SHUT: A now-closed SmartCity campus, which is up for lease.
SHUT: A now-closed SmartCity campus, which is up for lease. Contributed

Failed training provider sues SmartCity College for $3m

EXCLUSIVE: The man behind a failed training provider which left hundreds of high school students, some with disabilities, in limbo, is suing SmartCity Vocational College for more than $3 million in lost profits even as SmartCity has told a court his conduct in enrolling its students was being investigated by "regulatory authorities".

Edison Miraziz - the director of Australian School Based Traineeships Pty Ltd - placed his Sunshine Coast-based training organisation into liquidation and receivership this week.

That came as news broke about another vocational trainer, Careers Australia, going into liquidation.

The Australian School Based Traineeships website says the organisation offers school-based traineeships to Year 11 and 12 students with a disability, claiming to be a "leading employer" of school-based trainees in Australia.

The Daily can reveal Mr Miraziz is also a joint shareholder in iEducate Pty Ltd along with Daniel Custance, a former SmartCity Adelaide campus manager.

Mr Miraziz and Mr Custance, as well as iEducate and another of Mr Custance's companies, Think Labour Pty Ltd, have taken Federal Court action against SmartCity and its administrative arm SC Admin Pty Ltd.

Mr Miraziz and Mr Custance claim the $3.019 million owed to them represents a 50% share of profits agreed via an oral agreement which resulted in SmartCity employing iEducate staff and trainers, with the profits to be split between the two entities.

The Federal Court matter was first listed in South Australia on October 13 and a recent request by SmartCity to have the matters transferred to Queensland was refused by Justice Anthony Besanko.

Mr Miraziz told the Daily they had to drop the case against SC Admin after it entered receivership, but were proceeding with the case against SmartCity, also seeking more than $140,000 in outstanding student referral payments, with the matter next listed for hearing on May 30.

SC Admin - directed by Jim Spong, who also directs SmartCity - entered voluntary liquidation on December 16 last year, after pocketing about $80 million in Federal Government student loan funding in two years.


SmartCity Graduating class celebrate.  Photo Contributed
BETTER DAYS: A SmartCity Graduating class celebrate. Contributed

Its collapse left hundreds of staff nationwide owed up to $2.6 million in unpaid annual leave and other entitlements, while SmartCity shareholders and associated trusts were paid about $9 million in bonuses only 18 months before SC Admin's collapse.

SmartCity has claimed in a response to the Federal Court matter that the conduct of Mr Custance and Mr Miraziz and other employees under their direction was under investigation by regulatory authorities and was likely to result in student enrolments through the Adelaide office between November 2014-June 2015 being reversed.

The Daily has obtained a number of letters of complaint addressed to Mr Miraziz which allege unethical enrolments of students by staff reporting to Mr Miraziz.

Among the complaints, an elderly couple with limited schooling being signed up to a dual diploma and enrolling an illiterate, low-IQ man to an online business course worth more than $30,000.

Mr Miraziz explained they'd identified that "some of the people the boys signed up were less than legitimate" and those enrolments had been cancelled and the staff responsible let go.

He said there were "always issues" with students enrolled and the quality of people signed up, but denied that was a result of staff recruiting inappropriate people.

"For whatever reason they would fall out (of the course)," Mr Miraziz said.

He said by the time the arrangement with SmartCity started "going downhill" he estimated they'd signed up about 1200 students.

Mr Miraziz believed if they'd been paid the money they claimed they were owed in the Federal Court, it could have helped the viability of Australian School Based Traineeships Pty Ltd.

Mr Spong and his son, Glenn, CEO of SmartCity, were unable to respond to questions sent yesterday.

SmartCity had its approval to train students through the VET FEE-HELP student loan system cut off on March 20 by the Federal Education Department.