FEDERAL COURT OF AUSTRALIA

Australian International College Pty Ltd v Australian Skills Quality Authority [2018] FCA 2097

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application for the stay of enrolment restrictions imposed by the Administrative Appeals Tribunal as conditions for the stay of registration cancellation decisions made by the respondent, the Australian Skills Quality Authority, pending the hearing and determination of the appeal against those conditions, be dismissed with costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BROMWICH J:

1    The applicant, Australian International College Pty Ltd (AIC), was granted registered training organisation (RTO) status, which enabled it to provide training courses. It provides cooking and hospitality courses solely to overseas students who are in Australia on student visas. There is no government funding for any of AIC’s courses. The provision of those courses is regulated by the respondent, the Australian Skills Quality Authority (ASQA). ASQA administers two federal statutes for that purpose: the Education Services for Overseas Students Act 2000 (Cth) (ESOS Act); and the National Vocational Education and Training Regulator Act 2011 (Cth) (NVR Act).

2    On 17 July 2015, AIC was granted registered training organisation status for a period of seven years, concluding on 16 July 2022. However, an adverse audit report dated 17 November 2017 was later furnished to AIC. A response to that report was provided by AIC on 15 May 2018. By two separate letters each dated 17 August 2018, ASQA gave notice of two decisions. The first was a decision to cancel AIC’s registration under the ESOS Act. The second was a decision to cancel AIC’s registration under the NVR Act. Each cancellation decision was stated to have been made upon the grounds of finding non-compliance with the requirements for maintaining registration. It is not necessary for present purposes to detail what those findings were beyond observing that they included such things as inadequate staff training and course assessment. AIC takes issue with certain of those findings and is, in any event, seeking to rectify at least some of the deficiencies identified by ASQA.

3    Each of ASQA’s registration cancellation decisions is the subject of a merits review application before the Administrative Appeals Tribunal, which is set down for hearing on 6 to 10 May 2019. It is an open and practically unascertainable question as to whether AIC’s review application will succeed or fail. That is so both because this Court cannot (and will not) conduct a de facto merits review of ASQA’s cancellation decisions, and because, in any event, the merits review decision to be made by the Tribunal in the shoes of ASQA will, at least in part, turn on the circumstances that prevail when the review hearing takes place in over four months’ time, rather than present circumstances. A final Tribunal decision will probably not be available until some time after the Tribunal hearing, given its likely duration and the nature of the dispute.

4    AIC sought a stay of ASQA’s registration cancellation decisions before the Tribunal, so as to enable it to continue its business largely unfettered pending the outcome of the merits review application.

5    On Friday, 23 November 2018, that stay was granted by the Tribunal with conditions, including a condition that had been proposed by AIC and conditions that had been opposed by AIC. Oral reasons for imposing the conditions were given by the Tribunal at the time of making the stay order. AIC sought written reasons from the Tribunal. Those written reasons had not been provided when AIC commenced this appeal proceeding two weeks later on Friday, 14 December 2018.

6    On Monday, 17 December 2018, the Tribunal provided written reasons for its stay decision (and also for refusing a confidentiality order that would suppress AIC’s name, a decision that is not challenged).

7    By its Notice of Appeal filed in this Court on 14 December 2018, AIC seeks an initial interlocutory stay of conditions that prevent it from engaging in the process of enrolling new students or confirming their enrolment (enrolment restriction conditions) until its appeal can be heard. By its substantive appeal, AIC seeks to stay or remove the enrolment restriction conditions until the merits review application has been heard and determined.

8    One of the stay conditions, which makes provision for an alternative education supplier of the courses upon the contingency that the merits review application was unsuccessful, was offered by AIC. Doubtless that contributed to the Tribunal’s decision to grant the stay. The grant of a stay was not opposed by ASQA, provided that the enrolment restriction conditions were also imposed, as it transpired, over AIC’s objection. It is common ground that the enrolment restriction conditions that were imposed do not affect students who have already completed the enrolment process with AIC, including confirmation of enrolment, but have not yet commenced a course.

9    The Tribunal’s reasons for acceding to ASQA’s argument that the enrolment restriction conditions should be imposed were as follows:

Stay order

11.    From the outset ASQA indicated that it did not oppose the issuing of a stay order provided that certain terms and conditions were attached. These were initially reflected in the Tribunal’s Order of 10 October 2018.

12.    At the hearing, ASQA relied initially upon a draft Order which it proposed in paragraph 68 of its Outline of Submissions dated 16 November 2018. The Applicant put forward an alternative set of proposed conditions. The Tribunal engaged in discussions with the parties as to their respective views of each other’s proposals. ASQA was prepared to consent to the broad outlines of the Applicant’s proposals with some clarifications but nevertheless continued to insist on the inclusion of a prohibition on the Applicant enrolling any new students or creating any new Confirmation of Enrolments.

13.    This latter proposed condition was advanced on the basis that this was necessary for ASQA to discharge its responsibilities under section 2A of the NVR Act (set out below) which lists among the objectives of the Act the protection of students and the protection of the integrity of the national VET system.

14.    The Applicant opposed the inclusion of this condition on the basis that it would be fatal to the financial viability of the Applicant. It presented evidence in support of this contention by way of a Second Statement from Dr Stephen Rainer (dated 20 November 2018) setting out a detailed financial analysis of the Applicant’s current and projected position.

15.    ASQA challenged certain assertions in relation to this evidence and made the further point that, during the forthcoming year, were matters between the parties to be settled by some form of early conciliation, the Applicant would have time in the latter part of that year to make good any losses which might have been sustained initially.

16.    It is not the role of the Tribunal, at this stage in proceedings to resolve these competing claims in detail but rather to note the contended points: ASQA’s assertion of its statutory obligations and the Applicant’s assertions regarding the potential impact of certain proposed conditions.

17.    The Tribunal is of the opinion that ASQA is correct in pressing upon the Tribunal to need to have regard to the stated objectives of the NVR Act, and that, as a result, the Tribunal will impose conditions on further enrolments together with those modified terms and conditions suggested initially by the Applicant.

18.    The final form of the Order is set out below.

10    It may thus be seen that:

(1)    The basis for ASQA seeking the enrolment restriction conditions was that, as the administrator of the NVR Act, it was bound to give effect to the objects of that Act, as set out in s 2A. In particular, ASQA contended that the enrolment restriction conditions were necessary for it to discharge its responsibilities under s 2A, which lists among the objectives of the NVR Act the protection of students and the protection of the integrity of the national vocational education and training (VET) system as follows (the relevant objects being emphasised, statutory notes omitted):

The objects of this Act are:

(a)    to provide for national consistency in the regulation of vocational education and training (VET); and

(b)    to regulate VET using:

(i)    a standards-based quality framework; and

(ii)    risk assessments, where appropriate; and

(c)    to protect and enhance:

(i)    quality, flexibility and innovation in VET; and

(ii)    Australia’s reputation for VET nationally and internationally; and

(d)    to provide a regulatory framework that encourages and promotes a VET system that is appropriate to meet Australia’s social and economic needs for a highly educated and skilled population; and

(e)    to protect students undertaking, or proposing to undertake, Australian VET by ensuring the provision of quality VET; and

(f)    to facilitate access to accurate information relating to the quality of VET.

(2)    AIC opposed the imposition of the enrolment restriction conditions on the basis (recorded at [14] of the Tribunal reasons and reproduced at [9] above) that this would be “fatal to its financial viability”. It is not suggested that the Tribunal erred in its understanding that the asserted threat to financial viability was the sole basis upon which AIC opposed the imposition of the enrolment restriction conditions.

11    AIC’s next courses commence on 28 January 2019 for the first term, and on 22 April 2019 for the second term. AIC would ordinarily have been enrolling students from the beginning of December 2018 for the first term courses commencing on 28 January 2019. That is particularly necessary in respect of students who are not already in Australia, and who therefore need to obtain a student visa.

12    If interlocutory relief by way of an interim stay of the enrolment restriction conditions is not granted almost immediately, as a practical matter, enrolments for the first term courses commencing on 28 January 2019 will not be possible. If either interlocutory or final relief is not granted well prior to the Tribunal hearing on 6-10 May 2019, and otherwise by no later than late February or early March 2019, as a practical matter, enrolments for the second term courses commencing on 22 April 2019 will likely not be possible.

13    The following provisions of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) are of particular relevance:

(1)    an application for merits review by the Tribunal does not affect the operation of the original administrative decision that is the subject of that application, nor prevent the taking of action to implement that original decision: s 41(1);

(2)    despite s 41(1), the Tribunal has a discretion to make orders that stay or qualify the operation or implementation of the original decision or part of that decision to which the Tribunal proceeding relates: s 41(2);

(3)    the test for the Tribunal’s exercise of the discretion under s 41(2) is that the Tribunal considers that such an order is “appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review”;

(4)    the appeal to this Court is confined to questions of law: s 44(1);

(5)    that appeal does not affect the operation of the Tribunal decision under appeal, nor prevent the taking of action to implement that decision: s 44A(1);

(6)    despite s 44A(1), the Court has a discretion to make orders that stay or qualify the operation or implementation of a decision or part of a decision of the Tribunal or the decision or part of the decision to which the Tribunal proceedings relate: s 44A(2).

(7)    the relevant test for the exercise of the discretion under s 44A(2), being the power relied upon for this appeal, is that this Court or a judge of this Court considers that such an order is “appropriate for the purpose of securing the effectiveness of the hearing and determination of the appeal”.

14    It needs to be kept steadily in mind that this appeal is confined to the Tribunal decision and orders in granting the stay that AIC sought, including the enrolment restriction conditions that AIC opposed, rather than being directly concerned with the cancellation decisions that are the subject of the pending merits review application. The orders sought in the present application for interlocutory relief must advance the effectiveness of the hearing and determination of the appeal against the stay application conditions imposed by the Tribunal, rather than the hearing and determination of the merits review application by the Tribunal. This is thus not a typical situation in which the power and discretion in s 44A(2) of the AAT Act would fall for consideration. Ordinarily, or perhaps most commonly, the exercise of the discretion is directed to obviating adverse consequences, or otherwise preserving the status quo, pending the outcome of the substantive appeal against a final outcome, not just a substantive appeal against an interlocutory outcome. In this case, there is not yet any substantive appeal against a final outcome, because there is no final outcome as yet. The present substantive appeal is only from collateral relief granted on an interlocutory basis by the Tribunal under s 41(2) of the AAT Act.

15    The ordinary, or at least most common, way in which the exercise of the discretion in s 44A(2) arises collaterally to a substantive appeal from a final outcome is demonstrated by the following cases:

(1)    in Comcare v Nicolas [2014] FCA 638; 143 ALD 132, Comcare unsuccessfully sought a stay of Tribunal orders so that workers compensation payments would not be made that might later be found to be overpayments that would require recovery action if its appeal succeeded as to the respondent’s lack of entitlement;

(2)    in Ekinci v Civil Aviation Safety Authority [2014] FCA 905, an application to stay Tribunal orders that suspended the applicant’s approvals as a licenced aircraft maintenance engineer, imposed conditions and cancelled the applicant’s approvals as a chief pilot and as a chief flying instructor, pending appeals to this Court, were refused;

(3)    in Minister for Home Affairs v Zadeh [2018] FCA 1452, a Tribunal direction that a particular test that was necessary for the grant of citizenship be offered to the respondent was stayed pending an appeal from the decision which gave rise to the making of that direction.

16    The generally relevant principles for the exercise of the discretion in s 44A(2) have been articulated in prior cases as follows:

(1)    In Comcare v Nicolas, it was said (at [6]-[7]):

The discretion conferred by s 44A(2) of the AAT Act should be exercised only where special circumstances justify departure from the rule that a successful litigant is entitled to the fruits of judgment pending the appeal; for example, because the appeal, although successful, may otherwise be rendered nugatory: see Broadbent v Civil Aviation Safety Authority [1999] FCA 1871 at [5] and [6]; Hartnett v Migration Agents Registration Authority [2003] FCA 998 at [4]; Theo v Secretary, Department of Family Services [2004] FCA 1748 at [5]

Such special circumstances have been held to exist typically, but not exclusively, where the respondent’s financial state is such that there is no reasonable prospect of recovering the moneys paid pursuant to the judgment under appeal: Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Mouratidis [2010] FCA 880 at [21].

(2)    In Aspen Pharma Pty Ltd v H Lundbeck A/S [2013] FCA 324, it was observed (at [32]) that neither the notion of an entitlement to the “fruits of judgment” pending the appeal (it being the prima facie position under s 44A(1) of the AAT Act that an appeal to this Court does not affect the operation of the decision or prevent the taking of action to implement it), nor the possible purpose of s 44A(1) of ensuring that the subject matter of the appeal is not rendered nugatory by the implementation or coming into effect of the decision under appeal, should be “grafted onto the clear words of the provision so as to limit the occasions on which the broad discretion it confers should be exercised”.

(3)    In Zadeh, it was held (at [23]) that the statutory test of whether the order sought is “appropriate for the purpose of securing the effectiveness of the hearing and determination of the appeal” could give rise to the following non-exhaustive considerations (being sub-paragraphs to [23]):

As a general rule the successful party is entitled to the benefit of the judgment which is presumed to be correct.

The applicant bears an onus to demonstrate a proper basis for a stay.

Although speculation as to the prospects of success is generally unnecessary, a stay will not be granted in the absence of arguable grounds of appeal or where the appeal is not bona fide.

On the other hand, if it appears that the prospect of success is strong, this may in the circumstances of the particular case be a relevant factor to consider in exercise of the discretion and may interact with considerations of balance of convenience; if the prospect of the appeal succeeding is particularly strong then the appellant may have to show less in terms of balance of convenience.

All other things being equal, a stay will generally be granted if, but for a stay, the appeal would be rendered nugatory if the appeal is successful.

Considerations such as the balance of convenience and the competing rights of the parties and the effect of granting or not granting the stay on non-parties are to be weighed in the balance.

17    AIC needs to demonstrate at the interlocutory stage that there are arguable grounds of appeal for ASQA to be deprived of the conditions it successfully sought with the grant of a stay. The hearing of the substantive appeal will be the time and place to determine whether the grounds of appeal in final form should succeed. The only difference in substance between interlocutory relief now and final relief later is timing, and perhaps somewhat different grounds of appeal following the publication of these reasons. ASQA fairly acknowledges that AIC only received the Tribunal’s reasons the afternoon prior to the hearing of its interlocutory application in this Court and, as such, has been forced to advance any additional grounds of appeal on the run.

18    ASQA’s success in having the enrolment restriction conditions imposed may properly be regarded as “fruits of judgment” because that success clearly enough advances ASQA’s regulatory objectives of protecting prospective students from enrolment with AIC in circumstances in which it has found that there has been non-compliance with regulatory standards, albeit this being a conclusion under challenge by the merits review application.

19    The question of whether the substantive appeal from the imposition of the enrolment restriction conditions will be nugatory if the s 44A(2) discretion is not exercised is a misnomer in this case. That is because, as already noted, the exercise of the power in s 44A(2) is being sought not in aid of final relief but, rather, as final relief, for the evident purpose of preserving the pre-cancellation decision status quo pending the hearing and determination of the merits review application by the Tribunal.

20    While the Tribunal’s written reasons for determining that ASQA’s statutory obligations should prevail, so as to warrant granting the stay subject to the enrolment restriction conditions, are somewhat sparse, I am assisted by having before me the transcript of the stay application hearing before the Tribunal, as well as a copy of at least some of the material presented at that hearing (the Tribunal member refers to having at least looked at 1,600 pages of documents that had been provided, and I certainly do not have that much material before me). The transcript and those materials indicate that the primary competing arguments advanced concerned, as the Tribunal identified at [13]-[17] of its reasons reproduced at [9] above, the protection of the interests of prospective students, in substance by not permitting them to be enrolled by AIC unless and until the non-compliance issues had been resolved, as against the financial impact that the enrolment restriction conditions would have on AIC.

21    I have also been provided with material that has emerged since the Tribunal decision. However, it is doubtful that I can or should have regard to that later material. The issue before me is error on the part of the Tribunal, which must be confined to what was before it unless it was of a nature that goes to jurisdiction or jurisdictional error, which has not been suggested.

22    AIC cannot, in this Court, seek to have the enrolment restriction conditions stayed upon any broader basis than was argued before the Tribunal, because this is an appeal confined to questions of law, rather than a hearing de novo or rehearing. That said, AIC is entitled to raise grounds of appeal that go to any legal errors asserted to arise from the nature and content of the discretion that it was seeking to have the Tribunal exercise under s 41(2) of the AAT Act, and how that discretion was exercised.

23    AIC’s notice of appeal states (at [3]-[4]) that the following question of law arise, in substance indicating the asserted legal errors on the part of the Tribunal that are to be relied upon:

Whether the Tribunal failed to take into account relevant considerations including:

(a)    whether the effectiveness of the hearing and determination of the application for review would be secured by the Enrolment Prohibition Orders;

(b)    the financial interests of the Applicant;

(c)    the prospects of success of the Applicant on the application for review.

Whether by making both the Enrolment Order and the Enrolment Prohibition Orders, the exercise of the power conferred by section 41(2) of the AAT Act was exercised unreasonably.

24    At the hearing of the application for interlocutory relief, senior counsel for AIC identified the following further asserted legal errors on the part of the Tribunal, arising from the provision of written reasons (reproduced above at [9]) after this appeal proceeding had been commenced:

(1)    that [16] of the Tribunal’s reasons constitutes a “complete misapprehension” of what the role of the Tribunal is under s 41 of the AAT Act, which is said to be a serious issue to be tried – the substance of the foreshadowed ground, as best as I can tell, seems to be that the Tribunal, in failing to make any specific reference to the test for the making of the stay order under s 41(2) of the AAT Act, namely that such an order is “appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review”, had misconceived the power being exercised and had effectively decided that the stay provisions in s 41(2) were not to be taken into account;

(2)    that nowhere in the Tribunal’s reasons has the “critical factor” been addressed of why it was reasonable to have a condition that provided for the transition of students to another education provider that extended to students who had not yet been enrolled, and to also have a condition that prevented such enrolment from taking place – the enrolment restriction conditions are said by AIC to be unnecessary, given the condition providing for transition to another education provider, and illogical given the inconsistency between the condition providing for a transition of students who have not been enrolled to another education provider, and the enrolment restriction conditions preventing them from being enrolled; and

(3)    that [17] of the Tribunal’s reasons raises a question of law because, while the stated objectives of the NVR Act need to be a consideration, they should not have been the overriding and only consideration, especially when regard is had to the asserted contradiction or inconsistency between the condition providing for a transition to another education provider, and the enrolment restriction conditions.

25    I am not satisfied that AIC has established that the existing and presently proposed grounds of appeal are arguable so as to warrant the grant of interlocutory relief pending the final hearing of the appeal.

26    First and foremost, I am not satisfied that the Tribunal was not aware of, and did not apply, the test for granting a stay under s 41(2) of the AAT Act, namely that the stay order sought by AIC, albeit made subject to conditions that it opposed, was considered “appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review”. A significant part of the reason why I am not satisfied that the legal basis for the exercise of the discretion by way of the grant of a stay was not considered is that a perusal of the transcript of the stay application before the Tribunal on 23 November 2018, which went for approximately an hour and resulted in 24 pages of transcript, reveals two key things. First, that the debate was not over whether or not a stay should be ordered, but, rather, what conditions should form part of such a stay. There is no reason to suppose that the nature of the discretion and the basis upon which it may be exercised was not appreciated by the Tribunal.

27    Secondly, the Tribunal member was clearly alive to the pending merits review application and was asking questions about the compliance issues being able to be resolved so that the merits review application could be settled. The Tribunal clearly enough had the pending merits review application in mind.

28    Further, while the Tribunal did not give formal, written reasons until 17 December 2018, oral reasons were given on the day that the stay order was made. The transcript of those oral reasons reveals that specific reference was made to s 41(2) of the AAT Act, a reference that is repeated in the orders as finally made. The oral reasons also state that the cancellation orders would continue to be stayed “until such time as the application for review has been determined by the Administrative Appeals Tribunal either after the final determination of the proceedings or by settlement”, making it clear that the hearing and determination of the application for review, and thus, I also infer, its effectiveness, was clearly in contemplation. The financial viability issue raised by AIC was directly related to maintaining the pre-cancellation status quo pending the hearing and determination of the merits review application. In context, the grant of the stay, and the imposition or non-imposition of the enrolment restriction conditions had no independent life from the merits review application.

29    The written reasons given by the Tribunal for making the stay subject to the enrolment restriction conditions make express reference to AIC’s arguments as to financial viability. While it is true that the Tribunal declined to resolve the competing claims about the financial viability issue in detail, it cannot be said that this consideration, even if mandatory (which is doubtful), was not considered even if it was not found to be determinative in the face of the competing consideration of protecting the interests of students who had not yet enrolled.

30    The third suggested (mandatory) relevant consideration of the prospects of success of the AIC on its application for review does, upon a reconsideration of the Tribunal’s written reasons, appear to be a matter that was not, in terms, taken into account in those reasons. However, I fail to see why that is something that was mandatory. It is not a consideration that is provided for in s 41(2), and it is hard to see why such a mandatory relevant consideration would be inferred in the manner described in Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 at 39-40; see also Minister for Immigration and Border Protection v BHA17 [2018] FCAFC 68 at [133]-[139]. As already indicated above, the prospects of success of the application for merits review will depend upon the state of affairs at the time of the Tribunal hearing in May 2019, and perhaps beyond. By that time, the state of compliance may well have improved. Conversely, other problems may have emerged.

31    In any event, even though not reflected in the Tribunal’s written reasons, during the course of the stay application hearing, the Tribunal member was told by ASQA’s representative that it was “of the view and still are of the view that the applicant has made some progress towards addressing the non-compliances and that we have provided the evidence analysis which does outline the outstanding non-compliances and that if the applicant were of a view to resolve this, which we are trying to resolve in the interests of both parties, that the applicant could provide further evidence addressing those outstanding non-compliances, which we would undertake to review”. The Tribunal was thus on notice of the fluid state of affairs, which was hardly conducive to making any prediction as what the prospects of success would be by the time of the May 2019 hearing almost six months later. The Tribunal member specifically asked if the steps taken towards addressing non-compliance meant that it was possible for the matter to be settled without Tribunal intervention.

32    Thus, to the extent that it was possible to anticipate the outcome of the review application, the Tribunal member raised it, and so could not be said to have had no regard to it, even if that discussion did not feature in the formal written reasons and no concluded view was apparently possible. This is also a telling indicator as to why such a consideration could not be mandatory. It is difficult to see how it could be a mandatory relevant consideration in some cases, but not in others.

33    In relation to the suggestion that making the enrolment restriction conditions a part of the stay that was ordered was unreasonable, which I take to be asserted to be legally unreasonable in order to constitute a question of law, I am unable to detect any basis for reaching that difficult threshold: see Minister for Immigration and Border Protection v Eden [2016] FCAFC 28; 240 FCR 158 at [58]-[60]. It is not enough to advance emphatic disagreement with the decision that has been made, and yet nothing more has been demonstrated at this interlocutory stage. The Tribunal member weighed up the competing reasons for imposing or not imposing the enrolment restriction conditions, and decided that the former should prevail. Given that that was the way in which the debate was conducted before the Tribunal, I am unable to see what was wrong with the decision being made upon that basis.

34    The suggestion that the objects of the NVR Act concerning protection of the interests of students should not have been the overriding and only determinative consideration invites this Court to engage in impermissible merits review. At the appropriate level of legal abstraction, there was nothing inherently unreasonable about protection of the interests of students being found to be the dominant or even determinative consideration, let alone there being such a degree of unreasonableness as to constitute an exceeding of the metes and bounds of the executive power being exercised by reference to its terms, scope and purpose: Minister for Immigration and Border Protection v Stretton [2016] FCAFC 11; 237 FCR 1 at [8]-[13], [52]-[59] and [92].

35    The substance of the final possible ground of appeal to be considered concerns the asserted inconsistency between the condition providing for a transition to another education provider and the enrolment restriction conditions. Closer examination reveals that this ostensible disparity was deliberate on the part of ASQA. AIC’s representative had proposed before the Tribunal that the interim enrolment restriction conditions would cease upon the making of a final stay order, thereby permitting the enrolment of new students. AIC argued that if it was later found to be critically non-compliant, and therefore had to be shut down, those new students could then be transferred to the alternative education provider. However, ASQA’s representative made it clear that any new confirmation of enrolments (that is, for enrolments that had commenced but not yet concluded, so as to be caught by the second limb of the enrolment restriction conditions), that were to come to AIC prior to the hearing and determination of the merits review application would instead go to the alternative education provider. Thus, properly understood, the enrolment restriction conditions were not inconsistent with the alternative education provider condition because the latter would cover new students whose enrolment had commenced but not been concluded, ensuring that their interests were not overlooked. ASQA considered this to be part of the way in which the enrolment restriction conditions would be protected, so that there was no hiatus between those students who were fully enrolled and able to continue, and those students who had not yet commenced the enrolment process. Those who had commenced but not concluded the enrolment process would be diverted to the alternative education provider, rather than being left in limbo.

36    For the above reasons, no arguable ground of appeal has yet been identified to my satisfaction. In those circumstances, there is no utility in considering the balance of convenience in granting interlocutory relief in any detail. However, had it been necessary to make a decision on that, I would not have been inclined to intervene. That is for two reasons.

37    First, while the material to which I was directed by senior counsel for AIC that was before the Tribunal indicated that there would certainly be financial disadvantages in not being permitted to enrol 100 or so new students as sought for the courses beginning on 28 January 2019, and that those disadvantages were not insubstantial, it was not demonstrated beyond assertion that this met the claim in the affidavit by the solicitor for AIC before me that AIC would have to close its operations. Put simply, there were too many gaps in the financial evidence relied upon by AIC, as identified by counsel for ASQA, for me to be satisfied that being unable to enrol students to fill 100 of the estimated 150 vacancies in the first term of 2019 (out of an approved number of 468 students) would render AIC’s entire operations financially unviable. The evidence does not even clearly indicate that the inability to enrol those 100 students would entail AIC running at a loss, as opposed to a (perhaps substantially) reduced profit. Very clear evidence would be needed to show that AIC had to have enrolled such a high proportion of its maximum number of students in order to be financially viable pending the hearing and determination of its merits review application.

38    Secondly and more fundamentally, I am not satisfied that AIC’s financial predicament, to the extent that it was demonstrated to the Tribunal and replicated before me, was such as to outweigh the legitimate concerns of ASQA as the regulator, as expressed at the stay hearing before the Tribunal, that “international students should be quarantined from undertaking non-compliant training”. That is especially so given the extended period of time that AIC has had to rectify the identified defects since commenting on the audit report in May 2018. I also note that there is no evidence that I was taken to that indicated that this was no longer any basis for concern, let alone that this state of affairs was demonstrated to the Tribunal so as to indicate error in the conclusion it reached.

Conclusion

39    The interlocutory application for the stay of enrolment restriction conditions as conditions to the stay of the cancellation decisions granted by the Tribunal must be dismissed. AIC must pay ASQA’s costs of the application.

Associate:

Dated:    10 January 2019