Australasian College of Education and Training Pty Ltd and Australian Skills Quality Authority - [2020] AATA 4806

Australasian College of Education and Training Pty Ltd and Australian Skills Quality Authority [2020] AATA 4806 (30 November 2020)
Division:GENERAL DIVISION
File Numbers: 2019/7990 & 2019/7991
Re:Australasian College of Education and Training Pty Ltd
APPLICANT

AndAustralian Skills Quality Authority
RESPONDENT

DECISION
Tribunal:Member K. Parker
Date:30 November 2020
Place:Melbourne

The Tribunal affirms the Decisions Under Review.
[sgd]........................................................................
Member K. Parker
Catchwords
VOCATIONAL EDUCATION AND TRAINING – cancellation of registered vocational education and training organisation (RTO) – refusal of application to change scope of registration – breach of conditions of registration under the National Vocational Education and Training Regulation Act 2011 (Cth) – non-compliance with Standards for Registered Training Organisations 2015 – instance of cheating during examination – inadequate supervision and other conduct of assessor which enabled student to cheat – inadequate assessment systems – assessment guides not adhered to when marking assessments – whether previous security course delivered over sufficient duration – RTO failed to identify student learning support needs and to provide support – RTO failed to ensure its executive officers and high managerial agents met “fit and proper person” requirements – executive officers and high managerial agents made false statements to ASQA and the Tribunal and failed to disclose close association with suspended RTO – current CEO previously found by Victorian Ombudsman to have assisted students at RMIT to cheat during two examinations in 2008 and 2009 – Victorian Ombudsman’s issued public report – lack of commitment by owner to fulfil current role of executive officer and high managerial agent – insufficient insight and contrition by former and current CEOs into past breaches of conditions of registration and non-compliance with Standards - demonstrated minimalist and reactive approach to compliance – Tribunal does not have confidence RTO will meet conditions of registration and comply with Standards in future – decisions under review affirmed
Legislation
Administrative Appeals Tribunal Act 1975 (Cth), ss 37, 38AA, 62A
National Vocational Education and Training Regulation Act 2011 (Cth), ss 2A, 3, 17, 21, 22, 22A, 23, 24, 25, 26, 27, 28, 32, 33, 39, 55, 111, 155, 157,185, 186
Whistleblowers Protection Act 2001 (Vic), s 103
Legislative Instruments
Standards for Registered Training Organisations 2015
Cases
Australian Broadcasting Tribunal v Bond (1990)170 CLR 321
Brown and MARA, Re [2015] AATA 693
Claredale Academy Pty Ltd and Australian Skills Quality Authority, Re [2019] AATA 1869
Council of the NSW Bar Association v Franklin (No 2) [2014] NSWCA 428
Victorian Ombudsman’s Report
Brouwer, G E --- "Investigation into an allegation of improper conduct within RMIT's School of Engineering (Tafe) Aerospace (1.89MB)" [2010] VicOmbPRp 6 (1 July 2010) -
REASONS FOR DECISION
Member K. Parker
30 November 2020
INTRODUCTION

The Applicant, Australasian College of Education and Training Pty Ltd (ACET), is a “NVR registered training organisation”[1] (RTO) under the National Vocational Education and Training Regulation Act 2011 (Cth) (NVR Act) delivering vocational education and training (VET). ACET receives State-government funded subsidies to deliver…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Australasian College of Education and Training Pty Ltd and Australian Skills Quality Authority [2020] AATA 4806
Case: [2020] AATA 4806
Decision Date: 30 November 2020

CaseChat Overview and Summary

The Administrative Appeals Tribunal (Tribunal) considered an application by Australasian College of Education and Training Pty Ltd (ACET) for review of decisions made by the Australian Skills Quality Authority (ASQA) to cancel ACET's registration as a Registered Training Organisation (RTO) and to refuse its application to change its scope of registration. ACET sought to set aside these decisions.

The Tribunal was required to determine whether ACET had breached its conditions of registration under the *National Vocational Education and Training Regulation Act 2011* (Cth) and failed to comply with the *Standards for Registered Training Organisations 2015*. Specifically, the issues included instances of cheating during examinations, inadequate supervision and assessor conduct, non-adherence to assessment guides, insufficient duration of a security course, failure to identify and support student learning needs, and crucially, whether ACET's executive officers and high managerial agents met the "fit and proper person" requirements, particularly in light of past conduct involving false statements, non-disclosure of associations with a suspended RTO, and a history of assisting students to cheat.

The Tribunal found that ACET had failed to comply with its obligations under the *National Vocational Education and Training Regulation Act 2011* and the *Standards for Registered Training Organisations 2015*. The reasoning focused on significant breaches, including inadequate assessment systems and a failure to ensure its key personnel met the fit and proper person requirements. The Tribunal noted that the current and former CEOs had demonstrated a lack of insight and contrition regarding past breaches and a minimalist, reactive approach to compliance. Consequently, the Tribunal lacked confidence that ACET would meet its future obligations.

The Tribunal affirmed ASQA's decisions to cancel ACET's registration as an RTO and to refuse its application to change its scope of registration.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

If the Tribunal sets aside or varies the Cancellation Decision, the Tribunal must also consider whether ACET’s application to change its scope of registration should be granted. If the Tribunal affirms the Cancellation Decision, it will necessarily follow that the Change of Scope Decision will be affirmed because ACET’s registration as an RTO will have ended. BACKGROUND In the First Amarni Affidavit, Mr Amarni stated (on 12 December 2019) as follows:(a)since 2012, approximately 6,000 students had enrolled at ACET “and/or” completed about 6,800 qualifications;[7] [7] Refer paragraph [2] on page 2 (not paragraph [2] on page 1) of the First Amarni Affidavit.(b)initially ACET specialised in delivering training in security operations;[8] [8] Ibid at paragraph [4] on page 2.(c)since 2014, due to demand, ACET expanded its operations into other areas;[9] [9] Ibid.(d)ACET’s registration included approximately 15 courses across several industries including early childhood education, building and construction, security operations, beauty, make-up and hairdressing;[10][10] Ibid.(e)ACET employs “approximately 45 highly-qualified administrative, student support, trainers and management staff”;[11][11] Refer paragraph [6] on page 2.(f)ACET engages 24 trainers on a contract basis;[12][12] Ibid at paragraph [35].(g)528 students were enrolled at ACET (as at 2 January 2020) and all of them had commenced their training in 2018 and 2019 and would continue courses already commenced, and a further 200 students would be commencing new courses;[13][13] Ibid at paragraph [7].(h)ACET delivered training from four premises in Victoria based at Coburg, Coolaroo, Altona and Dandenong, and it hired other training facilities from time-to-time as required. ACET was approved to deliver the (now superseded) CPP20212 Certificate II in Security Operations and CPP30411 Certificate III in Security Operations (referred to collectively as Security Courses) from its four campuses;(i)ACET also delivered the following further courses from its Coburg premises;[14] (i)CHC30113 Certificate III in Early Childhood Education and Care;(ii)CHC33015 Certificate III in Individual Support;(iii)SHB30416 Certificate III in Hairdressing;(iv)SHB30115 Certificate III in Beauty Services;(v)SHB30215 Certificate III in Make-Up;(vi)CPC40110 Certificate IV in Building and Construction (Building);(vii)CHC43015 Certificate IV in Ageing Support; and(viii)CHC50113 Diploma of Early Childhood Education and Care.[14] Ibid at paragraph [16] to [25] inclusive, stating the position as at 2 January 2020. When Mr Hana gave evidence at the substantive hearing, he told the Tribunal that he had arranged to close some of ACET’s campuses due to the reduction in revenue on account of the stay condition prohibiting ACET from enrolling new students. ACET reported total revenue for the 2018/2019 financial year of about $4.8m.[15] Reportedly, this was a substantial reduction in revenue from the two previous financial years. ACET’s total revenue was reported as being about $6.4m for the 2017/2018 financial year; and about $6.85m for the 2016/2017 financial year.[16] [15] Refer ACET’s Financial Report for year ended 30 June 2018 forming part of Exhibit “MA-6” of the Second Amarni Affidavit.[16] Ibid.

Evidence

Evidence Before The Court

ACET engaged an RTO consultant, Ms Sally Tansley, to provide an opinion about the non-compliances as alleged by ASQA. An Affidavit sworn by Ms Tansley on 27 May 2020 was lodged with the Tribunal with two reports dated 20 March 2020 and 28 May 2020. Ms Tansley also appeared as an expert witness at the substantive hearing.ASQA’s affidavits and documentary evidence ASQA relied upon two affidavits lodged by an ASQA Lead Regulatory Officer, Mr Paul Bunce, who was involved in conducting the audit of ACET in February 2019:(a)Affidavit of Mr Bunce sworn 13 January 2020 (First Bunce Affidavit); and(b)Affidavit of Mr Bunce sworn 7 May 2020 (Second Bunce Affidavit). At the hearing, ACET informed the Tribunal that it would not require Mr Bunce to be made available for cross-examination. He was not called as a witness at the substantive hearing. The parties lodged statements of facts, issues and contentions (SFICs) and ASQA lodged an amended SFIC. ASQA lodged two sets of documents in accordance with s 37 and s 38AA of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act). The Tribunal will refer to these sets of documents as the T-Documents and Supplementary T-Documents respectively.[5] Further evidence was lodged during and after the hearing (some at the request of the Tribunal). [5] ASQA lodged the T-Documents totalling 123 pages with the Tribunal on 24 January 2020 and the Supplementary T-Documents totalling 7,883 pages on 20 May 2020. The hearing of the substantive application took place by video-link over four days on 1, 2, 3 and 9 June 2020. The Tribunal acknowledges the assistance provided to the Tribunal by Ms R Sion, appearing as counsel for ACET, and Mr S Rebikoff, appearing as counsel for ASQA. The standard of their advocacy was exemplary; and helpfully, they each prepared comprehensive closing submissions which were lodged with the Tribunal sometime after the hearing. For the reasons set out below, the Tribunal considers it appropriate in the circumstances for ACET’s registration as an RTO to be cancelled and that ACET’s application to change its scope of registration be refused. Accordingly, the Tribunal affirms the Decisions Under Review. LEGISLATIVE FRAMEWORKObjectives of the NVR Act RTOs are currently regulated by ASQA under the NVR Act. All references made to section numbers in these Reasons for Decision are references to provisions of the NVR Act except where otherwise indicated. The objectives of the NRV Act are set out in s 2A and provide as follows:2A 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 standard-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(e)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(f)to protect students undertaking, or proposing to undertake, Australian VET by ensuring the provision of quality VET; and(g)to facilitate access to accurate information relating to the quality of VET.Note 1:The standards‑based quality framework mentioned in paragraph (b) consists of instruments made by the Ministerial Council, the Minister or the National VET Regulator.Note 2:These objects are subject to the constitutional basis for this Act (see Division 3).

Decision

Reasons for decision

ACET seeks review of the Cancellation Decision and Change of Scope Decision (which the Tribunal will refer to collectively as the Decisions Under Review), by the General Division of the Administrative Appeals Tribunal (Tribunal). ACET applied for a stay of the Decisions Under Review pending resolution of this application. An interim stay hearing took place on 16 December 2019 followed by a final stay hearing on 22 January 2020. The Tribunal granted both an interim and final stay of the Cancellation Decision on condition that ACET not enrol any new students. No stay was granted in relation to the Change of Scope Decision because an order to stay that decision would have had no practical effect. Between 1 August 2011 and 21 January 2020, Mr Mahmoud Amarni, otherwise known as Mr Michael Amarni, held the position of CEO of ACET. Mr Amarni is the sole director and shareholder of ACET. On 21 January 2020, the day before the final stay hearing, Mr Amarni appointed ACET’s Training and Compliance Manager, Mr Nihal Hana, to become the new CEO of ACET. Mr Hana continues to hold the position of CEO of ACET.[4][4] As indicated on the signature block of an email sent by Mr Hana to the Tribunal on 5 November 2020.ACET’s affidavits, expert reports and documentary evidence ACET relies upon the following affidavit evidence which annexes most of its documentary evidence:(a)Affidavit of Mr Amarni sworn 12 December 2019 (First Amarni Affidavit);(b)Affidavit of Mr Amarni sworn 2 January 2020 (Second Amarni Affidavit);(c)Affidavit of Mr Amarni sworn 20 January 2020 (Third Amarni Affidavit);(d)Affidavit of Mr Hana sworn 12 December 2019 (First Hana Affidavit);(e)Affidavit of Mr Hana sworn 2 January 2020 (Second Hana Affidavit);(f)Affidavit of Mr Hana sworn 20 January 2020 (Third Hana Affidavit);(g)Affidavit of Mr Hana sworn 20 March 2020 (Fourth Hana Affidavit);(h)Affidavit of Mr Hana sworn 18 May 2020 (Fifth Hana Affidavit); and(i)Affidavit of Mr Hana sworn 29 May 2020 (Sixth Hana Affidavit). ACET engaged an RTO consultant, Ms Sally Tansley, to provide an opinion about the non-compliances as alleged by ASQA. An Affidavit sworn by Ms Tansley on 27 May 2020 was lodged with the Tribunal with two reports dated 20 March 2020 and 28 May 2020. Ms Tansley also appeared as an expert witness at the substantive hearing.ASQA’s affidavits and documentary evidence ASQA relied upon two affidavits lodged by an ASQA Lead Regulatory Officer, Mr Paul Bunce, who was involved in conducting the audit of ACET in February 2019:(a)Affidavit of Mr Bunce sworn 13 January 2020 (First Bunce Affidavit); and(b)Affidavit of Mr Bunce sworn 7 May 2020 (Second Bunce Affidavit). At the hearing, ACET informed the Tribunal that it would not require Mr Bunce to be made available for cross-examination. He was not called as a witness at the substantive hearing. The parties lodged statements of facts, issues and contentions (SFICs) and ASQA lodged an amended SFIC. ASQA lodged two sets of documents in accordance with s 37 and s 38AA of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act). The Tribunal will refer to these sets of documents as the T-Documents and Supplementary T-Documents respectively.[5] Further evidence was lodged during and after the hearing (some at the request of the Tribunal). [5] ASQA lodged the T-Documents totalling 123 pages with the Tribunal on 24 January 2020 and the Supplementary T-Documents totalling 7,883 pages on 20 May 2020.

Ratio Decidendi

Legal Principle Established

Section 21 mandates that an RTO must comply with the conditions set out in ss 22 to 28. The importance of due compliance with those conditions is reflected in s 111, which renders contravention of the conditions set out in s 21, subject to civil penalties.Conditions of registration The conditions of registration potentially relevant in this application include:(a)under s 22, that an RTO must comply with the NVR RTO Standards; Quality Standards; AQF and DPR. The NVR RTO Standards are defined as meaning standards made under s 185 by the Minister, by legislative instrument, and as agreed by the Ministerial Council. The Minister issued a standard under s 185(1) and s 186(1), entitled Standards for Registered Training Organisations (RTOs) 2015 (Standards);(b)under s 22A, that an RTO must “demonstrate a commitment, and the capability, to deliver quality vocational education and training”;(c)under s 23, that an RTO must satisfy the FPPR. Schedule 3 to Attachment A of the Standards contain the FPPR;[6] (d)under s 24, that an RTO must satisfy the FVRAR;(e)under s 25, that an RTO must notify ASQA of material changes to the organisation as prescribed in this provision;(f)under s 26, that an RTO must give ASQA such information as ASQA requests, by notice in writing, for the purposes of this Act, so long as the organisation is capable of complying with the request; and(g)under s 27, that an RTO must cooperate with ASQA, at least to the extent that it is necessary for ASQA to perform its functions or to facilitate ASQA’s performance of its functions.[6] Refer Standard 7. The structure of the Standards is also set out in Part 1- Preliminary, as follows (emphasis added):StructureThese Standards consist of eight Standards. Under each Standard is a set of Clauses of the Standard. To comply with a Standard, the RTO must meet each of the Clauses. A person applying to register as a new RTO must demonstrate the capacity to meet these Standards for all of the person’s intended scope of registration.For each Standard a context statement is also included. The context does not form part of the Standard itself, and has been included to provide background information to help readers understand the Standard. The Standards and Clauses are collectively referred to as Standards.FPPR Section 23 provides that an RTO must satisfy the FPPR. Standard 7 of the Standards requires that, “The RTO has effective governance and administration arrangements in place”.Clause 7.1 is relevant in this application and provides as follows:To be compliant with Standard 7 the RTO must meet the following: 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; andb) meet each of the relevant criteria specified in the Fit and Proper Person Requirements in Schedule 3.… Section 3 defines an “executive officer”, relevantly, as follows:executive officer, in relation to a registered training organisation, 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)…