CVT v NSW Department of Education & Communities, Early Childhood Education & Care Directorate - [2017] NSWCATAD 74 - NSWCATAD 2017 case summary — Zoe

NSWNSWCATAD

CVT v NSW Department of Education & Communities, Early Childhood Education & Care Directorate

[2017] NSWCATAD 74

NCAT Administrative and Equal Opportunity|2017-01-31

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Source facts

Court

NCAT Administrative and Equal Opportunity

Decision date

2017-01-31

Source

Original judgment source is linked above.

Judgment (12 paragraphs)

[1]

Background

On 10 November 2016 the applicant filed an application for administrative review with the Tribunal. That application concerned the decision of the respondent to cancel the service approval previously granted to the applicant in respect operating a Family Day Care Scheme. The applicant had previously applied for and had been granted approval by the respondent to operate a family day care service on 16 June 2015.
The application and approval was made under the Children (Education and Care Services) National Law (NSW) No 104a (the National Law) whereby various criteria for approval and maintaining of the currency of the approval are set out.
In summary five months after initial approval the applicant's family day care service had not commenced operation. On 13 November 2015 the applicant notified the respondent of this position. The National Law provides for a condition of approval being that the service commences within 6 months of initial approval. As the applicant had not commenced operation, and following communication between the parties the respondent granted a six-month extension to the commencement deadline, substituting 15 December 2015 for 15 June 2016. However by September 2016 the respondent had still not commenced their business service operations and the respondent issued a Notice to Show Cause on 6 September 2016 giving the applicant 30 days to respond.
On 11 October 2016 the respondent determined to cancel the applicant's service approval (effective 25 October 2016).
The application to the Tribunal referred to in paragraph 1 (above) was returnable on 24 November 2016. Accompanying that application for review was a stay application. On 24 November 2016 the parties reached agreement that the stay application could proceed by consent and orders were made by the Tribunal staying the respondent's decision to cancel the service approval, until further order of the Tribunal. The substantive matter was set down for hearing on 31 January 2016.

[2]

The legislative scheme

The National Law is expressed in the Note to the Long Title as: The Education and Care Services National Law is applied and modified as a law of NSW by the NSW Children (Education and Care Services National Law Application) Act 2010.
The Children (Education and Care Services National Law Application) Act 2010 (the Application Act) has a long title which states 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.
Whilst the Application Act has no objects section, it can be gleaned from the long title that a purpose of the Act is to apply law, which is directed towards relating the regulation of education and care services for children.
The objects section of the National Law is expressed as objectives and guiding principles at section 3 and goes to the provision of a quality framework, which improves and measures the provision of services to children. The section states: 3 Objectives and guiding principles (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.
The National Law provides under Part 3 for a natural person or company to operate an education and care service, which includes family day care services. An applicant must obtain service approval under Part 3 in order to operate an education and care service.
The process as taken from the National Law provides that under Part 2 an applicant must have provider approval from the regulatory body, which is defined in section 5. Under the Application Act the Regulatory Authority is taken to be the Secretary of the Department of Education. 9 Regulatory Authority For the purposes of the definition of Regulatory Authority in section 5 of the Children (Education and Care Services) National Law (NSW), the Director-General of the Department of Education and Communities is declared to be the Regulatory Authority for this jurisdiction for the purposes of that Law.
Section 51 of the National law addresses conditions of service approval. The section provides for the following specified mandatory and additional conditions of service approval: 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)
The Regulatory Authority has a number of consequential powers and functions under the National Law following the granting of service approval. These are in the nature of application and refusal, amendment, transfer, suspension, cancellation, application for waiver of approval and temporary waiver. These matters are set out at Divisions 1 - 6 (inclusive) of Part 3 of the National Law.
Section 77 of the National Law provides for grounds for the regulatory Authority to cancel the service approval in accordance with its powers under section 79 of the Act. The two sections are: 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. ……… 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.
In the current matter, the respondent made a decision under section 79 (1) (i) after deciding that the condition under section 51 (3) had not been met. As a result the applicant applied for external review of that decision by the Tribunal.

[3]

Jurisdiction

The jurisdiction of the Tribunal arises from the operation of both the National Law and the Application Act. In the recent decision of the Tribunal in CTG v NSW Department of Education Early Childhood and Care Directorate [2017] NSWCATAD 60 I determined the Tribunal's jurisdiction and the question as to whether the application constituted an external appeal or a review jurisdiction. At paragraphs 14- 20 (inclusive) I determined that the matter is properly dealt with by NCAT in its review jurisdiction. Jurisdiction 14. The jurisdiction of the Tribunal arises from the operation of both the National Law and the Application Act. The National Law provides for external review of the material decision. Section 192 (b) (iv) provides: 192 Reviewable decision - external review A reviewable decision for external review is - (a) a decision of the Regulatory Authority made under section 191 (other than a decision in relation to the issue of a compliance direction or a compliance notice); or (b) a decision of the Regulatory Authority under this Law as applying in any participating jurisdiction - (i) to suspend a provider approval under section 27; or (ii) to cancel a provider approval under section 33; or (iii) to suspend a service approval under section 72; or (iv) to cancel a service approval under section 79 or 307; or 15. Section 193 under Part 8 of the National Law provides for the manner of external review of a decision of the Regulatory Authority: 193 Application for review of decision of the Regulatory Authority (1) A person who is the subject of a reviewable decision for external review may apply to the relevant tribunal or court for a review of the decision. (2) An application must be made within 30 days after the day on which the applicant is notified of the decision that is to be reviewed. (3) After hearing the matter, the relevant tribunal or court may - (a) confirm the decision of the Regulatory Authority; or (b) amend the decision of the Regulatory Authority; or (c) substitute another decision for the decision of the Regulatory Authority. (4) In determining any application under this section, the relevant tribunal or court may have regard to any decision under this Law as applying in another participating jurisdiction of a relevant tribunal or court of that jurisdiction. 16. Section 5 of the National Law defines relevant tribunal or court. 5 Definitions (1) In this Law - …. relevant tribunal or court, in relation to a participating jurisdiction, means the tribunal or court declared by a law of that jurisdiction to be the relevant tribunal or court for the purposes of this Law or a provision of this Law; 17. Section 8 of the Application Act provides that NCAT is the relevant tribunal for the purpose of such an external review. 8 Relevant tribunal or court For the purposes of the definition of relevant tribunal or court in section 5 of the Children (Education and Care Services) National Law (NSW): (a) the District Court is declared to be the relevant tribunal or court for this jurisdiction for the purposes of section 181 of that Law, and (b) the Civil and Administrative Tribunal is declared to be the relevant tribunal or court for this jurisdiction for the purposes of Part 8 of that Law. 18. I note that the National Law makes no reference to the Administrative Decisions Review Act 1997 (the ADR Act). In this regard it could be argued that the Tribunal is not exercising administrative review functions but an external appeals function. Section 30 of the Civil and Administrative Tribunal Act 2013 additionally refers to administrative review by reference to the ADR Act. Section 31 however refers to the Tribunal's external appeal jurisdiction. Section 31 (1) provides the following: 31 External appeal jurisdiction of Tribunal (1) The Tribunal has external appeal jurisdiction over a decision (or class of decisions) made by an external decision-maker if legislation provides that an appeal may be made to the Tribunal against any such decision (or class of decisions). 19. 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. 20. 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.

[6]

Evidence at hearing

Prior to the evidence of the applicant, the respondent submitted that there had been some developments in the matter between the granting of the stay on 24 November 2016, and the substantive hearing. The material received as Exhibit 'A 3' relates to these developments.
The applicant gave evidence at the hearing. The applicant in their evidence in chief outlined that they had sought approval for the maximum number of educators (60) as part of the proposed business structure / model as allowed under their service approval under section 48 of the National Law.
The Tribunal inquired of the applicant into matters as to the change in status of the business in recent times. The applicant's evidence was that the business did not grow at all between 16 June 2015 (the date approval was granted) and January 2017. The applicant's evidence was that they understood that they were able to operate without childcare benefit approval (CCB) from the Commonwealth Department concerning the childcare rebate.
The applicant's evidence was that the business was now operating with four children between the ages of 5 and 13. The business had employed two educators to deliver the service provided by the business. Both educators had commenced studying the relevant courses which is a requirement to be an educator under the National Law.
The Child 'A.A' (Male) who is 4 years and 6 months of age is enrolled with the business. Another child, also 'A.A.' (female) who appears to be the twin of the male, is also enrolled with the business. Both siblings commenced attendance with the service the day prior to the hearing. (30 January 2017). The reasons that the applicant gave for this state of affairs was that the demand on the service was for before and after school care, and that the new school year / term for 2017 had only commenced a day or so prior to the hearing and this explained the children's actual commencement date with the service. In addition both siblings 'A.A.' had enrolled hours of 3pm to 7pm Monday to Friday and 8am to 7pm Saturdays.
Evidence was given that the first children enrolled with the business commenced in early January 2017. These children the child 'A.E' (female) who is 7 years of age, the child 'H.E.' (male) who is 13 years and 6 months of age, commenced their enrolment with the business on 3 January 2017. Both 'A.E.' and 'H.E.' are siblings. They are also the children of the applicant in these proceedings. Both of these children commenced with care attendances for the period 3pm to 7pm Monday to Friday and 8am to 6pm Saturdays. These enrolment conditions covered afterschool hours and one weekend day, albeit commencing some four weeks prior to the commencement of the school year.
Evidence was provided in respect of two educators engaged by the business. The educator 'S.B.'s appointment was substantiated by photo ID and a Birth Certificate as part of Exhibit 'A-3'. The educator 'R.Y.'s appointment was substantiated by photo ID, a Medicare Card and a Birth Certificate as part of exhibit 'A-2'. Copies of correspondence dated 9 January 2017 confirmed that educator 'R.Y.' had been approved as enrolled in the Diploma of Early Childhood Education and Care as of 11 January 2016. The Tribunal is uncertain as to whether the date is a typographical error, in that the approval commences a few days after the letter, or was given almost 12 months prior but not activated, and the next course commences January 2017. This matter was not clarified by the applicant or their Agent at the hearing. The letter advises that that the course commencement dates from 11 January 2017 - not 2016.
As previously noted at paragraph 25 (above), the possession of the qualification of a Diploma of Early Childhood Education and Care (or current enrolment in that course), is a mandatory prerequisite for approval as an educator under the National Law and associated provisions.

[8]

Respondent's submissions

In oral submissions the respondent submitted that at the time of the decision to cancel the service approval the applicant was unable to provide evidence that they were able to operate the service without CCB approval.
The respondent set out the timeline of its dealings with the applicant. On the respondent's submission service approval was granted on 16 June 2015.
On 13 November 2015 (approximately 1 month prior to the expiration of the 6 month period) the applicant advised that the service would not commence operating within the six-month period.
On 26 February 2016 the respondent sought details from the applicant concerning the proposed commencement date and reasons for the delay. On 10 March 2016 the respondent made telephone contact with the applicant who advised that the reason for the delay was that they were awaiting CCB approval.
On 4 April 2016 the respondent (after further exchanges of information) advised in writing that they would extend the commencement date for the service until 15 June 2016, and if the service had not commenced operation by that date, the respondent would proceed with cancelling the approval.
This was followed up by the respondent on 4 July 2016, and on 6 September 2016 the respondent gave notice to the applicant of its intention to cancel the service approval for a failure to commence operating. The same response was received (awaiting CCB approval) from the applicant. On 11 October 2016 the service approval was cancelled.
The respondent submitted that the National Law is, of its nature a law calling for strict compliance. In this regard the respondent referred to the case of: Long Life Family Daycare v Director General Education Directorate (Administrative Review) [2016] ACAT 69. At paragraph 12 the case observes: Even setting aside the issues of financial management, it is evidence (sic) that the providers of child care services are responsible for the health and welfare of the children in their care. This too, must require a high degree of probity, trustworthiness and compliance with the National Law.
The respondent submitted that by making certain requirements of the scheme mandatory, then such requirements (or conditions) are of some importance to the statutory scheme. The importance of compliance with those matters is further illustrated by the significant penalty provisions imposed under the National Law for breaches or non-compliance with certain relevant conditions.
The respondent submitted that the scheme envisages that in particular cases the respondent may exercise it's discretion detrimental to an applicant.
It submitted that a major factor going to the exercise of that discretion is the amount of time that an applicant is in breach of a condition. In the current matter the respondent pressed this issue notwithstanding the apparent commencement of the service in the intervening period. They submitted that: Even if the Tribunal accepts that the applicant has commenced operation, the respondent submits that the inference to be drawn from these documents is that the applicant has only commenced operating on a very small scale in order to assist it in the present proceedings. That is a factor which goes to reduce the weight to be given to the fact that operations have commenced in the determination of the correct and preferable decision.
The respondent emphasised the following submission in addition the paragraph above: Furthermore, the very limited scale of the operation strongly implies that if, as may well occur, the applicant is not granted CCB approval, the service may well not continue to operate. That, too, is a factor which supports the respondent's case.
In respect of a consideration of the applicant's grounds for not commencing the business (lack of CCB approval), the respondent submitted the following in support of the cancellation decision: Firstly it must be emphasised that the applicant may commence operation without CCB approval….. Secondly to permit an ongoing breach of section 51 (3) of the National Law on the basis that a provider is awaiting Commonwealth approval would undermine the operation of the scheme for service and provider approval, being matters which the respondent has regulatory responsibility.

[9]

Consideration

The delay in CCB approval was not significantly argued at the hearing. Perhaps this was because whilst various matters were provided by the applicant in Exhibit 'A 2', the landscape had changed by the time of the hearing with the apparent commencement of operations of the service.
Many of the matters relating to CCB approval are similar to the evidence and consideration given in the case of CTG v NSW Department of Education Early Childhood and Care Directorate [2017] NSWCATAD 60. In that case I observed at paragraph 38: 38. The central aspect of the applicant's argument again rests with his argument that in essence, the service cannot practically operate with out CCB approval, and therefore the service provider should be able to retain service approval until such time as the CCB approval is granted. At that time the service would begin to operate.
Further in CTG I also observed the following submissions of the respondent at paragraph 49: 49. In respect of a consideration of the applicant's grounds for not commencing the business (lack of CCB approval), the respondent submitted the following in support of the cancellation decision: • The applicant may commence operation without CCB approval. To permit an ongoing breach of section 51 (3) on the basis that a provider is awaiting Commonwealth approval would undermine the operation of the scheme for service and provider approval, being matters which the respondent has regulatory responsibility. ….. • To reinstate service approval whilst CCB approval remains pending and potentially unachievable would create a situation whereby the respondent has regulatory authority and responsibility over a service which may not operate for an indefinite period, if at all. Such a situation would be prejudicial to the respondent.
Those arguments do not strictly apply to the current matter. As a result significant portions of the respondent's submission fall away. However this arises from a factual development (the limited operation of the service). However in my view the fact that the service is operating provides some grounds for finding that as a matter of record the applicant is now complying with the relevant provisions of the National Law.
In addition, irrespective of the applicant's motives (which were not explored further at hearing and counter arguments in part took the form of reasoned speculation), it could be observed that the applicant is doing exactly what the respondent submitted they should. That is, commence operating the service in the terms of the service approval irrespective of the availability of CCB approval. In making this observation I note the significant delay in the period June 2015 to January 2017 attributable to the applicant.
The question remains as to whether notwithstanding those observations, the decision as made on 11 October 2016 was the correct and preferable decision (at that time).

[10]

Further consideration

I am satisfied that the applicant was in contravention of section 51 (3) of the National Law and that the respondent lawfully exercised it's discretion in accordance with section 77 (d) of the National Law in October 2016 and I so find.
In CTG at paragraphs 58 and 59 the following: 58. In my view the statutory provisions of the National Law as they relate to time frames in the conditions of approvals are quite clear. The system therefore is not designed to operate in order to facilitate the business variables of operators but clearly is designed with some flexibility to take these matters into account. It is therefore not a blunt bureaucratic instrument, but rather a regulatory scheme that have objects that go towards the provision of quality service in a somewhat protective environment. It is evident that the legislation should be applied and directed beneficially towards achieving the objects and guiding principles as set out in section 3. 59. 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. Currency of credentials, approvals, training and even some certainty of what is to be regulated or oversighted are in my view significant matters of public interest. They are matters consistent with the role for which approval is sought and in this instance the specific requirements of the Legislature in setting such specific standards.
Having made the finding above at paragraph 51 I am required to ascertain (notwithstanding that finding) what is the correct and preferable decision on the application now before me. I have considered whether it would be appropriate to set aside the decision and place conditions on the approval in accordance with the Regulation. However having examined the provisions of the Parts referred to in the Regulation, they are focused on maximum attendees rather than minimum number of children, and other relevant regulatory and compliance matters not specifically in issue in the current proceedings. Children (Education and Care Services) Supplementary Provisions Regulation 2012 Part 2  Division 1  Clause 7 7 Conditions of provider approval For the purposes of section 19 (1) of the National Law Alignment Provisions, the conditions of a provider approval are the provisions of Parts 3, 4, 5, 6 and 7 of this Regulation that are relevant to the type or types of education and care services that are provided by the approved provider. Note. Section 12 of the Act makes it an offence to contravene a condition of a provider approval.
In any event such an approach may be beyond the power or jurisdiction of the Tribunal, and would remain a function to be exercised as part of any ongoing monitoring as required under the National Law by the respondent.
Whilst these matters were in part canvassed at the conclusion of the hearing, it remains for the respondent to review any existing approvals of this or any service provider.

[11]

Conclusion

As I have found that the actions of the respondent were lawful and appropriate at the time of cancellation, I am left with a consideration of what order is appropriate at the conclusion of the evidence of the matter.
As already observed the landscape of the proceedings has shifted somewhat in the days and weeks prior to the hearing. It may be that is the decision is set aside, the appropriate course would be for the respondent to impose such further conditions, having regard to the limited operation of the business, in accordance with section 51 (5) (b) of the National Law as the respondent deems appropriate.
I observed the following in CTG at the conclusion of that matter: 62.If the applicant's desire is only to operate a service with CCB approval, then there seems to be no legal impediment to him reapplying for service approval and restarting or reactivating his CCB process. It would appear that various requisitions were in place and perhaps the timely attendance to these matters in any future application might assist the timely finalisation of such a CCB approval process. 63. Whilst these matters were canvassed at the conclusion of the hearing, I note that notwithstanding the lack of any apparent legal impediment, there is presumably some economic cost to such a course. In any event they will remain matters for the applicant to consider.
It would seem somewhat inappropriate to now in effect cancel the approval notwithstanding the fact that the service is operating (albeit on a limited basis), to merely uphold the decision and require the applicant to reapply in the manner envisaged in the discussion in CTG at 62 and 63. Such an approach would seem contrary to the guiding principle in the CAT Act 2013. 36 Guiding principle to be applied to practice and procedure (1) The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The Tribunal must seek to give effect to the guiding principle when it: (a) exercises any power given to it by this Act or the procedural rules, or (b) interprets any provision of this Act or the procedural rules. …. (4) In addition, the practice and procedure of the Tribunal should be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings. (5) However, nothing in this section requires or permits the Tribunal to exercise any functions that are conferred or imposed on it under enabling legislation in a manner that is inconsistent with the objects or principles for which that legislation provides in relation to the exercise of those functions.
Whilst not strictly on point concerning the manner / running of the proceedings in the Tribunal, this observation is in my view somewhat central to the resolution of the general issues in dispute between the parties as envisaged by section 36 (4). That observation (36 (4) ), is however balanced against the respondent's submissions which are more aligned with the matters at section 36 (5) of the CAT Act 2013.
Having considered all of the evidence and submissions given by the parties, and having regard to the objects and principles of the National Law, and the matters concerning the need for compliance as referred to in Long Life Family Daycare, for the reasons set out above, and in particular noting the potential remedy for the respondent at paragraph 57 (above), it is appropriate to make the following order.

CVT v NSW Department of Education & Communities, Early Childhood Education & Care Directorate

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