McMillan and Secretary, Department of Education - [2022] AATA 1317

McMillan and Secretary, Department of Education [2022] AATA 1317 (23 May 2022)
Division:General Division
File Number(s): 2021/9521
Re:Carmel McMillan
APPLICANT

AndSecretary, Department of Education
RESPONDENT

DECISION
Tribunal:Senior Member O'Donovan
Date:23 May 2022
Place:Canberra

The application for summary dismissal is dismissed.
………..[Sgd]…………
Senior Member D. O’Donovan
Catchwords
Dismissal under section 42B(1)(b) – whether the application has no reasonable prospects of success – questions of fact to be determined – gaps in the available evidence -- whether the applicant should be given an opportunity to lead evidence for substantive matter – where the applicant claims Careers Australia misinterpreted cost of course – where the applicant claims Careers Australia engaged in other forms of pressure to keep her in the course – where the applicant required significant assistance to complete units – where the applicant sought to have debts from enrolment re-credited under section 46AA – Tribunal not satisfied applicant has no reasonable prospects of success
Legislation
Administrative Appeals Tribunal Act 1975 (Cth), s 42B(1)(a), s 42B(1)(b).
Higher Education Support Act 2003 (HES Act), Schedule 1A s 46AA.
Federal Court of Australia Act 1976 (Cth), s 31A.
Cases
Spencer v Commonwealth (2010) 241 CLR 118.
Secondary Materials
Higher Education Support (VET) Guideline 2015, s 58A.
Federal Court Rules 2011, rule 26.01.
Explanatory Memorandum, Tribunals Amalgamation Bill 2015.
REASONS FOR DECISION
Senior Member O'Donovan
23 May 2022

From 2008 to 2016 the Federal Government conducted a disastrous experiment in extending what was once known as the Higher Education Contribution Scheme (HECS), but is presently known as the Higher Education Loan Program (HELP), to private providers of vocational education and training.
The HELP scheme, like the HECS scheme before it, allows a student to defer the cost of post-high school education by having the Commonwealth pay the course fees. The student then has an obligation to repay those fees through the taxation system if their income reaches a certain threshold. The fees payable in respect of the course are paid directly to the institution by the Commonwealth.
The deferred loan schemes implemented by the Commonwealth worked well when they were restricted to the higher education sector. However, in 2008 the scheme was extended to the vocational education and training (VET) sector. Restrictions on access to the scheme were further loosened in 2012. The availability of courses requiring no up-front payment by the student, coupled with the development of online courses where costs of delivery did not increase significantly with additional enrolments, resulted in a tsunami of abuse of the system. The Australian National Audit Office estimates that $1.2 billion in loans were issued inappropriately by VET providers in 2014 and 2015. A further billion dollars of inappropriate loans were given in 2015-2016.[1]
[1] Australian National Audit Office, Administration of the VET FEE-HELP Scheme, 20 December 2016.
Providers targeted low socio-economic areas and regional and remote areas and sought to entice students with up front benefits like a laptop, in exchange for an enrolment in a course. Enrolments were made without regard to whether the course was appropriate for the student. Such transactions generally resulted in a large debt for the student, no educational outcome and inflated course costs being paid by the Commonwealth to the VET provider. The specifics of the abuse by some providers have been well documented in decisions of the Federal Court.[2] The course provider relevant to this matter was the subject of adverse publicity concerning its practices,[3] and in 2017 it went into liquidation.
[2] ACCC v Australian Institute of Professional Education Pty Ltd (in liq) (No3) [2019] FCA 1982; ACCC v Unique International College.
[3] Michael Atkin, ‘Careers Australia salespeople accused of enrolling poor students with fake entrance exams’, ABC News (online, 26 February 2015) < Careers Australia salespeople accused of enrolling poor students with fake entrance exams - ABC News>.
When it became clear that a large number of students had been left with significant FEE-HELP balances which were effectively debts to the Commonwealth, amendments were made to the Schedule 1A of the Higher Education Support Act 2003 (HES Act) to facilitate debt forgiveness for victims of these practices. The Schedule relevantly provides:
(1) The Secretary may, on application…re-credit a person’s HELP balance with an amount equal to the amounts of VET FEE-HELP assistance that the person received for a VET unit of study with a VET provider, if the Secretary is satisfied that:
(a) either:
(i) the person has not completed the requirements for the unit during the period the person undertook, or was to undertake, the unit; or
(ii) under VET Guidelines prescribed for the purposes of this subparagraph, the person is taken not to have completed those requirements during that period; and
(b) it is reasonably likely that, having regard to any matters prescribed by the VET Guidelines for the purposes of this paragraph, the VET provider (or an agent of the VET provider) engaged in inappropriate conduct towards the person in relation to the unit, or the VET course of study of which the unit forms a part.
Section 58A of the VET Guidelines provides:
For the purposes of subparagraph 46AA(1)(a)(ii) of Schedule 1A to the Act, a person (the student) is taken not to have completed the requirements for a VET unit of study with a VET provider if it is reasonably likely that the student did not complete the requirements for the unit, regardless of whether the student is recorded as having completed the unit.
The applicant in this matter was enrolled in a Diploma of Business Administration with Careers Australia. She claims that Careers Australia significantly misrepresented the cost of the course and engaged in other forms of pressure to keep her in the course and completing units. She sought to have debts which she incurred as a consequence of her enrolment re-credited pursuant to section 46AA.
A delegate considered that request on or around 20 August 2020 and refused to re-credit the applicant’s HELP balance. On 17 November 2021 that decision was affirmed on review.
Although the original delegate accepted that the inappropriate conduct outlined in the applicant’s complaint was consistent with her VET provider’s known conduct, a decision was made (and affirmed on review) that no re-credit should be made because the applicant had completed the requirements for each of the units for which she was charged.
The applicant applied to this Tribunal for review of that decision.
The respondent applied to have the matter dismissed on the basis that the application had no reasonable prospect of success.[4] The respondent has provided evidence which establishes that the applicant was awarded a Diploma of Business Administration by Careers Australia. A number of databases record the applicant as having completed the 8 units which make up the Diploma. The respondent contends that, as a consequence, the applicant cannot establish that she has not completed the requirements for each of the units for which she was charged and consequently her application has no prospects of success.
[4] Section 42B(1)(b) of the Administrative Appeals Tribunal Act 1975 (AAT Act).
I am not satisfied that the application has no reasonable prospects for success and dismiss the respondent’s application.
Test for no reasonable prospects
The power to dismiss an application on the basis that it has no reasonable prospects of success is found in section 42B(1)(b) of the AAT Act. It was inserted into the AAT Act by the Tribunal Amalgamation Act 2015. The amendment was described in the explanatory memorandum in the following terms:
This amendment would modernise the language of existing paragraph 42B(1)(a) and clarify the policy surrounding the grounds for dismissal. The proposed new grounds are similar to dismissal powers available to other bodies. For example Rule 26.01 of the Federal Court Rules 2011 allow for summary judgment on matters which have no reasonable prospect of success…These powers would provide the Tribunal with greater power to dismiss unmeritorious matters early where appropriate.
It is clear from the text of the amendment to section 42B (when compared with the previous dismissal power which was restricted to dismissing frivolous or vexatious applications) that by making the amendments, the Parliament was seeking to expand the bases on which the Tribunal could dismiss unmeritorious applications. This purpose is confirmed by the Explanatory Memorandum. Consequently, decisions of the Tribunal made prior to the amendments concerning the principles to be applied in summary dismissal applications do not shed light on the operation of the amended provision.
Of more significance is the High Court’s decision in Spencer v Commonwealth (2010) 241 CLR 118 which considered the phrase ‘no reasonable prospect’ of success in the context of section 31A of the Federal Court Act. Some caution needs to be exercised in treating that provision as identical in scope to paragraph 42B(1)(b) given the different statutory context and the greater amplification of the concept in section 31A(3), but at least two points made in Spencer are relevant when considering paragraph 42B(1)(b). First, the change in statutory language brings about a change in the scope of the power to dismiss applications and makes it easier for the decision to dismiss to be reached. Full effect should be given to the amendments.
The second principle which emerges from Spencer, is that a proceeding should not be dismissed if the Court is required to determine contested issues of fact or engage in significant fact finding in order to reach the conclusion that an application has no reasonable prospects of success. This is so because at the point of determining the application the evidence is invariably incomplete and untested.[5] The Court expressly referred to the need for caution to attend the termination of proceedings summarily.
[5] Spencer at [21] and [24].
With these principles in mind it is necessary to consider whether, on the material provided to the Tribunal by the respondent, the conclusion can be reached that the applicant has no reasonable prospect of success.
Evidence that the applicant had completed the requirements of each unit
The application to dismiss proceeded on the basis that the respondent could establish that the applicant had completed the requirements for each of the units for which she was charged and accordingly the application had no reasonable prospects for success.
No attention at all was paid by the respondent to the VET Guidelines under which a person can be deemed not to have completed the requirements of a unit notwithstanding that the VET provider has records to the contrary. This is an issue I will return to later.
For present purposes it is useful to note that the applicant did not dispute that she had been awarded a Diploma of Business Administration by Careers Australia.
The evidence of such an award submitted by the respondent was substantial. The respondent submitted:
(a)A transcript held by the sector’s regulator – the Australian Skills Quality Agency (ASQA) – which recorded that the applicant had been found competent in 8 units which make up Careers Australia’s Diploma of Business Administration;
(b)An academic transcript issued by Careers Australia to the same effect;
(c)An extract from the Respondent’s own database – the Higher Education Information Management System – which records the units for which the applicant has incurred a VET FEE HELP debt;
(d)A Commonwealth Assistance Notice which is a document which the VET provider is required to supply to the student – which records 5 of the units in respect of which the applicant incurred a VET FEE HELP debt;
(e)A photograph of the Diploma awarded to the applicant.
The applicant conceded (subject to a qualification which I discuss below) that she had submitted assessment for all of the units in the Diploma and been awarded a Diploma by Careers Australia.
Consequently, there is significant evidence that the applicant completed all of the units of study for which she has a HELP debt and it is possible to conclude that the applicant will have great difficulty in establishing that subclause 46AA(1)(a)(i) is satisfied.
However, two things should be noted. First, there are holes in the respondent’s evidence that admit the possibility that the applicant did not complete the units for which she has been charged. Second, there is a significant question to be determined as to whether the applicant can be ‘taken not to have completed’ the unit requirements under the VET Guidelines and thus satisfies the alternative threshold requirement provided for by subclause 46AA(1)(a)(ii).
Holes in the evidence
While there are many documents and databases which record the applicant as having completed the 8 units for the Diploma of Business Administration, all of the information in that regard is ultimately sourced from Careers Australia. There is evidence in the material before me that Careers Australia might not be a reliable source. In particular, the respondent’s own documents note that ‘the ASQA audit report (22-24 August 2016) identified that the assessment(s) in the Diploma of Business was not conducted in accordance with the Principles of Assessment and Rules of Evidence in the RTO Standards 2015.’ This opens up the possibility that students were being certified as having completed unit requirements when in fact they had not.
The requirements of a unit are set objectively for RTOs to ensure that when a Diploma is issued it is a meaningful document that third parties like employers can rely on and have faith in. The fact that Careers Australia is willing to say that a person completed the requirements of a unit does not mean that they did. By 2016 RTOs had significant incentives to demonstrate to regulators that students were getting something out of their courses. It is more than idle speculation to suggest that it is possible that RTOs were certifying that students had completed the requirements for a unit when, if the required standards were being applied, they had not. Accordingly, a proper assessment of the true value of the documentary evidence needs to be undertaken before any conclusion could be drawn that the applicant completed the requirements of all 8 units in which she participated.
The other issue which emerged during the hearing is that the respondent is unable to establish that the units which the applicant is said to have completed are the same eight units for which she has a HELP debt. The difficulty arises because it is impossible to cross-reference the codes for the completed units and the codes for the units for which the applicant was charged. While at the substantive hearing it might be reasonable to infer that the units for which the applicant has a HELP debt are the units which Careers Australia has said she completed, in the context of a summary dismissal application that is not a conclusion I am prepared to draw. Accordingly, there remains a distinct possibility that Careers Australia, due to administrative incompetence or for some other reason, has charged the applicant for different units to the ones which it claims she completed. On the evidence available to me I cannot be satisfied that the applicant has no reasonable prospect of success of establishing that she did not complete the units for which she was charged. More evidence on the issue is required.
Additional doubts about whether the ‘student completed the requirements of the unit’
It is also worth emphasising that the respondent has given no consideration at all to the application of the alternative basis on which the discretion to waive can be triggered. Even if a student is recorded as having completed the requirements of a unit, under the VET Guidelines, she can still be taken not to have completed the unit requirements.
The VET Guidelines relevantly provide:
For the purposes of subparagraph 46AA(1)(a)(ii) of Schedule 1A to the Act, a person (the student) is taken not to have completed the requirements for a VET unit of study with a VET provider if it is reasonably likely that the student did not complete the requirements for the unit, regardless of whether the student is recorded as having completed the unit.
The documents before me record that the applicant advised the respondent when her case was the subject of internal review that ‘she had completed the course with the assistance of a family member who provided advice in answering the assessments as Ms McMillan found the content to be difficult.’
This raises the possibility that the applicant did not in any meaningful sense complete the requirements of some or all of the units which she is recorded as completing. If her sister completed some of the assessment, then it cannot be said that the applicant completed the requirements of the unit. The applicant should at least be given an opportunity to lead evidence on this matter.
Until the evidence concerning the level of assistance received by the applicant is assessed, I cannot be satisfied that the applicant does not meet the thresholds for the exercise of the discretion.
In these circumstances it cannot be said that the applicant has no reasonable prospect of success. There are questions of fact which ought to be determined before the merits of the application are considered. The burden is on the respondent to show that the discretion to dismiss should be exercised. The Respondent has failed to discharge that burden. The respondent’s application is dismissed.

34. I certify that the preceding 33 (thirty-three) paragraphs are a true copy of the reasons for the direction herein of Senior Member Damien O’Donovan.

...........[Sgd]...............................................
Associate
Dated: 23 May 2022

Date of hearing: 13 May 2022

Non-legal Advocate for the Applicant:

Solicitor for the Respondent:

Ms Veronica Pampa

Ms Maple Ko, Secretary, Department of Education, Skills and Employment