Federal Court of Australia

King Eeducational Service Pty Ltd v Australian Skills Quality Authority [2021] FCA 42

ORDERS

THE COURT ORDERS THAT:

1.    Both the decision of the Administrative Appeals Tribunal in matter 2015/6179 dated 10 December 2020 and the decision of the respondent to which that Tribunal proceeding related, being a decision under s  9AB of the Education Services for Overseas Students Act 2000 (Cth) not to renew the applicant’s registration as an approved provider, be stayed under s 44A(2) of the Administrative Appeals Tribunal Act 1975 (Cth) until 4.30 pm on 1 March 2021, subject to the condition that the applicant may not deliver training to any overseas student who has not, on or before 29 January 2021, started a course with the applicant.

2.    The hearing of the applicant’s application for a stay of the Tribunal’s decision and the respondent’s decision be adjourned to 25 February 2021 at 10.15 am.

3.    By 4.30 pm on 8 February 2021, the respondent file and serve any affidavits on which it intends to rely in relation to the applicant’s application for a stay.

4.    By 4.30 pm on 18 February 2021, the applicant file and serve any further affidavits on which it intends to rely in relation to its application for a stay.

5.    By 4.30 pm on 22 February 2021, the applicant file an outline of submissions in support of its application for a stay, limited to ten pages.

6.    By 4.30 pm on 24 February 2021, the respondent file an outline of submissions in relation to the applicant’s application for a stay, limited to ten pages.

7.    Costs reserved.

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

REASONS FOR JUDGMENT

(Revised from transcript)

Wheelahan J:

Introduction

1    The applicant applied to the Court on an urgent basis for an extension of time within which to institute an appeal from a decision of the Administrative Appeals Tribunal dated 10 December 2020, and for orders under s 44A of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) staying the operation of the decision of the Tribunal, and the decision of the respondent notified on 11 November 2015 that was the subject of the review by the Tribunal.

2    Yesterday, I heard and determined in the applicant’s favour its application to enlarge time for the institution of the appeal. I gave brief oral reasons for that decision which, in summary, were that I was satisfied that there was an explanation for the delay, it was accepted by the respondent that there was a question of law raised by the proposed appeal that was worthy of argument, there would be prejudice to the applicant if time were not extended, and it was accepted by the respondent that there was no relevant prejudice to it.

3    On the premise that the applicant would then proceed forthwith to institute the appeal, I proceeded to hear argument in relation to the applicant’s application for orders staying the operation of the Tribunal’s decision and the decision under review. In view of the urgency and the short notice of the application that had been given to the respondent, the applicant confined its application to one for an interim order. Ms Quadrio, who appeared for the respondent, did not oppose that course.

Background

4    The applicant’s application to the Tribunal resulting in its decision of 10 December 2020 has a lengthy history.

5    The applicant conducts a business providing educational services to international students. Pursuant to two regulatory schemes currently administered by the respondent, the applicant requires registration to provide courses to international students and, ultimately, carry on its business. This application concerns the registration scheme established by the Education Services for Overseas Students Act 2000 (Cth) (ESOS Act).

6    On or about 20 October 2009, the applicant was registered as a registered training organisation by the Western Australia Training and Accreditation Council, a relevant regulatory body at that time. Subsequently, that body and its functions were succeeded by a national regulatory scheme established under the National Vocational Education and Training Regulator Act 2011 (Cth) (NVR Act). Under that scheme, the applicant became registered as an NVR registered training organisation.

7    Separately, on 6 August 2012, the applicant was registered under the ESOS Act, referred to above, to provide specific courses to overseas students.

8    On 4 August 2014, the applicant applied to renew its registration as an NVR registered training organisation under the NVR Act, and on 6 August 2014 the applicant applied to renew its registration under the ESOS Act. On 27 October 2015, both applications were refused by the respondent. The applicant was notified of the decisions on 11 November 2015, and that they were to take effect on 16 December 2015.

9    On 25 November 2015, the applicant applied to the Tribunal for review of the decisions to refuse to renew its registrations. The application to the Tribunal was heard over 12 days in July 2016 and April, May, and June 2017, with the Tribunal reserving its decision on 7 June 2017. Shortly after reserving its decision, the Tribunal received written submissions from the respondent and the applicant dated, respectively, 14 June 2017 and 19 June 2017.

10    Commencing 1 July 2016, Part 2 of the ESOS Act, which included the provisions concerning registration and renewal of registration of providers, was the subject of substantial amendments that were effected by the Education Services for Overseas Students Amendment (Streamlining Regulation) Act 2015 (Cth) (the 2016 amendments).

11    On 6 March 2020, and while the Tribunal’s decision remained reserved, the respondent lodged further affidavits with the Tribunal which the Tribunal determined to admit. That evidence concerned attendances by authorised regulatory officers of the respondent upon the applicant’s premises in January 2020 for the purposes of assessing the applicant’s compliance with the terms of relevant regulatory instruments. Subsequently, the applicant filed evidence in reply. While there were further directions hearings in 2020, no further substantive oral hearing took place.

12    The respondent’s original decisions notified on 11 November 2015 were the subject of several successive orders of the Tribunal, made under s 41(2) of the AAT Act, staying their operation –

(1)    on 10 December 2015, the Tribunal granted a conditional stay of the operation of the decisions;

(2)    on 27 July 2016, the Tribunal vacated the conditional stay granted on 10 December 2015, and in lieu granted a modified conditional stay; and

(3)    on 7 June 2017, and at the conclusion of the hearing, the Tribunal granted an unconditional stay of the operation and implementation of the respondent’s decisions until the hearing and determination of the review or until further order.

13    The consequence of the stay orders of the Tribunal was that the applicant continued to provide training courses over the five year period during which the application before the Tribunal remained pending and the Tribunal’s decision remained reserved.

14    On 10 December 2020, the Tribunal set aside the decision to refuse the applicant’s registration as an NVR registered training organisation under the NVR Act, and substituted a decision that the applicant be registered under the NVR Act, but subject to some conditions that were directed to overseeing the applicant’s compliance with the legislation. In relation to the applicant’s application to renew its registration under the ESOS Act, the Tribunal affirmed the respondent’s decision of more than five years earlier refusing that application.

15    On 7 January 2021, the Tribunal made orders with the effect of extending the stay of the respondent’s decision to refuse renewal of its registration under the ESOS Act until 29 January 2021, and imposed conditions on the stay.

16    On 27 January 2021, the applicant filed in this Court its application for an extension of time under s 44(2A) of the AAT Act to appeal from the Tribunal’s decision to affirm the respondent’s decision to refuse the applicant’s renewal of its registration under the ESOS Act.

17    As I have mentioned, I extended the time to institute the appeal, and a notice of appeal was filed on 29 January 2021. The applicant raises two questions of law which I will address further below.

The legislation

18    The relevant provisions of the ESOS Act prior to the 2016 amendments in relation to the registration and renewal of registration of an approved provider were as follows.

19    Sections 9AA and 9AB provided for a two-step process for registration of an approved provider –

9AA    Recommendation by designated authority that approved provider be registered to provide a course at a location

(1)    A designated authority may recommend that an approved provider for a course for a location be registered under this Act to provide that course at that location to overseas students.

Risk management approach

(2)    A designated authority must use a risk management approach when considering whether to make such a recommendation.

Recommendation may relate to new or existing registration

(3)    A designated authority may make such a recommendation:

(a)    for the purposes of the Secretary registering an approved provider under section 9AB; or

(b)    for the purposes of the Secretary adding one or more courses at one or more locations to a provider’s registration under section 9AG.

9AB    Registration of approved providers by Secretary

Registering approved providers

(1)    The Secretary must register an approved provider if:

(a)    a designated authority makes a recommendation under section 9AA in relation to the provider; and

(b)    the provider is:

(i)    a resident of Australia; or

(ii)    a Table C provider (within the meaning of the Higher Education Support Act 2003); and

(c)    the provider has paid the first entry to market charge (unless the provider is exempt from the requirement to do so under regulations made under subsection 6(4) of the Education Services for Overseas Students (Registration Charges) Act 1977); and

(d)    if the provider is not a registered provider – the provider has paid its first TPS levy (see Subdivision B of Division 2 of Part 5A); and

(e)    in any case – the designated authority has given the Secretary a certificate in accordance with section 9AH; and

(f)    the Secretary has no reason to believe that the provider:

(i)    is not complying, or will not comply, with this Act or the national code; or

(ii)    does not have the principal purpose of providing education; or

(iii)    does not have the clearly demonstrated capacity to provide education of a satisfactory standard; or

(iv)    is unlikely to be able to provide education of a satisfactory standard; and

Note 1:    The Secretary must notify the relevant designated authority if the Secretary has reason to believe that any of the matters set out in this paragraph apply: see section 14.

Note 2:    For when a higher education provider has the principal purpose of providing education, see section 5A.

(g)    if the provider has previously been registered – the provider is not liable for an annual registration charge, a second or third entry to market charge or a late payment penalty that remains unpaid after it became due for payment.

Note:    The Secretary must determine that the provider is registered for a specified period: see section 9AC.

(2)    The Secretary must not register the provider in any other circumstances.

…

(5)    To avoid doubt, the Secretary registers a provider under this section if the Secretary renews the provider’s registration.

20    For the purposes of ss 9AA and 9AB, the respondent was both the designated authority and the delegate of the Secretary pursuant to a delegation made under s 170 of the ESOS Act. The terms of s 9AB(1)(f)(i) should be noted.

21    Where engaged, s 9AC(5) of the ESOS Act provided for the continuation of registration until the Secretary made a decision –

9AC    Period of registration

…

(5)    If:

(a)    a provider’s registration is due to expire; and

(b)    before that expiry, a designated authority makes a recommendation under section 9AA in relation to the provider; and

(c)    by the time the provider’s registration would otherwise expire, the Secretary has not yet made a decision whether to register the provider under section 9AB,

the provider’s registration is taken to continue until the Secretary makes his or her decision.

22    Section 9AE enabled the Secretary to impose conditions on registration –

9AE    Secretary’s conditions on provider’s registration

(1)    The Secretary, on the Secretary’s own initiative, may impose a condition on a provider’s registration.

(2)    The Secretary may impose a condition:

(a)    either:

(i)    at the time that a provider is registered; or

(ii)    at any time before a provider’s registration expires; and

(b)    either generally or in respect of any one or more specified courses for any one or more specified locations.

(3)    To avoid doubt, section 9AD does not limit the Secretary’s power to impose a condition under this section.

(4)    The Secretary must use a risk management approach in deciding whether to impose a condition under this section.

23    Section 176(1)(aa) provided for review by the Tribunal of a decision that an approved provider should not be registered under s 9AB –

176     Review of decisions

(1)    An application may be made to the Administrative Appeals Tribunal for the review of:

(aa)    a decision that an approved provider should not be registered under section 9AB; or

…

24    By the 2016 amendments, all the provisions set out above were repealed and replaced by other provisions. Section 9 of the ESOS Act now provides for an application for registration to be made to the “ESOS agency” –

9    Provider may apply to be registered

(1)    A provider may apply to be registered to provide a course or courses at a location or locations to overseas students.

(2)    The application must be made to the ESOS agency for the provider.

25    The respondent is the “ESOS agency”: see, ESOS Act, s 6C, the definition of “National VET Regulator” in s 5, and National Vocational Education and Training Regulator Act 2011 (Cth), s 155(1A).

26    Section 10 of the ESOS Act enables the registration of a provider –

10     ESOS agency for provider may register provider

(1)     If a provider makes an application under section 9, the ESOS agency for the provider may register the provider to provide a course or courses at a location or locations if the provider meets the registration requirements.

(2)     The ESOS agency for the provider must use a risk management approach when considering whether to register the provider.

27    Section 10B of the ESOS Act enables the ESOS agency to impose conditions on a provider’s registration –

10B    Conditions of registration

(1)    The ESOS agency for a provider or registered provider may at any time:

(a)    impose a condition on the provider’s registration; or

(b)    vary or remove a condition of the provider’s registration.

(2)    The ESOS agency for the provider or registered provider must use a risk management approach in deciding whether to impose, vary or remove a condition.

(3)    A condition may be:

(a)    imposed generally on a provider’s registration; or

(b)    imposed in respect of either or both of the following:

(i)    one or more of the courses that a provider is registered to provide;

(ii)    one or more of the locations at which a provider is registered to provide a course.

…

28    There are specific provisions for the renewal of registration in ss 10D and 10E –

10D    Registered provider may apply to renew registration

(1)    A registered provider may apply to renew the provider’s registration to provide a course or courses at a location or locations to overseas students.

(2)    The application must be:

(a)    made to the ESOS agency for the register provider; and

(b)    made within the period determined under subsection (3).

…

10E    ESOS agency for registered provider may renew registration

(1)    If a registered provider makes an application under section 10D, the ESOS agency for the provider may renew the provider’s registration to provide a course or courses at a location or locations if the provider meets the registration requirements.

(2)    The ESOS agency for the registered provider must use a risk management approach when considering whether to renew the registration of the provider.

29    Section 10F provides for the continuation of registration pending a decision by the ESOS agency –

10F    Registration continues until decision on renewal takes effect

If:

(a)    a registered provider makes an application under section 10D; and

(b)    the ESOS agency for the provider has not made a decision on the application before the end of the day on which the provider’s registration is due to expire;

the provider’s registration continues until the agency’s decision on the application is stated to take effect.

30    Sections 10 and 10E, which are set out above, condition the powers to register and to renew registration upon the provider meeting the “registration requirements”. That term is given content by s 11, which provides, inter alia –

11    When a provider or registered provider meets the registration requirements

A provider or registered provider meets the registration requirements if:

(a)    the provider is:

(i)    a resident; or

(ii)    a Table C provider (within the meaning of the Higher Education Support Act 2003); and

(b)    the ESOS agency for the provider is satisfied that the provider is complying, or will comply, with:

(i)    this Act; and

(ii)    the national code; and

(iii)    if the ESOS Standards or Foundation Program Standards apply in relation to the provider – those Standards; and

(c)    if the provider is not an exempt provider – the ESOS agency for the provider is satisfied that the provider is fit and proper to be registered; and

(d)    the ESOS agency for the provider is satisfied that the provider has the principal purpose of providing education; and

(e)    the ESOS agency for the provider has no reason to believe that:

(i)    the provider does not have the clearly demonstrated capacity to provide education of a satisfactory standard; or

(ii)    the provider has not been providing, or will not provide, education of a satisfactory standard; and

…

31    The terms of s 11(b) and its reference to satisfaction by the ESOS agency that “the provider is complying, or will comply,” should be noted.

32    The Education Services for Overseas Students Amendment (Streamlining Regulation) Act 2015 (Cth) which effected the 2016 amendments contained transitional provisions which included items 2(1) to (4) in Part 2 of Schedule 6 –

Part 2 – Registration of providers etc.

2    Continuation of existing registrations

(1)    This item applies if:

(a)    before commencement, a provider was registered to provide a course at a location; and

(b)    immediately before commencement, the provider’s registration was in force.

(2)    Despite the amendments of the ESOS Act made by Schedule 1 to this Act, the provider’s registration continues in effect, and may be dealt with, after commencement as if the provider were registered under the ESOS Act, as amended by that Schedule.

(3)    If, immediately before commencement, the provider’s registration was subject to any conditions, those conditions continue in effect, and may be dealt with, after commencement as if they had been imposed under section 10B of the ESOS Act, as inserted by Schedule 1 to this Act.

Special rule relating to renewal of registration

(4)    If, immediately before commencement, the provider’s registration was in force because of the operation of subsection 9AC(5) of the ESOS Act, then:

(a)    after commencement, the provider may apply to renew the provider’s registration under section 10D of the ESOS Act, as inserted by Schedule 1 to this Act; and

(b)    despite paragraph 10D(2)(b) of the ESOS Act, any such application must be made within 60 days after commencement; and

(c)    if the provider does not make such an application within that period – the provider’s registration ceases to be in force at the end of that period.

Note:    If the provider makes such an application then section 10F of the ESOS Act, as inserted by that Schedule, applies in relation to the provider’s registration.

The Tribunal’s decision

33    The Tribunal addressed submissions on the question whether the review should be undertaken by reference to the ESOS Act in the form it took at the time of the decision under review, or in its amended form following the 2016 amendments. The Tribunal referred to item 2(2) of the transitional provisions and held at [79]-[80] of its statement of reasons that the amended Act applied to the review of the applicant’s application for renewal of its registration –

79.    By providing that the “registration continues in effect, and may be dealt with …” as if a provider were registered under the amended ESOS Act, it must follow that the renewal of that registration is also dealt with under the amended ESOS Act. Renewal is dealing with a registration just as granting or cancelling registration is dealing with a registration.

80.    KES was a registered provider. ASQA’s decision was not to renew its registration but, when I stayed the operation of that decision, the practical effect was that KES continued to be a registered provider. That was the situation when the ESOS Amendment Act came into operation. Applying Item 2(2) of Schedule 6 of the ESOS Amendment Act, KES’s registration may be dealt with after 1 July 2016 as if it were registered under the amended ESOS Act. Therefore, its application for registration is dealt with under the amended ESOS Act with reference to s 10E.

34    The Tribunal held that the applicant had committed a number of breaches of relevant statutory standards over a period of years, including those that were the subject of the evidence admitted following the attendances by authorised regulatory officers of the respondent upon the applicant’s premises in January 2020. The Tribunal recorded that this evidence was the subject of responses by the applicant which included what appear to be at least three “Audit Rectification Responses” prepared by a consultant, Ms Jacqueline Hodge of RTO Advice Group Pty Ltd. The Tribunal defined this organisation as “RTO Advice”, but by a slip it referred later in its reasons to the “RTO Doctor”. At [195] of its reasons, the Tribunal referred to two Audit Rectification Responses: one lodged in June, and a “second and last Audit Rectification Response” lodged in August 2020. However, at [158] the Tribunal referred to a later Rectification Response which was exhibited to an affidavit of Ms Hodge sworn 26 October 2020.

35    In relation to the renewal of the applicant’s registration under the NVR Act, the Tribunal concluded at [202] that there had been systemic failures and contraventions of the relevant standards that were “quite fundamental to the scheme of accreditation that has been established by the NVR Act”. Nonetheless, the Tribunal determined to set aside the respondent’s decision and to substitute a decision by which the applicant’s registration was renewed for a period expiring on 24 December 2023, subject to conditions directed to overseeing compliance with the NVR Act. That part of the Tribunal’s decision is not challenged by the applicant.

36    In relation to the renewal of registration under the ESOS Act, the Tribunal concluded as follows –

204.    That brings me to [the applicant’s] registration under the amended ESOS Act. Although s 11(b) requires me to have regard to compliance, the test is a little different from that under s 16 of the NVR Act. The test is whether [the applicant] is complying, or will comply, with the amended ESOS Act. Under s 10E of the amended ESOS Act, I must use a risk management approach. I have had regard to the findings that I have made in relation to [the applicant’s] breaches of the amended ESOS Act. At the heart of most of them lies a lack of proper assessment tools and lack of monitoring. I am satisfied that [the applicant] has, for the most part, addressed the assessment tools. What remains to be tested is whether it is able to implement those tools and do so efficiently and effectively and to sustain the effort required to do so over the period of its registration. I have made findings regarding breaches of National Code Standards 11.1 and 11.2 some four years ago. Despite being on notice that ASQA at least had found it in contravention of the National Code at that time and despite having called evidence at that earlier time regarding work being undertaken to rectify its contraventions, [the applicant] has continued to be in contravention. It might be said that the contraventions are different but that is of no matter. The earlier contraventions and its proper response to rectify them should have made it very mindful to make sure that it attended to its systems and tools to ensure that it did not find itself in the same position again. Instead, it finds itself in a similar position in 2020 in having to call in the RTO Doctor to place it in a position of compliance. Given its past history and given the scope of the work that had to be undertaken by the RTO Doctor, I am not satisfied that [the applicant] will comply with the amended ESOS Act and the National Code. Therefore, I have decided to affirm ASQA’s decision dated 27 October 2015, and notified to [the applicant] on 11 November 2015, to reject [the applicant’s] applications for renewal of its registration under the amended ESOS Act.

37    In the alternative, the Tribunal addressed the conditions under s 9AB(1)(f)(i) of the ESOS Act before the 2016 amendments and came to the same conclusion –

205.    If it should prove to be the case that the ESOS Act 2000 applies and not the amended ESOS Act, I am not satisfied that I have, under s 9AB(1)(f)(i), no reason to believe that [the applicant] will not comply with either that legislation or with the National Code. My reasons for reaching that conclusion are the same as those in the previous paragraph. Again, that would lead me to affirm ASQA’s decision not to renew [the applicant’s] registration under the ESOS Act 2000.

The questions of law raised by the applicant’s notice of appeal

38    By its notice of appeal the applicant raises the following questions of law –

1.    Did the Tribunal ask the wrong question in assessing whether the Applicant “meets the registration requirements” within the meaning of section 11 of the ESOS Act? Is the Tribunal’s decision thereby affected by a jurisdictional error (or other error of law)?

2.    Further or alternatively, did the Tribunal act unreasonably by failing to consider whether the imposition of any condition under section 10B of the ESOS Act would be sufficient for it to be satisfied that the Applicant “meets the registration requirements” within the meaning of section 11 of the ESOS Act? Is the Tribunal’s decision thereby affected by a jurisdictional error (or other error of law)?

39    The first question is supported by a claim that the Tribunal erred, particularly at [204] of its reasons, in treating the phrase “is complying, or will comply” in s 11(b) of the amended ESOS Act as establishing two cumulative conditions of which the Tribunal had to be satisfied. The applicant claims that because the conjunctive word is “or” and not “and”, the provision should be construed in an ambulatory way. That is because the content of the term “meets the registration requirements” has to accommodate both an application for initial registration under s 10, and an application for the renewal of registration under s 10E.

40    As to the second question, the applicant relied on the inconsistency in the Tribunal deciding to renew the registration under the NVR Act subject to conditions, but not considering any such conditions in relation to the renewal under the ESOS Act.

41    The respondent accepted that the notice of appeal raised questions worthy of argument. I shall proceed on the basis that the questions raised by the applicant’s notice of appeal render its application to set aside the Tribunal’s decision properly arguable. Otherwise, it is not appropriate on this application that I venture any further views.

Applicable principles

42    Section 44A(2) provides –

44A Operation and implementation of a decision that is subject to appeal

Stay orders

(2)     Where an appeal is instituted in the Federal Court of Australia from a decision of the Tribunal, that Court or a Judge of that Court may make such order or orders staying or otherwise affecting the operation or implementation of either or both of the following:

(a)    the decision of the Tribunal or a part of that decision; and

(b)    the decision to which the proceeding before the Tribunal related or a part of that decision;

as that Court or Judge considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the appeal.

43    The principles applicable to s 44A(2) of the AAT Act were not put in issue by the parties. The power under s 44A(2) may be exercised for the purpose of preserving the status quo, or obviating adverse consequences pending the outcome of an appeal under s 44. In Australian International College Pty Ltd v Australian Skills Quality Authority [2018] FCA 2097, Bromwich J at [15]-[16] reviewed a number of the authorities, including Minister for Home Affairs v Zadeh [2018] FCA 1452, where at [23] Thawley J summarised the relevant principles in terms that I gratefully adopt –

Whether or not a stay should be ordered depends upon whether the Court considers it appropriate for the purpose of securing the effectiveness of the hearing and determination of the appeal. Considerations relevant to the exercise of the Court’s discretion, which are not confined, include:

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

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

(3)    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.

(4)    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.

(5)    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.

44    In State of Queensland v Humane Society International [2019] FCA 534; 164 ALD 400, Logan J at [8] addressed the reference in some of the authorities to a requirement that there be special circumstances, in terms with which I respectfully agree –

… one does not find in the text of s 44A(2) any reference to “special circumstances”. Nor, in terms, does one find reference to enjoyment of the fruits of judgment. What one finds in s 44A(1) is a statement that the mere “institution of an appeal … does not affect the operation of the decision under challenge or prevent the taking of action to implement” it. Further, one finds in s 44A(2) a statement that “the purpose of securing the effectiveness of the hearing and determination of the appeal” is the ordained touchstone. What I understand the references to “special circumstances” to mean is that there needs to be found in the evidence supporting a stay application something which establishes that a stay is necessary for the purpose of securing the effectiveness of the hearing and determination of the appeal in order to warrant the exercise of a discretion to stay the operation and implementation of that decision. In that sense, there has to be an element which establishes the circumstances are special, but the prism through which one views the stay application must be the terms of the conferral of jurisdiction to grant the stay, rather than considerations which might be abroad in relation to the granting of a stay in the exercise of some other appellate jurisdiction. Indeed, even to characterise the jurisdiction conferred by s 44 as “appellate” is loose language, for in truth that section confers an original jurisdiction with the proceeding best classed as a form of statutory appeal.

45    In this case, the primary decision that was stayed by the Tribunal, initially by its order of 10 December 2015, was the respondent’s decision to refuse the renewal of the applicant’s registration under the ESOS Act. Counsel for the applicant submitted, in reliance on the decision of Tamberlin J in Shi v Migration Institute of Australia Ltd [2003] FCA 1304; 134 FCR 326, that the effect of the order of the Tribunal staying the respondent’s decision refusing the renewal of registration was to continue a deemed registration of the applicant that was effected by s 9AC(5) of the ESOS Act, which I have set out above. It was submitted that prior to the respondent, as delegate of the Secretary, making its decision to refuse the application for renewal, it had received a recommendation. For the purposes of this application, I find that in determining not to renew the applicant’s registration, the Commissioners of the respondent had received a recommendation in relation to the applicant as contemplated by s 9AB(1)(a) of the ESOS Act. That recommendation is evidenced by an audit outcome decision record of the respondent dated 27 October 2015 that was in evidence before the Court.

46    It is then necessary to address the effect of the transitional provisions in item 2 of Schedule 6 of the Education Services for Overseas Students Amendment (Streamlining Regulation) Act 2015 (Cth). What follows are my conclusions reached for the purposes of this urgent interlocutory application for an interim stay, and without the benefit of full argument. Item 2(4) of Schedule 6 is engaged if a provider’s registration was in force because of the operation of s 9AC(5) of the ESOS Act. In this case, at the time of commencement of the 2016 amendments to the ESOS Act and of the transitional provisions, the applicant’s registration was in force not only because of the operation of s 9AC(5), but also because of the terms of the stay order made by the Tribunal pursuant to the independent statutory power in s 41(2) of the AAT Act, the evident object of which is to enable the preservation of the subject matter of applications before the Tribunal for the purpose of securing the effectiveness of the hearing and determination of the application for review. Regard must then be had to s 7 of the Acts Interpretation Act 1901 (Cth) and to the principles essayed by Mason CJ, Deane, Toohey and Gaudron JJ in Esber v The Commonwealth [1992] HCA 20; 174 CLR 430. There was much force in the submission of counsel for the applicant that by reason of the Tribunal’s stay order of 10 December 2015, a right had accrued to the applicant, and that clear and specific words would be required in the amending and transitional provisions of the legislation if they were to have the effect that upon commencement of the amending provisions the stay would cease to have its intended effect of securing the continuation of the applicant’s registration pending review of the respondent’s decision by the Tribunal. A similar analysis applies to subsequent orders of the Tribunal staying the respondent’s primary decision. The effect of the Tribunal’s stay orders of 27 July 2016, 7 June 2017, and 7 January 2021 was, by force of those orders, to continue the deemed registration that was effected by s 9AC(5) of the ESOS Act, notwithstanding its repeal. In the case of those orders, they did not result in circumstances that engaged item 2(4) of the transitional provisions, because the deemed registration was enlivened by the Tribunal’s orders after the commencement of the amending Act. There is a sufficiently strong argument that a similar analysis would apply to any orders made by the Court under s 44A(2) of the AAT Act, as sought by the applicant, such that there would be utility in making the orders.

The submissions of the parties

47    Counsel for the applicant relied on the affidavit evidence of the chief executive officer of the applicant, Mr Sarang Dhawan. The main points that arise from that affidavit evidence are –

(a)    the applicant had been operating without restriction from the conclusion of the final hearing on 7 June 2017 until 7 January 2021 when, by consent, the Tribunal further stayed the underlying decision until 29 January 2021 but imposing conditions that the applicant was not permitted to train any students or to enrol any new students;

(b)    the applicant agreed to the order of 7 January 2021 in the terms that were made because the stay granted by the Tribunal on 7 June 2017 was due to expire on 7 January 2021 by operation of s 43(5C) of the AAT Act, and in circumstances where because of the holiday period and the unavailability of legal practitioners, the applicant had been unable to prepare necessary appeal documents by that time;

(c)    currently, the applicant has 51 students studying with it who are enrolled in one of two courses being of 56 weeks and 42 weeks respectively in duration;

(d)    the applicant has a further 26 enrolled students to whom the applicant has provided a “confirmation of enrolment” and who have not yet commenced their course;

(e)    the applicant has a further 75 student applications that have not been processed;

(f)    the confirmation of enrolment facilitates the students’ applications for visas;

(g)    of all the students to whom a confirmation of enrolment has been issued, 30 have been granted visas and have been studying online due to COVID-19 travel restrictions, and a further 20 do not yet have visas;

(h)    in the past six months, 30 students have been enrolled, and 26 students with a confirmation of enrolment are scheduled to commence courses in the next six months;

(i)    the applicant has various ongoing fixed expenses, the largest items being rental of premises under a two year lease expiring on 23 August 2021, and wages of three administrative staff and two trainers and assessors;

(j)    the applicant continues to engage Ms Hodge of RTO Advice;

(k)    if the Court does not stay the Tribunal’s decision, then the applicant will cease to be able to operate as a provider of training and education to international students, and will be required to make arrangements under the ESOS Act to transfer all of its students to another provider or to cancel their enrolment;

(l)    the applicant would then effectively have to cease operating as a business, and will have to lay off staff and it will lose its premises;

(m)    the applicant does not have any accumulated cash reserves, and has operated under financial “duress” for a number of years pending a decision by the Tribunal, as it was difficult to operate a business without certainty of registration;

(n)    the applicant spent significant funds in the last 12 months in connection with the review by the Tribunal after the respondent lodged its further evidence;

(o)    the applicant has experienced additional difficulties in the international student market in the last 12 months as a result of COVID-19 restrictions on international arrivals; and

(p)    in summary, the applicant would be unable to survive if it was not permitted to operate pending the hearing and determination of the appeal.

48    Counsel for the applicant emphasised the fact that from 7 June 2017 to 7 January 2021 the applicant had been permitted to operate its business unhindered pursuant to the Tribunal’s unconditional stay orders. Picking up the language of s 44A(2) of the AAT Act, counsel submitted that the interim stay sought is appropriate for the purpose of securing the effectiveness of the hearing and determination of the appeal. That was because, to adapt the analysis of Tamberlin J in Shi v Migration Institute of Australia Ltd [2003] FCA 1304; 134 FCR 326 at [28]-[29], the operation of the applicant’s business was a continuum, and if the applicant is successful on appeal then the applicant will have wrongfully had its registration terminated by the Tribunal’s orders of 10 December 2020 with consequential damage and disruption to its business for which there was no provision for recovery of loss. Counsel went further and submitted that the appeal might be rendered nugatory if, as a result of not being registered, the applicant ceased to trade.

49    For the purposes of the applicant’s application for interim relief, counsel grouped the applicant’s students and potential students into three categories based upon the evidence of Mr Dhawan to which I referred above –

(a)    those students who were enrolled and who had commenced their course;

(b)    those students who had enrolled but who had not commenced their course; and

(c)    those persons who had applied for a course who had yet to enrol.

50    In relation to the first group of students, they were due to re-commence their studies shortly. In relation to the second group of students, counsel informed the Court that there were no enrolled students who had not commenced and were due to commence their studies during the proposed period of an interim order. Accordingly, they could be excluded from consideration for the time being. In relation to the third group, counsel submitted that there was no intention to commence teaching those persons during the proposed period of an interim stay, but that the applicant should be permitted to process applications for enrolment so that the applicant’s business might be able to continue as a going concern in the interim period.

51    In relation to what might occur should an interim stay lapse, or further down the track should a stay pending appeal lapse if the appeal is unsuccessful, counsel for the applicant relied on a number of provisions of Part 3 and Part 5 of the ESOS Act. Part 3 imposes obligations on registered providers. Part 5 contains mechanisms which seek to protect overseas students’ interests in the event that a registered educational service provider fails to provide tuition, which s 46A defines as a “default”. The ostensible effect of these mechanisms is to impose certain obligations on a defaulting provider in relation to affected overseas students. Without being exhaustive, the relevant provisions can be summarised as follows.

52    Within Part 3, ss 28 and 29 require all providers to credit tuition fees received from an overseas student before their commencement of study to a bank account within five days of receipt. The provider is obliged to ensure that there are sufficient funds in that account to repay all such tuition fees. The provider is prohibited from drawing on those funds to pay its debts, other than in limited specified circumstances. Contravention of these obligations is an offence under s 32.

53    Within Part 5, s 46D obliges a defaulting provider to arrange for affected students to be offered a place in an alternative course at the provider’s expense, or provide a refund of any unspent tuition fees received by the provider, within 14 days. Failing to do so is an offence under s 46F. A provider is permitted to draw money from the bank account described above to pay a refund pursuant s 46D.

54    Counsel for the applicant submitted that, in respect of any fees received on enrolment from new students, those fees would be held in accordance with these protective provisions at risk of criminal sanction.

55    Finally, counsel emphasised the imperative of the Court making an order on 29 January 2021 having regard to the terms of the Tribunal’s order of 7 January 2021, under which that stay was expressed to be “until close of business on 29 January 2021”. Counsel submitted that if the deemed registration of the applicant was not continued, then the applicant’s inability to undertake those activities which its registration enabled it to conduct would result in “provider default” for the purposes of s 46A of the ESOS Act, and trigger obligations under Part 5 of the Act to transfer its students to other providers.

56    Ms Quadrio did not dispute any of the applicable principles for the grant of a stay. Commendably, the respondent narrowed the issues in dispute and did not oppose the grant of an interim stay on terms, pending a further interlocutory hearing at which the respondent would have the opportunity to give proper consideration to the application, marshal evidence, and make more considered submissions. The respondent submitted that any interim stay should be subject to conditions. For present purposes, the respondent –

(a)    did not oppose an interim stay that would permit the applicant to continue teaching courses to enrolled students who had already commenced studying;

(b)    opposed permitting the applicant under the terms of any stay to commence teaching courses to any enrolled students who had not already started their course, but this was not in issue; and

(c)    opposed the making of an interim stay that would permit the applicant to continue to enrol students.

57    The respondent submitted that it was inappropriate to permit the applicant to enrol new students when there was a Tribunal decision adverse to the applicant that affirmed the respondent’s decision to refuse to renew the applicant’s registration that enabled it lawfully to provide tuition and education services to overseas students. The respondent submitted that, should the interim order not continue, there would be inconvenience to the overseas students concerned.

Consideration

58    The question whether an interim stay order should be granted, and if so its terms, is not free from difficulty. The respondent’s concession that it does not oppose the grant of an interim stay to the extent that it would permit the applicant to continue its courses for those overseas students who have commenced their courses goes some way to resolving the issue.

59    I am persuaded that it is appropriate to make an interim order on the terms proposed by the applicant in order to preserve what in this case was the status quo ante pending a full consideration of the applicant’s application in about four weeks’ time. It is not appropriate therefore that I say anything more than is necessary for the consideration of the merits of the application for an interim stay.

60    I consider that part of the continuum that should be preserved for an interim period pending full argument is the applicant’s ability to process enrolments as a going concern, as it had been able to do during the significant period of time after 7 June 2017 when the Tribunal’s decision was reserved. I am not inclined to interrupt that continuum for the short period until after a full hearing of the applicant’s stay application in this Court. I consider that any prejudice to non-parties, such as students, is ameliorated by two factors. The first is the protections that exist under Part 3 and Part 5 of the ESOS Act, to which I referred at [51]-[53] above. The second involves some degree of speculation, but the number of enrolments that the applicant procured in the six months to date show that the highest numbers were 13 in October 2020, and 12 in January 2021. Other months were significantly lower. The short point is that if the applicant’s deemed registration is not continued beyond the interim period, then the number of new enrolments in the next four weeks is not likely to be so great in number that they cannot be accommodated under the terms of Part 5 of the ESOS Act.

61    The parties were substantially agreed on the procedural orders that should be made to prepare the interlocutory application for further hearing.

Associate:

Dated:    3 February 2021