Austech Institute for Further Education Pty Limited v Vocational Education Training Accreditation Board [2009] NSWADT 6 (13 January 2009)

Last Updated: 15 January 2009

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL

CITATION:
Austech Institute for Further Education Pty Limited v Vocational Education Training Accreditation Board [2009] NSWADT 6


DIVISION:
GENERAL DIVISION

PARTIES:
APPLICANT
Austech Institute for Further Education Pty Limited

RESPONDENT
Vocational Educational and Training Accreditation Board



FILE NUMBERS:
093002

HEARING DATES:
8 January 2009

SUBMISSIONS CLOSED:
8 January 2009



DATE OF DECISION:
13 January 2009

BEFORE:
Hennessy N - Magistrate (Deputy President)





LEGISLATION CITED:
Administrative Decisions Tribunal Act 1997
Vocational and Educational Training Act 2005

CASES CITED:
Cardile v LED Builders Pty Ltd [1999] HCA 18
Shi v Migration Agents Registration Authority [2008] HCA 31
Williamson v Director General, Department of Transport [2000] NSWADT 165
Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 67 ALR 553
Dallikavak v Minister for Immigration and Ethnic Affairs (1985) 61 ALR 471
Manoher v Minister for Immigration, Local Government and Ethnic Affairs (1991) 24 ALD 405
State of New South Wales (Justice Health) and anor v Dezfouli [2008] NSWADTAP 69
United States Tobacco Co v Minister for Consumer Affairs (1988) 15 ALD 104
YG & GG v Minister for community Services [2002] NSWCA 247

TEXTS CITED:


APPLICATION:
Application for stay; registered training authority

MATTER FOR DECISION:



REPRESENTATION:
APPLICANT
P Singleton, barrister
RESPONDENT
S Butler, solicitor


ORDERS:
The decision of the Vocational Education and Training Accreditation Board that:
In accordance with sections 18(1)(b), 18(2)(d), 18(2)(g), 18(4)(b), 35(1)(c), 35(3)(d), 35(3)(g), 35(3)(j) and 35(3)(k) of the Vocational Education and Training Act 2005, notice is hereby given to impose an immediate condition on the approval to deliver the courses listed below:
THH33102 Certificate III in Hospitality (Asian Cookery);
THH51202 Diploma of Hospitality Management;
THH60202 Advanced Diploma of Hospitality Management
As a result of this condition, Austech Institute for Further Education Pty Ltd will not, in relation to any of the courses specified above, be able to:
. . .
(c) permit any student listed in Attachment A to begin their course
Further to this, the following amendment to the condition is imposed:
Austech Institute for Further Education Pty Ltd is required to pay each and every student listed in Attachment C a full refund of course money paid to Austech Institute for Further Education Pty Ltd for their course
Is stayed pending further order of this Tribunal.


Reasons for Decision:

REASONS FOR DECISION

Introduction

1 The applicant, Austech Institute for Further Education Pty Limited, (AIFE) is a Registered Training Organisation (RTO) with approval to provide three hospitality courses to overseas students. VETAB, the Vocational Education and Training Accreditation Board, administers the Vocational Education and Training Act 2005. VETAB’s main roles are to register training organisations, accredit vocational courses and approve persons to provide courses for overseas students: Vocational Education and Training Act 2005, s 6. In September 2008, VETAB conducted an interim audit of AIFE. In response to the findings of that interim audit VETAB imposed conditions on the scope of AIFE’s registration and on its approval to provide courses for overseas students. AIFE remained registered as an RTO.

2 Following negotiations the conditions were amended on 18 November 2008. However, as VETAB was not satisfied with the action plan provided by AIFE or with its failure to immediately comply with one of the conditions, VETAB imposed more onerous conditions on 16 December 2008. In summary those conditions were that AIFE should not enrol any further students and that it should refund course money paid by students who had enrolled but had not commenced their course by 24 November 2008. On 5 January 2009, AIFE applied to the Tribunal for a review of the decision to impose these conditions. AIFE also applied for an urgent stay of the conditions that it should not permit certain students to begin their course and that it should refund course money received from about 350 students (the figure varied in the evidence but was always in the vicinity of 335 to 366) who had not yet commenced their course. Given that 210 of these students are due to start their course on 19 January 2009, an urgent hearing was convened on 8 January 2009. Both parties attended and were legally represented.

3 Although AIFE had not applied for an internal review of VETAB's decision I decided that it was necessary, given the urgency of the application, to deal with the stay in order to protect AIFE's interests. I was also satisfied that the application had been made within a reasonable time following the making of the decision: Administrative Decisions Tribunal Act 1997 (ADT Act) section 55. The Tribunal has jurisdiction to review the decision: Vocational Education and Training Act 2005, section 47(e) and (o) and ADT Act, section 38.

Background

4 AIFE was registered as an RTO in December 2002 for a standard five-year period. The registration has been extended for short periods following its expiry. AIFE was accredited to provide three courses: Certificate III in Hospitality (Asian Cookery); Diploma of Hospitality Management and Advanced Diploma of Hospitality Management. The standards to which AIFE is subject are as follows:

(a) Australian Quality Training Framework 2007 Essential Standards and Conditions of Registration (AQTF 2007);

(b) the requirements of the Education Services for Overseas Students Act 2000; and

(c) requirements of the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2007 (the National Code).

5 Since commencing operations in 2003, the number of students enrolled in courses offered by AIFE has increased significantly especially in the last few months of 2008. In September 2007, there were 700 students enrolled, in September 2008, there were 1315 students. That number had increased to 1622 by 28 October 2008. AIFE applied to renew its registration as an RTO and sought approval to offer courses to overseas students. The application included additional sites and an increase in student numbers. VETAB assessed its compliance with the standards set out above in an interim audit that took place from 2 to 4 September 2008. AIFE said that they did not have sufficient notice of the audit. Nevertheless they co-operated with the process and have since had an opportunity to respond to the issues which were raised. The interim audit found that AIFE did not comply with any of the relevant AQTF 2007 Essential Standards or 8 of the 9 conditions of its registration. Further, it found that AIFE did not comply with any of the requirements of the National Code for approval to deliver to overseas students. The report states that:

. . . the extent and serious nature of the non-compliances identified in this report indicate that the courses are not currently being delivered as marketed and that Austech has no approved suitable kitchen premises for the current student numbers (1622 studying and 571 pending) and has effectively defaulted on providing the courses as per the Training Package, VETAB approval and its marketing materials.

6 In a letter to AIFE dated 3 November 2008, VETAB imposed an immediate condition on AIFE’s registration that it not:

(a) do anything for the purpose of recruiting or enrolling students for the courses; or

(b) solicit or accept any money from any student or intending student (other than from a student who has begun a course on or before 3 November 2008 and only in relation to that course); or

(c) if an accepted student of the provider has not begun a course – permit the student to begin the course and refund any money paid by the student in relation to that course.

7 The effect of these conditions was that AIFE was prevented from enrolling any further students and was required to refund all fees paid to date to all students enrolled after 3 November 2008. That letter went on to say that VETAB would consider lifting these conditions if AIFE met certain requirements. Those requirements included the submission of a detailed action plan within 7 days showing how rectification of the non-compliances could be achieved by 5 December 2008. VETAB added that on receipt of the action plan AIFE would be invited to attend a meeting with various stakeholders to "discuss the adequacy of the action plan submitted and further action in relation to the organisation’s application for renewal of registration, and the possible lifting of the condition imposed."

8 On 14 November 2008 AIFE met with VETAB and other stakeholders. The purpose of the meeting was to give AIFE an opportunity to present a case as to why the conditions imposed on 3 November should not be implemented and to seek an extension of time to provide an action plan. VETAB was satisfied that AIFE had made some progress towards addressing the non-compliances in the audit report and that it intended to lodge an action plan by 25 November 2008. Consequently, by letter of 18 November 2008, the conditions previously imposed were modified. The effect of the modified conditions was that AIFE was required to cease all further enrolments and offer all students listed in Attachment A a deferment to commence their course on 23 March 2009 or a full refund of course money paid if the student declined the offer of deferment. Attachment A was a list of 240 students who were enrolled but who had not commenced their course on or after 24 November 2008. VETAB required AIFE to provide, within 7 days, evidence that the students listed in Attachment A had been offered a deferment or a refund. VETAB also required AIFE to provide evidence that it had refunded fees to students who had declined the deferment option within 21 days of being advised by the student of that decision. AIFE did not offer any student a deferment or a refund. Instead, it continued to press its case that the conditions relating to pending students who had not commenced their course should be lifted.

9 An action plan to address the issues raised in the report was prepared with the assistance of an independent consultant, Susan Briggs. Ms Briggs is an expert in Tourism and Hospitality Training Packages and has been retained by VETAB to run workshops to assist RTOs implement Training Packages. The action plan was received on 26 November 2008. Among other things the Chief Executive Officer, Mr Bajwa, requested that VETAB lift the condition that students who had not commenced their course by 24 November be offered a deferral or a refund. VETAB was not satisfied with the content of the action plan nor with AIFE’s failure to comply with the previous condition to offer deferment or a refund to the 240 students listed in Attachment A. As well as not complying with that condition AIFE had confirmed the enrolment of a further 129 students who had been due to commence their studies on 24 November but who had deferred to January or February 2009. (Attachment B).

The reviewable decision

10 On 16 December 2008 VETAB made the following decision:

In accordance with sections 18(1)(b), 18(2)(d), 18(2)(g), 18(4)(b), 35(1)(c), 35(3)(d), 35(3)(g), 35(3)(j) and 35(3)(k) of the Vocational Education and Training Act 2005, notice is hereby given to impose an immediate condition on the approval to deliver the courses listed below:

THH33102 Certificate III in Hospitality (Asian Cookery)

THH51202 Diploma of Hospitality Management

THH60202 Advanced Diploma of Hospitality Management

As a result of this condition, Austech Institute for Further Education Pty Ltd will not, in relation to any of the courses specified above, be able to:

(a) do anything for the purpose of recruiting or enrolling students for the courses; or

(b) solicit or accept any money from any student or intending student (other than from a student who has begun a course on or before 24 November 2008 and only in relation to that course); or

(c) permit any student listed in Attachment A to begin their course

Further to this, the following amendment to the condition is imposed:

Austech Institute for Further Education Pty Ltd is required to pay each and every student listed in Attachment C a full refund of course money paid to Austech Institute for Further Education Pty Ltd for their course.

This means that all students who did not begin their course on or before 24 November 2008 must receive a full refund and the deferment option is withdrawn. (Emphasis added)

11 It is the two conditions highlighted in italics that AIFE has applied to have stayed. Attachment C comprises all the students in Attachment A plus all the students in Attachment B. It lists all pending students enrolled as at 16 December 2008.

12 VETAB gave the following reasons for its decision:

By failing to offer all students listed in Attachment A deferment or refund should they declined the offer of deferment, AIFE has contravened the condition imposed on it in VETAB's letter dated 18 November 2008.

The interim audit report of 31 October 2008 identified serious non-compliances in respect of which AIFE was required to show evidence of corrective action. The corrective action required by VETAB's letters of 5 and 18 November 2008 was to take the form of a detailed action plan demonstrating how the organisation would operate compliantly to enable all currently enrolled students to achieve competency against all three qualifications from the THH02 Training Package.

In the action plan your organisation was requested to:

‘identify the relevant AQTF standards, conditions and CRICOS requirements, propose corrective action, the person(s) responsible and the expected date of implementation. The action plan should also identify any progress towards compliance achieved since 3 December 2008, with relevant evidence attached including advice and refunds provided to the pending and current students as noted above’ and ‘a signed and dated copy of the contract your organisation has entered into with Ms Susan Briggs. This contract should include details of the full extent of her obligations to your organisation and involvement in the rectification process’.

The reasons for the above decisions are:

(a) the action plan provided by your organisation does not address these requirements

(b) further to this, the evidence submitted does not demonstrate that AIFE has additional or sufficient compliant kitchen facilities to cater for its current student numbers. At the meeting of 14 November 2008, your organisation indicated that it would no longer be using Nilla Function Centre and the action plan indicates that new kitchens will not be available until April 2009

(c) the evidence provided in the action plan does not demonstrate that arrangements are in place to ensure that all currently enrolled students will receive training and assessment enabling them to meet the requirements of the THH02 Training Package qualifications.

13 The conditions were applied immediately because of VETAB's view in accordance with section 15(2) of the Vocational Education and Training Act that "it is in the public interest for the decision to have effect immediately".

The law

14 AIFE's application for a stay of two of the conditions was made pursuant to section 60 of the ADT Act. That provision states that:

60 Operation and implementation of decisions pending applications for review

(1) Subject to this section, an application to the Tribunal for a review of a reviewable decision does not affect the operation of the decision under review or prevent the taking of action to implement that decision.

(2) On the application of any party to proceedings for an application for a review of a reviewable decision, the Tribunal may make such orders staying or otherwise affecting the operation of the decision under review as it considers appropriate to secure the effectiveness of the determination of the application.

(3) The Tribunal may make an order under this section only if it considers that it is desirable to do so after taking into account:

(a) the interests of any persons who may be affected by the determination of the application, and

(b) any submission made by or on behalf of the administrator who made the decision to which the application relates, and

(c) the public interest.

(4) While an order is in force under this section (including an order that has previously been varied on one or more occasions under this subsection), the Tribunal may, on application by a party to the proceedings, vary or revoke the order by another order. (Emphasis added)

15 Mr Singleton, representing VETAB, suggested that the Tribunal should essentially apply the common-law principles relating to stay applications which he characterised as determining whether there is an "arguable case" and then assessing the "balance of convenience" as between the parties. The Tribunal is a creature of statute and has no inherent jurisdiction. I must interpret and apply the power in section 60 in accordance with the words of the statute: Cardile v LED Builders Pty Ltd [1999] HCA 18, per Kirby J at [108]; Shi v Migration Agents Registration Authority [2008] HCA 31 at [92].

16 This case involves a dispute between a company and a government agency. Different considerations apply when considering an application for a stay in public law cases compared with cases between citizen and citizen. In Manoher v Minister for Immigration, Local Government and Ethnic Affairs (1991) 24 ALD 405 at 408 Lee said in relation to a general stay power in the Administrative Decisions (Judicial Review) Act 1977 (Cth) that he hesitated "to apply limitations to the exercise of that power by transposing, as implied terms of the statutory provision, rules that have been applied by the courts in determining the grant of interlocutory relief in suits between private litigants, namely, whether a prima facie case or a serious question to be tried has been demonstrated and a balance of convenience shown to rest in the applicant’s favour." His Honour went on to say that, in many cases "not only will such tests not be appropriate but positively inappropriate."

17 Section 60 highlights "the public interest" as a distinct factor the Tribunal must take into account when determining whether to grant a stay. Whether or not there is an arguable case or even a "serious question to be tried" is not mentioned in section 60. That is not to say that the prospects of success of the application cannot be taken into account. Section 60(b) allows the Tribunal to take into account the submissions of the decision maker. In this case those submissions included submissions about the merits of AIFE’s case. In Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 67 ALR 553 at 557 Mason ACJ discussed the relationship between the merits of the application and public interest considerations saying that "it may be that in some cases where the public interest would be adversely affected by the grant of an injunction the plaintiff may need to show a probability, even a distinct probability of success, in order to obtain an interlocutory injunction". Conversely, where the public interest in granting a stay is high, the merits of the case may not be regarded as particularly significant: Dallikavak v Minister for Immigration and Ethnic Affairs (1985) 61 ALR 471 per Jenkinson J at 481.

18 Section 60 requires firstly that a stay is appropriate to secure the effectiveness of the determination of the application. Examples of situations where a stay order may be regarded as appropriate is where the applicant is likely to cease trading or suffer irreparable financial loss if a stay is not granted: Williamson -v- Director General, Department of Transport [2000] NSWADT 165 at [15] and [17]. If I decide that a stay is appropriate to secure the effectiveness of the hearing I must go on to determine whether it is desirable to grant a stay taking into account the three matters listed in s 60. What is ‘desirable’ under section 60 must be determined in accordance with consistent standards and values, including those provided by the common law: State of New South Wales (Justice Health) and anor v Dezfouli [2008] NSWADTAP 69 at [61].

Issues

19 The issues can be summarised as follows:

1. Is a stay appropriate to secure the effectiveness of the determination of the application?

2. Is it desirable to grant a stay pending the Tribunal’s determination of the substantive application taking into account:

(a) the interests of any persons who may be affected by the determination of the application, and

(b) any submission made by or on behalf of the administrator who made the decision to which the application relates, and

(c) the public interest.

Is a stay appropriate to secure the effectiveness of the hearing?

20 Introduction. If the stay application is refused, the majority, if not all pending students will not commence their course and all will be entitled to a refund. There would be no point in the Tribunal subsequently making an order that the imposition of the conditions relating to pending students was not the "correct or preferable" decision because those conditions could not be reversed or varied after the dates for commencement in January and February have passed and after the refunds have been paid. Similarly, if the Tribunal grants the stay all pending students will be able to commence the courses for which they are enrolled and no refunds will be payable. When the Tribunal comes to assess the merits of the decision, the students will have already commenced their courses and there will be no point reviewing that part of the decision which seeks to prevent them from doing. This effectively means that even though this is a stay application, I am making a final decision as to whether the students can commence the courses in January and February for which they are enrolled. The decision in relation to refunds will only be a live issue for the Tribunal if a stay is granted.

21 Evidence of applicant. Mr Umesh Banga, the Assistant Chief Executive Officer of AIFE, gave evidence that if 335 students are to be refunded their enrolment fees and other money paid to date (comprising approximately $6,200 for each student) AIFE will have to pay a total amount of $2.1 million. Mr Banga said that there is approximately $850,000 in AIFE’s general account and AIFE is owed about $2.5 million in outstanding fees which it anticipates receiving in the next two months. Mr Banga is unsure whether the Tuition Assurance Scheme (TAS) would reimburse the AIFE for any refunds it makes but, in any case, there is insufficient cash on hand to refund the money in the immediate future. If AIFE is ordered to refund the money straight away, Mr Banga said it would have to consider external administration. Even if AIFE does not seek to go into administration, and can recover the money from its insurer, Mr Banga says it will cause irreparable harm to AIFE’s reputation if it is directed to provide a refund to the students who have not commenced their course.

14 Evidence and submissions of respondent. VETAB submitted that TAS would provide additional consumer protection to all students if the organisation failed to meet its contractual obligations. This comment suggests that students may be reimbursed if they were unable to commence their course and AIFE did not give them a refund. That is an important consideration because even if AIFE does not refund the money, the students are unlikely to be out of pocket. There was no information provided as to whether TAS is liable to reimburse AIFE for any refunds it gives as a result of the condition to refund fees paid by 335 students. VETAB submitted that AIFE is a profitable company and has the ability to repay the course fees.

Conclusion. Regardless of AIFE’s current ability to refund the money, unless covered by insurance, AIFE will suffer irreparable monetary loss if a stay is not granted. That loss is in the vicinity of $2.1 million. There is insufficient evidence to determine whether TAS would reimburse AIFE in the circumstances of this case. There is a possibility that it would not. In addition, if a stay is not granted, it is likely that AIFE will suffer a loss of reputation which could not be overcome by any order of the Tribunal. For those reasons I am satisfied that a stay is appropriate to secure the effectiveness of the determination of the application.

Is a stay desirable taking into account VETAB’s submissions, private interests and the public interest?

22 VETAB’s submissions re arguable case. VETAB submitted that AIFE has no arguable case because of the significant extent to which AIFE has failed to comply with the relevant standards. Mr Singleton submitted that AIFE does have an arguable case because the standards by which AIFE is being judged are expressed in general terms and minds may differ as to whether those standards have been met. Furthermore, Mr Singleton said that AIFE has made significant progress in overcoming the shortcomings identified by VETAB.

23 When the Tribunal ultimately determines the merits of VETAB’s decision it must do so on the basis of "material then before it" including "any relevant factual material": ADT Act, section 63. What that means in practice is that the decision under review will be assessed as at the date of the hearing, not as at the date it was made: YG & GG v Minister for community Services [2002] NSWCA 247 at [25]. By then AIFE will have had more time to overcome the shortcomings identified in the audit report. That makes it difficult to assess the likelihood that AIFE will be successful when the substantive application is heard. In any case, as I have said, some of the conditions imposed will not be live issues depending on whether or not a stay is granted. I am satisfied however, on the basis of AIFE’s evidence that there is a serious question to be determined, by which I mean that AIFE’s application has a "real, as opposed to a slight or illusory, chance of success": United States Tobacco Co v Minister for Consumer Affairs (1988) 15 ALD 104 at 107; 79 ALR 430. Whether there a probability or a distinct probability of success at hearing depends, to some extent, on AIFE’s conduct in the next few months.

24 Private interests. The private interests relevant to these proceedings can be summarised as:

(i) the interest of AIFE in maintaining its reputation, viability and profitability;

(ii) the interests of staff of AIFE in being engaged and in teaching for the hours they are anticipating they will be teaching;

(iii) the interests of about 350 overseas students in commencing a course for which they have paid and for which they have travelled (or are soon to travel) to Australia to attend.

25 Interests of AIFE. AIFE commenced operation in December 2002 receiving its first students in February 2003. An article in the Business Review Weekly, dated October 30 to November 26, states that AIFE’s turnover has grown from $982,000 in 2004/5 to $30.43 million in 2007/8. Mr Banga did not dispute the correctness of these figures. AIFE has a highly successful business and, according to Mr Singleton, is making a ‘handsome profit’. It is in the interests of AIFE to maintain its reputation, viability and profitability. Despite AIFE’s apparently strong financial position, I accept the evidence of Mr Banga that there is insufficient cash on hand to refund $2.1 million in full in the immediate future. If that condition remains and a stay is not granted there is a possibility that AIFE would have to consider external administration.

26 VETAB pointed to a Condition of Registration 5 set out in AQTF 2007, Essential Standards for Registration, which states that:

The RTO must protect fees paid in advance and have a fair and reasonable refund policy.

27 Ms Butler, representing VETAB, submitted that as AIFE is obliged to protect fees paid in advance, money paid for course fees by students who have not yet commenced their course, should be immediately available. Mr Singleton submitted that the standard does not mean that AIFE has to quarantine funds paid for course fees until the students commence the course.

28 In relation to the above condition of registration, VETAB noted in its interim audit report that:

Sighted refund policy on application form v4, 2007 specifying different circumstances and applicable refunds. Student Handbook states that refundable tuition fees are deposited into the Austech bank account and outlines protection offered by TAS and ESOS, however, no evidence sighted of internal systems. To be provided.

29 The nature of the internal systems required is not apparent from this comment. If AIFE is required by this condition of registration to quarantine all fees paid in advance in a separate bank account, then that is likely to have been made clear in the interim audit. AIFE has not responded to this matter either in its action plan or in the draft plan currently being prepared. I am not satisfied on the basis of the existing evidence that it is incumbent on AIFE to set aside all monies paid in advance as suggested by VETAB. In relation to the possibility of administration, if AIFE were given a reasonable time to refund the students, it is less likely that it would have to resort to administration.

30 Interests of staff. Mr Banga gave evidence that AIFE will have to reduce the hours and income offered to trainers if a stay is not granted with the effect that some trainers may resign because the hours are not sufficient.

31 Interests of pending students in commencing the course. Although there was no direct evidence in relation to visa requirements, I understand that overseas students studying in Australia may be in breach of their visa requirements if they are not enrolled in approved courses. About 350 overseas students are expecting to commence courses with AIFE in early 2009. It can reasonably be expected that they will be disadvantaged both in a financial and a practical sense if they are not able to commence those courses. That disadvantage could range from having to find another appropriate course in which to enrol to returning home without the qualifications they were expecting to obtain. This is a significant private interest for each of these students.

32 Public interest. The most difficult and contentious issue in these proceedings is the effect on the public interest of granting a stay. There is clearly a significant public interest in AIFE complying with all the required standards in order to ensure the quality and integrity of vocational education and training in NSW: Vocational Education and Training Act, s 6. It is apparent from the interim audit report and from AIFE’s evidence that AIFE does not currently fully comply with all the standards.

33 VETAB’s evidence. VETAB’s evidence comprised the audit report itself and the letters of 3 November, 18 November and 16 December 2008 referred to above under the heading "Background". Ms Giselle Mawer, an external auditor employed by VETAB, was responsible for the interim audit. At the Tribunal’s request she gave oral evidence highlighting VETAB’s major concerns. She said that one of her major concerns was the rapid expansion in student numbers and the shortage of kitchen facilities. Ms Mawer listed several other concerns including that valid leases or development approval had not been sighted for some kitchens and that in another there were occupational health and safety concerns. She said that while the courses related to Asian cooking, the focus was on Indian cookery and that the balance and sequence of theoretical and practical components of the course did not meet the standards. Further concerns were inadequate money being spent on ingredients, employment of unqualified staff, long hours being worked by some staff members and concerns about some systems issues. Ms Mawer said that AIFE had made progress since the interim audit report but that more needed to be done.

34 AIFE’s evidence. Mr Banga, the Assistant Chief Executive Officer, said that the audit report contained some factual inaccuracies and that several technical objections such as that leases or development applications had not been sighted had been rectified. He also listed in his affidavit 19 matters that had been attended to since the interim audit report. These included appointment of over 20 additional staff. In his further draft response to the interim audit report provided to the Tribunal at the hearing, Mr Banga said that:

The RTO . . . has, following the audit, provided 18 volumes of material in support of its position that not only is the audit factually incorrect in many of its findings but that further it had or now has made all necessary improvements to ensure sufficient and appropriate learning resources and materials will be provided in a timely fashion to all of its proposed kitchen facilities consistent with the requirements of the Training Package and proposed student numbers. Further . . . .the RTO has updated all of its learning and assessment strategies, assessment tools, has created the position of lead assessor and created an assessment team. A new workbook has been created which includes a student portfolio and all of this material has been placed on the RTO’s intranet and is available to all practical as well as theory-based students.

35 The evidence in Mr Banga’s affidavit in relation to "teaching capacity" is as follows:

Over the course duration of two years the college has the capacity to teach at least 3112 students divided between:

Theory – 1600 (all currently taught at its Ashfield campus); and

Practical – 1512 (taught at its leased premises)

The sequencing of practical and hearing modules must comply with certain prerequisites of the Training Package THH02 (volume 1 page 72) but otherwise the college may exercise its discretion on when the theory modules and the practical modules are taught. The college where possible teaches the practical modules within the first 12 months of the teaching period as a block of 16 weeks.

The college has additional capacity of 100 students per shift (20 hours per week) that can be taught at its Blacktown campus. Currently this campus is not used and this capacity has not been taken up. The Blacktown campus is equipped and can be used on less than two weeks’ notice.

Of the current student numbers of 1964 (including the January and February 2009 intakes) 586 students have already completed the practical modules of their courses.

Of the balance of 1378 students a further 351 will have completed their practical modules by the end of February 2009.

As the college’s advised capacity is currently 1512 (the advice has been received from an external consultant, Susan Briggs) then it can accommodate the January and February 2009 intakes without exceeding its practical teaching capacity.

In terms of the capacity to teach theory modules to 1964 students the college has capacity of 2000, being 1600 in Ashfield and 400 at Blacktown.

As can be seen, the students number of 1964 can be accommodated and it should be noted that 22 students will complete their qualifications in March (reducing numbers to 1942) and a further 74 students will complete in April (reducing numbers to 1868).

36 Most significantly, Mr Banga said that AIFE has appointed an independent consultant, Susan Briggs, as recommended by VETAB. A letter Ms Briggs wrote to Mr Banga and the Chief Executive Officer, Mr Bajwa, on 7 January 2009 provides evidence of her opinion of AIFE’s progress since the interim audit report. That letter states, in part:

My first substantial dealings with AIFE were in November 2008 in response to a request by Umesh Banga following the detailed interim audit report in September of the same year. I had heard that AIFE had ‘over enrolled’ and, given my involvement with SICB, approached AIFE with some hesitation. I was pleasantly surprised to find a modern building with a well-equipped classrooms and student facilities. I reviewed the interim audit report and noted some serious non-compliances, however, was informed by Umesh that many of them had already been addressed. Other issues which were potentially serious, I was not able to comment on until I had gained more information.

Subsequently, I went through each area of non-compliance with Umesh and we developed an action plan which incorporated my reviewing the various aspects and if required, assisting to rectify the non-compliances. For example, the assessment tools were found in the interim audit report to be inadequate. However, AIFE had already commissioned a consultant to write a complete set of learning and assessment materials which were due to be received in mid-November 2008 (Note that there are no assessment materials commercially available for Asian cookery). I agreed to review them once they were received to ensure they were compliant, and if not, assisting in making them so. I also agreed to conduct an inspection of the kitchens to ascertain the capacity. . to see if they were compliant with the Training Package. . .

. . .

Since the development of the Action Plan I have:

1. Inspected the kitchens and provided a report -- I believe that with the purchase of some small pieces of equipment, a review of student tool boxes and a structured timetable for assessment, the existing facilities are adequate. Given that AIFE is awaiting plans to be approved the construction of six new kitchens, planned to commence in April, I do not have concerns about the capacity to deliver cookery according to the requirements of the current and SIT07 Training Package.

2. Started to develop a professional development program for AIFE staff -- topics include assessment, work experience to students and liaising with the industry.

3. Commenced reviewing some of the new Learning and Assessment tools - Assessments look good so far but some of them do not adequately assess the Required Knowledge. This can easily be addressed.

4. Discussed how AIFE can better liaise with industry and commenced the formation of an industry advisory group.

Other minor areas such as the website or internal policy and procedures have already been addressed.

37 VETAB’s most serious concerns, as manifested in the statement of reasons, the interim audit report and Ms Mawer’s evidence, can be summarised as follows:

(a) the lack of sufficient compliant kitchen facilities to cater for its existing and pending students;

(b) the evidence provided in the action plan does not demonstrate that arrangements are in place to ensure that all currently enrolled students will receive training and assessment and enabling them to meet the requirements of the THH02 Training Package qualifications.

38 In the interim audit report, at page 11, VETAB commented that ‘students had been enrolled for more than 12 months before undertaking any practical kitchen experience." This criticism related to the course delivery sequence which was said to be inconsistent with the requirements of the Training Package and AIFE’s own Learning and Assessment Strategies. VETAB’s conclusion was that the sequencing appeared to be driven by the lack of availability of suitable kitchens. That conclusion is supported, to some extent, by the action plan provided by AIFE on 26 November 2008 which said, in part, that: "Under the current course structure. . AIFE do not need kitchen facilities for the students until 26 September 2009. However, as indicated . . . new kitchens are expected to be ready from April 2009, and as soon as they are available, we will re-structure their timetable to enable them to access the kitchens earlier. Should there be a delay, then alternative kitchens will be sourced as an interim measure." In his affidavit Mr Banga appeared to be relying on the use of a facility at Blacktown which, he said, could be used on 2 weeks’ notice.

39 The most recent evidence about the availability of kitchen facilities was from Ms Briggs who said that "Given AIFE is awaiting plans to be approved for the construction of six new kitchens, planned to commence in April, I do not have concerns about the capacity to deliver cookery according to the requirements of the current SIT07 Training Package." I note that Ms Briggs says that the construction of the kitchens is due to commence in April 2009 whereas Mr Banga’s evidence suggests that they will be available for use in that month.

40 AIFE’s response to VETAB’s concern about this matter appears briefly in their action plan. Mr Bajwa commented in the covering letter to that plan that "As per the action plan, most of the non-complaint areas will be looked into and rectified before the start of Jan 2009 and Feb 2009 which clearly indicates that students will receive the training and assessment as per requirements of Training Package." Ms Briggs expressed the view in her letter of 7 January 2009, that:

I do not believe that AIFE is far from being compliant. I believe that a number of non-compliances can be addressed within a reasonable period of time. Upgrading the current kitchens as per the report recommendations can be achieved virtually immediately. Reviewing and upgrading the assessments can be done by the end of January and other areas can also be achieved reasonably quickly.

. . .

I believe that AIFE has the capacity to deliver to existing students and new students already enrolled . . . I am committed to working with AIFE and happy with their level of commitment to improvement.

41 As at the date of the hearing VETAB was not satisfied with the progress AIFE had made in addressing the issues in the interim report and maintained its position that all the conditions listed in the letter of 16 December 2008 should be imposed immediately.

Conclusion

42 The students who are due to commence courses in January and February have a significant private interest in being able to go ahead with their plans. At least 210 students are due to commence their courses in less than a weeks’ time. I am concerned however, that AIFE has put these students in a potentially disadvantageous situation by failing to implement the condition imposed on 18 November 2008 (to offer deferment or a refund to the 240 students listed in Attachment A). As well as not complying with that condition, AIFE confirmed the enrolment of a further 129 students who had been due to commence their studies on 24 November but who had deferred to January or February 2009. (Attachment B). The alternative for AIFE would have been to apply to the Tribunal for a stay of the 18 November decision. That would have given the Tribunal more time to assess their application. Any disadvantage to students from an adverse decision by the Tribunal could have been ameliorated by making an application at that time. Failing to comply with VETAB’s conditions has put AIFE in a more favourable position than it would have been in had it made an application shortly after 18 November 2008.

43 The interests of AIFE itself, and its staff, are secondary considerations. The ability of AIFE to refund course fees to students is not the most critical concern because if the condition remains, and AIFE does not make the payments, the insurer, TAS, will reimburse the students. While AIFE’s reputation and profitability are at stake, those interests should not override the public interest in ensuring that AIFE delivers quality vocational education and training to its students.

44 VETAB has legitimate concerns about AIFE’s rapid expansion and its failure to demonstrate that it meets all the standards for the provision of training to overseas students. In general, training providers should be able to demonstrate current compliance in order to maintain unconditional registration. AIFE has agreed that it should not enrol any new students or accept payment from new students in the short term. It objects to having to turn away pending students who have enrolled in courses but who had not commenced those courses by 24 November 2008. I am minded to grant the stay if I can be satisfied that AIFE will continue to address and overcome the shortcomings highlighted in the interim audit report. I need to predict whether there is sufficient time, resources and motivation for AIFE to rectify the most significant matters that have been drawn to its attention.

45 It is not surprising that Mr Banga believes that there is. He has provided 19 volumes of information to VETAB and is working to complete a more detailed action plan in response to the audit report. Despite these efforts, there is obviously not enough time by 19 January 2009, to rectify each and every matter raised in the audit report. However, I am satisfied that AIFE is addressing and will continue to address the most significant areas of concern, in particular the availability and suitability of kitchens. That finding is based, to a significant extent, on AIFE’s efforts to demonstrate compliance in the action plan, in the 19 volumes of material provided by Mr Banga and in the further draft action plan provided to the Tribunal. My view has also been influenced by Ms Briggs’ opinion. She is highly qualified to give an opinion on this subject although I appreciate that her view is not an independent one because she is a consultant to AIFE. Her view is that AIFE can address a number of non-compliance issues within a reasonable period of time. Importantly, she believes AIFE has the capacity to deliver to existing and new students already enrolled and she will continue working with AIFE to assist in that process.

46 On balance I am satisfied that AIFE will be able to provide courses to overseas students which sufficiently meet the required standards. That finding is not one that I reached easily given VETAB’s clear view to the contrary. Ultimately I was persuaded by AIFE’s progress in achieving compliance and Ms Briggs’ optimism that substantial compliance can be achieved relatively quickly. In addition, while I was reluctant to make a decision which has the effect of rewarding AIFE for its non-compliance with VETAB’s conditions, I was influenced by the fact that about 350 overseas students expect to start courses in the next few weeks. AIFE must now ensure that these students receive the quality of vocational education to which they are entitled.

Orders

The decision of the Vocational Education and Training Accreditation Board that:

In accordance with sections 18(1)(b), 18(2)(d), 18(2)(g), 18(4)(b), 35(1)(c), 35(3)(d), 35(3)(g), 35(3)(j) and 35(3)(k) of the Vocational Education and Training Act 2005, notice is hereby given to impose an immediate condition on the approval to deliver the courses listed below:

THH33102 Certificate III in Hospitality (Asian Cookery)

THH51202 Diploma of Hospitality Management

THH60202 Advanced Diploma of Hospitality Management

As a result of this condition, Austech Institute for Further Education Pty Ltd will not, in relation to any of the courses specified above, be able to:

. . .

(c) permit any student listed in Attachment A to begin their course

Further to this, the following amendment to the condition is imposed:

Austech Institute for Further Education Pty Ltd is required to pay each and every student listed in Attachment C a full refund of course money paid to Austech Institute for Further Education Pty Ltd for their course.

This means that all students who did not begin their course on or before 24 November 2008 must receive a full refund and the deferment option is withdrawn. (Emphasis added)

Is stayed pending further order of this Tribunal.

Note the references to Attachment A and Attachment C are the references to those documents in VETAB’s letters of 18 November and 16 December 2008 respectively.

Further Directions

The matter is to be listed for directions on 20 January 2009 at 9.30 a.m.