Australian Vocational Driving Institute Pty Ltd and Australian Skills Quality Authority

[2014] AATA 889

[2014] AATA 889

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2014/5697
Re	Australian Vocational Driving Institute Pty Ltd
APPLICANT
And	Australian Skills Quality Authority
RESPONDENT

DECISION

Tribunal	Deputy President PE Hack SC
Date	1 December 2014
Place	Brisbane

1.   The time for the applicant to seek a review of the respondent’s decision of
2 September 2014 is extended until 29 October 2014.

2.   The application to stay the further implementation of the respondent’s decision of 2 September 2014 is refused.

....................[Sgd]....................................................

Deputy President PE Hack SC

CATCHWORDS

PRACTICE AND PROCEDURE – application for extension of time – application for stay – whether applicant misunderstood time limits for lodging application – whether granting of stay in public interest – extension of time granted – stay refused

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth) ss 29(7), 41(2)

National Vocational Education and Training Regulator Act 2011 (Cth) ss 2A, 155(1)

CASES

Re Scott and Australian Securities and Investments Commission (2009) 51 AAR 114; [2009] AATA 798

REASONS FOR DECISION

Deputy President PE Hack SC

1 December 2014

1. The applicant, Australian Vocational Driving Institute Pty Ltd, was, until the decision in issue in these proceedings, a "registered training organisation" as that expression is used in the National Vocational Education and Training Regulator Act 2011 (Cth). The respondent, the Australian Skills Quality Authority, is the "National Vocational Education and Training Regulator" established by s 155(1) of that Act.

2. These proceedings arise out of a decision made by the Authority on 2 September 2014, and notified to the applicant on 24 September 2014, to cancel the applicant's registration under the Act with effect from 29 October 2014. The applicant seeks an extension of time within which it may seek a review by the Tribunal of the decision of 2 September 2014 and, if an extension be granted, a stay of the further implementation of the cancellation decision of the Authority.

3. Some reference to the background to the cancellation decision is necessary. What follows is taken, in the main, from documents exhibited to the affidavits of Mr Hammaad Hassan, the applicant’s chief executive officer, and Ms Emma Betts, an employee of the Authority.

4. In late April 2013 an officer of the Authority emailed the applicant proposing that the Authority would undertake an audit of the applicant on 8 and 9 May 2013 to assess its compliance with the regulatory framework. Thereafter there was an exchange of emails with Mr Hassan in which Mr Hassan insisted that the audit could not proceed on those days because "key staff members" were on leave and others, including Mr Hassan, were occupied with an audit of the applicant by "another department". It was subsequently agreed that the audit would be postponed until 3 and 4 July 2013.

5. On 18 June 2013, in anticipation of the audit, the Authority's auditor, Ms Jane Connellan, sent an e-mail to the applicant setting out the scope of the audit and providing a list of material to be provided to the auditor in advance of the audit. On the evening of 2 July 2013 Mr Hassan e-mailed the auditor explaining that he had "been occupied in legal proceedings in another matter" and unable to provide the material but would "ensure that [the] items will be available to you at tomorrow's audit".

6. The legal proceedings referred to by Mr Hassan are in the County Court of Victoria between the applicant (as plaintiff and defendant by counterclaim) and the Victorian Skills Commission (or the State of Victoria) (as defendant and plaintiff by counterclaim). Mr Hassan says that the applicant’s case alleges breaches by the State of Victoria of written agreements made in 2011 and 2012 between the applicant and the Victorian Skills Commission. The nature of the counterclaim by the Commission does not emerge from the material. In those proceedings orders for discovery of student files were made on 13 June 2013 in these terms:

   …

   5.By 4:00pm on 20 June 2013, the plaintiff/defendant by counterclaim produce each of the documents described in paragraph 64 of the affidavit of documents of Hammaad Hassan sworn 8 April 2013 ("the Student Files") by delivering them to Law in Order Electronic Pty Ltd at Level 13/461 Bourke Street Melbourne for the purpose of inspection by the defendant/plaintiff by counterclaim.

   6.With respect to the Student Files produced pursuant to paragraph 8[sic] above:

   a.the defendant/plaintiff by Counterclaim, its servants and agents may inspect the Student Files at the premises of Law in Order electronic Pty Ltd , but shall not remove any of the Student Files (or any part thereof) from those premises;

   b.the defendant/plaintiff by Counterclaim may have the whole or any part of the Student Files copied and/or digitally scanned by Law in Order Electronic Pty Ltd;

   c.once any copying and/or digital scanning of the Student Files has been completed, they are to be delivered to or collected by the plaintiff/defendant by counterclaim or its solicitors; and

   …

   Mr Hassan says that the files were delivered as required prior to 20 June 2013[1] with the result that the files were not available for inspection when the audit was undertaken on 3 July 2013.

   [1]His affidavit, at paragraph 10, refers to 20 June 2014: I treat that as a typographical error.

7. During the audit Mr Hassan informed the auditor that the student files of the applicant were with the Victorian Government. On 4 July 2013 Ms Connellan emailed Mr Hassan asking him to forward evidence supporting the statement that the Victorian Government had the applicant’s student records. On 8 July 2013 Mr Hassan replied, providing contact details of the Operations Manager of Law in Order "who is currently in possession of our student files".

8. Seemingly, some time prior to 14 August 2013, the defendant in the County Court proceedings undertook inspection or copying of the Student Files. On that date[2] the files were taken from the premises of Law in Order however Mr Hassan’s evidence of their movements thereafter is confusing. He said:

   18.On 14 August 2014 [sic] I arranged to have the files collected from Law in Order and transported to a storage facility.  At the request of Vernon da Gama & Associates [the solicitors acting for the applicant in the County Court proceedings] the files were delivered to their offices.  I cannot remember the exact that the files were delivered to Vernon da Gama & Associates.  Once Vernon da Gama & Associates had inspected the files, they were returned to the storage facility.

   19.At the time that Jane Connellan of ASQA contacted me requesting the files, they were with Vernon da Gama & Associates.  I am informed and verily believe that Jane Connellan contacted Vernon da Gama & Associates, who informed her that the files were unavailable for ASQA to inspect because they were being examined for the purpose of the County Court proceeding.  I am informed and verily believe that Vernon da Gama & Associates advised Jane Connellan that the files would be made available to ASQA once the examination had been completed.  I am unaware if Jane Connellan made any further request to Vernon da Gama & Associates to inspect the files.

   [2]Again there is an apparent typographical error in Mr Hassan’s affidavit which refers to 14 August 2014.

9. From July 2013 onwards there were delays on the part of the Authority in finalising the audit due to ill health of relevant staff. Ms Connellan contacted Mr Hassan again on 15 October 2013 enquiring whether the student records would be available for inspection at the applicant's premises at Coopers Plains on 17 October 2013. Mr Hassan responded on 16 October 2013 advising that the applicant’s staff were currently on leave and that he would contact Ms Connellan the following week "to set up a time to finalise the audit". Then on 30 October 2013 Mr David Garner, the Authority's Regional Manager, Compliance, sent an email to Mr Hassan advising that the Authority was aware that student files had been returned to the applicant and asking Mr Hassan to advise by 1 November 2013 whether an inspection of the records on either 6 or 8 November 2013 would be suitable. Mr Hassan responded in these terms,

   I have spoken with my solicitor who is currently in possession of the requested student records.

   My solicitor has informed me that he requires to keep the files as our trial is set to begin on the 27^th of November 2013 in the Melbourne County Court.  The requested student records are part of our evidence for the trial.

   Unfortunately this means I will not be able make myself or the student records available until the trial is over.  Once the trial is over I will be able to confirm a suitable date for you to inspect the student records.

   I hope you can understand our position and appreciate your patience.

10. On 9 December 2013 an employee of the Authority contacted Vernon da Gama & Associates, the solicitors acting for the applicant in the County Court proceedings, and was informed that the solicitors were returning, or had already returned, the student records to the applicant. Attempts were made, unsuccessfully, to contact Mr Hassan between 9 and 19 December 2013.

11. By April 2014 the Authority wanted to finalise its audit. On 17 April 2014 it sent an email to Mr Hassan, enclosing an audit report identifying areas of non-compliance with the statutory framework. That report made reference to the difficulties experienced in obtaining student records and in contacting Mr Hassan. The applicant was informed that it had the opportunity to address the identified areas of non-compliance by providing rectification evidence on or before 14 May 2014.

12. On 9 May 2014 the applicant contacted the Authority requesting an extension of that deadline to 30 May 2014. That was not agreed to but an extension to 9am on 23 May 2014 was. No response was received by 23 May 2014 or thereafter.

13. On 4 July 2014 the Authority gave the applicant notice of a proposed intention to cancel the applicant’s registration as a registered training organisation based on the applicant's failure to provide rectification evidence and its critical non-compliance with some 20 specified standards. The applicant was informed that it had an opportunity to provide a written response to the notice but that any material was to be received by the Authority no later than 4 August 2014. Thereafter Ms Betts attempted to contact Mr Hassan but was unable to reach him on either of the telephone numbers provided.

14. Then, on 2 September 2014, the Authority's Commissioner, Compliance, made the decision to cancel the applicant's registration. The applicant was notified of the decision on 24 September 2014 and of its avenues to challenge the decision. Given the argument for the applicant it is necessary to set out a lengthy extract from that letter, in particular that part that dealt with the applicant's rights of review. It read,

    Reviewable Decisions

    You can seek a review of these decisions as they are reviewable decisions under section 199 of the NVR Act.

    Reconsideration by ASQA

    Because the decisions were made by a person or body exercising delegated authority, you may apply to ASQA for a reconsideration of the decisions.  This option must be exercised within 30 days after the date of this notice using the Application for reconsideration of reviewable decision. Your application must include the reasons for the application and requires payment of an application fee.  Please refer to the ASQA website at to obtain the application form and further information about reviewable decisions. ASQA will inform you of the result of its reconsideration of the decision within 90 days of receiving your application.

    Review by the AAT following reconsideration by ASQA

    If, upon the reconsideration, ASQA either affirms or varies its decision, you may seek a further review by the Administrative Appeals Tribunal (the AAT) under section 203(1) of the NVR Act.

    The AAT is and independent review authority that has the power to affirm, vary or set aside ASQA’s decisions.  The AAT aims to provide fair, impartial, high-quality and prompt review with as little formality and technicality as possible.

    Under section 41(2) of the Administrative Appeals Tribunal Act 1975, you also have the right to apply for a stay of the enforcement or implementation of ASQA’s decision/s until such time as the AAT determines its review of the decision/s.

    An application to the AAT for a review of the decision/s must be submitted within 28 days of receiving notification of ASQA’s decision and would usually require the payment of an application fee.  Your application to the AAT must be submitted in writing using the AAT forms are available from the AAT registry in your capital city, or from the AAT website Review applications may also be lodged at the Administrative Appeals Tribunal, GPO Box 9955 in your capital city.  You may contact the AAT directly by telephone at 1300 366 700.

    Review by the AAT without reconsideration byASQA

    You may also apply to the AAT for review of ASQA’s decision/s under section 203 (2) of the NVR Act, without first applying to ASQA for a reconsideration of the decision.

    The applicant was provided with a telephone number and e-mail address for ASQA if it required further information.

15. On 24 October 2014 (a Friday) the applicant lodged an application for reconsideration together with an application for a stay pending reconsideration. It pointed to its litigation with the Victorian Skills Commission as the reason it was unable to provide complete student records "as they were submitted as evidence in this litigation to the Court".

16. The following Monday, 27 October 2014, the Authority extended to 2 pm on 28 October 2014 the time for the applicant to submit evidence in support of his application for reconsideration. Nothing was received. Late in the afternoon of 28 October 2014 the Authority notified the applicant that the application for a stay had been refused and that the Authority would commence processing the application for reconsideration.

17. These proceedings were commenced on 29 October 2014 when Mr Hassan lodged an application for review (Form 1), an application for an extension of time to 29 October 2014 (Form 2) and an application for a stay (Form 6). The grounds given for the extension of time were:

    I tried submitting a review and stay of ASQA’s decision with ASQA before applying to the AAT but ASQA only considered my application for a review and not a stay.  As a result of this I was delayed in submitting my application for a review and stay with the AAT.  With this application I am also submitting my application for a review and stay.

18. The matter came before me on 20 November 2014. No material in support of the extension of time or the application for a stay had been lodged on behalf of the applicant. In particular what was said by the applicant's representative to be the applicant's explanation for the failure to lodge the review in time was not evidenced by any material from the applicant. For the reasons I then gave, I adjourned the application to 27 November 2014 and refused the oral application for a stay until 27 November 2014.

19. The discretion to extend the time for the making of an application is conferred by s 29(7) of the Administrative Appeals Tribunal Act 1975 (Cth) in these terms:

    The Tribunal may, upon application in writing by a person, extend the time for the making by that person of an application to the Tribunal for a review of a decision (including a decision made before the commencement of this section) if the Tribunal is satisfied that it is reasonable in all the circumstances to do so.

20. The principles that apply to applications for extensions of time are well known – they do not need to be recited.

21. First, it is relevant to note that the delay is not great. The application ought to have been lodged by 22 October 2014; it was out of time by seven days. Mr Hassan’s affidavit propounds an explanation for that delay although it must be said that the affidavit is remarkable for what it does not say rather than what it does say. In particular Mr Hassan refers to the fact that no time limit was specified in the letter for a first instance review to the Tribunal. Whilst he says that he relied on the information in the letter regarding the way in which the applicant could seek a review of the decision, he does not identify any part of the letter that was relied on nor suggest that the letter led to him holding an incorrect view about the period of time within which the applicant might seek a review. What Mr Hassan does say in paragraph 38 of his affidavit is that it was not until after he received the Authority’s letter of 28 October 2014 (refusing the stay pending reconsideration) that he realised that a time limit of 28 days applied to a first instance application to the Tribunal. He does not explain how he came to that realisation.

22. Mr Pritchard, the solicitor for the Authority, invited me to reject Mr Hassan’s explanation. He pointed to various matters, including apparent inconsistencies in the evidence, that he submitted ought lead me to conclude that the explanation could not be relied on. I think though that I must take into account the limited time that was available for Mr Hassan and his solicitor to compile the affidavit. One ought not to be too critical of apparent omissions from, and inconsistencies in, an affidavit prepared urgently for a hearing.

23. It was said by Ms Currie, counsel for the applicant, that refusal of the extension of time would deprive the applicant of the right to seek a review of the Authority’s cancellation decision. That may be right, albeit incorrectly expressed, however the applicant retains the right to seek a review of any decision on reconsideration adverse to it. That right, as I see it, strongly favours the grant of an extension of time. As it seems to me the preferable course, other matters being equal, would be to commence the Tribunal’s review of the decision now rather than await the outcome of reconsideration, a fortiori, where it appears almost certain that outcome would be unfavourable in the absence of the applicant providing any fresh material. The time of the Authority’s officials can be better spent on other matters.

24. There is no particular prejudice to the Authority in granting an extension of time. That identified by it, the fragmentation of the review process, can be avoided if the applicant adopts the sensible course suggested by Ms Currie of withdrawing its request for reconsideration.

25. I am then satisfied that it is reasonable in all the circumstances to extend to 29 October 2014 the time for the applicant to seek a review of the Authority’s cancellation decision of 2 September 2014.

26. I turn then to the application for a stay of the further implementation of the decision. Section 41(2) of the Administrative Tribunal Appeals Act is in these terms:

    The Tribunal may, on request being made, as prescribed, by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.

27. The decision to cancel took effect on 29 October 2014. By virtue of the decision the applicant has been unable to carry on business as a training organisation for some four weeks. Mr Hassan’s affidavit makes it clear that the decision, if not stayed, is likely to have devastating consequences for the applicant. So much may be accepted. But consideration of the exercise of the discretion requires much more than the likelihood of severe consequences for the applicant.

1. Mr Pritchard drew my attention to a decision of Downes J., sitting as the President of the Tribunal, in Re Scott and Australian Securities and Investments Commission,[3] a case involving an application for a stay of a decision banning the applicant in that case from managing corporations for a period of 18 months. His Honour said:[4]

   In considering the application, it is appropriate for me to consider a range of matters, including:

   1. The prospects of success.

   2. The consequence for the applicant of the refusal of a stay.

   3. The public interest.

   4. The consequences for the respondent in carrying out its functions depending upon whether a stay is granted or not.

   5. Whether the application for review would be rendered nugatory if a stay were not granted.

   6. Other matters that are relevant, amongst which I would include the length of time that the ban has already been in place and the gap between today and the hearing of the application.

   [3] (2009) 51 AAR 114; [2009] AATA 798.

   [4]At [4].

2. On a hearing of this nature it is not possible to do more than gain an impression of possible strength or weakness in an applicant’s case. Here it seems to me to be relevant to that evaluation to note that as long ago as April 2014 the Authority concluded that the applicant was not compliant in nine of eleven critical areas. Since then, a period in excess of six months, the applicant has not responded to numerous opportunities to dispute the audit conclusions. Nor is their evidence of it having taken any steps to rectify any of the defects identified beyond engaging a consultant on the day prior to this hearing

   to ensure that all aspects of [the applicant’s] operations as an RTO comply with the standards for NVR Registered Training Organisations.

3. The absence of any response to the identified deficiencies rather suggests that the applicant’s prospects are not particularly promising.

4. I accept, as Mr Hassan says, that refusal of a stay will have serious consequences to the applicant, its employees and particularly to its students. Nonetheless those consequences have been occurring already for some four weeks.

5. What seems to me to be of particular importance as it did to Downes J, in Scott,[5] is the public interest in matters such as this. His Honour said:

   9.I think it is very important to take into account the public interest in matters such as this, even although, in the present case, it may not be that there are particular persons, in Australia in any event, who may wish to deal, particularly in financial circumstances, with Mr Scott on behalf of a corporation.

   10.Nevertheless, I think it is important to note that the regulator which has supervisory control, at any event subject to appeal to the Administrative Appeals Tribunal, over the conduct of directors and managers, has made an adverse decision and all other things being equal, the public is entitled to the protection of such a decision. I note that the public interest is a substantial concept lying behind the whole of the Corporations Act and its provisions and, as well, I note that s 41 of the Administrative Appeals Tribunal Act requires the interests of persons who may be affected to be taken into account, which, in principle, directs attention to the interests of the public.

   The objects of the National Vocational Educational and Training Regulator Act demonstrate that the public interest underlies that Act.

   [5] At [9] & [10].

6. On reflection, I consider that Mr Pritchard is right to say that the issue of the production of the student files is something of a distraction (although he expressed it more colloquially). What is more significant is that a stay will permit the applicant to continue to provide training to persons in, for example, early childhood education, aged care and security, where the regulator has identified serious deficiencies in the provision of that training and where the applicant has never disputed the accuracy of the findings nor, until the day before the hearing, taken steps to rectify the deficiencies identified. A perusal of the audit report, and the deficiencies, shows that a stay would perpetuate an apparently flawed system where, amongst other concerning matters, it appears that training is delivered by persons whose qualifications to conduct that training could not be demonstrated at audit and have not been demonstrated since, despite ample opportunity to do so. Some of the deficiencies are identified in paragraphs 94 and 96 of the Authority’s original submissions.[6] I need not recite those matters.

   [6]Exhibit 4.

7. The interests of students and prospective students, and of members of the public who might be affected by those trained by the applicant, very much tell against the grant of a stay, as does the overall public interest in having a properly regulated system of vocational training.

8. If granted, a stay would not have any particular consequence for the Authority however I think it is right to observe that there may be an adverse effect on the Authority’s dealings with other organisations in circumstances where the applicant has, for all practical purposes, ignored the regulator over many months. It would be wrong to appear to encourage the belief that a training organisation may ignore the Authority’s requests for information and be permitted by the Tribunal to continue operating unaffected.

9. Whether a review application, if successful, would be rendered nugatory if a stay were not granted would depend, in large measure, on how soon the applicant could be ready for hearing. It would not be rendered nugatory if the applicant was in a position to prosecute its case promptly and efficiently. That would be expected whether a stay was granted or not, however the applicant’s history to date does not leave me with any confidence that it would or could prosecute the proceedings promptly or efficiently. I say that despite the efficiency displayed by its current legal practitioners. It is not their efficiency or diligence that I doubt.

10. Finally it is the case that the applicant has been unable to carry on business now for some four weeks. I infer that a significant disruption to the applicant’s business has already occurred.

11. Ultimately I have come to the conclusion that I should refuse the application for a stay. I will though discuss with the parties directions designed to bring the matter on for hearing (if not earlier resolved) at the earliest opportunity. The Tribunal can make hearing time available whenever it is required.

I certify that the preceding 38 (thirty -eight) paragraphs are a true copy of the reasons for the decision herein of Deputy President PE Hack SC

......................[Sgd]..................................................

Associate

Dated 1 December 2014

Date of hearing	27 November 2014
Counsel for the Applicant	Ms CE Currie
Solicitors for the Applicant	Slater & Gordon Lawyers
Advocate for the Respondent	Mr J Pritchard, Australian Skills Quality Authority