3 Bears Childcare Centre Pty Ltd v Secretary, Department of Education; Apple Bear Pty Ltd v Secretary, Department of Education; Hi5 Childcare Pty Ltd v Secretary, Department of Education
[2024] NSWCATAD 204
NCAT Administrative and Equal Opportunity|2024-07-02
The respondent gave reasons for its decision to cancel each applicant's authorities to operate child care centres. I have had regard to the individual decisions, however, they are in some respects the same. A considerable volume of information was provided to me with respect to the past breaches of the National Law and the National Regulations. I have regard to all of it, and I will not set it out here in detail. Given the urgent nature of the stay application, noting that the cancellation decision comes into effect on 4 July 2024, I have set out a summary of the more significant and concerning conduct of the applicant's, Mr Trang and the staff.
Hi 5 Childcare Centre Pty Ltd (Hi5) is an approved provider under the National Law (PR-40006179). It holds service approval SE-00008271 which authorises it to operate 3 Bears Childcare and Preschool, located at 107 Lord Street, Cabramatta (3 Bears Cabramatta). 3 Bears Cabramatta is authorised to provide education and care to a maximum of 36 children at any one time.
Apple Bear Pty Ltd (Apple Bear) is an approved provider under the National Law (PR-40007017). It holds service approval SE-00006429, which authorises it to operate 3 Bears Childcare and Preschool Fairfield, located at 99 Wolseley Street Fairfield (3 Bears Fairfield). 3 Bears Fairfield is authorised to provide education and care to a maximum of 45 children at any one time.
3 Bears Childcare Centre Pty Ltd (3BCC) is an approved provider under the National Law (PR-40004292). It holds service approval SE-00006213, which authorises it to operate 3 Bears Childcare, located at 61 Prospect Road Canley Vale (3 Bears Canley Vale). 3 Bears Canley Vale is authorised to provide education and care to a maximum of 54 children at any one time.
In the folder of documents, the respondent provided evidence of numerous inspections, assessments and complaints in relation to the operation of each of 3 Bears Cabramatta, 3 Bears Fairfield and 3 Bears Canley Vale, from March 2023 to February 2024.
The respondent's contention is that where Mr Trang is the sole controlling mind of each company, the evidence of one of the applicants engaging in, or failing to correct, conduct by its staff that breaches the National Law, is relevant to the question of the fitness and propriety of each of the individual companies to continue to hold their approval to operate.
Mr Trang confirmed at the hearing that he was, in effect, the controlling person of each company. This was not in dispute.
Each of the cancellation decisions relied on s 31(a), s 31(b) and s 31(e) of the National Law which provide as follows:
(a) the Regulatory Authority is satisfied that the approved provider or a person with management or control of an education and care service operated by the approved provider is not a fit and proper person to be involved in the provision of an education and care service,
(b) the Regulatory Authority is satisfied that the continued provision of education and care services by the approved provider would constitute an unacceptable risk to the safety, health or wellbeing of any child or class of children being educated and cared for by an education and care service operated by the approved provider,
(e) the approved provider has breached a condition of the provider approval.
The decisions relating to two of the applicants, include the following conduct which the respondent contends to have occurred:
1. Intentionally over enrolled students at the child care centres, which lead to the lawful student numbers and staff to student ratios being exceeded;
2. without parental consent, moved children between the child care centres, to minimise over enrolling students, and in an attempt to avoid detection during times of inspection by officers of the respondent;
3. concealed from officers of the respondent the true student numbers at each centre, including provided care for children at Mr Trang's non approved personal residence;
4. taken children outside of the centres, without permission under the guise of "excursions" to public libraries and supermarkets, apparently for a similar purpose;
5. financially inducing staff by way of additional renumeration to over enrol students. Conversely, threatened staff to a reduction in pay if over enrolment numbers were not maintained;
6. directing staff to use "upper floor as additional childcare centre";
7. making parents wait for the return of children from one centre to another;
8. use of a highchair as a restrictive practice/restraint on children;
9. transferring children with a disability or inability to speak to non-approved areas, on excursions or other centres (without parental approval);
10. wilfully classifying over enrolments as "emergency placements" without evidence;
11. penalised staff when they discussed operational inadequacies with other staff members;
12. failed to notify the respondent of serious incidents, including injuries to children and assaults;
13. failed to keep proper injury records and incident report registers;
14. failed to properly, or at all, attend to treating serious injuries to children whilst at the centre;
15. threatened staff via text message that "if there is one more complaint from parents or one more child pulling out [the applicant] will terminate staff";
16. sent a text message to staff on 7 January 2023 directing the organisation's "transport team" to transport the children whose parents were "less problematic", out of the centre to ensure appropriate staff to child ratios were not exceeded;
17. on 11 May 2023, a complaint was made about 3 children being placed in a van and parked on the street to escape an inspection by the respondent, without the children's water bottle and backpack;
18. targeted vulnerable families and overcharging child care subsidy by claiming their five days' child care subsidy entitlement whilst only providing 3 days care;
19. failed to have adequate risk assessments and authorisations completed for excursions and transporting children; and
20. failed to verify that staff had working with children checks.
The records include the following alleged breaches.
Firstly, on 17 October 2019, problems with electrical maintenance exposing wires above a handwashing sink. More recently in February 2024, inspections revealed allegations of serious and unacceptable risk to children in failing to identify a diagnosed allergy's and treating a child with a topical cream for suspected anaphylaxis.
3BCC was found by the respondent to have engaged in over enrolling students.
All of the alleged breaches were investigated over an extended period. Each of the respondents were given a show cause notice and provided multiple opportunities to remedy the breaches and, or, demonstrate that the alleged conduct had not occurred or was in some circumstances not established.
It is important to note that Mr Trang in his submissions made statements to the effect:
Q: What would you like to say about the allegations of moving children between centres:
A: No reason to move children from centre to centre. I did not do that.
I deny that I moved children from centre to centre.
I note this is in direct contradiction to statements provided to the respondent by educators, text messages from Mr Trang to his staff and complaints by parents to the applicants. After the respondent took me to evidence which contradicted Mr Trang's statements, Mr Trang said in reply:
I deny all of what Mr Li mentioned. Somethings we made mistakes
One of the staff is Dang Dang, she is responsible for CCS entries and enrolment issues. I told her we are not allowed to over enrol children and to put them on a waiting list, or enrol in another centre.
TQ: why have you not put a statement from Ms Dang
TQ: Did the over enrolling and moving children between centres happen more than 12 months ago
It happened but it is grey area, now it is crystal clear.
We have stopped transport in last 12 months to avoid confusion.
Mr Trang relied upon enrolment records for the last 12 months which he said show there has been no over enrolment. Mr Trang was unable to provide the same records for the period which the respondent raises concerns and said "we have changed computer systems" and we no longer have the records.
Mr Trang said he denies that he incentivised staff to over enrol students. However, in a text message to staff he proposed to financially incentivise the educators to enrol students over the approved number of students allowed.
Mr Trang's inability to make reliable submissions which were consistent with the documentary evidence caused me significant concern. His tendency to incorrectly state the truth, or indeed deny something occurred and then say that it did, and then justifying his denial by saying "that is a grey area" left me doubting the reliability of his submissions generally. Mr Trang when presented with contradictory documentation attempted to shift the blame on past employees or computer difficulties. I was cautious in respect of the weight I gave to his submissions for these reasons.
I have taken into consideration that one of the applicants had 91 recorded breaches of the National Law and the National Regulations between 10 February 2014 and 21 February 2024. Another had 363 recorded breaches over a similar period.
It is not in contest that by 10 July 2023, Mr Trang had been excluded from attendance at the child care centres after being issued a notice under s 171 of the National Law. He has since been found by the respondent to have breached that notice.
The applicants say the stay should be granted because there is no immediate or potential risks to the safety, health and wellbeing of children. The applicants have retained the services of an independent consultant Ms Ribarovski and as a result have implemented a number of changes to their business to ensure ongoing compliance with the National Law and the National Regulations.
Mr Trang contends that in respect of each of his companies, most of the alleged breaches occurred some time ago and due to the significant improvement in their conduct the Tribunal should have no concern about the risk to the safety, health and wellbeing of children. The applicants rely upon petitions, purportedly signed by parents of children enrolled at the centres and staff. There are letters also provided in support of the stay application. I note the pro-forma nature of the letters and petitions. However, I take them at face value and give the due weight in respect of this application. There is no evidence to the contrary.
[2]
Consideration
In considering the factors set out in the cases cited above at [18], I bear in mind the statutory context of the decision subject to the application for review and bear in mind the objectives and guiding principles of the National Law, which are set out in s 3.
Generally, the respondent should be taken to be entitled to the benefit of the decision at first instance unless the applicant can demonstrate that it is appropriate to grant a stay of the orders made.
[3]
Is a stay reasonably necessary to secure the effectiveness of the appeal
Mr Trang made very broad and unsupported submissions on this point. Despite me advising Mr Trang on 20 June 2024, that he should consider adducing evidence to substantiate the possible financial demise of the centres if a stay was not granted, he has not filed any evidence in this regard. The applicants have not demonstrated, apart from a general statement, that the services may not be able to continue even if the applicants succeeds in having the decision to cancel the service approval set aside.
The applicants have not demonstrated that a stay is necessary to secure the effectiveness of the appeal.
[4]
What is the strength of the applicant's case
Mr Trang made many statements about the alleged breaches and conduct of the staff and management of the companies. However, he filed no statement from neither himself, nor any other person, answering the alleged breaches or explaining his conduct. To the contrary, the submissions he made concerning some of the most serious conduct was contradicted in the respondents documentation. Mr Trang then attempted to withdraw, or justify his previous denial with a flimsy explanation, or, an attempt to shift blame. I do not have sufficient information to assess the strength of the case in relation to the history of the facility, though it seems from Mr Trang's submissions and the engagement of Ms Ribarovski, that measures have been taken to address some, but not all, of the issues.
Mr Trang in his submissions made reference to the fact that he was in the process of selling the companies and that he hopes the sale would be concluded in 60 days. While not fully explored at this interim stage, his submissions seemed to be relating the substantive applications being filed to extend the cancellation decision (and this stay) to allow for the companies to be sold and ownership transferred. In considering the object of the Act, this does not weigh in favour of the granting of a stay. The statement casts doubt upon the purpose and strength of the substantive administrative review applications.
I also have a concern that the applicants have filed little, if any, evidence to challenge any of the breaches of the National Law and National Regulations the respondent has found to be established. Likewise, there is little foundation established, at least on a preliminary basis, that the applicants, or any one of them, remain fit and proper for approval. This goes to the very heart of the respondents' concerns.
[5]
Balance of convenience
I have taken into consideration that by not granting a stay a significant number of families and many children will be affected. It is without question that the sudden inability of the applicants to offer a service would be a significant inconvenience for many of those families. The respondent submits that the serious concerns it holds for child safety if the stay is granted should be the prevailing consideration.
On the information before me, I am not satisfied that the operation of the service(s) could be addressed on an interim basis by the imposition of conditions. This is because I am not satisfied that the balance of convenience can be consistent with s 3(a) of the National Law. There are far too many serious alleged breaches. Mr Trang agreed to the some conduct occurring which related to a breach, such as over enrolling of children, despite his previous denials. The unacceptable risk to the health wellbeing and safety of the child can best be protected by refusing a stay.
[6]
Public Interest
The public has an interest in the availability of childcare, but it must be childcare which is focussed upon the safety, health and wellbeing of the children. The educational and development needs of the children need to be met. I accept that the respondent's concerns are serious, ongoing, well researched and documented. I do not accept the applicants' contention that the respondents concerns are all historical in nature. Nor do I accept the applicants' contention that there is no ongoing risk to the health and safety of children at the centres. Given my findings, I am not satisfied that the applicants have the capacity to provide childcare in accordance with the National Law, even if conditions were included in the stay order.
It is not in the public interest to grant a stay of the cancellation decisions after 6pm on 5 July 2024.
[7]
Conclusion
I am not satisfied that a stay of the cancellation decision(s) is consistent with the National Law to ensure the safety, health and wellbeing of children attending education and care services at the relevant centres paramount, after 6pm on 5 July 2024. Nor is such an order consistent with the guiding principles of the National Law, namely that the rights and best interests of the child are paramount. I consider the ongoing risk of serious harm to the children enrolled at the centre is unacceptable which, outweighs the other interests, including the convenience of families and staff at the centre(s).
At the hearing of the stay application, I concluded that it was not appropriate to grant a stay of the decision to cancel the service approval, after 6pm on 5 July 2024. The only reason I granted a very short stay was to allow families to make alternate arrangements for their children after the conclusion of the week ending 5 July 2024.
[8]
Orders
My orders are as follows:
1. The decision made by the respondent on 4 June 2024 is stayed until 6pm on 5 July 2024.
[9]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 25 July 2024
The principles applicable to an application for a stay of the cancellation of a service approval were set out in Mother's Choice Family Day Care Pty Ltd v Secretary, Department of Education [2020] NSWCATAD 194 at [16]-[18]:
16. In Bentran Pty Ltd v Sabbarton [2014] NSWCATAP 37 Wright J at [9] summarised the principles applicable to the exercise of the Tribunal's discretion to decide whether a stay of a decision should be granted under s 43 of the NCAT Act (citations omitted):
(1) Generally a successful party is entitled to the benefit of the decision or orders that the party has obtained at first instance, but a stay may be granted where the applicant has demonstrated an appropriate case to warrant the exercise of discretion in its favour - s 43(2) and (3) of the Act.
(2) In practical effect the onus is on an applicant for a stay to make out a case that it is appropriate for the court to make such an order.
(3) The mere lodgement of the notice of appeal is insufficient, of itself, to demonstrate that it is an appropriate case to warrant the granting of a stay.
(4) An order staying the operation of a decision or orders will generally be appropriate where such an order is reasonably necessary to secure the effectiveness of the appeal - s 43(3) of the Act. This is similar to, if not the same as, the considerations applied by the Courts that where there is a risk that an appeal will prove abortive if the applicant succeeds and a stay is not granted, or where unless a stay is granted an appeal will be rendered nugatory, the discretion should generally be exercised in favour of granting a stay.
(5) The Tribunal may also take into account the strength or otherwise of the case of the party seeking the stay. This consideration may be particularly relevant when it is plain that an appeal, which does not require leave, has been lodged without any real prospects of success and simply in the hope of gaining a respite against immediate execution of the decision.
(6) The Tribunal's power to grant a stay includes a power to make such an order subject to such conditions as the Tribunal specifies.
(7) In exercising the discretion, the Tribunal will also weigh the balance of convenience and the competing rights of the parties and may impose appropriate conditions so as to achieve a result that is fair to all parties.
(8) Finally, the overriding principle in an application for a stay is to ask what the interests of justice require.
17. In applying these principles, it is necessary to have regard to the statutory context in which the decision was made (Liu v Chinese Medicine Council of NSW [2019] NSWCATOD 13). In the context of the National Law, this includes that the rights and best interests of the child are paramount and that best practice is expected in the provision of education and care services.
18. In addition, in New South Wales Bar Association v Stevens [2003] NSWCA 95 Spigelman CJ explained that, in an application for a stay where the issues involve the protection of the public, the public interest is entitled to significant weight.