Victorian Institute of Technology Pty Ltd and Tertiary Education Quality and Standards Agency - [2020] AATA 3884

Victorian Institute of Technology Pty Ltd and Tertiary Education Quality and Standards Agency [2020] AATA 3884 (22 September 2020)
Division:GENERAL DIVISION
File Number(s): 2020/4647
Re:Victorian Institute of Technology Pty Ltd
APPLICANT

AndTertiary Education Quality and Standards Agency
RESPONDENT

DECISION
Tribunal:The Hon. Matthew Groom, Senior Member
Date of decision: 22 September 2020
Date of written reasons: 2 October 2020
Place:Melbourne

Pursuant to section 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth), the Tribunal orders that the operation of Condition 4(b) of the Respondent’s decision of 29 June 2020, imposed on 3 July 2020 is stayed pending the final hearing and determination of the application for review in this matter.
......................[sgd]............................................
The Hon. Matthew Groom, Senior Member
Catchwords
PRACTICE AND PROCEDURE – application for stay order – where application concerns a single condition of the reviewable decision - consideration of relevant factors – consideration of consequences for applicant if application refused - whether grant of a stay is in the public interest – application granted
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
Education Services for Overseas Students Act 2000 (Cth)
Higher Education Standards Framework (Threshold Standards) 2015 (Cth)
Cases
Greenfield Education Pty Ltd and Australian Skills Quality Authority [2018] AATA 4210
McLean v Australian Securities and Investments Commission [2016] AATA 22
ReScott and Australian Securities and Investments Commission [2009] AATA 789
Technical Education Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 3047
REASONS FOR DECISION
The Hon. Matthew Groom, Senior Member
2 October 2020
INTRODUCTION

The substantive application in this matter involves a review of the respondent’s decisions made on 30 June 2020 and 3 July 2020 to renew the applicant’s registration as a higher education provider (together with the accreditation of its Bachelor of Information Technology and Systems degree) for a period of four years, subject to a number of conditions.
The matter presently before the Tribunal is an interlocutory application brought by the applicant seeking a stay order in respect of one of those conditions. The relevant condition is worded as follows:
a.VIT may only deliver its accredited higher education courses of study from the following delivery locations:
i.Level 6/118 Queen Street, Melbourne VIC 3000
ii.Levels 3, 10, 11 and 14/123 Queen Street, Melbourne VIC 3000
iii.Levels 6,7, 8, 9 and 10/235 Queen Street, Melbourne VIC 3000
iv.Levels 5 & 8/333 Kent Street, Sydney NSW 2000
b.The maximum number of higher education students to which the Victorian Institute of Technology Pty Ltd may deliver its accredited courses of study may not exceed 2550 students (headcount) at any time.
The applicant has accepted the imposition of condition 4a as described above pending finalisation of the review but seeks a stay in respect of condition 4b. The respondent continues to resist the application.
Following the conclusion of the hearing but prior to the Tribunal’s decision, the respondent proposed an amendment to the condition, however, the applicant maintains that the proposed amendment does not address its essential concerns. The Tribunal has proceeded to consider this matter based on the condition as initially worded.
Each of the parties submitted materials in support of the respective positions on the application. In relation to the applicant, that included the affidavit of its CEO Mr Arjun Surapaneni dated 8 September 2020, together with its exhibits. The affidavit was unsworn but counsel for the applicant confirmed with the Tribunal that its contents had been approved by Mr Surapaneni but that it was practically difficult for him to have sworn the affidavit because of current COVID-19 restrictions. Counsel for the respondent did not take issue with the unsworn nature of the affidavit and accepted the circumstances that gave rise to it being unsworn. On the basis of the representations made, the Tribunal has accepted the affidavit of Mr Surapaneni as lodged with the Tribunal as his evidence in this application. The respondent’s material included an affidavit of Mr Gary Brook affirmed on 16 September 2020. Mr Brook is the Director of the Assurance Group with the respondent and at all relevant times had oversight responsibility for the application for renewal of the applicant’s registration and course accreditation.
Following the hearing of this interlocutory application the Tribunal decided to impose an interim stay in respect of condition 4b pending its final decision in respect of the application.
The Tribunal’s power to grant a stay is found in section 41(2) of the Administrative Appeals Tribunal Act. That section relevantly provides that the Tribunal may make such order or orders affecting the operation or implementation of the decision “as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review”. That power is contingent on the Tribunal having formed the opinion that the making of an order granting a stay is desirable “taking into account the interests of any persons who may be affected by the review”.
CONTENTIONS AND CONSIDERATION
It was not in dispute between the parties that the factors outlined by Justice Downes in Re Scott and Australian Securities and Investments Commission [2009] AATA 789 at [4] are an appropriate guide to the types of considerations that should be considered by the Tribunal in deciding whether or not to exercise its power to grant a stay.[1] Those factors include:
a)the prospects of success;
b)the consequences for the applicant of the refusal of a stay;
c)the public interest;
d)the consequences for the respondent in carrying out its functions depending upon whether a stay is granted or not;
e)whether the application for review will be rendered nugatory if the stay were not granted; and
f)any other matters that are relevant.
[1] See also Technical Education Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 3047 at [59] and Greenfield Education Pty Ltd and Australian Skills Quality Authority [2018] AATA 4210.
Prospects of success
The Tribunal accepts that in assessing the prospects of success consideration it is not the function of the Tribunal to conduct some form of mini-trial. Rather, the task of the Tribunal is to make a high-level assessment of whether there are facts asserted which, if established at the substantive hearing, would provide a reasonable basis for success in the review application.
The respondent contends that on the material before the Tribunal it could not be concluded that the applicant has a “strong chance” of succeeding in its review application. The respondent notes that, prior to relevant decisions being made, it had notified the applicant of its intention to reject the applicant’s application for renewal on the basis that it held significant concerns regarding the applicant’s compliance with the Higher Education Standards Framework (Threshold Standards) 2015 (the “Standards”).
The respondent acknowledges that the applicant has taken a number of steps in response to concerns it had previously raised. Those steps included the applicant making a number of appointments to its corporate and academic governing bodies, revising its governance framework and amending the learning outcomes and assessments of the relevant course.
Notwithstanding these efforts, the respondent maintains that it continues to have what it describes as a “residual concern” in respect of the applicant’s satisfaction of the Standards due to a lack of evidence of sustained and effective implementation of the changes. The respondent also contends that this risk assessment is further supported by what it claims are demonstrated examples of historical non-compliance. The respondent asserts that the fact the applicant has made the changes it has provides a basis for at least a strong inference that there has been historical non-compliance. More specifically, the respondent describes its residual concerns as including:
a)    Governance, and the extent to which the governing body assures itself that the applicant is operating effectively through obtaining required information and academic advice, and ensuring that the quality assurance processes are effective for the purpose of identification of risks, development of strategies for addressing risks and ensuring improvements.
b)    Quality of higher education and the extent to which the applicant’s institutional quality assurance framework/processes are effective in ensuring the quality of the applicant’s course offerings and its learning environment.
c)    Student well-being and the adequacy of staffing and resourcing arrangements to ensure academic and non-academic student support services meet the needs of the applicant’s student cohorts and are informed by the required monitoring activities.
d)    The extent to which the applicant has a staffing framework that provides quality assurance mechanisms for monitoring and reporting to the relevant governing bodies on the adequacy of staffing arrangements for teachings courses at each campus.
The respondent contends that its decision to renew the applicant’s registration subject to conditions was appropriate, proportionate and designed to afford the applicant further time to demonstrate the effective and sustained implementation of the changes it has made and its ongoing compliance with the Standards.
The applicant asserts that its prospects at the substantive hearing are good and certainly rejects any suggestion that there is no reasonable prospect of success. The applicant does not concede that it has engaged in historical non-compliance notwithstanding the changes it has implemented in response to the respondent’s concerns. However, it asserts that to the extent there has been non-compliance those concerns have been appropriately addressed through the changes it has implemented. The applicant asserts that the imposition of the conditions is disproportionate to any risk that could be said to exist. It argues that this is especially so given the absence of specific allegations of current non-compliance, arguing that the concerns described by the respondent are somewhat vague and speculative.
The applicant contends that condition 4b in particular is focused on addressing the respondent’s residual concern regarding the applicant’s capacity to maintain compliance as student numbers grow and in that sense necessarily involves conjecture about what may or may not happen in the future.
The applicant cites a number of references in the respondent’s Assessment Report dated 17 July 2020 (the “Assessment Report”) in support of this contention. For example:
Paragraph 149
… TEQSA’s concerns with the adequacy of VIT’s staffing profile in the context of assessment of CRICOS applications to add new campus locations and to increase student numbers.
Paragraph 158
… TEQSA is not satisfied that VIT has an effective framework of policies and processes to ensure that it meets the staffing Standards as it further develops its higher education activities with plans for increasing student enrolment numbers and new interstate campuses.
Paragraph 218
… TEQSA notes a concern that student support services may not be adequate to support the project (sic) growth within VITs.
The applicant argues that the conditions to its renewal are particularly disproportionate and inappropriate given what it claims will be significant adverse consequences it is likely to suffer as a consequence of the conditions.
The applicant also contends that the reasons presented by the respondent in support of its decisions as set out in the Assessment Report are flawed. It cites as an example the respondent’s stated concern regarding the applicant’s staffing profile in the context of future growth plans. The applicant argues that it is unreasonable to expect that substantial staff resources would be engaged and resourced prior to approval of its proposed expansion. Counsel for the applicant referred the Tribunal to the affidavit of Mr Surapaneni where it is asserted that the applicant has maintained staffing standards for both teaching and student support services at a high level. The applicant contends this ought to provide a basis for the Tribunal concluding at the final hearing that the applicant’s resourcing is above industry accepted practice and benchmarks and that the applicant will continue to ensure appropriate staffing resources are in place in line with future growth. The applicant also referred the Tribunal to the applicant’s workforce plan which sets out specific targets for progressive increases in both academic and support staff in line with projected growth.
In addition, the applicant contends that other findings upon which the respondent justified making its decision to impose conditions 1 through 3 have already been substantially addressed and remedied as set out in Mr Surapaneni’s affidavit (and in particular the response table and associated reports found in the exhibits to the affidavit).
The Tribunal expresses no view as to whether or not the applicant can be said to have a “strong chance” of succeeding in its review application. That is not an assessment required to be undertaken at this stage of the proceeding. However, having considered the materials before it, the Tribunal is satisfied that the case as asserted by the applicant, if ultimately substantiated, would provide a realistic prospect of success at the final hearing. There are a number of reasons for this conclusion.
The Tribunal accepts that the respondent is not making specific allegations of current non-compliance but rather has what it describes as a “residual concern” about the potential for non-compliance either presently or in the future as student numbers grow. The respondent describes its concern, and therefore the need to impose the conditions on renewal, as being due to a lack of evidence demonstrating the effective and sustained implementation of changes the applicant has adopted. It is necessarily a very subjective assessment and one which the Tribunal is now charged with responsibility to make, standing in the shoes of the regulator.
The Tribunal accepts that the affidavit of Mr Surapaneni details a number of measures that the applicant has taken in response to the respondent’s claims of non-compliance. These steps include having engaged an external expert to provide recommendations for improvement, having developed a remediation plan as well as substantive progress against that plan. Mr Surapaneni’s affidavit also detailed the development of a workforce plan providing for specific targets to increase academic and support resources to support growth in student numbers.
While the respondent continues to express a concern about the confidence it can have regarding the reliability of the responses implemented by the applicant, that is a judgment that the Tribunal will have to make and one which can only be done having regard to all of the evidence presented at the final hearing. It is certainly at least arguable that the applicant has done all it needs to do in response to the concerns raised by the respondent and that the imposition of conditions of renewal in that context are disproportionate to any perceived risk that could be said to exist.
Consequences for the applicant of the refusal of a stay
The applicant asserts that a decision not to stay the imposition of condition 4b has the potential for significant adverse consequences. It contends that the effect of the condition is to require the applicant to reduce student numbers which will result in substantial loss and damage. The affidavit of Mr Surapaneni asserts that the consequence of the imposition of the condition would include:
a)The need to cancel the enrolment of more than 300 students who are currently studying with the applicant;
b)The need to cancel the enrolments of a substantial number of students who are enrolled but have not yet commenced the course;
c)The need to cease the application process for numerous other prospective students whose application to enrol are at various stages of assessment;
d)The need to make some staff redundant;
e)The potential to suffer adverse reputational impact in the market, including among education agents and prospective students;
f)The potential to lose an established pipeline of student applications which in turn would impact on future enrolment numbers;
g)The potential for all such adverse consequences to in turn impact on the applicant’s financial viability, sustainability and profitability which could then also indirectly impact on the applicant’s capacity to continue to ensure ongoing compliance with the Standards in the future.
In addition, the applicant argues that the imposition of the condition will effectively render pointless the applicant’s current application to add campuses in Geelong and Adelaide under its Education Services for Overseas Students Act 2000 (the “ESOS Act”) registration which is currently before the respondent for its determination. The applicant argues that it has invested very significantly in order to be prepared for the expansion proposed and that, as the imposition of condition 4b means that such expansion cannot currently proceed, that investment will have been wasted, causing the applicant further substantial loss and damage.
The applicant contends that given the potential adverse consequences it is likely to suffer, the imposition of the condition is disproportionate to any perceived risk of non-compliance and beyond regulatory necessity and is therefore inappropriate. The applicant contends that in setting the student number cap included in condition 4b, the respondent was under the false apprehension that such a cap would not prejudice the applicant as it was not aware that the applicant had more than 2550 active students at that time.
The respondent rejects these contentions. The respondent contends that it is appropriate for the Tribunal to distinguish between adverse consequences that flow from the imposition of the condition itself and adverse consequences of the broader regulatory and economic environment in which the applicant is currently operating. The respondent contends that the applicant has significantly overstated the potential for the imposition of the condition to impact on enrolment. The respondent challenges the accuracy of the 300 cancellations figure put forward by the applicant. The respondent also contends that Mr Surapaneni‘s statistical analysis is flawed on the basis that the projected future student numbers assumes a 62% conversion rate, which the respondent contends does not accurately reflect the conversion rate during the period in which COVID-19 has impacted student numbers. The respondent contends that Mr Surapaneni’s projections of future revenue growth should be viewed “somewhat sceptically” for this reason.
In addition, the respondent contends that the future growth potential of the applicant is also constrained to some degree by the existence of the ESOS Act cap of 2800 international students. The respondent contends that the financial impact of the condition should not be confused with the impact the ESOS Act cap may also have on the applicant’s future growth potential. Further, the respondent contends that following the respondent’s decision, including the imposition of the condition, the applicant failed to act prudently to restrict enrolments in accordance with the condition, which has left it further exposed to potential adverse consequences due to its need to comply with the condition. While the respondent does not suggest that the applicant has acted in breach of the condition, it does contend that it would be inappropriate for the Tribunal to have regard to hardship that has, in part at least, been brought about by the applicant’s own conduct.

The respondent also rejects the applicant’s contention that staff redundancies will be caused by the imposition of the condition. The respondent contends that any risk of redundancy is more likely to be the result of the impact of the pandemic downturn, rather than the imposition of the condition itself. The respondent contends that the applicant’s enrolment numbers are below the current ESOS cap and therefore the inability to retain existing staffing levels is not as a consequence of the imposition of the condition but rather due to broader circumstances.
The respondent also rejects the applicant’s contention that is likely to suffer reputational damage as a consequence of the condition asserting that there is no evidence of reputational damage since the decision was first published, which was approximately two months ago. The respondent also contends that public awareness of the respondent’s decision is nonetheless important from a public interest perspective and the need for potential students to be made aware of the regulatory conditions imposed.
The Tribunal accepts that the applicant’s estimate of the likely impact of the imposition of the condition on student numbers would appear to be somewhat overstated. It accepts that the impact, on the applicant’s own evidence, would appear to be less than the 300 asserted for the reasons put forward by the respondent. It also accepts that the conversion rate adopted for the purpose of projecting future enrolments in the absence of the condition does not appear to fully account for the impact of COVID-19 as reflected in the numbers for March and July of 2020.
Notwithstanding these conclusions, the Tribunal accepts that there is likely to be a need to curtail student numbers as a consequence of the imposition of the condition. More specifically, the Tribunal accepts that the imposition of the condition would likely mean that a number of students who are currently enrolled, but who have not yet commenced or who are in the process of enrolling but who have not yet completed that process, would not be able to commence studies with the applicant while it remains subject to the cap. While the Tribunal cannot be precise about the likely number of students affected given the variables involved, it is satisfied that the number of students impacted would not be insignificant.
The Tribunal is also satisfied that, strictly enforced, the condition has required a curtailing of some students who were both enrolled and commenced. This is so notwithstanding the respondent’s concession that it was not its intent in imposing the condition. The Tribunal accepts the applicant’s evidence that its numbers were in excess of the cap at the date on which the condition was imposed and also at various dates thereafter, including at 14 August 2020 as notified to the respondent by letter of the same date. The Tribunal makes no criticism of the applicant in this regard. It was clearly unaware of the condition on the date it was imposed and, in the Tribunal’s view, has engaged with the respondent since being notified of the condition to respond to the issue in a responsible and appropriate manner.
The Tribunal accepts that the curtailing of student numbers is likely to have a significant adverse impact on the applicant. The precise nature and extent of that impact is difficult to project and will depend to some degree on student completion rates, the actual conversion of offers to enrolment as well as the time taken to make a final determination in the matter. However, the Tribunal accepts the evidence included in Mr Surapaneni’s affidavit that the student cap could potentially have a significant impact on the applicant’s revenue and profitability position. The Tribunal also accepts that the applicant has invested approximately $8.5 million in development in anticipation of student number growth and campus expansion and that the student cap makes the prospect of the proposed expansion problematic, at least in the shorter term. The Tribunal is satisfied that by imposing the student cap there is a genuine risk that some of the applicant’s investment in securing campuses and in market development in anticipation of its expansion will be wasted.
The Tribunal also accepts that the student cap will:
(a)have an impact on staffing requirements, which may result in the need to make some marketing and administrative staff redundant; and
(b)have adverse reputational impact amongst both students and educational agents and put at risk the applicant’s investment in establishing a pipeline of potential students for future enrolment.
In the Tribunal’s view there is a genuine risk that some of the adverse consequences for the applicant may not be able to be recovered in the shorter term. In the current very difficult economic circumstances, where financial viability is recognised as a substantive issue generally across the sector, this is an impact that must be weighed very carefully against the other relevant considerations.
For these reasons, the Tribunal is satisfied that the imposition of condition 4b pending finalisation of the review is likely to have significant adverse consequences for the applicant from both a financial and reputational perspective.
This consideration has weighed significantly in the mind of the Tribunal in reaching its decision on the granting of the stay.
The public interest
The respondent contends that imposing condition 4b as a measure to mitigate its assessment of the risk of non-compliance is consistent with the public interest and more specifically the protection of the interests of prospective students, as well as the wider public interest in the protection of Australia’s reputation for the provision of quality higher education.
The respondent argues that any stay of the condition would expose prospective students to a risk of unsatisfactory educational outcomes. The respondent refutes any suggestion of prejudice to prospective students arguing that the evidence before the Tribunal does not demonstrate that there are no other comparable courses that would be available to them.
The respondent contends that the imposition of the condition is consistent with protecting the wider public interest by ensuring that:
(a)the integrity and high standards of the Australian higher education sector is protected;
(b)confidence in Australian educational service providers is maintained; and
(c)other industry participants are informed of regulatory action taken by the regulator and, as a consequence, deterred from engaging in conduct of a similar kind.
The respondent also argues the public interest consideration should outweigh any prejudice or hardship to the applicant because of the primacy given to the public interest in the legislative scheme.[2]
[2] See McLean v Australian Securities and Investments Commission [2016] AATA 22 at [21]-[22].
The applicant contends that the public interest consideration needs to be assessed from both the respondent’s and applicant’s perspective. It argues that the public interest is also served by ensuring strong, financially viable and compliant higher education providers continue to operate. The applicant noted in its written submissions that:
Higher education providers must, rightly, undertake a rigorous application for registration which is not easy to achieve. They are not easily replaced. They provide an important service to students, both domestic and international and are an increasingly important part of Australia’s economy.
In that context the applicant contends that it is in the public interest for the applicant’s business to remain profitable and sustainable and that there is no justification for the imposition of the condition which could have a significant adverse impact on the applicant. The applicant contends that this is especially so in circumstances where there is no specific allegation of non-compliance.
In addition, the applicant contends that the public interest would not be served by potentially interrupting educational services being provided to existing students or making staff redundant, particularly in the very difficult current economic circumstances.
The applicant also contends that the imposition of the condition as currently worded is also not in the public interest in the sense that it is vague, ambiguous and was imposed without a proper understanding of the potential impact the condition could have for the applicant. The applicant contends that the use of the word “headcount” is vague and open to differing interpretations, has the potential to confuse and is not an example of a well worded condition with clearly understood impacts consistent with best practice conduct of a regulator. The applicant argues it is not in the public interest to facilitate the imposition of a condition of that kind.
The Tribunal rejects any suggestion that the public interest consideration will always be determinative in a case such as this. While the Tribunal accepts that the protection of the public interest is a primary function of the regulator and objective of the Tertiary Education and Quality Standards Agency Act 2011 (the “TEQSA Act”), the public interest remains nonetheless one of a number of factors that must be carefully weighed in reaching a conclusion as to whether or not to grant a stay. In addition, the public interest cannot be viewed solely from the perspective of the need to protect students and industry from sub-standard education providers. It also extends to ensuring consistency in regulation, the promotion of competitiveness as well as the encouragement and promotion of a higher education system necessary to meet Australia’s social and economic needs. This broader public interest perspective is reflected in the stated objects of the TEQSA Act.[3]
[3] See specifically s 3 of the TEQSA Act.
The difficulty the Tribunal has with the respondent’s position on the public interest argument more broadly is that this is not a case where there is a specific allegation of non-compliance that presents an immediate and material risk to students both existing and prospective. Rather, it is a case where the respondent has identified a residual concern about possible non-compliance either currently or at some point in the future. While the Tribunal does not doubt that the respondent has acted in good faith in seeking to mitigate what it perceives as a risk of non-compliance, the fact that it is not able to point to a specific example of actual non-compliance must temper to a significant degree the public interest consideration from a student protection perspective.
In addition, the Tribunal accepts that there are features of the condition itself and the manner in which it was adopted that also further undermine the respondent’s public interest argument.
First, it is not clear on the face of the materials precisely how the respondent determined the amount of the student cap included in the condition. The Tribunal accepts the applicant’s contention that it is most likely that the figure was determined on the misapprehension at the time that the number arrived at was slightly above the existing student numbers and prospective numbers based on an estimate of expected graduations. Further, that it was decided upon with the intention of limiting the applicant’s growth for the purpose of allowing the regulator the opportunity to develop a greater confidence in the capacity of the applicant to ensure compliance as student numbers grow. If that is correct, it would strongly suggest that the respondent was, at the time it imposed the condition, relatively comfortable with the applicant being able to provide its services to existing students in accordance with the Standards. This reinforces the speculative nature of the perceived risk the condition is designed to mitigate, which in turns undermines the potency of the respondent’s public interest argument. That is especially so when weighed against the potential for the condition to result in significant adverse consequences for the applicant.
The Tribunal also accepts that the wording and, in particular, the use of the word “headcount” is vague and has the potential to confuse. In the Tribunal’s view, the respondent has in effect conceded as much by proposing an amendment to the wording of the condition to remove the term “headcount” and substitute it with “enrolled and commenced”. The Tribunal also accepts that the condition was imposed without the respondent having a proper understanding of the potential impact it could cause the applicant or have for existing or prospective students of the applicant. The Tribunal accepts the applicant’s contention that there is a public interest in not facilitating the imposition of vaguely worded conditions that have the potential to confuse or to facilitate the imposition of conditions in circumstances where the consequences of the condition are not sufficiently understood. Again, in this sense the public interest consideration is against the respondent.
The Tribunal also accepts that the condition was imposed on the applicant without any prior notice of an intention to do so. Had the respondent advised the applicant of its intention, there would have been an opportunity for the applicant to explain the potential consequences of the condition to the respondent as well as to provide more accurate advice on anticipated student numbers. This may have avoided some of the deficiencies identified above. Of course, it may be appropriate in some circumstances to impose a condition without notice, for example if there is an identified specific and urgent risk that needs to be responded to, but that was certainly not the situation in the circumstances of this case.
The respondent argues that the condition was not without notice because it had previously indicated to the applicant that it may not renew the applicant’s registration at all. The Tribunal does not accept that explanation. While it is true to say the applicant was on notice about concerns the respondent had regarding its compliance, and that there was a risk its registration might not be renewed, there was no prior notice in relation to the capping of student numbers itself and the implications for the applicant flowing from that decision were quite distinct. The absence of prior notice also denied the respondent the opportunity to gather more complete information regarding the applicant’s prospective student pipeline and therefore better informed itself in setting a student cap. In the Tribunal’s view, the imposition of the condition in this manner further mitigates, to some degree, the respondent’s public interest argument.
In addition, as noted above, the effect of this decision is that some students are likely to have their education plans with the applicant disrupted as a consequence of the need for the applicant to restrict its numbers. While the Tribunal accepts that there may be other similar course offerings elsewhere that students can take up, any interruption to students education plans is particularly significant in the current environment due to the disruption most students have already experienced this year due to the implications of COVID-19. Again, this works against the respondent.
Far from being determinative in this matter, the Tribunal is satisfied that if the public interest consideration can be said to be in favour of the respondent at all, it is heavily tempered for the reasons set out above.
The consequences for the respondent in carrying out its functions depending upon whether a stay is granted or not
It was accepted by the parties that a decision either way on this matter is unlikely to have any significant adverse consequences for the respondent.
Whether the application for review will be rendered nugatory stay were not granted
The respondent contends that there is no evidence before the Tribunal that provides a reasonable basis to conclude that the review decision will be rendered nugatory if the stay is not granted.
The applicant does not contend that the review decision will be rendered nugatory in its entirety if the stay is not granted. It accepts that the applicant’s ongoing viability is not directly at risk. It does however contend that there is the potential for serious adverse consequences which may not be able to be fully recovered at least in the short term as set out in the section dealing with consequences for the applicant above.
While the Tribunal accepts that there is the potential for the condition to result in some adverse consequences for the applicant which may not be able to be fully corrected in the short term, it accepts the respondent’s contention that this does not equate to the decision under review being rendered nugatory. The Tribunal has already factored in the potential adverse impact on the applicant in the consideration dealing with that issue above.
Other considerations
The applicant contends that another relevant consideration to be weighed up by the Tribunal is the current impact of COVID-19 on the applicant and the sector more generally, in particular, the Australian government’s decision to prohibit international students from coming to Australia this year. In that context, the applicant argues that the potential of online and domestic students, not subject to the ESOS Act, is an important growth opportunity for a business such as the applicant which can help alleviate the very difficult present economic circumstances. In this context the applicant argues that it is disproportionate to any concern that has been raised by the respondent to impose a condition which limits such a growth opportunity for an education provider in the position of the applicant.
The Tribunal accepts that the present difficult economic circumstances are relevant and emphasise the need for the Tribunal to weigh very carefully any adverse consequences for the applicant that flow from the imposition of the condition and it has done so as set out in the section dealing with the adverse consequences for the applicant above.
Conclusion
Having considered the interests of the parties and weighed each of the relevant considerations carefully, the Tribunal is satisfied that the prospects of success and consequences for the applicant outweigh the other considerations in the circumstances of this application.
For these reasons, the Tribunal considers it appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review that a stay in respect of condition 4b be granted pending finalisation of this matter.
DECISION
Pursuant to section 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth), the Tribunal orders that the operation of Condition 4(b) of the Respondent’s decision of 29 June 2020, imposed on 3 July 2020 is stayed pending the final hearing and determination of the application for review in this matter.

I certify that the preceding 64 (sixty-four) paragraphs are a true copy of the written reasons for the decision herein of The Hon. Matthew Groom, Senior Member

..................[sgd].....................
Associate
Dated: 2 October 2020

65.     Dates of hearing:

17 & 22 September 2020

Counsel for the Applicant:

Solicitors for the Applicant:

66.     Mr T Mitchell

67.     GPZ Legal

68.     Counsel for the Respondent:

69.     Solicitors for the Respondent:

70.     Mr P Knowles

71.     Australian Government Solicitor