United Business College Pty Ltd and Australian Skills Quality Authority
[2019] AATA 1389
•20 June 2019
United Business College Pty Ltd and Australian Skills Quality Authority [2019] AATA 1389 (20 June 2019)
Division:GENERAL DIVISION
File Number: 2018/2480
Re:United Business College Pty Ltd
APPLICANT
AndAustralian Skills Quality Authority
RESPONDENT
DECISION
Tribunal:Chris Furnell, Senior Member
Date:20 June 2019
Place:Melbourne
The Tribunal refuses the Applicant’s request under s41(3) of the Administrative Appeals Tribunal Act 1975 for an order varying the Tribunal’s stay order of 1 November 2018.
..................[sgd]......................................................
Chris Furnell, Senior Member
Catchwords
PRACTICE AND PROCEDURE — stay granted — application to vary stay — removal of condition — prospects of success - public interest - consequences for parties - consequences on application for review considered by Tribunal — variation not granted
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
Education Services for Overseas Students Act 2000 (Cth)
National Vocational Education and Training Regulator Act 2011 (Cth)Cases
Australian Institute of Technical Training Pty Ltd and Minister for Education and Training [2018] AATA 5392
BOY19 v Minister for Immigration and Border Protection [2019] FCA 574
Cheng Li and Tax Practitioners Board [2013] AATA 66
Daily Update Pty Ltd and Australian Skills Quality Authority [2014] AATA 118
Gould and Tax Practitioners Board [2019] AATA 1056
Kadeh and Migration Agents Registration Authority (Migration) [2018] AATA 4461
Levi v Companies Auditors and Liquidators Disciplinary Board [2013] FCA 719
McDonald v Director-General of Social Security (1984) 6 ALD 6
Poidevin and Australian Securities and Investments Commission [2018] AATA 124
Re Scott and Australian Securities and Investments Commission [2009] AATA 798
Re Snook and Civil Aviation Safety Authority (2008) 109 ALD 122
Water Conservation Commission v Browning (1947) 74 CLR 492 at 505
Western Institute of Technology Pty Ltd and Australian Skills Quality Authority [2018] AATA 94
XTWK and Australian Securities and Investments Commission (2007) 98 ALD 131REASONS FOR DECISION
Chris Furnell, Senior Member
20 June 2019
On 4 April 2018, the Australian Skills Quality Authority (ASQA) made three decisions with respect to United Business College Pty Ltd (College).
Amongst other things, these decisions provided for cancellation of the College’s registration under the National Vocational Education and Training Regulator Act 2011 (Cth) (VET Act) and under the Education Services for Overseas Students Act 2000 (Cth) (ESOS Act).
On 15 May 2018, a stay with respect to these decisions was granted on certain conditions.
On 1 November 2018, at the request of the parties, the orders of 15 May 2018 were vacated and replaced by a stay order on conditions, including a condition that the College “must not enrol any new students into any courses.”
The College now requests an order varying that stay order so as to remove the no new enrolment condition. For the reasons which follow, I reject that request.
Power to vary stay order and approach to it
Under s41(3) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) the Tribunal “may” make an order varying a stay order upon the request of a party to the proceeding.
As Senior Member Cameron commented in Australian Institute of Technical Training Pty Ltd and Minister for Education and Training,[1] there is surprisingly little authority as to the approach to be adopted in relation to this section.
[1] [2018] AATA 5392 at [58].
In its terms, the power to vary a stay order is unconstrained. Nevertheless, limits on the capacity to exercise the power are imposed by reference to the subject matter, scope and purpose of the relevant legislation.[2]
[2] Water Conservation Commission v Browning (1947) 74 CLR 492 at 505.
Section 41(3) is found in a section of the AAT Act which deals with the operation and implementation of decisions that are subject to review by the Tribunal. It deals principally with the making and variation of stay orders.
Arguably, it would be inconsistent with the subject matter, scope and purpose of the relevant legislation to exercise the power to vary a stay order in such a way as would impinge on the likely rationale for granting a request to make the stay order in the form as varied were such a request then to be made, having regard to the matters that would be (or would be likely to be) taken into account in considering the request.
This argument is suggestive of an approach to a request for a variation which would entail an assessment of the stay order that would result were the request granted, having regard to the considerations or principles generally taken into account or applied in the context of stay order requests (as to which I refer to the oft cited decision in Re Scott and Australian Securities and Investments Commission[3]).
[3] [2009] AATA 798 at [4].
As to this approach, Senior Member Cameron stated that, while open to the Tribunal “…it is not as a general rule an approach that ought to be universally applied to each case. It in effect becomes a rerun of the stay application which overall should be avoided.”[4]
[4] Australian Institute of Technical Training Pty Ltd and Minister for Education and Training [2018] AATA 5392 at [58].
I agree (albeit that any rerun of the stay application would be conducted in the light of circumstances applicable when hearing the request to vary the stay order). Adoption of an approach which would encourage reruns is not one facilitative of the provision of a mechanism for review that is, amongst other things, economical and quick.[5]
[5] See the objective to be pursued by the Tribunal set out in s2A of the AAT Act.
Another approach would entail an assessment of the proposed variation to the stay order (rather than of the stay order as varied) having regard to the considerations or principles taken into account or applied in the context of stay order requests.
Yet another approach would entail a hybrid of the first two approaches. This hybrid approach is reflected in Senior Member Ettinger’s decision in Daily Update Pty Ltd and Australian Skills Quality Authority.[6]
[6] [2014] AATA 118.
In particular, it would require that the considerations or principles pertinent to a stay order request be taken into account or applied in relation to the variation sought (as opposed to the stay order as varied) but with an exception in relation to the consideration or principle concerned with prospects of success (an exception on which I elaborate later).
I adopt the hybrid approach. In this matter I consider it best reflects the context in which the variation power appears (by taking into account and applying considerations and principles taken into account and applied in relation to stay order requests) while reducing the risk of inefficiencies associated with reruns to which the first approach I mentioned gives rise.
The first step of the hybrid approach involves identifying the considerations and principles taken into account and applied in relation to stay order requests and then re-orienting them so that they are considered or applied to the requested variation (albeit with an exception in relation to the prospects of success consideration or principle).
Relevant considerations and onus
Under s41(2) of the AAT Act, a stay order may only be made 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 Tribunal’s review of the decision(s) in question.
If the Tribunal is of the requisite opinion, it is empowered to make such a stay order as it considers appropriate “for the purpose of securing the effectiveness of the hearing and determination of the application for review”.
Hence, given the terms of s41(2), a stay order can only be made in this matter after considering:
(a)the interests of persons who may be affected by the Tribunal’s review of ASQA’s decisions with respect to the College; and
(b)the appropriateness of the stay order (as affected by the conditions to which it is subject) for the purposes of securing the effectiveness of the hearing and determination of the College’s application for review.
In addition, in making a stay order the Tribunal would be likely to take into account a number of other (to an extent, inter-related) considerations, being considerations of the type traditionally taken into account in the exercise of the Tribunal’s stay order power.
These other considerations include:
(a)the prospects of success of the substantive application for review;
(b)the consequences for the applicant should the request be refused;
(c)the public interest;
(d)the consequences for the respondent in carrying out its functions should the request for the stay order be granted or refused;
(e)whether the substantive application for review would be rendered nugatory if the request for a stay order were not granted; and
(f)other relevant matters.[7]
[7] Re Scott and Australian Securities and Investments Commission [2009] AATA 798; (2009) 51 AAR 114 at [4]; Cheng Li and Tax Practitioners Board [2013] AATA 669 at [6]; Poidevin and Australian Securities and Investments Commission [2018] AATA 124; Gould and Tax Practitioners Board [2019] AATA 1056 at [7].
Re-oriented and expressed in terms of the requested variation to the currently applicable stay order, regard is to be had to:
(a)the impact, if any, of removal and of retention of the no new enrolment condition on the interests of persons who may be affected by the Tribunal’s review of ASQA’s decisions with respect to the College;
(b)the appropriateness of removal of that condition for the purposes of securing the effectiveness of the hearing and determination of the College’s applications for review;
(c)the consequences for the College should that condition not be removed;
(d)the impact on the public interest should that condition be removed;
(e)the consequences for ASQA in carrying out its functions of removal of that condition;
(f)whether the substantive application for review would be rendered nugatory if that condition was not to be removed; and
(g)other relevant matters.
As for the prospects of success consideration or principle, under the hybrid approach to the stay variation power I have adopted, it would not be assessed by reference to the effect (if any) that the requested variation would have on it but, rather, by reference to either the overall case of the applicant[8] or the changes to or advancements made with respect to that case occurring since the stay order was made (in the case of a request to vary the order by the addition of a condition) or since the relevant condition was imposed (in the case of a request to vary the order by deletion of a condition).[9]
[8] As appeared to be the view adopted in Western Institute of Technology Pty Ltd and Australian Skills Quality Authority [2018] AATA 94 at [32].
[9] As appeared to be the view adopted in Daily Update at [15]-[18]. In that matter a request to impose a no new enrolment condition was denied partly because the prospects of success on the substantive review application were considered favourable, having been enhanced by rectification work taken by the applicant after the decisions subject to review were made.
Mindful of the inefficiency risk of reruns, I consider the prospects of success only by reference to changes and advancements made since imposition of the no new enrolment condition (i.e., since 1 November 2018).
While not having an onus of proof,[10] the College has an onus to provide material that suggests that the various considerations, taken together, favour the grant of its request for a variation. Satisfaction of that burden requires that it provide the Tribunal with sufficient evidentiary material to enable it to exercise its discretion in accordance with law.[11] Put more succinctly, the College has “a practical onus of establishing on the evidence that those considerations point to the grant of a stay”[12] (or, in our case, the grant of the request for a variation).
[10] BOY19 v Minister for Immigration and Border Protection [2019] FCA 574 at [54] where it was stated that “…The word “satisfied” in that context is not amenable to the application of an evidentiary burden of proof, such as balance of probabilities. That is for at least two reasons. First, the decision is an administrative decision to which the rules of evidence are inapplicable and the evidentiary burden of proof inapposite….”.
[11] McDonald v Director-General of Social Security (1984) 6 ALD 6.
[12] XTWK and Australian Securities and Investments Commission (2007) 98 ALD 131 at [13].
I turn now to the various considerations or principles.
OTHER RELEVANT MATTERS
I address the other relevant matters consideration first because the facts pertinent to it serve to colour the treatment I subsequently afford to most of the other considerations.
The particular fact I have in mind concerns the period between the making of this decision on the College’s request for a stay order variation and the currently proposed date of the hearing of the College’s substantive review applications.
At the time of writing that period is less than a month.
In its statement of facts issues and contentions of 1 May 2019 it is contended that the College has four annual student intakes, in January, April, July and October.
This should mean that, if this proceeding progresses as currently intended and the College is ultimately successful in relation to its review applications, retention of the no new enrolment condition is likely to result in the College missing only one student intake.
Assuming that the quarterly student intakes are roughly equal in number (and nothing submitted by the College at the hearing of its stay order variation request suggests otherwise), it is likely that the College will have already endured the worst of the impact (from its perspective) of the no new enrolment condition and that only around 25% of its annual new student revenue is in issue.
INTERESTS AFFECTED
As previously identified, it is necessary to consider the impact, if any, of removal and of retention of the no new enrolment condition on the interests of persons who may be affected by the Tribunal’s review of ASQA’s decisions with respect to the College.
In this regard, those interests are, or at least include, the interests of persons whom an exercise of the registration cancellation power are intended to serve.[13] In large measure, they are identified by reference to the statutory scheme under which the decisions under review were made,[14] in particular, to those aspects of the scheme which outline the procedures which lead to the making of such decisions.[15]
[13] Poidevin and Australian Securities and Investments Commission [2018] AATA 124 at [14].
[14] Levi v Companies Auditors and Liquidators Disciplinary Board [2013] FCA 719 at [15]; Kadeh and Migration Agents Registration Authority (Migration) [2018] AATA 4461 at [25].
[15] Poidevin at [14]; Kadeh at [14].
The statutory schemes under which the decisions under review were made are directed to the protection and enhancement of Australia’s reputation with respect to vocational education and training (under the VET Act[16]) and quality education and training services (under the ESOS Act[17]), and also to the protection of students by ensuring the provision of quality VET[18] and providing tuition assurance with respect to course fees paid.[19]
[16] VET Act s2A(c).
[17] ESOS Act s4A(b).
[18] VET Act s2A(f).
[19] ESOS Act s4A(a).
Hence, it is necessary to consider the impact, if any, of removal and of retention of the no new enrolment condition on Australia’s interests and those of students. I shall do so under the rubric of the public interest.
Even if it were not otherwise obvious, it is also clear from the statutory scheme embodied in the relevant Acts that the interests of a person the subject of a registration cancellation decision are affected by the decision.
Hence, it is necessary to consider the impact, if any, of removal and of retention of the no new enrolment condition on the College’s interests. In addition, like an ASIC banning order, account also needs to be taken of the interests of certain persons associated with the College. This would include the College’s staff and its existing students.
In so examining the impact of removal and of retention of the no new enrolment condition several of the matters to which regard is to be had in considering the Colleges stay order variation request will be addressed.
PUBLIC INTEREST
Under the VET Act, the College, as a NVR registered training organisation, was obliged to observe the standards for such organisations made under s185 of the Act[20] (the standards). Cancellation of registration is a sanction available to ASQA in the event of non-compliance with this obligation.[21]
[20] VET Act s22.
[21] VET Act s36.
Under the ESOS Act, the College’s registration as a provider became prone to cancellation if ASQA came to believe (on reasonable grounds) that the College had breached or was breaching a National Code of Practice for Providers of Education and Training to Overseas Students[22] (the code).
[22] ESOS Act s83.
ASQA contends that the College is in material non-compliance with the standards and with the code. That contention is supported by an affidavit lodged in January 2019 to which was attached a review of evidentiary material made available by the College up to, and including, November 2018.
The College acknowledges that it remains non-compliant in certain respects but asserts that the non-compliance is immaterial.
The College did not, however, take the Tribunal to any material that tended to support its assertion. It did file a statement of facts issues and contentions but, in large part, it appeared to repeat responses it had provided in October 2017 with respect to areas of non-compliance identified in an audit conducted in 2017 rather than seek to address the review provided by ASQA in January 2019.
In these circumstances it is not in the public interest (in particular, in Australia’s reputational interests or in the interests of students generally) to permit an organisation now to enrol new students into courses of study when uncontroverted material suggests the subsistence of material non-compliance with the standards and the code.
Hence, the public interest weighs heavily against granting the College’s stay order variation request.
THE COLLEGE’S INTERESTS AND THOSE OF ASSOCIATES
As previously identified, retention of the no new enrolment condition will result in a loss to the College of around 25% of its annual new student revenue pending the College’s substantive review applications being decided.
No material was provided by the College which would tend to suggest, however, that this loss (or, indeed, the retention of the no new enrolment condition) put at risk the College’s financial viability or its capacity to employ staff or continue to provide tuition to an appropriate standard to its existing students.
Given the absence of that material it was unsurprisingly not contended that, if the no new enrolment condition was not removed, either the substantive applications for review would be rendered nugatory or that the effectiveness of the hearing and determination of those applications would be affected adversely.
In the result, the interests of the College and of its associates weigh in favour of granting its stay order variation request but do not do so strongly.
PROSPECTS OF SUCCESS
The question in issue with respect to this consideration is whether material provided since imposition of the no new enrolment condition (i.e., since 1 November 2018) changes or advances the case to be made out by the College at the hearing of its substantive review applications in such a way as to affect the prospects of that case being successful.
I note that an assessment of prospects at this stage of the proceeding can only ever be somewhat superficial. As was said in Poidevin[23] “it is not the role of the Tribunal in an interlocutory application of this nature to conduct a review of the merits or strength of the arguments, even on a preliminary basis.”
[23] Poidevin and Australian Securities and Investments Commission [2018] AATA 124 at [39].
Nevertheless, I should consider “… whether there are facts and circumstances which, if established at the substantive hearing, would provide a basis for the applicant’s success in the review on application; or whether there are points of law raised which, if sustained, would lead to that conclusion.”[24]
[24] Re Snook and Civil Aviation Safety Authority (2008) 109 ALD 122 at [21] cited with approval in Levi v Companies Auditors and Liquidators Disciplinary Board [2013] FCA 719 at [31].
No points of law were raised in submissions made on the College’s behalf after 1 November 2018 that, if sustained, would provide a basis for success of the substantive applications for review.
As to facts and circumstances, quite a deal of material has been lodged with the Tribunal since 1 November 2018 but I was not, in the hearing of the stay order variation request, taken by the College to any of it in an effort to establish that its prospects of success at the hearing of its substantive review applications had improved.
I did, however, review some of that material, including each party’s statement of facts, issues and contentions, an affidavit lodged with the Tribunal on behalf of ASQA and a position statement lodged on the College’s behalf. I note that ASQA now contends that the College not only remains non-compliant with a number of the requirements the alleged contravention of which gave rise to the decisions under review, but also non-compliant with several other additional requirements. At an impressionistic level only, I do not see that this material, on balance, is such as to materially improve the College’s prospects of success.
The prospects of success consideration is not such as to support the College’s stay order variation request.
RESOLUTION OF COMPETING INTERESTS
The considerations I have taken into account in addressing the College’s stay order variation request do not all point in the one direction. In particular, denial of the request is supported by the public interest consideration while granting the request is supported by the consideration concerning the College’s interests (and those of its associates).
Given this, the competing considerations need to be weighed in order to determine whether they are, on balance, such as to support either the grant or denial of the College’s request.
Central to this process are the schemes embodied in the VET Act and ESOS Act.[25]
[25] Australian Securities and Investments Commission v Administrative Appeals Tribunal (2009) 181 FCR 130 (the AAT decision) at [52]-[53].
Those schemes (as I have previously outlined, briefly) give pre-eminence to what I have characterised in this decision as the public interest, i.e., Australia’s interests and the interests of students, generally.
For this reason, I attribute significant weight to the public interest.
The result of so doing is that the balance of the considerations taken into account in assessing the College’s stay order variation application favour denial of the application and I so decide.
CONCLUSION ON THE APPLICATION
For the reasons articulated above, the Tribunal refuses the Applicant’s request under s41(3) of the Administrative Appeals Tribunal Act 1975 for an order varying the Tribunal’s stay order of 1 November 2018.
I certify that the preceding sixty-six (66) paragraphs are a true copy of the reasons for the decision herein of Chris Furnell .................[sgd]......................................
Associate
Dated: 20 June 2019
Date of hearing:
4 June 2019
Advocate for the Applicant: Prabhakar Agraja
Advocate for the Respondent: Jacqueline Steward
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