Secretary, Department of Education v Early Childhood Education Australia Pty Ltd [2021] NSWCATAP 397 | Case summary

NCAT Appeal Panel|2021-09-03

Background

This appeal arises out of a decision published on 4 May 2021 (the Cancellation Decision) and a further decision published on 7 June 2021 (the Conditions Decision). In both proceedings the Respondent to this appeal was the Applicant and the Appellant to this appeal was the Respondent. The same panel constituted the Tribunal in both proceedings.
The Respondent operates family day care services at a number of locations throughout Sydney and as such is regulated by the provisions of the Children (Education & Care Services) National Law (NSW) ("the National Law") and the Education & Care Services National Regulations ("the Regulations"). The Appellant is empowered under the Children (Education & Care Services) National Law Application) Act 2010 to regulate family day care services and regulates the services provided by the Respondent.
The effect of the Cancellation Decision was to set aside the decision by the Appellant to cancel the provider approval of the Respondent and the Appellant has appealed that decision.
The effect of the Conditions Decision was to impose conditions upon the Respondent's provider approval. The Appellant also appeals those orders. The following background facts are relevant to an understanding of this appeal: 1. The Respondent has been operating its day care services at 10 locations throughout Sydney through 10 educators (a term defined in the National Law). 2. Ms Krystal Bak, a director of the Respondent, has had control of the family day care business since October 2014 and since March 2018 has been the nominated supervisor (also a term defined in the National Law) for the Respondent.
The following chronology of events taken from the Cancellation Decision (and a document handed up without objection at the hearing of the appeal), summarises events relevant to the Appellant's decision to cancel the provider approval of the Respondent: 1. Between March 2013 and June 2019 there were 14 complaints about the Respondent raised with the Appellant. The Appellant investigated 10 of those complaints. Six investigations were closed with no regulatory action required and four resulted in findings of non-compliance. In the same period the Respondent was reported in respect of four serious incidents. One was investigated and the Appellant took no regulatory action about that matter [29]. 2. In June 2014 the Appellant conducted a "compliance visit" and further compliance visits occurred in August 2014 and June 2015 [29]. 3. In late 2016 the Appellant determined that further monitoring of the services of the Respondent was warranted [29]. 4. In February 2017 the Appellant rated the Respondent against the National Quality Standard for Early Childhood Education & Care and School Aged Care and gave the rating of "significant improvement required" [29]. 5. On 30 August 2017 the Appellant issued to the Respondent a Show Cause Notice and the Respondent responded to that notice in September 2017 [29]. 6. In January 2018 the Appellant decided not to cancel the Respondent's provider approval [29]. 7. In March 2018 the Appellant imposed a cap of 12 educators upon the Respondent [29]. 8. In September 2018 the cap on educators was increased to 30 following an internal review by the Appellant [29]. 9. In October 2018 the National Authority, a term defined in the National Law to mean the Australian Children's Education & Care Quality Authority issued a rating in respect of the Respondent which was described as "working towards NQS". 10. In January 2019 the Respondent applied to increase the cap on its educators to 60. The Appellant refused this application in April 2019. The Respondent applied for external review and that review is constituted by the proceedings referred to above, being 2019/242605 [29]. 11. On 3 July 2019 the Appellant conducted a compliance visit. The evidence prepared from that visit was a significant matter in the proceedings below. 12. In September 2019 the Appellant issued a Show Cause Notice and in October 2019 the Respondent responded to that notice [29]. 13. On 14 November 2019 the Appellant conducted a further compliance visit and there was another visit on 2 March 2020. Both these visits formed the basis of evidence before the Tribunal below. 14. On 26 March 2020 the Appellant determined to cancel the provider approval held by the Respondent and in April 2020 the Tribunal ordered a stay of the cancellation. 15. There was a further compliance visit in May 2020. 16. The proceedings below were heard on 24 to 27 August 2020 and the decision at first instance was published on 4 May 2021 (the Cancellation Decision). 17. On 7 June 2021 the Conditions Decision was published and the orders essentially enabled the Respondent to continue to provide day care services on the basis that there would be an obligation to provide monthly audits. There was an additional set of conditions limiting the number of educators to 12 initially but with incremental increases commencing 1 July 2021 up to a maximum of 20. The further order required Ms Bak (a director of the Respondent) to undertake governance and management training relevant to the education and care services provided by the Respondent.

Notice of Appeal and Reply

A Notice of Appeal was filed within time, followed by a Notice of Amended Grounds of Appeal. The Respondent has filed a Reply to the initial and Amended Notice of Appeal.
At the hearing of the appeal, we gave leave for the Appellant to rely upon the amended grounds of appeal.
We will describe the grounds of appeal below in the context of explaining the Appellant's submissions and the Respondent's submissions in opposition.
However, before proceeding with a description of the parties' submissions, it is necessary to set out a summary of the Tribunal's reasons in respect of both decisions.

The Decisions under Appeal

The following paragraphs summarise the Tribunal's reasons in respect of both decisions: 1. The evidence shows that a substantial "ongoing interaction" between Respondent and the Appellant has occurred over a long period of time [6] and that that "it appears that [the Respondent] has regularly fallen short in its obligations under the National Law" [7]. 2. The Appellant says that the Respondent "has not properly addressed its ongoing systemic problems despite all these ongoing interactions" [8].By s31 of the National Law the Appellant has power to cancel a provider approval subject to the grounds set out in that section [15]. 3. The Appellant relies upon alleged contraventions of the National Law and the Regulations to show that Ms Bak is not a fit and proper person to be involved in the provision of education and care services and also to show that the continued provision of education and care services by the Respondent would constitute an unacceptable risk to the safety, health and well-being of children being educated and cared for, and further that the Respondent has breached a condition of its provider approval [20]. 4. At [21] the Tribunal stated that it noted that "some contraventions are admitted" by the Respondent and that it is "sufficient for the Tribunal's purposes to assume that [the Respondent] has contravened the National Law on multiple occasions and that these contraventions contributed to the [Appellant's] decision to cancel [the Respondent's] approval. 5. The Tribunal found that the Respondent had an obligation to regulate "their educators and staff deployed in centres" [23] and that "Proper regulation" by the Respondent requires a Respondent to be "systematic and proactive in ensuring that each centre is properly operated" [26]. The Tribunal stated that if the Respondent "was systematic and proactive then most, if not all, preventable problems could not occur" [26]. 6. The Tribunal noted that the only witness put forward by the Appellant was Ms McGarity, a senior field officer, who was assigned to conduct compliance activities relating to the Respondent in November 2019. There was no "direct evidence any of [the Appellant's] officers who had visited [the Respondent's] centres [31]. The Appellant provided a document listing 174 separate instances of non-compliance. That document was referred to as an aide memoire. 7. The Tribunal stated it that it was not necessary to "recite or closely analyse" the 174 alleged instances of non-compliance. The Tribunal noted that 61 instances arose from the visits to the Respondent's centres on 3 July 2019, 50 instances arose from visits occurring on 14 November 2019, 32 arose from visits on a date in March 2020 and 31 from visits on a date in May 2020. 8. The Tribunal found that the number of instances relied upon "is significant" [33(5)] and that most of these instances were "preventable matters" about which the Respondent "could or should have taken appropriate steps" [33(6)]. 9. The Tribunal found that a large number of non-compliance matters were "very minor or technical" [34] and it listed examples of instances meeting that description. 10. At [36] the Tribunal stated that some of the "non-complying conduct is more significant. For example, important medicines were out of date in first aid kits, some cupboards containing dangerous materials were not locked, and some dangerous trip hazards and choke hazards were present." 11. At [37] the Tribunal described the evidence given by Ms Bak which included evidence concerning the presence of auditors deployed by the Respondent under the Respondent's monitoring, support and supervision policy. At [37(7)] the Tribunal stated that "All non-compliances identified by [the Appellant] have been rectified". 12. From [41] to [46] the Tribunal described the rating referred to earlier made by the Australian Children's Education & Care Quality Authority (ACECQA). The Tribunal referred to the rating described as "significant improvement required" given in June 2018 which was the subject of an application for review in August 2018. The new rating was described as "working towards the National Quality Standard". The Tribunal stated that, according to a publication put out by ACECQA 50.4% of family day care services were assessed as "working towards NQS". At [46] the Tribunal stated that it considered that this rating "to be quite important to our decision". The Tribunal stated that the Respondent is "on par with 50.4% of family day care services nationally". 13. The Tribunal addressed the question of whether Ms Bak was a fit and proper person as required by the National Law and at [57] the Tribunal stated that the Appellant had led "very little direct evidence" of the Respondent's conduct or Ms Bak's conduct. At [58] the Tribunal stated that it was quite concerned about "the generality" of the Appellant's evidence "particularly in light of the significant consequences for Ms Bak and [the Respondent] if the Tribunal finds that she is not a fit and proper person to be involved in the provision of an education and care service". The Tribunal then stated that "We don't need to reach a final conclusion about the generality of the [Appellant's] evidence because we are not satisfied on the evidence before us that s 31(a) is engaged. That is, even assuming that Ms Bak is responsible for all of [the Respondent's] shortfalls, we are not satisfied that the non-compliance by [the Respondent] supports the drastic step of cancelling [the Respondent's] approval". 14. At [60] the Tribunal found that all of the matters identified by the Appellant "over time have been rectified" and that many of the matters relied upon by the Appellant would "ordinarily be dealt with by alternative and less drastic means such as informal instruction to correct, or by allowing an operator the opportunity to provide further information in an orderly timeframe." 15. From [61] the Tribunal stated that the Appellant relied upon the cumulative effect of a large number of "small non-compliances dealing with systemic concerns". The Tribunal concluded that it was "difficult to find that [the Respondent's] overall conduct and systemic concerns warrant cancellation when [the Respondent] has the same rating is 50.44% of family day care services nationally". 16. Section 13 of the National Law sets out matters to be considered in determining whether a person, such as Ms Bak, is a fit and proper person. One consideration is the person's history of compliance and at [64] the Tribunal held that that history should be taken to mean whether the person has been found guilty of an offence under the National Law or the Regulation and should not be taken to mean that the regulatory authority (ie. the Appellant) has "simply formed the view that the person has committed an offence". The Tribunal stated that for "the most part" it agreed with the Respondent's construction but that the interactions of the Respondent with the Appellant and Ms Bak's interactions with the Appellant are "matters that the regulator is entitled to take into account in determining whether Ms Bak is a fit and proper person, regardless of whether the Respondent or Ms Bak have been found to have contravened the National Law or the Regulation [66]. 17. From [70] the Tribunal dealt with the issue of risk to children and found that there was no evidence of any "immediate material threat to the safety of any children" and that there was no evidence of any previous contraventions or non-compliance issues that caused an immediate material threat to the safety of any child. At [72] the Tribunal stated that the "highest we can describe the risk to the ongoing safety of children is that there is a higher concern for the safety of children in the Respondent's care based upon the Respondent's previous contraventions". However, at [73] the Tribunal found that it could not find that there was an unacceptable risk to the safety, health and well-being of any child or class of children. The Tribunal stated that it relied on the experience and expertise of the Appellant's officers and the fact that no officer appears to have tried to suspend the Respondent's approval or has been so concerned for the safety of any particular child that they have been removed from a centre. Further, the Tribunal noted that following the Respondent's response in October 2019 to the Show Cause Notice there was a delay of five months (until March 2020) in the Appellant deciding to cancel the Respondent's provider approval. The Tribunal found at [74] that the time taken to issue the cancellation notice does not "reflect well on the apparent unacceptable risk" submitted by the Appellant. The Tribunal's conclusion at [76] was that it could not conclude that the continuation of the Respondent's provider approval poses an unacceptable risk to the safety, health and or well-being of any child or class of children. 18. From [77] the Tribunal considered whether the Respondent had breached a condition of its provider approval, a matter arguably referred to in s 31(e) of the National Law. The Tribunal noted that the Appellant had a power to impose conditions on a provider approval and concluded that s 31(e) is to be understood as referring to a breach of such a condition rather than as a breach of the National Law. 19. At [86] the Tribunal concluded that the cancellation of the Respondent's approval was not the correct and preferred decision. At [90] the Tribunal stated that the correct and preferable decision was to amend the provider approval to require the Respondent to implement a stringent supervision regime for its centres under the indirect supervision of the Appellant. The Tribunal held that it was able to stand in the shoes of the Appellant and amend the Respondent's provider approval by imposing new conditions. 20. The Tribunal made directions for the parties to attempt to agree on conditions with a view to the Tribunal making orders subsequently. 21. The Tribunal referred to the Respondent's application for external review of the Appellant's decision to reject the Respondent's application to increase the cap on educators to 60 and concluded that the correct and proper decision was to reject the Respondent's application for a higher cap.
On 7 June 2021 the Tribunal published the Conditions Decision and the Tribunal's decision may be summarised as follows: 1. The Tribunal referred to the earlier directions for the parties to confer on terms and conditions to be imposed and noted that almost all conditions have been agreed. One condition remained in dispute. The Appellant proposed a condition that would limit the number of educators to 12 but the Respondent opposed that condition. 2. At [9] the Tribunal held that it accepted "in part" the Appellant's submissions that a "sharp and dramatic increase in the number of educators" might compromise the Respondent's attempts to improve its organisation. The Tribunal decided to allow a graduated return to 30 educators and made orders applicable from 1 July 2021 for the number of educators to increase to 12 initially, then to 15 and then to 20. There was a further condition about the provision of monthly audits.

The Legislation

A key feature of this appeal concerns provisions of the National Law. The relevant provisions are contained in ss 3, 13, 19, 25, 31, 32, 190 and 192. These sections are set out as follows: 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. 13 MATTERS TO BE TAKEN INTO ACCOUNT IN ASSESSING WHETHER FIT AND PROPER PERSON (1) In determining whether a person is a fit and proper person under this Division, the Regulatory Authority must have regard to-- (a) the person's history of compliance with-- (i) this Law as applying in any participating jurisdiction; and (ii) a former education and care services law of a participating jurisdiction; and (iii) a children's services law of a participating jurisdiction; and (iv) an education law of a participating jurisdiction; and Note : If a person has been served with an infringement notice for an offence under this Law, and the person has paid the penalty, the Regulatory Authority cannot consider that conduct when determining whether the person is fit and proper. See section 291(5). (b) any decision under a former education and care services law, a children's services law or an education law of a participating jurisdiction to refuse, refuse to renew, suspend or cancel a licence, approval, registration or certification or other authorisation granted to the person under that law; and (c) either-- (i) any prescribed matters relating to the criminal history of the person to the extent that history may affect the person's suitability for the role of provider of an education and care service; or (ii) any check of the person under a working with vulnerable people law of a participating jurisdiction; and (d) whether the person is bankrupt, or has applied to take the benefit of any law for the relief of bankrupt or insolvent debtors or, in the case of a body corporate, is insolvent under administration or an externally-administered body corporate. (2) Without limiting subsection (1), the Regulatory Authority may have regard to-- (a) whether the person has a medical condition that may cause the person to be incapable of being responsible for providing an education and care service in accordance with this Law; and (b) whether the financial circumstances of the person may significantly limit the person's capacity to meet the person's obligations in providing an education and care service in accordance with this Law; and. (c) whether the person has the management capability to operate an education and care service in accordance with this Law; and (d) any of the following actions taken under the A New Tax System (Family Assistance) (Administration) Act 1999 of the Commonwealth in relation to a child care service approved under that Act, operated by the person or in relation to which the person was a person with management or control-- (i) any sanction imposed under section 200 of that Act; (ii) any suspension imposed under section 201A of that Act; (iii) any infringement notice given under section 219TSI of that Act. (3) Nothing in subsection (1) or (2) limits the circumstances in which a person may be considered not to be a fit and proper person to be involved in the provision of an education and care service. 19 CONDITIONS ON PROVIDER APPROVAL (1) A provider approval may be granted subject to any conditions that are prescribed in the national regulations or that are determined by the Regulatory Authority. (2) Without limiting subsection (1), a provider approval is subject to the condition that the approved provider must comply with this Law. (3) A condition of a provider approval applies to the provider as the operator of any education and care service or associated children's service, unless the condition expressly provides otherwise. (4) An approved provider must comply with the conditions of the provider approval. Penalty: $10 000, in the case of an individual. $50 000, in any other case. 25 GROUNDS FOR SUSPENSION OF PROVIDER APPROVAL The Regulatory Authority may suspend a provider approval if-- (a) the approved provider has been charged with an indictable offence, or with an offence that if committed in this jurisdiction would be an indictable offence, or any other circumstance indicates that the approved provider may not be a fit and proper person to be involved in the provision of an education and care service; or (b) the approved provider has failed to comply with a condition of the provider approval; or (c) the approved provider has failed to comply with this Law as applying in any participating jurisdiction; or (d) action is being taken under Part 7 (other than a compliance direction) in respect of more than one education and care service operated by the approved provider; or (e) the approved provider has not operated any education and care service for a period of more than 12 months (including any period of suspension); or (f) the approved provider purported to transfer or receive a transfer of an approved education and care service without the consent of the Regulatory Authority; or (g) the approved provider has not paid any outstanding prescribed fees. 31 GROUNDS FOR CANCELLATION OF PROVIDER APPROVAL The Regulatory Authority may cancel a provider approval if-- (a) the Regulatory Authority is satisfied that the approved provider or a person with management or control of an education and care service operated by the approved provider is not a fit and proper person to be involved in the provision of an education and care service; or (b) the Regulatory Authority is satisfied that the continued provision of education and care services by the approved provider would constitute an unacceptable risk to the safety, health or wellbeing of any child or class of children being educated and cared for by an education and care service operated by the approved provider; or (c) the approved provider has been found guilty of an indictable offence or an offence that if committed in this jurisdiction would be an indictable offence; or (d) the approved provider has been found guilty of an offence under this Law as applying in any participating jurisdiction; or (e) the approved provider has breached a condition of the provider approval; or (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). 32 SHOW CAUSE NOTICE BEFORE CANCELLATION (1) This section applies if the Regulatory Authority is considering the cancellation of a provider approval under section 31. (2) The Regulatory Authority must first give the approved provider a notice ("show cause notice" ) stating-- (a) that the Regulatory Authority intends to cancel the provider approval; and (b) the reasons for the proposed cancellation; and (c) that the approved provider may, within 30 days after the notice is given, give the Regulatory Authority a written response to the proposed cancellation. 190 REVIEWABLE DECISION--INTERNAL REVIEW A reviewable decision for internal review is a decision of the Regulatory Authority under this Law as applying in any participating jurisdiction-- (a) to refuse to grant a provider approval or a service approval; or (b) to amend or refuse to amend a provider approval or a service approval; or (c) to impose a condition on a provider approval or a service approval; or (d) to suspend-- (i) a provider approval under section 28; or (ii) a service approval under section 73; or (iii) a supervisor certificate under section 126; or (e) to refuse to consent to the transfer of a service approval; or (f) to revoke a service waiver; or (g) to issue a compliance direction; or (h) to issue a compliance notice. 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 (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.

Ground 1

This ground contends that the Tribunal failed to give proper or any consideration to the Appellant's submissions and failed to give adequate reasons for rejecting the Appellant's reliance upon: 1. the significance of breaches that created a direct threat to the safety of children (ground 1(a)); 2. the significance of breaches concerning inadequate record-keeping practices (ground 1(b)); 3. the significance of breaches arising from the Respondent's failure to adequately distinguish between educator and assistant educators (ground 1(c)); 4. the significance of repeated breaches of the same kind in multiple different educators venues on multiple dates and the Respondent's ongoing failure to rectify those issues (ground 1(d)); 5. the significance of breaches which occurred in May 2020 after the approval had been cancelled while the Appellant's decision was subject to a stay granted by the Tribunal (ground 1(e)).
In respect of ground 1(a) the Tribunal erred by mistaking unacceptable risk for imminent risk and having found no imminent risk did not address the case put by the Appellant. At first instance counsel for the Appellant put to the Tribunal the distinction and nature of the risk. The Appellant did not put that there was anything striking or overt likely to injure a child but, instead, submitted that the repeated nature of breaches that involve serious issues and significant risk of harm gives rise to an unacceptable risk. The Appellant accepted that there was no imminent threat to safety. The Tribunal's reasons make it clear that it conflated imminent risk with unacceptable risk. The history of non-compliance that created real risks to the safety of children was relevant to the Appellant's case under ss 31(a), (b) and (e).
With respect to ground 1(b), the Appellant submitted that Ms Bak had not implemented adequate practices in relation to keeping accurate records of prescribed information. There were repeated breaches of this nature since 2015, including failures to ensure educators conducted adequate risk assessments relating to emergencies and failures to ensure enrolment records and visitors records were kept. Counsel for the Appellant had submitted that Ms Bak's confusion with regard to a number of the business records presented to her and her response (which was to blame administrative staff for oversights) was evidence inconsistent with that of an organisation that was fit and proper to run an education and care service. The Appellant's submissions were relevant to the Appellant's case primarily under s 31(a) and (e) but the Tribunal did not refer in its reasons to the Appellant's case on record-keeping failures.
Ground 1(c) concerns the submission that there were significant breaches by the Respondent in its failure to adequately distinguish between educators and educator assistants. This submission was relevant to the Appellant's case under each of ss 31(a), (b) and (e) but the Tribunal did not refer to the Appellant's case on this issue.
Ground 1(d) contends that there was significance in the fact of repeated breaches of the same kind in multiple different educators' venues on multiple dates and that there was a failure by the Respondent to rectify those matters.
The Tribunal at [61], [98] and [99] appears to accept the proposition that the "problems" with the Respondent were systemic. However, those paragraphs may be interpreted as merely recording the Appellant's submissions without the Tribunal making any findings with respect to those matters. If so, the Tribunal has failed to determine the issue and failed to give adequate reasons. The Tribunal's statement at [60] that all of the matters identified by the Appellant over time have been rectified is inconsistent with an acceptance that the Respondent had systemic problems with governance and compliance. There was in fact no evidence that all matters had been rectified. The Tribunal did not engage with the Appellant's submissions as to the systemic nature of the Respondent's compliance.
The Tribunal's finding that the ACECQA rating was relevant was inconsistent with accepting that the Respondent's problems were systemic. ACECQA's rating reflected its tentative view that, as at 2018, the Respondent's non-compliance was not systemic.
Ground 1(e) contends that the Tribunal did not engage in or give adequate reasons with respect to the significance of breaches which occurred in May 2020 after the approval had been cancelled. During this period the Respondent operated by virtue of a stay of the Cancellation Decision ordered by the Tribunal. The submission and the evidence upon which it was based concerning this ground was relevant to the ongoing and therefore systemic nature of the Respondent's breaches. The Tribunal did not engage with the submission and this lends further weight to the conclusion that the Tribunal did not properly consider the character of the Respondent's non-compliance.
Grounds 1(a) to (e) also involve the contention that the Tribunal did not give reasons for rejecting the Appellant's submissions and that such failure constitutes an error of law. The Appellant's submissions deal with the authorities concerning the nature and extent of an obligation to give reasons by courts and tribunals and we will make reference to those authorities subsequently in this decision.

Ground 2

Ground 2(a) contends that the Tribunal erred in law by making findings in respect of which there was no evidentiary basis or, alternatively, by failing to give adequate reasons for those findings. The findings are: 1. all of the matters identified by the Appellant over time have been rectified: [60]; 2. the large number of non-compliances relied upon by the Appellant were small in nature and would ordinarily be dealt with by alternative means: [60]-[61]; 3. the Respondent has continued to operate without significant incident in the period following the commencement of the proceedings: [75].
The finding at [60] referred to above was contrary to the Appellant's evidence as to the continuation of specific breaches and of the fact that breaches of various kinds continued over the course of many years and into the period after the Appellant had decided to cancel the Respondent's provider approval. In addition, the Tribunal's finding was inconsistent with the concession made by the Respondent that it had not fully rectified all breaches. The transcript discloses counsel for the Respondent said that it could not be said that there is not a single instance of non-compliance that can currently be pointed to (transcript 27 August 2020 p 31 ln 11-15). Further, as the Tribunal did not consider any of the contraventions as to their nature and extent, the Tribunal was not in a position to determine that contraventions had been rectified.
With respect to ground 2(b) the Tribunal found that Ms McGarity had "properly conceded" that many of the matters alleged against the Respondent "would ordinarily be dealt by alternative and less drastic means such as an informal instruction to correct, or by allowing an operator the opportunity to provide further information" [60]. The Appellant submits that Ms McGarity made no such concession and that the Tribunal erred in finding that she did. The Appellant's submissions refer to aspects of the transcript in which Ms McGarity acknowledged that alternative means of dealing with non-compliance were open to the Appellant but there was no evidence that she said that those alternative means would ordinarily be employed. To the extent that the Tribunal found that less drastic means than cancellation were warranted in the Respondent's case because small breaches would ordinarily attract lesser consequences, the Tribunal's reasoning was based on a false premise.
With respect to ground 2(c), the Appellant submits that the Tribunal erred in concluding that the Respondent has continued to operate without significant incident in the period following the commencement of the proceedings. In fact, the Appellant submitted evidence and made submissions that the Respondent had continued to commit breaches during that period. On 27 and 28 May 2020 the Appellant's officers made compliance visits to a number of the Respondent's educators and identified 31 breaches of 19 provisions of the National Law: see McGarity affidavit at [68].
Ground 7: this ground is expressed to be an alternative to ground 2 and it is put that if the Tribunal erred on a question of fact in making the findings identified in ground 2 the Appellant relies upon such errors on questions of fact.
With respect to ground 2 the Appellant submits, in the alternative, that if the findings referred to are findings of fact then the Appellant seeks leave to appeal them on the basis of the material contrary evidence filed in relation to each of those findings. On the basis of the principle set out in Collins v Urban [2014] NSWCATAP 17 leave to appeal should be granted because the questions raised in this appeal relate to questions of public importance which might have general application. They go to the standards which may be expected of approved providers in overseeing and operating education and care services. The Tribunal's adoption of the position contrary to the weight of the evidence was a factual error that was unreasonably arrived at and clearly mistaken and an error that was central to the decision.
Ground 3 concerns the ground that the Tribunal erred by misconstruing s 13(1)(a)(i) of the National Law in finding that a person's history of compliance should be construed to refer only to a person's history of being found guilty of an offence under the National Law. The Tribunal held that the Appellant was entitled to take into account Ms Bak's "interactions" with the Appellant in determining whether she was fit and proper but the Tribunal did not elaborate on whether the interactions that may be taken into account extended to the Appellant's determination that the approved provider contravened the National Law. The Tribunal did not consider whether the Appellant's evidence regarding contraventions established that Ms Bak was not a fit and proper person because the Tribunal was not satisfied that non-compliance by the Respondent supported the step of cancelling the Respondent's approval. The proper construction of s 13(1)(a) is that it requires the decision-maker to take into account the history of a person's compliance with the National Law both as determined by a court and as demonstrated on the evidence before the Secretary or, on review, before the Tribunal. On the Tribunal's construction, neither s 13(1) nor s 13(2) provides explicitly for a decision-maker to take into account the Secretary's findings that a person contravened the National Law. Section 13(1)(a), in its terms and having regard to the structure of the section, captures both regulatory and criminal history of compliance.
Ground 4 concerns the Appellant's contention that the Tribunal erred at law by misconstruing s 31(e) in finding that the words "condition of the provider approval" in that section referred only to conditions determined by the Appellant and not to the statutory condition imposed by s 19(2) that the approved provider comply with the National Law. The reason given by the Tribunal for this interpretation was that if s 31(e) is to be construed to include breaches of the National Law then s 31(d) is otiose. The Tribunal's interpretation was not advanced by either of the parties. Both parties proceeded on the understanding that the proper construction of s 31(e) is that it is engaged by breach of the conditions of the provider approval imposed by s 19(2) as well as any conditions imposed by s 19(1). By determining this aspect in the way that it did the Tribunal denied the parties procedural fairness: Stead v State Government Insurance Commission (1986) 161 CLR 141. The Tribunal's construction was also wrong in law and the Tribunal should have construed s 31(e) to include breach of conditions imposed by both ss 19(1) and (2). The Tribunal's construction would render s 19(2) otiose.
The contrary construction does not render s 31(d) otiose. That is because the statutory condition in s 19(2) requires a provider to comply with "this Law" (meaning the National Law applicable in New South Wales) and not to the analogous laws of the other States and Territories. Section 31(d) applies to an offence under "this Law as applying in any participating jurisdiction". By s 5(6) and the definition of "participating jurisdiction", s 31(d) extends to include references to laws of other States and Territories that substantially correspond to the National Law of NSW. In short, there is a range of circumstances in which s 31(d) is engaged but s 31(e) is not, and vice versa.
Ground 5 concerns the Appellant's contention that the Tribunal erred at law in determining that it would set aside the Appellant's decision and impose conditions on the Respondent's provider approval in circumstances where it is beyond the jurisdiction of the Tribunal to impose conditions on a provider approval as part of proceedings for review of the decision to cancel a provider approval under s 33 of the National Law. The Appellant acknowledges that this ground involves a departure from her concession made below that the Tribunal had power to impose conditions on the provider approval but the Appellant contends that she should be allowed to depart from her concession. The Appellant's written submissions set out the reasons for justifying the Appellant being allowed to depart from her prior concession, but it is unnecessary to explain those reasons in this decision.
Ground 6 concerns the contention that the Tribunal erred at law in finding that because the Respondent was rated as "working towards the National Quality Standard" by ACECQA in 2018, the Respondent was "on par with 50.4% of family day care centres nationally" and that therefore it was difficult to find that the Respondent's overall conduct and systemic concerns warrant cancellation. The error arises because it was irrational to reason from the Respondent's placement by ACECQA in a broad-rating band in 2018 that the Respondent was on par with other services in that broad-rating band. It was also irrational to reason that it followed that the Respondent was "on par" with other services for the different purpose of the exercise of the powers conferred on the Appellant under the National Law following the identification of a large number of breaches. The revised rating of ACECQA was based upon that agency's view that the breaches as at 2018 were not shown to be systemic. The evidence before the Tribunal showed that the breaches were certainly systemic by the time of the cancellation. The Tribunal either in fact accepted the Appellant's case that the problems were systemic or should have so found. The Tribunal could not rationally place significant weight on ACECQA's assessment. An examination of ACECQA's rating shows that the Respondent was at the lowest end of the band capable of being given the rating "working towards NQS". The Tribunal's implicit acceptance that the rating issued in 2018 showed that the cancellation decision in 2020 was not warranted was irrational.
Ground 6(a) concerns the contention, made as an alternative to ground 5, that the Tribunal's conclusion in the Conditions Decision that it was appropriate to allow the Respondent a cap of over 12 educators was irrational in light of the concessions made by the Respondent through Ms Bak's evidence and through its counsel in closing submissions.

Oral Submissions

It is necessary to record some aspects of the oral submissions made at the hearing of the appeal (because they elaborate upon the substance of the written submissions). These aspects are as follows: 1. In respect of ground 1 the Appellant submitted that whilst it was not necessary for the Tribunal to make findings in respect of each alleged breach it was necessary to make findings with respect to allegations either by categories or by findings with respect to important breaches and, in doing so, it was necessary for the Tribunal to find non-compliance with the National Law. These categories follow the five grounds referred to earlier under ground 1. The Tribunal did not with the requisite level of specificity engage in a consideration of the breaches or make appropriate findings of fact. 2. In respect of the Conditions Decision the Tribunal failed to take into account that the Respondent had withdrawn the application.

Respondent's Submissions

The Respondent submitted that the appeals should be dismissed and that there were several factors that the Appellant could not overcome before the Tribunal and which should weigh heavily against any different outcome on appeal. These factors include: 1. The delay it took the Appellant to cancel the Respondent's provider approval (five months from October 2019 to March 2020). 2. The fact that the Appellant elected to call no direct evidence from officers who inspected the Respondent's premises and educators and instead chose to rely upon secondary evidence in the form of notes and reports prepared by inspectors. 3. The Appellant's case was entirely dependent upon persuading the Tribunal that the Respondent was engaging in systemic non-compliance, rather than seeking to rely upon any one instance that by itself would warrant cancellation. 4. The Appellant proceeded to the cancellation option before taking other, less drastic steps that could have more appropriately addressed the alleged breaches, given that many were minor and low in objective seriousness. 5. The Tribunal referred to a document filed by the Respondent headed "Statement of Facts, Issues and Contention" and in the light of admissions made by the Respondent, the Tribunal assumed that the Respondent had contravened the National Law on multiple occasions. However, the Tribunal did not make any specific findings on which or how many of the 174 allegations of breach against the Respondent and Ms Bak were made out. The Decision reveals that the Tribunal was concerned about the general nature of the evidence of the Appellant, and it can be inferred that the Tribunal, rather than determining - on the basis of evidence which of the 174 allegations could be proven, instead proceeded on the basis that the Respondent had contravened the National Law on multiple occasions and considered what was the correct and preferable decision on the basis of that assumption in holding the rights and best interests of the child as paramount. The Decision did not expressly mention or adjudicate each of the 174 alleged instances of non-compliance. The Tribunal properly sought to dispose of the proceedings in a holistic and comprehensible way, as opposed to treating the list of allegations like a checklist. 6. The submissions deal at length with the applicable principles concerning the nature and extent of reasons for decisions of the Tribunal. In a case like this, where there are many allegations, it may not be necessary to make findings on each and every allegation because an underlying factual premise has been rejected or because the findings could not in any event be dispositive. 7. Nevertheless, the Tribunal did not make any findings of non-compliance more serious than its assumption at [21] that there had been "multiple occasions" of non-compliance and did not specify how many that meant. Nor was it required to do so in order to arrive at the correct and preferable decision. Insofar as the Appellant's submission includes a complaint that the Tribunal did not separately address individual contraventions and breaches, and failed to resolve disputed factual matters, the Appellant places too high a standard on the reasoning expected from the Tribunal.
In the following paragraphs we summarise the Respondent's submissions with respect to each of the grounds of appeal: 1. Ground 1(a): The Tribunal did not accept the Appellant's primary submission that the evidence established the case under s 31(b) and that cancellation was warranted. The Appellant's delay in issuing a cancellation notice may have been indicative of both the fact that there was no immediate risk to children and the fact that there was no serious risk to children (because in either case the Appellant would have acted sooner). Further, the Appellant makes no attempt to grapple with the concerns raised by the Tribunal regarding the generality of the Appellant's evidence at first instance. The criticism was important insofar as the Tribunal had reservations about affirming the drastic remedy of cancellation in circumstances where the Appellant's case lacked cogency and direct evidence. 2. Ground 1(b): The Respondent submits that the Appellant fails to grapple with the fact that it is not explained how any finding of inadequate record-keeping could possibly justify the cancellation of the Respondent's approval, in the absence of some other less drastic measure first being taken. The Tribunal found at [34] that some of the alleged record-keeping non-compliances were very minor and technical. Ms McGarity conceded in cross-examination that some of the alleged record-keeping breaches could have been addressed by the Appellant through a far less drastic measure. The Appellant does not make it clear as to how ground 1(b) is relevant to the case under s 31(b). 3. Ground 1(c): The Respondent submits that it is difficult to understand how this ground could meet the materiality threshold and have any bearing on the Tribunal's decision to set aside the Cancellation Decision. 4. Grounds 1(d) and (e): The Respondent submits that the Tribunal was aware of the way the Appellant generally put the case regarding the alleged systemic breaches. However, the Tribunal was not prepared to make any findings of systemic breaches given the issues the Tribunal had with the generality of the evidence. This is particularly so in circumstances where Ms McGarity made concessions that better evidence could have been obtained and that the relevant officers could not follow up on their enquiries due to their heavy workload. 5. This ground concerns the alleged error that at [60] the Tribunal found that all matters identified by the Appellant had over time been rectified. The Respondent submits that this finding (being the first sentence in [60] needs to be understood in the context of the concessions made by Ms McGarity that many of the matters relied upon by the Appellant were either trivial and/or could have been dealt with by way of an informal instruction or a quiet word. The Appellant had submitted that the Tribunal's finding at [60] was inconsistent with a concession made by counsel for the Respondent that it had not fully rectified all breaches. In response, the Respondent submits that that concession has been overstated and taken out of context. The transcript discloses that counsel for the Respondent submitted that based on the evidence of Ms Bak each of the contraventions or the non-compliance issues had been rectified. 6. Ground 2(b): The Respondent submits that the Tribunal's finding at [61] that the Appellant's case relied upon the cumulative effect of large number of small non-compliances was a finding that was entirely open to it. The Respondent points to the submissions of counsel for the Appellant in the closing oral submissions at first instance where counsel submitted that there was no "gaping fire pit that is about to swallow a child up" but rather the case was about systemic problems and problems with the systems that the Respondent has in place. Accordingly, it was proper for the Tribunal to characterise the Appellant's case as one relying on a large number of small non-compliances. With respect to the concessions made by Ms McGarity the Respondent submits that Ms McGarity repeatedly conceded that alternative and less drastic means would be reasonable, appropriate, proper and proportionate at various points in cross-examination. 7. Ground 2 (c): The Respondent submits that the Tribunal's finding at [75] that the Respondent has continued to operate without significant incident is entirely consistent with the notion that the Appellant's case struggled to raise any individual examples of significant breaches.

Ground 3

The Tribunal expressly acknowledged at [66] that allegations of non-compliance of the National Law or the Regulations could be legitimately considered in the assessment of whether Ms Bak is a fit and proper person, even though such allegations of non-compliance may not be a mandatory factor under s 13(1). The Tribunal did consider the allegations of non-compliance by the Respondent but formed the express view that it was not satisfied that the non-compliance supported the drastic step of cancelling the Respondent's approval (see [59]).
The Respondent's submissions concerning s 13 go on to explain why, in the opinion of the Respondent, the Appellant's construction of s 13 is in error. The Respondent referred to the decision in Jessica Education Centre Pty Ltd v Secretary, Department of Education [2020] NSWCATAD 99 at [47] where the Tribunal said that in s 13 would "normally" be interpreted to mean proven non-compliance prior to the incidents relied upon in the current proceedings. The Respondent also submitted that the Appellant's construction would be inconsistent with s 291 of the National Law. That section provides for the service of an infringement notice on a person for contravening specific sections of the National Law. Under s 291(5) payment of an infringement penalty "expiates the offence" and it is not to be considered in consideration of whether a person is a fit and proper person. If the Appellant's construction is adopted, (ie. that s 13(1) requires consideration of breaches of the National Law as determined by the Tribunal, as distinct from findings of guilt), then this would lead to a perverse outcome where a provider, whose approval is cancelled on the basis of alleged conduct that does not give rise to even an infringement notice is in a worse position than a provider whose approval is cancelled on the basis of conduct that does give rise to an infringement notice (which if contested may end up in a finding of guilt). That is because the latter's infringement notice can be paid and expiated with consequent prohibition of such non-compliance being considered as to whether someone is a fit and proper person.

Ground 4

The Respondent submits that even if the Appellant makes out this ground (or ground 3) the result does not materially impact upon the Tribunal's reasoning because the Tribunal formed the view that even assuming multiple admitted contraventions of the National Law any such non-compliance did not warrant cancellation as distinct from other less drastic and more proportionate disciplinary options.
The Respondent submits that the Appellant's construction of s 31(d) and (e) would enable the Appellant to circumvent s 31(d) in that the Appellant would not need to secure a conviction before cancelling under s 31(e). The Appellant would never proceed under s 31(d) given the requirement to secure a conviction. The Appellant's construction is also inconsistent with the wording in operation of s 25, which sets out the grounds for the less drastic option of suspension of the provider approval.

Ground 5

Contrary to the Appellant's submissions, the Respondent submits that ground 5 has no merit because the Tribunal did have the power to impose or amend conditions of the Respondent's approval. The Appellant relies upon the decision in Kids Belong Family Daycare Pty Ltd v Department of Education [2021] NSWCATAD 112 but that case is relevantly different from the present case. In Kids Belong the Tribunal held that it did not have jurisdiction to impose or amend conditions of a provider approval under either ss 29 or 58 of the NCAT Act. The Respondent submits that whilst a person cannot immediately apply for external review under s 193 in respect of a decision to impose a condition of a provider approval, as such a decision is not expressly listed as a reviewable decision for external review under s 192 of the National Law, a person can, nevertheless, apply where the person is the subject of such a decision for internal review of that decision under s 191(1) as such decision to impose conditions is listed as a reviewable decision for internal review under s 190(c). A decision of the Appellant to confirm that decision, or make any other decision in response to the application is itself listed as a reviewable decision for external review under s 192(a). Where the Tribunal conducts an external review it has power under s 193(3)(c) to substitute another decision for the decision of the Appellant. The Tribunal would not be acting outside its jurisdiction to substitute its own decision for the Appellant's decision by imposing further conditions on the approval. That is what happened in the current case. Here, there were two decisions for external review by the Tribunal, namely the decision to cancel the provider approval and the internal review decision of the Appellant confirming the decision not to increase the cap of educators. Its decision was a reviewable decision for external review by respectively subsections 192(b)(ii) and 192(a). In Kids Belong there was no application for external review of an internal review pursuant to s 192(a) to substitute a decision.
In the present proceedings, the Tribunal did not rely upon s 192(a). Rather, supported by submissions of the parties, the Tribunal was under the misapprehension that it would have had jurisdiction to alter the Respondent's licence conditions even without relying on s 192(a). To the extent that the Tribunal may not have had jurisdiction to refuse to cancel the provider approval and at the same time impose new conditions, the Appeal Panel is in a position of being able to reframe the orders made such that the conditions imposed by the Tribunal in the Conditions Decision are not a decision in substitution of the Cancellation Decision, but rather a decision in substitution of the Conditions Decision.

Ground 6

The Respondent submits that it was open to the Tribunal to rely upon the ACECQA rating as a relevant matter going to whether the Cancellation Decision was warranted. Reliance on the rating was not irrational and was underpinned by defensible logic. The Tribunal's finding at [62] that it was difficult to find that the Respondent's overall conduct and systemic concerns warrant cancellation when the Respondent has the same rating as 50.4% of family day care centres nationally was based upon evidence provided in the Appellant's material through Ms McGarity (namely the "May 2020 snapshot"). That report was a matter that the Tribunal could take into account and the only basis for appellant intervention is if the reliance by the Tribunal is wholly irrational or illogical.

Ground 6(a)

This ground is based upon an alleged concession made by Ms Bak on the third day of hearing, 26 August 2020. The Respondent submits that Ms Bak's evidence was to the effect that, when the evidence was given, the Respondent only had 10 educators, and that she was content with that number "at the moment". However, her evidence was also to the effect that she was anticipating a desire to increase the number of educators in the future. Following Ms Bak's evidence, counsel for the Respondent, on instruction formally withdrew the application for the review of the decision on the number of educators. However, counsel said that if the Tribunal were minded to overturn the Cancellation Decision, but nevertheless had residual concerns, the Respondent would consent for the Tribunal to impose conditions on its provider approval confining the number of its educators to 10. The Tribunal did have residual concerns about an immediate increase from 10 educators and imposed conditions having the effect of a graduated return to a higher number of educators. There was no inconsistency in Ms Bak's evidence or the position of the Respondent.

The Respondent's Oral Submissions

Counsel submitted that the Tribunal approached the task of assessing the evidence in an appropriate way. An aide memoire was provided but it did not constitute evidence. The Tribunal could have made a finding on each and every allegation, but instead the Tribunal assumed that there were multiple breaches and then asked if the breaches were serious enough to warrant cancellation. The aide memoire evidenced weaknesses in the underlying evidence. For example, some breaches were noted in the aide memoire as "not confirmed". Based upon the quality of the evidence, the Tribunal could not find that cancellation was warranted.
The Appellant's case was based upon allegations of systemic breach as opposed to allegations of significant breach. This meant that the case concerned allegations of multiple but minor breaches, although there were some allegations of significant breaches. The fact that breaches might be categorised as systemic does not lead to cancellation necessarily. The Tribunal did not find that the Respondent's conduct was serious.

The Appellant's Submissions in Reply

The Appellant made submissions in reply (written and oral). The key submission was that Ground 1 identifies five matters that were central to the Appellant's case which the Tribunal did not expressly address. It appears that the Tribunal decided not to grapple with them because it determined that it was not necessary for it to address all 174 allegations of breach. It may be open to the Tribunal to adopt a course that does not involve individually determining each of the alleged breaches. It might be that some or all breaches can, for example, be dealt with in groups or categories. If the Tribunal is to take a course in which it does not assess the alleged contraventions either in groupings, or individually, the minimum which the Tribunal must do to discharge its function is to address the matters on which the Appellant placed particular reliance and expose its reasoning as to what breaches or categories of beaches had been established in relation to those submissions. These were the matters identified on appeal, grounds 1(a)-(e), however, the Tribunal did not do so.

Consideration

In order to succeed on the appeal grounds in relation to an error of law, it is necessary for the appellant to establish that (i) there were errors of law in the consideration given by the Tribunal to the issues under appeal, (ii) the errors were material and (iii) the errors materially affected the decision. That is, absent such errors, there was a realistic possibility that the decision might have been different. (KEPCO Bylong Australia Pty Ltd v Bylong Valley Protection Alliance Inc [2021] NSWCA 216 per Basten and Payne JJA at [8])
The law as it relates to adequacy of reasons is expressed in New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231, Bell P, at [76-77] with whom Ward JA agreed at [109] What constitutes adequate reasoning on the part of a tribunal is also informed, in my opinion, by statements from well-known administrative law decisions relating to the limits of judicial review and the need for practical as well as principled restraint in that context: Pozzolanic at 287. These principles include the following: "Decision-makers commonly express their reasons sequentially; but that does not mean that they decide each factual issue in isolation from the others. Ordinarily they review the whole of the evidence, and consider all issues of fact, before they write anything. Expression of conclusions in a certain sequence does not indicate a failure to consider the evidence as a whole": Re Minister for Immigration and Multicultural Affairs, Re; Ex parte Applicant S20/2002; Appellant S106/2002 v Minister for Immigration and Multicultural Affairs [2003] HCA 30; 77 ALJR 1165 per Gleeson CJ at [14] (Ex parte Applicant); the court should not read passages from the reasons for decision in isolation from others to which they may be related: Re Maria Politis v Commissioner of Taxation [1988] FCA 739 at [14]; 20 ATR 108 at 111; the reasons must be read fairly and as a whole: Ex parte Applicant at [147] per Kirby J; Wu Shan Liang at 291; Bisley at 251; the reasons recorded ought not to be inspected with a fine tooth-comb attuned to identifying error: Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287; [1993] FCA 456 (Pozzolanic) at 287; Wu Shan Liang at 272, 291; there should be a degree of tolerance for looseness in the language of the tribunal, unhappy phrasing of the tribunal's thoughts or verbal slips: Pozzolanic at 287, Wu Shu Liang at 272 and 291.

The approach taken by the Tribunal

In a jurisdiction which requires a just, quick and cheap approach with as little formality as possible, this case was challenging for any Tribunal.
The Tribunal was faced with a voluminous amount of material and a case that relied on potentially many systemic breaches over a lengthy period. On the Appellant's case there was no single incident justifying cancellation or 'gaping pit' in the activities of the Respondent. An aide memoire was attached to the Appellant's submissions, which was intended as a means by which the Tribunal could navigate the volumes tendered. It referenced 174 breaches and although there was provision for the Respondent to respond to each breach, that column of the Aide Memoire was blank. Hence, the Tribunal did not have the benefit of the Respondent's response to each breach. The Appellant called just one witness who had a supervisory role in relation to the detection and recording of breaches. She was cross-examined.
The Tribunal approached the case in this way [21]. In this context we note that some contraventions are admitted by ECE. It is sufficient for the Tribunal's purposes to assume that ECE has contravened the National Law on multiple occasions and that these contraventions contributed to the Regulator's decision to cancel ECE's approval.
The Tribunal decided that it was not necessary for present purposes to 'recite or closely analyse the 174 alleged instances of non-compliance' [33].
The Appellant accepted that the Tribunal was not in error in either of these findings. The Appellant further submitted that having adopted this approach the Tribunal was required to make specific findings on the five matters set out in the grounds of appeal.
We agree that the approach taken by the Tribunal was available to it. The real question is the extent to which it was required, as a matter of law, to grapple with the volume of evidence so as to make findings and give reasons which justified and explained its ultimate decision.
We conclude that the Tribunal was, with respect to some evidence, required to do more than it did. While it was not necessary to 'recite or closely analyse' the alleged breaches, it did need to engage with them more than listing a few examples of the minor technical breaches and the significant breaches. We accept that one way of achieving that is to group the breaches by reference to the Notice of Facts and Contentions as submitted by the Appellant. The issue then arises as to the materiality of any errors of law made.
We do not underestimate the challenge before the Tribunal. The Aide Memoire was confusing and there was much overlap. The same activity or conduct was used to justify a number of breaches under different provisions.
Given the importance given to the Aide Memoire by the Appellant and Respondent, it is necessary to consider it in some detail. It consists of four sections. The first identifies the breaches 1-61 identified in the Show Cause Notice, the second, the breaches 62-111 identified in the Cancellation Decision (November 2019 Compliance Visits), the third, the breaches 112-143 and finally, the breaches 144-174 identified in the May 2020 Compliance Visits identified in the Cancellation Decision (March 2020 Compliance Visits)
The reference to the evidence in respect of the sections differs. The Respondent's evidence in the first section refers to a visit record. Of the 61 breaches, we have identified that the relevant visit record, has noted 'Breach Not Confirmed' on 30 occasions and on the remaining 31 occasions, 'Breach Confirmed.'
The Respondent's evidence in the second and fourth sections is in the form of checklists on which it is not recorded in the same express terms that the breach has or has not been confirmed.
The third section is in the same form as the first section. Of these 31 entries, we have identified one repeated entry, five entries which were identified in the aide memoire as proving the breach, on examination, did not prove the breach, one entry that was marked that it was not reviewed as to whether it was confirmed or not and two entries which were marked Breach Not Confirmed.
The Tribunal's attention was drawn to a number of instances about which it was recorded 'Breach Not Confirmed'. However, those instances were not the subject of submission by either party. The Tribunal did not refer to those instances in its decision.
The transcript records the Senior Member of the Tribunal stating in respect of the Aide Memoire 'we can work through that when we come to write the decision' Day 4 T6:18-19. That, it seems, was also the expectation of the parties. The real issue is what was required of the Tribunal to consider the Appellant's case of ongoing systemic breaches and ultimately determine whether the correct and preferable decision was cancellation of the license.
We now turn to each ground of appeal.

Ground 1(a)

The Tribunal found, on the evidence, that the breaches did not create a direct threat to the safety of children [70-73]. The Tribunal's findings were based on those actions taken by the Appellant's officers and the experience and expertise of those officers in determining what action to take.
Over time, notwithstanding the history of non-compliance, the officers took no action to suspend the licence and delayed in cancelling the Respondent's licence.
As properly conceded by the Appellant, the Tribunal was entitled to take into consideration the expertise of the officers in making its findings.
In our view, the Tribunal properly considered the Appellant's case and gave adequate reasons for concluding that it could not find that there was an unacceptable risk to the safety, health and or well-being of any child or class of children.
We do not agree that the Tribunal mistook unacceptable risk for imminent risk or conflated the two terms in its reasons. The Tribunal referred to 'imminent' risk during the course of its reasoning [70], however it correctly stated the statutory test at [73] when making the relevant finding.
We reject this ground of appeal.

Ground 1(b) and (c)

Grounds 1(b) and (c) concern record keeping practices of the Respondent and the distinction between educators and assistant educators.
The Tribunal's only reference to record keeping practices was to give an example of 'very minor or technical' non-compliance matters. At [34(5)], the Tribunal referred to a visitors record book spanning two years, one educator assistant failed to sign out of the premises on one occasion'. On our reading of the first section of the Aide Memoire, there were instances of confirmed breaches in enrolment records not containing the necessary health information (breach 30), accident and incident forms were not completed (breach 49), keeping incomplete medication records (breach 53), keeping incomplete enrolment records (breaches 54, 55) and a register not being kept (breach 58).
In our view, these breaches were more serious than the breach referred to in the decision.
We conclude that the Tribunal did not give proper consideration to the evidence as to the record keeping practices as advanced by the Appellant.
As to 1(c), the Tribunal did not refer at all to the distinction between educators and assistant educators.
We accept that there is no requirement to refer to each piece of evidence or submission. However, that distinction formed a key part of the Appellant's case and was set out in its Notice of Facts, Issues and Contentions.
In our view, the Tribunal did not give any consideration to this distinction in its decision. No reasons were given by the Tribunal for failing to engage with this issue.
It then must be addressed whether the Tribunal's failure to give adequate consideration to these matters was material to the decision. That is whether there was a realistic possibility that the decision might have been different.
In our view, these two issues were the least of the five identified in the Appellant's case. They were technical in nature and while could have given rise to an increased risk of harm to children, again, the lack of action on part of the Appellant's officers gives support to the conclusion that they were not material risks. We therefore conclude that each of these failures alone were not material to the decision.

Grounds 1(d) and (e)

We agree that the Tribunal failed to engage with the Appellant's case of repeated breaches of the same kind in multiple different educators' venues on multiple dates, including after May 2020. While the Tribunal accepted that there were systemic failures in compliance by the Respondent [26-27, 61, 98] and referred to the number of breaches after May 2020 [33], it did not grapple with their occurrence and re-occurrence in different venues over many dates. We accept the Appellant's characterisation of those findings as 'merely recording the Appellant's submissions'.
In our view, the Tribunal fell into error in failing to give adequate consideration with this aspect of the Appellant's case. That failure was material to the decision made because the essence or foundation of the Appellant's case was systemic. While the Tribunal accepted that there were systemic breaches, the reasons do not disclose that the Tribunal properly considered they occurred in different educator's venues and continued to occur after being drawn to the attention of the Respondent.
This was a material failure going to the essence of the Appellant's case.

Ground 2(a)

There was much evidence before the Tribunal as to rectification of the various breaches. The Respondent submitted that para 41 of Ms Bak's affidavit provides evidence in support of the finding made by the Tribunal. It states 'in the past, non-compliance concerns and the related complications that have been brought to light have been meticulously analysed and rectified amongst the Service staff and educators.'
The Appellant submitted that various exchanges recorded in the transcript and set out above were contrary to the Respondent's evidence.
On our reading of the transcript, the evidence as to whether all or some of the breaches were rectified was far from clear or consistent. We accept the Appellant's submission that the counsel for the Respondent effectively conceded that there could be an instance of non-compliance. Equally, we note that in her closing submissions, when asked by the Tribunal what the Appellant's position was in relation to rectification, and whether it was her understanding that any of the contraventions identified are still outstanding, the response was ultimately, it was impossible for Department to tell unless the Department was there every day. Day 4 T75.42-76.12
We are conscious of the decision in Orr set out above, that, there should be a degree of tolerance for looseness in the language of the tribunal, unhappy phrasing of the tribunal's thoughts or verbal slips: Pozzolanic at 287 Wu Shu Liang at 272 and 291. Nevertheless, we are of the opinion that, on balance, the evidence did not permit a finding that 'all' matters had been rectified and that the use of 'all' was not a mere verbal slip. The Tribunal, in our view, made an error of fact. That error is not elevated to one of law as it is not the case that there was no evidence to support it.

Ground 2(b)

We are satisfied that there was substantial evidence that there was a large number of small non-compliances. A review of the Aide Memoire reveals that. While Ms McGarrity did not give evidence in the precise terms set out in the reasons, the Tribunal was entitled to infer from Ms McGarrity's evidence that alternative means were open to the Appellant. It was also entitled to infer from the evidence that taking various actions short of a breach were reasonable and proportionate: T2.30.26-41, T2.36.2-6, T2.40.7-13, and that many of the matters would be ordinarily dealt with by alternative and less drastic means.
If there was any looseness in the language used, that, in the circumstances of this jurisdiction does not amount to an error of law.

Grounds 2(c) and 7

At first instance Ms Mansted for the Appellant, submitted to the Tribunal that it was the repeated nature of the breaches that involved serious issues and significant risks of harm: day 4 T62.32, however she also submitted that 'I don't think there's anywhere that where we say that there was a lion loose on the premises' and, 'that someone was about to get their head bitten off': day 4 T62.19-21. And again at day 4 T63.15-17 '…those breaches identified in the show cause notice aren't a gaping fire pit that's about to swallow a child up'. It was clear from her submissions that the case was a systemic one and not one of significant individual incidents.
We are not satisfied that there was no evidentiary basis for this finding or that inadequate reasons were given.

Ground 3

We agree with the Appellant that the proper construction of s 13(1)(a) is that it requires the decision-maker to take into account the history of a person's compliance with the National Law both as determined by a court and as demonstrated on the evidence before the Secretary or, on review, before the Tribunal.
The National Law creates various offences in Division 9 of Part 3 and Part 6. Part 7 sets out the process to be followed if the Regulator is satisfied that there has been non-compliance. That process includes issuing a compliance direction or notice and a show cause notice. The Regulator may bring proceedings for an offence: s 283 and the Regulator may serve an infringement notice on a person for the contravention of various provisions of the National Law: s 291.
It is clear on the evidence that a show cause notice was issued by the Regulator to the Respondent prior to it cancelling the Respondent's licence. From its Statement of Facts, Issues and Contentions, the Appellant particularised the breaches identified in the Aide Memoire as indicating Ms Bak and the Respondent's non-compliance with the National Law. It is implicit in those particulars that the Regulator had found that those breaches had occurred.
In any event, it is evident from the reasons, that notwithstanding the Tribunal interpreted s.13(1)(a) as being limited to a breach of the National Law as determined by a court, the Tribunal did take into account the evidence before the Regulator, in its finding of multiple breaches. We note that there were no relevant convictions.
Thus, notwithstanding that we do not agree with the Tribunal's interpretation of s.13(1)(a)(i), the Tribunal, as a matter of fact, considered the history of non-compliance without confining it to proven offences, in coming to its decision: see [21, 29, 34, 36]

Ground 4

We accept the submissions of the Appellant that the Tribunal erred in law in interpreting s.31(e) as to refer only to conditions determined by the Secretary under s.19(1): [81].
The Tribunal should have construed s 31(e) to include breach of conditions imposed by both ss 19(1) and (2). We agree that the Tribunal's construction would render s 19(2) otiose.
However, we accept the Respondent's submission that the result of this error does not materially impact upon the Tribunal's reasoning because the Tribunal formed the view that even assuming multiple admitted contraventions of the National Law any such non-compliance did not warrant cancellation.

Ground 5

In our opinion, the jurisdiction conferred by s.29(1)(a) and s.58 NCAT Act, individually and collectively, empowers the Tribunal to impose or amend the conditions of a provider approval. Those provisions are not limited by their terms and are entirely consistent with the legislation when read as a whole, its objects and the guiding principle set out in s 36. Although those provisions are subject to enabling legislation (see s35) there is nothing in the National Law which would override these sections of the NCAT Act. Section 19(1) does not cause us any doubt as to that interpretation.

Ground 6

We do not agree that the finding that the Respondent was on par with 50.4% of family day care centres nationally was irrational. While reasonable minds may differ as to the manner in which this statistic may be interpreted, the interpretation given by the Tribunal was an available one. The conclusion can be drawn that half of all family day care centres have the same assessment of 'working towards National Quality Standard' and this assessment is defined as the 'service provides a safe education and care program, but there are one or more areas identified for improvement. (TB 2 tab 15). It is accepted that there is likely to be a range between centres which barely met the assessment and those that were at the upper end of the assessment. However, we note that that lowest ranking of 'significant improvement required' which was not the assessment of the Respondent, is given when, among other matters, there is a significant risk to the safety, health and well being of children. It is available then, to conclude that wherever a centre may be in that range, it had been assessed as NOT being a significant risk to the safety, health and well being of children.
The Tribunal stated, and we agree that that finding was important. It is important because it directly addresses s.31(1)(e).

Ground 6A

We have already held that the Tribunal was able to impose conditions on the Respondent's approval. This ground contends that the decision to permit a cap over 12 educators was irrational in light of the concessions made by Ms Bak and the Respondent's counsel in closing submissions.
The effect of the Conditions Decision was to limit the number of educators to 12 until 31 August 2021 (i.e. 4 months after publication of the Conditions Decision) and then to allow increases between then and 31 December 2021. From 1 January 2022 the cap returns to 30 (see [9] of the Conditions Decision). The reason given by the Tribunal is explained in [9]: the submissions of the Appellant that a sharp and dramatic increase might compromise the Respondent's attempts to improve its organisation were accepted.
We are of the opinion that the evidence of Ms Bak (who had a desire to increase the number of educators) and the concession of counsel (who expressed the Respondents willingness to to accept a cap of 10 educators, which we take to mean an initial rather than an indefinite cap of 10) is not inconsistent with the orders that the Tribunal made.
For the above reasons this ground is rejected.
After the hearing of this Appeal, the decision in Secretary, NSW Department of Education v Gabriel's Family Day Care Pty Ltd [2021] NSWCATAP 263 was published. In that case, the Tribunal at first instance, did not adopt the approach taken in this case. That is, in that case there was extensive evidence as to the incidents relied on by the appellant and the response of the respondent to each of those incidents. The appellant produced two schedules, the first setting out the alleged breaches and the second included the response of the respondent to each breach. The Tribunal then engaged with many of the breaches individually.
As is seen from our analysis of this case concerning the conduct of the Respondent, the Tribunal, properly, as conceded by the Appellant, made assumptions as to the number of the breaches but did not analyse each breach set out in the Schedule tendered.
For the reasons given above the Appellant has satisfied us that the proceedings should be remitted and reheard.

Orders 1. The appeal is allowed. 2. The order made by the Tribunal on 4 May 2021 is set aside. 3. The proceedings are remitted to a differently constituted Tribunal for determinations based upon the evidence already adduced to the Tribunal and such further evidence, if any, as the Tribunal may allow. 4. The decision made by the delegate of the appellant on 26 March 2020 to cancel the respondent's provider approval is stayed until the redetermination of the proceedings by the Tribunal but on the basis that until further order of the tribunal the Respondent complies with the orders made in the Conditions Decision.

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: 10 December 2021

Secretary, Department of Education v Early Childhood Education Australia Pty Ltd

At a glance

Court

Decision date

Source

Judgment (30 paragraphs)

Parties

Cases Cited (13)

Cited By (2)