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Box Hill Institute Student Pilot Class Action

Settlement Approval

On 17 November 2022, a Settlement Approval Hearing took place before the Honourable Justice Dixon of the Supreme Court of Victoria for the Box Hill Institute (BHI) Student Pilot Class Action.

On 29 November 2022, his Honour approved the settlement and appointed Andrew Grech, partner of Gordon Legal as the Scheme Administrator.

The Settlement Scheme approved by the Court will now commence. A settlement distribution scheme is now in process.

The key terms of the settlement with BHI are as follows:

BHI will pay an all-inclusive amount of $33 million (Resolution Sum);

  1. from the Resolution Sum, the following sums will be deducted:
    1. $4,623,835.14 in legal costs that the Plaintiffs incurred in the commencement and conduct of the Class Action;
    2. $49,277.25 in respect of the costs of the Court appointed Costs Referee;
    3. $20,000 for the First Plaintiff’s claim for time spent and expenses incurred in the interests of prosecuting the Class Action on behalf of Group Members as a whole; and
    4. $15,000 for the Second Plaintiff’s claim for time spent and expenses incurred in the interests of prosecuting the Class Action on behalf of Group Members as a whole; and
    5. $15,000 for the Third Plaintiff’s claim for time spent and expenses incurred in the interests of prosecuting the Class Action on behalf of Group Members as a whole; and
    6. $15,000 for the Fourth Plaintiff’s claim for time spent and expenses incurred in the interests of prosecuting the Class Action on behalf of Group Members as a whole; and
    7. $15,000 will be paid to Soar’s liquidator.
  2. The Court has also ordered that the costs of the scheme administration will be capped at $3,250,000 and appointed a Costs Referee to oversee that the costs incurred by the Scheme Administrator are reasonable and proportionate. The costs of the scheme administration will be deducted from the Resolution Sum.
  3. the balance of the Resolution Sum, together with any interest that accrues on the Resolution Sum, will represent the compensation payment to the Plaintiffs and Group Members.
  4. in return, the Plaintiffs and Group Members will give BHI releases in relation to the subject matter of the Class Action (other than for damages for personal injury, with the exception of the claims for distress, inconvenience and vexation that are made in the Class Action) and agree not to make or pursue any claims with the Commonwealth Department of Employment and Workplace Relations against BHI in respect of any VET FEE-HELP or VET Student Loans they have taken out (and indemnify BHI in respect of any claim they may have already made or might make in the future).

In addition to the settlement with BHI, a settlement has been agreed with Soar and approved by the Court. The settlement with Soar involves the claim against Soar being discontinued, with $15,000 being paid to Soar’s liquidator for part of its legal costs, pursuant to a previous order of the Court. These costs were associated with the Plaintiffs obtaining information from Soar’s liquidators to test what assets Soar might have had to contribute to any settlement.

A copy of the Settlement Approval Orders are available under the “Relevant Documents” heading below.

Next Steps

If you are a Group Member in the Class Action and wished to participate in the Settlement Scheme, you needed to have lodged a Notice of Claim with Gordon Legal between 19 September 2022 and 21 October 2022. Pursuant to the Court’s orders of 16 September 2022. The period to lodge a Notice of Claim has now ended.

Each Notice of Claim lodged with Gordon Legal will now be assessed to determine whether or not the Group Members’ circumstances fit the criteria for them to be considered an ‘Eligible Claimant’ by the Scheme Administrator. Only Eligible Claimants will be able to make a claim for loss and damage under the Settlement Scheme.

If you have lodged a Notice of Claim, you will receive notification informing you whether or not you have satisfied the Eligibility Criteria by 27 December 2022.

Eligible Claimants will be invited to complete a questionnaire on the Claimant Hub. If you are an Eligible Claimant, you must complete the questionnaire with ninety (90) days of receiving it.

You will also need to provide any relevant documentation that may be used to substantiate your claim and attend a personal, telephone or video interview with a representative of the Scheme Administrator. At the interview you will be asked for more information specific to your circumstances and be given the opportunity to ask any questions.

Overview of the BHI Student Pilot Class Action

In March 2020, Gordon Legal commenced class action proceedings against BHI on behalf of the representative plaintiffs and group members, who enrolled to study a Diploma of Aviation (Commercial Pilot Licence – Aeroplane) (CPL Diploma) between 6 December 2015 and 26 March 2020.

The four named representative plaintiffs are Nerita Somers, Adel Hassanein, Matthew Lamont and Felix Ouldanov.

The compensation sought in the class action includes:

  • Reimbursement of tuition fees paid to BHI including in respect of group members’ student loans attributable to the CPL Diploma course;
  • Reimbursement for lost time incurred through attending and participating in the CPL Diploma course;
  • Refunds of additional costs incurred during the CPL Diploma Course, including flight costs paid to Soar, and additional studying costs incurred as part of preparing for CASA exams; Damages for distress and inconvenience as a result of the administration of the CPL Diploma;
  • Interest and legal costs.

In November 2022, the Honourable Justice Dixon approved the settlement in the BHI Student Pilot Class Action. Gordon Legal are proud of the settlement that has been achieved and believe that the Settlement Scheme represents an excellent outcome for Group Members as it provides them with a more certain outcome, more efficiently and at lower cost than any of the available alternatives.

Frequently Asked Questions

Yes. All Eligible Claimants’ claims have been carefully assessed in accordance with the Claim Assessment Principles set out in the BHI Class Action Settlement Scheme (Settlement Scheme). These can be found here.

The losses you can recover differ depending on whether you are part of the Withdrawn, Admitted or Passed cohort of Eligible Claimants.

You are a Withdrawn student if you did not graduate from the course and exited, withdrew or were removed from the Diploma of Aviation (Commercial Pilots License – Aeroplane) (the CPL Diploma) that was being offered in partnership by the Box Hill Institute (BHI) and Soar Aviation Pty Ltd (Soar) prior to the settlement being approved.

You are an Admitted student if you were still enrolled in the CPL Diploma as at the date of lodging a Notice of Claim.

You are a Passed student if you graduated from the course, having met all of the requirements of the CPL Diploma and the CPL Diploma was conferred.

The below are categories of loss and damage as set out in Schedule 1 of the Settlement Scheme.

This table indicates the Categories of loss and damage available to each cohort.

Category of loss and damages Withdrawn Admitted Passed
1. Fees paid to BHI X
2. VET Student Loan X
3. Fees paid to Soar (overflown hours) X X X
4. External flying lessons X X X
5. External ground theory lessons X X X
6. Gap fee payments X X X
7. Subsequent enrolments X X
8. Medicals, assessments and tests X X X
9. Associated expenses (e.g. Planning kits, memberships, security) X X X
10. Travel or accommodation Costs X X X
11. Textbooks/manuals X X X
12. Other loans – paid X X X
13. Other Loans – to be paid X X X
14. Past loss of earnings X X X
15. General damages X

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General Damages are an Eligible Category of loss and damage relating to the distress, inconvenience or vexation that you may have suffered as a result of the failures of BHI and Soar.

Under the Settlement Scheme, this type of compensation is only available to Withdrawn students.

General Damages are calculated using ordinary Common Law principles.

General Damages for Withdrawn students are assessed as $0 where the claimant has not provided evidence of distress, inconvenience or vexation that is sufficiently causally linked to the allegations contained in the court proceedings.

See clause 4.10 and Schedule 1 of the Settlement Scheme.

Yes. The Scheme Administrator has weighed all the information provided during the Claims Assessment Process carefully and taken into account the strengths and weaknesses of each claim based on the information available.

If a claim you submitted was not included in your Notice of Decision, this may be because the claim did not fall into one of the eligible categories of loss and damage for your cohort, the loss was not able to be linked to the failures of BHI and Soar, or there was insufficient evidence supporting the claim.

VET Student Loan Debt

Under the Settlement Scheme, only Withdrawn students can recover the balance of their student loan debt (such as a Vocational Education and Training (VET) Student Loan or a Higher Education Loan Program (HELP) Loan). Only the loans incurred in relation to your enrolment with BHI are recoverable.

In certain individual circumstances, your entire loan relating to BHI may not be recoverable. This may be because the evidence does not sufficiently establish a link between the failures and your withdrawal from the course or the full debt incurred.

Loss of earnings

To support a loss of earnings claim, Eligible Claimants need to demonstrate that the difference in their earnings during the time before their enrolment and during their enrolment was a consequence of the failures complained of in the court documents.

If you took less shifts, or a lower-paying position in anticipation of enrolling in the CPL Diploma to make time for study, a loss of earnings claim will not have been made out. This is because a voluntary decision to reduce your work hours before your enrolment cannot be said to be a result of BHI’s failures.

Subsequent enrolments

If you are a Withdrawn student and went on to complete further flight training elsewhere after your enrolment with BHI, and your student loan debt relating to BHI forms part of your assessed claim, you will only have been able to recover subsequent enrolments/flight lessons and associated costs where the total cost is more than the advertised cost of the CPL Diploma.

For example, if it was represented to you that the CPL Diploma with BHI and Soar would cost you $79,999, and you spent $99,999 on subsequent enrolments, you could recover the $20,000 difference. You would not have been able to recover the cost of subsequent enrolments that cost less than $79,999.

This is because claiming the full cost of subsequent enrolments, in addition to VET Student Loan Debt, amounts to ‘double dipping’, or obtaining a qualification for free.

If you are a Passed student, you may have been able to recover tuition fees for endorsements or other qualifications completed since your enrolment with BHI, if it was represented to you prior to your enrolment that you would receive these as part of your CPL Diploma.

Admitted students are not able to recover the cost of subsequent enrolments.

Travel or accommodation

Only travel undertaken because of the failures complained of in the court documents is recoverable.

This means that while you may have been able to claim travel to and from flight lessons which were cancelled for reasons other than weather, you will not have been able to claim all travel (or accommodation) costs incurred in relation to your enrolment.

Yes.

No. When the Court approved the Settlement Scheme in November 2022, it did so on the basis that compensation would be assessed as at that date. This means that the indexation applied on 1 June 2022 is taken into account, but any indexation applied since is not.

Yes. The terms of the Settlement Scheme approved by the Court require the Scheme Administrator to apply a discount of between 10%–40% to each assessed claim.

The Scheme Administrator gave careful consideration to the evidence you provided and how the terms of the Settlement Scheme should be applied to that evidence.

In summary, the Scheme Administrator is required to consider the following factors when arriving at the discount to be applied to the assessed claim of each Eligible Claimant:

  • Whether you are Withdrawn, Passed, or Admitted;
  • Whether you regularly attended theory classes;
  • Whether you regularly attended flight training;
  • Whether you obtained a flying qualification while studying at BHI and the level of that qualification;
  • If Withdrawn, the period of your enrolment;
  • Whether you were provided with feedback on the progress of your learning;
  • Whether you were given the adequate flight training in aeroplanes that had the characteristics necessary to give you the experience required to pass the flight test prescribed in the CASA CPL Licence Requirements;
  • Whether you were regularly provided with pre-flight and post-flight briefings;
  • Whether your flight training sessions were regularly cancelled for reasons other than weather-related operational reasons;
  • Whether you were able to undertake flight training sessions with the required frequency to retain skills;
  • Whether BHI represented to you that you would receive an RPL, PPL and CPL or an RPC, RPC with Navigational Endorsement and CPL; and
  • The representations made to you by BHI about the CPL Diploma Course.

These discounts take into account the risks and costs of litigation, that is, going to court, as opposed to the Claims Assessment Process in the Settlement Scheme.

The minimum discount to be applied is 10%. The maximum discount to be applied is 40%, unless your claim contains loss and damage that is not compensable in the circumstances, or insufficient evidence has been provided for the loss and damage claimed.

See clause 4.4 of the Settlement Scheme.

Under the Settlement Scheme, claims may be discounted where no documentary or corroborative evidence has been provided to support those claims.

See clause 4.4 of the Settlement Scheme.

Yes. You are entitled to seek a reconsideration of your claim as assessed in your Notice of Decision.

Your options are:

  1. Accept the assessment provided in the Notice of Decision (in which case the assessment is binding); or
  2. Request that the Scheme Administrator reconsider your claim pursuant to the Reconsideration Process.

If you choose not to accept the assessment in your Notice of Decision, the Scheme Administrator will reconsider its assessment of your claim. You must submit additional information, documents, statements in the form of statutory declarations or other material you consider relevant to the reconsideration of your claim.

The Scheme Administrator must provide a notice of reconsideration of its decision within 14 days of receiving additional information from you.

It is important to understand the possible outcomes of and deadlines in relation to requests for reconsideration of your claim.

See clauses 4.18 – 4.25 of the Settlement Scheme.

If you request a reconsideration, your claim will be assessed de novo, meaning from the beginning. This means the Scheme Administrator will consider your claim as though it was being assessed for the first time.

It is important to understand that this means that the settlement payment to which you are entitled may be assessed as the same, higher, or lower amount as that set out in your original Notice of Decision.

No. You may only make one application for reconsideration. See clause 4.20 of the Settlement Scheme.

Once the reconsideration process is complete, you will have the option to confirm your acceptance of the decision, in which case it is binding, or you may request a review by a Review Panel.

The Settlement Scheme provides for a Review Process whereby an independent barrister (the Review Panel) considers applications for review of decisions made by the Scheme Administrator in the Reconsideration Process.

In considering any application for review, the Review Panel will consider any relevant material filed by you, BHI or the Scheme Administrator. The possible outcomes of the Review Process are as follows:

Affirmation

The Review Panel may affirm the decision of the Scheme Administrator, meaning they agree with the assessment of your claim contained in the reconsideration of the Notice of Decision..

Substitution

The Review Panel may overturn the decision of the Scheme Administrator and replace it with its own decision, meaning the assessment of your claim will change.

There is no further appeal or right of review from a decision of the Review Panel. Its decision is final and binding on all parties.

See clauses 5.1-5.7 of the Settlement Scheme.

Once all Notices of Decision have been finalised, your settlement amount will be paid to your nominated bank account.

All Reconsideration and/or Review Processes must be complete before settlement amounts can be paid.

The Scheme Administrator will assess each claim on the basis of the following principles:

  1. Apply a discount based on the status of the Eligible Claimant as being Withdrawn, Passed or Admitted.
  2. Apply a discount depending on whether the Eligible Claimant provides any or both of:
    1. any documentary evidence in relation to those matters; or
    2. any corroborative evidence from a Group Member, former student of the CPL Diploma or person related to the delivery of the CPL Diploma Course who is prepared to execute a statutory declaration in relation to the subject matter of the Eligible Claimant’s claim.
  3. The following factors must also be considered by the Scheme Administrator in deciding what discount to apply to an Eligible Claimant’s claim:
    1. Whether the Eligible Claimant regularly attended theory classes;
    2. Whether the Eligible Claimant regularly attended flight training;
    3. Whether the Eligible Claimant obtained a flying qualification while studying at BHI and the level of qualification they achieved including:
      • an RPC;
      • an RPC with Navigation Endorsement;
      • an RPL;
      • a PPL; or
      • a CPL
    4. If the Eligible Claimant is Withdrawn, the period of their enrolment;
    5. Whether the Eligible Claimant was provided with feedback on the progress of their learning;
    6. Whether the Eligible Claimant had continuity with their Flight Instructors;
    7. Whether the Eligible Claimant was given the adequate flight training in aeroplanes that had the characteristics necessary to give them the experience required to pass the flight test prescribed in the CASA CPL Licence Requirements;
    8. Whether the Eligible Claimant was regularly provided with pre-flight and post-flight briefings;
    9. Whether the Eligible Claimant’s flight training sessions were regularly cancelled for reasons other than weather related operational reasons;
    10. Whether the Eligible Claimant was able to undertake flight training sessions with the required frequency to retain skills
    11. Whether BHI represented to the Eligible Claimant they would receive an RPL, PPL and CPL or an RPC, RPC with Navigational Endorsement and CPL; and
    12. The representations made to the Eligible Claimant by BHI about the CPL Diploma Course.

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