Sydney Business Institute Pty Ltd v NSW Vocational Education and Training... [2009] FCAFC 31 | Case summary

REASONS FOR DECISION 1 In December, 2007 the NSW Vocational Education and Training Accreditation Board decided, one, to grant Sydney Business Institute Pty Ltd (SBI) registration under the Vocational Education and Training Act 2005 (VET Act) as a registered training organisation and, two, to approve it to deliver courses to overseas students. The Board imposed several conditions. SBI proceeded to enrol students for the 2008 year, and commenced operation in February 2008 from premises in George Street, Sydney. 2 In September, 2009 the Board cancelled the registration and the approval. At the time it also had before it an application from SBI to extend the scope of its registration. Necessarily, that application was refused. 3 On 17 September 2009, SBI applied to the Tribunal for review of the decisions. After a three day hearing (25, 26 November; 10 December 2009) the Tribunal affirmed both of the Board's decisions: see Sydney Business Institute Pty Ltd v NSW Vocational Education and Training Accreditation Board [2009] NSWADT 322. The Tribunal delivered its decision on 24 December 2009. SBI lodged a notice of appeal on 6 January 2010. This decision deals with the appeal. The appeal hearing was held on 27 May 2010. 4 The notice of appeal, as amended, nominates 14 questions of law and gives 7 reasons as to why the Appeal Panel should extend the appeal to the merits, and re-decide the review application. (Appeals are governed by the Administrative Decisions Tribunal Act 1997, ss 112, 113.) Material before Tribunal 5 The material upon which the Board relied took the form of extensive audit reports and exchanges of correspondence (three volumes of documents). Ms Watkins, who is a certified auditor and VETAB's compliance officer, gave evidence for the Board. 6 For SBI, evidence was given by Mr Bagijn, the Director and Principal Shareholder of SBI, Mr Oostdyck, the former Principal Executive Officer and Mr Tonkin who had been the Acting PEO since October 2009. SBI also relied on the evidence of an education consultant, Mr Feagan. It produced two volumes of documents. 7 In its reasons for decision, the Tribunal noted that one of the most significant documents was a report provided by SBI to the Board dated 20 August 2009. The Tribunal stated that the report provided a useful summary of SBI's response to the Board's concerns as at that time. The Reasoning 8 The Tribunal's decision first examined whether and to what extent SBI contravened the specific conditions imposed by the Board on its registration and approval. The reasons dealt with the following matters: - Lodgment by SBI of applications to increase student numbers during a period when the Board's condition stated that it would not accept any further applications - The extent of SBI's failure to fulfil the Board's condition concerning various aspects of the employment of trainers/assessors - The extent of SBI's failure to fulfil the Board's condition concerning various aspects of student assessments - SBI's failure to adhere to the Board's condition imposing a cap on the number of overseas students that could be enrolled (234). 9 The Tribunal found significant non-compliances by SBI in relation to all of the above matters. Its comments included the following: (i) By not complying with the trainer conditions, 'the Board did not have the opportunity to comprehensively monitor the training and assessment SBI was providing': [51] (ii) In the same respect, 'We regard SBI's continuing preparedness to contravene three of those conditions as constituting a sufficient risk to consumers and to the integrity of the VET system to justify cancelling their registration and approval': [52] (iii) 'Despite being on notice that breach of the conditions was a significant issue, no explanation was provided as to why SBI did not comply with the trainer qualifications condition or the student assessment condition': [53] (iv) As to the failure to stay within the student cap - 627 enrolled as at 30 January 2009 and 501 as at 3 August 2009, and after considering explanations and opinions given on behalf SBI, 'those opinions do not explain or excuse SBI's unilateral decision not to comply with a condition of registration': [57]. 10 The Tribunal concluded that the breaches of the Board's conditions were serious enough to justify cancellation. It considered that cancellation was the correct and preferable decision. 11 After noting that it was not strictly necessary to do so given that conclusion, it went on to examine the other non-compliances alleged against SBI. A summary of the items considered and the Tribunal's assessment follows: - The national standard requiring registered providers to ensure that the marketing of their services is professional, accurate and maintains the integrity and reputation of the industry. The Tribunal referred to misdescriptions by Mr Bagijn of his academic qualifications. It found that Mr Bagijn knew that he was not entitled to describe himself or his qualifications as having a doctorate in economics and that he was passing himself off as having a qualification that he did not have. - The national standard requiring monitoring of students' course progress. This requirement has as its policy context Commonwealth law making it a condition of the visas issued to overseas students that they be required to attend for 20 hours a week and make satisfactory progress through their course. SBI made a 'frank admission of non-compliance' at least until around April 2009. - Errors in the words required to be used in the statements of attainment given to students for their use. It found these to involve a minor non-compliance. - The national standard in relation to fast tracking, flexible student attendance and rolling monthly enrolments. The Tribunal reported the reservations the Board's auditor (Ms Watkins) held about the way SBI dealt with these issues, but noted that she did not go so far as to regard them as non-compliant. - Omission of pre-requisites and inclusion of outdated courses. The Tribunal noted that SBI's expert, Mr Feagan, had identified omissions of this kind in the learning and assessment strategies for two courses, in failing to identify correctly the required pre-requisite units and in referring to superseded courses. - Recognition of Prior Learning. The Tribunal accepted the Board audit finding that SBI had no process in place for checking to make sure that a student enrolling in a course had completed a pre-requisite. - Competencies of staff. The Tribunal concluded that SBI was non-compliant prior to September 2009 in its programs for professional development of trainers. It referred to a table prepared by Mr Feagan which showed that of the 17 staff members he audited, 5 had no teaching experience and 9 had no record of recent professional development. Teachers who have no teaching experience must be supervised. The Tribunal found that: 'There was no evidence from SBI as to how they proposed to ensure that supervision was provided within the limits of its current resources': [85]. - Assessment tools such as assessor's guides and marking criteria. The Board's auditor, Ms Watkins, and SBI's expert, Mr Feagan, reported significant omissions and deficiencies in relation to this material. - Training and assessment material for courses. The Tribunal referred to the Board's concerns and SBI's acknowledgement of August 2009 that 'there were some modules that required significant improvement': [93]. The Tribunal concluded at [96]: 'While we are satisfied, given the evidence that SBI currently has the resources to train and deliver its courses, that was only very recently the case. SBI acknowledged as at August 2009, that considerable improvement was still required. Mr Feagan is correct to the extent that resources can always be improved.' 12 Given the above catalogue of failures, it is hardly surprising, we think, that the Tribunal was minded to make the same decisions as the Board. The vocational training and education system's effectiveness and credibility depends on providers adhering to the required standards. 13 SBI's position is that, as at today, it has put behind it this record of woe. In its application for leave to extend the appeal to the merits, it asserts that by the time the Tribunal made its decision (December 2009), it had significantly improved its compliance with the 'many standards and code provisions and it was, prior to deregistration, continuing to improve its compliance'. 14 SBI draws attention to the comments made by the Tribunal at [104] and [105] of its reasons where it noted that SBI had, since the appointment of Mr Oostdyck in July 2009, began to seriously address the issues of concern. (Mr Oostdyck moved on in October 2009, and Mr Tonkin took over.) 15 SBI's application states that it 'did not sit on its hands in response to the Board's complaints - it "took significant steps to address these issues"' quoting the Tribunal's words at [105]. The quotation is stripped of its context. The surrounding text follows: 105 SBI has had ample opportunity to address the issues highlighted by the Board in its 2007 audit during its first 15-18 months of operation. The Board registered SBI in the expectation that those matters would be rectified. Even as at the 2009 audit issues as critical as the implementation of the course progress policy had not been addressed. It was not until SBI's registration and approval was under threat that SBI took significant steps to address these issues. 16 The Tribunal was expressing a deep concern as to what the history of contravention said about SBI's attitude and commitment to compliance. SBI had only been in business for two years, and for the first 18 months, on any view, it had been in egregious non-compliance with matters of a fundamental kind. 17 The application for leave goes on to assert that SBI had established that it had the resources to train and deliver its courses (referring to Tribunal reasons at [96]); and that it should be given 'the benefit of the doubt' and be permitted to improve its service delivery and to improve 'its compliance with the standards and the code'. 18 Finally the application submits that the Tribunal should accept that SBI conducted a college that was 'apart from the accepted transgressions, a collegiate and successful college from the students and teacher's point of view and there was only one complaint … which was resolved.' It referred in support of its position to the approval issued to it on 5 August 2009 by the National English Language Training Accreditation Scheme (NEAS) authorising it to deliver English language courses to a total of 54 overseas students. The Appeal 19 Against this background, we turn to SBI's challenges to the Tribunal's decision on error of law grounds. 20 The Board's power in relation to the registration of training organisations, and related matters, is the subject of s 18 of the VET Act: 18 Board may cancel, suspend or amend registration (1) The Board may do any one or more of the following: (a) impose or amend the conditions recorded on the National Register in relation to a training organisation that has been registered by another registering body so as to restrict the operations of the training organisation in this State, (b) amend the scope of registration or recorded conditions of a training organisation that has been registered by the Board so as to restrict the operations of the training organisation in this State or any other jurisdiction, (c) suspend the registration, or part of the scope of registration, of a training organisation that has been registered by the Board, (d) cancel the registration of a training organisation that has been registered by the Board. (2) The Board may only take action under subsection (1) in relation to an RTO on any one or more of the following grounds: (a) the training organisation requests the suspension or cancellation of its registration, (b) the training organisation is no longer providing the courses in respect of which it is registered, (c) the training organisation has ceased to exist, (d) the training organisation has failed to comply with the RTO standards or the registration and accreditation guidelines, (e) the training organisation's financial arrangements or ethical standards are such that they would not warrant the registration of the training organisation if it were now to apply for registration, (f) a reasonable doubt exists as to the training organisation's financial capacity to continue to meet its contractual obligations to its students, staff or other persons, (g) the training organisation does not have the resources to competently provide the courses in respect of which it is registered, (h) the resources of the training organisation do not comply with the RTO standards or the registration and accreditation guidelines, (i) the training organisation has contravened this Act or a condition to which its registration is subject. (3) The Board may not impose a restriction under subsection (1): (a) unless the registering body that registered the training organisation: (a) fails to take any step to deal with the matter to which the grounds relate within 30 days after the matter comes to its attention, or (b) fails, after taking any step to deal with the matter to which the grounds relate, to take another step within 30 days. (4) Subsection (3) does not apply if the Board: (a) is relying on a ground established by a compliance audit, or (b) is satisfied that it is in the public interest to impose the restriction immediately. (5) A restriction or suspension imposed under subsection (1) (a), (b) or (c) may, but need not, relate to a particular place or jurisdiction, but if it does so, it may only be imposed because of a particular fact situation that has arisen in that place or jurisdiction. (6) A restriction or suspension imposed under subsection (1) (a), (b) or (c) must be consistent with this Act and the RTO standards. (7) Before cancelling the registration of a training organisation under subsection (1) (d), the Board must consult the registering bodies of each of the other jurisdictions where the RTO is operating. (8) Failure to comply with subsection (7) does not affect the cancellation. Also, the Board is not required to comply with subsection (7) if the Board is satisfied that it is in the public interest to immediately cancel the registration of the training organisation. (9) A restriction or suspension imposed under this section may be lifted at any time by the Board on payment of such fee as may be determined by the Board and if the Board is satisfied that such requirements as may be determined by the Board have been complied with. 21 In this case, the Board imposed the sanction allowed by s 18(1)(d) (cancellation), and did so, according to the text of its decision, having regard to matters seen as relevant to the grounds (d), (g), (h) and (i) set out in s 18(2). 22 Ground of appeal no 2 challenges as procedurally unfair the statement by the Tribunal that ground (i) was invoked ('the training organisation has contravened this Act or a condition to which its registration is subject'). The argument relies on the fact that ground (i) was not listed in the statement of grounds filed and served on SBI pursuant to the Tribunal's case management directions. The Tribunal referred to this omission at [18] of its reasons: Mr Cribb, acting for the Board did not include s 18(2)(i) in a statement of grounds document he prepared shortly before the hearing. That provision was included in both the decision made on 6 August 2009 and in the internal review. 23 This omission was the subject of the following hyperbole in the notice of appeal: The Tribunal determined … to deal with the determination of the review on a central basis that was not put forward by the respondent at the hearing, namely, that section 18(2)(i) … was relied on by the respondent, when it was not and the Tribunal did so without notice to the appellant. This constituted a failure of the Tribunal to afford the appellant natural justice or procedural fairness in that the appellant was deprived of the opportunity to make submissions on it and/or adduce further evidence on it. Accordingly the Tribunal's entire determination on the appellant's initial conditions on its registration … falls away as it was made without notice and in breach of procedural fairness. 24 Grounds of appeal of this kind are a waste of the time of the Appeal Panel. There can be no doubt from the history of the matter that the Board had as its central concern the question of the extent to which SBI had 'contravened this Act or a condition to which its registration is subject'. 25 A mere omission by the Board to refer expressly to the ground in a preparatory document for hearing is of no significance. SBI was well aware of the matters that had caused the Board to act as it did. There was no denial of procedural fairness. In any case the omission was aired before the Tribunal by SBI's then counsel. The Tribunal dealt with it appropriately. 26 Ground no 1 contains the principal challenge to the Tribunal's decision. It is asserted that the Tribunal failed in its duty to give adequate reasons. Many of the later grounds of appeal involve the same challenge. They highlight particular observations or findings in the reasons and criticise them individually. 27 It is plain that the Tribunal has a duty at common law to give adequate reasons, reinforced by the provisions of the ADT Act going to the matter (principally s 89). Sub-section (5) of s 89 provides: … the written reasons are to set out the following: (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, (c) the reasoning processes that led the Tribunal to the conclusions it made. 28 Section 89 is concerned only with those cases where there is an oral decision. This was not such a case. Appeal Panels have, of course, accepted that the standards apply generally to the decisions of the Tribunal. See for example, Woodside & Anor v Director General, Department of Community Services [2000] NSWADTAP 8; and Barwick v Law Society of New South Wales (No. 2) [2003] NSWADTAP 4; Satchithanantham v Zeaiter Corporate Holdings Pty Ltd [2009] NSWADTAP 53 at [37]. See also, Sinha v Health Care Complaints Tribunal [2001] NSWCA 206 dealing with the way a similar statutory provision governing the Medical Tribunal is to be interpreted and applied. 29 Observations in leading NSW cases such as Pettitt v Dunkley [1971] 1 NSWLR 376 and Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 have frequently been cited with approval. In the latter case McHugh JA said at 280: If an obligation to give reasons for a decision exists its discharge does not require lengthy or elaborate reasons … But it is necessary that the essential ground or grounds upon which the decision rests should be articulated. In many cases the reasons for preferring one conclusion to another also need to be given. 30 In an earlier case, Housing Commission of New South Wales v Tatmar Pastoral Co [1983] 3 NSWLR 378, Mahony JA said at 386: … [T]he basis of the decision of a trial judge or of an intermediate court of appeal should be made apparent. This does not mean that the reasons given need be elaborate: an elaborate argument may not require an elaborate answer. Reasons need be given only so far as is necessary to indicate to the parties why the decision was made and to allow them to exercise such rights as may be available to them in respect of it. 31 The principles relating to adequacy of reasons have recently been summarised by McColl JA in Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [58] - [66]; and in Carlisle Homes Pty Ltd v Barrett Property Group Pty Ltd [2009] FCAFC 31 by Tamberlin, Sundberg and Besanko JJ at [40]-[41]. 32 Many of the statements of what is required by way of adequacy of reasons belong to the universe of civil litigation, with its emphasis on pleadings, factual disputes that may be determinative of outcome, and those determinations being dependent in turn on assessments of the credibility of witnesses. Care must be taken in assimilating those statements to the task required of an administrative decision-maker making decisions based on an array of relevant material. In Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259, Kirby J noted at 293: … [I]t is not erroneous for a decision-maker, presented with a large amount of material, to reach conclusions as to which of the facts (if any) had been established and which had not. An over-nice approach to the standard of proof to be applied here is undesirable. It betrays a misunderstanding of the way administrative decisions are usually made. It is more apt to a court of law conducting a trial than the proper performance of the functions of an administrator … 33 The present case is one with a substantial history of interaction between the regulator, (the Board) and the regulated party (SBI). The process generated a large amount of material. This is a function of the detailed prescription of standards in the vocational education sector and the multi-faceted nature of the internal management, external auditing and broader accountability requirements. 34 The Tribunal in its merits review jurisdiction sits as a substitute administrator, often faced with volumes of material of the kind presented in this case. It is not conducting a civil trial. The general principles relating to the duty to give reasons enunciated in the general case-law apply, but with the fine-tuning reflected in Kirby J's observations about the nature of the administrative decision-making process. The administrative decision-making process serves, as compared to much civil litigation, the wider ends of the maintenance and protection of significant public interests. Those interests in this case include ensuring that the teaching undertaken in vocational institutions is of an adequate standard, and that the qualifications issued by these institutions have credibility and do not foist students on the public who are under-trained or not truly qualified. 35 In our view, the Tribunal dealt in a thorough and comprehensive way both with the primary objections to SBI's continued registration and the secondary objections. We have listed at the beginning of these reasons the many matters in which SBI was found to be non-compliant. The Tribunal differentiated between serious breaches, less serious breaches, those that were continuing and those that were now the subject of positive repair. 36 This is not a case of a rush to judgement, with little or no reasons being given. In our view, many of the grounds of appeal of SBI adopt, to use Kirby J's expression, an 'over-nice approach' to what is to be expected of the Tribunal. 37 Ground of appeal no 4, for example, criticises the Tribunal for making a finding at [44] that SBI did not comply with either part of the condition as to employment of trainers. The Tribunal made the finding based on inference, arising from the Principal Executive Officer Mr Oostdyck's failure to attest to any steps of the kind required, and the limited nature of the testimony he gave in relation to the extent of compliance during his period as PEO (July to October 2009). In our view, this was a perfectly orthodox way to approach this matter. The regulated party, SBI, had a condition imposed on it that required it to maintain the required data. If there was any data showing compliance it was in a position to furnish it. It did not. 38 Ground no 5 is to similar effect, challenging the Tribunal's finding at [47] that the specific condition relating to retention of completed student assessments was breached. It is plain from the evidence recited that the Tribunal was referring to a continuing breach that belonged to the entire period of operation of the college (18 months) until the time Mr Oostdyck took over. There is no substance to the challenge in Ground no 5. 39 Ground no 6 attacks the Tribunal's assessment of the significance of SBI's failure to adhere to the student cap condition (maximum permitted enrolment, 234). The submissions refer to the fact of widespread non-adherence to cap conditions among registered training organisations in recent years. This fact was acknowledged by Mr Cribb for the Board at the Appeal Panel hearing. The Tribunal considered the plea in mitigation that SBI made in regard to its non-adherence. See [56] of its reasons. This was not a marginal non-adherence, or a non-adherence that has been seen in some cases as a function of varying speeds of progress by students through their courses. The evaluation that the Tribunal ultimately made in the matter was clearly open to it. There is no substance to Ground no 6. 40 Ground no 7 draws on the law governing registration. It contends that SBI must have been compliant at the time of registration, as the Board can only issue a registration if it 'is satisfied that the applicant complies with the RTO standards' (s 12(3)(c)). The ground refers to statements in the Tribunal's reasons where it spoke of the Board not being satisfied that SBI was compliant when it granted registration. It is said that the Tribunal's misunderstanding of SBI's state of compliance gave rise to a 'manifest error' in the way it approached its task of determining the 'correct and preferable' decision. 41 It is plain from the history of the application for registration (not challenged by SBI) that SBI was not seen as being in a full state of compliance by the pre-registration audit undertaken in July 2007. Nonetheless in December 2007 the Board granted registration and approved the enrolment of overseas students. We have mentioned some of the specific conditions that the Board imposed (there were five, set out at [3] of the Tribunal's reasons). They went to the areas where non-compliance had been noted, their apparent purpose being to ensure that there was henceforth a state of compliance. 42 We see nothing unusual about such an approach to the administration of a licensing scheme. The approach was facilitative rather than obstructive of SBI's application. The Board was prepared to give it the go-ahead subject to strict conditions as to certain matters. SBI was allowed to enter the market, no doubt having also given relevant undertakings. 43 In our view, that is all the Tribunal was seeking to indicate, when it said that the Board 'was not satisfied' that SBI complied with all applicable standards when it granted registration; and when it said later in its reasons, at [105], that 'The Board registered SBI in the expectation that those matters would be rectified.' 44 There is no substance to Ground no 7. 45 Ground no 8 refers to [24] to [29] of the Tribunal's reasons where it is dealing with a preliminary issue. There was a dispute over the source of authority for the resolution made by the Board that promulgated the guidelines to be observed by organisations providing courses to overseas students. It is asserted that the Tribunal erred in its reasoning as to the source of authority. 46 Section 34(7)(e) of the VET Act mandates that it is a condition of the approval to provide courses to overseas students that the provider comply with the 'approval guidelines'. 'Approval guidelines' are defined as 'the guidelines issued by the Board under section 40'. 47 The relevant Board resolution made on 1 July 2007 (the Tribunal mistakenly states the year as 2009 at [26]) gave section 32, not section 40, as the head of power under which the Board acted. Section 32 deals with the subject of the issuance of guidelines in relation to registration and accreditation. 48 Ground no 8 asserts that in fact s 32 was the correct head of power. The Board itself submitted to the Tribunal that it should have recited s 40. In our view, it is plain from the terms of the resolution (set out at [26] of the reasons) that the Board was seeking to give effect to 'the National Code for Registration Authorities and Providers of Education and Training to Overseas Students', which is part of the Australian Quality Training Framework (AQTF). It is obvious that the resolution dealt with two subjects, and they had separate sources of authority, s 32 and s 40. 49 It is not apparent what the point of this ground of appeal is. As the Tribunal notes in its decision, an error in the nomination of the head of power does not affect validity provided there is a head of power. In our view, there can be no doubt that the Board issued approval guidelines within the meaning of s 40, and it was appropriate to apply them to SBI. In its final reasons the Tribunal relied entirely on the contraventions of the Board's conditions for its conclusion as to the correct and preferable decision. It only referred to the course approval issues on a supplementary basis. 50 Ground no 9 seizes on the date which the Tribunal gives for the resolution - 1 July '2009'. It is said that it is unfair to SBI to have guidelines made at that date applied to conduct belonging to an earlier period. Notably no point of this kind was made to the Tribunal, for the obvious reason from a scrutiny of the material that the resolution was in fact made 1 July 2007. The Tribunal simply made a clerical slip at this point in its reasons. This ground should not have been agitated, again wasting the time of the Appeal Panel. 51 In the closing section of its reasons, the Tribunal proceeded to assess the gravity and significance of the omissions it had identified, particularly the contraventions of conditions. It used as an aid the National Guideline for Managing Non-Compliance issued by the Commonwealth. Grounds nos 10, 11 and 12 proceed on the premise that the Tribunal is obliged to apply these guidelines, and that it misapplied them in various ways. 52 In our view, this document is no more than what it describes itself as - a guidance document. The Tribunal is not bound, slavishly, to treat its contents as a binding code. At this point of its decision the Tribunal was engaged in the making of a general evaluation of the significance of the proven misconduct in order to determine what the correct and preferable decision might be. It found the Guideline useful as a way of approaching the making of this judgement, and as an aid to the exercise of its discretion. There is no substance to these grounds. 53 Ground no 14 asserts that the Tribunal failed to consider or evaluate other or alternative possible sanctions, such as allowing SBI to remain in operation subject to a fine, or further conditions, or by imposing a period of suspension. It is plain that at [100] and [101] of its reasons it is considering the question of the 'appropriate sanction'. There is no need for the Tribunal to tick off one by one the various sanctions in the options open to the administrator. 54 Ground no 13 picks up comments made by the Tribunal in its background narrative at [13] to [20] explaining the place of the Standards for Registered Training Organisations under the Australian Quality Training Framework. The Tribunal notes that the particular standards are outcome oriented. It refers at [19] to the Introduction to the document which it sees as supporting that point. It notes at [20] that regulatory bodies, here the Board, are asked to make an assessment about the degree to which the organisation is achieving compliance. The Tribunal continues: 'Because the outcomes, in most cases, cannot be objectively measured, that is a judgement about which minds may differ. Nevertheless a judgement must be made.' 55 The ground of appeal is that the Tribunal 'failed to objectively measure training outcomes for the students in connection with the appellant'. It is apparent that the Tribunal was simply referring in the remarks quoted to that type of objective assessment that is quantitative, as in measurements using a numerical or similar grid. It was then observing that less definitely expressed standards leave a wider area for debate as to what is acceptable. It was not going so far as to suggest that it would abandon any attempt at detached consideration of the issue or fail to be objective in the sense of approaching the issues with an impartial mind and applying rational considerations. 56 Ground no 3 challenges as procedurally unfair the way the Tribunal dealt with the audit report of February 2009 prepared by Ms Watkins. At [31]-[32] the Tribunal had indicated that it would only rely on the report to a limited extent. SBI's submission is that in its final reasons it went further than that. 57 The Tribunal said: 31 Ms Watkins gave evidence for the Board. Mr Singleton chose to use the time available for cross-examination by focusing in some detail on Parts C and D of the National Code (up to Standard 11) and on standard 1.2 of the RTO Standards. During the course of that cross-examination Ms Watkins agreed with Mr Singleton that the Board cannot assess an RTO against the standards in Part C of the National Code because those standards are directed to regulators such as the Board and not to RTOs. Ms Watkins also agreed to change several findings of 'non-compliant' to findings of 'compliant', 'not applicable' or 'not auditable'. She maintained her finding of non-compliant in relation to Standard 10.1 of Part D of the Code relating to course progress. In addition, in relation to Standard 1.2 of the RTO Standards, Ms Watkins withdrew a finding of non-compliance saying that some of the text supporting that standard would have been better placed under element 1.5. On the basis of these concessions on selected parts of the audit report, Mr Singleton submitted that none of the remainder of the audit report can be relied on to support any of the Board's decisions. 32 Mr Cribb disagreed with that submission but nevertheless agreed that if the Tribunal were minded to affirm the Board's decision on the basis of material in the audit report on which Mr Singleton did not cross-examine Ms Watkins, a further hearing would be necessary to test that evidence. We do not agree that it follows that Ms Watkins' concessions in relation to some parts of the audit report mean that we should disregard the remainder of her report. Nevertheless we have not relied on her view in relation to matters about which she was not cross-examined. Rather, we have relied on the remainder of the evidence in forming our own view of compliance or non-compliance. 58 The submission is that by taking into account the Watkins report at [42], [47], [87] and [104]-[105] on matters where there had been no cross-examination, the Tribunal breached the above assurance and thereby denied SBI procedural fairness. 59 We set out below the paragraphs within which appear the references to the Watkins report to which we understand the objection to be taken (those references being bolded): 42 This condition has two parts: retaining contracts and other evidence of continued employment and advising the Board of the qualifications and experience of any new trainers and assessors. In the February 2007 [sic, should read '2009'] Audit Report at p 23, Ms Watkins noted that only two of the trainers listed as being on staff during the audit in 2007 were current trainers. Ms Watkins commented that SBI has not notified the Board of any changes to nominated assessors/trainers despite that being a condition of registration. 47 Mr Oostdyck's evidence in relation to this condition was that student records was an area of compliance which he identified as needing improvement. He said that he initiated a complete review of each student's individual file to ensure compliance with the standards. All student assessments were retained, filed and coded in boxes and stored with the student services unit. He maintains that historical inconsistencies in records were substantially rectified and systems were put in place for the appropriate retention of assessments and other records. With respect, even if systems are now in place, it is apparent that this condition was not being complied with until relatively recently. The Board conducted its February 2009 audit without the benefit of these documents. We are satisfied that SBI has contravened this condition. 87 In the audit report Ms Watkins stated that she had sampled the files of five students studying business qualifications and found that one file contained no assessment tools. Four 'reported' student files were also sampled. There were no assessment tools in those files. SBI's response to this concern was that completed assessment tools are now being filed systematically and that as part of the validation process, this area will be reviewed further. Mr Oostdyck gave evidence that assessments were reviewed and improved and the validation process was implemented across all qualifications. 104 SBI began enrolling students in February 2008. The Board's view in February 2009 was that SBI did not comply with the standards or conditions of registration. We accept the Board's evidence, which was not contradicted by SBI, that it had not addressed the alleged non-compliances brought to its attention following the July 2007 audit. Whether or not all the Board's conclusions about non-compliance in February 2009 were justified, it was not until after that report was provided, and in many cases until Mr Oostdyck was appointed as the Principal Executive Officer in July 2009, that SBI began seriously to address these issues. 105 SBI has had ample opportunity to address the issues highlighted by the Board in its 2007 audit during its first 15-18 months of operation. The Board registered SBI in the expectation that those matters would be rectified. Even as at the 2009 audit issues as critical as the implementation of the course progress policy had not been addressed. It was not until SBI's registration and approval was under threat that SBI took significant steps to address these issues. While relatively minor or even significant non-compliances would not normally justify cancellation, in this case those non-compliances together with SBI's entire compliance history persuades us that cancellation is the preferable decision. 60 None of these references go, in our view, so far as to rely on Ms Watkins' untested evidence. None of the references are critical to any conclusions that follow. In the case of the reference in para [87] it is by way of background to the Tribunal's fundamental point, which we have examined already. SBI could have produced evidence on this matter, and did not do so. The reference to the Watkins report makes no difference to this conclusion. Para [47] involves the same point. At para [42] the Tribunal refers to the contents of the Watkins report but takes the matter no further. The reference in [105] is merely one in passing. 61 In our view none of this material shows that the Tribunal relied on the Watkins report in reaching any finding of non-compliance. The appellant's written submissions merely repeat the terms of the ground of appeal, and do not explain in any precise way what prejudice or disadvantage it suffered. 62 Even if there was a procedural unfairness in making these references, the absence of that unfairness 'could not possibly have produced a different result' (Stead v State Government Insurance Commission (1986) 161 CLR 141 at 147). Conclusion 63 None of the grounds of appeal alleging errors of law are made out. Application for Leave to Extend to the Merits 64 We have referred in some detail to the application earlier in these reasons. The discretion to extend leave to the merits is to be exercised with care, mindful of the importance of finality in decision-making. 65 The Tribunal in its summation at [105], set out above, was deeply troubled by the persistent history of non-compliance from day one of the operation. At the eighteen month mark, SBI began taking steps to bring itself into compliance. The Tribunal acknowledged that, but plainly considered on balance that the cancellation decision should stand. 66 There is nothing exceptional about the way the Tribunal dealt with this case. There should be no extension of the appeal to the merits. Order Appeal dismissed.

Sydney Business Institute Pty Ltd v NSW Vocational Education and Training Accreditation Board

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Judgment (10 paragraphs)

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Cases Cited (5)

Cited By (19)