Chemcert Training Group and Australian Skills Quality Authority
[2019] AATA 313
•4 March 2019
Chemcert Training Group and Australian Skills Quality Authority [2019] AATA 313 (4 March 2019)
Division:GENERAL DIVISION
File Number(s): 2019/0179
Re:Chemcert Training Group
APPLICANT
AndAustralian Skills Quality Authority
RESPONDENT
DECISION
Tribunal:Chris Puplick AM, Senior Member
Date:4 March 2019
Place:Sydney
The application for a stay of the decision of ASQA made on 30 November 2018 and notified to the Applicant on 17 December 2018 not to grant the Applicant a shorter period of time in which to lodge its application for renewal of registration as an RTO is stayed pending the determination of the Tribunal at a hearing on the merits of the application.
..........................[sgd].............................................
Chris Puplick AM, Senior Member
CATCHWORDS
PRACTICE AND PROCEDURE – application to stay decision of Australian Skills Quality Authority – registered training organisation – where applicant failed to lodge application for renewal of registration more than 90 days before registration was due to expire – decision not to determine shorter period for making an application for renewal of registration – registration date elapsed – training organisation no longer registered – whether stay of decision can be granted in light of circumstances – practical effect of granting stay considered – prospects of success – consequences for Applicant – public interest – consequences for parties – whether review would be rendered nugatory – stay application granted
LEGISLATION
Administrative Appeals Tribunal Act 1975
National Vocational Education and Training Regulator Act 2011
CASES
Australian Tertiary Academy Pty Ltd v Australian Skills Quality Authority [2018] AATA 4875
Civil Aviation Safety Authority v Hotop [2005] FCA 1023
Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409
Mantra Training and Development Pty Ltd v Australian Skills Quality Authority [2019] AATA 66
Panganiban and Australian Securities & Investments Commission [2016] AATA 703
Real Training Outcomes v Australian Skills Quality Authority [2018] AATA 4611
Scott v Australian Securities and Investments Commission [2009] AATA 798
Technical Education Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 3047
REASONS FOR DECISION
Chris Puplick AM, Senior Member
4 March 2019
On 30 November 2018, the Australian Skills Quality Authority (ASQA), as the national regulator under the National Vocational Education and Training Regulator Act 2011 (the NVR Act) made a decision to refuse a request by Chemcert Training Group (the Applicant) not to allow it a shorter period for making an application for renewal of registration under the NVR Act as a registered training organisation (RTO).[1]
[1] Respondent’s Statement of Reasons dated 14 February 2019 at [1].
This decision was recommended to a meeting of ASQA Commissioners on 12 December 2018,[2] affirmed by them and signed off by the Chief Commissioner. It was formally notified to the Applicant on 17 December 2018.[3]
[2] Section 37 Tribunal Documents at [34] and Respondent’s Supplementary Submissions on Request of Stay dated 26 February 2019 at [3].
[3] Section 37 Tribunal Documents at [38].
ANTECEDENTS
The Applicant was first registered by the competent NSW authority in February 2003 and then registered with ASQA in July 2011 and again in January 2014. The ASQA registration expired on 23 January 2019.
The Applicant was notified by ASQA on 23 July 2018 and 23 September 2018 that its registration would expire on 23 January 2019 and that it had, under the requirements of the NVR Act until 25 October 2018 (that is 90 days prior to the expiry date) to submit an application for re-registration.[4]
[4] Section 37 Tribunal Documents at [34].
Section 31 of the NVR Act provides:
31 Renewal of registration
(1) The National VET Regulator may renew an NVR registered
training organisation’s registration under section 17 if the
organisation makes an application for renewal:
(a) at least 90 days before the day the organisation’s registration
expires; or
(b) within such shorter period as the Regulator allows.
The Applicant failed to lodge a renewal application by the due date and on 16 November 2018 it applied to ASQA to allow it a shorter time in which to lodge such an application (NVR Act s 31(1)(b)).
The Applicant emailed ASQA as follows:
“Could you please allow us to re-register ChemCert Training Group RTO 90855.
Unfortunately, we have had some delays in relocating our office to Chatswood and which in turn delayed a Board meeting.
To confirm the Directors the desire to continue as a registered training organisation.
My apologies!”[5]
[5] Ibid at [30]-[31].
The email was signed by Mr Brian Halse, the applicant’s Chief Executive Officer.
The explanation for delay related to the relocation of offices was repeated in a further email from Mr Halse dated 19 November 2018.[6]
[6] Ibid at [30].
On 4 December 2018 Mr Halse submitted a further document in which he explained that the delay was occasioned by “a simple mistake with the inputting into my calendar” and that furthermore he had undertaken a significant period of compassionate leave from the company to deal with major traumatic health issues involving his stepson.[7]
[7] Ibid at [32]-[33].
Despite these representations, ASQA made a decision on 17 December 2018 not to allow the Applicant a shorter period of time (i.e. beyond 25 October 2018) in which to submit a renewal application. In their considerations, the ASQA Commissioners had before them a submission which drew attention to several matters, including, inter alia:
· “Reasons for not lodging on time: Miscalculation of 90 day cut off + prolonged family health issue
· Reminder notices were sent to the current CEO email address on 23 July and 23 September 2018
· RTO’s request to ASQA arrived about three weeks late after the lodgement period closed
· Regulatory history:
o 3 complains in past two years – all finalised
o Commissioner-directed compliance audit on 13 April 2018 to follow up on 2015 audit findings – compliant at audit, closed 29/5/18 and invoice paid
o Annual registration invoices paid on time
o Registration expired in 2013 without having applied for renewal; but was permitted to re-register by Commissioners.”[8]
[8] Ibid at [34]-[35].
The reference to events in 2013 is to the fact that on that occasion the Applicant (although under a different management) failed to lodge a renewal application for a period of some five months (19/2/13 to 8/7/13). In granting a renewal after such a lengthy period of defalcation, the Chief Commissioner hand-wrote on the relevant document:
“Agree that all RTOs in situation have this recorded and that such RTOs will not be given any further dispensation.”[9]
[9]Ibid at [26].
It is thus apparent from the record that the Applicant had a serious previous breach of its compliance requirements in relation to an earlier re-registration application and that at the time they were granted a late registration the Chief Commissioner made a notation that such dispensations would not be available again at some future date. It is also apparent that the Commissioners were aware of the reasons proffered for the late submission and that they did not otherwise have in front of them any adverse findings against the Applicant in relation to audit or payment matters. It was on this basis that they proceeded to make their refusal decision.
On 17 December 2018 the Applicant was notified of the ASQA decision and provided with advice that its immediate options were to make a new application for what would be, in effect, an initial registration or in the alternate to appeal the decision to the AAT.
However on 8 January the Applicant made a submission seeking a reconsideration of the Commissioner’s decision. As is explained below this option was not, at any stage, available to the Applicant who was so advised by ASQA on 9 January 2019.
NATURE OF REVIEWABLE DECISION
The decision itself was made at an ASQA Commissioners’ meeting and signed off by the Chief Commissioner.[10] Thus, under the provisions of the NVR Act, this decision, not having been made by a delegate but by the Chief Commissioner, no internal review of that decision was available to the Applicant.[11] The only avenue of review of that decision provided for in the NVR Act is to this Tribunal[12] and such an application was lodged by the Applicant on 11 January 2019.
[10] Section 37 Tribunal Documents at [37]. Under s. 179(2) of the NVR Act, the Chief Commissioner is also the Chief Executive of ASQA whose actions are taken to be those of the organisation itself – s. 189(2).
[11] NVR Act ss 200(1) and 224.
[12] NVR Act s 203(2).
For the reasons outlined above, the argument advanced by the Respondent[13] that they had a right to have the original decision reviewed internally within ASQA is not sustainable.
[13] Applicant’s Submission dated 22 February 2019.
TRIBUNAL PROCEEDINGS
On 11 January 2019 the Applicant lodged an appeal with the Tribunal and, on 23 January 2019, in line with the ASQA decision not to grant a variation of time, the Applicant’s registration expired and it ceased to be an RTO.
The appeal lodged with the Tribunal in fact consisted of two separate appeals. The first was for a review of the 17 December 2018 decision on the basis that:
· “ASQA failed to take into account the discretion afforded it under section 31(1)(g) (sic)[14] of the NVERT Act
· CHEMCERT was 23 days late with their application of the registration (sic)
· ASQA did not take into account extenuating circumstances which affected the CEO which was presented in a submission to ASQA on Tuesday 8 January 2019.”
[14] The reference should be to section 31(1)(b).
The second was an application for a Stay Order under s 41(2) of the Administrative Appeals Tribunal Act 1975 (AAT Act). In this application what was sought was:
· “Order sought to stay a decision to de-register CHEMCERT
· To determine a shorter period in which to lodge a renewal of registration.”
The Applicant is obviously under a misapprehension as to the first of these matters since there never has been a decision to de-register the Applicant. It has ceased to be an RTO automatically upon expiry of its registration.
ASQA was notified of the Stay application and indicated its opposition (by notice dated 25 January 2019) on the basis that: “Granting of a stay in this matter does not assist the Applicant as its registration has expired.”
The Stay application came before the Tribunal for interlocutory hearing on 21 February 2019. At that stage the Tribunal expressed an opinion that the material submitted to that date by the Applicant was deficient in a number of respects in that it failed to provide details about student numbers, finances and other issues which the Tribunal regarded as necessary for it to make its decision. The Applicant was granted a period of time in which to lodge additional material and the Respondent was granted additional time in response. Both parties made detailed further submissions and the interlocutory hearing resumed on 27 February 2019 to determine the Stay application.
STAY APPLICATIONS
Stay applications are made in accordance with the provisions of s 41(2) of the AAT Act which is in the following terms:
The Tribunal may, on request being made 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.
In dealing with stay applications, the Tribunal is generally guided by the principles laid down by its then President, Downes J as follows:
“ [4] Application having been made for a stay of proceedings under s 41 of the Administrative Appeals Tribunal Act 1975, it is nevertheless incumbent upon me now to consider whether a stay is appropriate. In considering the application, it is appropriate for me to consider a range of matters, including:
·The prospects of success.
·The consequence for the applicant of the refusal of a stay.
·The public interest.
·The consequences for the respondent in carrying out its functions depending upon whether a stay is granted or not.
·Whether the application for review would be rendered nugatory if a stay were not granted.
·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."[15]
[15] Scott v Australian Securities And Investments Commission [2009] AATA 798.
Reflecting the terms of s 41(2), the primary emphasis relating to stay applications is summed up in the decision of Senior Member Taylor SC as follows:
(6) The Tribunal has the power to stay the operation or implementation of a reviewable decision, to the extent that it considers appropriate, “for the purpose of securing the effectiveness of the hearing and determination of the application for review”: AAT Act s 41(2). The power permits the Tribunal to impose conditions upon, and to determine the period of any stay: AAT Act s 41(6). Exercise of the discretionary power is preconditioned on the Tribunal taking into account “the interests of any persons who may be affected by the review”.[16]
THE APPLICANT’S POSITION[17]
[16] Panganiban and Australian Securities & Investments Commission [2016] AATA 703.
[17] Chemcert’s Submission in support of a Stay of decision under review, submitted 22 February 2019 – attachment.
In relation to the criteria outlined by Downes J, the Applicant submits that:
1.It would have every prospect of success at a merits-hearing on the basis that it has met all audit and financial requirements, has committed no breaches of standards and never been subject to any ASQA-imposed conditions;
2.That were a stay refused this would threaten the financial viability of the Applicant and have a major impact upon both current students and upon 11 permanent employees and 15 trainers/assessors;
3.In relation to matters of public interest, the Applicant claims that given the nature of its courses (which relate in large part to the safe use of chemicals within the agricultural sector), their forced withdrawal from the educational arena would have a negative impact on an important part of the national (rural) economy.
4.As outlined in relation to (2) above, there would be a significant negative impact upon the company’s operations and upon those students enrolled already in any third-party sponsored courses;
5.Any appeal would be rendered nugatory given that, without an extension of the registration period the Applicant would ceased to have exist as an RTO capable of defending its position; and
6.The personal circumstances of the CEO of the Applicant, being a material fact in the delay having taken place, should be taken into account and, combined with the relatively short period of failure to lodge (23 days) accorded some weight.
In relation to these matters, the Tribunal notes that the Applicant appears to be in a relatively strong financial position with significant net assets and a considerable operating surplus as at 30 June 2018.[18] There is some lack of clarity as to the actual numbers of students currently in various stages of their education with the third-party provider.[19] Finally the internal ASQA document of 12 December 2018 evidences that the Commissioners were aware of the personal circumstances of the CEO when they made their refusal decision.
ASQA’S POSITION[20]
[18] Figures are provided in Attachment C to Statement of Mr Brian Halse dated 22 February 2019.
[19] Ibid at para [6] and [8]. ASQA: (Supplementary) Submissions on Request for Stay, dated 26 February 2019.
[20] ASQA: (Supplementary) Submissions on Request for Stay, dated 26 February 2019.
ASQA draws attention to the previous failure of the Applicant (in 2013) to lodge a renewal application on time. It notes that while there may have been a change in personnel the company concerned remains one and the same. On this point it also emphasises that good governance in an RTO would not leave such decisions dependent upon the efforts of simply one person, particularly when the Board of Directors were granting him leave to attend to urgent family matters. It asserts, with some validity, that the maintenance of registration is a key responsibility of any company Board carrying out its proper role of due diligence.
ASQA questions statements made by the Applicant about potential threats to the company’s financial viability and reiterates its point that the company is still in a position to apply for a fresh registration and to resume its previous operations. In this regard it cites tribunal authority to the effect that applicants for a stay should be able to provide more detailed support for claims that any course of action would impact upon the applicant’s financial viability.[21]
[21] See Technical Education Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 3047.
This point needs to be considered in the light of the fact that the courses offered by the Applicant are almost exclusively one-day courses rather than being spread over a longer period of time. (Some e-portal courses may take place over a longer period.)
ASQA acknowledges that their audit of May 2018 found no issues for further action but that a later internal audit undertaken by the Applicant itself identified a number of matters which might need remediation.
ASQA also, rightly, draws attention to the impact that any grant of stay might have upon other RTO’s in terms of their attitudes towards compliance with re-registration requirements. In Mantra no 2 the Tribunal stated:
“A further aspect of prejudice, however, arises from the need for ASQA to establish a proper basis for the operation of section 31 for all RTOs. It is apparent that it will be common, if not almost universal, that an RTO that misses the 90-day deadline for applying for renewal and then seeks the benefit of the shorter period for making an application will face dire consequences if that shorter period is denied, just as Mantra did. In virtually every case, it seems, the RTO will be faced with the expiry of its registration, with the consequence that it could not continue operating. This may well happen at the most inopportune time, when students are enrolled and part way through their courses. Faced with that outcome in virtually every case (except perhaps cases where an RTO’s registration expires just as the academic year ends), ASQA is clearly in a difficult position: grant the shorter period for making an application, and the 90-day period allowed by the legislation disappears and other RTOs come to learn that they can rely on ASQA to allow the shorter period in every case; deny it and the RTO may fall by the wayside with severe consequences for students and staff. That choice is a difficult one unless it is obvious that the RTO has in any case no chance of success in the renewal process. But in a case such as the present, where Mantra’s departure from what is expected is quite apparent, if the shorter period is granted every RTO will know that an exception is likely in every case, not just those where there is a good reason for granting it. For those reasons, there is significant prejudice to ASQA were the shorter period to be granted.”[22]
[22] Mantra Training and Development Pty Ltd v Australian Skills Quality Authority [2019] AATA 66 (Mantra no. 2) at [43].
This echoes a previous decision of the Tribunal in Australian Tertiary Academy where it held that:
“While the focus is presumably on securing the compliance of a particular applicant. ASQA is entitled to look beyond the effect of its decision on the RTO in question. ASQA is also concerned with the need to promote compliance by other RTOs’ who might be influenced by how ASQA deals with a particular RTO.”[23]
[23] Australian Tertiary Academy Pty Ltd v Australian Skills Quality Authority [2018] AATA 4875 at [39].
ASQA advances an important consideration in terms of what might be the practical effect of a stay being granted to an organisation whose registration has ceased by virtue of the operation of the NVR Act itself rather than by any decision made by ASQA.
Unlike several previous stay applications considered by the Tribunal where although the date of re-registration had passed, at the time of the stay application’s consideration the applicant was still registered as an RTO, in this instance that date has also passed and the Applicant is no longer registered. Its registration has expired.[24]
[24] Mantra Training and Development Pty Ltd v Australian Skills Quality Authority [2019] AATA 66 (Mantra no. 2); Real Training Outcomes v Australian Skills Quality Authority [2018] AATA 4611.
ASQA submits the following[25]:
12. Section 41(2) of the AAT Act provides for the making of "orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceedings relates" (emphasis added). The 'effect' of staying or not implementing "the decision" here is that no decision has been made to refuse a request for a shorter time to submit a registration renewal application.
13. However, the Applicant's registration expired on 23 January 2019. To the extent that the Applicant seeks a stay order to prevent or allow its registration to continue and or to therefore operate as a RTO, the order would have to go beyond the decision and extend the Applicant's registration period to allow a renewal application to be lodged. Section 31 would then continue that registration until ASQA 'decides' it. That appears to go beyond extending the stay order to affect the operation of acts or events that are ancillary to, or consequential upon, the decision under review; Australian Securities and Investments Commission v Administrative Appeals Tribunal (2009) (FCFCA)181 FCR 130 at [5] (ASIC AAT).
14. Characterised this way, it is ASQA's submission that involves more than what section 41(2) of the AAT Act permits.
15. The circumstances here are also to be distinguished from those decisions dealing with a stay of a decision not to renew registration such as in Aviation Safety Authority v Hotop [2005] FCA 1023; (2005) 145 FCR 232). Decisions such as Hotop provide authority for the proposition that a stay of a decision, for example, to refuse to renew a training organisation's registration under the NVR Act, means that its registration continues. Put another way, an order staying the operation of such decisions has the permissible effect of 'restoring' registration or, as in Yolbir v Administrative Appeals Tribunal (1994) 48 FCR 245, Mr Yolbir's pension.
16. When ASQA made its decision as under review, the Applicant had a period before its registration expired. To permit its continued operation as a RTO, the Applicant's recourse was, similar to that in Real Training Outcomes, to have that decision stayed before that time so in effect, reopening the window through which to lodge a renewal application and activating section 31 (3).
[25] ASQA Submission on Request for Stay of Decision under Review, dated 21 February 2019.
In a subsequent submission ASQA returns to this point:
“It remains ASQA’s position that if the Tribunal is satisfied that it is unable to grant effective relief at the ultimate hearing then it follows it has no power to make orders under section 41(2) of the AAT Act (Hotop at 240).”[26]
[26] ASQA Supplementary Submissions on Request for Stay, dated 26 February 2019 at [26].
As the Tribunal understands it, ASQA seeks to draw an important distinction between granting a stay where a “late” applicant was still an RTO and this case where the “late” application has been, in effect, overtaken by the actual expiry of the registration for which an extension of lodgement time was sought.
The Tribunal accepts that this distinction is a valid one and what it is being asked to do is not just to allow a “late” application to be lodged but, in fact, to restore a registration which has expired.
CONSIDERATIONS
Accepting ASQA’s point about the practical effect of a stay decision, the Tribunal is mindful of the fact that had the “late” application been permitted – that is, had the applicant been granted a shorter period of time in which to lodge – then the expiry itself would not have automatically taken effect, provide, of course, that ASQA considered and granted the re-registration.
To that extent, the Tribunal does not believe that it would be beyond its powers to grant such a stay and trigger the consequences which might flow from that.
The Tribunal understands the decision in Hotop to mean that it has the statutory authority to grant the relief sought by the Applicant. In particular it draws attention to the comment of Siopis J in that case to the effect:
“[43] I now deal with the question of whether the terms of s 41(2) of the AAT Act preclude the Tribunal from making an order which is ‘positive’ in effect, in the sense of making an order that, pending the hearing of the application, a review applicant may continue to enjoy a statutory benefit, which the impugned decision would otherwise have denied. I reject the submission of Senior Counsel for the applicant that s 41(2) of the AAT Act is to be construed so as to preclude the Tribunal from making orders that have a positive effect.”[27]
[27] Civil Aviation Safety Authority v Hotop [2005] FCA 1023.
There is no doubt that the Applicant displayed a degree of negligence in failing to submit their renewal registration on time and that this is made more egregious by the fact that this is not the first time they have so failed. However the time in question was not excessive and the reasons have some degree of credibility. Equally, the Applicant has, as far as can be ascertained, conducted itself properly as an RTO and not come to the attention of the regulator for any failings or non-compliance.
On the other hand ASQA has a right to insist on compliance with statutory requirements and has legitimate concern about making exceptions which may establish unhelpful precedents. It also has the right to determine that where particular RTOs have been given one previous chance they are not to be afforded another.
In the final analysis, stays should be granted only where the Tribunal considers (it) appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review and where it makes it decision after taking into account the interests of any persons who may be affected by the review.”
In coming to the “correct or preferable”[28] decision which the Tribunal is required to make, in this case, the Tribunal believes that the Applicant has established that were the matter to proceed to a merits review its application for the granting of a shorter period of time in which to have lodged its renewal application would have a reasonable prospect of success.
[28] Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at [69]-[70].
As it is not possible to determine when such a hearing may be scheduled in the Tribunal, failure to grant what amounts to a renewal of the Applicant’s registration pending that final decision would, in effect, render the application itself nugatory.
Section 41(2) of the AAT Act is designed to prevent that occurrence.
DECISION
The application for a stay of the decision of ASQA made on 30 November 2018 and notified to the Applicant on 17 December 2018 not to grant the Applicant a shorter period of time in which to lodge its application for renewal of registration as an RTO is stayed pending the determination of the Tribunal at a hearing on the merits of the application.
I certify that the preceding 50 (fifty) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member
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Associate
Dated: 4 March 2019
Date(s) of hearing: 21 and 27 February 2019 Date final submissions received: 26 February 2019 Advocate for the Applicant: Mr Stephen Stanton (by phone) Solicitors for the Applicant: Ms Anurag Kanwar, Oxcom Legal (by phone) Solicitors for the Respondent: Mr John Pritchard, ASQA (by phone)
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