Western Institute of Technology Pty Ltd and Australian Skills Quality Authority
[2018] AATA 94
•25 January 2018
Western Institute of Technology Pty Ltd and Australian Skills Quality Authority [2018] AATA 94 (25 January 2018)
Division:GENERAL DIVISION
File Number(s): 2017/5747
Re: Western Institute of Technology Pty Ltd
APPLICANT
AndAustralian Skills Quality Authority
RESPONDENT
File Number(s): 2017/5751; 2017/5749
Re:Western Institute of Technology Pty Ltd
APPLICANT
AndMinister for Education and Training
RESPONDENT
DECISION
Tribunal:Senior Member D. J. Morris
Date:25 January 2018
Place:Melbourne
The request by the Applicant to vary the stay order of 22 November 2017 is refused. The stay order remains unchanged with respect to all applications.
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Senior Member D. J. Morris
PRACTICE AND PROCEDURE – application to vary stay order provisions – Tribunal’s discretion wide – principles to take into account – principles of Acts under which original decision made relevant – hearing not considering substantive review of original decision – steps towards compliance relevant to substantive review – application to vary stay order refused
Legislation
Administrative Appeals Tribunal Act 1975, ss 41(2), 41(3)
Administrative Appeals Tribunal Regulations 2015
Education Services for Overseas Students Act 2000, ss 4A(b), 10J(1), 93(4), 169ABNational Vocational Education and Training Act 2011, ss 2A(b)(c)(ii), 37(2), 199, 203(2)
Cases
Daily Update Pty Ltd and Australian Skills Quality Authority [2014] AATA 118
Scott and Australian Securities and Investments Commission [2014] AATA 798
REASONS FOR DECISION
Senior Member D. J. Morris
25 January 2018
BACKGROUND
This is an application by the Western Institute of Technology Pty Ltd (the Applicant) brought under section 41(3) of the Administrative Appeals Tribunal Act 1975 (the AAT Act) to vary a condition of a stay order made by the Tribunal on 22 November 2017. The main issue before the Tribunal is whether to extricate the Applicant from a ‘No New Enrolment Condition’ imposed by the original stay.
Applications before the Tribunal
Application 2017/5747
On 30 August 2017, the Commissioners of the Australian Skills Quality Agency (ASQA) made a decision to reject an application by the Applicant to change the scope of its registration. On the same date the Applicant was sent a notice of decision to cancel the Applicant’s registration as a Registered Training Organisation under the National Vocational Education and Training Act 2011 (the NVR Act). This decision was communicated to the Applicant by letter on 7 September 2017. In the letter, ASQA advised the Applicant that the decision was reviewable by the Tribunal under section 199 and section 203(2) of the NVR Act.
Application 2017/5751
On 7 September 2017, acting under section 93(4) of the Education Services for OverseasStudents Act 2000 (the ESOS Act), ASQA gave notice to the Applicant that it had decided to cancel all VET courses at all locations on the Applicant’s registration, effective from 12 October 2017. The notice advised the Applicant that this decision was reviewable by the Tribunal under section 169AB of the ESOS Act.
Application 2017/5750
On 7 September 2017, under section 37(2) of the NVR Act, ASQA advised the Applicant in writing that it had made a decision to cancel the Applicant’s registration under section 39 of the NVR Act, with effect from 12 October 2017. The notice advised the Applicant that this decision was reviewable by the Tribunal under section 199 of the NVR Act.
Application 2017/5749
On 7 September 2017, ASQA advised the Applicant that the Commissioners of ASQA had made a decision on 30 August 2017 to reject the Applicant’s application to change its registration as a provider of courses to overseas students as registered on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS). ASQA acted under section 10J(1) of the ESOS Act, having found the applicant non-compliant with the National Code of Practice for Providers of Education and Training to Overseas Students 2017. ASQA advised the Applicant that this decision was a reviewable decision by the Tribunal under section 169AB of the ESOS Act.
The Applicant sought review of these four decisions on 22 September 2017. A delegate of the Registrar of the Tribunal made an order on 27 September 2017 under subsection 23(1) of the Administrative Appeals Tribunal Regulations 2015 that, as the applications relate to the same Applicant, they may be conveniently heard before the Tribunal at the same time.
Stay application
On 11 October 2017, after application by the Applicant and upon the Respondent advising that they did not oppose the Applicant’s request for a stay order, Deputy President Forgie made an order under section 41 of the AAT Act staying operation of the four decisions of the Respondent communicated on 7 September 2017 until the parties could be heard. On 30 October 2017, Deputy President Forgie made further stay orders following an interlocutory hearing held 27 October 2017. On 22 November 2017 this stay order was varied by consent of the parties.
Under section 41(3) of the AAT Act, the Applicant sought a further variation of the stay orders at a hearing before the Tribunal, constituted by me, on 20 December 2017. The variation sought was not to disturb the conditions in the stay orders except for the deletion of paragraph 1.2(e) as varied and issued on 22 November 2017 (reproduced relevantly):
1.2 As to both cancellation decisions:
The Applicant must, until the hearing and determination of its applications for review:
…
(e) on and from 27 October 2017 not enrol (including for the purpose of completing Recognised Prior Learning) students in any VET course, save for commencing any student who is already enrolled in a training package comprising Certificate III, Certificate IV, Diploma or Advanced Diploma qualifications and who at 27 October 2017 is completing a qualification in that training package;…
At the hearing, the Applicant was represented by Ms Sarala Fitzgerald of counsel with Mr Liam Grigg. The Respondent was represented by Mr John Pritchard. At the commencement of the hearing, both parties made clear they would address the Tribunal only on the No New Enrolment Condition and would not seek to disturb the other conditions imposed in the stay order.
Applicant’s submissions
Ms Fitzgerald submitted that Deputy President Forgie had noted at the hearing on 27 October 2017, when imposing the No New Enrolment Condition, that if the Applicant provided further evidence of compliance and evidence of the financial impact of this condition, the Tribunal would consider that information.
Ms Fitzgerald referred to additional material provided to the Tribunal, an affidavit from Mr John Molenaar, an independent consultant engaged by the Applicant, and a report he had done, and a further affidavit from Mr Ross Maranzano, Chief Executive Officer of the Western Institute of Technology Pty Ltd (WIT).
In referring to the principles that apply to the granting of a stay more generally, the Applicant referred to the Tribunal decision in Daily Update Pty Ltd and Australian Skills Quality Agency [2014] AATA 118.
In terms of prospects of success, the Applicant argued that WIT has “very good prospects of at least partial success and good prospects of complete success such as the Tribunal is unlikely to consider it appropriate to cancel WIT’s registrations on the facts as they now stand.”
The Applicant drew the Tribunal’s attention to the statement in Mr Molenaar’s affidavit:
WIT is compliant against most of the assessed standards in the Investigation Report. Its ongoing compliance in relation to the remaining standards is dependent on the effective implementation of the strategies developed and the ongoing professional development of its staff. However, the policies and procedures that have been put in place since my engagement, if implemented effectively, are sufficient to address the non-compliances identified in the Investigation Report. I will continue to work with WIT to ensure that all of these policies and procedures are effectively implemented to avoid re-occurrence of the non-compliances identified in the Investigation Report. Having worked closely with WIT since September, I am confident that they are committed to ongoing improvement and to implementing the policies and procedures that I have developed for them.
Ms Fitzgerald also drew attention to Mr Maranzano’s affidavit which referred to the engagement of Mr Molenaar on 28 September 2017 and to the engagement of a Training Co-ordinator.
With regard to any prejudice should the stay order not be varied, Ms Fitzgerald argued that the No New Enrolment Condition “undermines much of the benefit of a stay for WIT and this erosion of the benefit of the stay will increase exponentially with the passing of time as current students graduate”. Ms Fitzgerald submitted that leaving the No New Enrolment Condition in place is “already causing significant financial and reputational harm to WIT...”
Ms Fitzgerald submitted that the No New Enrolment Condition “threatens [WIT’s] ability to service its loans, placing its ongoing financial viability at serious risk.”
Ms Fitzgerald also submitted:
The evidence shows that maintaining the No New Enrolment Condition may render the appeal nugatory because of the potential size of the permanent and detrimental impact of the condition in the period before a final decision is likely to be made.
Mr Maranzano submitted that the No New Enrolment Condition “has and will cause [sic] large, irreversible losses and may force WIT to cease trading. A successful review by the Tribunal at the final hearing could not reverse these effects.”
In terms of the public interest, the Applicant submitted that students will be “sufficiently well protected” because of additional reporting conditions imposed by the stay orders, which allow WIT to enrol new students. In the light of this, the Applicant submits, the public interest weighs in favour of allowing WIT to maintain financial viability and stay in business.
The Respondent’s submissions
The Respondent urged the Tribunal to note the exhortative provisions in the NVR Act at section 2A(c)(ii) that the object of the Act is to protect and enhance Australia’s reputation for VET nationally and internationally. A similar clause in the ESOS Act at section 4A(b) states that it is an object of that Act to protect and enhance Australia’s reputation for quality education and training services.
In terms of the financial effect of the No New Enrolment Condition, the Respondent drew the Tribunal’s attention to the evidence in the affidavit of Ms Jacqueline Steward, an officer of ASQA, dated 26 October 2017 which noted:
The Applicant is also registered on CRICOS in the name Western Senior Secondary College to deliver two secondary school courses to school students in Victoria. These courses are not VET courses as those terms are defined in the NVR Act but may include elements of a VET course. Regulation of the delivery of these courses lies with the Australian Department of Education and Training (DET).
Mr Pritchard told the hearing that the decisions under review do not affect the ability of the Applicant to continue to deliver these non-tertiary courses, nor the income stream that this provides to the Applicant.
Mr Pritchard also made submissions that the financial impact report on the potential effect of the No New Enrolment Condition, provided by the Applicant, had been prepared by its own finance officers and that this could not be regarded with the same weight as an independent audit report prepared and submitted by the Respondent’s independent auditors.
Relevant law
Section 41(2) of the AAT Act gives the Tribunal power to stay certain decisions to which an appeal relates:
…on request being made by a party to a proceeding before the Tribunal … if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.
Section 41(3) of the AAT Act goes on to state:
Where an order is in force under subsection (2) (including an order that has previously been varied on one or more occasions under this subsection), the Tribunal may, on request being made by a party to a relevant proceeding, make an order varying or revoking the first-mentioned order.
The AAT Act provides at section 41(4) that the Tribunal may not make a stay order or vary a stay order unless the person who made the decision to which the relevant proceeding relates has been given a reasonable opportunity to make a submission to the Tribunal and the person requesting the stay order, or variation, has also had a reasonable opportunity to make submissions to the Tribunal, in relation to the matter.
Downes J, then President of the Tribunal, in Scott and Australian Securities and Investments Commission [2009] AATA 798 (Scott) set out the relevant considerations when considering an application for a stay, I see no reason why these considerations would be any less relevant in an application to vary an existing stay. His Honour set out the considerations at [4]:
1.The prospects of success.
2.The consequences for the Applicant of the refusal of the stay.
3.The public interest.
4.The consequences for the Respondent in carrying out its functions depending upon whether a stay is granted or not.
5.Whether the application for review would be rendered nugatory if a stay were not granted.
6.Other matters that are relevant, amongst which I would include the length of the time that the ban has already been in place and the gap between today and the hearing of the application.
The Tribunal notes that the matter of Daily Update Pty Ltd, referred to by the Applicant, concerned an application to vary an existing stay. In that matter, particular attention was given to the following considerations:
The prospects of success of [the Applicant] on review
Whether there would be prejudice to the parties or anyone else if a variation to the Stay Order as applied for were to be granted
That the review application, if successful, would be rendered nugatory or pointless if the variation to the Stay Order were to be granted; and
Whether it is in the public interest to grant a variation to the Stay Order
CONSIDERATION
In terms of deciding whether to vary a stay order, the Tribunal has wide discretion. The Tribunal accepts that the Applicant has since the end of September 2017 undertaken certain steps towards addressing the deficiencies which led to the cancellation decisions by the Respondent, including the engagement of Mr Molenaar and the commissioning of him to prepare a report.
Prospects of success
If there are no prospects of success or very limited prospects of success, it would seldom be appropriate for the Tribunal to grant a stay. The Tribunal notes that Deputy President Forgie clearly considered this at the earlier hearing when she made the stay order, which I note was made by consent between the parties.
I have also considered this broad question, and do not conclude that there are no, or very limited, prospects of success if the matter was considered in a substantive matter by the Tribunal. But this is a procedural decision, and the arguments of parties about the merits of the original decisions are not before me.
Consequences for the Applicant
I accept the submissions of the Applicant that the preclusion of enrolment on new students will have a financial impact on the WIT, but I also note that the Applicant has other income sources which will not be affected by this condition, including that it will continue to provide certain courses to high school students. I also note that there will be a continued, albeit reduced, stream of income from students who are already enrolled in the courses described in paragraph 1.2(e) of the stay order and who retain the ability to “ascend”, that is, on the completion of one course, move up to study another course with a higher qualification. Such students are also not affected by the condition.
I am not satisfied on the evidence before me that the No New Enrolment Condition, of itself, will cause WIT to “cease to operate”. Apart from the continued sources of income referred to above, the Tribunal notes on the financial information provided that the organisation has significant property holdings, some nine properties, noting that there are mortgages over each of these.
The public interest
As Downes J, said in Scott, at [10]:
…I think it is important to note that the regulator which has supervisory control, at any event subject to appeal to the Administrative Appeals Tribunal, over the conduct of directors and managers, has made an adverse decision and all other things being equal, the public is entitled to the protection of such a decision. I note that the public interest is a substantial concept lying behind the whole of the Corporations Act and its provisions and, as well, I note that s 41 of the Administrative Appeals Tribunal Act requires the interests of persons who may be affected to be taken into account, which, in principle, directs attention to the interests of the public.
I respectfully agree with His Honour that I am bound by section 41 of the AAT Act to take the interests of the public into account. I also find that this section, expressed as it is, to require the Tribunal to take into account “the interests of any person” requires me to consider not only the interests of the Applicant but also the Respondent, and its responsibility to protect the public as the regulator.
As submitted by the Respondent, and I accept their submission, the NVR Act (at section 2A(b)(c)(ii)) and the ESOS Act (at section 4A(b)) both make clear that the protection of the interests of Australian students and overseas students seeking to study a course in Australia are a paramount consideration. Should the Tribunal find in favour of ASQA at the substantive hearing, and the various cancellations applicable to the Applicant are affirmed, there would certainly be prejudice to students enrolled subsequent to any variation to the No New Enrolment Condition of the stay order now in place. Any overseas students who have visas conditional on study with WIT may be affected.
I accept that a certain number of staff of WIT may be directly affected were the No New Enrolment Condition to remain in place, as might some contractors to WIT, albeit less directly. However this factor is mitigated somewhat by my satisfaction that WIT would continue to operate notwithstanding the stay orders as they currently stand.
In balancing all of these factors, I make clear that, in this interlocutory hearing, I do not delve into the matters rightly the subject of the substantive review. However on the evidence before me I find the potential adverse impact to the public interest, including the interest of potential enrolees, outweighs that of the detriment that may be suffered by other persons should the No New Enrolment Condition remain.
Whether the application for review would be rendered nugatory if a stay were not granted and other considerations
This has partly been answered by the fact that both the Applicant and the Respondent consented to the original stay orders and then consented to another variation to them, both of which included the No New Enrolment Condition, and the Applicant is only seeking, in this hearing, to have one of the conditions deleted and is not seeking to disturb any of the other conditions Deputy President Forgie applied. I do not believe that the substantive application for review would be rendered nugatory were the No New Enrolment Condition to remain, especially given that continuing students are unaffected by the condition, and that I am satisfied WIT would likely not “cease to operate”.
Conclusion
The recent (since September 2017) steps taken by the Applicant towards compliance and rectifying matters highlighted by ASQA in the original investigation may be relevant to the substantive consideration of the cancellation decisions. However, I am not satisfied on the evidence before me that the case has been made out to disturb the stay order made by Deputy President Forgie in terms of deciding to suspend new enrolments in VET courses until that review is decided.
Parties are urged to contact the Tribunal with a view to listing the substantive hearing within the next three months.
DECISION
The request by the Applicant for the stay order of 22 November 2017 to be varied is refused. The stay order remains unchanged with respect to all applications.
I certify that the preceding 43 (forty-three) paragraphs are a true copy of the reasons for the decision herein of Senior Member D. J. Morris
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Associate
Dated: 25 January 2018
Date(s) of hearing: 20 December 2017 Counsel for the Applicant: Ms Sarala Fitzgerald Solicitors for the Applicant: Maddocks Lawyers Solicitors for the Respondent: Mr John Pritchard
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