Sunrise Institute of Australia Pty Ltd and Australian Skills Quality Authority
[2019] AATA 1131
•5 June 2019
Sunrise Institute of Australia Pty Ltd and Australian Skills Quality Authority [2019] AATA 1131 (5 June 2019)
Division:GENERAL DIVISION
File Number(s): 2018/4941
Re:Sunrise Institute of Australia Pty Ltd
APPLICANT
AndAustralian Skills Quality Authority
RESPONDENT
DECISION
Tribunal:Professor P A Fairall, Senior Member
Date:5 June 2019
Place:Sydney
The Tribunal orders that:
(1)The Respondent’s application for dismissal of the application for review pursuant to ss 42A(5)(b) and 42B(1)(b) of the AAT Act is refused.
(2)Pursuant to section 33 of the AAT Act:
a. Within 30 days of the date of the Tribunal’s decision, the Applicant is required to provide to the Respondent and the Tribunal the financial viability risk assessment tool in the form requested by the Respondent, together with any associated documents.
b. Within 90 days of the date of the Tribunal’s decision, the Respondent is to provide to the Tribunal and the Applicant a response to the Applicant’s tendered documents.
c. On or before 14 June 2019, both parties are to file Hearing Certificates for the period September to November 2019.
..........................[sgd]..........................................
Professor P A Fairall, Senior Member
CATCHWORDS
PRACTICE AND PROCEDURE – application for dismissal of substantive application –Australian Skills Quality Authority – registered training organisation – decision to cancel NVR Act registration – decision to refuse CRICOS registration – whether Applicant failed to comply with a direction by the Tribunal – whether substantive application has no reasonable prospect of success – application for dismissal refused
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) ss 2A, 42A, 42B, 43
Education Services for Overseas Students Act 2000 (Cth) ss 8, 9, 10, 6E
National Vocational Education and Training Regulator Act 2011 (Cth) ss 155, 189
CASES
AIMT Pty Ltd and Australia Australian Skills Quality Authority [2018] AATA 4259
Australian Tertiary Academy Pty Ltd and Australian Skills Quality Authority [2017] AATA 480
Complete Training Institute Pty Ltd and Australian Skills Quality Authority [2018] AATA 4638
Guse v Comcare (1997) 49 ALD 288Sunrise Institute of Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 3935
SECONDARY MATERIALS
Standards for Registered Training Organisations (RTOs) 2015
Standards for VET Regulators 2015
REASONS FOR DECISION
Professor P A Fairall, Senior Member
5 June 2019
This is an application for dismissal brought by the Respondent in these proceedings, the Australian Skills Quality Authority (referred to as either “the Authority” or “ASQA”). The Applicant is the Sunrise Institute of Australia P/L (“Sunrise”), a one person proprietary company limited by shares incorporated on 18 August 2015. Mr Hara Prasad Pokharel is the sole director and shareholder of Sunrise.
The Authority asserts that Mr Pokharel has not complied with Orders of the Tribunal and should be sanctioned by dismissing his application for review. In the alternative the Authority argues that the application for review has no reasonable prospect of success. It seeks to enliven the Tribunal’s powers under ss 42A(5)(b) and 42B(1)(b) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”). If the Authority is successful in this application, it will dispose of the application for review, subject to the Applicant’s right to appeal the Tribunal’s decision under s 44 of the AAT Act.
The decision in question was made by the Authority on 1 August 2018. It de-registered Sunrise as an RTO and rejected its application for CRICOS registration. Mr Pokharel has challenged these decisions before the Tribunal. If the Authority succeeds at this stage, Mr Pokharel will no doubt feel crushed. He will not have had his day “in court” with a full hearing on the merits.
At the outset it is important to recall the objectives of the Tribunal as stated in s 2A of the AAT Act. In carrying out its functions, the Tribunal must pursue the objective of providing a mechanism for review that is fair and just and promotes public trust and confidence in the decision making of the Tribunal.
THE AUTHORITY AS THE NATIONAL REGULATOR
The Respondent is the national regulator for Australia’s vocational education and training (VET) sector, established under s 155 of the National Vocational Education and Training Regulator Act 2011 (Cth) (“the NVR Act”). The Authority has a comprehensive mandate in relation to monitoring Registered Training Organisations (“RTOs”) to ensure compliance with national standards. It regulates courses and training providers to ensure that Australia’s training standards are met. Under the Act it is an offence for a non-registered provider to deliver a VET course: see generally NVR Act, Part 6.
In carrying out its regulatory role, the Authority is required to implement a risk-based approach to regulation in order to (a) reduce the regulatory burden for high-performing providers with a history of strong compliance and (b) increase regulatory action for providers considered at higher risk. (See Standards for VET Regulators 2015, made under s 189 of the NVR Act). Any person wishing to register or operate an RTO is well served by a sound understanding of the regulatory function of the Authority and the manner in which it operates.
The Authority also has a mandate in relation to international students, as provided by the Education Services for Overseas Students Act 2000 (Cth) (“the ESOS Act”). It is an offence for any person to offer a course to an international student unless the person is registered to offer that particular course or has an arrangement with a registered service provider to do so: ESOS Act, s 8. Entry on the Commonwealth Register of Institutions and Courses for Overseas Students (“CRICOS”) is a precondition for delivering courses to international students. An RTO may apply to provide a course for international students and the application must be made to the Authority: ESOS, ss 9, 10, 6E.
SUNRISE SECURES REGISTRATION AS AN RTO
It is necessary to set out the history of the matter in some detail. On 16 October 2015 Mr Pokharel applied to the Authority to register Sunrise as an RTO under the NVR Act. He asked to deliver two face to face courses, a Certificate IV in Business Administration and a Diploma in Business Administration.
On 11 May 2016 registration was refused. An Authority audit found areas of “critical non-compliance” when measured against the Standards for Registered Training Organisations (RTOs) 2015. Indeed, six applicable Standards were not met. On 8 July 2016 Mr Pokharel sought an internal review for which he provided more information.
The further information must have been persuasive, because on 25 August 2016 Sunrise was granted registration as an RTO for 7 years: T2, p. 43. Approval was limited to the Certificate IV in Business Administration (BSB40215). The letter of notification was dated 1 September 2016 and required rectification within 20 days of each of the non-compliant matters identified in the audit report: T2, p. 43.
On 27 April 2017 the Authority approved the second course, included in his original application, a Diploma in Business (BSB50215). In considering the application, the Authority described the Applicant as “generally compliant”: T7, p. 88. It appears that Sunrise had not, at that time, enrolled any students in the Certificate IV course.
On 26 March 2017 Mr Pokharel applied for CRICOS registration: T3, p. 47. This request precipitated a site audit by the Authority which took place on 23 October 2017. The audit did not go well. Remedial action was required in all areas of the review. These covered Enrolment, Support and Progression, Training and Assessment, and Regulatory Compliance. On 2 November 2017 the Panel Auditor gave Mr Pokharel a Notice of Audit Non-Compliance and an opportunity to provide further information: T14, p. 123. On 16 December 2017 the audit report was updated to take account of additional information provided by Mr Pokharel. The updated report found that the Applicant remained non-compliant in each of the areas reviewed: T 23, p. 148.
In May 2018 the Authority sent Mr Pokharel two letters. Each was dated 21 May 2018. The first letter advised of a decision by the Authority to cancel registration under s 39 of the NVR Act, with effect from 25 June 2018 (T35, p. 208). The second advised that the CRICOS registration application had been refused by the Commissioner Regulatory Operations on 11 May 2018 (T36, p. 213).
On 25 June 2018 the Authority decided to provide a stay of the cancellation decision, subject to the condition that the Applicant not enrol, market or recruit students during the reconsideration period. Mr Pokharel agreed to this arrangement.
In July 2018 the Authority conducted a further review in light of additional evidence provided by the Applicant. Although the Authority found that some matters had been addressed, critically, it found ongoing non-compliance in the areas of Resources and Assessment.
On 1 August 2018 the original cancellation decision and the decision to refuse CRICOS registration were affirmed (T43, p. 256) and by letter dated 7 August 2018 Mr Pokharel was notified of this decision.
In the 7 August letter the Authority informed Mr Pokharel that it had conducted a further review but considered that Sunrise “remains non-compliant with the Standards for Registered Training Organisations (RTOs) 2015 and the National Code 2017…Specifically, Sunrise Institute of Australia Pty Ltd has failed to demonstrate it has:
·sufficient resources, specifically trainers/assessors and learning resources to deliver the training products on its scope of registration; and
·an assessment system that ensures that assessment (including recognition of prior learning): complies with the assessment requirements of the BSB training package and is conducted in accordance with the Principles of Assessment and Rules of Evidence”. - T 45, p. 260.
On 11 September 2018 the Applicant’s formal registration ceased and this decision was published by the Authority as Regulatory Decision 41581.
PROCEEDINGS BEFORE THE TRIBUNAL
On 30 August 2018 Mr Pokharel applied to the Tribunal for a review of the Authority’s decision of 1 August 2018: T47, p. 266. He also requested a Stay Order: T49, p. 275.
On 15 October 2018 the Tribunal declined the Stay application: see Sunrise Institute of Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 3935.
On 14 February 2019 Mr Pokharel wrote by email to the Tribunal requesting a Final Hearing date. He also made various statements about the Authority, suggesting in effect that it was not acting in good faith. He asked the Tribunal to “[p]lease regard these as our final submission”.
On 18 February 2019 directions were made by Conference Registrar Ingall that by 29 March 2019 the Applicant was to file all reports, records and any other documents on which it intended to rely, and by 10 May 2019 the Respondent was to give to the Tribunal a copy of the Analysis of the Applicant’s Further Evidence/Statement of Position.
On 19 February 2019, the Authority sent an email to Mr Pokharel stating:
“…ASQA has concerns about your organisation’s ability to comply with clause 7.2 of the National Standards relating to financial viability…ASQA requires you to submit the financial viability risk assessment tool and provide all associated documents by the 29 March, as per the Tribunal’s Directions for submission of further evidence….Please ensure you submit this by 29 March along with all the associated documents”.
On 25 March 2019 Mr Pokharel wrote by email to the Registry and explained that his consultant was still working on the rectification response and that his accountant was also working on the Financial Viability statement. He sought an extension to 30 April.
On 26 March 2019 by email the Authority informed the Sydney Registrar that it opposed the grant of an extension.
On 28 March 2019 Mr Pokharel applied for an extension setting out the following reasons:
“1. On 18 February 2019 we received the direction from AAT where we need to submit our rectification on Assessment Tools by 29 March 2019.
2. On the following day we received another request from ASQA to submit the financial viability statement.
3. ASQA request about financial viability must be declared invalid because (a) it was not part of refusal decision; and (b) it was not part of review application to AAT.
4. It is something ASQA is trying to impose the new requirement to us.
5. We believe ASQA is going outside of the criteria where they can raise the issue to us.
6. So, we request AAT to declare ASQA’s request about financial viability statement invalid.
…
11. Our intention is to comply fully to AAT direction on Assessment Tools but not for Financial Viability Statement”.
Clearly Mr Pokharel had changed his mind in the three days since telling the Registry that his accountant was working on the financial statements.
On 8 April 2019 the matter was listed for a non-compliance hearing on 18 April on the basis that the Applicant had failed to comply with the 29 March deadline and an extension of time had not been granted.
On 9 April 2019 Mr Pokharel wrote to the Registry indicating that he would be overseas, enclosing proof of travel. He asked for a later date. The Authority opposed shifting the listing date and a teleconference compliance hearing was set down for 18 April before Deputy President Rayment. At the hearing the connection was of a poor quality and the hearing was adjourned. A record of the teleconference does however show that the Authority raised the issue of dismissal. The learned Deputy President was understandably unwilling to deal with this at a non-compliance hearing with an unrepresented litigant and the hearing was adjourned to 2 May.
On 1 May 2019 Mr Pokharel submitted documents in belated compliance with the 29 March deadline imposed on 18 February.
On 2 May 2019 the Tribunal directed the parties to file submissions in relation to the dismissal hearing. Mr Pokharel indicated that he had retained a consultant to assist with the collating of documents requested under the 18 February orders. The Tribunal directed Mr Pokharel to file that document in paper form.
THE DISMISSAL HEARING
Ms Louise McDermott represented the Authority. She based the case for dismissal on two provisions of the AAT Act: s 42A(5)(b) (non-compliance); and s 42B(1)(b) (no reasonable prospect of success). Mr Pokharel appeared in person.
Non-compliance – s 42A(5)(b)
Section 42A(5)(b) provides that if an applicant for a review of a decision fails within a reasonable time to comply with a direction by the Tribunal in relation to the application, the Tribunal may dismiss the application without proceeding to review the decision. Ms McDermott submitted that the Applicant’s non-responsiveness in relation to the directions of 18 February, and the compliance hearings of 18 April and 2 May, provided a basis for exercising the power under s 42A(5)(b).
The existence of the sanction contained in s 42A(5)(b) is not surprising. A party who fails to comply with orders of the Tribunal not only undermines the authority of the Tribunal but undermines the statutory mandate to provide a mechanism for review that is fair, just, economical and quick. A failure to take action against a recalcitrant litigant will hardly promote public trust and confidence in the decision-making process, as required by the Act: see AAT Act, s 2A. However, the overriding consideration is procedural fairness. Fairness operates to protect both parties in disputes and promotes fair and just decision making.
Acceding to the Respondent’s submission would, of course, bring these proceedings to a swift end without a final hearing and is not to be entertained lightly. In Guse v Comcare (1997) 49 ALD 288 Burchett J said of s 42A(5)(b) that it was a “valuable discretionary power”. But the learned judge went on to say, at p 291:
“But para (b) does involve denying an applicant a hearing of the merits of his application. That should be done very sparingly and only, I think, as a decision of last resort. Particularly is this so in a case where the genuineness of the claim is not in dispute”.
The case also stands for the important proposition that s 42A(5)(b) does not contemplate that dismissal should occur automatically on default in compliance with a direction, as a predetermined procedure.
Ms McDermott conceded that the case to dismiss the application for non-compliance under s 42A(5)(b) was not very strong. At its highest the case was that Mr Pokharel had failed to comply or only partially complied with the direction of the Tribunal made on 18 February to file all documents by 29 March. Mr Pokharel sought an extension but only on 28 March 2019. She referred also to the 18 April teleconference compliance hearing and argued that Mr Pokharel did not comply with orders made therein until 1 May. And even then he had failed to provide the financial viability documentation required by the Authority to evaluate the company’s financial viability as an RTO.
It may be that Mr Pokharel did not comply with these orders to the letter. He is self-represented. Such litigants are entitled to some indulgence in procedural matters. Such indulgence will evaporate rapidly in the face of wilful defiance or serious dereliction. The case record does not disclose such conduct by Mr Pokharel. Indeed, it appears that, for the most part, he was trying to comply with the orders. There is however one blemish, and it is not insignificant. He seems to have adopted a somewhat churlish attitude to the request for financial viability documentation. This will be discussed below.
Ms McDermott also argued that the company had had many opportunities to demonstrate that it could deliver compliant training and assessment programs. It had failed to do so. Of course, failing to achieve the appropriately rigorous standards set by the Respondent for registration is not the same thing as failure to comply with an order of the Tribunal. Section 42A(5)(b) is aimed at the latter. This argument is more relevant to the alternative ground considered below. The Tribunal is satisfied that the ground for dismissal under s 42A(5)(b) is not made out.
Reasonable prospect of success – s 42B(1)(b)
The Respondent also submitted that the application for review should be dismissed on the basis that it has no reasonable prospect of success, relying on s 42B(1)(b). This section provides that the Tribunal may dismiss an application for the review of a decision, at any stage of the proceeding, if the Tribunal is satisfied that the application has no reasonable prospect of success.
In this contention Ms McDermott was on stronger ground. She noted the company’s poor record of rectification of compliance issues. As noted above, she stressed the many opportunities to demonstrate compliance. She instanced seven with the Authority and an additional two through the AAT process. She argued that the Authority is the regulator, not a consultant for aspiring RTOs.
The precondition for exercising the power under s 42B(1)(b) is that the Tribunal is satisfied that the application for review has no reasonable prospect of success. The Tribunal is asked to exercise this dismissal power on the basis of the evidence before it. An application dismissed pursuant to s 42B(1)(b) cannot be resurrected.
As Deputy President McCabe said in Australian Tertiary Academy Pty Ltd and Australian Skills Quality Authority [2017] AATA 480 at [17]:
“The power under s 42B is not exercised lightly. Its exercise denies the applicant the opportunity to put its case at a hearing where all of its evidence and submissions might be considered de novo. Where the application for dismissal relies on s 42B(1)(b), the Tribunal will need to be confident it can make any necessary findings of fact on the basis of the material before it that is not seriously contested. (It may not be necessary to make findings of fact in some circumstances: for example, where the applicant is unable to succeed as a matter of law.) It will also need to be confident that material which has not yet been adduced would not change the outcome. Ultimately, the Tribunal should be satisfied it is not appropriate to wait for a final hearing because there are no reasonable prospects of success”.
In Complete Training Institute Pty Ltd and Australian Skills Quality Authority [2018] AATA 4638 the Tribunal was able to conclude that the fit and proper person test could not be satisfied. The Applicant had filed fabricated documents purporting to be industry assessors and intended to mislead ASQA. The Tribunal had little difficult in applying s 42B(1)(b).
In AIMT Pty Ltd and Australia Australian Skills Quality Authority [2018] AATA 4259 the application was dismissed because of repeated non-compliance with the Tribunal’s directions, and looking at the long history of non-compliance the Tribunal was able to conclude that the application had no reasonable prospect of success.
The Tribunal notes that Mr Pokharel has now filed paper copies of the documentary material he intends to rely upon in support of the application for review. However, Mr Pokharel has refused up until this point to provide the all-important financial viability risk assessment documentation. This is a serious matter and moves the case closer to the sort of case of which AIMT is an example.
Mr Pokharel is responsible for failing to provide this information to the Authority when requested to do so on 19 February 2019, some 3 months ago. He seems to have been under a misconception that the Authority had no right to call for this material. Given the explicit reference to resources in the Authority’s letter of 7 August 2018 it is hard to understand why he formed this view.
At the dismissal hearing Mr Pokharel said that he would, if asked by the Tribunal, provide the financial documentation. In proceeding in this way, Mr Pokharel has taken a very serious risk that his application for review will be dismissed. He was not entitled to assume that the request by the Authority for financial documentation was outside the scope of its remit merely because those documents had not been explicitly called for by the Tribunal.
The original ground for cancellation of the Applicant’s RTO status related in large part to concerns about resources available to the company. It is hard to see any justification for assuming that financial viability was not central to the Authority’s concern. Indeed, the original rejection letter of 7 August 2018 refers explicitly to the sufficiency of resources. This concern was underlined in the email of 19 February 2019 requesting the financial viability statement. That was of particular importance given the company’s long period of inactivity since de-registration.
At the Tribunal hearing Mr Pokharel indicated that he was now prepared to submit the financial viability statement but would need some time to get the information together in the correct format. Ms McDermott said that if the Tribunal refused the dismissal application, she expected that it would take at least 2 months to assess the material tendered by Mr Pokharel and the new financial viability information. It is unfortunate that the information required by the Authority to complete a final review was not provided to the Authority in a timely manner. The conference and two compliance hearings held in 2019 may have been avoided had the information been made available. One can only extract so much sympathy for Mr Pokharel from his status as an unrepresented litigant.
Mr Pokharel appears to have formed the view that the Authority is against him and determined to thwart his attempts to reinstate the company’s registration. There is nothing in the record to support this perception. It may be that the capacity to respond to the Authority’s concerns and progress this matter to a satisfactory conclusion has been hampered by this attitude. The community is entitled to expect that any person seeking registration as an RTO will act professionally and proficiently in pursuing registration, and that any defect in an application will be swiftly remedied. In this case, especially in relation to the financial assessment tool, this has not occurred.
The task before the Tribunal is to determine whether the application for review has no reasonable prospect of success. This requires an examination of the evidence before the Tribunal. No evidence has been put to the Tribunal of any misapplication by the Authority of any of the Standards that it is bound to apply. Mr Pokharel has filed a paper copy of relevant documents addressing some of the substantive concerns of the Authority. On a superficial review, those materials appear to be of some substance. Whether they address satisfactorily the Authority’s concern should be tested at a final hearing. They may address some of the educational concerns, for example, about assessment, although regrettably they do not appear to address the important question of resources. There is no evidence before the Tribunal as to the financial viability of the company and the Tribunal is therefore unable to form a view as to whether the relevant Standard is capable of being satisfied. The position with regard to resources is therefore as it was in August 2018 when the final decision to de-register was made by the Authority. The Tribunal is not able to say what the financial viability documentation may say about the resources available to the Applicant.
Despite this difficulty, or more precisely, because of it, the Tribunal is not able to find that the application for review has no reasonable prospect of success. The Tribunal notes that the Applicant did achieve registration under the NVR Act on 25 August 2016 but subsequently lost that status as a result of a site audit and its failure to remedy the shortcomings identified by the Respondent. Under these circumstances, the matter must proceed to a final hearing.
Although on this occasion the case for dismissal under sections 42A(5)(b) or 42B(1)(b) is not made out, the Tribunal is entitled to note that this case was finely balanced. Any future avoidable delays would be inimical to the Tribunal’s objectives of securing outcomes that are economical and quick, as well as fair and just: see the AAT Act, s 2A(b). They are unlikely therefore to be received with any great indulgence.
Orders
The Tribunal orders that:
(1)The Respondent’s application for dismissal of the application for review pursuant to ss 42A(5)(b) and 42B(1)(b) of the AAT Act is refused.
(2)Pursuant to section 33 of the AAT Act:
a. Within 30 days of the date of the Tribunal’s decision, the Applicant is required to provide to the Respondent and the Tribunal the financial viability risk assessment tool in the form requested by the Respondent, together with any associated documents.
b. Within 90 days of the date of the Tribunal’s decision, the Respondent is to provide to the Tribunal and the Applicant a response to the Applicant’s tendered documents.
c. On or before 14 June 2019, both parties are to file Hearing Certificates for the period September to November 2019.
I certify that the preceding 55 (fifty-five) paragraphs are a true copy of the reasons for the decision herein of Professor P A Fairall, Senior Member
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Associate
Dated: 5 June 2019
Date of hearing: 28 May 2019 Applicant: In person Solicitors for the Respondent: Ms L McDermott, Australian Skills Quality Authority
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