"..... leave it to the judgement of the FE......."
Quite. If the Regulator can't trust its Examiners, why appoint them in the first place?
On the subject of ATPL Examiners, a pre- requisite for this qualification should be an airline background.
The flying club mentality prevails in parts of CASA. Much of the instructor approval and renewal process seems to be skewed towards the old Grade One type stuff, with some CASA inspectors having no real world knowledge of how airlines operate.