King Eeducational Service Pty Ltd trading as Kinggdom Institute of Management and Australian Skills Quality Authority
[2020] AATA 5105
•10 December 2020
King Eeducational Service Pty Ltd trading as Kinggdom Institute of Management and Australian Skills Quality Authority [2020] AATA 5105 (10 December 2020)
Division:GENERAL DIVISION
File Numbers: 2015/6179 and 2015/6180
Re:King Eeducational Service Pty Ltd
trading as Kinggdom Institute of ManagementAPPLICANT
AndAustralian Skills Quality Authority
RESPONDENT
DECISION
Tribunal:Deputy President S A Forgie
Date of decision: 10 December 2020
Place:Melbourne
DECISION
1.In relation to the applicant’s registration under the NVR Act, the Tribunal decides to:
(1)set aside the respondent’s decision dated 11 November 2015; and
(2)substitute a decision that:
(a)subject to its:
«engaging a consultant approved by the respondent for an initial 12 month period and on either a full or part time basis to oversee its compliance with the National Vocational Education and Training Regulator Act 2011, including the VET Quality Framework; and
«implementing appropriate systems to ensure compliance and enforcing its own compliance with those systems;
(b)the applicant will be registered as an NVR registered training organisation from the day after the expiration of its previous registration for a period expiring on 24 December 2023.
2.In relation to the applicant’s registration under the Education Services for Overseas Students Act 2000, the Tribunal decides to:
(1)affirm the respondent’s decision dated 27 October 2015 refusing the applicant’s applications for renewal of its registration under the Education Services for Overseas Students Act 2000.
[sgd]
Deputy President S A Forgie
Catchwords – VOCATIONAL EDUCATION AND TRAINING – registration refused on basis of lack of compliance with legislative requirements – time at which to consider legislative requirements – Tribunal’s power to impose conditions – decision set aside and decision substituted.
Catchwords – VOCATIONAL EDUCATION AND TRAINING – registration refused on basis of lack of compliance with legislative requirements – time at which to consider legislative requirements – consideration of a risk management approach when relevant –decision affirmed.
Legislation
Acts Interpretation Act 1901
Administrative Appeals Tribunal Act 1975
Compensation (Commonwealth Government Employees) Act 1971
Compensation Employees’ Rehabilitation and Compensation Act 1988
Corporations Act 2001
CRICOS National Code
Education Services for Overseas Students Act 2000
Education Services for Overseas Students Amendment (Streamlining Regulation) Act 2015
Fit and Proper Person Requirements 2011
National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2007
National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2017
National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2018
National Vocational Education and Training Regulator Act 2011
National Vocational Education and Training Regulator Amendment Act 2020
National Vocational Education and Training Regulator Amendment (Governance and Other Matters) Act 2020
National Vocational Education and Training Regulator Regulations 2011
Standards for Registered Training Organisations (RTOs) 2015
Standards for Registered Training Organisations (RTOs) Amendment 2017
Standards for Registered Training Organisations (RTOs) Amendment 2019 (No. 1)
Cases
Australian Securities and Investments Commission v Donald [2003] FCAFC 318; (2003) 136 FCR 7; 203 ALR 566; 48 ACSR 394; 22 ACLC 24; 38 AAR 288; 77 ALD 449
Australian Skills Quality Authority v Brighton Pacific Pty Ltd [2020] FCA 617
Carpenter v Carpenter Grazing Co. Pty. Ltd. & Ors (1987) 5 ACLC 506
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60; 46 FLR 409
Esber v Commonwealth of Australia [1992] HCA 20; (1992) 174 CLR 430; 106 ALR 577; 66 ALJR 373; 15 AAR 249
Frugtniet v Australian Securities and Investments Commission [2019] HCA 16; (2019) 266 CLR 250; 367 ALR 695; 93 ALJR 629
George v Rockett [1990] HCA 26; (1990) 170 CLR 104
Jebb v Repatriation Commission (1988) 80 ALR 329; 8 AAR 285
Kingham v Sutton [2002] FCAFC 107; [2002] FCA 506
McDonald v Director-General of Social Security [1984] FCA 57; (1984) 6 ALD 6
McLean Bros & Rigg Ltd v James Grice (1906) 4 CLR 835
Raffles College Pty Ltd v Tertiary Education Quality Standards Agency [2015] FCA 734; (2015) 233 FCR 162
Re Coshott and Commissioner of Taxation [2013] AATA 822
Re D. R. McKendry Nominees Pty Ltd [2015] VSC 560
Re McDermott and Australian Securities and Investments Commission [2020] AATA 3362
Re The Trustee for the Confidential Trust and Commissioner of Taxation [2013] AATA 682
Re Thomson [2015] VSC 370
Repatriation Commissionv Smith (1987) 15 FCR 327; 74 ALR 537; 12 ALD 798; 7 AAR 17
Sea Shepherd Limited v Commissioner of Taxation [2013] FCAFC 68; (2013) 212 FCR 252
Secretary, Department of Social Security v Hodgson [1992] FCA 338; (1992) 37 FCR 32; 108 ALR 322; 15 AAR 563; 27 ALD 309;
Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286; 248 ALR 390; 82 ALJR 1147; 103 ALD 467
XYZ v Commonwealth [2006] HCA 25; (2006) 227 CLR 532; 227 ALR 495; (2006) 80 ALJR 1036
Secondary Materials
Macquarie Dictionary Online
Oxford English Dictionary Online
REASONS FOR DECISION
Deputy President S A Forgie
On or about 20 October 2009, King Eeducational Service Pty Ltd trading as Kinggdom Institute of Management (KES) was registered as a registered training organisation by the Western Australia Training and Accreditation Council. KES agreed to operate within the regulatory framework later provided for in the National Vocational Education and Training Regulator Act 2011 (NVR Act). That was on or about 30 August 2012. On 4 August 2014, KES applied to the National Vocational Education and Training Regulator (National VET Regulator) for renewal of its registration as a registered training authority under the NVR Act. Registration under the NVR Act means that it would be an NVR registered training organisation[1] (RTO) and would have “VET Registration”. The Australian Skills Quality Authority (ASQA) is the name by which the National VET Regulator is known.[2] On 11 November 2015, ASQA notified KES that it had rejected KES’s application for registration on the basis that it had not met one or more of the VET Quality Framework (VETQF) and the conditions of registration set out in ss 21 to 28 of the NVR Act.
[1] NVR Act; s 3: “NVR registered training organisation means a training organisation that is registered by the National VET Regulator as a registered training organisation under this Act.”
[2] NVR Act; s 155(2) and National Vocational Education and Training Regulator Regulations 2011; r 15
KES followed its application with another on 6 August 2014 for renewal of its registration as a provider of vocational education and training services to overseas students under the Education Services for Overseas Students Act 2000 (ESOS Act). This is known as “CRICOS Registration”.[3] KES had first been registered under the ESOS Act to provide courses to overseas students on 6 August 2012. The specific courses for which KES applied for registration were:
[3] The Secretary must keep a Register, known as the Commonwealth Register of Institutions and Courses for Overseas Student (CRICOS) under s 14 of the ESOS Act. All of the contents of the Register are publicly available.
(1)
BSB40212
Certificate IV in Business
(2)
BSB40215
Certificate IV in Business
(3)
BSB41412
Certificate IV in Work Health and Safety
(4)
BSB41415
Certificate IV in Work Health and Safety
(5)
BSB51312
Diploma of Work Health and Safety
(6)
BSB51315
Diploma of Work Health and Safety
(7)
BSB51107
Diploma of Management
(8)
BSB51207
Diploma of Marketing
(9)
BSB51215
Diploma of Marketing
(10)
BSB60507
Advanced Diploma of Marketing
(11)
BSB60515
Advanced Diploma of Marketing
(12)
BSB50613
Diploma of Human Resources Management
(13)
BSB50615
Diploma of Human Resources Management
(14)
And any new training package product that would be automatically added to the scope of CRICOS registration because it is equivalent to one which appears above.
On or about 15 September 2014, ASQA commenced an audit of KES in relation to KES’s VET Registration and CRICOS Registration but discontinued it in April 2015 for reasons relating to its own procedural matters. After conducting a comprehensive site audit at KES’s premises on 23 and 24 June 2015, ASQA found that KES had not complied with 48 of the standards[4] prescribed in the Standards for Registered Training Organisations (RTOs) 2015 (VET Standards) and Parts C and D of the CRICOS National Code (National Code).[5] On 7 August 2015, KES gave ASQA evidence directed to addressing the non-compliances identified by ASQA in relation to cll 1.11, 6.1, 6.2 and 8.1 of the VET Standards and cll 3.1, 3.2, 6.1, 6.2, 6.5, 6.7, 7.3, 7.6, 8.1, 9.5 and 11.2 of Part D of the VET Standards. When ASQA conducted a Rectification Audit after giving KES an opportunity to address its non-compliance, it determined that it had addressed non-compliance in relation to four of the VET Standards and non-compliance in relation to nine of the standards prescribed in Part D of the National Code. Non-compliance had not otherwise been addressed.
[4] ASQA identified non-compliances in relation to cll 1.1, 1.3, 1.4, 1.5, 1.6, 1.7, 1.8, 1.9, 1.11, 1.13, 1.16, 2.1, 2.2, 3.1, 3.2, 3,3, 3.4, 4.1, 6.1, 6.2, 6.3, 8.1 and 8.2 of the VET Standards
[5] ASQA identified non-compliances in relation to Standard 12.1 of Part C of the National Code and Standards and 1.1, 1.2, 2.1, 2.2, 3.1, 3.2, 6.1, 6.2, 6.3, 6.5, 6.6, 6.7, 7.1, 7.3, 7.6, 8.1, 9.1, 9.5, 10.1, 10.2, 10.3, 10.5, 11.2, 14.1 and 14.2 of Part D
As a consequence, on 27 October 2015, ASQA’s Commissioners rejected KES’s applications for renewal of its VET and CRICOS Registrations. ASQA notified KES of their decisions on 11 November 2015. Those decisions were to take effect on 16 December 2015 but, on 10 December 2015, I granted a conditional stay of the operation and implementation of those decisions under s 41(6) of the Administrative Appeals Tribunal Act 1975 (AAT Act).
After KES lodged its application for review in the Tribunal on 25 November 2015, it produced a considerable amount of material directed to establishing that it was not in non‑compliance with either the VET Standards or National Standards. ASQA has analysed that material and, by the time of the hearing, remained of the view that the evidence demonstrated that KES was not in compliance with cll 1.1, 1.3, 1.4, 1.5, 1.6, 1.8, 1.9, 1.10, 1.13, 1.14, 2.1, 3.1 and 4.1 of the VET Standards. This list omits reference to the eight clauses in respect of which ASQA had been satisfied that KES had achieved compliance but added two further clauses, marked in bold, in respect of which it had found KES to be non-compliant: cll 1.10 and 1.14.
In relation to its CRICOS Registration, ASQA’s position was that KES remained non-compliant in relation to cl 12.1 of Part C and cll 1.1, 1.2, 2.1, 2.2, 6.2, 7.6, 9.1, 10.1, 10.2, 10.3, 10.5, 14.1 and 14.2 of Part D of the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2007 (National Code 2007). ASQA was satisfied that KES had achieved compliance in relation to three of the standards since its decision.
Consistent with the scope of the stay order then in place, ASQA added the current versions of KES’s four courses to its scope of registration during 2016. At the conclusion of the hearing, Standards 11.1 and 11.2 of the National Code were central to the submissions.
On 28 April 2017, I vacated my earlier stay order and ordered that, subject to KES’s students being limited to those who had commenced their studies on or before midnight on 24 April 2017, the ASQA’s decision dated 11 November 2015 was stayed until the Tribunal had heard and determined its application for review or until further order. The matter was heard over 12 days with the last on 7 June 2017. At the conclusion of the hearing, I made an order revoking the stay order in light of KES’s stated intention to act with good faith and to adopt new processes and procedures to deliver compliant vocational education and training. Therefore, as an RTO, KES has delivered vocational education and training to CRICOS students.
Following the hearing, further submissions were lodged on behalf of ASQA on 14 June 2017. They were entitled “Procedural Unfairness and Unsatisfactory Conduct of the Applicant’s Case”. These were followed by submissions made on behalf of KES in reply and dated 19 June 2017.
In January 2020, ASQA sent Authorised and Regulatory Officers (AROs), Mr Stewart Mills, Ms Katherine Owen and Ms Stephanie Clayton to KES’s premises. During the visit and under warrant, the AROs scrutinised KES’s operations to assess its compliance with the VETQF and with the National Code. Each prepared an affidavit, which was lodged in the Tribunal on 6 March 2020. Given that I had not yet made my decision and on the basis that KES could lodge evidence in reply, I accepted that further evidence. On 27 March 2020, KES sought six months in which to prepare that further evidence. Various directions hearings have been held since then with the upshot being that I did not revoke the existing stay orders but set a timetable for the parties to lodge further evidence. Originally, further hearing days were scheduled but it has now been agreed that I decide the matter on the evidence that I have to date be it oral or written. The parties have made further submissions.
I have decided that KES will be registered under the NVR Act but only for a period expiring in three years’ time and then only on condition that it engage a consultant to oversee its compliance with the NVR Act and the VET Quality Framework and that it implement appropriate systems to achieve compliance and that it monitor and enforce compliance. In relation to KES’s registration under the ESOS Act, I have decided to affirm ASQA’s decision under the ESOS Act to refuse KES’s application for renewal of its registration.
THE ISSUES
In addition to issues relating to non-compliance further issues were raised. Some are not issues that the Tribunal has power to decide. It does not, for example, have power to determine whether KES is in breach of ss 93 and 94 of the NVR Act if it has been training students in courses that do not come within its scope of registration. That is not an issue that arises in reviewing the decisions in this case. In any event, decisions made under ss 93 and 94 to impose civil penalties are not reviewable decisions within the meaning of s 199 and so are not reviewable by the Tribunal. The same is an issue whether KES was in breach of s 40 of the ESOS Act if it was found to be non-compliant with cl 12.1 of Part C of the National Code and/or Part D of that code.
Issues that I have been able to consider in this matter include:
(1)Are the issues decided by reference to the ESOS Act in operation at the time ASQA made its decision in 2015 or after it was amended by the Education Services for Overseas Students Amendment (Streamlining Regulation) Act 2015 (ESOS Amendment Act) with effect from 1 July 2016.[6]
(2)If KES is non-compliant at the date of ASQA’s decision and until some point during the review process in the Tribunal, is it regarded as compliant if it achieves compliance during that hearing?
(a)Can compliance be achieved by producing appropriate documentary evidence or is that simply evidence of intention to comply and compliance must be demonstrated by the delivery of properly planned and appropriately delivered training?
LEGISLATIVE FRAMEWORK
[6] ESOS Amendment Act; s 3; Schedule 1 and see also s 2; Item 2
The NVR ACT
The objects of the NVR Act, which are set out in s 2A, are:
“(a) to provide for national consistency in the regulation n of vocational education and training (VET); and
(b) to regulate VET using:
(i)a standards-based quality framework; and
(ii)risk assessments, where appropriate; and
(c)to protect and enhance:
(i)quality, flexibility and innovation in VET; and
(ii)Australia’s reputation for VET nationally and internationally; and
(d)to provide regulatory framework that encourages and promotes a VET system that is appropriate to meet Australia’s social and economic needs for a highly educated and skilled population; and
(e)to protect students undertaking, or proposing to undertake, Australian VET by ensuring the provision of quality VET; and
(f)to facilitate access to accurate information relating to the quality of VET.
Note 1:The standards-based quality framework mentioned in paragraph (b) consists of instruments made by the Ministerial Council, the Minister or the National VET Regulator.
Note 2:These objects are subject to the constitutional basis for this Act (see Division 3).”
A. Scheme of regulation of vocational education and training
The scheme of regulation provided in Part 2 of the NVR Act centres on three essential features: the registration of training organisations as RTOs; the VETQF, which provides for national standards against which RTOs are regulated; and ASQA, which is an independent statutory body having responsibilities as part of the regulatory scheme as well as reporting obligations to the Ministerial Council for Tertiary Education and Employment. The provisions relating to the registration of training organisations illustrate the way in which the features interact.
Under s 17(1) of the NVR Act, ASQA may grant an application for registration made under s 16. It may also renew an RTO’s registration under s 17 if that RTO has applied for renewal at least 90 days before its registration expired and paid an application fee.[7] The RTOs registration is taken to continue until its application is decided.[8] Section 17 provides:
“In deciding whether to grant an application, the National VET Regulator must consider whether the applicant complies with”
(a) the VET Quality Framework; and
(b)the applicable conditions of registration set out in Subdivision B of this Division.”[9]
When considering the application, ASQA may conduct an audit of any matter relating to the application. If it considers it appropriate to do so, ASQA may impose one or more conditions under s 29(1), to which an organisation’s registration is subject.[10]
[7] NVR Act; ss 31(1) and (2)
[8] NVR Act; s 31(3)
[9] NVR Act; s 17(2)
[10] NVR Act; s 17(6)
The expression “VET Quality Framework” means the following:
“(a) the Standards for the NVR Registered Training Organisations;
(aa)the Quality Standards;
(b)the Australian Qualifications Framework;
(c)the Fit and Proper Person Requirements;
(d)the Financial Viability Risk Assessment Requirements;
(e)the Data Provision Requirements.”[11]
[11] NVR Act; s 3
The applicable conditions of registration are set out in Subdivision B of Division 1 of Part 2 of the NVR Act. Section 21 provides that an RTO must comply with the conditions set out in ss 22 to 28 and with any conditions imposed on its registration under s 29(1).
To some extent, the requirements of s 22 overlap with those of s 17(2). The latter requires compliance with the VET Quality Framework whose components I have set out at [17] above. Although s 22 is headed “Condition – compliance with the VET Quality Framework”, it requires compliance with only three of the components of the VET Quality Framework: the Standards for the NVR Registered Training Organisations, the Quality Standards and the Australian Qualifications Framework. Compliance with the last two components of the VET Quality Framework is the subject of ss 23 and 24. Section 22(3) requires compliance with the Data Provision Requirements.
The Standards for the NVR Registered Training Organisations are standards made by the Minister for RTOs and as agreed by the Minister.[12] They are known generally as the “VET Standards” and are found in the Standards for Registered Training Organisations (RTOs) 2015 that has been amended in 2017 and 2019. The amendments started on the day after registration in the case of the Standards for Registered Training Organisations (RTOs) Amendment 2017[13] and some of the amendments in the case of the Registered Training Organisations (RTOs) Amendment 2019 (No. 1) and 1 July 2019 in the case of others.[14] Neither included transitional provisions. I have not considered whether the VET Standards in their amended or unamended form should apply in this case for no amendment was made to the clauses of those Standards, with which I am concerned.
[12] NVR Act; ss 3 and 185
[13] Standards for Registered Training Organisations (RTOs) Amendment 2017; cl 2
[14] Registered Training Organisations (RTOs) Amendment 2019 (No. 1); cl 2
Under s 23, an NVR RTO must meet the Fit and Proper Person Requirements and, under s 24, the Financial Viability Risk Assessment Requirements. What is meant by the “Fit and Proper Person Requirements” is set out in s 186.[15] They are requirements specified by the Minister and as agreed by the Ministerial Council for assessing whether a person is a fit and proper person. The Fit and Proper Person Requirements 2011 (FPPR) were made on 26 June 2011. Paragraph FPPR 4 sets out the matters to which the National VET Regulator must have regard in assessing whether an application for registration or for renewal of registration as an NVR RTO meets the Fit and Proper Person Requirements. In so far as they may be relevant in this case, they are:
“(a)-(h) …
(i)whether the person has ever been found not to be a fit and proper person for the purposes of the Education Services for Overseas Students Act 2000;
(j)whether the public is likely to have confidence in the person’s suitability to be involved in an organisation that provides or assesses national qualifications; and
(k)any other relevant matter.”
[15] NVR Act; s 3
A person mentioned in paragraph FPPR 4 does not meet the Fit and Proper Person Requirements if the National VET Regulator is satisfied that, having regard to the matters provided in paragraph FPPR 4, one or more of the following persons do not meet the Fit and Proper Person Requirements: an executive officer of the person referred to in paragraph FPPR 4; a high managerial agent of the person mentioned in paragraph FPPR 4; or any person or entity which exercises a degree of control or influence over the management or direction of the RTO.[16]
[16] NVR Act; paragraph FPPR 5
An RTO must notify the National VET Regulator of an event that occurs, or is likely to occur, that significantly changes its ability to comply with the VET Quality Framework, changes in the name or contact details of an executive officer or high managerial agent and any other substantial changes in its operation.[17] Section 26 provides that an RTO must give ASQA such information as it requests in writing and for the purposes of the NVR Act. The notice requesting that information must specify the period within which the information is to be given. An RTO must cooperate with the National VET Regulator to the extent that it is necessary for the regulator to perform its functions or to facilitate its doing so.[18] It must also comply with any written general directions given by the NVR Regulator regarding the way in which RTOs are to comply with the VET Quality Framework.[19]
[17] NVR Act; s 25
[18] NVR Act; s 27
[19] NVR Act; s 28
An applicant’s registration commences on the day specified in the notice that ASQA gives it. If a renewal, renewal starts on the day after the day on which its previous registration expired.
B. Outline of operations if a provider is an RTO
Registration means that an RTO may do those things for which it is registered. The scope of registration allows an RTO to:
“(a) both:
(i)provide training and assessments resulting in the issue of VET qualifications or VET statements of attainment by the organisation; and
(ii)provide assessments resulting in the issue of VET qualifications or VET statements of attainment by the organisation; or
(b)provide assessments resulting in the issue of VET qualifications or VET statements of attainment by the organisation.”[20]
[20] NVR Act; s 3
A “VET qualification” means:
“… a testamur, relating to a VET course, given to a person confirming that the person has achieved learning outcomes and competencies that satisfy the requirements of a qualification.”[21]
[21] NVR Act; s 3
A VET statement of attainment:
“… in relation to units of competency or modules of a VET course, means a statement given to a person confirming that the person has satisfied the requirements of units of competency or modules specified in the statement.”[22]
[22] NVR Act; s 3
A “VET course” means:
“(a) the units of competency of a training package that is endorsed by the Ministerial Council; or
(b)the modules of a VET accredited course; or
(c)the modules of a course accredited by a VET Regulator of a non-referring State.”[23]
A “VET accredited course” means:
“(a) if the National VET Regulator has delegated to a body the function of accrediting a course – a course accredited by the body under the delegation;
(b)in any other case – a course accredited by the National VET Regulator.”[24]
[23] NVR Act; s 3
[24] NVR Act; s 3
An RTO may apply to ASQA to change its scope of registration if it wishes to offer all or part of a VET course that is not within that scope.[25] In deciding whether to grant the application, ASQA must look at the RTO’s ability to provide the VET course, or relevant part of the VET course, in accordance with the VETQF, at the other VET courses it offers and whether it complies with the VETQF and the other conditions of registration imposed by Subdivision B of Division 1 of Part 2 of the NVR Act.[26]
[25] NVR Act; s 32
[26] NVR Act; s 33
C. Ensuring compliance with the VET Quality Framework
C.1 Compliance powers
ASQA may, at any time, conduct a compliance audit of an RTO’s operations to assess whether that organisation continues to comply with the NVR Act and the VETQF.[27] It may also review or examine any part of an RTO’s operations to determine any systemic issues relating to the quality of vocational education and training.[28] If an RTO is in breach of a condition of its registration, ASQA may give it a written direction requiring it to rectify the breach.[29] Section 35A(2) requires ASQA to have regard to the RTO’s conduct, or to the circumstances existing, before it had cause to consider giving the direction.
[27] NVR Act; s 35(1)
[28] NVR Act; s 35(2)
[29] NVR Act; s 35(1)
Apart from the power to give directions, ASQA is given the power to impose administrative sanctions. It is given that power by s 36 after it has satisfied natural justice requirements but, in exceptional circumstances, it may impose sanctions without satisfying natural justice requirements.[30] The decisions that ASQA may make in imposing an administrative sanctions are set out in s 36(2) and are:
“(b) give a written notice to an NVR registered training organisation requiring the organisation to notify its VET students, in writing, of a matter set out in the direction;
(c)shorten the period of an NVR registered training organisation’s registration;
(d)amend an NVR registered training organisation’s scope of registration;
(e)suspend all or part of an NVR registered training organisation’s scope of registration under section 38;
(f)cancel an NVR registered training organisation’s registration under section 39.”
[30] What ASQA must do in order to satisfy natural justice requirements is set out in s 37. In summary, s 37 requires it to give the RTO notice that it intends to make a decision to do a thing referred to in s 36(2) and its reasons for the decision it intends to make. The notice must invite the RTO to give ASQA a written response within a period specified in the notice and consistent with the periods specified in s 37(1)(b). If, after considering any response received within the period specified, ASQA may make the decision if it continues to consider that it should be made. ASQA must give the RTO notice of its decision.
In determining what action to take in relation to an RTO, ASQA may have regard to:
“(a) the organisation’s conduct, or circumstances existing, before the Regulator had cause to consider imposing a sanction on the organisation (including before the commencement of this section); and
(b)if section 37 applies – the organisation’s conduct, or circumstances existing, since the Regulator gave the organisation a written notice as mentioned in that section.”[31]
[31] NVR Act; s 36(3)
Section 38 elaborates upon ASQA’s power to suspend all or part of an RTO’s scope of registration. Section 38(2) provides:
“During the period of suspension, the National VET Regulator may require the NVR registered training organisation to do something, not to do something, or both. The may include restrictions on:
(a)enrolling a student in a VET course or part of a VET course; or
(b)allowing a VET student to begin a VET course of part of a VET course; or
(c)publishing or broadcasting an advertisement relating to a VET course or any part of a VET course; or
(d)causing to be published or broadcast an advertisement relating to a VET course or any part of a VET course.
Note:Failure to comply with the National VET Regulator’s requirements is an offence and a contravention of a civil penalty provision, see sections 101 and 102 respectively.”
Cancellation of an RTO’s registration is the subject of s 39. ASQA may, by notice in writing, cancel an RTO’s registration in any circumstances that ASQA considers it appropriate to do so, including for failure to pay a registration fee.[32] When an RTO’s registration is cancelled under the NVR Act, that RTO may not apply for registration as an RTO for a two year period after the day the cancellation takes effect. ASQA may shorten that period if it considers it appropriate to do so.[33]
[32] NVR Act; s 39(1)
[33] NVR Act; s 39(3)
In addition to these sanctions, or as an alternative to them, ASQA may take action, or cause action to be taken, under Part 6 of the NVR Act.[34] Part 6 provides for civil penalty proceedings leading to the imposition of pecuniary penalties.[35] A pecuniary penalty for contravening a civil penalty provision may not be imposed if the person has been convicted of an offence against the NVR Act constituted by conduct substantially the same as the conduct constituting the contravention.[36] The reverse of that situation also applies so that criminal proceedings may not be started against a person for conduct substantially the same as conduct contravening a civil penalty provision if the person has been ordered to pay a pecuniary penalty under the NVR Act for the contravention.[37]
[34] NVR Act; s 40
[35] NVR Act; Part 6, Division 2, Subdivision A
[36] NVR Act; s 142
[37] NVR Act; s 144
Part 6 also enables ASQA to accept a written undertaking by a person if it considers that the person has committed an offence against the NVR Act or contravened a civil penalty provision.[38] If ASQA consents, the person may withdraw or vary the undertaking at any time.[39] ASQA may cancel the undertaking by giving the person a written notice.[40] If ASQA considers that a person has breached any of the terms of an undertaking, it may apply to the Federal Court or Federal Circuit Court for an order under s 147(2). Four types of order may be made. One order that the court may make is to direct the person to comply with the term of the undertaking. A second is to direct the person to pay to the Commonwealth an amount up to the amount of any financial benefit that the person has obtained directly or indirectly and that is reasonably attributable to the breach. The court may direct the person to compensate any other person who has suffered loss or damage as a result of the breach. Finally, the court may make any other order the court considers appropriate.
[38] NVR Act; s 146(1)
[39] NVR Act; s 146(2)
[40] NVR Act; s 146(3)
C.2 Investigative powers
Part 5 of the NVR Act gives ASQA investigative powers. Some are powers to make a request to a person who is, or was, connected with an RTO or former RTO or organisation that holds itself out to be such an organisation. If ASQA has reason to believe that the person is capable of giving information or producing a document or thing, it may request that person to give it information or documents specified in its request.[41]
[41] NVR Act; s 62(1)
For the purposes of finding out whether the NVR Act has been, or is being, complied with, or for assessing the correctness of information provided under that legislation, an authorised officer of ASQA may enter any premises and exercise the monitoring powers set out in s 67.[42] Those powers are:
[42] NVR Act; s 66(1)
“(a) the power to search the premises and any thing on the premises;
(b)the power to examine any activity conducted on the premises;
(c)the power to inspect, examine, take measurements of or conduct tests on any thing on the premises;
(d)the power to make any still or moving image or any recording of the premises or any thing on the premises;
(e)the power to inspect any documents on the premises;
(f)the power to take extracts from, or make copies of, any such document;
(g)the power to take onto the premises such equipment and materials as the authorised officer requires for the purpose of exercising powers in relation to the premises;
(h)the powers set out in subsections (2), (3) and (5).”
Sections 67(2) and (3) are concerned with the exercise of monitoring powers in relation to the operation of electronic equipment. If entry is under a monitoring warrant, s 67(5) provides that the monitoring power includes a power to secure a thing for a period of time.
If an authorised officer has reasonable grounds for suspecting that there may be evidential material on any premises, the authorised officer may enter the premises and exercise the powers of enforcement set out in s 68.[43] The authorised officer may only do so if the occupier of the premises has consented and the authorised officer has shown his or her identity card if requested to do so or the entry is made under a warrant.[44]
[43] ESOS Act; s 66(2)
[44] NVR Act; s 66(3)
D. Review
Part 9 of the NVR Act sets out review provisions. Section 199 sets out those decisions that are reviewable decisions. Item 2 includes as a reviewable decision a decision to reject an application for registration as an RTO. A person who is dissatisfied with a reviewable decision may apply to ASQA to reconsider the decision under s 200. An application may be made to the Tribunal for review of a reviewable decision that ASQA has affirmed or varied under s 201.
ESOS Act
A.Common features of the ESOS Act as in force before and after 1 July 2016
The ESOS Act was amended by the ESOS Amendment Act with effect from 1 July 2016.[45] It made quite significant amendments to Part 2, which regulates those who provide courses to overseas students. With that in mind, I have begun with the objects of the legislation that remain the same and the general outline of Part 2, which remain the same both before 1 July 2016, when the original decision under review was made, and after that date. I have then set out the relevant provisions of the ESOS Act in both time periods. I shall call the ESOS Act as in force before 1 July 2016, the “ESOS Act 2000” and that in force from that date, the “amended ESOS Act”. Where the provisions remain the same, or substantially the same, for the purposes of this case, the reference will be to the “ESOS Act”.
[45] ESOS Amendment Act; s 3; Schedule 1 and see also s 2; Item 2
A.1Object of ESOS Act to regulated those who provide courses to overseas students
Beginning with the principal objects of the ESOS Act, they are:
“(a) to provide tuition assurance, and refunds, for overseas students for courses for which they have paid; and
(b)to protect and enhance Australia’s reputation for quality education and training services; and
(c)to complement Australia’s migration laws by ensuring providers collect and report information relevant to the administration of the law relating to student visas.”
The ESOS Act regulates those who provide courses to overseas students by requiring that they either be registered under that legislation to provide those particular courses at a particular location or that they do so in accordance with an arrangement with a provider who is so registered. It is otherwise an offence to provide courses to overseas students, to offer to provide courses or to invite overseas students to undertake or to apply to undertake courses at a location. In the absence of registration, it is also otherwise an offence for a person to hold himself, herself or itself out as willing to provide a course to overseas students at a location.[46] Conditions may be imposed on a registered provider and those conditions may be varied or revoked.[47] A Register containing information about the registration of each registered provider’s registration must be maintained.[48]
[46] ESOS Act; s 8
[47] ESOS Act; Part 2; Division 3
[48] ESOS Act; ss 14A and 14B
A.2 Ensuring compliance with the registered provider’s obligations
There are differences between the ESOS Act before and after its amendment in relation to compliance but, in the context of this case, they are not differences of substance. I will not, for example, refer to ASQA’s powers should a registered provider breach the ELICOS Standards or Foundation Program Standards for they are not relevant in this case. The ELICOS (English Language Intensive Course for Overseas Students[49]) Standards are made by legislative instrument under s 176B of the ESOS Act and the Foundation Program Standards are made by legislative instrument under s 176C.[50]
[49] English Language Intensive Course for Overseas Students: ESOS Act; s 5
[50] ESOS Act; s 5
Although I note that the Minister was given the power to impose sanctions on a registered provider before the 2016 Amendment Act under Division 1 of Part 6 of the ESOS Act and the ESOS agency for the registered provider after it came into operation, the practical effect is the same. Under s 170 of the ESOS Act 2000, the Minister delegated power to the National VET Regulator, which is ASQA, and the ESOS agency for KES under the ESOS Act is the National VET Regulator and so ASQA.[51] I will refer to both as ASQA.
[51] See [65] below
I will return to the provisions of the ESOS Act providing for the imposition of conditions on a registered provider’s registration and their obligations generally. For the moment, I note that ASQA may impose sanctions in the circumstances specified in s 83. Those circumstances were amended by the 2016 Amendment Act. Except for the addition of the ELICOS Standards and Foundation Program Standards and variations to confer power on the ESOS agency rather than the Minister, s 83(1) is in the same terms. In either form the Minister, and later the ESOS agency may take one or more actions listed in s 83(3) if he, she or it believes on reasonable grounds that the registered provider, or provider, or an associate or high managerial agent of the registered provider, or provider, is breaching, or has breached, the ESOS Act, the National Code or a condition of the provider’s registration.
The sanctions are specified in s 83(3) and have remained consistent throughout the period. They are:
“(a) to impose one or more conditions on the registered provider’s registration either generally or in respect on any one or more specified courses for any one or more specified locations (see section 86);
(b)to suspend the registered provider’s registration for any one or more specified courses for any one or more specified locations (see section 95);
(c)to cancel the registered provider’s registration for any one or more specified courses for any one or more specified locations.”
ASQA may take action under s 83 against the provider’s registration for a particular course for a location even if the conduct, or that situation, that results in the agency taking the action does not relate to that particular course.[52] It may take action under s 83 even if other action has already been taken under that section in relation to the same matter.[53] ASQA may take action against the provider under s 83 even if the provider was not registered at the time of the relevant breach. That is the effect of s 85.
[52] ESOS Act; s 83(4)
[53] ESOS Act; s 84
Examples of conditions that the ESOS agency may impose under s 83 are conditions that:
“(a) there be no net increase, or only a limited net increase, in the number of overseas students enrolled with the provider;
(b)the provider enrol only a limited number of new overseas students;
(c)the provider not accept any new students from a specified country;
(d)the provider not deal with a specified agent in relation to overseas students or intending overseas students;
(e)the provider not provide a specified course.”[54]
These examples do not limit the kinds of condition that ASQA may impose.[55]
[54] ESOS Act; s 86(1)
[55] ESOS Act; s 86(2)
Subdivision C of Division 1 of Part 6 sets out circumstances in which a registered provider may be automatically suspended or cancelled. Subdivision D of Division 1 of Part 6 is entitled “Common rules for conditions, suspension and cancellation”. Division 4 of Part 6 is concerned with enforceable undertakings. Part 7 of the ESOS Act provides for the monitoring of registered providers’ compliance with the ESOS Act, the National Code, the ELICOS Standards or the Foundation Program Standards. All four were amended by the 2016 Amendment Act and I will set out the relevant provisions in summarising the ESOS Act 2000 and the amended ESOS Act.
Once registered under the ESOS Act, a number of obligations are imposed upon a registered provider. They are set out in the ESOS Act and in the National Code, the ELICOS Standards and the Foundation Program. Provision is made for circumstances in which a provider or an overseas student defaults and either does not start or does not finish a course. A call may be made on the Overseas Students Tuition Fund established under s 52A to pay for alternative courses or to provide refunds to students where providers have not already done so.
B. The ESOS Act 2000 in force before 1 July 2016
B.1 Registration of an approved provider
An “approved provider” for a course for a location means a provider approved by a relevant designated authority to provide that course at that location to overseas students. It does not include a provider whose approval has been withdrawn by that authority.[56] A “provider” was defined in s 5 to mean “… an institution or other body or person that provides or seeks to provide courses to overseas students.”
[56] ESOS Act; s 4
A “designated authority” might recommend that an approved provider for a course for a location be registered under the ESOS Act 2000 to provide that course at that location.[57] ASQA must use a risk management approach when considering whether to make a recommendation that an approved provider for a course for a location be registered. The expression “risk management approach” is not defined. A designated authority may make such a recommendation for the purposes of the Secretary’s registering an approved provider under s 9AB or for the purposes of the Secretary’s adding one or more courses at one or more locations to a provider’s registration under s 9AG.
[57] ESOS Act 2000; s 9AA(1)
Identification of the “designated authority” depended on the characteristics of the provider. In the case of KES, the designated authority was the National VET Regulator.[58] The National VET Regulator had the same meaning as in the NVR Act[59] and might be known as the Australian Skills Quality Authority.[60]
[58] ESOS Act 2000; s 7A, Item 2
[59] NVR Act; ss 3 and 155
[60] National Vocational Education and Training Regulator Regulations 2011; r 15
In so far as it is relevant, s 9AB provides:
“Registration of approved providers by Secretary
Registering approved providers
(1)The Secretary must register an approved provider if:
(a)a designated authority makes a recommendation under section 9AA in relation to the provider; and
(b)-(e)…
(f)the Secretary has no reason to believe that the provider:
(i)is not complying, or will not comply, with this Act or the national code; or
(ii)does not have the principal purpose of providing education; or
(iii)does not have the clearly demonstrated capacity to provide education of a satisfactory standard; or
(iv)is unlikely to be able to provide education of a satisfactory standard; and
Note 1:The Secretary must notify the relevant designated authority if the Secretary has reason to believe that any of the matters set out in this paragraph apply: see section 14.
Note 2:For when a higher education provider has the principal purpose of providing education, see section 5A.
(g)…
Note:The Secretary must determine that the provider is registered for a specified period: see section 9AC.
(2)The Secretary must not register the provider in any other circumstances.
(3)Nothing in subsection (1) of this section creates a duty for the Secretary to seek any information about the matters mentioned.
Registering courses and locations
(4)At the time the Secretary registers an approved provider under this section, the Secretary must determine:
(a)the course or courses that the provider is registered to provide; and
(b)the location or locations at which the provider is registered to provide that course or those courses.
Note 1:For when the approved provider becomes registered to provide a course at location, see subsection 14A(6).
Note 2:Under section 9AG, courses and locations can be added later to a provider’s registration.
(5)To avoid doubt, the Secretary registers a provider under this section if the Secretary renews the provider’s registration.”
The reference to the “national code” is a reference to the National Code of Practice for Providers of Education and Training to Overseas Students in force under Part 4 of the ESOS Act.[61] Its purpose is to provide nationally consistent standards and procedures for registered providers and persons who deliver educational services on behalf of registered providers.[62] It is made by the Minister by legislative instrument.[63] If the Secretary has information suggesting that a registered provider for a course for a location may have breached, among other things, the National Code, he or she must notify each relevant designated authority of the possible breach and may ask it to investigate the matter. If a possible breach requires urgent action, the Secretary may investigate the matter without advising each relevant designated authority.[64]
[61] ESOS Act 2000; s 5
[62] ESOS Act 2000; s 34
[63] ESOS Act 2000; s 33
[64] ESOS Act 2000; s 43
Section 9AC is concerned with the period of registration. At the time the Secretary registers an approved provider, the Secretary must determine that the provider is registered for a specified period that is more than two years but no more than five years.[65] The situation in which a provider’s registration would otherwise expire before the process of renewal of registration was completed, s 9AC(5) comes into play:
[65] ESOS Act 2000; s 9AC(1)
“If:
(a)a provider’s registration is due to expire; and
(b)before that expiry, a designated authority makes a recommendation under section 9AA in relation to the provider; and
(c)by the time the provider’s registration would otherwise expire, the Secretary has not yet made a decision whether to register the provider under section 9AB;
the provider’s registration is taken to continue until the Secretary makes his or her decision.”
When a provider’s registration is due to expire before the provider has finished providing course for which the provider is registered, the provider is taken to be registered to provide the course until it has finished providing the course to the students who were enrolled in that course before that registration was due to expire.[66]
[66] ESOS Act 2000; s 9AC(6)
The Secretary may, at the time of registering a provider, impose a condition on its registration if a designated authority has approved that provider to provide courses to overseas students and has imposed a condition on its provision of those courses at a time before it is registered under s 9AB.[67] If a provider is already registered under s 9AB, the Secretary may impose a condition on its registration relating to its provision of those courses.[68] In deciding whether to impose a condition under s 9AD, the Secretary or Minister must have regard to any advice of the relevant designated authority and use a risk management approach.[69]
[67] ESOS Act 2000; s 9AD(1)
[68] ESOS Act 2000; s 9AD(2)
[69] ESOS Act 2000; s 9AD(3)
Under s 9AE, the Secretary may, on his or her own initiative, impose a condition at the time a provider is registered or at any time before a provider’s registration expires. The Secretary may do so either generally or in respect of any one or more specified courses for any one or more specified locations.[70] The Secretary must use a risk management approach in deciding whether to impose a condition under s 9AE.[71] The Secretary may vary or remove a condition that he or she has imposed under ss 9AD or 9AE. Again, the Secretary must use a risk management approach in deciding whether to vary or remove a condition under the section.[72]
[70] ESOS Act 2000; ss 9AE(1) and (2)
[71] ESOS Act 2000; s 9AE(4)
[72] ESOS Act 2000; s 9AF(3)
Under s 170(2), the Secretary may delegate any or all of the Secretary’s powers under the ESOS Act 2000 to, among others, the National VET Regulator i.e. ASQA.[73] The Secretary has made a delegation to that effect.
[73] ESOS Act 2000; s 170(2)(a)
B.2Sanctions for non-compliance and procedures to be followed
At [44]-[47] above, I have referred to s 83 and to the Minister’s power to take one or more of the actions listed in s 83(3) if he or she believes on reasonable grounds that a registered provider or an associate or high managerial agent of the registered provider is breaching, or has breached, the National Code or a condition of the registered provider’s registration. Sections 93(1)(aa), (c) and (d) set out the procedures that the Minister was required to follow before making a decision to impose a condition under s 9AD(2). Those procedures required the Minister to give a registered provider written notice of his or her intention to impose a condition and to give it at least 72 hours in which to make submissions about the matter.
If a condition is imposed on a provider’s registration, the Minister may give a provider a notice under s 94(1) that the condition will be removed by force of s 94(2) when the provider pays the associated reinstatement fee. The Minister may follow a similar procedure under ss 94(3) and (4) if a provider’s registration is suspended.
B.3Review
An application may be made to the Tribunal for review of decisions set out in s 176(1) of ESOS Act 2000. Among those decisions are those that an approved provider should not be registered under s 9AB, that it should be registered for a specified period or to vary such a specified period and a decision to impose a condition on a provider’s registration under ss 9AD or 9AE or to vary a condition under s 9AF.
C. The amended ESOS Act in force from 1 July 2016
The ESOS Amendment Act amended the definitions of certain terms and “ESOS agency” and repealed and replaced s 7A, which is concerned with deciding whether a provider or registered provider is fit and proper to be registered. It amended Part 2 of the ESOS Act. In particular, it repealed and replaced Division 3 of Part 2, which is concerned with the registration of providers.
C.1 Registration of an approved provider
The term “provider” is defined in s 6E in wide terms. It includes a registered higher education provider, a registered VET provider, an approved school provider, a person or entity that provides an ELICOS or a Foundation Program or another person or entity (other than those specified by the Minister by legislative instrument as an entity for that purpose) that provide, or seek to provide, courses to overseas students.
If a provider makes an application for registration, the ESOS Agency for the provider may register it to provide a course or courses at a location or locations if the provider meets the registration requirements.[74] The “ESOS Agency” or a provider or a registered provider is, in the case of a registered VET provider, the National VET Regulator, which is ASQA.[75]
[74] amended ESOS Act; s 10
[75] amended ESOS Act; ss 5 and 6C(1), Item 2
Sections 10B(1) to (3) provide:
“(1) The ESOS agency for a provider or registered provider may at any time:
(a)impose a condition on the provider’s registration; or
(b)vary or remove a condition of the provider’s registration.
(2)The ESOS agency for the provider or registered provider must use a risk management approach in deciding whether to impose, vary or remove a condition.
(3) A condition may be:
(a)imposed generally on a provider’s registration; or
(b)imposed in respect of either or both of the following:
(i)one or more of the courses that a provider is registered to provide:
(ii)one or more of the locations at which a provider is registered to provide a course.”
If a registered provider makes an application under s 10D to renew its registration, the ESOS agency for a provider may renew the provider’s registration to provide a course or courses at a location or locations if the provider meets the registration requirements. The ESOS agency for the registered provider must use a risk management approach when considering whether to renew the registration of the provider.[76] If a registered provider applies under s 10D to renew registration and the ESOS agency for the provider has not made a decision before the provider’s registration is due to expire, its registration continues until the agency’s decision on the application is stated to take effect.[77]
[76] amended ESOS Act; s 10E
[77] amended ESOS Act; s 10F
Section 11 of the ESOS Act sets out the circumstances in which a provider or registered provider will meet the registration requirements. They include the ESOS Agency’s being satisfied that the provider is complying, or will comply, with the ESOS Act and the National Code. As at 1 July 2016 when the amendments made by the ESOS Amendment Act came into operation, the National Code was the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2007 (National Code 2007), which had been in effect since 1 July 2007. It was subsequently replaced by the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2017 (National Code 2017) with effect from 9 April 2017. Clause 2.1 of the National Code 2017 foreshadowed a revised national code to be made following consultation with State and Territory representatives of industry and student bodies. The Explanatory Statement to the National Code 2017 explained that it had been made in substantially the same terms as the National Code 2007. Its changes were of a clerical nature to ensure that the terms it used were consistent with those used in the ESOS Act following its amendment in 2015 and 2016. That revised National Code - the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2018 (National Code 2018) – was made on 1 January 2018 when it repealed and replaced the National Code 2007.
If the provider is not an exempt provider, the ESOS agency must be satisfied that the provider is a fit and proper person to be registered.[78] Section 7A sets out the matters to which, among others, the ESOS agency must have regard when deciding whether a provider or registered is fit and proper to be registered. The matters to which the ESOS agency must have regard are:
[78] amended ESOS Act; s 11(c) An “exempt provider” is defined in s 6D(1) to be a provider or registered provider administered by a State education authority or the provider is entitled to receive funds under a law of the Commonwealth for recurrent expenditure for the provision of education or training and is not a provider specified in the regulations. The regulations may also specify a provider to be an exempt provider.
“(a) whether the provider or a related person of the provider has ever been convicted of an offence; and
(b)whether the registration of the provider or a related person of the provider has ever been cancelled or suspended under this Act or the old ESOS Act; and
(c)whether the provider or a related person of the provider has ever been issued with an Immigration Minister’s suspension certificate; and
(d)whether a condition has ever been imposed under this Act on the registration of the provider or a related person of the provider; and
(e)whether the provider or a related person of the provider has ever:
(i)become bankrupt; or
(ii)taken steps to take the benefit of any law for the relief of bankrupt or insolvent debtors; or
(iii)compounded with one or more creditors of the provider or person; or
(iv)made an assignment of the remuneration of the provider or person for the benefit of one or more creditors of the provider or person; and
(f)whether the provider or a related person of the provider has ever been disqualified from managing corporations under Part 2D.6 of the Corporations Act 2001; and
(g)whether the provider or a related person of the provider was involved in the business of the provision of courses by another provider who is covered by any of the above paragraphs at the time of any of the events that gave rise to the relevant conviction or other action; and
(h)any other relevant matter.”
C.2Sanctions for non-compliance and procedures to be followed
If the ESOS agency for a provider or a registered provider is considering imposing a condition on, or varying a condition of, the provider’s registration, under s 10B, it must comply with s 93. Before imposing or varying a condition, the ESOS agency must give the provider or registered provider written notice that it is considering to do so and request written submissions within a period that is at least 72 hours in length.[79]
[79] amended ESOS Act; ss 93(1)(a)(i), (2) and (3)
If a condition is imposed on a provider’s registration, the Minister may give a provider a notice under s 94(1) that the condition will be removed by force of s 94(2) when the provider pays the associated reinstatement fee. The Minister may follow a similar procedure under ss 94(3) and (4) of a provider’s registration is suspended.
ARE THE ISSUES DETERMINED BY REFERENCE TO THE ESOS ACT 2000 OR THE AMENDED ESOS ACT?
On behalf of KES, Mr Mitchell submitted that the changes made by the ESOS Amendment Act are substantive, rather than procedural, changes. The scheme of registration provided for in s 11 of the amended ESOS Act is new. Citing s 7 of the Acts Interpretation Act 1901 (AI Act) and Esber v Commonwealth of Australia[80] (Esber), Mr Mitchell submitted that KES is entitled to have its application determined under the ESOS Act 2000. On behalf of ASQA, Mr Lloyd submitted that the matter must be decided under the amended ESOS Act. In particular, he submitted, I am bound to take a risk mandated approach.
[80] [1992] HCA 20; (1992) 174 CLR 430; 106 ALR 577; 66 ALJR 373; 15 AAR 249; Mason CJ, Deane, Toohey and Gaudron JJ, Brennan J dissenting
In so far as it applies in this case, s 7(1) of the AI Act provides that:
“If an Act, or an instrument under an Act, repeals or amends an Act (the affected Act) or a part of an Act, then the repeal or amendment does not:
(a) …
(b)affect the previous operation of the affected Act or part (including any amendment made by the affected Act or part), or anything duly done or suffered under the affected Act or part; or
(c)affect any right, privilege, obligation or liability acquired, accrued or incurred under the affected Act or part; or
(d)affect any penalty, forfeiture or punishment incurred in respect of any offence committed against the affected Act or part; or
(e)affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment.
…”
The case of Esber was concerned with issues relating to accrued rights. The resolution of that case revolved around the applicability of redemption provisions in the Compensation (Commonwealth Government Employees) Act 1971 (1971 Act) after they had been repealed by the Compensation Employees’ Rehabilitation and Compensation Act 1988 (1988 Act). The delegate of the Commissioner for Commonwealth Employees’ Compensation had disallowed Mr Esber’s claim for redemption because he was not satisfied that certain requirements had been met. At the time of the repeal of the 1971 Act, Mr Esber’s application to the Tribunal was out of time and the extension had not yet been granted. The majority considered first the transitional provisions of the 1988 Act and concluded that those provisions ensured that Mr Esber’s entitlement to redemption was to be determined in accordance with the 1971 Act.
In Esber, the High Court focused on the nature and extent of any rights that arise in relation to the review of a decision made under the 1971 Act. The majority went on to say:
“... at the least, the applicant had, at the time of the repeal of the 1971 Act, a right to have his application to the Tribunal determined pursuant to Pt V of the 1971 Act. It may not be possible to say of a person in the position of the appellant that he had a right to a favourable determination from the Tribunal. The Tribunal was required to stand in the shoes of the decision-maker (the delegate) and arrive at its own decision … [Drake v Minister for Immigration (1979) 24 ALR 577 at 589]. In Drake, Bowen CJ and Deane J said of the Tribunal … [at 589]:
‘The question for the determination of the Tribunal is not whether the decision which the decision maker made was the correct or preferable one on the material before him. The question for the determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal.’
But that is not to the point here. If it be assumed that the appellant did not have a right to redemption in the sense first discussed [i.e. a right to redemption of weekly payments within the meaning of section 8 of the Acts Interpretation Act 1901], he had a right to have his claim to redemption determined in his favour if the delegate had wrongly refused his claim. To borrow a sentence from the judgment of Hope JA in NSW Aboriginal Land Council v Minister Administering Crown Lands (Consolidation) Act and Western Lands Act …[(1988) 14 NSWLR 685 at 694]:
‘The right might be said to be a conditional one, namely, conditional upon the relevant facts being established, but the right was nonetheless a right because it was conditional.’
Once the appellant lodged an application to the Tribunal to review the delegate’s decision, he had a right to have the decision of the delegate reconsidered and determined by the Tribunal. It was not merely ‘a power to take advantage of an enactment’ …. Nor was it a mere matter of procedure …; it was a substantive right … Section 8 of the Acts Interpretation Act protects anything that may truly be described as a right, ‘although that right might fairly be called inchoate or contingent’ … This was such a right. It was a right in existence at the time the 1971 Act was repealed. That being so, and in the absence of a contrary intention, the right was protected by s 8 of the Acts Interpretation Act and was not affected by the repeal of the 1971 Act.”[81]
[81] (1992) 174 CLR 430; 106 ALR 577; 66 ALJR 373; 15 AAR 249; at 440-441; 583; 377; 255
There was no contrary intention found by the majority. Even though s 8 is now numbered s 7 in the AI Act, its principles are also subject to any contrary intention in the amending legislation. Schedule 6 of the ESOS Amendment Act has application, transitional and savings provisions. Item 6 is concerned with the review of decisions made before 1 July 2016. As its terms are limited to those situations in which an application for review has not been made in the Tribunal immediately before 1 July 2016 and the time in which to do so has not expired, it is not relevant in this case for KES had made its application for review before that date.
Item 2 of Schedule 6 applies if, before 1 July 2016, a provider was registered to provide a course at a location and, immediately before that date, the provider’s registration was in force. Under Item 2(2), it follows that:
“Despite the amendments of the ESOS Act made by Schedule 1 to this Act, the provider’s registration continues in effect, and may be dealt with, after commencement as if the provider were registered under the ESOS Act, as amended by that Schedule.”
If, immediately before 1 July 2016, the provider’s registration was subject to any conditions, those conditions continue in effect, and may be dealt with, after that date as if they had been imposed by s 10B of the amended ESOS Act.[82]
[82] ESOS Amendment Act; s 3; Schedule 6; Item 2(3)
By providing that the “registration continues in effect, and may be dealt with …” as if a provider were registered under the amended ESOS Act, it must follow that the renewal of that registration is also dealt with under the amended ESOS Act. Renewal is dealing with a registration just as granting or cancelling registration is dealing with a registration.
KES was a registered provider. ASQA’s decision was not to renew its registration but, when I stayed the operation of that decision, the practical effect was that KES continued to be a registered provider. That was the situation when the ESOS Amendment Act came into operation. Applying Item 2(2) of Schedule 6 of the ESOS Amendment Act, KES’s registration may be dealt with after 1 July 2016 as if it were registered under the amended ESOS Act. Therefore, its application for registration is dealt with under the amended ESOS Act with reference to s 10E.
ARE THE ISSUES DETERMINED BY REFERENCE TO THE NATIONAL CODE 2007, 2017 OR 2018?
The National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2007 (National Code 2007) had been in effect since 1 July 2007. It was subsequently replaced by the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2017 (National Code 2017). Clause 2.1 of the National Code 2017 foreshadowed a revised national code to be made following consultation with State and Territory representatives of industry and student bodies. That revised National Code - the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2018 (National Code 2018) – was made on 1 January 2018 when it repealed and replaced the National Code 2007.
Clause 2 of the National Code 2017 stated that it replaced the National Code 2007 with effect from the day after registration on the Federal Register of Legislation. No transitional provisions were included but the terms of s 9AB(1)(f)(i) do not suggest that the Secretary must have no reason to believe that the provider is not complying with, or will not comply with, the National Code at a definite time. Under s 33(3) of the ESOS Act, the Minister must ensure that, as far as practicable, there is a National Code at all times. That does not suggest that reference to the national code is a reference to the National code at a particular time. Rather, it suggests that the reference to the National Code is a reference to it as it exists from time to time. That suggestion is consistent with the content of the Note to s 33(1) when it refers to the Minister’s power to rely on s 33(3) of the AI Act to amend the national code.
By way of contrast to the National Code 2017, the National Code 2018 included savings and transitional provisions at cl 5. Those provisions are:
“Applications for registration or renewal of registration submitted by providers on or before 31 December 2017 will be assessed under the National Code 2017 (F2017L00403).
Applications for registration or renewal of registration submitted by providers on or from 1 January 2018 will be assessed under the National Code 2018.
Currently registered providers must be compliant with the National Code 2018 from its commencement on 1 January 2018.
For enforcement action undertaken by an ESOS agency on or before 31 December 2017, the National Code 2017 (F2017L00403) will apply.
For enforcement action undertaken by an ESOS agency on or after 1 January 2018, the National Code 2018 will apply.
For any student complaint or appeal initiated on or before 31 December 2017, the National Code 2017 (F2017L00403) will apply
For any student complaint or appeal initiated on or after 1 January 2018, the National Code 2018 will apply.”
Clause 5 leads me to the conclusion that the relevant National Code in this case is National Code 2017 as KES’s application for registration was made before 31 December 2017. That does not mean that the National Code 2007 is not relevant. It is relevant in considering historical matters in the context of taking a risk management approach when considering matters under s 10E(2) of the ESOS Act.
ARE THE ISSUES DETERMINED BY REFERENCE TO THE NVR ACT AT THE TIME THE DECISION WAS MADE OR AS SUBSEQUENTLY AMENDED?
Since ASQA made its decision under the NVR Act, that legislation has been amended by, among others, the National Vocational Education and Training Regulator Amendment Act 2020[83] (first 2020 NVR Amendment Act) and the National Vocational Education and Training Regulator Amendment (Governance and Other Matters) Act 2020[84] (second 2020 NVR Amendment Act). Under the first 2020 NVR Amendment Act, amendments were made to the registration provisions in Part 2 of the NVR Act. Section 17A was inserted and variations were made to the reviewable decisions. None of them made any material variation to the NVR Act as in force at the time that ASQA made its decision. The same is true for the second 2020 NVR Amendment Act. It is, therefore, unnecessary to consider this issue further in the context of the NVR Act.
[83] Act No. 10 of 2020
[84] Act No. 77 of 2020
WHAT IS NO REASON TO BELIEVE UNDER THE ESOS ACT?
Mr Mitchell drew my attention to the expression “no reason to believe” as used in s 9AB(1) of the ESOS Act 2000. He referred to a passage from the High Court’s judgment in George v Rockett:[85]
“The objective circumstances sufficient to show a reason to believe something need to point more clearly to the subject matter of the belief, but that is not to say that the objective circumstances must establish on the balance of probabilities that the subject matter in fact occurred or exists: the assent of belief is given on more slender evidence than proof. Belief is an inclination of the mind towards assenting to, rather than rejecting, a proposition and the grounds which can reasonably induce that inclination of the mind may, depending on the circumstances, leave something to surmise or conjecture.”[86]
87. Bearing this passage in mind, Mr Mitchell submitted that it follows that KES’s right to renewal of its registration turns on whether the Tribunal has an inclination less than proof but more than suspicion, based on reasonable grounds, to accept KES is not complying, or will not comply, with the ESOS Act or the National Code.
[85] [1990] HCA 26; (1990) 170 CLR 104; Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ
[86] [1990] HCA 26; (1990) 170 CLR 104 at 116
The expression “no reason to believe” is not used as commonly as “reason to believe”. It has, however, been used in s 913B(1) of the Corporations Act 2001, which provides that the Australian Securities and Investments Commission must grant an application if, among other factors, it has no reason to believe that the applicant will not comply with the obligations applying under s 912A. I considered both expressions in Re McDermott and Australian Securities and Investments Commission[87] in that context. Having reviewed the authorities, I concluded that:
“ In summary, these authorities establish that a decision-maker will have a ‘reason to believe’ the existence of a certain fact or state of affairs if two factors are satisfied. First, the decision-maker must, in fact, hold that belief. Second, the decision-maker must do so on the basis of evidentiary material that would be sufficient to induce that state of mind in a reasonable person. Extrapolation of the same principles to the requirement that a decision-maker has ‘no reason to believe’ the existence of a certain fact or state of affairs leads to a similar outcome. …”[88]
[87] [2020] AATA 3362
[88] [2020] AATA 3362 at [51]
The practical effect is that the expression “reason to believe” a positive proposition establishes a relatively low standard of proof. By way of contrast, the expression “no reason to believe” a negative proposition establishes a different standard of proof that is more difficult to reach. It is not a case of looking for a reason to believe the proposition but of looking and eliminating all the reasons to believe the proposition so that there is no reason to believe it. The expression “no reason to believe” does not impose a burden or onus of proof although, as a matter of practicalities, parties will be advised to lead evidence relevant to the issue.
WHAT IS A RISK MANAGEMENT APPROACH UNDER THE ESOS ACT?
In considering whether to renew the registration of a provider, s 10E(2) provides that a ASQA must use a “risk management approach”. That expression is not defined in the amended ESOS Act, which is the context within which it must be interpreted. While searching for the meaning of a composite phrase by combining the dictionary meanings of its component parts will ordinarily be misleading,[89] I have begun my search in that way but bearing in mind that I must always do so in the context of the ESOS Act.[90]
[89] XYZ v Commonwealth [2006] HCA 25; (2006) 227 CLR 532; 227 ALR 495; (2006) 80 ALJR 1036; Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon and Crennan JJ at [19]; 543-544; 503; 1044-1045 per Gleeson CJ
[90] Sea Shepherd Limited v Commissioner of Taxation [2013] FCAFC 68; (2013) 212 FCR 252; Besanko, Gordon and Dodds-Streeton JJ at [34]; 261 per Gordon J
The ordinary meaning of the expression “risk management” is:
“… the devising of procedures, strategies, etc., which seek to minimise risk, such as risk of injury in a workplace, risk of financial loss in stock trading, etc.”[91]
“… the forecasting and evaluation of risks in business and commerce, combined with the identification of procedures to avoid or minimize the impact of such risks.”[92]
[91] Macquarie Dictionary Online
[92] Oxford English Dictionary Online (OED)
When used as a noun, as it is in the ESOS Act, the word “approach” would seem to mean:
“11. the method used or steps taken in setting about a task, problem, etc.”[93]
“[5] b. figurative. A way of considering or handling something, esp. a problem.”[94]
[93] Macquarie Dictionary Online
[94] OED
As used in s 10E, the composite phrase “risk management approach” suggests that the ESOS agency is required to follow a course of information gathering, analysis and reasoning that leads it to have regard to risk when deciding whether a registered provider meets the registration requirements. The focus of a risk management approach is upon the process and not upon the outcome, or analysis, that would follow from applying that approach.[95] The “risk” that is central to a risk management approach in the context of s 10E is the risk of a provider’s, or a registered provider’s, not meeting the registration requirements. In taking that course, it must be remembered that some registration requirements are absolute but others are not. Section 11(a), for example, specifies an absolute requirement i.e. that the registered provider “is” a resident or a Table C provider. By way of contrast, s 11(b) does not specify an absolute requirement when it requires that “the ESOS agency for the provider is satisfied that the provider complying, or will comply, with …”, among others, the ESOS Act and National Code. It follows that the nature of the risk is a relevant factor in a risk management approach.
[95] Raffles College Pty Ltd v Tertiary Education Quality Standards Agency [2015] FCA 734; (2015) 233 FCR 162 at [36]; 172; Perram J
Also relevant in a risk management approach in the context of s 10E is a registered provider’s past compliance, or otherwise, with its obligations. In doing so, it is necessary to look to the environment in which the registered provider operated in the past and, specifically, the factors that may have had an impact on the provider’s ability to comply or not comply with its obligations. Those factors may have prevailed more generally in the community or may have been specific to the registered provider. Factors relating specifically to a registered provider might have included its resources to meet the registration requirements and the nature and number of any shortcomings, its systems and management. Where a registration requirement is that a registered provider “will comply” or is complying, a risk management approach will also need to look at similar factors including the estimated timeframe within which compliance will be achieved.
Section 10E and the registration requirements in s 11 do not stand alone. They ae found in legislation which empowers the ESOS agency to impose conditions on a provider’s registration or to vary or remove a condition under s 10B.[96] Again, the ESOS agency must use a risk management approach in deciding whether to do so but the fact that it may do so sits with the same approach it must take in relation to considering whether to renew a registered provider’s registration. A risk management approach will need to take account of conditions, if any, that, if met would enable the registered provider to comply with the registration requirements.
IS REGARD HAD TO THE EVIDENCE AT THE TIME ASQUA MADE ITS DECISIONS OR AT THE TIME I MAKE MY DECISION?
[96] Section 10G(2)(f) requires the ESOS agency to give notice of the renewal of a registration including any conditions imposed on the provider’s registration under s 10B at the time of the renewal of the registration and when it will take effect.
One of the hallmarks of this case has been what Mr Lloyd once described as its “staccato” progress. The parties contributed to that before the hearing in July 2017 and I have made my own contribution since. In the period leading to the hearing, KES undertook a great deal of remedial work on its documentation and presented that evidence. That raised the question of the time at which the decision was to be reviewed and the evidence that would be accepted. Could the proceedings in the Tribunal be used, as it were, as an opportunity for a provider or registered provider to remedy breaches identified by ASQA and meet its obligations at that later time. The question arose in a different way this year when my delay in attending to this matter meant that ASQA wanted to lead further evidence as to what it alleges are KES’s ongoing breaches of its obligations. I permitted ASQA to lead that evidence and gave KES an opportunity to lead evidence in contradiction. I have gone back to the principles underlying merits review to answer this question.
Mr Mitchell referred to these and other aspects of Ms Clayton’s analysis of KES’s new assessment system as “incredibly positive”.[152] He submitted that:
“These findings are sufficient to leave the Tribunal confident about future compliance with Standards 1.8 and 3.1. These findings should also satisfy the Tribunal that Ms Hodge’s work is fully compliant, and up to the standard expected by ASQA.”[153]
[152] Applicant’s Submissions dated 23 October 2020 at [54]
[153] Applicant’s Submissions dated 23 October 2020 at [60]
I have not included the specific examples given by Ms Clayton in her report but I have considered each. I have also noted that KES has not chosen the path of denial but the path of rectification and, indeed, entire replacement of its assessment systems to meet each of the shortcomings identified by Ms Clayton indicates that KES is not disputing her findings. In the absence of any contradictory material, I accept the shortcomings and incidents of non-compliance identified by Ms Clayton. The examples she gives represent serious shortcomings in KES’s systems of assessment and in its oversight of those systems. I also accept that those shortcomings will be addressed if KES implements the assessment tools prepared by Ms Hodge.
Clause 3.1 of VET Standard
That brings me to cl 3.1, which is incorporated in Standard 3 and which states:
“The RTO issues, maintains and accepts AQF certification documentation in accordance with these Standards and provides access to learner records.”
The Context of Standard 3 is:
“To maintain the integrity and national recognition of training products, AQF certification must be consistent in presentation and RTOs must accept the certification issues by other RTOs. This is the purpose of nationally agreed requirements about the nature of certification content and presentation and maintenance. Learner needs should be met through timely issuance of AQF certification documentation and access to their records.
RTOs are not obliged to issue any certification that would be entirely comprised of units or modules completed at another RTO or RTOs.”
In order to be compliant with Standard 3, an RTO must meet six criteria, one of which is set out in cl 3.1:
“The RTO issues AQF certification documentation only to a learner whom it has assessed as meeting the requirements of the training product as specified in the relevant training package or VET accredited course.”
In her September Evidence Review Report, Ms Clayton concluded that KES was not compliant with the requirements of cl 3.1 because it had not demonstrated in the context of cl 1.8 that all learners, who had been issued AQF certification documentation had been assessed as meeting the requirements of the training product. She gave examples relating to four students. Ms Clayton had set out the same analysis in her February and July Evidence Review Reports. One of the examples was of a student who had been issued three AQF certification documents for the same qualification on the same day with each bearing a different certificate number. The August Audit Rectification Response acknowledged that one was the original certificate but that KES’s administrator had used the Student Management System (SMS) Axcelerate to reissue, rather than to reprint, the certificate. As a result, a Statement of Attainment had been issued by mistake when what should have been produced was a Statement of Results. KES stated that training had been put in place to show the current administration staff how to provide a second or replacement certificate if required and when to issue a Statement of Attainment. Furthermore, “The awards register in Axcelerate had been cleaned up withdraw any testamurs and any wrongly issued Statements of Attainment.”[154]
[154] August Audit Rectification Response at 41
Ms Clayton’s September Evidence Review Report had regard to the further material. If fully implemented, she noted, the new assessment system indicates that, in the future, only those students who had been assessed as having met the training package requirements will be issued AQF certification documentation. Ms Hodge had advised that KES had introduced new procedures and trained administration staff how to issue testamurs, Records of Results and Statements of Attainment correctly.
What KES had omitted to do, Ms Clayton wrote, related to remedial action:
“Remedial action for past students
The organisation did not provide evidence that it has undertaken remedial action to address the non-compliances identified with its assessment practices at Clause 1.8. Therefore, the organisation has not demonstrated that all learners who have been issued AQF certification documentation have been assessed as meeting the requirements of the training product.”[155]
[155] September Evidence Review Report at 18
On behalf of KES, Mr Mitchell submitted:
“ASQA submits, in accordance with Ms Clayton’s evidence, that King is yet to undertake remedial training and assessment, to catch up with the present state of the assessment tools recently implemented. The premise is logically unassailable – King could not have assessed past students against assessment tools recently devised – but the conclusion does not follow that King’s registration should not be renewed as a result. It should have the opportunity to provide the necessary remedial training and assessment in the usual way required by ASQA. That is addressed in the condition proposed at paragraph 63 and 64 below. That is particularly the case when ASQA has not until reply submissions raised this issue. If it were so critical to King’s renewal, it is surprising that Ms Clayton did not identify it in any of her previous reports.”[156]
[156] Applicant’s Submissions dated 23 October 2020 at [61]
While it is true that Ms Clayton had not previously raised rectification of past errors in considering the issues raised by Clauses 1.8 and 3.1, I would have thought that her focus on the shortcomings in its assessments and in its AQF certification documentation would have put KES on notice to check its past documentation. It can be expected to have been aware of its obligations. In the case of Standard 3, it would have been aware that its obligation to issue, maintain and accept AQF certification documentation in accordance with the VET Standards. That was not an obligation that applied only to current or future documentation but an obligation that applied equally to documentation that it had issued in the past. Having acknowledged the shortcomings in its assessment processes and in its documentation, it is not unreasonable to expect that KES would have looked to its past documentation. For KES to be surprised that Ms Clayton only raised it in her September Evidence Review Report is itself surprising. Assessments had been a focus of ASQA’s ongoing audits and KES was obliged to comply with those Standards. A reading of them reveals that one of their purposes is to ensure that training packages offered by RTOs meet the requirements of training packages or VET accredited courses and that those training products have integrity for employment and further study.
Ms Lahni Howard
During the January 2020 audit, Mr Mills noted that Ms Lahni Howard was then training students in Certificate IV in Business but that she was not qualified to do so under cl 1.13 of Standard 1 of the VET Standards. That clause provides:
“In addition to the requirements specified in Clause 1.14 and Clause 1.15, the RTO’s training and assessment is delivered only by persons who have:
a)vocational competencies at least to the level being delivered and assessed; and
b)current industry skills directly relevant to the training and assessment being provided; and
c)current knowledge and skills in vocational training and learning that informs their training and assessment.
Industry experts may also be involved in the assessment judgement, working alongside the trainer and/or assessor to conduct the assessment.”
Ms Howard agreed with Mr Mills that she had completed the old qualification but not the Certificate IV in Business. That meant that KES had not met the requirements of cl 1.13. KES’s response to its having delivered training and assessment in Certificate IV in Business by a person who did not meet the requirements of cl 1.13 was:
“Lahni Howard is no longer employed by King. She has been replaced with Marini Angouw, who is relevantly qualified as outlined at page 5-7 of the audit rectification response prepared by Ms Hodge.”[157]
[157] KES’s submissions dated 23 October 2020
The August Rectification Response prepared by KES with Ms Hodge show that KES had engaged Ms Angouw as a trainer and assessor for Certificate IV in Business. The response acknowledges that it is not entirely certain that Ms Angouw’s qualifications met the requirements of cl 1.14 at the time. KES was recruiting for a new trainer and:
“A process has been put in place to ensure only trainers and assessors who meet requirements fully will be appointed to commence training. The trainer’s documents will be checked through external RTO experts before they commence. …”[158]
[158] Affidavit of Ms Hodge sworn 18 August 2020; Exhibit JH-2 at 6
Misleading and deceptive conduct
A. Section 15 of the ESOS Act: Enrolment in 2015 training package
Section 15 of the ESOS Act states:
“A registered provider must not engage in misleading or deceptive conduct in connection with:
a)The recruitment of overseas students or intending overseas students; or
b)The provision of courses to overseas students.”
Clause 1.26 comes under the heading “Transition of training products”. Superseded training products are the subject of cl 1.26(a):
“Subject to Clause 1.27 and unless otherwise approved by the VET Regulator, the RTO ensures that:
a)where a training product on its scope of registration is superseded, all learners’ training and assessment is completed and the relevant AQF certification documentation is issued or learners are transferred into its replacement, within a period of one year from the date the replacement training period was released on the National Register.”
Clause 1.27 provides that the requirements of cl 1.26(a) do not apply where a training package requires the delivery of a superseded unit of competency. There is no suggestion in this case that this is so. The word “learner” is defined in the Glossary to the VET Standards as “… a person being trained and/or assessed by the RTO for the purpose of issuing AQF certification documentation.”
Ms Owen stated in her report dated 27 February 2020 that two courses provided by KES had been superseded. They were BSB41415 Certificate IV in Work Health and Safety (CRICOS code: 082991K) and BSB51315 Diploma of Work Health and Safety (CRICOS code: 087436G). The National Register records that, as at 30 August 2019, the former had been replaced by BSB414419 Certificate IV in Work Health and Safety and the latter by BSB51319 Diploma of Work Health and Safety. As at 27 February 2020, Ms Owen recorded that neither of the replacement courses - by BSB414419 Certificate IV in Work Health and Safety and BSB51319 Diploma of Work Health and Safety – was on its scope of registration and that KES was not registered under the ESOS Act to deliver either of them to overseas students.
Ms Owen said that ASQA had searched PRISMS on 24 January 2020 to identify Certificates of Enrolment (CoEs) created by KES after 30 August 2019, which was on the date on which the two courses became superseded. She reported:
“2.9 Interrogation of this data indicates that between 2 September 2019 and 23 January 2019 [sic], after the provider became aware that it could no longer deliver Work Health and Safety to any student beyond 30 August 2020, various Authorised Users for and on behalf of King created CoEs for students in the BSB51315 Diploma of Work Health and Safety with an accepted commencement date after the provider will no longer be lawfully able to provide the course.
2.10ASQA notes that, as at 24 January 2020, King has created enrolments for 47 overseas students into a course, with start dates as follows:
«12 students due to commence on 12 October 2020;
«6 students due to commence on 9 November 2020;
«30 students due to commence on 30 January 2021;
«1 student due to commence on 8 March 2020.
2.11King has recruited these 47 students and contracted to commence them in a course that will not be on their scope of registration by the time the commencement date arrives, and has done so knowing this to be the case. ASQA notes that all 47 of the students were recruited offshore – and none are likely to be aware that they will not be able to start the course as the provider that has enrolled them will not lawfully be able to teach the course.
2.12…
2.13In doing so, ASQA is of the view that King has been deceptive in respect of recruitment of these 47 students. King has not created bona fide CoEs in respect of these students, and has placed both any fees paid by the students for the course and any visas that may be issued to the students to undertake the course in jeopardy.
2.14ASQA further analysed PRISMS data to identify a further 42 accepted students where an Authorised User for and on behalf of King has created an enrolment, after becoming aware that King would not be able to lawfully deliver Work Health and Safety courses beyond 30 August 2020. These 43 overseas students have been offered an enrolment with an end date after the course will have expired, and King is not able to lawfully complete their training.
2.15ASQA notes that the majority of these students have been enrolled offshore, and are unlikely to be aware that they will be unable to complete the course King has agreed to provide.”
In its response, KES has not disputed the analysis of the data presented by Ms Owen. Instead, it has submitted that it was not in breach of any requirements regarding the superseded courses. KES noted that the transition period for the courses has been extended by ASQA. I have not been given any details of that extension but my own searches have revealed that ASQA decided on 21 August 2020 that the “Extended training, assessment and certification issuance period ends” would end on 1 March 2021 for BSB41415 Certificate IV in Work Health and Safety (CRICOS code: 082991K) and BSB51315 Diploma of Work Health and Safety. When regard is had to cl 1.26, it is clear that the transition period relates to those who are already “… being trained and/or assessed by the RTO for the purpose of issuing AQF certification documentation.” It does not relate to those who are yet to be enrolled and so yet to commence the course and to be “learners” in that course.
I will summarise the position in relation to the two courses in the following table:
Date
Event
KES actions
30 August 2019
Courses superseded and replaced.
2 September 2019 to 23 January 2020
KES created CoEs for 47 overseas students for the superseded BSB51315 Diploma of Work Health and Safety starting between 12 October 2020 and 30 January 2021.[159]
19 December 2019 to 23 January 2020
KES created CoEs for 36 overseas students in BSB41415 Certificate IV in Work Health and Safety starting between 23 December 2019 and 10 August 2020 and ending between 19 October 2020 and 7 May 2021.[160]
31 August 2020
Conclusion of transition period.
21 August 2020
Transition period extended to 1 March 2021.
[159] Ms Owen’s report; Annexure G
[160] Ms Owen’s report; Annexure H
The table shows that KES was offering courses to students at a time when it knew that those courses were already superseded and that, given the starting and finishing dates, it would have to transfer the students to the replacement courses. It knew by 30 August 2019 that would be the case and so well before it started enrolling the students referred to in the table. It is of no consequence that the end of the transition period was later extended. It was not extended at the time that KES created the CoEs or at the time that the students committed themselves to the course.
KES denies that its activities were misleading saying:
“It is the title of the qualification, and not its code that a student is interested in. If a student enrols in the 2015 qualification, and it is updated to the 2019 qualification by the time that student commences their studies, it is hardly a matter about which the student is likely to complain. …”[161]
The submission is made without the support of any evidence. Without evidence, I do not accept it. The submission assumes that students do not care about the content of the course they study. That may be so for some but not for all. To enrol students for courses that a provider knows are superseded and from which the student will have to be transitioned to another course is a failure to act with openness and honesty. Such a provider is selling a product that it knows that, in some cases, it cannot deliver or, in others, it can only deliver in part before it must transition the student. This is behaviour that misleads or deceives those who enter a contract to study at KES.
[161] KES’s Submissions dated 23 October 2020
Discrepancies between rolls of students maintained by KES and students shown on PRISMS as enrolled
This is not about attendance but about enrolment. Mr Mills recorded that PRISMS recorded that 29 students were studying Certificate IV in Health and Safety as at 30 January 2020 while the roll maintained by KRS showed 22 students. For the Diploma in Work Health and Safety, PRISMS showed 20 students to be taking the course but KES’s roll recorded 19. Mr Lloyd submitted that this means that KES is complicit in students’ not meeting their visa requirements. While they are recorded on PRISMS, they are able to obtain a student visa but, as far as KES is concerned, they do not exist. Mr Lloyd directed his submission to [49]-[52] of Mr Mills’ affidavit but I think that the substance of it is directed to [58]-[70].
Mr Mitchell submitted that, had ASQA provided names of students missing from the rolls, it could have responded to the allegation. It does not follow that an enrolled student must attend every class. Mr Mitchell was, rightly I think, confused by Mr Lloyd’s reference to [49]-[62] of Mr Mills’ affidavit but he did look to [59]-[62] as well and [61] contains the crux of ASQA’s assertion when Mr Mills states: “According to the class rolls there were 41 students scheduled to attend. That is eight (8) students listed as studying on PRISMS were not identified on the class rolls.” The issue is the discrepancy between those enrolled on KES’s rolls and those entered on PRISMS. KES was placed on notice about the issue and had access to its own rolls and to PRISMS, into which it entered, and from which it could retrieve, data.
In the absence of any evidence, that discrepancy remains unanswered. Without being answered, it raises questions as to the accuracy of KES’s recordkeeping or, more seriously, questions of the sort raised by Mr Lloyd.
CONSIDERATION
Mr Dhawan expressed concern about the time that KES was given to respond to the January Evidence Review Report. He had requested six months and was disappointed when required to lodge its evidence by 29 May 2020 in response to ASQA’s application to set aside the stay order. As matters have turned out, KES lodged its first Audit Rectification Response at the end of June as an Exhibit to an affidavit of Mr Dhawan. Its second and last Audit Rectification Response was lodged in August 2020 in response to Ms Clayton’s July Evidence Review Report. I understand that KES needed those months for the RTO Doctor, and so Ms Hodge, to prepare new documentation and procedures complying with the VET Standards and the National Code. I also accept that the new documentation and procedures accord with those requirements and that ASQA is of the same view. What is of concern to me is the nature and the extent of the work that has been undertaken by the RTO Doctor to achieve compliance with the assessment tools. That work was done in an environment in which KES had, as an NVR Registered Training Organisation, an ongoing obligation under s 22 of the NVR Act to comply with the VET Quality Framework that includes the VET Standards.
Having said that, I must have regard to the legislative requirements that KES must meet for re-registration. I have already decided that they differ between the NVR Act and the ESOS Act. In the case of s 17(1) of the NVR Act, the issue is whether KES “complies with” the VET Quality Framework and the applicable conditions of registration in Subdivision B of Division 1 of Part 2 of the NVR Act. As matters stand and having regard both to the breaches relied upon by ASQA on the basis of the Evidence Review Reports prepared by Ms Clayton and the rectification relied upon by KES in the form of Ms Hodge’s rectification work, I am satisfied that KES complies with the requirements of s 17(1).
Even if I have regard only to the fact that such extensive rectification work was required in 2020, I have grave concerns whether KES will implement the new assessment tools recommended by Ms Hodge and, if it does, whether it will continue to have in place systems to monitor compliance. On the evidence that I have, I am not satisfied that KES had, at the time of the audits conducted from January 2020, monitoring systems of that sort or even spot check monitoring. It is not enough to tell teaching or administrative staff to undertake tasks or to give them the assessment tools and expect them to complete them properly. It should be enough but those who are the executive officers of any RTO need to bear in mind that they may be personally liable to a civil penalty if the RTO should prove to be in breach of civil penalty offences under Division 1 of Part 6 of the NVR Act.[162]
[162] NVR Act; ss 133 and 133A. See, for example, s 105, which creates a civil penalty offence for, in general terms, issuing a VET statement of attainment without providing adequate assessment.
Mr Lloyd submitted that the Tribunal has power to make any decisions that ASQA has power to make. He referred to the judgment of Collier J in Australian Skills Quality Authority v Brighton Pacific Pty Ltd,[163] when she adopted and applied the principles established by earlier authorities such as Secretary, Department of Social Security v Hodgson[164] and Australian Securities and Investments Commission v Donald.[165] The essential principles are also found in Frugtniet v Australian Securities and Investments Commission,[166] to which Collier J referred and set out the following passage:
“… [E]xcept where altered by some other statute, which has not occurred here, the jurisdiction conferred on the AAT by ss 25 and 43 of the AAT Act, where application is made to it under an enactment, is to stand in the shoes of the decision-maker whose decision is under review so as to determine for itself on the material before it the decision which can, and which it considers should, be made in the exercise of the power or powers conferred on the primary decision-maker for the purpose of making the decision under review[53]. The AAT exercises the same power or powers as the primary decision-maker, subject to the same constraints. The primary decision, and the statutory question it answers, marks the boundaries of the AAT's review. The AAT must address the same question the primary decision-maker was required to address, and the question raised by statute for decision by the primary decision-maker determines the considerations that must or must not be taken into account by the AAT in reviewing that decision [54][[167]]. A consideration which the primary decision-maker must take into account in the exercise of statutory power to make the decision under review must be taken into account by the AAT. Conversely, a consideration which the primary decision-maker must not take into account must not be taken into account by the AAT.”[168]
[163] [2020] FCA 617
[164] [1992] FCA 338; (1992) 37 FCR 32; 108 ALR 322; 15 AAR 563; 27 ALD 309; Hill J
[165] [2003] FCAFC 318; (2003) 136 FCR 7; 203 ALR 566; 48 ACSR 394; 22 ACLC 24; 38 AAR 288; 77 ALD 449; Gray, Kenny and Downes JJ
[166] [2019] HCA 16; (2019) 266 CLR 250; 367 ALR 695; 93 ALJR 629; Kiefel CJ, Bell, Gageler, Nettle, Gordon and Edelman JJ
[167] Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286; 82 ALJR 1147; 48 AAR 345 at [142] ; 327; 1173; 380 per Kiefel J
[168] [2019] HCA 16; (2019) 266 CLR 250; 367 ALR 695; 93 ALJR 629 at [51]; 271; 709; 641 per Kiefel CJ, Keane and Nettle JJ
The NVR Act does not restrict the Tribunal’s power to use ASQA’s power. The only restriction comes from s 43(1) of the AAT Act when it provides that “For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision …”.
Mr Mitchell’s submission is also based on the Tribunal’s having the same powers as those conferred on ASQA. In so far as KES’s registration under the NVR Act is concerned, he submitted that I should set aside ASQA’s decision and substitute a decision that KES be registered but on condition that Ms Hodge be required to report to ASQA in 12 months’ time regarding KES’s resourcing and implementation of the new assessment system (including the issues identified at pages 14 to 17 of Ms Clayton’s September Evidence Review Report), KES’s compliance with VET Standard 3.1 and its remedial training and assessment of past students. KES would be required to pay for the report and Ms Hodge would be required to provide an impartial analysis to assist ASQA in its regulatory functions. KES would undertake any remedial action recommended by Ms Hodge. Mr Mitchell submitted that renewal of KES’s registration on this condition would strike the right balance. KES has gone to significant effort to develop a system that ASQA recognises is compliant if properly implemented. It should have the opportunity to implement that scheme.
I accept that Ms Hodge would act professionally if she were asked to take this role but it is not a role that I think that she should be asked to undertake or that I can ask or require her to undertake. The investigative powers are given by the NVR Act to ASQA. ASQA has power to delegate all or any of its functions and powers to, among others, a consultant engaged under s 184 but that is not a power that the Tribunal can exercise. I cannot exercise it. Although the power of delegation is conferred on the decision-maker, ASQA, it is not a power that can be characterised as a power that the Tribunal would use “for the purpose of reviewing a decision”. It is a power that gives ASQA choice and flexibility as to how it carries out its functions and exercises its powers but it is not a power that has any relevance in deciding, and so reviewing, whether an RTO has met its obligations under the NVR Act and the decision that should be made regarding that RTO’s application for registration.
KES’s contraventions of the VET Standards are quite fundamental to the scheme of accreditation that has been established by the NVR Act. That is illustrated by the contraventions identified in 2020 even if I do not have regard to the previous contraventions. They are not simply errors or oversights but systemic flaws. They are systemic flaws that were apparent before 2020. I have touched on them in looking at past historical events but I do not rely on the past to come to that view about the present situation. Systemic failures are not consistent with the objects set out in s 2A of the NVR Act. In particular, it is not consistent with the object to protect and enhance quality in vocational education and training or with the object to protect students undertaking, or proposing to undertake, Australian vocational education and training by ensuring that quality education is provided. These purposes are underlined by the purpose set out in Part 1 of the VET Standards to ensure that training products delivered by RTOs meet the requirements of training packages or VET accredited courses and that they have integrity for employment and further study. Unless there can be some certainty that learners are being properly assessed in their coursework, the integrity of the VET system as a whole is in jeopardy.
Bearing these matters in mind, I have decided that I should set aside ASQA’s decision dated 11 November 2015. In its place I will substitute a decision that, subject to a condition, KES be registered as an RTO from the day after the expiration of its previous registration[169] for a period expiring on 24 December 2023. The condition is that KES engage a consultant approved by ASQA for an initial 12 month period and on either a full or part time basis to oversee its compliance with the NVR Act, including the VET Quality Framework. Compliance means that it will have in place appropriate systems to meet its obligations and that it will implement, monitor and enforce those systems. I would expect ASQA to conduct an audit at the end of that 12 month period but that it do so is not part of my decision.
[169] NVR Act; s 20(1)(a)(i)
That brings me to KES’s registration under the amended ESOS Act. Although s 11(b) requires me to have regard to compliance, the test is a little different from that under s 16 of the NVR Act. The test is whether KES is complying, or will comply, with the amended ESOS Act. Under s 10E of the amended ESOS Act, I must use a risk management approach. I have had regard to the findings that I have made in relation to KES’s breaches of the amended ESOS Act. At the heart of most of them lies a lack of proper assessment tools and lack of monitoring. I am satisfied that KES has, for the most part, addressed the assessment tools. What remains to be tested is whether it is able to implement those tools and do so efficiently and effectively and to sustain the effort required to do so over the period of its registration. I have made findings regarding breaches of National Code Standards 11.1 and 11.2 some four years ago. Despite being on notice that ASQA at least had found it in contravention of the National Code at that time and despite having called evidence at that earlier time regarding work being undertaken to rectify its contraventions, KES has continued to be in contravention. It might be said that the contraventions are different but that is of no matter. The earlier contraventions and its proper response to rectify them should have made it very mindful to make sure that it attended to its systems and tools to ensure that it did not find itself in the same position again. Instead, it finds itself in a similar position in 2020 in having to call in the RTO Doctor to place it in a position of compliance. Given its past history and given the scope of the work that had to be undertaken by the RTO Doctor, I am not satisfied that KES will comply with the amended ESOS Act and the National Code. Therefore, I have decided to affirm ASQA’s decision dated 27 October 2015, and notified to KES on 11 November 2015, to reject KES’s applications for renewal of its registration under the amended ESOS Act.
If it should prove to be the case that the ESOS Act 2000 applies and not the amended ESOS Act, I am not satisfied that I have, under s 9AB(1)(f)(i), no reason to believe that KES will not comply with either that legislation or with the National Code. My reasons for reaching that conclusion are the same as those in the previous paragraph. Again, that would lead me to affirm ASQA’s decision not to renew KES’s registration under the ESOS Act 2000.
DECISION
For the reasons I have given:
(1)in relation to KES’s registration under the NVR Act, I:
(a)set aside ASQA’s decision dated 11 November 2015; and
(b)substitute a decision that:
(i)subject to its:
«engaging a consultant approved by ASQA for an initial 12 month period and on either a full or part time basis to oversee its compliance with the NVR Act, including the VET Quality Framework; and
«implementing appropriate systems to ensure compliance and enforcing its own compliance with those systems;
(ii)KES be registered as an NVR RTO from the day after the expiration of its previous registration for a period expiring on 24 December 2023.
(2)in relation to KES’s registration under the ESOS Act, I:
(a)affirm ASQA’s decision dated 27 October 2015 rejecting KES’s applications for renewal of its registration under the ESOS Act.
| I certify that the preceding two hundred and six (206) paragraphs are a true copy of the reasons for the decision herein of Deputy President SA Forgie |
.........[sgd]...............................................................
Personal Assistant
Dated:10 December 2020
| Heard: Stay hearings: Directions hearings: | 27 and 28 July 2016, 27 and 28 April 2017, 22, 23, 24, 25 and 26 May 2017 and 8 May 2017 and 21 July 2020 3 November 2016, 23 March 2020, |
Counsel for the Applicant: | Mr T Mitchell |
| Solicitor for the Applicant: Solicitor for the Respondent: | Mr N Galatas Mr T Lloyd Australian Skills Quality Authority |
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