CVM v New South Wales Department of Education, Early Childhood Education & Care Directorate

Relevant Legislative scheme in regard to decision to cancel a service approval

1. The Children (Education and Care Services National Law Application) Act 2010 states in its long title that it is 'An Act to apply as a law of this State a national law relating to the regulation of education and care services for children'. As stated in the Second Reading Speech: The bill lays the legislative foundation for nationally consistent standards to ensure quality education and care is provided by long day care, family day care, preschool and outside school hours care services. These national standards were agreed by the Council of Australian Governments in December 2009. (NSW Legislative Council, Parliamentary Hansard 23.11.2010)
2. The National Law implements a uniform national scheme for the regulation of education and care services or children. It replicates corresponding legislation enacted in other Australian jurisdictions.
3. The objects and guiding principles of the National Law are set out in section 3: (1) The objective of this Law is to establish a national education and care services quality framework for the delivery of education and care services to children. (2) The objectives of the national education and care services quality framework are - (a) to ensure the safety, health and wellbeing of children attending education and care services; (b) to improve the educational and developmental outcomes for children attending education and care services; (c) to promote continuous improvement in the provision of quality education and care services; (d) to establish a system of national integration and shared responsibility between participating jurisdictions and the Commonwealth in the administration of the national education and care services quality framework; (e) to improve public knowledge, and access to information, about the quality of education and care services; (f) to reduce the regulatory and administrative burden for education and care services by enabling information to be shared between participating jurisdictions and the Commonwealth. (3) The guiding principles of the national education and care services quality framework are as follows - (a) that the rights and best interests of the child are paramount; (b) that children are successful, competent and capable learners; (c) that the principles of equity, inclusion and diversity underlie this Law; (d) that Australia's Aboriginal and Torres Strait Islander cultures are valued; (e) that the role of parents and families is respected and supported; (f) that best practice is expected in the provision of education and care services.
4. To operate an education and care service, including a family day care service, a person or company must have a provider approval and a service approval. Pt 2 of the National Law sets out the provider approval process and this includes an assessment that the applicant is a fit and proper person. Part 3 of the National Law sets out the service approval process. The Regulatory Authority has the power to grant and cancel service approval (and provider approval) under the National Law. Section 9 of the Application Act declares that the Regulatory Authority is the Secretary of the Department of Education.
5. The conditions on which service approval is granted is set out in s.51 of the National Law. 51 Conditions on service approval (1) A service approval is granted subject to the condition that the education and care service is operated in a way that - (a) ensures the safety, health and wellbeing of the children being educated and cared for by the service; and (b) meets the educational and developmental needs of the children being educated and cared for by the service. (2) A service approval for a family day care service is granted subject to the additional condition that the approved provider must ensure that - (a) sufficient persons are appointed as family day care co-ordinators to monitor and support the family day care educators engaged by or registered with the service; and (b) each family day care educator is adequately monitored and supported by a family day care co-ordinator. (3) A service approval is granted subject to a condition that the service must commence ongoing operation of the service within 6 months after the approval is granted unless the Regulatory Authority agrees to an extension of time. (4) A service approval is granted subject to a condition that the approved provider must hold the prescribed insurance in respect of the education and care service. (5) A service approval is granted subject to any other conditions prescribed in the national regulations or imposed by - (a) this Law; or (b) the Regulatory Authority. … … … (Emphasis added)
6. Section 51(8) also imposes penalties for a breach of these conditions being $10,000 for an individual and $50,000 in any other case.
7. The Regulatory Authority has the power to suspend or cancel service approvals. s.77 Grounds for cancellation of service approval A Regulatory Authority may cancel a service approval if - (a) the Regulatory Authority reasonably believes that the continued operation of the education and care service would constitute an unacceptable risk to the safety, health or wellbeing of any child or class of children being educated and cared for by the education and care service; or (b) the service has been suspended under section 72 or 73 and the reason for the suspension has not been rectified at or before the end of the period of suspension; or (c) the service approval was obtained improperly; or (d) a condition of the service approval has not been complied with. s.78 Show cause notice before cancellation (1) This section applies if the Regulatory Authority is considering the cancellation of a service approval under section 77. (2) The Regulatory Authority must first give the approved provider a notice (show cause notice) stating - (a) that the Regulatory Authority intends to cancel the service approval; and (b) the reasons for the proposed cancellation; and (c) that the approved provider may, within 30 days after the notice is given, give the Regulatory Authority a written response to the proposed cancellation. s.79 Decision in relation to cancellation (1) After considering any written response from the approved provider received within the time allowed by section 78(2)(c), the Regulatory Authority - (a) may - (i) cancel the service approval; or (ii) suspend the service approval for a period not more than the prescribed period; or (iii) decide not to cancel the service approval; and (b) must give the approved provider written notice of the decision. 173 Offence to fail to notify certain circumstances to Regulatory Authority (1) An approved provider must notify the Regulatory Authority of the following in relation to the approved provider or each approved education and care service operated by the approved provider - (a) a change in the name of the approved provider; (b) any appointment or removal of a person with management or control of an education and care service operated by the approved provider; (c) a failure to commence operating an education and care service within 6 months (or within the time agreed with the Regulatory Authority) after being granted a service approval for the service. Penalty: $4000, in the case of an individual. $20 000, in any other case.

Jurisdiction

1. Under the National Law a decision by the Regulatory Authority to cancel a service approval is a reviewable decision for external review. See s.192(b)(iv). The relevant Tribunal to hear the review is the tribunal or court declared by a law of that jurisdiction to be the relevant tribunal or court for the purposes of this Law. See s5 definition section. Section 8 of the Application Act (NSW) provides that the relevant tribunal is the Civil and Administrative Tribunal for the purposes of the external review function.
2. Part 3 of the Civil and Administrative Tribunal Act 2013 provides for the jurisdiction of this Tribunal. Section 30 sets out the administrative review jurisdiction and refers to the Administrative Review Act 1997 and the circumstances in which the Tribunal has jurisdiction. The National Law does not provide for 'an administrative review under Administrative Review Act 1997. Therefore, the external appeal jurisdiction set out in s.31 of the Civil and Administrative Tribunal Act is applicable. The National Law does not refer to 'appeal' but rather 'external review'. The Tribunal considered this matter in CTP v NSW Department of Education, Early Childhood and Care Directorate (2017) NSWCATAD 60; "The relevant legislation (the National Law) does not make a reference to an 'appeal' but rather uses the language 'external review' at sections 192 and 193: Therefore, in my view the Tribunal is exercising its review functions rather than appeal functions. Whilst the import of this position may be subtle, it alters the nature and onus of the proceedings slightly, and provides for the Tribunal to make the correct and preferable decision. For clarity I find that the nature of the jurisdiction of these type of recent proceedings to the Tribunal, for the reasons set out above, is in the form of administrative review." This Tribunal agrees it is exercising its administrative review function.

Hearing

1. The applicant was represented by Counsel and gave evidence. He was cross examined by the respondent. The respondent was represented by a solicitor from the Crown Solicitor's office. No witnesses were called by the respondent.
2. The applicant filed the following material:

• Application for administrative review attaching letter from his solicitor setting out grounds of application
• Affidavit of applicant dated 11 January 2017 attaching exhibits
• Written submissions prepared and filed by solicitor on 10 February 2017

1. The respondent filed the following material:

• The Section 58 documents
• Written submissions prepared and filed by solicitor on 31 January 2017

Applicant's case

1. The applicant submits that the service XYZ had commenced ongoing operation prior to the cancellation decision being made. The applicant's submissions and affidavit refer to having policies and procedures in place, rental premises from which the service operates, one employed co-ordinator, two employed educators and three children in its care.
2. The applicant submits that on the day of the site visit on the 18 October 2016 he was involved in a motor vehicle accident. He sustained injuries and was unable to attend the XYZ service. He attended a doctor's appointment and sought medical treatment. He also notified the respondent of his absence and that XYZ would be temporarily closed for 3 days. The coordinator was on leave and overseas at the time of the site visit.
3. The applicant acknowledges the service did not commence operation for over 12 months. The reason for not commencing in that time was the applicant was waiting for CCB approval which was needed for parents using XYZ to obtain child care benefits from the Commonwealth Government.
4. Counsel submitted the breach of failing to commence operation is at the lower end of seriousness and should attract a period of suspension for 12 months rather than cancellation. Counsel also submitted the condition set out in s.51(3) of the National Law requiring an approved service commence operation in 6 months was the 'least important' of all the conditions listed in s.51. That is, Counsel suggested a type of hierarchy of conditions of which sub-section (3) was the 'least important'. Counsel provided no authority or any other basis for this statutory interpretation.
5. The applicant's submissions refer to the decision of Long Life Family Daycare v Director-General, Education Directorate (Administrative Review) (2016) ACAT 69 (Long Life). In that case the decision to suspend the service was affirmed and the suspension was reinstated for a further period of time. The applicant relies on this case for authority that suspension is the appropriate penalty for a breach rather than cancellation in the circumstances of this case.

Respondent's case

1. The applicant did not commence operation of the service. The officers from the respondent's office attended the XYZ on the 18 October 2016 and found no evidence of a family day care service operating.
2. The applicant's explanation about being in a motor vehicle accident is not plausible. The medical certificate is generic and inadequate. There is no other independent supporting evidence in relation to the motor vehicle accident and injuries sustained.
3. The applicant stated the coordinator of XYZ was on leave and overseas at the time of site visit but there is no evidence of her being overseas and the coordinator is not referred to in the applicant's affidavit.
4. The applicant provided different dates of registration for the educators in his affidavit to the dates he provided in his undated letter to the respondent when advising service operation had commenced on 30 August 2016.
5. The respondent submits that while the Tribunal can suspend rather than cancel the service approval, its primary and preferable submission is for the Tribunal to confirm the cancellation decision. The applicant failed to commence ongoing operation within the prescribed time and this included a further 6 month extension granted by the respondent.
6. The conditions of service approval set out in S.51(1)-(4) are mandatory conditions and their importance are confirmed by the penalty provisions (if breached) in s51(8) of the National Law.
7. The applicant has only attempted to commence operation on a small scale to assist this case rather than as a genuine attempt to commence operation. If the applicant is not granted CCB approval it is highly unlikely the service will operate in the future.
8. The applicant may commence operation without CCB approval. The CCB approval is subject to and controlled by Commonwealth legislation and is not part of the statutory scheme under the National Law.
9. To permit a breach of s.51(3) of the National Law on the basis that a provider is awaiting approval from the Commonwealth under another regulatory regime would undermine the operation of the scheme for provider and service approval under the National Law.

Consideration

1. The Tribunal is not persuaded by the applicant's submission that the service had commenced ongoing operation and was operating on the day of the site visit on 18 October 2016.
2. The officers who attended the site found a garage with a sign of the name and contact details of the service. They met the person who lived in the main residence who told them the garage was rented out separately. There was no evidence of children, educators or a coordinator being present and operating a family day care service. There was no signage of the service being temporarily closed. There is also no evidence from the applicant that the children's parents had been notified of the temporary closure on that day or on the following days it was closed.
3. The applicant gave evidence that he was in a motor vehicle accident and sustained injuries on the day of the site visit on the 18 October 2016 causing him to temporarily close the service. The medical certificate relied upon is a general statement of unfitness due to a 'medical condition' signed by the attending doctor. There is no reference to the symptoms or injuries sustained or the cause of injuries being a motor vehicle accident. The applicant was asked about the inadequacy of the certificate in cross-examination and stated that the doctor who provided the medical certificate also sent him to hospital on the same day. He stated he went to hospital and was treated by another doctor who gave him medication and provided a further medical certificate with more information. However, the applicant did not provide this second medical certificate in the material filed or during his evidence. There is also no reference to his later treatment at the hospital contained in his Affidavit sworn 11 January 2017.
4. There is little information about the motor vehicle accident in the applicant's evidence. There are no witness statements or details about the accident. If the accident was reported to police and or to an insurance company, there is no supporting documents.
5. The applicant gave evidence that the family day care co-ordinator was not available on the 18 October 2016 as they were overseas. However, the applicant provided no statement or evidence about this person and no other supporting documentation was provided as to their whereabouts on the 18 October 2016.
6. A family day care service under National Law is defined by a service that is delivered through 2 or more educators. See s.5 of the Act. After the applicant received the Show Cause Notice dated 6 September 2016 he wrote to the respondent regarding the operation and provided the educator registration details for one educator. On the 18 October 2016, the applicant notified the respondent that he had been in a motor vehicle accident and again referred to having one educator. Registering only one educator does not comply with the definition of a family day care service. The applicant's Affidavit of the 11 January 2017 does refer to registering two educators with the service. However, this is contrary to the applicant's earlier statements. There may be an explanation to reconcile these differences but none was provided by the applicant in his Affidavit or in evidence.
7. The Tribunal finds the applicant's explanation for his absence from the service on the 18 October 2016 lacks credibility and is not persuaded that the service was operating on the day of the site visit.

Contravention of s.51(3) of the National Law

1. For the reasons above the Tribunal is satisfied that the XYZ service had not commenced ongoing operation within the time agreed to by the respondent and prior to the respondent's decision to cancel the service approval. The applicant was therefore in contravention of s.51(3) of the National Law. It follows that the respondent's decision to cancel the service approval under s77(d) of the National Law was a lawful exercise of their discretion.

Cancellation or Suspension

1. Under s.193(3) of the National Law the Tribunal can either affirm or amend the decision of the Regulatory Authority or it can substitute another decision for the decision of the Regulatory Authority.
2. The applicant has requested that the Tribunal not cancel but rather suspend the service approval for a period of twelve months. This would give the applicant more time to obtain CCB approval.
3. The applicant has submitted that the Tribunal should regard any failure to commence operation within the prescribed time as a minor breach and not one warranting cancellation. The applicant submits it has shown at the very least, a readiness to commence operation subject to CCB approval and the service should be suspended to enable the applicant more time to obtain CCB approval.
4. Section 63(1) of the Administrative Decisions Review Act 1997(NSW) guides the Tribunal as to what information it can take into account when making a decision. 63 Determination of administrative review by Tribunal (1) In determining an application for an administrative review under this Act of an administratively reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following: (a) any relevant factual material, (b) any applicable written or unwritten law.
5. In considering a decision whether to suspend or cancel a service approval, it is reasonable and relevant in the Tribunal's opinion, for the respondent to have regard to the history of compliance of the applicant since attaining service approval.

Applicant's history of Compliance

1. The respondent granted the applicant a service approval to XYZ on the 21 August 2015 subject to the condition that it commence within 6 months expiring on the 20 February 2016. XYZ did not commence operation within this time.
2. The applicant sent the respondent a notification that it had not commenced operation on 1 March 2016. The notification was sent after the expiration of 6 months and in breach of s. 173(1) of the National Law. It is an offence under this section to fail to notify the respondent within 6 months. The Tribunal notes the applicant referred in his affidavit to sending a notification to the respondent on the 18 January 2016. However, the only notification attached to the affidavit is dated 1 March 2016.
3. On the 8 March 2016 the respondent agreed to extend the time for an additional 6 months expiring on the 20 August 2016. XYZ did not commence operation within this time.
4. The respondent issued a Show Cause Notice to the applicant on the 6 September 2016. The applicant advised the respondent that it had commenced operation on the 30 August 2016.
5. The respondent conducted an unscheduled site visit on the 18 October 2016. The site visit found no evidence of XYZ operating as a family day care service for children. The applicant provided reasons as to why he was absent on this day and why the service was not operating. As already discussed in this decision the Tribunal is not satisfied the service was operating.
6. The applicant was given a significant period of time to commence the ongoing operation of XYZ. It failed in that regard in significant respects. These are matters that, in the Tribunal's view can be properly taken into account, in considering whether or not to cancel or suspend the service approval.

Other relevant matters

1. The applicant raised the difficulties of not obtaining CCB approval as justification for its non- commencement. However, CCB approval is about the financial management of the service and is not a criteria or barrier to commencing operation under the National Law.
2. The Tribunal also agrees with the respondent that to permit a breach of s.51(3) of the National Law on the basis that a provider is awaiting approval from another regulatory authority may undermine the statutory scheme for provider and service approval.
3. This issue was addressed by the Tribunal in CTG v NSW Department of Education, Early Childhood and Care Directorate (2017) NSWCATAD 60: "The purpose of the time frames is to provide currency to the approval process, and avoid a situation whereby one set of regulatory compliance is satisfied whilst another parallel regime could (in some instances) remain in abeyance for considerable time, if not indefinitely."
4. The applicant referred to the matter of Long Life Family Daycare v Director General Education Directorate (Administrative Review) [2016] ACAT 69. However, the applicant did not detail or elaborate how Long Life supported its submissions. This case was decided on its facts that stemmed from the regulatory authority suspending a service that had been operating for some time. Much of the case involved a discussion on numerous compliance issues relating to the ongoing operation of the service. In the Tribunal's view, it does not assist the applicant on these facts.
5. For the reasons given, the Tribunal is satisfied that the cancellation decision is the correct and preferable decision and the Tribunal makes the following order:

Order 1. The decision of the respondent is affirmed. 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: 05 April 2017