AIMT Pty Ltd and Australian Skills Quality Authority

[2017] AATA 1234

AIMT Pty Ltd and Australian Skills Quality Authority [2017] AATA 1234 (31 July 2017)

Division:GENERAL DIVISION

File Number(s):      2016/6029

Re:AIMT Pty Ltd

APPLICANT

AndAustralian Skills Quality Authority

RESPONDENT

File Number(s):      2016/6030

Re:Wyndham Institute Pty Ltd

APPLICANT

AndAustralian Skills Quality Authority

RESPONDENT

DECISION

Tribunal:Deputy President J W Constance

Date:31 July 2017

Place:Sydney

The applications by the Respondent, to dismiss the applications for review lodged by the Applicants on 8 November 2016, are dismissed.

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Deputy President J W Constance

CATCHWORDS

PRACTICE AND PROCEDURE – dismissal applications – section 42B – no reasonable prospect of success – power to dismiss to be used cautiously – dismissal applications dismissed

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth) s 42B

National Vocational Education and Training Regulator Act 2011 (Cth) s 29

CASES

Charara v Commissioner of Taxation [2016] FCA 451

Re Filsell and Comcare [2009] AATA 90

REASONS FOR DECISION

Deputy President J W Constance

31 July 2017

INTRODUCTION

1. Each Applicant is a registered training organisation under the National Vocational Education and Training Regulator Act 2011 (Cth). The Respondent is the National Vocational Education and Training Regulator under the Act.

2. On 14 October 2016 the Respondent decided to impose certain conditions on the current registration of each Applicant. Some of these conditions took effect from 17 October 2016 and some from 21 November 2016. There has been no stay of the Respondent’s decisions and they remain in force.

3. On 8 November 2016 each Applicant applied to this Tribunal to review the Respondent’s decisions.

4. On 21 March 2017 the Respondent applied to have both applications dismissed on the basis that neither had reasonable prospects of success. For the reasons which follow I have decided that neither application will be dismissed and each should proceed to be determined on its merits.

   APPLICATION FOR ADJOURNMENT

5. When the Respondent’s dismissal applications came on for hearing the Solicitor for the Applicants applied for an adjournment to enable them to file a statement of the Chief Executive Officer of the Applicants.  The Respondent opposed this application.

6. On 31 March 2017 the Tribunal made the following directions in relation to the Respondent’s applications:

   1.by close of business on 4 April 2017, the Respondent is to lodge with the Tribunal and give to the Applicant:

   a.a brief outline of its argument in respect to the dismissal application;

   b.any witness statements or other documents on which the Respondent intends to rely at the hearing of the application;

   2.should the Respondent intend not to rely on any witness statements or other documents at the hearing, the Respondent shall notify the Tribunal and the Applicant of this in writing by close of business on 4 April 2017;

   3.By close of business 21 April 2017, the Applicant is to lodge with the Tribunal and give to the Respondent, copies of any witness statements and documents on which it intends to rely at the hearing;

   4.should the Applicant intend not to rely on any such witness statements and/or documents, the Applicant shall notify the Tribunal and the Respondent of this in writing by close of business 21 April 2017.

7. By email of 5 April 2017 the Tribunal requested the Solicitor for the Applicants to advise of his availability for a hearing of the dismissal applications on one of seven days in May 2017. The Solicitor did not respond to this request.

8. By notice of 20 April 2017 the Applicants were informed that the hearing of the dismissal application would take place at 10am on 5 May 2017. This notice was forwarded to the Applicants care of their Solicitor.

9. The Applicants did not provide any witness statements and/or documents in accordance with the Tribunal’s Direction. By email of 26 April 2017 the Respondent wrote to the Solicitor for the Applicants requesting his advice whether it was intended to provide any material in accordance with the Direction. On 26 April 2017 the Solicitor for the Applicants advised the Respondent that material would be forthcoming and that he would be in further contact the following day.

10. On 27 April 2017 the Respondent wrote to the Solicitor for the Applicants by email noting that no further material had been received and advising that should material not be produced by 2pm the following day it was the Respondent’s intention to seek a directions hearing in relation to the Applicants’ non-compliance.

11. By email of 28 April 2017 the Solicitor for the Applicants advised the Respondent as follows:

    I am unable to respond to your letters about these matters, but I propose to write to you before COB today.

12. Later that day the Solicitor for the Applicants advised the Respondent that he was attending to the filing of the Applicants’ material as a matter of urgency and that he expected to have it to the Respondent well before the hearing of the dismissal application.

13. By letter of 1 May 2017 the Solicitor for the Applicants advised the Respondent that he had been unable to complete the Applicants’ material and requested the Respondent’s consent to an adjournment of the dismissal hearing.

14. At the commencement of the hearing on 5 May 2017 the Solicitor for the Applicants applied for an adjournment on the basis that the Chief Executive Officer of the Applicants had been overseas and that he (the Solicitor) had been appearing in another matter before the Tribunal on 27 and 28 April 2017. The Solicitor was unclear as to when the Chief Executive Officer had left the country.

15. I refused the request for an adjournment on the basis that the Applicants had ample time to prepare for the hearing. In breach of the Tribunal’s Direction of 31 March 2017 the Applicants had not filed and served material and had not advised the Tribunal that it was not intended to do so. In these circumstances the Applicants should have applied for an extension of time in which to file further material. They did not do this.

16. Further, the Solicitor for the Applicant was aware in advance that he would be required to appear in the Tribunal on 27 and 28 April 2017 and should have made allowance for this in preparing documents in this matter. He did not give any explanation as to why he could not contact the Chief Executive Officer while he was overseas to obtain instructions in relation to the applications.

    THE CONDITIONS IMPOSED BY THE RESPONDENT

17. Each Applicant was notified of the conditions imposed by the Respondent by letter of 17 October 2016. Each letter included the following paragraphs:

    The Australian Skills Quality Authority (ASQA), as the national VET regulator, has determined that the following conditions will be imposed on your organisation’s registration under Section 29 of the Act, which will take effect 35 calendar days after the date of this written notice:

    ·The RTO to provide details of the location, date and time, and the identity of any trainer/assessor, for any training or assessment, including assessment of RPL, to be conducted by the RTO at least 7 days prior to it occurring for the entire period of its current registration

    ·The RTO to notify ASQA, at least 7 days prior to the sale of the RTO, the identity of any purchaser for the entire period of its current registration

    ·The RTO must inform ASQA within 14 days, of the details of any students issued with a VET qualification or statement of attainment for the entire period of its current registration.

    The following condition will be imposed on your organisation’s registration under Section 29 of the Act with immediate effect:

    ·The RTO must retain copies of all completed student assessment material including material for assessment of RPL for the entire period of its current registration.

    BACKGROUND IN RELATION TO AIMT PTY LTD

18. The Respondent relied upon documents filed in the Tribunal to support its application for dismissal. For the purposes of this application I am satisfied of the facts in the following seven paragraphs as alleged by the Respondent in the Outline of Submissions dated 5 April 2017.  The references preceded by “T” are references to documents filed by the Respondent.

    On 30 July 2015, the AIMT submitted an application to the Respondent seeking registration as an RTO. The Chief Executive Officer (CEO) of the AIMT, Mr Abu Sarker, is also CEO of Wyndham Institute Pty Ltd (Wyndham) (Ref: file no 2016/6030).

    On 20 October 2015, the Respondent conducted a site audit at the AIMT’s former premises located in Queensland (the Audit) to assess the AIMT's compliance with the VET Quality Framework (VQF), in particular the RTO Standards (T 6-30).

    On 24 November 2015, the Respondent granted AIMT registration as an RTO until 23 November 2022 (T 31).

    On 1 July 2016, the AIMT notified the Respondent that it had changed its head office address to Suite 6, 108 Haldon Street, Lakemba NSW 2195 (T 34-42) .

    From approximately 12 August 2016, the media reported on Australian Federal Police (AFP) investigations into allegations that childcare subsidies had been fraudulently obtained by Mohammed Omar and Ibrahim Omar (the Omar brothers), who also operated a number of family day care services in NSW, to fund terrorism activities overseas (T 43-49).

    On 9 August 2016 and 17 August 2016, the Australian Government Department of Education and Training (DET) and the NSW Department of Education Early Childhood Education and Care Directorate, respectively, suspended service approval of a number of family day care services operated by the Omar brothers (T 50-66).

    The suspension notices issued by DET, (to two services of which Mohammad Omar is a director and one service of which Ibrahim Omar is a director), were addressed to RTOs operated by the Omar brothers located at Suite 4, 108 Haldon Street, Lakemba NSW 2195.

    BACKGROUND IN RELATION TO WYNDHAM INSTITUTE PTY LTD

19. On the same basis as I have referred to in relation to AIMT Pty Ltd I am satisfied of the facts in the following six paragraphs.

    On 21 December 2015, Wyndham was registered as an Australian Proprietary Company. The Chief Executive Officer (CEO) of the Applicant, Mr Abu Sarker, is also CEO of AIMT.

    On 3 January 2016, Wyndham submitted an application to the Respondent seeking registration as an RTO.

    On 6 April 2016, the Respondent conducted a site audit at Wyndham's former premises located in Queensland (the Audit) to assess compliance with the VQF, in particular the RTO Standards (T 6-33).

    On 26 April 2016, the Respondent granted Wyndham registration as an RTO until 25 April 2023 (T 34).

    On 4 May 2016, the Wyndham notified the Respondent that it had changed its head office address to Suite 6, 108 Haldon Street, Lakemba NSW 2195 (T 37-45) .

    On 17 October 2016, the Respondent notified Wyndham of the Decision under Review (T 70-72).

    THE RESPONDENT’S ARGUMENT

20. The Respondent argues:

    ·…… the conditions are appropriate given the legitimate concerns [the Respondent] holds arising from the geographical proximity of the Applicants to persons who are the subject of investigation for alleged serious criminal conduct and whom [sic] regulatory action has [been] taken by other agencies.

    ·….. additional Tribunal Documents in fact raise further concerns, currently being considered by the Respondent, that the Applicants are not financially viable, do not have the stated intention to deliver nationally accredited vocational education and training and do not have the resources or staff necessary to do so.

    ·…… information indicates that the trainers put forward by AIMT to ASQA are not legitimate [b]ased on these enquiries; the Respondent holds serious concerns that the Applicants may have provided false or misleading information to the Respondent as part of their initial applications to become RTO’s.

    ·…… [t]hese conditions are not punitive and are protective in nature. In that respect, they do not rely on any wrongdoing having been established by the Applicants, nor do they need to. Regulation of the VET sector is risk based and conditions are a tool used by the Regulator to manage risk.

    ·…… these conditions impose simple reporting obligations that would have little or no impact on the Applicants’ ability to carry on their respective businesses and are appropriately adapted to manage risk and meet genuine concerns held by the Regulator.

    ·the Applicants are in breach of valid notices issued in accordance with section 26 of the Act in that each has failed to produce documents required by that notice.

    ·each of the review applications resisting the imposition of non-punitive, simple reporting and record retention conditions can have no prospects of success where each Applicant is in continuing breach of a condition of its registration.[1]

    [1] Respondent’s Outline of Submissions dated 5 April 2017.

    THE POWER TO DISMISS AN APPLICATION FOR REVIEW

21. Section 42B of the Administrative Appeals Tribunal Act 1975 provides, in part:

    (1)  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:

    ……

    (b) has no reasonable prospect of success …… .

    CONSIDERATION

22. The power to dismiss an application without determining it on its merits is a power to be used cautiously.[2]

    [2] Re Filsell and Comcare [2009] AATA 90; Charara v Commissioner of Taxation [2016] FCA 451.

23. The Respondent argues that:

    ·persons whose activities are of concern to the Respondent may be involved in the Applicants’ operations;

    ·the Respondent has concerns as to the Applicants’ financial viability; and 

    ·the Respondent has “serious concerns” that the Applicants have provided misleading information.

24. It may be that some or all of these concerns prove to be justified.  On the other hand the Applicants may have explanations for their conduct. Only after a hearing on the merits can these issues be properly considered and determined.

25. The Respondent also argues that the conditions it has imposed are “non-punitive” and “simple”.  This may be true but it does not mean that the Applicants should be denied the opportunity to challenge the justification for the imposition of additional conditions on their respective registrations, no matter how simple.

26. All registered training organisations must comply with certain conditions which are set out in the Act.[3] 

    [3] See sections 21-28 of the National Vocational Education and Training Regulator Act 2011 (Cth),inclusive.

27. The power to impose other conditions is contained in section 29 which provides:

    (1)The National VET Regulator may impose other conditions on an NVR registered training organisation’s registration. Such conditions need not be imposed at the time of registration.

    (2)The National VET Regulator may vary a condition imposed under subsection (1).

28. The use of the word “may” in this section makes it clear that the Respondent has a discretion whether or not to impose such conditions.  In reviewing the Respondent’s decision the Tribunal has the same discretion.

29. A discretion given by statute must be exercised after proper consideration of the relevant information.  In this case it matters not that the discretion may have been exercised only to impose conditions described as “non-punitive simple reporting and record retention conditions”.  The Applicants are entitled to argue that the discretion to impose other conditions should not have been exercised at all.  The Respondent’s argument that the Applicants’ alleged failures to produce documents means that their applications have no prospects of success should also be the subject of argument at a hearing on the merits.

30. The Respondent further argues that its regulation of registered training organisations is “risk based and conditions are a tool used by the Regulator to manage risk”.  This may be so, but it does not follow that the imposition of conditions should not be the subject of challenge at a hearing on the merits.  Neither Applicant has sought a stay of the Respondent’s decision.  As a result the conditions remain in force whilst the applications are being considered.

    CONCLUSION

31. The applications by the Respondent, to dismiss the applications for review lodged by the Applicants on 8 November 2016, will be dismissed.

I certify that the preceding 31 (thirty - one) paragraphs are a true copy of the reasons for the decision herein of Deputy President J W Constance

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Associate

Dated: 31 July 2017

Date(s) of hearing:	5 May 2017
Solicitors for the Applicant:	N Galatas, GPZ Legal
Solicitors for the Respondent:	D Cox, Australian Skills Quality Authority