Australian Accredited College Institute Pty Ltd and Australian Skills Quality Authority

[2018] AATA 3662

Australian Accredited College Institute Pty Ltd and Australian Skills Quality Authority [2018] AATA 3662 (28 September 2018)

Division:GENERAL DIVISION

File Number(s):        2018/4768

Re:Australian Accredited College Institute Pty Ltd

APPLICANT

AndAustralian Skills Quality Authority

RESPONDENT

File Number(s):        2018/4820

Re:Ideal Institute of Technology Pty Ltd

APPLICANT

AndAustralian Skills Quality Authority

RESPONDENT

DECISION

Tribunal:Chris Puplick AM, Senior Member

Date:28 September 2018

Place:Sydney

For the reasons outlined, each of the two applications under review is refused.

...........................[sgd].............................................

Chris Puplick AM, Senior Member

CATCHWORDS

EXTENSION OF TIME – whether it is reasonable in all the circumstances to grant an extension of time –  principles to be applied – Hunter Valley Developments Pty v Cohen –  explanation for delay – resting on rights – prejudice to respondent and other parties – merits of substantive application – extension of time refused

LEGISLATION

Administrative Appeals Tribunal Act 1975 s 29

Fit and Proper Person Requirements 2011

National Vocational Education and Training Regulator Act 2011

CASES

Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541

Comcare v A’Hearn (1993) 45 FCR 441

Crick and Prosegur Australian Pty Ltd [2016] AATA 313

Hillman v Australian Postal Corporation [2017] AATA 1411

Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344

O’Gorman and Comcare (Compensation) [2017] AATA 2192

REASONS FOR DECISION

Chris Puplick AM, Senior Member

28 September 2018

EXTENSION OF TIME APPLICATIONS

1. By consent of the parties and by direction of the Tribunal these two matters have been joined and were heard together.

2. The two matters before the Tribunal are separate but associated appeals from Australian Accredited College Institute Pty Ltd (AACI) and Ideal Institute of Technology Pty Ltd (Ideal). Each is appealing against a decision made by the Australian Skills Quality Authority (ASQA) which is the national regulator under the National Vocational Education and Training Regulator Act 2011 (NVR Act).

3. In relation to AACI: ASQA has cancelled its registration as a Registered Training Organisation (RTO) under the NVR Act.

4. In relation to Ideal: ASQA has rejected its application for registration as an RTO under the NVR Act.

5. Both organisations, which are owned by the same Principal (Ms Taslima Shatter) have lodged applications for extensions of time to challenge the ASQA decision.

   THE AACI CASE

6. AACI initially applied for registration as an RTO in 2016 but, following an initial audit was found to be non-compliant with standards set out under the NVR Act. It was notified of this decision on 10 August 2016. AACI responded to this notification by undertaking certain rectifications but, following a further review ASQA deemed that these were insufficient for registration and notified the Applicant accordingly on 14 October 2016. This decision was subject to internal review within ASQA which affirmed the non-registration decision.[1]

   [1] The chronology of these events is set out in the Respondent’s Submission as to Application for Extension of Time (dated 25 September 2018).

7. That decision came before the Administrative Appeals Tribunal on 22 March 2017. By agreement, the Tribunal set aside the ASQA decision and granted AACI registration as an RTO with certain conditions imposed on its registration. The exact details of those conditions need not be elucidated, suffice to say that AACI was permitted to operate only with those conditions attached.

8. On 18 July 2017 AACI changed hands and was bought by Ms Taslima Shatter who became its sole owner and Chief Executive Officer. The Tribunal notes that in her oral evidence Ms Shatter indicated that she made no effort to meet with the previous owner, although her husband (Mr Mohammed Azad) apparently did. Similarly, she was “advised” on this matter by a Mr Fahd Jaman who is a family friend and runs a company (although Ms Shatter could not recall the name of this company).

9. While processes of transfer of responsibility for AACI to its new owner were underway Ms Shatter made a further application (5 August 2017), this time on behalf of Ideal, seeking to register it as an RTO. In this application Ms Shatter failed to disclose, as required, that she had any association with another RTO, namely AACI.

10. In relation to AACI, Ms Shatter signed a Statutory Declaration on 16 August 2017[2] in which she attested that:

    “I declare that I have read and understand the VET Quality Framework, as amended from time to time, comprising:

    (a) The Standards for NVR Registered Training Organisations

    (b) The Australian Quality Framework

    (c) The Fit and Proper Person requirements

    (d) The Financial Viability Risk Assessment Requirements

    (e) The Data Provision Requirements.”

    [2] Respondent’s submissions at page 61, Annexure O1.

11. Between 21 September 2017 and 24 October 2017 ASQA issued three requests to AACI for information relevant to the new acquisition of AACI. A reply was forthcoming on 27 October 2017 but was inadequate, prompting two further requests for information from ASQA on 1 and 9 November 2017.

12. On 16 January 2018 Ms Shatter, on behalf of AACI submitted to ASQA an application to add new courses to those already offered by AACI. However on 31 May 2018 ASQA notified AACI of its intention to cancel AACI’s registration. The grounds for this were that AACI had allegedly breached the conditions of registration imposed by this Tribunal in its determination of 22 March 2017. Although these terms were imposed upon AACI under its previous ownership they were, nevertheless, equally binding upon the new owners.

13. In response to this notification, AACI (through its legal representatives) advised ASQA on 7 June 2018 that it had no knowledge of the imposed conditions. In their letter they advised that:

    ”Our client did not have knowledge about the conditions imposed on the registration AACI ….. Our client was not notified or advised of the conditions of registration by the prior owner of AACI.”[3]

    [3] Respondent’s submissions at page 72, Annexure Q.

14. However, this statement was contradicted in oral evidence given to the Tribunal by Ms Shatter. She advised the Tribunal that the consultant, Mr Jaman, had informed her that there were conditions on the registration, but that they had lapsed with the change of ownership and were, as a result, not applicable to AACI’s then current operations. This of course, is not the case, the imposed conditions survive any chance of ownership or management. However the Tribunal must conclude that Ms Shatter was not totally unaware of conditions existing in this environment.

15. After consideration of AACI’s response to the notice of intention to cancel, ASQA notified AACI of its decision to proceed to cancellation on 19 July 2018 with this to take effect from 23 August 2018.

    THE IDEAL CASE

16. Running in parallel with all the AACI developments, Ms Shatter was also involved in seeking to register Ideal as a new RTO.[4]

    [4] The chronology of these events is set out in the Respondent’s Submission as to Application for Extension of Time (dated 25 September 2018).

17. The initial RTO application was submitted to ASQA on 5 August 2017 an address in Yagoona, NSW 2199 (the family home of Ms Shatter and Mr Azad) as the head office and principal place of  business.

18. On 9 November 2017 ASQA issued Ms Shatter (on behalf of Ideal) a notice of a scheduled Audit of the Yagoona premises and on 30 November such a site audit was conducted. Ms Shatter, despite being both the sole owner and CEO of Ideal and the applicant for its registration did not attend the audit but was represented by her husband (Mr Azad) and a Mr Nick Colonna (designated as Training Manager and Assessor).

19. On 20 December ASQA issued Ideal with a notice of non-compliance resulting from the Audit. On 27 February ASQA notified Ms Shatter of her failure, in the Ideal registration material, to disclose her association with AACI as required by law. This resulted in Ms Shatter submitting a revised registration application on 8 March 2018.

20. However in this application form there is a clearly stated question which requires the identification, by any applicant, of “influential NON-OWNERS of the legal entity applying for registration”. Specifically there is a question requiring the identification of: “A person who will exercise a degree of control or influence over the management or direction of the RTO but who is not an executive officer or high managerial agent or an owner”. Ms Shatter’s husband, Mr Azad, clearly meets this description, but his name or association was not disclosed by Ms Shatter.

21. When it was put to her that there was some deliberate attempt on her part to conceal the involvement of her husband in her business activities, she made an outright denial of this.

22. After consideration of the renewed Ideal registration application, ASQA determined on 11 July 2018 to reject the application and notified Ideal on 19 July 2018.

    A “family business”

23. Ms Shatter was summonsed to appear (by telephone) to give evidence before the Tribunal. In that evidence she made it clear that she and her husband were jointly involved in a “family business” which encompassed both AACI and Ideal, although the businesses were registered in her name. In addition, Mr Azad is the CEO of another RTO, Global Education and Migration Solutions (GEM). On 27 September ASQA imposed a sanction on GEM to remove certain courses from its scope of registration. These included one particular course (BSB51915 Diploma of Leadership and Management) which appeared subsequently as one of the courses which Ideal was proposing to offer in its initial registration application.[5]

    [5] Respondent’s Submission as to Application for Extension of Time (dated 25 September 2018) paragraph 54(v).

24. Ms Shatter also advances as one of her qualifications that she has had training experience at GEM (in early childhood and care courses, and first aid courses) and has developed relevant managerial skills working as an administration manager for that company where she organised classes and courses. The Tribunal has no evidence before it which independently verifies Ms Shatter’s role at GEM.

    EXTENSIONS OF TIME: ISSUES FOR CONSIDERATION

25. There is no automatic right for any applicant to receive an extension of time under section 29(7) of the Administrative Appeals Tribunal Act 1975 and indeed these are to be granted only where the Tribunal “is satisfied that it is reasonable in all the circumstances to do so.”

26. The importance of there being meaningful time limits established within the framework of Australian public administration was made pellucidly clear by the High Court.

27. McHugh J in Brisbane South Regional Health Authority v Taylor[6] gave four reasons why such limitations are an important part of the legal/administrative process. He noted that:

    “First, as time goes by, relevant evidence is likely to be lost. Second, it is oppressive, even “cruel”, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them.

    The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible.”

    [6] Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at [552]-[553].The Respondent in the High Court case is not related to the Applicant in the present proceedings.

28. His Honour also noted that:

    An applicant for an extension of time who satisfies those conditions [i.e. the conditions laid down in the relevant Act] is entitled to ask the court to exercise its discretion in his or her favour. But the applicant still bears the onus of showing that the justice of the case requires the exercise of the discretion in his or her favour.[7]

    [7] Ibid at [551].

29. It is generally accepted that the “check-list” outlined by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen[8] should be taken as the guide by this Tribunal in determining EOT matters.

    [8] Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344.

30. That list provides as follows:

    ·an applicant must show an “acceptable explanation of the delay” and this it is “fair and equitable in the circumstances” to extend time;

    ·a distinction is to be made between an applicant who has “rested on his rights” and allowed the decision-maker to believe that the matter was finally concluded, and one who has continued to make the decision-maker aware that he or she contests the finality of the decision;

    ·any prejudice to the respondent caused by the delay;

    ·whether any  others or the general public would suffer any prejudice as a result of the extension, or established practices be upset;

    ·the merits of the substantial application; and

    ·“considerations of fairness as between the applicant and other persons” in a similar position.

31. Wilcox J did, however, warn that:

    Although the section [s 11 of the Administrative Decisions (Judicial Review) Act] does not, in terms, place any onus of proof upon an applicant for extension, an application has to be made. Special circumstances need not be shown, but the court will not grant the application unless positively satisfied that it is proper so to do. The “prescribed period”….. is not to be ignored.” (Ralkon v Aboriginal Development Commission (1982) 43 ALR 535 at 530). Indeed it is the prima facie rule that proceedings outside that period will not be entertained (Lucic v Nolan (1962) 45 ALR 411 at 416). It is a precondition to the exercise of discretion in his favour that the applicant for extension show an “acceptable; explanation of the delay” and that it is “fair and equitable in the circumstances” to extend time. (Duff v Freijah (1982) 43 ALR 479 at 485; Chapman v Reilly, Neaves J, 9 December 1983, not reported at p. 7)[9]

    [9] Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at [348].

32. The Tribunal in Hillman v Australian Postal Corporation[10] set out four tests which it said should be met in deciding whether to grant a review of a decision where the application was made out of time. Those four grounds, which are in many ways merely a refinement of some of the principles laid down in Hunter Valley, are: delay; prejudice; merits and fairness.

    [10] Hillman v Australian Postal Corporation [2017] AATA 1411.

33. Equally, this Tribunal has noted that the check-list items in Hunter Valley “are not be applied mechanically” and that “an acceptable explanation for the delay” is not “an essential precondition to the exercise of that discretion although it is to be expected that such an explanation will normally be given.”[11]

    [11] O’Gorman and Comcare (Compensation) [2017] AATA 2192 at [13], citing Comcare v A’Hearn (1993) 45 FCR 441.

34. It is also important to note that in making a decision about what is reasonable in all the circumstances, the Tribunal must consider all of the circumstances of each individual case.[12]

    [12] Crick and Prosegur Australian Pty Ltd [2016] AATA 313 at [14].

    HUNTER VALLEY PRINCIPLES APPLIED

35. The Tribunal has applied the principles set out in Hunter Valley to the circumstances in this particular case in order to come to its decision.

    An explanation for delay

36. Both AACI and Ideal submitted material which indicated that the relatively short periods by which their applications are out of time (eight and eleven days respectively) were occasioned by some confusion arising from the advice of ASQA about their appeal rights in circumstances in which internal reviews were precluded by operation of the NVR legislation itself and by the prioritisation of certain matters by their legal representative. The details of these matters do not need to concern the Tribunal as the Respondent (ASQA) accepts that the explanations given are adequate. In these circumstances the Tribunal sees no need to question or contradict an agreement between the parties.

    Resting on Rights

37. It follows that both parties then accept that the Applicants were not “resting on their rights” but were active in pursuit of their claims.

    Prejudice to Respondent

38. ASQA claims that to allow this (or indeed any) EOT application to succeed would have the impact of disrupting the orderly business processes of the organisation; would divert resources into an area which it had concluded (and had the right to conclude) was settled; would compromise its overall ability to manage the large and complex area of regulation which it discharges under the NVR Act and would adversely affect the interests of those of its clients who have proceeded within the specified time limits and have a (more) legitimate expectation that their matters will be dealt with expeditiously. It believes that were EOTs granted regularly, the incentive for its clients to adhere to time limit requirements would be such that there would be no benefit in adhering to them. The Tribunal has some sympathy with this point of view which is generally consistent with the principle laid down by the High Court in Brisbane South but notes that automatic rejection of such claims has no more basis in law or equity than automatic acceptance.[13]

    [13] Respondent’s Submission as to Application for Extension of Time (dated 25 September 2018) Part IV.

    Prejudice to other Parties/General Public

39. In this instance it cannot be said that any established practices would be upset by the granting of an EOT, nor are there any other identifiable parties who would suffer prejudice.

    Merits of the Application

40. As to the merits of the application, it is important to note that it is specifically not the role of the Tribunal to come to conclusions about any of the specific matters raised, but rather, to assess whether or not the case which would be presented by the Applicant, were they to succeed on the EOT application, has some reasonable prospect of success.

41. In assessing this particular matter an important starting point is s 2A of the NVR Act. It provides that the objectives of that Act are to regulate the VET sector using

    “(i) a standards-based quality framework; and

    (ii) risk assessments, where appropriate….”

42. Furthermore the objectives of the Act include protecting students and ensuring the quality of VET courses offered.

    (a)An integral part of these processes is that organisations should be owned and run by people who ae “fit and proper” for this task. What constitutes a fit and proper person is laid out very clearly in the Fit and Proper Person Requirements 2011 (the Requirements) made as Standards under the Act by the Minister, and in operation as from 26 June 2011

    (b)ASQA’s position relies upon two essential elements: namely that in relation to AACI it has failed to meet its compliance obligations, and in relation to both AACI and Ideal that, in effect, Ms Shatter who is the owner and CEO of both, is not a fit and proper person as defined by the Requirements and that as a result, the public can have no confidence in any organisation with which she is associated in such a role.

    (c)In relation to the first issue, the Tribunal accepts the submission made by the Applicant that the instances of non-compliance on the part of AACI are relatively minor. They involve a failure to notify the date of the commencement of a course and the offering of enrolment in unauthorised courses in breach of a licence condition, of which the Applicant pleaded ignorance. Accepting that ignorance is no excuse, it cannot be said that any measurable or material harm was suffered by any student, or anyone else as a result of these essentially minor breaches. Similarly none of the non-compliance matters were incapable of being remedied both simply and swiftly. As such the Tribunal draws no significantly adverse inferences from them.

    (d)On the other hand the matter of Ms Shatter’s status as a fit and proper person must be in question. Two matters are particularly germane. The first is her failure to attend the on-site audit of Ideal. This was clearly her responsibility as the principal involved. Her reliance on others, albeit her husband, cannot be seen as acceptable conduct in the light of her own clear and personal responsibilities. The second relates to answers given by Ms Shatter to questions put by ASQA’s representative in the Tribunal’s hearing. These focussed on Ms Shatter’s Statutory Declaration relating to her knowledge of the VET Quality Framework. It was entirely evident from her testimony that she has no more than the most rudimentary understanding, if even that,  of what this is and certainly no understanding of the complexities of the Framework, let alone the other elements of it as specified in that Statutory Declaration. The Tribunal notes that it would be hard not to accept the proposition advanced by ASQA that Ms Shatter’s understating of her responsibilities would lead members of the public to have very little confidence in her suitability to lead and manage two accredited RTOs.

    (e)Fairness between parties or to others in a similar position

    (f)The tribunal does not believe that any issues arise for its consideration under this criterion.

1. For the sake of completeness, the Tribunal acknowledges that ASQA has also raised the issue of what it characterises as the “failure” of Ms Shatter to undertake the degree of due diligence required to establish whether or not the company she was purchasing (AACI) had any conditions attached to its registration. On behalf of Ms Shatter it is contended that she undertook some investigation through an agent/friend who gave her faulty advice. ASQA goes further to call into question the larger issue of her general competence to “run a private company in a regulated environment in a compliant manner.” It finally draws attention to an “absent willingness to cooperate with ASQA by failing to promptly respond to requests for information concerning the sale and takeover of AACI.”[14]

   [14] Respondent’s Submission as to Application for Extension of Time (dated 25 September 2018) at paragraphs 54(iv) and 57 respectively.

2. ASQA makes a great deal of Ms Shatter’s association with her husband, Mr Azad and of her apparent failure to be upfront about this and to declare it in various formal documents. Ms Shatter contends that this is something not uncommon in the joint operation of a family business. ASQA goes on to suggest that Mr Azad is, in effect, the real controller of the AACI and Ideal businesses, as well as his own GEM operations. Further it raises questions about the probity of one of these inter-related businesses (GEM) losing the right to offer a particular course while another closely related new organisation (Ideal) seeks to do so.[15]

   [15] Respondent’s Submission as to Application for Extension of Time (dated 25 September 2018) at paragraph 54 (v).

3. On behalf of Ms Shatter it was put to the Tribunal while she was not “particularly articulate” in her responses to questions about the VET Quality Framework, this should not be taken to mean that either she was in cable of understanding it or of accessing advice and assistance to do so. It was put that allowances should be made for her position in a family business, her perhaps less than fulsome use of the English language and that note should be taken that she held a Bachelor of Education degree (the awarding institution not specified).

4. In taking all these matters into consideration the Tribunal has reached the conclusion that the “merits of the substantial application” in relation to the AACI decision are exceptionally limited and that almost any review on the merits would be likely to conclude with findings adverse to the Applicant.

5. In relation to Ideal there is already open to Ms Shatter the right to make a fresh and compliant application which can be dealt with by ASQA, on its merits and in the normal course of its business, involving no public cost or disruption to its activities or those of this Tribunal.

6. For the reasons outlined above, the two applications under review are each refused.

I certify that the preceding 48 (forty-eight) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member

..........................[sgd].........................................

Associate

Dated: 28 September 2018

Date(s) of hearing:	26 September 2018
Solicitors for the Applicant:	Mr S Atila (by phone)
Solicitors for the Respondent:	Mr A Grullemans (by phone)