Summary of complaint

  1. The husband and wife (the Students) enrolled in a course with the Education Provider (the Provider), which they attended for a number of weeks, prior to withdrawing from the course. The Students seek a refund of the balance of the course fees which were paid in advance. The Provider has agreed to refund a portion of the fees only. The Students raise a complaint with the International Student Contract Dispute Resolution Scheme, seeking an order that the full balance of the course fees be refunded.
     

Outcome

  1. The Students complaint is dismissed. I find there is no obligation on the Provider to refund the balance of the course fees as claimed.
     

Background

  1. The Students enrolled with the Provider to undertake an English language course, commencing on 14 September 2015.  
  2. [Redacted].
  3. The ‘Application form’ from [the wife] has been provided, which includes a ‘declaration’ that was signed by the applicant.  That declaration includes confirmation that [they] had read and accepted the conditions of enrolment, found on the back of that form. That includes the following condition at ‘6’:

“If you are enrolled for a course of study of thirteen weeks or longer and withdraw within the first ten working days of the first date of the course for which attendance of the student at the establishment is required, you will be refunded in full less a deduction for costs incurred by [Provider name] up to a maximum of 25% of the fee total paid…If you withdraw 11 or more working days after the first date of the course for which attendance of the students at the establishment is required you are not entitled to a refund.”

  1. On 2 July 2015, both students were advised that their application for study was accepted.
  2. I understand the course started on 14 September 2015.
  3. On 22 October 2015, a ‘withdrawal / refund application’ form was completed for [the wife]. The new finish date was recorded as 30 October 2015. With respect to reasons for the withdrawal, the following is recorded:

“Need to go back to [Home Country] because for the inheritance procedures. Will come back on 18 January 2016 and going to extend the course.”

  1. On 28 October 2015, the Students advised that they wished to undertake further study with the provider.  That would have allowed a ‘credit’ for [the wife] to be used.  An additional [$amount] was paid principally to cover further study costs for [the husband].
  2. The Providers states that a further withdrawal was requested on 15 January 2016, on the basis of “inheritance problems” and “the wife’s mother’s health problems”.  
  3. Subsequently the Students applied for a refund of the course fees.
  4. The provider states that a negotiation occurred, and it was agreed the provider would make a partial refund totaling [$amount], comprising: a. The full amount of the enrolment for the second period for [the husband], minus the enrolment fee [redacted]. b. Other application and materials fees totaling [$amount]
  5. The Students were dissatisfied with this offer, and a complaint was lodged with the International Student Contract Dispute Resolution Scheme.
     

Students position

  1. The Students have provided a combined complaint and response.
  2. [The wife] states that prior to travelling to New Zealand, that [she] needed to undergo surgery on 13 July 2015 [redacted].  Subsequently the student travelled to New Zealand and commenced the course but found that she was not able manage for health-related reasons. The student states that “my body could not last to live in NZ after operation”, and accordingly she returned to [Home Country] in November 2015 to convalesce. 
  3. The Students state that during the enrolment process, they had advised the enrolment agent of the recent surgery for [the wife]
  4. The Student states that she was not able to return to New Zealand following a return to [Home Country], and accordingly applied to the Provider for a refund of course fees.
  5. The Students position is that the Provider should refund some [$6,000 approx], being the portion of the fees for the balance of the course not attended.
  6. While it was acknowledged that the Provider had offered that the Students could return to a later course, the Student states that she would not be able to return to New Zealand for health and family reasons.
  7. The Students state they were not aware of the Providers rules regarding refunds until after they had commenced the course.
     

Providers position

  1. The Provider states that some two weeks following the commencement of the course, that the Students elected to return to [Home Country] between 28 September 2015 and 19 October 2015, which the provider states was for child’s school holiday.
  2. Following return to the course the students underwent a further few weeks of study, before withdrawing on 30 October 2015. The Provider states that the reason given on the withdrawal form was that the Students “need to go back to [Home Country] because for the inheritance procedure”. The Provider states that no mention on the form, or to its staff, was made of any health-related issues.
  3. However, the provider states the Students had indicated they would return to the course on 1 February 2016, and therefore the remaining course fees were treated as a credit for a course to commence from that date.
  4. On 28 October 2015 an application was received to enrol [the husband] for a further 14 course from 8 July 2016.  An additional [$3,000 approx] was paid for this further course.
  5. Ultimately, the Provider states that a request to withdraw was received on 15 January 2016:

“…due to ‘inheritance problems’ and ‘the wife’s mothers health problems.”

  1. Following discussion between the parties, the Provider agreed that it would provide a partial refund as set out above.
  2. The provider states that when the withdrawal form was provided, the reason for the withdrawal was recorded as “family matter”, without any mention of health issues.
  3. The Provider does not consider it is liable to provide any further refund to the Students.
     

Discussion

  1. The Students seek a refund of fees following their withdrawal from the respective courses of study. In short the Students consider that a full refund of the balance should be provided, whereas the Provider considers it has no such obligation.
  2. I consider this complaint must be considered both with respect to the statutory obligations on the provider as it relates to refunds, and also the relevant contractual obligations.
     

Statutory obligations

  1. Section 235A of the Education Act 1989 (“the Act”) is relevant. That provision relates to the refund entitlements for international students, and holds.

235A Refund entitlements of international students

(1) A private training establishment must—

(a) allow every international student enrolled for a programme or training scheme that is of 3 months’ duration or more to withdraw from it at any time within the refund period; and

(b) refund to every international student who so withdraws, without deduction, at least so much of any payment, or of the sum of any payments, made by the student to the establishment in respect of that programme or training scheme, and, if withdrawal from the programme or scheme also constitutes withdrawal from the establishment as a whole, in respect of enrolment at the establishment, as exceeds the percentage specified in the notice made under section 235B; and

(c) …

(d) refund to every international student who so withdraws a minimum amount or proportion, specified by the Authority, of any payments made by the student to the establishment in respect of the programme or training scheme.

(2) …

(4) In this section, refund period means the period that begins when the student’s fees are paid to the private training establishment (or paid directly to the independent trustee) and ends on the date specified in the notice made under section 235B.

  1. Section 235B requires that the Minister provide a notice, which simply put, sets out the minimum requirements for refunds for international students.
  2. Such has notice has been given, which is the Education (Refund Requirements for International Students) Notice 2012 (“the Notice”). This notice sets out minimum requirement for courses of study more than three months induration. The Notice confirms that if a student withdraws from the course within 10 working days of the commencement of the course, that the provider may only retain a maximum of 25% of the fees.
  3. However the Notice does not have any minimum requirements when a student withdraws more than 10 working days after course commencement, as is the case with these students with respect to the first period of enrolment.
  4. In relation to the second period of the enrolment, assuming that the Notice would be relevant for that second period, then I would also have accepted that the provider had complied with that notice. Again if the withdrawal occurred during the refund period, then the maximum funds that could be withheld would be 25%. The provider could withhold funds (totalling less than 25%) for certain costs, which could include administrative fees. In this case a full refund of $3,360 has been made less administrative fees of $225, which would seem reasonable.
  5. Accordingly, I find that the Provider has not breached any obligation with the Students, as it relates to the minimum refund requirements of the Education Act.
     

Contractual obligations

  1. The question then becomes whether the Provider is under any contractual obligation to refund a higher amount of fees.  
  2. The contractual obligations are those recorded on the back of the application form.
  3. While I have not been provided with a copy of the application form for [the husband] I have reviewed the application form for [the wife]. I assume both forms were the same. That form includes the ‘withdrawals and refund policy’ on the back of the application form, and is also referred to on the first page at the Students declaration. In particular the ‘declaration’ states that “I have read and accept the conditions of enrolment overleaf”.  
  4. I am satisfied that this form is clear and unambiguous that the conditions to apply for the enrolment, include the ‘withdrawal and refund policy’, which the Student has confirmed reviewing, as reflected in her signature on that form.
  5. The conditions found in that refund policy simply mirror the minimum obligations found under the notice.
  6. As I have found above, I consider the provider has not breached any obligation under the notice, and so must be the conclusion in relation to obligations under the contract.
     

Stated reasons for the withdrawal

  1. The Students position, is that given the medical situation for one of the Students, including wider family circumstances, that a refund should be made.
  2. I have not been pointed to any provision in the contract which would allow a refund of fees following withdrawal for such reasons. While I accept they may well be genuine reasons for ending the course early, they are not I find reasons to compel the provider to issue a refund in excess of its obligations otherwise under the law.
     

Conclusion

  1.  I find that the Provider is under no obligation to refund to the Students any further course fees.
     

Proposed decision

  1. The proposed decision of the International Student Contract Dispute Resolution Scheme, is that the Students complaints are dismissed.
     

Parties further comments

  1. A response has been received from [the wife] stating that:
  1. The Student was unaware of the refund policy, because it was not explained to them.
  2. The training has not been received, notwithstanding having been paid for.
  3. The Provider is profiteering from international students.
  1. The Provider advised it had no further comment to make.
     

Final decision

  1. I have considered the response from the Student, however I am not persuaded that grounds have been established to show that the proposed decision should not stand.
  2. The Student submits that the refund policy was not explained to them. Even if that was the case, the Student has not disputed that the refund policy was not notified to them on the rear of the application form. There is a reasonable expectation that any enrolling student will review and understand the terms and conditions that they are signing up to.   
  3. I accept that the Students have not received all of the training they have paid for. However, the reason for that is because the Students withdrew from the programme. I am satisfied that the Provider has complied with its legal obligations both under the contract between the parties, and the respective statutory obligations.
  4. I am not persuaded that this is a case of a provider profiteering on international students. It is likely that the provider would have delivered the training the students paid to receive, had the withdrawal not occurred. It can also be accepted that there are legitimate administrative costs which would be incurred in reliance on the contract between the parties. For example, staff and building costs. The fees held by the provider would reasonably go to offset those costs.
  5. For the above reasons, I conclude that the proposed decision as set out above, should be confirmed as the final decision in this complaint.  
  6. The final decision in this complaint is dismissed.

 

Dated: 9 March 2017 
Rex Woodhouse
Barrister
International Student Contract Dispute Resolution Scheme