Student accordingly.
  6. The second tutor sent correspondence to the Student on 13 January, 2016, that stated: “I don’t think this will work. I do not think I am able to continue these tutorials on top of my currently quite hectic life. I apologize and wish you all the best.”
  7. The Student lodged a complaint with NZQA regarding the staffing issues she had encountered in January, 2016. 
  8. On 12 February, 2016, the Provider advised the Student: “As the situation has changed for ‘C’ and he has not been able to accommodate you into his time schedule I have arranged for another Doctor to provide you with tuition.”
  9. The Student advised the Provider of difficulties with the third tutor regarding the quality of the lessons and requested a refund for unused tutorial hours on 2 March, 2016: “It would be nice to have a tutor with a level of knowledge that is higher than mine … but I have little hope for it now so I’m wondering if I could get a refund for the hours that have not been delivered yet so I can continue preparation without coming to the school”.
  10. The Student proceeded without a tutor to complete the MCQ Preparation aspect of the course, however, it is noted that she did not pass.
  11. On 1 June, 2016, the Student emailed the Provider regarding an earlier phone call stating: “I would like to get a refund of the fees.”
  12. On 8 June, 2016, the Provider emailed to advise the Student that they were offering a partial refund of her tuition fees. This was broken down on 13 June, 2016, as: 

Total Fee Paid:     $30,000

English Language: 6 weeks x $340  $2,040

Direct Costs:  Lecture fee: 28hr at $150 per hour $4,200,  Books: $280 + $244   $524, Online Access to      MCQ   $900, Marketing fees in excess of  $5,000

Total      $12,664 

Refund  $17,336

  1. Negotiations continued by email with various calculations and breakdowns provided by both Student and Provider for the following week, with the final request being made by the Student for a refund of $24,636. This was broken down on 15 June, 2016, as:

Total Fee Paid:     $30,000

MCQ Lessons Received    $2,800

Books:      $524

English Language    $2,040

Total      $5,364

Refund      $24,636 

  1. The Provider then asked that the Student meet with management on 21 June 2016, in an attempt to reach a final agreement.
  2. Following this meeting, the Provider emailed the Student on 22 June 2016, requesting the Student come to the school to sign an agreement in settlement of the dispute for $23,000 as agreed. The email stated: “Once this is signed, [the Provider] will hand you the cheque for this amount accordingly.”
  3. The Student responded to the Provider, and requested that the agreement be sent by email and that she will then: “sign and send you a scan.” However, an agreement was not sent. 
  4. The Provider stated in further correspondence that: “We do need your formal acceptance to move forward.” In response, the Student asked for clarification in further matters relating to tutor invoicing and referencing the 22 June, 2016, meeting.  
  5. The Provider emailed the Student on 23 June, 2016, to confirm: “Without further misunderstanding, we have on this morning, deposited the amount of $23,000 to your account which was agreed by both parties as per our meeting on Tuesday, 21 June.” The correspondence further requested that the Student: “please reply me via e-mail confirming that you have received this amount of $23,000 from [the Provider] as full and final settlement of all disputes between [the Provider] and yourself and that you have no further claims against [the Provider].”
  6. The Student confirmed receipt of the funds on 27 June, 2016, stating: “Yes, I received the funds ($23,000) from [the Provider]. Thank You.” 
  7. The Student lodged a complaint with the International Student Complaint Contracts Dispute Resolution Scheme on 17 January, 2017. Her complaint was recorded as: 

NZQA investigated the case [against [the Provider]] and proved that the provider is in breach of a few rules. I negotiated with the provider about getting a refund but the negotiations were not fair and I am not satisfied with the refund that I received.

Please find attached the NZQA's complainant outcome letter. Its main point is that I only received 6 weeks of full-time English lessons + 25 hours of medical lessons instead of 36 weeks of full time studies. Therefore, I think that the $23,000 refund is not fair considering that I didn't receive many lessons. The fee that I paid was $30,000.

  1. On March 14, 2017, a mediation meeting was convened to attempt to resolve the dispute. The Student was in attendance and the Provider was represented by a member of management and a representative of their board. No settlement of the dispute was reached at mediation.  

Student’s Position

  1. The Student confirmed that they are no longer enrolled with the Provider and did not successfully finish the MCQ component of the course. They do not wish to return to the Provider to complete the studies. 
  2. The Student does not believe that they were provided with the quality or number of classes that they had enrolled for and that a refund should be made on that basis.
  3. The Student’s position is that the amount of $23,000 refunded by the Provider is insufficient based on their calculations.

Provider’s Position

  1. The Provider’s position is that the matters was resolved between the parties in June 2016, and they believe that by way of conduct, the $23,000 was received as a full and final settlement.
  2. Moreover, if it is found not to be a full and final settlement, the Provider’s position is that the $23,00 refunded is a sufficient remedy when the first part of the course as well as standard administrative costs are taken into consideration.

Discussion

  1. There are two questions the International Student Contract Dispute Resolution Scheme must determine:  
  1. First, whether the $23,000 paid by the Provider to the Student is to be considered a full and final settlement.
  2. Second, if not, whether the $23,000 refunded to date is a sufficient remedy to the Student’s complaint.
  1. To determine the first part of this question, I must consider the relevant legal principles of accord and satisfaction. 
  1. Whether the payment made by the Provider to the Student was accepted as a full and final settlement is essential to the determination of this matter. I consider the well-established legal principle of accord and satisfaction which requires that there must be a genuine meeting of the minds between the parties to the dispute that any payment made is in fact accepted as being in full and final settlement.
  1. The Provider processed the refund of $23,000 despite the Student not agreeing to sign an agreement or acknowledging the amount as a full and final agreement as requested by email correspondence. 
  1. In this case, I find that the Student has made their position clear and the payment should not be considered accepted by her as being in full and final settlement of the complaint. 
  1. Given the determination by NZQA that there had been a breach of the code by the Provider, I find the Student’s complaint to be upheld. 
  1. I must now consider whether the $23,000 that has been received by the Student is a sufficient remedy to the breaches in question. The Student and Provider both acknowledge that the first portion of the course was completed successfully and have both taken this into consideration when providing their calculations. The same can be said for the course books and to an extent the MCQ tutorials. 
  1. I consider the Marketing Fees included in the Providers calculation of approximately $5000 to be a reasonable administrative expense, however, as the course was not completed, it may be suitable for the Provider to refund a portion of this. 
  1. Given that the Student completed the first of the three portions of the course, I consider that the same portion of the marketing fees applicable.
  2. Subtracting this amount ($1,666) from the Student’s calculations leaves a total amount of $22,970, just short of that refunded.

Conclusion

  1. In the circumstances of this complaint, the Provider reimbursed a significant portion of the course fees as a result of negotiations with the Student.
  2. Although it has been found that the Student did not accept this reimbursement as a full and final settlement of the matter, the amount was sufficient to remedy the circumstances that lead to the complaint being raised.
  3. The proposed decision of the International Student Contract Dispute Resolution Scheme is that the Student’s complaint is upheld but no further award is made in this matter.
  4. The parties are now invited to provide any final comments on this proposed decision within 10 working days of it being issued, before the decision is finalised.

Final Decision

  1. Following the proposed decision, comment was provided from the Student and in turn the Provider in response. 
  2. My attention has been brought to a document from NZQA dated 19 May, 2016 titled “Outcome of Formal Complaint Investigation”. The findings in this document have changed my decision as noted below.
  3. NZQA deemed that [the Provider] had changed the programme length and frequency of tuition without approval from NZQA and accordingly found that “[the Provider] has delivered a programme it does not have approval for or accreditation to deliver.”
  4. Based on this finding, I do not consider that the arrangements put in place by [the Provider] are what was agreed to by the Student in the Offer of Place and accordingly, the Student should be reimbursed for the tuition charged.
  5. Based on earlier calculations in this decision, the Provider submits that 28 hours of tuition took place at a costing of $150 per hour, totalling $4,200. 
  6. Further, I do not consider the charge of $900 for online access to MCQ to be a reasonable administration fee based on NZQA’s findings of the programme. 
  7. The final decision of the International Student Contract Dispute Resolution Scheme is that the Student’s complaint is upheld and an award of $5,100 granted. 

 

Dated: 28 April 2017 
Anthony Syder
Resolution Practitioner
International Student Contract Dispute Resolution Scheme