Forever Family Day Care Pty Ltd v Secretary, Department of Education

Review of a decision to cancel provider approval

1. Section 31 of the National Law relevantly sets out that: The Regulatory Authority may cancel a provider approval if- … (f) the approved provider has not operated any education and care service for a period of more than 12 months (including any period of suspension).
2. Under the National Law, an approved provider can apply for review of a decision to cancel a provider approval to this Tribunal (see s 192(b)(ii) and s 193(1) of the National Law. The Tribunal exercises jurisdiction under section 29 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act): see DBU v Secretary, Department of Education [2017] NSWCATAD 257 at [20]-[22].

Principles governing the exercise of the discretion to stay the operation of a decision to cancel provider approval

1. Unless a Tribunal makes an order staying the operation of the respondent's decision to cancel provider approval, the making of an application does not affect the operation of that decision nor prevent the taking of action to implement that decision (s 43(2) of the NCAT Act). Section 43(1)(c) of the NCAT 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...
2. The NCAT Act does not specify the factors to be taken into account when determining whether to stay the operation of a decision.
3. The Appeal Panel summarised the principles relevant to stay applications in Bentran Pty Ltd v Sabbarton [2014] NSWCATAP 37 (Bentran) and in Burriss v Hallit [2014] NSWCATAP 39. As noted by the President in Burriss at [13], "the overriding principle in an application for a stay is to ask what the interests of justice require".
4. In Bentran, 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."
5. While Bentran was a decision on appeal, I am satisfied that the principles outlined are equally applicable in this type of matter. The Tribunal in Early Childhood Education Australia Pty Ltd v Secretary, Department of Education (NSW) [2020] NSWCATAD stated that in addition to those principles (at [10]) "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)."

Consideration

1. 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.

Securing the effectiveness of the determination of the application for review

1. The applicant submits that a stay is necessary in this case to secure the effectiveness of the substantive application. The applicant acknowledges that it does not currently generate substantial income from operating its family day care service because it does not hold an approval to administer the CCS. In her statement, Ms Fatuma Omar, who is the sole director of the applicant, indicates that she intends to operate on a larger scale again if the applicant receives a favourable decision in the AAT proceedings. The applicant submits that, practically, if the cancellation decision takes effect on 29 October 2021, and the AAT gives a favourable decision to the applicant, it will be deprived of the possibility of a favourable outcome in the AAT which would allow it to administer the Commonwealth childcare subsidy, and it will have no further avenue for merits review. The applicant submits that this will have implications for its viability as a business and, therefore, the effectiveness of the substantive application. The applicant submits that the payment of the CCS by the Commonwealth is dependent upon the applicant holding a provider approval.
2. The respondent submits that there is no legal requirement for an applicant to obtain CCS approval in order to provide the operator service. The respondent submits that, even if the applicant is ultimately successful in the AAT proceedings, it will not affect the substantive question for the Tribunal in these proceedings. The respondent submits that, while the Commonwealth's decision to cancel the CCS may explain the interruption of continuity to operate in the case of the applicant, but it does not detract from the significance of a failure to operate. The respondent submits that, regardless of the outcome of the AAT proceedings, the applicant has not operated an education and care service with any regularity in at least 22 months.

Prospect of Success

1. The applicant submits that it has strong prospects of success which weigh in its favour for the grant of a stay.
2. The applicant makes submissions that the respondent's decision to cancel the provider approval and the reasons provided by the respondent proceeded on several critical errors. 1. That Ms Omar saying "not at the moment" in response to a question about whether the applicant had provided an education and care service between 15 December 2019 and 4 November 2020 were misconstrued and that her affidavit sworn on 22 October 2021, explains how this comment was taken out of context. They submit that by saying "not at the moment", Ms Omar intended to communicate that no care was being provided at the time of the compliance visit on 4 November 2020. 2. There was a defective reliance on the "attempted visits" to the educators' residences. They refer to the statutory register which records that the educator, Maryan Omar, provides care "on Sundays only". The reasons for cancellation refer to "attempted visits" conducted on "14 April 2020 and 29 April 2020", neither being a Sunday. 3. The analysis of a 'Yearly Compliance Report' did not provide a rational basis for finding that the applicant had not operated an education and care service for the last 12 months. In the reasons, the delegate "acknowledges the submission of a Yearly Compliance Report for educator Maryan Omar, dated 5 July 2020". The reasons then state that "analysis" reveals "expired qualifications for Ms Maryan Omar". The next two bullet points refer to a First Aid certificate which "expired on 27 April 2021", and a "CPR certificate expired on 21 April 2021" Ms Omar provides evidence that the First Aid certificate and the CPR certificate were both renewed on 6 April 2021.
3. Further, the applicant submits that s 31(f) of the National Law does not specify a rate at which an education and care service must have "operated". The applicant submits that the core requirement for a service to meet the definition of a "family day care service" in s 5 requires "2 or more educators" operating from "2 or more residences". The applicant submits that the information from its provider register, which is extracted at the top of page 3 of the cancellation decision, establishes that it satisfies this definition because the register contains the names and residence details of two educators who provide care to two different children.
4. The applicant also submits that contemporaneous documentary evidence demonstrates that it operated an education and care service within the last 12 months. The applicant refers to Ms Omar's affidavit which exhibits several timesheets recording care being provided, including as recently as 19 May 2021.
5. Finally, the applicant again refers to the prospect that if it receives a favourable decision in the AAT, and obtains approval to administer the Commonwealth childcare subsidy, those matters are relevant factors in determining the strength of the applicant's case for substantive relief, and are relevant to whether a stay should be granted in aid of that. The applicant submits that it may become relevant because the power in relation to cancellation in s 33(1)(a) is discretionary and allows the decision-maker to cancel, suspend, or "decide not to cancel the provider approval". The applicant submits that the case for relief on discretionary grounds is particularly strong in circumstances where s 31(f) is the only ground relied upon for cancellation, and where the notice of cancellation does not rely on or raise any issues about fitness and propriety (s 31(a)), or risk to the safety, health or wellbeing of a child (s 31(b)).
6. The respondent submits that the strength of the applicant's prima facie case for substantive relief is not strong. The respondent submit that the applicant's case that s 31(f) of the National Law is not engaged depends on two occasions on which care was allegedly provided to children between 20 December 2019 and 3 February 2021 (being on 26 July 2020 and 12 August 2020). The respondent submits that each occasion is alleged to have involved the provision of care to one child only and both children were from the same family.
7. The respondent also submits that there is an actual dispute as to whether care was in fact provided on the two alleged occasions. In particular the respondent refers to evidence of visits in which Mr Shukri Omar, who is a resident of one of the premises, stated to authorised officers of the respondent that he was unaware that the residence was being used to provide family day care services. The respondent also refers to the fact that Ms Omar signed a notebook stating that no education and care had been provided between 20 December 2019 and 3 February 2021.
8. The respondent notes that the terms "operat[ion]" of an "education and care service", are defined in s 5 of the National Law by reference to the provision of education and care "on a regular basis", excluding "a personal arrangement". The respondent refers to the decision of Al Hamid v Secretary, Department of Education [2018] NSWCATAD 74 which dealt with s 51(3) of the National Law that requires commencement of operation of an operator within 6 month. The respondent submits that the section is analogous to s 31(f) and that, in that case, the Tribunal took the view that the provision of care to six children by four educators, in a four week period, to six children, was not sufficient to involve the ongoing operation of a service, but was simply an ad hoc arrangement. The applicant made oral submissions at hearing that s 51(3) is not analogous to s 31(f) in its terms.

The public interest

1. The applicant submits that there are no public interest issues that weigh against it because there are no allegations at all concerning risks to safety, or issues going to fitness and propriety. The applicant submits that the broader public interest in this case relies upon the broader interests of justice which arise from pending proceedings in the AAT.
2. The respondent submits that it is not in the public interest to grant the stay. The respondent submits that the grant of a stay would detract from the respondent's regulatory functions and the respondent would be required to exercise her regulatory responsibilities in monitoring the applicant for an indefinite period of time. If the applicant recommences providing an education and care service, the respondent will be required to devote additional resources to monitoring the applicant.
3. The respondent also notes that there are credible allegations by the Commonwealth Department that raise doubts as to the trustworthiness of the applicant's record keeping practices. The respondent submits that this would require her to devote additional resources to monitoring the applicant if a stay were granted and the applicant recommenced operations.

The Balance of Convenience

1. The applicant submits that the main factor tipping the balance of convenience relates to the two pending AAT proceedings. The applicant submits that, if a favourable decision is obtained, then, in order to satisfy the approval criteria to administer the CCS, the applicant must hold the provider approval which the respondent cancelled. The applicant submits that the AAT matter proceeded on the basis that the applicant holds the relevant State approvals and licences required for the provider approval. If a stay is not granted and the respondent's cancellation decision takes effect on 29 October 2021, then any subsequent decision by the AAT that is favourable to the applicant will be rendered nugatory because the applicant will not be able to satisfy the requirements in s 194B(1) of the Cth Administration Act to be an approved provider to administer the CCS and the AAT will have potentially made a decision on the wrong footing, based on common factual ground that no longer exists.
2. The applicant further submits that such an outcome would be an injustice to it because it will have lost its opportunity for merits review in the AAT to an avoidable defect and have no further avenues for merits review. Ms Omar states in her affidavit that the applicant has incurred over $100,000 in legal costs connected to its AAT proceedings and expended considerable time and effort to run those matters to the point where it is waiting for an imminent decision. Those resources and efforts will have been wasted if the respondent's cancellation decision takes effect from 29 October 2021 and the AAT subsequently gives its decision. The applicant submits that the prospect of those resources being wasted, in these circumstances, is a balance of convenience factor weighing in favour of a stay.
3. Ms Omar's affidavit of 22 October 2021 indicates that care has been provided on six total occasions to two children for a total of 16 hours and 45 minutes over the course of 22 months from December 2019. The respondent submits that there would be effectively no loss of working hours for the applicant's staff, contracted educators or childcare arrangements and so there would be minimal impact on the children, the families or the community to which the applicant refers.
4. Further, in her affidavit Ms Omar gives evidence that the applicant will suffer a loss of reputation if the cancellation decision takes effect: The respondent submits that the evidence of Ms Omar on this issue is speculative and is not a factor which would weigh heavily in the exercise of the Tribunal's discretion.
5. The respondent submits that there is no evidence that the absence of a stay would have "significant adverse consequences" on the applicant. The respondent submits that the applicant does not presently appear to be operating an education and care service and in any case is not operating at scale and has not been operating at scale for an extended period of time.

Conclusion

1. While there are considerations favouring and weighing against the exercise of the discretion to stay the operation, I have decided not to make an order staying the operation of the decision to cancel the provider approval.
2. I am satisfied that several factors weigh against the exercise of the discretion to stay the operation of the cancellation decision.
3. I accept that it may not be argued that the application has no prospects of success. There are a number of factual and legal disputes to be resolved in the final determination. The applicant maintains that there were two alleged occasion (being 26 July 2020 and 12 August 2020) in which they provided care. However, a male at one of the residence of the educator indicated no knowledge of family day care and Ms Omar signed a notebook of an authorised officer on 3 February 2021 indicating that no had been provided to the children between 20 December 2019 and 3 February 2021. There also remains legal issues to be resolved including the interpretation of the terms "operat[ion]" of an "education and care service" and whether the applicant fits within those terms. Those are issues which remain to be determined.
4. I also accept that there are presently no serious alleged contraventions of the National Law and Regulations except for the alleged failure to operate within the 12 month period. There is no evidence before the Tribunal of an established history of contraventions. The only relevant concern is related to the reasons for the cancellation of the CCS. Contained in the respondent's documents is a 'Notice of Cancelation' of the CCS from the Commonwealth Department in regards to the applicant's record keeping practices. I am mindful that they are the matters which are currently the subject of the AAT review.
5. However, there are a number of issues weighing against these factors.
6. Firstly, taking Ms Omar's affidavit of 22 October 2021 at its highest, care has been provided on six occasions to two children for a total of 16 hours and 45 minutes over the course of 22 months from December 2019. Given that the applicant has operated with such irregularity in the last 22 months, I do not find that the cancellation would have significant impact on staff, children, families or the community. There is very little loss of working hours for the applicant's staff and contracted educators. On the evidence from Ms Omar it appears that only one family may be affected and given the very limited attendance, there is very little demonstrated inconvenience likely to be experienced by the parents or children attending the applicant's services. Further, while Ms Omar states that the applicant will suffer loss of reputation, given the small scale of the operation; it is unlikely that there will be a wide reaching loss of reputation.
7. Secondly, the operator approval is not contingent on the CCS. I do not accept that the decision in the AAT will have an impact on the effectiveness of the substantive application in this matter. If the applicant obtains a favourable decision in the AAT and the operator approval remains cancelled then it is open to them to apply for a new operator approval.
8. The issues that are being raised in the matters in the AAT are quite separate from the issues being raised in the Tribunal. This Tribunal is only tasked with reviewing the cancellation decision. That decision was made on the ground of the applicant's failure to operate for a period of 12 months. If a decision is made in favour of the applicants in these proceedings it is open to the Tribunal to set aside the cancellation regardless of the outcome of the AAT proceedings. Either way, the outcome of the AAT proceedings, will not secure the effectiveness of the determination of the substantive application for review in this Tribunal. Further, while the applicant indicates that the decision in the AAT is imminent, nothing has been provided as to when the decision will be provided. In any case, the finalisation of the substantive proceedings in this Tribunal will not require a determination from the AAT.
9. I also find that a stay would result in the need for continued regulatory monitoring by the respondent that is in circumstances where the operation of care by the applicant has been sporadic over the last 22 months. The respondent will be required to devote resources to monitoring the applicant in circumstances where there have been lengthy periods of inactivity, such devotion of resources, being disproportionate to the scale of care being provided to children by the applicant.
10. Considering what the interests of justice require, I am not satisfied that in the circumstances the applicant has made out a case for a stay. I am satisfied that the respondent remains entitled to the benefit of the cancellation decision.
11. Separate directions have been made in the substantive application and the matter has been listed for final hearing.
12. I make the following orders: 1. The application for a stay is dismissed.

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: 28 October 2021