Australian Tertiary Academy Pty Ltd and Australian Skills Quality Authority - [2017] AATA 480

Australian Tertiary Academy Pty Ltd and Australian Skills Quality Authority [2017] AATA 480 (12 April 2017)
Division:GENERAL DIVISION
File Number(s): 2017/0290
Re:Australian Tertiary Academy Pty Ltd
APPLICANT

AndAustralian Skills Quality Authority
RESPONDENT

DECISION
Tribunal:Deputy President Bernard J McCabe
Date:12 April 2017
Place:Sydney

The application for dismissal under section 42B of the Administrative Appeals Tribunal Act1975 is refused.
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Deputy President Bernard J McCabe
CATCHWORDS
PRACTICE AND PROCEDURE – cancellation of training organisation registration – application to dismiss application for review on ground of no reasonable prospect of success – Tribunal not satisfied application has no reasonable prospect of success – application refused
LEGISLATION
Administrative Appeals Tribunal Act 1975, s 41(2); s 42B
National Vocational Education and Training Regulator Act 2011, s 3; s 36(2)(f); s 39; s 211
SECONDARY MATERIALS
Standards for Registered Training Organisations (RTOs) 2015
REASONS FOR DECISION
Deputy President Bernard J McCabe
12 April 2017

The Australian Skills Quality Authority (ASQA) is the decision maker in these proceedings. ASQA has asked the Tribunal to exercise the power under s 42B of the Administrative Appeals Tribunal Act 1975 (the AAT Act) to dismiss an application for review brought by Australian Tertiary Academy Pty Ltd. ASQA says the substantive application has no reasonable prospects of success within the meaning of s 42B(1)(b) of the AAT Act.
I am not satisfied the matter should be summarily dismissed under s 42B. I explain my reasons below.
THE REVIEWABLE DECISION AND THE APPLICATION FOR REVIEW
The applicant is – or was – a registered training organisation operating under the National Vocational Education and Training Regulator Act 2011 (the NVR Act). ASQA decided to cancel that registration on 14 December 2016 with effect from 31 January 2017. The cancellation decision was made after ASQA concluded the applicant did not comply with a number of the standards referred to in the Standards for Registered Training Organisations (RTOs) 2015. The non-compliance was first identified in an audit in mid-2015 but the applicant was unable to address the problems to ASQA’s satisfaction, which led to the cancellation decision.
The power to cancel is contained in ss 36(2)(f) and 39 of the NVR Act. The power in s 39 in particular is broad. It authorises ASQA to cancel registration “in any circumstances that the Regulator considers it appropriate to do so.” While there are no explicit criteria for cancellation, it is clear the power must be exercised for a proper purpose and the discretion of the decision-maker (or the Tribunal on review) is shaped and constrained by the legislative scheme.
The applicant filed an application for review in the Tribunal on 18 January 2017. The applicant also filed a request for a stay of the reviewable decision pursuant to s 41(2) of the AAT Act, but that application was refused. Directions were subsequently made for the parties to exchange statements of facts, issues and contentions and provide any materials on which they intended to rely upon at the hearing. A hearing date is expected in the middle of the year.
THE APPLICANT’S OBLIGATION TO PRODUCE VET STUDENT RECORDS
ASQA has been corresponding with the applicant about requirements in s 211 of the NVR Act which are imposed on an organisation whose registration is cancelled. That section provides the organisation must produce copies of its student records to ASQA within 30 days of the date cancellation takes effect.[1] A failure to produce records in accordance with s 211 is a criminal offence, and may give rise to a civil penalty.
[1] The section also applies to registered training organisations that have ceased to operate.
ASQA said the applicant was obliged to provide the records in question by 2 March 2017. I was told the applicant did not provide any student records until approximately 17 March – and only then, ASQA says, because it insisted. If ASQA is right, then the applicant was in contravention of s 211 throughout that period. The applicant finally provided a spread-sheet containing records on 17 March 2017 but ASQA says the applicant remained in contravention of s 211 because the information it provided did not include all “VET student records” as that term is defined in s 3 of the NVR Act.
The spread-sheet was not produced at the dismissal hearing but I note the applicant provided two spread-sheets to the Tribunal in electronic form on 20 March 2017. Those spread-sheets include limited information about the students. Mr Cox, who appeared for ASQA, said the applicant’s spread-sheet did not include essential information including information about assessments and the award of qualifications. Mr Cox said these shortcomings had been pointed out in correspondence from ASQA addressed to the applicant’s lawyer on 20 March 2017 which stated:
…your client has not produced the VET Student Records for any of its students – this would include copies of enrolment forms, all communication and all assessments; as well as a copy of the students qualification if a qualification was issued.
The applicant says it encountered difficulties in complying with s 211 prior to 17 March 2017. (ASQA doubts that: it says there is evidence the applicant’s officers could have accessed the relevant records in a timely way.) The applicant argued it had discharged its obligation under s 211 by 17 March 2017 in any event because it supplied records of the kind ASQA had specified on its website. ASQA says the applicant should have provided VET student records within the meaning of the NVR Act, and that was not (and still has not been) done.
I am satisfied the definition of VET student records in s 3 of the NVR Act should be given a broad interpretation. Mr Cox pointed out the whole purpose of the legislative scheme was to ensure registered training organisations had a proper basis for issuing qualifications. The process of accreditation is ultimately a public function, after all. The records should disclose all of the information required to permit a qualitative assessment of whether the student was appropriately enrolled, assessed and accredited. The records provided by the applicant do not appear to do that. It is likely that there has been a contravention of s 211.
I was provided with copies of correspondence between ASQA and the applicant. Both parties appear to have taken a combative approach to each other. ASQA says the effect of that evidence is as follows:
·While ASQA’s decision to cancel registration was made with reference to the applicant’s failure to comply with standards, the applicant has since cancellation also failed to comply with s 211 of the NVR Act.
·An inability comply with s 211, and the applicant’s apparent unwillingness to meet its obligations under that section even after exhortation, is centrally relevant to the Tribunal’s review of ASQA’s cancellation decision.
·The Tribunal is unlikely to find in the applicant’s favour on the substantive application because the applicant is incapable and perhaps unwilling to meet its legal obligations, as evidence by its subsequent failure to comply with s 211.
·The substantive application for review has poor prospects of success, so it should be dismissed pursuant to s 42B of the AAT Act.
In this case, the applicant claims it can provide an explanation for the delay in providing the information required under s 211. That explanation is set out in the body of statements provided by Mr Wassim Hawchar and Mr Mahmoud Sari. The explanation referred to therein do not appear especially compelling on their face.
Mr Cox, who appeared for ASQA, requested an opportunity to question Mr Hawchar and Mr Sari at the dismissal hearing. But the hearing was conducted by telephone. Cross-examination over the phone is an unattractive course where credit might be an issue. I was also told the applicant’s counsel, Ms Nikou, had only recently become involved in the matter and had not had the opportunity to speak with either witness. That was problematic in circumstances where the evidence in question related to matters that could give rise to criminal proceedings. It was inappropriate to take evidence from the witnesses, and effectively conduct a mini-trial, in these less-than-satisfactory circumstances.
ASQA argued the applicant’s non-compliance with s 211 was likely to be of such moment that the substantive application for review would almost certainly fail because the applicant’s behaviour painted a dire picture of its record-keeping and business processes, approach to complying with its obligations under the law, and attitude to the regulator and the regulatory scheme.
I accept the apparent failure to comply with s 211 prior to 17 March 2017 and the (at most) partial compliance since that date could be influential, or even decisive, in the Tribunal’s ultimately review. But counsel for the applicant, urged me not to rush to judgment.
Ms Nikou said there may yet be other evidence which has not been provided which might somehow explain, qualify or ameliorate all of the applicant’s apparent failings. The applicant says I should see any problems with respect to s 211 in the context of all the evidence it intends to adduce. That submission assumes a contravention of s 211 may not be as decisive as ASQA contends.
SHOULD THE PROCEEDINGS BE DISMISSED PURSUANT TO S 42B?
The power under s 42B is not exercised lightly. Its exercise denies the applicant the opportunity to put its case at a hearing where all of its evidence and submissions might be considered de novo. Where the application for dismissal relies on s 42B(1)(b), the Tribunal will need to be confident it can make any necessary findings of fact on the basis of the material before it that is not seriously contested. (It may not be necessary to make findings of fact in some circumstances: for example, where the applicant is unable to succeed as a matter of law.) It will also need to be confident that material which has not yet been adduced would not change the outcome. Ultimately, the Tribunal should be satisfied it is not appropriate to wait for a final hearing because there are no reasonable prospects of success.
I made clear to the applicant that, on the current evidence before the Tribunal, it was likely to face considerable difficulty at hearing. There is force to ASQA’s contention that the applicant did not (and still does not) comply with s 211 of the NVR Act, and that non-compliance is likely to weigh against the applicant in the final measure at the hearing. That evidence may even be decisive – however there may yet be additional material provided by the applicant which could tip the scales. It is difficult to know what weight to accord the evidence about the contravention of s 211 until the other evidence is brought into consideration.
Notwithstanding the serious questions over the applicant’s prospects for success, I think it would be premature to dismiss the matter at this point in the proceedings. The standard contemplated in s 42B(1)(b) is necessarily onerous. While I accept the applicant appears to face significant difficulties, the success of the applicant’s case ultimately turns on a balancing of factors. ASQA is asking me to assume there is no other evidence of other factors which could outweigh the evidence of a contravention of s 211. I am not ready to go that far.
The applicant will shortly be required to produce all of the evidence it intends relying upon at the hearing under the terms of the directions that are already in place. It seems to me the best course in the circumstances is to press forward and bring the matter on for a hearing at the earliest opportunity once the parties have exchanged their statements of facts, issues and contentions together with their evidence.
CONCLUSION
The application under s 42B is refused.

I certify that the preceding 21 (twenty-one) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe

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Associate
Dated: 12 April 2017

Date of hearing: 31 March 2017

Solicitor for the Applicant: Australian Skills Quality Authority

Counsel for the Respondent: Ms E Nikou

Date of hearing:	31 March 2017
Solicitor for the Applicant:	Australian Skills Quality Authority
Counsel for the Respondent:	Ms E Nikou