Tred Consultants Pty Ltd v Kirana Training Pty Ltd [2020] NSWDC 690

District Court New South Wales

Medium Neutral Citation: Tred Consultants Pty Ltd v Kirana Training Pty Ltd [2020] NSWDC 690 Hearing dates: 29 October 2020 Date of orders: 29 October 2020 Decision date: 29 October 2020 Jurisdiction: Civil Before: Abadee DCJ Decision: See paragraph 13 Catchwords: PRACTICE AND PROCEDURE – commercial matter – contest on monies owed to plaintiff – alleged debtor contends quantum of monies owing are conditional upon funding by government – debtor also contends correct level of funding is disputed – desirability of review by forensic accountant – appropriate use of Court's resources Category: Procedural and other rulings Parties: Tred Consultants Pty Ltd (Plaintiff/Cross-Defendant) Kirana Training Pty Ltd (Defendant/Cross-Claimant) Representation: Counsel: Mr R McCrudden for the plaintiff/cross-defendant Mr S Baron Levi for the defendant/cross-claimant

Solicitors: FutureLegal for the plaintiff/cross-defendant United ACL for the defendant/cross-claimant File Number(s): 2018/206266 Publication restriction: Nil

Judgment

BACKGROUND 1. The hearing in this matter commenced before me this morning. I have heard brief opening arguments from Counsel as to the issues that arise. It is clear that, as between the Counsel, the parties have very different views as to the scope of the issues that the Court can and should determine. 2. Speaking in overly simplistic terms, the plaintiff performs the role of being something like a sub-contractor of teaching and assessment of students at vocational educational institutions. The defendant has oversight over the quality of the teaching and assessment services supplied by the plaintiff. Upon satisfaction of both of these matters, students in vocational centres receive their certification. Both parties entered into a written agreement. The plaintiff issues invoices to the defendant and those invoices are paid through funding which the defendant obtains in its capacity as a Registered Training Organisation ('RTO'). This case concerns two levels of funding in relation to the services, one at the Commonwealth Government level (called Vocational Education Training Fee Help) and the other at the NSW Government level (the New Entrant Traineeship model). The plaintiff's claim is partly based upon an unpaid invoice arising under the VET Fee Help model and partly based upon an unpaid invoice under the New Entrant Traineeship model. 3. There is no dispute that those invoices have not been paid. However, the defendant disputes the plaintiff's entitlement to the amounts claimed in its pleading. Its defence, and to some extent a cross-claim that it has filed, is centred upon the circumstance that the amount that the plaintiff receives from the defendant is tied to proportions of funding that the defendant effectively receives from the Commonwealth and State Governments. 4. The funding that the defendant receives from both levels of Government is not easily amenable to transparent calculation. According to the defendant's Counsel, the level of funding supplied by both levels of Government is the product of the input of information which the defendant has supplied to the bureaucracies. The nature of the exercise may be productive of error and, in this case, the defendant has indicated its wish to contend that, at least at the NSW Government level, errors have occurred as to what amount that the plaintiff is actually entitled to. At the VET Fee Help (Commonwealth) level, there is a further complication. As has been explained to the Court, there is something like the HECS scheme in operation. Monies are effectively given to students as a loan in the form of credits paid to RTOs for the delivery of services and delivery of training material. But some students, of course, do not complete their training; in which event they have a year to 're-credit'; which effectively cancels a debt to Government. But this takes the form of an off-set against the amount which the Commonwealth Government pays to the RTOs, like the defendant. 5. The defendant says that at both levels of funding, there is a real dispute as to what is actually owing to the plaintiff. It wishes to put forward evidence of reconciliations in the NSW Government's Portal and printouts of NSW Government invoices and eventually contend that, in respect to this part of the plaintiff's claim, the plaintiff is only entitled to the sum of about $40,000. It wishes to put forward material in relation to the Commonwealth funding to indicate that multiple re-credits have been received which, through the offsetting arrangements with the Commonwealth, means that the amount to which the plaintiff says it is entitled is substantially reduced. 6. The plaintiff contends that the evidence served in accordance with directions previously made by the Court is such as to be virtually conclusive that the defendant has received funding from both levels of Government and that the defendant should not be permitted, at this late stage, to rely upon new evidence. Once the defendant accepts that it has received funding, no further inquiry is needed. The plaintiff's Counsel further says that the arguments which the defendant wishes to make are not based upon primary evidence. The plaintiff objects to the defendant relying upon new material now. If, however, the material was admitted, Counsel indicated that he would wish to have the opportunity to challenge it. 7. I do not accept the plaintiff's contention that the arguments that the defendant wishes to marshal fall outside its pleading. That being so, at least one party to the dispute wishes to impress upon the Court determination of what is, in effect, an accounting exercise; in circumstances where, because of the recent service of material that the defendant has obtained, the parties have not themselves engaged accountants to consider the new material. 8. The defendant's Counsel did indicate, during the course of his opening, that his client had a discrete claim against the plaintiff, this being an alleged non-compliance by the plaintiff with certain standards which, the defendant contends, triggered a requirement for audits. The defendant contends that it is entitled to the costs of the audit, which it presently quantifies as being approximately $9,000.