In a decision handed down on Thursday, Justices Michael Wigney, Michael O’Bryan and Kylie Downes dismissed challenges by Captain Cook College, parent company Site International and executive Blake Wills to Justice Angus Stewart’s ruling, but sent the case back for re-wording of the judge’s declarations.

“Otherwise, having conducted a close review of the evidence and the reasons of the primary judge, we find no error in the primary judge’s reasoning and conclusions. In our view, the college’s conduct should be condemned as unconscionable,” the Full Court said.

The Full Court said the college knew of the “risk and prevalence of misconduct” by recruitment agents and the enrolment on its online campus of “unwitting or unsuitable students”.

“Despite that knowledge, at the behest of agents and in the pursuit of increased enrolments (and the resulting…revenue), the college altered its enrolment processes in a manner that weakened its existing safeguards against the occurrence of agent misconduct and against the enrolment of unwitting or unsuitable students,” the judges said.

The appeals court said it was “entirely foreseeable” that the college’s changes in enrolment process would cause large numbers of students to be enrolled online without a proper understanding of the debts they were incurring or whether they were unsuitable because they lacked the required language, literacy or numeracy skills. 

“What was entirely foreseeable came to pass, to the enrichment of the college and the harm to thousands of persons who should never have been enrolled at the college’s online campus,” they said.

The Full Court found Wills was “involved in all of the key decisions” that caused the college to be engaged in systemic unconscionable conduct. 

“His attempts to avoid personal responsibility for the decisions that he was intimately involved in should be rejected,” they said.

Justice Stewart ruled in July 2021 that Productivity Partners, trading as Captain Cook College, engaged in systemic unconscionable conduct for the three month period beginning September 7, 2015 by relaxing consumer safeguards to increase its enrolment numbers.

During this period, Captain Cook enrolled 7,000 vulnerable and disadvantaged consumers in its online courses, over 90 per cent of whom did not complete their online course. Around 86 per cent never even logged on.

The company claimed over $50 million from the Commonwealth under the VET FEE-HELP program for around 6,000 of those enrolled in this period.

The Full Court found Justice Stewart’s declaration “suffers from significant ambiguity which should be corrected” and sent the orders back for re-wording. But the judges said the change to the declarations did not involve any substantive change to Justice Stewart’s findings and “does not mark any success” for the college on Wills on the systemic unconscionable conduct case.

The judges amended Justice Stewart’s declaration that Wills was knowingly concerned in the college’s unconscionable conduct from the date its enrolment changes were implemented. Instead the start date of the contravention was November 2015, when he became acting CEO of the college.

ACCC commissioner Liza Carver said Thursday the regulator welcomed the Full Court’s decision to uphold the finding of systemic unconscionable conduct and the ruling that Site and Wills were knowingly concerned. 

“We brought this case because there was clear evidence that Captain Cook College enrolled vulnerable and disadvantaged consumers in courses they were unlikely to ever complete or receive any vocational benefit from despite incurring a large VET FEE-HELP debt. Over 90 per cent of those consumers did not complete any part of their online course, and about 86 per cent of them never even logged into their course,” Carver said.

“Captain Cook College sought to maximise its profit at the expense of students who were left with a debt, and at the expense of the Commonwealth, which made substantial payments under the VET FEE HELP scheme, which was funded by taxpayers.”

The case against Captain Cook College, Site and Wills will now return to Justice Stewart for a hearing on the orders sought by the ACCC, including orders for pecuniary penalties and costs.

Lawyerly has contacted lawyers for Captain Cook College for comment. 

Customers affected by Captain Cook’s unconscionable conduct are among the more than 152,800 students who have been re-credited more than $2.8 billion in VET FEE-HELP debt since 2016.

Most of this has been through the VET FEE-HELP Student Redress Measures which were designed to address inappropriate conduct by VET providers.

The ACCC has gone after a whole host of vocational colleges for alleged breaches of consumer laws, including AIPE, Empower Institute, Acquire Learning, Unique International College, Phoenix Institute and Community Training Initiatives.

In 2019, the ACCC won a record $26.5 million penalty against Empower Institute for duping disadvantaged customers into enrolling in courses they couldn’t afford with the promise of free laptops and cash.

The regulator secured a $4 million penalty against Unique in October 2019.

Captain Cook, which was acquired by Site Group in 2014, ceased trading at the end of 2016.

The ACCC is represented by Kristina Stern SC and Stephanie Patterson, instructed by Johnson Winter & Slattery. Captain Cook and Site Group are represented by Jeremy Giles SC and Rob Davies, instructed by MinterEllison. Wills is represented by Michael Hodge KC and Conor Bannan, instructed by HWL Ebsworth.

The case is Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (trading as Captain Cook College). The appeal is Productivity Partners Pty Ltd (trading as Captain Cook College) v Australian Competition and Consumer Commission. 

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