FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) (No 3) [2019] FCA 1982

ORDERS

THE COURT ORDERS THAT:

1.    The parties furnish, by email to the associate to Justice Bromwich, agreed or competing orders arising from the reasons for judgment within 14 days, or such further time as may be allowed.

2.    A case management hearing be listed on a date to be fixed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BROMWICH J:

INTRODUCTION

1    The first applicant in this proceeding is the Australian Competition and Consumer Commission (ACCC). The second applicant is the Commonwealth of Australia. The respondent is the Australian Institute of Professional Education Pty Ltd (in liq) (ACN 126 628 215) (AIPE). The applicants allege that the respondent breached the Australian Consumer Law (ACL) in connection with the supply or possible supply of vocational education courses, including by engaging in a system of conduct or pattern of behaviour that was unconscionable, and by engaging in conduct that was false or misleading or deceptive.

2    The applicants commenced this proceeding against AIPE on 31 March 2016, before it went into liquidation. Later that year, on 6 October 2016, the directors of AIPE resolved to wind up the company, and liquidators were appointed on the same date. On 16 May 2017, over the opposition of the liquidators, I granted conditional leave under s 500 of the Corporations Act 2001 (Cth) to the applicants to bring this proceeding against AIPE as a company in liquidation: Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) [2017] FCA 521.

3    From 1 May 2013 up to 1 December 2015 (relevant period), AIPE conducted a business which included marketing and providing online vocational education training (VET) courses. Those courses were eligible for Commonwealth funding by way of a scheme of student loans under the Higher Education Support Act 2003 (Cth) (HES Act) known as the Vocational Education and Training Fee Higher Education Loan Program (VET FEE-HELP). Upon confirmation of a student’s enrolment in an eligible course, the Commonwealth paid the course fee directly to the VET provider, in this case, AIPE. The student incurred a corresponding debt of 120% of that course fee. That debt was payable through the income tax system once the student’s taxable income reached a certain threshold (between just over $51,000 to just over $54,000 per annum over the relevant period).

4    The VET FEE-HELP scheme was deliberately and significantly liberalised by the government in 2012 for the express purpose of addressing low participation rates of disadvantaged people, including those with a disability, living in regional and remote areas, coming from lower socio-economic backgrounds, from non-English speaking backgrounds, not in paid employment, and Aboriginal and/or Torres Strait Islander peoples. Prior requirements of progression to study at a higher education institution were removed, making vocational training an independent objective.

5    Each person had a lifetime assistance cap, at that time of less than $100,000. Money expended on any given course, whether completed successfully or not, reduced the government assistance available to that person in the future.

6    This proceeding is not about the quality of teaching provided by AIPE to consumers who were bona fide or genuine students and participated as such in the courses it provided, but about the enrolment of consumers whom the applicants contend did not meet that description. The label “student” can only safely be applied to those consumers who enrolled for AIPE’s online VET FEE-HELP funded courses and were suitable to be so enrolled. In these reasons, I therefore refer in a neutral way to “consumers enrolled as students”.

7    The applicants’ case turns on:

(1)    the way in which AIPE marketed to and enrolled consumers as students in its online VET courses, including through the use of recruiter organisations (agents) paid by substantial commissions, with employees in the field (recruiters); and

(2)    how it dealt with consumers who had been enrolled as students, especially in relation to a census date after which the debt to the Commonwealth was incurred.

8    The agency arrangement was confined to recruitment leading to enrolment, and did not extend to being able to bind AIPE in relation to the final step of entering into an enrolment agreement, that taking place between the prospective student and AIPE, albeit apparently with active involvement or assistance on the part of the recruiter. The agent’s role, via their recruiters, who were also thereby recruiters for AIPE, may be seen to be somewhat akin to a real estate agent, who facilitates a sale, but leaving the sale contract to take place between the vendor and purchaser. AIPE preferred to refer to agents as “service providers”, being a term introduced into policy documentation that was stated to take effect from 1 September 2015 for the final four months of the relevant period. However, that term does not usefully convey the nature of the agent’s role and accordingly they will be referred to as agents in these reasons.

9    There was only one such agent for most of the first year of the relevant years, Acquire Learning Pty Ltd, with other agents commencing to be engaged from about November 2013.

10    By mid-2014, AIPE had entered into contracts with 35 agents, although the evidence reveals that almost 80% of consumers enrolled as students during the relevant period were recruited by four of those agents. Neither AIPE, nor the applicants, called any evidence from any agent or any recruiter. The evidence concerning their activities comes from AIPE’s business records, key former AIPE employees and a small number of consumers approached by recruiters as described in the following paragraph.

11    The evidence of only 13 consumers who were, or were sought to be, enrolled as students, comprising a small fraction of the total numbers of consumers enrolled as students (in excess of 15,000 if the period is counted from 1 January 2013), is relied upon by the applicants to give direct evidence of what happened to them in an illustrative, rather than representative way, in the context of the rest of the evidence. In these reasons the term “consumer witnesses” is therefore used to refer to the 13 consumers who gave affidavit evidence of their enrolment experiences at the hands of recruiters from a number of different agents. They are not referred to as “students” because, as will be readily apparent when their evidence is considered in detail, it is clear that none of them were suitable to be enrolled as a student by AIPE.

12    The outcome that an overwhelming majority of consumers enrolled by AIPE as VET FEE-HELP funded students were not suitable to be enrolled in the first place and so were not genuine or bona fide students, while formally disputed, was a conclusion that is difficult to avoid. It is a conclusion that I ultimately reach on the balance of probabilities based on, inter alia, the disputed enrolment data relied upon by the applicants and the vast number, in excess of 11,000, who incurred VET FEE-HELP debts who failed to complete their courses, with many never being active students. The live question is whether this outcome was the product of unconscionable conduct, or only, for example, a consequence that flowed naturally from an education loan funding scheme that made this likely to occur no matter what, and therefore for which AIPE could not and did not bear any legal responsibility.

13    This posited alternative is not the complete universe of alternatives to the conclusion urged upon the Court by the applicants, but it adequately illustrates the nature of the binary determination required to be made between finding that unconscionable conduct has been made out as a matter of a system of conduct or pattern of behaviour, and a finding that this has not been made out. It is in the nature of the determination required to be made that reasonable alternative explanations for what took place to that posited by the applicants need to be considered in an evaluative sense. In that context, the evidence of the 13 consumer witnesses, while not led as a representative sample, served to illustrate how AIPE’s enrolment practices were able to be, or were even permitted and encouraged to be, implemented, rather than leaving that only to a process of judicial evaluation, including by processes such as inference.

14    The remaining and greater bulk of the evidence the applicants rely upon came from AIPE records, Commonwealth records, analysis of both kinds of records, and a number of key former AIPE employees. A report prepared by a social scientist, Dr Matthew Ericson, was rejected after his cross-examination, although certain demographic tables that he produced were admitted without objection. AIPE adduced affidavit evidence of one of its three joint and several liquidators, Mr Morgan Kelly, who was not cross-examined.

THE PLEADED POSITION AND CASE FOR THE PARTIES

Overview of the applicants’ case and AIPE’s response

15    The applicants seek to establish a “system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour” that was, in all the circumstances, unconscionable, contrary to s 21(1) via s 21(4)(b) of the ACL. Section 21 of the ACL, which is in schedule 2 to the Competition and Consumer Act 2010 (Cth) (CCA) provided as follows:

21 Unconscionable conduct in connection with goods or services

(1)    A person must not, in trade or commerce, in connection with:

(a)    the supply or possible supply of goods or services to a person (other than a listed public company); or

(b)    the acquisition or possible acquisition of goods or services from a person (other than a listed public company);

engage in conduct that is, in all the circumstances, unconscionable.

(2)    This section does not apply to conduct that is engaged in only because the person engaging in the conduct:

(a)    institutes legal proceedings in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition; or

(b)    refers to arbitration a dispute or claim in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition.

(3)    For the purpose of determining whether a person has contravened subsection (1):

(a)    the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

(b)    the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.

(4)    It is the intention of the Parliament that:

(a)    this section is not limited by the unwritten law relating to unconscionable conduct; and

(b)    this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and

(c)    in considering whether conduct to which a contract relates is unconscionable, a court’s consideration of the contract may include consideration of:

    (i)    the terms of the contract; and

(ii)    the manner in which and the extent to which the contract is carried out;

and is not limited to consideration of the circumstances relating to formation of the contract.

16    The Court, in deciding whether s 21 has been contravened, may also have regard to the following non-exhaustive considerations set out in s 22(1) of the ACL:

Without limiting the matters to which the court may have regard for the purpose of determining whether a person (the supplier) has contravened section 21 in connection with the supply or possible supply of goods or services to a person (the customer), the court may have regard to:

(a)    the relative strengths of the bargaining positions of the supplier and the customer; and

(b)    whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and

(c)    whether the customer was able to understand any documents relating to the supply or possible supply of the goods or services; and

(d)    whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the customer or a person acting on behalf of the customer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and

(e)    the amount for which, and the circumstances under which, the customer could have acquired identical or equivalent goods or services from a person other than the supplier; and

(f)    the extent to which the supplier’s conduct towards the customer was consistent with the supplier’s conduct in similar transactions between the supplier and other like customers; and

(g)    the requirements of any applicable industry code; and

(h)    the requirements of any other industry code, if the customer acted on the reasonable belief that the supplier would comply with that code; and

(i)    the extent to which the supplier unreasonably failed to disclose to the customer:

(i)    any intended conduct of the supplier that might affect the interests of the customer; and

(ii)    any risks to the customer arising from the supplier’s intended conduct (being risks that the supplier should have foreseen would not be apparent to the customer); and

(j)    if there is a contract between the supplier and the customer for the supply of the goods or services:

(i)    the extent to which the supplier was willing to negotiate the terms and conditions of the contract with the customer; and

(ii)    the terms and conditions of the contract; and

(iii)    the conduct of the supplier and the customer in complying with the terms and conditions of the contract; and

(iv)    any conduct that the supplier or the customer engaged in, in connection with their commercial relationship, after they entered into the contract; and

(k)    without limiting paragraph (j), whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the customer for the supply of the goods or services; and

 (l)    the extent to which the supplier and the customer acted in good faith.

17    The applicants assert that AIPE breached s 21 of the ACL in various ways. Its sales representatives, the applicants allege, visited low socio-economic communities to enrol consumers in its courses, including by calling on consumers in their homes, making representations that they could receive a free laptop computer or tablet by signing up to an AIPE course, and by offering these items as inducements. Additionally, the applicants allege that the recruiters told consumers that its courses were free, and failed to adequately explain the nature of the VET FEE-HELP scheme. The respondents are said to have provided financial incentives to its sales representatives in order to maximise the number of consumers enrolled in its course. These persons enrolled included those who could not use or access the Internet or a computer, had inadequate literacy or numeracy skills, or were otherwise unsuitable. These actions, it is said, were done in order to maximise AIPE’s revenue from payments by the Commonwealth under the VET FEE-HELP scheme.

18    The applicants contend that as a result of that asserted system of conduct or pattern of behaviour, a significant proportion of the enrolments should not have taken place, corresponding payments should not have been made by the Commonwealth to AIPE, and related debts should not have been incurred by the consumers concerned. In total, VET FEE-HELP payments were made by the Commonwealth to AIPE in excess of $210 million, although the sums potentially affected by this proceeding are only a presently unidentified portion of that amount.

19    The applicants also assert, as a much lesser part of their case, contraventions of ss 18, 29(1)(g), 29(1)(i), 76 and 78 of the ACL, which respectively proscribe misleading or deceptive conduct, making different types of false or misleading representations, and failing to comply with particular statutory obligations in relation to unsolicited consumer agreements. In the greater part, the conduct established by the evidence is only faintly defended by AIPE in terms of reliability, with appropriate concessions as to certain findings that are properly open to be made.

20    By a further amended originating application (in part amended to reflect injunctive relief no longer sought against AIPE due to it being in liquidation):

(1)    both applicants seek numerous declarations of contravention and a mandatory injunction requiring AIPE to refund to the Commonwealth amounts that were paid in purported discharge of any consumer’s VET liability as specifically identified that has not been repaid;

(2)    the ACCC seeks pecuniary penalties, a sealed copy of the reasons for judgment be kept on the Court file for the purposes of s 137H(3) of the CCA, orders seeking to rectify the position of consumers by way of non-party redress, ineligibility to VET FEE-HELP and annulment of liability to the Commonwealth and directions expunging enrolment references; and

(3)    the Commonwealth seeks a further declaration as to the effect of the non-party consumer redress orders sought by the ACCC.

21    There can be no enforcement of any pecuniary penalty, refund or costs order without the leave of the Court, because that was a condition of the Court granting the applicants’ leave to proceed under s 500 of the Corporations Act.

22    AIPE:

(1)    specifically denies that it engaged in a pattern of behaviour for marketing and enrolling consumers as students that was generally or specifically unconscionable, noting as discussed below that the case was conducted also upon the basis of a system of conduct which was also denied;

(2)    no longer denies that it engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, or that it made false or misleading representations in relation to certain of the individual consumers;

(3)    instead admits that, in the context of enrolling students in VET courses, failing to explain the nature of the VET FEE-HELP scheme and offering inducements can amount to misleading or deceptive conduct, but submits that the applicants’ evidence is inadequate on this point;

(4)    does not admit contravening ss 76 and 78 of the ACL in relation to unsolicited consumer agreements as alleged;

(5)    does not maintain a prior denial that “service providers” were agents or sub-agents of AIPE, but states that any loss or damage proven arose from conduct of unauthorised sub-contractors or sub-sub-contractors who were not acting as agents for AIPE;

(6)    denies that the individual consumers suffered loss or damage; and

(7)    does not admit that the Commonwealth is entitled to any repayments.

23    AIPE in substance denies that any real or substantial wrongdoing has been shown to have taken place beyond isolated events concerning the individual consumer witnesses. It attributes, in substance, if not in terms, what happened to the very nature of the post-2012 VET FEE-HELP scheme in opening up VET to disadvantaged members of the community. To put the substance of AIPE’s opposing case in simple terms, it contends that the applicants’ evidence failed to bridge the gap between:

(1)    on the one hand, consumers who may have been vulnerable and ripe for exploitation as the legislative target group for the post-2012 VET FEE-HELP scheme, and the recruitment practices that had the effect of encouraging enrolments that included consumers who might have had those characteristics; and

(2)    on the other hand, there being enough evidence to prove any system of conduct or pattern of behaviour that established unconscionable conduct in relation to that category of consumers.

Admissions as to background facts

24    It is convenient to reproduce the background facts that are admitted by AIPE, before turning to the allegations that are denied, in order to identify the area of dispute calling for an adjudication as to whether or not the applicants have discharged their burden and onus of proof. AIPE, in its further amended response to the applicants’ concise statement, specifically admits the following (at [1]-[13]):

[1]    The respondent, Australian Institute of Professional Education Pty Ltd (AIPE), has carried on the business of supplying online courses, including Diplomas in Travel and Tourism, Business, and Hospitality, since 2013. Each of these courses required at least approximately 6 months’ full-time study (and in the case of Diplomas in Hospitality, 12 months).

[2]    An eligible student who enrolled in an AIPE online course, each of which consisted of several units of study, was entitled to a Commonwealth student loan called VET FEE-HELP for each of those units of study. Under the VET FEE-HELP program, the Commonwealth paid eligible students’ course fees directly to AIPE in discharge of the student’s liability to pay course fees. Further, the students’ entitlement to a loan from the Commonwealth, the second applicant, was set by criteria determined by the Higher Education Support Act 2003 (Cth) (HESA) and by the Commonwealth.

[3]    Once a student’s annual threshold income has been exceeded the student may be required to make repayments as stipulated by the Commonwealth. There are circumstances where repayments would not need to be made even where the threshold is met, in accordance with criteria set by the Commonwealth.

[4]    There were 15,932 enrolments of students in AIPE’s courses between 1 January 2013 and 1 December 2015 and AIPE has received $210,890,848.80 for these enrolments.

[5]    Between 1 July 2013 and 25 August 2016, AIPE re-credited the amount of $24,660,402 in funding to the Commonwealth as part of its withdrawal of 1,681 of the enrolments specified in (4) above.

[6]    The Commonwealth has not paid the sum of $20,833,332.20 to AIPE pursuant to the advance payment determination made on 18 December 2014 for the period November – December 2015. The advance payment determination made on 18 December 2014 was revoked on about 9 March 2016.

[7]    Between 1 May 2013 and 1 December 2015 (the Relevant Period) AIPE entered into contracts with 35 service providers (Service Providers) to enrol students in its vocational education training (VET) courses. The Service Providers are listed in Attachment A to the Schedule to the Concise Statement filed on 10 May 2016.

[8]    AIPE has no knowledge of the total number of sub-contractors or other entities (together subcontractors) engaged by the Service Providers. The vast majority of AIPE’s contracts with its respective Service Providers prohibited the Service Provider from engaging sub-contractors without AIPE’s consent.

[9]    AIPE has consented to certain Service Providers engaging sub-contractors (Authorised Sub-Contractors), from particular dates, as set out in Annexure A to this amended response, for the purposes of marketing to and enrolling students in VET courses with AIPE.

[10]    During the Relevant Period AIPE accepted enrolments of students from both Service Providers and their Authorised Sub-Contractors through an online portal.

[11]    AIPE paid Service Providers a commission for referring students:

(a)    once the census date had been reached without the student having withdrawn, and in some of those cases the payment was reversible if AIPE “re-credited” the student and reversed the student’s debt; or

(b)    in respect of a small number of Service Providers, a service fee was paid before the census date but in those cases the service fee was repayable, or the Service Provider was required to provide AIPE with a credit equal to the amount of the service fee, if the student withdrew before the census date.

[12]    Some of AIPE’s contracts with Service Providers contained clauses describing a minimum number of students to be referred each month. The number of students was arrived at based on the Service Providers’ capabilities and having regard to the requirement set by the Commonwealth to estimate VET FEE-HELP requirements and other matters.

[13]    In terminating AIPE’s arrangements with [a] certain number of the Service Providers it stated as a reason for termination that the Service Provider had not met its minimum monthly student referrals but that for many of its Service Providers, over the course of the term of its contract with the Service Providers, it did not terminate Service Providers where that Service Provider did not achieve minimum referral of students for a particular month.

25    In addition to the above admissions, AIPE does not take issue, in its further amended response, in its opening submissions or in its closing submissions, with the conduct of its contracted agents and their recruiters being conduct properly able to be attributed to it. This is sensible, in light of Gleeson J’s conclusions about agency in Australian Competition and Consumer Commission v Cornerstone Investment Aust Pty Ltd (in liq) (No 4) [2018] FCA 1408 (Empower, because that is the name of the college involved), discussed below.

26    In response to requests by AIPE for further details of the facts and allegations made in the concise statement, the applicants filed a schedule to that concise statement. The schedule lists, in three attachments, the details of the contractual arrangements established by the evidence in relation to 35 agents who had contracts with AIPE, and a list of the recruiters of those agents. The schedule additionally pleads (at [7] and [8]):

[7]    Agents who were contracted to market courses on behalf of AIPE were not trained or given directions by AIPE staff in 2014 as to how its courses should be marketed to individual students so as to ensure that:

•    the enrolment of unsuitable students in its courses was avoided;

•    each potential student was informed of the financial obligations that arose from pursuing a course of study with AIPE;

•    each potential student was aware of the range of withdrawal opportunities without penalty if the student elected not to proceed with a course of study;

•    compliant practices were promoted among the agents contracted by AIPE.

Prior to January 2015 agents were not required by AIPE to attend training sessions offered by AIPE staff.

[8.1]    Agents and sub-agents [i.e. recruiters] visited the areas identified in paragraph 8.1 and recruited students in those locations.

AIPE sometimes gave agents leads as to particular locations in which students might be recruited.

At all material times, AIPE was aware of the locations from which its students were being recruited because:

(i)    At the time the agent and AIPE entered into the Student Enrolment Agreement, the agent and AIPE agreed the geographical areas in which the agent or sub-agent would recruit students; and

(ii)    Agents were required to give 2 weeks’ notice of any changes to those agreed areas;

(iii)    In regional locations, agents were required by AIPE to notify it of the suburbs to be visited by agents and sub-agents at least 2 weeks in advance; and

(iv)    AIPE was provided with the addresses of potential students by agents and sub-agents before they were formally enrolled into courses by AIPE.

Notwithstanding the knowledge of AIPE, it continued to enrol students from low socio-economic communities into its courses.

[8.3]    The representations were oral. The specific representations relied upon will be set out in the evidence.

[8.4]    The use of the word “including” in the paragraph is deliberate. The paragraph indicates the facts that the Applicants are aware of to date. In the event that additional facts come to light at the time when the Applicants serve their evidence, the Applicants will inform AIPE of those additional facts.

[8.5]    Due to the vulnerabilities of the students whom AIPE enrolled into its courses, and the relatively high cost of the courses offered, there was a heightened obligation on AIPE to ensure that students were aware of their VET FEE-HELP obligations before they were enrolled. The evidence of the individual students recruited on behalf of AIPE will demonstrate that the agents and sub-agents did not explain the nature of their VET FEE-HELP obligations to them and that the students were ignorant of their debt to the Commonwealth. The evidence will demonstrate that the Agents and Sub-Agents often represented that the courses were free, or, if they were not free, that the students would never have to repay the debt. Further they often represented to students that, if they enrolled in a course, they would be given a free laptop computer or tablet, when in fact the laptop was provided on loan.

[8.6]    As above, this is a matter for evidence, which will be provided by students enrolled into AIPE courses.

27    In the further amended response, AIPE pleads as follows (at [14A], [14B] and [15A]):

[14A]    AIPE admits that certain Service Providers and Authorised Sub-Contractors, on its behalf, and for the purposes of recruiting and enrolling students in VET courses of study:

a.    visited, in addition to suburban and urban areas, low socio-economic communities, including rural towns, remote communities and communities with Aboriginal populations:

b.    conducted face-to-face marketing by calling on consumers in their homes, telephoned potential students and conducted group marketing sessions at public venues, such as careers and education exhibitions and school presentations.

[14B]    AIPE admits that it provided to students enrolled in VET courses who requested a learning device, laptops, on loan, which had been configured with relevant course material for the course in which the student was enrolled and which were required to be returned by the student at the completion of their course of study.

  [15A]    AIPE admits that in the context of enrolling students in VET courses:

a.    a failure to explain in plain and clear terms the VET FEE-HELP scheme and that it would leave a person with a debt to the Commonwealth: or

b.    offering a free laptop to poorly educated or illiterate persons on the basis that the person signs up to a VET FEE-HELP course without explaining in plain terms the VET FEE-HELP scheme:

can amount to misleading and deceptive conduct.

28    With regards to the agency issue, s 139B(2) of the CCA, which is deliberately in similar terms to s 84 of the CCA (and s 84 of the predecessor Trade Practices Act 1974 (Cth)), provides as follows:

Any conduct engaged in on behalf of a body corporate:

(a)    by a director, employee or agent of the body corporate within the scope of the actual or apparent authority of the director, employee or agent; or

(b)    by any other person:

(i)    at the direction of a director, employee or agent of the body corporate; or

(ii)    with the consent or agreement (whether express or implied) of such a director, employee or agent;

if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the director, employee or agent;

is taken, for the purposes of this Part or the Australian Consumer Law, to have been engaged in also by the body corporate.

29    In Empower, Gleeson J, in dealing with the application of s 139B(2)(a) and the attribution of the conduct of agents and their recruiters in marketing a VET provider’s courses to such a provider said as follows (at [282] to [287]):

The term “agent” is not defined in the Act or in the ACL. It is thus appropriate to have regard to the meaning(s) of agent at common law.

It has been observed that the word “agent” is one that can cause difficulty because of its potentially wide and varying meaning: Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389 (“Tonto”) at [170] per Allsop P (Bathurst CJ and Campbell JA agreeing); NMFM at [512] per Lindgren J; see also Dal Pont, Law of Agency (3rd ed, LexisNexis, 2014) at [1.1].

The key feature of an agency relationship is that the agent acts on behalf of the principal. That this is the key characteristic of agency explains why, in Australian Competition and Consumer Commission v Maritime Union of Australia [2001] FCA 1549; (2001) 114 FCR 472, Hill J at [81] observed that s 84(2) appeared – by its reference to “on behalf of” in addition to “agent” – to have a “double requirement” of agency. In Tonto, Allsop P (with whom Bathurst CJ and Campbell JA agreed) said, at [177]:

Agency is a consensual relationship, generally (if not always) bearing a fiduciary character, in which by its terms A acts on behalf of (and in the interests of) P and with a necessary degree of control requisite for the purpose of the role. Central is the conception of identity or representation of the principal.

His Honour said further at [177]:

It is sufficient to recognise that the essential characteristic is that one party (A) acts on the other’s (P’s) behalf, and that this will generally be in circumstances of a requirement or duty not to act otherwise than in the interests of P in the performance of the consensual arrangement.

It is well established that where a question arises as to whether two persons have a relationship of agency, the label they apply to the relationship, or expressly disclaim, is not determinative of the nature of their relationship. As a result, a term in a written contract between the persons that their relationship is not one of agency will not determine the matter, although such a term must be given proper weight: South Sydney District Rugby League Football Club Ltd v News Ltd [2000] FCA 1541; (2000) 177 ALR 611 at [134]-[135] per Finn J.

As Allsop P observed in Tonto at [178], it should not be controversial that the concept of agency may properly extend to persons whose roles may be described as “canvassers” or “introducing agent”. There, his Honour quoted, with apparent approval, a passage from Bowstead and Reynolds on Agency (19th ed, Street & Maxwell, 2010) at [1-019], where the authors observed that such agents may only introduce a third party to the principal and leave them to enter a contract between themselves. However, such agents often “have authority to receive and communication information on their principals’ behalf, and in so doing have the capacity to alter their principals’ legal position”.

30    After considering the particular contractual terms and arrangements, Gleeson J at [298] to [300] considered, by reference to long-standing authority, whether the conduct of the agents (including via their recruiters) was engaged in on behalf of the VET provider, and concluded (at [301]):

In general, and subject to the question of conduct which might be outside the scope of the agents’ authority, the conduct of the agents in selling and promoting services provided by Empower was conduct engaged in on behalf of Empower because it occurred:

(1)    in the course of their respective agency relationships with Empower;

(2)    when the agents were acting as representatives of Empower; and

(3)    for the benefit of Empower, that is, to build the business of Empower.

31    On the topic of the scope of the agents’ actual or apparent authority, Gleeson J said the following (at [302] to [308]):

In the law of agency, the liability of the principal for an agent’s defaults can be explained by the principal’s ability to stipulate an agent’s authority: Dal Pont, Law of Agency [22.15].

The expressions “actual authority” and “apparent authority” are not defined in the Act or ACL. It is therefore useful to have regard to the general law in determining their meaning.

At common law, the principal is civilly liable for an agent’s torts committed by the agent while acting within the scope of his or her actual or apparent (also called “ostensible”) authority: Ex parte Colonial Petroleum Oil Pty Ltd (1944) 44 SR (NSW) 306 at 308. As to the latter, Jordan CJ repeated the following statement from his decision in Bonette v Woolworths Ltd (1937) 37 SR (NSW) 142 at 151:

If an agent is authorised to do a particular class of acts, the principle is liable if the agent does an act of the class authorised notwithstanding that it is done mistakenly, negligently or wrongfully; and a principle cannot escape liability by expressly prohibiting his agent from making mistakes or being careless in carrying out his duties …

Concluding:

A principal is not, of course, responsible, either civilly or criminally, for anything done by a person who is in fact his agent, if it is done by that person on his own behalf and not in the course of the performance of his duties as agent or within the scope of his general authority as agent.

As a matter of interpretation, these principles apply under s 139B so that the conduct of Empower’s agents in selling and promoting Empower’s courses (being conduct of the authorised class) is taken, for the purposes of the ACL, to also have been engaged in by Empower.

This conclusion is consistent with cases in which the principal has been found liable for the misleading or deceptive conduct of its agent: see, for example, Aliotta v Broadmeadows Bus Service Pty Ltd (1988) 10 ATPR 40-873, Transport Accident Commission v Treloar (1991) ATPR 41-123 at 52,819 and Havyn Pty Ltd v Webster [2005] NSWCA 182; (2005) ATPR (Digest) 46-266.

It follows that the conduct of the agents in using any of the alleged marketing methods is, by s 139B, taken to have also been engaged in by Empower.

It also follows that the conduct of the agents the subject of the evidence given in relation to the Consumers below is, by s 139B, also taken to have been engaged in by Empower.

32    I am satisfied, as was Gleeson J in Empower that, generally speaking, the activities of the agents and recruiters were agents of AIPE within the meaning of that term in s 139B, extending to the conduct of the recruiters in selling and promoting education services by AIPE. This conduct plainly occurred in the course of the agency relationship between the agents and AIPE, including the conduct of the recruiters. The agents and recruiters were generally acting as representatives of AIPE and were doing so for the benefit of AIPE, building its business by the recruitment of consumers to become enrolled as students. Except for extreme or aberrant behaviour, such as making overtly false statements, which would likely fall outside their authority, I accept that the recruiters were ordinarily acting within the scope of their actual or apparent authority on behalf of AIPE.

33    In any event, the applicants submit, and I accept, that even if the conduct of some of the recruiters was not the conduct of AIPE under s 139B(1)(a), it does not follow that such conduct is outside or irrelevant to the system of conduct or pattern of behaviour alleged. AIPE’s enrolment system involved the implementation of its decisions and actions, which facilitated and encouraged conduct in the field by reference to the structure of the written contracts with the agents, the payment of large commissions and the lack of processes identified in some detail below to ensure that only consumers who were suitable were enrolled as students.

Core disputed allegations

34    The core disputed allegations relied upon by the applicants are sufficiently succinct to reproduce rather than summarise. At [6]-[13] of the concise statement, the applicants allege as follows:

[6]    AIPE paid the Agents a commission (representing between 15-25% of the course fee) for each student enrolled into a course, thus giving them a financial incentive to maximise the number of students enrolled. Some of the agency contracts contained clauses stipulating a minimum number of students to be recruited each month. AIPE monitored the success of its Agents in meeting sales targets by organising monthly or bi-monthly meetings with them, and in some instances, AIPE terminated the contracts of Agents who did not meet the minimum monthly requirement for recruitments.

[7]    AIPE failed to provide any, or adequate, training or instruction to the Agents or Sub-Agents [i.e. recruiters] to ensure that their conduct on behalf of AIPE complied with the requirements of the Australian Consumer Law (ACL), which is Schedule 2 to the Competition and Consumer Act 2010 (CCA).

[8]    During the Relevant Period, AIPE engaged in a pattern of behaviour for marketing and enrolling students in its courses. This pattern of behaviour involved certain Agents and Sub-Agents (the Applicants do not allege that this conduct was engaged in by all Agents and Sub-Agents):

8.1    visiting low socio-economic communities, including rural towns, remote communities and communities with Aboriginal populations, to recruit disadvantaged or vulnerable students.

8.2     conducting face-to-face marketing by calling on consumers uninvited in their homes or the homes of relatives or friends, telephoning potential students at their homes and conducting group marketing sessions at public venues, including clubs.

8.3    making false or misleading representations to prospective students that:

(a)     the courses were free, when in fact a student immediately incurred a lifetime debt to the Commonwealth;

(b)    if the prospective students elected to sign up for VET FEE-HELP, the debt would never have to be repaid, when this was not the case;

(c)    the courses were specifically designed for Aboriginal people, when it was not; and/or

(d)    if the prospective students enrolled in a course they would be given a free laptop computer or tablet, when in fact the laptop or tablet was provided on loan.

8.4    using unfair tactics, including offering inducements to prospective Aboriginal students to enrol in a course, including Wi-Fi access and mobile phone credits, and paying Aboriginal people (in cash) to assist in recruiting other Aboriginal people to enrol in courses.

8.5    failing to explain to prospective students the nature of their VET FEE-HELP obligations if they enrolled in a course, so that most of the students did not know that they had incurred a debt to the Commonwealth or when that debt would have to be repaid.

8.6    not undertaking any or any adequate assessment of the literacy, numeracy or computer skills of the prospective student, although after March 2015 Agents and Sub-Agents assisted the students to complete their learning, literacy and numeracy tests which were ostensibly designed to determine the student’s ability to undertake a course.

8.7    not assessing whether students had the necessary skills to complete the courses, and as a result, AIPE enrolling students into courses that were not suitable for them, having regard to their limited education, reading, writing and education skills.

8.8    not considering whether students had access to the internet, and as a result, AIPE enrolling students for online courses when they did not have access to the internet; and

8.9    not informing prospective students of the fact that they could withdraw from a course, and that any withdrawal had to be prior to the Census Date, nor how the agreement could be terminated, and not providing students with a copy of the agreement.

[9]    During the Relevant Period, AIPE’s pattern of behaviour, set out in paragraph 8, was implemented at least in Queensland, Western Australia and New South Wales. Specific examples of the conduct include the conduct leading to the enrolment of nine students set out in Annexure A to this Concise Statement.

[10]    After receiving a student enrolment application from an Agent, AIPE did not routinely make a call to the student to verify whether he or she had the necessary skills to undertake the course, wanted to do the course, was aware of his or her VET FEE-HELP obligations, was aware that the course was not free, or advise that the student could withdraw from the course prior to the Census Date.

[11]    AIPE knew that each student would incur a debt to the Commonwealth regardless of whether he or she was capable of undertaking or completing the course.

[12]    AIPE enrolled students in courses for its own financial gain, knowing that few if any of them would actually commence the course, or take steps to withdraw from the course before incurring the debt. AIPE would therefore receive VET FEE-HELP payments for each student without, in most cases, having to provide any teaching services.

[13]    During 2014 and 2015, AIPE received complaints about the conduct of its Agents, both from students themselves who had been enrolled into courses and from other agencies representing students who had signed up for courses. Despite AIPE being aware of these complaints, it did not immediately terminate its contracts with those Agents, if at all, during the Relevant Period, nor instruct those Agents to cease the engagement of Sub-Agents to recruit students and did not seek to prevent those Agents from conducting door-to-door sales.

35    While the chapeau to [8] and the text of [9] of the concise statement reproduced above refer only to “pattern of behaviour”, the entire hearing of this proceeding, including opening and closing submissions, was conducted upon the dual basis of the applicants’ case being based upon establishing unconscionable conduct, beyond the consumer witnesses, by reliance upon the s 21(4)(b) concept of a “system of conduct or pattern of behaviour”. AIPE’s understanding that this was the case it had to meet was made explicit in AIPE’s closing written submissions at [25] to [26]. Thus, a pleading problem of the kind identified in Australian Building and Construction Commissioner v Hall [2018] FCAFC 83; 277 IR 75 at [25]-[26], and raised but not found to be a problem in Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 365 ALR 402 at [220]-[222], did not arise.

36    The applicants’ pleaded case is that AIPE exploited the vulnerabilities of the liberalised VET FEE-HELP scheme in a manner that was unconscionable. In opening written submissions dated 6 September 2018, prior to the first trial day on 17 September 2018, the applicants framed their characterisation of AIPE’s model for marketing to and enrolling consumers as students as follows (at [5]-[7], excluding footnotes, omitting parts not maintained in closing submissions, and emphasising points squarely going to the VET FEE-HELP scheme):

[5]    In the period from 20 February 2013 to 16 October 2015, AIPE received $211,002,401 in VET FEE-HELP payments from the Commonwealth in respect of students it enrolled in its online courses.

[6]    … AIPE had 6,057 students that were enrolled in 2015 and, of those, only 77 (1.3%) finished their course. All students enrolled in AIPE’s courses who did not withdraw before the census date and who were not subsequently withdrawn, or otherwise had their debt remitted, have been left with significant debts.

[7]    It is the Applicants’ case that AIPE recruited such a large number of students through its unconscionable business practices in marketing and enrolling students in its courses and failing to identify and withdraw unsuitable students before they incurred permanent debts to the Commonwealth. AIPE’s unconscionable business practices included the following key elements:

(a)    AIPE used third party recruiters to identify and recruit students on its behalf for enrolment in its courses. AIPE admits that it does not know how many sub-agents were recruiting students on its behalf …

(b)    AIPE incentivised its recruiters to sign up as many students as possible by paying them commissions of up to 40 per cent of the cost of the course per student (up to $8,376). AIPE required some agents to achieve a minimum number of student recruitments per month and monitored the performance of its agents in meeting their targets.

(c)    For a significant part of the Relevant Period, AIPE failed to provide any, or any adequate, training to its recruiters as to how to lawfully perform their role, including on matters such as ensuring that prospective students understood their obligations under the VET Scheme if they were enrolled in an AIPE course.

(d)    AIPE did not provide any ACL training to its employees or to the recruiters before August 2015.

(e)    AIPE enrolled students who were unlikely to be able, or inclined, to undertake and complete its diploma and advanced diploma level courses.

(f)    AIPE’s recruiters conducted face-to-face marketing by calling on prospective students uninvited in their homes and conducting sign-ups in public venues, including public bars. At least one of AIPE’s recruiters engaged in tele-marketing by cold calling prospective students for recruitment.

(g)    AIPE’s recruiters made false and misleading representations to prospective students including that AIPE’s courses were free, or were free unless students earned over a certain amount, that students would receive a free laptop for signing up to a course, or that the courses were specifically designed for Aboriginal people. AIPE’s recruiters offered prospective students inducements to enrol in a course, including cash and mobile phone credits. AIPE’s recruiters paid Aboriginal people (in cash) to assist in recruiting other Aboriginal people to enrol.

(h)    AIPE’s recruiters were ignorant of their legal obligations and failed to adequately explain (or explain at all) to students the VET FEE-HELP scheme and their obligations if they signed up to a course and received VET FEE-HELP assistance, including that they would incur a significant debt to the Commonwealth.

37    The underlying issue in this proceeding is whether the applicants have proven that this was what in fact took place, and if so, whether there was anything unconscionable in doing this, in the manner alleged.

38    AIPE characterises the key dispute as being whether, by reason of what is pleaded by the applicants at [8] to [13] of the concise statement (reproduced above), its system of conduct or pattern of behaviour in enrolling consumers as students during the relevant period was unconscionable in the broad and pervasive way alleged by the applicants. By its pleaded response to those paragraphs, AIPE effectively seeks to confine any possible success by the applicants to contraventions (and thereby remedies) in relation only to the small number of individual consumers who were witnesses. In substance, AIPE admits to at least the possibility of isolated contraventions in relation to those consumers, but maintains that the applicants have not discharged the burden of showing even that took place, let alone that something more than that had taken place.

39    On the third day of the trial, the Full Court decision in the VET FEE-HELP case of Unique International College Pty Ltd v Australian Competition and Consumer Commission [2018] FCAFC 155; 362 ALR 66 was handed down. Unique had features in common with this case, thereby giving significant guidance to the approach required to be taken. In Unique, the primary judge’s unconscionable conduct findings based on a system of conduct or pattern of behaviour were overturned. An important point to emerge from Unique is that unconscionable conduct cases, especially within the framework of the VET FEE-HELP scheme, turn on their own facts and evidence, including the forensic approach taken in bringing such a case.

40    The applicants in substance contend that this case has been brought in a materially different way to Unique. They contend that the evidence goes further than in Unique to permit the necessary findings to be made. AIPE aligns this case more closely to Unique and maintains the applicants’ case should therefore similarly fail, albeit that the resistance to much more limited findings concerning individual consumers is less emphatic. On any view, the evidence of the applicants’ system of conduct or pattern of behaviour case, and what conclusions should be drawn from that evidence, is the most important part of this proceeding.

Divergent views on what needs to be established and how

41    For the most part, the evidence was not disputed or made the subject of cross-examination. Limited rulings were required as to admissibility or restrictions on use (apart from the exclusion of Dr Ericson’s report, confining his evidence to tables containing limited demographic analysis). Nor was there very much dispute about the facts established by that evidence, as opposed to what to make of it, and what the evidence was capable of establishing. AIPE did not take any substantial issue in relation to what had happened to the 13 consumer witnesses relied upon by the applicants, although it cautioned about relying upon their account of what was said to them. In the end, the defence of the applicants’ individual consumer case was somewhat muted.

42    The greater part of AIPE’s case turned on arguments that the applicants’ evidence simply did not go far enough to make good their system or pattern case, especially when regard is had to the quality of evidence that is required, even on the balance of probabilities, when serious allegations are made. Reliance is placed on the practical effect of s 140(2) of the Evidence Act 1995 (Cth) as a legislative manifestation of the principles in Briginshaw v Briginshaw (1938) 60 CLR 336 per Dixon J at 362.

43    The applicants, however, state that it is sufficient that they demonstrate that the marketing and enrolment process and AIPE’s business practices in relation to consumers was unconscionable, as a system of conduct or pattern of behaviour. They do not, they submit, bear an evidentiary burden of proving each instance of conduct in relation to all consumers enrolled as students during the relevant period, nor even a large representative sample. This is on the basis that AIPE’s marketing and enrolment process was a widespread system of conduct or pattern of behaviour, geographically and temporally, and that this conduct necessarily involved conduct in respect of individual consumers affected by it.

44    In summary, the bulk of the ACCC’s case relies upon evidence of the systems and patterns of behaviour, with the evidence related to individual consumers enrolled as students intending to illustrate, by way of detailed examples, the outcomes these unconscionable systems and patterns of behaviour were likely to produce, and, by reference to enrolment data and other evidence, did produce.

45    In addition to differing positions on how a system of conduct or pattern of behaviour might be evidenced, the parties diverged on how much variation is permitted in order to constitute “a system of conduct or pattern of behaviour”. The applicants’ closing written submissions state that “AIPE’s recruitment and enrolment processes varied somewhat” over the course of the three-year relevant period. Those submissions then assert that:

In broad terms, AIPE’s enrolment processes involved unsolicited door-to-door contact by recruiters at prospective students’ homes and recruitment in public areas such as in public bars. Recruiters carried iPads and had students complete the AIPE enrolment form on the iPad. One of AIPE’s agents (Acquire Learning) made unsolicited telephone calls to prospective students, generally chosen from among people who had responded to online job advertisements.

46    AIPE seizes upon the reference to “varied somewhat”, and the way the submission on this topic is developed by the applicants (as described further below) to submit that this highlights a “troubling aspect” of the applicants’ case. AIPE asserts that because the central allegation is that AIPE engaged in “a system of conduct or pattern of behaviour” during the relevant period that was unconscionable, and because only one such system is pleaded in the concise statement, the applicants’ submission referring to the processes varying somewhat was at odds with the pleaded case. AIPE contends that it is incumbent upon the applicants to establish the features of the enrolment process alleged to have been engaged in by AIPE, that the enrolments process was deployed “in… such [a] manner or on a sufficient number of occasions” to constitute “a system of conduct or pattern of behaviour”, and that a system of that kind can be characterised as unconscionable.

47    AIPE points out that there is no pleaded allegation that the system changed during the relevant period, and submits that a variation in the enrolment process “may well be” inconsistent with the notion that a single enrolment process can amount to a system or pattern capable of being characterised as unconscionable, as pleaded. In this context, AIPE asserts that it made admissions in relation to the way in which service providers visited low socio-economic communities and conducted marketing face-to-face by home visits, telephone calls and group marketing sessions. However, it asserts that those admissions do not amount to an enrolment process that “in broad terms” had the characteristics described by the applicants. AIPE submits that the Court should be cautious in accepting such “broad brush” submissions upon the basis that they overstate the effect of the evidence and admissions. AIPE submits that:

The precise features of the enrolment process, whether those features were deployed in a systemic way and whether that system was unconscionable is the pivotal issue which is to be addressed and the Court is not assisted by broad brush summaries of the process.

48    The applicants respond in reply to the effect that AIPE operated a marketing and enrolment process in a number of States that had common features during the relevant period, and that while there may have been some variation in the detail, common features were present at all times and are asserted to be at all times unconscionable. These common features include, but are not limited to, the use of third party recruiters, the payment of large commissions to recruiters, the use of inducements to encourage consumers to enrol and a lack of systems and processes at the operational level to ensure that the respondent only recruited suitable consumers who were capable of completing the courses. The applicants contend that remains so, even though some limited improvements were introduced, including in relation to training, which are described by the applicants as cursory. The applicants therefore submit that none of those changes were such as to alter the asserted unconscionable nature of AIPE’s enrolment system overall.

49    In support of their argument, the applicants assert that an unconscionable system of conduct or pattern of behaviour can continue to exist as proscribed even where key features that constitute it vary or evolve over time. The applicants rely upon what was said by Rangiah J in Australian Competition and Consumer Commission v ABG Pages Pty Ltd [2018] FCA 764 at [37]. His Honour there observed:

While different elements of the system were used at different times in relation to different customers, the same system existed throughout this period and it was continuously applied by ABG Pages in relation to its dealings with customers and potential customers.

50    Rangiah J in ABG Pages characterised the systemic and unconscionable conduct that his Honour found had been established as forming part of an “ongoing, single episode of wrongdoing”. The applicants also cite Moshinsky J in Australian Competition and Consumer Commission v Harrison [2016] FCA 1543 at [10], where his Honour took a similar approach in describing the key elements of the system of conduct or pattern of behaviour found to be unconscionable. Moshinsky J in Harrison, albeit in dealing with a very different case concerning telecommunications consumer contracts, took a reasonably broad and general view of the conduct, rather than descending into variations in the fine detail that was involved in the execution of the single overall system that was alleged and proven.

51    The applicants therefore submit that there is no authority of which they are aware (and none is cited by AIPE) to the effect that an alleged system must be shown to have been “created at a particular point in time with all of its constituent elements identified and operating in a fixed manner over time”. Rather, the applicants submit, a system may evolve over time, which is consistent with the broad remedial approach which should be taken in interpreting and applying s 21 of the ACL. The applicants submit that the approach urged by AIPE would unduly confine the operation of s 21(4)(b) to a very narrow class of conduct, which would be at odds with both business practice and a sensible understanding of the overall legislative regime and proscription. They submit that the approach that they contend for allows for a system to adapt and evolve incrementally over time, yet still be found overall to fall within the proscribed concept, provided the essential elements relied upon do not materially change. I prefer and accept the applicants’ submissions on this topic. The suggestion of a single, narrowly drawn, system case is not reflective of the case that has been brought, and sought to be proven.

52    AIPE assert a number of other weaknesses in the ACCC’s evidence in support of its system or pattern case. First, it submits that the ACCC conceded that the recruitment methods of Acquire Learning do not form part of the system of conduct or pattern of behaviour alleged. This is said to present an issue as Acquire Learning was by far the most prolific recruiter agent for AIPE, and were indeed the only recruiter agent for AIPE from before the beginning of the relevant period until November 2013. AIPE submits that any non-party redress orders made on the basis of a finding of an unconscionable system or pattern of behaviour therefore need to exclude the approximately 40% of enrolments that were procured by Acquire Learning.

53    AIPE also submits that the substantial sums received by it are insufficient to evidence a “real motive” for enrolling students, and that nor is there any other evidence going to motive.

54    Evidence of the individual consumer witnesses is said by AIPE not to assist the applicants’ system or pattern of behaviour case, for the following reasons:

(1)    the 13 consumer witnesses were not relied upon to prove the case on a representative or sample basis;

(2)    the allegations are of a widespread system or pattern, despite:

(a)    it being conceded by the applicants that the impugned conduct was not engaged in by all recruiter agents;

(b)    noting the concession attributed to the applicants regarding Acquire Learning’s individual recruitment method not forming part of the system alleged, there being no other recruiter agent up until about September 2013;

(c)    the individual consumers are examples of conduct by only seven of the 35 recruiter agents used by AIPE; and

(d)    in a similar vein, the absence of evidence of what took place by way of oral representations or omissions by individual recruiters, or the practices put in place by their employer agents; and

(3)    an asserted lack of correlation between what happened to the 13 consumer witnesses and the system pleaded, having regard to the diverse locations that they came from, an asserted lack of clarity as to where those individuals fit into the pleaded case, and significant differences in the manner in which each of them was approached and enrolled, such that they cannot be relied upon to establish any uniform or consistent enrolment process; and

(4)    the evidence of the consumer witnesses does not cover the whole of the relevant period, with the first in time consumer witness giving evidence of events beginning February 2014.

55    The evidence of the employee witnesses was similarly attacked on the basis that none of them gave evidence as to AIPE’s practices prior to January 2014. This and other objections related to employee evidence are dealt with in greater detailed below.

56    The further alleged deficiencies of the applicants’ systems case noted above are misconceived or overstated for a range of reasons. First, the impugned conduct does not need to be proven, letter and verse, with regards to each and every agent. Nearly 80% of enrolments came from the four biggest recruiters, and the evidence of former AIPE employees concerned the system overall without that degree of parsing. Second, the concession made by the applicants as to Acquire Learning’s conduct not forming part of the system alleged was confined to its unique practice of using job seeker advertisements to target consumers to seek to enrol them in VET FEE-HELP courses, which was not of itself of any great moment on the applicants’ case. Other conduct of Acquire Learning, for example its language, literacy and numeracy (LLN) test, was expressly relied upon as illustrative of what the AIPE enrolment system permitted and even encouraged.

57    The suggestion of an absence of evidence of motive is also misplaced. Motive does not require confession. It can amply be established by circumstances, as it was in this case.

58    As to the criticism of the evidence not covering all of the relevant period, that is only so if inference is excluded. The key features of the enrolment scheme were demonstrated with sufficient clarity to support an inference that they were at least no better earlier in time, although it is reasonably clear that the problems escalated as the level of enrolments rose, a fact directly proven by the employee witnesses.

59    Ultimately, and most importantly, AIPE’s criticisms fail to appreciate that it is AIPE’s system that is under scrutiny. Other evidence relied upon, such as enrolment data or consumer witnesses, helps to prove what the system allowed or even encouraged to take place. To demand more granular evidence of particular transactions or individuals would defeat the strengths of s 21(1) via s 21(4)(b) of the ACL in not requiring proof of individual disadvantage, or requiring pervasive evidence for all points in time. Similarly, to demand evidence of the conduct of each and every agent is to mistake the focus of the inquiry to be made.

60    The approach urged by the applicants should generally be preferred to that asserted by AIPE, but with the following qualification when it comes to the assessment of what has taken place. The more general or abstract the system or behaviour that is alleged and proven, the harder it may be to establish that it has the character of being unconscionable for want of necessary detail to show that is so, or that it has the necessary pervasive and proscribed character. By contrast, too granular an approach may more readily demonstrate isolated instances of contravening conduct, but may fall short of showing that any overall proscribed system or behaviour took place. That process of characterisation forms part of the evaluative exercise required to be carried out, reflecting in substance the crux of some of the key competing arguments. That is because AIPE submits that the evidence relied upon by the applicants is not sufficiently granular at the enrolment systems level, and that any contravening conduct that is shown to have taken place in respect of individual consumers was isolated, even if repeated from time to time, and that this does not establish that its enrolment system overall had the proscribed character of being unconscionable. By contrast, the applicants rightly seek to draw all of the threads of evidence together, with the individual instances being illustrative of the way in which the system worked overall in an unconscionable way as alleged.

61    A problem with the approach taken by AIPE in its final submissions was, quite understandably in light of the evidence considered in some detail below, to focus on what was not to be found in the evidence, and to pick holes in the evidence that was there, but not to engage in detail with the accumulated and combined effect of the evidence that the applicants rely upon, nor to confront the inferential reasoning processes properly available to the Court. While the applicants had an onus to discharge, and while the seriousness of the allegations required that the evidence be of a quality sufficient to establish that those allegations were proved by more than (per Briginshaw) “inexact proofs, indefinite testimony, or indirect inferences”, it remained at all times a civil case to be proven on the balance of probabilities. This aspect is discussed below in some detail when considering the Full Court Unique decision. The wide ambit of s 21(1) of the ACL, via s 21(4)(b), enabling unconscionable conduct to be established by proving a “system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour”, must also be kept steadily in mind.

62    The key questions ultimately to be answered, beyond the individual consumer witnesses, were:

(1)    was it more probable than not that the conduct alleged by the applicants had taken place beyond that proven by direct evidence, such as by relying on the totality of the evidence and inferences able to be drawn; and

(2)    if so, did it have the requisite proscribed legal character of being unconscionable?

63    Given the gulf between the parties, it is necessary to consider a substantial volume of evidence, albeit a relatively small subset of the digital court book containing the equivalent of some 40 or so lever arch folders of documents, including affidavits, reports and AIPE business records, as well as limited viva voce evidence, mostly in cross-examination, in a methodical way. This was not the subject of any contrary view expressed by AIPE going to the detail of the arguments advanced by the applicants.

64    In conducting this evaluative exercise, the case pleaded by the applicants is of course central and important. However, a pleading does not and cannot contain every nuance and detail revealed by the evidence. This made the applicants’ oral and written submissions, both opening and closing, important to understanding the totality of their case, and to aid in the detailed consideration of the evidence. I consider that I am required to conduct my own assessment of the evidence within that broad framework, and am not restricted to every detail in the case as presented, nor on the other hand to express a view on every argument advanced. That is especially so as the parties relied only upon written closing submissions, which by necessity could not address every nuance in the evidence, nor require a response to everything that was thereby argued. The focus must be on what is determinative.

THE VET FEE-HELP SCHEME

Essential Features

65    In order to understand the significance of key parts of the evidence, and the use that the applicants seek to make of it, it is necessary to outline the essential features of the VET FEE-HELP scheme. It was a scheme to assist eligible consumers to undertake higher level VET courses. The scheme is detailed in Sch 1A of the HES Act as it applied in the relevant period. AIPE was an approved “VET provider” under that Act.

66    An introduction to the overall way in which the VET FEE-HELP scheme operated was helpfully summarised by Perram J in Australian Competition and Consumer Commission v Unique International College [2017] FCA 727. While his Honour’s ultimate conclusion as to unconscionable conduct was overturned by the Full Court on the particular facts and evidence in that case (as noted above at [39]), his Honour’s summary of the essential features of the VET FEE-HELP scheme was not affected. His Honour said (at [5]):

VET FEE-HELP is a shorthand for Vocational Education and Training FEE Higher Education Loan Program. … the VET FEE-HELP scheme had these pertinent features:

•    it was available to Australian citizens or holders of a permanent humanitarian visa who were resident in Australia, provided that they were enrolled in a full fee paying course approved for VET FEE-HELP (as Unique’s four courses were);

•    the Commonwealth would pay in full whatever the tuition fee was for each unit of the approved course and would treat the combined amounts as a loan to the student;

•    the loan would be repayable through the tax system once the student began to earn more than the ‘minimum repayment income’ ($53,345 for the period 1 July 2014 to 30 June 2015; $54,126 for the period 1 July 2015 to 30 June 2016) on the income above that amount at a sliding scale of between 4% to 8%. The highest rate became applicable at $99,070 during the relevant period;

•    each person had a maximum lifetime amount which could be borrowed through this and other related schemes (such as HECS). This amount was indexed and was $97,728 for the 2015 financial year. The amount which the student had at any time borrowed was specified in an account maintained by the Commonwealth called the FEE-HELP balance;

•    there was a 20% loan fee on top of the tuition fee which was also payable to the Commonwealth and which was debited to the student’s FEE-HELP balance; and

•    the amount of the student’s FEE-HELP balance was indexed to the Consumer Price Index (‘CPI’).

67    The relevant period in Unique was from 1 July 2014 to 30 September 2015, being in the latter part of the relevant period in this proceeding from 1 May 2013 to 1 December 2015.

68    In order to access a VET FEE-HELP loan, a student had to complete, sign and return a request for Commonwealth assistance (Assistance Request Form), in a form approved by the Minister, and return it to the VET provider on or before the census date for that unit of study: Sch 1A, cl 43(1)(h) and cl 88(3) of the HES Act. The version of the Assistance Request Form used by AIPE on its face had five check or tick boxes by which the person seeking a loan was required to declare that they had read the VET FEE-HELP information booklet, and were aware of their obligations to the Commonwealth if they received such assistance.

69    The applicants, in their closing submissions, draw specific attention to the terms of the Assistance Request Form. The design of the VET FEE-HELP scheme meant this form was plainly intended to be a very important part of the enrolment process. It was evidently intended to ensure, as much as possible, that consumers as prospective students understood the legal and financial obligations they were assuming by becoming enrolled in a course to which VET FEE-HELP applied. The contents of that form are therefore of importance in assessing the evidence going to the issue of AIPE’s enrolment practices and conduct, including by agents of AIPE. Specifically, the applicants point out that the Assistance Request Form required consumers to declare that they understood that:

(1)    they were requesting a loan from the Commonwealth in the amount of their VET tuition fees, whereupon the Commonwealth would pay the student’s tuition fees to the VET provider on the student’s behalf, and the student would incur a debt to the Commonwealth;

(2)    if they were a full fee-paying student, a loan fee of 20% would be applied to the amount of the VET FEE-HELP assistance provided;

(3)    the student would repay the Australian Tax Office the amount loaned plus the 20% loan fee; and

(4)    the student could cancel their request for VET FEE-HELP assistance at any time, but would become liable to pay a debt to the Commonwealth if they did so after the census date, regardless of whether they had withdrawn from or cancelled their enrolment in the VET unit of study.

70    It is helpful to reproduce the second page of an AIPE Assistance Request Form in evidence:

The above reproduction of the form gives a sense of the font size and density (although not a perfect reproduction as to overall size, but largely to scale), as well as the typographical and grammatical errors contained within (such as the first listed obligation switching from the first to the second person, and the spelling of “Conditions” as “Conidtions”).

71    As the discussion above shows, the integrity of the VET FEE-HELP scheme, and in particular the protection of the financial interests of the Commonwealth and of consumers, depended on each and every consumer enrolled as a student being aware of, and understanding, the vitally important features of that scheme as set out in the Assistance Request Form. It was a critical and mandatory safeguard, intended to prevent consumers who were unsuitable for VET study from becoming enrolled and incurring VET FEE-HELP debts. Doubtless that was why consumers were, by lodging that form, taken to declare that they aware of the obligations they were assuming if they received VET FEE-HELP assistance.

The VET FEE-HELP scheme and its potential for abuse

72    There were two inherently vulnerable features of the VET FEE-HELP scheme that were ripe for exploitation. The first is that an eligible student incurred a VET FEE-HELP debt to the Commonwealth of 120% of the fee even if he or she did not complete any part of the unit of study for which enrolment had taken place. If a person who had been approved for a VET FEE-HELP debt was enrolled as a student with a VET provider as at the census date, but did not in fact ever partake in the course, that provider would get the revenue benefit of the course fees from the Commonwealth, but would not have to incur the variable costs of providing the course to that person, including any related support. That would happen irrespective of whether the person who was enrolled was a bona fide or genuine student or not.

73    To the extent that the outcome of enrolling consumers who were not bona fide or genuine students was able to be maximised across a large enough pool of individuals, the VET provider would obtain revenue for those consumers without needing to employ staff to provide the services that were needed for bona fide or genuine students who did partake of study. This feature therefore created a significant, and reasonably obvious, windfall profit opportunity to a VET provider who wished to exploit it, or was even prepared to let it occur without correction.

74    There was nothing in the express terms of the VET FEE-HELP scheme that prohibited a VET provider from engineering such a windfall profit outcome, and a corresponding debt being incurred by someone who was never a bona fide or genuine student. The declaration aspect of the Assistance Request Form, by seeking to avoid consumers becoming enrolled except with open eyes, would, if properly used, at least help to reduce the risk of this happening. That is because consumers were meant to be warned that they were enrolling as a student, of the debt that they would incur by doing so, and that they needed to withdraw before the census date to avoid incurring that debt if they were not going to continue with a course.

75    Any enrolment system that failed to ensure that a declaration ostensibly given by a consumer prior to enrolment was genuine and informed would be at serious risk of constituting, or at least forming an important part of, a system of conduct or pattern of behaviour that was unconscionable.

76    As will be apparent from the AIPE Assistance Request Form reproduced above, the declaration was able to be made by the mere act of submitting the form. It made no provision for a signature or initials by way of any overt acknowledgement by a person of the key features of the VET FEE-HELP scheme. This was a serious systemic weakness, because the effect was that a declaration was taken to have been made, without any real safeguard to ensure that this aligned with reality. However, even signing a version of this form would be no better unless it was much more than, literally, ticking a box. Self-evidently, a student would not be able to give a genuine and meaningful declaration as part of submitting the Assistance Request Form if they did not have the skills to understand that it had that effect, and it was not otherwise expressly brought to their attention. That is especially so if signing or otherwise adopting the form was permitted to take place on an electronic device such as a tablet, but also if that was on a piece of paper viewed only fleetingly. Any enrolment confirmation given by telephone, rather than in writing, was inherently vulnerable to error, misunderstanding or misuse, especially if the original process was not sound.

77    What was required to be done in relation to the Assistance Request Form is an important tool by which to assess the true character of what was permitted – and even encouraged – to happen by those enrolling individual consumers as students. This was usefully illustrated by the evidence of the individual consumer witnesses considered in some detail below, giving a real world indication of how the system was capable of playing out in reality. Such illustrations mean that the Court does not need to rely solely upon abstract policies or make purely abstract assessments as to what would, on the balance of probabilities, be likely to have happened to any consumer who was enrolled as a student by any recruiter acting for AIPE.

78    The evidence of what actually took place, both at AIPE via the employee witnesses, and by way of illustration in the field with individual consumers, dovetails with AIPE’s enrolment data proving, as far as it goes, the outcome that was produced. It is readily able to be inferred in all the circumstances that the enrolment outcome was either intended or at least accepted to be what the enrolment system produced.

79    The words and conduct of AIPE generally, including by its recruiter agents and by its CEO, Mr Amjad Khanche, must inevitably be inferred to have occurred in the context of awareness of the contents of the Assistance Request Form and both its express and implicit requirements. Alarm bells should have been ringing if there was a concern that consumers were being enrolled as students in circumstances where they might not, did not, or realistically could not, have understood what they were getting themselves into. If alarm bells did not ring, or were not listened to, it can be inferred that this is because inaction was a desirable thing from the point of view of a VET provider like AIPE looking to maximise profit at the expense of the actual provision of educational services – an issue addressed in some detail below.

80    An enrolment process that predictably produced, or even encouraged a situation in which such unsuitable consumers became enrolled would invite close scrutiny to see whether that was, in all the circumstances, unconscionable. The conclusion that the conduct overall was unconscionable would be more readily reached if such an outcome was either intentional or sufficiently predictable or recurrent to require overt steps to be taken to minimise the chance of it occurring. This is so even having regard to the caution to be applied before reaching such a serious conclusion.

81    A VET provider acting in good faith with the VET FEE-HELP scheme, having regard to the centrality of the Assistance Request Form, should have had an enrolment process that would minimise the prospect of consumers who were not likely to be bona fide or genuine students becoming enrolled in the first place, or remaining enrolled as at the census date.

82    A VET provider should have had in place enrolment procedures by its own staff, and by any third party agents and recruiters, that ensured that the Assistance Request Form was brought to the attention of consumers who were prospective students, that its contents were understood and that a declaration was meaningfully given. These procedures should have included monitoring such procedures for their effectiveness. If a consumer was an inactive “student” in the time between enrolment and the census date, that would be a warning sign that the consumer possibly had not appreciated that they had become enrolled as a student, or did not appreciate the debt that they were about to incur. Complaints about the enrolment process would also be a warning sign that the enrolment procedures might not be effective, or might not be properly implemented, or might even be improperly carried out. Examples of consumers being enrolled without having the requisite level of awareness would be illustrative of the malfunctioning of the enrolment system. If complaints to that effect were brought to the attention of senior personnel at the VET provider, and either were not acted upon, or not acted upon effectively, that would tend to indicate that this went beyond a merely unintended and unknown outcome, and was instead accepted to be a feature of the enrolment system that was in place. Enrolment data might rebut that as being an outcome, or contribute to that conclusion.

83    In this context, evidence of complaints made to AIPE about its enrolment processes, even though not admitted as evidence of the truth of the assertions as to what had occurred, is important evidence of AIPE being put on notice of potential problems with its enrolment processes. How such complaints were dealt with may be a cogent indicator of the attitude that prevailed at AIPE, including as to whether and when this was a cause for concern and what action was considered appropriate. Reluctance to act on such a complaint, or the way or basis upon which it was responded to, may be a telling sign of whether the outcome complained about was a source of concern, or just an accepted feature, as well as fixing AIPE with awareness of the issue that had been raised. It may go further in contributing to a conclusion that the outcome was considered desirable, or was even intended.

84    The step of ensuring that the terms of the declaration in the Assistance Request Form were in some way brought expressly to the attention of a prospective student is a strong sign of a good system; and absence of such a step is a warning sign that the system may be defective, including as a matter of design, intention, or just predicable consequence. A process producing a particular outcome does not have to be intentional to be unconscionable, although awareness will tend to support that conclusion. As Beach J (Perram and Murphy JJ agreeing) pointed out in Australian Competition and Consumer Commission v Medibank Private Ltd [2018] FCAFC 235 (at [247]):

Eighth, statutory unconscionability does not require only focusing on Medibank’s or its officers’ or employees’ state of mind, whether actual intention or knowledge or what it ought to have known. It is a broader concept requiring an “objective value judgment on behaviour” (cf Yeoman’s Row Management Ltd v Cobbe [2008] 4 All ER 713 at [92] per Lord Walker of Gestingthorpe). But the subjective state of mind of the alleged contravener whether actual or constructive is relevant to the broader sense. Although I am concerned with a normative notion of conscience, the boundaries and content of which are informed by the explicit and implicit values previously identified, Medibank’s state of mind is relevant.

85    Any demonstrated state of mind is especially relevant in this case because there was such an obvious and powerful financial incentive to enrol consumers as students who would incur VET FEE-HELP debts, producing corresponding revenue, without being aware of the declaration in the Assistance Request Form which might have caused them not to enrol. This class of person enrolled as a student would produce the greatest profits by bringing in revenue, without much, if anything, in the way of related marginal costs beyond the recruiter’s commission deducted from that additional revenue.

86    This had nothing to do with the quality of the course or of the teaching that was in fact provided to consumers who did partake of a course: again, whether or not that was the case is not directly relevant to this proceeding. However, assuming as I must (due to the way in which the applicants brought their case) that the quality of the courses were of the requisite standard, the number of active students would necessarily have a bearing on how many staff a VET provider would need in order to deliver such services. An inexplicably small number of staff to provide services to a large number of consumers ostensibly enrolled as students, or a lack of any notable increase in staff numbers correlated with increases in enrolments, may be a telling indication that it was anticipated that a greater number of staff would not be needed, because many such consumers who were enrolled as students would never need those services. If the discrepancy between these two statistics was large enough, that, together with other evidence, might support an inference that this was not merely a matter of good fortune or happenstance from the perspective of the course provider, but rather an outcome that was deliberately allowed to happen.

87    The second vulnerable feature of the VET FEE-HELP scheme arose from a lack of prohibition on VET providers paying not just a commission, but a very substantial commission, to an agent (also referred to as a broker), via a recruiter who caused a consumer to be enrolled as a student. The payment of the commission depended on the consumer remaining enrolled as a student as at the census date so as to trigger the entitlement to the loan payment by the Commonwealth.

88    That feature of large recruiter commissions facilitated the windfall profits to VET providers described above. Recruiters acting as an agent for a VET provider had powerful financial incentives to convince every consumer they came across not just to sign up for a course, but to do so in a way that would maximise the likelihood that they would remain enrolled until the census date. That in turn provided incentives to a recruiter to minimise the prospect of enrolment being cancelled before the census date, whether by a student or by a VET provider. This feature would tend to encourage practices that ensured that a consumer being enrolled as a student either did not know that was happening, or did not know about, or understand, the declaration in the Assistance Request Form. It would also tend to encourage the spruiking of the benefits of being a student by half-truths or even overtly false information. That could involve such things as:

(1)    representing to a consumer that a course was free when in fact there would be a debt obligation incurred;

(2)    offering some collateral advantage to a consumer for becoming a student, such as a “free” laptop which was collateral to the debt being incurred, so as not to be truly free at all;

(3)    not telling a consumer that they would incur a debt;

(4)    not telling a consumer about the census date; and

(5)    even not telling a person that they had been enrolled at all (though students unknowingly being enrolled in a course of study does not form part of the unconscionable system alleged against AIPE).

89    The likelihood of any such conduct achieving the objective of a consumer becoming enrolled until at least the census date would potentially be enhanced if the consumer to whom such conduct was directed was in some way lacking the capacity to look after their own interests. It is important to remember that the Commonwealth government had intentionally expanded the reach of VET training to consumers who had historically been excluded by reason of disadvantage. The VET FEE-HELP scheme was intended to address the financial aspect of that disadvantage, in the same way as prior loan schemes had for university education. It was inevitable that a higher proportion of consumers who were bona fide or genuine students might not succeed compared with consumers who did not have to deal with the burden of disadvantage.

90    A VET provider was entitled to target disadvantaged consumers in keeping with the post-2012 liberalised VET FEE-HELP scheme, but was necessarily required to take such consumers as they found them and therefore to proceed upon the basis of their greater vulnerability. The same conduct might be unconscionable in relation to one class of consumers, but not for another, when regard is had to vulnerabilities, either inherent or separately proven. It is noteworthy that the High Court in Australian Securities and Investments Commission v Kobelt [2019] HCA 18; 368 ALR 1 divided on what the facts in that case were capable of establishing, but not in substance on the principles to be applied. The division between the four justices in the majority, and the three justices in the minority, turned on whether ASIC had proven that Mr Kobelt, in providing a “book up” system of credit provided to members of a remote Indigenous community, had exploited his customer’s socio-economic disadvantage in order to extract a financial advantage from them. The majority found this was not proven, while the minority found that it was. It was not in doubt that such exploitation if proven would be unconscionable. The difference in the conclusions reached largely turned on the question of whether, on the evidence, the customers could be regarded to have a free will to use or not use the credit system on offer.

91    Though the VET FEE-HELP scheme was targeted at disadvantaged groups, service providers and their agents were not permitted to seize upon these vulnerabilities such that consumers were incurring liabilities without their eyes wide open. It is clear that the scheme was only meant to be made available to consumers who were aware of its essential features; that is, course fees being charged, those fees being met by the Commonwealth as a loan, and that loan resulting in a debt being incurred by the student and made repayable once the student’s income was above a particular threshold. Each and every consumer who was enrolled as a student and who remained enrolled past the census date was meant to do so on a sufficiently informed basis, expressly reflected in the declaration in the Assistance Request Form.

92    Similarly, although low language, literacy and numeracy skills was not an express barrier to participation in the VET FEE-HELP scheme, it is obvious that it should not have to be express. Self-evidently, no provider should have been enrolling consumers as students if they did not have the minimum threshold of language, literacy and numeracy skills required to have any realistic possibility of participating in, and completing, a course. To do so would be a cruel hoax to perpetrate on disadvantaged consumers by giving them a false hope of this being a means of improving their lives, because even a remote possibility of success would likely be illusory in these circumstances.

93    If the two features identified above were sought to be taken advantage of, or at least allowed to be taken advantage of, it was in the simultaneous interests of the VET provider and the agents and their recruiters to make sure that as many consumers as possible were signed up as students and remained signed up until the census date. However, only the VET provider stood to gain windfall profits if the consumer never actually partook of the course after that, unless this resulted in the VET FEE-HELP debt later being cancelled despite the census date passing.

AIPE’S OPERATIONS

Overview of AIPE’s business

94    AIPE was incorporated in 2007 and registered as a Registered Training Organisation (RTO) on 12 September 2008 with the Australian Skills Qualification Authority (ASQA) under the National Vocational Education and Training Regulator Act 2011 (Cth). As noted above, to be eligible to receive VET FEE-HELP payments, AIPE had to be, and was, an approved VET provider under the HES Act.

95    AIPE carried on business providing, inter alia, VET courses to domestic and international consumers, both on-campus and via an online learning platform detailed further below. AIPE also provided English Language Intensive Courses for Overseas Students (ELICOS) and higher education courses. This proceeding concerns only online VET courses in which domestic consumers could be enrolled as students.

96    AIPE’s office and operations were initially in North Sydney, employing some 90 staff by 2013. In June 2014, AIPE moved to larger premises at 160 Sussex Street, Sydney. Again, AIPE emphasises that the applicants do not allege that the courses that it offered were inadequate, inappropriate or ineligible for VET FEE-HELP funding.

97    AIPE’s registration as an RTO was cancelled by ASQA on 17 December 2015. Merits review proceedings of that decision were commenced in the Administrative Appeals Tribunal (AAT) the following month, but were dismissed before conclusion by consent in November 2016, consequent upon AIPE being placed into administration on 6 October 2016, and AIPE ceasing to provide any courses of study with effect from 31 October 2016.

98    A forensic audit report in evidence was prepared for the Department by McGrathNicol. The McGrathNicol report was produced by a partner, Mr Michael Dunnett, a chartered accountant. While AIPE objected unsuccessfully to the admission of the McGrathNicol report into evidence (Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) (No 2) [2018] FCA 1459), Mr Dunnett was not required for cross-examination. The McGrathNicol report in the executive summary at [1.1] describes the background and scope of that report as follows:

Australian Institute of Professional Education Pty Ltd (“AIPE”) is a provider of training courses in a wide range of fields, including accounting and business, health and community, hospitality, human resources, IT, marketing, and management. AIPE is an approved VET Provider and therefore eligible students enrolled in AIPE courses are able to obtain VET loans.

AIPE management advised that in 2014, AIPE had approximately 800 students, but that this increased to approximately 6,000 students in 2015.

Due to the significant increase in VET loans claimed by AIPE, the Department engaged to undertake a forensic audit of AIPE student enrolments during 2015 and 2016.

The Department appointed McGrathNicol as auditor in accordance with clause 26(2) of Schedule 1A of the Higher Education Support Act 2003 (“HESA”). The scope of the appointment was to undertake an audit in relation to the matters listed at clause 26(1)(b)(ii), (iv), and (v) of Schedule 1A of the HESA, being:

•    the veracity of enrolments in those courses of students who receive VET FEE-HELP assistance for VET units of study forming part of those courses;

•    the level of engagement in any of those courses of students who receive VET FEE-HELP assistance for VET units of study forming part of those courses; and

•    the completion rates for any of those courses of students who receive VET FEE-HELP assistance for VET units of study forming part of those courses.

99    Based on the second paragraph reproduced above, the applicants assert that in 2014, AIPE had about 800 consumers enrolled as students in its courses, rising to about 6,000 by 2015, which I understand to be a static figure for each year. AIPE submits that the Court should approach that submission with caution, noting that AIPE admitted that it had 15,932 enrolments in courses from 1 January 2013 (preceding the commencement of the relevant period on 1 May 2013) and 1 December 2015. It asserts that while the precise number of consumers enrolled as students is not an issue directly calling for determination in this proceeding, if the Court finds there have been any contraventions of the ACL, and that the applicants are entitled to any orders to redress loss or damage in favour of consumers as students under s 239 of the ACL, then the precise number of consumers that are entitled to receive the benefit of that remedy will need to be identified. There is room to debate whether that overstates what is needed and if not, how such a “precise” figure may be arrived at if that point is reached. The reason AIPE advances for treating the student numbers with caution is addressed below under the heading “Enrolment data relied upon by the applicants”.

100    AIPE delivered its VET FEE-HELP courses online to consumers through a learning management system (LMS) called Moodle, a software application it used for administering, reporting upon and delivering online education. Consumers were meant to be provided with a login at the time of enrolment which would enable them to log in to Moodle from any Internet accessible device. Clearly this was only possible if there was ready Internet access. Consumers who enrolled and partook of study conducted all of their course activity through Moodle, apart from occasional direct contact with course trainers via email. Moodle was used by AIPE’s staff to check a student’s level of engagement with their course. This is important, because AIPE were able to know with a reasonably high degree of accuracy who were the consumers enrolled as students who proceeded no further than enrolment.

101    The McGrathNicol report describes how Moodle was used:

(1)    by participating students, per [6.1] of that report, to:

•    view course materials;

•    access library materials via the Cengage GALE portal;

•    complete quizzes and submit assignments;

•    chat to a course trainer;

•    post topics and discuss course materials on course forums; and

•    complete tests to determine course suitability.

(2)    by AIPE, per [6.3] of that report, to monitor the activities of consumers enrolled as student via activity logs, which recorded data each time such a consumer engaged in a “system defined interaction”, and thereby to measure and ascertain the extent of consumer engagement with AIPE’s online courses, including:

•    name of the student who interacted with the Moodle LMS;

•    date of the interaction;

•    course and subject that the student interacted with;

•    module of the Moodle LMS that the student interacted with. Examples of the modules recorded include “login”, “chat”, “resource”, “assign”, “forum”, “library”, “message”, “questionnaire”, and “quiz”; and

•    activity that the student undertook at each module. Examples of the activities recorded include “view”, “submit”, “attempt”, “login”, “logout”, and “search”.

102    AIPE also had a separate “Customer Relationship Manager” (CRM) computer program which stored information about every consumer enrolled as a student, including their prior level of education, the cost of the course they were enrolled in, the census date, the start date, and, from about March 2015, the results of LLN tests. CRM was also used to retain a record of AIPE’s more general dealings with consumers who were enrolled as students, including in particular, complaints. Data about VET FEE-HELP consumers who were enrolled as students and who had been granted a VET FEE-HELP loan was required to be, and was, furnished by AIPE to the Department. That data came from CRM.

103    The evidence considered in some detail below comes from, and/or is about the following key senior employees at AIPE:

(1)    Mr Amjad Khanche, Chief Executive Officer of AIPE;

(2)    The following direct reports to Mr Khanche:

(a)    Ms Swapna Pawar, Student Retention Manager;

(b)    Mr John Luhr, Business Operations Manager;

(c)    Ms Lyndall Benton, Student Services Manager – who was also a witness;

(d)    Ms Shumaila Ali, Human Resources and Projects Manager;

(3)    Ms Dimitra Tzanos, Partnership Relationship Manager, who reported to Mr Luhr.

104    In addition to Ms Benton, other former AIPE employees who were witnesses were:

(1)    Ms Glashie Qudsia, a face-to-face vocational trainer and assessor of international students; and

(2)    Ms Romina Casale, an Online Student Services Team Leader.

AIPE’s enrolment process and forms

105    It is helpful to outline the general nature of AIPE’s enrolment system in order to better understand how the various elements are sought to be proved by the applicants. As noted above, the applicants allege that AIPE’s enrolment processes involved unsolicited door-to-door contact in low socio-economic communities by recruiters at the homes of prospective students and also in public areas such as in public bars. The applicants acknowledge that Acquire Learning’s business practice differed from the face-to-face approach described in the Concise Statement, in that it made unsolicited telephone calls. AIPE admits that agents conducted face-to-face marketing on its behalf, though submits there is not enough evidence to show that this occurred in public bars. A live point of contention is the impact that socio-economic disadvantage had on the suitability of consumers who were enrolled in this way.

106    The applicants point to recruiters carrying tablet devices upon which consumers enrolling to become students were required to complete the AIPE enrolment form. In the applicants’ argument, such a device was a feature of the overall system which tended to detract from a proper understanding by a consumer as to what they were in fact being asked to commit themselves to. As the argument was developed, that was said to be so both because it facilitated the application in fact being completed by a recruiter asking questions and recording the answers, and because, even if the consumer being enrolled filled the electronic form out themselves, the significance of what was taking place was unlikely to be understood by the class of consumers who were being approached by this cold call methodology.

107    Additionally, the applicants cite as an extension of that conduct, and a particular manifestation of the implementation of the system overall, that one of AIPE’s biggest agents in terms of numbers of consumers enrolled as students, Acquire Learning, made unsolicited telephone calls to consumers as prospective students who were generally chosen from among people who had responded to online job advertisements. They do not specifically allege that doing so was unconscionable.

108    The applicants rely upon AIPE’s recruiters obtaining identification information from the consumers recruited to be enrolled as students in person and having such consumers complete enrolment forms and an Assistance Request Form. The applicants rely upon AIPE forms in evidence used for that purpose, and the results of the McGrathNicol Report addressing AIPE’s enrolment processes (which describes the Assistance Request Form as a VET FEE-HELP Assistance form, or a VET FEE-HELP form). This forms part of the applicants’ case as to how it alleges AIPE’s processes and procedures, both via AIPE itself, and via its agents and their recruiters, caused unsuitable consumers to be enrolled. There is no suggestion by AIPE that the forms that it produced by way of discovery and admitted into evidence were other than representative of the forms that were used throughout the relevant 2013-2015 period. It is safe to proceed upon the basis that there was no material change, none having been suggested.

109    The applicants note that electronic submission of the forms was meant to be, and sometimes was, followed by a verification call. Some consumers enrolled as students participated in such calls in the presence of the recruiter, while for others, this verification call took place shortly after the visit by the recruiter. The inadequacy of the verification process is part of the evidence relied upon by the applicants to show how the overall system as pleaded played out in the field upon consumers.

110    During the relevant period, until early 2015, verification calls were conducted on AIPE’s behalf by Global Learning Support (GLS), a company based in the Philippines. In February 2015, AIPE terminated its contract with GLS, instead using its own staff to conduct verification calls directly with consumers enrolled as students. While the applicants effectively concede that this change was an improvement, the general nature of the verification system remained, on their case, inadequate to overcome the enrolment of consumers as students who should not have reached that stage in the first place.

111    The applicants rely upon evidence that proves that prior to March 2015, AIPE had no procedures in place for its recruiters to assess the suitability of consumers as prospective students for enrolment. This was instead left to the largely unguided and unmonitored discretion of recruiters, who had ample incentive to make no such assessment given the substantial commissions to be had from each enrolment that took place and lasted until the census date. Until February 2015, those recruiters were offered no training on consumer suitability for enrolment as students (assuming that any amount of training would have been sufficient to overcome the malign incentives that were in place). Once again this is an evidentiary detail of the pleaded system that the applicants seek to establish.

112    In March 2015, AIPE introduced an LLN test as part of its enrolment procedure. This was another example of a late improvement in its enrolment system, but is still said by the applicants to fail to overcome the unconscionable nature of the system as pleaded. On the applicants’ case, at best this starkly demonstrated how poor AIPE’s enrolment system had been until that was introduced. The LLN test was introduced because staff at AIPE had noticed that many of the consumers being enrolled as students lacked basic literacy and numeracy skills, and regulator scrutiny had increased. Some consumers had not completed year 9 at school. The LLN test was meant to be completed prior to finalisation of the enrolment, but this requirement was ineffective in ensuring that only suitable consumers were enrolled in AIPE’s courses. For example, evidence from former employees of AIPE, detailed below, showed that the LLN test was sometimes completed by recruiters on behalf of consumers to ensure that they could be, and were, enrolled as students, such that the test formed no screening role at all. Thus, on the applicants’ case, the very late introduction of a process that was intended to screen out unsuitable consumers was easily able to be subverted.

113    Another feature of the evidence led by the applicants to prove the system as pleaded, and its alleged unconscionable character, is that consumers contacted by telephone by Acquire Learning were required to provide identification information before they could be enrolled in an AIPE course. However, that requirement was compromised because AIPE did not have oversight of Acquire Learning’s enrolment calls and was not in any position to monitor them. AIPE received complaints from consumers recruited by Acquire Learning, putting them squarely on notice that this was alleged to be happening. Other evidence, discussed below, shows that those complaints were reflective of what was actually taking place.

114    When AIPE introduced an LLN test in March 2015, Acquire Learning responded by developing its own LLN test, as well as conducting its own verification calls and its own induction calls. AIPE did not place itself in a position by which it could oversee these procedures to ensure that they were being conducted properly. This rendered ineffective, or insufficiently effective, the purpose of the LLN test as a means of screening out consumers who would not be able to meaningfully partake of AIPE’s online course when recruited by Acquire Learning, by far the largest agent by consumer enrolment figures.

115    The AIPE enrolment process involved the completion of an online application form by a prospective student. Although the ACCC submitted that copies of this form, apparently entitled “Application Form for Domestic Students” were in evidence, the documents referred to were not titled this, and instead appeared on their face to be merely a confirmation of details provided through online enrolment.

116    In response to a notice under s 155 of the CCA, AIPE provided an extract of the online enrolment form. In paragraph 10 of the s 155 response, AIPE said that if the online enrolment form was not available because its online system was down, a prospective student was directed to complete a hard copy application form.

117    The next, and indeed critical, aspect of AIPE’s enrolment system relied upon by the applicants concerns the way in which consumers who enrolled as students applied for a VET FEE-HELP loan. In general terms, a prospective student who wanted to use a VET FEE-HELP loan to pay course fees was required to complete a form entitled “Request for VET FEE-HELP assistance”, as discussed above. Part of that form states: “Before completing this form, you must read the VET FEE-HELP information booklet”.

118    For some consumers enrolled as students by some recruiters, there is in evidence a signed acknowledgement form, referring to and acknowledging key aspects of the enrolment process in conclusory terms, such as “I understand that” followed by a number of dot points which include “I have applied for a VET FEE-HELP loan to pay for this course and have received information about this loan and the repayments criteria”. However, such a form says nothing about whether the person had any understanding of what they were acknowledging, let alone whether they were themselves submitting the form. In all the circumstances, no such inference can safely be drawn. If consumers in fact understood what they were getting themselves into, this form adds nothing; but if they did not, it subtracts nothing. In other words, a system of obtaining a signed acknowledgment form could only be as effective as the enrolment system to which it related.

119    Evidence is relied upon by the applicants to demonstrate, systematically they say in the context of all of the surrounding evidence, that the enrolment process for AIPE courses failed to ensure that the consumers who were enrolled as students and applied for VET FEE-HELP assistance in fact understood the essential features of that loan scheme. The applicants rely contextually upon the high volume of consumers who were enrolled as students yet never took even the first steps to partake of the course.

120    While, as already observed, it is not necessary to prove intent, at least some of the evidence relied upon by the applicants indicates that failure on the part of agents and their recruiters to provide this information was both systemic and not accidental. But the ultimate question to be answered is whether that was nothing more than an isolated problem, essentially with an unrepresentative rogue element among agents and recruiters, or the inevitable product of an unconscionable system in its dealings with the target of consumers from disadvantaged backgrounds, and perhaps going so far as to be an effective undeclared design feature in aid of the desirable outcome of the advancement of windfall profits.

121    The enrolment information transmitted to AIPE was loaded into the CRM, recording such things as the consumer who had been enrolled as a student’s reported level of education, the cost of the course, the census date, the start date, and from about March 2015, the result, or purported result, in his or her LLN test. The CRM also recorded, to the extent that any administrative system can, AIPE’s dealings with consumers, including that conduct on behalf of AIPE by its contract call centre operator, GLS.

122    During 2014, AIPE’s procedure entailed consumers who submitted their details on an AIPE enrolment form being contacted by GLS by telephone. The sole or at least dominant purpose of the call was to verify the consumer’s enrolment. This call was supposed to take place prior to the consumer’s census date, as an effective condition to remain enrolled in a course. The applicants rely on evidence from former AIPE employees to prove that this often did not occur, including recordings of some of the verification calls which give rise to concerns about the adequacy of those calls more generally. The evidence also describes how this was reported to the CEO of AIPE, Mr Khanche, in 2014. There is a dispute about whether those witnesses are capable of giving what amounts to systems evidence to prove anything prior to the commencement of their employment. This is addressed as part of the consideration of that evidence.

123    As mentioned above, AIPE cancelled its relationship with GLS in February 2015 and thereafter, the verification calls were carried out by an internal team at AIPE. This team was led by Ms Benton. As detailed further below, in late 2014 Ms Benton asked Mr Khanche and Mr Luhr to introduce an LLN test. She made this recommendation because a review by her of student files on the CRM revealed that many of the consumers lacked the ability to complete their course.

124    Ms Benton’s recommendation was eventually accepted and acted upon with the creation of an LLN test within Moodle by Mr Davies in early January 2015, it being used from about March 2015. However, on the applicants’ case this improvement in AIPE’s enrolment system was undermined because a key AIPE recruiter, Acquire Learning, developed and used its own LLN test, to which staff at AIPE had no access.

125    Until early 2015, every consumer who enrolled as a student with AIPE for online courses was automatically issued with a “loan” of a Microsoft Surface tablet at no additional cost to them, provided they had paid fees upfront or via VET FEE-HELP. This was reflected in what was described as an “Electronic Study Tool (EST) Delivery Policy”, one of the terms of which was that the tablet would become the property of the consumer upon graduation. The tablet came with programs to assist consumers enrolled as students with their studies. The tablet was only issued after AIPE had confirmed that the consumer had passed the census date several weeks after enrolment and had thereby incurred the VET FEE-HELP debt.

126    With a change in government policy prohibiting the giving of such devices to consumers who enrolled as VET FEE-HELP assisted students, the name of the policy changed to an “Electronic Study Tool (EST) Loan Policy”, with effect on the face of the policy from 13 February 2015. This policy removed the provision for ownership to pass to the student upon graduation. The evidence of Ms Casale is that after April 2015, if a consumer enrolled as a student completed a loan form they would be sent a tablet/laptop sometime after they had passed their census date.

127    Part of the applicants’ case is that the timing of AIPE providing a tablet demonstrates that the focus was on getting consumers past the census date so as to trigger VET FEE-HELP payments. The applicants submit that the effect of this was that any consumer who needed the tablet to access and thereby engage with course content could not do that until the census date had passed and the VET FEE-HELP debt had been incurred.

Enrolment data relied upon by the applicants

128    There is also a dispute about how the enrolment data in evidence relied upon by the applicants can be used. It is important to note that this was raised with the Court for the first time in AIPE’s closing submissions, the evidence not having been objected to, or sought to be qualified in any way during the hearing.

129    The applicants rely upon several “datasets” in order to seek to prove the following by way of three tables:

(1)    the very low number of consumers enrolled as students by AIPE who had completed their courses or were “current” students by the time that AIPE effectively closed down on 31 October 2016, along with some related statistics;

(2)    the proportion of consumers enrolled as AIPE students by various agents, including:

(a)    just under 49% of consumers enrolled as students who were recruited by Acquire Learning;

(b)    just under 18% who were recruited by Online Study Pathways Australia (OSPA);

(c)    just under 7% who were recruited by the third largest recruiter, Uvision Australia; and

(d)    just over 5% who were recruited by the fourth largest contributor, Vision Sales;

(e)    just over 4% who were recruited by the fifth largest contributor, Students R Us;

(3)    The remaining 17% of consumers enrolled as students were recruited by the remaining 30 or so recruiters, with few of those recruiters accounting for more than 1% of consumers enrolled as students – AIPE’s evidence principally focusses on Acquire Learning and OSPA;

(4)    The high proportion, nearly 40%, of consumers enrolled as students who were “withdrawn after census” and were charged for their courses without completing them – all but 15 out of a total of 11,534 consumers.

130    The first dataset in evidence comes from Ms Maureen Wood in her capacity as a Director in the Higher Education Information Management System (HEIMS) Data Collections/Economic and Market Analysis Branch at the Department. HEIMS is an information technology application that enables, inter alia, VET providers such as AIPE to report to the Department as required with data about consumers enrolled as students and their courses, including such information as course enrolments, costs, fees, the VET FEE-HELP debts. This was information that was required to be provided regularly. Ms Woods deposes to the data she extracted as being for consumers that AIPE enrolled as students into a unit of study with a census date in the period 1 January 2013 to 31 December 2015 in relation to a list of 21 diploma courses.

131    The second dataset in evidence is conveniently referred to as the “ASQA1 Spreadsheet”. It is not necessary to detail the genesis of this spreadsheet. It suffices for present purposes to say that the data came from AIPE’s liquidators, being a copy of AIPE’s VET student records, as detailed in a 2 December 2016 letter from the liquidators’ solicitors to ASQA. That data was then analysed to prepare the tables relied upon by the applicants, as described in general terms above. The terms used in the tables come from the ASQA1 Spreadsheet. Those terms are not defined or explained in the ASQA1 Spreadsheet or elsewhere in the evidence.

132    AIPE contends that this Court should not make any findings based upon the enrolment data that the applicants rely upon in the three tables because, it contends:

(1)    the first table refers to setting out the number of consumers enrolled as students by AIPE during the period from May 2013 to December 2015, giving a figure of 29,743 enrolments, whereas the concise statement alleges that AIPE had approximately 15,439 enrolments;

(2)    The applicants in their closing submissions:

(a)    at [2] refer to 15,932 consumers;

(b)    at [27] refer to 800 consumers in 2014 and to an increase to approximately 6,000 by 2015;

(3)    the enrolments in the table prepared by Dr Ericson (and admitted into evidence by consent) refer to total enrolments of 14,660 or 14,686 (as noted below, the data produced by Ms Wood was provided to Dr Ericson);

(4)    the ASQA1 Spreadsheet has 30,157 line entries or records and there is no evidence as to how the total number of enrolments is to be assessed from those records, with 14,541 having no amount recorded, suggesting that their enrolment was not finalised or concluded or no application for a VET FEE-HELP loan was made;

(5)    some of the descriptors in the ASQA1 Spreadsheet are admitted by the applicants in the column “Course Status” to have not been explained, with no evidence from the former AIPE employer witnesses or otherwise in relation to the course status information in CRM;

(6)    the ASQA1 Spreadsheet refers to consumers enrolled as online and on-campus students, so cannot be used as evidence of the total number of students in AIPE’s online VET courses during the relevant period, who are the subject of this proceeding;

(7)    none of the applicants’ submissions on this topic should be accepted because of there being no evidence that the ASQA1 Spreadsheet is confined to the body of consumers with which proceeding is concerned.

133    The applicants’ response in their closing submissions is that the data came from AIPE, having been created in the ordinary course of its business, and reported to several Commonwealth agencies (as required by law). The applicants submit that the data they rely upon shows that, as at 25 August 2016, there were approximately 15,190 records in the Department’s HEIMS database for consumers enrolled at students with AIPE during the period 1 January 2013 to 31 December 2015, noting that AIPE admits in its response to the concise statement that there were 15,932 enrolments in that period.

134    In relation to the three tables produced using the data in the ASQA1 Spreadsheet, again from data compiled and prepared by AIPE, this records 29,743 consumers enrolled in the period May 2013 to December 2015 and that almost 50 per cent of those enrolled were “cancelled” or “cancelled after census”, being classifications created by AIPE. This data reveals that AIPE’s marketing and enrolment process was used for a much larger cohort than those who are recorded as incurring a VET FEE-HELP debt. The applicants points out that none of this data was challenged as to validity or veracity at the trial, which is noted to be unsurprising given that the raw data was created by AIPE in the course of its business. In those circumstances, the applicants contend that it is not now open to AIPE to challenge the reliability of the data.

135    In relation to the complaint recorded at [132(6)] above, being the reference to on-campus and online enrolments, the applicants point out that only 10 entries (0.034%) were listed as being “On Campus” and erroneously included in the ASQA1 Spreadsheet. As such, the applicants contend that the error created by those erroneous entries is insignificant and does not affect the conclusions that may be drawn from the subset that is the online enrolment numbers.

136    I am not satisfied that AIPE has made good its objection to the use that the applicants seek to make of the data extracted into the three tables. Statistical data often has its limitations, but the conclusions sought to be drawn are not matters of fine detail in this case. Rather, this is evidence that pertains to aspects of the outcomes produced by AIPE’s enrolment system and the contributing roles of the different recruiters used by AIPE, as measured using AIPE’s own data. Properly considered, the larger student numbers in the ASQA1 Spreadsheet compared to the Departmental data produced by Ms Wood do not make any material difference to the conclusions properly able to be reached. For example, there is nothing to suggest that the proportion of consumers enrolled as students by the various agents for the larger number of consumers was in some way not representative of the subset that were part of the data submitted by AIPE to the Department. Certainly, AIPE did not make any submission to that effect.

137    Table 1 is as follows:

138    Table 1 is relied upon by the applicants to show the number of consumers enrolled as students by AIPE during the period from May 2013 to December 2015. It shows the “Course Status” of those consumers as at the date that the ASQA1 Spreadsheet was created on 31 October 2016 when AIPE shut down, both as raw numbers and as a percentage of the total. Some adjustments had to be made to the analysis reflected in the table to make up for omissions of some of the start date data for the period prior to 1 October 2014, but I am satisfied that it is not necessary to descend to that level of detail as it does not affect the results overall.

139    The point made by the applicants by reference to Table 1, drawn from an analysis of AIPE’s own data, is that fewer than 1% of those enrolled in the relevant period had completed their courses by 31 October 2016, and only about 6% remained “current” by that time, meaning that the vast majority had either never studied at all, or had dropped out. In context the total number may be seen to be as important as the low percentage: only 288 consumers enrolled as students completed their course of study, a miniscule outcome when considered against total enrolment figures. That is a startling figure, even when the total excludes the consumers whose enrolment was cancelled.

140    However, a low success rate on its own would be unlikely to take the applicants’ case anywhere, because that would not say anything about the cause of this happening. For example, the overall design of the VET FEE-HELP scheme might have been to blame for high failure rates after the census date. However, this outcome has an important bearing on the assessment of the evidence independently proving AIPE’s enrolment practices, to the extent that it supports a conclusion that many consumers should never have been enrolled as students in the first place, and who only became enrolled, and remained enrolled up to the census date, because of AIPE’s enrolment practices. It is such an extreme outcome that it may properly be used to assist in dispelling benign explanations for those practices. This is an important consideration given the seriousness of the conclusions that the Court is asked to reach. It is a part of the matrix of evidence to be weighed in the balance in considering whether the allegations pleaded have been made out.

141    The applicants also note in relation to table 1 that the difference between “cancelled” and “withdrawn” is not explained. As the applicants are unable to say that the term “Cancelled After Census” does not meant that those consumers had not just their enrolment cancelled, but also their VET FEE-HELP debts cancelled – that being the most plausible explanation and the most favourable conclusion to AIPE – an inference should be drawn to that latter effect: that is, both enrolment and VET FEE-HELP debt were cancelled. However, only about 12% of consumers enrolled as students fall into this category. About 38% of the consumers overall who were enrolled as students were “withdrawn after census”. The number of consumers in that category – 11,534 – are the subject of table 3 below, which apportions those consumers between the various recruiters and demonstrates that nearly all of them incurred a VET FEE-HELP debt. This is a strong indicator, but on its own not conclusive, that AIPE were enrolling consumers who should not have been enrolled in the first place. The live question is whether the explanation lies in the unrealistic expectations or inbuilt flaws of the VET FEE-HELP scheme itself, given that it targeted disadvantaged groups and did not impose any reasonable barriers to enrolment, or, as the applicants contend, AIPE’s unconscionable system of conduct or pattern of behaviour in the enrolment system it deployed.

142    Table 2 is as follows: