Academy of Global Business Training Pty Ltd and Australian Skills Quality Authority
[2019] AATA 1345
•12 June 2019
Academy of Global Business Training Pty Ltd and Australian Skills Quality Authority [2019] AATA 1345 (12 June 2019)
Division:GENERAL DIVISION
File Numbers: 2018/2511 and 2018/2512
Re:Academy of Global Business Training Pty Ltd
APPLICANT
AndAustralian Skills Quality Authority
RESPONDENT
DECISION
Tribunal:Deputy President S A Forgie
Date of decision: 12 June 2019
Place:Melbourne
The Tribunal decides to:
refuse the respondent’s application that the applicant’s applications be dismissed under s 42B(1) of the Administrative Appeals Tribunal Act 1975.
[sgd].....................................................................
Deputy President S A Forgie
Catchwords
PRACTICE AND PROCEDURE – application for dismissal under s 42(B)(1) of the Administrative Appeals Tribunal Act 1975 – whether no reasonable prospects of success or application lacks substance – whether failure to meet criterion j) of Fit and Proper Person Requirements fatal to application – application for dismissal refused
Legislation
Administrative Appeals Tribunal Act 1975
National Vocational Educational and Training Regulator Act 2011
Standards for Registered Training Organisations 2015
Cases
Australian Securities and Investments Commission v Donald [2003] FCAFC 318; (2003) 136 FCR 7; 203 ALR 566; 38 AAR 288; 77 ALD 449; 22 ACLC 24; 48 ACSR 394
Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955
Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658
Freeman v Secretary, Department of Social Security [1988] FCA 294; (1988) 19 FCR 342; 87 ALR 506; 15 ALD 671; 9 AAR 255
Grant v Repatriation Commission [1999] FCA 1629; (1999) 57 ALD 1
Holcon Australia Pty Ltd v The Corporation of the Town of Walkerville [2006] SCASC 437
Jebb v Repatriation Commission [1988] FCA 105; (1988) 80 ALR 329; 8 AAR 285
Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd and Others [2008] FCAFC 60; (2008) 167 FCR 372
Mohamed v Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs [2009] FCA 336
Nitschke v Foraco Australia Pty Ltd [2014] SASC 88; (2014) 120 SASR 162
Re Bolton and Australian Securities and Investments Commission [2018] AATA 976
Re Easton and Repatriation Commission (1987) 12 ALD 777; 6 AAR 558
Re Oliver and Comcare [2018] AATA 1964
Re Tiknaz and Director-General of Social Services (1981) 4 ALN N44
Shi v Migration Agents’ Registration Authority [2008] HCA 31; (2008) 235 CLR 286; 248 ALR 390; 48 AAR 345; 103 ALD 467; 82 ALJR 1147
REASONS FOR DECISION
Deputy President S A Forgie
The Australian Skills Quality Authority (ASQA) has sought an order dismissing applications made by Academy of Global Business Training Pty Ltd (AGBTPL) for review of two decisions made by ASQA on 28 March 2018 but notified by letter dated 11 April 2018. One of those decisions is a decision to reject its application to change the scope of its registration as a National VET Regulator (NVR) registered training organisation (RTO) under the National Vocational Educational and Training Regulator Act 2011 (NVR Act) to include three courses and to cancel its registration under that legislation.[1] The second decision is a decision to cancel AGBTPL’s registration as an RTO.[2] ASQA has sought the order under s 42B(1) of the Administrative Appeals Tribunal Act 1975 (AAT Act) on the basis that AGBTPL’s application has no reasonable prospects of success[3] and that it is lacking in substance and vexatious.[4] It did so after it had received, on 5 February 2019, a copy of the Final Notice of Termination of a Smart and Skilled Contract and a Final Performance Monitoring Report issued by the New South Wales Department of Industry (DOI) addressed to AGBTPL’s Chief Executive Officer.
[1] 2018/2512
[2] 2018/2511
[3] AAT Act; s 42B(1)(b)
[4] AAT Act; s 42B(1)(a)
For the reasons set out below, I have decided to refuse ASQA’s application that I dismiss the applications under s 42B(1) of the AAT Act.
BACKGROUND
AGBTPL as an NVR registered training authority
Under s 16 of the NVR Act, a person may apply to the National VET Regulator for registration as an RTO. The National VET Regulator is a body, being ASQA, established under s 155 of the NVR Act.[5] ASQA may grant an application for registration and, in deciding whether to do so, must consider whether the applicant complies with the VET Quality Framework and the applicable conditions of registration set out in Subdivision B of Division 1 of Part 2 of the NVR Act.[6]
[5] NVR Act; s 3
[6] NVR Act; ss 17(1) and (2)
The reference to the “VET Quality Framework” is a reference to, among others, the Standards for Registered Training Organisations 2015 (Standards Instrument) and the Fit and Proper Person Requirements set out in Schedule 3 to the Standards Instrument.[7] Once registered, an RTO must comply with the conditions set out in ss 22 to 28 of the NVR Act as well as with any conditions imposed on the RTO’s registration under s 29(1). Among those conditions is that in s 22(1) that an RTO must comply with the Standards Instrument and that in s 23 that an RTO must satisfy the Fit and Proper Requirements. Section 25 is also relevant:
[7] NVR Act; s 3
“(1) An NVR registered training organisation must notify the National VET Regulator, in writing, if:
(a)an event occurs that would significantly affect the organisation’s ability to comply with the VET Quality Framework; or
(b)the name or contact details of an executive officer or high managerial agent of the organisation change; or
(c)there are other substantial changes to the operations of the organisation.
(2)The notice must be given to the National VET Regulator as soon as practicable after the NVR registered training organisation becomes aware of a matter mentioned in subsection (1).”
An “executive officer” in relation to an RTO means:
“(a) a person, by whatever name called and whether or not a director of the organisation, who is concerned in, or takes part in, the management of the organisation; or
(b)if the organisation is a body corporate:
(i)a person who, at any time during a period for which the organisation is registered, owns 15% or more of the organisation; or
(ii)a person who, at any time during a period for which the organisation is registered, is entitled to receive 15% or more of dividends paid by the organisation; or
(c)an administrator, receiver and manager, or liquidator of the organisation (other than a receiver and manager, or liquidator, appointed by a court); or
(d)if the organisation is a body corporate – the administrator of a deed of company arrangement executed by an organisation; or
(e)if the organisation is a body corporate – a trustee or other person administering a compromise or arrangement made between the organisation and another person or persons.”[8]
[8] NVR Act; s 3
A “high managerial agent” of an RTO is defined in s 3 of the NVR Act to mean:
“… an employee or agent of the organisation with duties of such responsibility that his or her conduct may fairly be assumed to represent the organisation in relation to the business of providing courses.”
AGBTPL was registered as an RTO with ASQA on 11 April 2014. On 16 January 2015, ASQA asked AGBTPL to provide specified information for a post initial registration audit. Exchanges of correspondence followed when ASQA found there to be insufficient delivery data and asked AGBTPL to provide further information.
Application for change of scope of registration
On 19 August 2016, ASQA received notification that AGBTPL had applied for a change of scope of its registration. In relation to an RTO, a reference to its scope of registration is a reference to the things that it is registered to do. It will allow an RTO to:
“(a) both:
(i)provide training and assessments resulting in the issue of VET qualifications or VET statements of attainment by the organisation; and
(ii)provide assessments resulting in the issue of VET qualifications or VET statements of attainment by the organisation; or
(b)provide assessments resulting in the issue of VET qualifications or VET statements of attainment by the organisation.”[9]
[9] NVR Act; s 3
Section 33 of the NVR Act sets out the circumstances in which ASQA, as the National VET Regulator, may grant an application for a change in an RTO’s scope of registration. Sections 33(2) and (3) provide:
“(2) In deciding whether to grant an application, the National VET Regulator must consider:
(a)the applicant’s ability to provide the VET course, or part of the VET course, in accordance with the VET Quality Framework; and
(b)the other VET courses, or parts of VET courses, offered by the applicant; and
(c)whether the applicant complies with:
(i)the VET Quality Framework; and
(ii)the other conditions of registration set out in Subdivision B of Division 1 of this Part.
(3)If the National VET Regulator grants an application, the Regulator must determine the day from which the VET course, or part of the VET course, may be delivered by the applicant.”
VET Quality Framework: condition of registration and relevant in change of scope application
As a registered RTO when it applied for a change of scope of its registration, AGBTPL was required to comply with cl 7.1 of the Standards Instrument. It provides:
“Standard 7. The RTO has effective governance and administration arrangements in place
Context:
Business viability is critical to the ongoing sustainability of an RTO and the investment it makes in its services. If RTOs are not viable, then this negatively impacts on the quality of its training and assessment outcomes and on learners.
Operational and financial business standards therefore provide important protective measures for the learner and RTOs, as well as acting as a disincentive for underprepared organisations to enter the market.
The factors determining the viability of an RTO are dependent upon the business objectives and operating characteristics of the RTO. For example, the factors determining the business viability of an enterprise RTO embedded within a major Australian business may be different to those impacting upon a private provider or a publically-owned TAFE Institute.
To be compliant with Standard 7 the RTO must meet the following:
7.1The RTO ensures that its executive officers or high managerial agent:
a)are vested with sufficient authority to ensure the RTO complies with the RTO Standards at all times; and
b)meet each of the relevant criteria specified in the Fit and Proper Person Requirements in Schedule 3.
7.2-7.5…”
The criteria for suitability are set out in the Fit and Proper Person Requirements, which provides:
“Criteria for suitability
In assessing whether a person meets the Fit and Proper Person Requirements, the VET Regulator will have regard to the following considerations:
a)whether the person has been convicted of an offence against a law of the Commonwealth or a State or Territory of Australia, or of another country, and if so, the seriousness of the offence and the time elapsed since the conviction was recorded;
b)whether the person has ever been an executive officer or a high managerial agent of an RTO at a time that the RTO had its registration on the National Register cancelled or suspended by its VET Regulator for having breached a condition imposed on its Registration;
c)whether the person has ever been an executive officer or high managerial agent of an RTO at time when the RTO was determined to have breached a condition of its registration under the Education Services for Overseas Students Act 2000 or the Tertiary Education Quality and Standards Agency Act 2011;
d)whether the person has ever become bankrupt, applied to take the benefit of a law for the benefit of bankrupt or insolvent debtors, compounded with his or her creditors or assigned his or her remuneration for the benefit of creditors, and if so, the time elapsed since this event occurred;
e)whether the person has ever been disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001, and if so, whether the disqualification remains in place;
f)whether the person was involved in the business of delivering courses or other services on behalf of a person that was the subject of regulatory action described in points b) or c) above, and if so, the relevance of the person’s involvement;
g)whether the person has ever provided a VET Regulator with false or misleading information or made a false or misleading statement to a VET Regulator, and if so, whether it is reasonable to assume that the person knew that the statement made or information provided to the VET Regulator was false or misleading;
h)whether the person has ever been determined not to be a fit and proper person as prescribed under any law of the Commonwealth or of a State or Territory of Australia, and if so, whether that determination remains in place;
i)whether the public is likely to have confidence in the person’s suitability to be involved in an organisation that provides, assesses or issues nationally recognised qualifications;
j)whether the person has ever been an executive officer or high managerial agent of an RTO at a time that the RTO was determined to have breached a government training contract; and
k)any other relevant matter.”
Ensuring compliance with the VET Quality Framework
Section 35 of the NVR Act provides that ASQA may, at any time, conduct a compliance audit of an RTO’s operations to assess whether the organisation continues to comply with that Act or the VET Quality Framework. ASQA may also review or examine any aspect of an RTO’s operations to determine any systemic issues relating to the quality of vocational education and training.
Section 35A provides that ASQA may give written directions to an RTO requiring it to rectify a breach of a condition of the RTO’s registration.[10] In determining whether it is appropriate to give such a direction, ASQA may have regard to the RTO’s conduct, or the circumstances existing, before ASQA had cause to consider giving the direction.[11] Section 36 sets out sanctions that ASQA may impose on an RTO if, after satisfying natural justice requirements,[12] it considers one or more appropriate to impose.[13] The sanctions ASQA may impose are:
“(b) give a written direction to an NVR registered training organisation requiring the organisation to notify its VET students, in writing, of a matter set out in the direction;
(c)shorten the period of an NVR registered training organisation’s registration;
(d)amend an NVR registered training organisation’s scope of registration;
(e)suspend all or part of an NVR registered training organisation’s scope of registration under section 38;
(f)cancel an NVR registered training organisation’s registration under section 39.”
[10] NVR Act; s 35A(1)
[11] NVR Act; s 35A(2)
[12] ASQA need not follow natural justice requirements in exceptional circumstances: NVR Act; s 36(1)(b). The natural justice requirements are set out in s 37 of the NVR Act.
[13] NVR Act; s 36(1)(a)
Whether to impose a sanction and the nature of that sanction are discretionary decisions as is made apparent from s 36(3) when it provides:
“In determining what action to take in relation to an NVR registered training organisation, the National VET Regulator may have regard to:
(a)the organisation’s conduct, or circumstances existing, before the Regulator had cause to consider imposing a sanction on the organisation (including before the commencement of this section); and
(b)if section 37 applies – the organisation’s conduct, or circumstances existing, since the Regulator gave the organisation a written notice as mentioned in that section.”
The reference to s 37 in s 36(3)(b) is a reference to the natural justice requirements and it is relevant in considering the point in time at which ASQA makes its decision and the information and evidentiary material on which it relies. It is clearly the point in time at which it makes its decision and not when it gives the RTO notice of its intention to make a decision under s 37. This is also a relevant factor in deciding the point in time at which the Tribunal reviews the decision that ASQA ultimately makes and the information and evidentiary material to which it may have regard. The way in which the Tribunal would come to its decisions on those issues was summarised, albeit in a different but no less relevant context, by Middleton J in Mohamed v Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs[14] (Mohamed). His Honour was considering an appeal from a decision made by the Tribunal regarding Mr Mohamed’s entitlement to a pension. Resolution of the decision turned on whether Mr Mohamed was an Australian resident:
“ The starting point is to acknowledge, as the High Court in Shi [Shi v Migration Agents’ Registration Authority] directs, that s 43 of the AAT Act does not limit, by time or substance, the information or evidence the Tribunal may take into account in making its decision. However, this is only the beginning of the inquiry. Reference must then be made to the legislation under which the original decision was made and, having properly construed that legislation, the Tribunal must ask itself the question whether or not it is confined in considering information or evidence by virtue of a restriction of time or subject matter.
…
Therefore, in my view the Tribunal the subject of this application before me was entitled to take into account all the facts proved before it, as long as the Tribunal focussed on the correct period of time.”
…
The Tribunal considered the relevant matters under s 7(3) of the Act. The findings of fact made by the Tribunal were supported and confirmed by the applicant’s subsequent actions, which demonstrated that the Tribunal’s consideration of the relevant objective and subjective matters in reaching a decision about whether the applicant had established residency.[15]
[14] [2009] FCA 336
[15] [2009] FCA 336 AT [24], [30] and [36]
The essential points made in this passage are that the legislation under which the decision has been made must be analysed to determine the answer. That is also made clear in the judgments of the High Court in Shi v Migration Agents’ Registration Authority[16] (Shi), to which Middleton J referred in Mohamed. I have analysed those judgments in an earlier case[17] and adopt that analysis in this and set out only the principles I understand from them:
[16] [2008] HCA 31; (2008) 235 CLR 286; 248 ALR 390; 48 AAR 345; 103 ALD 467; 82 ALJR 1147; Kirby, Hayne, Heydon and Crennan JJ; Kiefel J dissenting
[17] Re Bolton and Australian Securities and Investments Commission [2018] AATA 976 at [106]-[113]
“(1)The application of the general principles is subject to the particular legislative context in which the decision under review was made and in which it is being reviewed.
(2)The decision that the Tribunal must review is determined by reference to the statutory provisions conferring jurisdiction on it:
(a)For example, the decision reviewed by the Tribunal may be only one of the decisions that the original decision-maker is required to make in resolving an application made to it.
(3)The Tribunal will address the same issues or questions as those addressed by the original decision-maker:
(a)It does not address the same decision and so does not characterise the decision as, for example, a cancellation decision or an entitlement decision and address those same issues or questions in light of that characterisation.[18]
(4)Unless there is a temporal element in the legislation requiring a contrary conclusion, the Tribunal will review a decision as at the date it conducts that review and reaches its own decision.
(5)The Tribunal may have regard to evidence on issues and matters up to the date of its decision on review; and
(6)The task of the Tribunal:
(a)is to reach a decision that is the correct or preferable decision i.e. the decision that is correct according to the law and on the evidence and, where more than one decision meets that description, the decision that is preferable having regard to the limits imposed by the legislation under which the decision is made and the facts of the case; and
(b)is not to decide whether the decision under review is itself the correct or preferable decision.”[19]
[18] In this, the High Court has moved from the way in which the Tribunal’s task was identified by reference to the decision made by the original decision-maker in Freeman v Secretary, Department of Social Security [1988] FCA 294; (1988) 19 FCR 342; 87 ALR 506; 15 ALD 671; 9 AAR 255 (Davies J); Re Tiknaz and Director-General of Social Services (1981) 4 ALN N44 (Davies J, President, Senior Member Ballard and Dr Garlick, Member); Jebb v Repatriation Commission [1988] FCA 105; (1988) 80 ALR 329; 8 AAR 285 (Davies J); Re Easton and Repatriation Commission (1987) 12 ALD 777; 6 AAR 558 ; Re Easton and Repatriation Commission (1987) 12 ALD 777; 6 AAR 558 (Davies J).
[19] Re Bolton and Australian Securities and Investments Commission [2018] AATA 976 at [113]
In the case of the imposition of sanctions under s 36, the application of these principles leads to the conclusion that an RTO’s conduct, or circumstances existing, since ASQA gave it written notice under s 37 is relevant when it makes its decision. Therefore, it is arguable that the RTO’s conduct to the date of any review in this Tribunal will also be relevant.
Notice of ASQA’s decision to cancel AGBTPL’s registration as an RTO
AGBTPL is a registered training organisation within the meaning of s 3 of the NVR Act. On 12 July 2017, ASQA gave AGBTPL notice under s 37 of the NVR Act that it intended to make a decision to cancel its registration under s 39. It invited AGBTPL to make a written response and, at AGBTPL’s request extended the time for that response. After receiving the response on 30 October 2017 and considering it, ASQA decided on 11 April 2018 to cancel AGBTPL’s registration under s 39 of the NVR Act with effect from 16 May 2018. ASQA made its decision after deciding that AGBTPL:
“… remains critically non-compliant with the VET Quality Framework, including the Standards for Registered RTOs 2015 at clauses 1.1, 1.2, 1.3, 1.4, 1.5, 1.6, 1.8, 1.9, 1.10, 1.11, 1.13, 2.1, 2.2 and 3.1.
These non-compliances indicate that there is potential for adverse impact on learner as well as on persons affected by the outcomes of the training and assessment services. Of significant concern is that:
·the RTO has failed to demonstrate that its training and assessment strategies, as well as its practices are consistent with the requirements of the relevant training product that enables each learner to meet the requirements of each unit of competency in which they are enrolled. (Clauses 1.1 & 1.2)
·assessment is not being conducted in accordance with training package requirements and Principles of Assessment and Rules of Evidence. The widespread and systemic non-compliances with the RTOs assessment system indicate that qualifications may have been issued to learners who do not have the requisite skills and knowledge. (Clause 1.8)
·the RTO has failed to demonstrate it has sufficient training and learning resources relevant to its training and assessment strategy. (Clause 1.3)
·trainers and assessors making assessment judgments are not qualified to do so as they do not have the requisite vocational competence, industry currency and/or current knowledge and skills relevant to a competency based environment. (in accordance with Clauses 1.13-1.16)
·the RTO has failed to rectify the impact that the non-compliances may have caused to all learners that were affected, including those currently enrolled. (Clause 3.1)”
Application to the Tribunal and conditional stay of the operation or implementation of the decisions
On 9 May 2018, AGBTPL lodged applications in the Tribunal for review of ASQA’s decisions dated 28 March 2018. At the same time, AGBTPL requested that the operation or implementation of ASQA’s decision be stayed. On 8 June 2018, I ordered that the decision be stayed until the Tribunal had heard and determined the application for review or until further order but with the condition that AGBTPL could not enrol any new students in any course. Both parties had liberty to apply.
Termination of AGBTPL’s Smart and Skilled Contract
Earlier, on 27 April 2018, DOI had sent AGBTPL a Notice of Suspension. On 5 October 2018, DOI sent AGBTPL’s Chief Executive Officer (CEO), Ms Trantalles, a Notice setting Events of Default that it had identified in its Performance Monitoring. AGBTPL responded but DOI decided that it had failed to provide evidence demonstrating that all of the Events of Default did not occur. DOI decided to exercise its right to terminate AGBTPL’s Smart and Skilled Contract due to the Events of Default.
In a letter dated 21 December 2018, the DOI advised AGBTPL that it had terminated its Smart and Skilled Contract with immediate effect. As a consequence, AGBTPL was immediately required to cease to deliver Subsidised Training to all enrolled students. It was required to follow the Transfer Out Process set out in [10] of the Smart and Skilled Operating Guidelines and to advise all enrolled students of their options for continuing training as well as provide them with Statements of Attainment or Testamur to reflect their actual training and assessment progress.
DOI’s letter referred to a full Performance Monitoring Report that would be made available to AGBTPL on receipt of a written request. That report, which was undated, was endorsed by the Regional Manager, Quality Assurance and Compliance in DOI. The report summarised the Events of Default that had been identified during Performance Monitoring and sustained:
“1. The Provider has supplied information to the Department, which was incorrect and untrue and reported in a misleading way; in that student mobile phone numbers uploaded into the Department’s portal (STS Online) were the same for multiple students, and was the CEO’s mobile phone number. (Sustained, Clause 7(i) S&S Contract)
2.The Provider acted in a way that could be seen to be reckless and dishonest in their reporting of training activity data, in that:
·UoC Outcome 20s were reported for 37 students and 277 UoCs, where the Provider holds no records to support that the students were assessed and satisfied all training package requirements.
·UoC Outcome 70s were reported for 20 students and 203 UoCs, where the Provider holds no records to support that the students participated in subsidised training.
·UoC Outcome 40s were reported for student Letisha O’Donnell for 4 UoCs, where the Provider did not hold records to support that the student participated in subsidised training. (Sustained, Clause 7(s)(i) S&S Contract)
3.The Provider failed to comply with the notification of enrolment process, in that consent for enrolment of 5 Prospective Students was not obtained. (Sustained 7(s)(i) S&S Contract).
4.The Provider provided untrue data to the Department in a misleading way, in that it enrolled a secondary student, Tahlia Alexander, in four qualifications, funded under Smart and Skilled (Sustained, Clause 7(i)(a) S&S Contract).”
Directions dated 6 March 2019
At a directions hearing with the parties on 6 March 2019, ASQA’s representative, Mr Cox, noted that AGBTPL had been in breach of a condition of its registration since its training contract had been terminated. The condition was that set out in criterion j) of Schedule 3 to the Standards Instrument. I made a direction first noting the history that I have set out above and also noting that Ms Trantalles continues to be the CEO of AGBTPL. I directed the parties to make written submissions on whether criterion j) of Schedule 3 to the Standards Instrument applies to, and is determinative of, AGBTPL’s application.
TRIBUNAL’S POWER TO DISMISS UNDER SECTION 42B(1)
Section 42B(1) of the AAT Act provides:
“The Tribunal may dismiss an application for the review of a decision, at any stage of the proceeding, if the Tribunal is satisfied that the application:
(a) is frivolous, vexatious, misconceived or lacking in substance; or
(b) has no reasonable prospect of success; or
(c) is otherwise an abuse of the process of the Tribunal.”
THE SUBMISSIONS
On behalf of ASQA, Mr Cox submitted that AGBTPL’s application should be dismissed on two bases. One was that cancellation is an appropriate response to an applicant that maintains, as its CEO, the person who was CEO at the time it was determined to have breached a government training contract. That follows from the fact that AGBTPL would be in breach of cl 7.1 of the Standards Instrument and compliance with that instrument is a condition of its registration under s 22 of the NVR Act. Given the seriousness of the breach and in the absence of any reason to act otherwise, the circumstances are such that the RTO should no longer be registered as such. Some of the criteria in Schedule 3 allow for ASQA to exercise some discretion to determine whether they have been met or not but others do not. Those such as criterion f) allow ASQA to consider the relevance of a person’s involvement in the business of delivering courses or other services on behalf of a person that was the subject of regulatory action in criterion b) or c). In the case of criteria such as b), c) and j), there is no such discretion to go behind the reasons leading to the cancellation, suspension or breach as described in each of them. In the case of criterion j), Mr Cox submitted, there is no discretion because there is such a close nexus between requirements of government training contracts and the responsibilities of an executive officer and those holding high managerial positions in an RTO that, if the criterion is not met, the presumption is raised that the AGBTPL should not continue to have registration. In the absence of any contention made on behalf of AGBTPL to the contrary, its registration should be cancelled and its application dismissed.
Mr Cox’s second submission addressed a submission made on behalf of AGBTPL that its CEO may be a different person at the time of the hearing. He noted that AGBTPL had taken no steps to effect that change to date. AGBTPL’s position must be regarded as speculation and does not rise to the level of providing any satisfaction that there is a reasonable prospect of success based on the evidence or contentions.
Mr Cox’s third submission was formulated on a basis that AGBTPL had not complied with my direction to make submissions on a particular issue. Its failure to do so meant that it had not used its best endeavours to assist the Tribunal and that is in breach of s 33(1AB) of the AAT Act. Furthermore, AGBTPL had attempted to delay, obfuscate and put ASQA to proof on making out every definition of plain words or uncontroversial facts. He referred also to AGBTPL’s failure to notify ASQA of the cancellation of the Smart and Skilled Contract by DOI and so failure to comply with s 25(1)(a) of the NVR Act to notify ASQA of the occurrence of an event that would significantly affect its ability to comply with the VET Quality Framework.
The essence of the submissions made on behalf of AGBTPL is that ASQA has not explained how a person is assessed against the Fit and Proper Person Requirements or how they are to be applied at the final hearing of the application. It is premature for AGBTPL to have decided whether it will rely on further evidence or whether it will replace its CEO if Ms Trantalles is found not to meet the Fit and Proper Person Requirements.
SCOPE OF SECTION 42B
Mr Cox drew my attention to Re Oliver and Comcare[20] (Oliver) in which Deputy President Humphries drew on principles regulating s 31A of the Federal Court of Australia Act 1976 (FCA Act) saying:
[20] [2018] AATA 1964
“39. Section 42B was introduced into the AAT Act by the Tribunals Amalgamation Act 2015. The Explanatory Memorandum to the Tribunals Amalgamation Bill 2014 explained:
550. New section 42B would ... provide for additional circumstances in which the Tribunal may dismiss an application for review.
552.This amendment would modernise the language of existing paragraph 42B(1)(a) and clarify the policy surrounding the grounds for dismissal. The proposed new grounds are similar to dismissal powers available to other bodies. For example Rule 26.01 of the Federal Court Rules 2011 allow for summary judgment on matters which have no reasonable prospect of success, or are an abuse of process. Similarly, section 47 of the Queensland Civil and Administrative Tribunal Act 2009 provides for dismissal of applications where the application is frivolous, vexatious, misconceived, lacking in substance or otherwise an abuse of process. These powers would provide the Tribunal with greater power to dismiss unmeritorious matters early where appropriate.
40.In Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd and Others [2008] FCAFC 60 the Full Court of the Federal Court considered the scope of s 31A of the Federal Court of Australia Act 1976, a provision providing for summary judgement where a party has no reasonable prospect of successfully prosecuting or defending the proceeding. Their Honours there summarised the effect of s 31A in slightly different ways. Finkelstein J noted at [23]:
... the section requires the judge to conduct what might loosely be described as a preliminary trial and look more closely than he would under an O 14 application to a party’s assertion that there is a real question of law or fact to be decided. Such an assertion is to be examined with a critical eye. The judge is to decide whether the opposing party has evidence of sufficient quality and weight to be able to succeed at trial. There will be cases where the asserted facts appear to be so improbable that there is no point in allowing them to go to trial.
41. Rares J at [74] considered:
Accordingly, if Jefferson Ford is able to establish that there was a real issue of fact or a real issue of law capable of being decided in its favour then, subject to the Court’s discretion to determine the question of law, the matter ought to be allowed to go to trial in the ordinary way.
42.Gordon J set out several principles which inform consideration of an application for judgment under s 31A. Her Honour referred at [124] to comments of Lord Browne-Wilkinson who opined that:
... ‘civil litigation is far too expensive’ and ‘there should be an increased emphasis on summary disposal of proceedings which are amenable to such treatment’).
Her Honour then noted:
Section 31A is a provision which permits, and assists, the Court to manage proceedings and therefore assists in controlling the cost of, and delays in, resolving proceedings by summarily dismissing claims which have no reasonable prospect of success. At the same time, it is a provision that ensures that no injustice is done to a party. The mechanism adopted to achieve these objectives is that before judgment is entered, the claim or part of the claim must have ‘no reasonable prospect of success.’
43.One of the principles to which her Honour referred at [132] was that:
...the court must draw all reasonable inferences — but only reasonable inferences — in favour of the non-moving party...
44. Her Honour also noted at [124]:
... the express words of s 31A impose a different and less stringent test to that described in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129–30.
45.Counsel for Comcare distilled the tests proposed by Finkelstein and Rares JJ as follows: does the applicant have evidence of sufficient quality and weight to succeed at trial such that a real issue of fact or law must be determined?”
The passages cited in Oliver need to be understood in light of s 31A of the FCA Act:
“Summary judgment
(1)The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a)the first party is prosecuting the proceeding or that part of the proceeding; and
(b)the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.
(2)The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a)the first party is defending the proceeding or that part of the proceeding; and
(b)the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a)hopeless; or
(b)bound to fail;
for it to have no reasonable prospect of success.”
Section 31A is firmly set in a court context in which the basis on which cases will be decided is determined by the pleadings lodged by the parties. The dispute is between those parties and will be decided between them. The analyses of s 31A made by each of the Judges in Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd and Others,[21] are also made on that same basis.
[21] [2008] FCAFC 60; (2008) 167 FCR 372; Rares and Gordon JJ; Finkelstein J dissenting
The nature of a pleading was described by the High Court in Dare v Pulham:[22]
“ Pleadings and particulars have a number of functions: they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it (Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In liq.) [1916] HCA 81; (1916) 22 CLR 490, at p 517); they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial (Miller v. Cameron [1936] HCA 13; (1936) 54 CLR 572, at pp 576-577); and they give a defendant an understanding of a plaintiff's claim in aid of the defendant’s right to make a payment into court. Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings (Gould and Birbeck and Bacon (1916) 22 CLR, at pp 517, 518; Sri Mahant Govind Rao v. Sita Ram Kesho (1898) LR 25 Ind App 195, at p 207). But where there is no departure during the trial from the pleaded cause of action, a disconformity between the evidence and particulars earlier furnished will not disentitle a party to a verdict based upon the evidence. Particulars may be amended after the evidence in a trial has closed (Mummery v. Irvings Pty. Ltd. [1956] HCA 45; (1956) 96 CLR 99, at pp 111, 112, 127), though a failure to amend particulars to accord precisely with the facts which have emerged in the course of evidence does not necessarily preclude a plaintiff from seeking a verdict on the cause of action alleged in reliance upon the facts actually established by the evidence (Leotta v. Public Transport Commission (N.S.W.) (1976) 9 ALR 437, at p 446; 50 ALJR 666, at p 668).”[23]
[22] [1982] HCA 70; (1982) 148 CLR 658; Murphy, Wilson, Brennan, Deane and Dawson JJ
[23] [1982] HCA 70; (1982) 148 CLR 658 at [6]; 664
What this passage shows is that the pleadings are the vehicle for stating the parties’ cases but it is not a vehicle for providing a statement or statements of the evidence. As the High Court said, the pleadings “… define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial …” (emphasis added). The evidence is separate from the issues. This was made clear by Stanley J in Nitschke v Foraco Australia Pty Ltd:[24]
“A proper pleading will contain the material but not all the facts and will contain sufficient particulars being material facts necessary to give fair notice. Whether the material facts and whether sufficient particulars have been pleaded will depend upon the cause of action, the complexities of the case and the whole of the circumstances of the case.”[25]
A proper pleading must contain all material facts and not merely a cause of action based on a hypothesis[26] but it is a material fact, and not evidence, which is pleaded.[27] Pleadings define the issues in the case.
[24] [2014] SASC 88; (2014) 120 SASR 162
[25] [2014] SASC 88; (2014) 120 SASR 162 at [30]; 168
[26] [2014] SASC 88; (2014) 120 SASR 162 at [33]; 169
[27] Holcon Australia Pty Ltd v The Corporation of the Town of Walkerville [2006] SCASC 437 at [18]; White J and cited with approval in Nitschke v Foaco Australia Pty Ltd [2014] SASC 88; (2014) 120 SASR 162 at [34]; 169
A Statement of Facts, Issues and Contentions (SFIC) shares similarities with pleadings. It is similar in that it sets out a statement of issues as each party sees them as well as each party’s contentions regarding those issues and the facts. Generally, a SFIC would not set out the evidence on which each party relies just as pleadings would not. Unlike pleadings in a court, SFICs lodged by the parties do not define the issues to be determined by the Tribunal in that case. The Tribunal has a duty to consider the issues raised by the relevant enactment and the material even if those issues have not been raised by the parties in their SFICs or elsewhere. The Full Court of the Federal Court explained in Grant v Repatriation Commission:[28]
“An inquisitorial review conducted by the AAT ... is one in which the tribunal is required to determine the substantive issues raised by the material and evidence advanced before it and, in doing so, it is obliged not to limit its determination to the ‘case’ articulated by an applicant if the evidence and material which it accepts, or does not reject, raises a case on a basis not articulated by the applicant ...”[29]
[28] [1999] FCA 1629; (1999) 57 ALD 1; Merkel, Goldberg and Weinberg JJ
[29] [1999] FCA 1629; (1999) 57 ALD 1 at [18]; 6
Applications are not decided on the basis of resolving a dispute between the parties to that application – generally, the applicant and the Commonwealth department or agency – but on the basis of reaching what is the correct (or preferable if a discretion is involved) decision of the rights, duties, privileges, obligations and so on of the person affected by the decision. It is made in the context of a statutory framework that applies equally to others and so, having regard to the variations in factual circumstances that may be present from one case to another, must be made consistently with all other decisions made in that context.
Certainly, the parties generally lodge SFICs together with their evidence but those SFICs are quite different from pleadings. Provided it gives each party a reasonable opportunity to present its case, the Tribunal is not bound to decide the matter according to the matters contended in the SFICs.
The difference between the bases of proceedings in the courts and in the Tribunal means that it is important that the focus in considering an application for dismissal not be entirely on the evidence that has been, or has not been, lodged at that time or even on the assertions of fact. There must be some focus, however, for if there is no assertion of a fact essential to support an applicant’s case, the very absence of that assertion may lead to an exercise of power to dismiss on the basis that the application has no reasonable prospects of success. Before it actually leads to that exercise of power, however, thought would need to be given to whether an applicant should have the opportunity to consider whether he or she can establish that fact. The Tribunal is intended to act fairly and to give parties an opportunity to address any such issues rather than act according to strict formulaic rules.
Not every fact to which regard must be had in reviewing a decision is necessarily relevant to the resolution of an application. Take, for example, a discretionary decision, such as a decision to cancel a visa under s 501 of the Migration Act 1958 on the basis that the visa holder is not a person of good character. The fact that a person has committed a serious crime will be relevant, and may even be determinative that the visa holder is not a person of good character but it will be only one of the factors in deciding whether the visa should be cancelled, for that decision is a discretionary decision and the weight given to the evidence may vary from case to case.
Despite the differences between proceedings in a court and in the Tribunal and provided the differences between the two are kept in mind, some guidance is to be found in the cases that have considered s 31A of the FCA Act. As Gilmour J said in Dandaven v Harbeth Holdings Pty Ltd[30] in relation to whether there is “no reasonable prospect of success”, which lies at the heart of s 31A and is the only issue arising under s 42B(1)(b):
[30] [2008] FCA 955 at [6]
“Success under s 31A does not require a demonstration that the case is hopeless or bound to fail. The following principles are of general application to an application under s 31A:
(a)the Court must be very cautious not to do a party an injustice by summarily dismissing proceedings;
(b) the Court ought not dismiss a claim based on a predictive assessment of prospects, where it is possible that if the claim went to trial, it may succeed;
(c) in a case where evidence can give colour and content to allegations, and where questions of fact and degree are important, the Court should be more reluctant to dismiss a proceeding on the face of a pleading;
(d) it is not Parliament's intention to require the Court to engage in lengthy and elaborate trials on an interlocutory basis for the purposes of determining whether or not a proceeding has no reasonable prospects of success. It may be necessary for the opposing party to provide no more than an outline of evidence, sufficient to show that there is a genuine dispute, to prevent the summary application becoming a trial;
(e) if there is a real issue of fact or law to be decided, and the rights of the parties depend upon it, it is obviously appropriate that the matter goes to trial. It cannot be said that where there is a real factual dispute and that factual dispute must be resolved to determine whether the claim succeeds that there is ‘no reasonable prospect of success’;
(g)it ought not be used to shut out proceedings where, on a proposition of law, there may be room for doubt. On questions of law, an inquiry as to their merit should not be for the purpose of resolving them and also not simply to determine whether the argument is hopeless, but in order to decide if it is sufficiently strong to warrant a trial;
(h)evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects;
(i)in determining if there are real issues of fact in issue so as to preclude summary judgment the courts must draw all reasonable inferences in favour of the non-moving party.”[31]
[31] [2008] FCA 955 at [6] (paragraph (f) omitted in judgment)
SHOULD AGBTPL’S APPLICATIONS BE DISMISSED UNDER SECTION 42B(1)(b)?
This is not the occasion for a detailed consideration of the evidence in this matter but it is important that they be considered in the context of the law. In this regard, I agree with Mr Cox that criterion j) of Schedule 3 does not provide for a discretionary decision to be made. If an RTO has been determined to have breached a government training contract and the person being assessed against the Fit and Proper Person Requirements was an executive officer or high managerial agent at that time, criterion j) has not been met. In reaching that determination, a decision-maker must first decide what is meant by the words “executive officer of high managerial agent” and “government training contract”. For the purposes of this application, I am prepared to accept that the CEO of an RTO is an “executive officer or high managerial agent” as each of those terms is defined in s 3 and that a contract, such as the Smart and Skilled Contract, between an RTO and a department or agency of the Commonwealth, a State or a Territory is a “government training contract”. Therefore Ms Trantalles, who will be assessed against the Fit and Proper Person Requirements because she is its CEO, was an “executive officer of high managerial agent” of an RTO, being AGBTPL, when it was determined by DOI to have breached the terms of a government training contract. That means that AGBTPL cannot meet the Fit and Proper Person Requirements.
Decision refusing to change the scope of AGBTPL’s registration
Is failure to meet criterion j) fatal to AGBTPL’s application seeking review ASQA’s refusal to change the scope of AGBTPL’s registration? Section 33(1) is framed in discretionary terms when it provides that ASQA “… may grant an application for a change in the applicant’s scope of registration.” (emphasis added) The word “may” can be used as a word conferring power or discretion. When read with s 33(2), it would seem to be used in the sense of conferring discretion. Under s 33(2), compliance with the VET Quality Framework, of which the Fit and Proper Person Requirements are one element, is something that ASQA “must consider” in deciding “whether to grant an application”. The wording is clear that ASQA must consider compliance but the choice of the words “whether to grant an application” (emphasis added) suggests that the decision is discretionary.
Is the nature of that discretionary decision changed when I have regard to the conditions with which an RTO must comply? Those conditions include its complying, under s 22, with the VET Quality Framework. There is nothing in Division 3 of Part 2 of the NVR Act, which would require ASQA to cancel AGBTPL’s registration as an RTO when it is in breach of a condition. Indeed, s 35A(1) provides that ASQA may give an RTO a written direction to rectify a breach of a condition. ASQA may have regard to the RTO’s conduct or the circumstances existing before it had cause to consider giving the direction.[32] Under s 36, ASQA may impose sanctions of the sort set out in s 36(2)(b) to (f). Cancellation is only one of those sanctions. The power to cancel is set out in s 39. It is a very wide power given to ASQA “… in any circumstances that the Regulator considers it appropriate to do so …”.[33] Section 39 does not require ASQA to cancel an RTO’s registration in any given circumstances.
[32] NVR Act; s 35A(2)
[33] NVR Act; s 39(1)
I turn to the prospects of success of AGBTPL’s application for review of the decision refusing to change the scope of registration on the factual assertions and evidentiary material I have at the moment. That material has been lodged in response to my direction of 15 June 2018 to lodge SFICs and any material on which each party intends to rely. It also includes the documentary material relating to the cancellation of the Smart and Skilled Contract that has since occurred and to which I have referred above.
The application under s 42B(1)(b) cannot be ignored by an applicant. It is an occasion to review its evidentiary material and assertions of fact. This is not a case in which the law is unclear and it should be left to a hearing. This is a case in which Ms Trantalles remains AGBTPL’s CEO and criterion j) of the Fit and Proper Person Requirements cannot be met. There has been no assertion at this stage that AGBTPL’s CEO will be changed. The fact that the Fit and Proper Person Requirements cannot be met at this time does not mean that they will not be met at the time of the review. If they are not met, it will be a factor that may weigh against granting AGBTPL’s application for change of scope but its absence is not necessarily fatal to the application. The same is true of the assertion that that AGBTPL failed to advise ASQA of the termination of the Smart and Skilled Contract as this was not the subject of my direction of 6 March 2019.
It follows that I do not consider that AGBTPL’s application should be dismissed under s 42B(1)(b) of the AAT Act on the basis that it has no reasonable prospects of success. The matter should go to hearing.
Decision to cancel AGBTPL’s registration as an RTO
The decision to cancel AGBTPL’s registration as an RTO is a little different but does not lead to a different outcome in the considering the dismissal application under s 42B of the AAT Act. Failure to meet the Fit and Proper Person Requirements is a breach of the VET Quality Framework. Breach of the VET Quality Framework, is a breach of a condition of an RTO’s registration and is a basis on which ASQA may decide to direct it under s 35A to rectify the breach of condition or may impose sanctions to suspend that registration under s 38 or cancel it under s 39. ASQA has discretion whether to require rectification or to suspend or cancel registration. That is quite apart from its powers to take, or cause to be taken, action under Part 6 of the NVR Act but that does not arise in this case.
Which path to take is a discretionary decision for ASQA but it cannot be said that it has a discretion to take none of them. That follows from the fact that the objects of the NVR Act include those to provide national consistency in the regulation of vocational education and training (VET) and to regulate VET using a standards-based quality framework and, where appropriate, risk assessments.[34] ASQA is required by the Standards for VET Regulators 2015 made under s 189 of the NVR Act to implement a risk-based approach to reduce the regulatory burden for high-performing providers with a strong history of compliance and increase regulatory action for those providers considered a higher risk. That allows ASQA to direct its resources according to the Minister’s directions given under s 190 of the NVR Act and entitled Risk Assessment Framework. Risk management does not, however, permit ASQA to ignore breaches when it finds them for the VET scheme is dependent upon RTOs operating within a standards-based quality framework.
[34] A Regulatory Risk Framework has been prepared by ASQA in accordance with s 190 of the NVR Act.
As I said, ASQA has a discretion as to which path to take and so does this Tribunal. Therefore, despite the failure to meet criterion j) of the Fit and Proper Person Requirements, the choice of appropriate path remains open. It cannot be said that the applicant does not have reasonable prospects of success for it is still open to the Tribunal hearing the matter to choose any of those paths as they are paths that were available to ASQA.[35] Therefore, I refuse to dismiss application No. 2018/2511 seeking review of ASQA’s decision to cancel AGBTPL’s registration as an RTO.
[35] Australian Securities and Investments Commission v Donald [2003] FCAFC 318; (2003) 136 FCR 7; 203 ALR 566; 38 AAR 288; 77 ALD 449; 22 ACLC 24; 48 ACSR 394; Gray, Kenny and Downes JJ at
| I certify that the preceding forty eight (48) paragraphs are a true copy of the reasons for the decision herein of Deputy President S A Forgie |
[sgd]........................................................................
Associate
Dated: 12 June 2019
| Heard by telephone: | 6 March 2019 |
| Solicitor for the Applicant: | Mr Nick Galatas, GPZ Legal |
| Solicitor for the Respondent: | Mr Damian Cox, Australian Skills Quality Authority |
17
0