DAM v NSW Department of Education and Communities

Legislative background

1. The objectives and guiding principles of the National Law are in section 3: 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.
2. Section 4 provides how the functions under the National Law are to be exercised as follows: 4 How functions to be exercised An entity that has functions under this Law is to exercise its functions having regard to the objectives and guiding principles of the national education and care services quality framework set out in section 3.
3. 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. The applicant in this matter is a company. An applicant must obtain service approval under Part 3 in order to operate an education and care service.
4. The process under the National Law provides that under Part 2 an applicant must have provider approval from the regulatory body, which is defined in section 5. The Regulatory Authority is defined in section 5 to be: "Regulatory Authority" means a person declared by a law of a participating jurisdiction to be the Regulatory Authority for that jurisdiction or for a class of education and care services for that jurisdiction...
5. Pursuant to section 24 of the Children (Education and Care Services) Supplementary Provisions Act 2011 (NSW) references to Regulatory Authority in the National Law is a reference to the Regulatory Authority for this jurisdiction. Under section 9 of the Children (Education and Care Services National Law Application) Act 2010 (NSW), the Regulatory Authority for this jurisdiction (NSW) is the Director-General of the Department of Education and Communities.
6. A service approval is granted pursuant to section 48 of the National Law.
7. There are conditions which attach to the grant of a service approval as provided by section 51 of the National Law, and relevantly for this application, also by any other conditions prescribed in the regulations or imposed by the National Law or by the Regulatory Authority, by reason of section 51 (5). The penalty for failure to comply is $50,000 in the case of a company such as the applicant in this matter. The provisions of section 51 of the National Law are as follows: 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. (6) A condition of a service approval does not apply to an associated children's service unless the condition is expressed to apply to that associated children's service. (7) A condition of a service approval may be expressed to apply solely to an associated children's service only if the Regulatory Authority has first consulted with the children's services regulator. (8) An approved provider must comply with the conditions of a service approval held by the approved provider. Penalty: $10 000, in the case of an individual. $50 000, in any other case.
8. The National Law also provides a mechanism for the Regulatory Authority to suspend or cancel a provider approval and a service approval. Relevantly for this matter section 77 of the National Law provides: 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.
9. If the Regulatory Authority is considering the cancellation of the service approval under section 77 a "show cause notice" must issue under section 78 of the National Law. In this matter a show cause notice was issued on 13 September 2016. Pursuant to section 78(2)(c) the approved provider may, within 30 days after the notice is given, give the Regulatory Authority a written response to the proposed cancellation. The applicant provided a response to the show cause notice on 4 October 2016.
10. After considering any written response to the show cause notice received within 30 days, the Regulatory Authority may cancel, suspend or decide not to cancel the service approval pursuant to section 79 of the National Law. The decision is a discretionary decision.
11. In this application the respondent decided to cancel the service approval because of the alleged breaches of the provider approval by failing to comply with the law in relation to specific requirements under the regulations which are detailed in the show cause notice.

Jurisdiction

1. In CTG v NSW Department of Education Early Childhood and Care Directorate [2017] NSWCATAD 60, Senior Member McAteer determined that the application before the Tribunal is in the review jurisdiction rather than as an external appeal. This decision was followed by the Senior Member in CVT v NSW Department of Education & Communities, Early Childhood Education & Care Directorate [2017] NSWCATAD 74. In CTZ v NSW Department of Education, Early Childhood Education and Care Directorate [2017] NSWCATAD 132 the currently constituted Tribunal considered the same matters in detail. The following paragraphs contain alot of that exposition.
2. Pursuant to section 28 of the Children (Education and Care Services) Supplementary Provisions Act 2011 (NSW) a reference in section 192 of the National Law to a reviewable decision for external review includes "any decision of the Regulatory Authority of a kind specified for the regulations to be a reviewable decision for external review." Clause 114 of the Children (Education and Care Services) Supplementary Provisions Regulation 2012 (NSW) in relation to a reviewable decision states: 114 Reviewable decisions For the purposes of section 28 of the Act, the following decisions of the Regulatory Authority are reviewable decisions for external review: (a) a decision to require an approved provider to employ additional staff, (b) a decision to refuse an application for an approval to provide a child-minding service under Part 8.
3. Pursuant to section 28 (a1) of the Community Services (Complaints, Reviews and Monitoring) Act 1993 (NSW) a decision that is administratively reviewable for external review under section 192 of the National Law Alignment Provisions is to be heard in the Civil and Administrative Tribunal for administrative review under the Administrative Decisions Review Act 1997 (NSW). The National Law Alignment Provisions is defined in section 17 of the Children (Education and Care Services) Supplementary Provisions Act as follows: 17 Alignment with National Law The National Law, as in force from time to time: (a) applies to State regulated education and care services as if those services were education and care services within the meaning of the National Law, and (b) so applies with the modifications provided for by or under this Act, and (c) as so applying may be referred to as the "National Law Alignment Provisions" , and (d) so applies as if it were part of this Act.
4. Section 192 of the National Law relevantly 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 (v) to suspend or cancel a supervisor certificate under section 125; or (vi) to direct the approved provider of a family day care service to suspend the care and education of children by a family day care educator; or (vii) to give a prohibition notice or to refuse to cancel a prohibition notice. Note : A person is not entitled to a review under this section in respect of a suspension or cancellation of a service approval if that suspension or cancellation relates only to an associated children's service. Any right of review would be under the children's services law.
5. The cancellation of a service approval under section 79 of the National Law is thus a reviewable decision for external review pursuant to section 192 (b) (iv) of the National Law.
6. Section 193 of the National Law provides: 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.
7. In section 5 of the National Law the definition of relevant tribunal or court is: "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;
8. In section 8 of the Children (Education and Care Services National Law Application) Act 2010 the relevant Tribunal is declared: 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.
9. Therefore, the scheme of the legislation is that the Civil and Administrative Tribunal is the relevant tribunal to which an application may be made for external review of a decision of the Regulatory Authority under section 79 of the National Law. The powers given to the Tribunal by section 193 of the National Law are not as extensive as the powers under section 63(3) of the Administrative Decisions Review Act 1997 (NSW).
10. Since the application to this Tribunal is an administrative review it is considered that the Tribunal is to decide what the correct and preferable decision is having regard to the material before it: section 63(1) Administrative Decisions Review Act 1997 (NSW); YG & GG v Minister for Community Services [2002] NSWCA 247, Hodgson JA (with whom Foster and Brownie AJJA agreed) at [25].

The evidence relied upon in the interim hearing

1. The documents in evidence for the interim application before the Tribunal are: 1. Application for stay or interim order filed 5 April 2017, annexing the Administrative review application form filed on the same date together with a letter from the respondent dated 23 March 2017 and the applicant's letter to the registrar dated 4 April 2017: Exhibit 1. 2. Affidavit of a Director of the applicant dated 11 April 2017 and filed the same date: Exhibit 2.
2. The Tribunal was also assisted by the parties' representatives and their respective oral submissions.

Other Legislative Provisions relevant to the interim decision

1. The guiding principle to be applied to practice and procedure in the Tribunal "is to facilitate the just, quick and cheap resolution of the real issues in the proceedings" consistent with the objects and principles under the Act: section 36 of the Civil and Administrative Tribunal Act.
2. The Tribunal may determine its own procedure in relation to any matter for which the Civil and Administrative Tribunal Act, or Civil and Administrative Rules 2014 do not otherwise make provision. Additionally, the Tribunal is not bound by the rules of evidence (except in relation to privileged disclosures, for example under section 128 of the Evidence Act 1995), and is to act with as little formality as the circumstances permit to appropriately determine matters without regard to technicalities or legal form: sections 38, and 67 of the Civil and Administrative Tribunal Act; Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32.
3. Procedural fairness and other aspects of natural justice, of course, are to apply to these proceedings and the Tribunal has a discretion to act on material which is rationally probative, but must determine in all the circumstances whether it is proper to act on that material and must act fairly towards the parties: see e.g. Commission for Children and Young People v FZ [2011] NSWCA 111; Roberts v Balancio (1987) 8 NSWLR 436.
4. The Administrative and Equal Opportunity Division ("AEOD") of the Tribunal has its practice and procedure prescribed by reason of Schedule 3 of the Civil and Administrative Tribunal Act. Relevantly, a party to proceedings in this division on an application for review of this current decision is not entitled to be represented by a lawyer without seeking leave of the Tribunal: see sections 16, 17 and Schedule 3, clause 9(1), of the Civil and Administrative Tribunal Act. Also, costs may be awarded; see schedule 3, clause 13.

The Issue

1. The applicant seeks to stay the decision of the NSW Department of Education and Communities made on 23 March 2017. The applicant seeks that the operation of the decision should be stayed until after a further and more complete hearing. The Tribunal has to determine whether it is desirable to do so after taking into account: 1. the interests of any persons who may be affected by the determination of the application, and 2. any submission made by or on behalf of the administrator who made the decision to which the application relates, and 3. the public interest.
2. Additionally, conditions may be imposed while granting a stay for a specified period of time, or if no period is specified until the decision of the Tribunal on the application takes effect: section 62 Administrative Decisions Review Act; Elgammal v Director General, Department of Transport [1999] NSWADT 82.
3. Generally, in civil litigation, a stay of the operation of a decision pending an appeal is granted where a successful appeal would be useless or futile unless the stay were granted: Polini v Gray (1879) 12 Ch D 438. This application is not an appeal but an administrative review, but there is force in the rationale behind the grant of a stay in those circumstances.
4. It has also been said that the overriding principle in any stay application is that of upholding the interests of justice in the particular circumstances: New South Wales Bar Association v Stevens [2003] NSWCA 95 at [83].
5. Where a decision has been made in the public interest, the protection of the public is a matter entitled to significant weight: New South Wales Bar Association v Stevens (supra) at [90]-[104].
6. In New South Wales Bar Association v Stevens (supra) His Honour Chief Justice Spigelman (as he then was), with whom Meagher and Sheller JJA agreed, said this of the public interest at [103]-[104]: "[103] The significance of the public interest dimension in the exercise of the discretion to grant a stay in such circumstances, was highlighted by Kirby J in Bryant v Commonwealth Bank of Australia (1996) 70 ALJR 306 at 309 where his Honour said: "In the exercise of the jurisdiction to provide a stay, it has often been emphasised that cases involving a stay of the operation of the criminal law or of laws designed to protect the public (e.g. deregistration of a professional lawyer or medical practitioner) are in a class different from cases involving no more than the suspension of the operation of orders affecting two private litigants only." [104] It is clear from this consideration of the authorities that each case must turn on its specific facts. The range of relevant considerations is broad. Nevertheless the fact that the issues involved in professional rights to practice concern the protection of the public, means that the public interest is always entitled to significant weight."
7. As previously referred to, the issue the Tribunal is to decide in these proceedings is what "the correct and preferable decision is having regard to the material then before it" including material which may not have been before the NSW Department of Education and Communities: section 63(1) Administrative Decisions Review Act 1997 (NSW); YG & GG v Minister for Community Services [2002] NSWCA 247, Hodgson JA (with whom Foster and Brownie AJJA agreed) at [25].
8. There is no requirement upon the applicant to show that the original decision maker's decision was wrong: Re Control Investments Pty Ltd v Australian Broadcasting Tribunal (No 2) (1981) 3 ALD 88.

Considerations and the Evidence

1. The application and approval was made under the National Law where various criteria for approval and maintaining of the currency of the approval are set out.
2. The applicant has been operating its childcare business presumably without drawing adverse attention from after the approval in late 2013 up until the inspection which occurred on 29 August 2016. There is no evidence as to when the business actually commenced operating.
3. The applicant records in the affidavit from the Director (Exhibit 2) that many of the alleged breaches are able to be remedied by the provision of further information or certificates, and overall the compliance with those matters is capable of relatively expeditious remedy. The applicant has engaged a specialist compliance consulting firm prior to the inspection in order to assist it to comply with the National Law. The applicant will continue to engage with the consultant to ensure compliance with its obligations under the National Law.
4. The fortnightly expenses of the applicant to conduct its business is about $10,500. The applicant will incur a liability between 6 April 2016 and 6 October 2016 of approximately $136,500. The applicant operates with approximately 250 students and 40 educators. It is not a relatively minor business. The educators in the employ of the applicant received a cumulative income of approximately $100,000 per fortnight.
5. In the event that the stay was not granted the parents of the students and the educators would have to move to other providers and there would be no business for the applicant to operate if the final decision was in its favour. It is likely the applicant would become insolvent and be liquidated if the stay was not granted.
6. The guiding principles under the National Law are in subsection 3(3) stated to be: (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.
7. The rights and best interests of the child are paramount in implementing the National Law. Since section 4 of the National Law requires an entity that has functions under the law to exercise those functions having regard to the objectives and guiding principles set out in section 3, the Tribunal is required to regard the rights and best interests of the child as paramount in making a determination as to the correct and preferable decision in this matter.
8. It is in the interests of all those involved in the provision of the applicant's childcare services and the consumers of those services for there to be as little interruption to those services as possible until a final determination is made in the Tribunal.
9. The administrator has made relevant submissions.
10. It is in the public interest for properly run services to continue to operate. These services provide a worthwhile and much-needed public benefit for the care and education of children.

Conclusion

1. The ultimate determination of the correct and preferable decision must regard the best interests of the child who may receive the benefit of the service as paramount.
2. The National Law facilitates the provision of a national education and care services quality framework for the delivery of education and care services to children. The fact that the applicant received service approval to run a Family Day Care Service is an indication that the applicant was considered capable of providing quality education and care services to children. The fact that the service has operated successfully is also an indication that it has been viewed favourably by parents of the children who benefit from its service.
3. The respondent agreed that children would have to go elsewhere if this childcare centre closed down and agreed that there was no serious imminent risk in the Family Day Care Service continuing to operate whilst the final decision is made by the Tribunal.
4. A successful review would be useless or futile unless the stay was granted. In those circumstances a stay of the operation of a decision pending the review should therefore be granted. The overriding principle in any stay application is that of upholding the interests of justice in the particular circumstances, and the interests of justice in this matter appear to require that the decision not be acted upon until the review is determined.
5. An order under section 60 of the Administrative Decisions Review Act to stay the operation of the decision is desirable to do so after taking into account the matters required in the subsections. In particular it is in the interests of the applicant for the service to continue to operate unimpeded until a final determination is made. It is in the interests of the parents and children for the service to continue to operate until a final decision is made. It is in the public interest for the service to continue to operate provided it operates properly and within the National Law. Since it is in dispute as to whether there is compliance by the applicant with the National Law, it is not in the public interest to reach a precipitous and potentially damaging conclusion before considering all of the evidence.
6. It was for these reasons that a stay was granted on 12 April 2017.

Order

1. The order of the Tribunal is that: 1. The decision of the respondent on 23 March 2017 to cancel the applicant's provider approval under the Children (Education and Care Services) National Law (NSW) is stayed until the final determination of the Tribunal of the Administrative review application filed 5 April 2017.

Endnotes

1. See section 28(1)(a1) Community Services (Complaints, Reviews and Monitoring) Act 1993 (NSW)
2. See section 28(1)(b) Community Services (Complaints, Reviews and Monitoring) Act 1993 (NSW) 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: 02 June 2017