Australian English Colleges Pty Ltd and Australian Skills Quality Authority (Practice and procedure)
[2025] ARTA 543
•25 April 2025
Australian English Colleges Pty Ltd and Australian Skills Quality Authority (Practice and procedure) [2025] ARTA 543 (25 April 2025)
Administrative Review Tribunal
Applicant/s: Australian English Colleges Pty Ltd
Respondent: Australian Skills Quality Authority
Tribunal Number: 2024/10783
Tribunal: General Member J Ross
Place: Canberra
Date: 25 April 2025
Corrigendum Date of Corrigendum: 12 May 2025
Pursuant to section 114 of the Administrative Review Tribunal Act 2024, the following alteration is made to the statement of reasons for the decision:
Ms S Wright appears as counsel for the Respondent. The corrected appearance details are as follows:
| Date: Datesofhearing: | 25 April 2025 24 March 2025 |
| Applicant’sRepresentative: | Velocity Legal |
| Counsel for the Respondent: Solicitors for the Respondent: | Ms S Wright Australian Government Solicitor |
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General Member J Ross
Decision and Reasons for Decision
Applicant/s: Australian English Colleges Pty Ltd
Respondent: Australian Skills Quality Authority
Tribunal Number: 2024/10783
Tribunal: General Member J Ross
Place: Canberra
Date: 25 April 2025
Decision:Under s 32(2) of the Administrative Review Tribunal Act 2024 (Cth) the Tribunal ORDERS:
1.The implementation of the decisions under review are stayed until the final hearing and determination of the review or until further order of the Tribunal.
2.Order 1 is subject to the Applicant:
1.meeting the timeframes that have been set to expediate this matter to hearing.
2.complying with the conditions of registration in ss 21-27 of the National Vocational Education and Training Regulator Act 2011 (Cth).
3.not enrolling or commencing any student in a course or a part of a course under the Education Services for Overseas Students Act 2000 (Cth) or the National Vocational Education and Training Regulator Act 2011 (Cth).
4.not taking any action to recruit or enrol students.
5.changing the message on its website bic.edu.au to state that it is currently not accepting any new enrolments.
6.maintaining the inability for students to enrol from the website.
3.The interim stay orders made on 11 February 2025 are discharged.
4.Each party has liberty to apply.
The Tribunal DIRECTS that:
1. On or before 29 April 2025, the Applicant gives to the Tribunal and Respondent any witness statements on which the Applicant intends to rely on at the hearing;
2. On or before 9 June 2025, the Respondent gives to the Tribunal and the Applicant:
a. copies of all reports, records and other documents on which the Respondent intends to reply on at the hearing;
b. a statement of the evidence to be given by any witnesses intended to be called by the Respondent at the hearing.
3. On or before 23 June 2025, the Applicant gives to the Tribunal and the Respondent:
a. any documents in reply;
b. a statement of facts, issues, and contentions.
4. On or before 7 July 2025, the Respondent gives to the Tribunal and the Applicant a statement of facts, issues, and contentions.
5. On or before 14 July 2025, the Applicant gives to the Tribunal and the Respondent a statement of facts, issues, and contentions in reply.
6. Any evidence to be filed by the parties in this proceeding is to be filed in the same form as the Tribunal Book.
7. The matter is set down for a three day hearing at the end of July 2025.
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General Member J Ross
Catchwords
PRACTICE AND PROCEDURE – application to stay decision of Australian Skills Quality Authority – decision to cancel registration – prospects of success – consequences for Applicant – public interest – consequences for ASQA – whether review would be rendered nugatory – interests of students – stay application granted with conditions.
Legislation
Administrative Appeals Tribunal Act 1975 (Cth) s 41
Administrative Review Tribunal Act 2024 (Cth) ss 32, 33,
Education Services for Overseas Students Act 2000 (Cth) ss 4A, 33, 83, 89
National Vocational Education and Training Regulator Act 2011 (Cth) ss 2A, 21-27, c39, 185-6
Cases
Australian Securities and Investments Commission v Administrative Appeals Tribunal
(2009) 181 FCR 130; [2009] FCAFC 185
Australian Securities and Investments Commission v PTLZ [2008] FCAFC 164
Barkly International College Pty Ltd and Australian Skills Quality Authority (Practice and Procedure) [2025] ARTA 242
Cassidy and Australian Securities and Investments Commission [2020] AATA 66
Elmi and Australian Skills Quality Authority (Guidance and Appeals Panel) [2025] ARTA 192
Hopfner and Tax Practitioners Board [2019] AATA 851
Kender and Australian Securities and Investments Commission [2018] AATA 4445
Le’Sam Accounting Pty Ltd and Tax Practitioners Board [2020] AATA 890
Poidevin and Australian Securities and Investments Commission [2018] AATA 124
Re Birdseye and Tax Practitioners Board [2020] AATA 1250
Rust-oleum Australia Pty Ltd v Australian Pesticides & Veterinary Medicines Authority
[2017] AATA 298
Scott and Australian Securities and Investments Commission (2009) 51 AAR 114; [2009]
AATA 798
Sunrise Institute of Australia Ltd Pty and Australian Skills Quality Authority [2018] AATA 3935
Trades College Australia Pty Ltd v Australian Skills Quality Authority [2018] AATA 1703
Secondary Materials
National Code of Practice for Providers of Education and Training to Overseas Students 2018
Revised Explanatory Memorandum to the Administrative Review Tribunal Bill 2023 (Cth)
Standards for Registered Training Organisations 2015
Statement of Reasons
This is an application by Australian English Colleges Pty Ltd (AEC Pty Ltd or the Applicant) for a stay of the decisions made by the Australian Skills Quality Authority (ASQA or the Respondent) on 3 December 2024 to:
1. cancel its registration under the National Vocational Education and Training Regulator Act 2011 (Cth) (the NVETR Act), and
2. cancel its registration under the Education Services for Overseas Students Act 2000
(Cth) (the ESOS Act).
THE PROCEDURAL HISTORY – IN SUMMARY
AEC Pty Ltd trading as Bayside International College (BIC) has been operating as a privately operated Registered Training Organisation (RTO) since August 2017. AEC Pty Ltd’s registration expired in August 2024 but is continuing while a renewal application is being considered. 1 AEC Pty Ltd was registered to provide 10 courses including Certificate IVs in Commercial Cookery and Kitchen Management. 2
On 7 July 2023, an audit of AEC Pty Ltd was conducted. 3
On 15 December 2023, AEC Pty Ltd was issued with a notice of intent to make a regulatory decision. It was also informed that ASQA intended to cancel its registration as an RTO because of non-compliance with the NVETR and ESOS Acts.
In February, May and June 2024, AEC Pty Ltd responded to the notice of intent, providing supporting documents to ASQA.4
On 7 June 2024, AEC Pty Ltd was notified of ASQA’s decision to cancel its registration under both the NVETR Act and ESOS Act due to non-compliance against several regulatory requirements in the Standards for Registered Training Organisations 2015 (the Standards) and the National Code of Practice for Providers of Education and Training to Overseas Students 2018 (the National Code). 5
On 25 June 2024, AEC Pty Ltd requested ASQA for more time to submit an internal review application and for an extension to the effective date of the decision. On 2 July 2024, ASQA granted an extension of time until 5 August 2024 to submit the application and extended the effective date of the decision until 8 August 2024.
On 6 August 2024, AEC Pty Ltd submitted an internal review application and at the same time requested a stay which ASQA granted on 9 August 2024 with conditions.
1 Registered Training Organisations, 45215 Australian English Colleges Pty Ltd, training.gov.au.
2 Ibid.
3 T1, page 14. The information in [4] to [6] above has been taken from the summary of key actions at T1, page 14.
4 Outline of Respondent’s submissions on stay application, page 4.
5 Ibid.
On 3 December 2024, the original decision was affirmed. 6 The internal review decision stating that the relevant non-compliance which informed the original decision had been addressed in part and the remaining non-compliance remained significant. 7 ASQA rated the risk of harm to students arising from the non-compliance as ‘severe’. 8
On 19 December 2024, the Applicant applied to the Tribunal for review of those decisions and also for stays of the decisions.
On 11 February 2025, the Tribunal granted interim stays, subject to conditions, until the hearing and determination of this stay application.
THE VET REGULATORY FRAMEWORK
ASQA is the national vocational education and training (VET) regulator responsible for the registration of RTOs and monitoring their compliance with national VET standards under the NVETR Act.9 It has related responsibilities related to the regulation of VET accredited courses and functions under the ESOS Act.
The Standards made under s 185 and s 186 of the NVETR Act, among other things, set out the requirements that RTOs must meet to be a RTO and ensure that training products delivered by RTOs meet the requirements of training packages or VET accredited courses. 10 The National Code made under s 33 of the ESOS Act sets out nationally consistent standards for the delivery of quality education and training to international students by RTOs to ensure their protection. 11
6 T1, page 11.
7 T1, pages 8 and 9.
8 T1, page 9.
9 Department of Employment and Workplace Relations, Vocational education and training (VET) regulators, National Regulatory Framework - Department of Employment and Workplace Relations, Australian Government, accessed 24 March 2025.
10 Federal Register of Legislation - Standards for Registered Training Organisations (RTOs) 2015, accessed 26 March 2025.
11 Federal Register of Legislation - National Code of Practice for Providers of Education and Training to Overseas Students2018, accessed 26 March 2025.
The VET Quality Framework includes the Standards as well as Fit and Proper Person Requirements; Financial Viability Risk Assessment Requirements 2021; Data Provision Requirements 2020 and the Australian Qualification Framework. 12
Under s 39(2)(f) of the NVETR Act, ASQA can cancel a RTO’s registration in any circumstances it considers appropriate to do so. Under s 83(3)(c) of the ESOS Act, ASQA’s can cancel the provider’s registration (for one or more specified courses in one or more specified locations) if it believes on reasonable grounds that the provider has breached, among other things, the National Code.
APPLICABLE LEGAL PRINCIPLES – STAYS OF DECISIONS
The general rule in s 32(1) of the ART Act is that the application for a review of a decision does not affect the operation of that decision. There is an exception to this general rule found in s 32(2) of the ART Act which provides that on application, the Tribunal may make an order staying the decision or otherwise affecting the operation or implementation of the decision if the Tribunal ‘considers that it is desirable to do so for the purpose of ensuring the effectiveness of the review’. Under s 32(3) a stay may be subject to conditions.
Section 32(7) of the ART Act provides that the Tribunal must not make an order staying the decision unless the Tribunal has given the parties to the proceeding a reasonable opportunity to make submissions to the Tribunal and the Tribunal has considered the interests of any person who may be affected by the review of the decision.
It is incumbent on the Applicant to satisfy the Tribunal that a stay should be granted; 13 it is not an onus of proof as such.
The Revised Explanatory Memorandum to the Administrative Review Tribunal Bill 2023 (Cth) explains that s 32 of the ART Act is equivalent to s 41 of the Administrative Appeals Tribunal Act 1975 (Cth), therefore the authorities concerning the former section are relevant. 14
12 ASQA, VET Quality Framework, VET Quality Framework | Australian Skills Quality Authority (ASQA), accessed 24 March 2025.
13 Re Poidevin and Australian Securities and Investments Commission [2018] AATA 124 at [40].
14 At [362].
In Elmi and Australian Skills Quality Authority (Guidance and Appeals Panel) [2025] ARTA 192 at [32] it was observed by the Tribunal that the principles identified in Birdseye and Tax Practitioners Board [2020] AATA 1250 at [28]-[30] taken from the approach in Re Scott and Australian Securities and Investments Commission 15 and Poidevin and Australian Securities and Investments Commission16 remain relevant to determining whether a stay should be granted under s 32 of the ART Act.
The non-exhaustive set of factors to be considered when determining an application for a stay order are:
1. Prospects of success of the application for review.
2. The consequence for the applicant of refusing a stay.
3. The public interest.
4. The consequences for the respondent if the stay is granted or not.
5. Whether the application for review would be rendered nugatory if a stay were not granted.
6. Other relevant matters. 17
These factors are generally regarded as the criteria against which stay applications are considered. However, they should not be regarded as a ‘comprehensive list of all matters that may be relevant in a particular case’. 18 Further, the facts and circumstances of the case will affect the weight, if any, to be given to a particular factor. 19
PARTIES’ SUBMISSIONS – IN SUMMARY
The Tribunal has had the benefit of receiving written and oral submissions from the parties. Given this is an interlocutory hearing, I have summarised them below in line with the
15 (2009) 51 AAR 114; [2009] AATA 798 at [4].
16 [2018] AATA 124.
17 Birdseye and Tax Practitioners Board [2020] AATA 1250
18 Trades College Australia Pty Ltd v Australian Skills Quality Authority [2018] AATA 1703 at [38].
19 Hopfner and Tax Practitioners Board [2019] AATA 851 at [7].
mandatory considerations in s 32(7) of the ART Act and the discretionary factors referred to in [21].
Applicant’s submission
In relation to the parties whose interests need to be considered, the Applicant submits that apart from themselves, ASQA, staff and students of the Applicant and the community need to be considered. 20 Further the Applicant submits that save for ASQA all would be adversely affected by the implementation of the decision if it was later found to be wrong. 21
In relation to the factors outlined in [21] the Applicant submits, among other things, that:
1. The merits of the application is a neutral factor. 22 The Applicant also submits that previous Tribunal decisions have found that a stay application does not involve a preliminary hearing of the substantive matter, although it is relevant for the Tribunal to consider whether there exists facts and circumstances that if established at the substantive hearing would provide a basis for review. 23
2. Its business would suffer extremely significant financial and reputational damage24 and its commercial viability would be compromised if a stay was not granted. 25
3. There is no evidence that granting a stay would harm the public interest, recognising the public interest in providers of VET courses being compliant with relevant standards. 26
4. There is no evidence of the consequences for ASQA if a stay is granted. 27
5. The effectiveness of the review would be irreparably compromised and any relief sought would be rendered nugatory by the time of the hearing without a stay. This is because
20 Outline of Applicant’s submissions on stay application, page 2.
21 Ibid, page 3.
22 Outline of Applicant’s submissions on stay application, page 3.
23 Ibid. The Applicant’s submissions on this point cited Szmekura-Moor; Secretary, Department of Social Services (Social Services Second Review) [2018] AATA 868, [26](Senior Member Evans), citing Secretary, Department of Employment and Workplace Relations and Anastasisdis [2007] AATA 1065, [10]-[11] (Member Fice)).
24 Ibid.
25 Outline of Applicant’s submissions in reply on stay application, page 1.
26 Outline of Applicant’s submissions on stay application, page 6.
27 Ibid.
the financial impact of not staying the decisions would render the business commercially unviable even if ultimately successful on review. 28
The Applicant further submits that using the language of injunctive jurisprudence, the ‘balance of convenience’ favours the granting of a stay. This is because if the reviewable decision turns out to be correct, its implementation has been delayed by a few months, whereas if it turns out to be wrong, then the Applicant, students and staff will have suffered damage, and the application will have been rendered nugatory. 29
Respondent’s submissions
The Respondent submits that when considering the ‘desirability’ of granting a stay, the Tribunal must look beyond the commercial interest of a party and must consider desirability in the context of the effectiveness of the review which is separate to considering the interests of the parties. 30 In relation to the parties whose interests need to be considered, the Respondent submits it is necessary to pay particular attention to the priority afforded to those interests by the relevant statutory scheme. 31 The Respondent further submits that in this case, the scheme established by the NVETR and ESOS Acts (the Acts) and the purpose of the sanction regime established under those Acts reveal that it is in the interests of the public who bear the consequences of inadequate training and assessment along with the students who have paid fees and can suffer from inadequate education and training that are all impacted.
In relation to the discretionary factors outlined in [21] the Respondent submits, among other things, that:
1. the Applicant has not demonstrated that its application has any real prospects of success having not yet filed any evidence about the matters which are the subject to the review. 32
28 Ibid, page 5.
29 Outline of Applicant’s submissions on stay application, page 6.
30 Outline of Respondent’s submissions on stay application, page 5.
31 Ibid, page 6.
32 Ibid, page 12.
2. the evidence and submissions the Applicant has filed for its stay application only demonstrated that AEC Pty Ltd would suffer financial loss if a stay was not granted. 33 In that regard, having the matter heard quickly will limit the adverse impacts on the Applicant. 34
3. the public interest is the overriding consideration in this case and that the objects of the ESOS Act can be used to inform the Tribunal of the applicable public interest considerations. 35 In this regard, the fundamental purpose of regulating RTOs is to protect the public including participants in the sector. 36
4. part of the public interest considerations is the significant public interest (where a stay is granted) in the final determination occurring expeditiously to minimise risk to students, public confidence in the regulation of the VET sector and its international reputation.
5. the application for review will not be rendered nugatory if a stay is not granted because the evidence is that the AEC Pty Ltd would not be wound up in the next 6 months.
The Respondent further submits that the public interest weights strongly against the granting of a stay as AEC Pty Ltd’s repeated breaches of the ESOS Act (including during periods of a prior stay) demonstrates that the risk to the public interest in safeguarding the integrity of Australia’s migration law is unacceptably high. 37 Therefore the Tribunal cannot be confident that AEC Pty Ltd would be compliant with the Acts during the period of any stay.38
CONSIDERATIONS INCLUDING PARTIES’ SUBMISSIONS
Although the list of factors identified in [25] should not be regarded as a ‘fixed list’ 39 it nonetheless provides a useful scaffold for the consideration of the parties’ submissions which follows.
33 Ibid.
34 Ibid, page 13.
35 Ibid, page 10.
36 Ibid, page 12.
37 Ibid, page 19.
38 Ibid.
39 Barkly International College Pty Ltd and Australian Skills Quality Authority (Practice and Procedure) [2025] ARTA 242.
However, first I consider the interest of those who may be affected by the review of the decision as required in s 32(7) of the ART Act by reference to the statutory scheme under which the reviewable decision was made. 40
AEC Pty Ltd is obviously affected by the outcome of the review. To assist with this assessment, the Applicant provided the Tribunal with the Affidavit of Mr Terry Lu, Chief Executive Officer of AEC Pty Ltd, sworn on 4 March 2025 (Lu Affidavit). The Lu Affidavit explains those impacts in terms of the reputational damage currently occurring and future financial and staff impacts. ASQA, as the National VET Regulator, is also affected as explained further below. The community at large is also affected. This is because it is ultimately the community (including employers and consumers) who bear the consequences of inadequate training and assessment. The students who have paid fees are affected and can suffer from inadequate education and training. AEC Pty Ltd’s workers (employees and contractors) will also be affected by the review of the decision. In resolving these potentially competing interests the Full Court of the Federal Court stated in Australian Securities and Investments Commission v Administrative Appeals Tribunal (2009) 181 FCR 130; [2009] FCAFC 185 at [52] that the scheme embodied by the legislation is central and further at [53] the structure of the scheme also indicates Parliament’s assessment of the appropriate resolution of competing interests. Reference to the objects of the Acts41 alone would indicate it is the students and the community at large that should be afforded priority.
1.Prospects of success of the application for review
I am not obliged, nor is it appropriate, to conduct a full consideration of the merits of the substantive application or what has been coined a ‘mini trial’. 42 However, I am obliged to consider if there is an evidentiary foundation upon which I could be satisfied that the Applicant has ‘a reasonably arguable case’. 43 In Re Poidevin and Australian Securities and Investments Commission, Deputy President Redfern stated that the Tribunal is at least obliged to determine if there are facts, circumstances or points of law that if argued at the substantive hearing could lead to a different result. 44
40 Downes and Jagot JJ in Australian Securities and Investments Commission v Administrative Appeals Tribunal (2009) 181 FCR 130.
41 The objects of the ESOS Act are set out in s 4A. The objects of the NVETR Act are set out in s 2A.
42 Le’Sam Accounting Pty Ltd and Tax Practitioners Board [2020] AATA 890; Cassidy and Australian Securities and Investment Commission [2020] AATA 66 at [11].
43 Re Birdseye and Tax Practitioners Board [2020] AATA 1250 at [105].
44 [2018] AATA 124 at [39]-[40].
It is incumbent upon the Applicant to satisfy the Tribunal that there is a prima facie or arguable case. In this case, the Applicant has discharged their practical onus of establishing the existence of at least an arguable case even if their evidentiary foundations for that case may not be strong at this stage. 45 On the information provided by both parties it appears there is a serious dispute to be resolved at the hearing. 46 Although I cannot say that the Applicant has a strong case; I also cannot dismiss its prospects altogether. In Kukulovski and A Committee convened under section 40-45 of the Insolvency Practice Schedule (Corporations), 47Deputy President McCabe in discussing the applicant’s prospects said that it was unclear if at this stage whether the applicant has any real prospects of heading off regulatory action altogether, but it may have some prospects of achieving a more favourable outcome knowing that reasonable minds can differ. The same could be said for the Applicant’s prospects in this matter.
The evidence available for the stay hearing was the Lu Affidavit which did not cover any steps that had been taken to address compliance concerns. However, the oral and written submissions provided by the Applicant’s representative did go beyond the making of just bare assertions including pointing to logical inconsistencies in ASQA’s Statement of Reasons. 48 Although the Respondent at the hearing disputed these inconsistencies, they nonetheless point to the existence of at least an arguable case and that there is a serious dispute to be resolved at the hearing.
The Applicant has now filed evidence for the final hearing which consists of its response to ASQA’s reconsideration report. This evidence was filed just before the stay hearing and it was confirmed by the Applicant at the hearing that for the purposes of the stay application the Tribunal should only rely on the fact it has been filed and not on its substance. It will be open to the Tribunal to form a view on that evidence at the substantive review.
Putting that aside, there is sufficient evidence in the written and oral submissions provided by the Applicant’s representative that tips this factor towards supporting the Applicant’s case
45 See Senior Member Olding in Re Birdseye and Tax Practitioners Board [2020] AATA 1250 at [105].
46 In Cassidy and Australian Securities and Investment Commission [2020] AATA 66 at [11] Deputy President McCabe states that ‘in most cases, the Tribunal will not go much beyond satisfying itself that, in light of the information provided by the parties, there is a serious dispute which must be resolved at the hearing’.
47 [2020] AATA 40 at [13].
48 Outline of Applicant’s submissions in reply on stay application, page 2.
for a stay, noting that the bar for this factor is not high and that it can also be considered a neutral factor. 49
2.The consequence for the applicant of refusing a stay
Under this factor I am obliged to consider the consequences to the Applicant if a stay is not granted including financial and reputational consequences. This means I need to consider whether there is sufficient evidence to support the assertion made by the Applicant that the financial consequences would be great and that not granting the stay would render the business commercially unviable. 50
The Tribunal accepts that should a stay not be granted AEC Pty Ltd would lose its primary source of revenue that being student fees pending the conclusion of the review process. 51 However, unlike the situation in Barkly International College Pty Ltd and Australian Skills Quality Authority (Practice and Procedure) [2025] ARTA 242, the gaps in the financial evidence do not prevent the testing of some assertions. This is because the Lu Affidavit contains a current profit and loss (P&L) statement which goes some way to backing up the claims made in it about the losses AEC Pty Ltd will suffer due to expenses it will need to carry if a stay is not granted or if a stay is granted on a conditional basis. I have more to say about the probative value of this evidence below.
In relation to reputational considerations, no real evidence was led to back up the statements in the Lu Affidavit of the current and future reputational damage regarding student withdrawal if a stay is not granted or if a stay is granted on a conditional basis. 52
As to AEC Pty Ltd employees and contractors, evidence has not been presented directly in terms of the detriment they will suffer, leaving the Tribunal to infer this. The Lu Affidavit states it will lose its 7 employees and 5 trainers on contract if a stay is not granted or if a stay is granted on a conditional basis not all the roles would be required. 53
49 Rust-oleum Australia Pty Ltd v Australian Pesticides & Veterinary Medicines Authority [2017] AATA 298, [33]-[36].
50 Outline of Applicant’s submissions in reply on stay application, page 5.
51 GM Smith faced a similar situation in Barkly International College Pty Ltd and Australian Skills Quality Authority (Practice and Procedure) [2025] ARTA 242 at [56].
52 Lu Affidavit at [14]-[15].
53 Lu Affidavit at [28]-[29].
The Lu Affidavit states a significant proportion of the loss will occur if a condition is imposed on new student enrolments and states that if a conditional stay is granted it will directly and detrimentally affect the cash-flow and future viability of BIC. 54
The Lu Affidavit qualifies some of the impact in terms of if the final hearing is not within a 6- month timeframe. In this regard, the Tribunal notes both the Applicant’s and Respondent’s willingness to expedite these proceedings.
This factor tends slightly towards supporting the Applicant’s case for a stay.
3.Public Interest
The Respondent submits that the overwhelming consideration in this case is the public interest. I tend to somewhat agree.
As DP McCabe states in Kender and Australian Securities and Investments Commission [2018] AATA 4445 the public interest ‘looms large’ in cases like this as the public expects to be protected from bad practices like those which have been alleged against the Applicant.
In this regard, the compelling evidence before the Tribunal is of serious and systemic non- compliance by the Applicant which it has been on notice of since July 2023. Under this factor, I need to consider the protection of current and prospective students and the community that rely on the integrity of the VET system to deliver high quality education and training.
As considered in Barkly, I need to consider the inconvenience to the students should the stay not be granted against the risk of being exposed to non-compliant teaching. 55
This factor tends to support the Respondent’s case for a stay not to be granted, particularly if no conditions were attached. I see that the risk to the public could be minimised by conditions imposed on the granting of a stay (which I say more about below). Likewise, the risk to students and AEC Pty Ltd’s workers could also be minimised.
54 Lu Affidavit at [19].
55 Barkly International College Pty Ltd and Australian Skills Quality Authority (Practice and Procedure) [2025] ARTA 242 at [61].
4.The consequences for the Respondent if a stay is granted or not
No evidence has been adduced that the granting of a stay would impact the performing of the Respondent’s statutory functions or its credibility. Concerns have been expressed about public confidence in the regulation of the VET sector and its international reputation. However, again with reference to DP McCabe in Kender and Australian Securities and Investments Commission [2018] AATA 4445 at [17]:
a stay order is not in and of itself a rebuke to the regulator; it is a power intended to facilitate the review process. The fact of a stay decision does not inevitably compromise the integrity of the regulatory regime.
I am satisfied that ordering a stay would not impact ASQA performing its role as the National VET Regulator.
This factor tends to support the Applicant’s case for a stay.
5.whether the application for review would be rendered nugatory if a stay was not granted
This factor goes to the core of the consideration in s 32(2) of the ART Act regarding the desirability of ensuring the effectiveness of the review. The Applicant submits that without a stay the review would be irreparably compromised, and any relief sought would be rendered nugatory by the time of the hearing. This is said to be because the combined effect of several financial impacts would render the business commercially unviable even if ultimately successful on review.
The Lu Affidavit states it includes AEC Pty Ltd’s ‘management accounts for the financial year 2024/25 as at 31 December 2024’. However, management accounts typically comprise a P&L report, a balance sheet and cashflow accounts. The Lu Affidavit only includes a P&L report which alone does not provide a clear picture of the company’s position.
The P&L report includes figures for the period from 1 July 2024 to 31 December 31 2024. It shows AEC Pty Ltd experienced an operating loss of $102,231.11 for this six-month period. The report also shows that AEC Pty Ltd suffered a $607,688.18 operating loss ‘last year’.
The Lu Affidavit claimed if a stay is not granted, within six months AEC Pty Ltd will have an operating loss of $765,536. It also claims if a stay is granted with a condition of no new enrolments, AEC Pty Ltd will have the same operating loss in six months’ time.
This does not appear to make sense as AEC Pty Ltd is unlikely to have the same operating result under both scenarios as a conditional stay would mean the company would at least be earning revenue from its existing students. The Lu Affidavit also claims that if a stay is not granted it is anticipated that AEC Pty Ltd will only receive $480,000 in revenue. It is unclear where this revenue would come from given there will be no student fees.
AEC Pty Ltd’s largest operating expense is wages and salaries. However, the Lu affidavit does not provide any information on whether its 7 employees are full-time or part-time, or what the salary ranges might be.
The Lu Affidavit refers to the company’s financial position in ‘six months’ because it feared a final hearing would not occur for at least six months.
However, as previously said both parties have now agreed to expedite this matter which means AEC Pty Ltd’s chances of still being financially viable at the time of determination of the matter if determined in its favour are probably higher.
While noting the issues and uncertainties above, it does seem very likely that if a stay is not granted soon the financial viability of AEC Pty Ltd will be significantly impacted and the Lu Affidavit is probably correct in claiming this will mean ‘it will not be financially viable’ for AEC Pty Ltd ‘to continue to operate until hearing with no revenue’.
If a stay is granted but with the condition of no new enrolments, it is also likely AEC Pty Ltd will struggle to remain financially viable as revenue may quickly shrink as existing students either complete or withdraw from their courses.
If a stay were to be granted without conditions, AEC Pty Ltd should be able to generate fresh revenue from students that have enrolled but have not started their courses yet. That said, AEC Pty Ltd may still be reporting operating losses.
Without studying AEC Pty Ltd’s balance sheet and cashflow statements, I cannot determine precisely how long AEC Pty Ltd may be able to continue reporting operating losses but still fund and maintain its business.
On the evidence provided, it does appear that there is a significant risk that the review would be rendered nugatory or pointless if a stay is not granted. Granting a conditional stay means the risk remains albeit slightly reduced. Expediting the matter to substantive hearing reduces the risk.
For this reason, this factor tends slightly towards supporting the Applicant’s case for a stay.
Other relevant matters to consider are the steps the Applicant could have taken to mitigate the effect of the conduct that led to the adverse decision. 56 On this point, no evidence or submission was made by the Applicant of the steps that had been taken to mitigate financial and reputational risks. That is not to say that this will not form part of the evidence that has been filed for the hearing.
Weighing up these considerations
Several factors weigh in favour of a stay being granted. These are that the Applicant appears to have an arguable case although given the extent of non-compliance the prospects of success appear low; there is evidence to support prejudice to the Applicant if a stay is not granted in that the Applicant’s business would suffer financial damage and its commercial viability would be compromised; there is no evidence to support prejudice to the Respondent in terms of compromising its ability to perform its statutory functions; there is evidence of a risk that the review will be rendered nugatory if AEC Pty Ltd is not allowed to continue in the short term.
The public interest factor is finely balanced. In weighing up the public interest considerations, it is necessary to consider the risks to the community including future students while at the same time avoiding the immediate disruption to current students and the adverse consequences for AEC Pty Ltd’s workers.
I consider these risks can be managed by granting a stay on a number of strict conditions:
56 Sunrise Institute of Australia Ltd Pty and Australian Skills Quality Authority [2018] AATA 3935 at [22].
1. The Applicant meets the timeframes that have been set to expediate this matter to hearing.
2. The Applicant complies with the conditions of registration in ss 22-27 of the NVERT Act. In order ensure the protection of students the Applicant should comply with its obligations.
3. The Applicant will not enrol or commence any student in a course or a part of a course under the Acts. This means that only students who are enrolled in and have commenced a course with the Applicant prior to the date of this order can continue to complete that course they are enrolled in and have commenced.
4. The Applicant will not take action to recruit or enrol students. The Applicant changes the message on its website bic.edu.au to say that it is currently not accepting any new enrolments. I note that its website currently says ‘please come back later for our new courses and innovative learning program’.
5. The Applicant maintains the inability for students to enrol from the website.
These conditions as proposed by the Respondent will regulate the operation of the stay and allow ASQA to bring this issue back to the Tribunal if it believes the conditions are not being adhered to and students are being exposed to the risks of non-compliant teaching.
Given the importance of public interest considerations in this case, I consider these conditions are necessary to ensure the adequate protection of the public including current and future students and the businesses that one day may employ them. They are also necessary to protect Australia’s student visa system and Australia’s reputation for providing high quality education and training. In addition, AEC Pty Ltd has been on notice of compliance action since July 2023 and has had the opportunity to take steps to minimise financial risks.
I acknowledge that the Applicant not being able to enrol new students could result in financial and reputational damage and may impact worker retention as outlined in the Lu Affidavit. This means that this stay may have limited effect for the Applicant in warding off the consequences of the Respondent’s decisions. To the extent that financial loss may be suffered by the Applicant this has been found by the Tribunal and Courts to be an inherent
feature of the taking of regulatory action. 57 It is within the control of the Applicant to take the necessary steps to minimise the risk of regulatory action interrupting their business operations.
The application for review can still be heard and determined within about 4 months. This will lessen the impact on the Applicant regarding the conditions that have been imposed and, on the Respondent, due to the granting of a limited stay. I consider this to be an appropriate way of securing the effectiveness of the review process. It also provides incentives for both parties to stick to their undertakings to progress this matter expeditiously.
As noted by the Full Court in Australian Securities and Investments Commission v PTLZ, 58 where a stay is granted it should be accompanied by direction to expedite the matter with the earliest possible hearing to limit any adverse effects of the stay decision. Likewise, if a stay is denied. 59
Accordingly, I have agreed to the making of the parties’ proposed consent directions with a slight variation to accommodate the time it has taken to provide these reasons. The Applicant and Respondent have already provided the Tribunal with their availability for a three-day hearing. The Applicant has filed reports, records and other documents on which it intends to rely on at the hearing. I have referred this matter to be listed for hearing in the first half of July.
I certify that the preceding 76 paragraphs are a true copy of the reasons for the decision herein of General Member J Ross.
......[SGD]..........
Tribunal Officer
Date: 25 April 2025 Dates of hearing: 24 March 2025
Counsel for the Applicant: Applicant’s Representative: Counsel for the Respondent: Solicitors for the Respondent:
J Hill
Velocity Legal S Valliappan
Australian Government Solicitor
57 Le’Sam Accounting Pty Ltd and Tax Practitioners Board [2020] AATA 890 at [32].
58 [2008] FCAFC 164 at [29].
59 Ibid.
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