Western Institute of Technology Pty Ltd and Australian Skills Quality Authority - [2019] AATA 657

Western Institute of Technology Pty Ltd and Australian Skills Quality Authority [2019] AATA 657 (3 April 2019)

Division:GENERAL DIVISION
File Number(s): 2017/5747, 2017/5749, 2017/5750, 2017/5751, 2016/0940, 2016/0941

Re: Western Institute of Technology Pty Ltd

APPLICANT

AndAustralian Skills Quality Authority
RESPONDENT

Tribunal:Senior Member Damien Cremean
The Hon. Matthew Groom, Senior Member

Date:3 April 2019
Place:Melbourne

DECISION

The Tribunal affirms the decisions to:
a.cancel the applicant's registration as training organisation under the National Vocational Education and Training Regulator Act 2011;
b.cancel the applicant's registration as a registered provider of vocational education and training to overseas students under the Education Services for Overseas Students Act 2000;
c.refuse the applicant’s application to change the scope of its registration under the National Vocational Education and Training Regulator Act; and
d.refuse the applicant’s application to change the scope of its registration under the Education Services for Overseas Students Act; and
The Tribunal dismisses the 2016 Applications.

................[sgd]........................................................

Senior Member, Damien Cremean

Catchwords

Vocational Education and Training – registration cancelled – application to change scope of registration denied – non-compliance with standards – training and assessment – approved capacity limits and facilities – staff skills, qualifications and experience – English language proficiency assessment – course attendance an progress monitoring – decision affirmed

Legislation

Education Services for Overseas Students Act 2000 (Cth)

National Vocational Education and Training Regulator Act 2011 (Cth)

Cases

Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577
Re Austwide Institute of Training Ltd and ASQA [2016] AATA 266
Re Australian Academy of Management & Science Ltd and ASQA [2013] AATA 530
Re Ivy Education Group Ply Ltd and ASQA (2013) 134 ALD 446

Secondary Materials

REASONS FOR DECISION

Damien Cremean, Senior Member
The Hon. Matthew Groom, Senior Member

INTRODUCTION

Western Institute of Technology Pty Ltd (‘the applicant’) seeks review of five decisions made by the Australian Skills Quality Authority (‘the respondent’) on 30 August 2017 under the National Vocational Education and Training Regulator Act 2011 (‘NVR Act’) and under the Education Services for Overseas Students Act 2000 (‘ESOS Act’) namely:
(a) a decision to cancel the applicant's registration as a training organisation under the NVR Act (‘NVR Act Cancellation Decision’);
(b) a decision to cancel the applicant's registration as a registered provider of vocational education and training to overseas students under the ESOS Act (‘ESOS Act Cancellation Decision’);
(c) a decision to refuse the applicant's application to change the scope of its registration under the NVR Act (‘NVR Act Change of Scope Decision’); and
(d) two decisions to refuse the applicant's application to change the scope of its registration under the ESOS Act (‘ESOS Act Change of Scope Decisions’),
(together, ‘the Cancellation and Change of Scope Decisions’).[1]
[1] Page 4741 of the documents submitted under Section 37 of the Administrative Appeals Tribunal Act 1975 (‘T’ documents).
The applicant is a private company that, prior to the Cancellation and Change of Scope Decisions, was registered to deliver training services across four campuses in Victoria, namely South Melbourne, Maidstone, Dandenong, and West Melbourne, and also one campus in Sydney.[2]
[2] Steward affidavit affirmed 26 October 2017, Exhibit JS-3.
Mr Intaj Khan is the Secretary, sole director and sole shareholder of the applicant. Mr Khan is also the former CEO of the applicant. The current CEO is Mr Ross Maranzano.[3]
[3] Steward affidavit affirmed 11 May 2018, Exhibits JS-1 and 2.
The applicant was first registered as a training organisation on 23 June 2008 with the Victorian Registration and Qualifications Authority. The applicant was subsequently registered as a training organisation with the Commonwealth Register of Institutions and Courses for Overseas Students (‘CRICOS’) on 4 July 2008 and as an NVR registered training organisation (‘RTO’) on 1 July 2011.[4]
[4] T3483.
The applicant also holds CRICOS registration under the ESOS Act, which is regulated by the Australian Government Department of Education and Training, as ‘Western Senior Secondary College’.
As at 15 February 2017, the applicant had 14 courses and qualifications within the scope of its registration under the ESOS Act and 16 courses and qualifications within the scope of its registration under the NVR Act. The qualifications included Business, Construction, Plumbing and Services, Property Services, and Screen and Media.[5]
[5] T3483.
Following concerns raised by the respondent arising out of a 2015 audit of the applicant, in February 2016 the respondent commenced a further investigation into the applicant. As a result of this investigation, the respondent found the applicant to be materially non-compliant with its obligations under the NVR Act and the ESOS Act.
On 28 February 2017, the respondent gave the applicant notice of its intention to cancel the applicant's registration as an RTO under the NVR Act and as a registered provider for all vocational, education and training (‘VET’) courses at all locations under the ESOS Act.[6]
[6] T3489−3496.
The applicant subsequently provided a number of written responses to the notices.

10. The respondent reviewed this further material and decided that the applicant had not, in its view, fully addressed the identified instances of non-compliance.[7]

[7] T4739.

11. On 30 August 2017, the respondent made the Cancellation and Change of Scope Decisions.[8] Those decisions were communicated to the applicant by a letter dated 7 September 2017.[9]

[8] T4741−4753.

[9] T4755.

12. On 22 September 2017, the applicant applied to this Tribunal for a review of the Cancellation and Change of Scope Decisions. At the same time, the applicant also applied for a Stay of the Decisions; which was granted subject to a number of conditions.

THE LAW

NVR Act

The NVR Act establishes a regulatory framework for the provision of vocational education and training in Australia and establishes the respondent as the National VET Regulator.
The NVR regulatory regime is intended to achieve the broad objectives set out in s 2A of the NVR Act, which are:
(a)to provide for national consistency in the regulation of VET courses;
(b)to regulate VET courses using:
i.a standards-based quality framework; and
ii.risk assessments, where appropriate;
(c)to protect and enhance:
i.quality, flexibility and innovation in VET courses; and
ii.Australia's reputation for VET courses nationally and internationally;
(d)to provide a regulatory framework that encourages and promotes a VET system appropriate to meet Australia's social and economic needs for a highly educated and skilled population;
(e)to protect students undertaking, or proposing to undertake, Australian VET courses by ensuring the provision of quality VET courses; and
(f)to facilitate access to accurate information relating to the quality of VET courses.
Section 17(2) of the NVR Act provides that in assessing an application for registration as an RTO under the NVR Act, the National VET Regulator must consider whether the applicant complies with:
(a) the VET Quality Framework; and
(b) the applicable conditions of registration set out in the NVR Act.

The VET Quality Framework is defined in s 3 of the NVR Act and includes:
(a) the Standards for an NVR RTO made under s 185 of the NVR Act (‘RTO Standards’); and
(b) the Fit and Proper Person Requirements specified in an instrument made under s 186 of the NVR Act (‘Fit and Proper Person Requirements’).
Under ss 21 to 28 of the NVR Act, an RTO must:
(a) comply with the RTO Standards;
(b) satisfy the Fit and Proper Person Requirements; and
(c) meet any other conditions imposed on its registration.
Under the NVR Act an RTO is registered for specified VET courses. An RTO may apply for a change in the scope of its registration so as to include alternate or additional courses. When assessing an application of this kind s 33(2) of the NVR Act requires the National VET Regulator to consider:
(a)the applicant's ability to provide the VET course, or part of the VET course, in accordance with the VET Quality Framework; and
(b)the other VET courses, or parts of other VET courses, offered by the applicant; and
(c)whether the applicant complies with:
i.the VET Quality Framework; and
ii.the other conditions of registration.
Section 35 of the NVR Act empowers the respondent to conduct a compliance audit of an RTO’s operations to assess whether the organisation continues to comply with the NVR Act.
Section 36 of the NVR Act empowers the National VET Regulator to impose sanctions on an RTO where, after having complied with natural justice requirements, the National VET Regulator is satisfied it is appropriate to do so. Sanctions available to the National VET Regulator include cancellation of the RTO’s registration “in any circumstances that the Regulator considers it appropriate to do so” (s 39(1)).

ESOS Act

The ESOS Act establishes a regulatory framework for the provision of VET courses to overseas students. If an RTO wishes to provide VET courses to overseas students then the RTO must be registered to do so as a “registered provider” in accordance with the ESOS Act. Under the ESOS Act, registration assessments and oversight are performed by the respondent as the designated ‘ESOS Agency’.
The ESOS regulatory regime is intended to achieve a range of objectives which are set out in s 4A of the ESOS Act as follows:
(a) to provide tuition assurance, and refunds, for overseas students for
courses for which they have paid; and
(b) to protect and enhance Australia's reputation for quality education and training services; and
(c) to complement Australia's migration laws by ensuring providers collect and report information relevant to the administration of the law relating to student visas.
It is an offence under s 8 the ESOS Act for a person to provide a course at a location to an overseas student unless the person is registered to provide that particular course at that particular location under the ESOS Act; or the person does so in accordance with an arrangement that the person has with a registered provider for that particular course for that particular location.
The provisions relating to the registration of approved providers or a change of scope to an existing registration are set out in ss 9 and 10 of the ESOS Act. Section 9 allows a provider to apply to provide a nominated course or courses at a nominated location or locations to overseas students. Section 10 allows the ESOS Agency to register a provider if they meet the registration requirements set out in s 11.
Under s 11 of the ESOS Act, when assessing an application for registration or change of scope to an existing registration the ESOS Agency must be satisfied, among other things, that:
(a)the applicant is complying, or will comply, with the ESOS Act and the national code made under s 33 of the ESOS Act (‘National Code’);
(b)the applicant is fit and proper to be registered;
(c)the applicant has the principal purpose of providing education; and
(d)the ESOS Agency has no reason to believe that the applicant does not have the clearly demonstrated capacity to provide education of a satisfactory standard, or has not been providing, or will not provide, education of a satisfactory standard.
Section 83 of the ESOS Act sets out sanctions that may be imposed on a registered provider in circumstances where the ESOS Agency believes on reasonable grounds that:
(a)the registered provider or an associate or high managerial agent of the registered provider is breaching, or has breached, the ESOS Act, the National Code or a condition of the provider's registration;
(b)the registered provider is not fit and proper to be registered;
(c)the registered provider does not have the principal purpose of providing education, or the clearly demonstrated capacity to provide education of a satisfactory standard, or has not been providing, or has not provided, education of a satisfactory standard; or
(d)the registered provider ceases to be a registered VET provider or any of its courses ceases to be a VET accredited course in relation to that provider.
Where any of the above grounds are made out, s 83 of the ESOS Act empowers the ESOS Agency to cancel the registered provider's registration for any one or more courses or at any one or more locations.

ISSUES

The issue for determination in relation to the NVR Act Cancellation Decision is whether the Tribunal is satisfied that, in all the circumstances, it is proper to cancel the applicant's registration as an RTO under s 39 of the NVR Act.
In making its assessment the Tribunal retains a broad discretion. However, the Tribunal considers that this discretion must be exercised in accordance with the objects and purpose of the NVR Act. While there are no prescribed considerations for the Tribunal to have regard to in reaching its decision, previous decisions of the Tribunal have identified a number of considerations that may be relevant and may be taken into account including:
(a)the nature and extent of the applicant's current non−compliance with its obligations under the NVR Act, and the seriousness of that non−compliance;
(b)the nature and extent of the applicant's past non−compliance with its obligations under the NVR Act and the extent and manner in which such non-compliance has been rectified;
(c)the likelihood that current non−compliance will persist, continue, or recur in the future;
(d)the extent of the applicant’s commitment to, and capacity to ensure compliance with its obligations under the NVR Act;
(e)the extent of the applicant’s willingness and capacity to deliver quality VET in accordance with the objects of the NVR Act; and
(f)the effect of the decision on the applicant's students and the public interest in ensuring VET colleges operate at a satisfactory standard, both for the benefit of students and also to ensure that Australia's reputation as a provider of high quality VET is maintained.[10]
[10] See Re Austwide Institute of Training Ltd and ASQA [2016] AATA 266 at [73]; and also Re Australian Academy of Management & Science Ltd and ASQA [2013] AATA 530 at [133].
The issue for determination in relation to the ESOS Act Cancellation Decision is whether the Tribunal is satisfied that there are reasonable grounds for forming the view that:
(a)the applicant, or an associate or high managerial agent of the applicant, is breaching, or has breached, the ESOS Act or the National Code;
(b)the applicant is not fit and proper to be registered;
(c)the applicant does not have the principal purpose of providing education; or
(d)the applicant has not been providing or does not have a clearly demonstrated capacity to provide, education of a satisfactory standard;
and if so, whether, in those circumstances, the applicant's registration should be cancelled under s 83 of the ESOS Act.
The issue for determination in relation to the NVR Act Change of Scope Decision is whether the Tribunal is satisfied that the applicant's application for a change in the scope of its registration should be granted, having regard to:
(a)the applicant's ability to provide the relevant courses in accordance with the VET Quality Framework; and
(b)the applicant's current and previous compliance with the VET Quality Framework and other relevant conditions of its registration.
The issue for determination in relation to the ESOS Act Change of Scope Decision is whether the Tribunal is satisfied that the applicant's application to add the relevant courses at the relevant locations should be granted, considering whether the applicant has a demonstrated capacity to provide the courses to a satisfactory standard and its current and previous compliance with its obligations under the ESOS Act and the National Code.
In reaching its decision in relation to each of these issues, and in this matter generally, the Tribunal is of the view that it should take into account all relevant evidence available to it at the time of the hearing including that presented or made available by the applicant. As stated in Drake vMinister for Immigration and Ethnic Affairs:
The question for the determination of the Tribunal is not whether the decision which the decision-maker made was the correct or preferable one on the material before him. The question for the determination of the Tribunal is whether the decision was the correct or preferable one on the material before the Tribunal.[11]
[11] (1979) 24 ALR 577. See also Re Ivy Education Group Ply Ltd and ASQA (2013) 134 ALD 446.

BACKGROUND FACTS

Events leading to the 2015 audit and suspension decisions

There is a long history of complaints made against the applicant for regulatory non-compliance which dates back to 2011. Between 20 July 2011 and 11 February 2016 the respondent received 22 complaints about the applicant’s conduct and other allegations of non-compliance.
An audit of the applicant conducted by the respondent in January 2014 resulted in five complaints against the applicant. The complaints related to inadequate resources, lack of training and students being given full recognition of prior learning without adequate evidence of competency.
According to a subsequent audit decision report, most of these instances of non-compliance were rectified. However, the respondent notified the applicant of its intention to amend the applicant’s scope of registration due to certain ongoing non-compliances as regards specific courses.[12]
[12] T162.
A number of complaints against the applicant were received by the respondent from the Department of Immigration and Border Protection (‘DIBP’). These complaints have related to students breaching the conditions of their visas by working full time, as well as allegations of fraudulent activity with respect to training and assessment, and also the progress and attendance of students. Some of these complaints were found by the respondent to be only partially substantiated; and some were not investigated by the respondent at all as they were deemed to not be within its jurisdiction.[13]
[13] Ibid.
In June and July 2015 the respondent undertook another compliance audit of the applicant’s activities. During the audit, the respondent’s regulatory officers conducted compliance monitoring visits at four of the applicant’s campuses. The respondent summarises the observations made by them on such visits as follows:
Minimal students were observed on campus across all four campuses, with no students at all in attendance at some of the campuses despite there being around 1500 current enrolments. Further, the review identified a series of instances of apparent plagiarism and/or students being provided with the answers by assessors.[14]
[14] Respondent’s Amended SFIC 6-7.
The audit found the applicant critically non-compliant with clauses 1.4 and 1.8 of the RTO Standards and non-compliant with Standard 14.2 of the Standards for Registered Providers under Part D of the National Code (‘RP Standards’).[15]
[15] T159-166.
On 1 September 2015 the respondent notified the applicant of such findings of non-compliance.[16]
[16] Ibid.
On 29 September 2015, the applicant provided the respondent with claimed rectification evidence, which the respondent subsequently reviewed. According to the audit decision report, the respondent found that the applicant continued to be critically non-compliant. The respondent acknowledged that the non-attendance of students and falsification of course progress documentation could not be substantiated through the audit process.[17]
[17] Ibid.

On 24 November 2015, the respondent issued the applicant with a notice of intention to cancel its registration under the NVR Act and under the ESOS Act.[18]
[18] T167-172.
Following receipt of that notice the applicant provided further information to the respondent in response to the claimed non-compliance. That information included revised policies and procedures to prevent assessment non-compliance and address the plagiarism complaints.[19]
[19] T173-188.
Following an evidence review, which again resulted in further findings of non-compliance, on 20 January 2016 the respondent made the decision to suspend the applicant’s registration in respect of its Certificate IV in Business and Diploma of Building and Construction (Management) qualifications (‘suspension decisions’).[20]
[20] T3484.
The applicant applied for a review of the suspension decisions at the Tribunal and, at the same time, applied successfully for a Stay of the suspension decisions.
Following the Stay of the suspension decisions, the applicant again endeavoured to address the respondent’s concerns by providing additional information that it maintained demonstrated compliance.
In February 2017 the Tribunal made a decision to set the suspension decisions aside. Further, the Tribunal declined to make the applicant’s registration subject to a condition to retain all completed assessment materials for a period of two years, as was sought by the respondent. The respondent subsequently appealed the decision to the Federal Court.
In August 2017, prior to the hearing of the appeal in the Federal Court, the applicant conceded that the Tribunal’s decision involved a denial of natural justice to the respondent and consented to the matter being remitted to the Tribunal for hearing and determination according to law. The applicant was subsequently ordered to pay the respondent's costs of the appeal. The matters that were remitted to the Tribunal are now the subject of applications 2016/0940 and 2016/0941 (‘2016 Applications’).

The 2016 investigation

In February 2016, as a consequence of issues identified during the 2015 audit, the respondent commenced an investigation into the applicant’s non-compliance.
During the course of the investigation witness statements were obtained from three former employees at the applicant’s Sydney campus. A number of issues were identified as arising out of those statements including:
(a)students not attending class;
(b)students unable to speak English to the requisite level;
(c)trainers not being provided with adequate teaching resources;
(d)trainers not being appropriately qualified; and
(e)course progress not being adequately monitored.[21]
[21] T3503.
As a result of these issues being identified, in July 2016 the respondent decided to investigate further and to undertake further site visits at the applicant’s campuses.[22]
[22] Ibid.
The investigation included an analysis of data on the Provider Registration and International Student Management System (‘PRISIMS’), which identified a number of further issues which are summarised in the Investigation Report dated 13 December 2016 (‘Investigation Report’) as follows:
(a)The approved capacity for the Sydney campus was 90 students; 490 students were reported as studying at that campus.
(b)The approved capacity for the Maidstone campus was 90 students; 107 students were reported as studying at that campus.
(c)33 students were reported by [the applicant] for unsatisfactory course progress during the period 1 January 2016 to 1 August 2016; 16 of these students were reported more than 200 days after the student’s last day of study.
(d)Three students were reported as studying on PRISIMS however information provided by DIBP identified that the three students had departed Australia more than two months prior. Information from DIBP also identified that another student had overstayed their visa by more than 6 months.
(e)[The applicant] had not confirmed commencement for 166 students.
(f)From a sample of 48 students, commencement was reported more than 60 days after the proposed start date for 14 of the students (29%).[23]
[23] Ibid.
In August and November 2016 further compliance monitoring site visits were conducted at the Sydney campus and the South Melbourne campus. Again, a number of non-compliances with the ESOS Act, the National Code and the RTO Standards were identified.[24]
[24] T3504.
The key findings of the 2016 investigation, as set out in the ESOS Agency’s Investigation Report, include the following:
(a)The applicant was ‘critically non-compliant’ with the ESOS Act, National Code and RTO Standards;
(b)the applicant does not have a clearly demonstrated capacity to provide education of a satisfactory standard. Examples included:
i.the applicant failing to conduct assessments in compliance with the Principles of Assessment and Rules of Evidence;
ii.in July 2016 the number of overseas students studying at the campus was 400% over the maximum capacity approved by the respondent;
iii.the resources and facilities not being satisfactory for the number of students enrolled;
iv.a high percentage of students not making satisfactory course progress; and
v.a high percentage of students not having satisfactory attendance records;
(c) the applicant failing to comply with the ESOS Act and National Code. Specifically, there were non-compliances with ss 19 and 46 of the ESOS Act and RP Standards 2, 9, 10 and 14 of Part D of the National Code; and
(d)the applicant failing to comply with RTO Standards. Specifically, there were non-compliances with clauses 1.3, 1.8, 1.13. 1.14 and 8.5. Examples included:
i.the applicant failing to have appropriate staffing and education resources;
ii.the applicant failing to demonstrate that trainers and assessors have appropriate qualifications, skills or experience;
iii.the applicant failing to conduct assessments in accordance with the Principles of Assessment or Rules of Evidence; and
iv.the applicant failing to comply with the National Code or ESOS Act.[25]
[25] T3499.
The Investigation Report included a recommendation that action be taken against the applicant under ss 83(1C)(b) and 83(1) of the ESOS Act and that action be taken to cancel the applicant’s registration as permitted by s 39 of the NVR Act.[26]
[26] T3514-3517
The Investigation Report sets out more specific examples of non-compliance, which are summarised in the respondent’s Amended Statement of Facts and Contentions (‘SFIC’) as follows:

Failure to comply with reporting and notification requirements:

(a) The investigation determined that [the applicant] was consistently failing to comply with its obligations under s 19 of the ESOS Act, and also failed to comply with its notification obligations under ss 46B, 46D and 46F of the ESOS Act. The issues identified included:
i.Students being reported for non-commencement after the 31 day time limit prescribed under the ESOS Act. Of the 95 students reported during the period 1 January 2016 to 11 July 2016, 36 were reported between 33 and 106 days after their proposed start date: T3504 at [21]−[23].
ii.Students being reported for termination of their studies after the 31 day time limit prescribed under the ESOS Act. Of the 73 students reported during the period 1 January 2016 to 11 July 2016, 21 were reported between 33 and 235 days after their last day of study: T3505 at [30−a33].
iii.Students being reported for unsatisfactory course progress after the period specified in [the applicant's] Course Progress Policy, or not at all. Of the 33 students reported for unsatisfactory course progress during the period 1 January 2016 to 1 August 2016, 16 were reported more than 200 days after the student's last day of study. Further, 8 students from the sample obtained during the investigation were not reported for unsatisfactory progress notwithstanding persistent failures to complete assessment: T3505−6 at [34]−[42].
iv.Students being enrolled in new courses without their consent when their existing course became superseded. In particular, 62 students enrolled in the course BSB60407 Advanced Diploma of Management were sent an email advising them they would be enrolled in BSB61015 Advanced Diploma in Leadership and Management unless they objected. This resulted in at least one student not receiving the email and being unaware that he had been enrolled in the course: T3506−8 at [45]−[57].

Failure to adequately monitor course progress:

(a)The investigation determined that [the applicant] did not systemically monitor course progress in accordance with RP Standards 9 and 10 of Part D of the National Code and that when unsatisfactory course progress was identified the appropriate intervention strategies were not put in place. The issues identified included:
i.Failing to adequately monitor students who did not complete assessment. In one case, a sampled student had been studying for 18 months [with the applicant] without submitting any assessment, yet no evidence of an implemented intervention strategy was provided and the student was not reported for unsatisfactory course progress: T3506 at [41]−[42] and T3518 at [2]-[5].
ii.Failing to apply a consistent approach to intervention. A review of the communication records for 62 sampled students showed that 75% of the students had received at least one warning letter and 53% had received a second warning letter. However, the warning letters were issued on an erratic basis, with some being issued two weeks apart and others being issued 6 months apart. T3506 at [43] and T3523−4.
iii.Failing to take appropriate action when unsatisfactory course progress was identified. For example, a student who had only ever completed a single piece of assessment was sent an initial warning letter 6 months after the assessment was provided. She then remained enrolled for a further 9 months without any assessment being submitted or more action being taken: T3520 at [18]−[19].
iv.Failing to ensure students completed within the expected duration of the course and enrolling students for durations that exceeded the CRICOS registered duration for the course by up to 14 weeks: T3510−11 at [74]−[78].

Disregard for approved student capacity limits:

(a)The investigation revealed that [the applicant] had exceeded its approved capacity limits at both its Maidstone and Sydney campuses by as much as 400 percent, in contravention of section 12.1 of Part C of the National Code, notwithstanding a demonstrated awareness of the need to have all increases in capacity approved by [the respondent]. The issues identified included:
i.Enrolling 490 students at [the applicant's] Sydney campus, and 107 students at its Maidstone campus, notwithstanding that the approved capacity for each campus was limited to 90 students: T3508−9 at [62]−[63].
ii.Persistently disregarding the approved capacity of the Sydney campus, which significantly exceeded its approved capacity from August 2015 to at least July 2016, even though an application to increase its capacity was made to [the respondent] in November 2015 and subsequently withdrawn: T3509 at [64]−[68].

Failure to ensure students have appropriate English language proficiency:

(a)The investigation determined that [the applicant] was failing to apply its stated English proficiency requirements and failing to adequately assess the English language skills of students or ensure that students had appropriate English proficiency contrary to RP Standard 2 of Part D of the National Code. The issues identified included:
i.Inconsistent information being provided about the English language requirements for [the applicant's] courses, with course guides identifying different requirements to policy documents supplied to [the respondent]: T 3510 at [70] and T3525 at [3]-[4].
ii.Inconsistent evidence of English proficiency being collected from students, with sample files collected during the investigation containing in some cases certified copies of IELTS tests, in other cases language, literacy and numeracy tests, and in many cases no evidence at all: T3525−6 at [7].
iii.Students with very poor English skills being enrolled, including students who were not able to communicate with investigators without the assistance of an interpreter or who did not understand many of the questions asked by investigators but were nonetheless enrolled in courses at Certificate IV and Diploma level: T3525−6 at [5]−[12].

Failure to ensure staff have appropriate qualifications, skills and experience:

(a)The investigation determined that staff employed by [the applicant] did not have the necessary training qualifications, vocational competencies and/or current industry skills or experience, contrary to [RP] Standard 14.1 of Part D of the National Code and clauses 1.3, 1.13, 1.14 and 1.16 of the [RTO] Standards. The issues identified included:
i.Staff being assigned to teach courses without having relevant qualifications, skills or experience in the areas being taught. For example, the staff member assigned to teach the Advance Diploma in Marketing at the South Melbourne campus did not have any qualifications in marketing and had industry experience limited to eight months responsibility for marketing as part of an Assistant Manager role in 2012: T3531 at [6]−[8].
ii.Qualifications and evidence of industry experience not being able to be corroborated by investigators. For example, one staff member claimed to have current industry experience working for a painting and decorating company. When contacted, the company stated no one by that name had worked there. Another claimed to have had his training and assessment qualification issued by an organisation that had no record of the qualification: T3532-3 [10] and [22].
iii.All sample trainer files having similar or identical evidence regarding professional development opportunities, most of which were sent between 1 and 9 August 2016, with many having no evidence of professional development before this time: T3534 at [28].

Failure to provide appropriate facilities or sufficient trainers and assessors:

(a)The investigation determined that [the applicant] did not have the appropriate facilities to accommodate the number of students enrolled or have sufficient trainers and assessors to deliver training and assessment to those students, in contravention of [RP] Standard 14.2 of D of the National Code and clause 1.3 of the [RTO] Standards. The issues identified included:
i.The Sydney campus not being large enough to accommodate the number of students scheduled to be there at particular points in time, such as Wednesday mornings when 400 students were scheduled to attend classes even though the campus only has six classrooms with approximately 160 desks: T3528 at [4]−[5].
ii.The Sydney and South Melbourne campuses not having classrooms large enough to accommodate the number of students timetabled per class, with trainers regularly having classes of 70 or 80 students scheduled even though the largest classroom in each campus had desks for less than half that number: T3528−9 at [3]−[5] and [7]−[9].
iii.Trainers being scheduled to deliver classes in two different courses at the same time and classes being scheduled for days when trainers were not contracted to work: T3528−9 at [5] and [10].

Failure to ensure assessment is valid, authentic and sufficient:

(a)The investigation determined that [the applicant] had not complied with the Principles of Assessment or the Rules of Evidence set out under clause 1.8 of the [RTO] Standards and that within the sample student files provided there were many instances where assessments were marked as competent when they were incomplete, the answers were plagiarised or the answers were incorrect. The issues identified included:
i.Students submitting assessments with answers that were identical to those submitted by other students, identical to answers that could be found on the internet, written in two different handwriting styles or written in a level of English that varied within the answer from broken English to English of a high standard: T3535−39.
ii.Students submitting assessments that were incomplete, obviously wrong, or contained responses that were half of the required length specified for the exercise but were still marked as satisfactory: T3535−39.
iii.Trainers having a clause in their contract stating that they would only be paid upon the students being marked as competent: T3516 at [107].

Failure to ensure satisfactory attendance by students:

(a)The investigation determined that a high percentage of students [enrolled to study with the applicant] did not have satisfactory attendance, indicating that [the applicant] did not have the clearly demonstrated capacity to provide education of a satisfactory standard contrary to s 83(1C) of the ESOS Act. The issues identified included:

i.A significant proportion of students not attending class or attending only a minority of classes, with 34 percent of sampled students across the Sydney and South Melbourne campuses not attending a single class during the sample period, and those students who did attend averaging approximately 47 percent of classes held: T3513−4 at [96]−[98] and T3516 at [107].
ii.Students not attending as scheduled during site monitoring visits conducted by [the respondent], with 36 students sighted on one occasion when 139 were scheduled to attend, 16 students sighted on another occasion when 90 were scheduled to attend, and 4 students sighted on a third occasion when 350 were scheduled to attend: T3514 at [100].
iii.Classes often being held for 12−16 contact hours per week rather than the 20 contact hours scheduled, or scheduled on days when attendance records suggested no classes were held, with tutorials often cancelled and students not required to attend: T3514 at [99] and T3516 at [107].

(b)As a result, [the respondent] concluded that the evidence demonstrated that [the applicant] had not complied with the ESOS Act and the National Code, had not complied with the [RTO] Standards, and did not have the clearly demonstrated capacity to provide education of a satisfactory standard: T3477−3487.

Cancellation decisions

93. On 28 February 2017, the respondent issued the applicant with a notice of non-compliance and intention to cancel its registration as an RTO under the NVR Act, and its registration for all VET Courses at all locations under the ESOS Act.[27]

[27] T 3491-3495.

94. In the notice, the applicant was advised that the basis for the decision to cancel its registration was:

(a)in the case of its NVR registration, the respondent’s view that the applicant was critically non-compliant with clauses 1.3, 1.8, 1.13, 1.14 and 8.5 of the RTO Standards and that, on the balance of probability, it had contravened s 99 of the NVR Act; and
(b)in the case of its ESOS registration, the respondent’s view that, on the balance of probabilities, the applicant had contravened the following sections of the ESOS Act and the National Code:
i.Section 19(1)(c) of the ESOS Act – prescribed information about accepted students who did not begin their course when expected had not been reported within 31 days.
ii.Section 19(1)(d) of the ESOS Act – the termination of accepted students’ studies before the students’ course was completed had not been reported within 31 days.
iii.Section 19(2) of the ESOS Act – particulars of breaches by accepted students of a prescribed condition of a student visa had not been given as soon as practicable.

iv.Section 46B of the ESOS Act – notification of provider default was not given via PRISMS.
v.Section 46D of the ESOS Act – provider default obligations had not been discharged by obtaining acceptance of an offer to an alternate course in writing from the students.
vi.Section 46F of the ESOS Act – notification of discharge of provider obligations was not given via PRISIMS.
vii.Section 12.1 of Part C of the National Code – the Sydney campus had 400 students above the approved capacity studying at the campus.
viii.RP Standard 2.2 of the National Code – procedures to assess whether the students’ English proficiency is appropriate for the course for which enrolment is sought had not been implemented.
ix.RP Standard 9 of the National Code – the expected duration of study specified in the students’ CoEs (confirmations of enrolment) exceeded the CRICOS registered course duration and the students’ progress was not monitored to ensure completion within the expected duration.
x.RP Standard 10 of the National Code - students’ course progress was not systematically monitored and reported and intervention strategies had not been put in place when required.
xi.RP Standard 14 of the National Code – the applicant did not have the facilities or the number of trainers and assessors required to support the number of students undertaking the training and assessment. The applicant’s Staff did not have the capabilities required by the Quality Assurance Framework.
xii.The applicant did not have the clearly demonstrated capacity to provide education of a satisfactory standard. This is because:
1.Assessments were not being conducted in accordance with the Principles of Assessment and the assessment evidence was not being collected in accordance with the Rules of Evidence.
2.The facilities were not sufficient to support the number of learners undertaking training and assessment.
3.The number of trainers and assessors were not sufficient to deliver training and assessment to the number of learners.
4.The trainers and assessors did not have the required skills and qualifications.
5.Students were not meeting course progress requirements and this was not being identified by applicant.
6.Students were not attending classes.[28]
[28] T3491-3494.

On 4 April 2017, the applicant provided the respondent with a written response to the notices. Further information responding to the allegations of non-compliance was provided by the applicant on 18 April 2017, 1 May 2017 and 7 June 2017.[29]
[29] T3543-4666.
The respondent undertook a review of the further information provided by the applicant and concluded that the applicant had failed to address the majority of the breaches and non-compliances identified during the investigation. It had not addressed the impact of non-compliances on students, and had not shown it had a demonstrated capacity to provide education of a satisfactory standard.[30] The respondent’s Amended SFIC summarises the conclusion of the respondent’s review as follows:
(a) Although [the applicant] claimed to have rectified its procedures and appointed a new PRISMS Officer, PRISMS did not show any change in the login used to enter data on behalf of the RTO. Further, while [the applicant] attempted to explain some of the breaches identified, no explanation was provided in relation to the majority of the reporting failures identified in the investigation report: T4704−4708.
(b) [The applicant] did not provide any evidence to show that it monitored, recorded or assessed the course progress of each student for each unit of the course for which the student was enrolled in accordance with its documented policies and procedures and did not provide any evidence it had carried out remedial action to address the impact caused by the lack of systemic monitoring: T4707−4710.
(c) Although [the applicant] claimed that its over-enrolment of students at its Sydney and Maidstone campuses was based on an incorrect understanding as to the nature of its capacity limits as a result of an audit report received in November 2015, this was inconsistent with the fact that it applied to increase the capacity of the Sydney campus on 15 February 2016: T4715−4716.
(d) Although [the applicant] provided evidence in relation to its English language proficiency policy, the evidence provided indicated that the policy had only been followed for 3 out of 15 students sampled. Further, no verification process appeared to be undertaken in relation to qualifications provided as proof of English proficiency, and 8 of the 11 qualifications supplied to [the respondent] were found to be fraudulent. In addition, no remedial action appeared to have been undertaken in relation to current students whose English language proficiency had not been properly assessed: T4716−9.
(e) [The applicant] did not provide any further evidence in relation to many of the trainers identified in the investigation as not possessing sufficient qualifications, skills and experience and did not provide any evidence of rectification action being taken in relation to students who had previously been taught or assessed by those trainers. It also did not provide evidence of action being taken to verify the qualifications provided by new or existing trainers. Further, the evidence it provided in relation to new trainers revealed that many of those trainers also had insufficient qualifications, skills and experience: T4721−4731.
(f) Although [the applicant] attempted to provide an explanation in relation to the allocation of classrooms and resources, the student numbers and classes were shown for international students only, notwithstanding that [the applicant] also has a significant number of domestic students. The explanation also showed 9 classrooms listed at a campus that was previously observed only to have 4, incompatible classes being taught in the same room, and inconsistent numbers of desks where the same classroom was used for multiple courses: T4732−4735.
(g) Although [the applicant] provided a revised plagiarism policy and claimed to have purchased anti-plagiarism software, it did not provide any further evidence to address the criticisms of the assessments that were identified in the investigation report (including the criticism about answers that were incomplete or obviously wrong being marked as competent), and did not provide any evidence to show that it had carried out remedial action to identify and address the impact of the non−compliance on the students who were not adequately assessed: T4735−4736.
(h) Although [the applicant] provided sample attendance spreadsheets for a limited number of courses, those attendance records still showed that for some classes attendance percentages were less than 50 percent, with most students having an attendance percentage less than 25 percent. It did not provide any further evidence in relation to the remainder of its courses and did not demonstrate that its attendance levels had improved to a consistent level across all courses: T4736-4739.
[30] T4703-4739.
In the period following the Cancellation and Change of Scope Decisions and leading up to the hearing of this matter, the applicant provided further information to the respondent in response to the claimed non-compliance. In each case the further information has then been reviewed by the respondent and a further assessment in reply has been provided. This exchange of claim and counter-claim is contained in the affidavit materials of Mr Maranzano, witness for the applicant, and Ms Steward, Mr Penna, Ms McFadgen, Ms Sheehan and Mr Pritchard, witnesses for the respondent.

CONTENTIONS

The principal contention of the applicant is that, to the extent that there have been any previous instances of non-compliance with its regulatory obligations, the applicant has taken the necessary steps to rectify the non-compliances in all material respects.
In its closing submissions the applicant cited a number of practical steps it says have been taken to address alleged non-compliances including that it:
(a)took immediate steps to close one of the campuses, and teach out the remaining students, when it had enrolled more overseas students than were approved for that campus;
(b)brought in external compliance consultants (Mr John Molenaar, Mr Steven Morrissey and Dr Dino Ruzzene) to assist it in assessing and responding to the respondent’s reports, and to achieve continuous improvement in its compliance;
(c)made significant further investments in resources, such as software (e.g. ACER and anti-plagiarism software) and revamped policies and procedures; and
(d)dismissed a trainer who had been identified as not complying with proper policies and procedures.
The applicant contends that these steps demonstrate its “serious commitment” to satisfying its “many and varied statutory obligations”.
In relation to the compliance consultants, the applicant contends that the consultants have collectively concluded that the applicant has either addressed or put in place processes to address any non-compliance that has been identified by the respondent. Further, the applicant contends that the consultants have more experience than the respondent’s lead investigator and that therefore greater weight should be given to their views. However, no direct evidence was led by the applicant in respect of the consultants’ conclusions other than some vague and unpersuasive assertions made by Mr Maranzano during the course of his evidence. The consultants were certainly not made available to be cross-examined by the respondent as to any conclusions that they may have reached. The Tribunal therefore places very little weight on the applicant’s contentions in this regard.
In addition, the applicant contends that, to the extent that the respondent continues to make claims of ongoing non-compliance, those claims have not been particularised by the respondent in its evidence before the Tribunal in sufficient detail to enable the applicant to understand the alleged non-compliances as well as their significance to the Cancellation and Change of Scope Decisions. Therefore, it has been denied the opportunity to effectively address any areas of ongoing non-compliance that could be considered material to the sanction decision.
The applicant contends that if the respondent had particularised any examples of ongoing non-compliance that were material to the Cancellation and Change of Scope Decisions then the applicant would have effectively addressed them in the same manner that, the applicant argues, it has done so in the past.
The applicant contends that the approach adopted by the respondent in presenting the matter before the Tribunal gives rise to a risk that the applicant has, in effect, been denied natural justice in not being heard properly and not being able to address matters that are material to the Cancellation and Change of Scope Decisions.
The applicant also contends that, as a consequence of the respondent’s failure to particularise alleged ongoing non-compliance, the respondent has failed to assist the Tribunal in administering a review that is “fair, just, economical, informal and quick” as required by s 2A of the Administrative Appeals Tribunal Act 1975 (‘AAT Act’). Furthermore, that the respondent has also failed to use its “best endeavours to assist the Tribunal to make its decision in relation to the proceeding” as required by s 33(1AA) of the AAT Act.
Further, the applicant contends that the respondent has lacked fairness and objectivity in its pursuit of the applicant and that in such circumstances the Tribunal should exercise serious caution in relying on any evidence that has been presented to the Tribunal by the respondent in support of its claims against the applicant. In support, the applicant cites delays by the respondent in commencing and notifying the applicant of the outcome of its investigations into the applicant’s conduct, errors in the respondent’s claims against the applicant, and the respondent’s pursuit of an appeal to the Federal Court in respect of the Tribunal’s 2017 decision despite, it contends, having already made a decision to cancel the applicant’s registrations.
The respondent rejects each of the applicant’s contentions.
First, the respondent contends that it has presented the basis for its decision to cancel the applicant’s registration in significant detail and that the evidence before the Tribunal continues to demonstrate examples of serious and ongoing non-compliance by the applicant in respect of its obligations under both the NVR Act and the ESOS Act regulatory regimes that are sufficient to justify the Cancellation and Change of Scope Decisions.
While the respondent acknowledges that some steps towards rectification have been made, it contends that any such measures have been piecemeal and not comprehensive. Where new policies have been introduced or existing policies updated, the respondent contends that there is no compelling evidence of their effective implementation.
The respondent contends that the nature and seriousness of the applicant’s non-compliance provides a reasonable basis for concluding that the applicant is likely to engage in material non-compliance in the future; and also, for having a view that the applicant lacks a clearly demonstrated capacity to provide an education of a satisfactory standard.
The respondent contends that any suggestion that the applicant has been provided with insufficient information in relation to the claims made against it, in order to be able to effectively respond, should be rejected. It contends that any suggestion it has failed to fulfil its obligations as a party to the proceeding under the AAT Act should be rejected.
The respondent also contends that any suggestion the respondent’s pursuit of the applicant has lacked fairness or objectivity or involved any element of bad faith should also be rejected.
CONSIDERATION
Having carefully considered all of the materials presented by way of evidence before it, the Tribunal is satisfied that the applicant has failed to comply in material respects with its obligations under the NVR Act and ESOS Act, the RTO Standards and the National Code and, further, that it continues to do so.
The Tribunal has reached this conclusion having regard to the evidence before it of each of the following, which it finds as a fact:
(a)the applicant’s poor training and assessment standards;
(b)the applicant’s history of exceeding approved capacity limits and failure to provide the facilities necessary to deliver quality education outcomes;
(c)the applicant’s failure to engage staff with the requisite qualifications and experience to deliver quality education outcomes;
(d)the applicant’s poor quality English language proficiency assessments;
(e)the inaccuracy of the applicant’s course attendance and progress monitoring; and
(f)the applicant’s failure to comprehensively address identified examples of non-compliance including, in particular, its ongoing failure to address the impact of its non-compliance on current and former students.
The Tribunals conclusion is supported by the evidence presented to it by the respondent, in particular:
(a)the Investigation Report and Evidence Analysis prepared by Ms Jacqueline Steward, a legal officer for the respondent;
(b)Ms Steward’s affidavits of 11 May 2018 and 10 August 2018 together with her oral evidence;
(c)the affidavits of Mr Ian Penna of 8 May 2018 and 13 August 2018 together with his oral evidence;
(d)the affidavit of Ms Monica McFadgen of 8 May 2018;
(e)the affidavit of Mr John Pritchard of 8 May 2018; and
(f)the affidavit of Ms Roxanne Sheehan of 8 May 2018.
Ms Steward’s evidence was challenged by the applicant and she was cross-examined at length by Counsel for the applicant. However, the Tribunal was satisfied, considering what she said and observing her demeanour, that her evidence was detailed, frank, consistent and credible and should be accepted by the Tribunal. Accordingly, the Tribunal accepted her evidence given orally and by affidavit in its entirety.
The applicant, in rejecting the respondent’s conclusions from the 2016 investigation, as well as the broader claims of non-compliance made by the respondent, relied heavily on the evidence of its current CEO Mr Maranzano, including his affidavits of 19 February 2018, 6 July 2018, and 21 August 2018, and his oral evidence.
The Tribunal found that Mr Maranzano’s oral evidence was, in many instances, lacking in detail and candour. Much of his evidence was given, evasively and not in direct response to the question being asked. The Tribunal was not satisfied therefore, observing his demeanour and considering what he said, that it should place reliance on his evidence where it was in conflict with that of Ms Steward. Bearing these matters in mind, the Tribunal makes the following further observations.
Training and assessment
Ms Steward’s evidence was that the applicant had failed to deliver quality training and assessment in breach of the principles of Assessment and Rules of Evidence and the RTO Standards. More specifically, Ms Steward’s evidence referred to examples of answers provided by students that were incomplete, plagiarised or wrong. Ms Steward’s evidence also referred to the respondent’s review of student assessments having identified a number of examples where the Rules of Evidence and Principles of Assessment had not been complied with.
In her affidavit of 10 August 2018, Ms Steward addressed further information that had been provided by the applicant as evidence of rectification in relation to training and assessment. She noted a number of examples where, in her view, the identified non-compliance had not been effectively rectified by the applicant. More specifically, she noted that:
(a)“No attempt has been made to develop proper policies to ensure that the issues identified by [the respondent] in relation to assessment … are addressed”;
(b)“[The applicant] has provided no evidence to satisfy [the respondent] that the identified issues will not be repeated in the future”;
(c)“No attempt has been made to take any remedial action in relation to students affected by past non-compliances, including students enrolled over approved capacity limits, students with inadequate English language skills, students with plagiarised or inadequate assessment or students taught by unqualified trainers”;
(d)“No evidence has been provided of ongoing and consistent use of the Plagscan software”;
(e)“A review of student assessments identified the Rules of Evidence and Principals of Assessment have not been complied with”.
In addition, Ms Steward gave evidence to the Tribunal that despite the applicant having rectified some instances of non-compliance, she continued to have “concern” about the applicant due to the nature and seriousness of its non-compliance and the fact that not all examples had been comprehensively addressed.
In his evidence, Mr Maranzano acknowledged that quality training and assessment was one of the fundamental obligations of an RTO. He accepted that, in its Investigation Report and Evidence Analysis, the respondent had identified a number of issues with the quality of training and assessment undertaken by numerous of the applicant’s trainers, including examples of assessments being marked as competent when the answers were clearly wrong, incomplete or plagiarised. Mr Maranzano conceded a number of instances presented to him in evidence where a student had been marked as competent for an answer that was clearly not correct or was incomplete. He accepted that these were representative of a broader issue. In some other examples of student answers presented to him, Mr Maranzano was, in the Tribunal’s view, deliberately evasive in his responses, insisting that he did not know the answer, was not well placed to answer, or not sufficiently qualified or informed to form a view.

Mr Maranzano gave evidence of the new anti-plagiarism software put in place by the applicant with a new plagiarism policy adopted by the applicant in response to the respondent’s concerns. He told the Tribunal that following the implementation of the applicant’s rectification measures there were no longer any issues in relation to the quality of the applicant’s training and assessment. However, there was, in the Tribunal’s view no adequate evidence of the effectiveness of such measures.
The Tribunal also noted that Mr Maranzano could not explain how such measures addressed the issue of wrong or incomplete answers being marked as correct, other than to refer to the applicant’s new policy of checking more rigorously.
Mr Maranzano referred, in his first affidavit, to a ‘Sample of Checked Assessments’ as an example of the implementation of the new policy. However, under cross-examination Mr Maranzano conceded that he was unable to explain the precise nature of the ‘checking’ that had been undertaken in the sample on the basis that he does not have any practical oversight of the process. This response, which appeared to be very unsatisfactory, came as some surprise to the Tribunal.
Further, Mr Maranzano could not provide a satisfactory explanation for how, during a site visit in March 2017, following the purported introduction of the new checking policy, the respondent had identified an instance of an approved student assessment that was undertaken by the student on a date the attendance records showed the student was not present in class. This was no less surprising to the Tribunal.
Moreover, Mr Maranzano could not provide a satisfactory explanation as to why, in its response to the concerns raised by the respondent, the applicant had taken action against only one of the trainers involved; and had reassessed students of only that one trainer and none of the others involved in what the Tribunal considered to be clear examples of non-compliance. The Tribunal considered this to be most troubling.
Mr Maranzano told the Tribunal that the applicant had made an assessment and concluded that only one of its trainers warranted remedial action of this kind. This is despite him having acknowledged in his oral evidence examples of issues with the training and assessment compliance of other trainers. When pressed on the point, Mr Maranzano could not explain the basis for his conclusion other than to say “I’ve been guided by what our training manager has assessed, being his department, as the best way and what we needed to respond to in the investigation report”.
In the Tribunal’s view, for the applicant to have acknowledged issues with the quality of its training and assessment but then not to have sought to fully understand the impact that these issues had on education outcomes for its students and, where appropriate, to seek to address that impact, is inconsistent with the applicant having a genuine commitment to delivering quality education outcomes for its students.
Although Mr Maranzano did not specifically acknowledge the point in evidence, the Tribunal accepts that there is evidence of similar issues associated with the poor quality of the applicant’s training and assessment that were identified by the respondent in an earlier audit undertaken in 2015.
The applicant argued that concessions made by the respondent in relation to the applicant’s rectification of previous claims of non-compliances meant that any previous non-compliance was not relevant to the Tribunal’s current assessment. The Tribunal rejects this argument. The fact that the respondent agreed that some issues of non-compliance were rectified with respect to the earlier audit does not mean, in the Tribunal’s view, that such historical non-compliance is irrelevant in the current proceedings. Nevertheless, having said this, the Tribunal does not place great weight at all on instances of non-compliance which are not directly involved or implicated in the current proceedings.
The Tribunal is satisfied that the applicant has failed to comply with its obligations under the regulatory regimes in relation to training and assessment, consistent with the conclusions of the Investigation Report. It is satisfied that the applicant has not responded to examples of non-compliance identified in that Report in a comprehensive way, and in a manner that can provide confidence that, in the future, material non-compliances will not recur should the applicant remain an RTO. The Tribunal cannot be satisfied that the applicant is compliant with one of the most basic and fundamental obligations a registered provider has, and that is to teach students properly and ensure that they are then assessed fairly and accurately.
Approved capacity limits and facilities
Ms Steward’s evidence was that the applicant had exceeded approved student capacity limits and otherwise failed to ensure appropriate facilities in breach of the regulatory regimes, including the National Code. An example cited in Ms Steward’s evidence was that of the Sydney campus where, in July and August of 2016, 490 students were reported as studying at the campus when the applicant’s approved capacity limit for that campus was 90 students.
In her affidavit of 10 August 2018, Ms Steward noted a number of instances where the applicant’s rectification measures had, in her view, failed to address the non-compliance effectively, including:
(a)“[The applicant] has provided no evidence to demonstrate any remedial action to identify and address the impact previous non-compliances may have caused for students”;
(b)“[The applicant] has provided insufficient evidence to demonstrate that the policy and procedures provided have been and/or will be implemented to ensure that if [the applicant] is allowed to enrol new students it will not enrol above the approved capacity at any one campus”; and
(c)“[The applicant’s] Sydney campus was enrolled 400% over the approved capacity in circumstances where there were not enough desks for the students enrolled. [The applicant] has not identified, for example, if there was any impact on students from a lack of access to resources including facilities or trainers as a result of this non-compliance.”
In his evidence, Mr Maranzano acknowledged that the applicant had previously had enrolments at its Sydney and Maidstone campuses that were in excess of the approved capacity under its registration. This acknowledgement by the applicant is underlined, in the Tribunal’s view, by the fact that the applicant applied for an increase in its student capacity after having received the results of the respondent’s 2015 audit report.
Mr Maranzano was wholly unpersuasive, in the Tribunal’s view, in the explanations he advanced for why the applicant had allowed its student numbers to exceed the approved capacity. Initially, he sought to explain away this issue by telling the Tribunal that the applicant’s staggered timetables ensured that no more students attended at any one time than the size of the classroom allows for. However, the Tribunal accepts the respondent’s contention that the findings of the audit report makes it plain that the applicant was scheduling significantly more students than it was able to accommodate in the rooms available. The Tribunal is of the view that the applicant’s attitude on this issue, as indicated in the evidence of Mr Maranzano, is indicative of an expectation that a high percentage of students would not attend class, or of a lack of commitment to the provision of appropriate learning facilities, or both.
The Tribunal was particularly concerned by Mr Maranzano’s acknowledgement in evidence that the applicant had been teaching from the York Street, Sydney address without authorisation for several months despite knowing that its application for approval at that location had not been granted and that in doing so the applicant was committing an offence. Mr Maranzano was unable to provide any satisfactory explanation for this conduct which, in the Tribunal’s view, was not impressive on his part.
Mr Maranzano gave evidence to the Tribunal regarding the implementation of a facilities management plan and contended that the existence of the plan would prevent similar student capacity breaches occurring again. The Tribunal found Mr Maranzano’s evidence regarding the plan to be lacking in detail and unconvincing. For this reason, the Tribunal was not satisfied it should place any weight on the evidence of Mr Maranzano in this regard.
The Tribunal is satisfied that the applicant has failed to meet its regulatory obligations in relation to capacity limits and facilities, consistent with the conclusions of the Investigation Report. More significantly however, in the Tribunal’s view, the fact that the applicant was willing to knowingly exceed student capacity limits and operate from a location without approval demonstrates an appalling lack of commitment to compliance with the regulatory regime. What makes this even more egregious is the fact that the conduct was repeated.
The applicant’s conduct in this regard presents a reasonable basis for the Tribunal to conclude that it is likely the applicant will engage in further material non-compliances in the future if it were to continue as an RTO.
Staff qualifications and experience
Ms Steward’s evidence was that the applicant had failed to ensure that staff had the requisite qualifications, skills and experience necessary to comply with the regulatory regimes including the National Code and RTO Standards. In her affidavit of 10 August 2018 Ms Steward noted a number of ongoing concerns in relation to the information the applicant had provided regarding its rectification measures on this issue including:
(a)“No attempt has been made to take remedial action in relation to students affected by past non-compliances, including … students taught by unqualified trainers”;
(b)“[The applicant] has taken remedial action in relation to only one trainer identified by [the respondent] as not meeting the requirements of the [RTO] Standards. [The applicant] has provided conflicting information, and no evidence, as to whether all students or only a sample of students assessments conducted by this trainer were checked”;
(c)“[The applicant] has not provided evidence of systemic verification of qualifications in line with its own policy and procedure”;
(d)“[The applicant] has provided insufficient evidence to show that its current trainers and assessors meet the requirements of the Standards”.
In his oral evidence Mr Maranzano acknowledged that a number of the applicant’s staff did not have the requisite qualifications, skills or experience required to teach the courses for which they were responsible. He told the Tribunal that “yes, historically we probably weren’t as sharp on that as we should have been and many of these trainers have since moved on”. Mr Maranzano also told the Tribunal that the applicant had introduced more rigorous procedures to ensure that similar issues do not occur again. However, under cross-examination he conceded examples of where the applicant had failed to properly verify staff qualifications and experience in accordance with the new procedures.
In giving his evidence Mr Maranzano sought to deflect responsibility on this issue, telling the Tribunal that it was not his role to assess the qualifications, skills and experience of staff but rather that he relied on others to make the appropriate judgment. The Tribunal was particularly concerned to hear this, considering Mr Maranzano is CEO of the applicant and given his acknowledgment of the applicant’s previous failure to ensure the RTO Standards were being met.
Of particular concern to the Tribunal was the fact that Mr Maranzano was unable to provide a satisfactory explanation to the Tribunal for why, with the exception of one trainer, the applicant had not taken to steps to assess the potential impact on students taught by trainers whose qualifications, skills and experience had been brought into question, or to redress any such impact. Moreover, he could not explain why the applicant had failed to take further steps to follow up concerns raised by the respondent in relation to the qualifications, skills and experience of the applicant’s staff.
Again, Mr Maranzano gave evidence to the Tribunal of new policies and procedures the applicant had adopted to address these concerns. However, Mr Maranzano was not able to explain how the assessment of qualifications, skills and experience actually occurred in any detail, nor why the policies and procedures did not appear to have been followed consistently.
In the view of the Tribunal, the applicant’s approach to this issue, as clearly demonstrated by Mr Maranzano’s evidence, is inconsistent with the applicant having a commitment to delivering quality education outcomes for its students. This seriously brings into question the applicant’s good faith as a provider.
The Tribunal is satisfied that the applicant has failed to comply with the National Code and RTO Standards when it comes to maintaining requisite qualifications, skills and experience of its trainers and assessors consistent with the conclusions of the Investigation Report. The Tribunal is also satisfied that the applicant has not rectified the non-compliances in a comprehensive way, and in a manner that can provide confidence that further material non-compliance will not or may not recur, should the applicant continue as an RTO.
English language proficiency assessment
Ms Steward’s evidence was that the applicant’s English language proficiency assessment compliance was in breach of both regulatory regimes including the RP Standards in the National Code. Ms Steward’s evidence included examples of students who, in her view, had English language proficiency levels below the standard that could reasonably be expected. In her affidavit of 10 August 2018 Ms Steward noted an ongoing concern in relation to the information the applicant had provided regarding its efforts to rectify the English language proficiency issues including:
(a)“That the revised policy, while clearer, does not cover all courses on [the applicant’s] scope of registration”;
(b)“No attempt has been made to take any remedial action in relation to students affected by past non compliances, including … students with inadequate English language skills”;
(c)“[The applicant] has stated that it has undertaken no remedial action with respect to English language skills because it undertook an informal review by talking to the trainers and no issues were identified. This would appear to be contrary to the evidence previously identified by [the respondent]”;
(d)“There is no evidence on how this policy will be implemented for offshore applicants”;
(e)“Comprehensive, current and plain English information with respect to the requirements for acceptance to a course, including the minimum level of English language proficiency is not available to overseas students or intending overseas students”.
The applicant continued to reject the respondent’s claim that students have been enrolled in higher certificate and diploma level qualifications with clearly deficient English language skills.
However, the respondent played a recording to the Tribunal of a student being questioned in relation to her English proficiency. This was very instructive. The student was enrolled in an advanced business course. Having listened carefully to the recording, the Tribunal is satisfied that the student being interviewed did not have English language skills consistent with the standard reasonably expected of a person studying advanced business in Australia.
The applicant sought to explain the example provided by the respondent as being that of a shy Thai student who was simply nervous and intimidated by the situation but who was otherwise able to understand and respond in English to a satisfactory standard. The Tribunal rejects this explanation without hesitation. The student in question clearly struggled to understand even basic questions relating to her address and the name and details of the course she was studying. The difficulty she clearly had in responding to the questioning cannot be explained away, in the Tribunal’s view, as nerves or shyness. The Tribunal was astonished at the applicant’s endeavour to do so; and is firmly of the view that this showed the applicant was not prepared to be utterly frank with the Tribunal and to ensure, through Mr Maranzano, that the truth was being told.
Mr Maranzano gave evidence to the Tribunal about a new English proficiency policy the applicant had introduced in November 2017. However, when pressed under cross-examination, Mr Maranzano did not appear to understand how the policy was applied in practice. He could not explain to the Tribunal how the policy was capable of implementation in any meaningful way (when it required testing only after the student had arrived in Australia) despite the fact that a student would have been required to be enrolled in the course already in order to gain entry to Australia. The Tribunal was of the view that this made plain the applicant’s lack of concern to ensure appropriate standards of English language proficiency.
The Tribunal was particularly concerned about the dismissive nature of Mr Maranzano’s response on this issue. In the view of the Tribunal, Mr Maranzano demonstrated a lack of concern not only about the potential impact the applicant’s failings had on the students concerned, but also about Australia’s reputation as a destination for quality education and training and the applicant’s own reputation as a training provider. The respondent said in its closing submissions, “everyone loses in this scenario” and the Tribunal agrees with this summation. For these reasons, the Tribunal is satisfied that the applicant’s conduct on this issue is in breach of its obligations under the RP Standards and National Code consistent with the conclusions of the Investigation Report. The Tribunal is also satisfied that the applicant has not rectified the non-compliance in a comprehensive way and in a manner that demonstrates a commitment to delivering quality education outcomes for its students.
Course attendance and progress monitoring
Ms Steward’s evidence was that the applicant’s course attendance and progress monitoring was in breach of the regulatory regimes including the ESOS Act and the National Code. Ms Steward gave examples of where, in her view, the applicant had failed to systematically monitor course progress and where, when unsatisfactory course progress was identified, the applicant had failed to put in place appropriate intervention strategies. There were also examples of the applicant failing to report unsatisfactory course progress as required. In addition, there was evidence of very poor course attendance. In the Investigation Report, Ms Steward reported that based on an assessment of 234 students at the Sydney campus, 99 students (or 42.3%) did not attend any classes during the sample period. Of the students that did attend, the average attendance was 41.85% during the period.
In her affidavit material, Ms Steward acknowledged that the applicant had subsequently provided further information in response to the respondent’s concerns including those relating to a number of new and updated policies. She acknowledged in evidence that the applicant updated its PRISMS reporting policy with respect to non-commencement by students and noted that it was “much clearer, and now appears to be capable of implementation”. She also acknowledged that the applicant’s updated course progress policy “is much clearer and appears capable of implementation except with respect to the Diploma of Building and Construction”. However, Ms Steward noted that, in her view, the applicant had not provided any compelling evidence of the effective implementation of such policies. Ms Steward rejected the applicant’s new attendance monitoring policy as being effective in addressing the issues of concern identified by the respondent noting that “this policy is unclear as it does not specify the time frame over which attendance will be monitored or the exact circumstances in which a student will be reported”.

In response, Mr Maranzano conceded that there were multiple instances where the applicant had failed to meet its policy in relation to the monitoring and reporting of course progress and, more specifically, that there were multiple examples of students not being reported for course progress when they should have been.
Mr Maranzano gave evidence that, having been put on notice in relation to attendance issues, the applicant was now placing more emphasis on attendance and had adopted a number of new and updated policies and procedures with the assistance and guidance of a number of consultants, including Mr Molenaar and Mr Morrissey. However, the Tribunal agreed with Ms Steward and considers that Mr Maranzano did not give evidence of the effectiveness of any of the new measures that had been adopted. The Tribunal considered this was a serious failing.
While Mr Maranzano maintained that all of the issues identified by the respondent regarding student attendance and course progress had been addressed by the applicant, he conceded under cross-examination that the applicant had a poor student attendance record. Mr Maranzano sought to downplay the significance of this, suggesting to the Tribunal that students were able to achieve good outcomes without necessarily having a high attendance record. Mr Maranzano told the Tribunal that he would expect that the low attendance of students would not cause any particular concern for his staff because it was not what the organisation was “measured against”. In the Tribunal’s view, this response seemed quite extraordinary, and demonstrated an appalling lack of commitment to quality education outcomes.
Mr Maranzano told the Tribunal that he was not concerned to learn that more than half the students at one of the applicant’s campuses had never attended class. The Tribunal was taken aback at his evidence on this point.
The Tribunal is satisfied that the applicant has failed to comply with its regulatory obligations and its commitments with respect to course attendance and progress monitoring, consistent with the conclusions of the Investigation Report.
While the Tribunal acknowledges that some efforts have been made by the applicant to rectify issues that have been identified, it is satisfied that the applicant has not addressed these concerns in a comprehensive manner and in such a way that can provide confidence that the applicant will not or may not engage in further non-compliance of this kind in the future should it continue as an RTO.
As the respondent noted in its closing submissions, the applicant’s performance when it comes to student attendance and monitoring and reporting course progress is below the standard the public would reasonably expect and that this “goes to the heart of the issue”. The Tribunal is in complete agreement. A failure by the applicant to ensure appropriate attendance and accurate monitoring and reporting of course progress makes it very difficult to deliver quality education outcomes for students.
CONCLUSION
The Tribunal has indicated that it prefers the evidence of Ms Steward to that of Mr Maranzano for the reasons given. Except where Mr Marazano has made a concession, where otherwise the two witnesses are in conflict it has preferred the evidence of Ms Steward. Her evidence, in its view, was unexceptionable. But this cannot be said of Mr Maranzano’s evidence, which in the various ways indicated was most unsatisfactory and unpersuasive.
The Tribunal is satisfied that Ms Steward was an impressive witness and that it should accept her evidence and make findings of fact based on her evidence accordingly.
For these reasons, the Tribunal is satisfied, and makes findings of fact, that the applicant has failed to meet its obligations in each of the ways set out above under the NVR Act, the ESOS Act, the RTO Standards and the National Code.
In the view of the Tribunal, the nature of applicant’s failures to comply with its regulatory obligations are particularly serious given that they strike at the heart of the objects of the two regulatory regimes which include:
(a) protecting the quality of education and training;
(b) protecting and enhancing Australia’s reputation for education and training;
(c) protecting students undertaking education and training; and
(d) promoting an education and training system that will meet Australia’s needs for a highly educated and skilled population.
The applicant’s failure to meet its obligations under the regulatory regimes not only has a direct impact on the students involved, it also undermines public confidence in Australia’s education and training sector as a whole – domestically and internationally.
The Tribunal was particularly concerned that a number of the examples of applicant’s non-compliance are systemic and repeated.
Given the nature and seriousness of the applicant’s various non-compliances, the Tribunal would need to be satisfied that the non-compliance issues have been comprehensively rectified if it was to set aside the Cancellation and Change of Scope Decisions.
For the reasons given above, the Tribunal is not satisfied this is so.
While the Tribunal recognises that some effort has been made by the applicant to respond to issues of concern identified by the respondent, the applicant’s approach to these issues has been piecemeal and, in many respects, lacking in substance. Furthermore, the applicant’s conduct is suggestive of an approach to compliance that is about responding to issues identified by the regulator rather than taking a proactive approach that involves taking responsibility for understanding its regulatory obligations and demonstrating a willingness and capacity to ensure that those obligations are met.
The Tribunal is most concerned that in some areas the applicant has demonstrated a willingness to disregard the law entirely. It has done so in respect of approved capacity limits and also by providing training from a campus knowingly without approval. These are matters of great concern to the Tribunal and represent the antithesis of what is expected of a registered training provider.
The Tribunal is satisfied that there is a reasonable basis for concluding that the applicant does not have a commitment to compliance with its regulatory obligations and therefore future non-compliances of a similar nature must be considered likely were the applicant to continue as an RTO.
The Tribunal is also satisfied that there is a reasonable basis for concluding that the applicant does not have a demonstrated capacity to deliver quality education outcomes.
For these reasons, the Tribunal is of the view, that in all the circumstances of the case, and considering the objectives of the regulatory regimes, the proper course, and the correct or preferable decision, is for the Tribunal to:
(a) cancel the applicant’s registration as an NVR RTO under s 39 of the NVR Act; and
(b) cancel the applicant’s registration as a registered provider of vocational education and training to overseas students for all VET courses at all locations under s 83 of the ESOS Act.
It flows from this decision that the Change of Scope applications must also be refused.
Breach of natural justice argument
Having made its decision, the Tribunal does not need to deal in any depth with the applicant’s contention that the respondent failed to provide sufficient detail in relation to its non-compliance and that it has been denied the opportunity to respond. The Tribunal would, in any event, reject this contention. The applicant moreover has been able to present its case in the Tribunal in a fresh hearing so there can be no substance in the point.
Bad faith argument
Further, having made its decision, the Tribunal does not need to deal in any depth with the applicant’s contention that the applicant was actuated by bad faith. The Tribunal would reject this contention also. In any event, the role of the Tribunal is to review decisions and not to roam more widely into administrative law principles.
Fit and proper person argument
An issue raised in the course of the hearing by the respondent related to the applicant’s compliance with the Fit and Proper Person Requirement under clause 7.1 of the RTO Standards concerning Mr Khan and his alleged convictions.
It is also unnecessary for the Tribunal to deal with this point having regard to its decision. Mr Khan’s alleged convictions have not figured in the Tribunal’s analysis or reasoning, as is apparent.
2016 Applications
The one final matter for the Tribunal to address is in respect of the 2016 Applications referred to earlier in these reasons. As a practical matter, the 2016 Applications were, in effect, superseded by the NVR Act Cancellation Decision and the ESOS Act Cancellation Decision. The applicant and the respondent both accept that there is no utility in pursuing the 2016 Applications and, accordingly, they are dismissed.

DECISION

For the reasons set out above:
The Tribunal affirms the decisions to:
a.cancel the applicant's registration as a training organisation under the National Vocational Education and Training Regulator Act;
b.cancel the applicant's registration as a registered provider of vocational education and training to overseas students under the Education Services for Overseas Students Act;
c.refuse the applicant’s application to change the scope of its registration under the National Vocational Education and Training Regulator Act; and
d.refuse the applicant’s application to change the scope of its registration under the Education Services for Overseas Students Act; and
The 2016 Applications are dismissed.

I certify that the preceding 182 (one-hundred and eighty-two) paragraphs are a true copy of the reasons for the written reasons herein of Damien Cremean, Senior Member and Matthew Groom, Senior Member.

..........[sgd]............................................

Associate

Dated: 3 April 2019

Date(s) of hearing:

Applicant:

Solicitors for the Applicant:

Respondent:

20, 21 and 22 August and 17 September 2018

Western Institute of Technology

GPZ Legal

Australian Skill Quality Authority