Legal Issues Arising From The Closure Of A Private College In Australia

Background of the Private College and Its Closure

1.Discuss the legal issues arising from the article. Refer to relevant statute and/or case law in your answer.

2.Advise Tina and Aristotle whether William has breached the common law, the ASIC Act or the Corporations Act.

1.The sage Institute is a vocational training and education service provider. The group on consisted of eight entities. The primary services of the group included:

• Certificate accredited based on classroom and workplace I am diploma;
• Virtual learning and flexible online learning;
• Work placement and experience based industrial training;
• Providing employment to students after completing the qualification;

The Nexus and ACI where's the largest business in the group. The other organizations were the supporting entities for ACI and nexus. These organizations helped the two companies by providing funding, employment, property, telecommunications, plant, and equipment leases. On analyzing the position of the company, it was found that the operation of the group was mainly funded by the ACI. It can be seen that ACI has accounted for 65% of the revenue during the financial year 2016[1]. On analyzing the operation of the company, it was found that the group relied on the receipt of VET Free Help advance from the Commonwealth so that ACI could remain solvent. It was seen that the VET installment that was due to be received in March but was delayed. This has caused a detoriation of the cash position of the group. The assets of the group mainly included intercompany and student debt. The net asset position and working capital of the company were highly reliant on the collectability of the debtors. It can be said that group has been estimated remained insolvent since December 2016.

The article highlighted that private college had shortage of fund however it spend one third of its taxpayers budget in advertising. The decision of the college to close down has left the student with shock. It was seen that the college has earned over $32 million in two years. The earning was made through VET Fees HELP scheme for loan while graduating the 45% of the student. In the case in administrative appeal, Tribunal the hearing was held against the company’s decision to spend $6 million in advertising the innovative diploma officers using course for one year. The course have to be shut down as a deal with the national basketball League failed. Mr. Wills was used as the face for the partnership between the stage and Melbourne United basketball club. It was denied by says that any amount was paid to the Melbourne United[2]. However, Mr. Wills after getting the media report of the college also claimed to be victim of the institute. Mr. Wills argued that he had no financial interest and was not engaged in the running of the business. It was argued by the college that it has not received any federal government support since the late 2016 therefore had to face cash dry. The administrator of a college said that the decision of selling the college to another group was not going forward. The company did not received any bid proposal that allowed the group to continue the courses across the Australia. The administrator advised that the group has ceased is operation in Brisbane and Sydney. The student was told that they would be liable for paying the portion of course fees that has been completed. This payment has to be made by the student irrespective of the fact that the college has been closed.  This has caused eyelash out against the operators because they promoted the course a something that does not exist in our college. The student was misled by the wrong marketing campaign of the college. The college marketed itself to be the best and biggest in the industry but does not have enough resources to run their operation. The training facility offered by the college had old equipment’s in office floor. The interactive classes has been suspended in Victoria and has been running in Sydney alone. The cooperation with Australian skills quality authority and the Australian Council for Private Health education and training is sought so that students can be enrolled in different courses. That means the students will be transferred to another provider for completing the course. This has been a bad time for the student so it is important that necessary legal actions are taken for addressing the grievances. As per the general view of the law, it can be said that the institute has violated many laws and the principle of natural justice[3]. The institute has committed fraud or breach of Trust by making wilful wrong advertising. The advertisement stated that Institute provides training that other institutes cannot provide. However, the institute did not fulfill this commitment, as they did not provide any modern facility a training program that was not provided by others. The institute failed to operate as a result of cash crunch. This means there was a failure on the part of the institute. However, institute demanded from the student the remaining fees of the part of the course that has already been provided. The demand of the fees by the institute is illegal as it was violated the contract of providing the complete certificate after the course[4]. Therefore, as per the Contract Act, the student should demand the institute did not honor compensation from the college as the contract between the student and the organization.

Legal Issues Arising from the Closure of the College

The Tina and Aristotle Papadopoulos migrated to Australia from Greece. They sold the family fruits shop at a profit of $750000. They decided to invest this money and looked for help from a financial advisor. On advice of the advisor they invested in shares of a company with the aim of receiving double of investment within 18 months. The investment was made in big dreams Limited and it was performing poorly from the financial perspective. Therefore, it can be said that there was no bases for offering double return within 18 months. It was further offered by the financial advisor to take up insurance but they were not interested taking a new insurance. The financial advisor was mainly interested to sign new clients for receiving coffee gift cards. William prepared all the necessary paperwork for life insurance policy and provided no opportunity to the client for reading the document. It turned out that cost of insurance was high and the shares of value has fallen. In this case, the issue is to determine the nature of contract and determine liability of willful misrepresentation.

The rules that have been applied for determining the issues are given below:

• Bisset v Wilkinson [1927] AC 177
• Solle v Butcher [1950] 1 KB 671
• Google Inc v ACCC

In the case of Basset v Wilkinson [1927], it was found that the plaintiff purchased two blocks of land. for the farming of sheep. At the time of negotiation, the defendant told that if the place is maintained properly then 200 sheep could be kept in the vicinity. The property was purchased by plaintiff on the believe that it can hold 200 sheep’s. However, both the parties are well aware that the defendant has not carried out sheep farming on the land. The law provides that if the owner of the property makes any statement then it is a matter of fact. However, in this case the statements were expression of opinion and not a matter of fact[5]. In the case of Google Inc v ACCC the decision of the court is provided relating to the deceptive and misleading conduct. In this case, it was held that the Google was not misleading. Based on the above case laws, it can be said that the information provided by the advisor is a matter of fact and opinion. Therefore it can be said that the advice provided by financial advisor should be in accordance with law. In this case, wilful misrepresentation by the financial advisor was very high show the financial advisor will be liable to pay damages.

Conclusion

Based on the above discussion it can be concluded that the financial advisor should be liable for all the damages faced by the old couple.

References

Australian corporations & securities legislation. in , 1st ed., North Ryde [N.S.W.], CCH Australia, 2016.

Duns, J, A Duke, & B Sweeney, Comparative competition law. in , 1st ed., Cheltenham, Edward Elgar Pub. Ltd., 2015.

Newcastle City Centre Renewal Transport Management and Accessibility Plan. in , 1st ed., Sydney, N.S.W., AECOM Australia, 2010.

The Victorian rider handbook 2016. in , 1st ed., [Kew, Vic.], Roads Corp., Victoria, 2016.

Then, now, tomorrow. in , 1st ed., [Southbank, Vic.?], Mobil Oil Australia, 2015.

Based on the above discussion it can be concluded that the financial advisor should be liable for all the damages faced by the old couple.

J Duns, A Duke & B Sweeney, Comparative competition law, in , 1st ed., Cheltenham, Edward Elgar Pub. Ltd., 2015.

Newcastle City Centre Renewal Transport Management and Accessibility Plan, in , 1st ed., Sydney, N.S.W., AECOM Australia, 2010.

The Victorian rider handbook 2016, in , 1st ed., [Kew, Vic.], Roads Corp., Victoria, 2016.

Then, now, tomorrow, in , 1st ed., [Southbank, Vic.?], Mobil Oil Australia, 2015.