LawAnswers.com.au - Australia's #1 Legal Community

LawAnswers.com.au is a community of 10,000+ Australians, just like you, helping each other.
Ask a question, respond to a question and better understand the law today!
Join us, it only takes a minute:

NSW Australian Institute of Fitness - Cancellation of Contract

Discussion in 'Commercial Law Forum' started by jmharp75, 22 May 2015.

  1. jmharp75

    jmharp75 Member

    Joined:
    22 May 2015
    Messages:
    2
    Likes Received:
    0
    I have enrolled in a Certificate 4 Sports Massage and Diploma of Remedial Massage (VET FEE help) with the Australian Institute of Fitness in early February 2015. This is a package deal and the total cost is $14 980. I had made a $500 deposit on the day of signing the contract.

    I was due to start in June 2015 but for personal reasons am wanting to cancel the contract. I had contacted the Australian Institute of Fitness and they had informed me that I cannot cancel the agreement and even if I don't attend the class I would still have to pay for 50% of the total fee for the Certificate 4 Sports Massage ($3500).
    Due to apparently not being able to cancel the program I went with the option to defer the class to a September 2015.

    I am aware that in the contract it says that a full refund can be made if cancelled within the cooling off period (10 days) but it does also state:
    " If you terminate after the cooling off period and no later than 7 business days prior to the start date of your program there will be a refund of 50% of the fees for any program that you terminate."

    It is not clear that I have to pay for 50% of the total cost of the course if I were to cancel. I don't believe I should have to pay $3500 if I haven't started the course and haven't received any relevant materials. Under contract law, can they force me to pay the $3500?
     
  2. Sophea

    Sophea Well-Known Member

    Joined:
    16 April 2014
    Messages:
    2,300
    Likes Received:
    334
    Hi jmharp75,

    If this was the only reference in the contract to your liability for payment after the cooling off period, it certainly does seem to indicate that it is merely a refund of 50% of the fees for any program terminated. Which could even be extrapolated to mean that you should receive $250 back from them as %50 of the deposit you paid already. It doesn't suggest to me that you would be required to pay half of the total course fee, if you had not already.

    If there was a term in your contract stating that you had to pay 50% of the course fee if you cancelled, this may be construed as a "penalty" at law which is unenforceable - or simply an unfair contract under the Australian Consumer Law. A penalty clause is defined as a one that requires a party to pay an excessive or unconscionable amount as a penalty for breaching a contract, which is disproportionate to the actual loss suffered by the innocent party. Obviously here, as a result of your breach the College will lose out on significant revenue, however I'm not sure how a court would construe it in this situation.

    I would contact NSW Fair Trading and talk to them about whether it would be considered an unfair contract. But also, if there is nothing else in the agreement stating that you must pay 50% of the course fee upon cancellation, then I would be refusing to pay the money to the college, on the basis that its not what you agreed to in the contract.
     
    DennisD likes this.
  3. DennisD

    DennisD Well-Known Member

    Joined:
    11 July 2014
    Messages:
    179
    Likes Received:
    57
    On these forums there are countless complaints about the Australian Institute of Fitness

    First I agree with Sophea's comments regarding ''penalties'', and second recommend that you consider using the LawAnswers search function to find previous responses to similar grievances with that organisation.
     
  4. Sophea

    Sophea Well-Known Member

    Joined:
    16 April 2014
    Messages:
    2,300
    Likes Received:
    334
    Perhaps you could all bring a joint action having the contract term declared invalid as a penalty :)
     
    DennisD likes this.
  5. jmharp75

    jmharp75 Member

    Joined:
    22 May 2015
    Messages:
    2
    Likes Received:
    0
    I still seem to be having a bit of trouble with the AIF.
    This is directly from the terms and conditions.

    "4) WHAT IS THE INSTITUTE'S REFUND POLICY?
    (a) Full refund, including your deposit, if you terminate during the cooling-off period and return all materials in good condition;
    (b)If you terminate after the cooling off period and not later than 7 business days prior to the start date of your program there will be a refund of 50% of the fees for any program you terminate;
    (c) if you enrol in more than one program and cancel one of the programs, any refund payable under this policy will be applied at the discounted price of the program cancelled.
    (d) If the institute postpones a program you have selected it will do its best to offer you a place in any replacement program at a time and place whish is suitable to you. If such a replacement program is not available then a refund of the fees for the postponed program will be made to you.
    (e) if your circumstances come within clause 11 of this agreement there is a right of refund, but only for the unexpired period of your program"


    My father had emailed the institute on my behalf.

    "Australian Institute of Fitness,

    I am writing on behalf of ..., my daughter. She has brought to my attention her situation regarding the Certificate 4 in Sports Massage and Diploma in Remedial Massage course she has enrolled in with The Australian Institute of Fitness on March. This course was to commence in June but was subsequently changed to September.

    This letter is advising you that due to family commitments, ... is in New Zealand indefinitely and will not be able to attend the course at all and wishes to cancel her enrolment.

    I have been informed, quote that she “would have to pay 50% of the full course fees ($3500) should she wish to cancel”. I have read through the terms and conditions thoroughly and do not see anywhere stating that ... would have to pay 50% of the full course fee. The statement “If you terminate after the cooling off period and no later than 7 business days prior to the start date of your program there will be a refund of 50% of the fees for any program that you terminate” itself is open to interpretation.

    After receiving legal advice, it would appear that the Australian Institute of Fitness has failed to acknowledge its obligations under Australian Consumer Law which, amongst other things, protects consumers from unfair contract terms, regardless of what a contract might say. Further, I have also been advised there are a number of other issues at play here, not least of which is that the Australian Institute of Fitness appears to have imposed a 'contractual penalty' which is legally not allowed.

    Due to the notice being given 3 weeks prior to the original course start date, 01/06/15, and now several months to the deferred date 28/09/15, I don't believe it is unreasonable to ask for the contract to be terminated with no further costs to Jane. I certainly do think it is unreasonable to expect ... to pay thousands of dollars for a course she hasn’t started, received relevant materials for or won't be attending.

    Please note that the direct debits will be cancelled since ... is no longer in the country.

    I sincerely hope this matter will not need to be taken further legally but due to the advice I have already received, and the large amount of money involved, we are quite willing to do so. I am therefore appealing to your good nature, and asking for a 50% refund of any money already been paid and an agreement to cancel and not pursue, any further payments from ....
    "

    This was their reply:

    "As you have read in our terms and conditions if ... cancels her program within 7 days of the class start there will be a refund of 50% of the fees for any program enrolled that you cancel. As the Massage Cert 4 program is worth 6,990 we would credit/refund the program at $3,495. If ... had paid upfront she would have received this as a refund, as she is on a payment plan she is credited 50% therefore only being liable for $3,495 instead of the full price.

    We have these terms and conditions as our classes fill up quite quickly and often months before they start, if students decide to cancel their program prior to starting it disadvantages us as we have limited time to replace the student in that class.

    I am not sure what the "contractual penalty" you are refering to is?

    As this was previously discussed with ... the outcome was to defer her program to a later date in the hope she would be back by then to complete the program.

    I will also let you know that as this situation hasn't been resolved yet if the bank account/ repayments stop we may continue to refer the account onto a debt collection agency.

    If you have any further questions please feel free to contact me or ask ... to send me any email :)"


    Statement b) refers to my situation. I did not pay the course upfront and no where is it mentioned that I would have to pay $3500 if I were to cancel.

    How am I still liable to pay for 50% of the course?
     
  6. DennisD

    DennisD Well-Known Member

    Joined:
    11 July 2014
    Messages:
    179
    Likes Received:
    57
    Hi again

    Your father's email sets things out clearly and succinctly.

    The AIF response states:
    We have these terms and conditions as our classes fill up quite quickly and often months before they start, if students decide to cancel their program prior to starting it disadvantages us as we have limited time to replace the student in that class

    I am not sure what the "contractual penalty" you are refering to is?

    It seems they missed the point perhaps. The fine imposed under the contract for withdrawing needs to be proportionate to the reasonably foreseeable or actual disadvantage suffered, otherwise the clause is a ''penalty'' and invalid. That is an oversimplification and for an authoritative statement of the doctrine you should engage a lawyer.

    As for the February intake, did they manage to fill your spot? If so what if any damage has been suffered? And even if they did not, how is $3500 proportionate to the disadvantage suffered? As for the September intake they still have months lead in time, so how can they possibly justify $3500 as proportionate? Finally I agree with Sophea's comments about the penalty doctrine in her second paragraph which is well worth rereading

    Good luck with this and please let us know how it goes
     

Share This Page

Loading...