REVIEW OF DECISION BY EXTERNAL DECISION-MAKER - decision to cancel provider approval by the regulatory authority under section 33 of the Children (Education and Care Services) National Law (NSW)
Source
Original judgment source is linked above.
Catchwords
REVIEW OF DECISION BY EXTERNAL DECISION-MAKER - decision to cancel provider approval by the regulatory authority under section 33 of the Children (Education and Care Services) National Law (NSW)
Judgment (9 paragraphs)
[1]
Background to the cancellation decision
In March 2013, the Secretary granted a "provider approval" to Early Childhood under Pt 2 of the National Law. Early Childhood holds a service approval for an approved education and care service known as the Sydney Family Day Care Scheme. That approval permits Early Childhood to register or engage "family day care educators" to provide education and care for children up to age 13 in a residence or to provide education and care for children in their home. The service has a particular focus on the Australian-Korean community. Apparently, many of the family day care educators are of Korean origin.
Ms Krystal Bak is the "person with management or control" of Early Childhood, that is, the person who is responsible for managing the delivery of Early Childhood's education and care service: s 5(1) of the National Law.
In June 2014, the Department identified multiple areas where the family day care service provided by Early Childhood was said to contravene the National Law and Regulations. Following receipt of Early Childhood's response to a "non-compliance notice" (ss 176(2)) issued by the Department on 10 July 2014, no further action was taken.
The Department issued further non-compliance notices in September 2014, June 2015 and January 2017. On 30 August 2017, the Department issued a show cause notice to cancel Early Childhood's provider approval on the grounds that there was an unacceptable risk to the safety, health and wellbeing of children, and that Early Childhood had breached a condition of the provider approval by failing to comply with the National Law in respect of the service approval: ss 31(b), 31(e) of the National Law. After reviewing Early Childhood's response to the show cause notice, on 23 January 2018 the Secretary decided not to cancel Early Childhood's provider approval and to schedule the service for another assessment and rating.
Early Childhood Education Australia Pty Ltd v Secretary, Department of Education [2020] NSWCATAD 118 | Case summary | Zoe
In February 2017, the Department assessed the service against the National Quality Standards (the "NQS") and gave it a rating of "Significant Improvement Required", the lowest of five prescribed rating levels: see Ch 3, Pt 3.1 of the Regulations and s 134(1) of the National Law. The Regulations state that a Significant Improvement Required rating may be given for a quality area stated in the NQS if the education and care service does not meet that quality area standard or a relevant regulation for that quality area in a way that the Regulatory Authority is satisfied constitutes a significant risk to the safety, health or wellbeing of any child or children being educated and cared for by the service: reg 59.
On 1 October 2017, following changes to the National Law, the Secretary imposed conditions requiring Early Childhood to engage no more than 12 educators and that the ratio between its "family day care coordinator" and educators be at least 1:15. A family day care coordinator is defined by the National Law to mean a person employed or engaged by an approved provider of a family day care service to monitor and support the family day care educators who are part of the service: s 5(1).
In May 2018, the Department again identified multiple areas of non- compliance. The following month, applying the revised NQS, the Secretary Department again rated the service as Significant Improvement Required. On 2 July 2018, following a request for reassessment of that rating (a first-tier assessment, s 141) made by Early Childhood, the Department's assessor determined that the overall rating of Significant Improvement Required remained unchanged. Early Childhood requested a review of that assessment. On 11 October 2018, the Australian Children's Education and Care Quality Authority ("ACECQA") determined that Early Childhood failed to meet 20 of 40 elements making up the NQS and gave it an overall rating of "Working Towards the National Quality Standard", the second lowest available rating: reg 57( c).
In July 2019, the Department conducted further compliance visits again identifying multiple areas of non-compliance. On 18 September 2019, the Secretary issued a show cause notice, setting out the grounds of the proposed cancellation and inviting Early Childhood to comment on why its service approval should not be cancelled. The stated grounds of the proposed cancellation were the Secretary's findings that:
1. Ms Bak is not a fit and proper person to be involved in the provision of an education and care service;
2. the continued provision of education and care services by Early Childhood would constitute an unacceptable risk to the safety, health or wellbeing of any child; and
3. Early Childhood has breached conditions of its provider approval: ss 31(a), 31(b) and 31( e) of the National Law.
In its response, Early Childhood rejected the finding that Ms Bak is not a fit and proper person, contending that the basis for that allegation was not particularised. In addition, it disputed the contention that Ms Bak lacks "knowledge of the National Law and Regulations" and "the capability to put in place effective governance systems to manage the service in accordance with the regulatory requirements". Early Childhood asserted that any alleged shortcomings in Ms Bak's display of such knowledge or demonstration of such capability "can reasonably be attributed to the manner in which the questioning of her" by authorised officers was conducted, specifically the "lack of sufficient and proper regard for language difficulties that should have been obvious".
The Department's officers conducted further compliance visits in November 2019 and again identified multiple areas of non-compliance with the Regulations.
[2]
The cancellation decision
In a decision made on 26 March 2020, the Secretary decided to cancel Early Childhood's provider approval. This is the decision the subject of Early Childhood's applications for a review and stay of operation. In detailed reasons given for that decision, a delegate of the Secretary stated that the reasons for that decision were the same as those set out in the Show Cause Notice.
Referring to further monitoring visits conducted by officers of the Department after the show cause notice was issued, the delegate wrote that "she was not convinced that [Early Childhood] had satisfactorily addressed each element of non-compliance set out in the non-compliance notice". That notice listed 35 provisions of the National Law and the Regulations which Early Childhood is alleged to have contravened.
[3]
Should the discretion to stay the operation of the cancellation decision be exercised?
Early Childhood submits that the factors listed by Wright J in Bentram, taken together, favour the exercise of the discretion to stay the operation of the cancellation decision. While conceding that the Service has contravened provisions of the National Law and the Regulations, it disputes the contention that it has failed to take appropriate action to rectify those breaches and, furthermore, contends that the breaches are not of a nature so as to pose a risk to the safety and welfare of the children attending its service.
The Secretary urges the Tribunal to reject the application for a stay of the cancellation decision, pointing out that it has identified 238 individual breaches of the National Law and the Regulations, evidencing systemic and recurrent non-compliance, which Early Childhood is either unwilling or unable to address. In those circumstances, to permit the service to continue to operate until the application for a review of the cancellation decision is completed would pose an unacceptable risk to the safety, health and well-being of the children in the care of Early Childhood.
I address below the submissions made by the parties in respect of the considerations relevant to the determination of whether to exercise the discretion to stay the operation of the cancellation decision.
[4]
Securing the effectiveness of the determination of the application for review
Early Childhood claims that if the cancellation decision comes into effect, it will become financially non-viable and will be forced to cease to operate. If that occurs, even if its application for review of the cancellation decision (the substantive application) were successful, the reinstatement of its provider approval would come too late, rendering that application futile. Referring to an affidavit sworn by Ms Bak on 14 April 2020, it asserts that the income generated by the service is its sole source of income and, if it were to lose that income, it would be unable to meet the expenses of the business, approximately $57,000 per month, primarily rent, wages and contractor fees.
The Secretary concedes that if the cancellation decision comes into effect Early Childhood will inevitably suffer financial loss but asserts that that Early Childhood has overstated the extent of its loss, pointing out that if the business is not in operation, inevitably expenses will reduce. In any event, the Secretary argues that given the frequency and seriousness of Early Childhood's identified contraventions, it would be inappropriate to permit it to continue to operate a family day care service, even for a short period.
[5]
Parents of children attending the service
Early Childhood contends that the public interest favours the granting of the stay, asserting that the availability of childcare is critical to enabling parents who use its service, a number of whom are essential service workers, to remain in employment. Early Childhood argues that the availability of paid childcare is especially important in the circumstances presented by the COVID-19 pandemic, where informal childcare options, such as care provided by grandparents, may not be available.
Early Childhood points to letters in support of its application for a stay of the operation of the cancellation decision provided by many parents of children in its care. Several parents state that they find the prospect of obtaining alternative care for their children at short notice in the current COVID-19 pandemic to be deeply distressing. Some parents state that, in circumstances where it will be difficult to assess the quality of care likely to be provided and, in particular, the likelihood that COVID-19 infection control measures would be implemented, they would be reluctant to entrust their child to a new provider. A number of parents assert that "culturally sensitive" childcare for members of the Australian Korean community's children is extremely limited.
[6]
Broader public interest concerns
There is a public interest in ensuring that the care provided to children attending Early Childhood's service complies with the relevant National Quality Standards and the safety, health and well-being of children attending its services is ensured. There is also a broader public interest in maintaining public confidence in the quality of care provided by approved providers and signalling to other providers the unacceptability of providing a service identified as failing to meet the relevant standards.
[7]
Prospects of success
Early Childhood submits that in determining its application for a stay of the operation of the cancellation decision, the proper approach is to determine whether "there exist facts and circumstances which would provide some basis for success", and not to conduct a preliminary hearing or "mini trial", citing in support Australian Skills Quality Authority [2018] AATA, a decision of the Administrative Appeals Tribunal, which considered the operation of s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth), the counterpart to s 43(3) of the NCAT Act. The provisions are not in identical terms.
The Secretary accepts that it could not reasonably be argued that there is no prospect that Early Childhood will succeed in its substantive application. Nonetheless, he contends that the long history of Early Childhood's repeated contraventions of the National Law and the Regulations, many of which he asserts are of a serious nature, provides a powerful justification for not staying the operation of the cancellation decision.
The Secretary contends that at this stage of proceedings the Tribunal could not be satisfied that the continuation of Early Childhood until the determination of the substantive application does not pose an unacceptable risk of harm to the children attending its services. The Secretary submits that this consideration weighs heavily against the exercise of the discretion to stay the operation of the cancellation decision.
In detailed submissions, Early Childhood responded to some of the more serious instances of non-compliance detailed in the cancellation decision. Early Childhood contends that the available material indicates that many of those alleged contraventions have been addressed by, among other things, terminating the services of some its educators. In addition, Early Childhood contends that the evidential basis for some of the alleged contraventions is weak. Further, it points out that of the 14 investigations conducted by officers of the Department between March 2013 and June 2019:
in eight, no areas of non-compliance were identified;
in three, the Secretary considered Early Childhood had provided a satisfactory response;
in two, Early Childhood addressed the identified areas of non-compliance and, apart from scheduling another assessment and rating in relation to one of those assessments, the Secretary decided to take no further action.
[8]
Conclusion
Several factors favour the exercise of the discretion to stay the operation of the cancellation decision. First, as properly conceded by the Secretary, it could not be said that there are no reasonable prospects that the cancellation decision will not be varied or set aside. This is especially so given that cancellation is not the only order available to the Tribunal, even if it agrees with the Secretary's assessment that Early Childhood has repeatedly contravened the National Law and Regulations over an extended period. Second, the real possibility that if the cancellation decision is not stayed, the substantive application may be rendered pointless. Third, the difficulties and inconvenience likely to be experienced by the parents of the 120 children attending Early Childhood's services, if they were forced to find alternative care for their children at short notice. As a consequence of the COVID-19 pandemic, those difficulties are likely to be heightened and many parents will be, understandably, reluctant to entrust their child to a new carer. I also accept from the glowing testimonials tendered in these proceedings, that some parents hold a high opinion of the quality of care provided by Early Childhood. Of course, it may be if those parents had full knowledge of the details of the cancellation decision, they may revise that opinion.
Against these considerations is the risk posed to children in the care of the Early Childhood if the implementation of the cancellation decision were to be delayed. This requires an evaluation of the seriousness of the alleged contraventions of the National Law and Regulations and the nature and extent of any justifiably apprehended harm that might be caused to children attending Early Childhood's services if any were to be repeated in the intervening period before the substantive application is determined. At this stage of the proceedings, it is neither possible nor appropriate to conclusively determine one way or the other, whether there exists a proper basis for finding that the alleged contraventions occurred.
While, arguably, some of the identified alleged contraventions could be characterised as being not especially serious in nature, a number are most concerning. These include the identified alleged breaches of s 167 of the National Law which make it an offence for an approved provider to fail to "ensure that every reasonable precaution is taken to protect children being educated and cared for by the service from harm and from any hazard likely to cause injury". The available material reveals that some of the residences where care was being provided contained potentially hazardous items such as ladders, glass and broken furniture, which were accessible to the children attending those premises to varying degrees. Early Childhood contends that each of those identified breaches have been rectified and they no longer engage some of the carers who were the subject of those and other serious allegations.
Also of concern is the long history of multiple contraventions being identified over successive inspections. As the Secretary submits this may indicate a lack of willingness or ability by the managers of Early Childhood to ensure that its educators meet the standards of education and care prescribed by the National Law and the Regulations. It is possible, if not probable, that the inspections have not identified all areas of non-compliance.
Self-evidently, there are inherent difficulties in undertaking the predictive exercise of risk assessment, especially in circumstances such as these where there is limited available material. Given the large number of alleged contraventions of the National Law and the Regulations, it is not possible at this stage of proceedings to conclusively determine that no child is likely to be placed at risk if they were continue to attend services provided by Early Childhood during the period prior to the determination of the substantive application.
Nonetheless, given the available material about the steps taken by Early Childhood to rectify the most recently identified contraventions, together with the relatively short period until the substantive decision is likely to be determined, and the obvious inconvenience and distress it would cause to parents if the cancellation decision was implemented immediately, I am satisfied that with the imposition of conditions, specifically that Early Childhood conduct fortnightly inspections of a number of its carers who are alleged to be responsible for multiple contraventions, the risk can be reduced to one that is acceptable.
While the considerations favouring and weighing against the exercise of the discretion to stay the operation of the cancelation decision are finely balanced, I have decided to make orders staying the operation of that decision subject to conditions.
I make the following orders:
1. The Decision made on 26 March 2020 to cancel the applicant's provider approval is stayed until the Tribunal determines the substantive application, on the following conditions:
1. The Applicant not engage any new educators or relief educators.
2. The Applicant provide the Respondent with fortnightly compliance reports for the following persons until the proceedings are determined: Jeongin Choi, Jungok Bae, Junsun You and Heui Jae Kim.
[9]
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: 30 April 2020
Parties
Applicant/Plaintiff:
Early Childhood Education Australia Pty Ltd
Respondent/Defendant:
Secretary, Department of Education
Legislation Cited (3)
Education and Care Services National Regulations (National Regulations) Civil and Administrative Tribunal Act 2013(NSW)
Principles governing the exercise of the discretion to stay the operation of a cancellation decision
Where an application is made to the Tribunal for review of a decision made by the Secretary to cancel a provider approval (a pending application), that application does not affect the operation of that decision nor prevent the taking of action to implement that decision unless the Tribunal makes an order staying or otherwise affecting the operation of that decision: s 43(2) of the Civil and Administrative Tribunal Act 2013 (NSW) ("NCAT Act"). Section 43(1)(c) states:
The Tribunal may make such orders (whether with or without conditions) staying or otherwise affecting the operation of a decision to which a pending general application ... relates as it considers appropriate to secure the effectiveness of the determination of the pending general application...
The NCAT Act does not specify the factors to be taken into account in determining whether the power to stay the operation of a decision under appeal should be exercised. In Bentran Pty Ltd v Sabbarton [2014] NSWCATAP 37 (Bentran), when considering an appeal against a decision made by the Tribunal to which ss 43(2) and 43(3) also applied, after examining the authorities, Wright J at [9] summarised the principles applicable to deciding whether a stay of a decision under appeal should be granted (citations omitted):
(1) Generally a successful party is entitled to the benefit of the decision or orders that the party has obtained at first instance, but a stay may be granted where the appellant has demonstrated an appropriate case to warrant the exercise of discretion in its favour - s 43(2) and (3) of the Act.
(2) In practical effect the onus is on an applicant for a stay to make out a case that it is appropriate for the court to make such an order.
(3) The mere lodgement of the notice of appeal is insufficient, of itself, to demonstrate that it is an appropriate case to warrant the granting of a stay.
(4) An order staying the operation of a decision or orders will generally be appropriate where such an order is reasonably necessary to secure the effectiveness of the appeal - s 43(3) of the Act. This is similar to, if not the same as, the considerations applied by the Courts that where there is a risk that an appeal will prove abortive if the appellant succeeds and a stay is not granted, or where unless a stay is granted an appeal will be rendered nugatory, the discretion should generally be exercised in favour of granting a stay.
(5) The Tribunal may also take into account the strength or otherwise of the case of the party seeking the stay. This consideration may be particularly relevant when it is plain that an appeal, which does not require leave, has been lodged without any real prospects of success and simply in the hope of gaining a respite against immediate execution of the decision.
(6) The Tribunal's power to grant a stay includes a power to make such an order subject to such conditions as the Tribunal specifies.
(7) In exercising the discretion, the Tribunal will also weigh the balance of convenience and the competing rights of the parties and may impose appropriate conditions so as to achieve a result that is fair to all parties.
(8) Finally, the overriding principle in an application for a stay is to ask what the interests of justice require.
The application considered by Wright J in Bentran - an appeal from a decision of the Consumer and Commercial Division of NCAT (an "internal appeal"), s 43(1)(c)) - self-evidently is of a different nature to the application the subject of these proceedings, an application for review of a decision made by an "external decision-maker" (s 43(1)(a)). Nonetheless, the principles outlined in Bentran are, in my view, equally applicable. In applying these principles, it is necessary to have regard to the statutory context in which the cancellation decision was made, together with the objectives and guiding principles of the National Law, which are to ensure the safety, health and wellbeing of children attending care services; to improve the educational and developmental outcomes for children attending care services; and to promote continuous improvement in the provision of quality care services: ss 3(2)(a), 3(2)(b), 3(2)(c).