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King Eeducational Service Pty Ltd v Chief Executive Officer of the Australian Skills Quality Authority (No 2) [2021] FCA 183 (5 March 2021)
Last Updated: 5 March 2021
FEDERAL COURT OF AUSTRALIA
King Eeducational Service Pty Ltd v Chief
Executive Officer of the Australian Skills Quality Authority (No 2) [2021] FCA
183
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File number(s):
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Judgment of:
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Date of judgment:
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5 March 2021
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Catchwords:
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ADMINISTRATIVE LAW – application for
stay of a decision of the Administrative Appeals Tribunal to affirm the
respondent’s decision to refuse
to renew registration, and of the
respondent’s original decision – where Tribunal ordered stay of
respondent’s
original decision – whether the Tribunal’s
decision came into effect notwithstanding the Tribunal’s stay of the
original decision – whether Court can make an order under s 44A(2) of the
Administrative Appeals Tribunal Act 1975 (Cth) with retrospective
operation – whether stay should be granted unconditionally or on terms
– stay granted with retrospective
operation and on terms
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Legislation:
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Federal Court of Australia Rules 2011 (Cth) r 1.61(5)
Maxwell on Statutes, 6th ed
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Cases cited:
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Australian International College Pty Ltd v Australian Skills Quality
Authority [2018] FCA 2097
Azaria Family Day Care Pty Ltd v Secretary, Department of Education and
Training [2018] FCA 1640
Director-General of Social Services v Chaney (1980) 47 FLR 80
King Eeducational Service Pty Ltd v Australian Skills Quality
Authority [2021] FCA 42
McBride v Walton (Court of Appeal (NSW), Handley JA, 27 August 1993,
unrep)
Re Wardle; ex parte Widen v Australia and New Zealand Banking Group
Ltd (1987) 70 ALR 633
Zivanovic v Australian Securities and Investments Commission [2017]
FCA 1633
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Division:
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General Division
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Victoria
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Administrative and Constitutional Law and Human Rights
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Number of paragraphs:
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Date of last submission/s:
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1 March 2021
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Counsel for the Applicant:
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Mr N Wood
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Solicitor for the Applicant:
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GPZ Legal
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Counsel for the Respondent:
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Ms S Wright
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Solicitor for the Respondent:
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Australian Government Solicitor
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ORDERS
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KING EEDUCATIONAL SERVICE PTY
LTDApplicant
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AND:
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CHIEF EXECUTIVE OFFICER OF THE AUSTRALIAN
SKILLS QUALITY AUTHORITY Respondent
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THE COURT ORDERS THAT:
- Subject
to further order, until the hearing and determination of this appeal, pursuant
to s 44A(2) of the Administrative Appeals Tribunal Act 1975 (Cth),
the operation and implementation of the following decisions shall be stayed,
effective from 7 January 2021 –
(a) the decision of the Administrative Appeals Tribunal
dated 10 December 2020 in matter 2015/6179; and
(b) the decision of the respondent to which the decision of the Tribunal related
–
to the extent that those decisions determined for the purposes of s 9AB
of the Education Services for Overseas Students Act 2000 (Cth) that the
registration of the applicant as an approved provider should not be renewed.
- By
4.00 pm on 12 March 2021, the applicant, pursuant to s 44A(4)(a) of the
Administrative Appeals Tribunal Act 1975 (Cth), is to:
(a) review the accuracy of its data in the PRISMS
system;
(b) use its best endeavours to remedy any inaccuracies; and
(c) advise the respondent of when that task has been
completed.
- The
name of the respondent be amended to “Chief Executive Officer of the
Australian Skills Quality Authority”.
- The
proceeding is listed for hearing at 10.15 am on Monday, 19 April 2021 on an
estimate of one day.
- On
or before 4.30 pm on 22 March 2021, the applicant serve Parts A and B of the
appeal book prepared in accordance with Practice Note
APP2 and Special Measures
Information Note SMIN-3.
- The
requirements of r 33.24 of the Federal Court Rules 2011 (Cth) and
paragraphs [4.1] to [4.4] of Practice Note APP2 be dispensed with.
- On
or before 4.30 pm on 22 March 2021, the applicant file and serve an outline of
submissions, not exceeding ten pages, and chronology
of relevant events.
- On
or before 4.30 pm on 7 April 2021, the respondent file and serve an outline of
submissions, not exceeding ten pages, a chronology
of relevant events, and a
list of materials to be included in Part C of the appeal book.
- On
or before 4.30 pm on 13 April 2021, the applicant file and serve any submissions
in reply, not exceeding five pages.
- By
4.30 pm on 13 April 2021, the applicant serve Part C of the appeal book in
accordance with Practice Note APP2 and Special Measures Information Note
SMIN-3.
- On
or before 4.30 pm on 13 April 2021, the applicant file and serve a
chronologically ordered appeal book in electronic form, which:
(a) is produced in a text-recognised and enhanced PDF
format;
(b) is paginated and within the divisions of the appeal book is chronologically
ordered;
(c) contains electronic bookmarks and descriptions to each document in the
appeal book; and
(d) includes an index.
- On
or before 4.30 pm on 13 April 2021, the applicant:
(a) file a joint list of legislation and authorities to
be relied upon at the hearing; and
(b) provide the Court, by email to the Chambers of the Honourable Justice
Wheelahan (at Associate.WheelahanJ@fedcourt.gov.au and
EA.WheelahanJ@fedcourt.gov.au), with a download link with electronic copies of
each authority, in text-recognised and enhanced, PDF
format, titled with the
full case name and citation.
- The
applicant have leave to rely on an amended interlocutory application in the form
previously submitted to the Court.
- Costs
of the interlocutory application shall be costs in the
proceeding.
REASONS FOR
JUDGMENT
WHEELAHAN J:
Introduction
- The
applicant conducts a business involving the education of international students
which is regulated by Commonwealth legislation.
It has brought an appeal under
s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT
Act) against a decision of the Tribunal dated 10 December 2020 to the extent
that the Tribunal affirmed a decision of the respondent
dated 27 October 2015
refusing its application for renewal of its registration under the Education
Services for Overseas Students Act 2000 (Cth) (ESOS Act). On 29
January 2021, pursuant to s 44A(2) of the AAT Act, I stayed on an interim
basis the decision of the Tribunal, together with
the underlying decision of the
respondent that was affirmed by the Tribunal on review: King Eeducational
Service Pty Ltd v Australian Skills Quality Authority [2021] FCA 42
(the interim decision). The applicant now seeks a stay pending the
hearing and determination of its appeal against the Tribunal’s decision. I
have
proposed and will order that the appeal be fixed for hearing on 19 April
2021. The respondent opposes any form of further stay.
Background
- The
applicant’s application for a stay of the Tribunal’s decision
pending the hearing and determination of the appeal
has some unusual features. I
referred to some of those features in my reasons for granting an interim stay.
- The
applicant first applied for renewal of its registration in August 2014 under two
pieces of legislation: the ESOS Act, and the
National Vocational Education
and Training Regulator Act 2011 (Cth) (NVR Act). The applications
were refused by the respondent on 27 October 2015, notice of which was given to
the applicant on 11 November 2015.
On 25 November 2015, the applicant applied to
the Tribunal to have the respondent’s decisions reviewed. The hearing of
the
review took place over 12 days in July 2016, and April, May, and June 2017.
In 2020, the Tribunal received further written evidence
upon the review,
although no further substantive oral hearing took place. The Tribunal published
its decision on 10 December 2020,
which was to renew the applicant’s
registration under the NVR Act for a period expiring on 24 December 2023, but
subject to
conditions, and to affirm the respondent’s decision not to
renew the applicant’s registration under the ESOS Act. The
appeal from the
Tribunal’s decision relates only to the renewal of the applicant’s
registration under the ESOS Act.
- During
the period when the applicant’s application for renewal of its
registration under the ESOS Act remained pending before
the respondent, its
registration was taken to continue pursuant to s 9AC(5) of the ESOS Act, as
then in force. Subsequently, during
the period the review remained pending
before the Tribunal, a sequence of stay orders was made by the Tribunal pursuant
to s 41(2)
of the AAT Act. Some of those orders contained conditions.
However, the orders made by the Tribunal on 7 June 2017 did not contain
conditions, and remained in force until 7 January 2021 when they were vacated
and replaced by further orders to which I shall refer
below.
- The
result of all of this is that for a period of over six and a half years, the
applicant has been conducting its business without
having its registration under
the ESOS Act renewed, and with the benefit of a statutory deeming of its
registration, and for most
of the period, the benefit of stay orders.
- In
its decision of 10 December 2020, the Tribunal found that the applicant had been
in breach of a number of statutory standards,
including breaches relating to its
assessment procedures, and breaches that resulted from offering courses that
were superseded and
replaced. Many of the breaches were the subject of the
evidence that was admitted by the Tribunal in 2020, and to which the applicant
was given an opportunity to respond. The responses were contained in reports of
Ms Jacqueline Hodge, who is a director of a consultancy
business under the
name “RTO Advice Group”. The Tribunal found that Ms Hodge had
prepared new documentation and procedures
that complied with the relevant
statutory standards. However, the Tribunal expressed concern about the nature
and extent of the work
that had been undertaken to achieve compliance. In
relation to the renewal of the applicant’s registration under the ESOS
Act,
the Tribunal at [204] of its reasons framed the issue as being whether the
applicant “is complying, or will comply” with
the relevant statutory
provisions. Whether that was the correct question is in issue in the appeal.
After framing the issue in those
terms, the Tribunal
stated –
Under s 10E of the amended ESOS Act, I must use a risk
management approach. I have had regard to the findings that I have made in
relation to [the applicant’s] breaches of the amended ESOS Act. At the
heart of most of them lies a lack of proper assessment
tools and lack of
monitoring. I am satisfied that [the applicant] has, for the most part,
addressed the assessment tools. What remains
to be tested is whether it is able
to implement those tools and do so efficiently and effectively and to sustain
the effort required
to do so over the period of its registration. ... Given its
past history and given the scope of the work that had to be undertaken
by [Ms
Hodge], I am not satisfied that [the applicant] will comply with the amended
ESOS Act and the National Code. Therefore, I
have decided to affirm
ASQA’s decision dated 27 October 2015, and notified to [the applicant] on
11 November 2015, to reject
[the applicant’s] applications for renewal of
its registration under the amended ESOS Act.
- The
Tribunal’s decision was notified to the applicant on 10 December 2020. The
applicant did not file a notice of appeal or
seek an extension of time within
which to file a notice of appeal within the 28 day period prescribed by
s 44(2A) of the AAT Act.
The evidence is that in correspondence with the
respondent’s solicitor the applicant’s solicitor persisted in
expressing
the view that the time period prescribed by s 44(2A) of the AAT
Act was subject to r 1.61(5) of the Federal Court of Australia Rules
2011 (Cth), and that the time between 24 December 2020 and 14 January 2021
was not to be counted. Counsel for the applicant did not make
that submission to
the Court, and instead the applicant sought and on 28 January 2021 was granted
an extension of time within which
to file a notice of appeal.
- On
7 January 2021, and upon the application of the applicant, the Tribunal made the
following order staying the operation and implementation
of the decision under
review until “close of business” on 29 January 2021. The legality
and effect of that order is in
issue, so I shall set it out in
full –
UPON APPLICATION of the applicant lodged on 25
November 2015 for review of a decision of the Australian Skills Quality
Authority (ASQA) dated 11 November
2015 AND UPON the Tribunal's having
made an order dated 7 June 2017 amending a stay order dated 28 April 2017 and
staying the operation and implementation
of the respondent's decision dated 11
November 2015 until the Tribunal heard and determined the application for review
or until further
order AND UPON MY DECIDING the application on 10
December 2020 AND UPON the applicant's considering whether or not it wishes to
lodge an appeal or an application
for extending the time within which to lodge
an appeal AND UPON HEARING Mr Galatas on behalf of the applicant and Mr
Pritchard and Mr Lloyd on behalf of the respondent IT IS ORDERED
that:
- the
stay order dated 7 June 2017 be vacated; and
- subject
to the applicant’s not delivering any training and not enrolling any new
students, the operation or implementation of
the respondent's decision dated 11
November 2015 is stayed until close of business on 29 January 2021.
- On
29 January 2021, I granted an interim stay of the Tribunal’s decision and
the decision under review to which I referred in
[1] above to the extent that they concerned
the renewal of the applicant’s registration under the ESOS Act.
Preliminary issues
- There
are two preliminary questions which arise on the application and that I will
address.
- First,
the respondent alleges that by operation of the s 41(6) of the AAT Act, the
Tribunal’s order of 7 January 2021 ceased
to have effect on 8 January
2021, which is the date on which the respondent alleges that the
Tribunal’s decision dated 10 December
2020 came into operation. The
respondent submits that as a result of the Tribunal’s decision coming into
operation, from 8
January 2021 the applicant ceased to be registered under the
ESOS Act, in consequence of which the applicant defaulted for the purposes
of
Part 5 of the ESOS Act, and in particular s 46A. A default event under the
ESOS Act triggers obligations on the provider to, inter alia, arrange
alternative courses for its international students, or provide refunds of any
unspent tuition fees. The respondent submits
that by reason of the occurrence of
a default event, and of the applicant’s obligations under the ESOS Act
that were triggered
by the default event, any further stay of the
Tribunal’s decision now ordered would lack utility.
- Second,
one of the applicant’s responses to the respondent’s claim that the
order of the Tribunal ceased to have effect
on 8 January 2021 is that the Court
may order that the Tribunal’s decision be stayed with retrospective
effect, that is, from
8 January 2021. The applicant’s submission raises
the questions whether the Court’s power under s 44A(2) of the AAT Act
extends to making an order with retroactive effect, and if so, whether as a
matter of discretion the Court should make such an order,
putting other
discretionary issues to one side.
Did the Tribunal’s order of 7 January 2021 cease to
have effect on 8 January 2021?
- Section
41(2) of the AAT Act empowers the Tribunal to make an order staying or otherwise
affecting the operation or implementation
of the decision under review, and
s 41(3) empowers the Tribunal to vary or revoke such an
order –
- Operation
and implementation of a decision that is subject to
review
...
(2) The Tribunal may, on request being made by a party to a proceeding before
the Tribunal (in this section referred to as the relevant
proceeding), 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.
Note: This section does not
apply in relation to proceedings in the Social Services and Child Support
Division, as a result of provisions
in the enactments that authorise
applications for reviews that will be heard in that
Division.
(3) 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 the relevant proceeding, make an order varying or revoking
the
first-mentioned order.
...
- Under
s 41(6) of the AAT Act, an order that is in force under s 41(2) ceases
to have effect upon the expiration of any period of operation
specified in the
order or, if the application for review is decided by the Tribunal before the
expiration of that period, when the
decision of the Tribunal comes in to
operation –
(6) An order in force under subsection (2) (including an
order that has previously been varied on one or more occasions under subsection
(3)):
(a) is subject to such conditions as are
specified in the order; and
(b) has effect until:
(i) where a period for the
operation of the order is specified in the order—the expiration of that
period or, if the application
for review is decided by the Tribunal before the
expiration of that period, the decision of the Tribunal on the application for
review
comes into operation; or
(ii) if no period is so specified—the decision of the Tribunal on the
application for review comes into
operation.
- It
is next necessary to refer to s 43(5A) to (5C) of the AAT Act. Section
43(5C) effects a stay of the Tribunal’s decision initially
until the end
of the period within which an appeal might be brought, or such further period
for bringing the appeal that is allowed
by the Court before the end of that
period, and if an appeal is brought, until the determination of the
appeal –
When Tribunal’s decision comes into
operation
(5A) Subject to subsection (5B), a decision of the Tribunal comes into operation
forthwith upon the giving of the decision.
(5B) The Tribunal may specify in a decision that the decision is not to come
into operation until a later date specified in the decision
and, where a later
date is so specified, the decision comes into operation on that date.
(5C) Despite subsections (5A) and (5B), if:
(a) the Tribunal has made an order under
subsection 41(2) staying the operation or implementation of the decision under
review; and
(b) the order was in force immediately before the decision given by the Tribunal
on the review;
then, unless the Tribunal, the Federal Court of Australia or the Federal Circuit
Court of Australia otherwise orders, the operation
or implementation of the
Tribunal’s decision is stayed until:
(c) subject to paragraph (d), the end of the period within which a party to the
proceeding before the Tribunal may appeal from the
decision to the Federal Court
of Australia under subsection 44(1) (including any further time for bringing the
appeal that is allowed
by the Federal Court before the end of that period);
or
(d) if such an appeal is brought—the appeal is
determined.
- In
the present case, the Tribunal did not specify in its decision of 10 December
2020 that the decision was not to come into operation
until a later date.
Because the Tribunal had stayed the decisions under review, by operation of
s 43(5C) the operation or implementation
of the Tribunal’s decision
was stayed until 8 January 2021, being the day after the expiry of the period
within which the applicant
could appeal. The respondent submitted that the
Tribunal’s power under s 43(5C) of the AAT Act extends to ordering
that its
decision is to come into operation forthwith as s 43(5A) provides,
rather than upon the expiration of the appeal period referred
to in
s 43(5C). In substance, the respondent submitted that the power under
s 43(5C) to otherwise order did not extend to enlarging
the period of the
stay of the Tribunal’s decision effected by s 43(5C), and that the
Tribunal’s power to specify a date
on which its decision would come into
effect was under s 43(5B), and that this power had not been exercised
because the Tribunal
had not specified in its decision of 10 December 2020 that
the decision was not to come into operation until a later date.
- In
these circumstances, the respondent submitted that the source of the
Tribunal’s power, if any, to make the order of 7 January
2021 was in
s 41(2) of the AAT Act, and that by operation of s 41(6), the
Tribunal’s order of 7 January 2021 ceased to have
effect on 8 January
2021. The respondent submitted that the Tribunal’s order of 7 January 2021
was therefore futile. By its
submissions, the respondent accepted that it did
not raise this issue at the hearing before the Court of the application for an
interim
stay. It appears that the respondent’s solicitors first notified
the applicant’s solicitors of this contention by letter
dated 18 February
2021.
- The
Tribunal’s order of 7 January 2021 operated in respect of the decision of
the respondent to refuse renewal of the applicant’s
registration under the
ESOS Act. That decision was affirmed by the Tribunal, and may be regarded as a
“valid affirmed decision”:
Plaintiff M174 of 2016 v Minister for
Immigration and Border Protection [2018] HCA 16; 264 CLR 217 at [40].
- There
may be questions about the statutory foundation for the orders made by the
Tribunal on 7 January 2021 that stayed the decisions
under review until 29
January 2021. However, having regard to the preamble of the Tribunal’s
order, the objective of the order
is clear enough: it was to preserve the
applicant’s position while it considered whether to appeal the
Tribunal’s decision.
There is no evidence that at the time the order was
made that the respondent submitted to the Tribunal that it lacked power to make
the order. And following the making of the Tribunal’s order, the
respondent did not bring any application to the Court for
a remedy under the
Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR
Act), or s 39B of the Judiciary Act 1903 (Cth) in respect of the
order.
- There
are reasons to question the respondent’s submission that the
Tribunal’s order of 7 January 2021 ceased to be effective
on 8
January 2021. The first reason is that, assuming that the Tribunal’s order
was made under s 41(2) of the AAT Act, which
is not itself free from
argument, there is doubt whether s 41(6)(b)(i) was engaged. That is because
at the time the Tribunal made
the order, the Tribunal had already on 10 December
2020 made its decision. The application for review was therefore not decided
after
the making of the order and before the expiration of the period of the
stay. This argument treats the words, “is decided by
the Tribunal”
in s 41(6)(b)(i) as looking to the future beyond the date of the order.
- The
above analysis directs attention to an alternate view that s 41(2) of the
AAT Act does not authorise the making of an order after
the Tribunal has made
its decision on the review. Section 41(2) provides that the Tribunal may make an
order “for the purpose
of securing the effectiveness of the hearing and
determination of the application for review”, which are words of
limitation
on the power. However, it is at least arguable that the effective
exercise of rights of appeal under s 44 of the AAT Act and the
Court’s power under s 44(5) of the AAT Act to remit the case to be
heard again might be regarded as an integral part of the
application for review
for which the Act provides. As I have noted, the respondent has not brought any
application to challenge the
legality of the Tribunal’s order on the
ground that it was outside the power conferred by s 41(2).
- A
further alternative is that the Tribunal’s order of 7 January 2021 was
authorised by s 43(5C) of the AAT Act. The respondent’s
submission
that the power of the Tribunal or of the Court to “otherwise order”
is limited to an order negating the effect
of s 43(5C) upon the operation
or implementation of the Tribunal’s decision so that there is no stay,
does not reflect the
way in which s 43(5C) has been understood by the
Court. In Zivanovic v Australian Securities and Investments Commission
[2017] FCA 1633, Gleeson J refused an application to vary the stay effected
by s 43(5C) in order to permit the Australian Securities and Investments
Commission to publish a media release following a Tribunal decision that
affirmed a decision of a delegate to disqualify a person
from managing
corporations. Although the application was refused, there is nothing in her
Honour’s reasons that casts doubt
on the power to vary the effect of the
statutory stay short of removing the statutory effects completely. However, the
power under
s 43(5C) is a power to make an order that derogates from the
statutory stay of the Tribunal’s decision: it is not a power that
is at
large. That leads to what in my view is the real difficulty for the applicant in
relying on s 43(5C), which is that the subject
of s 43(5C) is the
operation or implementation of the Tribunal’s decision, and not the
decision under review. The order made
by the Tribunal on 7 January 2021 was not
directed to the operation or implementation of the Tribunal’s own
decision, but to
the operation and implementation of the respondent’s
decision dated 11 November 2015. The terms of the order therefore suggest
that
the Tribunal was purporting to exercising power under s 41(2) of the AAT
Act to make an order affecting the respondent’s
decision, rather than
power under s 43(5C) to make an order affecting the statutory stay on its
own decision.
- I
have concluded that it is not appropriate to express final views about the
validity and the effect of the Tribunal’s order
of 7 January 2021 on
an interlocutory application to stay or otherwise affect the operation or
implementation of the Tribunal’s
decision of 10 December 2020, and of the
respondent’s decision that was subject to the review. It is sufficient to
say that
I do not consider that the respondent’s submissions about these
matters are so compelling as to lead to the conclusion that
an order of the
Court under s 44A(2) would be inutile.
Can the Court make an order under s 44A(2) of the AAT
Act with retrospective operation?
- The
above considerations direct attention to the applicant’s primary argument
that the Court should stay the decisions of the
Tribunal and of the respondent
in terms that are expressed to commence from 7 January 2021. If the Court has
power to make such an
order, and determines to make it, any difficulties with
the efficacy of the Tribunal’s order of 7 January 2021 may be of even
less
significance to the question whether there would be utility in the Court
granting a further stay.
- The
Court’s power to make an order staying or otherwise affecting the
operation or implementation of a decision of the Tribunal
is expressed in broad
terms in s 44A(2) of the AAT Act, which should be read with s 44A(1)
for context –
44A Operation and implementation of a decision that
is subject to appeal
Appeal does not affect operation of
Tribunal’s decision
(1) Subject to this section, the institution of an appeal to the Federal Court
of Australia from a decision of the Tribunal does
not affect the operation of
the decision or prevent the taking of action to implement the decision.
Stay orders
(2) Where an appeal is instituted in the Federal Court of Australia from a
decision of the Tribunal, that Court or a Judge of that
Court may make such
order or orders staying or otherwise affecting the operation or implementation
of either or both of the following:
(a) the decision of the Tribunal
or a part of that decision; and
(b) the decision to which the proceeding before the Tribunal related or a part
of that decision;
as that Court or Judge considers appropriate for the purpose of securing the
effectiveness of the hearing and determination of the
appeal.
...
- The
consequences of an order of a court setting aside a decision of legal
consequence of an administrative decision-maker or of a
court will vary, and
will be dependent upon the legislative context in which such an order is made.
By way of illustration, in Wilde v Australian Trade Equipment Co Ltd
[1981] HCA 13; 145 CLR 590 it was held (Stephen, Murphy and Wilson JJ;
Aickin J agreeing; Gibbs J dissenting) that a charge over the property of a
company that
was registered pursuant to an order of a court extending time for
registration remained valid notwithstanding that the order extending
time had
been set aside on appeal. The reasons included the fact that at the time the
charge was presented for registration there
was an order of a court extending
time for doing so that was held to be within jurisdiction.
- In
Australian Rail, Tram and Bus Industry Union v Metro Trains
Melbourne Pty Ltd
[2020] FCAFC 81 
; 276 FCR 172 the Full Court (Flick,
Bromberg and Anastassiou JJ) held that the Court in its original
jurisdiction had power to make an order nunc pro tunc to revoke
interlocutory orders retrospectively from their outset, and thereby deem the
interlocutory orders previously made to have
never been made with the
consequence that there could be no conduct in breach of the orders that were
revoked.
- In
Esso Australia Pty Ltd v Australian Workers’ Union [2017] HCA 54;
263 CLR 551 at [49], Kiefel CJ, Keane, Nettle and Edelman JJ referred to
authorities that demonstrate that there is greater scope to construe statutory
provisions as conferring power on courts to make orders nunc pro tunc
where there are procedural questions rather than substantive rights in
issue. By way of contrast, their Honours referred to the statutory
power of the
Fair Work Commission under s 603 of the Fair Work Act 2009 (Cth) to
make orders varying or revoking its decisions. There is no express provision in
s 603 that authorises the variation or revocation of decisions with
retrospective operation, but there is a long line of authority that
was cited by
their Honours that construed cognate powers in earlier industrial legislation as
extending to making orders with retrospective
operation.
- In
George Hudson Ltd v Australian Timber Workers’ Union [1923] HCA 38;
32 CLR 413 at 434, Isaacs J referred to the presumption against
retrospectivity as resting on a presumption that the legislature does not intend
what is unjust, citing Maxwell on Statutes, 6th ed at 381.
However, his Honour observed that the application of the presumption was not
sure unless the whole of the circumstances
were considered, and that what may
seem to be unjust when regarded from the standpoint of one person affected may
be absolutely just
when a broad view is taken of all who are affected.
Isaacs J referred at 436 to the Commonwealth Conciliation and
Arbitration Act 1904 (Cth) as a remedial statute and held that the relevant
powers under that Act to certify an agreement were not to be read down as
if
confined to a prospective operation at the expense of the “great public
policy” which the Act embodied, namely, that
of encouraging and
maintaining “industrial peace in the Commonwealth”: see 434.
- The
present question is whether the power under s 44A(2) of the AAT Act, to
make an order staying or otherwise affecting the operation
or implementation of
a decision the subject of an appeal to this Court, should be construed so that
it is limited to a power that
has prospective effect only.
- In
Yolbir v Administrative Appeals Tribunal [1994] FCA 910; (1994) 48 FCR 246, the Full
Court (Davies, Burchett and O’Connor JJ) held that the corresponding
power of the Tribunal under s 41(2) of the AAT
Act to stay or otherwise
affect the operation or implementation of the decision under review empowered
the Tribunal in relation to
the decision to cancel a pension to restore the
pension if that was appropriate for the purposes of securing the effectiveness
of
the hearing and determination of the application for review. It appears,
however, that the Court did not consider the question whether
the power under
s 41(2) extended to a power to restore the entitlement to receive a pension
retrospectively, as the Court’s
citation of the orders of Bowen CJ
that were the subject of appeal in Director-General of Social Services v
Chaney (1980) 47 FLR 80 (see Deane J at 98) tends to confirm.
- In
Ooi v Minister for Immigration and Multicultural Affairs [2000] FCA 514;
98 FCR 133, Madgwick J held that the Court’s powers under s 482
of the Migration Act 1958 (Cth), as then in force and which was in
similar terms to s 44A(2) of the AAT Act, supported an order staying a
decision to cancel
the applicant’s visa with the consequences that the
applicant would be reinstated as a “lawful non-citizen” and
that his
continued detention would not be authorised. However, in the circumstances of
the case, his Honour declined to grant the
temporary relief that was sought. On
the other hand, in Long v Minister for Immigration and Multicultural and
Indigenous Affairs [2002] FCA 774; 122 FCR 159, which was decided after the
repeal of s 482 of the Migration Act in the terms considered by
Madgwick J in Ooi, R D Nicholson J held that absent
the statutory authority that had existed under s 482, the
Court’s general power under s 23 of the Federal Court of Australia
Act 1976 (Cth) did not authorise a stay of a decision to cancel a visa to
the extent that it had taken effect.
- Section
60(2) of the Administrative Decisions Review Act 1997 (NSW) is in terms
that are similar to s 41(2) of the AAT Act. In AVS Group of Companies
Pty Ltd v Commissioner of Police [2010] NSWCA 81; 78 NSWLR 302
(AVS), the respondent revoked various licences that had been
granted to the applicants under the Security Industry Act 1997 (NSW). The
revocation of the licences took effect when notice of the revocations was served
on the applicants. The applicants sought
a merits review of the decision by the
New South Wales Administrative Decisions Tribunal. The applicants had also
applied for, and
following an appeal to the Tribunal’s Appeal Panel and a
subsequent remitter the Tribunal had ordered, a “stay”
of the
respondent’s decision. The Tribunal’s order was terse: “Stay
granted”. At the time the applicants
sought a “stay” from the
Tribunal, the revocation of the licences had already taken effect. The main
issue on the appeal
to the New South Wales Court of Appeal was whether an
obligation on the Tribunal under s 29(3) of the Security Industry Act
1997 (NSW) not to disclose any criminal intelligence report or other
criminal information applied to the hearing of an application for
a stay of the
decision under review. In the course of considering that question, the Court
addressed the nature of the power under
s 60(2) of the Administrative
Decisions Review Act (then titled Administrative Decisions Tribunal Act
1997). Basten JA, who joined in the orders of the Court, but who gave
separate reasons, held at [15] that the respondent’s revocation
of the
licences must be taken to have been valid and effective. At [16], Basten JA
then ventured the view that a “stay”
was ineffective to allow the
applicants to continue their operations, stating –
What the applicants required, in order to continue their
licensed operations, was an order reinstating their licences. That cannot
be
achieved in terms by a “stay”, a somewhat imprecise term which is
usually understood to refer to a future event, which
has not yet taken place:
see McBride v Walton (Court of Appeal, 27 August 1993, unreported) per Handley
JA.
- Later,
at [26], Basten JA referred to a “stay” in the sense of an
order designed to prevent an operation which had not
yet taken place, and
contrasted that type of order with “the retrospective variation of the
decision of the Commissioner to
undo consequences which had already
occurred...”.
- At
[18], Basten JA referred to s 60 of the Administrative Decisions
Review Act, and stated –
It is arguable that the second limb of s 60 (referring
to an order “otherwise affecting the operation of the decision under
review”) would allow the Tribunal to
suspend the operation of a revocation
of a licence, or reinstate the licence on a temporary basis. That approach may
gain support
from the scope for a final decision on a review to operate from the
date of the original decision: ADT Act, s 66(2)(b). Arguably
that could be done
by retrospectively varying the date from which the Commissioner’s order
was to have effect. Although the
Tribunal did not make an order otherwise than
in terms of a “stay”, the question of statutory construction should
be
addressed having regard to the scope and effect of the orders available under
s 60. Indeed, it was assumed by the applicants that
the order in fact made
allowed them to continue to operate, as if they held valid
licences.
- However,
at [32] his Honour stated that the legal effects of the particular orders that
had been made to allow the applicants to continue
to operate did not need to be
determined.
- The
passage from the reasons of Basten JA set out under [35] above, although obiter, gives
support to construing this Court’s power under s 44A(2) of the AAT
Act as extending to making an order that retrospectively
varies the date on
which the Tribunal’s decision was to have effect. In the same domain would
be an order that retrospectively
suspends the operation of the Tribunal’s
decision.
- Campbell JA,
with whom Handley JA agreed, also expressed doubts about whether the
Tribunal could “stay” an action that
had already taken place in the
past. His Honour at [105] criticised as inapt the use of the word
“stay” by the Tribunal
in its order, if what was intended was that
the revocation of a licence be treated as though it had not taken place and that
the
licence remained on foot pending the hearing of the review by the Tribunal,
which was the construction which his Honour placed on
the Tribunal’s order
having regard to surrounding context: see [110]. Of relevance to the present
case, Campbell JA at [97]
expressly left for further argument the question
whether s 60(2) of the Administrative Decisions Review Act was wide
enough to enable the Tribunal to restore a revoked licence with retrospective
effect.
- In
Riverside Nursing Care Pty Ltd v Bishop [2000] FCA 434; 60 ALD 704, an
administrative decision was made to revoke the approval of the applicant as a
provider of aged care services. The applicant sought
an order under
s 15(1)(a) of the ADJR Act to suspend the operation of the decision pending
the determination of its application under
the ADJR Act for judicial review.
Sundberg J refused the application on the ground that there was no point of
substance to argue
or serious question raised by the grounds of review. However,
his Honour also addressed an argument raised by the respondents that
the power
under s 15 of the ADJR Act to “suspend the operation of the
decision” and to order “a stay of all or
any proceedings under the
decision” had no room to operate when the power was spent. The argument
was made by reference to
an earlier decision of the Court concerning the power
under s 37(1) of the Bankruptcy Act 1966 (Cth), as then in force, to
suspend the operation of an order made under that Act: Re Wardle; ex parte
Widin v Australia and New Zealand Banking Group Ltd (1987) 70 ALR 633
(Neaves J).
- In
Re Wardle, a judge of the Court had made a sequestration order, and had
concurrently suspended the operation of the order for 14 days. The
question
before Neaves J was when the sequestration order came into effect, which
his Honour held to be at the expiry of the period
of suspension. In the course
of his Honour’s reasons, Neaves J stated –
The legislature, in conferring power on the court to
suspend the operation of a sequestration order, must, in my opinion, have
intended
to enable the court to prevent those statutory consequences ensuing
during the period of suspension. Otherwise, suspension of the
sequestration
order would have no practical effect. That intention will be defeated unless the
order of suspension is regarded as
having the effect that the sequestration
order is not made until the expiration of the period of suspension. So to regard
the order
made by Beaumont J in this case presents no difficulty as the order
for suspension was made at the same time as the announcement
of the
sequestration order. Difficulty may have arisen if the order for suspension
had been made at a later time, being a time between the announcement of the
sequestration order and the signing and sealing of that order, for the statutory
consequences of the making of the sequestration
order would have already taken
effect before the order for suspension was made.
(Emphasis added.)
- In
Riverside Nursing Care Sundberg J rejected the application of the
above observations to an order made under s 15 of the ADJR Act. At [28] his
Honour stated
–
In my view the respondent’s argument misapprehends
the effect of an order under s 15(1)(a) suspending the operation of a
decision.
Counsel conceded that if the applicant were successful on the
substantive hearing, the decisions would be quashed, the revocation
of approved
status would be lifted, and the allocation of places would be restored. The
effect of the court’s order would be
to render non-existent decisions that
were theretofore effective and binding. If the court has power to grant final
relief the effect
of which is to annul an earlier decision, it must have power,
by a suspension order, to produce that result on a temporary basis:
cf
Minister for Immigration, Local Government and Ethnic Affairs v Msilanga
[1992] FCA 41; (1992) 34 FCR 169 at 179; [1992] FCA 41; 25 ALD 545; 105 ALR 301 per Beaumont J. The fact that
the decision is itself determinative of rights, and that there are no
consequences yet to flow from
it, is irrelevant.
- The
obiter of Sundberg J in Riverside Nursing Care accords with
the views ventured by Basten JA ten years later in AVS to which I
referred at [35] above. Sundberg J
referred to the power of the Court to grant final relief as a reason for
construing the power to suspend as including
a power to annul a decision on a
temporary basis. In AVS, Basten JA pointed to the scope for a final
decision to operate from the date of the original decision as a ground
supporting the
argument that the power under s 60 of the Administrative
Decisions Review Act extended to empower the Tribunal to suspend the
operation of a revocation of a licence, or to reinstate the licence on a
temporary
basis, including retrospectively.
- Riverside
Nursing Care was cited in Azaria Family Day Care Pty Ltd v Secretary,
Department of Education and Training [2018] FCA 1640 (Wheelahan J),
where the Court rejected a similar argument to that raised before
Sundberg J, namely that the power to suspend under s 15 of
the ADJR
Act did not extend to the suspension of a decision that had already taken
effect. At [50] the Court stated –
I reject the idea that the respondent’s decision
to cancel the applicant’s provider approval is not now amenable to an
order under s 15(1)(a) of the ADJR Act to suspend its operation on the ground
that it became effective on 17 October 2018. I consider
that I should apply the
reasons of Sundberg J in Riverside Nursing Care Pty Ltd v Bishop at [28],
which are considered obiter dicta that are directly on point. Section 15 of the
ADJR Act is a remedial provision which can
be given a beneficial construction.
The analysis of Sundberg J in Riverside Nursing Care Pty Ltd v Bishop at
[28] gives s 15 of the ADJR Act a construction which is harmonious with powers
of the Court under s 16 of the ADJR Act to give
final relief, and gives s 15 an
interpretation which augments and furthers the purpose of the Act which can be
inferred from its
operative provisions, such as s 16. In my opinion, the
construction adopted by Sundberg J should be preferred over other
interpretations:
Acts Interpretation Act 1901 (Cth), s
15AA.
- It
is relevant to recognise that in Azaria, the applicant sought a
suspension of the decision that was the subject of the application for review on
terms that were prospective
only: see Azaria at [3].
- There
are other cases which raise the separate question of the power of a court to
make orders pending a final hearing to ameliorate
on a temporary basis the
consequences of a decision that is the subject of an application for review. In
Williment v Federal Commissioner of Taxation [2010] FCA 808; 190 FCR 234,
Perram J considered an application for temporary relief in relation to
notices issued under the income tax legislation that required
the attendance of
the applicants before certain officials of the Tax office. Perram J
considered that the power to stay under the
ADJR Act would extend to staying the
decision that led to the issue of the notices, but that it would not necessarily
be possible
to stay the operation of the notices themselves which operated to
require the attendance of the applicants under the threat of penalty.
Perram J considered, by way of obiter, that it was within the power
of the Court to make an interim order to compel the Commissioner to exercise
power under s 33(3) of the Acts Interpretation Act 1901 (Cth) in
such a way as to adjourn or prolong the time for compliance with notices that
had been issued.
- In
McBride v Walton (Court of Appeal (NSW), Handley JA, 27 August 1993,
unrep), it was held that under the relevant provisions of the Medical
Practice Act 1992 (NSW), as then in force, the Court’s only power
pending the hearing of an appeal from an order that a medical
practitioner’s
name be removed from the register of medical practitioners
was to stay the order, and that the Court’s power did not extend
to
ordering reinstatement of the medical practitioner on the register on an interim
basis.
- However,
in Russo v Legal Services Commissioner [2016] NSWCA 95, Barrett AJA
made an interlocutory order staying an order of the New South Wales Civil and
Administrative Tribunal that the applicant’s
name be removed from the
local roll of practitioners if it had not already been executed, and made a
further order that if the order
of the Tribunal had been executed, that the
applicant’s name be reinstated to the Supreme Court Roll of legal
practitioners
upon the applicant giving an undertaking to consent to the removal
of his name upon request by the Court.
- In
Attia v Health Care Complaints Commission [2017] NSWSC 178 at [28],
McCallum J referred to the type of order made by Barrett AJA in
Russo as in the nature of a “restorative injunction”, and at
[39] stated that the decision in Russo turned very much on the inherent
jurisdiction and power of the Court with respect to the control and discipline
of legal practitioners.
- The
application before the Court in Attia was for temporary relief pending
the hearing of an application to appeal a decision of the New South Wales Civil
and Administrative
Tribunal to cancel the registration of a pharmacist. The
decision took effect on the date it was given: Civil and Administrative
Tribunal Act 2013 (NSW), s 61. Subsequently, the applicant’s name
was removed from the register of pharmacists maintained by the Australian Health
Practitioner
Regulation Agency. The applicant sought orders that, until
determination of the appeal, the orders of the Tribunal be stayed, and
that the
Agency reinstate his registration as a pharmacist. McCallum J stated at
[40] that her Honour was not persuaded that the
Court did not have the power to
grant the relief sought, and stated that the power should be exercised
sparingly. The sources of
the power to which her Honour referred were s 66(4) of
the Supreme Court Act 1970 (NSW), and Schedule 5 of the Civil and
Administrative Tribunal Act. In the circumstances of the case, her Honour
refused the application for temporary relief, holding at [62] and [67] that
considerations
going to the balance of convenience afforded compelling reasons
to refuse the temporary relief sought.
- The
power under s 44A(2) of the AAT Act that the applicant seeks to have the
Court invoke in the present case has two limbs to it.
There is the power to
stay, and there is the power otherwise to affect the implementation or operation
of the Tribunal’s decision
and the decision under review. In my view, the
latter limb of s 44A(2) includes the power to affect the operation or
implementation
of a decision of the Tribunal or of the primary decision-maker
that has already come into operation. Were that not so the latter
limb
provision, which is expressed in broad terms, would be stripped of much of its
utility. I respectfully adopt the analysis of
Sundberg J in Riverside
Nursing Care, and consider that it is equally applicable to s 44A(2) of
the AAT Act. The Court has wide powers under s 44(4) and (5) of the AAT
Act
to give final relief upon an appeal, which include the power to set aside a
Tribunal’s decision and to remit the case to
be heard again. That is the
substance of the relief that the applicant seeks in the present case. Whether in
a particular case the
exercise of a statutory power to set aside an
administrative decision should operate from the date of the order, or ab
initio, is a question that may arise for consideration: see, Jadwan Pty
Limited v Secretary, Department of Health and Aged Care [2003] FCAFC 288;
145 FCR 1.
- It
is sufficient for present purposes to say that the applicant has made a claim
for final relief that the Tribunal’s decision
be set aside ab
initio, which is properly arguable. If the Court has power to grant
that relief on a final basis, then applying the analysis of Sundberg J
in
Riverside Nursing Care, the Court has power to give corresponding relief
on a temporary basis. That construction of s 44A(2) should be preferred
over other
interpretations, because it gives better effect to the purpose of
s 44A(2) apparent from its text, namely as a remedial provision
to secure
the effectiveness of the hearing and determination of an appeal: see, Acts
Interpretation Act 1901 (Cth), s 15AA.
- In
AVS at [18] which I set out at [35] above, Basten JA posited the
argument that an order that had the effect of reinstating a licence could be
achieved by retrospectively
varying the date from which the administrative
decision was to have effect. Seen in this way, and having regard to the analysis
by
Sundberg J in Riverside Nursing Care, the power under
s 44A(2) authorises orders that have a retrospective element to them. There
are, however, different dimensions of
retrospectivity which may be assessed by
the extent to which orders of the Court affect substantive rights. Consistently
with the
observations of Kiefel CJ, Keane, Nettle and Edelman JJ in
Esso Australia Pty Ltd v Australian Workers’ Union at [49]-[50],
care must be taken in considering the exercise of any power with retrospective
effect, in particular to consider whether
there would be any inappropriate or
unfair interference with rights. But these considerations go to the exercise of
the power, and
do not warrant the implication of arbitrary limits on the power
itself: FAI General Insurance Company Ltd v Southern Cross Exploration NL
[1988] HCA 13; (1988) 165 CLR 268 at 283-284 (Wilson J).
- In
the present case, I find that until the respondent’s solicitors wrote to
the applicant’s solicitors on 18 February
2021 and questioned the
continued effect of the Tribunal’s order of 7 January 2021 beyond 8
January 2021, the parties assumed
that the Tribunal’s order was effective
according to its terms such that the applicant did not enter into a default
situation
for the purposes of Part 5 of the ESOS Act. That is a reason
supporting the exercise of the Court’s discretion to make an order
staying
from 7 January 2021 the operation of the Tribunal’s decision to the extent
that it concerned the renewal of the applicant’s
registration under the
ESOS Act. It is also a reason to think that such an order is unlikely in the
special circumstances of this
case to have unjust consequences.
Should the Court make an order until the determination of the
appeal staying the Tribunal’s decision?
- Other
than the preliminary matters to which I referred above, on the hearing of the
current application, as with the application for
the interim stay, there was no
substantial dispute as to the principles to be applied. I referred to those
principles in the interim
decision at [43]-[44], and at [60] I applied like
reasoning to that of Tamberlin J in Shi v Migration Institute of
Australia Ltd [2003] FCA 1304; 134 FCR 326 at [28]- [29] in holding that the
applicant’s business as a going concern was a continuum that ought not be
interrupted pending a full hearing
of the applicant’s application for a
stay pending the determination of the appeal.
- Counsel
for the respondent accepted in oral argument that by its notice of appeal the
applicant had raised grounds of appeal relating
to questions of law that were
worthy of argument. Counsel for the applicant characterised the argument in
relation to one ground
of appeal as strong, while counsel for the respondent
submitted in writing that there was very little merit in the appeal. Neither
submission was developed, so I will act on the accepted position that the
grounds of appeal are worthy of argument.
- The
applicant maintained, as it had on the application for an interim stay, that a
stay of the Tribunal’s decision should be
given for the reasons to which I
referred in the interim decision at [47]-[55], and which I shall not repeat.
- I
have dealt with the respondent’s submissions about the effect of the
Tribunal’s order of 7 January 2021. Other than
that, the strong focus
of the submissions of counsel for the respondent was to point to the
applicant’s non-compliance with
applicable statutory requirements as a
reason why, in the public interest, the Court should not stay the
Tribunal’s decision
so as to permit the applicant to continue to operate.
These submissions had substance to them. In evaluating the respondent’s
submissions, I shall differentiate between those breaches that were the subject
of the Tribunal’s findings, and other breaches
that were the subject of
evidence before the Court.
- As
to the Tribunal’s findings, I referred to them in the interim decision at
[34]-[37]. There are two features of the Tribunal’s
findings that are
relevant for present purposes. The first is that in relation to the
applicant’s registration under the NVR
Act (which is not a subject of this
appeal) the Tribunal found that there had been systemic failures and
contraventions of the relevant
standards that were “quite fundamental to
the scheme of accreditation that has been established by the NVR Act.” Yet
the Tribunal determined to set aside the respondent’s decision refusing
renewal of registration under the NVR Act and to substitute
a decision by which
the applicant’s registration was renewed for a period of three years, but
subject to conditions. The reason
I mention this is that past breaches by the
applicant, even of a substantial nature, did not preclude a conditional renewal
of registration
under the NVR Act. This forms one of the foundations for the
applicant’s appeal to the Court, in that the applicant claims
that the
Tribunal unreasonably failed to consider renewing its registration under the
ESOS Act in a like manner, that is, subject
to conditions.
- The
second feature of the Tribunal’s decision is its findings at [204] of its
reasons that at the heart of most of the breaches
of the ESOS Act lay a lack of
proper assessment tools and a lack of monitoring. Significantly, the Tribunal
also found that it was
satisfied that the applicant had, for the most part,
addressed the assessment tools. The reason the Tribunal did not regard this
as a
sufficient ground to renew the applicant’s registration under the ESOS Act
was that it was not satisfied that the applicant
would comply with the ESOS Act
and the relevant code into the future. Relevant to that finding was the
Tribunal’s assessment
of the applicant’s history of non-compliance
and the scope of work that had to be undertaken by the applicant’s
consultant,
Ms Hodge of RTO Advice Group. On the appeal, the applicant
contends that this aspect of the Tribunal’s decision was affected
by an
error or law, in that it is claims that the Tribunal asked itself the wrong
question by considering whether the applicant will
comply with the ESOS Act and
the relevant code, and that the correct question was limited to whether the
applicant was complying
with the statutory requirements.
- The
point of drawing attention to these features of the Tribunal’s reasons is
that on the applicant’s case, its past contraventions
of the legislation
should not preclude renewal of its registration by the Tribunal, and that the
Tribunal’s decision to decide
otherwise was affected by an error of law
that might be, but does not need to be, characterised as jurisdictional in
nature.
- I
shall now turn to the evidence before the Court relating to the
applicant’s non-compliance with statutory requirements.
- Before
the Court were affidavits filed on behalf of the applicant, being two affidavits
of Mr Dhawan, the CEO of the applicant, an
affidavit of the
applicant’s solicitor, and an affidavit of Ms Hodge, an RTO Consultant to
whom I have already made reference.
At the hearing of the application, pursuant
to leave counsel for the respondent cross-examined Mr Dhawan about his evidence
in relation
to uploading information to the PRISMS system in relation to
students who apparently had not paid fees but who were recorded in the
PRISMS
system as having paid at least part of the tuition fees. That cross-examination
occurred on Microsoft Teams, where counsel
was present in Court in Melbourne,
and the witness was situated in Perth in an informal setting using a laptop
computer. I found
that the cross-examination of this particular witness using
Microsoft Teams was not ideal, but it was the best that could be achieved
in the
circumstances.
- The
respondent relied on affidavits of Ms Owen, a Stakeholder Coordinator of the
respondent, and Mr Mahajan, Director of Tuition Protection
Service. By the
respondent’s evidence, various instances of the applicant’s
non-compliance with ESOS Act obligations
were alleged, some accepted and others
disputed by the applicant. It was undisputed between the parties that the
applicant gave false
or misleading information in two categories, in breach of s
108 of the ESOS Act.
- First,
Ms Owen identified 184 students in respect of whom “misleading”
information was entered into PRISMS by the applicant
between 10 and 30 December
2020. The applicant caused the students’ PRISMS records to be amended as
though their details or
the details of their studies had changed, when in fact,
Ms Owen identified that the students’ studies had been terminated.
The
ESOS Act contains additional reporting obligation upon termination of studies,
which obligations, Ms Owen concluded, were not
complied with. Mr Dhawan accepted
in his affidavit evidence that he decided that the students would be terminated
following the Tribunal’s
decision, and during cross-examination, he
accepted that the applicant terminated enrolments between 10 and 30 December
2020, but
could not confirm whether there were 184 terminations. In his
affidavit dated 19 February 2021, Mr Dhawan sought to explain the entries
as
having been made in December 2020 in an environment of uncertainty about the
future of the applicant’s business. I must
say that Mr Dhawan’s
explanation about what the applicant did is not altogether clear to me. At [13]
of his affidavit Mr Dhawan
concluded his explanation as
follows –
I am not sure if that was the best way to approach the
difficulty I faced in late December last year, having been notified of a
negative
decision by the Tribunal, not knowing if the Applicant could appeal and
being concerned to ensure that the Applicant complied with
all its obligations
under the Act and to the [Tuition Protection Service], as well as to its
students. In acting the way I did, I
believe I acted to the detriment of the
Applicant in order to ensure it remained compliant with its legal obligations,
it assisted
the [Tuition Protection Service] and it protected the students it
had enrolled.
- Second,
Ms Owen identified 84 students in respect of whom the applicant had recorded in
the PRISMS records as having received at least
partial payment of tuition fees.
Separately, in response to a notice issued to the applicant under s 113 of the
ESOS Act requesting
information, the applicant stated that it had not received
any such money, which was identified in Mr Mahajan’s evidence. Ms
Owen concluded that the applicant’s entries in relation to these 84
students appeared to be false and misleading. Mr Dhawan
accepted that the
entries were false. During cross-examination, Mr Dhawan also accepted that he
had given his PRISMS login details
to other staff of the applicant. Counsel for
the respondent submitted that doing so contravened the PRISMS User Guide. In
relation
to those entries Mr Dhawan stated in his affidavit –
- The
students listed in Annexure E are from Karachi in Pakistan, which had also
suffered severe flooding and is also suffering from
the effects of the Covid-19
pandemic. As a result of the uncertainty caused by all these factors, education
agents have been reluctant
to make the payment for the prepaid component of the
tuition fee until the student received the visa and is confident he or she can
come to Australia and commence their qualification with us.
- As
I established with the education agent that the student had the money, I
recorded the amount of the prepaid component of the tuition
fee as paid because
I was satisfied the funds were available and would be paid upon the visa being
granted.
- I
did not believe that I was providing false or misleading information in relation
to any of the instances referred to in parts 2
or 3 in Ms Owen's affidavit and
the students referred to in Annexures D and E. In relation to Annexure D, I
thought I was doing the
right thing by the students and by the [Tuition
Protection Service] in the circumstances in which the Applicant found itself
around
Christmas last year. In relation to the students referred to in Annexure
E, I was noting on PRISMS the proportion of the tuition
fee which was the
prepaid component and which I was satisfied would be prepaid upon the visa being
issued and I did not believe that
by completing the PRISMS record as I did
amounted to providing false or misleading information.
- Mr
Mahajan identified a course of alleged non-compliance with notices that he
caused to be issued to the applicant under s 113 of
the ESOS Act, requesting
certain information including explanations for the 84 students for whom false
payment entries were made
in PRISMS. That alleged non-compliance comprised late
and deficient responses to the notices, and in some cases failure to respond
at
all. Mr Dhawan accepted Mr Mahajan’s description of the communications.
- There
are other instances of alleged non-compliance which are disputed by the parties.
- First,
Ms Owen’s evidence was that the applicant had failed to comply with
reporting obligations. Ms Owen analysed data for
the period 28 February
2020 to 4 February 2021. Ms Hodge, in response, proposed that
Ms Owen’s inclusion of data from 28 February
to 17 July 2020 in her
review negatively skewed the analysis. Ms Hodge claimed to have assisted
the applicant from 17 July 2020 to
review its PRISMS reporting processes and
practices, and concluded that inclusion of data prior to 17 July 2020 overlooked
the improvements
made by the applicant since that date.
- Second,
Ms Owen alleged that the applicant failed to report students’
non-commencement of studies within the acceptable period
on 28 occasions between
28 February 2020 and 4 February 2021, in breach of s 19(1)(c) of the ESOS Act.
In response, Ms Hodge claimed
that between 17 July 2020 and 7 February
2021, there were only four students whose non-commencement of studies was
reported late.
The applicant provided explanations for this late reporting: in
respect of two students, they were not granted visas in the first
place and so
were offshore; in respect of one student, the last permitted reporting day fell
on a Friday but staff of the applicant
do not work on Fridays, so the reporting
occurred “immediately” on the following Monday; and in respect of
one student,
it was explained that, by an administrative error, two identical
entries existed for one student and the erroneous entry was identified,
reported, and the error rectified.
- Third,
Ms Owen alleged that the applicant failed to report termination of
students’ studies within the acceptable period on
three occasions between
28 February 2020 and 4 February 2021, in breach of s 19(1)(d) of the ESOS Act.
In response, Ms Hodge identified
the same three students between 17 July
2020 and 7 February 2021 whose termination of studies was reported late.
Ms Hodge surmised
that these late reports were caused by the erroneous
entry of the last day of study as the date of termination. She noted that the
PRISMS User Guide does not provide guidance on how to determine the date of
termination. She also noted that Ms Owen’s analysis
failed to
identify that for at least two of the three students, it should have been clear
that the date of termination would not
usually be the student’s last day
of study. With respect to the third student, Ms Hodge explained that the
reporting time was
justified because the student had requested an extension of
time to finish the course, and subsequently requested a release from
the
applicant. The applicant, according to Ms Hodge’s evidence, reported
the termination upon finalising the release request.
That led Ms Hodge to
conclude that, in fact, there had been no breaches in this respect.
- Fourth,
Ms Owen alleged that the applicant failed to report students’ breach of
visa condition 8202, being unsatisfactory progress,
as soon as practicable on 19
occasions between 28 February 2020 and 4 February 2021, in breach of s
19(2) of the ESOS Act. Ms Hodge
was critical of Ms Owen’s method.
Ms Hodge stated that Ms Owen would have required the date of termination of
those identified
students to calculate the reporting date. Ms Hodge
identified five students whose records did not have a termination date and in
respect of whom Ms Owen incorrectly used the last day of study to measure
the reporting period. Ms Hodge concluded that reporting
occurred on or near
the date of termination with those students, such that there were “no
issues” with the applicant’s
reporting.
- In
the interim decision at [58] I stated that the question whether an interim stay
should be granted, and if so its terms, was not
free from difficulty, and it
remains the case that the question whether the Court should stay the
Tribunal’s decision on terms
that would permit the applicant to continue
to operate its business is not free from difficulty. I am particularly troubled
by the
evidence of false entries relating to 84 students in the PRISMS system
when set against the background of the history of non-compliance
detailed in the
Tribunal’s reasons. However, I consider that the correct approach to these
difficulties in the special circumstances
of this case is as follows.
- Upon
an application to stay the decision of the Tribunal, the Court may properly take
into account the public interest in having the
applicant comply with relevant
legislative requirements. I am mindful of that consideration. However, in
assessing the relevance
of the applicant’s past non-compliance, and the
prospect that there may be non-compliance in the future, there are two important
considerations. The first is that this Court is concerned with the legality of
the Tribunal’s decision, and within certain
boundaries the Court is not
concerned with the merits of the applicant’s application for renewal of
its registration under
the ESOS Act. As Bromwich J stated in Australian
International College Pty Ltd v Australian Skills Quality Authority [2018]
FCA 2097 at [3] in an allied context, “this Court cannot (and will not)
conduct a de facto merits review of ASQA’s cancellation
decisions”. The second point flows from the first. The Court does not have
all the
evidence that the Tribunal had before it, nor the benefit of seeing
witnesses who, on a merits review, may give more comprehensive
evidence than
they have given on this application, and who may be challenged in a more
complete way in cross-examination. There is
a danger that in an application for
a stay of the Tribunal’s decision, the fate of the applicant might be
determined in a summary
way without the benefit of all the evidence and full
argument that may occur on a merits review by the Tribunal, which is the body
charged with that function.
- With
these observations in mind, I shall address the evidence of the
applicant’s non-compliance in three categories. The first
category is the
Tribunal’s findings to which I referred at [58]-[60] above. By themselves, I give those
findings little weight as a reason for refusing the applicant’s
application for a stay,
because the applicant’s claim is that despite
those findings the Tribunal made legal errors in arriving at its decision.
- The
second category is the evidence of non-compliance that was not disputed to which
I referred at [64]-[66]. Mr Dhawan proffered explanations for
these instances of non-compliance. I do not consider that it is appropriate that
I should
act on what could only be preliminary views about those explanations on
an interlocutory application with only brief and limited
cross-examination of Mr
Dhawan on a Microsoft Teams video link.
- The
third category is the evidence about issues that are the subject of dispute to
which I referred at [67]-[71] above. It is not appropriate that I
evaluate the competing evidence about those issues on this application.
- The
appeal in this proceeding has been able to be expedited as a result of another
matter being re-fixed for hearing, and the date
of 19 April 2021 has become
available. The short time between the determination of the application for a
stay, and the hearing of
the appeal is a matter that I take into account as
favouring the grant of a stay of some sort. If the applicant succeeds in its
appeal
on either question of law that it has framed in its notice of appeal,
then it would be open to the Court to set aside the Tribunal’s
decision
and to remit the matter for re-hearing by the Tribunal according to law. The
terms of any re-hearing would be a matter to
be determined. On the assumption
that the Tribunal’s decision is set aside ab initio for error
of law, then there would be the prospect that the applicant will be restored to
the position that it was in immediately
prior to the Tribunal’s decision
of 10 December 2020, namely that it could continue to operate its business
pursuant to the
unconditional stay ordered by the Tribunal on 7 June 2017. That
would be subject to any further order that the Tribunal might make
pursuant to
s 41(3) of the AAT Act varying or revoking the stay.
- For
the above reasons, balanced against the other considerations to which I refer
below, I do not consider that the evidence of the
applicant’s
non-compliance with statutory requirements is a matter that should carry such
weight as to lead me to refuse the
application for a stay of the
Tribunal’s decision and the underlying decision of the respondent.
- The
next question is the terms on which any stay should be given. Here, there are
different interests that should be addressed and
balanced.
- In
the interim decision, I referred to the interests of the applicant in
maintaining its business as a going concern so that if the
appeal were to be
allowed and the Tribunal’s decision set aside, the effectiveness of the
hearing and determination of the
appeal is secured. The ability of the applicant
to continue its business is the subject matter of the appeal. In the interim
decision
I referred at [47] to the evidence of the applicant’s
circumstances. Of particular importance are the following considerations,
which
for the purposes of this application I am prepared generally to accept, and to
which I give weight –
(a) if the Court does not stay the Tribunal’s
decision, then the applicant will cease to be able to operate as a provider of
training and education to international students, and will be required to make
arrangements under the ESOS Act to transfer all of
its students to another
provider or to provide refunds of unspent tuition fees;
(b) the applicant would then effectively have to cease operating as a business,
and will have to lay off staff and it will lose its
premises;
(c) the applicant does not have any accumulated cash reserves, and has operated
under financial “duress” for a number
of years pending a decision by
the Tribunal, as it was difficult to operate a business without certainty of
registration;
(d) the applicant spent significant funds in the last 12 months in connection
with the review by the Tribunal after the respondent
lodged its further
evidence;
(e) the applicant has experienced additional difficulties in the international
student market in the last 12 months as a result of
COVID-19 restrictions on
international arrivals; and
(f) in summary, the applicant would be unable to survive if it was not permitted
to operate pending the hearing and determination
of the
appeal.
- The
respondent was critical of the quality of some of the evidence about the
applicant’s financial circumstances. However, the
main point that I
consider to be important is that I accept that there is a connection between the
applicant’s ability to continue
trading as a provider of educational
services to international students and the maintenance of the applicant’s
business as
a going concern. This is the “continuum” to which I
referred at [60] of the interim decision.
- The
interests of students who are enrolled or who may be enrolled is to be taken
into consideration. There are three categories of
students that I shall
identify. The first is those students who have enrolled and who have already
commenced a course offered by
the applicant. By the terms of the interim stay
order made on 29 January 2021, the applicant was permitted to recommence the
delivery
of courses to those students. The second group of students is those who
have enrolled but who have yet to commence a course. The
terms of the interim
stay did not permit the applicant to commence teaching those students, and at
the time counsel for the applicant
informed the Court that there were no
students who were due to commence a course during the period of the interim
stay. The third
group is those students who might enrol for a course. The terms
of the interim stay permitted the applicant to continue to accept
enrolments.
- The
third interest that is to be accommodated is the public interest that is
represented by the respondent, which has sought over
a period of years to secure
the applicant’s compliance with the relevant legislation.
- The
applicant’s primary position on this application is that the Court should
stay the Tribunal’s decision, and the decision
of the respondent that was
subject to review, without any limitations. The applicant’s alternate
position was that the stay
in the terms ordered on 29 January 2021 should be
continued. The applicant pointed to the fact that over a relatively short period
of time the applicant has been the subject of stays on three different sets of
terms: (1) an unconditional stay that was ordered
by the Tribunal on 7 June 2017
that ceased to have effect on 7 January 2021; (2) the Tribunal’s
conditional stay that was ordered
on 7 January 2021; and (3) the limited terms
of the interim stay ordered by the Court on an urgent basis on 29 January
2021.
- The
respondent’s primary position is that there should now be no stay. For the
reasons that I have given above relating to the
effect of the Tribunal’s
order of 7 January 2021, the power of the Court to make an order under
s 44A(2) with retrospective
operation, and my disinclination to treat the
evidence about the applicant’s non-compliance as disentitling it to the
benefit
of a stay, I am not inclined to accept the respondent’s primary
submission. In the alternative, the respondent submitted that
any stay should be
the subject of conditions. The conditions that the respondent proposed were as
follows –
From the date of this order (separate to any other
obligations under the Education Services for Overseas Students Act 2000
(ESOS Act)), the applicant must:
- Within
2 days, ensure that all entries relating to students or potential students of
the applicant are accurate and complete within
the computer system referred to
at s 109 of the ESOS Act, known as ‘PRISMS’.
- Not
enrol or take any steps to enrol any current or potential student in a course or
a part of a course under the ESOS Act.
- Not
commence any current or potential student enrolled in a course or a part of a
course under the ESOS Act. For the avoidance of
doubt, students who are in
Australia and who have enrolled in, and have commenced a course (or a part of a
course) with the applicant
on a date prior to the date of this order (current
students) may continue to completion of that specific course (or part of a
course) only where they commenced prior to the date of this order.
However, the
applicant may not enrol a current student in any new or further course or allow
a current student to commence any new
or further course, or part of a
course.
- In
respect of any student already enrolled, but yet to commence his or her first
course with the applicant (subject students): (1) advise subject students
in writing that they cannot commence a course or a part of a course with the
applicant until further
order of the Federal Court of Australia, (2) not demand
payment from a subject student (3) provide refunds to subject students when
requested, and (4) if a student seeks to transfer to another provider, the
applicant must, in accordance with the National Code made
under the ESOS Act,
release the student seeking the transfer provided that the student owes no
outstanding monies (fees) to the applicant
for completed units, (5) provide ASQA
with copies of all written notifications to students made under (1), clearly
identifying each
individual student and the date and method by which the
communication was sent, (6) within 5 days of the date of this order, amend
its
Overseas Student Transfer Policy and Procedure (required by Standard 7.2 of the
National Code) and provide a copy of the amended
policy to ASQA, so that the
policy permits students to transfer to another provider where the student owes
no outstanding monies
(fees) in relation to completed
units.
- I
am not attracted to the conditions proposed by the respondent for a number of
reasons. First, it would be undesirable that the continuation
of a stay be
contingent on the applicant complying with the conditions that the respondent
proposes. It would mean that the maintenance
of a stay ordered by the Court
would be contingent on the occurrence of external events which may be the
subject of disputation.
It is more likely however, that the respondent did not
intend that a stay be contingent on the applicant’s compliance with
conditions, but rather that the conditions simply be imposed, and that if there
was evidence of non-compliance, the respondent could
approach the Court to have
the stay set aside.
- As
to the conditions proposed, I think that there is sense in requiring that the
applicant as a condition accompanying any stay attend
to the accuracy of its
data in the PRISMS system. I am prepared to make an order pursuant to
s 44A(4)(a) of the AAT Act that within
seven days the applicant is to: (1)
review the accuracy of its data in the PRISMS system; (2) use its best
endeavours to remedy any
inaccuracies; and (3) advise the respondent of when
that task has been completed.
- The
other conditions proposed by the respondent have caused me more concern. After
giving the matter careful consideration I have
determined that there can be no
perfect outcome, and that subject to the condition referred to above, there
should be no limitation
on the stay, so that the stay granted by the Court under
s 44A(2) of the AAT Act which is to be effective from 7 January 2021 is
of
the same practical effect as the stay given by the Tribunal on 7 June 2017 and
which was in force until 7 January 2021. My reasons
for coming to this
conclusion are as follows –
(1) While it might be tempting to impose conditions on
the applicant’s operations as a response to the evidence of the
applicant’s
contraventions, in the circumstances, I do not consider that
to be an appropriate course. Any conditions should have as their purpose
protection of the public, while balancing that interest against the
applicant’s interest in securing the effectiveness of the
hearing and
determination of the appeal. Punishment of the applicant by the imposition of
limitations on its ability to operate should
not form part of the discretionary
considerations.
(2) The conditions proposed by the respondent seek to set up a further regime of
compliance which, on the respondent’s own
submissions, would operate in
parallel with the statutory requirements. It is undesirable that the Court
becomes the de facto regulator of the applicant’s operations, so
that what is already a complex regulatory framework is supplemented by further
requirements
imposed by Court order.
(3) The imposition of limitations is liable to influence events that may not be
capable of being controlled. The inability of the
applicant to deliver courses
to particular students who have enrolled for courses may trigger obligations
under Part 5 of the ESOS
Act. Further, the imposition of the conditions may have
consequences in relation to the students’ compliance with the conditions
of their visas. The Court does not have before it complete information to
identify and give consideration to these potential consequences,
and I am
reluctant to enter a field which introduces these types of problems.
(4) The appeal will be fixed for 19 April 2021 and should be able to be
determined relatively quickly. The position of all interested
parties will then
be settled. On balance, I do not think it is desirable to introduce a complex
regime to operate between now and
the hearing and determination of the appeal.
There was much force in the submissions of counsel for the applicant in this
respect.
(5) There is a symmetry between the unconditional stay orders proposed by the
applicant as its primary position, and the stay orders
under which the applicant
operated for over three and a half years prior to the Tribunal’s decision
of 10 December 2020. There
is therefore also a symmetry between such orders and
the final relief that the applicant claims to be entitled in the appeal.
(6) The purpose of granting a stay under s 44A(2) of the AAT Act is to
secure the effectiveness of the hearing and determination
of the appeal. That
purpose would be compromised if there were conditions on the stay as proposed by
the respondent. The conditions
would have a tendency to undermine the continued
operation and viability of the applicant’s business, including by
rendering
the applicant incapable of delivering courses to students who have
enrolled, and to continue developing a pipeline of new enrolments.
(7) I remain satisfied that, if the applicant is unsuccessful in its appeal and
ceases to be able to offer courses to its students,
then as I stated at [60] of
the interim decision there are mechanisms in Parts 3 and 5 of the ESOS Act that
are calculated to protect
the interests of the students.
Conclusions:
- For
the foregoing reasons, subject to further order, until the hearing and
determination of this appeal, pursuant to s 44A(2) of the
AAT Act the
operation of the following decisions shall be stayed, effective from 7 January
2021 –
(a) the decision of the Administrative Appeals Tribunal
dated 10 December 2020 in matter 2015/6179; and
(b) the decision of the respondent to which the decision of the Tribunal related
–
to the extent that those decisions determined for the purposes of s 9AB of
the Education Services for Overseas Students Act 2000 that the
registration of the applicant as an approved provider should not be renewed.
- There
will also be an order made substantially to the effect of that referred to in
[87] above.
- Costs
shall be costs in the proceeding.
I certify that the preceding ninety-one (91)
numbered paragraphs are a true copy of the Reasons for Judgment of the
Honourable Justice
Wheelahan . |
Associate:
Dated: 5 March 2021
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