Ad Astra Institute Pty Ltd and Australian Skills Quality Authority

Ad Astra Institute Pty Ltd and Australian Skills Quality Authority [2019] AATA 2514 (13 August 2019)
Division:GENERAL DIVISION
File Numbers: 2019/3895 & 2019/3896
Re:Ad Astra Institute Pty Ltd
APPLICANT

AndAustralian Skills Quality Authority
RESPONDENT

DECISION
Tribunal:Member K. Parker
Date:13 August 2019
Place:Melbourne

The stay application made by Ad Astra Institute Pty Ltd on 27 June 2019 is refused.
The Tribunal revokes the interim stay orders previously made by the Tribunal on 7 August 2019.
..................[sgd]......................................................
Member K. Parker
Catchwords
VOCATIONAL EDUCATION AND TRAINING - stay application - decisions under review to cancel registrations – interests of persons affected by the review – stay application refused
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
Education Services for Overseas Students Act 2000 (Cth)
National Vocational Education and Training Regulator Act 2011 (Cth)
Cases
Re Scott and Australian Securities and Investments Commission [2009] AATA 798
Secondary Materials
Financial Viability Risk Assessment Requirements 2011 (Legislative Instrument F2011L01405 dated 1 July 2011)
Standards for Registered Training Organisations 2015
REASONS FOR DECISION
Member K. Parker
13 August 2019

On 20 May 2019, the Chief Commissioner for the Commissioners of the Australian Skills Quality Authority (ASQA) made a decision to cancel the registrations of Ad Astra Institute Pty Ltd (Ad Astra):
(a)as a registered training organisation (RTO) under the National Vocational Education and Training Regulator Act 2011 (Cth) (NVR Act); and
(b)as a provider registered on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS provider) under the Education Services for Overseas Students Act 2000 (Cth) (ESOS Act).
The Tribunal will refer to the decisions referred to in the above paragraph collectively as the reviewable decisions.
Ad Astra seeks review of the reviewable decisions by the Administrative Appeals Tribunal (review applications) and has requested:
(a)a stay of the reviewable decisions pending the substantive hearing of the review applications (stay application); and
(b)an expedited hearing of the review applications (expedition request).
ASQA opposes the stay application and consents to the expedition request.
Ad Astra relied on the evidence given by its current CEO, Ms Yintong Tang (also known as Ms Alina Tang), in her witness statement signed on 3 July 2019 (Ms Tang’s Statement). Ms Tang also gave oral evidence at the stay hearing. According to Ms Tang, Ad Astra has been operating for two years commencing in 2017. It delivers commercial cookery courses to international students and currently has about 130 enrolled students.
Ms Tang stated that the courses were initially delivered from Ad Astra’s city offices at 2/600 Collins Street, Melbourne and from a rental kitchen space located at 17-21 Buckhurst Street, South Melbourne (Buckhurst Street premises). Ms Tang stated that Ad Astra no longer operates from those locations and it is now based at 95 Albert Street, Brunswick (Albert Street premises).[1] At the hearing, Ms Tang told the Tribunal that Ad Astra had commenced delivering courses at the Albert Street premises before it submitted an application to change its CRICOS registration. The Tribunal notes that Ms Tang signed a Principal Executive Officer’s declaration which was attached to the change application on 31 March 2019.[2]
[1] Refer paragraph [5] of Ms Tang’s Statement.
[2] Refer T-Documents page 1166.
Ad Astra also relied on a witness statement by Ms Sally Tansley, a vocational education and training consultant, signed 17 July 2019 (Ms Tansley’s Statement). Ms Tansley also briefly gave oral evidence for a brief time at the stay hearing to clarify matters that were not clear from her statement.
Further to this evidence, Ad Astra relied on documents it lodged pursuant to the Tribunal’s directions made on 8 July 2019. Ad Astra lodged written submissions, dated 16 July 2019, in support of its stay application and expedition request which the Tribunal has taken into consideration (Ad Astra’s Submissions). The Tribunal has also taken into account the submissions of Ad Astra sent after the conclusion of the hearing, seeking remittal under s 42D of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) of the reviewable decisions, and ASQA’s response to that suggestion.
ASQA lodged written submissions in relation to the stay application with the Tribunal on 1 August 2019 which have been taken into consideration (ASQA’s Submissions).
ASQA relied upon an affidavit by Ms Bronwyn Turton, one of its lead regulatory officers, and also a witness statement by one of Ad Astra’s former students. Pursuant to its obligations under s 37 and s 38 of the AAT Act, ASQA lodged with the Tribunal a set of documents on 2 August 2019 and a supplementary set of documents on 5 August 2019. These documents are paginated 1 to 1239 and will be referred to collectively as the T-Documents.
The Tribunal listed the stay application for a hearing on 7 August 2019 and directed that specific documentary evidence and written submissions be produced to the Tribunal. For the most part, the parties complied with those orders. The Tribunal noted at the stay hearing that Ad Astra’s tax returns lodged with the ATO were missing and further directions were made for Ad Astra to produce those documents by 12 noon the following day.
Ad Astra also tendered additional documentary evidence on the day of the stay hearing to which ASQA did not object, other than to make submissions as to the degree of weight the Tribunal should place on those documents.
As mentioned above, two days after the stay hearing, Ad Astra’s legal representatives wrote to the Tribunal and to ASQA seeking, on behalf of Ad Astra, that the Tribunal exercise its discretion under s 42D of the AAT Act to remit this matter to ASQA. Ad Astra contended that it was not possible for the Tribunal to determine what it described as a significant issue in the review without ASQA having made a determination about Ad Astra’s “change of venue” application; and alternatively, because ASQA has not turned its mind to the suitability of the venue.
Ad Astra also requested that if the Tribunal was not prepared to exercise its discretion under s 42D, it should make directions requiring ASQA to produce further supplementary documents relating, in essence, to the assessment of the new kitchen’s suitability for its courses, relevant specifications in the training packages and correspondence to date that had passed between it and ASQA about this issue; and to delay any decision on the stay application for seven days to allow for the production of that further documentary evidence. Ad Astra offered to make an immediate undertaking (on 9 August 2019) that it would not deliver any courses from the new premises, awaiting determination of its s 42D request or production of the documents it was seeking as part of this alternative request.
ASQA opposed these further requests for the reasons set out in an email by it to the Tribunal and Ad Astra dated 12 August 2019.
The Tribunal is not prepared to exercise its discretion to remit this matter to ASQA under s 42D of the AAT Act. This application was not put to the Tribunal or ASQA at the stay hearing on 7 August 2019. Nevertheless, the Tribunal has considered this request. Even if the Tribunal were to accept the contentions by Ad Astra upon which this request is made, it would make no difference to the Tribunal’s assessment of Ad Astra’s stay application because, quite separate from the issue of lack of any approval of the new premises, the Tribunal considers that Ad Astra’s prospects of success remain poor, by reason of it being unlikely, in the opinion of the Tribunal, to be able to establish at the substantial hearing that it satisfies the condition of registration under s 24 of the NVR Act and further, as a separate matter, under s 23 of the NVR Act, as explained below in these Reasons for Decision.
Further and purely, by way of observation, there did not appear to be any reason for the Tribunal to consider that ASQA had attended to processing the belated “change of venue” application in a timely way. To the contrary, the Tribunal heard evidence, which Ms Tang accepted, that ASQA had not yet been provided with information from Ad Astra which would allow it to properly assess the change application.
On 12 August 2019, Ad Astra’s legal representatives wrote to the Tribunal again, this time suggesting that Ad Astra’s “s 42D” application to be listed for hearing and referring to a number of matters concerning Ad Astra’s new premises. Ad Astra also notified the Tribunal that it had voluntarily ceased delivering its courses at the new premises and would undertake to continue not to do so until the new venue is approved. A request was also made in this email that the Tribunal re-open the stay hearing if it “is inclined to deliver its decision in the stay hearing prior to determining Ad Astra’s s 42D application”, on the basis of the following contentions (the Tribunal will address each of these contentions as they are mentioned below):
(a)there is crucial evidence that should have been, but was not, produced. This evidence was not specified in the email. If it related to the venue application, the following considerations apply;
(b)the first time ASQA informed Ad Astra that it considered its venue application as being “deficient and not worthy of consideration” was at the stay hearing on 7 August 2019. The Tribunal does not accept there had been any surprise on the part of Ad Astra at the stay hearing of the key matters that ASQA intended to raise. The Tribunal notes that Ad Astra was on notice at least since 1 August 2019 about those “venue” issues when ASQA lodged its written submissions; stating at paragraph [38.1] that it was contended by ASQA that Ad Astra “does not have an approved premises from which to deliver training and assessment to overseas students”; and at paragraph [38.2] that Ad Astra “does not currently have an appropriate simulated commercial kitchen from which to deliver the practical aspects of its training program and has not had one for a substantial period of time”. Paragraphs [21] to [29] of Ms Turton’s affidavit lodged with the Tribunal and served on Ad Astra on 5 August 2019 also address this issue and specifically, allege that there had been a contravention of s 8 of the ESOS Act. As noted earlier, Ad Astra submitted a bundle of documents at the stay hearing—including photographs of the Albert Street premises and architectural plans—to support the submission that the premises is a “satisfactory training environment”;[3] and
(c)there were legal authorities which should have been, but were not, put forward to the Tribunal. The Tribunal notes the matters referred to in the above paragraph and is satisfied that Ad Astra has had sufficient time since service of Ms Turton’s affidavit on 5 August 2019 to consider the allegations regarding s 8 of the ESOS Act, and for counsel representing Ad Astra to bring case authorities to the attention of the Tribunal at the stay hearing on 7 August 2019. The Tribunal is under an obligation to deal with applications, including interlocutory applications, with as much expedition as a proper consideration of the matters permit, consistent with the general objectives of the Tribunal as set out in s 2A of the AAT Act. Detailed procedural directions were made in preparation of the stay hearing and the stay hearing itself took place over a period of four hours, during which two witnesses were called by Ad Astra to give evidence and detailed submissions were made by both parties. The Tribunal is satisfied that Ad Astra has been given an ample opportunity to put the case in support of its stay application to the Tribunal. In any event, as the Tribunal as stated above, even if the issue of the unapproved premises were put to one side, the Tribunal remains of the view that Ad Astra’s prospects of success at the substantive hearing remain poor, as it is unlikely to be able to demonstrate that it satisfies the condition of registration under s 23 of the NVR Act and, as a separate matter, under s 24 of the NVR Act.
[3] Refer Exhibit A1 and Transcript of stay hearing on 7 August 2019 (Transcript) at line 15 on P-55.
The Tribunal received further submissions from Ad Astra’s legal representatives on 13 August 2019, as these Reasons for Decision were being finalised. These submissions reiterated the previous request for a remittal under s 42D of the AAT Act, noted Ad Astra’s inability to submit new information to asqanet (ASQA’s portal), outlined the measures it has taken to avoid prejudice to its students and made an argument about section 8 of the ESOS Act. The Tribunal has considered these submissions and, as articulated above, is not minded to exercise its powers under s 42D.
For the reasons set out in these Reasons for Decision, the Tribunal has decided to refuse Ad Astra’s request for stay orders to be made pending determination of the review applications. The Tribunal revokes the interim stay orders made on 7 August 2019. This means that Ad Astra must immediately cease delivery of any courses or units of competency to any of its students pending the resolution of the reviewable decisions or until further order by the Tribunal.
LEGISLATIVE FRAMEWORK
The effect of s 41 of the AAT Act is that unless the Tribunal orders a stay of the operation of a reviewable decision, which it has the power to do under s 41(2), the mere making of an application for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the reviewable decision; in this case, being the cancellation decisions.
Upon request by a party to an application, the Tribunal may order a stay of the application of the reviewable decision under s 41(2) of the AAT Act:
If the Tribunal is of the opinion that it is desirable to do so after taking in to account, the interests of any persons who may be affected by the review.
The Tribunal may make orders:
Staying the decision or part of it, as appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.
President Downes J in Re Scott and Australian Securities and Investments Commission [2009] AATA 798 (Re Scott) set out a number of factors to be considered in determining whether to grant a stay under subsection 41(2) of the AAT Act. Applying the principles referred to in Re Scott to the present case, the Tribunal considers that the persons potentially affected by a stay of the relevant decisions, include Ad Astra, its shareholder, its employees, students, prospective students, the ASQA, prospective employers who may employ or engage Ad Astra’s graduates in the future or persons who may receive services from them.
Applying the approach in Re Scott, the Tribunal has identified the following factors it will consider in forming an opinion as to whether it is desirable to order a stay in relation to the reviewable decision and if so, whether any conditions should attach to the stay:
(a)the Tribunal’s general impression as to the prospects of success of the review applications;
(b)the interests of Ad Astra and the likely consequences of the refusal of the stay on it;
(c)the public interest, incorporating a consideration of:
(i)the consequences on ASQA in carrying out its functions;
(ii)any potential impact on the reputation of the sector;
(iii)any potential impact on future employers who may employ Ad Astra’s graduates on the basis of the qualifications awarded by Ad Astra;
(d)the interests of Ad Astra’s employees and consequences of the refusal of a stay;
(e)the interests of Ad Astra’s current and prospective students and the consequences of the refusal of the stay on them;
(f)whether the review applications, if successful, would be rendered nugatory or pointless if the stay was not granted; and
(g)the estimated time for the Tribunal to hear and determine the relevant applications.
Taking each of those considerations in turn:
THE PROSPECTS OF SUCCESS OF THE SUBSTANTIVE APPLICATIONS
The Tribunal acknowledges that in considering whether to grant a stay, it is not required to undertake a full consideration of the merits of the substantive applications. For one thing, there are alleged non-compliances which remain in dispute as between the parties. As would be expected, Ad Astra (and ASQA) may wish to supplement their respective evidence already lodged with the Tribunal in response to those matters. Further, the evidence of both parties lodged to date has not been fully tested and much of it is contested.
However, the Tribunal considers that it is able (and appropriate) to take in to account the information and evidence presently available, so as to form a general impression as to Ad Astra’s prospects of success. The Tribunal notes this factor is not solely determinative of whether the Tribunal should order a stay, as it is required to consider the other factors identified above in paragraph [25].
As explained to the parties at the hearing, the Tribunal considers it appropriate to apply a sliding scale. At one end of the scale, the Tribunal would be more inclined to form an opinion that it is desirable to grant a stay if it considers Ad Astra’s prospects of success in relation to the review applications are good. At the other end of the scale, the Tribunal would be less inclined to do so if it considered Ad Astra’s prospects of success are poor.
The Tribunal has formed a general impression from the evidence before it and the submissions made by the parties that Ad Astra’s prospects are poor. The Tribunal has reached this view for a number of reasons as referred to below, including the following (taken together or separately):
(a)Ad Astra is not presently registered to deliver its courses to overseas students from the Albert Street premises and to do so constitutes a contravention of s 8 of the ESOS Act;
(b)Ad Astra is unlikely to be able to satisfy the Tribunal when it goes to final hearing that it has met either, or both, of the following conditions of registration being the:
(i)financially viability requirements under s 24 of the NVR Act; and
(ii)fit and proper person requirements under s 23 of the NVR Act.
Ad Astra not registered to deliver courses to overseas students from new Albert Street premises
At the stay hearing, the current CEO of Ad Astra, Ms Tang initially told the Tribunal that she was not aware that the Albert Street premises, from which Ad Astra was delivering its courses to overseas students, was not “registered”. Ms Tang was asked whether she had seen this allegation as it appeared in Ms Turton’s affidavit. Ms Tang stated that she “couldn’t remember that part”.[4]
[4] Refer Transcript at P-19.
Ms Tang was asked when she had commenced in her role as CEO of Ad Astra and she answered “after March”.[5]
[5] Refer Transcript at P-20.
The Tribunal notes that an Ad Astra company resolution appearing at page 377 of the T-Documents confirms that Ms Tang was appointed as Director of Ad Astra on 28 February 2019. This resolution also records that her husband, Mr James Sackl, resigned as Director of Ad Astra on the same day. Ms Tang’s evidence was that Mr Sackl remained as an adviser to her; he was not paid any fees; and there was no documentary employment contract or other contractor agreement in existence as between Mr Sackl and Ad Astra.
At the stay hearing, Ms Tang accepted that Ad Astra had commenced delivering courses at the Albert Street premises before it had submitted its application to ASQA for approval of those premises.[6] Ms Tang also conceded that she knew that Ad Astra was required to obtain registration to provide training at the Albert Street premises.[7] The Tribunal also notes the following information provided by ASQA to Ad Astra’s appointed legal representatives in an email on 12 June 2019:[8]
…
I must remind your client that the application (CHGCRI0004524) to change the location of training for international students to the Brunswick site has not yet been approved and no training of international students can take place until the application is processed and approved.
…
[6] Refer Transcript at P-23.
[7] Refer Transcript at lines 6-8 on P-23.
[8] Refer T-Documents page 936.

The Tribunal notes that on 1 May 2019, under Mr Sackl’s signature, Ad Astra provided ASQA (attached to the Application to change CRICOS registration form (Change Form)), only the first lease that was entered into for the new premises between a different entity owned by Ms Tang, namely, Sonic Language School Pty Ltd and the landlord of the Albert Street premises (First Lease). At the stay hearing, Ms Tang accepted that she had not provided ASQA to date (separate from these review applications) with a copy of a subsequent lease agreement entered into with the landlord of the new premises, this time with Ad Astra rather than Sonic Language School Pty Ltd, for the new premises (Second Lease); and that ASQA did not have the information it would need to enable it to process Ad Astra’s request for a change of registration to allow it to deliver courses at the new Albert Street location.
During cross-examination, Ms Tang was asked whether Ad Astra had any intention of ceasing the delivery of its courses at the Albert Street premises, now that she had been made aware that ASQA had not approved the premises, and that by continuing to deliver courses at that premises Ad Astra was in contravention of s 8 of the ESOS Act. Ms Tang evaded the question, stating that she was not aware. Notably, Ms Tang did not provide any indication or undertaking on behalf of Ad Astra that it would (or intended to) voluntarily cease delivery of courses at the Albert Street premises.[9]
[9] Refer Transcript from line 15 on P-20
The Tribunal inquired of Ms Tang why she had not followed up with ASQA about Ad Astra’s approval application, once the application was lodged. Ms Tang’s only response was, “Yes, I didn’t, sorry”.[10] The Tribunal notes the following exchange that took place between counsel for ASQA and Ms Tang at the stay hearing:[11]
COUNSEL FOR ASQA: You do. This document also raises the fact that there are no approved premises. Did that concern you, Ms Tang, to realise that you were committing an offence – your company is committing an offence, because there are no approved premises from which training can be provided by Ad Astra- - -?
MS TANG: ---I just said - - -
COUNSEL FOR ASQA: - - - to any students- - -?
MS TANG: ---I just said I didn’t check. Sorry about that.
COUNSEL FOR ASQA So, you did read the submissions?
MS TANG: ---So, I didn’t check whether it was granted or not, that the facts.
COUNSEL FOR ASQA: That’s not my question. You read the submissions and they say – they’re from ASQA – and they say, it has not been granted and you have nowhere to provide approved training. You did nothing about that, did you? You did nothing about that, did you Ms Tang?
MS TANG: ---Yes, hence we hire a lawyer to help with us to updated the information.
[10] Refer Transcript at P-21.
[11] Refer Transcript at P-21.
During cross-examination, Ms Tang was asked why it had taken Ad Astra until 26 June 2019 (a delay of almost two months after submitting the Change Form on 1 May 2019) to pay ASQA the application fee required before ASQA could commence processing the application for change of details. Ms Tang’s response was, “I know that I transfer the money to pay that” and “I couldn’t recall the date”.[12]
[12] Refer Transcript at P-22.
Part 2 of the ESOS Act deals with the registration of providers. Division 1 sets out a Guide to Part 2. This Guide is set out in s 8A and relevantly, states as follows:
A person who provides a course at a location to an overseas student must be registered to provide that course at that location (or do so in accordance with an arrangement with a provider who is so registered).
Division 2 creates an offence for a person who contravenes that requirement. It is also an offence for a registered provider to offer courses, or hold itself out as able to provide a course, to overseas students without being appropriately registered (or doing so in accordance with an appropriate arrangement).
…
Division 2 makes it an offence to provide or promote a course without registration. Specifically, s 8(1) of the ESOS Act provides as follows (emphasis added):
(1) A person commits an offence if the person:
a.    provides a course at a location to an overseas student; or
b.    makes an offer to an overseas student or an intending overseas student to provide a course at a location to that student; or
c.    invites an overseas student or intending overseas student to undertake, or to apply to undertake, a course at a location; or
d.    holds himself, herself or itself out as able or willing to provide a course at a location to overseas students;
unless:
e.    the person is registered to provide that particular course at that particular location; or
f.   the person does so in accordance with an arrangement that the person has with a registered provider for that particular course for that particular location.
Penalty: Imprisonment for 2 years.
The general impression formed by the Tribunal is that Ad Astra is likely to find it difficult at the substantive hearing to establish that it did not contravene s 8(1) of the ESOS Act, as alleged by ASQA. There was no evidence put before the Tribunal at the stay hearing, or alluded to by Ad Astra that it intends to put before the Tribunal at the substantive hearing, that would appear to establish a defence or acceptable explanation in respect of any allegation that s 8 had been contravened. The Tribunal accepts that it is possible that Ad Astra will be able to establish that there were mitigating circumstances at play, in that Ad Astra considered that the previous kitchen rental facilities were inadequate and had led to complaints being made by students, which had prompted it decision to acquire and move to a new location.
At the stay hearing, Ad Astra was asked why it had not approached ASQA when it found itself in a predicament at this time. There was no acceptable explanation given as to why it did not do so. In closing submissions, counsel for Ad Astra conceded that it would have been a better course for Ad Astra to have taken to have approached the regulator.[13] Counsel stated that instead, Ad Astra had sought advice from a consultant and was advised to “choose the lesser of two evils, move and get your application in to ASQA to have the new premises approved”. Ultimately, under advisement or not, Ad Astra was required to make a decision about how to deal with the predicament it faced. Ad Astra made a decision not to disclose those significant issues to the regulator; to keep on delivering its courses and collecting fees from students even though there was no approved venue from which to deliver those courses and for a prolonged period, no kitchen from which to conduct the practical classes, and to let those students wait (many of them unhappily its seems from the evidence) until Ad Astra took steps behind the scene to build a new kitchen.
[13] Refer Transcript lines 19-32 on P-51.
Ad Astra contended that it had done everything it could have done to change its registration to include the new Albert Street premises. The Tribunal does not accept this contention for the following reasons:
(a)based on Ms Tang’s own admissions, Ad Astra commenced delivery of its courses before it submitted the Change Form;
(b)despite an automatically generated email being sent to Ad Astra advising that the Change Form application would not be processed until Ad Astra had paid the application fee (which Mr Tang accepted that she had received), Ad Astra did not pay that fee to ASQA for a period of almost two months. There was no explanation as to why it had not been paid. Ms Tang’s response was that she knew she had paid it but could not remember when;
(c)Ad Astra did not provide to ASQA a copy of the Second Lease (between the landlord of the premises and Ad Astra), and when it was provided, the Second Lease was executed by a person, Mr Sackl, who had not authority to execute the lease as he was not a Director of Ad Astra at that time;
(d)no follow up was made by Ms Tang to ascertain the status of the “change of venue” application; and
(e)no application was made by Ms Tang or Ad Astra or on its behalf for the processing of the “change of venue” application to be expedited by ASQA until after the stay hearing before this Tribunal.
Further, the Tribunal is also concerned that if it were to order a stay, in effect, it would play a role in facilitating Ad Astra to engage in conduct which constituted an offence under s 8 of the ESOS Act. The only courses being delivered by Ad Astra are commercial cookery courses which are, by their inherent nature, practical and require kitchen facilities in order for the practical elements of those courses to be delivered. These considerations render it highly undesirable for the Tribunal to order a stay given the circumstances being that Ad Astra is not presently registered to deliver courses to overseas students at the Albert Street premises.
This issue of delivering courses from a location for which Ad Astra is not registered should be a matter of serious concern for Ad Astra (noting that if the relevant person(s) were successfully prosecuted for such an offence, the offence is punishable by imprisonment). Ms Tang offered an apology during cross-examination but the Tribunal did not get any sense from her evidence that she understood the gravity of this issue, nor did she display any remorse for this apparent wrongdoing. The Tribunal considers that Ad Astra’s prospects of overcoming this significant issue at the substantive hearing are poor.
Financial viability risk assessment requirements
A condition of registration of an RTO arising under s 24 of the NVR Act is that it must satisfy the Financial Viability Risk Assessment Requirements (FVRAR). The FVRAR are prescribed in a legislative instrument made under s 158(1) of the NVR Act, namely, Financial Viability Risk Assessment Requirements 2011.[14] This instrument defines:
(a)“financial viability” as the ability (of the RTO) to generate sufficient income to meet operating payments, debt commitments and, where applicable, to allow growth while delivering quality training and assessment services and outcomes; and
(b)“financial viability risk” as the assessed financial performance, operations, and capacity of an organisation as an ongoing concern to deliver quality training and assessment services and outcomes for the duration of its registration, and the potential of its losing this capacity.
[14] Refer Federal Register of Legislative Instruments F2011L01405, dated 1 July 2011.
The intent of these requirements is stated in clause FVRAR 5 of Part 2 of the legislative instrument as follows:
…
The assessment of an organisation’s financial viability risk is directed at evaluating the likelihood of its business continuity, and its capacity to achieve quality outcomes. In particular, the assessment informs a judgement about whether the organisation has the financial resources necessary to:
a)acquire the requisite assets and physical resources to deliver all qualifications on its scope of registration;
b)employ sufficient appropriately qualified staff to cover the courses for which it takes enrolments;
c)provide appropriate levels of student services to students;
d)remain in business to ensure that each student can achieve completion; and
e)meet the above requirements, even in an unsure environment.
Prior to the stay hearing, Ad Astra produced some reports and statements relating to its financial performance. It also tendered some financial projections prepared by Ad Astra’s accountants.
There is little doubt that Ad Astra has financially invested or committed itself significantly to seek to acquire assets and physical resources, in particular, the new kitchen facilities and classrooms at the Albert Street premises. However, the financial information does raise considerable doubt as to whether Ad Astra will be able to remain in business to the medium to long-term to ensure that each student can achieve completion. Ad Astra is in its third year of operation and has only ever traded at a loss. Its net asset position is dire on account of some very significant liabilities, as detailed below.
Ad Astra made the following contentions in its written submissions about the issue of its financial viability:
14…
e. Clause 7.2. This concerns financial viability. ASQA failed to properly consider financial evidence by Ad Astra’s accountant. The financial investment in the company, and the company’s accounts indicate that it is financially viable. Evidence as to a payment plan with the ATO, and a recent agreement for a further substantial source of students, has also been submitted.[15]
[15] Refer Tang Statement at paragraphs 10 – 14,15, 20.g, 20.h and annex F, L, N, W-W2, X & X3.
The Tribunal has considered those matters and in particular, the recent partnership agreement entered into on 21 June 2019 between Ad Astra with Genesis Education Immigration Pty Ltd (Genesis) based in Box Hill which, if successfully implemented, is contended will provide a potential new source of at least 100 students to Ad Astra per annum.[16] The Tribunal accepts that this opens up the possibility for an increased number of student enrolments at Ad Astra going forward, even though this is a new arrangement and it premature to make any assumptions as to how Genesis will perform under this new arrangement.[17]
[16] Refer Annexure N to Ms Tang’s Statement for a copy of this partnership agreement.
[17] Refer Transcript at line 22-25 of P-48 where counsel for Ad Astra informed the Tribunal, on instructions, that no students, referred by Genesis, had yet commenced studies at Ad Astra.
At the stay hearing, counsel for Ad Astra submitted that its losses for the first two years of operation were in the vicinity of about $300,000.[18] Ad Astra contended that those initial financial losses were to be expected for a company which was essentially a “start-up”. The Tribunal sought clarification as to which years counsel was referring to. It remained unclear.
[18] Refer Transcript at line 5 of P-58
During cross-examination, Ms Tang accepted that for the financial year ending 30 June 2018, Ad Astra made a loss in the order of $1.394m and it has incurred debts to Australian Taxation Office (ATO) for not paying its taxes and super liabilities on time. The Tribunal notes that this figure appeared on Ad Astra’s profit and loss statement for the 2017/2018 financial year.[19] Ad Astra’s total/net income or loss was recorded in its 2017/2018 tax return lodged with the ATO are recorded as a loss of $1,404,861 (and for in its 2016/2107 tax return, as $408,904).
[19] Refer T-Documents page 767.
Ad Astra’s total liabilities recorded in its 2017/2018 tax return were $2,155,733 and in its 2016/2017 tax return as $477,548.
When asked about Ad Astra’s ATO debts, Ms Tang explained that Ad Astra had made a plan with the ATO to repay those debts by instalments.
The Tribunal was informed at the stay hearing that the financial reports for the 2018/2019 had not yet been finalised. The Tribunal notes that the T-Documents included a profit and loss statement and balance sheet for Ad Astra for the period 1 July 2018 to 31 December 2018.[20] It shows the date 4 March 2019 at the base of the document. This profit and loss statement records that Ad Astra’s total income for this six-month period was $615,153 and that it suffered a net loss of $473,282. Ad Astra’s total liabilities as at 31 December 2018 were recorded as $1,218,513 (exceeding its total assets of $289,765). Ad Astra’s net asset position as at 31 December 2018 was $931,748 in the negative.
[20] Refer T-Documents page 768 and 769.
This indicated a further deterioration of Ad Astra’s net asset position from the previous two years, being negative $535,467 at the end of the 2017/2018 financial year and negative $410,754 at the end of the 2016/2017 financial year, based on further balance sheets produced in the T-Documents (noting that those reports also show the same date on them, being 4 March 2019).[21]
[21] Refer T-Documents page 773.
The Tribunal acknowledges that Ad Astra is expecting to turn around its financial performance predicting a significant profit in the current financial year if it is permitted to continue delivering courses. Despite those expectations, given Ad Astra’s financial performance to date and its very substantial liabilities, there remains some doubt about the reliability of those projections and significant doubts about whether it will remain trading as a solvent entity in the medium to long-term even if it is able to continue delivering courses.
Upon consideration of the evidence presented to it at this preliminary stage, the Tribunal considers that Ad Astra will find it difficult to demonstrate at a final hearing that it meets the FVRAR being a condition of registration of an RTO under s 24 of the NVR Act.
Fit and proper person requirements
A further issue that concerns the Tribunal is whether Ad Astra will be able to demonstrate at the substantive hearing that it has complied with the condition of registration under s 23 of the NVR Act. This condition provides that the RTO must satisfy the Fit and Proper Person Requirements (FPP Requirements).
The FPP requirements are made under the Standards for Registered Training Organisations 2015 (the Standards). Standard 7 provides that for an RTO to be compliant with this standard it must meet the requirements set out in Standards 7.1 to 7.5. Part of Standard 7.1 requires the RTO to “ensure that its executive officers or high managerial agent” meet each of the relevant criteria specified in the FPP Requirements as set out in Schedule 3 to Attachment A.
The FPP Requirements provide that consideration will be given to a range of specified matters or “any other relevant matter” in assessing whether a person meets the FPP Requirements. Relevantly, those specified matters include whether the person has ever provided a VET Regulator with false or misleading information or has made a false or misleading statement and whether it is reasonable to assume the person knew it was false or misleading. Consideration will also be given to whether the public is likely to have confidence in the person’s suitability to be involved in an organisation that provides, assesses or issued nationally recognised qualifications.
In her witness statement, Ms Tang made the following statements (emphasis added):
2.We have invested our life savings in Ad Astra. It is very much our family business and the sole source of income for our family (mine and James’) family
3.…
Our investment in Ad Astra
10.We have invested a significant amount of money into Ad Astra, from inception to date, which amounts to approximately $1.8 million…
11.In addition to the $1.8 million already invested, we have committed to investing the following further amounts to improve our offering to our current future students:
a. New premises…
b. New kitchens…
c. New student management system…
d. Onsite restaurant setup…
e. Writing new student resources…
12.As security for the above commitments, we have re-mortgaged our family home in Port Melbourne which the primary place of residence for me, my husband, our four young children and my ageing parents for whom we are also financially responsible. Attached as annex “L” is true copy of the second mortgage loan documents.
13.In addition to the above, we have committed to our new tenancy for 10 years at $180,000 per annum plus GST plus outgoings which equates to around $2,120,000. A copy of our new lease is attached as annex “M”.
14.When all investments is made, we will have invested $3,158,875 into Ad Astra with a rental liability of $2,120,000 for the duration of the lease we have entered into and personally guaranteed, a combined $5,278,875.
…
23.If the cancellation of our RTO went in effect, or if we are unable to enrol any VET students over the coming months, that would likely mean the end of our RTO and personal bankruptcy for me and my husband…
24.We would lose all our investments to date. The security we have provided for the money we have borrowed to invest would likely be enforced. We would not be able to repay these debts. We would need to declare bankruptcy. We would lose our family home. Eight people, including our four young children and my two elderly parents, would lose the only roof over their heads.

At the end of this statement, the following words appear under which Ms Tang signed her name on 3 July 2019:
All the facts and circumstances contained in this statement are true and correct to the best of my knowledge and belief.
The Tribunal has considered the following exchange that took place at the stay hearing during cross-examination of Ms Tang:[22]
[22] Refer Transcript at P-32 and P-33.
COUNSEL FOR ASQA: In your statement, you say you’ve re-mortgaged your family home and that if a stay is not granted – so, you refer to re-mortgaging it at paragraph 12 and you say that the family home could be lost. Is that the family home at 132 Ross St?---Yes, Port Melbourne.
Do you live there?---Not at the moment
Right. So, you don’t live there and it’s on the market, isn’t it?---On the market, yes.
So, you can’t lose something that you’re already not living in and that you have sale? Ms Tang, you’ve said they will - eight people will not have a roof over their head because you will lose your family home at Ross Street and that is not true, is it, because you’re not living at Ross Street and it’s already on the market isn’t it?---It is on the market. It’s for sale, regarding the Family Court things and at this moment, it is still our house.
Okay?---Yes.
What do you - when you say “Lose a roof over their heads”, because you will lose your family home, that’s not true, because it’s not the roof over your head, is it?---It is, technically.
Who owns that house then? You don’t own it, do you?---Not under my name.
Well that’s exactly what ownership means.
MEMBER: Ms Tang, who owns the house?---My husband.
COUNSEL FOR ASQA: No, that’s not true either. Who owns the house, Ms Tang?---Student Group.
Thank you Ms Tang?---Yes.
That’s now correct, and this is another company. That’s right, isn’t it?---That’s a company that holds the properties.
Right and - - -
MEMBER: Sorry, a company that hold properties?---Yes.
So it’s an investment property company. Is that what you mean by that?---N, it’s a family trust set up to hold all the properties.
Okay?---Yes..
Counsel for ASQA sought to ascertain from Ms Tang why the company that owned the Ross Street property could not obtain loans from banks and needed to go to private financiers (at a significant cost). The Tribunal notes Ms Tang’s response to this inquiry and the exchange that followed:
COUNSEL FOR ASQA: You just explained the reason you had to have unfavourable loan terms was because you couldn’t obtain a second mortgage from a bank – or the company that owns 132 Ross Street?---That’s the situation about Family Court issues cause everything, yes. I don’t know if it’s proper to mention in this court, but obviously [?]…the Student Group company got issues, so I have to borrow money from other finance companies with this high interest.
Are you a director of Student Group?---No.
Okay, so you don’t own that house. Student Group owns it and you’re not a director of Student Group?---No.
[The land title search for the Ross Street property was tendered into evidence by ASQA]
MEMBER: Is it – just to short cut things – is that the trustee of the family trust for – Ms Tang, is Student Group?---It’s owned by James Sackl.
…
The company is. So, he’s the sole shareholder of Student Group. Yes, so it’s a private company, its not a trustee for a family trust? You said before, a family trust to hold properties. What did you mean by that? Is Student Group Pty Ltd a trustee for your family trust?--- I think that’s James’ company who – - -
His private company?---Yes, as a private company set up for holding all the properties that he owns, yes.
Okay. So, your best understanding is that Student Group Pty Ltd is a private company?---M-mm.
Of which James Sackl owns 100 per cent of the shares?---Yes.
And when you’re referred before to Family Court proceedings, are you still – do you remain married to Mr Sackl?---We are separating at the moment.
So, you’re separating right at the moment?---Yes.
Okay and does James Sackl still live in the property at 132 Ross Street?---No.
No, So, neither of you live there anymore. Is it being rented?---No
COUNSEL FOR ASQA: Ms Tang, you’ve moved to a new address. That’s right, isn’t it?---Yes.
When you said in your statement that you would lose the only roof over your head, you have a different roof over your head now, don’t you?---Which needs renting properties. Renting properties.
The Transfer of Land Act 1958 title search document, dated 6 August 2019, for the property at the above street address tendered by ASQA at the stay hearing confirmed that its sole proprietor was Student Group Pty Ltd. There were two mortgages listed against the property and six caveats one lodged on 19 September 2018 by Ms Tang on the grounds of “agreement with the registered proprietor” and stated to be an executory or contingent interest.
Ms Tang has sought to give the Tribunal the impression if the Tribunal does not order a stay, it would result in Ms Tang and her seven other family members being turned out of their family home onto the street. Based on the evidence outlined above, the Tribunal considers this to be far from the case.
Firstly, the re-mortgaged property to which the Tribunal was referred in Ms Tang’s statement is not occupied by any of Ms Tang’s family members, including Mr Sackl. In any event, that property is not owned by either Ms Tang or Mr Sackl (it is owned by a private company, related only to Mr Sackl). It is currently vacant and being marketed for sale.
Ms Tang and Mr Sackl now live separately in rental accommodation. Ms Tang made a statement that the business of Ad Astra was the only source of income for their family. The financial reports indicate that this business has only ever operated as a considerable loss. Ms Tang gave evidence that she does not draw a salary from Ad Astra. Ms Tang also gave evidence that Mr Sackl was not being paid any fees by Ad Astra. If the Tribunal is being asked to accept this evidence, it would be inconsistent for the Tribunal to accept as true Ms Tang’s statement that Ad Astra was the sole source of income for her family as in fact, the evidence revealed that Ad Astra has provided no income for her family and this has been the case since 2017.
No attempt was made by Ms Tang or Ad Astra at the commencement of the stay hearing to correct the evidence that that had been put on by Ms Tang in her statement. The factual matters regarding the property at 123 Ross Street as referred to above were revealed only when put to Ms Tang by ASQA during cross-examination. If this had not occurred, the Tribunal would have been left to deliberate on a false factual basis. When such matters were revealed, Ms Tang was unapologetic and did not offer any other explanation other than to suggest that “technically” the property at 132 Ross Street was still their family home.
The Tribunal considers that such conduct alone may make it difficult for Ad Astra to be able to satisfy the Tribunal at the substantive hearing that it has ensured that its executive officers and high managerial agents are fit and proper persons. The Tribunal is satisfied that Ms Tang has demonstrated that in order to serve her interests (or the interests of Ad Astra) she is prepared to declare as being “true and correct” factual matters, which are not true and correct and intended to mislead the Tribunal and ASQA as a party to the review applications. A demonstrated propensity by Ms Tang to make false or misleading statements to the Tribunal and the relevant regulator, would not instil the public’s confidence in Ms Tang’s suitability to be involved in an organisation that provides, assesses or issued nationally recognised qualifications.
The Tribunal considers that Ad Astra is unlikely to be able to establish at the substantive hearing that it has met the condition of registration being that it has ensured that Ms Tang as one of its executive officer and high managerial agent is a fit and proper person.
Alleged non-compliances with Standards
Ad Astra stated that it contested ASQA’s allegations of non-compliances with some of the Standards. It contended that there was sufficient evidence before the Tribunal to indicate that it had reasonable prospects of success in the review applications.
Specifically, Ad Astra contended as follows:[23]
The material submitted by Ad Astra demonstrates that it has reasonable prospects in respect of its Review Application. The Cancellation Decisions and attached evidence analysis document referred to non-compliance with certain clauses of the Standards for Registered Training Organisations 2015 (the Standards). As to these, Ad Astra notes the following:
a.    Clause 1.1. This concerns alleged inadequacies with two workplace agreements and a failure to meet training requirements for two competencies. Ad Astra’s evidence shows workplace agreements with four third-party organisations and which meet training requirements. Further, Ad Astra has put considerable resources into updating and improving its learning and assessment materials.[24]
b.    Clause 1.3. This concerns alleged inadequacies in workplace agreements and the availability of resources to carry out training, with particular reference to the face-to-face training facility and kitchen. Ad Astra’s evidence shows that it has relocated to excellent training facilities, including a kitchen on site, at 95 Albert Street Brunswick.[25]
c.    Clause 1.5. This concerns alleged inadequacies in stakeholder feedback and industry engagement. This allegation is contested and evidence as to industry engagement has been provided.[26]
d.    Clause 7.1. This concerns an allegation that James Sackl, the former CEO of Ad Astra, is not a fit and proper person by the mere fact that he is the director and secretary of a company in liquidation. Schedule 3 of the Standards say nothing about a person not being fit and proper by the mere fact of being the director of a company in liquidation. Further, no consideration has been given by ASQA to the circumstances of the company in liquidation, including that it is not an RTO nor involved in the training sector in any way. ASQA’s systems have failed to update changes of appointment at Ad Astra.[27]
e.    …
f.   Clause 8.1. This concerns an alleged failure to cooperate with the regulator, including alleged issues concerning appointment of a new director, kitchen training facilities, and whether Mr Sackl is a fit and proper person. Ad Astra contests the allegation that it has failed to cooperate with the regulator, and this concern is otherwise dealt with at clauses 1.3 and 7.1 above.
g.    Clause 8.5. This concern is based solely on an allegation that Ad Astra has not complied with its tax obligations. As noted at clause 7.2 above, evidence as to a payment plan with the ATO has been submitted.
[23] Refer paragraph [14] of Ad Astra’s Submissions.
[24] Refer Tang Statement at paragraphs 11.e and 20.c and annexes Q1 - Q7 & K.
[25] Refer Tang Statement at paragraphs 8, 9, 13, & 20.e and annexes D, E1 – E11 & M.
[26] Refer Tang Statement at paragraphs 20.b and annex P.
[27] Refer Ms Tang’s Statement at paragraphs 20.a & 20.f and annex T.
The Tribunal has considered the evidence of Ms Turton and Ms Tansley in relation to these issues. In essence, Ms Turton’s evidence was that in her opinion, having considered Ad Astra response, Ad Astra remained non-compliant with some of the Standards. This was in stark contrast to Ms Tansley’s evidence who stated that her opinion, Ad Astra was compliant with the Standards. Surprisingly, neither of those persons had inspected the kitchen facilities at the new premises. Ms Tansley informed the Tribunal at the stay hearing that she had been invited to do so by Ad Astra but had declined the offer as she considered the focus of her task at hand was “the paperwork”.
As noted earlier, Ad Astra submitted photographs, one bundle comprising a set of photographs taken the day before the stay hearing, which appeared to show a well-equipped commercial kitchen. The day after the hearing, at the request of the Tribunal, Ad Astra indicated that the total surface area of the kitchen facilities at the new premises was 375 m². Ms Tang said that while she could not remember exactly, she thought that approximately one-third of Ad Astra’s 130 students were completing a Certificate III in Commercial Cookery and the majority were completing a Certificate IV in Commercial Cookery. Ms Tang referred in her statement to another course as being “on offer” by Ad Astra, being the Diploma in Hospitality Management, but the students for this course had not yet commenced. Ms Tang told the Tribunal they were due to commence in “a couple of weeks”.
Ad Astra’s course materials, which were produced to the Tribunal, indicate that the above courses are delivered over 2.5 days (or 20 hours) per week and involve both practical and theoretical training. ASQA stated at the stay hearing that it did not press any allegation that Ad Astra’s current staff were not sufficiently qualified to deliver the courses.
It is not appropriate for the Tribunal to undertake a detailed assessment at this stage as to whether Ad Astra’s current staff, training facilities, course materials and other resources and its assessment practices are sufficient to enable it to comply with the Standards when delivering Certificates III and IV in Commercial Cookery to its 130 students. This is a matter for further consideration and assessment at the final hearing.
For present purposes, the Tribunal is willing to accept that there has been significant investment made by Ad Astra to attempt to set up facilities that may better support its course delivery obligations to its students. This has been a very significant issue in the past. It seems to the Tribunal that Ad Astra has only very recently approached a point where it may be ready to deliver courses properly to its students. The unfortunate history for Ad Astra is that it seems to have enrolled students and sought to deliver those courses now for a period of over two years in circumstances where initially, on Ad Astra’s own admissions, sub-standard premises were being used at the rental kitchen facilities at Buckhurst Street in South Melbourne. Subsequently, Ad Astra has moved to the new Albert Street premises but they are still undergoing renovation.
The Tribunal considers that the evidence before it seems to indicate that Ad Astra sought fit to commence operating as an RTO and that it did so prematurely before it had properly established its educational facilities, critical in case like this, where its goal was to teach practical skills expected of person holding a nationally recognised commercial cookery qualification. This leaves the Tribunal with an impression that the priority for Ad Astra was the early generation of student-fee revenue, over concerns about whether it was capable of delivering quality training in accordance with the regulatory standards applicable in Australia to its private fee-paying students.
Be that as it may, the Tribunal is willing to accept for the purpose of considering the present stay application that Ad Astra may be able to establish at a final hearing that in the future, particularly with the recent completion of its new premises and re-vamped course materials and other infrastructure, that it is in a position going forward to offer quality VET to its students.
Ad Astra contended that if the Tribunal did not order a stay it would suffer significant financial losses and would not survive to see the substantive matter heard and determined. In those circumstances, Ad Astra argued that the review applications would be rendered nugatory.[28]
[28] Refer paragraph [19] of Ad Astra’s Submissions.
Specifically, Ad Astra contended as follows:[29]
Ad Astra has provided a statement from its accountant, Mr Shee. Mr Shee has personal knowledge of the business and financial affairs of the company and has provided financial projections as to the impact upon the company in the event of a stay not being granted, or a stay only being granted on a conditional basis. In the event of a stay not being granted, Mr Shee’s projection states that the company would have a loss of around $128,000 per month and would run of the net loss of around 1.5 million by June 2020. If a conditional stay were granted, the projection indicates a loss of between 27,000 and $145,000 per month, with a net loss of over $1 million by June 2020. Ms Tang’s evidence is that the company could not sustain losses of that magnitude.[30] Given her qualifications (Masters of Accounting), experience in the education industry and close knowledge of the company,[31] Ms Tang is very well placed to provide this observation to the Tribunal. In any event, the Tribunal may take on notice that a company of this size,[32] could not sustain losses of that magnitude without being irreparably harmed. The result would plainly be the insolvency of Ad Astra.
[29] Refer paragraph [17] of Ad Astra’s Submissions.
[30] Refer Ms Tang’s Statement at paragraph 22 to 25.
[31] Refer Ms Tang’s Statement at paragraph 2.
[32] See the company accounts for 2018, Ms Tang’s Statement at annex F.
Ad Astra has only been operating since 2017. The financial reports show that at least up until 31 December 2018, it has operated at a significant loss and is subject to significant liabilities.
As set out above, it is contended by Ad Astra that it could not sustain losses in excess of $1 million. However, it is evident that Ad Astra had sustained a loss well in excess of $1 million during the 2017/2018 financial year, which continued into the last six months of 2018 and despite this, the company had survived to date.
The Tribunal notes that there is a minor financial reprieve arising from the fact that a rent-free period applies under the lease for the new Albert Street premises. Rental payment obligations do not begin to accrue under the lease agreement until after 30 September 2019. This was not disclosed to the Tribunal when Ad Astra made its submissions, nor reflected in the projections prepared by Ad Astra through it accountants, when it should have been.
At the stay hearing, Ms Tang gave evidence that the projections prepared by the accountant had also included a salary of $150,000 to be paid to her in her role as CEO even though, Ms Tang’s evidence was that from March 2019 until now, she had not drawn down a salary from Ad Astra.
The matters referred to in the above two paragraphs shed some doubt about the reliability and accuracy of the projections.
Further the wages are not adjusted appropriately in the table relating to a “no-stay” scenario, to reflect that Ad Astra’s wage costs could be significantly reduced by bringing to an end the employment of some of its staff members, particularly a number of them who have been employed for a period of less than one year, according to evidence given by Ms Tang at the stay hearing – see paragraph [97].
Despite those doubts, the Tribunal nevertheless accepts that if no stay is ordered Ad Astra is likely to experience ongoing financial losses of a reasonable magnitude which have the potential to topple over Ad Astra into insolvency if they are not permitted to deliver courses significantly into the 2020 calendar year.
The Tribunal concludes that the consideration of the interests of Ad Astra weighs in favour of granting a stay to Ad Astra.
THE PUBLIC INTEREST
The objectives of the NRV Act, as set out in s 2A, are to provide for national consistency in the regulation of vocational education and training (VET); to regulate VET using a standard based quality framework and risk assessments where appropriate; to protect and enhance quality, flexibility and innovation in VET and Australia’s reputation for VET nationally and internationally; 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; to protect students undertaking or proposing to undertake Australia’s VET by ensuring the provision of quality VET and to facilitate access to accurate information relating to the quality of VET.

The Tribunal also notes the legislated functions of ASQA are set out in s 157 of the NVR Act. ASQA is empowered as the relevant regulator to undertake enforcement action and to make decisions intended to promote and protect the students and the general reputation of the Australian vocational education and training sector, and to ensure that registered RTOs providers are operating in compliance with their statutory obligations. They are empowered to make important decisions about the scope of registration and what courses can be offered by individual RTOs. For CRICOS providers offering courses to international students, ASQA is empowered to make important decisions about locations from which those courses may be delivered and to place limits on the number of students who may be enrolled at any one time based on an assessment of the training facilities.
The Tribunal is satisfied that there is a risk that the objectives of the legislative regime may be undermined, including a risk of damage to the reputation of the Australian vocational education and training sector and the risk of undermining and devaluing the qualifications issued by Ad Astra, if Ad Astra is permitted to deliver courses pending determination of the review applications. In particular, the Tribunal considers that it would undermine the process of ASQA approving locations prior to a CRICOS provider delivering courses at a particular location. It would also weaken the importance of providers ensuring that they continue to meet the legislated conditions of registration, once registration has been granted.
There is also a risk that future prospective employers, whether in Australia or in the student’s home country, may employ Ad Astra graduates on the basis of their Australian VET qualification, only to discover that those students do not possess the requisite degree of practical skills and knowledge to undertake the task for which they were employed. This may detrimentally affect the international (and domestic) reputation of the Australian VET sector, depending on where those graduates are employed.
In these circumstances, the Tribunal considers that the risk of an adverse impact on the public interests identified weighs against the desirability of the Tribunal granting a stay in the circumstances of this case.
THE INTERESTS OF AD ASTRA’S EMPLOYEES
The Tribunal has taken into account Ms Tang’s evidence that Ad Astra has 10 full-time employees including Ms Tang as the CEO. Three of them are recent employees not having worked for more than six months. Another two were employed as recently as “at the end of 2018” according to Ms Tang’s evidence at the stay hearing. It is a young company, and its longest serving employee has only worked at Ad Astra for two years.
The Tribunal accepts that if those employment arrangements come to an end because a stay is not ordered those employees will be affected by an immediate loss of personal income. Those employees may be successful in finding alternative work, although there is no guarantee that they will do so. They may be left without a regular source of income, potentially impacting their livelihood and impacting their families.
Accordingly, the Tribunal is satisfied that the impact of Ad Astra ceasing to deliver its courses will have a negative impact on its employees as it is likely that their employment will need to be terminated.
This consideration weighs in favour of the desirability of granting a stay.
THE INTERESTS OF AD ASTRA’S CURRENT AND PROSPECTIVE STUDENTS
The Tribunal acknowledges that if Ad Astra immediately ceases to deliver courses this is likely to cause a temporary disruption to current students who have already commenced those courses, and also to students who have enrolled but have not yet commenced their students. However, those students will have an opportunity to transfer their studies to an alternative RTO to complete their units and courses and Ad Astra are under an obligation to take steps to assist them with this transition.
Further, a possible outcome of the review process, and one that the Tribunal considers is more likely than not, is that if Ad Astra is unsuccessful in restoring its registration at the conclusion of the review applications, this will undermine and devalue any qualifications that have been issued by Ad Astra, including those qualifications that may be issued between now and the final determination of the relevant applications if Tribunal were to grant a stay. In respect of prospective students thinking of enrolling with Ad Astra and have not yet paid any fees, they will avoid becoming a student of an RTO where there is a significant risk that the cancellation of its registration may take effect, if not set aside upon review, before they complete their course or unit.
On balance, given those competing considerations, the Tribunal considers that this factor weighs against granting a stay to Ad Astra. The Tribunal considers that Ad Astra’s students will be better served if they are transitioned across to an alternative RTO now, while the review applications are pending, even if it causes them some temporary disruption and that prospective students are given the chance to select an alternative RTO with which to commence their studies in Australia.
WHETHER THE REVIEW APPLICATION, IF SUCCESSFUL, WOULD BE RENDERED NUGATORY OR POINTLESS IF THE STAY WAS NOT GRANTED
The Tribunal is satisfied on the evidence before it that Ad Astra may well become insolvent if it is not permitted to operate until finalisation of the review applications, in particular, if the applications are not finalised until well in 2020. However, the Tribunal considers that Ad Astra is likely to be able to keep afloat at least until early 2020. The Tribunal acknowledges that Ad Astra will need to pay for some refunds to its students if they have paid fees and have not yet completed units in respect of those fees. However, Ad Astra has some reprieve as rental payments for its new premises will not commence until 30 September 2019.
The Tribunal was given the impression by Ad Astra that its kitchen facilities at the Albert Street premises are now set up and ready to be used. The Tribunal infers from this that the kitchens are functional despite any further works that may be planned (for example, the plans to build an adjoining restaurant). It would be open to Ad Astra to enter into short term arrangements with other third party companies in the interim, catering companies for instance, to use the Albert Street premises as a way to generate some revenue pending finalisation of the review applications.
Estimated time to finalise the review applications
Ad Astra have requested expedition of the review applications. ASQA stated that they agree to this and that ASQA ready to submit a hearing certificate to the Tribunal for the soonest available hearing date.
The Tribunal is prepared to grant expedition and has made inquiries with the Registry. The review applications are able to be listed for a substantive hearing in November 2019. The estimated time for finalisation of the review applications is early 2020.
This being the case, the Tribunal is satisfied that, based on recent history, Ad Astra is likely to remain afloat between now and the final determination of the review applications estimated to occur by early 2020. For this reason, the Tribunal considers that it is likely that the applications would not be rendered nugatory or pointless, if the stay was not granted. The Tribunal considers that this consideration does not weigh in favour of the desirability of granting a stay in this case.
CONCLUSION
The Tribunal acknowledges that that its refusal to grant a stay will significantly impact on Ad Astra’s financial position and on its current employees. However, the Tribunal considers that Ad Astra’s prospects of success are poor at the very least for the reason that it is unlikely to meet two important conditions of registration as outlined above. The Tribunal also considers that the continued delivery by Ad Astra of its course is likely to have a detrimental impact on its current and prospective students in the way outlined above. The Tribunal also considers that the public interests weigh in favour of the desirability of not granting a stay to Ad Astra.
Weighing up the different considerations set out in these Reasons for Decision and following review of the evidence and submissions presented, the Tribunal has decided to refuse the application to stay the reviewable decisions and to revoke the interim stay that was ordered by the Tribunal on 7 August 2019.

111.

I certify that the preceding one-hundred and ten (110) paragraphs are a true copy of the reasons for the decision herein of Member K Parker.

...........[sgd].............................................................
Associate
13 August 2019
Dates of stay hearing:  7 August 2019
Counsel for Applicant:  Mr Scott Seefeld
Solicitors for Applicant:  Mr Zmarak Zhouand, rto.legal
Counsel for Respondent:                   Ms Sarah Wright
Solicitors for Respondent:                 Ms Jacqueline Pellow, in-house lawyer, ASQA

[2019] AATA 2514

13 August 2019

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Stay of Proceedings

Procedural Fairness

Standing

Statutory Construction

Appeal