HEARD : 13 DECEMBER 2005, 24, 25 JANUARY 2006 FURTHER WRITTEN SUBMISSIONS 7, 17 FEBRUARY 2006

DIRECTOR GENERAL, DEPARTMENT FOR COMMUNITY DEVELOPMENT

Administrative law ­ Child care licence ­ Refusal to renew ­ Jurisdiction of Tribunal to extend licence pending review ­ Whether power to stay operation of decision includes power to renew licence ­ Licence expired by effluxion of time ­ Whether licensee capable of providing child care service in accordance with regulations ­ History of breaches of regulations

Administrative Appeals Tribunal Act 1975 (Cth), s 41, s 41(2)

Community Services (Child Care) Regulations 1988 (WA), reg 13, reg 13(1), reg 13(4), reg 14, reg 14(1), reg 14(5), reg 29, reg 30, reg 30(1), reg 35(1), reg 37, reg 37A, reg 37(1), reg 56(b), reg 58, reg 58(b), reg 58(b)(i), reg 62, reg 62(c), reg 67,

Community Services Act 1972 (WA), s 17B, s 17B(1), s 17B(3), s 17B(6)

Interpretation Act 1984 (WA), s 18

reg 67(1), reg 67(3), reg 68, reg 69B, reg 69B(1), reg 71(1)(d), reg 71(3)

State Administrative Tribunal Act 2004 (WA), s 25, s 25(2), s 25(4), s 29, s 87(1)

Respondent : Mr TC Russell (on 13 December 2006) and Ms LA Eddy (24, 25 January 2006)

Civil Aviation Safety Authority v Hotop (2005) FCA 1023

Shi v Migration Institute of Australia Ltd [2003] FCA 1304; (2003) 134 FCR 326

Yolbir v Administrative Appeals Tribunal [1994] FCA 910; (1994) 48 FCR 246

1 Cuddles Group Pty Ltd (Cuddles Group) operates 12 child care centres in Western Australia. One of those, Cuddles Maddington, is located at 12 Ballard Place, Maddington. Cuddles Maddington has operated under a licence issued with the Community Services Act 1972 (WA) for around six years. Licences are required to be renewed every two years.

2 On 17 November 2005, the Department for Community Development (the Department) advised Cuddles Group that it proposed to refuse to renew the licence and advised the company that it could make submissions about the proposed refusal. The company did make submissions on 28 November, but on 8 December the Department confirmed that it would not renew the licence which was due to expire on 13 December 2005. Cuddles Group made an urgent application to the Tribunal for a review of the decision to refuse renewal and for an order preventing the Department's decision taking effect until a full review of the decision could be heard.

3 The Department argued that the Tribunal's power to make an order staying the operation of a decision could not be used to permit the company to continue operation after its licence had expired. Alternatively, it argued that if the power did exist, the reasons for which the decision had been taken were such that the stay should not be granted in any event.

4 The Tribunal concluded that s 25(2) of the State Administrative Tribunal Act 2004 (WA) did give the Tribunal the power to make orders which had the effect of enabling the company to continue to trade up until the time its application for review was heard and determined. It concluded that, given the significant prejudice that would be suffered by the families using the centre and the dire consequences to the employees and the business if the child care centre could not continue to operate until the hearing of the case, it was desirable that the operation of the Department's decision should be stayed.

5 The matter was then programmed to a hearing. At the hearing, the Department relied upon a history of alleged breaches of the regulations by the operators of Cuddles Maddington, including a breach for which the centre's operator was successfully prosecuted in April 2005. The Tribunal examined the circumstances of each alleged breach, most of which were admitted by the applicant, and the applicant's response to each breach. It concluded that the breaches did not demonstrate that the applicant is incapable of providing a child care service in accordance with the regulations, and that the licence should be renewed.

6 On 13 December 2005, I heard an urgent interim application under s 25(2) of the State Administrative Tribunal Act 2004 (WA) (the SAT Act) for an order staying the operation of a decision of the respondent not to renew the applicant's licence issued under s 17B(1) of the Community Services Act 1972 (WA) (the CS Act). The decision not to renew the licence was communicated to the applicant on 8 December 2005. The licence was due to expire on 13 December 2005.

7 The matter was listed on an urgent basis with limited time for argument. The respondent contended that s 25(2) of the SAT Act did not give the Tribunal power to renew the licence which would simply expire by the effluxion of time that afternoon. The respondent also argued that, if power did exist, the operation of the decision should not be stayed having regard to the merits of the decision.

8 After hearing submissions, I made an order that the operation of the Department for Community Development's (the Department) decision made on 8 December 2005 be stayed, and the operation of the licence be extended until determination of the applicant's application for review. The renewal was subject to a condition that the applicant observes reg 30 of the Community Services (Child Care) Regulations 1988 (WA) (the Regulations) and does not engage in the practice of backfilling as that term was described in an affidavit that had been sworn in support of the application for interim relief. I gave brief reasons for making that order, and then made procedural orders so that the substantive application could be dealt with in late January 2006. I subsequently indicated that full reasons would be published with the reasons on the substantive application, and these are those reasons.

9 The applicant operates some 12 child care centres within Western Australia. Two are under a management agreement and the others are fully owned and operated by the applicant or a related company. One of those is located at 12 Ballard Place, Maddington (Cuddles Maddington). Cuddles Maddington has operated for some six years. In order to operate a child care centre, it is necessary to hold a licence under s 17B of the CS Act and the Regulations. Section 17B(3) specifies the matters upon which the Director General must be satisfied before he is obliged to issue a licence. Section 17B(3) reads:

"Where an application for a licence or permit is made in accordance with the regulations, the Director-General shall issue a licence or a permit to the applicant if the Director-General is satisfied -

(a) that the applicant is a fit and proper person to hold a licence or permit, or in the case of an application by a body corporate, department of the public service or a public authority, that the officer of that body, department or authority who is likely to be directly responsible for the effective supervision of the child care service is a fit and proper person to be so responsible; and

(b) that the applicant is capable of providing a child care service in accordance with the regulations or, in the case of a permit, in accordance with the terms of the permit."

10 The licence held by the applicant in relation to Cuddles Maddington was renewed on 14 December 2003 for a period of two years so that it was due to expire on 13 December 2005. Regulation 13(1) of the Regulations provides that "a licence may be renewed upon application being made to the Director-General on a form approved by the Director-General". Regulation 13(4) obliges the Director General to renew a licence where application is made, unless the Director General is no longer satisfied that the applicant is fit and proper to hold a licence and is capable of providing a child care service in accordance with the regulations, or is of the opinion that the licensee has been guilty of any default or misconduct which has impaired or would impair the provision of the child care service to which the licence relates.

11 Under reg 14, the Director General must give 21 days written notice to a licensee before refusing to renew a licence, and within that period the licensee may apply to the Director General for a review of the proposed decision. The Director General must give the applicant an opportunity of making submissions on the matter and may then confirm or vary the refusal.

12 Section 17B(6) of the CS Act empowers the Director General to cancel or suspend a licence if the Director General ceases to be satisfied as to those matters which entitle a licence to be granted, or is satisfied that the holder of a licence has persistently failed to comply with the Regulations. That power is reflected in reg 14(5) which provides that the Director General may suspend a licence at any time without notice if he is satisfied that the continuation of the licence or permit would expose a child to the imminent risk of serious harm.

13 In this case, the applicant applied for renewal of its licence on 3 November 2005. Notice was given to the applicant pursuant to reg 14(1) that the Director General proposed to refuse to renew the licence. The notice specified the grounds upon which the refusal to renew was based. The notice advised that the Director General had ceased to be satisfied that Mr Gerard Carver, the responsible officer in respect of the licence, was a fit and proper person, and that the applicant, in relation to its Cuddles Maddington licence, is capable of providing a child care service in accordance with the Regulations. The basis of that conclusion was then set out. It was:

(i) Failure to comply with minimum contact staff requirements as prescribed by reg 30 on two occasions on 1 December 2003 and 9 September 2005.

(ii) An incident on 22 April 2004 when a child in attendance at the child care service was locked in the premises and left on his own, an offence for which the applicant was prosecuted and convicted on 27 April 2005.

(iii) Four alleged failures to comply with the requirements for cleanliness, maintenance and repair of the premises on 1 December 2003, 5 March 2004, 7 October 2004 and 22 August 2005.

(iv) A failure on two occasions to comply with the requirements for safe storage of tools and dangerous materials on 1 December 2003 and 22 August 2005 contrary to reg 58.

(v) A failure to prominently display the menu for the week in a place visible to parents on one occasion on 22 August 2005 contrary to reg 62.

(vi) A failure on two occasions to prominently display a copy of the programme of activities for the children in the child care service on 1 December 2003 and 22 August 2005 contrary to reg 67.

(vii) A failure to ensure that an accurate daily record of attendance has been kept on 9 September 2005 contrary to reg 69B.

14 In the applicant's submission to the Director General on 28 November 2005, the applicant advised that it had appointed a centre manager at Cuddles Maddington and sought to have her appointed as the responsible officer in place of Mr Carver. The letter provided details of the new manager's background and experience. The submission then dealt specifically with each of the alleged breaches of the Regulations and advised of the steps which had been taken in response to each allegation at the time it had been notified to the applicant. In relation to the very serious breach of reg 35(1), for which the applicant was successfully prosecuted, the submission outlined various measures that had been taken to ensure that such an incident did not reoccur.

15 The affidavit evidence tendered at the stay application in December 2005 revealed that, on 28 November 2005, representatives of the applicant met with representatives of the respondent and presented the submissions addressing each of the issues outlined in the notice of 17 November 2005. Following that meeting, the respondent caused an inspection to take place of Cuddles Maddington's premises on 2 December 2005 between 10.00 am and 11.40 am. No non-compliance with any regulation was noted on the inspection report at that time. The inspectors returned to the premises at 3.30 pm the same day, and remained on the premises between 3.30 pm and 5.30 pm. They found that one child was not recorded as present in the attendance records which they inspected, being a breach of reg 69B, and that a health certificate in relation to one employee was not available, contrary to reg 37(1). The monitoring visit summary also noted that the "outcome of staffing and attendance visit conducted on 2 December 2005 (3:30 pm) (10.00 am) to be advised". The circumstances of that visit as they emerged in evidence at the substantive hearing will be dealt with later in these reasons.

16 The applicant wrote to the Acting Executive Director on 7 December responding to the allegations of breaches on 2 December in relation to the failure to include a child on the attendance register. The letter advised that a final check by the Centre Manager is usually conducted at 3.30 pm, because after that time no further children are accepted into the centre. According to the letter, the inspectors arrived just prior to 3.30 pm to conduct their inspection, and the Centre Manager spent the next two hours assisting the officers with their visit. It was for that reason she had not carried out her check of the attendance register when they saw it, but she apparently did so before leaving the premises at 5.30 pm that night. With respect to the health certificate, the letter advised that the relief worker concerned was new, and that reg 37 required the provision of a health certificate within 14 days within commencement of employment. That period had not elapsed, but the letter advised that the Centre Manager had received an undertaking from the employee concerned to provide the medical certificate within the required period.

17 On 8 December 2005, the Acting Executive Director gave notice to the applicant that it proposed to affirm its decision not to renew the licence. The letter referred to breaches of reg 30 and reg 69B. The breach of reg 30 had not been identified in the monitoring visit summary provided to the applicant, but was related to the reference to further advice being provided concerning staffing. The full circumstances surrounding that allegation were investigated at the substantive hearing and will also be dealt with later in these reasons. The letter asserted that the explanation of the two December breaches "lacks credibility" but did not provide any basis for that conclusion. The Acting Director General's letter advised that the applicant would be unable to operate a child care service at Cuddles Maddington from 14 December 2005.

The consequences of the decision taking effect if not stayed

18 In her affidavit in support of the stay, Ms Julia D'Ascenzo, Area Manager for the applicant, identified a number of aspects of detriment which would be suffered if the centre could not continue in operation pending finalisation of its application for review of the Acting Director General's decision. She advised that Cuddles Maddington looks after children from 67 families. All of those would need to deal with Centrelink in relation to any change to a new child care centre. Centrelink confirmation would be required by letter before children can be resettled into another centre. Ms D'Ascenzo expressed concern as to the impact on the children of a sudden upheaval from the centre with which they are familiar. She indicated that some staff members would have difficulty finding re-employment, and would suffer financial detriment which would be all the more significant just two weeks prior to Christmas. Some staff were undergoing training which would be interrupted if the centre was shut down. The applicant itself would suffer detriment in the form of loss of income, ongoing rental expense, and damage to its valuable business and reputation.

19 Section 25(2) of the SAT Act provides power for the Tribunal, on application of a party or on its own motion, to make an order staying the operation of a decision that is the subject of a proceeding for review.

20 Section 25(4) provides:

"(4) The Tribunal may make an order under subsection (2) only if it considers that it is desirable to do so after taking into account -

(a) the interests of any persons whose interests may be affected by the order;

(b) any submission made by or on behalf of the decision-maker; and

21 It was apparent that there are a significant number of persons whose interests may be affected by the order the Tribunal was asked to make. Those include the applicant itself, its employees, and importantly the children and families that are its clients. The immediate cessation of the business would have had an obvious and, in some cases, serious adverse impact on the interests of all of those persons.

22 At the stay application, the respondent made submissions to the effect that the constant breaches of the regulations warranted the non-continuation of the licence. The decision-maker placed particular emphasis on the fact that it found non-compliance with the regulations in relation to staffing matters and recording of attendance on 2 December, after having received assurances on 28 November 2005 that further breaches of the regulations would not happen. Whether the alleged breaches occurred, and any explanations for them if they did, were all matters which fell to be dealt with at the ultimate hearing of the application. For the purposes of an interim order staying the operation of the decision, however, I took the view that the alleged breaches would not, if established, have suggested that there was an imminent danger to the safety or well-being of any child using the centre such as would outweigh the risk of detriment to the applicant, its employees and clients if a stay were not granted.

23 The overriding element of the public interest that arises in this case is the welfare and safety of children using the centre. There is also a public interest in maintaining confidence in the regulation of the childcare industry in Western Australia. None of the alleged breaches of regulations caused the respondent to exercise its powers under s 17B(6) of the CS Act to cancel or suspend the applicant's licence. Even the serious breach of regulations which led to the applicant's conviction did not result in suspension or cancellation. It is clear that the respondent did not consider that there was imminent risk of serious harm to any child which should lead to a suspension of a licence under reg 14(5). Whether the cumulative effect of persisting breaches is such that the licence should not be renewed was properly a matter to be dealt with at the full hearing of the application for review of the Director General's decision. On an interim basis, having regard to those matters identified in s 25(4) of the SAT Act, I concluded that it was desirable that an order staying the operation of the decision be made, provided that, contrary to the respondent's contentions, power to permit the business to continue exists under s 25 of the SAT Act.

24 At the stay application, the respondent contended that

"The effect of setting aside the decision is exactly that, a setting aside of the decision to refuse to renew the Applicant's licence. Section 25(2) is limited by its terms and cannot be construed to confer upon this Tribunal the power to renew a licence. It follows that the effect of setting aside the decision in this matter, is that the licence remains in force for its term, expiring ... 13 December 2005. There is no alternative statutory power available to this Tribunal to renew the Applicant's licence, except upon determination of the ultimate issue at review pursuant to section 29 of the SAT Act."

25 The first observation that can be made about that submission is that it substitutes the expression "setting aside the decision" for the words of the statute which are "staying the operation of a decision". There is significance in those words.

26 There is no issue that the decision by the Director not to renew is a reviewable decision under the SAT Act. The express power under s 25(2) is a power to make an order "staying the operation of" that decision. In order to determine what is "the operation of the decision" it is necessary to return to a review of the provisions of the regulations.

27 Regulation 13 relevantly provides:

(1) A licence may be renewed upon application being made to the Director-General on a form approved by the Director-General.

(4) Where an application is lodged under sub-regulation (1) the Director-General shall renew the licence unless the Director-General -

(a) is no longer satisfied as to the matters mentioned in section 17B(3); or

(b) is of the opinion that the licensee has been or is guilty of any default or misconduct which has impaired or would impair the provision of the child care service to which the licence relates."

28 It is apparent from reg 13 that there is an entitlement to renewal of a licence, and an obligation on the Director General to renew a licence, unless the Director General reaches a specified opinion. It is the Director General's conclusion that is the "decision that is the subject of a proceeding for a review". The operation of that decision is that the applicant is deprived of the entitlement to renewal which it has under reg 13. If the decision had not been made, or was not "to operate" a new licence must issue once, as in this case, application had been made in the appropriate form.

29 It follows that on a plain reading of the regulations, "an order staying the operation of (the) decision" must in substance have the effect of fulfilling the applicant's entitlement, and thus renewing the licence.

30 A similar conclusion was reached by Siopis J in Civil Aviation Safety Authority v Hotop (2005) FCA 1023. In that case, the learned judge was considering the power of the Administrative Appeals Tribunal under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). The particular matter concerned a decision made by the Civil Aviation Safety Authority to cancel an air operators certificate. By the time an application for an order staying the decision to cancel came before the AAT, the relevant certificate had already expired by the effluxion of time. The AAT made an order staying the cancellation decision and extending the certificate until the hearing of the application. It was argued in the Federal Court that no such power existed under s 41 of the AAT Act. That section provides:

"(1) Subject to this section, the making of an application to the Tribunal for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision.

(2) The Tribunal may, on request being made, as prescribed, by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review."

31 Siopis J referred to authority to the effect that s 41(2) of the AAT Act must be given a broad interpretation (Yolbir v Administrative Appeals Tribunal [1994] FCA 910; (1994) 48 FCR 246 at 249 and Shi v Migration Institute of Australia Ltd [2003] FCA 1304; (2003) 134 FCR 326 at 332). His Honour then observed (at [45]):

"Second, there is nothing in the language of the section that precludes the Tribunal from making an order in positive terms. In fact, the language used is of wide ambit permitting the Tribunal to make 'such order or orders staying or otherwise affecting the operation or implementation of the decision... as [it] considers appropriate' to achieve the specified purpose. In the context of a refusal to issue a statutory licence to an existing statutory licence holder, in a case where effective relief can be granted at the hearing, this language is wide enough to include an order permitting the review applicant to continue in business until the hearing of the application. This is because the Tribunal's order in those terms would 'affect the operation' of the impugned decision, which would otherwise operate to preclude the review applicant from continuing to carry on its existing business. In other words, the order of the Tribunal affects the operation of the impugned decision because it neutralises its adverse effect and anticipates that a favourable decision with retrospective effect may replace the impugned decision."

32 His Honour then referred to what was said by Tamberlin J in Shi v Migration Institute of Australia Ltd at 333 where he said:

"It is evident that if a decision favourable to an applicant is made by the AAT in relation to the application to renew, then the agent in this case will have been wrongfully deprived of the opportunity to earn his livelihood from that time up to the time of the favourable determination. There may also be damage to his practice and reputation. There is no provision for recovery of this loss or for any disruption to the practice, or loss of reputation or goodwill. A favourable decision to the applicant by the AAT would also mean that the applicant had been wrongfully refused registration and these are important considerations: see the remarks of Davies J in Re Dekanic & Tax Agents Board of New South Wales (1982) 6 ALD 240 at 242 - 243. These observations were applied in Re Nelson & Tax Agents Board Queensland [1993] AATA 262; (1993) 30 ALD 317.

If the applicant in the present case is not granted a stay, the effectiveness of the hearing and determination of the application for review will be diminished."

33 In my view, the observations made by Siopis J and Tamberlin J are equally applicable to s 25(2) of the SAT Act. Although the words of s 41(2) of the AAT Act may be wider than the words of s 25(2) of the SAT Act, an order effectively permitting the continuation of the applicant's business pending completion of the proceedings for review is encompassed within the expression "an order staying the operation of a decision". A construction of s 25(2) which permits a positive order to be made to preserve an applicant's ability to continue to operate its business pending completion of the review proceedings is a construction which promotes the purpose and object underlying s 25(2) of the SAT Act: See Interpretation Act 1984 (WA) s 18. Furthermore, s 29 of the SAT Act confers on the Tribunal, when dealing with a matter in the exercise of its review jurisdiction, functions and discretions corresponding to those exercisable by the decision-maker in making the reviewable decision. That section reinforces the Tribunal's power to make a positive order under s 25(2) in the present case, or alternatively is itself a source of power to do so.

34 It was for those reasons that I made the orders referred to at [8] above.

35 The Director General's notice specified that he had ceased to be satisfied that the officer directly responsible for the supervision of Cuddles Maddington, Gerald Carver, was a fit and proper person to be so responsible. It also advised that the Director General had ceased to be satisfied that the applicant is capable of providing a child care service in accordance with the Regulations.

36 As mentioned above, at the time the decision was made not to renew the licence, the applicant had applied to have Ms Janet Chester appointed as the responsible officer in place of Mr Carver. When the matter was heard in January 2006, that application had not been finally dealt with; although it appeared that there was no impediment to the approval of Ms Chester by the respondent. In view of those circumstances, the parties did not consider it necessary to examine the question of Mr Carver's fitness for the position, although it was made clear by the applicant that it maintained that Mr Carver was fit and proper to hold the position. Subsequent to the hearing, Ms Chester was approved by the appropriate officer of the Department for Community Development as the responsible officer in relation to Cuddles Maddington. It follows that the only issue for determination in these proceedings is whether the applicant is capable of providing a child care service in accordance with the regulations.

37 The respondent relies upon the history of breaches of the regulations as demonstrating an incapacity on the applicant's part to comply generally with the regulations. It is necessary, therefore, to examine the breaches of regulations identified by the respondent to determine the ultimate issue before the Tribunal.

38 The licence for Cuddles Maddington was most recently renewed in December 2003. Prior to that time, there had been two inspections of the premises. One had been carried out on 12 March 2002. It was a health and safety check. The inspection report demonstrates compliance by the centre with the relevant requirements in all respects save for a finding of chipped walls in the laundry area. That was treated as a breach of reg 56(b), which requires that "the child care premises and all equipment and furnishings on those premises are maintained in a thoroughly safe, clean and hygienic condition and in good repair". As a result of being notified of that breach, the centre wrote to the Child Care Services Board on 26 March 2002 advising that the paint chips were being rectified by painting the following day.

39 On 2 December 2002, a child care licensing officer conducted a staffing and attendance check on Cuddles Maddington. The inspection report revealed five alleged breaches of regulations. The first was that five children were present but not registered as present (reg 69B(1)); an enrolment form for one child was not available for sighting (reg 69); federal police checks were not available for two staff members and the person preparing meals (reg 37A); qualifications were unable to be sighted for one staff member (reg 30); and a medical certificate was unavailable for one staff member (reg 37). The centre wrote to the licensing units by letter the same day explaining why various documents were not available for inspection, and steps being taken to remedy other breaches, and in particular a system for signing in children.

40 These allegations do little more than provide a context in which subsequent breaches can be viewed. Given that they occurred more than a year before the previous renewal of the licence in December 2003, they can be given little weight in relation to the decision in December 2005 as to the applicant's capacity to comply with the regulations.

41 As part of the licence renewal process, an inspection of Cuddles Maddington was carried out on 1 December 2003. A number of apparent breaches of the regulations were identified. They included a shortage of a qualified staff member in the babies' room (reg 30(1)); a programme for school aged children was not available in writing (reg 67(3) - although wrongly identified in the visit summary sheet as reg 67(1)); a high chair, two bicycles and a play area surface in need of repairs (reg 56(b)); unmarked cleaning products being accessible to children (reg 58); the staff toilet needed cleaning (reg 56(b)).

42 On 3 December 2003, the Area Manager for Cuddles Group wrote to the Child Care Services Board advising as to the manner in which each of the breaches identified on 1 December 2003 was being dealt with. She advised that changes had been made to the staff roster to avoid the problem of inadequate child to staff ratios, a written programme for school aged children had been developed and initiated, various items of equipment had been repaired, the playground surface was being resurfaced with astro turf the following week, and the other breaches had been remedied.

43 The licence was renewed as from 14 December 2003.

44 On 5 March 2004, a further monitoring visit was carried out by a licensing officer. She identified a breach of reg 56(b) in that the artificial turf in the outdoor area had not been laid evenly, some "wooden materials protruding from uneven surface not fixed", and three bicycles had broken pedals. Ms Jarrett, who conducted the investigation, took with her the list of breaches recorded from the December inspection. In a letter, which she wrote on 8 March 2004, Ms Jarrett confirmed that, with the exception of the unsatisfactory state of the outdoor area, the breaches earlier identified had been rectified. Enquiries made by the licensing officer during the course of the inspection revealed that the outdoor area was due to be completed on the weekend of 20/21 March 2004. Ms Jarrett did re-attend the centre on 30 March 2004 to identify whether the issues identified at her visit of 5 March 2004 had been attended to. She confirmed that they had, and Noelene Heywood, the Area Manager for Cuddles Group, wrote confirming that fact on the same day. On 21 May 2004, the Department responded to the applicant's letter of 30 March 2004 thanking the applicant for its cooperation, and advising that they had noted the response to the breaches and that the matter was now finalised.

45 On 22 April 2004, a serious incident occurred at the centre. An incident report prepared by Ms Heywood reveals that, at 5.10 pm that day, there were six staff present on the premises, with eight babies and fourteen toddlers and kindy children. Between 5.10 pm and 5.25 pm, seven babies and twelve of the other children were collected from the premises. Two of the staff left at 5.30 pm telling the staff member in charge that there were two children left. In fact there was also a baby asleep in a cot in the baby's room. The two remaining toddlers were collected at approximately 5.45 pm. At that stage, one of the remaining staff members checked the various rooms, including the babies room, but, apparently because of the solid end of the cot in which the child slept, failed to see that child. The remaining staff members then locked the office up at approximately 5.55 pm and left the centre. At 6 pm, Ms Heywood, who was at Cuddles Group's principal office, received a telephone call from a distressed grandparent enquiring as to the whereabouts of her grandchild. Contact was made with the staff member in charge of Cuddles Maddington, and both that person and Ms Heywood returned to the centre. The other staff member arrived before Ms Heywood and located the child asleep in the cot room. The grandmother and mother of the child were then contacted and arrived to collect the child at 6.30 pm.

46 The applicant was prosecuted for a breach of reg 35(1) which requires at least one adult to supervise at a child care service where there are not more than four children in attendance. The complaint initiating the prosecution was made on 9 February 2005 and the conviction was entered on 27 April 2005.

47 It is apparent that, on the morning after the incident, Ms Heywood contacted an officer of the Department to advise of what had occurred the previous evening. It would appear that that contact was made at 8.30 am on 23 April 2004. The applicant then put in place a system whereby it introduced a system of record keeping designed to avoid a repetition of such an incident. That system involved a parents daily attendance record, a backup system whereby staff record arrival and departure times of children on a separate sheet and a process of review of the attendance sheets around 10 am and 3.30 pm each day.

48 It is apparent that the applicant called in officers of the respondent as soon as was practicable after the incident occurred, and appears to have worked with the respondent's representatives in reviewing its systems to avoid any repetition. However, in the following weeks during which the respondent embarked upon compiling statements for the purposes of prosecution, the relationship between the respondent's representatives and Mr Carver, the then responsible officer, appears to have deteriorated rapidly.

49 A further inspection was carried out on 10 September 2004. A breach of reg 56(b) was again detected. The issues of maintenance, cleanliness or repair identified were recorded as:

"Soft fall loose and ripped in one section - tripping hazard;

Wooden climbing fort - paint chipping, splinters present, broken sections and wooden ladder had one rung missing - wooden climbing fort - rubber tyres - screws protruding at children's eye level;

Yellow slide - paint chipping - base exposed;

Taupaulin in both sand-pits accessible to children - held down by loose bricks - safety hazards

Ground near swing area - uneven - tripping hazards;

Staff room - sofa cover ripped - foam exposed."

50 Those breaches were formally brought to the attention of the applicant by letter dated 7 October although by that time, the centre had already written to the respondent reporting on steps taken to address the matters identified at the visit on 10 September 2004.

51 On 9 March 2005, Ms Wilkinson, the Children's Services Licensing Team Leader, wrote to the applicant advising that the Department had "received evidence demonstrating compliance with" reg 56(b). In her evidence to the Tribunal, Ms Wilkinson was unable to recall the evidence to which her letter refers, but noted that the file contained a quotation for resurfacing the synthetic grass area and doing other work in relation to play equipment at the centre.

52 On 22 August 2005, a further inspection was carried out by a licensing officer, Ms Jenny Clark. The inspection involved a comprehensive review of the compliance by the centre with the regulations generally. A number of failures to comply with the regulations were identified. It should be noted, however, that the requirements in relation to in excess of 40 regulations was examined. In the context of the issues in these proceedings, it can be noted that a significant number of regulations dealing with safety and hygiene issues, and regulations dealing with record keeping and admission registers were found to be satisfactorily observed.

53 The areas of non-compliance were identified in a letter from the Department to the centre dated 7 September 2005. The non-compliance comprised: the menu for the week not being prominently displayed in a place visible to parents (reg 62(c)); a spray bottle in the nappy change area not being clearly labelled (reg 58(b)(i)); fees not being readily available in writing, and a copy of the regulations not being available (reg 71(1)(d) and (3)); a failure to display a programme in the age 3 to 6 room and having non-current programmes in two other rooms (they were dated 25 July 2005 to 5 August 2005)(reg 67(3)); insufficient equipment for the number of children the service is licensed for "for eg the dramatic play area had no tea sets or props such as saucepans" (reg 68); walls chipped and paint missing, dramatic play furniture in need of repair, outside play area surface uneven, shade cloths over pergolas having holes, bricks on top of a shade cloth area posing a safety hazard, an outdoor area needing to be swept, and broken equipment stored in the babies' outdoor play area (reg 56b). The letter called for compliance with the regulations to be effected by 22 September 2005. The applicant responded to that letter by letter dated 2 November 2005, advising that the various matters to which attention had been drawn had been rectified.

54 At the hearing, it emerged that the spray bottle referred to in the context of reg 58(b)(i) was disinfectant left in the baby change area, out of reach of children, but not clearly labelled.

55 In evidence at the hearing, Ms Jenny Clark, who carried out the inspection accepted that the programmes which were not current were, nevertheless, quite acceptable in their content.

56 On 9 September 2005, two licensing officers, Ms Jenny Clark and Ms Tracy Nolan carried out a further monitoring visit. Ms Nolan arrived first and waited in her car for Ms Clark to arrive. While sitting in her car she observed the centre's bus leave the premises. Shortly afterwards, Ms Clark arrived and they entered the centre. They spoke to a staff member who advised that there was no qualified staff member present until Janet Chester returned. Shortly afterwards Janet Chester arrived back at the centre. According to Ms Nolan, she had been absent for approximately ten minutes, a fact which Ms Nolan knew because she had seen Ms Chester leave on the bus a short time before. The applicant accepts that, for that period of ten minutes, the centre did not have the minimum contact staff present. A file note prepared by Ms Clark for Tina Bell, the Children Services Team Leader, and Jon Pilkington, the Children Services Licensing Supervisor, in relation to the visit of 9 September 2005 contains an assessment of the staff to children ratios. The assessment identifies that "without backfilling" the centre needed three qualified staff and two unqualified staff so that, at the start of the visit, the centre would have been understaffed to the extent of three unqualified staff. The assessment "with backfilling" identified that the minimum staff needed would be one qualified and four unqualified with the result that the centre was understaffed to the extent of one qualified person for a period of approximately ten minutes, but otherwise complied with the staffing requirements.

57 It is convenient at this point to make some observations about the process of "backfilling". Regulation 30 specifies minimum contact staff requirements. The ratios are determined by reference to the number of children within specified age groups present at the centre at any time. In broad terms, the younger the children, the higher ratio of staff to children. It is clear that there is a long standing practice within the child care industry (known as "backfilling"), that involves counting, and physically moving, older children into younger groups where the number of children in the younger group is less than the maximum permissible for the staff assigned to the younger group. The effect of so doing is that all children are receiving at least the level of supervision required by the regulations, but the total number of staff required is reduced.

58 At the initial hearing for a stay of the order, representatives of the respondent indicated to the Tribunal that the process of backfilling was unacceptable, and that a licensee whose numbers of staff without backfilling were inadequate would be in breach of the regulations, notwithstanding that, with backfilling, the numbers met the requirements of the regulations. Following the visit of 9 September 2005, Ms Bell wrote to the applicant as to the breaches said to have been found. In relation to reg 30(1), dealing with minimum staff requirements, the letter asserted a breach of minimum staff requirements based on there being no backfilling. It is clear that that letter, and the position indicated to the Tribunal at the initial hearing, did not represent the long standing position of the Department. Ms Clark made it clear in her evidence during cross-examination that backfilling is generally considered for the purpose of working out whether or not a centre is complying with reg 30. Ms Susan Hudd, the Director of Policy and Programme Development for the Department, said that it had been the practice in the child care licensing unit in the past that for the purpose of determining correct staff to child ratios, licensees have not been required to physically move children into the lower age group when backfilling. She said that she understood that the assessment of minimum contact requirements across a whole centre, including backfilling, had been applied since the introduction of the regulations and "has become established custom and practice". She produced a copy of a newsletter published by the former Child Care Services Board in 1999 which advised that:

"The Child Care Licensing Unit often takes queries from service staff who want to know the procedure for backfilling child places under the staffing regulations.

If places are vacant in lower age groups older children can be placed in these spots. This does not mean these older children have to be physically grouped in the younger group but that they are included in child numbers to determine staff requirements. Correct staff to child ratios must be maintained at all times.

...

Younger children can't be backfilled into an older age group due to the higher staff to child ratios required for younger children. A centre cannot therefore take babies over and above the licensed numbers."

59 The allegation contained in the respondent's letter of 30 September 2005 as to the extent of the failure to comply with reg 30(1) was clearly inconsistent with the long standing practice of the unit. There was a breach, but it was a breach of ten minutes duration when Ms Chester left the premises without a qualified person present for that period.

60 The other breach recorded on 9 September 2005 was that the parental sign in records had not been completed in relation to 11 children. The applicant accepts that the parents sign in sheets did not record 11 children, but says that the licensing officers were not shown the daily records maintained by the staff as a backup to the parent sign in sheets. Ms D'Ascenzo said that the daily staff record of attendance, which had been introduced following the incident on 22 April 2004, did show all children properly signed in and signed out. Those records were not produced in evidence at the hearing, for reasons which were not explored by counsel. Under cross-examination, however, Ms D'Ascenzo maintained that the staff records did correctly record the children present, but they had simply not been shown to the licensing officers at the time of the inspection. In her submission to the respondent in relation to the renewal of the licence, when dealing with this issue, Ms D'Ascenzo says "our Centre Manager Janet Chester is now completely aware that we are able to show any licensing [sic] our backup system". Ms Chester, in cross-examination, maintained that the staff record was kept, although she was unable to say why she did not show it to the licensing officers at the visit of 9 September 2005. In her letter dated 7 October 2005 concerning the September visit, Ms Heywood said, in relation to the complaint of a breach of reg 69B(1): "the Centre Manager and second qualified have organised a roster to check the sign in sheets every day so that all children are accounted for. They also use the attached sheet to double check that all children are signed in", and the letter attached the form of the daily attendance sheet. The respondent's contention is that the Tribunal should find that there were no attendance records kept by staff on 9 September 2005, because if there were, it is inevitable that they would have been shown to the licensing officers when the inadequacy of the parent records was observed.

61 On balance, I am not prepared to reject the evidence of Ms Chester and Ms D'Ascenzo to the effect that the staff daily attendance sheet was maintained in September 2005, and thus that, although the parent sign in sheets had not been properly completed by parents when delivering their children, there was in place a backup system which was capable of meeting the requirements of reg 69B(1).

62 In her witness statement, Ms Nolan made a series of criticisms of the facilities and environment of the centre at the time of the inspection on 9 September 2005. None of those matters was mentioned in the monitoring visit summary, nor the file note prepared by Ms Clark following the inspection. Ms Clark made no reference to those matters in her witness statements, although she made an implicit criticism of the coordinator in that "she didn't appear to be directly involved with the care or supervision of the children". She did, however, acknowledge that, throughout the period of the visit, the centre coordinator attended to assisting the licensing officers with their inspection, as is customary. As to the matters mentioned by Ms Nolan, she acknowledged that they were going to the quality of service, rather than compliance with regulations. These criticisms illustrate an apparent approach taken by officers of the Department in the course of their evidence to cast the business of the applicant in as poor a light as possible. They are not matters that go to the applicant's capacity to comply with the regulations.

63 Following the meeting in relation to the renewal of the licence on 28 November 2005, the respondent arranged a further inspection of the premises on 2 December 2005. That inspection was carried out by Ms Clark, and Ms Hudd. They visited the premises in the morning, and then again in the afternoon.

64 The first visit extended from 10 am to 11:40 am. According to Ms Clark, the purpose of the inspection was to check whether the initiatives identified in the applicant's submission in relation to renewal had been implemented, and to take note of how many staff and children were present. She said that she was not instructed to, and did not, undertake a full staffing and attendance visit. They checked for rectification of breaches recorded at the visit of 22 August 2005, and found that the issues identified had all been attended to. At the completion of the visit they did not record any breaches on the licensing visit summary sheet, and obtained signatures from Ms Chester and Ms Heywood confirming their agreement to the details noted on that sheet.

65 Upon returning to her office, Ms Clark was instructed to return to the centre to conduct a staffing and attendance check with another licensing officer, Ms Shelley Daniels. They arrived back at the centre at 3:30 pm on 2 December 2005.

66 The licensing officers reviewed the number of children and staff in each room and inspected the attendance records and staff records. They ascertained that one child in the toddlers room was not recorded as present on the staff daily attendance sheet. They noted that as a breach of reg 69B(1). They also noted that no tuberculosis clearance was available in relation to one staff member contrary to reg 37(1).

67 The applicant's explanation as to the absence of a health certificate was that the staff member concerned had only commenced working on that day, and thus the requirement under reg 37 for the provision of a tuberculosis clearance within 14 days of commencing employment had not yet arisen. That explanation was not challenged by the respondent in these proceedings.

68 As to the failure to note one child on the attendance record, the applicant observes that the procedures put in place following the incident on 22 April 2004 required a check by the Centre Manager of the attendance records at 3:30 pm each day. That was the time that the licensing officers arrived. The applicant's position is that the time that they conducted a count of the children was the time that Ms Chester would otherwise have been undertaking the check of the attendance records. It was because the licensing officers had arrived that the normal routine did not take place. That explanation is objectively reasonable, and I accept it.

69 The licensing officers spent a further two hours until 5:30 pm completing their inspection. The monitoring visit summary was endorsed "outcome of staffing and attendance visit conducted on 2 December 2005, (3.30 pm)(10.00 am) to be advised".

70 On 5 December 2005, the applicant wrote to Mr David Vicary, the Acting Executive Director of the Department, in relation to the visit on 2 December 2005. The letter confirmed that, at the first visit, full compliance with the regulations was found, and provided the explanations referred to above in relation to the issues arising from the second visit. Mr Vicary was requested to consider that letter before making any final decision in relation to the renewal of the licence.

71 On 8 December 2005, Mr Vicary wrote to the applicant advising of his decision not to renew the licence. That letter stated that "I have also given careful consideration to the letter of 7 December 2005 from Ms D'Ascenzo, the licensee's Area Manager, purporting to explain the breaches, but I find the explanation lacks credibility". The reference to the letter of 7 December 2005 was presumably an erroneous reference to the letter received by the Department on 5 December 2005. Why it was said that the explanations "lacked credibility" was not explained in the letter, nor did Mr Vicary give evidence at the hearing of this application to explain that assertion. The letter also asserted that the licensing officers found that the applicant was again in breach of reg 30 and reg 69B. That was the first time that there had been any notification to the applicant of an allegation of breach of reg 30 on 2 December 2005. All that had been told to the applicant by way of the monitoring visit summary was that the outcome of the staffing and attendance visit would be advised.

72 Considerable time was spent at the hearing endeavouring to determine the precise nature of the alleged breach of reg 30 on 2 December 2005. Ms Clark who attended both visits on that day, was adamant that because she had not undertaken a full staffing and attendance review on the morning of 2 December 2005, the breach of reg 30 referred to in the Acting Executive Director's letter was a breach found at the afternoon visit. She confirmed that, if backfilling were taken into account, the applicant was not in breach on the afternoon of 2 December 2005, but the allegation of breach was based on the proposition that backfilling was unacceptable.

73 Ms Clark's evidence was inconsistent with the investigation outcome report which was signed by her, Ms Daniels and Ms Hudd. That report suggested that a breach of reg 30 occurred in the morning when one additional staff person was required to meet the requirements of the regulations. That conclusion was reached on the basis of figures recorded on the morning visit, notwithstanding Ms Clark's evidence that the nature of enquiry was not such as to enable her to make an assessment of compliance with reg 30 at that visit.

74 The investigation outcome report in relation to the 2 December 2005 was apparently prepared the next working day. According to Ms Hudd, she typed the document from a draft prepared by someone else. Neither Ms Daniels nor Ms Clark recalled preparing the document, though each acknowledged signing it. It concluded with a recommendation to the Acting Executive Director to not renew the licence of Cuddles Maddington due to breaches of reg 30 and reg 69B. It is reasonable to expect that it was a document given significant weight by the decision-maker in relation to renewal of the licence. In that regard, it contains some significant errors. The first is that the incident where the child was left in the premises was recorded as having occurred on 22 April 2005, some seven months before the licence renewal, whereas in fact the incident took place in April 2004. It recorded that the applicant was prosecuted under reg 30 and reg 35(1) whereas there was, in fact, no allegation of breach of reg 30 in the complaint. Those errors tend to aggravate the allegation of a further breach of reg 30 in December 2005.

75 As to the allegation on 2 December 2005 that there was a breach of reg 30, the question of whether or not there was a breach turns on the treatment given to Ms Janet Chester's mother, Ms Brenda Chester, who was shown in the contact staffing details recorded by the licensing officers as a member of the contact staff. If Ms Brenda Chester is treated as a contact staff member, as the form suggests, then the minimum staff requirements were met. It would appear, however, that Ms Brenda Chester was engaged in the role of food coordinator rather than as a member of contact staff, in which case the respondent's position was that there was a shortfall, by one, of the minimum staff requirements. That was a matter in respect of which the applicant, contrary to the indication given at the time of the inspection, was never given an opportunity to explain before the decision not to renew the licence was confirmed. The substance of the alleged breach of reg 30, upon which Mr Vicary relied, was not revealed until the course of the hearing of this matter. The evidence of the respondent's officers was inconsistent on the point, and there was limited opportunity to fully resolve the issue at the hearing.

76 Following the decision by the Tribunal to grant an interim renewal of the licence pending hearing of the application for review, the respondent caused a further inspection of the premises to take place on 22 December 2005. The inspection was carried out by Ms Shelley Daniels. Ms Daniels carried out a full staffing and attendance review. Ms Daniels concluded that there was a breach of reg 29 in that there were more children at the centre than specified in the licence, and a breach of reg 30 as to the minimum contact staff requirements. Those breaches were not substantiated at the hearing of the matter, and it was conceded by counsel for the respondent that the allegations of those breaches were not supported by the evidence. It was clear from cross-examination of Ms Daniels that it was her lack of familiarity with the applicable regulations which misled her into concluding that breaches had occurred. Her reluctance to concede her error is a further example of the tendency of the respondent's witnesses to cast the applicant in a poor light.

77 On 6 January 2006, the respondent caused a further inspection by Ms Clark. She identified no failures to comply with the regulations on that occasion.

78 On 17 January 2006, Ms Nolan carried out a further staffing and attendance check at Cuddles Maddington. She observed no breaches of the regulations on that occasion.

79 A number of the breaches of regulations by the applicant since December 2003 are relatively minor and have been dealt with properly. They can be effectively ignored for the purposes of determining whether the applicant is capable of complying with the regulations. The balance of the breaches, or alleged breaches, fall into four categories. The first is that the category related to cleanliness, maintenance and repair. The second relates to breaches of reg 30 concerning the minimum staff to children ratios. The third relates to record keeping matters, in particular the attendance registers for children. The fourth is the breach for which the applicant was prosecuted.

80 The breaches of reg 56(b) were, in a number of cases, quite minor (such as chipping paint). More significant are the allegations concerning the state of the play areas and equipment which may pose a risk of injury to children. An ongoing problem appears to have been the outdoor carpet in the children's play area. It is clear that notwithstanding repairs from time to time, problems have reoccurred. No problems in that regard have been reported between August 2005 and the hearing in January 2006, despite a number of inspections within that time. There is no dispute that maintenance work has been carried out on the synthetic turf and play equipment from time to time, and there is no basis for concluding that the applicant is not capable of keeping the premises and equipment in satisfactory repair.

81 Since the incident of 22 April 2004, there have been two occasions on which inspections had revealed inadequacies in the attendance records kept by the applicant. Those occasions were on 9 September 2005 and 2 December 2005. As indicated above, I have accepted that the staff attendance record was kept in September 2005, so that although the parent register had not been properly completed, there was a record at the centre which accurately recorded the number of children present. With respect to the breach on 2 December 2005, I accept the explanation that the failure to record one child would, in the ordinary course, have been identified by the 3:30 pm check by the centre coordinator had not the visit by the licensing officers occurred at that time.

82 In respect to the minimum contact staff issue, without wishing to underplay the importance of maintaining qualified staff at child care centres, the breach on 9 September 2005 involved a period of only 10 minutes, and thus was very much at the bottom end of seriousness of breaches of that nature. As to the breach on 2 December 2005, the position is not clear, although it does appear that a breach may have occurred if Ms Brenda Chester is not accounted for as a contact staff member as, I suspect, she should not have been.

83 The breach of reg 35(1) for which the applicant was successfully prosecuted stands separate. It was a very serious matter. It occurred, however, some 19 months before the licence fell for renewal. I accept that systems were put in place to avoid any repetition of that incident. The incident did not, by itself, commend itself to the respondent as a basis to immediately cancel the applicant's licence. In view of the applicant's response to the incident, in my view the respondent's decision not to cancel the licence was appropriate.

84 The three inspections which took place after the decision was taken not to renew the licence, all revealed no breaches of the regulations. Undoubtedly, those conducting the inspections did so thoroughly. It is quite apparent from the accounts of the inspections, and the way that the witnesses from the respondent gave their evidence, that the licensing officers, and the respondent generally, were anxious to identify any possible breaches or other criticisms that might be made in view of the impending review proceedings.

85 In my view, looked at objectively, the established breaches of regulations by the applicant do not warrant a refusal to renew the licence. Put in its simplest terms, the applicant has demonstrated that it is capable of complying with the regulations because it has done so in the most recent three inspections of its premises. The only basis upon which it might be said that the applicant is not capable of providing a child care service in accordance with the regulations would be if the history of breaches indicated some inevitability of breaches in the future. In my view, objectively analysed, that conclusion is simply not open.

86 Ms Hudd produced with her witness statement an extract from the Auditor General's report in relation to the respondent. That report revealed that in 2004/05, 1845 breaches were recorded against 498 services, with approximately 20% of services having more than 5 breaches. By way of comparison, Ms Hudd said that between December 2003 and September 2005, there were 12 substantiated breaches for Cuddles Maddington, being roughly six per year. There is, therefore, nothing in the sheer number of substantiated breaches which appears to set this centre apart from approximately 20% of centres in the State. Ms Hudd said that, apart from this case, there has never been a decision made not to renew a child care licence in Western Australia. It follows that the application should succeed, and that the applicant's licence should be renewed.

87 The applicant contends that, if it is successful in the proceedings, it ought to receive an order that the respondent pay its costs. It makes the submission that the decision-maker made no genuine attempt to make a proper decision on the merits. That proposition is based upon contentions that:

i) the decision-maker's letter suggests that careful consideration has been given to submissions, and makes reference to a breach of reg 30, about which the applicant had made no submissions because it had never been advised of that alleged breach;

ii) the investigation outcome report upon which the decision was based was prepared by three licensing officers all of whom gave evidence to an effect that did not support the contents of the document;

iii) the investigation outcome report contained material errors; and

iv) no natural justice was extended to the applicant in relation to the alleged breach of reg 30 on 2 December 2005.

88 In my view, it cannot be said that the decision-maker in this case made no genuine attempt to make a decision on its merits. The process of renewal of the licence is dealt with by reg 13 and reg 14. That process was observed by the Director General. It was open to him, and appropriate, to take into account, in assessing the submissions made to him concerning the grounds upon which it was proposed to refuse renewal, to have regard to the outcome of the inspection of 2 December 2005.

89 I accept that the investigation outcome report contained significant errors. It may be that those errors influenced the exercise of discretion by the Director General. In its Statement of Issues, Facts and Contentions filed in these proceedings, the applicant makes assertions that Mr Vicary did not give due and careful, or any proper consideration to certain documents and sets out the basis upon which the applicant seeks to draw that inference. In submissions, the applicant observes that Mr Vicary did not choose to give evidence to explain the basis upon which he reached his decision. However, given that it is the task of the Tribunal to consider the matter de novo, the Tribunal is not concerned with the question of whether or not the original decision-maker was in error. The failure of Mr Vicary to give evidence is, in that context, quite understandable.

90 It will be common in review proceedings that, where the Tribunal reaches a different decision from an original decision-maker, that difference may arise because the Tribunal takes a view that some matters to which the decision-maker had regard should not be taken into account or that the decision-maker failed to consider relevant matters. In that sense, the Tribunal may consider the decision-maker to have been in error. In this case the decision-maker clearly had before him erroneous material which was potentially prejudicial to the applicant's position. It cannot be said, however, that the Acting Director General, or those providing advice to him, acted in bad faith, or did not make a genuine attempt to make a decision on the merits. There are certainly aspects of the manner in which this matter was conducted by some officers of the Department which do not reflect well on them. In my view, however, those matters fall short of providing a basis upon which it can be said that the decision-maker made no genuine attempt to make a decision on the merits. The parties should bear their own costs as contemplated by s 87(1) of the SAT Act.

91 The applicant's licence number 4121 issued under the Community Services Act 1972 and the Community Services (Child Care) Regulations 1988 is renewed for a period of two years commencing on 14 December 2005 on the same terms and conditions as previously applied.

I certify that this and the preceding [91] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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JUDGE J CHANEY, DEPUTY PRESIDENT