Inbalance Motorbike Training Pty Ltd v Chief Executive, Department of Transport and Main Roads
[2017] QCAT 418
•28 November 2017
CITATION: | Inbalance Motorbike Training Pty Ltd v Chief Executive, Department of Transport and Main Roads [2017] QCAT 418 |
PARTIES: | Inbalance Motorbike Training Pty Ltd |
| v | |
| Chief Executive, Department of Transport and Main Roads (Respondent) | |
APPLICATION NUMBER: | GAR021-17 |
MATTER TYPE: | General administrative review matters |
HEARING DATE: | 13 November 2017 |
HEARD AT: | Brisbane |
DECISION OF: | Member Cranwell |
DELIVERED ON: | 28 November 2017 |
DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The decision of the Chief Executive, Department of Transport and Main Roads to cancel the approval of Inbalance Motorbike Training Pty Ltd as a Registered Service Provider is confirmed. |
CATCHWORDS: | ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – review of decision by respondent to cancel the approval of the applicant as a Registered Service Provider under the Transport Operations (Road Use Management) Act 1995 (Qld) PROFESSIONS AND TRADES – LICENSING OR REGULAITON OF OTHER PROFESSIONS, TRADES OR CALLINGS – OTHER PROFESSIONS, TRADES OR CALLINGS – cancellation of approval as registered service provider for Q-Ride training Queensland Civil and Administrative Act 2009 (Qld), s 19, s 20 |
APPEARANCES: | |
APPLICANT: | Mr M Kehoe of Counsel, instructed by SPC Lawyers |
RESPONDENT: | Mr D de Jersey of Counsel, instructed by RBG Lawyers |
REASONS FOR DECISION
Inbalance Motorbike Training Pty Ltd (Inbalance) was approved by the Department of Transport and Main Roads as a Q-Ride Registered Service Provider (RSP). The director of Inbalance is Mr Bradley Hall.
Inbalance subcontracted with a number of Accredited Rider Trainers (ARTs). Two of these ARTs were Mr Ian Singleton and Mr Justin Singleton (the Singletons). Mr Hall is also an ART. The Singletons carried out their work as ARTs at premises approximately two kilometres away from the premises used by Mr Hall.
Following a covert operation by the Queensland Police Service, the Singletons were alleged to have been issuing Q-Ride certificates to persons who had not completed the training and assessment according to the
Q-Ride Competency Standards. In particular, the statement of Senior Constable Deborah McDougall records that:
a)she observed the Singletons’ premises on several occasions;
b)
training records completed by the Singletons indicated that
13 learners had received several hours of training; and
c)based on Ms McDougall’s observations, the learners had either attended the premises for a matter of minutes or had not attended the premises at the date and time recorded on the training records.
The Singletons were subsequently arrested and charged with offences relating to the fraudulent obtaining of motorcycle licences. The characterisation of the Singletons’ conduct as fraudulent was not disputed in these proceedings.
By decision dated 14 December 2016, and confirmed by internal review on 25 January 2017, Inbalance’s approval as a RSP was cancelled. The grounds for cancellation were those set out in s 18(1)(b), s 18(1)(h) and
s 18(1)(q) of the Transport Operations (Road Use Management) Act 1995 (Qld) (the Act):
(1) Each of the following is a ground for amending, suspending or cancelling an approval—
…
(b) the holder of the approval has contravened a condition of the approval;
…
(h) for any approval other than an approval mentioned in paragraph (g)—public safety has been endangered, or is likely to be endangered, because of the approval;
…
(q) the chief executive considers it necessary in the public interest.
If a ground for cancellation is established, the Chief Executive has a discretion to (amongst other things) cancel the approval under
s 19(2)(c)(iii). The internal review decision is reviewable by the Tribunal under s 65A of the Act.
In deciding the review, s 19 of the Queensland Civil and Administrative Act 2009 (Qld) provides that the Tribunal has all the functions of the decision-maker for the decision being reviewed. Under s 20, the purpose of the review is to produce the correct and preferable decision. In meeting that purpose, the Tribunal must hear and decide the review by way of a fresh hearing on the merits.
The Q-Ride legislative framework
Under s 17B of the Act, a regulation may be made authorising the Chief Executive to grant or renew an approval. One of the approvals that the Chief Executive is authorised to grant under the Transport Operation (Road Use Management Accreditation and Other Provisions) Regulation 2015 (Qld) (the Regulation) is approval as a RSP.
Approval as a RSP enables the person to provide Q-Ride Training to eligible persons, and to employ ARTs to provide such training: see r 33. “Q-Ride Training” is defined in Schedule 7 of the Regulations to mean:
Q-Ride training means either of the following given by a registered service provider to an eligible person—
(a) advice, demonstration, instruction or training in the competencies required under the Q-Ride training curriculum for learning to ride a class RE motorbike or riding a class RE or R motorbike;
(b) an assessment of the attainment of the competencies.
Registration as a RSP is subject to the conditions in Parts 1 and 2 of Schedule 2 to the Regulation. Section 2(1) of Part 2, as it stood at
1 January 2016, provided:
A registered service provider must not contravene the registered service provider standards.
The “registered service provider standards” made under r 93(2) applicable to the decision under review are the “Q-Ride Registered Service Provider Standards, Version 9.2”. Part 7 of these standards deals with the provision of Q-Ride training, and states:
The registered service provider must demonstrate how they will ensure that:
· their Q-Ride training program is approved and reviewed.
· their accredited rider trainers follow the RSPs documented Q-Ride training program when delivering Q-Ride training.
Inbalance provided a standards manual to the Chief Executive as part of its application for approval as a RSP to demonstrate that it would comply with the registered service provider standards. Relevantly, the standards manual stated:
The Director will ensure that ART’s:
· Observe the student’s skills at the tasks
· Facilitate a short answer questionnaire
· Collect third party evidence
· Observe the Trainee performing skills to the Q-Ride competency standards
…
The Director will ensure that during the assessment ART’s, observe the performance of the student whilst they perform the Q-Ride maneuvers (sic) and supervise the answering of the test and mark the record according to the evidence provided.
“Employee” is defined in Schedule 7 of the Regulations to include an “agent or contractor”. The Singletons are therefore to be regarded as employees of Inbalance for the purposes of the Regulation. The duty of employers is set out in r 17:
(1) The employer of an accredited person must ensure the accredited person complies with all conditions to which the accreditation is subject.
Maximum penalty—80 penalty units.
(2) The employer does not commit an offence against subsection (1) if the employer exercised reasonable diligence and took reasonable steps to ensure the accredited person complied with the conditions mentioned in subsection (1).
Compliance efforts by Inbalance
In his statutory declaration dated 28 July 2017, Mr Hall stated at paragraph 20 that he would attend the Singletons’ premises every three to four weeks. At paragraph 22, he stated that he would also see the Singletons two or three times a week while they were conducting road rides as they used the same public roads.
I note at the hearing that Mr Hall initially told me that he would informally visit the Singletons two or three times a week. When I asked him how long he would stay, he told me that the visits would last between five and 30 minutes, and that on occasion he would have a cup of tea. Later in the hearing, Mr Hall conceded under cross-examination that this was not correct and that his earlier evidence was an exaggeration. However, he stated that he was able to see cones and manoeuvres taking place at the Singletons premises as he drove past.
During the passage of cross-examination referred to above, Mr Hall claimed that he would drop in on the Singletons unannounced two to three times a month. If Mr Hall had adopted the practice of unannounced visits with any particular frequency, I would have expected him to have made mention of this in his statutory declaration. I consider that Mr Hall’s evidence in relation to unannounced drop-ins or two or three times a month is infected by the same exaggeration as his claimed visits of two or three times a week, and I do not accept that such unannounced visits took place.
Mr Hall stated that he telephoned the Singletons to give them notice of his three to four weekly visits. Mr Hall also stated that he would review the paperwork provided to him by the Singletons.
In addition to the steps set out above, Mr Hall also relied on internal and external audits that were conducted of the records of Inbalance. Internal audits refer to audits conducted by the Department of Transport and Main Roads. External audits refer to audits conducted by independent auditors chosen from a panel maintained by the Department.
Inbalance led evidence from Mr Anthony Feagan, an external auditor. During the course of questioning, I asked him whether he had any way of discerning from the training records provided whether the training was actually carried out or not. Mr Feagan conceded that he did not.
The Chief Executive led evidence from Mr William Milligan, an internal auditor. When I asked him the same question that I asked Mr Feagan, Mr Milligan’s answer was that his experience was that if someone was deliberately pulling the wool over his eyes, the documents would not have been made available for inspection during the audit.
Mr Milligan was asked under cross-examination how the fraud by the Singletons could have been picked up. Mr Milligan stated that he did not know what could have been done by Inbalance to detect the fraud. He did not think like a defrauder.
In fairness to Inbalance, reference should also be made to the written submissions dated 14 July 2017 attached to Mr Hall’s statutory declaration, which describe his efforts at compliance as follows:
[T]he applicant maintains that he undertook all reasonable steps to ensure that the Singletons complied with their obligations as Accredited Rider Trainers and specifically:
i) he conducted site visits at the Singleton’s premises no less than once per month;
ii) he conducted regular staff meetings;
iii) he inspected the motorbike’s utilised by the Singletons on a regular basis;
iv) he provided written materials including Power point Presentations and procedure.
Beyond the above, the applicant’s operations were subject to:
i) an internal audit performed by an auditor appointed by the respondent on 10 December 2015;
ii) an external audit performed by Mr Trevor Parminter on 16 June 2015;
iii) an external audit performed by “Where to From Here” on 5 April 2016;
iv) various self-assessments performed by the Singletons on a quarterly basis.
I note that there is no evidence before me of regular staff meetings, beyond the three to four weekly meetings referred to above.
Contravention of a condition of approval
As noted above, s 18(1)(b) of the Act provides that a ground for cancelling approval as a RSP is if “the holder of the approval has contravened a condition of the approval”.
It is clear to me that Inbalance has contravened a condition of its approval. The Singletons did not follow Inbalance’s documented Q-Ride training program on 13 occasions when delivering Q-Ride training as required by Part 7 of the “Q-Ride Registered Service Provider Standards, Version 9.2”.
Further, Mr Hall as the director of Inbalance did not ensure that the Singletons observed the 13 students’ skills at the tasks, observed the performance of the students while they performed the Q-Ride manoeuvres and supervised the answering of the test as required by Inbalance’s standards manual.
It follows that I am satisfied that s 18(1)(b) is enlivened as a ground for cancelling Inbalance’s approval as a RSP. In the circumstances, it is not necessary for me to consider the additional grounds under s 18(1)(h) and
s 18(1)(q) relied on by the Chief Executive.
Exercise of discretion
As noted above, a ground for cancellation is established the cancellation is discretionary under s 19(2)(c)(iii).
Inbalance has made submissions in relation to the “reasonable diligence” and “reasonable steps” defence contained in r 17(2). It is not clear to me that r 17 has any direct relevance to the proceedings before me, which do not relate to the imposition of a civil penalty. However, I consider that the reasonableness of the steps taken by Inbalance to ensure the Singletons complied with their obligations as ARTs is relevant to the exercise of my discretion as to whether to cancel its approval as a RSP.
I have had regard to the submissions of Inbalance as set out above. Submissions were also made that Inbalance had no reasonable way of discovering the Singletons’ activities short of conducting a covert undercover operation of the kind conducted by the police.
The evidence before me was that the Singletons committed a paperwork fraud, which was inherently incapable of being detected by a review of the paperwork.
In terms of auditing, Mr Feagan conceded that he had no way of ascertaining from the documentation whether the training had been carried out or not. Mr Milligan did not cavil with this proposition, instead stating he would not expect to be shown fraudulent records. I regard Mr Milligan’s statement that he was unable to identify what could have been done by Inbalance to detect the fraud as being limited to his area of expertise, which is document auditing.
Much was made of Mr Hall’s careful review of the documentation prepared by the Singletons. Self-evidently, this review was also incapable of detecting the fraud. Mr Hall’s clear evidence was that he saw nothing in the documentation that caused him concern.
If the fraud was unable to be uncovered by review of the documentation alone, whether by Mr Hall or an auditor, the only other avenue for uncovering it was by physical supervision by Mr Hall. I have accepted that Mr Hall visited the Singletons’ premises every three to four weeks, and that these visits took place on notice. I have also accepted that he drove past their premises and observed signs of activity, and that he would see them on the road two or three times per week.
I do not consider that this represents a reasonable level of physical supervision. There were clearly other steps which Mr Hall could have taken to increase the chances of discovering the fraud. For example, there is no credible evidence before me to suggest that Mr Hall conducted unannounced checks on the Singletons. Nor is there evidence that he spent extended periods of time physically present at the Singletons’ premises supervising their operations. These would have been reasonable steps for Mr Hall to have taken, particularly given the obligations he assumed in Inbalance’s own standards manual. Further, it appears to me that had the Singletons been subjected to active monitoring by Mr Hall, they may well have been deterred from committing the fraud in the first place.
Even if steps such as spot checks and extended periods of physical presence did not lead to the fraud being uncovered, it would at least have provided Mr Hall with a defensible basis for arguing that his physical supervision of the Singletons was reasonable in the circumstances. Such a basis is lacking on the evidence before me.
For these reasons, I consider that the correct and preferable decision is to cancel Inbalance’s approval as a RSP. I confirm the Chief Executive’s decision to do so.
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