Tristar Academy Pty Ltd and Australian Skills Quality Authority
[2019] AATA 5873
•19 December 2019
Tristar Academy Pty Ltd and Australian Skills Quality Authority [2019] AATA 5873 (19 December 2019)
Division:GENERAL DIVISION
File Number(s): 2019/6195
Re:Tristar Academy Pty Ltd
APPLICANT
AndAustralian Skills Quality Authority
RESPONDENT
DECISION
Tribunal:Emeritus Professor P A Fairall, Senior Member
Date:19 December 2019
Date of written reasons: 16 January 2020
Place:Sydney
For the reasons given orally at the conclusion of the hearing of this matter, the Tribunal affirms the decision under review, being the decision of the Australian Skills Quality Authority, dated 20 September 2019.
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Emeritus Professor P A Fairall, Senior Member
CATCHWORDS
VOCATIONAL EDUCATION AND TRAINING – decision to refuse to allow Applicant to make application for renewal of registration within shorter time period – where Applicant failed to make application for renewal of registration at least 90 days before the day registration expired – interpretation of “application” under s 31(3) – discretion under s 31(1)(b) – relevant principles – explanation for the delay – prejudice to Respondent – prospects of success – public interest – decision under review affirmed
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) s 43
National Vocational Education and Training Regulator Act 2011 (Cth) ss 2A, 16, 17, 20, 31, 116
CASES
Bahonko v Nurses Board of Victoria (No 4) [2007] FCA 1449
Comcare v A'Hearn (1993) 45 FCR 441
Duong v The Australian Postal Corporation (2005) FCA 991
Hunter Valley Developments Pty Ltd v Cohen, Minister for Home Affairs and Environment (1984) 3 FCR 344
Mantra Training and Development Pty Ltd and Australian Skills Quality Authority [2019] AATA 66
Noonan and Comcare (Compensation) [2019] AATA 515Trades College Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 1703
WRITTEN REASONS FOR ORAL DECISION
Emeritus Professor P A Fairall, Senior Member
16 January 2020
BACKGROUND
The Applicant, Tristar Academy Pty Ltd (Tristar), is a proprietary company limited by shares. It was registered on 15 April 2014 in the Australian Capital Territory (ACN 169 113 375).
The Australian Skills Quality Authority (ASQA) is the Respondent in these proceedings. ASQA is the statutory regulator of registered training organisations (RTOs) under the National Vocational Education and Training Regulator Act 2011 (Cth) (the NVR Act).
In 2014 Tristar was registered under the NVR Act as an RTO for five years (from 1 October 2014 until 30 September 2019), but did not engage in any training. It has submitted a “nil return” report to the National Centre for Vocational Educational Research (NCVER) for each year since 2016, attesting that it has conducted no VET delivery activity up to 2018.
Section 31(1) of the NVR Act provides that ASQA may renew registration if the RTO 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.
Tristar was therefore required to apply for renewal of registration no later than 2 July 2019, by reason of s 31(1) of the NVR Act. ASQA sent Tristar three renewal reminders prior to the expiration date (on 30 September 2018, 30 March 2019 and 30 May 2019). Tristar did not act on the notices and did not apply for registration before the deadline.
On 20 August 2019 Ms Rani, who owned 100% of the shares in Tristar, sold her entire shareholding to Mr Venkateshwar Anandula. On 16 September 2019 ASQA processed the relevant notification form advising that the company shareholding had transferred to new ownership.
In due course the new owner, Mr Anandula, became aware that the 2 July 2019 deadline had passed. On 16 September 2019 he requested ASQA allow him to apply for renewal within a shorter period, invoking s 31(1)(b).
On 18 September 2019 ASQA decided not to allow a shorter period of time than 90 days to submit an application for renewal of registration (the reviewable decision). The effect of ASQA’s refusal was that Mr Anandula was not able to submit an application to renew Tristar’s registration which was due to lapse on 30 September 2019.
Tristar sought review of the reviewable decision on the day Tristar’s RTO registration expired, namely, 30 September 2019.
I heard the application for review on 19 December 2019.
At the time of the reviewable decision, Tristar’s registration was still on foot (and about to expire). However, by the time of the hearing, Tristar’s registration under the NVR had been defunct for 80 days.
After hearing from Tristar’s solicitor, and the solicitor for ASQA, I affirmed the decision under review for the following reasons.
LEGISLATIVE FRAMEWORK
The NVR Act provides a framework for the regulation of the vocational and training sector. The objects of the Act are set out in s 2A of the Act. They are as follows:
2A Objects
The objects of this Act are:
(a) to provide for national consistency in the regulation of 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 quality VET; and
(f) to facilitate access to accurate information relating to the quality of VET.
…
[emphasis in original]
I set out below the most salient provisions of the NVR Act relevant to this application.
Section 116 provides that it is an offence to provide or offer to provide all or part of a VET course without registration.
Section 16(1) provides that a person may apply for registration, including renewal of registration, as an NVR RTO.
Section 16(3) provides that an application for registration must be in a form approved by the National VET Regulator and must be accompanied by:
(a) any information or documents that the Regulator requires; and
(b) the application fee determined by the Minister, by legislative instrument, under section 232.
Section 17(1) provides that the National VET Regulator may grant an application for registration.
Section 17(2) provides that in deciding whether to grant an application, the National VET Regulator 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, Part 2 of the NVR Act.
Section 17(5) provides that if the National VET Regulator grants an application, the Regulator must also determine the period for which the applicant is registered. The period must not be more than 7 years.
Section 20(1) provides that an applicant’s registration:
(a) commences:
(i) if it is a renewal of registration—on the day after the day on which the NVR registered training organisation’s previous registration expired; or
(ii) in any other case—on the day specified in a written notice given to the applicant; and
Section 20(2) provides that the National VET Regulator may, in exceptional circumstances, extend an NVR RTO’s registration without the organisation needing to apply to have its registration renewed.
Section 20(3) provides that if an NVR registered RTO’s registration is so extended, a reference in this Act to the period of an NVR RTO’s registration is to be read as a reference to that period as so extended.
Subdivision C is titled “Renewing registration”. Section 31(1) provides that the National VET Regulator may renew an NVR RTO’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.
Section 31(2) provides that an application must be accompanied by the application fee determined by the Minister, by legislative instrument, under s 232.
Section 31(3) provides that an NVR RTO’s registration is taken to continue until the organisation’s application is decided.
Section 31(4) provides that an NVR RTO may apply for renewal of registration during a period when all or part of its scope of registration is suspended.
CONSIDERATION
At noted above, Tristar’s registration as an RTO came to an end on 30 September 2019, well before the matter was heard by the Tribunal on 19 December 2019.
The solicitor for ASQA argued that even if the reviewable decision was set aside, the effect would be nugatory because the registration could not be brought back to life. He referred to s 43(6) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). Even if the Tribunal set aside the decision not to permit a shorter period of time to make the application for renewal, the reality was that no application had been made before the registration lapsed. That fact could not be changed retrospectively.
But what of s 31(3)? It provides that the RTO’s registration is taken to continue until the organisation’s application for renewal is decided. The solicitor for ASQA argued that once the deadline has passed, an application cannot be made unless the shorter period is approved, and if the registration lapses due to effluxion of time, there is no application before ASQA to engage the operation of s 31(3). In short, the request for a shorter period is not an “application”, but merely a preliminary step to making an application. This argument depends on a distinction between:
(a)the application for renewal under s 17 made in a timely fashion (that is, at least 90 days prior to the expiration of registration - as mandated by s 31(1)(a)); and
(b)the application to seek a shorter period of time to lodge an application for renewal (s 31(1)(b)).
I was not referred to any authority in support of the proposition that the word “application” in s 31(3) includes a request for approval to lodge an application for renewal within a shorter period of time.
One consequence of interpreting the word “application” so as to include this preliminary step (to seek permission to make the application) would be that an RTO which was defunct because its registration had lapsed by effluxion of time would be brought back to life. As noted by Deputy President Forgie in Trades College Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 1703 at [36] in the context of cancellation of registration:
…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… 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.
The solicitor for ASQA urged me to accept that where registration has lapsed (whether through the effluxion of time or for some other reason) it cannot be resurrected pursuant to s 31(3), or perhaps more precisely, by a combination of s 43(6) of the AAT Act and 31(3) of the NVR Act. With respect, I pass on the invitation to consider whether such zombie RTOs might exist in this sort of case, because ultimately this matter can be disposed of on other grounds.
The solicitor for ASQA also properly drew my attention to s 20(2) of the NVR Act which provides that ASQA may, in exceptional circumstances, extend an RTO’s registration without the organisation needing to apply to have its registration renewed. He did not concede that there were exceptional circumstances in this case.
The essential facts are that the previous owner failed to apply for renewal of Tristar’s registration by the 2 July 2019 deadline, and neither she nor the broker mentioned to Mr Anandula as incoming owner that the relevant date had passed. It appears Mr Anandula simply failed to pick up this critical fact going to the value of the shares as part of his due diligence. I agree with ASQA’s solicitor that the circumstances of the present case are not exceptional.
THE DISCRETION UNDER S 31(1)(b)
The discretion under s 31(1)(b) is akin to the discretion to grant an extension of time in other time limited matters before the Tribunal. The Tribunal has stated that s 31(1)(b) is governed by the same principles: see Mantra Training and Development Pty Ltd and Australian Skills Quality Authority [2019] AATA 66 at [30].
Those principles are set out in the well-known case of Hunter Valley Developments Pty Ltd v Cohen, Minister for Home Affairs and Environment (1984) 3 FCR 344 (Hunter Valley) and other cases. The essence of Hunter Valley is that where a statutory provision provides that an application must be made by a certain time, there is no presumption in favour of granting an extension merely because the statutory provision does not exclude that possibility. The starting point is that deadlines should be complied with.
In the case of s 31(1)(b), this is reinforced by the objects of the NVR Act as set out in s 2A (see above at para [13]), and the requirement of orderly administration, which is central to the manner in which ASQA performs its statutory functions.
Hunter Valley has been refined in subsequent cases. In Duong v The Australian Postal Corporation [2005] FCA 991 (Duong), at [17] Edmonds J restated the Hunter Valley principles within the context of an appeal from a decision of the Tribunal as follows:
(1) Prima facie, proceedings should be commenced within the prescribed period and an applicant for extension must show ‘an acceptable explanation of the delay’ and that it is ‘fair and equitable in the circumstances’ to extend time;
(2) Any action taken by the applicant, other than by making an application for review, is relevant to the consideration of the question whether an acceptable explanation for the delay has been furnished. A distinction is to be made between the case of a person who, by non-curial means, has continued to make the decision-maker aware that he contests the finality of the decision (who has not ‘rested on his rights’) and a case where the decision-maker was allowed to believe that the matter was finally concluded.
(3) Any prejudice to the respondent including any prejudice in defending the proceedings occasioned by the delay is a material factor militating against the grant of an extension.
(4) However, the mere absence of prejudice is not enough to justify the grant of an extension. In this context, public considerations often intrude. A delay which may result, if the application is successful, in the unsettling of other people or of established practices is likely to prove fatal to the application.
(5) The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted.
(6) Considerations of fairness as between the applicants and other persons otherwise in a like position are relevant to the manner of exercise of the court’s discretion.
Importantly, there is no legal requirement that a satisfactory explanation is a necessary precondition for a successful application for an extension of time: see Comcare v A'Hearn (1993) 45 FCR 441; Noonan and Comcare (Compensation) [2019] AATA 515 at [11] per Deputy President Humphries.
In Bahonko v Nurses Board of Victoria (No 4) [2007] FCA 1449 at [48] the various factors identified in Hunter Valley and Duong were condensed as follows:
(a) the explanation of the delay;
(b) any prejudice to the respondent; and
(c) whether the applicant has an arguable case.
Explanation for the delay
I have outlined above the unfortunate circumstances under which Mr Anandula acquired an interest in an RTO after the due date for renewal of its registration had passed. At the hearing Mr Anandula said that when he assumed control of Tristar he was unaware of the 90 day rule under s 31(1)(a) and was certainly not aware that the deadline had passed. He was simply unaware that in the normal course 90 days was required to enable ASQA to scrutinise the application. He thought he had sufficient time to register the company in the weeks before the registration expired, as one might a motor vehicle. One might reasonably expect the CEO of an RTO to have a better understanding of these registration and renewal procedures. It is indeed surprising that Mr Anandula overlooked this matter. The value of the shares he had purchased were a function of the registration status of the company. Overall, his explanation for the delay is unsatisfactory.
Prejudice to the Respondent
There would be significant prejudice to ASQA were the Tribunal to reinstate Tristar’s registration for the purpose of considering the application for renewal. There is a strong policy justification for an orderly renewal process. The 90 day rule is an important safeguard to enable ASQA to perform its oversight function in a thorough manner. The liberal granting of permission under s 31(1)(b) would significantly dilute the social protection afforded by the 90 day rule and therefore the quality of oversight provided by ASQA. This will inevitably lead to pressure on ASQA. It is no comfort that this burden might be mitigated somewhat by the presence of s 31(3), allowing for the continuance of registration.
Prospects of success
One of the factors applied by Wilcox J in Hunter Valley relates to prospects of success.
The written submissions provided by the solicitor for ASQA draw attention to the deficiencies of the material submitted by Mr Anandula in support of his request for an abridgment of time. He rightly draws attention to the formal and substantive deficiencies of the Business Plan presented by Mr Anandula, his relative lack of business experience and exposure to the VET sector, and his lack of skill, experience and qualifications relevant to the role of CEO of an RTO.
It would be an overstatement to suggest that an application for renewal in its present state would have no prospects of success, although it is apparent from the material before the Tribunal that as matters stand an application will face significant difficulties, and will benefit significantly from further refinement and reflection.
Other factors
I note that Mr Anandula can make a fresh application for Tristar’s registration as an RTO. The solicitor for ASQA indicated that his failure to comply with the deadline in this case would not count against him in a further application. I cannot see that it should.
Mr Anandula’s solicitor submitted that he was a young man brimming with enthusiasm who had much to offer the sector once he had learned the ropes. But this is an area where the public interest demands that those responsible for managing RTOs are fully acquainted with their responsibilities and the duties of operating an RTO within the compliance framework administered by ASQA. It is also strongly within the public interest to ensure the orderly administration of RTOs.
Some further period of study will enable Mr Anandula to become acquainted with the duties and responsibilities inherent to the role of an RTO operator or manager. The risk assessment framework established by the regulator is stringent. By way of consolation I offer the observation that the value of the lesson learned cannot readily be measured, but it is not insignificant. It may indeed avoid further difficulties downstream in navigating the regulatory scheme administered by ASQA.
CONCLUSION
Under these circumstances, the reviewable decision of the Respondent is affirmed.
I certify that the preceding 50 (fifty) paragraphs are a true copy of the reasons for the decision herein of Emeritus Professor P A Fairall, Senior Member
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Associate
Dated: 16 January 2020
Date(s) of hearing: 19 December 2019 Solicitors for the Applicant: Mr J Coelho, Coelho & Coelho Solicitors Solicitors for the Respondent: Mr J Pritchard, Australian Skills Quality Authority
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