Merc Training Pty Ltd and Australian Skills Quality Authority
[2018] AATA 2298
•17 July 2018
Merc Training Pty Ltd and Australian Skills Quality Authority [2018] AATA 2298 (17 July 2018)
Division:GENERAL DIVISION
File Number(s): 2016/1930
Re:Merc Training Pty Ltd
APPLICANT
AndAustralian Skills Quality Authority
RESPONDENT
DECISION
Tribunal:Senior Member A Poljak
Date:17 July 2018
Place:Sydney
The decision under review is affirmed.
........................[sgd]...........................................
Senior Member A Poljak
CATCHWORDS
VOCATIONAL EDUCATION AND TRAINING – application for initial registration – Standards for NVR Registered Training Organisations – non-compliance with standards – Fit and Proper Person Requirements – honesty and character of chief executive officer – decision under review affirmed
PRACTICE AND PROCEDURE – Commonwealth as model litigant – duty to assist Tribunal to arrive at “correct or preferable decision” – failure to lodge all documents in possession or control relevant to the decision under review – reliance on findings of original decision-maker
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) ss 33(1AA), 37, 43
National Vocational Education and Training Regulator Act 2011 (Cth) ss 3, 16, 17, 21, 22, 23, 157, 185, 186
Security Industry Act 1997 (NSW) ss 15, 26CASES
Australian Academy of Management & Science Pty Ltd and Australian Skills Quality Authority [2013] AATA 530
Australian Competition and Consumer Commission v Get Qualified Australia Pty Ltd (in liquidation)(No 3) [2017] FCA 1018
Azzi v NSW Police Force [2016] NSWCATOD 47
Azzi v Commissioner of Police, NSW Police Force (No.2) [2016] NSWCATOD 112
Re Echelon National Security Agency Pty Ltd and Australian Skills Quality Authority (2014) 63 AAR 190
Secretary, Department of Employment, Education, Training & Youth Affairs and Mackay (1998) 29 AAR 95
Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32
SECONDARY MATERIALS
Standards for Registered Training Organisations (RTOs) 2015
REASONS FOR DECISION
Senior Member A Poljak
17 July 2018
INTRODUCTION AND BACKGROUND
The applicant, Merc Training Pty Ltd (“Merc Training”), is a registered training organisation (“RTO”) that currently operates as a labour hire company for security personnel under the name of Merc Security. The respondent, Australian Skills Quality Authority (ASQA) is the “National VET Regulator” as defined in section 3 of the National Vocational Education and Training Regulator Act 2011 (Cth) (“the NVR Act”). The NVR Act empowers ASQA to register training organisations that comply with a specific framework and standards to ensure that national improved quality standards in vocational education and training (“VET”) are met.
On 21 July 2015, Merc Training applied for initial registration as an RTO under the NVR Act to deliver training in a Diploma of Business (“initial application”). Merc Training sought to become an RTO after its CEO, Mr Azzi, identified an opportunity to provide security staff with training to develop their skills and knowledge and enable them to diversify into different security areas, but also deliver training to the general public. Merc Training expected to deliver training to two cohorts of 15 to 20 students in its premises in Auburn. It did not intend to deliver training to overseas students or apply for government training contracts. Additionally, Merc Training noted in its application that it would be interested in applying for First Aid, Responsible Service of Alcohol and Responsible Gaming Services training in the future.
On 12 November 2015, an ASQA Lead Auditor conducted a site audit on Merc Training to assess the initial application against the Standards for Registered Training Organisations (RTOs) 2015, a legislative instrument which relevantly came into effect between 1 January and 1 April 2015. Consequently, ASQA identified that Merc Training was critically non-compliant with clauses 1.1, 1.4, 1.5, 1.6, 1.8 and 2.1 of these standards.
On 18 December 2015, Merc Training responded to a request from ASQA for rectification evidence to address identified non-compliances. Following review of the rectification evidence, Merc Training was deemed compliant with clauses 1.1, 1.5 and 1.6, but ASQA found that there were still significant non-compliances remaining against clause 1.8 and as such clauses 1.4 and 2.1; the particulars of which are detailed in the Audit Report- VET Quality Framework (Final report).
On 22 January 2016, the ASQA Commissioner of Risk Intelligence and Regulatory Support made the decision to reject the initial application pursuant to section 17 of the NVR Act (“the decision”). Following reconsideration upon the request of the applicant and the provision of further evidence, ASQA affirmed the decision on 6 April 2016. This is the decision under review in these proceedings (“the decision under review”).
RELEVANT LEGISLATIVE PROVISIONS
Section 157 of the NVR Act sets out ASQA’s functions. They include functions of registering an organisation as an RTO, accrediting courses that may be offered and/or provided by an RTO and carrying out compliance audits of RTOs. A person may apply to ASQA for registration and for renewal of its registration as an RTO (s 16). In deciding whether to grant an application for registration, pursuant to section 17 of the NVR Act, ASQA must consider whether the applicant complies with the applicable conditions of registration set out in Subdivision B of Division 1 of Part 2 of the NVR Act and the VET Quality Framework. When considering an application, ASQA may conduct an audit of any matter relating to the application (s 17(3)).
The conditions of registration are set out in Subdivision B of Division 1 of Part 2. Section 21 provides that:
“An NVR registered training organisation must:
(a) comply with the conditions set out in sections 22 to 28; and
(b) comply with any conditions imposed on the organisation’s registration under subsection 29(1).
Note: Failure to comply with a condition of registration is a contravention of a civil penalty provision, see section 111.”[1]
[1] ASQA may also impose other conditions on an RTO’s registration and need not do so at the time of registration: ss 17(6) and 29(1) of the NVR Act.
Section 22(1) provides that an NVR registered training organisation must comply with the Standards for NVR Registered Training Organisations. Relevantly in these proceedings, section 23 provides that RTOs must satisfy the Fit and Proper Person Requirements.
The expression “VET Quality Framework” is defined in section 3 of the NVR Act and its meanings relevantly include:
“(a) the Standards for NVR Registered Training Organisations;
…
(c) the Fit and Proper Person Requirements; …”
The expression “Standards for NVR Registered Training Organisations” has the meaning given by section 185 of the NVR Act. The Minister may, by legislative instrument, make standards for RTOs, as agreed by the Ministerial Council, and they are known as “Standards for NVR Registered Training Organisations” (“Standards”) pursuant to s 185(2).
The Minister may also, pursuant to section 186 of the NVR Act, by legislative instrument, make requirements for assessing whether a person is a fit and proper person, as agreed by the Ministerial Council. The agreed requirements are known as the “Fit and Proper Person Requirements” (“FPPRs”).
For the purposes of subsection 185(2) of the NVR Act, the Standards are at Attachment A of the legislative instrument Standards for Registered Training Organisations (RTOs) 2015. For the purpose of subsection 186(2) of the NVR Act, the FPPRs are specified in Schedule 3 of Attachment A. The FPPRs sets out a non-exhaustive list of considerations which a decision maker will have regard when assessing a person’s suitability.
Further Clause 7.1 of the Standards provides:
“The RTO ensures that its executive officers or high managerial agent… (b) Meet each of the relevant criteria specified in the Fit and Proper Person Requirements in Schedule 3.”
DIFFICULTIES FACED AND THE STATE OF THE EVIDENCE BEFORE THE TRIBUNAL
The task of adequately identifying the relevant evidence and making a determination about the applicant’s compliance with the Standards is one of some difficulty in this matter. Such difficulty might hopefully be reduced in future matters by a greater degree of assistance from the parties, and particularly from ASQA in the organisation and presentation of material and submissions to the Tribunal.
I think it is appropriate to highlight that the role of the Tribunal is to come to the “correct or preferable” decision and ASQA’s role in these proceedings is that of a model litigant, assisting the Tribunal with this task; section 33(1AA) of the Administrative Appeals Tribunal Act 1975 (Cth) (“AAT Act”). I accept that ASQA is entitled to act firmly and properly to protect its interests and can take all legitimate steps to pursue and defend claims, however when litigation descends into being unnecessarily obstructive and combative, it is of no assistance to the Tribunal. The role of ASQA is not simply to seek to uphold the existing decision even though that might be the approach which would be taken in ordinary litigation.
In these proceedings, ASQA initially lodged with the Tribunal documents apparently in compliance with section 37 of the AAT Act. Under section 37, ASQA is required to lodge with the Tribunal documents in its possession or control which are relevant to the review of the decision by the Tribunal. While some level of discrimination is required when lodging documents ‘relevant’ to the decision under review, ASQA has an obligation to lodge every document in ASQA’s possession or control that is relevant to the decision under review.
In this regard, I agree with the comments of Senior Member Taylor in Australian Academy of Management & Science Pty Ltd and Australian Skills Quality Authority [2013] AATA 530 at [37] and [38]:
“The obligation cast upon decision makers by AAT Act s 37(1) is to lodge with the Tribunal documents that are “relevant to the review of the decision”. This criterion of relevance requires some genuine discrimination in the material that is provided. The degree of discrimination that can appropriately be achieved is a matter of judgment. I accept that a statutory criterion as to whether or not a particular decision is “appropriate” is one of considerable generality and justifiably encourages an expansive view to be taken about areas of potential relevance. However this reinforces, rather than diminishes, the necessity for material to be presented to the Tribunal, and to be available to the parties themselves, in a way that permits the true relevance and materiality of documents to be perceived, and facilitates their ready identification, location and retrieval. That necessity is itself essential for the Tribunal to be able to achieve its function of administering a mechanism of review that is “fair, just, economical, informal and quick”: AAT Act s 2A. It is also a necessity that falls within the “best endeavours” obligation to which decision makers are subject in review proceedings before the Tribunal: see AAT Act s 33(1AA).”
I have made these comments for the purpose of encouraging more effective future management of these types of matters, rather than to convey pejorative criticism of ASQA’s participation in the present matter. The reality is that ASQA has specific functions, skills and expertise, and administers a regulatory regime across a wide range of disciplines. There is much complexity in the statutory function, in the regulatory requirements, and in satisfactorily arriving at an “appropriate” decision in any particular case. The Tribunal has, in the exercise of its review function, all of ASQA’s statutory powers. But it does not necessarily have, and must rely on the parties (particularly ASQA) to contribute, the expertise and knowledge that comes from day to day familiarity with the responsibilities of the primary administrative tasks with which ASQA is charged. If the Tribunal’s review jurisdiction over ASQA’s decisions is to be both a true merits review (ie neither unjustifiably critical of, nor merely deferential to, ASQA’s assessments), and also “economical, informal and quick” it is very important that the material presented to the Tribunal is conducive to a ready identification of the substantial matters likely to be materially determinative in the review proceedings, and the evidence that principally bears on those matters.”
When this matter originally came on for hearing it became apparent that some documents relevant to the decision under review were not provided by ASQA. In its Statement of Reasons pursuant to section 37(1)(a) dated 18 May 2015, ASQA stated at paragraph [20]:
“The Reconsideration Application included a set of volumes material; omitted to keep this AAT review proportionate to the importance and complexity of the matter, pursuant to the Tribunals objective in section 2A(c) of the Administrative Appeals Tribunal Act 1975.” [Emphasis added]
What ASQA instead lodged with the Tribunal, was its “analysis” of the Reconsideration Application dated 13 February 2016 (“the reconsideration application”), contained in a report headed Evidence analysis- VET Quality Framework (“Evidence Analysis”). It appears that the reconsideration decision, which is the decision under review in these proceedings, was made based on the Evidence Analysis.
The “voluminous material” (as described by ASQA) which was filed with the applicant’s reconsideration application, is plainly relevant to the decision under review and should have been lodged with the Tribunal by ASQA in accordance with its obligations under section 37 of the AAT Act. The Tribunal’s role is to consider this matter afresh and undertake a full merits review. It is not appropriate to only rely on ASQAs “analysis” of the applicant’s evidence. Accordingly, the hearing was adjourned to a later date so that the appropriate documents could be filed; albeit at an additional cost to the parties as a result of adjourning the proceedings. The documents were ultimately lodged by ASQA in accordance with directions and the hearing proceeded.
In regards to the compliance issues, ASQA submits that “there is no evidence before the Tribunal upon which it could be satisfied that there was any procedural defect with the reconsideration decision and, even if there was there is nothing to suggest this would impact practically on the determination of compliance”, and that “the applicant is currently not compliant with the Standards on the evidence before the Tribunal”. While this may very well be the case, these broad submissions of ASQA are most unhelpful. ASQA relies on the findings contained in the Evidence Analysis performed by Ms Khoury, an ASQA Principal Auditor, on 22 February 2016, the reconsideration decision, which is the decision under review in these proceedings and is based on the findings of Ms Khoury in the Evidence Analysis, and the most recent evidence analysis performed by Ms Khoury, on 16 June 2016 following the provision of new evidence by the applicant on 8 June 2016. ASQA undertook no further analysis of the evidence in these proceedings nor did it provide submissions directed at the areas of non-compliance.
Throughout these proceedings, ASQA has taken the position that it is for the applicant to prove that they are compliant with the Standards. While it is of course necessary for the applicant to present its case and demonstrate why it is compliant with the Standards, as the decision maker, ASQA’s role is to assist the Tribunal in understanding the issues and arriving at the correct and/or preferable decision. What would have been helpful here are detailed submissions on the outstanding non-compliances; cross-referencing the Standards and the evidence of the applicant, submitted prior to the decision under review and filed in this proceeding. It is unjust and unfair for me to merely rely on the findings made by the decision maker below when undertaking merits review. This poses a significant difficulty because I must now review all of the evidence before me, having regard to the Standards, with little or no assistance from ASQA.
Another difficulty with this matter is that the case put forward by the applicant is in the nature of judicial review, focusing on the inadequacy of ASQA’s reasons for decision and an alleged denial of procedural fairness and natural justice. This may have impacted on the submissions and evidence relied upon by the applicant in these proceedings. As already touched upon, the role of the Tribunal in the system of administrative law is to review administrative decisions on the merits: that is, to consider afresh the facts, law and policy relevant to a decision under review and decide whether that decision should be affirmed, varied or set aside. Any alleged deficiencies in the decision making process below, as asserted by the applicant, may be remedied by the review of this Tribunal, having regard to all of the evidence before it.
COMPLIANCE ISSUES
The issue for determination in regards to compliance is whether the applicant is compliant with clause 1.8 of the Standards, and if not, by consequence, clauses 1.4 and 2.1 of the Standards for units BSBMGT517 Manage Operational Plan and BSBHRM501 Manage Human Resource Services in the training product BSB50215 Diploma of Business.
Clause 1.4 of the Standards provides:
The RTO meets all requirements specified in the relevant training package or VET accredited course.
Clause 1.8 of the Standards provides:
The RTO implements an assessment system that ensures that assessment (including recognition of prior learning):
a) complies with the assessment requirements of the relevant training package or VET accredited course; and
b) is conducted in accordance with the Principles of Assessment contained in Table 1.8-1 and the Rules of Evidence contained in Table 1.8-2.
Table 1.8-1: Principles of Assessment
Fairness
The individual learner’s needs are considered in the assessment process.
Where appropriate, reasonable adjustments are applied by the RTO to take into account the individual learner’s needs.
The RTO informs the learner about the assessment process, and provides the learner with the opportunity to challenge the result of the assessment and be reassessed if necessary.
Flexibility
Assessment is flexible to the individual learner by:
· reflecting the learner’s needs;
· assessing competencies held by the learner no matter how or where they have been acquired; and
· drawing from a range of assessment methods and using those that are appropriate to the context, the unit of competency and associated assessment requirements, and the individual.
Validity
Any assessment decision of the RTO is justified, based on the evidence of performance of the individual learner.
Validity requires:
· assessment against the unit/s of competency and the associated assessment requirements covers the broad range of skills and knowledge that are essential to competent performance;
· assessment of knowledge and skills is integrated with their practical application;
· assessment to be based on evidence that demonstrates that a learner could demonstrate these skills and knowledge in other similar situations; and
· judgement of competence is based on evidence of learner performance that is aligned to the unit/s of competency and associated assessment requirements.
Reliability
Evidence presented for assessment is consistently interpreted and assessment results are comparable irrespective of the assessor conducting the assessment.
Table 1.8-2: Rules of Evidence
Validity
The assessor is assured that the learner has the skills, knowledge and attributes as described in the module or unit of competency and associated assessment requirements.
Sufficiency
The assessor is assured that the quality, quantity and relevance of the assessment evidence enable a judgement to be made of a learner’s competency.
Authenticity
The assessor is assured that the evidence presented for assessment is the learner’s own work.
Currency
The assessor is assured that the assessment evidence demonstrates current competency. This requires the assessment evidence to be from the present or the very recent past.
Clause 2.1 provides:
The RTO ensures it complies with these Standards at all times, including where services are being delivered on its behalf. This applies to all operations of an RTO within its scope of registration.
In these proceedings, I have before me further evidence of compliance and rectification provided by the applicant on 8 June 2016, any evidence provided at and up to hearing as well as all of the evidence that was before ASQA relevant to the decision under review. I have considered this evidence in making the following remarks and findings.
Compliance with Clause 1.8 of the Standards
BSBMGT517 Manage Operational Plan
The most recent version of the Marking Guide for BSBMGT517 in evidence is v6.0_01-05-2016 (“the marking guide”). The marking guide is intended to be used by an assessor to guide the assessment process and should be used in conjunction with the Assessment Record Tool.
In the evidence analysis conducted by Ms Khoury on 16 June 2016, it appears that the remaining compliance issues for this unit relate to assessment tasks 4 and 5. No other outstanding compliance issues have been identified by ASQA in these proceedings. The outstanding issues identified by Ms Khoury can be summarised as follows:
(a)In Task 4, the applicant has not addressed how the implementation of developed strategies will be managed/undertaken in a face-to-face delivery mode where candidates may not have access to workplaces;
(b)In Part 2 of Task 4, the instructions specify that the candidate must “develop and implement a strategy for ensuring (resource procurement) policies and procedures are followed in the workplace” (emphasis added), however, there is no indication of how the implementation is meant to be carried out in a face-to-face delivery mode where candidates may not have access to workplaces. In addition, the instructions do not specify what the evidence of implementation to be submitted is, other than a statement that “you (the candidate) must seek approval from relevant parties and sign-off statement to implement your strategy”. This statement is vague and does not address the requirement to demonstrate actual implementation as is required by the training package;
(c)The task instructions in Part 2 of Task 4, include reference to one of the submitted documents titled “University of Southern Queensland Procurement and Purchasing Policy and Procedure”. There is no explanation of why this document is mentioned, how it is to be used or how it fits into the task;
(d)The task instructions for Task 5, specify that in the second part of the candidate’s talk, they must summarise their “review of the policies and procedures that the HR management team at your company has in place for recruitment and induction of new employees, and whether or not they are compliant with these” (emphasis added). This requires access to evidence of a company’s HR practices, given the intended mode of delivery and the target group of this unit; it is not clear from the instructions how this access would occur. Additionally, the requirement to identify compliance with HR practices requires specific HR knowledge that is not part of this unit;
(e)The criteria contained in the Presentation Checklist for Assessor includes things such as, “presentation was well prepared”; “report delivered in the order stated in introduction and conclusion”. These criteria describe skills that are not required within the unit. The other criteria such as “knowledge of report clearly demonstrated” and “other roles: holder engaged to some of main points discussed implications”, do not provide sufficient guidance to ensure all assessors make a consistent judgement on performance;
(f)The applicant has not addressed the non-compliances regarding meeting training package requirements and collecting sufficient evidence to demonstrate competence in all required skills and knowledge.
I have carefully considered all of the evidence before me, with particular regard to the Standards, and I am satisfied that the compliance issues identified above remain outstanding and that these issues go to a number of the principles of assessment contained in Table 1.8-1 of the Standards (“the principles of assessment”). For example, the principles of assessment that judgement of competence is based on evidence of learner performance that is aligned to the unit/s of competency and associated assessment requirements; evidence presented for assessment is consistently interpreted and assessment results are comparable irrespective of the assessor conducting the assessment; and the individual learner’s needs are considered in the assessment process.
The current outstanding compliance issues are in my mind, fairly minor and able to be easily rectified. This has been acknowledged by ASQA. Unfortunately for the applicant, the outstanding compliance issues have not been rectified nor have they been addressed by the provision of further evidence or by way of submissions. As such, I am unable to find that the applicant complies with clause 1.8 of the Standards.
BSBHRM501 Manage Human Resource Services- assessment materials
The most recent version of the Marking Guide for BSBHRM501 in evidence is that filed on 8 June 2016 (“the marking guide”).
In the evidence analysis conducted by Ms Khoury on 16 June 2016, it appears that the remaining compliance issues for this unit are that the marking guide does not demonstrate that reliability principles of assessment are met. No other outstanding compliance issues have been identified by ASQA in these proceedings. Some examples of the outstanding issues identified by Ms Khoury can be summarised as follows:
(a)Some of the criteria contained in the assessors’ checklists do not give adequate guidance on expected performance. There are a number of criteria which are simply a check of whether the candidate has completed parts of the tasks successfully, or submitted the requisite evidence;
(b)It is not clear how some of the task requirements and the criteria contained in the checklists relate to the unit and its requirements. For example, one of the tasks requires sending a meeting request via Outlook. The use of Outlook is not a required skill in this unit. Additionally, many of the checklists include criteria such as “submission of the task by the due date”, “completion in clear and concise English” etc. How these criteria relate to the unit and its requirement is not evident.
I have carefully considered all of the evidence before me, with particular regard to the Standards, and I am satisfied that the compliance issues identified above remain outstanding and that these issues go to a number of the principles of assessment that demonstrate validity and reliability. Particularly, that any assessment decision of the RTO is justified, based on the evidence of performance of the individual learner, that the assessment against the unit/s of competency and the associated assessment requirements cover the broad range of skills and knowledge that are essential to competent performance, that evidence presented for assessment is consistently interpreted and assessment results are comparable irrespective of the assessor conducting the assessment.
As like outstanding compliance issues with unit BSBMGT517, the current outstanding compliance issues for this unit are, in my mind, fairly minor and able to be easily rectified. This has been acknowledged by ASQA. The outstanding compliance issues have not been rectified nor have they been addressed by the provision of further evidence or by way of submissions. As such, I am unable to find that the applicant complies with clause 1.8 of the Standards.
Compliance with Clauses 1.4 and 2.1 of the Standards
As I have found that the evidence before me in these proceedings does not demonstrate that assessment materials meet the requirements of the training package, and principles of assessment and rules of evidence, as per clause 1.8 of the Standards, the applicant has not demonstrated, as a consequence, compliance with clause 1.4 and clause 2.1.
FITNESS AND PROPRIETY
The decision under review did not contain a consideration of the FPPRs. As such I am required to first consider whether the Tribunal has jurisdiction to consider the new ground of fitness and propriety raised, for the first time, in these proceedings.
The effect of section 43(1) of the AAT Act is that, “[f]or the purpose of reviewing a decision”, the Tribunal stands in the place of the original decision-maker. That is, for the purpose of determining whether the decision under review was the correct or preferable decision on the material before it, the Tribunal “may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision” (emphasis added). The function of this Tribunal is not limited to deciding whether the original decision-maker erred in making the decision under review, but extends to making the correct and preferable decision on the material before the Tribunal. The Tribunal is not confined to the decision-making power upon which the decision-maker relied, but is armed with all the powers and discretions of the original decision-maker that are relevant to the review; see the decision of Kenny J in Secretary, Department of Employment, Education, Training & Youth Affairs and Mackay (1998) 29 AAR 95 at [98] and ReEchelon National Security Agency Pty Ltd and Australian Skills Quality Authority (2014) 63 AAR 190.
In Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32, the Federal Court addressed a similar question, namely that if the original decision-maker had not made any decision not to waive the payment of a debt, would it follow that the Administrative Appeals Tribunal, on review, would not have the power to review the matter of waiver. Hill J said at [39] – [40]:
“Although I accept, therefore, that a decision to recover an overpayment does not necessarily involve a consideration of waiver, I do not think that it follows that in an appeal against the decision to proceed to recover an overpayment where the question of waiver has been raised by an applicant the Tribunal is precluded from exercising the power to waive under s 43(1) of the Administrative Appeals Tribunal Act. The language of s 43 is quite clear and unambiguous. It empowers the Tribunal to exercise all the powers and discretions conferred upon the original decision-maker provided it does so for the purpose of reviewing a decision. Provided the necessary purpose is present, the power conferred upon the Tribunal is not otherwise limited. It is not necessary or permissible to put a gloss upon s 43 that would permit the Tribunal to exercise the decision-maker's powers and discretions only when those powers or discretions are necessarily interdependent with the decision under review or where the power or discretion to be exercised by the Tribunal is necessarily involved in the making of the decision under review.
Of course there must be an association between the power to be exercised by the Tribunal and the decision under review, but that association is to be found in the restriction of the grant of power in s 43(1) to the purpose of the Tribunal's review. The test is one of relevance rather than dependence. Where the exercise of a power or discretion is relevant to the making of the decision under review then, if requested, the Tribunal may exercise the discretion…”
An RTO cannot be registered unless it complies with the VET Quality Framework and the applicable conditions of registration; which includes a consideration of whether the RTO (including its executive officers or high managerial agent) satisfies the FPPRs. This is an essential consideration for registration. Despite the decision under review not containing a consideration of the FPPRs, the Tribunal has jurisdiction in this matter to consider the new ground of fitness and propriety raised in these proceedings, as it is relevant to the decision under review.
Accordingly, in this matter, pursuant to section 23 of the NVR Act and clause 7.1 of the Standards, it is necessary to determine whether the applicant and its CEO, Mr Azzi, meet the criteria identified in the FPPRs. Criteria contained in the FPPRs which are of particular relevance in these proceedings are as follows:
(a) - (f)….
(g)
whether the person has ever provided a VET Regulator with false or misleading information or made a false or misleading statement to a VET Regulator, and if so, whether it is reasonable to assume that the person knew that the statement made or information provided to the VET Regulator was false or misleading;
(h) whether the person has ever been determined not to be a fit and proper person as prescribed under any law of the Commonwealth or of a State or Territory of Australia, and if so, whether that determination remains in place;
(i) whether the public is likely to have confidence in the person's suitability to be involved in an organisation that provides, assesses or issues nationally recognised qualifications;
…
(k) any other relevant matter.
Criteria (g) of the FPPRs - Has Mr Azzi ever provided a VET Regulator with false or misleading information or made a false or misleading statement to a VET Regulator?
Mr Azzi did not disclose his association with now cancelled RTO Peacemakers Security Pty Ltd RTOID 32179 (“Peacemakers”) as he was required to do in his Initial Application dated 21 July 2015 (questions 3.1 and 3.2).
The Security Licensing and Enforcement Directorate (“the SLED”) is responsible for the administration of the Security Industry Act 1997 (NSW) (“SI Act”). Mr Azzi’s association with Peacemakers is described in an interview with NSW SLED conducted on 18 May 2016. In evidence I have their electronic recording of the interview as well as the transcript. The evidence shows that Mr Azzi gave his facilities free of charge to Peacemakers, and collected referral fees of between $50 and $100 dollars for at least 20 students. He also admitted that he had provided an accreditation test, with answers, to people who had not undergone any study or training with the knowledge and assistance of Peacemakers.
Criteria (h) of the FPPRs - Has Mr Azzi ever been determined not to be a fit and proper person as prescribed under any law of the Commonwealth or of a State or Territory of Australia?
There are two decisions of the New South Wales Civil and Administrative Tribunal (“NCAT”) concerning Mr Azzi. In Azzi v NSW Police Force [2016] NSWCATOD 47, the Tribunal found that it was not in the public interest to overturn a decision by the Commissioner of New South Wales Police to refuse to grant Mr Azzi security industry licences 1EF2ABD. It found at [51]-[52] and [61]-[62]:
“[51] The Tribunal finds that Mr Azzi supplied information with 23 March 2015 application which was to his knowledge, misleading in a material particular – the false and misleading information ground. The Tribunal is satisfied that Mr Azzi knew that the information that he provided in his resume accompanying the March 2015 application was false or misleading. He had already been interviewed by the SLED officers in January 2014 in relation to the inaccuracies and inconsistencies in his resume. It is not a matter for the Tribunal to establish the true account of Mr Azzi’s experience. Having heard Mr Azzi’s evidence, the Tribunal cannot now be sure of the true picture of Mr Azzi’s work experience.
[52] The Tribunal finds that Mr Azzi knew that the information in the resume he provided with his application in March 2015 was incorrect…
…
[61] In these circumstances the Tribunal considers it is not in the public interest for Mr Azzi to be provided with the licences he is seeking on the basis of the information that he has provided to the Commissioner and the Tribunal. The licensing system relies upon applicants to provide true and correct information. The Tribunal cannot be certain that Mr Azzi has done so or that he has understood that the responsibility to do so is his.
[62] The Tribunal finds that it is not, at this point in time, in the public interest for the Applicant to hold security industry licences 1EF2ABD.” [Emphasis added]
In Azzi v Commissioner of Police, NSW Police Force (No.2) [2016] NSWCATOD 112, on the question of costs, the Tribunal found:
“[52] The proceedings became purposeless as a result of the Applicant's inability to furnish accurate or new information during the proceedings.
[53] The Applicant wasted resources and time of the Tribunal and the Respondent. To not award costs in favour of the Respondent would be to reward the behaviour of the Applicant and send the wrong message to others who might think about engaging in similar conduct.
…
[55] The Applicant engaged in behaviour before the Tribunal and with the Respondent that was deceitful and purposefully misleading. Given the background to the proceedings, the Applicant was entirely aware of the lies in his resume and was given many opportunities to correct them. Despite this, the Applicant conducted his case by maintaining his lies, dismissing them as a "little misunderstanding[s]".
[56] The Applicant has shown no accountability. He blames others for the inaccuracies in his resumes for which he is ultimately and solely responsible. He blames his wife for writing his resume, and claims no responsibility for providing false information about Mr Farah. The Applicant shows no insight into his behaviour, suggesting that he is a person of uppermost integrity and saying that "it was not a problem with honesty, but a problem with oversight". Those statements are clearly incorrect.
…
[78] In this instance, the Tribunal is satisfied that Mr Azzi’s application was frivolous, lacking in substance and had no tenable basis in fact or law.” [Emphasis added]
While I note the comments made about Mr Azzi in the NCAT Proceedings detailed above, it is important to acknowledge that no findings were made about whether the applicant was a fit and proper person. NCAT found that the information supplied by Mr Azzi was (to the applicant’s knowledge) false or misleading in a material particular and as such it must refuse to grant applications for security industry licences pursuant to section 15(2C) of the SI Act. Additionally, it was found that it was not in the public interest that Mr Azzi be granted security licences pursuant to section 15(3) of the SI Act.
However, on 28 July 2016, a finding about Mr Azzi’s fitness and propriety was made when the Master Licence 000100384 (“the Master Licence”) held by the applicant, was revoked by the New South Wales Police Commissioner under section 26(1) of the SI Act. The grounds for the revocation were as follows:
“I am satisfied that a close associate (Michael Azzi), who was nominated in the application for the grant of a master licence, is not a fit and proper person to hold a security licence.
I consider that it is not in the public interest for the company to continue to hold a licence.” [Emphasis added]
These findings were based on the findings of NCAT, evidence obtained by SLED enforcement officers during an audit conducted on 10 March 2016 of the business premises of the applicant and evidence provided by Mr Azzi in an electronically recorded interview with SLED on 18 May 2016. The New South Wales Police Commissioner found, inter alia:
“Based on this interview, it appears Mr Azzi’s view is that there is nothing wrong with facilitating NSW residents to obtain a security licence by the “backdoor” method of mutual recognition. I consider his actions have undermined the integrity of the New South Wales security licencing system and also constitute an abuse of the principle of mutual recognition. I am satisfied that Mr Azzi’s actions demonstrate a course of conduct which sheds a negative light on his character and consider this to be unacceptable behaviour for a security licence holder.”
Criteria (i) of the FPPRs - whether the public is likely to have confidence in Mr Azzi’s suitability to be involved in an organisation that provides, assesses or issues nationally recognised qualifications
The public’s confidence in the education sector is of particular relevance when assessing an applicant’s suitability to be involved in an RTO. In Australian Competition and Consumer Commission v Get Qualified Australia Pty Ltd (in liquidation)(No 3) [2017] FCA 1018 Beach J states at [1]:
“In recent years, the education sector has been infected by the parasitic practices of operators preying upon the vulnerable and the unwary. They have taken unconscientious advantage of those who commendably have sought to improve themselves and their qualifications…”
In these proceedings Mr Azzi has provided references from Rev. Fr. Pierre El-Khoury, Assistant Priest of Our Lady of Lebanon; Lupco Apostolovski; Andrew Mortimer; and Alastaire Frederick. The references speak well of Mr Azzi’s character and I have taken them into consideration.
Having particular regard to the evidence and findings in regards to the applicant’s fitness and propriety (as detailed above), I am not convinced that the public will likely have confidence in Mr Azzi’s suitability to be involved in an organisation that provides, assesses and/or issues nationally recognised qualifications. As such Mr Azzi’s association with the applicant taints the public confidence in the organisation as a whole.
Consideration
The serious and damning findings in regards to Mr Azzi’s honesty and character as detailed in this decision are largely unmet by the applicant.
For all of the above reasons I am satisfied that Mr Azzi does not satisfy criteria (g), (h) and (i) of the FPPRs. It follows that the applicant is in breach of clause 7.1 of the Standards.
DECISION
The decision under review is affirmed.
I certify that the preceding 55 (fifty-five) paragraphs are a true copy of the reasons for the decision herein of Senior Member A Poljak
........................[sgd]............................................
Associate
Dated: 17 July 2018
Date(s) of hearing: 22 February 2017 & 11 September 2017 Counsel for the Applicant: P Lott Solicitors for the Applicant: Kheir Lawyers Solicitors for the Respondent: D Cox, Australian Skills Quality Authority
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