Sydney Training Academy Pty Ltd and Australian Skills Quality Authority

Sydney Training Academy Pty Ltd and Australian Skills Quality Authority [2018] AATA 3361 (7 September 2018)
Division:GENERAL DIVISION
File Number(s): 2018/4633
Re:Sydney Training Academy Pty Ltd
APPLICANT

AndAustralian Skills Quality Authority
RESPONDENT

DECISION
Tribunal:Chris Puplick AM, Senior Member
Date:7 September 2018
Date of written reasons: 10 September 2018
Place:Sydney

For the reasons given orally at the Interlocutory hearing of this matter on 7 September 2018, the Tribunal issues a Stay Order in the following terms:
1.The Decision under review, being the cancellation of the Applicant’s Registration as from 11 September 2018 is stayed pending further order of the Tribunal.
2.The conditions below are imposed upon the Applicant in consequence of the decision in (1) above, with any breach of such conditions to have the effect of an immediate lifting of the stay order.
3.That, for the duration of the stay the Applicant is:
(a)not permitted to enrol any students in any VET course, or part thereof; and
(b)not publish or broadcast, or cause to be published or broadcast, in any media, any advertisement relating to any VET course, or part thereof.

4.That all current files and specifically assessments of all current students of the Applicant be made available for inspection of the Respondent. This is to also apply for any students that are trained or graduate from the Applicant while the Stay is in effect and all student records are to be maintained for a period of twelve months from the date on which the student is issued with a qualification or statement of attainment.
5.Within 1 month of the Stay order, the Applicant is to provide to the Respondent the details and qualifications of a proposed new CEO and Director and that upon compliance with this order Mr Mahmoud Abougazaleh is to be removed as CEO and Principal Executive Officer of the Applicant.
6.That a detailed Rectification and Remediation plan is to be provided to the Respondent within 1 month, addressing all issues found to be non-compliant in the Audit Report of 23 July 2018 and monthly updates as to the status of rectifications must continue to be provided to the Respondent until final determination of any appeals.
7.The Applicant is to provide to ASQA the following information (in the form of an Excel spreadsheet) for each student enrolled in each of its VET courses on a monthly basis for 12 months from their commencement date, or until final determination of any appeals:
(i)Unique student identifier;
(ii)name, enrolment status, contact phone number and email address;
(iii)course code, unit code and unit outcome (AVETMISS);
(iv)start date of course;
(v)end date of course;
(vi)name of trainer;
(vii)name of assessor;
(viii)training location;
(ix)delivery mode (AVETMISS); and
(x)the date that any qualification or statement of attainment was issued
(xi)work placement details.

8.That either party have liberty to apply.

.............................[SGD]...........................................
Chris Puplick AM, Senior Member
CATCHWORDS
GENERAL ADMINISTRATIVE – application to stay decision of Australian Skills Quality Authority – decision cancelled Applicant's registration – prospects of success – public interest – consequences for parties – consequences on application for review – stay application granted with conditions
LEGISLATION
Administrative Appeals Tribunal Act 1975
National Vocational and Education Training Regulator Act 2011
CASES
ASIC v AAT (2009) 181 FCR 130
Civil Aviation Authority v Hotop (2005) 145 FCR 232
Metro College of Technology Pty Ltd and Australian Skills Quality Authority [2015] unreported AAT 2015/6137
Re Griffiths Grif-Air Helicopters P/L v Civil Aviation Authority (1993) 31 ALD 380
Rust-oleum Australia P/L and Australian Pesticides and Veterinary Medicines Authority [2017] AATA 298
Scott and Australian Securities and Investment Commission (2009) 51 AAR 114
Sher-E-Punjab Pty Ltd and Australian Skills Quality Authority [2018] AATA 46
Technical Education Australia P/L and Australian Skills Quality Authority [2018] AATA 3047
Windshuttle v Commissioner of Taxation (1993) 46 FCR 235
WRITTEN REASONS FOR ORAL DECISION
Chris Puplick AM, Senior Member
10 September 2018

The Sydney Training Academy (STA) has been operational since 2012 under the VET Quality Framework which is regulated and monitored by the Australian Skills Quality Authority (ASQA). The STA is a Registered Training Organisation (RTO) for the purposes of the National Vocational and Education Training Regulator Act 2011 (the NVR Act).
ASIC records show that Mr Mahmoud Abedelkhaliq Abughazaleh is the sole owner/director of Sydney Training Academy P/L which in this instance, is the RTO. STA was formerly known as Australian K9 Protective Services P/L when apparently its main activities were related to training in the security industry.
According to its website the STA offers a number of courses in:
(a)Construction (including courses dealing with safety at work);
(b)Community services (including early childhood education and aged care);
(c)Hospitality (including responsible service of alcohol); and
(d)Health (including cardiopulmonary resuscitation and advanced first aid).
A number of these are classified by ASQA as being “high-risk courses”.
The Applicant stated in its appeal application that it had 437 students currently enrolled in Queensland, New South Wales and the Australian Capital Territory. Subsequent representations have reduced this number to 371 (271 in government funded courses and 100 as full fee-paying).
The Applicant told the Tribunal that in its current iteration, STA was primarily involved in providing training in the aged care and childhood education areas with some 80% of their students enrolled in these courses.
In May and August 2017 proceedings were taken in the NSW Civil and Administrative Tribunal (NCAT) by Mr Abughazaleh appealing against a decision by the NSW Commissioner of Police to revoke Mr Abughazaleh’s security licence and the master licence of the STA related to security licence courses. In December 2017 that Tribunal issued a determination to uphold the Commissioner’s revocation of the licences in question and went on the find that Mr Abughazaleh was not a fit and proper person to hold a security licence.[1]
[1] Sydney Training Academy v Commissioner of Police, NSW Police Force; Abughazaleh v Commissioner of Police, NSW Police Force [2017] NSWCATOD 176
It is important to note that this finding was challenged by representatives for the Applicant who also asserted that in any case, such a finding was not relevant to the current or proposed management arrangements for STA. The Tribunal finds no reason to dispute or call into question the findings of the NSW Tribunal.
Between October 2016 and February 2018 the activities of STA were subject to monitoring by the NSW Department of Industry (which is part of the co-operative scheme provided by the VET Quality Framework). The NSW Department of Industry wrote to STA in September 2017 and February 2018 outlining a number of events of default under their Contract. STA replied to these letters but the NSW Department found these responses inadequate.
The NSW Department of Industry considered a report (undated) (the NSW Report) from Training Services NSW and, as a result on 16 July 2018 terminated its contract with STA (Smart and Skilled Contract) effective immediately. It listed a number of matters, including the following, as the basis for its termination of the contract:
(a)Failure to comply with requirements under the VET Quality Framework;
(b)Failure to deliver and assesses subsidised training in accordance with the Contract;
(c)Failure to deliver subsidised training consistent with AQF volume of learning descriptors for each qualification level;
(d)Failure to deliver subsidised training compliant with the relevant training package;
(e)Failure to meet evaluation requirements and maintain records;
(f)Incorrect reporting of required data.
The NSW Monitoring Report also drew adverse conclusions from an analysis of student assessment responses which were so identical as to raise questions as to the integrity of the assessment process rendering them in effect invalid.[2]
[2] Training Services NSW Performance Monitory Final Report – Sydney Training Academy Pty Ltd, p 29.
After incorporation and registration in NSW in 2009, the STA came under the aegis of ASQA as part of the new national co-operative scheme in 2011. In April 2015 ASQA rejected STA’s application for renewal of registration due to multiple instances of non-compliance with Standards (inadequate training and assessment strategies, insufficient facilities and equipment). After remedial action was taken by STA a “partial” renewal was granted, apparently for a period of seven years.
In March and April 2018 ASQA undertook an Audit of STA which resulted in a report dated 23 July 2018. This report identified numerous failures and levels of non-compliance with a number of the Standards set out in the Standards for Registered Training Organisations 2015.
Some of these appear to stretch back several years and, having been brought to the attention of STA on previous occasions, appear not to have been remediated to a degree satisfactory to ASQA. This also appears to have been the finding of the NSW Department of Industry.
The Respondent drew the Tribunal’s attention to the fact that while certain matters had been identified in the NSW Report and in letters as far back as September 2017, they remained unaddressed and unrectified by the time the same issues were identified in the ASQA report of July 2018, more than six months later. The Respondent invited the Tribunal to draw adverse conclusions from this.
On 30 May 2018 ASQA notified STA under s 37(1)(a) of the NVR Act of its intention to cancel STA’s registration (under s 39 NVR Act) and invited submissions from STA related to this notification. These were required by 27 June 2018. The letter of 30 May identified areas of concern under the headings of (a) training and assessment, (b) completion and (c) regulatory compliance/governance issues.
These representations in reply were received on 27 June 2018 (apparently at 11:51 pm) and considered by ASQA which determined, after giving them due consideration, nevertheless to proceed with the registration cancellation effective from 11 September 2018.
On 17 August the Applicant applied to this Tribunal for a stay of that decision under

s 41(2) of the Administrative Appeals Tribunal Act 1975 (AAT Act). This stay was opposed by ASQA.
The stay appeal was heard by way of interlocutory on 6 September 2018 at which time, after hearing oral submissions and receiving from the Applicant a proposal for granting of a conditional stay, the Tribunal requested both parties to provide further information to it by the following day. Both parties complied. The Tribunal has found this additional material to be most useful and is grateful to both parties for their assistance.
The Applicant based their appeal on several grounds:
(a)The welfare and position of its 437/371 currently enrolled students;
(b)Its refutation by assertion of the claims of non-compliance;
(c)The audit by the Queensland Department of Education finding its operations compliant; and
(d)The failure of ASQA to undertake a further review of its cancellation decision.
In oral submissions, the Applicant advanced further grounds of appeal, including, inter alia:
(a)The position which STA occupies in its local community and its special role in the training of Muslim women and girls, and other female members of smaller or marginalised communities helping both their community integration and economic independence;
(b)The lack of complaints from employers about the quality of their trainees and graduates who had secured local employment;
(c)STA’s significant improvements in areas identified as deficient and their commitment to further improvement and compliance.
The Applicant provided some support for these assertions in its additional written submission.
In response, ASQA asserts that:
(a)The students can be placed in other training institutions and in any event the cancellation of the NSW registration leaves students in that State currently unfunded and furthermore funding has been suspended by the ACT Training Authority on the basis of ASQA’s notice to cancel registration;
(b)Mere refutation of non-compliance claims fails to place reliable evidence before the Tribunal for its assessment;
(c)The Queensland Audit is irrelevant in that it relates only to auditing of funding claims and does not address any matters of quality of assessments or compliance with other requirements;
(d)The review process under the NCR Act is such that when it is made by the Chief Commissioner and another Commissioner, it is not subject to further internal review as it might have been, had it been made by a delegate alone (see ss 200, 224, 225 of the NVR Act). Once a decision is made at this level it may only be reviewed by application to the AAT.
The Tribunal of course, has no role, in a stay application, in seeking to determine the merits of any case which might be argued at a later stage in appeal proceedings (Windshuttle v Commissioner of Taxation [1993] 46 FCR 235).
In Scott v Australian Securities and Investment Commission (2009) 51 AAR 114 at [4] then AAT President Downes set out the range of matters which the AAT should assess in considering stay applications. These were (in summary):
(a)Prospects of success
(b)Consequences for the Applicant of refusal
(c)Public interest
(d)Consequences for the Respondent in carrying out its functions depending on whether the stay was issued or not
(e)Whether the review would be nugatory if the stay not granted
(f)Other matters considered relevant.
Section 41(2) of the AAT Act also enjoins the Tribunal to consider “the interest of any persons who may be affected by the review” which clearly involves not only the principal of STA but also its staff and students.
The Tribunal notes that the Applicant has now drawn to its attention a more recent decision by Deputy President Forgie (Rust-oleum Australia P/L v Australian Pesticides and Veterinary Medicines Authority [2017] AATA 298) in which, on the basis of recent Federal Court authority, the question of whether or not (or to what extent) the Tribunal should consider “prospects of success”, is called into question. Deputy President Forgie’s most recent decision suggests that “Prospects of success have no place” in the considerations of the Tribunal (at [36]). However the Deputy President does note that if there is absolutely no prospect of success, this is a matter which should influence the considerations of the Tribunal (at footnote 30). The Tribunal makes no attempt to reconcile the differing opinions expressed in Scott and Rust-olem as that is not necessary for the purposes of this determination.
In brief, the Tribunal is of the opinion that:
(a)The material originally submitted by Mr Abughazaleh in his stay application was essentially based upon a series of assertions, not supported by sufficient probative evidence for the Tribunal to have been able to safely base a decision for a stay, and would, under the Scott test have presaged little prospect of success. (Re Griffiths Grif-Air Helicopters P/L v Civil Aviation Authority [1993] 31 ALD 380; Technical Education Australia P/L v Australian Skills Quality Authority [2018] AATA 3047). However the material submitted by the Applicant in response to an invitation of the Tribunal’s after the initial hearing, although still not perhaps fully comprehensive, nevertheless places far more evidence before it in support of a stay application to allow the material to be heard in detailed proceedings on the merits. The best that can be said is that this material does not lead the Tribunal to the opinion that the submission presented by the Applicant can be characterised as being without merit and that it provides some basis for a review of the cancellation decision on its merits.
(b)The consequences of refusing a stay for the Applicant would be substantial.
(c)There is a major public interest in ensuring that all RTOs are fully compliant with VET requirements, especially where issues of safety (e.g. safety on building sites; first aid; cardiopulmonary resuscitation; child welfare; the provision of aged care) are concerned and these must be given primary consideration. The interests of consumers, employers and those reliant upon people with appropriate qualifications are encompassed within this descriptor (Sher-E-Punjab Pty Ltd and Australian Skills Quality Authority [2018] AATA 46; Metro College of Technology Pty Ltd and Australian Skills Quality Authority [2015] unreported AAT 2015/6137).
(d)The authority of ASQA should be given considerable respect in such proceedings as it is the essential guardian of the integrity of the VET regulation system. The Tribunal must have regard to the fundamental elements, objectives and purposes of the regulatory scheme in assessing stay decisions (ASIC v AAT [2009] 181 FCR 130 at [53]). In this instance s 2A of the NVR Act includes among its objects national consistency in regulation and the protection of students.
(e)As any application for review of the cancellation decision lies to this Tribunal, and as a preliminary conference in this matter is already scheduled (25 October 2018) the question of whether this would be rendered nugatory by a stay decision (one way or the other) does not arise. Such a conference and application is not dependent upon the decision regarding a stay of the cancellation, although the Tribunal agrees with the Applicant that its decision will materially affect the status and standing of the Applicant in those hearings. This is a matter to which the Tribunal attaches some weight.
(f)The interests of both staff and students would obviously be adversely affected by the cancellation within the next five days.
(g)The Tribunal must give serious attention to “the interests of any person who may be affected by the review” as this is a clear and unambiguous requirement imposed by the AAT Act itself, as is the consequence of its decision in “securing the effectiveness of the hearing and determination of the application for review” (s 41(2)). (See also: Civil Aviation Authority v Hotop [2005] 145 FCR 232).
The Respondent makes the point that the interests of students cannot be seen from one perspective only. Although they would be disadvantaged should their courses or training be interrupted, they would equally suffer negative consequences were it to be found that their training was incomplete, insufficient or inadequate or that their accreditation had been granted improperly.
The competing public interests, in effect, pitch the financial viability of the RTO and the employment of its staff, together with the disruption of the study (and potential financial and time losses) of the students, plus disruptions to community development and integration efforts, against the public interest in both maintaining safe standards, the integrity of the assessment system and the importance of support for ASQA’s role as regulator of the national scheme.
The Tribunal has taken into account:
(a)The adverse findings made by the NSW Tribunal as to the fit and proper status of Mr Abughazaleh;
(b)The prolonged record of non-compliance and non-rectification demonstrated by the Applicant and outlined in both the NSW and ASQA audits;
(c)The decision of the NSW authority to cancel its existing contract;
(d)The decision of the ACT authority to suspend financial support.

Equally it has to take into account the assurances given by the Applicant which go to evidence about remediation steps already taken, effective restructuring of the organization and management and acceptance of the need to ensure compliance with all ASQA requirements. In particular the Tribunal notes the Applicant’s proposals which effectively remove Mr Abughazaleh from a role as any part of the “key personnel” of the restructured entity.
The Tribunal notes that the Applicant, in its further submissions has made it clear that it is not seeking an unconditional stay of the decision under review and, implicitly at least, acknowledges, almost for the first time, its need to address more seriously some of the issues raised by ASQA.
The Applicant has put to the Tribunal a proposal for what amounts to a conditional stay of the cancellation decision. It would allow for a period of time for current students to complete their courses of study, the non-enrolment of any further students and the completion of all remediation and rectification requirements which ASQA considers to be outstanding.
The Respondent, while still pressing its primary submission as being to deny any stay, indicates that, were the Tribunal to be minded to grant a stay, it should be with further and more stringent conditions attached.
The Tribunal has concluded that it is appropriate for a stay order to be granted, for a limited period of time and with significant conditions attached. It does so in order to allow the Tribunal (in another iteration) to hear the appeal of the Applicant to be determined on its merits and without prejudice to the standing of the Applicant in those proceedings.
The conditions to be imposed are an amalgamation of those proposed by the Applicant and those required by the Respondent.
CONCLUSION
The Tribunal issues a Stay Order in the following terms:
1.The Decision under review, being the cancellation of the Applicant’s Registration as from 11 September 2018 is stayed pending further order of the Tribunal.
2.The conditions below are imposed upon the Applicant in consequence of the decision in (1) above, with any breach of such conditions to have the effect of an immediate lifting of the stay order.
3.That, for the duration of the stay the Applicant is:
(a)not permitted to enrol any students in any VET course, or part thereof; and
(b)not publish or broadcast, or cause to be published or broadcast, in any media, any advertisement relating to any VET course, or part thereof.
4.That all current files and specifically assessments of all current students of the Applicant be made available for inspection of the Respondent. This is to also apply for any students that are trained or graduate from the Applicant while the Stay is in effect and all student records are to be maintained for a period of twelve months from the date on which the student is issued with a qualification or statement of attainment.
5.Within 1 month of the Stay order, the Applicant is to provide to the Respondent the details and qualifications of a proposed new CEO and Director and that upon compliance with this order Mr Mahmoud Abougazaleh is to be removed as CEO and Principal Executive Officer of the Applicant.
6.That a detailed Rectification and Remediation plan is to be provided to the Respondent within 1 month, addressing all issues found to be non-compliant in the Audit Report of 23 July 2018 and monthly updates as to the status of rectifications must continue to be provided to the Respondent until final determination of any appeals.
7.The Applicant is to provide to ASQA the following information (in the form of an Excel spreadsheet) for each student enrolled in each of its VET courses on a monthly basis for 12 months from their commencement date, or until final determination of any appeals:
(i)Unique student identifier;
(ii)name, enrolment status, contact phone number and email address;
(iii)course code, unit code and unit outcome (AVETMISS);
(iv)start date of course;
(v)end date of course;
(vi)name of trainer;
(vii)name of assessor;
(viii)training location;
(ix)delivery mode (AVETMISS); and
(x)the date that any qualification or statement of attainment was issued
(xi)work placement details.
8.That either party have liberty to apply.

I certify that the preceding 38 (thirty -eight) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member

...............................[SGD].........................................
Associate
Dated: 10 September 2018

Date(s) of hearing: 6 and 7 September 2018

Solicitors for the Applicant: P Doukas - Denison Toyer

Solicitors for the Respondent: L McDermott - ASQA

[2018] AATA 3361

7 September 2018

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Stay of Proceedings

Remedies

Jurisdiction

Standing

Date(s) of hearing:	6 and 7 September 2018
Solicitors for the Applicant:	P Doukas - Denison Toyer
Solicitors for the Respondent:	L McDermott - ASQA