Trades College Australia Pty Ltd v Australian Skills Quality Authority
[2018] AATA 1703
•12 June 2018
Trades College Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 1703 (12 June 2018)
Division:General Division
File Number: 2018/1994
Re:Trades College Australia Pty Ltd
APPLICANT
AndAustralian Skills Quality Authority
RESPONDENT
DECISION
Tribunal:Deputy President S A Forgie
Date:12 June 2018
Place:Melbourne
The Tribunal refuses the applicant’s applications under s 41(2) of the Administrative Appeals TribunalAct 1975 for stays of the operation or implementation of the decisions made by a delegate of the respondent on 11 April 2018.
..................[sgd]..................................................
S A FORGIE
Deputy President
PRACTICE AND PROCEDURE – Renewed stay application under s 41(2) of the Administrative Appeals Tribunal Act 1975 – Tribunal will not grant stay where doing so would be ineffectual in affecting implementation of reviewable decision by operation of law – stay would have legal effect if granted.
PRACTICE AND PROCEDURE – decision by delegate to cancel registration – application for stay refused.
Legislation
Administrative Appeals Tribunal Act 1975 s 41, 44A
Civil Aviation Act 1988 ss 27, 27AB, 27AC, 28BA, 28, 31, 31A
Corporations Act 2001
Migration Act 1958 s300, 476, 501A
National Vocational Education and Training Regulator Act 2011 ss 2A, 3, 16, 17, 155, 157, 185
National Vocational Education and Training Regulator Regulations 2011 r 5
Social Security Act 1991
Cases
Australian Securities and Investments Commission v Administrative Appeals Tribunal [2009] FCAFC 185; (2009) 181 FCR 130
Civil Aviation Safety Authority v Hotop [2005] FCA 1023; (2005) 145 FCR 232
Director-General of Social Services v Chaney (1980) 47 FLR 80; 31 ALR 571
Re Alexander and Migration Agents’ Registration Board (1995) 40 ALD 99
Re Gurkhas Institute of Technology Pty Ltd trading as Royal Gurkhas Institute of Technology and Australian Skills Quality Authority [2017] AATA 1018
Re Scott and Australian Securities and Investments Commission [2009] AATA 798; (2009) 51 AAR 114
Re Trades College Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 1360
Seymour v Migration Agents Registration Authority [2007] FCAFC 5; (2007) 156 FCR 544
Shi v Migration Agents’ Registration Authority [2008] HCA 31; (2008) 235 CLR 286; 248 ALR 390; 48 AAR 345; 103 ALD 467; 82 ALJR 1147
Windshuttle v Commissioner of Taxation [1993] FCA 553; (1993) 46 FCR 235; 93 ATC 4992; 27 ATR 88
Yolbir v Administrative Appeals Tribunal (1994) 48 FCR 245
Other material
Financial Viability Risk Assessment Requirements 2011
Macquarie Dictionary, revised 3rd edition, 2001, The Macquarie Library Pty Ltd
Standards for Registered Training Organisations
REASONS FOR DECISION
Deputy President SA Forgie
On 30 October 2012, Trades College Australia Pty Ltd (TCA) was registered as an NVR registered training organisation[1] (RTO) under the National Vocational Education and Training Regulator Act 2011 (NVR Act) for a period expiring on 24 May 2018. As an RTO, TCA specialises in awarding trades-based qualifications to existing workers who want to be issued with certification so that they can apply for a licence such as a builder’s licence, carpenter’s licence or plumber’s licence.[2] The National Vocational Education and Training Regulator is established under s 155 of that legislation where it is referred to as the “National VET Regulator”.[3] It is also known as the Australian Skills Quality Authority (ASQA) and that is the name that I will use.[4]
[1] The term “NVR registered training organisation” is defined in s 3 of the NVR Act to be a training organisation registered under that legislation.
[2] First affidavit of Ms Jane Connors sworn on 16 May 2018 at [9]
[3] NVR Act; ss 3 and 155(1)
[4] NVR Act; s 155(2) and National Vocational Education and Training Regulator Regulations 2011 (NVR Regulations); r 5
Before its registration was due to expire on 24 May 2018 and at some time before 28 March 2018, TCA applied for renewal of its registration. On 11 April 2018, ASQA cancelled TCA’s registration with effect from 16 May 2018. In a separate letter also dated 11 April 2018, ASQA advised TCA that it had decided on 28 March 2018 to refuse to renew its registration. TCA applied to the Tribunal for a stay of both decisions. Initially, a differently constituted Tribunal granted an interim stay on 7 May 2018[5] but refused both applications on 24 May 2018.[6] After applying to the Federal Court for judicial review of the final decision on the applications for a stay and a hearing of that application was adjourned, TCA renewed its applications for stay of both decisions. I have decided to refuse TCA’s application for a stay order under s 41(2) of the AAT Act.
[5] See [11] below
[6] Re Trades College Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 1360; A Maryniak QC, Member
BACKGROUND
The factual matters referred to in the following paragraphs are set out for the purpose of considering the stay application only.
Outline of responsibilities of an RTO specialising in assessment based on recognition of prior learning
In her first affidavit, Ms Connors described the way in which an RTO, such as TCA, which assesses training products using recognition of prior learning (RPL). She said:
“… It involves the review of an individual’s relevant prior learning. It includes and [sic] assessment of formal learning (previously completed relevant qualifications) and informal learning (resulting from work or similar related activities).
RPL assessment process requires the learner to submit a significant amount of evidence. Assessment of RPL evidence is technical and demanding because the assessor needs to review and align a range of evidence such as referee reports, resumes, photographic and documentary evidence and interviews with the learners against all requirements of every competency in every unit of competency. The assessor also needs to verify that the evidence is authentic, reliable and sufficient. For a qualification, that usually takes several years to complete such as Certificate III or Certificate IV in Plumbing, the documentary evidence for an adequately assessed RPL qualification would be hundreds of pages which must be detailed and mapped across each unit of competency.
ASQA expects that RPL is conducted with the same rigour as any other form of assessment – a comprehensive quality process that covers the content (skills and knowledge) of the qualification being assessed. The evidence used to make a decision about competence must be valid, sufficient, authentic and current as stated in Clause 1.8 of the RTO Standards 2015 with which the RTO must comply by law. The RTO should have a system including policies and procedures to support the decision making process.
Examples of evidence that may be submitted by an individual applying for CPC30211 Certificate III in Carpentry RPL could include, however is not limited to:
·a resume of work history demonstrating skills and knowledge that are required by the qualification
·employer references to verify the resume work history skills and knowledge
·certified certificates and documents to verify relevant activities listed in the resume
·referee names and contact details to confirm work history
·time stamped photos or videos demonstrating skills – ensuring the applicant can be seen in the evidence
·a portfolio of tasks completed that can be verified
·a mapping of the evidence to the skills and knowledge required by the unit of competency
·a third party verification report directly related to the skills and knowledge required by the unit of competency
·a third party verification report directly related to the skills and knowledge required by the unit of competency
·a self assessment check list that is authenticated by the individual
·a record of discussion with a teacher or trainer recommended [sic] the individual as a suitable candidate for RPL.
RPL is high risk because the assessor is only relying on material evidencing competence rather than their written and practical assessment of competence. Because it can be used to avoid an apprenticeship over several years – RPL for trade qualifications is very valuable and is used to receive a license [sic] and being immediately working in the construction and maintenance industries. Where a student does not have the required competencies they can cause harm to the reputation of an confidence in the industry through defective work and damage to commercial and residential property which may injure other workers or the public through their incompetence.”[7]
[7] First affidavit of Ms Jane Connors sworn on 16 May 2018 at [12]-[16]
TCA’s non-compliance in 2016, cancellation and continuation of registration
In April 2016, an ASQA audit found TCA to be critically non-compliant with its obligations under the Standards for Registered Training Organisations (RTOs) 2015 (RTO Standards) made under the authority of the NVR Act. The audit found that TCA was non-compliant in relation to cll 1.1, 1.2 and 1.8 of the RTO Standards and particularly in so far as its practices regarding RPL were concerned. It had, the audit found, inadequate tools for conducting an assessment of RPL. Furthermore, it found, TCA had issued qualifications for units without evidence that those units had been assessed or completed. TCA appeared, the audit concluded, to have issued qualifications based solely on statutory declarations from the students themselves that they held the appropriate qualifications.[8]
[8] First affidavit of Ms Jane Connors sworn on 16 May 2018 at [17]-[18] and JC-002 at 12-14
On 29 August 2016, ASQA cancelled TCA’s registration with effect from 3 October 2016. After TCA lodged an application to review ASQA’s decision and undertook to implement changes and remediation to its training and assessment in order to become compliant, including reassessing a number of students, ASQA consented to its registration continuing.[9]
[9] First affidavit of Ms Jane Connors sworn on 16 May 2018 at [19]
Further audit of TCA in 2017
On 3 March 2017, TCA gave ASQA evidence of reassessment of six of the students whom it had previously agreed to reassess. ASQA found that evidence to be inadequate to demonstrate the students’ competency against all of the requirements for each unit of competency. ASQA formed the view that the evidence consisted of undated photographs and high-level conversations regarding competency in order to demonstrate the students’ competency in units such as Carry out basic demolition, erect and dismantle restricted height scaffolding and Use explosive power tools.[10] ASQA also relied on statements of two former employees of TCA: Mr Tom van der Werff and Mr Peter Ellevsen. They said that TCA had provided RPL to students who had not shown any practical competence and had not had their practical skills assessed. As a result of its concerns, ASQA started a compliance monitoring audit of TCA.
[10] Audit Report: Trades College Australia Pty Ltd dated 26 July 2017: First affidavit of Ms Jane Connors sworn on 16 May 2018; Annexure JC-003 at 13-14
Notice of intention to cancel registration based on non-compliance
On 5 September 2017, ASQA gave TCA notice under s 37(1)(a) of the NVR Act that it intended to make a decision cancelling its registration under s 39. The notice invited TCA to give ASQA a written response to its notice no later than 4 October 2017. TCA responded and ASQA considered it and then gave notice in a letter dated 11 April 2018 that it intended to cancel TCA’s registration with effect from 16 May 2018. ASQA’s reason for its decision was that TCA did not demonstrate compliance with cll 1.8, 3.1, 3.3, 3.4 and 8.1 of the RTO Standards. In particular, TCA:
“· has failed to conduct adequate assessment on students to ensure they are competent against all requirements of the training product with regard to training package requirements, the principles of assessment and the rules of evidence
·has not demonstrated that it has capacity to correct its assessment system (to comply with Clause 1.8) for current of future students (Clause 1.8)
·has failed to ensure that AQF certification documentation is only issued to learners who have been assessed as meeting all training product requirements
·has failed to correct its systems and practices for issuance of AQF certification documentation (to comply with Clause 3.1) for current and future learners (Clause 3.1)
·has failed to ensure that AQF certification is issued to all learners within 30 calendar days of the learner being assessed as meeting the requirements of the training product if the training program in which the learner is enrolled is complete, and providing all fees the learner owns to the RTO have been paid
·has failed to correct its systems for future learners in relation to the issuance of AQF certification documentation to learners within thirty days of the learner being assessed as meeting the requirements of the training product (Clause 3.3)
·has failed to correct its system to maintain records of AQF certification documentation (to comply with Clause 3.4) for future students and has systems and practices in place to ensure that it is this system that is applied. (Clause 3.4)
·the RTO has not demonstrated that it has the capacity to provide sufficient remedial action to address the impact of the identified non-compliance.”
These issues were addressed further in a report entitled “Audit report: Trades College Australia Pty Ltd” dated 26 July 2017 (Audit Report) and later updated in a report dated 19 January 2018. The same reasons were given for ASQA’s deciding to reject TCA’s application for registration. The decision was made on 28 March 2018 and ASQA gave notice of it to TCA in a letter dated 11 April 2018. ASQA rejected TCA’s application on the basis that it had not met one or more of the requirements of the VET Quality Framework and the conditions of registration set out in ss 21 to 28 of the NVR Act. In particular, TCA had not demonstrated compliance with cll 1.8, 3.1, 3.3, 3.4 and 8.1 of the RTO Standards. ASQA set out details of TCA’s non-compliance as it had in its letter, also dated 11 April 2018, giving notice of the cancellation of registration.
Application(s) for review and applications for stay orders
On 13 April 2018, TCA lodged an application for review. The application gives the date of the decision of which it seeks review as 11 April 2018 but does not give a description of it. Section 3 of the application form TCA lodged asks for reasons for the decision. TCA has responded:
“The decision is wrong.
The College will prove that it is compliant with all elements that are alleged by the decision making authority, in this case the Australia Skills Quality Authority (ASQA).”
The reference is to one decision but that decision is not identified as either the cancellation or the refusal to register decision.
The completed form entitled “Request for Stay Order” was lodged together with the application for review. It did identify the decision of which stay was sought: “A Stay of the Decision Cancelling the Registration of the Applicant”. That would suggest that the decision of which review was sought was the cancellation decision. On 7 May 2018, Mr Maryniak QC made the following interim order staying the cancellation decision:
“1. A stay application in this matter is listed for 18 May 2018 at 10.00am, in Melbourne …
2.The decision of the Respondent made on 11 April 2018 to cancel the Applicant’s registration under s 39 of the National Vocational Education and Training Regulator Act 2011 is stayed between the effective date of the decision being 16 May 2018 and the date a decision is provided with respect to the Application referred to in the paragraph above.
3.During the period of the Interim Stay from 16 May 2018 to the Decision date referred to in paragraph 2 above, the Applicant shall not issue any qualifications.
4.On or before 4:00pm 9 May 2018 the Applicant shall lodge with the Tribunal and serve on the Respondent a Statement of Facts, Issues and Contentions, limited to 5 pages, together with any evidence in support of its Stay Application.
5.On or before 4:00pm 16 May 2018 the Respondent shall lodge with the Tribunal and serve on the Applicant a Statement of Facts, Issues and Contentions, limited to 5 pages, together with any evidence in support of its Stay Application.”
On 11 May 2018, Mr Maryniak gave leave to TCA to amend its application to stay ASQA’s decision made on 11 April 2018 to refuse to renew registration. With the consent of the parties, he stayed that decision from 16 May 2018. I note that, on their face, the documents lodged on behalf of TCA on 13 April 2018 read as if review was sought of only one decision being the cancellation decision. In the absence of an application for review of a decision, the Tribunal has no power under s 41(2) to stay the operation or implementation of a decision. The only way in which the stay order made on 11 May 2018 can be understood to be made under s 41(2) is if the original application for review is to be understood as seeking review of both decisions. From a practical point of view, it would make sense for TCA to seek review of both decisions. They were made on the same day and on the same grounds and, given their proximity to the date on which TCA’s registration would come to an end in any event, both directly affected their ability to operate as an RTO. If I am to understand the application in that way, and it would seem that the parties have done so, it needs to be reflected in the creation of a further file for the refusal of registration decision. Given that the two applications would both related to TCA and the Registrar, or her delegate may be satisfied that both applications can be conveniently heard before the Tribunal at the same time, she may make an order under s 23 of the Administrative Appeals Tribunal Regulation 2015 having the effect that no further application fee is payable.
Decision on applications for stay orders and Federal Court proceedings
On 18 May 2018, Mr Maryniak refused to stay either the cancellation or the refusal decisions.[11] He gave written reasons. On 30 May 2018, TCA lodged an application for judicial review in the Federal Court. It was heard by North J on 4 June 2018 when his Honour adjourned further consideration to 6 August 2018 with liberty to apply if a hearing is required before that date. I do not think it unfair to say that what happened at the hearing is encapsulated in his Honour’s statement towards the end of the hearing:
[11] [2018] AATA 1360
“… Mr Mitchell, I’m trying to look for a practical solution.
…
… [A]s is probably quite evident, at the moment I’m not sympathetic to the application for interlocutory relief, but, at the same time, I acknowledge that the decision of the tribunal was robust in the sense that it had a very severe consequence to your clients, although quite how severe the tribunal, I think, was no persuaded. I’m just wondering if there is merit in seeing whether you can get back before the tribunal for a stay application – I mean, a renewed stay application. It would presumably be before a different member, and it would be on different evidence, and I think you might have some insight into the type of evidence that might be more persuasive from what has happened this morning. If that can be done and also a timetable for a early hearing, I think your [Mr Mitchell’s] client would be better served than having a judgment on this application which at the moment is not likely to get, but, you know, there are - - -
…
But, as I said, I’m not, at the moment, attracted by some of the serious pillars of your argument: (a) the serious issue to be tried as an irrelevant consideration; (b) from the exercise we’ve so far performed I am not persuaded at the moment that the tribunal was wrong in its view about the evidence and its generality. They’re two very important parts of your argument. So I’m just wondering whether the best use of time might be for me to stand the matter down, for you to – well, there are – if the position is, as you’ve been instructed, that the rectification work has been completed, then it may be that you can sit down with the first respondent and talk through whether they would oppose a stay application in view of the work that has been done, and, if they do – and, you know, they would be wise to be – they would be wise to be open to engagement on that issue because, on the face of it, the consequence that has flowed from the refusal of the stay is so dire that the question of unreasonableness might really be up for grabs at some time, even if not now.
But that if such an engagement did not work, you went back to the tribunal – I mean within days rather than weeks – and see how you went there. If the tribunal were to 10 grant a stay and you needed to come back here on ancillary orders, if you like, then I think you would find a much more sympathetic judge. I mean, me, but in a more sympathetic mood. I’m thinking along these lines because I do appreciate the consequences that are said to have arisen as a result and would seem obvious, but, on the other hand, your client has got a lot of backfilling to establish bona fides because this thing has been going on for some time, and very tangible signs of bona fides need to come forth, if not to the first respondent then to the tribunal, and if not to them then to me. I mean, I can stand the matter over for a couple of days and see how you go, but I think it would be much more fruitful to your client to have another go on a rather different basis.”[12]
LEGISLATIVE FRAMEWORK
[12] Transcript in NSD893 of 2018 at 35-36
Tribunal’s power to stay a decision
The making of an application to the Tribunal for review of a decision does not affect the operation of that decision or prevent the taking of action to implement it.[13] Section 41(2) of the Administrative Appeals Tribunal Act 1975 (AAT Act) provides:
“The Tribunal may, on request being made by a party to the proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.
Note:…”
[13] AAT Act; s 41(1)
Where an order has been made and is in force, the Tribunal may, on request being made by a party to the relevant proceeding, make an order varying or revoking that order.[14]
[14] AAT Act; s 41(3)
Objects of NVR Act
The objects of the NVR Act are:
“(a) to provide for national consistency in the regulation of the vocational education and training (VET); and
(b)to regulate VET using:
(i)a standards-based quality framework; and
(ii)risk assessments, where appropriate; and
(c)to protect and enhance:
(i)quality, flexibility and innovation in VET; and
(ii)Australia’s reputation for VET nationally and internationally; and
(d)to provide a regulatory framework that encourages and promotes a VET system that is appropriate to meet Australia’s social and economic needs for a highly educated and skilled population; and
(e)to protect students undertaking, or proposing to undertake, Australian VET by ensuring the provision of qualify VET; and
(f)to facilitate access to accurate information relating to the quality of VET.”[15]
[15] NVR Act; s 2A
ASQA’s functions
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 RTO’s.[16] A person may apply to ASQA for registration and for renewal of its registration as an RTO.[17] In deciding whether to grant an application for registration, ASQA must consider whether the applicant complies with the VET Quality Framework and the applicable conditions of registration set out in Subdivision B of Division 1 of Part 2 of the NVR Act.[18] If ASQA grants an application, it must also determine the period for which the applicant is registered. The period of the registration must not be more than seven years.[19]
[16] NVR Act; ss 157(1)(a), (b) and (c)
[17] NVR Act; s 16(1)
[18] NVR Act; s 17(2)
[19] NVR Act; s 17(5)
A.VET Quality Framework: Standards for NVR Registered Training Organisations
The expression “VET Quality Framework” is defined in s 3 and its meanings include:
“(a) the Standards for NVR Registered Training Organisations;
(aa)-(e)…”
The expression “Standards for NVR Registered Training Organisations” has the meaning given by s 185.[20] The Minister may, by legislative instrument, make standards for RTOs, as agreed by the Ministerial Council[21] and they are known as “Standards for NVR Registered Training Organisations”.[22]
[20] NVR Act; s 3
[21] NVR Act; s 185(1)
[22] NVR Act; s 185(2)
B. Applicable conditions of registration
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.”[23]
Section 22(1) provides that an NVR registered training organisation must comply with the Standards for NVR Registered Training Organisations.
[23] ASQA may also impose other conditions on an RTO’s registration and need not do so at the time of registration: NVR Act; ss 17(6) and 29(1).
Renewal of registration
ASQA may renew a registration under s 31 of the NVR Act. Section 31 provides:
“(1) The National VET Regulator may renew an NVR registered training organisation’s registration under section 17 if the organisation makes an application for renewal:
(a) at least 90 days before the day the organisation’s registration expires; or
(b) within such shorter period as the Regulator allows.
(2) An application must be accompanied by the application fee determined by the Minister, by legislative instrument, under section 232.
(3) An NVR registered training organisation’s registration is taken to continue until the organisation’s application is decided.
(4) An NVR registered training organisation may apply for renewal of registration during a period when all or part of its scope of registration is suspended.”
ASQA’s power to cancel an RTO’s registration
Under s 35(1) of the NVR Act, ASQA may, at any time, conduct a compliance audit of an RTO’s operations to assess whether that organisation continues to comply with the NVR Act or the VET Quality Framework.[24] ASQA may also review or examine any aspect of an RTO’s operations to determine any systemic issues relating to the quality of vocational education and training.[25] Section 35A provides that, if ASQA is satisfied that it is appropriate to do so, it may give written direction to an RTO requiring that organisation to rectify a breach of a condition of the organisation’s registration. If, after natural requirements have been satisfied or there are exceptional circumstances, ASQA is satisfied that is appropriate to impose one or more sanctions on an RTO, ASQA may impose one or more of the sanctions set out in s 36(2). Among them is that in s 36(2)(f) which authorises ASQA to cancel an RTO’s registration under section 39(1). If ASQA cancels an RTO’s registration, that RTO may not apply for registration for a period of two years unless ASQA considers a shorter period appropriate.[26]
[24] NVR Act; s 35(1)
[25] NVR Act; s 35(2)
[26] NVR Act; s 39(3)
CONSIDERATION
A stay order takes effect having regard to the terms of the enactment under which the decision under review has been made
At the hearing, Mr Rebikoff of counsel appearing for TCA referred to the case of Civil Aviation Safety Authority v Hotop[27] (CASA v Hotop) as authority for the proposition that a stay of a decision to refuse to renew TCA’s registration means that its registration continues. While, for the reasons I will come to, I agree that TCA’s registration would continue, I respectfully do not agree that CASA v Hotop should be regarded as authority for a broad statement of principle as summarised in the headnote in the authorised report:
“(1) The Tribunal’s power to make orders under s 41(2) of the AAT Act is dependant on the Tribunal being able to grant effective relief in relation to the impugned decision at the ultimate hearing of the review application, which is a question of fact in each case. …
…
(2)Section 41(2) of the AAT Act should not be construed so as to preclude the Tribunal from making orders that have a positive effect (ie. as opposed to merely preserving the situation prior to the reviewable decision) …”[28]
[27] [2005] FCA 1023; (2005) 145 FCR 232; Siopis J
[28] [2005] FCA 1023; (2005) 145 FCR 232 at 232
CASA v Hotop concerned a decision made by CASA on 14 January 2005 to cancel an Air Operator’s Certificate (AOC) issued to the operator of an aviation business. Over the previous 22 years and for the entirety of the time that it had conducted its business, the operator, Polar Aviation Pty Ltd (Polar) had held an AOC or its predecessor instrument. In May 2004, Polar applied for an AOC to take effect from the time that its then current AOC expired on 31 July 2004. CASA issued Polar with a show cause notice as to why its application for an AOC should not be refused. While Polar was responding and CASA was considering its responses, CASA extended its AOC on several occasions with the last expiring on 31 January 2005. CASA then decided to cancel the AOC with effect from 31 January 2015. Polar instituted proceedings in the Federal Court claiming that it had a reasonable expectation that CASA would renew the AOC but had not done so. It sought review of the cancellation decision in the Tribunal and requested a stay of the decision.
Siopis J referred to s 41 of the AAT Act and to s 31(1) of the Civil Aviation Act 1988 (CA Act), which provides that a “reviewable decision” is a refusal to grant or issue, or a cancellation, suspension or variation of, a certificate, permission, permit or licence, granted or issued under that legislation or under regulations made under it. Section 31A(3) provided that the operation of a reviewable decision was stayed by force of that section but s 31A(4) provided that the effect of that stay would cease to have effect at the end of the following fifth business day unless, before that time, the holder of the relevant certificate, permission and so on applied to the Tribunal for review of the decision. In that situation, s 31A(5) provided that the stay would continue until the earlier of the time when the Tribunal decided the application for review or 90 days after the day on which CASA notified the person of its decision. Section 31A(7) provided that, at any time before the end of the 90 days, the holder might apply to the Tribunal for an order under s 41(2) of the AAT Act.
The reasoning adopted in CASA v Hotop is encapsulated in the following passage:
“ I deal firstly with the argument in relation to the limits on the power of the Tribunal to make orders under s 41(2) of the AAT Act. The powers conferred on the Tribunal by s 41(2) of the AAT Act are to be exercised for the purpose of securing the effective hearing and determination of the review application. This is apparent from the terms of the section itself; and, further, in the Yolbir case the Full Court said at 250:
‘In the present case, the relevant decision was the decision that Mr Yolbir’s pension be cancelled. That decision, that Mr Yolbir’s pension be cancelled, was “the decision as affirmed” for the purposes of s 1283(2) of the Social Security Act. It follows that on the application made by Mr Yolbir, the Administrative Appeals Tribunal had power to restore the pension under s 41 of the AAT Act, if this were appropriate for the purpose of securing the effectiveness of the hearing and the determination of the application for review.’
It follows that I accept the applicant’s argument that the Tribunal’s power to make orders under s 41(2) of the AAT Act depends on the Tribunal being able to grant effective relief in relation to the impugned decision at the ultimate hearing of the review application. It will be a question in each case, therefore, whether the decision the subject of the review application is a decision in respect of which the Tribunal may be able to grant effective relief at the ultimate hearing, having regard to its statutory function as a body empowered to conduct a merits review of the impugned decision. In this regard it is significant that s 43 of the AAT Act provides that the Tribunal has the power to substitute its decision for the decision of the decision‑maker under review; and for the Tribunal’s decision to be deemed to take effect at the time of the decision under review.”[29]
[29] [2005] FCA 1023; (2005) 145 FCR 232 at [40]-[42]; 240
His Honour referred to several cases including that of Yolbir v Administrative Appeals Tribunal[30] (Yolbir) referred to in this passage. The Full Court of the Federal Court considered a decision made by a differently constituted Tribunal that it did not have power to make an order under s 41(2) when review was sought of a decision made by the then Social Security Appeals Tribunal (SSAT) affirming a decision made by a delegate of the Secretary to cancel a pension that had been paid to Mr Yolbir. The case turned on the identification of the operative decision for the Tribunal had taken the view that, under s 1283 of the Social Security Act 1991, it could review only the SSAT’s decision affirming the delegate’s decision and not the cancellation decision it affirmed. Having found that the cancellation decision was the operative decision that the Tribunal was required to review, the Full Court determined that it was the decision whose operation or implementation could be stayed by the Tribunal.
[30] (1994) 48 FCR 245; Davies, Burchett and O’Connor JJ
The stay of a decision to cancel a pension whose payment would otherwise be ongoing is to leave the payment in place. What was an ongoing entitlement to be paid before cancellation continues to be an ongoing entitlement when a decision cancelling it is stayed. That is the effect of the stay order on the facts of the case. The Full Court considered how to frame its decision. It debated between framing it in terms of suspending the operative decision or adopting the positive terms used by Bowen CJ in Director-General of Social Services v Chaney[31] (Chaney) i.e. “to direct payment of the pension to [Mrs Chaney] as from today (a pension day) until the hearing of the appeal or further order”.[32] The case of Chaney was a similar case because the decision under review was the cancellation of a widow’s pension. Like Yolbir, the Court was considering its powers to make a decision under s 44A(2) of the AAT Act. That section gives the Federal Court powers on appeal similar to those given to the Tribunal under s 41(2). I respectfully suggest that nothing should be made of the debate in Yolbir regarding the way in which the order is framed. The order to direct payment of pension could not have been made unless the entitlement to be paid pension had been revived by stay of the cancellation decision. Nothing more can be made of the Full Court’s choosing to frame its order in positive terms than that.
[31] Unreported, 4 June 1980 but referred to in the reasons of Deane J in Director-General of Social Services v Chaney (1980) 47 FLR 80; 31 ALR 571 at 98; 588 per Deane J with whom Fisher J agreed in a separate judgment; Northrop J dissenting
[32] Referred to in the judgment of Deane J in Director-General of Social Services v Chaney (1980) 47 FLR 80;
Siopis J also referred to the High Court case of Shi v Migration Agents’ Registration
Authority[33] (Shi) in which Tamberlin J had said:
“…It is evident that if a decision favourable to an applicant is made by the AAT in relation to the application to renew, then the agent in this case will have been wrongfully deprived of the opportunity to earn his livelihood from that time up to the time of the favourable determination. There may also be damage to his practice and reputation. There is no provision for recovery of this loss or for any disruption to the practice, or loss of reputation or goodwill. A favourable decision to the applicant by the AAT would also mean that the applicant had been wrongfully refused registration and these are important considerations: see the remarks of Davies J in Re Dekanic & Tax Agents Board of New South Wales (1982) 6 ALD 240 at 242-243. These observations were applied in Re Nelson & Tax Agents Board Queensland [1993] AATA 262; (1993) 30 ALD 317.
If the applicant in the present case is not granted a stay, the effectiveness of the hearing and determination of the application for review will be diminished.”[34]
[33] [2003] FCA 1304; (2003) 134 FCR 326
[34] [2003] FCA 1304; (2003) 134 FCR 326 at [278]-[29]; 333
This passage might be thought to favour a conclusion that the Tribunal has power to make a decision under s 41(2) in positive terms but it is not so when regard is had to the statutory framework of the Migration Act 1958 (Migration Act) under which the decision under review was made. Mr Shi, who ultimately went to the High Court but not in relation to this particular issue,[35] applied for renewal of his registration as a migration agent for a 12 month period commencing on 11 December 2002. The Migration Agents’ Registration Authority (MARA) did not decide his application before that date. Under s 300(1) of the Migration Act, Mr Shi’s registration continued in effect until MARA decided his application for renewal. Therefore, if the Tribunal were to exercise its power to stay the operation of MARA’s decision refusing to renew registration, the effect would be that Mr Shi’s application for renewal remained undecided. Section 300(1) took effect by operation of law to continue his registration. It was not a case in which the Tribunal could make a positive decision as it were but what followed by operation of law to the facts of the case.
[35] Shi v Migration Agents’ Registration Authority [2008] HCA 31; (2008) 235 CLR 286; 248 ALR 390;
This, it seems to me, is what Tamberlin J decided:
“ The question is whether an order for a stay in the present case is in respect of the operation or implementation of the decision not to renew the existing registration. Prior to the refusal to renew, the position was that the agent’s registration was taken to continue pursuant to s 300(1) of the Migration Act. This deeming provision is a statutory fiction (see, for example, Ex parte Walton; In re Levy (1881) 17 Ch D 746 at 756 per James LJ), but it requires that the agent must be treated as if he or she were registered. In substance, this means that the agent must be taken to have the same rights as if he or she were registered up to the time of the making of the decision not to renew. Accordingly, the prohibition in s 280 of the Migration Act, which prevents a registered agent from giving immigration assistance, would not apply to him or her. After a decision not to renew is made, the direct legal effect of the decision is that the deemed registration is terminated. That is because the deemed registration is taken to continue only until the MARA decides the application for renewal. Accordingly, in substance, and as a direct consequence of the MARA decision, there has been a termination of the rights of the agent enlivened by the deemed registration. This is quite different from ceasing to have effect a statutory expiry as a consequence of the lapse of time. Accordingly, the decision not to renew has an operation which is capable of being stayed pursuant to s 41(2) of the AAT Act. It is the cessation of the deemed right to be treated as if he were registered as a consequence of the decision not to renew that is the subject of the stay. The ‘operation’ of the decision is the legal impact on the right of Mr Shi to be taken to continue as a registered agent. This is terminated by the decision. Therefore, both as a matter of language, and construing s 41(2) in the light of its purpose, the decision not to renew is capable of being stayed. A stay is therefore within the power of the AAT under s 41(2) of the AAT Act.”[36]
[36] [2003] FCA 1304; (2003) 134 FCR 326 at [26]; 332
As Tamberlin J noted, Mr Shi’s situation was quite different from that in which a registration has ceased to have effect as a result of expiration under statute as a consequence of the lapse of time. That was the situation that faced Siopis J in CASA v Hotop. I respectfully suggest that, unlike the case in Shi, there was no statutory provision deeming a registration to continue while an application for registration was considered. There is nothing that equates with the situation in which there is an ongoing entitlement to pension or other privilege, benefit or right if a decision cancelling it is stayed. Rather, once 31 January 2005 had passed, Polar did not hold an AOC because, not only had it been cancelled with effect from that date, it had expired on that date. There was nothing to revive by staying the cancellation decision for the AOC had expired.
I also note that s 300 of the Migration Act has been amended since Shi was decided. The amended provisions were the subject of a judgment of the Full Court of the Federal Court in Seymour v Migration Agents Registration Authority.[37] MARA had refused Mr Seymour’s application for re-registration as a migration agent for the 12 month period from 24 May 2005 to 23 May 2006. It made its decision on 20 February 2006. Under s 300 of the Migration Act, lodgement of an application for renewal of registration leads to automatic continuation of that registration until the application is decided by MARA. That was the case in Shi but, since that case was decided, s 300 had been amended. As amended, s 300(7) provided that, for the purposes of s 300, MARA is taken to have made a decision even if that decision is later stayed. It followed, the Full Court decided, that an order staying the operation of MARA’s would not have the effect of allowing the deemed registration to continue. Section 300(7) was clear in its terms that MARA’s decision was taken to have been made regardless of the Tribunal’s making an order under s 41(2) staying its operation. The effect was that the period of deemed registration came to an end on 20 February 2006 and any order under s 41(2) would have no effect and so be futile.
[37] [2007] FCAFC 5; (2007) 156 FCR 544; Tamberlin, Gyles and Stone JJ
In supplementary submissions that I gave leave to the parties to make over the weekend, Mr Mitchell referred me to the earlier case of Re Seymour and Migration Agents Registration Authority.[38] He did so as support for the proposition that the words of s 41(2) should be given a broad interpretation as decided in Yolbir,[39] and should be interpreted as allowing orders to be made nunc pro tunc. In this case, that expression applied to a situation in which acts are allowed to be done even though the time for them to be done under law has passed. The issue in that case was whether the Tribunal could accept documents purported to be lodged by MARA as required under s 37 of the AAT Act even though it was one day late in doing so. Section 37(1) gives the Tribunal power to extend the time within which they may be lodged but MARA had not applied for an extension of that time before it expired. Senior Member Allen decided that the discretion given to the Tribunal by s 37(1) of the AAT Act was unfettered and would permit an order extending time to be made nunc pro tunc.[40] That is to say, the time could be extended after it had expired. The discretionary power under s 37(1) bears no relationship to the power given to the Tribunal under s 41(2).
[38] [2012] AATA 86; (2012) 125 ALD 145; Senior Member Allen
[39] (1994) 48 FCR 245 at 249-250
[40] [2012] AATA 86; (2012) 125 ALD 145 at [18]; 148
Having regard to the authorities, it seems to me that Deputy President McMahon was correct when he said in Re Alexander and Migration Agents’ Registration Board:[41]
“ The power is given to enable the tribunal to preserve the status quo, so as to ensure that a continuum which is broken by a reviewable decision may be reinstated in order to secure the ultimate effectiveness of the hearing. …
…
… Section 41(2) is not positive in its effect but merely negative. The content of the power is limited by its legislative intendment. It is intended to preserve the situation obtaining prior to the reviewable decision. It is not intended to change the situation entirely and put the applicant in a different position from what he would have been in prior to the reviewable decision. …”[42]
[41] (1995) 40 ALD 99
[42] (1995) 40 ALD 99 at 103
Whether I am correct or not in my views regarding CASA v Hotop, this is a case in which staying the cancellation decision and, more importantly at this time, the refusal decision, would have a legal effect. That comes about because, under s 31(3) of the NVR Act, an RTO’s registration is taken to continue until the organisation’s application is decided. TCA’s application for registration was refused on 28 March 2018 but, if the operation or implementation of that decision is stayed under s 41(2) of the AAT Act, the legal situation is that the application for registration has not been decided. There is no provision in the NVR Act, which equates with s 300(7) of the Migration Act and which would lead to the stay order’s having no legal effect.[43] Section 31(3) of the NVR Act takes effect and TCA remains registered until the Tribunal reviews the substantive decision. It does not matter that ASQA also cancelled TCA’s registration with effect from 16 May 2018 for s 31(3) continues registration and it does not distinguish between circumstances in which registration would otherwise have come to an end because of the effluxion of the period for which ASQA had initially registered an RTO or whether the registration is cancelled.[44]
[43] See [33] above
[44] Had the application for renewal been made after the date of cancellation of the registration, the outcome would have been different. Refusal of the application for registration would not have brought s 31(3) into play for s 31 is predicated upon an RTO’s applying for renewal of registration while still registered.
Relevant considerations under section 41(2)
For the purposes of the hearing, I accept that the matters outlined by a former President of the Tribunal, Downes J, in Re Scott and Australian Securities and Investments Commission[45] (Scott) are relevant matters that will usually arise when considering an application under s 41(2). The place that each has in any consideration and the weight that will be given to each may differ from case to case for they must take their final form in light of the enactment under which the decision under review has been made. They include:
[45] [2009] AATA 798; (2009) 51 AAR 114
“… In considering the application, it is appropriate for me to consider a range of matters, including:
1. The prospects of success.
2. The consequence for the applicant of the refusal of a stay.
3. The public interest.
4.The consequences for the respondent in carrying out its functions depending upon whether a stay is granted or not.
5.Whether the application for review would be rendered nugatory if a stay were not granted.
6.Other matters that are relevant, amongst which I would include the length of time that the ban has already been in place and the gap between today and the hearing of the application.”[46]
[46] [2009] AATA 798; (2009) 51 AAR 114 at [4]; 115
While the matters listed are relevant matters, I respectfully suggest that the list should not be regarded as a comprehensive list of all matters that may be relevant in a particular case. What may be relevant in any particular case will be determined in light of s 41(2) of the AAT Act and the enactment under which the particular decision under review has been made. While regard will generally need to be had to matters of the sort identified by Downes J, it is important not to lose sight of the question that s 41(2) requires the Tribunal to answer and what it needs to take into account in answering it.
First, the Tribunal must take “into account the interests of any persons who may be affected by the review”. The description necessarily draws in the parties to the proceeding. In some instances, such as a decision to refuse to grant an age pension to a person, it might be said that the interests of the parties represent the interests of everyone who may be affected by the review of the refusal decision. As the person with the day to day responsibility for the administration of the Social Security Act 1991, the Secretary of the Department of Social Services could be taken to represent the interests of the wider Australian community.
A decision made under the NVR Act is a little different. Even though ASQA is the regulator under the NVR Act and a key factor in that legislation’s achieving the objects set out in s 2A, its interests lie in its carrying out its functions. Its doing so is a necessary part of the regulatory framework that, among other things, encourages and promotes a VET system that is appropriate to meet Australia’s social and economic needs for a highly educated and skilled population and protects students undertaking, or proposing to undertake, Australian VET by ensuring the provision of qualify VET. Inherent, but not expressed, in s 2A are the interests of the members of the Australian community as a whole in the achievement of the NVR Act’s objects. Also relevant in considering s 41(2) are the interests of those members of the Australian community who call upon people they take to be skilled tradesmen to undertake their work. They may do so, for example, as employers or engage their services for particular tasks in their businesses or domestic settings.
Having considered the interests of any who may be affected by the review, the question posed by s 41(2) of the AAT Act then becomes whether the Tribunal is:
“… of the opinion that it is desirable to … make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of the decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.”
What is “desirable” is that which is “advisable”[47] having regard to the interests of those affected by the review of the decision. It is a discretionary decision. Identification of the particular legislative context in which a discretionary power is conferred and is to be exercised is important in order to identify the boundaries within which the power may be exercised.[48] It is informed by matters of the sort referred to in Scott.
[47] Macquarie Dictionary, revised 3rd edition, 2001, The Macquarie Library Pty Ltd
A. Prospects of success
The authorities establish that a consideration of the prospects of success of an application and so the merits of the substantive application must not involve the Tribunal in a full consideration of those merits. The issue arises in various interim or interlocutory proceedings such as an application for an extension of time within which to lodge an application for review of a decision. It did so when Mrs Windshuttle sought such an extension. Von Doussa J explained the relevance of issues relating to the merits of the substantial application in Windshuttle v Commissioner of Taxation[49] (Windshuttle). In essence, when prospects of success are being considered:
“… It is sufficient for that purpose, if the parties chose to so argue their case, to merely identify the factual assertions which the applicant made in the objection, and then to consider whether the application of the law to those assertions would bring about the result for which the applicant contends. In other words the assertions can, if the parties so choose, be treated as pleadings are treated where an application is made to strike out an action on the ground that the pleadings disclose no cause of action. On an application of that kind the true existence of the facts alleged in the pleadings is not explored by evidence. … [W]here the issue is whether leave should be given to extend time it is inappropriate for the tribunal concerned to embark on a full scale trial of the merits of the underlying question which will be agitated only if time is extended. …”[50]
[49] [1993] FCA 553; (1993) 46 FCR 235; 93 ATC 4992; 27 ATR 88
[50] [1993] FCA 553; (1993) 46 FCR 235; 93 ATC 4992; 27 ATR 88 at [26]; 243-244; 4999 and 95 and approved by Federal Commissioner of Taxation v Brown [1999] FCA 1198 at [12] per Drummond, Sackville and Hely JJ
The same point was also made by Senior Member Fice when he said in Re Gurkhas Institute of Technology Pty Ltd trading as Royal Gurkhas Institute of Technology and Australian Skills Quality Authority:[51]
“I am acutely aware that it is not my role in this type of preliminary hearing to undertake a full consideration of the merits of RGIT’s application. I am required to consider whether there are facts and circumstances which, if established at the substantive hearing, would provide a basis for success on the substantive application, or whether there are points of law raised which, if sustained, would lead to that conclusion.”[52]
[51] [2017] AATA 1018
[52] [2017] AATA 1018 at [29]
B. Public interest
Item 3 in the list from the reasons for decision of Downes J in Scott refers to the public interest. In a joint judgment, Downes and Jagot JJ said in Australian Securities and Investments Commission v Administrative Appeals Tribunal[53] in relation to the exercise of the power under s 41(2) in relation to a decision made under the Corporations Act 2001:
“… [C]areful consideration … must be given by the AAT in any exercise of power under s 41(2) of the AAT Act to the balance of competing rights and interests struck by Parliament as embodied in the terms of the Corporations Act, particularly the balance between the rights and interests of the recipient of the banning order and of the public including existing and potential future clients of the recipient of the banning order. As we have said the scheme which the provisions of the Corporations Act embody – with the potential making of a banning order to remain private unless and until the ASIC decides to make such an order after having given the recipient an opportunity to be heard – is not mere statutory background or a neutral factor in the process of the formation of the required opinion about what is desirable under s 41(2) of the AAT Act. The scheme which Parliament has established in the Corporations Act, and the public interest in the right of the market to know relevant information as soon as practicable, must be treated as a fundamental element in the decision-making process required under s 41(2) of the AAT Act.”[54]
[53] [2009] FCAFC 185; (2009) 181 FCR 130; Moore, Downes and Jagot JJ
[54] 2009] FCAFC 185; (2009) 181 FCR 130 at [71]; 147-148
The sorts of matters identified by Downes and Jagot JJ are those that are of concern to the regulator and to those who might deal with the person who was the subject of the banning order. In keeping with the language used in s 41(2) of the AAT Act, these are interests that are encapsulated within the description: “interests of any persons who may be affected by the review”. There may be a wider public interest in some cases.
C. The nature of the orders that may be made under s 41(2)
The order that the Tribunal may make under s 41(2) is an “… order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision for the purpose of securing the effectiveness of the hearing and determination of the application for review.” I have added emphasis to two elements of the Tribunal’s power as prescribed and will consider each further.
C.1 Operation or implementation of the decision
In Australian Securities and Investments Commission v Administrative Appeals Tribunal, the Full Court of the Federal Court held that the Tribunal’s power extended to staying or otherwise affecting the operation of acts or events that are ancillary to, or consequential upon, the decision under review. As Moore J said after referring to the scheme of the Corporations Act:
“… The context, in its broadest sense … is a legislative scheme which permits the AAT to review decisions on their merits made under enactments and make a decision in substitution of that of the primary decision-maker, operative (unless the AAT otherwise orders) from the time of the original decision-maker: s 43(6), which may involve setting aside the original decision (see s 43(1)(c)). If the decision of the primary decision-maker enlivens statutory provisions creating consequences of the type I have been discussing, it would be an entirely natural and obvious part of the statutory scheme for the AAT to have power to modify or prevent those consequences in circumstances where the decision of the primary decision-maker might later be set aside.”[55]
[55] [2009] FCAFC 185; (2009) 181 FCR 130 at [5]; 133
Her Honour’s conclusion is, I respectfully suggest, reflective of the principle in s 41(1) that the making of an application to the Tribunal for a review of a decision does not affect “… the operation of the decision or prevent the taking of action to implement the decision” (emphasis added). The word “operation” is replicated in s 41(2) but the words “taking of action to implement” the decision are concertinaed into the one word “implementation”.
C.2Securing the effectiveness of the hearing and determination of the application for review
The language used in s 41(2) is mirrored in similar provisions in other legislation. An example is found in the Migration Act 1958 (Migration Act) as it was previously drafted. Mr Madafferi had applied to the Federal Court under s 476 for review of a decision made by the Minister for Immigration and Multicultural Affairs (Minister) under s 501A of that legislation refusing him a permanent resident visa. He also sought orders that the operation and implementation of that decision be stayed and that the Minister be restrained from treating him as a non-citizen or as a person other than the holder of a visa. His application was refused and Mr Madafferi appealed to the Full Court of the Federal Court. At the relevant time, s 482(2) of the Migration Act provided that:
“If an application is made to the Federal Court under section 476 … a Judge of the Federal Court may make such orders of the kind referred to in subsection (3) as that … Judge considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the appeal.”[56]
[56] The word “appeal” should have read as “application”: Madafferi v Minister for Immigration and Multicultural Affairs [2001] FCA 250; (2001) 106 FCR 76; 184 ALR 473; 63 ALD 373 at [9]; 78-79; 476; 375; Heerey, Emmett and Conti JJ
In an affidavit, Mr Madafferi had referred to the severe financial punishment that would be inflicted on him and his family were he to be detained pending the resolution of his application for review. He referred to his business that met all of its taxation, workers’ compensation and other obligations and to his obligations to meet the mortgage payments on his family home and on another property. The Full Court said of this evidence:
“… There does not appear to have been any suggestion that any financial ‘punishment’ would interfere in any way with the capacity of the applicant to prosecute the substantive proceeding. Nor is there any explicit suggestion that being in custody would impede the ability of the applicant to give instructions in connection with the substantive proceeding. There is certainly no finding in relation to either of these matters.
It is difficult to see how s 482(2) is attracted in the circumstances of the evidence before the primary judge. His Honour does not appear to have addressed the question of whether the detention of the applicant will impact in any way on the effectiveness of the hearing and determination of the appeal. That is the primary question that arises under s 482(2). …”[57]
[57] Madafferi v Minister for Immigration and Multicultural Affairs [2001] FCA 250; (2001) 106 FCR 76; 184 ALR 473; 63 ALD 373 at [23]-[24]; 81; 478; 377-378; Heerey, Emmett and Conti JJ
Is it desirable to make an order under section 41(2) in this case?
Prospects of success
Mr Rabih Chamma, the Chief Executive Officer of TCA, has produced a copy of a report prepared by Ms Bettina Brooke regarding the status of TCA’s compliance with the RTO Standards and the conditions of registration under the NVR Act (Further Rectification Schedule). Ms Connors has also reviewed Ms Brooke’s report. She noted in her second affidavit that it contained only two changes from an earlier Rectification Schedule. One was a reference to a review of all remaining RPL kits. Two were said to have been completed: Certificate III in Plumbing and Certificate IV in Building and Construction. Review of RPL kits was in progress for five training products and would be completed for third party review. Four would be completed by 8 June 2018 (Bricklaying, Electrotechnology, Airconditioning and Carpentry) with one, Concreting, completed by 15 June 2018. TCA has 24 training products but no mention was made of the timing of the other 17 revised RPL kits. Even when the RPL kit had been completed, no mention is made of any steps that have to be taken to implement the updated RPL kits or training of staff.
The second matter that was referred to in the Further Rectification Schedule was the reference to an attempt to arrange for the re-assessment of students identified in ASQA’s earlier Audit. Item 3, for example, refers to four particular students and what has been done to reassess them by reference to the revised RPL kits. Other items name other students and set out what has, or has not, been done to reassess them. The Further Rectification Schedule does not address what is being proposed to address reassessment of all of its students. Ms Connor states that some of the students included in the Further Rectification Report were identified in the Audit and have still not been reassessed.[58]
[58] Second affidavit of Ms Jane Connors sworn on 7 June 2018 at[17]
On the basis of Ms Connor’s second affidavit and my examination of the Further Rectification Schedule, I find that TCA has advised some 21 students by email that their qualifications have been recalled but it has not produced evidence that it has done so or notified ASQA to that effect. It has not provided any refunds to those students and had not given them information regarding licensing outcomes.[59]
[59] Second affidavit of Ms Jane Connors sworn on 7 June 2018 at[17]
Mr Channa said in his affidavit that he intended to form a Board of non-executive directors who are not involved in the business but who would provide ongoing guidance and support to the business. If a stay order is made, Mr Channa said, TCA:
“… will immediately commence enrolling and training students again, in an attempt to generate income and stave off insolvency. However, it will also continue its process of ongoing investment in the training materials, assessment materials (RPL kits) and assessment for students.”[60]
[60] Unsworn affidavit of Mr Chamma at [17]-[18]
Mr Channa has set out information relating to the financial situation of TCA and his own. He has stated that TCA’s net profit was $278,707.74 in the Profit and Loss Statement but added that this figure does not accurately reflect the cash profit of the company. There had been no “cash profit’ generated in that period. Income that is expected to be received from students who are booked into courses is reflected in the management accounts profit and loss statement. The true position, however, is only determined after quarterly adjustments are made by TCA’s external accountants. Mr Channa said:
“… From the 2018 financial year there are hundreds of thousands of dollars of income recorded in the management accounts profit and loss statement, which Trades College is yet to earn, and is not yet entitled to receive. They will not appear in the tax accounts and end of financial year statements prepared by external accountants on a cash basis, and nor have they appeared in quarterly business activity statements lodged by Trades College (also prepared on a cash basis, although this was not always the case).
Trades College has $204,425.11 in outstanding liabilities. Two of the creditors to whom Trades College is in arrears are its landlords. The Port Melbourne landlord’s agent has served a reminder notice in respect of rent due on 2 May 2018. The Punchbowl landlord has served a notice of breach in respect of rent due on 1 May 2018. Neither rent has been paid because Trades College does not have available funds to do so.”[61]
[61] Unsworn affidavit of Mr Chamma at [9]-[10]
Mr Chamma has said that TCA has only one bank account into which fees are deposited and expenses withdrawn. He attached a screen shot of the most recent entries between 29 May and 7 June 2018. It showed that he had $6,996.58 available to him. The Payroll Activity Summary for the period 1 June 2017 to 30 June 2018 shows that he has been paid a net salary of $60,896 and expenses of $7,858.40. This information does not take me much further than the Profit and Loss Statement prepared on a cash basis. It does not reflect TCA’s assets or any available sources of income although I note that Mr Channa states that there are none.
If this matter comes to a hearing of the merits of the application for review, time will have passed. That may be enough time for TCA to address all of the non-compliances that ASQA has identified. It may have reviewed and updated its RPL kits for all of its training products. It may have contacted all of the students and reassessed them. It says that it will. If I review the prospects of success only in light of its statements as to what it will do and bear in mind that the hearing may be some way off, I could conceivably conclude that TCA has some prospects of succeeding on substantive review. That conclusion would be based on the fact that, following the High Court case of Shi v Migration Agents’ Registration Authority, its compliance will be assessed on the evidence at the time that the Tribunal makes its decision and not on the current state of affairs which would not support such a conclusion regarding prospects of success. The statements are as to what will be done and not as to what has been done.
Even looking at prospects of success at that future time, there is nothing that is asserted by Mr Chamma or that is in the material that there are facts and circumstances asserted which, if established, would provide a basis for finding that TCA has prospects of success in showing compliance with s 24 of the NVR Act. Section 24 is a condition imposed on its registration and I to the effect that TCA must be able to satisfy the Financial Viability Risk Assessment Requirements. They are set out in the Financial Viability Risk Assessment Requirements 2011 (FVRA Requirements), ASQA may ask an RTO to demonstrate its viability[62] at any point in time. Taking FVRAR 5 as an example, it states that:
“The assessment of an organisation’s financial viability risk is directed at evaluating the likelihood of its business continuity, and its capacity to achieve quality outcomes. In particular, the assessment informs a judgement about whether the organisation has the financial resources necessary to:
a)acquire the requisite assets and physical resources to deliver all qualifications in the scope of its registration
b)employ sufficient appropriately qualified staff to cover the courses for which it takes enrolments
c) provide appropriate levels of student services to students
d) remain in business to ensure each student can achieve completion
e) meet the above requirements, even in an unsure environment.”
[62] “Financially viable means the ability of an organisation to generate sufficient income to meet operating payments, debt commitments and, where applicable, to allow growth while delivering quality training and assessment services and outcomes.”: VRRA Requirements; FVRAR 3.
Mr Channa’s affidavit shows that TCA cannot meet the condition as things stand. If a stay is granted, he says, TCA will immediately commence enrolling and training students again in an attempt to generate income and stave off insolvency. That statement, taken with the unpaid and overdue rent on two properties, the lack of any reference to any further sources of income suggests that it cannot meet its obligation to satisfy the Financial Viability Risk Assessment Requirements and so cannot meet the condition set out in s 24 of the NVR Act.
If that is not the case and Mr Channa has overstated the desperation of TCA’s financial situation, he has not addressed the issues that he needs to. They include references to assets held by TCA, any other sources of income available to it, its operating costs and other options available to it if the leases are terminated.
B. The consequences for TCA of the refusal of a stay
Taking Mr Channa’s statements in his second affidavit of the dire predicament in which TCA finds itself and having considered the Profit and Loss Statements annexed to his first, I accept that the evidence points to TCA’s being totally dependent on the receipt of any amount by way of fees if it is to have any hope of survival. My refusing to stay ASQA’s decision would extinguish that hope. The material that Mr Channa has submitted does not refer to other sources of income or other means of maintaining TCA’s viability.
C. The consequences for ASQA if a stay is granted or refused
As the regulatory body, ASQA is responsible for ensuring that each RTO complies with the VET Quality Framework, including the RTO Standards, and the conditions of its registration as set out in Division 1 of Part 2 of the NVR Act. Its responsibility makes it a key functionary in achieving Parliament’s objects as set out in s 2A. In this instance, it has found TCA to be critically non-compliant with its obligations. It did so in April 2016 and TCA’s response remains one largely of what it will do and not what it has done or is doing that will address and rectify those non-compliances. As a regulator, ASQA has given TCA from April 2016 until its cancellation decision on 11 April 2018 to address them. If a stay is granted, the consequences for ASQA is that an RTO is allowed to continue to make assessments against inadequate RPL kits and in an industry, the building and construction industry and its allied trades, where it is not satisfied that its students will meet the appropriate standards of skill. Its concerns will be allayed if the stay order is not made.
D. The interests of the Australian community
TCA has been assessing training products using RPL in skills or competencies such as Certificate III in Bricklaying/block laying, Certificate III in Carpentry, Diploma of Building and Construction, Certificate IV in Plumbing, Certificate III in Engineering Fabrication Trade, Certificate III in Air-conditioning and Refrigeration and Certificate IV in Civil Construction Supervision. The Australian community expects that those who have been assessed to have skills and competencies such as these will indeed have them. It expects that a proper assessment will have been made. The consequences of having unskilled people work in such areas can be serious and can be a threat to people’s health and safety if the work is not carried out properly. There is also a financial cost, whether to businesses or individuals, if work is not carried out to a satisfactory standard.
E.Whether the application for review would be rendered nugatory if the stay were not granted
From what I have said, it is clear that that TCA’s application for review will be rendered nugatory if I do not stay the operation or implementation of ASQA’s cancellation decision. It is also clear from what Mr Chamma has said that the application may be to no avail even if the stay order were granted. He talks of attempting to generate income and to stave off insolvency.
F. Decision
On the material that I have been given, I have concluded that, if I do not have regard to financial matters, TCA might have some prospects of success by the time a hearing can be scheduled and a decision given. It does not have prospects of success if the matter were held in the near future for its material does not point to its being in a position to address the critical non-compliances identified in the Audit. Its efforts have been directed at individual students and its shortcomings in its assessment of them but has not addressed the systemic issues that have led TCA to being found to be non-compliant. It has not addressed the issues that have been raised in the Audit regarding review of past assessments. If I were to make a stay order, the material that I have been given does not give me any confidence that TCA would deliver vocational education and training that would meet the RTO Standards or that it is addressing the critical non-compliances that would mean that it is meeting those standards in relation to current and future students and will address its non-compliances in relation to past students. The Australian community could not have any confidence that it would do so in a short period of time.
In this case, the interests of the Australian community in having RTOs that meet the RTO standards and other conditions, outweighs the interests of the individual training organisation in the form of TCA. The regulatory framework established under the NVR Act recognises that there will be non-compliance and has sanctions in place to deal with that. It has given TCA an opportunity to comply at an earlier time and it was permitted to continue as an RTO. On this occasion, however, the nature of its non-compliance, the scant attempts it has made to address its non-compliance and the consequences of its not making appropriate assessments for members of the Australian community lead me to conclude that it is not desirable that I make any order under s 41(2) of the AAT Act. Therefore, I refuse TCA’s application under that section.
| I certify that the preceding sixty seven [67] paragraphs are a true copy of the reasons for the decision herein of Deputy President S A Forgie. |
...............[sgd]...................................................
Associate
Dated: 12 June 2018
| Date of hearing: Counsel for the Applicant: | 14 May 2018 Mr Travis Mitchell |
| Solicitor for the Applicant: Counsel for the Respondent: | Mr Peter Doukas Mr Stephen Rebikoff |
| Solicitor for the Respondent: | Ms Laura Groves Australian Government Solicitor |
31 ALR 571 at 96; 588
48 AAR 345; 103 ALD 467; 82 ALJR 1147; Kirby, Hayne, Heydon and Crennan JJ; Kiefel J dissenting
203 CLR 194; 174 ALR 585 at 204-205; 591-592 and see also Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60 at 590; 70 per Bowen CJ and Deane J and 602; 80 per Smithers J
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