FEDERAL COURT OF AUSTRALIA Pow Wow Training Pty Ltd v Australian Skills Quality Authority [2012] FCA 1245 Citation: Pow Wow Training Pty Ltd v Australian Skills Quality Authority [2012] FCA 1245 Parties: POW WOW TRAINING PTY LTD (ACN 120 698 231) v AUSTRALIAN SKILLS QUALITY AUTHORITY File number: VID 860 of 2012 Judge: JESSUP J Date of judgment: 7 November 2012 Legislation: Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 5 & 11 Judiciary Act 1903 (Cth) s 39B National Vocational Education and Training Regulator Act 2011 (Cth) ss 17, 31, 35-38 Date of hearing: 7 November 2012 Place: Melbourne Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 15 Counsel for the Applicant: Mr J Pizer Solicitor for the Applicant: Wilmoth Field Warne Counsel for the Respondent: Mr P Cribb Solicitor for the Respondent: Australian Skills Quality Authority IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 860 of 2012 BETWEEN: POW WOW TRAINING PTY LTD (ACN 120 698 231) Applicant AND: AUSTRALIAN SKILLS QUALITY AUTHORITY Respondent JUDGE: JESSUP J DATE OF ORDER: 7 NOVEMBER 2012 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. Pursuant to s 11(1)(c) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), the applicant be allowed until 31 October 2012 to lodge its application for an order of review of the decision of the respondent, notified to the applicant by letter dated 17 September 2012, to reject the applicant's application to renew its registration as a registered training organisation pursuant to the provisions of the National Vocational Education and Training Regulator Act 2011 (Cth). 2. Upon the applicant by its counsel undertaking, pending the hearing of this proceeding or further order, not to enrol or seek to enrol any student in a VET course or part of a VET course, the operation of the decision of the respondent, notified to the applicant on 5 October 2012, to suspend all of the applicant's scope of registration under s 38 of the National Vocational Education and Training Regulator Act 2011 (Cth) be stayed pending the hearing and determination of this proceeding or further order. 3. The applicant have leave to file and serve any further affidavit material upon which it intends to rely at or before 4:00 pm on 8 November 2012. 4. The respondent file and serve any affidavit material upon which it intends to rely at or before 4:00 pm on 9 November 2012. 5. The applicant file and serve its outline of submissions at or before 10:00 am on 12 November 2012. 6. The respondent file and serve its outline of submissions at or before 10:00 am on 14 November 2012. 7. The proceeding be given expedition and be listed for hearing on a date to be notified to the parties. 8. Costs be reserved. 9. The parties have liberty to apply. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 860 of 2012 BETWEEN: POW WOW TRAINING PTY LTD (ACN 120 698 231) Applicant AND: AUSTRALIAN SKILLS QUALITY AUTHORITY Respondent JUDGE: JESSUP J DATE: 7 NOVEMBER 2012 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 In this proceeding, commenced on 31 October 2012, the applicant challenges two decisions made by the respondent under the National Vocational Education and Training Regulator Act 2011 (Cth) ("the Act"), namely: (a) the decision notified to the applicant on 17 September 2012 to reject the applicant's application for a renewal of its registration as a registered training organisation under the Act; and (b) the decision notified to the applicant on 5 October 2012 to suspend all of the applicant's scope of registration under the Act. The applicant relies on s 5(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") and on s 39B of the Judiciary Act 1903 (Cth). 2 To the extent that it invokes s 5 of the ADJR Act to challenge the first of the decisions mentioned, the applicant requires an extension of time under s 11(1)(c) of that Act. The extension was not opposed by the respondent and, for reasons which I gave earlier today, it will be granted. 3 When the proceeding came on for directions today, the applicant sought an expedited hearing because it has until 21 November 2012 to lodge an expression of interest to be considered for an offer of a service agreement for the provision of nationally recognised training to individuals eligible to commence government subsidised training, through the Victorian Government's Victorian Training Guarantee Program, in 2013. That expression of interest must be lodged with the Victorian Skills Commission. In ways which were explained by counsel for the applicant, and not contradicted by the respondent's solicitor who represented it today, it seems that the prospect of the applicant being able to lodge such an expression of interest, at least in terms that would lead to any likelihood of a service agreement being offered, would be severely compromised if the suspension of the scope of the applicant's registration were at the relevant time still effective and operative. Thus the applicant sought the expedited hearing of the main proceeding in the hope that the court would be in a position to decide the matter before 21 November 2012. 4 Regrettably, the resources of the court are not such as would permit me now to give an assurance of such an outcome. There is a slender possibility that I might be able to hear the matter myself on 15 or 16 November, but the very real prospect that this will not occur has lead to the making of an application by the applicant for a stay, on an interlocutory basis, of the operation of the second of the two decisions to which I have referred in para 1. I turn then to that application. 5 As is apparent from what I have already said, the applicant is a registered training organisation under the Act. Such registration exists not in the broad, but only in relation to what is called the scope of the registration of the organisation: see s 18(c)(i) of the Act. The power to suspend is given by s 38(1) of the Act in the following terms: The national VET Regulator may, by notice in writing suspend all or part of an NVR registered training organisation's scope of registration. Subsection (2) of the same section may also be relevant, and it provides: During the period of suspension, the National VET Regulator may require the NVR registered training organisation to do something, not to do something, or both. This may include restrictions on: (a) enrolling a student in a VET course or part of a VET course; or (b) allowing a VET student to begin a VET course or part of a VET course; or (c) publishing or broadcasting an advertisement relating to a VET course or any part of a VET course; or (d) causing to be published or broadcast an advertisement relating to a VET course or any part of a VET course. 6 On the facts of the present case, the relevant suspension was of all of the applicant's scope, and it was notified to it in the following terms: I now write to advise that, after considering the RTO's response, ASQA considered that the decision set out in the Notice of Intention: to suspend all of the RTO's scope of registration under section 38 of the NVR Act including requiring the RTO to, during the period of suspension, not enrol any student in a VET course or part of a VET course or part of a VET course (the Decision) should be made and that the Decision was in fact made on 4 October 2012 with effect from the date of this notice. For present purposes it is important to note that the respondent's position, made clear to the court, is that this decision had effect only insofar as it suspended the applicant's right, as a registered training organisation, to enrol new students. It did not, it is said, affect the applicant's ability to continue training its existing students. 7 The applicant's sole challenge to the decision notified on 5 October 2012 is want of natural justice. To explain how this is put, I shall need to refer briefly to the facts so far as they are contained in the material before the court on this interlocutory occasion. 8 The applicant's previous registration under the Act was due to expire on 31 July 2012. Accordingly, on 4 May 2012, the applicant applied for a renewal of its registration pursuant to s 31 of the Act. By subs (3) of s 31: An NVR registered training organisation's registration is taken to continue until the organisation's application is decided. By email sent on 25 July 2012, the respondent informed the applicant that its application for renewal had been "forwarded to the compliance team in Victoria", and that, in the meantime, the applicant's registration had been extended to 31 October 2012. 9 On 24 August 2012, the respondent informed the applicant that a renewal audit had been scheduled for 28 and 29 August 2012. There are two provisions of the Act under which the respondent might then have been proceeding, namely, s 17(3), which relates to applications for registration: When considering the application, the national VET Regulator may conduct an audit of any matter relating to the application. and section 35(1) which provides as follows: The National VET Regulator may, at any time, conduct a compliance audit of an NVR registered training organisation's operations to assess whether the organisation continues to comply with this Act or the VET Quality Framework. 10 The audit went ahead on 28 and 29 August 2012. The results were very unfavourable for the applicant, and I shall say nothing further about them now. At the end of the audit, the leader of the audit team informed the applicant's director that it would take 15 days to finalise the audit report, and that, once the applicant had received the report, it would have 20 days to address any non-compliance, and to provide a response, including evidence of rectification, before any final decision was made. If the applicant thought that, before any decision was made by the respondent on its application for renewal, it would be given a copy of the completed audit report and an opportunity to comment on it, it was disappointed. The next it heard was by way of receiving letters from the respondent dated 17 September 2012, in which its application for renewal was rejected and stating an intention to suspend all of the applicant's scope of registration under the Act. 11 The second letter was in the following terms: The Australian Skills Quality Authority (ASQA), the National VET Regulator referred to in the National Vocational Education and Training Regulator Act 2011 (the NVR Act), hereby gives Pow Wow Training Proprietary Limited (the RTO), notice under section 37(1) of the NVR Act: (a) stating that ASQA intends to do the thing mentioned in section 36(2)(e) of the NVR Act – namely to suspend all of the RTO's scope of registration under section 38 of the NVR Act including requiring the RTO to, during the period of suspension, not enrol any student in a VET course or part of a VET course – for the same reasons as particularised in ASQA's letter of 17 September 2012 giving notice of rejection of the RTO's application for renewal; and (b) inviting the RTO to give ASQA a written response to this notice to me by email [and both an email and ordinary postal address were set out] by no later than 4 pm on Friday, 21 September 2012. That letter was written pursuant to ss 36(1)(a) and 37(1)(a) of the Act, which provide: 36 Sanctions (1) This Subdivision applies if: (a) after natural justice requirements have been satisfied, the National VET Regulator is satisfied that it is appropriate to impose one or more sanctions on an NVR registered training organisation …. 37 Natural justice requirements (1) For the purpose of paragraph 36(1)(a), before making a decision to do any of the things mentioned in subsection 36(2) in relation to an NVR registered training organisation, the National VET Regulator must give the organisation a written notice: (a) stating that the Regulator intends to make a decision to do a thing mentioned in that subsection and the reasons for the proposed decision …. 12 Mistakenly thinking that the letter under s 37(1)(a) of 17 September 2012 was in fact by way of suspension of the scope of the applicant's registration, the applicant informed the respondent that it had ceased all enrolment activity with effect from 5:00 pm on 17 September 2012. It also applied to the Administrative Appeals Tribunal for a review of the decision notified in that letter. By letter dated 28 September 2012, the respondent informed the applicant that it had not yet made a decision to suspend, and gave the applicant until 4:00 pm on 1 October 2012 to make any further response for its consideration. The applicant made no such response "given the nature and scope of the matters raised in the notice of intention to suspend". The respondent made its decision to suspend on 4 October 2012 and, as I have said, notified the applicant by letter dated 5 October 2012. 13 The applicant's natural justice point is that it had a legitimate expectation, based on the comments made by the audit team leader on 29 August 2012, that it would be provided with a copy of the audit report, and then given 20 days to respond to it before any decision to suspend was made. It was not given that period for response, and this constituted a denial of natural justice. The respondent's response is that, in relation to a decision to suspend under s 36(1)(a), the rules of natural justice are comprehensively stated in s 37(1), and there is no suggestion that the latter provision was not complied with. To this the applicant says that s 37(1) is not codifying, and that a decision might yet be in breach of the rules of natural justice, even if the requirements of that section are satisfied. 14 Since this is an interlocutory hearing only, I should say no more about the merits of the applicant's natural justice point than is necessary to decide the present application. However, it is established that, in the exercise of the court's discretion, the apparent strength of the applicant's case is a factor to be taken into account. For that purpose only I would say that the applicant has a case which deserves to be argued, but whose challenges are self-evident. 15 There is, however, another consideration which influences me greatly in the discretionary decision which I must now make. I mentioned before that the respondent takes the view that the only effect of the decision of 4 October 2012 was to remove from the applicant's scope of registration its ability to enrol new students. For its part, in return for the interlocutory stay which it seeks, the applicant is prepared to undertake not to enrol or to seek to enrol any new students pending the hearing and determination of the application or further order of the court. That is to say, in a practical sense, both sides are content with an interlocutory status quo, as it were, in which the applicant does not enrol, or seek to enrol, new students but in which it continues to train those already enrolled. I am not at all sure about the legal justification for the view which the respondent takes as to the effect of its suspension decision, but I shall say nothing further on that subject. What I do today implies no opinion on that subject one way or the other, but the measure of consensus as between the parties to which I have referred has persuaded me that the appropriate course is to accept the applicant's undertaking and to grant it the interlocutory stay which it seeks. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. Associate: Dated: 27 November 2012