Parents are increasingly avoiding paying school fees due to deficient enrolment contracts, warns a school law expert.
Paul O'Halloran is partner at Colin Biggers & Paisley. He said the enrolment contract in place between non-government schools and parents is a “curiously neglected document” with many schools failing to update it to cater for the variety of commercial interests that school must protect today, such as privacy, fee recovery, data breach, parent behaviour and student discipline.
“The enrolment contract between the school and parents is a legally binding document,” O'Halloran said.
“In the event of disputes, such as unpaid fees, the enrolment contract will be the basis of any fee recovery action. It is therefore critically important that its terms clearly outline the relationship between the school and the student’s parents or guardian”.
Unfortunately, says O'Halloran, many enrolment contracts that are schools use are “outdated, inadequate, and in some cases contain unlawful terms”.
School left $20,000 out of pocket
O'Halloran pointed to a recent case in South Australia which found that an independent Catholic school was unable to recover almost $20,000 in unpaid tuition fees from a parent because the original enrolment contract signed by the parents in 2009 contained deficiencies.
The contract did not make it clear that the relationship between the school and the parents was an ongoing one and it did not expressly state that the contract would continue in force beyond the end of each school year unless subsequent steps were taken,” O'Halloran said.
“It also indicated that school fees would be reviewed each year, which was suggestive of a series of annual contracts, rather than one underlying contract.”
The application for enrolment issued by the school included acknowledgments that the signing parent agreed to pay the fees “in accordance with the College Board policy”, as well as any debt recovery costs.
Following lengthy litigation, the Supreme Court of South Australia determined that the school was unable to rely upon the original enrolment contract to recover unpaid school fees in respect of the 2017 and 2018 school years, because the school and the mother had entered into a series of annual contracts inadvertently, which superseded the original enrolment contract.
O'Halloran explained that that whilst the case largely turned on the particular facts, it "demonstrates that parents are more willing than ever to engage in litigation when schools seek to recover unpaid tuition fees,” O'Halloran said.
“As a consequence, enrolment documentation must be robust enough to withstand judicial scrutiny”.
O'Halloran says enrolment documentation should be drafted to ensure a number of issues are addressed with sufficient detail.
"Parents must disclose information about the physical, learning or other disabilities of their child and the process the school will undertake to consider reasonable adjustments, in accordance with disability discrimination laws", he said.
"Family law court orders should be provided for schools to understand any obligations imposed in relation to the information that can be provided to separated parents, such as school reports or school photos".
‘Careful review’ of documentation needed
Regarding fee recovery, O'Halloran recommends ensuring fee recovery is "carefully articulated and includes the circumstances where fees are payable even where there has been some disruption to the child’s education, such as illness or allegations of student-on-student bullying".
The conditions of enrolment which include the "school’s policies and procedures should be expressly incorporated into the enrolment documentation as binding contractual obligations on students and parents".
For schools who accept enrolments from international students, O'Halloran says there are various mandatory terms in enrolment documentation stipulated by the National Code of Practice for Providers of Education and Training to Overseas Students 2018 which must be included.
Finally, consideration should be given to whether a "dedicated Parent Code of Conduct is required". This helps to "set expectations relating to appropriate behaviours and responsibilities of parents/guardians including the consequences of non-compliance," says O'Halloran.
"Considering the array of statutory and common law responsibilities facing schools today, along with the tendency for parents to litigate in response to fee recovery, a careful review of enrolment documentation is strongly recommended to guard against the emerging legal risks in this area."
Non-government schools seeking advice can contact Paul O’Halloran, Partner at Colin Biggers & Paisley on (03) 8624 2000.