Australian Competency Training for Industry and Vocational Employment Pty Ltd v TVET Australia [2011] QCAT 40

CITATION: PARTIES: Australian Competency Training for Industry and Vocational Employment Pty Ltd v TVET Australia [2011] QCAT 40 Australian Competency Training for Industry and Vocational Employment Pty Ltd v TVET Australia APPLICATION NUMBER: GAR122-10 MATTER TYPE: General administrative review matters HEARING DATE: Decision on the papers HEARD AT: Brisbane DECISION OF: Ms Peta Stilgoe, Member DELIVERED ON: 3 February 2011 DELIVERED AT: Brisbane ORDERS MADE: The application is refused. The respondent’s decision is confirmed. CATCHWORDS : REGISTRATION OF TRAINING ORGANISATION – where applicant changed directors – whether a substantial change in control, management or operation – where respondent required applicant to submit fresh application for registration - whether respondent could require applicant to submit fresh application for registration – where respondent conducted audit – where non-compliance – where respondent issued show cause – where applicant was not able to demonstrate compliance Vocational Education, Training and Employment Act 2000 ss 24, 26(2), 26(3), 26(4), 31 Corporations Act 2001 (Cth) s 198A APPEARANCES and REPRESENTATION (if any): This matter was heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009. -- 1 of 6 -- GAR122-10 / Page 2 of 6 REASONS FOR DECISION [1] As I have previously recorded, in April 2009, Ms Justine Gerry resigned as director of Australian Competency Training for Industry and Vocational Employment Pty Ltd (“ACTIVE”) and Ms Mandy Reid was appointed. ACTIVE advised the National Audit and Registration Agency of the changes by letter dated 3 July 2009. [2] On 3 August 2009, TVET Australia (“TVET”), as delegate of the National Audit and Registration Agency, advised ACTIVE that: the notice of change of officeholders was not provided 30 days before the changes took place; this was a breach of the Vocational Education, Training and Employment Act 2000 (“the Act”); and ACTIVE was required to submit an application for registration. [3] ACTIVE has applied for a review of this decision. It says: a) The changes notified to TVET in July 2009 were not “substantial changes in control, management or operations”. b) If there was a substantial change in control, and ACTIVE did not notify TVET as required by s 26(2)(b), the appropriate action is to impose a penalty. c) ACTIVE has complied with the requirements of Draft 7 of the Queensland Training and Employment Recognition Policy by nominating a new legally responsible person. d) If TVET had wanted to divest ACTIVE of its registration, the Act sets out the appropriate procedure and that procedure was not followed. [4] The issues that I am required to determine are: whether there was a substantial change in ACTIVE within the meaning of s 26(2)(b); and, if there was a substantial change, whether the actions taken by TVET were within its legislative remit and appropriate. Was there a substantial change within s 26(2)(b)? [5] Section 26(2)(b) of the Act requires a training organisation to give notice to the Training and Employment Recognition Council of any substantial change to the control, management or operations of the training organisation immediately after they happen. [6] An ASIC search reveals that: Ms Reid was appointed as sole director/secretary on 16 April 2009; Ms Hill resigned as a director on or about 30 April 2009; and the principal place of business was changed on 8 May 2009. The shareholding has not changed. -- 2 of 6 -- GAR122-10 / Page 3 of 6 [7] There are a number of cases that suggest a change in control is effected by a change in the majority shareholding 1 . Using that test, I am satisfied that there has been no change in the control of ACTIVE. [8] Section 198A of the Corporations Act 2001 (Cth) makes it clear that the management of a company is undertaken by its directors. ACTIVE did change its director and, in the absence of further material, there can be no doubt that the substitution of one director for another must fall within the description of a change in management. [9] ACTIVE argues that, in fact, there is no change in management because ACTIVE was a “two person operation” and the two people (Ms Gerry and Ms Reid) operated in a “legal partnership” and simply swapped roles within the company. [10] The difficulty with this argument is that there is simply no evidence before the tribunal to support the proposition: a partnership agreement has not been produced; there are no documents preceding 16 April 2009 that show Ms Reid’s involvement in the operation; there is not even a statement from the shareholder, who might have been able to shed some light on the operation and management of ACTIVE. ACTIVE’s submissions refer to a letter from an accountant dated 25 August 2009 but that letter is not part of the filed material. In any event, any assertions in that letter would have to be supported by the primary evidence, of which I have none. [11] I find that there was a substantial change in the management of ACTIVE upon the resignation of Ms Gerry and the appointment of Ms Reid. I also find that ACTIVE is in breach of s 26(2)(b) in that it did not give TVET notice “immediately” after the change in management. What is the appropriate action? [12] Once a body is registered under the Act, it must comply with the conditions in s 26(2) of the Act during the period of its registration. In addition to s 26(2)(b), relevant conditions are: • 26(s)(c): to submit to any compliance audit conducted by the council under s 37; • 26(2)(f): to give to the council any information about any of its operations reasonably required by the council. [13] The purpose of Draft 7 of the Queensland Training and Employment Recognition Policy (“the Policy”) is: “…to outline the Council’s registration requirements which apply … when there are changes to the legal entity, however minor or major.” [14] The Policy requires a company in ACTIVE’s position to notify of the proposed change (albeit in a timeframe that conflicts with the Act) and apply for registration in accordance with the new registration process. The Policy is 1 See, for example Alford & ors v Ebbage & ors [2004] QCA 283; Ito & Anor v Shinko (Australia) Pty Ltd & Anor [2004] QSC 268. -- 3 of 6 -- GAR122-10 / Page 4 of 6 premised on the fact that a certificate registration cannot be transferred, sold or otherwise assigned. [15] I take ACTIVE’s point that there is nothing in the Act that permits or requires TVET to call for a fresh application for registration. However, given the provisions of ss 26(2)(c) and 26(2)(f), I have formed the view that the requirement to apply afresh is a shorthand, if inelegant, way to ensure that TVET has enough information available to it to be satisfied that that entity is still suitable for registration. [16] I find that it was reasonable for TVET to call upon ACTIVE to submit an application for initial registration. [17] In deciding an application for registration, TVET must apply the national standards 2 and it must not grant the application unless it considers that the applicant complies with the national standards 3 . In considering whether the applicant complies with the national standards, TVET may have regard to a compliance audit of the applicant.4 [18] ACTIVE submitted an application for registration on 10 August 2009. TVET’s assessment of the application proceeded: a) By letter of 21 August 2009, it advised ACTIVE that it would be conducting an audit. b) It undertook the audit and by letter of 16 September, advised ACTIVE that the audit revealed some areas of non-compliance. TVET invited ACTIVE to submit further material to “rectify” the non-compliance. c) By letter of 6 November 2009, it advised ACTIVE that, as there was evidence to rectify the non-compliance, TVET was issuing a show cause notice. [19] ACTIVE submitted material in response to the show cause by letter of 3 December 2009. By letter of 24 February 2010, TVET extended another opportunity to ACTIVE to submit material that would address areas of non- compliance. Helpfully, TVET set out the areas of non-compliance and the ways in which the material already supplied was non-compliant. [20] A letter from TVET on 30 March 2010 records that ACTIVE still did not comply with the national standards. The letter also records that Mr Davidson of TVET met with Ms Gerry, Ms Reid and Ms Field on 5 March 2010 and that he confirmed the outcomes of that meeting – that serious gaps as to compliance remained – in an email of 8 March 2010. [21] In it submissions, ACTIVE asserts that it has not been given a right to be heard, nor afforded natural justice, in TVET’s decision to de-register TVET. Plainly, on the material submitted by TVET, that assertion cannot be substantiated. Indeed, it seems the converse is true in that ACTIVE was given a number of opportunities to demonstrate its capacity to meet the national 2 Section 24(2) Vocational Education, Training and Employment Act 2000. 3 Section 24(3)(c) supra. 4 Section 24(4) supra. -- 4 of 6 -- GAR122-10 / Page 5 of 6 standards and was unable to do so. I find that the procedure adopted by TVET is consistent with the requirements of s 31 of the Act. [22] Even if I formed the view that TVET should not have required ACTIVE to submit a fresh application for registration, it is inevitable that the parties would end up in the same place: a) TVET has the ability to call for information during the period of an entity’s registration. b) TVET has the ability to conduct an audit of during the period of an entity’s registration. c) The audit revealed that ACTIVE did not comply with the national standards. d) TVET issued a show cause notice. e) ACTIVE was not able to satisfy TVET in response to the show cause. f) That is a decision that can be reviewed by this tribunal.5 g) ACTIVE has not filed any material that would persuade a tribunal that TVET’s decision is wrong and that ACTIVE does comply with the national standards. [23] The application should be refused and TVET’s decision confirmed. Addendum [24] This dispute was determined on the papers in light of directions I made on 20 December 2010. Relevantly, I directed that ACTIVE could file and serve any material in reply by 1 February 2011 and that I would determine the application not before that date. [25] Foolishly, but in compliance with the tribunal’s mandate of providing decisions that are as quick as is consistent with achieving justice 6 , I wrote the body of this decision on 2 February 2011. After I had written the reasons, I received further material from ACTIVE which was filed on 2 February 2011. [26] TVET filed supplementary submissions on 4 February 2011. There was no provision for these submissions in my directions. [27] There must be an end to the material that the parties can file in this proceeding. I do not consider that I am obliged to consider the further submissions from either party but, for completeness, I note: a) My reasons are based upon the premise that the decision on 3 August 2009 is, in essence, a request for further information. b) TVET has the power to require an audit of a training organisation at any time during its registration. It advised ACTIVE that it was going to conduct 5 Section 224(1) supra. 6 S4(c) QCAT Act -- 5 of 6 -- GAR122-10 / Page 6 of 6 an audit. I accept ACTIVE’s submission that it was an audit of a body which TVET considered had a conditional registration but it is still an audit. [28] ACTIVE now contends that the officers carrying out the audit considered the question of whether a provisionally registered organisation should have its registration cancelled, not whether an existing registered organisation was complying with the requirements of registration. [29] ACTIVE gives one example of the difference of approach – Community Services 02. I note, however, that: a) ACTIVE has not filed statements from any person which directly addresses this submission. b) The audit revealed ACTIVE had deficiencies in a number of respects. c) ACTIVE was given a number of opportunities to address TVET about the non-compliance and/or rectify the deficiencies. d) In its material of 3 December 2009, ACTIVE refers to the Community Services 02 training. It does not, as here, argue that it had 12 months to comply with the new standards. [30] The late submissions by ACTIVE do not otherwise address the findings of the audit. They do not alter my decision. It is not necessary to address specifically the further submissions of TVET. -- 6 of 6 --