DBU v Secretary, Department of Education [2017] NSWCATAD 257 | Case summary

NCAT Administrative and Equal Opportunity|2017-08-09

Background

The applicant has been granted provider approval to run a proposed family day care service and is therefore an "approved provider" for the purposes of the National Law. On 28 June 2016, the applicant was granted a service approval to operate a family day care service at a location in Sydney. The approval was granted subject to conditions, including those set out in s 51 of the National Law.
In a telephone call on 26 September 2016 the applicant informed the respondent that she was awaiting "CCB approval". By that the applicant meant that she had been waiting for the service to be approved under part 8 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) ("CCB approval") so that the Commonwealth could pay Child Care Benefit payments for a child enrolled for care at the service.
On 21 February 2017 there was a further telephone call between the applicant and the respondent. While there is some difference of view between the applicant and the respondent about what was actually said during the conversation, the upshot of it was that the applicant stated that the service did not have any registered educators at that time and she was still awaiting CCB approval.
On 22 March 2017, some nine months after the approval had been granted, the applicant was issued with a show cause notice of intention to cancel the service approval on the basis that ongoing operation of the service had not commenced within six months after the service approval as required by the conditions in s 51. Following the applicant's response to the show cause notice, the service approval was cancelled on 28 April 2017 with effect from 12 May 2017.
On 23 June 2017 the Commonwealth refused the applicant's application for CCB approval. The applicant has sought an internal review of that decision but no decision has been made to date.

Did the applicant comply with the condition to commence ongoing operation?

The respondent cancelled the applicant's service approval because it was of the view that the applicant's family day care service did not "commence ongoing operation" within six months, as required by s 51(3) of the National Law. In s 5 of the National Law an "education and care service" is defined to mean "any service providing or intended to provide education and care on a regular basis to children under 13 years of age" other than some prescribed exceptions. Also in s 5, a family day care service is defined as "an education and care service that is delivered through the use of 2 or more educators to provide education and care for children in residences whether or not the service also provides education and care to children at a place other than a residence".
The applicant argues that it has commenced ongoing operations and points to the use of the word "intended" in the definition of an "education and care service". She states that she has always intended to provide education and care on a regular basis to children under 13 through the use of two or more educators. The service has attempted to register educators, but none would join the service without it having CCB approval. Similarly, parents would not enrol children unless they were assured of being able to obtain the child care benefit and this assurance could not be given without CCB approval.
Furthermore, the applicant states that she considers her family day care service to be operational as it is staffed, has external signage and contact details, insurances such as public liability and workers compensation are in place, the business has an ABN and a registered business name and bank accounts and the service is a member of Family Day Care Australia.
The respondent, on the other hand, submits that, it is not sufficient for a family day care service to be operating a business. In order for the applicant's family day care service to be an "ongoing operation" for the purposes of s 51(3), it must be operating in the way contemplated by the definitions of an "education and care service" and "family day care service" in s 5. That is, it must be providing education and care services to children on a regular basis in residences through the use of two or more educators. The inclusion of the words "intended to provide" in the definition of "education and care service" is necessary because a service, once approved, has six months to commence operations.
The respondent also points out that a service can enrol children and engage educators without having obtained CCB approval. The applicant states that, in her case, this was a practical impossibility.
It is clear from the legislation that, once a service approval has been granted, the provider has six months within which to commence operations - unless, of course, that time is extended by the respondent. In this case, there was no such extension sought or granted. I agree with the submissions made by the respondent that for a family day care service to have commenced ongoing operations, it must have commenced in the way contemplated by the National Law. That is, it must actually be operating as a family day care service providing education and care to children through the use of two or more educators. This was the conclusion reached by the Tribunal in CVM v NSW Department of Education [2017] NSWCATAD 108 with which I respectfully agree.
The phrase "intended to provide" is included in the definition of an "education and care service" because the nature of the scheme is that initial approval must be obtained before operations can in fact commence. I have no doubt that the applicant has always intended to provide a family care day service, but that subjective intention is not sufficient and not what is meant by the inclusion of the phrase in the definition. On the evidence before the Tribunal it is apparent that the applicant had not commenced ongoing operations in the way required by the National Law within six months of the approval.
I am therefore satisfied that the applicant was in contravention of the condition attached to the approval as set out in s 51(3) of the National Law. The respondent's decision to cancel the approval under s 79 of the National Law was therefore open to it in the exercise of its discretion.

Should the approval be cancelled?

Under s 193(3) of the National Law the Tribunal can confirm or amend the decision of the Regulatory Authority or it can substitute another decision for the decision of the Regulatory Authority.
The applicant has asked the Tribunal to set aside the decision to cancel the approval. She states, in essence, that the delay in enrolling children and registering educators has been due to matters beyond her control. This is because of the lengthy delay on the part of the Commonwealth in assessing the service's eligibility for CCB. She states she had done everything she could and is willing to provide whatever information is required to the relevant authority. It was apparent from the evidence provided by the applicant that, in her opinion, the lack of CCB approval provided a practical barrier to the operation of the service, particularly given the socio-economic features of the area within which the service is located.
The respondent submits that the decision under review should stand because of the nature of the scheme as a whole, the importance of the condition breached, the lack of a compelling reason for the delay and the length of delay.
In Long Life Family Daycare v Director-General, Education Directorate [2016] ACAT 69 at [12] the ACT Civil and Administrative Tribunal stated: [I]t is evidence (sic) that the providers of child care services are responsible for the health and welfare of the children in their care. This … must require a high degree of probity, trustworthiness and compliance with the National Law.
Indeed, the objectives and guiding principles of the National Law as set out in s 3 make clear the law is directed towards facilitating the implementation of a quality framework for the delivery of education and care services for children on a national basis which has at its forefront the rights and best interests of those children. To further those aims it is important that compliance with the law be implemented thoroughly and consistently throughout all Australian jurisdictions.
The applicant is in breach of the condition set out in s 51(3) of the National law. I agree with the submissions of the respondent that the condition is one of importance. Unlike some other conditions which may be imposed on an approval, this is a mandatory condition with legislative force. Furthermore, the importance of compliance with the condition is evident in the offence provision in s 173 and the penalties which may be imposed.
As was stated by this Tribunal in CGT at [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.
Some 10 months had elapsed before the respondent made a decision to cancel the approval. This is not an insignificant period of time. While I understand the practical issues raised by the applicant in commencing to operate the service without CCB approval, as stated above, there is no legal requirement that CCB approval be obtained before educators can be registered and children enrolled in the service.
Since this application was lodged, the Commonwealth has made a decision to refuse the application for CCB approval. That decision indicates that the delay in the CCB approval process was substantially attributable to the applicant who submitted incomplete information and was required to provide amended documentation at several points in the process.
The applicant is of the view that the decision will be overturned on review. The respondent, on the contrary, submits that there is no reason to expect that the Commonwealth will make a different decision. The Tribunal makes no comment on the applicant's prospects of success in the review application. I have, however, considered, in light of that application, whether the decision under review should be set aside and the applicant, in effect, be given further time to commence operation.
I am not satisfied that in the circumstances of this application that would be an appropriate course. The service approval was now granted more than 12 months ago on the basis of the information current at that time. That information may have changed. There are no children and parents who are affected by the cancellation of the approval as the service has not commenced. Members of the public are therefore not affected by the cancellation.
I accept that the cancellation has been a severe blow to the applicant's aspirations. She has made it apparent that she believes she can only successfully operate the service if she obtains CCB approval. If she is successful in her application for review of the CCB decision, while there may be some cost to her in reapplying for service approval, that course would appear to be open to her.
Having considered all the evidence and competing submissions of the parties, under s 193(3) of the National Law, I confirm the decision under review.

ORDER 1. The decision under review is confirmed.

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: 18 August 2017

Review jurisdiction

A decision to cancel a service approval is a reviewable decision for external review under s 192 of the National Law. Section 193 of the National Law provides: 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.
This Tribunal is identified in s 8 of the Application Act as the relevant tribunal to which an application for review may be made in New South Wales.
The respondent has raised an issue about the basis on which the Tribunal exercises the jurisdiction given to it by the Application Act.
Under the Civil and Administrative Tribunal Act 2013 ("the Tribunal Act") the Tribunal has jurisdiction of various kinds. These are: 1. the general jurisdiction in s 29 of the Tribunal Act; 2. the administrative review jurisdiction in s 30; 3. the appeal jurisdiction of the Tribunal (comprising its external and internal appeal jurisdiction in ss 31 and 32 respectively); and 4. the enforcement jurisdiction in s 33.
The internal appeal jurisdiction in s 32 and the enforcement jurisdiction in s 33 of the Tribunal Act have no relevance to the current issue.
In the case of CTG v NSW Department of Education [2017] NSWCATAD 60 the Tribunal held that it was not exercising its external appeals function but its administrative review jurisdiction under s 30 of the Tribunal Act. That decision has been followed in CVM v NSW Department of Education [2017] NSWCATAD 108, CVN v NSW Department of Education [2017] NSWCATAD 109, CVT v NSW Department of Education [2017] NSWCATAD 74 and CTZ v NSW Department of Education [2017] NSWCATAD 132. The respondent has submitted that those cases were wrongly decided and that jurisdiction is conferred under the general jurisdiction provision in s 29 of the Tribunal Act. The respondent does not dispute that CGT is correct in finding that the Tribunal's jurisdiction is not one in relation to an external appeal under s 31. The National Law refers to "external review", not "external appeal". It does not appear that the Tribunal in CGT gave consideration to s 29 of the Tribunal Act as a source of jurisdiction.
Section 30 of the Tribunal Act sets out provisions with respect to the Tribunal's "administrative review jurisdiction". Sub-section 30(1) states that the circumstances in which the Tribunal has "administrative review jurisdiction" over a decision of an administrator is determined by the Administrative Decisions Review Act 1997 ("ADR Act"). Section 9 of the ADR Act provides that the Tribunal has "administrative review jurisdiction" over a decision (or class of decisions) of an administrator if enabling legislation provides that applications may be made to the Tribunal for an administrative review under the ADR Act.
The National Law does not, in s 192, provide for administrative review under the ADR Act and no mention is made of the ADR Act in s 8 of the Application Act which identifies the Tribunal as the review body in NSW. Furthermore, the Tribunal's powers on review are set out in s 193 of the National Law rather than by reference to the ADR Act.
The Tribunal in CTZ v NSW Department of Education [2017] NSWCATAD 132, however, found that the jurisdiction of the Tribunal is enlivened under the ADR Act because of additional provisions set out in the Children (Education and Care Services) Supplementary Provisions Act 2011 (NSW) and the Community Services (Complaints, Reviews and Monitoring) Act 1993 (NSW). The respondent also submits that the approach of the Tribunal in that case was wrong.
Sub-section 28(1) of the Children (Education and Care Services) Supplementary Provisions Act provides: For the purposes of the National Law Alignment Provisions, a reference in section 192 of the National Law to a reviewable decision for external review includes, in addition to the decisions listed in that section, any decision of the Regulatory Authority of a kind specified by the regulations to be a reviewable decision for external review.
That is, the Children (Education and Care Services) Supplementary Provisions Regulation 2012 ("the Regulation") can provide that the Tribunal is able to review other specified decisions of the NSW Regulatory Authority in addition to the limited number of reviewable decisions set out in s 192 of the National Law.
Clause 114 of the Regulation sets out two classes of decision that are also reviewable decisions for external review. These are: 1. a decision to require an approved provider to employ additional staff, and 2. a decision to refuse an application for an approval to provide a child-minding service under Part 8 of the Regulation.
In CZT the Tribunal pointed to s 28(1)(a1) of the Community Services (Complaints, Reviews and Monitoring) Act which provides for administrative review under the ADR Act of "a decision that is an administratively reviewable decision for external review under section 192 of the National Law Alignment Provisions (within the meaning of the Children (Education and Care Services) Supplementary Provisions Act 2011)". On its face that would seem to mean that the present decision is indeed reviewable under the ADR Act.
The effect of s 17 of the Children (Education and Care Services) Supplementary Provisions Act is to define the term "National Law Alignment Provisions" to mean the National Law as it applies to "State regulated education and care services". Sub-section 4(3)(a) of that Act makes clear that family day services are not included within the definition of "State regulated education and care services". The decision to cancel the service approval for a family day care service is therefore not one to which s 28(1)(a1) of the Community Services (Complaints, Reviews and Monitoring) Act applies.
In summary, while the National Law and associated legislation provide for review of some decisions with respect to child care services to be dealt with in the Tribunal's administrative review jurisdiction, that does not include the decision presently under review because it relates to a family day care service. That decision therefore falls for review within the Tribunal's residual general jurisdiction in s 29 of the Tribunal Act.
The import of this conclusion is that the Tribunal's powers with respect to the review are not derived from the ADR Act. In particular, the provisions of s 58 and s 63 of the ADR Act do not apply and the Tribunal's orders are made under s 193 of the National Law, not the ADR Act.
What then is the Tribunal's task on review in the present case? Under s 192 of the National Law the Tribunal is to conduct an "administrative review" of the decision made by the Regulatory Authority. That term is not defined. While the Tribunal Act sets out the practice and procedure to be followed by the Tribunal in its proceedings, it also is silent on what the Tribunal's task in its general jurisdiction with respect to an administrative review.
Consideration of the scope of an administrative review function arose most notably in the case of Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 where, in relation to the then newly established Commonwealth Administrative Appeals Tribunal (AAT), the Full Federal Court stated at 579 that the AAT's task was to reach "the correct or preferable decision" on the material before it. That description (and the similar formulation "correct and preferable") of a decision-maker's obligations when conducting administrative review has been repeated many times since, both in case law and in legislation. Indeed, under s 63 of the ADR Act in its administrative review jurisdiction, this Tribunal is tasked with making the "correct and preferable decision".
In my view, in conducting an administrative review in the exercise of its general jurisdiction under s 29 of the Tribunal Act, the Tribunal is required to perform essentially the same task as it would if the matter fell within its jurisdiction under s 30 of the Tribunal Act, that is, it is required to make the correct and preferable decision on the material before it. The High Court in the case of Shi v Migration Agents Registration Authority (2008) CLR 286 confirmed that administrative review is conducted at the time of the review on the material available to the Tribunal at the time of the review, which may include new or additional material that was not before the original decision-maker.

DBU v Secretary, Department of Education

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