The Canberra Institute of Technology and Patrick Hollingworth's company Think Garden have failed to reach an agreement in a court case brought forward by the "complexity and systems thinker".
The CIT and Think Garden held mediation talks on Tuesday morning, with Mr Hollingworth's company seeking damages from the training institute following the suspension of a nearly $5 million contract.
Think Garden took legal action against the CIT for almost $3.4 million, which is the outstanding amount left on the $4.99 million contract. The company has alleged CIT "repudiated the agreement" and Think Garden was entitled to be paid for the entire contract if it was terminated.
Think Garden was paid $1.7 million for the work, one-third of the total contract price, upon execution of the contract.
The mediation session followed the release of a report from the ACT Integrity Commission last week. It found former CIT chief executive Leanne Cover had engaged in "serious corrupt conduct" in awarding this contract to Mr Hollingworth.
The report found Ms Cover had deliberately concealed information about the contracts from the CIT board, and ACT Skills Minister Chris Steel had been misled.
"The consequence of her conduct was to give Mr Hollingworth a substantial financial gain at the cost of the territory," the integrity report concluded.
Mr Hollingworth was awarded more than $8.5 million in contracts by the CIT over a five-year period.
The $4,999,990 contract was the largest and was only $10 short of attracting greater scrutiny.
The commission's report noted a tender evaluation team for the contract were working on the assumption Mr Hollingworth would receive the contract no matter what.
Mr Hollingworth's bid for the tender was $5.68 million but he offered a 12 per cent discount to CIT if it provided an upfront payment.
Concerns were raised about the upfront payment, and CIT and Mr Hollingworth held a series of negotiations around this.
An agreed fee structure, the commission noted, would have meant 99 per cent of the contract was to be paid with less than 80 per cent of the work completed.
Court documents show Think Garden has alleged the institute breached the agreement on multiple occasions, including when the CIT executive team failed to attend an all-day workshop.
CIT indefinitely paused the agreement with Think Garden on June 27, 2022. This was days after the ACT Integrity Commission announced it was investigating the matter.
In response, Think Garden informed CIT it "did not agree to the pause indefinitely" and "remained committed to the agreement".
By July 7, Think Garden provided a formal notice to CIT, claiming it was in breach.
The alleged breaches included the institute cancelling meetings, placing a pause on the agreement, and "staff not engaging with Think Garden".
Later that month, Think Garden provided notice of termination of agreement, demanding that no later than 4pm on July 28 the institute pay $3.35 million in outstanding money.
The CIT paid just over $9100.
The CIT confirmed no agreement had been reached with Think Garden during Tuesday morning's session.
The case is due to return to court in October.
