Cogninet Resource Corner Pty Ltd and Australian Skills Quality Authority

[2019] AATA 5165

Cogninet Resource Corner Pty Ltd and Australian Skills Quality Authority [2019] AATA 5165 (29 November 2019)

Division:GENERAL DIVISION

File Number(s):      2017/6181 & 2017/6182

Re:Cogninet Resource Corner Pty Ltd

APPLICANT

AndAustralian Skills Quality Authority

RESPONDENT

DECISION

Tribunal:Senior Member D. J. Morris

Date:29 November 2019

Place:Melbourne

The Tribunal affirms the decision of Australian Skills Quality Authority (ASQA) on 13 September 2017:

(1)To reject the Applicant’s application for initial registration as a Registered Training Organisation under section 17 of the National Vocational Education and Training Regulator Act 2011; and

(2)Not to register the Applicant, under section 10 of the Education Services forOverseas Students Act 2000, to provide courses for overseas students.

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

Senior Member D. J. Morris

Catchwords

VOCATIONAL EDUCATION AND TRAINING – rejection of application for initial registration as a registered training organisation (RTO) – refusal to register applicant to provide a course to overseas students – evidence regarding proposed site of organisation to conduct training and assessment – evidence regarding training and assessors – suitability of proposed CEO – decisions under review affirmed

Legislation

Administrative Appeals Tribunal Act 1975 (Cth), ss 37, 38AA
Education Services for Overseas Students Act 2000 (Cth), s 10

National Vocational Education and Training Regulator Act 2011 (Cth), s 17

Cases

Technical Education Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 3047

REASONS FOR DECISION

Senior Member D. J. Morris

29 November 2019

BACKGROUND

1. On 26 December 2016, the Australian Skills Quality Agency (ASQA) received from the Applicant an application for registration of Cogninet Resource Corner Pty Ltd (the Company) as a Registered Training Organisation (RTO) under section 17 of the National Vocational Education and Training Regulator Act 2011 (Cth) (the NVR Act), and an application for the company to be a registered provider of a course for overseas students under section 10 of the Education Services for Overseas Students Act 2000 (Cth) (the ESOS Act), known as Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) registration.

2. In both applications, the company request encompassed only one course, namely BSB50215 Diploma of Business.  The address proposed for the delivery of this course was Unit 2, 15 Anderson Street, Fortitude Valley in Queensland and the Applicant proposed that 400 students was the maximum capacity for that site.

3. On 1 March 2017, ASQA emailed the Applicant with a notice of audit and requested further information by 15 March 2017, which the company provided.  On 29 March 2017 an ASQA officer conducted a site audit at the premises in Anderson Street and the officer was provided with other material, including a course entry test, organisational chart and tax invoices.  On 30 May 2017 ASQA emailed a request for further information to the Applicant on the basis that ASQA had received ‘multiple applications from organisations for registration as an RTO with the same address and location as the Applicant’ (see the Respondent’s Closing Submissions, dated 1 April 2019).  The information was provided on 6 June 2017 and reviewed by ASQA.

4. ASQA identified ‘non-compliances’ which were particularised in two audit reports, an audit report-CRICOS and an audit report-VET. On 13 June 2017 ASQA emailed non‑compliance notices to the company and invited the Applicant to provide rectification evidence by 11 July 2017, which it did.  ASQA then reviewed the evidence provided and decided that the Applicant was still not compliant with clauses 1.3, 7.1, 7.2 and 8.1 of the Standards and Standard 14.1 of Part D of the National Code.

5. On 13 September 2017, ASQA rejected both applications and on 18 September 2017 the Applicant was notified of the two decisions and provided with audit reports detailing what the Respondent describes as ‘non-compliances’.

6. The Applicant has brought the two decisions to the Tribunal for review.  The hearing was held on 4 March 2017.  The Applicant was represented by Ms Renee Sion, of Counsel, instructed by GPZ Legal Pty Ltd.  The Respondent was represented by Mr Damian Cox, a legal officer of ASQA.  Mr Prabal Barua, a director of the company, gave evidence on behalf of the Applicant and was cross-examined.  The Tribunal admitted into evidence documents provided by ASQA in compliance with section 37 and section 38AA of the Administrative Appeals Tribunal Act 1975 (Cth) (T-documents). The Tribunal also admitted into evidence a number of documents, which are listed in the Appendix to these reasons. At the conclusion of the hearing, the Tribunal gave leave for the parties to make written closing submissions, which they did and which are taken into account in these reasons.

   THE RESPONDENT’S SUBMISSIONS

7. ASQA submitted that the Applicant provided false or misleading information to it, specifically that the company had not provided accurate and factual information regarding the intended delivery location for the course, and the nominated trainers and assessors.  In addition, ASQA submitted that the fit and proper declaration provided by the company for Mr Don Giles (a proposed trainer) did not disclose Mr Giles’ involvement with another RTO, Australian Rail Training Pty Ltd, at the time that the RTO’s registration was cancelled by ASQA.

8. ASQA also submitted that the company has not demonstrated that it satisfies the Financial Viability Risk Assessment Requirements laid down in the legislation, in particular that the Applicant has not provided accurate and factual estimations or its forecast annual turnover and how this turnover apparently increased when the student capacity was halved.

9. ASQA submitted that the Applicant has not demonstrated compliance with the Standards of the National Code and, finally, that the Company has not satisfied the registration requirements contained in section 11 of the ESOS Act, specifically that it has not satisfied the agency that its principal purpose is to provide education.

10. In terms of the provision of trainers and assessors, ASQA said that the Applicant advised that the four trainers and assessors to deliver the course would be: Mr Alaric Acosta,      Mr Hemayet Uddin, Ms Sheenal Ashni Chand and Mr Pushkar Baral.  When the ASQA officer visited the Anderson Street premises, the officer interviewed Mr Acosta and Mr Uddin.  Mr Acosta said he had recently moved from Sydney to Brisbane and would relocate his family to Brisbane should the Applicant receive registration as an RTO.  Mr Uddin said he was still located in Sydney but would relocate should registration be approved.

11. ASQA submitted that three of these persons were also registered as trainers for another RTO, namely Training Organisation NSW Pty Ltd, which is located in Parramatta.        That organisation had provided advice to ASQA in terms of its CRICOS registration that Mr Acosta, Mr Uddin and Ms Chand undertake face-to-face training from 9a.m. to 6p.m., from Monday to Friday, in Parramatta, New South Wales, and that the Cogninet Resource Corner Pty Ltd also identified that these same four people would provide face‑to-face training from 9.00a.m. to 6.00p.m. for it, in Fortitude Valley, Queensland.

12. ASQA also submitted that the physical facilities at the Anderson Street premises comprised of two classrooms with an open entrance (with no door) to a third room which could be used as a classroom, and that each room appeared to have ‘a couple of power points’, which would not support the needs of 20 or 30 students per classroom.         ASQA stated that the Applicant said there were plans for remedial work to the facilities but did not give a timeline for completion, or the work proposed to be done.

13. The Respondent contended that the Audit report prepared by ASQA indicates a history of the Applicant providing incomplete, inaccurate and confusing information concerning its operations.  Mr Cox submitted that the Tribunal cannot be satisfied that Mr Barua will ensure that the Applicant complies with its obligations into the future ‘given he does not appear to understand how to operate a business and that he has provided incomplete, inaccurate or confusing information in his applications for initial registration of an RTO under section 17 of the NVR Act and for initial registration as a CRICOS provider under section 10 of the ESOS Act.’  The Respondent further submitted that the person proposed by the Applicant to be Chief Executive Officer of the RTO, Ms Medcalf, ‘does not have the skills, qualifications and experience to ensure that the Applicant would comply with all its operations into the future.’

14. In respect of the persons proposed to be trainers and assessors, the Respondent submitted that each has been nominated to be a trainer and assessor in relation to a number of current RTOs and a number of recent initial applications for VET and/or CRICOS registration.  As examples, Mr Acosta has been nominated in relation to five other RTOs, four based in New South Wales and one based in Queensland; Mr Uddin has been nominated in relation to two other RTOs, one in Queensland and one in New South Wales; Mr Baral has been nominated in relation to three other RTOs, all in New South Wales; and Ms Chand has been nominated in relation to one other RTO, in Parramatta, New South Wales.

15. Significantly, the Respondent submitted that Mr Acosta, Mr Uddin and Ms Chand have all been identified in material submitted to ASQA as undertaking face-to-face training for these other interstate RTOs from Monday to Friday in the hours 9.00a.m. to 6.00p.m.

16. The Tribunal notes Mr Barua’s evidence that Mr Giles’ involvement with the company has been ‘terminated’.

    CONSIDERATION

17. It is significant to the Tribunal that three of the persons who are nominated as assessors and trainers by the Applicant are proposed to be offering face-to-face training in Brisbane at the Anderson Street premises of the company when they are also, apparently, providing face-to-face training for other RTOs interstate.

18. In the Applicant’s submissions in reply following the hearing, dated 10 April 2019, the Applicant stated:

    Mr Barua’s evidence on the topic of delivery location went largely unchallenged before the Tribunal.  Mr Barua confirmed that the Applicant proposed to deliver its training from premises at Unit 2, 15 Anderson Street, Fortitude Valley, Queensland.  Mr Barua gave evidence that an original copy of the lease was executed in 2016 and submitted to ASQA at the time of initial registration, and that it has thereafter secured an extension to the lease to 30 June 2022.

19. In its written closing submissions dated 1 April 2019, ASQA advised that it has received:

    …a number of other VET registration applications for Unit 2, 15 Anderson Street, Fortitude Valley, Queensland, including: Education Investments Australia Pty Ltd; The College (AUS) Pty Ltd; The Training College Company (AUS) Pty Ltd.

20. It does not seem plausible, in the Tribunal’s consideration, given the evidence advanced by the Applicant about the physical nature of the Anderson Street premises                   (i.e. two classrooms and one other room), for at least four RTOs to operate in the same space.

21. So, the problem for the Applicant is that he has been unable to satisfy the Tribunal that he has trainers and assessors available when many of them would appear at this time to be employed delivering courses and teaching in another State, and, accepting that he has provided proof of a lease for the Anderson Street premises to the satisfaction of the Tribunal, he has also been unable to satisfy me that the company will be able to carry out its training obligations under the legislation in a space that is, apparently, to be shared with at least three other RTOs.

22. In terms of the suitability of Ms Margaret Medcalf, who has been nominated by the Applicant to be the CEO, the Tribunal notes that ASQA has merely submitted that it remains ‘unclear’ if she is sufficiently qualified and is vested with sufficient authority to ensure that the RTO complies with the legislative obligations required of it.

23. The Respondent submitted that as Ms Medcalf was not called to give evidence, the Tribunal is entitled to draw an adverse inference from this failure, citing Technical Education Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 3047. In that matter Senior Member Cameron relevantly said, after discussing the writing of the Hon. Sir Oliver Gillard in Wigmore on Evidence, at [101]:

    Sir Oliver noted that the effect of a party failing to call a witness (or produce other evidence such as a document) that would be expected to be available to such party and who in the circumstances would have close knowledge of the facts on a particular issue, would be to increase the weight of the proof given on such issue by the other party and to reduce the value of the proof given by the party failing to call the witness, or produce the document in evidence.

24. The Tribunal, with respect, agrees with the conclusions drawn by the learned Senior Member.  However, the distinction in this matter is that Ms Medcalf was available to be called, and telephone contact with her was attempted a number of times during the hearing for her to give evidence.  Counsel for the Applicant said she was available the following day (the hearing had been listed for two days), but the Respondent did not press the matter.

25. In the light of this, I consider it would be unreasonable for me to come to any adverse conclusions about Ms Medcalf’s relative suitability to be a CEO.  However, I am also not satisfied, in a positive sense, that the Applicant has made out to an adequate standard that Ms Medcalf, merely by having been involved in preparing documentation for Mr Barua, necessarily has displayed the requisite skills that need to be satisfied for me to be comfortable that she understands the obligations required of a CEO of an RTO.  But I emphasise that I do not make an adverse finding against her, in a personal sense.

26. In terms of the résumé that Mr Barua drafted and posted on the Internet, it is troubling to me that it was, at best, vague about the nature and extent of his involvement in the past with other RTOs and, at worst, it could be taken to have been selective to the extent of misleading readers, including ASQA.  In answer to direct questions from the Tribunal,    Mr Barua agreed that several claims in his résumé were not correct.  It was telling that   Mr Barua conceded that he has been involved in the past with a number of RTOs which have closed down because of compliance problems, but he omitted reference to these in the résumé he submitted to the Respondent with the papers relating to the application for initial registration.

27. The Tribunal was left with the impression that he included puff in his Internet résumé with the deliberate aim of giving an impression of more extensive experience and involvement to readers of his curriculum vitae. I do view adversely that the selectivity of the background Mr Barua provided to ASQA attempted to paint a picture which was misleading.  However, I am not satisfied that there is sufficient material before the Tribunal for me to make a finding that he is not a fit and proper person in terms of the requirements in the Act.

    CONCLUSION

28. Having considered the written submissions, the evidence given at the hearing, and the comprehensive submissions made by each party after the conclusion of the hearing,     the Tribunal is satisfied that the decision under review should be affirmed.

29. The Tribunal is not satisfied that Mr Barua has exhibited an understanding of the obligations he must meet for initial registration of the Applicant as an RTO.  It may be that, in part, he has good intentions in regard to compliance, but good intentions are not enough. 

30. While I may be satisfied that the lease for the Anderson Street property is genuine, I am significantly troubled by the evidence that several other RTOs are proposed to operate from the same premises.  Fatally for the Applicant’s case, it simply cannot be possible that the assessors and trainers named will be able to provide training in two places, in different States, at the same time.  No evidence to my satisfaction was advanced by the Applicant to respond to this conundrum.

31. If the Applicant is seeking registration as an RTO, it needs, at the very least, to be able to provide trainers and assessors who are able to act, and who are not otherwise occupied.  The Respondent submitted that the Tribunal may, as an alternative to affirming the refusal of initial registration decision, approve initial registration subject to stipulated conditions.  The Tribunal has considered this course but considers that the whole of the contents of the Applicant’s application have the quality of being too parlous. 

32. In summary, the adequacy of available trainers and assessors, the adequacy of premises, proof of financial viability (particularly with the widely fluctuating numbers of proposed enrolees which halved from the numbers first proposed of 400 to 200 without a corresponding explanation of the change in income) and inconclusive evidence about the qualifications of the proposed Chief Executive Officer and satisfaction that the person would fully understand the obligations required under the NVR Act, all undermine my confidence that initial registration, even registration subject to a range of rigorous conditions, could be permissible while adhering to the statutory principles set out in the legislation.

33. A solution for the Applicant is to prepare a more comprehensive application which better responds to the expected requirements of an RTO for ASQA’s consideration, and make a fresh application that can then be considered. 

    DECISION

34. The Tribunal affirms the decisions of ASQA on 13 September 2017 to reject the Applicant’s application for initial registration as an RTO under section 17 of the NVR Act. The Tribunal also affirms the decision of ASQA on 13 September 2017 not to register the Applicant, under section 10 of the ESOS Act, to provide courses for overseas students.

1.        

2.       I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for the decision herein of Senior Member D.J. Morris.

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

Associate

29 November 2019

Dates of stay hearing:  4 March 2019

Date final submission received:        12 April 2019

Counsel for Applicant:  Ms Renee Sion

Solicitors for Applicant:  GPZ Legal

Solicitors for Respondent:                 Mr Damian Cox, Legal Officer, ASQA

APPENDIX – LIST OF EXHIBITS

R1      T-documents Volume 1 (pages 1-288), lodged 23 November 2017

R2      T-documents Volume 2 (pages 289-425), lodged 25 September 2018

R3      T-documents Volume 3 (pages 426-462), lodged 26 September 2018

R4      Company extract for Cogninet Australia, dated 26 February 2019

R5      Company extract for Cogninet Resource Corner Pty Ltd, dated 26 February 2019

R6      Company extract for Resource Corner Pty Ltd, dated 26 February 2019

R7      Company extract for Raoul Pty Ltd, dated 26 February 2019

R8Extract from Charles Institute of Technology titled ‘Policies and Procedures’, lodged on 4 March 2019

R9Extract from Fast Track Training titled ‘Section Three – Continuous Improvement’, lodged on 4 March 2019

A1Affidavit of Prabal Barua dated 14 February 2019, sworn on 4 March 2019

A2Affidavit of Prabal Barua dated 8 November 2018 (with attachments)

A3Affidavit of Prabal Barua dated 4 March 2019 (with attachments)

A4Lease from Gantry Nominees Pty Ltd to Cogninet Resource Corner Pty Ltd, dated 1 June 2017