The Federal Court is the proper venue to argue that a decision was an unlawful exercise of power because some essential procedural part of the decision making process was not done in accordance with the law. That is quite different to asserting the decision was wrong on the merits, or that the RTO has fixed up the non-compliance identified as the basis for a decision of ASQA. Those are arguments should be run in the Administrative Appeals Tribunal (AAT).

As explained in Pow Wow Training v ASQA (here), a decision by ASQA will be an unlawful exercise of power if ASQA does not give the RTO procedural fairness.  This case also spells out some of the procedural fairness requirements that ASQA must comply with in making an adverse decision.

So, what is procedural fairness?

In substance, it comes from the notion of a fair hearing.  It embodies several principles, but the one under discussion in this case was the right to be heard – a government decision-maker can’t make a decision that affects a person’s rights or interests without first giving that person an opportunity to be heard about the decision.   Any decision made in without procedural fairness will be invalid.

For RTOs, the procedural fairness requirement means ASQA must that give the RTO:

• notice of the basis (in fact and law) on which it will make an adverse decision, and
• a proper opportunity to make submissions and present evidence to ASQA about the circumstances relevant to the decision.

The High Court has approved (here) the following description of relevant procedural fairness requirements:

“…a person likely to be affected by the decision is entitled to put information and submissions to the decision-maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material.”

In Pow Wow Training v ASQA  the Federal Court found that ASQA had failed to afford the RTO procedural fairness.

Pow Wow applied to renew its registration and ASQA undertook an audit, identifying non-compliance issues.  ASQA’s auditor told Pow Wow’s director that the audit report would take about 15 days to complete, and then Pow Wow would have 20 days to respond to the allegations of non-compliance before ASQA made a decision.  Pow Wow launched into rectification action before the report was received, spending some $100,000 on improving compliance.

When, after about 2 weeks, Pow Wow contacted ASQA to ask where the audit report was, the auditor told her a decision had been made which would be published shortly.  Pow Wow received a notice of decision to refuse renewal of registration and a notice of intention to suspend its registration, giving it 4 days from the date of the letter to respond to the latter and no opportunity to respond to the former.  When asked, ASQA stated that the promised 20 days had been reduced because of the severity of the non-compliance.

Pow Wow persuaded the Court that the decisions to suspend registration and refuse renewal were unlawful because:

• Pow Wow had not been given any opportunity to make submissions about the refusal to renew registration before the decision was made
• Pow Wow had not been given an adequate opportunity to make submissions about the intended suspension decision, and
• ASQA had represented to Pow Wow that it would have 20 days to respond, and it unilaterally resiled from the representation without allowing Pow Wow to be heard on whether the 20 day period should be shortened.

The decisions were quashed and ASQA was ordered to pay Pow Wow’s costs.

Hopefully, ASQA has learned from its mistakes.  But for RTOs to protect themselves they should be aware of the following:

1. The RTO should discuss the audit and decision time frame with the auditor.  Any representations made by ASQA may be able to be relied upon if they are not complied with.
2. If ASQA makes a decision without giving an RTO the opportunity to be heard about the basis of the decision, it is likely to be invalid.  Federal Court proceedings can be issued to set the decision aside.  If the RTO is successful, ASQA will most likely be ordered to pay costs (which are not available in the AAT).
3. If the decision affects the RTO’s operations significantly, you may be able to obtain an injunction which stays the effect of the decision.  Injunctions may be refused if a party sits on its hands for too long, so see your lawyer immediately after you receive the decision and seek legal advice.