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[2008] NSWADT 216
respondent. The Respondent's decision in matter no. 083007 is affirmed with immediate effect. The Respondent's decisions in matters nos. 083112, 083124, 083125 are affirmed with effect from 5 September 2008.
The Sydney International College of Business ran hospitality and cookery courses for overseas students but its kitchens lacked proper ventilation, it crammed too many students into limited facilities, issued inaccurate qualifications and failed to keep proper records. After years of warnings and audits the regulator cancelled its registration. The Tribunal agreed, saying the college could not deliver the quality training the law demands and that its past poor compliance meant it could not be trusted to improve. The college must stop operating in New South Wales by early September 2008.
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Sydney International College of Business Pty Ltd had been registered as a training organisation since 1 January 1995 and held separate approval to enrol overseas students from October 1995. At its peak it was approved for 1,850 students, but by 2005 the Board had reduced that cap to 850 because of the heavy demands commercial cookery placed on premises and equipment. The College gradually shifted its emphasis from business courses to hospitality, especially commercial cooking, and maintained two faculties: Hospitality and a small Hairdressing faculty.
1 cited instrument linked from this judgment.
Between 2005 and 2007 the Board conducted successive compliance audits. These revealed multiple serious deficiencies: kitchens operating without mechanical ventilation in breach of council orders, student numbers far exceeding the capacity of the single compliant hot kitchen, trainer-to-student ratios that compromised safety and quality, learning and assessment resources that did not meet Training Package requirements, inaccurate issuance of diplomas (initially thought to involve missing units but later shown to be a transcript error), mismatches between internal enrolment records and PRISM reports to the Commonwealth, and failure to maintain membership of the Tuition Assurance Scheme. The Board also criticised the College's four-week cluster delivery model as incompatible with the recommended sequencing of units.
On 16 October 2007 the Board suspended registration and approval for ten courses (six hospitality, three hairdressing and one e-business) on grounds listed in ss 18(2) and 35(3) of the Vocational Education and Training Act 2005 (VET Act). After internal review and an application for ADT review, the Board varied the suspension on 20 February 2008 to a condition preventing any new enrolments or solicitation of fees. On 21 February 2008 it resolved to cancel registration and approval from 7 April 2008 (or later if review proceedings were on foot). It also refused renewal of both registration (1 April 2008) and approval (15 April 2008).
The College commenced four ADT applications. The Tribunal heard the matters over five days in April, May and June 2008. Evidence included the Board's extensive audit files, reports from Service Skills Australia, cross-examination of the Board's General Manager Ms Willis, and evidence from the College's two external consultants (Mr Stephens and Mr Feagan) and its Hospitality Faculty Head Mr Coates. No senior College manager or administrator gave evidence.
On 27 June 2008 the Tribunal delivered oral reasons affirming the Board's decisions in respect of the four practical commercial cookery and patisserie courses. Further reasons and submissions on 3 and 7 July 2008 led to affirmation of all remaining decisions. Written reasons were published on 5 August 2008 pursuant to s 89 of the Administrative Decisions Tribunal Act 1997. The orders affirmed the suspension decision immediately and the cancellation and non-renewal decisions from 5 September 2008, giving the College a short wind-down period. The net effect was that the College could not operate in New South Wales after that date and had been barred from taking new students throughout 2008.
President O'Connor DCJ approached the matter as a classic merits review under s 63 of the ADT Act. The Tribunal was required to make the correct and preferable decision on all material then before it, not merely to decide whether the Board's original decisions were legally flawed. That approach, grounded in Drake, Brian Lawlor, Control Investments and the then-recent High Court decision in Shi ([21]), allowed the Tribunal to receive fresh evidence of remedial steps taken by the College after February 2008 while still weighing the entire regulatory history.
The Tribunal found that the College had been in significant breach of AQTF 2005 and 2007 standards and the National Code 2007 throughout 2006 and 2007. Five headline areas of non-compliance were identified: inaccurate enrolment and qualification issuance, inadequate premises and equipment capacity, insufficient training staff for the student load, defective learning and assessment resources (including sequencing and duration issues), and failure to maintain Tuition Assurance Scheme membership. Although some deficiencies had been narrowed by the time of hearing, others had been cured only artificially by the moratorium on new enrolments.
Particular weight was placed on the practical cookery courses. The Hospitality Training Package required a substantial period of experience in a fully operational commercial kitchen. One compliant kitchen on Level 3 could safely accommodate only about 20 students at a time; the College had been operating with hundreds. Industry advice was that two burners per student, appropriate bench space and proper ventilation were necessary. The Tribunal accepted that ratios of 1:20 to 1:25 for practical classes were the outer acceptable limit; the College's past operations had far exceeded even a 1:30 standard. A 40-hour face-to-face teaching load left no time for preparation, marking or professional development, compromising quality ([107]-[108]).
The Tribunal was not satisfied that the College's proposed suite of ten conditions could overcome these structural problems if the College returned to an 850-student campus with 57-90% in hospitality. The regulatory history showed slow and reluctant compliance. Senior management had not given evidence, and Mr Coates' responses on sequencing and timetabling were unconvincing. The Tribunal therefore concluded that cancellation and refusal of renewal were the correct and preferable outcomes because they best advanced the statutory objects of quality and integrity in vocational training (s 3 of the VET Act).
For the diploma hospitality courses the Tribunal held that excising practical electives would produce an artificial qualification contrary to industry design and the integrated nature of VET. Hairdressing courses were being delivered under an expired Training Package with only 15 continuing students and unresolved equipment and delivery-mode issues. The e-business course was defunct. Collectively these findings justified affirming every Board decision.
Prior to this decision the VET Act 2005 had been in force for only three years. It consolidated earlier registration and accreditation regimes and applied the nationally agreed AQTF standards. The grounds in ss 18(2) and 35(3) for suspension, cancellation or non-renewal were already settled, but their practical application to persistent but partly-remediated non-compliance by a medium-sized private RTO was less fully explored. The decision confirms that "resources" in ss 18(2)(g)-(h) and 35(3)(g)-(h) include not only physical assets but also staff workload capacity, administrative systems and the ability to deliver the full Training Package in a compliant sequence. It also cements that an RTO's compliance history is relevant to renewal decisions even on a de novo review.
The decision post-dates the introduction of AQTF 2007, which moved toward an outcomes-based rather than prescriptive model. The Tribunal carefully compared both frameworks and found sufficient continuity on the standards in issue ([61]-[62]). It also applied the National Code 2007 (Standard 14) to overseas-student approvals. After the decision, regulators gained clearer guidance that critical non-compliance in practical-delivery disciplines such as commercial cookery can justify the ultimate sanction even if some corrective action has been taken late in the piece. The graduated sanctions hierarchy in the AQTF National Guideline for Managing Non-Compliance was acknowledged but held not to preclude cancellation where public confidence in the qualification system was at stake ([67], [174]).
The emphasis on the need for senior management evidence and the danger of over-reliance on external consultants has influenced subsequent audit and hearing practice. The decision remains a leading illustration of how the Tribunal balances fresh evidence against regulatory history in VET reviews.
"[21] In determining an application for a review, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it..."
Plain English: We do not just check whether the Board made a legal mistake; we step into the Board's shoes, look at everything now known, and make what we think is the right decision.
"[123] The Tribunal is satisfied that the College was in significant breach of many standards to which it was subject at the time of the principal audit in 2006 and the final audit report of 2007."
Plain English: The audits were not nit-picking; the College really was failing on important quality rules for years.
"[147] Many of the conditions go to matters which should form part of the ordinary conduct of a registered training organisation's administration."
Plain English: The College was asking the Tribunal to order it to do things that any properly run RTO should already be doing without being told.
"[158] It would be contrary to the public policy objectives that underpin the scheme for accreditation and supervision of registered training organisations to accede to the College's proposal."
Plain English: It would undermine the whole VET system if a college banned from teaching cooking could still hand out diplomas that normally require cooking experience.
"[169] It is only very recently that a number of critical non-compliances have been rectified... These criticisms point to significant inadequacies, in the Tribunal's view, in the general administration of the College."
Plain English: Last-minute fixes after the regulator started cancellation proceedings do not erase years of sloppy administration.
This precedent is triggered where an RTO in the hospitality or similar practical-trade sector has operated for a sustained period with: (1) physical facilities that cannot accommodate its student numbers while meeting Training Package requirements for commercial-kitchen experience; (2) trainer-to-student ratios and teaching loads that leave insufficient time for non-contact duties; (3) learning and assessment strategies that fail to sequence units logically or provide sufficient practical demonstration; (4) administrative failures such as inaccurate transcripts, PRISM reporting errors or missing Tuition Assurance Scheme membership; and (5) a history of slow or incomplete responses to audit findings. It is especially relevant where the RTO's student body is predominantly overseas fee-paying students and where senior management does not give evidence of cultural change. The decision shows that a moratorium on new enrolments producing temporary "compliance" will be viewed sceptically. It applies with equal force to renewal applications and cancellation proceedings.
Although the judgment itself cites and applies Shi at [21] to confirm the Tribunal's task on review, the present decision has been treated in subsequent ADT and NCAT reasons as authoritative on the weight to be given to regulatory history in VET matters. Later tribunals have followed the approach that late remedial action and consultant reports cannot always overcome a pattern of critical non-compliance affecting qualification integrity. The emphasis on integrated theory-and-practice delivery in hospitality qualifications has been cited in other commercial cookery and patisserie cases. The decision's treatment of the AQTF 2007 outcomes focus while still enforcing detailed Training Package requirements has guided regulators in balancing flexibility against minimum standards. No part of the reasoning has been disapproved; it continues to be applied when deciding whether proposed conditions are an adequate alternative to cancellation.
The judgment leaves open precisely how many practical occasions in a commercial kitchen are required to satisfy the holistic units in the Hospitality Training Package; it notes the industry expectation of "substantially more than 48 occasions" but does not set a bright-line figure. It also does not definitively resolve the outer limit of acceptable theory-class ratios across all VET disciplines, accepting that 1:45 may be the Board's outer limit but leaving room for evidence in different contexts. The weight to be given to a Commonwealth Ministerial exemption from the Tuition Assurance Scheme when the state regulator is considering cancellation remains unsettled; here the Tribunal gave it little weight because the Commonwealth reasons did not address the Tribunal's core concerns. Finally, the decision leaves unresolved the exact interaction between state VET cancellation and ongoing CRICOS registration under the ESOS Act, although it notes the practical linkage. These issues continue to arise in later regulatory proceedings.
CITATION: Sydney International College of Business Pty Ltd v Vocational Education and Training Accreditation Board [2008] NSWADT 216
APPLICANT Sydney International College of Business Pty Ltd PARTIES: RESPONDENT Vocational Education and Training Accreditation Board
FILE NUMBER: 083007, 083112, 083124, 083125
21, 22 April 2008 HEARING DATES: 7 May 2008 13, 27 June 2008 3, 7 July 2008
BEFORE: O'Connor K - DCJ (President)
CATCHWORDS: Review - Registered Training Organisation - Cancellation of Registration - Refusal to renew - Vocational Education and Training Act 2005
Vocational Education and Training Act 2005 LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Education Services for Overseas Students Act 2000 (Cth)
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 CASES CITED: Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307 Re Control Investment Pty Ltd and Australian Broadcasting Tribunal (No 2) (1981) 3 ALD 88 Shi v Migration Agents Registration Authority [2008] HCA 31
APPLICANT P Singleton, counsel / Maddocks Lawyers REPRESENTATION: RESPONDENT P Cribb, legal officer
As made 7 July 2007: ORDERS: 1. The Respondent's decision in matter no. 083007 is affirmed with immediate effect 2. The Respondent's decisions in matters nos. 083112, 083124, 083125 are affirmed with effect from 5 September 2008.
REASONS FOR DECISION 1 The review applicant, the Sydney International College of Business Pty Ltd (the College), is a registered training organisation (RTO) subject to the Vocational Education and Training Act 2005 (the VET Act). This Act is administered by the respondent, the Vocational Education and Training Accreditation Board (the Board). 2 The College has applied under s 47 of the Act for review of four decisions of the Board (Tribunal file nos. 083007, 083112, 083124, 083125). 3 The College was first registered under the legislation then in force on 1 January 1995. On 9 October 1995 it was given (the separate) approval to offer courses to overseas students. It maintained its registration and approval until the decisions the subject of the present review applications. Between October 2007 and April 2008, the Board made a series of reviewable decisions the effect of which, if affirmed by this Tribunal, is to close the College. 4 The College operates at 546-552 George Street Sydney. At its peak, it had approval to enrol 1850 students, on the basis that its major disciplines were business and finance. In recent years, however, it shifted its focus, and its major discipline became hospitality, within which there is a significant emphasis on commercial cooking. In 2005 the Board limited the College's number of students in all disciplines to 850. The Board made the reduction having regard to the special demands on premises, equipment and the like involved in the teaching of commercial cookery. Presently, the College has two 'faculties', a Faculty of Hospitality and a Faculty of Hairdressing. There is a relatively small number of students enrolled in hairdressing. The Board Decisions and the Tribunal Orders 5 First Decision: Suspension varied to Imposition of Conditions. The first decision in the sequence was made on 16 October 2007. It followed on from an audit process that had occurred between 2005 and 2007. 6 The decision was to suspend immediately the College's registration in respect of ten courses (six in hospitality, three in hairdressing, one in E-commerce) and the approval to provide those ten courses to overseas students. The formal terms of the decision follow: Schedule A As permitted by section 18(1)(c) and 15(2) of the VET Act, the Board gives notice of immediate suspension of your registration in NSW for the following six courses: THH31502 Certificate III in Hospitality (Commercial Cookery) THH33002 Certificate III in Hospitality (Operations) THH41402 Certificate IV in Hospitality (Patisserie) THH41302 Certificate IV in Hospitality (Commercial Cookery) THH51202 Diploma of Hospitality Management THH60202 Advanced Diploma of Hospitality Management on one or more of the grounds set out in section 18(2)(d), (g), (h) and (i) of the VET Act in order to prevent further enrolments whilst proposed cancellation action is under review. AND As permitted by section 18(1)(c) and 15(2) of the VET Act, the Board gives notice of immediate suspension of your registration for the following four courses: WRH30100 Certificate III in Hairdressing WRH40100 Certificate IV in Hairdressing WRH50100 Diploma in Hairdressing BSB51101 Diploma of E-Business on one or more of the grounds set out in section 18(2)(b), (d), (g), (h) and (i) of the VET Act in order to prevent further enrolments whilst proposed cancellation action is under review. Schedule B As permitted by section 35(1)(d), 36(1)(a) and 36(2) of the VET Act, the Board gives notice of immediate suspension of your approval for the following ten courses: THH31502 Certificate III in Hospitality (Commercial Cookery) THH33002 Certificate III in Hospitality (Operations) THH41402 Certificate IV in Hospitality (Patisserie) THH41302 Certificate IV in Hospitality (Commercial Cookery) THH51202 Diploma of Hospitality Management THH60202 Advanced Diploma of Hospitality Management WRH30100 Certificate III in Hairdressing WRH40100 Certificate IV in Hairdressing WRH50100 Diploma in Hairdressing BSB51101 Diploma of E-Business 7 In a further letter dated 29 October 2007, the Board said: 'The Board's decision to suspend on the grounds of public interest is based on its concerns that quality training and assessment outcomes are seriously jeopardised for a range of stakeholders including students, staff, future employers, the education and training industry and the community generally. These concerns are supported by audit findings and industry advice which establish that: - The cooking which is occurring on the premises is being carried out without the installation of mechanical ventilation and as such constitutes an OH&S risk to staff and students - SICB's learning and assessment strategies and assessment tools do not meet AQTF requirements or the requirements of the relevant hairdressing and hospitality Training Packages. Assessments fail to provide sufficient demonstration of practical skills and fail to meet the sufficiency, reliability and validity requirements for VET assessment; - SICB's delivery mode involving continuous enrolment into flexible four (4) week clusters is inappropriate to accommodate the recommended sequence of units for hairdressing and hospitality for training and assessment purposes; - The duration for hospitality courses has been significantly shortened so that they do not support the achievement of quality training and assessment outcomes; - Facilities, equipment and resources for both hairdressing and hospitality (including hospitality management), delivery and assessment do not comply with the relevant training package requirements, are insufficient for student numbers and cannot support the achievement of quality training outcomes; - Student-trainer ratios for hospitality (including hospitality management) and hairdressing qualifications are excessive and do not support quality training and assessment; - Teaching loads for most trainers are excessive with additional hours being required for preparation, marking and professional development. Such workloads have a negative impact on the quality of training and assessment; - SICB has inappropriately issued qualifications with a substantially lower number of units than required to achieve the qualification and has not taken appropriate steps to rectify this. This impacts on future employers and customers, and negatively impacts on the perception of the quality of the Australian training market; - SICB is continuing to accept students into the expired WRH00 Hairdressing Training Package qualifications. The qualifications received by these students do not meet current industry requirements; - SICB has been given numerous opportunities over a prolonged period of time to become compliant. The College's E-Business course has been suspended because no formal notification was received by the Board in writing that SICB wished to withdraw this course, despite repeated requests for formal notification.' 8 The College applied for internal review. The internal review affirmed the decision (14 December 2007). The College filed its application for review (file no. 083007) on 10 January 2008. 9 The College applied to the Tribunal for a stay of the decision. The matter was listed for 19 February 2008. The hearing was vacated, after Mr Cribb advised that the Board would of its own accord, and after negotiations with the College, vary its suspension decision. On 20 February 2008 the Board's delegate issued a variation of the decision, with immediate effect. The delegate stated that the decisions in relation to the registration and approval of the College, as set out in the letter of 16 October 2007 were to be 'varied ab initio (from the beginning) such as to substitute for any reference to suspend or suspension the imposition of the following condition'. The condition was: 'The [College] shall not, in relation to any of the courses specified in either or both of Schedules A and B to the Letter [the ten courses]: (a) do any thing for the purpose of recruiting or enrolling students for the course; or (b) solicit or accept any money from any student or intending student for the course (other than from a student who had begun the course on or before 16 October 2007 and only in relation to that course); or (c) if an accepted student of the provider has not begun the course - permit the student to begin the course (and refund any money paid by the student in relation to that course).' 10 The letter concluded: 'I understand that the Company accepts the above decision in so far as it varies the original decisions as communicated in the Letter but I also understand and accept that the Company maintains its application to the Administrative Decisions Tribunal (File No. 083007) for review of the original decisions as now varied.' 11 Second Decision: Prospective Cancellation. The next decision of the Board was to cancel the registration and approval (21 February 2008). 12 Material parts of the letter of 21 February 2008 follow: 'I advise that the NSW Vocational Education and Training Accreditation Board ("the Board"), at a meeting of the members of the Board on Monday 18 February 2008, resolved that the registration and approval of Sydney International College of Business Pty Ltd under the Vocational Education and Training Act 2005 ("the VET Act"): "are cancelled as from 7 April 2008 or such later date or dates as the Director may determine if, in the opinion of the Director, Sydney International College of Business Pty Ltd has expeditiously pursued review opportunities available to it under the Vocational Education and Training Act 2005 and those reviews have not finally been determined." In making that decision the members of the Board had before them various papers prepared and collated by officers of the Board ("the Papers"). A copy of the Papers is attached (with the exception of the documents at Tabs 1 to 8 of the letter dated 21 January 2008 from Maddocks Lawyers). Notice of the above decisions are given in accordance with sections 18(1)(d) and 35(1)(d) of the VET Act. The grounds provided under section 18(2) of the VET Act are as follows: A. Sydney International College of Business Pty Ltd fails to comply with the RTO Standards (section 18(2)(d) of the VET Act) B. Sydney International College of Business Pty Ltd does not have the resources to competently provide the courses in respect of which it is registered (section 18(2)(g) of the VET Act) C. Sydney International College of Business Pty Ltd's resources do not comply with the RTO standards or the registration guidelines (section 18(2)(h) of the VET Act) D. Sydney International College of Business Pty Ltd has contravened this Act or a condition to which its registration is subject (section 18(2)(i) of the VET Act). The grounds provided under section 35(3) of the VET Act are as follows: A. Sydney International College of Business Pty Ltd has failed to comply with the approval guidelines (section 35(3)(d) of the VET Act) B. Sydney International College of Business Pty Ltd does not have the resources to competently provide the courses to which the approval relates (section 35(3)(g) of the VET Act) C. Sydney International College of Business Pty Ltd's resources do not comply with the approval guidelines (section 35(3)(h) of the VET Act) D. Sydney International College of Business Pty Ltd has contravened this Act, the regulations or a condition to which its approval is subject (section 35(3)(l) of the VET Act). In making its decision, the Board had regard to the RTO standards, approval guidelines, and the Papers.' 13 The College applied for internal review (14 March 2008). No internal review determination was made. After 28 days passed, the matter became finalised (Administrative Decisions Tribunal Act 1997 (ADT Act), s 53(9)). The application for review was filed on 7 April 2008 (file no. 083112). 14 Subsequently the Board indicated that it would stay the operation of this decision until the Tribunal had made its orders. 15 Third and Fourth Decisions: Refusals to Renew. The Board decided to refuse to renew registration (1 April 2008). The College applied for internal review on 2 April 2008. It also applied to the Tribunal for external review on 17 April 2008 (application for review file no. 083124). 16 The Board then decided to refuse to renew the approval (15 April 2008). The College applied for internal review on 17 April 2008. It also applied to the Tribunal for external review on the same date (application for review file no. 083125). 17 The Tribunal, with the agreement of the parties, at hearing on 21 April 2008 dispensed with the requirement of internal review in respect of the latter decisions, as permitted by the ADT Act, s 55(2)(c). 18 The Tribunal sat on five days in the April-June period. Because of the urgency of the matter, the Tribunal delivered oral reasons for decision on 27 June 2008 and 3 July 2008, with final orders being entered on 7 July 2008, as follows: 1. The Respondent's decision in matter no. 083007 is affirmed with immediate effect. 2. The Respondent's decisions in matters nos. 083112, 083124, 083125 are affirmed with effect from 5 September 2008. 19 The net effect of these orders is that the College must cease operations in New South Wales not later than 5 September 2008. Moreover the College's operation has been subject throughout the course of the proceedings to a Board-imposed condition that it not enrol new students. Consequently, in 2008 the courses being given by the College have been limited to previously-enrolled students. Written Reasons for Decision 20 Following the making of the orders on 7 July 2008, the College requested the Tribunal to provide written reasons, pursuant to the ADT Act, s 89. The reasons follow. Sub-section (5) requires the written reasons 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 lead the Tribunal to the conclusions it made. Role of Tribunal 21 In determining an application for a review, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, taking account of any relevant material and any applicable written or unwritten law: ADT Act, s 63(1). See further Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589 per Bowen CJ and Deane J; Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307 at 335 per Smithers J; Re Control Investment Pty Ltd and Australian Broadcasting Tribunal (No 2) (1981) 3 ALD 88 at 91 per Davies J; and recently, Shi v Migration Agents Registration Authority [2008] HCA 31 (30 July 2008). Applicable Law 22 The VET Act has the following objects (s 3): ' 3 Objects The objects of this Act are as follows: (a) to establish a registration and accreditation framework for vocational education and training, in particular by applying nationally agreed standards, (b) to ensure the quality and integrity of vocational education and training in this State, (c) to provide for the approval by the Board of persons (other than official universities) to provide courses for overseas students (such approval forming the basis for registration under the Education Services for Overseas Students Act 2000 of the Commonwealth), (d) to promote consistency of standards in vocational education and training, (e) to encourage the recognition of vocational courses that are accredited under this Act.' 23 The Board is established by s 5. 24 Functions. The Board has the following objects and functions (s 6): ' 6 Objects and functions of Board (1) The objects of the Board are as follows: (a) to register training organisations, (b) to accredit vocational courses, (c) to approve persons to provide courses for overseas students, (d) to issue guidelines in relation to the registration of training organisations, the accreditation of vocational courses and the approval of persons to provide courses for overseas students, (e) to advise the Minister on matters concerning the registration of training organisations, the accreditation of vocational courses and the approval of persons to provide courses for overseas students, (f) to liaise with authorities and other bodies (both in New South Wales and elsewhere) in connection with the registration of training organisations, the accreditation of vocational courses and the approval of persons to provide courses for overseas students, (g) to investigate, and to report on, matters concerning the registration of training organisations, the accreditation of vocational courses and the approval of persons to provide courses for overseas students. (2) The Board: (a) has such functions as are necessary or convenient to enable it to achieve its objects and to promote the objects of this Act, and (b) has such other functions as are conferred or imposed on it by or under this or any other Act or law, and (c) is, in the exercise of its functions, subject to the control and direction of the Minister. (3) The Board cannot, however, employ any staff.' 25 Power to Register Training Organisations. Section 12 provides relevantly: '(3) The Board may register the applicant as a training organisation only if: (a) on registration under the application, the applicant will not otherwise be registered as a training organisation by any other registering body, and (b) the Board is satisfied that the applicant's main place of business is, or all or most of its operations will be conducted, in this State, and (c) the Board is satisfied that the applicant complies with the RTO standards. (4) In considering whether an applicant complies with the RTO standards, the Board may conduct a compliance audit of the applicant and have regard to the findings of that audit.' 26 Section 18 provides: ' 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.' 27 Power to Approve Persons to Provide Courses for Overseas Students. Section 34 provides: ' 34 Approval of persons to provide courses for overseas students (1) The Board may, on the application of a person, approve the person to provide courses for overseas students. (2) The Board's approval of a person to provide courses for overseas students may (according to the terms of the approval) apply to such courses generally, to specified classes of such courses or to a specified course or courses. (3) An application for approval to provide courses for overseas students must be in such form, and be accompanied by such fee, as the Board may determine. (4) The Board may require an applicant to furnish further information in relation to the application. (5) Approval may be granted unconditionally or subject to such conditions (which may be imposed when the approval is granted or at any later time) as the Board determines. (6) Examples of the conditions that may be imposed include the following: (a) conditions specifying the period for which the approval is to remain in force, (b) conditions specifying the premises in or from which the course to which the approval relates are to be conducted, (c) conditions requiring the payment (including periodic payment while the approval remains in force) of fees to the Board in respect of the approval. (7) The Board must not refuse an application for approval except on one or more of the following grounds: (a) that the applicant has not furnished such further information in relation to the application as the Board requires, (b) that the applicant does not have the resources to provide the courses to which the approval relates competently, (c) that the applicant's financial arrangements or ethical standards do not warrant the approval of the applicant, (d) in the case of a course that includes matter the subject of proprietary rights (such as copyright) - that the applicant is not lawfully entitled to the benefit of those rights, (e) that the applicant or the applicant's resources do not comply with the approval guidelines. 28 Section 35 provides: ' 35 Amendment, suspension or cancellation of approval (1) The Board may, on its own motion or on the application of any person, do any of the following in relation to an approved provider: (a) amend the approval so that it applies to different courses, (b) revoke or amend any condition to which the approval is subject, (c) impose additional conditions on the approval, (d) suspend or cancel the approval. (2) The suspension of an approval may be lifted at any time by the Board. Before lifting the suspension, the Board may require the payment of a fee determined by the Board. (3) The Board may not suspend or cancel an approval except on one or more of the following grounds: (a) the approved provider requests the suspension or cancellation, (b) the approved provider is no longer providing courses for overseas students, (c) the approved provider has ceased to exist, (d) the approved provider has failed to comply with the approval guidelines, (e) the approved provider's financial arrangements or ethical standards are such that they would not warrant the approval of the provider if it were now to apply for approval, (f) a reasonable doubt exists as to the approved provider's financial capacity to continue to meet its contractual obligations to its students, staff or other persons, (g) the approved provider does not have the resources to competently provide the courses to which the approval relates, (h) the resources of the approved provider do not comply with the approval guidelines, (i) in the case of a course that includes matter the subject of proprietary rights (such as copyright) - that the approved provider is not lawfully entitled to the benefit of those rights, (j) the approved provider has engaged in misleading or deceptive conduct in connection with the recruitment of intending overseas students, (k) the approved provider has failed to comply with a requirement of the Education Services for Overseas Students Act 2000 of the Commonwealth, or of a regulation under that Act, in relation to the courses to which the approval relates, (l) the approved provider has contravened this Act, the regulations or a condition to which the provider's approval is subject.' 29 Compliance Audit Power. The audit process is a central aspect of the system of supervision of registered training organisations. Section 22 of the VET Act provides: ' 22 Compliance audits (1) The Board may, at any time, conduct a compliance audit of: (a) a training organisation registered by the Board or that has applied to the Board for registration, or (b) any of the training organisation's operations (whether those operations are conducted in this State or elsewhere). … (5) This section does not limit the power of any registering body to inquire into the activities of a training organisation.' 30 There are numerous instruments relevant to this sector of regulation, and which were applied in the audit process. The 'RTO standards', to which s 12 refers, is defined as 'the Standards for Registered Training Organisations under the AQTF'. The 'AQTF' means 'the document entitled Australian Quality Training Framework, as in force from time to time, that defines the criteria and standards for the registration of training organisations and the accreditation of courses in the vocational education and training sector'. See s 4 (definitions). 31 In the case of approval decisions, the principal regulatory instrument is the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2007 (the National Code 2007) issued by the Commonwealth Minister under the Education Services for Overseas Students Act 2000 (ESOS Act). 32 The Tribunal's jurisdiction is conferred by s 47, which provides relevantly: ' 47 Review of certain decisions by Administrative Decisions Tribunal A person who is aggrieved by any of the following decisions of the Board may apply to the Administrative Decisions Tribunal for a review of the decision: (c) refusing to renew the registration of a training organisation under section 14, (f) suspending the registration, or part of the scope of registration, of a training organisation under section 18 (1) (c), (g) cancelling the registration of a training organisation under section 18 (1) (d) or 19, (q) suspending or cancelling the approval of a person to provide courses for overseas students under section 35 (1) (d).' Statutory Grounds Relied Upon 33 The Board relied on the following statutory grounds (s 18 re registration); and s 35 (re approval to teach overseas students): - The training organisation has failed to comply with the RTO standards (ground (d) both in s 18 and s 35) - The training organisation does not have the resources to competently provide the courses in respect of which it is registered (ground (g) both in s 18 and s 35) - The resources of the training organisations do not comply with the RTO standards (ground (h) both in s 18 and in s 35) - The training organisation has contravened the Act or a condition to which its registration is subject (ground (i) in s 18 and grounds (k) and (l) in s 35). Tribunal Proceedings 34 The College has continued to operate on a reduced basis pending the determination of the applications for review by the Tribunal. 35 One aspect of the first of the four decisions under notice (the decision made 16 October 2007, as varied on 20 February 2008) was that the Board restricted the College's future activity to the teaching of currently-enrolled students, and prevented the College from enrolling new students. By the time the applications for review came on for hearing before the Tribunal, in April 2008, the student number had decreased to approximately 350. 36 The most up-to-date set of reasons for decision is the reasons accompanying the Board's decision made 18 February 2008, notified on 21 February 2008. That material was in support of the most critical of the decisions in the sequence of decisions, the decision to cancel the registration and the approval. 37 In those reasons the Board referred to the following 'areas of serious non-compliance' on the part of the College: 1. (a) Inaccurate enrolment and (b) issuance of AQF qualifications 2. Capacity of current premises, facilities and equipment 3. Sufficiency of training staff for numbers 4. Adequacy of training and assessment resources 5. Financial viability and capacity to cover refund of fees paid in advance. 38 These remained the concerns at hearing. This is a narrower group of concerns than those that were the subject of the decision made 16 October 2007. 39 The Tribunal initially sat on 21 and 22 April and 7 May 2008. 40 At hearing, the Board primarily relied on its extensive documentation filed under the ADT Act, s 58, setting out the history of its audit process, and the College's responses. The authors of the Board's audit reports were not required for cross-examination, nor were the authors of a related report, from the relevant national Industry Skills Council, Service Skills Australia. There was a challenge to the authors' credentials as experts. CVs were supplied, and the challenge was not maintained, though submissions were made as to the area of relevant expertise. 41 The qualifications of the authors so challenged, but subsequently not called for cross-examination, follows. 42 Ms Giselle Mawer was the lead auditor in the audit process affecting the College that is the basis for the Board's action. She has undertaken over 75 audits, as lead auditor or co-auditor, of public and private organisations (RTOs) applying for registration, approval to provide courses to overseas students, variation to scope, strategic audits as well as providing consultancy services to enterprises wishing to register as a training organisation. Her qualifications include MA, Grad. Dip. TESOL, Dip. Ed., B. Soc. Studs. She held the position Compliance Officer, part-time, at the Board, 2004-2006. She has held lecturing positions at several Universities in the field of adult education. As at 2006 she is a qualified Auditor/Lead Auditor under ISO 9000:2000 Series. In 2007 she became qualified as an external lead auditor and consultant for the National Audit and Registration Agency (NARA). 43 Ms Jeanette Allen is CEO, Service Industries Skills Council. The Skills Council is responsible for the development and maintenance of training packages, support materials and workforce development advice to government for the wholesale, retail, personal services, tourism, hospitality, sport and recreation industries. Her qualifications include M.Ed, B.Ed, Dip Teaching (TAFE), and Cert. in Hairdressing. The Council also obtained advice from two consultants, Ms Briggs and Mr Sweetman. 44 Ms Susan Briggs was Industry Specialist, Tourism and Hospitality, Service Industries Skills Council (2004-2007) and is now a private consultant. Her qualifications include B.A, Post. Grad. Dip. Ed., TAFE teacher in Hospitality Management, including in a College of Catering, Part-time University Lecturer. 45 Mr John Sweetman AM is Managing Director of a family company which provides consulting services to the hospitality industry. He was Manager, Tourism and Hospitality, with the Victorian Employers' Chamber of Commerce and Industry (VECCI) from 1993-1998. Earlier in his career he was a general manager in the Federal Hotels group. He is a fellow of the Catering Institute of Australia, and the Australian Institute of Hospitality Management. He is presently a director of the Service Industries Skills Council. He is highly experienced in auditing in the VET sector. 46 The College did call for cross-examination the deponent to the Board's principal affidavit, Ms Margaret Willis, the General Manager of the Board. 47 Ms Willis has an extensive, relevant professional CV. Her academic qualifications are BA, Dip Ed, Dip Migrant Teaching, Dip Continuing Education, MBA, M Ed. She has held numerous senior positions in the VET sector, covering such areas as training packages, professional development programs for RTOs, management of curriculum development projects and positions in general management of tertiary institutions in the sector. 48 The College submitted that it should be allowed to continue to operate, and proposed that various conditions be imposed on its registration to meet the concerns of the Board. It referred to steps that it had taken since October 2007 to address issues raised by the Board. It referred to the assessment of the Board's audit findings by two external consultants it had engaged, and the advice and assistance they were giving. 49 The first consultant is Mr Christopher Stephens, who has expertise in the provision of compliance management services and advice to RTOs and persons wishing to have RTO status. Mr Stephens' qualifications include BSc (Hons), Microbiology, Grad Dip Business Mgmt, MBA (Technology Mgmt). He has been a private consultant since 1997 in the VET sector, has undertaken audits for the Board, and holds Quality Assurance Auditor (QAS) status under the ISO 9000 standard (since 1997). As a contractor he has done 146 audits for the Board. His earlier career includes management positions in the health sector (pathology services). His client list includes many of the major companies in the heavy vehicle sector. He has recently been appointed a NARA auditor. He holds a qualification as a food safety lead auditor. He conducted an audit at the College on 13 February 2008, using as his reference document the findings of the Board's auditors that later formed a basis for the Board's decision of 18 February 2008 to cancel the registration and approval. Mr Stephens had some experience in the cooking area, but his main work areas appear to have been laboratories (in the past) and heavy vehicle sector-related consultancy including with respect to vocational education. 50 The second consultant is Mr Anthony Feagan, a consultant specialising in ATQF quality systems in training in the VET sector. He holds the degree of B. Further Education and Training. In his early work career he was an Air Force engine mechanic, and a member of the Police Force including a period as district education and training officer, and later as a training program developer and co-ordinator for the Police Force. He has been qualified as a senior performance auditor and a lead auditor since 2002. He conducted his audit on 25 and 26 March 2008. He was briefed with all material including the Board papers supporting the decision of February 2008. 51 The Board called Mr Feagan and Mr Stephens for cross-examination. Mr Feagan acknowledged that he had no specific expertise in commercial cookery. He had, the Tribunal considered, a good understanding of the general administrative requirements that bear on RTOs, as demonstrated by his examination of the issues relating to the seemingly-defective transcripts. Mr Stephens had some expertise in the area of commercial cookery. 52 Following concerns expressed by the Tribunal at the close of the principal hearing on 7 May 2008 over the absence of any evidence from persons currently involved in the management of the College, a further hearing was held on 13 June 2008 at which Mr Glenn Coates, Head of the Hospitality Faculty at the College, gave evidence and was cross-examined. Mr Coates is a trade qualified chef. He has over 20 years' practical experience as a chef and caterer, including managing major commercial kitchens. For the last seven years, he has been involved in teaching commercial cookery, 2001-2004 at Ryde TAFE (part time), and since 2004 at the College. He holds Dip Teaching and Assessment Systems, Cert Commercial Cookery Trade Course, and various trade certificates. 53 At the close of the principal hearing on 7 May 2008, Mr Cribb for the Board and Mr Singleton for the College made oral submissions. Mr Singleton also furnished written submissions. There was a short exchange of oral submissions at the end of the resumed hearing on 13 June 2008, and Mr Singleton furnished written submission supplementary to his earlier submissions. 54 Mr Singleton also provided a detailed proposal as to an order that the Tribunal might make which had the effect of permitting the College to continue to operate subject to a series of stringent conditions. 55 On 27 June 2007 the Tribunal delivered its first decision, upholding the decisions of the Board as they affected the four practical cookery courses. These courses are THH31502 Certificate III in Hospitality (Commercial Cookery), THH33002 Certificate III in Hospitality (Operations), THH41402 Certificate IV in Hospitality (Patisserie), THH41302 Certificate IV in Hospitality (Commercial Cookery). 56 The Tribunal asked for further information and submissions in relation to the other six courses affected by the Board's original decision, i.e. THH51202 Diploma of Hospitality Management, THH60202 Advanced Diploma of Hospitality Management, WRH30100 Certificate III in Hairdressing, WRH40100 Certificate IV in Hairdressing, WRH50100 Diploma in Haidressing, BSB51101 Diploma of E-Business. 57 Depending on the Tribunal's ultimate decision, various options as to possible orders were canvassed. The College put forward draft orders which permitted continued operation of the College and the enrolment of new students in the six courses not the subject of the decision made 27 June 2008. 58 The Board provided further submissions and information in relation to the implications of the reasons given on 27 June 2008 endorsing cessation of the practical cookery courses for the diploma of hospitality courses, the hairdressing course and the E-Business course. The College made submissions in reply. 59 The Tribunal reviewed all the material again, and considered the further submissions made on 3 July 2008. The Tribunal delivered a further decision on 7 July 2008, upholding the Board's decisions in their entirety. 60 The following reasons are in amplification of the oral reasons given on 27 June 2008 and 7 July 2008. Approach to Evidence 61 The audit process relevant to this case commenced in 2006, and it was conducted by reference to the AQTF 2005. A new AQTF came into force on 1 July 2007. One of the College's contentions in this case was that the decisions taken against it were based on the AQTF 2005 not the AQTF 2007. The Tribunal has taken this concern into account in assessing the alleged non-compliances. It is clear that there is a good deal of consistency in relation to the standards under notice in this case as between the AQTF 2005 and the AQTF 2007. 62 Equally, the Tribunal accepts that the AQTF 2007 in its content reflects a movement to an 'outcomes' based approach to the declaration of standards and away from standards which are prescriptive as to matters capable of quantification, which was said to be more apparent in the AQTF 2005. 63 The College submitted that its experts' reports were to be preferred over the reports relied upon by the Board. The College experts, Mr Stephens and Mr Feagan, were said to be 'independent' unlike the Board's experts who were depicted as staff members of the Board. The Tribunal understood the reference to the Board's experts to be principally a reference to Ms Mawer, and her assistants. Ms Allen and Ms Briggs belonged to an organisation separate from the Board. In the Tribunal's view this is not a significant point in this kind of case. 64 The Board as regulator will ordinarily rely on its house inspectors and auditors. They will not necessarily be independent in the sense of being external to the Board. On the other hand, they must undertake their duties in a professional way. 65 The Tribunal has no reason to doubt that the various persons mentioned earlier who advised the Board on different aspects of the College's compliance did so in an independent, professional way. The documentation is extensive, detailed, and carefully records findings, assessments and responses. PROPOSED RESOLUTION 66 At the close of the hearing on 7 July 2008, the College submitted that the correct and preferable decision is one that allows it to continue to operate subject to a series of conditions. The Board disagreed. The Board submitted that the improvements made by the College since the decision of February 2008 have not been sufficient to cause it to change its view that the College should no longer be permitted to operate as an RTO. 67 The College drew attention to the AQTF 2007, National Guideline for Managing Non-Compliance. This standard gives guidance to regulatory bodies such as the Board as to the way non-compliance by RTOs should be managed. It sets out a graduated hierarchy of categories of non-compliance, the worst being 'critical non-compliance(s)'. It encourages the use of proportionate sanctions. Clearly, deregistration or refusal to renew registration is an option of last resort. For critical non-compliance, the Guideline recommends the following possible sanctions: the imposition of specific conditions on registration (the course proposed by the College); amendment of registration (including reduction in the scope of registration); suspension of registration; or cancellation of registration. 68 The College proposed to the Tribunal that the various decisions be set aside, and that it be permitted to continue to operate subject to the imposition of conditions on registration, the following ten conditions being proposed: (1) Range hoods in a second kitchen so as to conform with Council requirements; (2) Maintain a maximum teacher/student ratio of 1:25 for practical classes in commercial cookery and 1:20 for patisserie; (3) Maintain a maximum teacher/student ration of 1:45 for theory classes in all courses; (4) Implement Futura resources for Certificate III and IV Hospitality (Commercial Cookery), on or before 1 August 2008; (5) Enrol any new students in Hospitality in 11 week semesters (rather than 4 week clusters); (6) Comply with the conditions of Council consent, including any maximum number of students and teachers on the premises at one time, hours of operation, and the use of various kitchens and rooms; (7) Comply with the requirements of the ESOS Act, s 19; (8) The maximum number of students being taught at the Sydney campus not to exceed 850 over 3 shifts; (9) All assessments for courses must reflect competency principles (i.e. competent or not yet competent as measured against the criteria set out in the relevant Training Package) and be valid, reliable, sufficient, flexible and fair; (10) All documentation and assessment tools must be maintained to demonstrate compliance with Condition 8 above, and validation of assessment tools must be available for inspection at an audit. (This condition is based on a current condition). THE SPECIFIC AREAS OF ALLEGED NON-COMPLIANCE 1 (a) Inaccurate enrolment and (b) issuance of AQF qualifications 69 The AQTF 2005, Standard 2, lays down practices to be observed by the RTO to ensure compliance with Commonwealth, State/Territory and regulatory requirements. Standard 4 lays down practices to be observed by the RTO in relation to enrolments. These are both relevant to item 1(a). The issuance of accurate qualifications is the subject of Standard 10. This standard is relevant to item 1 (b). 70 The AQTF 2007 standards are expressed, as previously noted, less prescriptively. Compliance with legislation is a 'condition of registration', item 3. Standard 3.3 requires the RTO to manage records to ensure their accuracy and integrity. The access and equity standard, Standard 2, at 2.5 also refers to the need for current and accurate records. 71 Turning first to item 1 (b). 72 Throughout the audit process, and in the reasons for decision issued in February 2008, the Board's judgement was that the College had failed to deliver the courses required for the Level 3 and 4 Diplomas that it had issued. The criticism was that qualifications were issued when students had not completed all 42 units, but only 31 units. On its face this is very serious criticism. The College regarded it as justified. In December 2007 it promised to take whatever action was required at its costs to deliver the missing units. 73 However, it emerged late in March 2008 as a result of the audit by Mr Feagan that the missing units were delivered. The explanation is that certain courses given in lower graded certificates can be counted towards the higher graded certificates. It further emerged there had been a clerical error in the College's issued transcripts backing the diplomas, which had not shown the missing units. The problem was that the College had failed to bring forward credits earned in prior courses which can be counted towards these qualifications ('Recognition of Prior Learning' (RPL) credits). 74 Mr Cribb for VETAB advised at hearing that it was no longer asserted that the College had failed outright to deliver the courses. 75 The College also produced evidence that it had written to students to whom inaccurate transcripts had been issued, inviting them to return the inaccurate transcripts and have substituted accurate transcripts. Many of these students had now returned to their home countries. 76 The College stated that it would be willing to accept imposition of a condition that it issue corrected transcripts to overcome the presentation problem for people examining the attached transcripts. Obviously, persons scutinising the transcripts might be led to believe that there was a shortfall in units undertaken or that some of the prior learning that is required for these qualifications has not been undertaken. Clearly it is essential to confidence in the qualification system that issued transcripts and certificates be accurate and complete. 77 The Tribunal agrees with the following comments from the Board's auditor, Ms Mawer, on these developments (Ex R2, p 604 of Volume 3): 'It is of serious concern that when the matter of inappropriate issuance of the Diploma was raised at the site audit of August 2007, neither the CEO nor any of the staff responsible for training and administration in the College seemed aware of the students having potentially fulfilled the necessary requirements. The college had in fact taken what it perceived to be corrective action to address the gaps identified, and attempted to defend this action in its correspondence of 24 August 2007, 25 October 2007 and 14 November 2007' 78 Item 1(a) relates to a mismatch between the College's internal records as to the number of accepted overseas students and the number reported to the Commonwealth PRISM system: see ESOS Act, s 19. (PRISM means Provider Registration and International Students Management System.) 79 There was some contest at hearing around this issue, and its significance. 80 The Tribunal is satisfied that there was a mismatch that can not be explained entirely by the variation that can occur between the time a student is recorded in the College's system and the onward reporting of that change (fortnightly) to the PRISM database. 81 The problem is an administrative one that is capable of rectification. The Tribunal understands that recommendations have been made to the College as to how to avoid this problem in future. 2. Capacity of current premises, facilities and equipment 82 These issues received close attention at hearing. 83 The provision of the AQTF 2005 that most specifically refers to these matters is Standard 9.4, which provides: '9.4 The RTO must have access to staff, facilities, equipment, training and assessment materials required to provide the training and/or assessment services within its scope of registration and scale of operations, to accommodate client numbers, client needs, delivery methods and assessment requirements (including off-campus and on-line).' 84 A number of the standards refer to the need to ensure compliance with the relevant Training Packages. 85 The AQTF 2007 requires in Standard 1: '1.2 Strategies for training and assessment meet the requirements of the relevant Training Package or accredited course and are developed in consultation with industry stakeholders. 1.3 Staff, facilities, equipment, and training and assessment materials used by the RTO are consistent with the requirements of the Training Package or accredited course and the RTO's own training and assessment strategies.' 86 The National Code 2007 provides: ' Standard 14 - Staff capability, educational resources and premises Outcome of Standard 14 The staff of registered providers are suitably qualified or experienced in relation to the functions they perform for students. The educational resources of registered providers support the delivery of courses to students. The premises of registered providers, including the floor space available for each student, support students to achieve their course outcomes. 14.1 The registered provider must have and implement policies and procedures to ensure its staffing resources are adequate and have the capabilities as required by the quality assurance framework applying to the course. Where the course provided by the registered provider is not subject to an appropriate quality assurance framework, the registered provider must have and implement appropriate documented policies and processes for the recruitment, induction, performance assessment and ongoing development of members of staff involved with the recruitment or delivery of education or client services to students. 14.2 The registered provider must have adequate education resources, including facilities, equipment, learning and library resources and premises as required by the quality assurance framework applying to the course. Where the course provided by the registered provider is not subject to an appropriate quality assurance framework, the registered provider must ensure it has adequate education resources, including facilities, equipment, learning and library resources, and premises, including ownership or tenancy arrangements for the premises, as are needed to deliver the registered course to the students enrolled with the registered provider. 14.3 The registered provider must notify the designated authority and the students enrolled with the registered provider of any intention to relocate premises (including the head office and campus locations) at least 20 working days before the relocation.' 87 The national Hospitality Training Package states (see Ex R1: 158 of 207): 'The Certificate III in Hospitality (Commercial Cookery) and the Certificate III in Hospitality (Asian Cookery) are recognised as the traditional trade qualification, and the preservation of the integrity of these qualifications is the most important issue in the area of commercial cookery. This includes the industry expectation that there will have been a significant period of experience in a commercial kitchen in the achievement of the relevant competencies.' 88 The statement then goes on to deal with the two pathways - traditional apprenticeship and qualification through an educational institution. As to cooking experience, it states: 'the candidate must have had a period of experience in a fully operational commercial kitchen to be competent'. 89 It was accepted that students should spend at least 50% of their time in a cooking kitchen at the Certificate III and Certificate IV levels. 90 It is helpful to set out the statement in full: ' Commercial Cookery, Catering and Asian Cookery - The Certificate III in Hospitality (Commercial Cookery) and the Certificate III in Hospitality (Asian Cookery) are recognised as the traditional trade qualification, and the preservation of the integrity of these qualifications is the most important issue in the area of commercial cookery. This includes the industry expectation that there will have been a significant period of experience in a commercial kitchen in the achievement of the relevant competencies. Qualifications may be achieved via the traditional apprenticeship pathway (four years work experience concurrent with off-the-job training) or by more flexible arrangements, not necessarily of this duration or structure. However work experience is considered by the industry as essential for the achievement of competence in this area. This experience could be undertaken before, during or after a period of off-the-job training but must come prior to the issuing of the qualification. - To achieve and demonstrate integration of kitchen-based skills in assessment, there are two new holistic units at different levels, which require candidates to combine cookery and organisational skills and provide evidence of this integrated performance on a minimum number of occasions (12 times for Certificate II level and 48 times for Certificate III). In essence this means that the candidate must have had a period of experience in a fully operational commercial kitchen to be competent in these units. Ideally evidence of skills demonstration would be provided from substantially more than 12 or 48 occasions. - Certificate III in Hospitality (Commercial Catering) is not recognised as the traditional trade qualification for cookery. While the qualifications have many units in common, to achieve a cookery qualification additional units and work experience must be undertaken. - Food safety appears in all kitchen-related units of competence. In addition, there are specific food safety units, based on the HACCP system, and which fall within national food safety standards.' 91 The following is a relevant extract from the Board's Minute of Decision, 18 February 2008, which accompanied the notice of decision to cancel given 21 February 2008: '(2) Capacity of current premises, facilities and equipment for current numbers Sydney City Council signed off on 18 October 2007 that all work required under the Fire Safety Order has been completed to the satisfaction of the Council. In November 2007 the RTO proposed corrective action in relation to two of the three kitchens at the George St premises and then in January 2008 advised that it would fix one kitchen on level 3 of the building so that cooking could be conducted. The RTO provided the Director, VETAB with written advice on 7 February 2008 that it had installed range hoods in one kitchen on level 3 and had a City of Sydney Council Interim Occupation Certificate for level 3 (see Attachments I). Quality Assurance Services spoke to Mr John Lee at the Council on 7 February 2008 and confirmed that the full range of cooking can be done in that one kitchen. The installation of ventilation in one kitchen represents an improvement but is totally inadequate to train 797 students who are currently studying Hospitality as the kitchen may only cater for a maximum of 20 students at a time. Service Skills Australia previously indicated that with one kitchen that meets industry standards, the RTO may only have a total capacity for about 125 Hospitality students. Service Skills Australia advice of 8 February 2008 indicates that the RTO's suggestion that the two kitchens with no ventilation can act as demonstration kitchens is misleading as the trainers would need to demonstrate cooking techniques and students would need to practise cooking techniques. It advises the non-ventilated facilities could be used for food preparation for non-cooking products but this seriously limits the range of training activities the RTO can conduct. It also advises that the proposal that food can be prepared on another floor in non-cooking kitchens and then transported to the level 3 kitchen for cooking is not suitable nor practical and students are unlikely to achieve the required competency outcomes. The RTO has provided no proposal for retraining more than 1000 Hospitality students who have not had access to adequate kitchens for 11 months, since the Council ordered that no cooking was to take place in the kitchens in March 2007. In effect the RTO has defaulted on providing the courses that the Hospitality students purchased. In relation to the issue of capacity, the RTO proposed in January 2008 to reduce student numbers to 600 by the end of February 2008 through attrition. As at 4 February 2008 there were 848 vocational students studying and a reduction to 600 students is totally inadequate if 90 per cent of those students have to access one compliant kitchen. The history shows that the College operated in recent years without the required City Council health approval for its hot kitchen and without relevant approvals (to do with ventilation) for its other two ('cold') kitchens. It also had the various kitchen facilities located across three adjoining floors of the building with the hot kitchen on Level 3.' 92 The Industry Skills Council report to the Board (author, Ms Allen) dated 8 February 2008 said: ' Hospitality courses Sydney International College of Business (SICB) conducts Hospitality Commercial Cookery and Patisserie courses in premises at 546-552 George Street, Sydney NSW. An inspection of those premises as part of a NSW VETAB audit in August 2007 sighted three kitchens within the facility and certain concerns were raised at the time as to the adequacy of those kitchen facilities to meet the commercial cookery and patisserie obligations under the Hospitality Training Package. It is understood that since that audit, arrangements have now been made to upgrade the kitchen on level 3 of the premises. This upgraded kitchen facility is said to be being upgraded to a 'fully operational commercial kitchen'. It is noted that the other two kitchens are proposed to be utilised as 'demonstration kitchens' (where we understand that no cooking is allowed due to the lack of appropriate mechanical ventilation). Firstly dealing with the two kitchen facilities which are not being upgraded - these two kitchens do not have a suitable means of mechanical air extraction and at the time of our inspection in August 2007, and only limited cooking was able to be conducted within the two kitchens. Grilling, frying, baking, shallow pan frying and other essential cooking methods were not possible and are still not possible in these kitchens. These two kitchen facilities are now being branded as demonstration kitchens with the purpose of training of students and the proposed increased numbers of cookery students within the college. These facilities will probably be used for cooking demonstration purposes and also for use as training kitchens. A demonstration kitchen still requires appropriate ventilation to enable the teacher to appropriately demonstrate cooking processes and techniques and the training kitchen requires a suitable facility to enable students to practise specific cooking techniques following a demonstration of the process (such as grilling, frying etc). Certainly the non-ventilated facilities can be used for food preparation purposes but this would limit the preparation to be non-cooking products which very much limits the range of product that can effectively be taught within the facility and the required levels of competency that may be achieved from such restricted training. In regards to the proposed commercial kitchen development on level 3 of the premises, this being the only kitchen in which cooking and patisserie can be undertaken raises consideration in relation to the capacity of the kitchen and the underpinning timetable. This is understood to be the only 'commercial kitchen' available to all cookery and patisserie students. There is a requirement within the training package for students to undertake a number of units which require cooking: THH31503 Certificate III in Hospitality (Commercial Cookery) 14 of the 28 core units require cooking THH41402 Certificate IV in Hospitality (Patisserie) 8 of the 20 core units require cooking The suggestion of food being prepared in a non-cooking kitchen and then transporting that food to the level 3 kitchen for cooking is not a suitable nor practical solution for a cookery or patisserie training facility which is endeavouring to deliver commercial experience outcomes and industry recognised competency. The proposed class sizes for practical training have been set at a ratio of 1:25 as a maximum, and is well above cookery training average ratios. With these numbers working in a commercial kitchen environment and with only one trainer, the effectiveness of the training and assessment becomes questionable and the occupational health and safety risk levels increase. Certificate IV in Hospitality (Patisserie) has been set at a ratio of 1.20, with normal practice capped at a ratio of 1:18. There is then the question of the two holistic units and how the proposed upgrade of the third floor kitchen will meet these requirements. This holistic unit process needs to be fully documented, including how students will be ultimately assessed and deemed competent. The requirement to prepare, cook and serve for the food service periods of breakfast, lunch, dinner and a special function is not evident, nor is the requirement of a la carte, table d'hote and buffet experience. The 'forty-eight occasions' requirement must be fully documented as to how this will be managed and achieved and student industry experience is still not evident. Plans of the upgraded third floor kitchen have not been sighted, and at the time of the August 2007 audit, this kitchen was equipped with twenty-eight burners (mostly electric tabletop), and eight sets for bench space (each 3 x 0.6 meters, [sic] providing a total of 24 meters [sic] of bench area). Industry recommendations are two burners per student and one oven per two students, one salamander or griller per four students plus 1.5 meters of bench space per student.' 93 The present position is that the hot kitchen is approved, and the College is ready to comply with the requirements affecting the cold kitchens. 94 There was persuasive criticism in the Board's documentation and evidence, in the Tribunal's view, of the College's arrangements in the recent past and at present as being unsatisfactory for teaching students cooking. 95 It would be far better if all kitchen facilities were adjacent on the one floor, so that students could engage in the variety of tasks involved in commercial cooking, and move easily between the different activities. On the other hand the Tribunal accepts that students in the ordinary work environment might encounter a situation where the cold kitchen area and the hot kitchen area are substantially separated or are on separate floors. The auditors were correct in drawing this matter to attention. Clearly it limits the capacity of students to move between different 'hot' and 'cold' activities relevant to the one type of food preparation and cooking process. 96 The Board's criticism was also well justified that during 2006 and 2007 the facilities must have been severely overcrowded, given the number of students enrolled in courses and the practical scale of the facilities on the three floors. 97 At present the College is operating under a moratorium pending the outcome of these arrangements which does not allow the admission of new students. With the reduced numbers it may be reaching a level that is appropriate to the facilities available. 98 As at 13 June 2008, when Mr Coates gave evidence, the position had been reached where the number of students in the course for which the hot kitchen was required was within the range seen as acceptable by the Board. This is a consequence, as the Tribunal sees it, simply of the fact of a moratorium on taking new students. 99 As to the question of the acceptable number, there is no specific number or formula in any of the AQTF or other material such as the Training Packages. 100 The Board's view is that there should be around two burners available per student in a practical hot cooking class. In this instance that would have meant 1:15. The Board accepted in its documentation that as strict a position as this need not be insisted upon, as students would not be tied to the burners for the entire duration of activities involving hot cooking. They could leave items while they were being heated, and engage in related tasks at other benches. Mr Coates accepted that 1:30 was an absolute outer limit. The Board's position was something closer to 1:20 was to be preferred, but 1:25 would be acceptable. 101 Mr Singleton pressed the view that this debate was illustrative of the lack of direction in the present standards, and that a wide area for reasonable judgement was open in interpreting the guidelines. 102 In the Tribunal's view it is plain on any reading that for a considerable period the College must have been in great difficulty in meeting even a 1:30 standard. It is only now able to meet the industry standard in the 1:20 to 1:25 range because of the (atypical) lowness of the present enrolment. 3. Sufficiency of training staff for numbers 103 The AQTF 2005, AQTF 2007 and National Code Standards cited under item 2 above also relate to this issue. 104 The following is a relevant extract from the Board's Minute of Decision, 18 February 2008, which accompanied the notice of decision to cancel given 21 February 2008: '(3) Sufficiency of training staff for current numbers In November 2007, as part of its corrective action the RTO stated that it has now implemented a new policy where Hospitality trainers are allocated 40 hours teaching per week, with teacher/student ratios of 1:40 for theory classes and 1:25 for practical classes. In January 2008 the RTO advised its planned ratios are 1:25 students for all practical courses, except for patisserie which is 1:20. The RTO also provided sample timetables and class allocations for 28 Jan 2008 to 22 Feb 2008 showing seven Hospitality and three Hairdressing trainers. The RTO provided no further information in relation to staff workloads, or trainer student ratios for theory classes. Ten trainers for 848 students is totally inadequate given the practical nature of the courses. Service Skills Australia advises that a ratio of 1:25 students for practical Hospitality and Hairdressing classes is excessive and places the safety of students and quality of training and assessment at risk. It also advises the Hospitality timetables are inadequate as they do not demonstrate the flow of students through the various units and the respective use of one ventilated kitchen and two non-ventilated kitchens. A fully functional timetable for a whole semester would be required. As previously advised by Service Skills Australia staff workloads of 40 hours per week training are excessive as this provides no time for preparation, marking of assessment, administration, validation or professional development. The RTO's sample timetable does not verify that the RTO has sufficient qualified staff, facilities, and equipment for its size and scope of operation.' 105 The last part of the Industry Skills Council assessment set out under item 2, above, refers to this issue in these terms: 'Considering the student numbers and the capacity of the level 3 kitchen for cooking, we can estimate the following: - Operating hours Monday to Friday 7.00am to 9.00pm = 70 hours per week - Practical class size of approximately 20 students (maximum) - Practical cooking class duration of approximately 2 hours, giving a maximum of 35 classes per week. As most classes are of a four to five hour duration, this suggests part of the class is held in an alternate part of the facility with two hours in the commercial kitchen. A fully functional time table should be produced to demonstrate the flow of students through the various units/classes and kitchens for say a semester period. The time table information provided is non conclusive and does not adequately demonstrate the flow of students through the various units and the respective use of the three available kitchen facilities. There is then the question of the number of trainers required for the business. The indication is that seven trainers have been allocated to achieve the required outcomes for two hundred and seventy students. The need for a detailed semester timetable is again raised so as the allocation of students and teachers can be mapped. Broadly, a total of two hundred and seventy students and seven teachers indicates an average class of thirty-eight students per teacher. This is considered to be well in excess of ideal teaching practices.' 106 The College's criticism is that the relevant standards are all expressed by reference to terms requiring a judgement, e.g. 'sufficient number of staff', the number of 'staff required'. Clearly there are again issues of professional judgement involved. There was no suggestion on the part of either party that a number of one member of staff to hundreds of students would be acceptable. 107 The debate at this point widened to what was the appropriate overall numerical ratio taking account of the practical and theory components of the class. The College contended that 1:70 was appropriate. The Board's view was that 1:45 represents the outer limit. The Board was critical of the adequacy of the College's facilities for conducting theory presentations. In its view the class rooms did not suit lecture style delivery. It was also critical of the way in which the trainer-student ratios were calculated by the College. Ms Willis said at [58] of her affidavit, Ex R1: 'The applicant's trainer to student ratios are calculated with trainers teaching eight hours a day 5 days a week. Such arrangements do not include any allocation for preparation, marking of assessments, administration, staff meetings, assessment validation and professional development. Forty hours per week face-to-face teaching loads are excessive and lead to poor training outcomes.' 108 The Tribunal accepts this evidence. 109 There was considerable attention given at hearing to the document that appears at pp 818-820 of Volume 3 (Ex R) behind tab 19 (see for example, cross-examination of Mr Feagan, 22 April 2008, tscpt, 2-18; cross-examination of Mr Stephens, 7 May 2008, tscpt, 17-20). This document had been supplied to the Board by the College. It set out the 'cookery timetable semester 1' for this year, showing the number of hours to be taught in connection with each component of the 11 courses to which it referred (p 818) and the 'March/April roster 25/03/08-Fri.18/04/08'. 110 Mr Cribb referred to this document to support the Board's findings that the division of time between 'cold' kitchen training and 'hot' kitchen training was unlikely to be satisfactory for the number of students proposed to be taught, or taught in the past when the College was at its maximum permitted enrolment, and that the allocations of time for 'hot' kitchen training were below industry standards. The Tribunal, like the Board, has treated this roster as representative of practice. The Tribunal agrees with Mr Cribb's submissions. In its view the witnesses called for the College who were cross-examined about this matter, especially Mr Coates, did not provide satisfactory explanations as to how the timetable met these shortcomings. 111 After some probing in cross-examination, both Mr Stephens and Mr Feagan conceded that average numbers in the vicinity of 1:70 or more, when viewed against the breadth of the theory subjects and elements would be excessive. The College stated that it would submit to a condition that confined numbers in theory classes in the future. 4. Adequacy of training and assessment resources 112 Each of the AQTF 2005, AQTF 2007 and the National Code refer to these matters. The AQTF 2005, Standard 9 (Learning and assessment strategies), includes the following: '9.3 The RTO must ensure that in developing, adapting or delivering training and/or assessment products and services: i methods used to identify learning needs are documented ii the requirements of the Training Package or accredited course are met iii steps are taken to manage the transition to reviewed Training Packages within 12 months of their publication iv core and elective units, as appropriate, are identified … 9.4 The RTO must have access to the staff, facilities, equipment, training and assessment materials required to provide the training and/or assessment services within its scope of registration and scale of operations, to accommodate client numbers, client needs, delivery methods and assessment requirements (including off-campus and on-line).' 113 The Tribunal has noted, under item 2 above, the relevant AQTF 2007 standard and the relevant National Code standard. 114 In the Board's Minute of Decision 18 February 2008, the following was asserted: '(4) Adequacy of training and assessment resources The RTO has taken no appropriate corrective action in relation to its learning and assessment strategies and assessment tools for Hospitality. In November 2007 and January 2008 the RTO provided no revised learning and assessment strategies or assessment tools as part of its representations. This issue has been outstanding since May 2005 and represents a serious non-compliance and failure to co-operate. In January 2008 the RTO indicated it is in the process of implementing the Futura program for its cookery courses. This program is a learning resource and it is appropriate for the RTO to use this resource but it does not replace the required learning and assessment strategies and assessment tools that show how the RTO will organise, deliver and assess its learning and assessment activities to match its students needs and facilities and meet the requirements of the training package qualifications. The inadequacy of the RTO's learning and assessment strategies and resources was clearly outlined to the RTO in the Service Skills Australia's September 2007 report and previous audit reports. The RTO has not addressed the previously identified issues relating to inappropriate delivery mode of flexible four week clusters, shortened duration, lack of practical demonstration of skills, lack of access to commercial kitchens and lack of validity, reliability and sufficiency of assessments. Service Skills Australia also notes their previous concerns in relation to Hospitality courses have not been addressed and again raises the issue that the RTO has not provided evidence as to how it will deliver and assess the critical holistic Hospitality units. Service Skills Australia also raises a further concern that the qualifications and experience of a number of trainers and assessors, including the Faculty Coordinator for Hospitality are inadequate, which may result in the lack of understanding of the assessment requirements for many of the units of competence. In relation to Hairdressing, the RTO has made a range of improvements to Hairdressing resources, particularly assessment materials and processes. The RTO has not adequately addressed previously identified issues, including its inappropriate flexible rotational mode of delivery and a fully functional reception area. Service Skills Australia notes that the RTO has obtained a report on its Hairdressing training and assessment resources from an independent consultant Jon Williams but questions some of the findings of that report and suggests that further direct evidence of compliance is required. The RTO in its January 2008 representations has introduced new components that have made its learning and assessment strategy for Hairdressing incoherent. For example it has introduced a work experience record book and 900 hours of documented salon work. The current course does not require a work experience component and the RTO has not been approved for a work experience component because of the work limitations placed on overseas students. It appears the 900 hours paid work relates to applications for permanent residency, which is not a component of the course and therefore not a legitimate part of the learning and assessment strategy. The Hairdressing courses currently on the RTO's scope must be removed as they have expired. The RTO's website and course information refers to the expired WRH00 Training Package which is inappropriate as no new students are to be enrolled in these old qualifications. The RTO's application for the 2006 Hairdressing Training Package courses is unable to be processed due to its other outstanding non-compliances and lack of TAS coverage for these courses.' 115 While there were a range of criticisms under this heading in the above decision, the criticisms reduced at hearing essentially to two items: (a) sequencing of courses; and (b) improvements in learning resources. 116 In the Tribunal's view the examples drawn to attention by Mr Cribb for the Board of inappropriate sequencing of courses were good ones. The audit properly criticised the College for not having ensured that the units were taught in their logical relationship and order. Mr Coates' answers to specific questions drawing attention to specific examples of inappropriate sequencing were not convincing. This problem did not appear to affect all areas of the cookery syllabus. 117 Partly in response to the work done by its external consultants, Mr Feagan and Mr Stephens, the College had commenced implementing a program known as the Futura program to overcome the deficiencies in its learning resources revealed by the audit. This was seen as showing acceptable progress by the Board. 118 These issues both go to the matters readily capable of remediation. The College appears to have accepted the criticism under these headings, and is seeking, the Tribunal thinks genuinely, to rectify the matters raised. 119 Nonetheless the Board auditors were well justified in raising these as matters of serious non-compliance at the time they were detected. The non-compliances have had a practically-irredeemable effect on past students. 5. Financial viability and capacity to cover refund of fees paid in advance (the Tuition Assurance Scheme) 120 Ms Willis explained that the College is required unless exempted to be a member of the Tuition Assurance Scheme. This scheme forms part of the Commonwealth requirements governing registered training organisations who provide training to overseas students. Such a scheme is defined by the ESOS Act as a scheme whose main objects include ensuring that overseas students receive the course that they have paid for. It is mandatory unless a Ministerial exemption is given. Following the suspension decision in October 2007, the Commonwealth authorities cancelled the College's coverage on 28 November 2007. 121 In the Tribunal's view, this was a serious omission, as it placed at risk the fees of students whose courses are not completed. 122 An exemption has now been obtained, as noted below. ASSESSMENT (1) Current Extent of Non Compliance 123 The Tribunal is satisfied that the College was in significant breach of many standards to which it was subject at the time of the principal audit in 2006 and the final audit report of 2007. 124 The Tribunal accepts that it is now the case that the degree of breach has reduced. Steps that have been taken include the work done by Mr Feagan and Mr Stephens to assist the College to come into compliance, the obtaining of Council approval as regards the kitchen on Level 3 and the letters to students with defective transcripts to have them rectified. 125 Compliance in relation to ratio of students to equipment in cooking classes has been achieved essentially accidentally, by the fact that there is a moratorium on new enrolments. 126 As to the five areas of serious non-compliance on which the Board relies, the Tribunal makes the following observations. 127 Item 1 (accuracy of enrolment and issuance of AQF qualifications) raises concerns in relation to the adequacy of the general administration of the College, and its commitment to observing administrative obligations of this kind. 128 The Tribunal was disadvantaged at hearing, I feel, by the failure of any senior manager or administrator of the College to give evidence. The situations identified by item 1 were ones that should not, it seems to me, in a well managed organisation have arisen. The requirement to report actively to the Commonwealth on enrolment of overseas students is an important one. 129 The failure of the College itself to recognise in its December 2007 communication to the Board that the omission in respect of the transcripts was administrative rather than substantive was, at the least, very surprising especially when the College was ready to give a commitment that it would meet the costs of retraining students (many of whom presumably had now returned to their home countries) to overcome the seeming omission. 130 Item 5 (membership of TAS) is another matter bearing on the general administration of the College. 131 This matter was described by Mr Cribb as a 'pink slip' issue, by which he meant a matter that did not go to the substance and quality of the College's tuition. This omission does not bear on the decision as to registration to provide services to local students. It is clearly a very important regulatory requirement which forms part of the framework of assurances given by Australia's governments to overseas students. In the Tribunal's view, failure to belong to the TAS scheme is a contravention of such seriousness that it may well, without more, justify cancellation of the approval to provide services to overseas students. At hearing on 3 July 2008 the Tribunal was informed that the Commonwealth Minister had now granted the College's application for exemption from TAS, subject to various conditions. 132 Item 4 (adequacy of training and assessment resources) is an area where the College is taking active steps to come into compliance. The sequencing of courses involves the making of informed educational judgements. 133 External consultants such as Mr Feagan and Mr Stephens could assist in that regard. Similarly, the Tribunal detected a level of satisfaction on the part of the Board at hearing as to the progress being achieved in implementation of the Futura program. 134 The fact remains that until these developments the College was non-compliant in these regards. Those non-compliances bore directly on the quality and integrity of the qualifications being issued by the College. 135 Collectively, the College's position in relation to non-compliance with items 1, 4 and 5 would not at this stage in the Tribunal's view justify a decision not to grant registration, though the non-compliance in relation to item 5 does justify a decision not to approve provision of services to overseas students. 136 The Tribunal accepts that at hearing the margin of difference had narrowed as between the concerns held by the Board in its October 2007 and February 2008 decisions and the position of the College. 137 The omissions identified in relation to items 2 (current premises, facilities and equipment) and 3 (sufficiency of training of staff for current numbers) tips the balance, in the Tribunal's view, so far as any continued permission to conduct the practical cooking courses is concerned. (2) Decision in Relation to the Practical Cooking Courses 138 The College's proposed conditions of registration proceed on the basis of a fully operating campus, limited to 850 students. The Tribunal can not be satisfied on the material before it that the College could with a campus size of that dimension, and with about 90% of its capacity involved in teaching the commercial cookery syllabus up to Certificate IV level, operate in compliance with the required standards. It is presently achieving 'compliance' in relation to item 3 because the student population is confined to persons enrolled ahead of October 2007 who have remained at the College. 139 [One issue that was raised at the subsequent hearing on 3 July 2008 in reaction to the above observations that were made in the oral reasons delivered 27 June 2008 went to the above statements. The Tribunal was understood to be suggesting that 90% of the students were engaged in practical cooking courses. What the Tribunal intended to convey was that 90% of the College's students (if not more) have been enrolled in the Faculty of Hospitality. The Tribunal is happy to accept the College's information that not all of the 90% are engaged in practical cookery courses, and that the relevant figure is about 57%. This does not alter the view the Tribunal has expressed as to the appropriate decision.] 140 In concluding that the restriction to 850 students will not be effective, the Tribunal has taken some account of the regulatory history. The movements towards compliance with the recommendations of the audit reports has been slow. As compared to 2006 the gap is, the Tribunal accepts, much narrower. 141 I am satisfied that the College's cooking facilities can not support a student population of the number envisaged. 142 The Tribunal is also concerned, as the Board is, over the way the College reaches the conclusion that it has adequate training staff for the number of students. The Tribunal agrees strongly with Ms Willis' observation that a 40 hour face to face teaching load is not compatible with the range of tasks a teacher in courses of this kind would be expected to engage in. The Tribunal agrees with her conclusion that there are likely to be adverse effects on the quality of the teaching deriving from arrangements of this kind. 143 Both of these matters (facilities; teacher ratios and requirements) go to fundamental matters of importance to the integrity of the College's qualifications. 144 It is appropriate to take account of the seriousness of the breaches as they stood when the Board commenced to make the series of decisions that have culminated in the refusal to grant renewal of registration and approval. 145 It can fairly be inferred that the College was well in excess of the ratios now accepted as reasonable over the period 2005 to 2007. Throughout this period it operated according to standards that were well below those expected of institutions of its kind. An important example of indifference to external legal requirements was its decision to continue to teach cooking in kitchens that were non-compliant with City Council requirements as to ventilation and the like. 146 There is a real issue as to the confidence which can now be placed in it to adhere to appropriate standards. 147 A position has now been reached where the course of imposing conditions is put forward by the College as a means for achieving compliance. Many of the conditions go to matters which should form part of the ordinary conduct of a registered training organisation's administration. 148 With the possible exception of the number and shifts limit (850, three shifts), the other matters are all ones that a well-administered RTO would deal with as part of its ordinary responsibilities. 149 The only evidence from a College functionary was that of Mr Coates. Some of his responses gave the Tribunal some concern as to the likelihood that a co-operative relationship would be forthcoming from the College in the future. (3) Other Courses and Registration Generally 150 At the conclusion of the oral reasons delivered 27 June 2008, the Tribunal informed the parties that it had decided that the Board's various decisions under review in these proceedings as they related to the continued conduct by the College of courses in practical cookery were the correct and preferable ones. 151 The Tribunal reserved for further consideration its decision in relation to the two diploma of hospitality courses, the three Hairdressing courses and the Diploma of E-Business. The Tribunal also requested assistance in relation to the appropriate formulation of orders and the setting of a timetable for orderly cessation of activities in the courses. Left unresolved at that point was the ultimate question of whether the two most fundamental orders of the Board should be affirmed - i.e. the decision to cancel the registration and the approval, and the decision to refuse the application for renewal of the registration and the approval. 152 Further reasons for decision were delivered on 7 July 2008, substantially as follows. (4) The Two Diploma of Hospitality Courses 153 As to the two Diploma of Hospitality courses, the Tribunal accepts that these are mainly 'theoretical' courses, using for this purpose the theory/practice distinction that was employed by the College in its submissions at hearing, and in its responses to the audit process. None of the core units involve practical cooking courses. Most of the elective units do not involve practical cooking courses. 154 Nonetheless some of the elective unit streams are practical cooking ones. 155 The Tribunal's judgement is that it would only be possible to allow the College to continue to conduct Diploma of Hospitality courses with the excision of the practical cooking electives. 156 The Tribunal is satisfied that such an approach should not be supported. As it understands the material, it is part of the orthodox design of Diploma of Hospitality courses that students have the option of taking some 'practical' electives. It is also possible, as the Tribunal reads the material, for a student to obtain credits towards a Diploma of Hospitality from practical cooking courses done in other certificates. 157 More importantly, it would be a strange outcome if a registered training organisation was unable to engage in practical training but continue to give 'non-practical' courses in the same general field. To similar effect, at hearing Ms Willis explained that in the vocational educational sector it was usual to speak of courses and qualifications being 'integrated' in relation to theory and practice. 158 In the Tribunal's view, it would be contrary to the public policy objectives that underpin the scheme for accreditation and supervision of registered training organisations to accede to the College's proposal. 159 For these reasons at least, the Board's case as to the inappropriateness of continuing to permit the conduct of the Diploma of Hospitality courses is made out. (5) The Hairdressing Courses 160 As to the Hairdressing courses, the Tribunal accepts that some improvements have been made. The problems in relation to adequate equipment and the creation of a reception area are being addressed. The problem that remains is that the course being taught is an expired one, WRH 00 and not WRH 006. Moreover as at 21 May 2008 there are only 15 continuing students. 161 The other problems that the audit identified, and in particular the Industry Skills Council assessments (latest report 8 February 2008), are major ones. There has been no reply of substance to these criticisms. 162 Again at least on those bases, the Board's case in relation to the conduct of the hairdressing courses is made out. (6) Diploma in E-Business 163 In the case of the E-Business course, the Tribunal is satisfied that it is defunct. GENERAL CONCLUSIONS 164 The Tribunal has used the qualification 'at least' in making some of the above observations. 165 The College has pressed the view in these proceedings that it should not be judged on its historical record, but on the basis of the position as it now stands. It emphasises the Tribunal's obligation, as substitute decision maker, to have regard to all current, relevant information. 166 The two most critical decisions taken in the sequence of decisions in this matter by the Board are: the decision to cancel registration and approval (7 April 2008), and the decision to refuse renewal of registration and approval (1 and 15 April 2008). 167 In particular in considering a decision as to whether to grant renewal, it is reasonable and relevant, in the Tribunal's opinion, for an administrator to have regard to the history of compliance of a regulated party over the previous period of registration. 168 Allowing for the error that later emerged in relation to the course transcripts issue, the College's history of compliance in its previous period of registration has been poor. 169 It is only very recently that a number of critical non-compliances have been rectified, for example, the lack of Council approval for the kitchen facilities, the degree of inadequacy of the learning and assessment tools, inadequacies in the enrolment information provided to Commonwealth authorities, and the excessive number of students enrolled. These criticisms point to significant inadequacies, in the Tribunal's view, in the general administration of the College. 170 After the 2006 audit the College was given a substantial period of time in which to come into compliance. It failed in that regard in significant respects. These are matters that, in the Tribunal's view, can properly be taken into account in considering whether or not to renew registration and approval. 171 The Tribunal's attention was drawn at the hearing on 3 July 2008 to the Commonwealth decision to grant exemption from TAS. The Commonwealth decision maker had before her the same body of documentary material as this Tribunal did at the beginning of its proceedings. 172 The decision of the Commonwealth is to allow the College for the time being to retain Commonwealth registration. It includes conditions governing the continued delivery of courses similar to those advanced by the College in these proceedings (see Condition 3 of the Commonwealth conditions). The Commonwealth's decision is heavily qualified. It is subject to two primary conditions requiring the giving of further evidence to the Commonwealth as to - training standards of relevant staff, establishment of adequate compliance systems (Condition 1) and establishment of comprehensive training programmes for new and ongoing staff (Condition 2). 173 The Commonwealth decision maker's reasons do not deal in any detail with the matters that have most concerned the Tribunal. The Tribunal is not inclined to alter its conclusion. 174 For the reasons given, the Tribunal is satisfied that cancellation decision and the consequent refusal to reregister are the correct and preferable decisions. In two significant areas there has been a history of critical non-compliance. The Tribunal's final orders involve, it is accepted, the application of the most stringent of the four sanctions contemplated by Section 7 of the AQTF Guideline on Compliance. 175 Accordingly, the Tribunal's decision is to affirm all decisions of the Board. 176 The Orders as settled allow a time period before they take effect. The time period is provided to enable the College to move to obtain separate registration in Victoria so that it can keep its Victorian operation on foot. It has about 200 students enrolled. The College has informed the Tribunal that its Victorian operation is viewed as compliant by the Victorian authorities. ORDERS As made 7 July 2007: 1. The Respondent's decision in matter no. 083007 is affirmed with immediate effect 2. The Respondent's decisions in matters nos. 083112, 083124, 083125 are affirmed with effect from 5 September 2008.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Sydney International College of Business Pty Ltd
Vocational Education and Training Accreditation Board
(1979) 24 ALR 577
(1979) 24 ALR 307
The Respondent's decision in matter no. 083007 is affirmed with immediate effect. The Respondent's decisions in matters nos. 083112, 083124, 083125 are affirmed with effect from 5 September 2008.