Achieve Goals Pty Ltd and Australian Skills Quality Authority
[2019] AATA 1239
•11 June 2019
Achieve Goals Pty Ltd and Australian Skills Quality Authority [2019] AATA 1239 (11 June 2019)
Division:GENERAL DIVISION
File Number(s): 2018/3074
Re:Achieve Goals Pty Ltd
APPLICANT
AndAustralian Skills Quality Authority
RESPONDENT
DECISION
Tribunal:Chris Puplick AM, Senior Member
Date:11 June 2019
Place:Sydney
The decision under review is affirmed.
..................................[sgd]......................................
Chris Puplick AM, Senior Member
CATCHWORDS
VOCATIONAL EDUCATION AND TRAINING – application for initial registration as an RTO – whether applicant complies with standards for NVR registered training organisations - whether applicant satisfies Fit and Proper Person Requirements – decision affirmed
LEGISLATION
Education Services for Overseas Students Act 2000 (Cth)
National Vocational Education and Training Regulator Act 2011 (Cth) ss 22, 23, 24, 28, 158
National Vocational Education and Training Regulator (Consequential Amendments) Act 2011 (Cth)National Vocational Education and Training Regulator (Transitional Provisions) Act 2011 (Cth)
CASES
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Australian Tertiary Academy Pty Ltd and ASQA [2018] AATA 4875
Browne v Dunn (1893) 6 R 67
Commissioner of Police v Tanos (1958) 98 CLR 383
Complete Training Institute Pty Ltd and Australian Skills Quality Authority [2018] AATA 4638
Davies v Australian Securities Commission [1995] FCA 1496; (1995) 59 FCR 221
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577
Echelon National Security Agency Pty Ltd and Australian Skills Quality Authority [2014] AATA 438
Haining v Commissioner of Police, NSW Police Service [1999] NSWADT 6
Hughes and Vale Pty Ltd v New South Wales (No.2) (1955) 93 CLR 127
Kioa v West (1985) 159 CLR 550
Re Echelon National Security Agency and Australian Skills Quality Authority [2014] AATA 151
Secretary, Department of Employment, Education, Training, and Youth Affairs v McKay (1998) 58 ALD 130
Secretary, Department of Social Security v Hodgson (1992) 27 ALD 309
Shi v Migration Agents Registration Authority [2008] HCA 31
South Pacific Education College Pty Ltd and ASQA (unreported)
Trades College Australia Pty Ltd and ASQA [2018] AATA 1360Twentyman v Secretary, Department of Social Services [2019] FCA 586
SECONDARY MATERIALS
Financial Viability Risk Assessment Requirements 2011 s 5
Fit and Proper Person Requirements 2011
General Direction 2018: Resourcing requirements – for applicants seeking initial registration or change of scope of registrationStandards for Registered Training Organisations (RTOs) 2015 Standards 1.3, 1.8, 2.2, 7.1, 7.2, 7.5 and 8.1
REASONS FOR DECISION
Chris Puplick AM, Senior Member
11 June 2019
On 30 January 2017 Achieve Goals Pty Ltd (the Applicant) submitted an application under the National Vocational Education and Training Regulator Act 2011 (Cth) (the Act) for registration as a Registered Training Organisation (RTO).
The application named Ms Hilani Eldamouni as the sole owner of the Applicant.
Since July 2011, the Australian Standards Quality Authority (ASQA) has operated as the national regulator for the purposes of the operation of the Act.[1]
[1] By passage of: National Vocational Education and Training Regulator Act 2011 (Cth); National Vocational Education and Training Regulator (Consequential Amendments) Act 2011 (Cth) and National Vocational Education and Training Regulator (Transitional Provisions) Act 2011 (Cth).
The application for registration as an RTO came before a full meeting of the Commissioners of ASQA on 4 April 2018 where it was rejected under the provisions of s. 17 of the Act.
The Act provides that where a decision is made by a full Commissioners’ meeting, no further avenue of internal review or reconsideration is available. However, an appeal may be made for a review of the Commissioners’ decision to this Tribunal and such an appeal was made on 4 June 2018.
The matter came before the Tribunal for hearing on 3 May 2019 when all the evidence was taken and the hearing resumed on 21 May 2019 for the presentation of closing submissions by the parties.
LEGISLATION
Apart from establishing ASQA as the national regulator, the Act (s. 186(1)) also provides authority for the making of standards which are required to be met and complied with by RTOs. These are the Standards for Registered Training Organisations (RTOs) 2015 (the Standards).
Section 2A of the Act sets out its Objectives:
The objects of this Act are:
(a)to provide for national consistency in the regulation of vocational education and training ( VET ); and
(b)to regulate VET using:
(i) a standards-based quality framework; and
(ii) risk assessments, where appropriate; and
(c)to protect and enhance:
(i) quality, flexibility and innovation in VET; and
(ii) Australia's reputation for VET nationally and internationally; and
(d)to provide a regulatory framework that encourages and promotes a VET system that is appropriate to meet Australia's social and economic needs for a highly educated and skilled population; and
(e)to protect students undertaking, or proposing to undertake, Australian VET by ensuring the provision of quality VET; and
(f)to facilitate access to accurate information relating to the quality of VET.
The Standards are themselves, part of a broader framework for the regulation of the VET sector, known as the VET Quality Framework, other elements of which include (inter alia):
·Fit and Proper Person Requirements 2011— which determine requirements for people with some control or influence over the operation of a registered training organisation. They are established under s. 186 of the Act and issued by the Minister as a legislative instrument.
·Financial Viability Risk Assessment Requirements 2011—which relate to the requirement for registered training organisations and applicant training organisations' ability to meet financial viability requirements. They are made by ASQA itself under s. 158(1) of the Act and are also a legislative instrument.
Sections 21 to 30 of the Act provide for a number of conditions which must be satisfied if an Applicant is to become an RTO. Section 22 requires compliance with the VET Quality Framework (including the Standards); section 23 with the Fit and Proper Persons requirement and section 24 with the Financial Viability requirements.
REGISTRATION PROCESS
The ASQA website sets out the details by which an organisation may become an RTO.[2]
[2] you are considering registration with ASQA, you must be prepared to meet the following requirements for registration:
ocompliance with all components of the Vocational Education and Training (VET) Quality Framework:
oStandards for Registered Training Organisations (RTOs) 2015
oAustralian Qualifications Framework
oFit and Proper Person Requirements
oFinancial Viability Risk Assessment Requirements 2011
oData Provision Requirements 2012.
ocooperation with ASQA—including compliance with general directions and cooperation with compliance monitoring activity
opayment of fees and charges associated with registration
oregistration of courses on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) to offer those courses to overseas students on student visas
oadditional requirements for RTOs offering VET courses with additional licensing requirements
oregistration for at least two years before applying to deliver qualifications or assessor skill sets from the Training and Education Training Package.
An application for RTO registration must provide ASQA with certain details, as outlined above and also specify details about the courses which the Applicant proposes to offer, the qualifications of its teachers and assessors and details of the premises in which it proposes to conduct education or training services.
The Applicant’s application specified that the following courses were to be offered:[3]
·Develop and use emotional intelligence (BSBLDR501)
·Lead and manage effective workplace relationships (BSBLDR502)
·Communication with influence (BSBLDR503).
[3] Outlines of these courses are attached as an Appendix.
THE AUDIT PROCESS
On 29 June 2017 ASQA conducted an Audit of the Applicant which covered an assessment of its ability to deliver a quality education related to the nominated courses; matters of compliance with various aspects of the Standards; the Financial Viability requirements and the adherence to the Fit and Proper Standards on the part of the applicant’s key personnel. The proposed training premises at Clyde Street, South Granville, NSW, were also inspected.
The officer conducting the Audit was Mr Stephen Auburn.
During the Audit inspection a copy of the Applicant’s business plan was requested but none was forthcoming at the time. It was however provided the following day (30 June 2017) and contained a disclaimer signed by the Applicant’s nominated accountant also dated 30 June 2017. That disclaimer reads, in part:
“Our procedures use accounting expertise to collect, classify and summarize the financial information, which the Directors have provided, in compiling the business plan. Our procedures do not include verification or validation of information. No audit or review has been performed and accordingly no assurance is expressed. The special purpose income statement and statements of cash flows were compiled exclusively for the benefit of the Directors. We do not accept responsibility to any other person for the contents of this business plan.”[4]
[4] Section 37 Tribunal Documents at [91].
On 1 July 2017 ASQA prepared a report arising from the Audit in which it determined that the Applicant was compliant in some areas but not compliant with several other clauses of the Standards.
Relevantly, the following clauses of the Standards were reviewed:
·Training and Assessment : 1.1, 1.2, 1.3, 1.8, 1.13-1, 1.20
·Regulatory Compliance/Governance: 2.3, 2.4, 7.2, 8.2.[5]
[5] Section 37 Tribunal Documents at [94], Audit report 1 July 2017 page [2].
The Audit Report identified that the specific areas of non-compliance on the part of the Applicant were clauses 1.3 and 7.2.[6]
[6] Ibid at [97].
There was then an exchange of information between the parties as follows:
·29 August 2017 ASQA to the Applicant providing a notice of non-compliance and requesting rectification evidence by 26 September 2017
·26 September 2017 Applicant to ASQA providing rectification evidence
·13 October 2017 ASQA to Applicant requesting further information by 20 October 2017 (extended on request to 27 October 2017)
·27 October 2017 Applicant to ASQA submitting further evidence as requested.
In addition, during this process, Ms Eldamouni completed a Fit and Proper Person declaration (associated with the application under review) on 24 October 2017.[7]
[7] Ibid at [288].
On 17 November 2017 a further Audit Report, taking into account all the material supplied by the Applicant in response to ASQA requests, determined that the Applicant remained non-compliant with clauses 1.3 and 7.2 of the National Standards.[8]
[8] Ibid at [293].
These non-compliances formed the basis of a report to the ASQA Commissioners, to which was added an assessment that Ms Eldamouni did not meet the requirements of the Fit and Proper Person test, thus being non-compliant with clause 7.1 of the Standards.
THE NON-REGISTRATION DECISION
This Report was considered by the ASQA Commissioners at their meeting on 4 April 2018 at which they determined to refuse the Applicant’s registration. The Applicant was notified of this decision on 8 May 2018 and provided with a copy of the Audit report.
Pursuant to subsequent directions given by Tribunal Registrars the Applicant provided the Tribunal (and ASQA) with further material, in particular details of a business plan and a completed financial viability risk assessment tool. In addition material was provided related to the Fit and Proper Person report.
The decision of the ASQA Commissioners to refuse registration is based upon three determinations:
(a)The failure of the Applicant to be compliant with clause 1.3 of the Standards in that the Applicant’s trainers, assessors, support staff, premises and equipment are not sufficient to deliver the educational outcomes required to be met;
(b)The failure of the Applicant to be compliant with clause 7.2 of the Standards in that the Applicant has failed to demonstrate that it has the financial resources to deliver quality training to the requisite level and provide appropriate services to students; and
(c)The failure of Ms Hilani Eldamouni to be compliant with clause 7.1 of the Standards in that she failed to meet the Fit and Proper Person requirements.
It is necessary for the Tribunal to consider each of these determinations in detail.
DISCUSSION
Standard 1.3
This relates to the educational, training and assessment competency of the Applicant and compliance is mandated by s. 22 of the Act. The clause provides:
1.3. The RTO has, for all of its scope of registration, and consistent with its training and assessment strategies, sufficient:
(a)trainers and assessors to deliver the training and assessment;
(b)educational and support services to meet the needs of the learner cohort/s undertaking the training and assessment;
(c)learning resources to enable learners to meet the requirements for each unit of competency, and which are accessible to the learner regardless of location or mode of delivery; and
(d)facilities, whether physical or virtual, and equipment to accommodate and support the number of learners undertaking the training and assessment.
The updated Audit report of 17 November 2017 which was before the Commissioners for their consideration and which was itself based upon an earlier Audit report (1 July 2017) and consideration of the Applicant’s responses to that initial set of Audit findings, examined the number and qualification of individuals who were purported to be providing the training for the designated courses.
It identified the following persons as being involved in the organisation and management structure:
·Ms Hilani Eldamouni: she is the sole owner of the business and is proposed to be a trainer/assessor. She holds an Advanced Diploma in Management and a Diploma in Early Childhood Education and Care;
·Mr Abdul Hamid Abdul Khalik: is listed as the CEO of the Applicant. He also holds an Advanced Diploma in Management and a Diploma in Early Childhood Education and Care. He is currently a full-time employee of Australia Post. He is the husband of Ms Eldamouni;
·Mr Jamal Abdul Khalik: is listed as the Interim Manager of the RTO. He was, at the time, a third year apprentice electrician who is also currently enrolled in an online course of study for TAE40110 Certificate IV in Training and Assessment.
·Ms Nahla Abdul Khalik: is shown as providing administrative support and was, at the time, undertaking her second year in Bachelor of Primary Teaching.
In addition it appears that two trainers were to be engaged:
·Ms Su Zay: who has a Diploma of Children’s Services; a Certificate IV in Training and Assessment, a Diploma of Leadership and Management and a Bachelor of Early Childhood Education.
·Mr Syed Warisi: who holds a Certificate IV in Training and Assessment, a Diploma of Business, an Advanced Diploma in Leadership and Management and a Master of Business Administration (Osmania University, Hyderabad, India) plus several Webinar statements of attendance at various courses.
The issue of these two potential trainers was discussed briefly before the Tribunal. It was agreed by both parties that the position of Mr Warisi need not be considered further. In relation to Ms Zay there appears to be some disagreement about the extent to which she was offered employment and the timing of any such discussions. In the event, there was no need to resolve these disagreements because this issue itself was not germane to the essential points in the decision-making process. By the time the application was considered by the Commissioners it appears that Ms Eldamouni herself was proposed to be the sole trainer.
There is a considerable lack of clarity in terms of the number of students for whom the Applicant is seeking to cater. Mr Khalik initially informed the Auditor that the RTO’s target was 50 – 100 students per annum.[9]
[9] Section 37 Tribunal Documents at [295].
The Applicant maintains that its courses will be priced at $500 per unit.[10] Based upon this its Business Plan projects an income for FY 2018 of $360,000.00[11] (rising to $540,000.00 in FY2020) which would equate to a student enrolment of 720 per annum.
[10] Ibid at [163] Business Plan Table 7.
[11] Ibid at [178].
In the report before the Commissioners a figure of $480,000.00 in revenue was mentioned, equating to 960 students. However this appears to be based on an earlier Business Plan submitted on 30 June 2017.[12]
[12] Ibid at [295] referring back to figures at [89].
However since neither Business Plan is actually dated it is difficult to be precise about any of these estimates. The revised Business Plan was apparently submitted to ASQA on 26 September 2017.[13]
[13] Affidavit of Stephen Auburn, dated 6 February 2019, at [41.2].
In any event, the Business Plan(s) does suggest that the number of students proposed to be enrolled in any one year will be at least 720, well beyond any initial estimate of 50 to 100.
The position taken by ASQA is as follows:
(a)The number of proposed trainers is inadequate to meet the educational and assessment needs of the proposed number of enrolled students;
(b)The number of administrative and support staff proposed is inadequate to provide sufficient support to either the operations of the RTO or to meet the support needs of students. Furthermore, information from the Applicant about the student management system and the training and assessment resources required to be purchased/implemented, discloses that seriously insufficient provision has been made, either financially or technically, for these resources to be acquired and deployed;
(c)The proposed premises, which, at the time of the Audit, were located at Clyde Street, Granville (NSW) were physically inadequate to accommodate the number of projected students.[14]
[14] Respondent’s Statement of Facts, Issues and Contentions at [53]-[60].
The Applicant’s response to these contentions is as follows:
(a)It is now proposed that there will only be one trainer for the courses offered, namely Ms Eldamouni herself.[15]
(b)The Applicant stated that there would be a reduction in the cost of student resources in that the more expensive IPSA tools would be replaced by “paper and pencils training resources” with considerable savings.[16] In addition the Applicant stated in oral evidence on 21 May that adequate training software could be purchased for around $21.95 per unit, per student[17] and that this cost would be covered from the $50.00 non-refundable fee which each enrolled student had to pay up-front for registration in the course(s). The Applicant maintains that Mr Khalik, acting in his role as CEO will provide adequate administrative support for the operation of the RTO and that, as required, “more staff will be hired”.[18]
(c)In relation to the accommodation at Clyde Street, Granville, the Tribunal accepts from the evidence presented that they appear to be physically adequate in terms of size and amenities and in terms of issues such as desks and chairs and other office equipment; and noting that although they have been used previously as a training or educational facility, it is clear that they are not currently approved by the local Council for such purposes. The Applicant stated in answer to a question from the Respondent:
“So you don’t currently have an approval to operate from that premises? --- I don’t have currently approval but it’s just done over the phone and it’s only a raise of Council rates, so it will just double.”[19]
[15] Transcript of proceedings, Achieve Goals Pty Ltd v Australian Skills Quality Authority, no 3074 of 2018, dated 3 May 2019 at [19.20]. (Hereafter Transcript.)
[16] Ibid at [25.6-7].
[17] See also Ibid at [2334].
[18] Applicant’s Submissions at [Tab 9 page 2].
[19] Transcript at [33.31-33].
Standard 7.1
This Standard relates to the Fit and Proper requirements and compliance is mandated under s. 23 of the Act. The clause provides:
7.1. The 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.
The discussion of whether or not Ms Eldamouni and indeed, Mr Khalik, are fit and proper persons for the purposes of this application requires a diversion into the history of a previous RTO known as iGrow Family Day Day Care Pty Ltd.[20] (Hereafter iGrow Family).
[20] There is some understandable confusion as to the name of this Company. The ASIC website shows it registered in this name (the word “Day” occurring twice) as ACN 165 471 572 /ABN 29 165 471 572 registered 24/08/2013 and deregistered 20/01/2019. The company’s registration as an RTO shows the name as iGrow Family Day Day Care Pty Ltd (see Section 37 Tribunal Documents at [386]). Many of the documents refer to the company as iGrow Family Day Care or simply iGrow.
iGrow Family was registered by ASIC on 24 August 2013 and deregistered by it on 20 January 2019.
iGrow Family was registered as an RTO under the Act on 27 October 2014 with Ms Hilani Eldamouni as Director, Chief Executive Officer and Managerial Agent. It was registered at the same Clyde Street address in Granville, NSW 2142.
iGrow Family was subsequently the subject of a request for information and an audit by ASQA. The interaction between them was as follows:[21]
·ASQA requested information from iGrow Family which responded by providing the information (related to enrolments and qualifications) on 14 October 2016;
·ASQA to iGrow Family on 2 November 2016 putting them on notice that an audit was to be conducted;
·iGrow Family to ASQA on 11 November 2016 providing pre-audit information as requested;
·24 November 2016 ASQA conducted site audit (premises in Burwood, NSW) and interview with Ms Eldamouni. The Auditor was Mr Stephen Auburn;
·ASQA to iGrow Family on 28 March 2017 advising of a finding of non-compliance, notifying of intention to cancel registration and seeking response;
·iGrow Family (per Ms Eldamouni) to ASQA on 28 and 29 April 2017 providing response(s) as requested;
·iGrow Family (per Ms Eldamouni) to ASQA on 1 and 2 June 2017 providing additional material;
·11 August 2017 ASQA made decision to cancel the registration of iGrow Family as an RTO and notified this to Ms Eldamouni on 15 August 2017, effective as from 19 September 2017.
[21] Affidavit of Stephen Auburn, dated 6 February 2019, at [26]-[34].
At all material times, during this process, Ms Eldamouni signed correspondence as the Director of iGrow Family.
The relevance of this is that, in completing her Fit and Proper Person Declaration, Ms Eldamouni answered “no” to a question in the following terms:
“(6) Have you ever been an executive officer or high managerial agent of an organisation at a time when its actions resulted in its registration being cancelled or suspended in part or in full:
(i) as a registered training organisation…”[22]
[22] Section 37 Tribunal Documents at [286].
Standard 7.2
This relates to the regulator being satisfied as to the financial viability of the Applicant, based primarily upon an analysis of its proposed business plan at the time of application for registration. Compliance is mandated by s. 24 of the Act. The clause provides:
7.2. The RTO satisfies the Financial Viability Risk Assessment Requirements.
Relevantly, section 5 of the Requirements provides:
Intent
The National VET Regulator requires a NVR registered training organisation to demonstrate its financial viability at any point in time, upon request.
The assessment of an organisation’s financial viability risk is directed at evaluating the likelihood of its business continuity, and its capacity to achieve quality outcomes. In particular, the assessment informs a judgement about whether the organisation has the financial resources necessary to:
(a)acquire the requisite assets and physical resources to deliver all qualifications on its scope of registration
(b)employ sufficient appropriately qualified staff to cover the courses for which it takes enrolments
(c)provide appropriate levels of student services to students
(d)remain in business to ensure that each student can achieve completion
(e)meet the above requirements, even in an unsure environment.
The current Business Plan sets out certain relevant figures.[23]
[23] Section 37 Tribunal Documents at [178].
Projected Profit and Loss for Year ended:
Year ended
30 JuneTotal Income
Employee Wages + superannuation
Total expenses
Profit/Loss EBIT
2018
$ 360,000
$ 194,200
$ 303,780
$54,220
2019
$ 450,000
$ 200,790
$ 336,430
$ 110,570
2020
$ 540,000
$ 207,440
$ 371,080
$ 164,920
This Plan is accompanied by a certificate from the Applicant’s nominated accountant which states, inter alia:
“I certify that the applicant should be financially viable based on the forecasted financial information provided that discloses sufficient income and other financial resources to meet financial and statutory obligations for the financial viability requirements under the NVR Act and the ESOS Act.”[24]
[24] Ibid at [200]. ESOS Act = Education Services for Overseas Students Act 2000 (Cth).
The Tribunal has referred already to the variation in claims about the numbers of students to be enrolled in any one year and uncertainty in this area makes it difficult to assess, with accuracy, the state of the Applicant’s financial commitments and hence viability.
The revised Business Plan, together with the Financial Viability Risk Assessment report submitted on 26 September 2017, over the signature of Mr Abdul Khalik (as CEO)[25] was considered by ASQA.
[25] Section 37 Tribunal Documents at [199].
In his Affidavit before the Tribunal[26], ASQA Auditor Stephen Auburn attests that:
“40.1 the financial information provided by the Applicant does not match the information provided in the business plan and as a result it is not clear how the Applicant intends to operate or what resources it intends to use;
40.2 the Applicant has not provided a valid lease or evidence that the intended premises is suitable to use as an educational facility;
….
40.4 (and) the financial information provided by the Applicant does not demonstrate that the Applicant satisfies the financial viability risk assessment requirements because, for example, there’re a number of expenses not accounted for in the financial information and the projected enrolments are inconsistent and unrealistic.”
[26] Affidavit of Stephen Auburn, dated 6 February 2019.
Mr Auburn adds a further concern:
“41.4 I have conducted a review of the business plans of 1 Vision International Pty Ltd (dated May 2017) and Illuminate Institute Pty Ltd (dated July 2017) and compared them to the business plan of Achieve Goals provided by Mr Khalik on 26 September 2017. This review identified that large sections of the three business plans are identical including the market analysis, industry research, goals and measurement, strategic direction and marketing strategy. A business plan is something unique to an individual business. In circumstances where the business plan provided is in large part identical to that of another business plan it cannot be said to be truthful and accurate or reflect the true intentions of the business.”
Mr Auburn appeared before the Tribunal as a witness and his statements and conclusions were tested in cross-examination by the Applicant. However the Tribunal found no basis, arising therefrom, to doubt the accuracy of the material presented in his reports or audit assessments.
In the report which was before the Commissioners, several other concerns were identified, namely:
(a)The failure of the Business Plan to elucidate any of the assumptions upon which it bases its financial projections, or forecasts of its income streams, expenditure or student enrolment numbers, and
(b)The limited allocations made in its 2018 budget for training resources.[27]
[27] Section 37 Tribunal Documents at [299]-[300].
In its Statement of Facts, Issues and Contentions, ASQA repeats its concerns about the variation in student number projections, holding that an enrolment of 50 to 100 in the first year of operations is “a realistic figure” but that “the Applicant’s financial projections are based on 270 enrolments in the first year.”[28]
[28] Respondent’s Statement of Facts, Issues and Contentions at [74].
It also states:
“the evidence before the Tribunal is that the Applicant has not made payments in accordance with the ‘lease’ that it entered into for the premises at Clyde Street and no provision has been made in its financial projections for many of the resources that it intends to use, including learning materials and the student management system.”[29]
[29] Ibid at [73].
The Applicant, in response, claimed that matters of the lease payments had been attended to and in the final submissions the Respondent did not press this point, and it has not been considered further by the Tribunal. The matters of the costs of some of the learning materials has been discussed above.
However ASQA’s criticisms of the Applicant’s Business Plan(s) still apparently only in draft form are significant.
BUSINESS PLAN(S) AND FINANCIAL VIABILITY
The Tribunal has already made extensive reference to matters associated with the various Business Plans adopted and put forward by the Applicant.
In its initial Statement of Facts, Issues and Contentions, ASQA noted that, on the day of the Audit, “the Applicant’s business plan was also requested however was unable to be provided.”[30] A Business Plan was provided to ASQA the following day.
[30] Respondent’s Statement of Facts, Issues and Contentions at [28].
At the time of the Audit, ASQA did not have a policy that business plans were to be required to be presented at the audit or that organisations under audit were notified in advance that they were required to present such plans at the audit. The Tribunal understands that this policy has now changed and business plans, with prior notification, are required to be available for inspection at the audit. However that was not the case in this instance and, as a result, there was no compliance failure on the part of the Applicant in this instance.
However, ASQA has relied with considerable force on the alleged failure of the Applicant to present it with a viable business plan or at least one which would allow it (ASQA) to undertake a full assessment both of the Applicant’s financial viability and its general compliance with registration requirements. In its written outline of closing submissions ASQA attacks the Applicant’s position on three matters, the final one of which is its concern that “the Applicant does not currently have a finalised business plan.”[31]
[31] ASQA: Outline of Respondent’s closing submissions (21 May 2019) at [8.3], [16.1], [17.1].
ASQA asserts that in order to meet the requirements set out in its Financial Viability Risk Assessment Requirements[32]
The assessment of an organisation’s financial viability risk is directed at evaluating the likelihood of business continuity, and its capacity to achieve quality outcomes. In particular, the assessment informs a judgement about whether the organisation has the financial resources necessary to…[33]
[32] Financial Viability Risk Assessment Requirements 2011 being a legislative instrument made under subsection 158(1) of the National Vocational Education and Training Regulator Act 2011.
[33] Financial Viability Risk Assessment Requirements; FVRAR 5.
More generally, ASQA contends:
Both FVRA tools completed by the Applicant in relation to its application for registration as an RTO required the business plan to be attached. However, the Applicant has provided ASQA with business plans containing inaccurate information on two occasions and has now simply decided to not provide one at all. The conclusion to be drawn here is that at best the Applicant simply does not understand its obligations or if it does, it has adopted a deliberately cavalier attitude as to its compliance with the Financial Viability Risk Assessment Requirements. [34]
[34] ASQA: Outline of Respondent’s closing submissions (21 May 2019) at [18].
When Mr Hamid, on behalf of the Applicant, signed the Form (FVD-0001) as part of the Financial Viability Risk Assessment Pack, a document which is regrettably undated[35] but appears as part of a larger collection of material signed on 16 January 2017,[36] he agreed to a statement in the following terms:
“3. I have and can produce to ASQA…
(a)A current business plan, which clearly demonstrated my organisation’s purpose for initial registration is or will be to provide education and/or training, and details of the objectives of the business, analysis of the business markets, basic strengths, weaknesses, opportunities and threats and financial projections for the next 12-24 months.
…
4. I have produced a copy of my organisation’s business plan and all relevant financial information to the Nominated Accountant….”
[35] Section 37 Tribunal Documents at [28].
[36] Ibid at [30].
ASQA has also attacked the Applicant’s approach to the development of its business plans as follows:[37]
26. With respect to the second business plan provided by the Applicant, both Ms Eldamouni and Mr Dhillon[38] conceded that this business plan was based on a template.[39] The evidence before the Tribunal demonstrates that the business plan submitted by the Applicant is in large sections identical to the business plans of Illuminate Institute Pty Ltd and 1 Vision International Pty Ltd.[40] Recent decisions of the Tribunal highlight that ‘template’ or ‘cut and paste’ business plans are simply not satisfactory.
[37] ASQA: Outline of Respondent’s closing submissions (21 May 2019).
[38] Mr Dhillon is an independent consultant who provided advice to the Applicant in the development of their Business Plan(s) and gave evidence before the Tribunal.
[39] Transcript at [95.46-47].
[40] Affidavit of Mr Auburn at [41.4].
It goes on:
27. In the unreported decision of South Pacific Education College Pty Ltd and ASQA [2018/1697] Senior Member Nikolic observed:
“The business plan it submitted was inaccurate. Key parts of it were unrelated to the scope of registration being sought. It was a document largely replicated in a number of other application submitted for RTO registration. It did not genuinely, in my view, reflect the scope of South Pacific’s intended registration. I can only conclude its sole purpose was to satisfy the business plan requirement rather than constituting an honest and complete reflection of the intended scope of registration.”[41]
[41] Transcript of oral decision 5.45 – 6.2
The Applicant’s attitude towards the role of a formal business plan in its operations was expressed by Ms Eldamouni in the following terms:
“If you ask me again to produce a business plan, a fresh one, update one, obviously based on the new financial viability risk assessment, I would revise the one we have, currently have, and update the financial figures according to the new financial viability risk assessment and resubmit is again with other main areas, what analysis would be revised but may not change.”[42]
“Despite the importance of business plan, it is, at the end it’s speculative document. It is a fact things could go either way.”[43]
[42] Transcript dated 21 May 2019 (hereafter Transcript 2) at [7.11-15].
[43] Ibid at [7.29-30].
The Tribunal was not reassured by Ms Eldamouni’s further comment:
“If every person thinks with their brains before committing to a new business, no one would be in the business and take a risk, but wise business people actually think with their hearts.”[44]
[44] Ibid at [8.1-4].
Although the Applicant appears somewhat dismissive of the role of business plans in its, or other organisation’s operations, the Tribunal takes note of the fact that on the Australian Government’s own business.gov.au website under the heading “Writing a business plan” it advises:
You don't have to start with a blank sheet of paper
To write an effective business plan you'll need discipline, time and focus. Although the process can seem challenging, it's very rewarding and gives you a sense of control over your business. You don't have to start with a blank sheet of paper. Download our Business plan template and guide to get you started.[45]
[45] Updated 14/08/2018.
That same website defines what a business plan is, or should be:
A business plan is a documented set of business goals, objectives, target market information and financial forecasts that you are aiming to achieve over a certain period of time. It is important to prepare a business plan when starting or growing your business and review it regularly to keep it up to date.[46]
[46] Idem.
The Tribunal however, is persuaded that for the purposes of registration as an RTO, any applicant needs to meet certain standards consistent with the Objectives of the Act. One of these is to have a valid and meaningful business plan.
In Complete Training Institute Pty Ltd, the Tribunal stated clearly:
“Persons applying for registration as RTOs are expected to provide more than ‘cut and paste’ documents”
and that any document purporting to be a business plan which was no more than a cut and paste submission would amount to a:
“business plan [..] inconsistent with a proposed RTOs obligations under the NVR Act.”[47]
[47] Complete Training Institute Pty Ltd and Australian Skills Quality Authority [2018] AATA 4638 at [48].
Mr Dhillon, who appeared as a witness for the Applicant, told the Tribunal that he had taken a leading role in the preparation of the business plans.[48] When asked about market research undertaken to provide a basis for assumptions or projections to be incorporated into those plans he stated:
“Market research is available. If we consider, like, that sector has a very limited market research that you could do. Most of the statistics are present on the web sites, the government web sites, so we have pretty much extracted the research information…”[49]
[48] Transcript at [95.17-21].
[49] Ibid at [95.35-38].
He gave important testimony about his, and Ms Eldamouni’s understanding of the relevance of business plans to their registration application, as follows:
“And we have to keep in mind that the whole decision is based on business planning, then ASQA’s requirement at that time, on page 8 of the business financial viability document it states what it requires is a very basic business plan. So on page 8 ASQA explicitly states the requirements from the candidate, and it also states that ASQA will be examining it through the initial period of registration, clearly stating that the application will not go ahead until these requirements have been met, so this is a very initial process. And in responding to that, what we did with Ms Eldamouni, what was required what we call is a lean business plan or a dehydrated business plan.”[50]
[50] Ibid at [96.1-10].
The Tribunal views this approach as justifying the claim made by ASQA that the Applicant was writing their business plan primarily to satisfy ASQA requirements, rather than as a genuine guide to the way in which they intended to operate their business or upon which they based their assessments about financial viability and training requirements an approached remarked upon with disapproval by the Tribunal in South Pacific Education (see above).
ASQA puts its position thus:
In addition, ASQA contends that the Applicant, rather than provide true information as to the nature of its organisation and how intends to operate, is simply providing ASQA the information it thinks will ensure ASQA will find it compliant and grant registration.[51]
[51] ASQA, Statement of Facts, Issues and Contentions at [64].
Mr Dhillon also confirmed both that he relied upon the use of templates to construct business plans and that he had been the consultant to both iVision International and Illuminate Institute, the organisations whose near-identical business plans were referenced in Mr Auburn’s affidavit.[52]
ADDITIONAL MATERIAL RELIED UPON BY ASQA
[52] Transcript at [95.47] and [97.25-28].
FURTHER GROUNDS OF NON-COMPLIANCE
It is a well-established principle that this Tribunal must make its decision(s) based upon the evidence which is before it at the time of the hearing, irrespective of the fact that such material may not have been before the original decision-maker at the time they made the reviewable decision. This was made clear in Drake where the Federal Court stated:
"The question for the determination of the Tribunal is not whether the decision which the decision-maker made was the correct or preferable one on the material before him. The question for the determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal."[53]
[53] Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at [589].
Similarly, in Shi the High Court stated:
“But ultimately, it was for the Tribunal to reach its own decision upon the relevant material including any new, fresh, additional or different material that had been received by the Tribunal as relevant to its decision.”[54]
[54] Shi v Migration Agents Registration Authority [2008] HCA 31 at [37] per Kirby J.
Thus, new material, relevant to the decision-making in question may legitimately be considered by the Tribunal. This was also made explicit in Echelon[55] where the Tribunal stated:
[17] It is not in doubt that the Tribunal can and should consider any new material or evidence of relevance to the original decision and to the particular grounds identified by the original decision-maker. For example in the present case if there is new information about compliance with standards 4.2, 4.3. 4.4 and 4.5, then that information can properly be considered by the Tribunal. But what is the position if an entirely new ground has been raised?
[55] Re Echelon National Security Agency and Australian Skills Quality Authority [2014] AATA 151.
The Tribunal went on the answer its own question about the issue of entirely new material being raised by considering the Federal Court cases of Secretary, Department of Social Security v Hodgson[56] and Secretary, Department of Employment, Education, Training, and Youth Affairs v McKay[57] in adopting their position that:
[24] In both those decisions the Federal Court held that the Tribunal did have jurisdiction to consider a new ground provided it was relevant to the decision under review. Different grounds were then considered which were not the basis of the original decision but which were relevant to that decision.
[56] (1992) 27 ALD 309.
[57] (1998) 58 ALD 130.
In this instance, ASQA draws to the attention of the Tribunal two further matters which, it alleges constitute breaches of the Standards.
The first of these relates to clause 2.2 which provides:
2.2. The RTO:
(a)systematically monitors the RTO’s training and assessment strategies and practices to ensure ongoing compliance with Standard 1; and
(b)systematically evaluates and uses the outcomes of the evaluations to continually improve the RTO’s training and assessment strategies and practices. Evaluation information includes but is not limited to quality/performance indicator data collected under Clause 7.5, validation outcomes, client, trainer and assessor feedback and complaints and appeals.
In relation to this clause ASQA alleges that the Applicant has provided no evidence “to demonstrate that it has in place systems and processes to ensure its own compliance with the Standards or that it systematically monitors its own training and assessment strategies and practices.”[58]
[58] Respondent’s Statement of Facts, Issues and Contentions at [61].
The second relates to clause 8.1 which provides:
8.1. The RTO cooperates with the VET Regulator:
(a)by providing accurate and truthful responses to information requests from the VET Regulator relevant to the RTO’s registration;
(b)in the conduct of audits and the monitoring of its operations;
(c)by providing quality/performance indicator data;
(d)by providing information about substantial changes to its operations or any event that would significantly affect the RTO’s ability to comply with these standards within 90 calendar days of the change occurring;
(e)by providing information about significant changes to its ownership within 90 calendar days of the change occurring; and
(f)in the retention, archiving, retrieval and transfer of records.
In this instance, ASQA alleges that the Applicant provided false information to it on a number of occasions. It particularises these as follows:[59]
[59] Ibid at [63]-[64]. Tribunal document citations omitted.
63. On the evidence before the Tribunal, it is clear that the Applicant has provided ASQA false information in the following instances:
63.1. when it submitted its initial application for registration
63.2. when it provided its business plan to ASQA on 30 June 2017; 26
September 2017 and 28 August 2018; and
63.3. when it provided its rectification evidence on 26 September 2017;
63.4. when it provided the requested additional evidence on 27 October 2017;
63.5. when it provided its financial viability risk assessment form to ASQA on 3 December 2018.
64. In addition, ASQA contends that the Applicant, rather than provide true information as to the nature of its organisation and how intends to operate, is simply providing ASQA the information it thinks will ensure ASQA will find it compliant and grant registration. For example, following the initial audit report where ASQA identified the concern that the Applicant did not have adequate resources, the Applicant provided evidence that it had decided to offer training and assessment from four delivery sites rather than the one site initially proposed. However in the most recent evidence provided by the Applicant, the Applicant states it has decided to operate from one site only.
It is an equally well-established principle that anything put against an Applicant should be put in a way that allows the Applicant opportunity to respond and to put to the decision-maker any evidence which might contradict or be relevant to the allegations raised.
As Griffiths J has recently emphasised in Twentyman[60] this is a matter of procedural fairness, incorporating the rule established in in Browne v Dunn (1893) 6 R 67. His Honour said:
38….. There can be no doubt that the principles of procedural fairness applied in the proceedings conducted by the second AAT. As Brennan J stated in Kioa v West (1985) 159 CLR 550 at 629 (emphasis added):
… in the ordinary case where no problem of confidentiality arises an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made.
39Earlier, in Kioa, Brennan J referred at 618 to the joint judgment of Dixon CJ and Webb J in Commissioner of Police v Tanos (1958) 98 CLR 383 at 395, where their Honours described as “a deep-rooted principle of the law that before anyone can be punished or prejudiced in his person or property by any judicial or quasi-judicial proceeding he must be afforded an adequate opportunity of being heard.”
[60] Twentyman v Secretary, Department of Social Services [2019] FCA 586.
The Tribunal was at pains to ensure that these matters, not specifically particularised in the Audit report nor in the original material put before the Commissioners and thus not formally recorded as part of their decision-making, were put to the Applicant directly, in the hearing. The Applicant was given an opportunity to respond to each of these matters and indeed did so in some detail.
There are essentially, two matters raised here by ASQA: the Applicant’s plans to ensure compliance with the Standards and the issue of whether it has provided false information to the regulator (ASQA).
In relation to the former, the following exchange took place in the hearing:
(Respondent) “Ms Eldamouni, does Achieve Goals have a compliance plan? ---Yes.
Have you provided that to ASQA? --- No, I was not asked to do it, or to even, we have not discussed that ever. This is the first time I hear about it.”[61]
[61] Transcript at [60.36-43].
Later:
“Do you have the responsibility for the compliance of Achieve Goals? --- As a trainer, I will be making sure my work is correct. Then it will be them – have the external consultants do my compliance work, together with the CEO.
Are you responsible for the compliance of the organisation or is it the CEO?--- The CEO will be responsible for the compliance, together with external consultancy.[62]
[62] Ibid at [61.37-43].
On the other hand in her formal Statement to the Tribunal, Ms Eldamouni writes:
“Ms Eldamouni intends to operate a 100% successful and compliant RTO.”[63]
“Ms Eldamouni and the leadership team will take responsibility for the implementation and adherence to all processes and procedures to make sure Achieve Goals Pty Ltd is compliant at all times.”[64]
[63] Applicant’s Statement, dated 2 December 2018, Tab 5 at page 6.
[64] Ibid at page 7.
The Tribunal has no confidence that Mr Khalik possesses any of the qualifications necessary to ensure compliance with the Standards, even less so taking into account Ms Eldamouni’s statement to the effect that he had not fully read the Business Plan before submitting it to ASQA[65]. Although Ms Eldamouni somewhat qualified this in her oral testimony on 21 May 2019, the Tribunal is left with the clear impression that Mr Khalik is not in a position to be able to monitor adequately the Applicant’s compliance responsibilities. It is unfortunate that Mr Khalik chose not to appear before the Tribunal to assist it in its deliberations.
[65] Transcript at [62.7].
In this respect ASQA is correct to draw to the Tribunal’s attention the analogous comments by Deputy President McCabe in Australian Tertiary Academy:
I am satisfied Mr Hawchar’s performance is such that I cannot be satisfied the applicant meets the fit and proper person requirements. He has not demonstrated the competence and commitment that is to be expected of a diligent manager of an organisation that is conducting a regulated activity of this nature.[66]
[66] Australian Tertiary Academy Pty Ltd and ASQA [2018] AATA 4875 at [100].
It would be inappropriate for Ms Eldamouni herself to monitor compliance given her position both as the sole owner/operator and trainer of the organisation.
The Applicant also failed to provide any coherent response to ASQA’s concerns about the lack of assessment strategies or outcome validations.
The Applicant seemed reliant upon her ability to rectify non-compliance once it was identified rather than being committed to ensure that there was no non-compliance in the first instance. She stated, in response to a question about the possibility of non-compliance reoccurring (as it had with her previous organisation, iGrow Family):
No, because that’s why, working with ASQA and having external consultants and you conducting your post initial, you have your own mechanisms in place and I have my own mechanisms in place and if you find something that is not compliant, there is room for rectification.”[67]
[67] Transcript at [60.29-34].
Taken together, these concerns lead the Tribunal to agree to a general proposition advanced by ASQA in the following terms:
“Ms Eldamouni’s reliance on being able to rectify non-compliances demonstrates a profound misunderstanding of the regulatory regime. The onus is on registered training organisations to remain compliant with the NVR Act and the Standards at all times; in Trades College Australia Pty Ltd and ASQA [2018] AATA 1360 the Tribunal has previously observed at [11]:
The Applicant bears the onus of self-regulation under the Standards, it being under legislative obligations to have systems and processes in place to ensure that it complies with the Standards at all times, as required by the Act.”[68]
[68] ASQA: Outline of Respondent’s closing submissions (21 May 2019) at [37].
Fit and Proper person(s)
The Tribunal has stated above that it accepts the Respondent’s assertion that, in terms of the requirements of the NVR Act, Mr Khalik is not a fit and proper person and has given reasons for that decision. However, in a broader context, the Tribunal believes it should explain the basis for such decision making.
The High Court has made it clear that the term “fit and proper person” is one which “takes its meaning from its context” and is necessarily a “value judgment … for evaluation by the decision maker.”[69] Equally, the High Court has stated that the “very purpose (of the expression) is to give the widest scope for judgment and indeed rejection.”[70]
[69] Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at [380] and [388] per Toohey and Gaudron JJ.
[70] Hughes and Vale Pty Ltd v New South Wales (No.2) (1955) 93 CLR 127 at [156-7].
Further, the President of the NSW Administrative Decisions Tribunal in Haining stated, in relation to a regulated industry, that
“Whether a person is ‘fit and proper’ to hold a licence in a regulated industry will be affected by general considerations relating to the character of the person, special considerations that take account of the nature of the industry in issue and the public policy objective leading the legislature to regulate the industry.”[71]
[71] Haining v Commissioner of Police, NSW Police Service [1999] NSWADT 6 at [41].
The contextual nature of the determination of who is a fit and proper person was emphasised by Hill J in Davies v Australian Securities Commission:
“...the content of what is necessary to constitute a fit and proper person to occupy a particular office or pursue a particular vocation will vary having regard to the office or vocation under consideration.”[72]
[72] [1995] FCA 1496; (1995) 59 FCR 221 at 232.
Finally, in Echelon, Deputy President Groom accepted that evaluations of compliance with the Fit and Proper Persons requirements were an integral part of determining the fit and proper status of applicants applying for registration as an RTO.[73]
[73] Echelon National Security Agency Pty Ltd and Australian Skills Quality Authority [2014] AATA 438 at [51]-[54].
These authorities allow the Tribunal to bring into its considerations the stated objectives of the public policy underpinning the ASQA regulatory scheme which are set out in section 2 of the NVR Act (see above) and the specific requirement in FPPR4(j):
“(j) whether the public is likely to have confidence in the person’s suitability to be involved in an organisation that provides or assesses national qualifications”.
The question then arises as to whether the fit and proper requirements are met by Ms Eldamouni in her role as owner and the effective controller of the company in her stated role as “high managerial agent”.[74]
[74] Section 37 Tribunal Documents at [12]. Ms Eldamouni is covered by this requirement as per the definitions of “Executive officer” and “High managerial agent” appearing on page 1 of the Fit and Proper Person Requirement declaration, see Section 37 Tribunal Documents at [31].
ASQA has set out its reasons for contending that Ms Eldamouni is not a fit and proper person for the purposes of the NVR Act in the following terms:
67. ASQA contends that it is clear on the evidence before the Tribunal that the Applicant’s executive officer, Ms Hilani Eldamouni, provided ASQA false or misleading information in the following instances:
67.1. when she provided the delivery data summary on behalf of iGrow on 14 October 2016;
67.2. when she provided pre-audit evidence on behalf of iGrow on 11 November 2016;
67.3. during the audit of iGrow on 24 November 2016;
67.4. when she signed the Chief Executive Officer/Principle (sic) Executive Officer Certificate on 18 January 2017;
67.5. when she signed the Fit and Proper Person Declaration on 24 October 2017;
67.6. when she provided the business plan on behalf of Achieve Goals Pty Ltd on 28 August 2018; and
67.7. when she provided the financial viability risk assessment tool on behalf of Achieve Goals Pty Ltd on 3 December 2018.
68. ASQA further contends that due to Ms Eldamouni’s involvement in iGrow and the findings of critical non-compliance while she was sole Director, Shareholder and trainer/assessor for the RTO the public is unlikely to have confidence in her suitability to be involved in an organisation that provides, assesses or issues nationally recognised qualifications.
69. In the circumstances ASQA contends that it cannot be said Ms Eldamouni satisfies the Fit and Proper Person Requirements. That is particularly so having regard to the objects of the NVR Act and the position of trust and confidence that RTOs hold under the regulatory regime. If the key personnel behind an applicant for registration are willing to mislead ASQA this undermines the ability of ASQA to carry out its regulatory function.[75]
[75] Respondent’s Statement of Facts, Issues and Contentions.
Ms Eldamouni has stated in her Submission to the Tribunal that she held the position of CEO and Director of iGrow Family Day Day Care between August 2013 and June 2017.[76]
[76] Applicant’s Submission (2 December 2018) at [1].
The Tribunal is not satisfied that ASQA has made out the case that statements made by Ms Eldamouni as outlined in subparagraphs 67.1 to 67.4 (above) were all materially false and misleading. Some of them are open to a variety of interpretations and understandings.
Equally, the Tribunal does not find that the business plans and financial viability risk assessment material (subparagraphs 67.6 and 67.7) was necessarily false or misleading. It was certainly inadequate and confused/confusing, but that is a different matter.
However Ms Eldamouni confronts a more compelling accusation when considering the ASQA claim (subparagraph 67.5 above) that when she signed the Fit and Proper Person Requirements declaration on 24 October 2017[77] she made a false declaration by answering “no” to the question:
Have you ever been an executive officer or high managerial agent of an organisation at a time when its actions resulted in its registration being cancelled or suspended in part or in full:
(i) as a registered training organisation…
[77] Section 37 Tribunal Documents at [284]-[288].
In relation to this, ASQA contends:[78]
33. Ms Eldamouni was previously an executive officer and high managerial agent of the registered training organisation (RTO) iGrow Family Day Care Pty Ltd (iGrow). As a result of the post initial audit ASQA found that organisation critically non-compliant and subsequently cancelled its registration.
34. Ms Eldamouni’s contention is that as she was no longer involved with the organisation at the time of its cancellation, she was unable to seek a review of the decision and therefore it should not result in a finding that she does not meet the Fit and Proper Person Requirements. In her written statement provided to the Tribunal, Ms Eldamouni stated “the decision to cancel the NVR Act Registration meant the opportunity to rectify non-compliance’s was taken out of my hands and I could NEVER fix anything.”[79]
35. At no point has Ms Eldamouni contended that iGrow was in fact compliant; her responses rely on the fact she was unable to “fix” anything.
[78] ASQA: Outline of Respondent’s closing submissions (21 May 2019).
[79] Applicant’s Statement at page [8].
The position put by ASQA is unassailable on the facts. The statement signed by Ms Eldamouni contained a false answer. It leads to an inevitable conclusion that, in the context of the NVR Act and its requirements she does not meet the fit and proper person test. The Tribunal makes no findings on this matter beyond that narrowly circumscribed by the NVR Act and its associated requirements.
The Tribunal’s attention was drawn to the fact that ASQA has recently revised its Fit and Proper Person declaration and that the question outlined above has been replaced with a more precise question:
“Were you or any related person associated with an RTO, a CRICOS provider or higher education provider at the time (or within 12 months prior to) a decision being made by ASQA or another VET regulator to:
·reject an application for initial registration as an RTO/CRICOS provider
·cancel registration, in part or in full
·suspend registration, in part or in full
·reject an application to renew registration
·determine that the provider breached a condition of registration
·impose a condition on registration
·issue an infringement notice.”[80]
[80] ASQA Fit and Proper Person declaration, updated 13 March 2019.
The Tribunal agrees that this is a more coherent and accurate question to be put to establish any prior relationships between an Applicant and any previous roles as a service provider in the sector. However, this was not the question operational at the time of Ms Eldamouni’s declaration and it is only in relation to that statement that the Tribunal can have any regard.
2018 General Direction
The Tribunal notes that on 14 December 2018 a new General Direction: Resourcing requirements – for applicants seeking initial registration or change of scope of registration (the Direction) was made under section 28(1) of the NVR Act. This Direction sets out a series of resourcing requirements covering educational and support services; facilities; equipment, initial cohort numbers; learning resources; trainers and assessors and states:
“Applicants are expected to have access to all required resources for each training product included in the application at the time of submitting the application.”
The Direction then sets out clauses 1.3, 1.8 and 7.5 of the National Standards and states: “Organisations must meet these requirements at the time of lodging an application.”
Arising from this, ASQA made a final submission to the Tribunal as follows:
ASQA’s submission is that it is clear from the evidence before the Tribunal that the applicant is not in a position to commence operation as a registered training organisation. The evidence before the Tribunal establishes that the applicant does not currently have assessment tools that meet the requirements of the training package for all of its scope of registration, that it does not currently have approval from the council to operate an education facility at the proposed site of training delivery and that the applicant does not currently have a finalised business plan.
The applicant has today handed up a printout of its website where it can be purchase training tools. However, simply purchasing assessment tools does not mean that those assessment tools will be compliant with the standards for registered training organisations or that they will meet the training package requirements. In most situations, once an applicant purchases assessment tools, they then need to contextualise those assessment tools for the method of training and delivery and the context of the training and delivery that they propose to undertake and that needs to take into account the cohort of trainers and their experience and background. Without these assessment tools, the applicant is simply unable to commence operations as a registered training organisation.
Similarly, whilst the applicant has submitted that it is able to obtain the relevant council approval, the position is it does not currently have that approval. Accordingly, it is ASQA’s position that the applicant does not satisfy clause 1.3 or 1.8 of the standards which require the organisation to have learning resources and facilities and requires the organisation to implement an assessment system that complies with the assessment requirements of the relevant training package.
Similarly, without a business plan it is unclear the direction the applicant intends to take. For example, during the hearing and on cross-examination, Mr Eldamouni gave evidence with respect to whether the training was intended to be online or face to face. What is in the applicant’s application for initial registration differed from what was in the business plan and upon questioning, Ms Eldamouni was unable to give a clear answer as to what the intended position was with respect to that.[81]
[81] Transcript 2 at [20.41] to [21.34].
The Tribunal can find no basis upon which not to accept this submission.
The required elements of assessment tools, physically available premises and a coherent business plan to take the Applicant forward to deliver training on the instant that registration is granted, are simply not present and cannot be demonstrated.
The business plans submitted, such as they are, demonstrate a failure to be based on sound, comprehensive, competent market research; their allocations for training resources are questionable and problematic and they are devoid of necessary arrangements for monitoring and evaluation. Similarly the provisions for administrative support referencing the proposed roles and qualifications of Mr Jamil Khalik and Ms Nahla Khlaik (see above) appear less than adequate.
The Tribunal is less inclined to accept ASQA’s final submissions calling into question the financial viability of the Applicant. Evidence given by Ms Eldamouni about the financial position of the Applicant was to the effect that:
At the same time, it was obvious to me, and I could tell ASQA had no clue how to analyse financial numbers in debt and how to put it into perspective whether the business cash flow is positive or negative. It should have been very obvious that there is still 67,000 in the bank account that you have in front of you, and you had evidence of that. In fact, I was asked, 'How did you say the business cost you 14,000,[82] which is true figure, where in the bank there were 70,000 left, so that's 110. That's when I replied that the rest is from personal cash injection that I won't reimburse myself. However, if I want to reimburse myself, I would still have 30,000 in the bank account. Hence the business would still have positive cash flow to survive for a year before making any income.
Other assets as per balance sheet of 22,000 are already held by the entity. The financial viability risk assessment has given us the green status, that's your own design and model, so it was - it says it's okay to submit to ASQA, so it was okay to submit it based on the green status. We have no liabilities whatsoever. Our combined assets, including current cash on hand, 100,000, including the 70 Achieve Goals. We have a real estate property which is our residence, bare minimum valuation would be 1.5 mil, two cars, 55,000, personal effects 30,000, and we have a commercial shop worth 500,000, and that would be 2.2 million as a total value of our combined income and assets, and net assets because there's no liabilities. We are able to sustain a business for long time.[83]
[82] The figure in the printed Transcript is “14,000” however this may be a mistake as it would be more logical for this to be “40,000” being the difference between the $70.000 left over and the $110,000 figure given.
[83] Ibid at [6.19-41].
The Tribunal finds nothing unusual about a small business operation conducting its affairs in this fashion and while ASQA has a clear responsibility to ensure that students are not put at risk because of a lack of financial viability on the part of the training provider, it does not believe that this risk has been established, by ASQA, on the basis of the material before it.
CONCLUSIONS
The Tribunal has to decide, ultimately, whether the grounds upon which the Commissioners made their refusal to register decision were valid grounds, based upon all available evidence; along with consideration of matters arising after promulgation of the 2018 General Direction.
The Commissioners’ decision related to three standards:
(a)1.3: the Applicant’s capacity to deliver the training proposed to the required standards: the Tribunal finds that the Commissioners’ decision in this respect was and is fully justified by the evidence before the Tribunal. In particular, the lack of a coherent business plan and the lack of clear strategy to ensure compliance with the Standards, must count very heavily against the Applicant.
(b)7.2: the financial viability of the Applicant: the Tribunal has been presented with evidence which leads it to a conclusion that the Applicant has sufficient capacity to maintain at least a medium-term level of financial viability which would allow its continued operation.
(c)7.1: Ms Eldoumani’s status as a fit and proper person as per the requirements of the NVR Act and regulations: in this instance the Tribunal agrees with the finding of the Commissioner that she does not so qualify.
In addition, the Tribunal agrees with ASQA’s subsequent contentions in relation to clauses 2.2 and 8.1 of the standards, namely that the Applicant has not demonstrated a coherent strategy or programme for monitoring and evaluating the training and assessment requirements of the standards and that it has, in a number of instances provided misleading and false information to ASQA as the national regulator.
Finally, the Tribunal accepts ASQA’s proposition that, were registration to be granted, the Applicant would not be in a positon to commence, immediately, providing the training services its proposes and this is incompatible with compliance with the 2018 General Direction.
DECISION
The decision under review is affirmed.
I certify that the preceding 133 (one hundred and thirty-three) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member
..................................[sgd]......................................
Associate
Dated: 11 June 2019
Date(s) of hearing: 3 and 21 May 2019 Date final submissions received: 21 May 2019 Applicant: In person Solicitors for the Respondent: Ms J Pellow, Australian Skills Quality Authority APPENDIX : OUTLINE OF PROPOSED COURSES OFFERED
BSBLDR501 - Develop and use emotional intelligence
This unit covers the development and use of emotional intelligence to increase self-awareness, self-management, social awareness and relationship management in the context of the workplace. It includes identifying the impact of own emotions on others in the workplace, recognising and appreciating the emotional strengths and weaknesses of others, promoting the development of emotional intelligence in others and utilising emotional intelligence to maximise team outcomes. It applies to managers who identify, analyse, synthesise and act on information from a range of sources and who deal with unpredictable problems. They use initiative and judgement to organise the work of self and others and plan, evaluate and co-ordinate the work of teams. No licensing, legislative or certification requirements apply to this unit at the time of publication.
BSBLDR502 - Lead and manage effective workplace relationships
This unit describes the skills and knowledge required to lead and manage effective workplace relationships. It applies to individuals in leadership or management who have a prominent role in establishing and managing processes and procedures to support workplace relationships taking into account the organisation's values, goals and cultural diversity. At this level work will normally be carried out within complex and diverse methods and procedures, which require the exercise of considerable discretion and judgement, using a range of problem solving and decision making strategies. No licensing, legislative or certification requirements apply to this unit at the time of publication.
BSBLDR503 - Communicate with influence
This unit describes the skills and knowledge required to present and negotiate persuasively, lead and participate in meetings and make presentations to customers, clients and others. It applies to managers and leaders who identify, analyse, synthesise and act on information from a range of sources, and who deal with unpredictable problems. They use initiative and judgement to organise the work of self and others and plan, evaluate and co-ordinate the work of teams. No licensing, legislative or certification requirements apply to this unit at the time of publication.
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