Pacific Flight Services Pty Ltd and Australian Skills Quality Authority - [2019] AATA 745

Pacific Flight Services Pty Ltd and Australian Skills Quality Authority [2019] AATA 745 (23 April 2019)
Division:GENERAL DIVISION
File Number(s): 2019/1675 & 2019/1676
Re:Pacific Flight Services Pty Ltd
APPLICANT

AndAustralian Skills Quality Authority
RESPONDENT

DECISION
Tribunal:Chris Puplick AM, Senior Member
Date:23 April 2019
Place:Sydney

The application for a stay of the ASQA determination of 13 March 2019 is refused.
............................[sgd]............................................
Chris Puplick AM, Senior Member
CATCHWORDS
PRACTICE AND PROCEDURE – request for stay of decision – decision under review to refuse to renew registration under NVR Act – decision under review to refuse to renew registration under ESOS Act – factors to be considered in deciding whether to grant stay – prospects of success – consequences for the Applicant – public interest – consequences for the Respondent – whether refusal would render application nugatory – stay refused
LEGISLATION
Education Services for Overseas Students Act 2000
National Vocational Education and Training Regulator Act 2011
CASES
Australian International College Pty Ltd v Australian Skills Quality Authority [2018] FCA 2097
Federal Commissioner of Taxation v Myer Emporium Ltd [No.1](1986) 160 CLR 220
Galaxy Day Care Pty Ltd v Secretary, Department of Education [2018] AATA 4675
Institute of Training Pty Ltd v Australian Skills Quality Authority [2018] AATA 4127
Re Dart and Director-General of Social Services (1982) 4 ALD 553
Re Metro College of Technology Pty Ltd and Australian Skills Quality Authority (unreported, Administrative Appeals Tribunal, Senior Member McCabe, 24 December 2015)
Re Snook and Civil Aviation Safety Authority (2008) 109 ALD 122
Rust-Oleum Australia Pty Ltd and Australian Pesticides & Veterinary Medicines Authority [2017] AATA 298
Scott v Australian Securities And Investments Commission [2009] AATA 798
Sher-E-Punjab Ltd and Australian Skills Quality Authority [2018] AATA
Sydney Training Academy Pty Ltd v Australian Skills Quality Authority [2018] AATA 3361
Technical Education Australia Pty Ltd v Australian Skills Quality Authority [2018] AATA 3047
SECONDARY MATERIALS
National Code of Practice for Providers of Education and Training to Overseas Students 2018
Standards for Registered training Organisations 2015
REASONS FOR DECISION
Chris Puplick AM, Senior Member
23 April 2019

Pacific Flight Services (the Applicant) seeks an order from the Tribunal to stay a decision made by the Australian Skills Quality Authority (ASQA) on 13 March 2019 to:
·Refuse to renew the Applicant’s registration as a Registered Training Organisation (RTO) under the National Vocational Education and Training Regulator Act 2011 (the NVR Act), and
·Not renew the Applicant’s registration to provide certain courses for overseas students under the Education Services for Overseas Students Act 2000 (the ESOS Act).
ASQA is the designated national regulator under both the NVR and ESOS Acts. Its decisions were based upon the findings of an ASQA Audit Report dated 14 January 2019 and an Audit Outcome Decisions Record dated 13 March 2019.
The decision of 13 March 2019 would take effect, if not stayed, on 24 April 2019. The application for review of the ASQA decision was made on 26 March 2019 and heard by the Tribunal on 16 April 2019.
THE APPLICANT
The Applicant is currently an RTO, (registered under the NVR Act) which provides training for overseas students (under the ESOS Act) in various aspects of aviation training. It was first registered in June 2008 and approved for CRICOS in September 2008.
It operates out of Bankstown Airport and its students are drawn principally from India, Indonesia, Papua New Guinea and Singapore. The company is owned by Singaporean interests and operates from Seletar Airport in Singapore.
It appears that it generally has a small student enrolment of 6 to 10 students and offers courses generally taking between 60 and 80 weeks to complete. At present it has 8 students enrolled. It appears that its principal courses of instruction are: Diploma of Aviation (Commercial Pilot Licence – Aeroplane); Diploma of Aviation (Instrument Rating) and Diploma of Aviation (Instructor Rating). Fees for the first of these courses are in the order of $74,000 per student.[1]
[1] Mr R Crane, Statement (15 April 2019) at [15].
Unlike many other RTOs, this Applicant is also required to be registered with another regulatory body, the Civil Aviation Safety Authority (CASA) in order to be able to operate as an approved flight school.
When students have completed their training with the Applicant in the Diploma of Aviation (Commercial Pilots Licences – Aeroplane) they are required to undertake further assessment by CASA in an independent and separate process in order to obtain a commercial pilots licence.
Training appears to be provided on Learjets 35 and 45 and Gulfstream G150 aircraft. The Tribunal understand that the company does not own or lease these aircraft but has them on the basis of being hired at appropriate times for student training purposes.
Training times for students are affected by matter such as the availability of training aircraft at any particular time, the availability of instructors and weather conditions.
AUDITS
The Applicant was audited by ASQA in 2014 and its registration renewed.
The Applicant was the subject of a Surveillance Report by CASA in June and August 2016. Some adverse findings were made in that process related to record keeping with specific reference to information relating to proficiency checks.[2] The Tribunal presumes that such deficiencies identified were rectified to the satisfaction of CASA as it took no steps to withdraw or cancel the Applicant’s registration as a flight school.
[2] Civil Aviation Safety Authority: Surveillance Report 2018 as Annexure 1 to Mr R Crane, Statement (15 April 2019).
In October 2018 ASQA undertook a further regular audit of the Applicant. Its report was created on 15 November 2018 and updated on 14 January 2019. That report (the Audit Report) identified a significant number of instances of non-compliance with requirements of the Standards for Registered training Organisations 2015 and the National Code of Practice for Providers of Education and Training to Overseas Students 2018 which are instruments made under the NVR and ESOS Acts respectively.
Following the Audit Report in October 2018, which required remedial action to be taken to secure compliance with the National Standards and the National Code, the Applicant advised ASQA of what steps they had taken to effect that remediation.
In December 2018 ASQA determined that the Applicant remained non-compliant with 9 of the National Standards (of 12 originally identified) and 5 items of the National Code (of 17 originally identified).
ASQA set out its findings as follows:[3]
[3] As extracted in Respondent’s Submissions in relation to stay (15 April 2019).
15. The non-compliances included the following:
• the Applicant has not provided evidence that it has implemented remedial action for four current students and one student who completed the Diploma of Aviation Commercial Licence —Aeroplane) in the past six months who may have been impacted by the non−compliance
• the training and assessment strategies are not consistent with the requirements of the training package and the amount of training is not for international students; it is not evident that the students are engaged with the learning for 20 hours per week as required for international students and for the Diploma of Aviation (Commercial Licence− Aeroplane), the hours can be as low as 13.2 hours per week
• the Applicant has allocated 320 hours of study but it is not evident how these hours contribute to the development of skills and knowledge as per unit of competency requirements
• the Applicant doesn't have the trainers and assessors to deliver the training and assessment, and hasn't demonstrated that it has the learning resources that enable learners to meet the requirements for each unit of competency and that these resources are accessible at all times
• the Applicant's trainers and assessors have been issued AQF qualifications by the Applicant in reliance on inadequate assessment.
16. In addition, the Applicant admitted at audit that its current assessment tools did not meet training package requirements and yet failed to provide revised assessment tools.
17. Other issues with assessment included assessment tools that contained insufficient performance benchmarks and assessment tools that do not guide the assessor as to the expected responses to knowledge questions.
18. The Applicant did not provide an RPL assessment tool for the Diploma of Aviation (Commercial Licence — Aeroplane) and records sighted at audit for three students did not demonstrate that the competency requirements had been met or that their assessments had been conducted in accordance with the Principles of Assessment and Rules of Evidence.
On the basis of these findings ASQA proceeded to cancel the Applicant’s NVR and ESOS registrations.
RESPONSE TO THE AUDIT FINDINGS
The Applicant responded to the Audit findings in its submissions to the Tribunal in support of its stay application. Evidence was tendered in the form of a statement by Mr Rodney Crane (dated 15 April 2019), an experienced pilot who is the General Manager of the Applicant and report prepared by Phoenix Compliance Management (dated 15 April 2019) entitled: “Rectification for Pacific Flight Services Pty Ltd”. Further oral submissions were made to the Tribunal by their counsel at the hearing.
These were in addition to the original statement of the Applicant in support of its formal request for a stay (the Application Statement, dated 26 March 2019).
In the initial Stay request, the Applicant identified two areas in which non-compliance had been found by ASQA:
·“Insufficient evidence of remedial action taken to address improperly issued qualifications” and
·“Inconsistent training timeframes in the Training and Assessment Strategy.”
However nothing was provided in any documentation to give details of what steps had been taken by the Applicant to address these matters.
Next, the Applicant submitted that ASQA had “mis-identified two non-AVI instructors….as AVI instructors” and had, as a result erroneously concluded that the Applicant had insufficient instructors to deliver the AVI products or undertake sufficient staff vocational professional development. In response, ASQA asserts that the two named individuals in question were identified to the ASQA auditors, at the time of the Audit as AVI instructors. There is no way that the Tribunal can, at this stage, make any finding either way on this matter.
In relation to a finding that various assessment tools “have been determined to contain insufficient Rules of Evidence, namely sufficiency, validity and reliability”, the Applicant puts its response in the following terms: “It is important to note that the identical assessment tools have been approved by ASQA for another aviation Registered Training Organisation training the same AVI products.”
ASQA persists in its opinion that its assessment at both the Audit and rectification stage “revealed seriously deficient assessment tools and practices.”
Finally, in terms of the actual ASQA non-compliance findings, the Applicant states that, “the non-compliances … are of a relatively minor nature and can be successfully addressed through the provision of additional evidence.”[4]
[4] Application Statement of Pacific Flight Services Pty Ltd (26 March 2019).
Specifically, in relation to non-compliance issues, the subsequent letter from Mr Crane does not address any of the matters raised above or referred to in the Application Submission. He does however, contend that:
“12. The standards for monitoring RTOs have been working in parallel with those standards for pilot training schools and it is a balancing act to maintain compliance with both. Our priority, however, is to maintain compliance with CASA which determines the safety and effectiveness of pilot training in Australia.
13.There has been no allegation of any pilot being trained improperly. There has also been no allegation from the audit report or any associated documents that any pilot that is produced by our college is not qualified as a pilot.”[5]
[5] Mr R Crane, Statement (15 April 2019).
The Phoenix “Rectification” report acknowledges that a number of non-compliances have been identified and posits that:
“(A4) I believe that I can create the amended documents within one week as all amendments are relatively simple correction of typing errors; the assessment tools are subject to the validation process and will take longer to resolve. However these are resolved prior to use by any of the students.”
“(A8) That they remain with documentation issues is a function of the complexity of their course management, having to meet Commonwealth Register of Courses for Overseas Students (CRICOS) requirements, vocational education and training as well as the detailed requirements of the Civil Aviation Safety Authority (CASA). This has been exacerbated by the departure of key members of staff which is the nature of aviation as airline intake of pilots is random and independent of the training industry.”[6]
[6] Phoenix Compliance Management (dated 15 April 2019 “Rectification for Pacific Flight Services Pty Ltd”.
TRIBUNAL CONSIDERATIONS
The Tribunal is concerned by the response of the Applicant to the Audit findings in the following regards:
1.None of the Applicant’s responses provide any detail of specific steps taken, or proposed to be taken, in an attempt to rectify any of the outstanding issues of non-compliance.
2.The claim that the assessment tools used in relation to the Applicant are identical with those used for other similar RTOs is not a claim that carries any weight. It is not supported by any evidence, certainly none of complete equivalence. It fails to acknowledge that ASQA has found serious deficiencies in the tools used and to respond to those concerns other than with reference to other RTOs.
3.If the non-compliances are indeed relatively “minor” (there being no evidence adduced to support this), and if they are capable of being rectified “within one week” there is no explanation as to why they persisted, unrectified, for the better part of six months.
4.The Tribunal does not accept that there are such inconsistencies between ASQA and CASA regulations and requirements that it is legitimate to give priority to one over the other. They are not actually regulating the same thing: a flight school is not necessarily the same as an RTO, especially in relation to matters of record keeping, advice to students and assessment. It is the obligation of any organisation registered with more than one regulator to ensure that its operations satisfy all regulators.
5.Failures to attend to documentation requirements cannot be excused on the basis that the management of courses is complex. RTOs are expected to manage such complexities.
THE BASIS OF A STAY APPLICATION AND CONSIDERATIONS
It is generally accepted by the Tribunal that applications for stay orders should be considered with regard to the elements identified by Downes J (then AAT President) in Scott v Australian Securities And Investments Commission [2009] AATA 798 where he stated:
[4] Application having been made for a stay of proceedings under s 41 of the Administrative Appeals Tribunal Act 1975, it is nevertheless incumbent upon me now to consider whether a stay is appropriate. In considering the application, it is appropriate for me to consider a range of matters, including:
1.The prospects of success.
2.The consequence for the applicant of the refusal of a stay.
3.The public interest.
4The consequences for the respondent in carrying out its functions depending upon whether a stay is granted or not.
5.Whether the application for review would be rendered nugatory if a stay were not granted.
6.Other matters that are relevant, amongst which I would include the length of time that the ban has already been in place and the gap between today and the hearing of the application.
The Tribunal will consider each as it relates to this application and the submissions of the parties, although item (6) in the list is not relevant, although if the stay is not granted there will be some time elapsing between the cessation of the registrations and the final hearings in the Tribunal.
In relation to prospects of success it is hardly surprising that the parties stand at polar opposites. ASQA maintains that there are “limited prospects of success”[7] due to the Applicant’s failure to demonstrate a significant commitment to remedial action.
[7] Respondent’s Submission in relation to stay (15 April 2019) at [29].
In oral submissions the Applicant’s counsel rated the prospects as “high” due to the failure of CASA to express any concerns given its further supervisory role; the actions taken by the engagement of external consultants (Phoenix Compliance Management) and the relatively “trivial” nature of the non-compliances.
Although there is some recent authority calling into question the very process of giving consideration to prospects of success, it has nevertheless been the Tribunal’s general approach to do so.[8]
[8] Rust-Oleum Australia Pty Ltd and Australian Pesticides & Veterinary Medicines Authority [2017] AATA 298 at [36] per Deputy President Forgie discussed by this Tribunal in Galaxy Day Care Pty Ltd v Secretary, Department of Education [2018] AATA 4675 at [26].
However, it is not the role of the Tribunal in these proceedings to make an actual finding as to the likely outcome of any merits hearings[9] unless it is persuaded that the Applicant’s case is utterly without merit and inevitable doomed to failure.[10] It cannot make such a finding in this case as the Applicant obviously has an arguable case to advance.
[9] Re Dart and Director-General of Social Services (1982) 4 ALD 553 at [555]; Re Snook and Civil Aviation Safety Authority (2008) 109 ALD 122 at [21].
[10] For example, this Tribunal’s decision in Hotson-Jones and Secretary, Department of Home Affairs [2019] AATA 121.
In terms of the consequences for the Applicant if a stay were to be refused, the Applicant advances an argument that it would suffer significant financial harm and serious reputational damage. In his Statement Mr Crane alludes to the fact that the Applicant has a business plan which envisages the enrolment of up to 25 international students and 20 VET students, without which Applicant would have to dismiss staff and incur expenses in seeking to accommodate displaced students.
This may well be the case, but the Tribunal has no evidence before it to sustain such claims. Counsel for the Applicant conceded as much in the hearing. In upholding a previous decision of this Tribunal, the Federal Court in Australian International College Pty Ltd v Australian Skills Quality Authority made the point that there were “too many gaps in the financial evidence relied upon”[11] for the Court to be satisfied in relation to claims of financial disadvantages being advices by the Applicant. In this instance there is no evidence at all before the Tribunal which, as a result, cannot accord this claim any weight.
[11] Australian International College Pty Ltd v Australian Skills Quality Authority [2018] FCA 2097 at [37] per Bromwich J.
The same might be said in relation to alleged reputational damage. As Senior Member Cameron pointed out in Technical Education Australia Pty Ltd v Australian Skills Quality Authority such claims requires explanation and substantiation beyond mere assertion.[12] None has been advanced here.
[12] Technical Education Australia Pty Ltd v Australian Skills Quality Authority [2018] AATA 3047 at [125]-[128].
In relation to any “public interest” test, ASQA advances two claims in this regard: the first that the particular nature of the training/business involved, namely aviation and flight safety requires particular attention to be given to the consequences of continued non-compliance and secondly that the maintenance of the regulatory environment and its enforcement powers should be protected.

The Respondent counters the first leg of the argument by reminding the Tribunal that none of its students is put in a position where their aviation/pilot activities would potentially endanger themselves or members of the public because of the subsequent supervisory hurdles imposed by CASA certification which are required. The Tribunal accepts this point and does not place any weight on the supposedly “unique” situation in relation to risks to the public advanced by ASQA.
ASQA’s submission quotes from two decisions of this particular Tribunal and one by Senior Member McCabe (as he then was) to the effect that the protection of the integrity of the regulatory system and support for regulators enforcing adherence to standards is an important consideration for this Tribunal.[13] There is an overriding purpose in the NVR (s.2A) and ESOS (s.4A) Acts which relate to matters such as the need for national consistency in vocational education and training with a standards-based quality framework, the protection of the position of students and the protection and enhancement of Australia’s reputation for quality education and training services. This Tribunal has recognised that actions which risk damage to these objectives or compromise their fulfilment should be taken into account in its decision-making.[14]
[13] Institute of Training Pty Ltd v Australian Skills Quality Authority [2018] AATA 4127 at [57]; Sydney Training Academy Pty Ltd v Australian Skills Quality Authority [2018] AATA 3361 at [28]; Re Metro College of Technology Pty Ltd and Australian Skills Quality Authority (unreported, Administrative Appeals Tribunal, Senior Member McCabe, 24 December 2015) at [10].
[14] Sher-E-Punjab Ltd and Australian Skills Quality Authority [2018] AATA 46 at [109].
What the Tribunal said in those various decisions must remain a central consideration in any matter which seeks to have the regulator’s decision set aside or stayed.
The consequences for the Respondent in this instance, ASQA, are advanced, by it as relating to matters of its credibility and of the credence of its regulatory decisions if they are seen to be set aside or stayed without compelling reasons. The Tribunal has accepted that it should consider the extent to which compliance by other RTOs with the standards or ASQA determinations is influenced by any apparent perception that those standards or determinations can be disregarded or not taken seriously.[15] It is a matter of pour encourager les autres.
[15] Australian tertiary Academy Pty Ltd and Australian Skills Quality Authority [2017] AATA 4875 at [39] per Deputy President McCabe.
The question of rendering an application for review potentially nugatory is an important consideration for the Tribunal.
The High Court in Federal Commissioner of Taxation v Myer Emporium Ltd[16], said that a decision may be rendered nugatory:
… where for whatever reason, there is a real risk that it will not be possible for a successful appellant to be restored substantially to his former position if the judgment against him is executed: …
[16] Federal Commissioner of Taxation v Myer Emporium Ltd [No.1 ](1986) 160 CLR 220 at [223].
Again, this Tribunal is placed in a positon where it has, in effect, no evidence before it to assess the Applicant’s position beyond the assertions in the Statement of its General Manager.
The Tribunal appreciates that an effective cancellation date of 24 April 2019 poses some problems for the Applicant in terms of its falling close to the Easter and ANZAC Day public holidays and that there is, as yet, no scheduled date for the merits hearing to be held. Unfortunately the lack of guidance for the Tribunal as to the exact position, in terms of financial viability, staff contracts, confirmed future student enrolments or any contractual obligations on the part of the Applicant make it difficult for the Tribunal to be able to assess the extent to which a refusal of stay would have the effect of rendering any future proceedings nugatory. The burden of demonstrating this lies with the Applicant.
The Applicant has also made a claim, in the Application Statement to the effect that “ASQA has denied PPS the right to redress these issues directly with ASQA.” The Tribunal is not aware of what this might mean in that the Applicant had the opportunity to engage with ASQA between the date of the Audit and the date of the cancellation decision. It is true that decision was made by a full Commissioner’s meeting and that this precludes any further reconsideration or internal review,[17] but that decision was made in March 2019, some considerable time after the Applicant was first put on notice about its need to rectify matters following the October 2018 audit.
[17] ASQA Audit Outcome Decision Record, 13 March 2019.
The Tribunal also notes that the report of Phoenix Compliance Management (at paragraph A14) alludes to the fact that the Audit was not undertaken by a named person who, it is implied, “normally” undertakes such audits and is “highly experienced in flying school assessment because of the complexity of the processes for delivery and assessment.” This may very well be the case in terms of the named individual but ASQA was at pains to point out that the assessor who undertook the Audit was equally as qualified and the Tribunal rejects any suggestion (implicit or otherwise) on the part of the Applicant, via this Report, to call into question the professional competency of the ASQA assessor(s) involved.
CONDITIONAL STAY
The Applicant offered the Tribunal the option of imposing a stay with conditions rather than an outright stay of the ASQA determination. It proposed that it would agree not to enrol any further CRICOS students; or to graduate any existing students.
However in Mr Crane’s Statement he makes clear that “If we are granted the stay, I undertake to continue training these current students to the best of our ability.”[18]
[18] Mr R Crane, Statement (15 April 2019) at [18].
This however is the heart of the matter since ASQA has found that the assessment procedures for these students being trained is deficient and non-compliant. At the hearing ASQA indicated that were a conditional stay to be granted they would seek to include a condition that the Applicant refrain from issuing any student assessments, however this did not appear to find any level of acceptance with the Applicant and, in any case, is in direct contradiction to the proposal of the Applicant in the first instance.
It was the Tribunal’s understanding that a key element of the proposed conditional stay would be for the Applicant to continue training students and that this must necessarily involve undertaking activities which had been identified by the Audit as non-compliant. This clearly would lead to a situation where, should a stay be granted the Applicant would continue to operate in a non-compliant fashion.
The Tribunal does not support this proposal.
DECISION
The application for a stay of the ASQA determination of 13 March 2019 is refused.

I certify that the preceding 54 (fifty -four) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member

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Associate
Dated: 23 April 2019

Date(s) of hearing: 16 April 2019

Counsel for the Applicant: Mr P Doukas (by phone)

Solicitors for the Respondent: Ms L McDermott, Australian Skills Quality Authority (by phone)

Date(s) of hearing:	16 April 2019
Counsel for the Applicant:	Mr P Doukas (by phone)
Solicitors for the Respondent:	Ms L McDermott, Australian Skills Quality Authority (by phone)