Two Cubed Pty Ltd v Secretary of the Department of Education NSW

NCAT Administrative and Equal Opportunity|2019-01-25

AAH of 2004 (2006) 231 CLR 1 New South Wales Bar Association v Muirhead (1988) 14 NSWLR 173 Re Control Investments Pty Ltd v Australian Broadcasting Tribunal (No 2) (1981) 3 ALD 88 Shi v Migration Agents Registration Authority (2008) 235 CLR 286 SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; 228 CLR 152 YG & GG v Minister for Community Services [2002] NSWCA 247 Category: Principal judgment Parties: Two Cubed Pty Ltd (Applicant) Secretary of the Department of Education NSW (Respondent) Representation: O Chumakova (Director of the Applicant) C Trahanas (Respondent)

Solicitors: Crown Solicitor (Respondent) File Number(s): 2018/00311991 Publication restriction: None

Background matters

The applicant sought service approval by way of an application to the Regulatory Authority for Grammars House on 7 May 2018. This application was refused on 23 August 2018. This decision is not the subject of this review.
The applicant sought provider approval by way of an application to the Regulatory Authority which was received on 10 May 2018. This application was refused on 28 September 2018. The applicant had unsuccessfully sought provider approval on 2 prior occasions. The second refusal in relation to provider approval was on 8 May 2018, 2 days prior to the most recent application.
The provider approval application was refused under section 15 (2) of the National Law on the basis that the applicant was not a fit and proper person to be involved in the provision of an education and care service. On 20 August 2018 the Regulatory Authority affirmed the decision made on 8 May 2018 following an internal review.

Basis of the review

The applicant sought review of the decision made on 20 August 2018 in relation to provider approval on the basis, in summary, that: 1. the director of the applicant is a 'fit and proper person'; 2. denied that there was the operation of an illegal service; 3. denied that she misrepresented her qualifications and her resume; 4. the applicant takes issue with the software solution to assist in managing the scheme proposed by the director of the applicant; and 5. states that the service approval application was rejected prior to rejection of the provider approval application.
The director of the applicant has approximately 3 years' experience as a family day care educator. The respondent contends, in summary, that the director of the applicant is not a 'fit and proper person' to be given provider approval for 3 reasons: 1. the director has not demonstrated an adequate knowledge and understanding of the National Law and Regulations; 2. the director of the applicant has demonstrated a lack of understanding and insight regarding her own qualifications, including what constitutes misleading information about those qualifications; and 3. for a period of time around June 2018 to August 2018, the director of the applicant operated Grammars House without the proper approvals under the National Law.
The Tribunal finds, for the reasons which are later set out, that the applicant is not a fit and proper person to hold provider approval and therefore the decision under review is confirmed.

Legislative background

The objectives and guiding principles of the National Law are found in section 3: 3 Objectives and guiding principles (1) The objective of this Law is to establish a national education and care services quality framework for the delivery of education and care services to children. (2) The objectives of the national education and care services quality framework are- (a) to ensure the safety, health and wellbeing of children attending education and care services; (b) to improve the educational and developmental outcomes for children attending education and care services; (c) to promote continuous improvement in the provision of quality education and care services; (d) to establish a system of national integration and shared responsibility between participating jurisdictions and the Commonwealth in the administration of the national education and care services quality framework; (e) to improve public knowledge, and access to information, about the quality of education and care services; (f) to reduce the regulatory and administrative burden for education and care services by enabling information to be shared between participating jurisdictions and the Commonwealth. (3) The guiding principles of the national education and care services quality framework are as follows- (a) that the rights and best interests of the child are paramount; (b) that children are successful, competent and capable learners; (c) that the principles of equity, inclusion and diversity underlie this Law; (d) that Australia's Aboriginal and Torres Strait Islander cultures are valued; (e) that the role of parents and families is respected and supported; (f) that best practice is expected in the provision of education and care services.
Section 4 provides how the functions under the National Law are to be exercised as follows: 4 How functions to be exercised An entity that has functions under this Law is to exercise its functions having regard to the objectives and guiding principles of the national education and care services quality framework set out in section 3.
The National Law provides under Part 3 for a natural person or company to operate an education and care service, which includes family day care services. The applicant in this matter is a company rather than a natural person. An applicant must obtain service approval under Part 3 in order to operate an education and care service.
The Regulatory Authority is defined in section 5 to be: "Regulatory Authority" means a person declared by a law of a participating jurisdiction to be the Regulatory Authority for that jurisdiction or for a class of education and care services for that jurisdiction...
Pursuant to section 24 of the Children (Education and Care Services) Supplementary Provisions Act 2011 (NSW) references to Regulatory Authority in the National Law is a reference to the Regulatory Authority for this jurisdiction. Under section 9 of the Children (Education and Care Services National Law Application) Act 2010 (NSW), the Regulatory Authority for NSW is the Director-General of the Department of Education and Communities, now known as the Secretary of the Department of Education.

Jurisdiction

In CTG v NSW Department of Education Early Childhood and Care Directorate [2017] NSWCATAD 60, Senior Member McAteer determined that the application before the Tribunal is in the review jurisdiction rather than as an external appeal. This decision was followed in CVT v NSW Department of Education & Communities, Early Childhood Education & Care Directorate [2017] NSWCATAD 74. It was also considered that an application such as this is to be heard in the review jurisdiction of the Tribunal and that determination was made previously in CTZ v NSW Department of Education, Early Childhood Education and Care Directorate [2017] NSWCATAD 132.
The matters of CTG v NSW Department of Education [2017] NSWCATAD 60, CVM v NSW Department of Education [2017] NSWCATAD 108, CVN v NSW Department of Education [2017] NSWCATAD 109, CVT v NSW Department of Education [2017] NSWCATAD 74 and CTZ v NSW Department of Education [2017] NSWCATAD 132, with respect, were wrongly decided in respect of the identified jurisdiction and the reference to the jurisdiction conferred by section 28 of the Community Services (Complaints, Reviews and Monitoring) Act 1993 (NSW) is in error. The jurisdiction is instead more correctly considered to be conferred on the Tribunal under the general jurisdiction provision in s 29 of the Civil and Administrative Tribunal Act 2013 (NSW). The reasoning in CTG is respectfully correct in finding that the Tribunal's jurisdiction is not one in relation to an external appeal under section 31 of that Act. The National Law refers to "external review", not "external appeal". It is apparent that the Tribunal in CTG and in the decision in CTZ did not give consideration to section 29 of the Tribunal Act as a source of jurisdiction and as set out in the reasoning in DBU v Secretary, Department of Education [2017] NSWCATAD 257, section 29 of the Tribunal Act is the source of jurisdiction in this matter.
In Secretary, Department of Education v Joys Child Care Ltd [2017] NSWSC 749, Justice Parker acknowledged that there were two views about the statutory basis for the Tribunal's review power. The court in that matter did not need to reach any conclusion as to whether the Tribunal was exercising its jurisdiction under section 43 of the Civil and Administrative Tribunal Act or section 60 of the Administrative Decisions Review Act. Section 43 of the Civil and Administrative Tribunal Act is the equivalent stay provision to section 60 of the Administrative Decisions Review Act.
In DBU v Secretary, Department of Education [2017] NSWCATAD 257 (DBU) it was held by Senior Member Ransome at [22] that: In summary, while the National Law and associated legislation provide for review of some decisions with respect to child care services to be dealt with in the Tribunal's administrative review jurisdiction, that does not include the decision presently under review because it relates to a family day care service. That decision therefore falls for review within the Tribunal's residual general jurisdiction in s 29 of the Tribunal Act.
Because the Children (Education and Care Services) Supplementary Provisions Act 2011 (NSW) (especially sections 4 and 17) applies to "State regulated education and care services" and family day care services are excluded from the definition, the provisions of the Community Services (Complaints, Reviews and Monitoring) Act 1993 (NSW) do not apply to this application. For the reasons given by Senior Member Ransome in DBU the previous determinations as to the exercise of the Tribunal's jurisdiction identified as having been conferred by section 28 of the Community Services (Complaints, Reviews and Monitoring) Act 1993 (NSW) is in error and those previous decisions were incorrectly decided in that respect. It is noted that Senior Member Dr Lucy has also held that to be so in CYU v Secretary, Department of Education [2017] NSWCATAD 290.
A reviewable decision for internal review is a decision of the Regulatory Authority under the National Law including a decision to refuse to grant a provider approval or a service approval. Section 191 of the National Law sets out how that internal review is to be conducted. There was an internal review in this matter which resulted in a confirmation of the refusal to issue a provider approval and a service approval.
Section 192 of the National Law relevantly provides: 192 Reviewable decision-external review A reviewable decision for external review is- (a) a decision of the Regulatory Authority made under section 191 (other than a decision in relation to the issue of a compliance direction or a compliance notice); or (b) a decision of the Regulatory Authority under this Law as applying in any participating jurisdiction- (i) to suspend a provider approval under section 27; or (ii) to cancel a provider approval under section 33; or (iii) to suspend a service approval under section 72; or (iv) to cancel a service approval under section 79 or 307; or (v) to suspend or cancel a supervisor certificate under section 125; or (vi) to direct the approved provider of a family day care service to suspend the care and education of children by a family day care educator; or (vii) to give a prohibition notice or to refuse to cancel a prohibition notice. Note : A person is not entitled to a review under this section in respect of a suspension or cancellation of a service approval if that suspension or cancellation relates only to an associated children's service. Any right of review would be under the children's services law.
The decision under section 191 of the National Law is thus a reviewable decision for external review pursuant to section 192 (a) of the National Law.
Section 193 of the National Law provides: 193 Application for review of decision of the Regulatory Authority (1) A person who is the subject of a reviewable decision for external review may apply to the relevant tribunal or court for a review of the decision. (2) An application must be made within 30 days after the day on which the applicant is notified of the decision that is to be reviewed. (3) After hearing the matter, the relevant tribunal or court may- (a) confirm the decision of the Regulatory Authority; or (b) amend the decision of the Regulatory Authority; or (c) substitute another decision for the decision of the Regulatory Authority. (4) In determining any application under this section, the relevant tribunal or court may have regard to any decision under this Law as applying in another participating jurisdiction of a relevant tribunal or court of that jurisdiction.
In section 5 of the National Law the definition of relevant tribunal or court is: "relevant tribunal or court" , in relation to a participating jurisdiction, means the tribunal or court declared by a law of that jurisdiction to be the relevant tribunal or court for the purposes of this Law or a provision of this Law;
In section 8 of the Children (Education and Care Services National Law Application) Act 2010 the relevant Tribunal is declared: 8 Relevant tribunal or court For the purposes of the definition of "relevant tribunal or court" in section 5 of the Children (Education and Care Services) National Law (NSW) : (a) the District Court is declared to be the relevant tribunal or court for this jurisdiction for the purposes of section 181 of that Law, and (b) the Civil and Administrative Tribunal is declared to be the relevant tribunal or court for this jurisdiction for the purposes of Part 8 of that Law.
As Senior Member Ransome stated in DBU at [24]-[26]: [24] What then is the Tribunal's task on review in the present case? Under s 192 of the National Law the Tribunal is to conduct an "administrative review" of the decision made by the Regulatory Authority. That term is not defined. While the Tribunal Act sets out the practice and procedure to be followed by the Tribunal in its proceedings, it also is silent on what the Tribunal's task in its general jurisdiction with respect to an administrative review. [25] Consideration of the scope of an administrative review function arose most notably in the case of Drake v Minister for Immigration and Ethnic Affairs(1979) 24 ALR 577 where, in relation to the then newly established Commonwealth Administrative Appeals Tribunal (AAT), the Full Federal Court stated at 579 that the AAT's task was to reach "the correct or preferable decision" on the material before it. That description (and the similar formulation "correct and preferable") of a decision-maker's obligations when conducting administrative review has been repeated many times since, both in case law and in legislation. Indeed, under s 63 of the ADR Act in its administrative review jurisdiction, this Tribunal is tasked with making the "correct and preferable decision". [26] In my view, in conducting an administrative review in the exercise of its general jurisdiction under s 29 of the Tribunal Act, the Tribunal is required to perform essentially the same task as it would if the matter fell within its jurisdiction under s 30 of the Tribunal Act, that is, it is required to make the correct and preferable decision on the material before it. The High Court in the case of Shi v Migration Agents Registration Authority (2008) CLR 286 (sic) confirmed that administrative review is conducted at the time of the review on the material available to the Tribunal at the time of the review, which may include new or additional material that was not before the original decision-maker.
Therefore, the scheme of the legislation is that the Civil and Administrative Tribunal is the relevant Tribunal to which an application may be made for external review of a decision of the Regulatory Authority under section 191 of the National Law. The powers given to the Tribunal are those in section 193 of the National Law. In addition, the National Law provides at section 194 that the Act which establishes this Tribunal is not limited by the National Law. The Tribunal therefore is required to make the correct and preferable decision on the material before it.

The evidence relied upon in the hearing

The documents in evidence before the Tribunal are: 1. Application for Administrative review filed 12 October 2018.: Exhibit A1. 2. Bundle of documents relied upon by the applicant filed 28 December 2018: Exhibit A2. 3. Summary of legal arguments relied upon by the applicant filed 22 January 2019: Exhibit A3. 4. Bundle of documents including relevant documents before the primary decision-maker filed on behalf of the respondent on 28 November 2018: Exhibit R1. 5. Supplementary Tender Bundle of the Respondent filed 20 December 2018 including Affidavit of Brett Lalor sworn 20 December 2018, Transcript of Interview on 16 August 2018: Exhibit R2. 6. Supplementary Tender Bundle filed 16 January 2019 including the submissions for the respondent: Exhibit R3.

Onus of proof

The decision of the Tribunal in BJB v NSW Office of the Children's Guardian (No 2) [2014] NSWCATAD 164, recorded at [32]: "…there is currently no precedent decision in relation to the standard of proof or onus of proof which is applicable on a review pursuant to section 27 of the Act. That may change in the event that any of the decisions are taken on appeal to the Supreme Court. For present purposes the relevant applicable standard is the civil onus: the balance of probabilities as modified by section 140(2) of the Evidence Act 1995 (NSW). Neither party bears an onus of proof in relation to an application under section 27 of the Act: see Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 (2006) 231 CLR 1 at [39]-[40]. The Tribunal has to consider all of the evidence whether adduced by the applicant or the respondent in the light of and under the mandated considerations contained in sections 15 and 30 of the Act. As adverted to earlier in these reasons the Tribunal is to act with as little formality as the circumstances permit to appropriately determine matters without regard to technicalities or legal form: section 38 of the [Civil and Administrative Tribunal Act]; Kostas v HIA Insurance Services Pty Limited [2010] HCA 32 at [15]-[17]. Ultimately, the Tribunal is the decision maker and can have regard to 'any' material subject to the rules of natural justice: section 63 of the Administrative Decisions Review Act 1997."
This concept is repeated in the Supreme Court decision in Bronze Wing Ammunition Pty Limited v SafeWork NSW (No 2) [2016] NSWSC 988 in the way referred to in the following paragraphs.
Further support for these principles, particularly about onus of proof in proceedings such as these in this Tribunal, can be found in the judgment of Justice Basten in Re Sophie (No 2) [2009] NSWCA 89, where His Honour stated at [98]: "Whether s 140 of the Evidence Act imposes a burden on a particular party, or merely identifies the standard of proof which is to be applied to the party bearing the burden, may be open to question. In the present case, given the fact that the proceedings are not to be conducted in an adversarial manner (s 93(1)), it is at least doubtful that there is any legal burden of proof imposed on a particular party: compare, in relation to an administrative tribunal, SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; 228 CLR 152 at [40]. Again, as a practical matter, it is no doubt true that the Director-General must ensure that there is material before the Court which satisfies it as to the necessary preconditions to the making of a care order, but there would be no legal error if the Court were properly satisfied of the relevant precondition otherwise than as a result of the case presented by the Director-General. That possibility is real because of the requirement that the Court conduct the proceedings with as little formality and legal technicality and form as the circumstances of the case permit: s 93(2). Again, it is not necessary to determine the precise nature of the legal obligations which bind a court in proceedings to which s 93 of the Care and Protection Act applies, but it is desirable to state that what appear to have been common assumptions in Re Sophie (No. 1) and were not in issue in the present case are not necessarily legally correct."
The Supreme Court has considered the onus of proof in an administrative review and has accepted that there is no onus of proof upon either party. In Bronze Wing Ammunition Pty Limited v SafeWork NSW (No 2) [2016] NSWSC 988 ("Bronze Wing") at [62] and [74] per Button J, where it was said at [74], accepting the submissions of the respondent at [71]-[72] which are also extracted: "[71] It was said that, pursuant to s 38 of the [Civil and Administrative Tribunal Act], the rules of evidence did not apply before the single member. It was also said that, in truth, there was no onus of proof cast upon either party. Because there was no onus of proof, there was no standard of proof, whether that be proof beyond reasonable doubt, proof on the balance of probabilities, or some refinement of the latter standard, pursuant to what was said in Karakatsanis v Racing Victoria Ltd [2013] VSCA 305; (2013) 42 VR 176 at [35]-[36]. [72] Accordingly, it was said, the single member was not required to have regard to the principles discussed in Briginshaw, and the decision of the single member was not required to reflect them, either explicitly or implicitly. For that reason, it was said, there was no error in the Appeal Panel rejecting the ground based upon the Briginshaw test. … [74]Turning to my determination, it will be recalled that the proceedings before the single member were neither a criminal prosecution, nor anything analogous to it. Rather, it was a proceeding to determine whether a natural person and a corporation were fit and proper persons for various purposes. Nor did counsel for the appellants dispute the general proposition of counsel for the respondent that, in proceedings such as those conducted before the single member, there is no onus cast upon either party."
The consequences of there being no onus of proof and some refinement of the civil standard of proof to the effect referred to in the Victorian Court of Appeal in Karakatsanis v Racing Victoria Ltd [2013] VSCA 305; (2013) 42 VR 176 ("Karakatsanis ") at [36]-[39], and referred to with approval by Justice Button in Bronze Wing, is that which is referred to in these extracted paragraphs from Karakatsanis: "[36] Provided that the Tribunal acted fairly and on the basis of relevant evidence (ie evidence rationally affecting the assessment of the probabilities of the facts in issue), it could not be readily concluded that it acted contrary to the law. [37] This said, it was entirely proper for the Tribunal to take the approach that it did and require that it be 'comfortably satisfied' of the facts in issue. As the High Court made clear in Neat Holdings [[1992] HCA 66; (1992) 67 ALJR 170], the relevant principle should be understood as reflecting 'a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct'. The approach that the Tribunal took was a rational and proper one in all the circumstances of the case. Further, it accorded with the approach accepted as proper before other tribunals in disciplinary proceedings not governed by the rules of evidence. [See, eg, Australian Football League v Carlton Football Club Limited (1998) 2 VR 546 (Hayne JA, 569); Myers v Medical Practitioners Board of Victoria [2007] VSCA 163; (2007) 18 VR 48 (Warren CJ, 63 [58]); Forster v Legal Services Board [2013] VSCA 73 (Kyrou AJA [179])] [38] In Greyhound Racing Authority v Bragg [[2003] NSWCA 388] Santow JA expressed in the following way the applicability of the Briginshaw concepts to the functions of a tribunal concerned with questions of the type in issue in this case:[Ibid. [35] (emphasis omitted).] 'The notion of 'inexact proof, and indefinite testimony or indirect references [scil. inferences]' needs to be translated to a comfortable level of satisfaction, fairly and properly arrived at, commensurate with the gravity of the charge, achieved in accordance with fair processes appropriate to and adopted by such a body.' [39] This formulation captures the relevant sense in which the application of the principles stated by Dixon J in Briginshaw must be qualified in cases such as the present."(footnotes and references included)
The Court of Appeal in Bronze Wing International Pty Ltd v SafeWork NSW [2017] NSWCA 41 on 9 March 2017 after granting leave to appeal, dismissed the appeal from Justice Button's decision and orders in Bronze Wing.
The initial practical or forensic onus but not the legal onus is thus generally to be carried by the applicant. In support of that proposition the Tribunal can place weight upon the decision in Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 (2006) 231 CLR 1 at pp 16-17, paras [39]-[40]. It was stated in the High Court, by the plurality comprising Gummow A-CJ, Callinan, Heydon and Crennan JJ, in that decision at [40] that: "This Court has repeatedly said that the proceedings of the Tribunal are administrative in nature, or inquisitorial, and that there is an onus upon neither an applicant nor the Minister. It may be that the Minister will sometimes, perhaps often, have a greater capacity to ascertain and speak to conditions existing in another country, but that does not mean that the Minister is to bear a legal onus, just as, in those cases in which an applicant is the better informed, that applicant is not to be so burdened." (Citations omitted)

Further Legislative Provisions relevant to the decision

The guiding principle to be applied to practice and procedure in the Tribunal "is to facilitate the just, quick and cheap resolution of the real issues in the proceedings" consistent with the objects and principles under the Act: section 36 of the Civil and Administrative Tribunal Act.
The Tribunal may determine its own procedure in relation to any matter for which the Civil and Administrative Tribunal Act, or Civil and Administrative Rules 2014 do not otherwise make provision. Additionally, the Tribunal is not bound by the rules of evidence (except in relation to privileged disclosures, for example under section 128 of the Evidence Act 1995), and is to act with as little formality as the circumstances permit to appropriately determine matters without regard to technicalities or legal form: sections 38, and 67 of the Civil and Administrative Tribunal Act.
Procedural fairness and other aspects of natural justice, of course, are to apply to these proceedings and the Tribunal has a discretion to act on material which is rationally probative, but must determine in all the circumstances whether it is proper to act on that material and must act fairly towards the parties: Commission for Children and Young People v FZ [2011] NSWCA 111; Roberts v Balancio (1987) 8 NSWLR 436.
The Administrative and Equal Opportunity Division ("AEOD") of the Tribunal has its practice and procedure prescribed by reason of Schedule 3 of the Civil and Administrative Tribunal Act. Relevantly, a party to proceedings in this division on an application for this review is entitled to be represented by a lawyer without requiring leave of the Tribunal: see sections 16, 17 and Schedule 3, clause 9, of the Civil and Administrative Tribunal Act. There is no automatic prohibition on the publication of names under section 65 of the Civil and Administrative Tribunal Act because this review is not one under the Supplementary Provisions Act. This does not prevent the Tribunal from making nonpublication order under section 64 of the Civil and Administrative Tribunal Act of its own motion. The Tribunal does not consider a nonpublication order appropriate in the circumstances of this matter and no order was sought by the parties.

The Issue

As previously referred to, the issue the Tribunal is to decide in these proceedings is what "the correct and preferable decision is having regard to the material then before it" including material which may not have been before the Secretary Department of Education: see DBU v Secretary, Department of Education [2017] NSWCATAD 257 at [24]-[26]; YG & GG v Minister for Community Services [2002] NSWCA 247, Hodgson JA (with whom Foster and Brownie AJJA agreed) at [25]; Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286.
There is no requirement upon the applicant to show that the original decision maker's decision was wrong: Re Control Investments Pty Ltd v Australian Broadcasting Tribunal (No 2) (1981) 3 ALD 88.
The Tribunal may itself be a source of evidence: ALH Group Pty Ltd v Dicey's Toowong Pty Ltd [2003] 2 QdR 1. However, subject to the rules of natural justice, the Tribunal may act on its own knowledge: Carr v Simnovic (1980) 26 SASR 263; Maloney v New South Wales National Coursing Association Ltd [1978] 1 NSWLR 161; Hall v New South Wales Trotting Club Ltd [1977] 1 NSWLR 378; Collector of Customs (Tas) v Flinders Island Community Association (1985) 7 FCR 205. Subject to the same rules of natural justice, the Tribunal may make its own enquiries, whether of a factual matter or scientific matter, where a member of the Tribunal has the requisite expertise: New South Wales Bar Association v Muirhead (1988) 14 NSWLR 173 at 211; Bowen-James v Delegate of Director-General of Department of Health (1992) 27 NSWLR 457 at 481.

The Evidence

The National Law regulates a range of "education and care services" including "family day care services". A family day care service is an education and care service that is delivered through the use of 2 or more family daycare educators at 2 or more residences.
The scheme of the legislation is that a person who wishes to operate a family day care service must obtain "provider approval" under Part 2 of the National Law. This involves an assessment of whether the person is a "fit and proper person" to be involved in the provision of a service. Once a person holds a provider approval they are known as an "approved provider".
A service approval must also be obtained for a family day care service. This approval is under Part 3 of the National Law. This approval focuses upon the education and care service which is actually operated and involves consideration of those matters specified in the Education and Care Services National Regulations ("National Regulations") at clause 6.
Once there is a provider approval and a service approval in place, the approved provider and the family daycare educators have continuing obligations under the statutory regime.
A person, which includes a body corporate, may apply to the Secretary for provider approval. The Secretary may grant or refuse to grant provider approval. It is necessary that the Secretary is satisfied that the applicant for provider approval is fit and proper to be involved in the provision of an education and care service: National Law, section 15 (2). An applicant who is a body corporate (a company: like the applicant in this matter) must satisfy the Secretary that each person who has management or control of an education and care service to be operated by the applicant is a fit and proper person to be involved in the provision of an education and care service, and the applicant is a fit and proper person to be involved in the provision of an education and care service: National Law, section 12 (2).
The matters to be addressed in assessing fitness and propriety are set out in section 13 of the National Law. The matters which are set out include the person's history of compliance with the National Law and the Children (Education and Care Services) Supplementary Provisions Act 2011 (NSW), and whether the person has management capability to operate an education and care service in accordance with the National Law. The Secretary may take into account other factors in assessing whether a person is a fit and proper person to be involved in the provision of an education and care service.
When a provider approval has been granted, an approved provider may apply to the Secretary for a service approval for an education and care service. The approved provider has personal responsibility for and overall management and control of, an education and care service. A provider approval is subject to the condition by reason of section 19 (2) of the National Law that approved provider must comply with the National Law. There are a significant number of regulatory requirements with which approved providers must comply under Part 6 of the National Law and in the associated regulations. The list of those numerous requirements is not necessary for the purpose of these reasons.
The applicant is a company. Ms Olga Chumakova is the director of the applicant and the person with management or control of the applicant.
Ms Chumakova has worked as an educator, running a family day care centre called Grammars House since around June 2015. Ms Chumakova has also worked under the following provider schemes: 1. Brilliant Minds Family Day Care from around July 2015 to April 2017; 2. Bella Family Day Care from around 27 April 2017 to around 10 May 2018; 3. Kids Connection for approximately 2 weeks in June 2018 including 5-7 June 2018; 4. Holistic Approach Family Day Care from 20 August 2018.
The Regulatory Authority submits that the internal review decision should be confirmed because Ms Chumakova as the person with management or control of the family day care service to be operated by the applicant, is not a fit and proper person to be involved in the provision of an education and care service.
The phrase "fit and proper" has been the subject of a number of decisions including decisions in the High Court. The context in which the person is or will be engaged in the underlying principles and objects of the legislation give the phrase meaning in particular circumstances: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 380. A definition of fitness and propriety at least includes "honesty, knowledge and ability": Hughes & Vale Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127 at 156.
An assessment of fitness and propriety "also includes public confidence that the person is able to maintain high standards of rectitude and that they likely future conduct will keep to that standard": CYD v Secretary of the Department of Education NSW [2017] NSWCATAD 190 at [89].
In the regulatory regime surrounding provider approvals, the term "fit and proper" in context refers to the provision of education and care services to children under 13 years of age. An applicant's fitness and propriety may well be dependent then on an adequate knowledge and understanding of the responsibilities of an approved provider, whether the applicant acts in accordance with those responsibilities and whether the applicant has sufficient moral integrity and character to be entrusted with the provision of education and care services: Tanyous v Secretary, Department of Education [2018] NSWCATAD 197 at [31]; Brandusoiu v Commissioner of Police [2015] NSWCATAD 204 at [91]-[92].
Compliance with the National Law is a mandatory consideration in the assessment of the applicant's fitness and propriety because of the conditions attached to provider approvals. A person's management capability to operate an efficient education and care service in accordance with the National Law is a relevant consideration in assessing whether a person is a fit and proper person to be engaged in education and care services.
The objectives of the National Law are promoted where persons with management or control of an education and care service have knowledge and understanding of the National Law and Regulations: CYU V Secretary Department of Education [2017] NSWCATAD 290 at [53]-[54]; DPW v Secretary Department of Education [2018] NSWCATAD 257 at [40], [42]-[43].
Ms Chumakova has approximately more than 3 years' experience as a family day care educator under 4 different provider schemes.
Efficient management of educators and assessing their practices in compliance with the National Law is a key indicator of competence and knowledge. However, Ms Chumakova identified in the evidence before the Tribunal that she would monitor educators through videos and photos which she would review to determine whether the practice of the educators was appropriate. This process would not ensure that educators themselves will understand their obligations, and physical visits to a family day care residence or venue to observe interactions with the children and to check that food being provided to them was actually nutritious, was not part of the response to questions posed to her at interview. Whilst technology may be useful it is not likely to adequately determine whether appropriate care is provided unless there are physical visits and in-person assessments.
Ms Chumakova, as part of the interview and assessment process undertaken by the Regulatory Authority, was said to have exhibited a lack of understanding as to the complaint process and reporting obligations under the National Law and Regulations. The Tribunal accepts that as an accurate assessment of the evidence. Ms Chumakova failed to identify the records which are required to be kept for all individuals who reside at or otherwise visit a family day care residence.
It is accepted by the Tribunal from the evidence before it that Ms Chumakova had a limited understanding and could not properly identify the requirements regarding information that has to be displayed at the premises of family daycare residences. Those requirements include the provider approval, service approval, the rating of the service, the hours and days of operation of the service, the name and telephone number of a person to whom complaints can be addressed and the contact details of the Regulatory Authority. Information about the contents in operation of the educational program for the service should also be displayed.
Ms Chumakova could not identify, in the evidence before us, how she would ensure that the programs delivered by educators meet the educational and developmental needs of the children other than relying upon resources provided by the Department, webinars, samples of planning, and observation rather than, by way of example, actually reviewing an educator's programs.
Ms Chumakova exhibited to the Regulatory Authority an inadequate understanding of strategies to manage and support family daycare educators in her answers during interview and the second assessment session. It was assessed that she did not understand the strategies for managing and supporting family daycare educators or how she would monitor and evaluate educators and that she had to develop a relationship with the educators. Ms Chumakova failed to outline any improvement strategies in relation to a hypothetical scenario at an education and care service: see Exhibit R1, pages 101, 108, 115, 118, 230. The Tribunal accepts that evidence before us.
Family daycare educators must have, or must be actively working towards, at least a certificate III level education and care qualification that has been approved by the Australian Children's Education and Care Quality Authority. An educator is actively working towards a qualification if they are enrolled in a course for the qualification and provide an approved provider with documentary evidence from the course provider that the educator has commenced the course, and is making satisfactory progress towards completion of the course, and meeting the requirements for maintaining the enrolment: National Regulations, regulations 4 (1), 10, 127, 137. On 5 July 2018 Ms Chumakova attained her certificate III qualification: Exhibit A2 p 87. It is apparent from the documentation in Exhibit A2 that Ms Chumakova enrolled in a master of teaching in 2015 or 2016 and completed some subjects. However, from mid-2017 until mid-2018 Ms Chumakova was not making satisfactory progress towards completion of the Masters program because she did not complete any subjects for the program. In those circumstances, she was enrolled but not actively working towards a certificate III qualification for a period of approximately one year: Exhibit R1, p 20. Ms Chumakova says that she was told on the telephone that she had 5 years in which to complete the study. Ms Chumakova says that she applied on 14 June 2018 for the certificate III of early childhood education presumably on the basis of her completed subjects in the Masters course.
In the second assessment session Ms Chumakova failed to identify all of the minimum qualifications of persons involved in the provision of a family daycare service, and her insistence that she was fully qualified as a family day care educator evidences a lack of understanding about qualifications of educators, particularly the concept of actively working towards a qualification. Ms Chumakova says that the questioning was conducted in an adversarial and aggressive manner which impacted upon her performance. It is a necessary quality of an approved provider that she ensures that family daycare educators, educator assistants and family day care coordinators meet the qualification requirements for their respective roles: National Law sections 163, 169; National Regulations, regulation 136; Exhibit R1 p 251. Ms Chumakova could not provide assurance that she understood the requirements.
Ms Chumakova also represented on the Grammar's house website that she had a "Master degree in Teaching": Exhibit R1 pp 152, 209. Ms Chumakova does not hold this qualification. When asked whether she considered this to be misleading, at interview she stated that she had not updated the website for some time. Ms Chumakova says that the website is no more than an online business card and has not substantially changed since 2015. It is a clearly misleading statement whether updated or not because she has never held a master degree in teaching. The honesty and knowledge of Ms Chumakova is thus deficient.
Ms Chumakova says that she utilised Google advertising which was paused from 3 June 2018 until 26 August 2018. The website however was still up and accessible and providing an advertisement of the services irrespective of Google advertising.
Between June 2018 and 10 August 2018 Ms Chumakova cared for children even though she did not have registration with a family day care service. This is operating a family day care service without provider approval: Exhibit R1, pages 17-18, 157, 159. Ms Chumakova said that she had a "personal arrangement" with families involved. Ms Chumakova said that was an informal arrangement and she was not advertising a service. It was also established that she temporarily lowered her fees because the families were not entitled to a government rebate: Exhibit R1 p 3; Exhibit R2, interview 16/8/2018, p 31. A "personal arrangement" arises where a friend of a family personally provides education and care to the child that family under an informal arrangement where no offer to provide that education and care was advertised: National Law, section 5 (1). Ms Chumakova was not a friend of the families of the children to whom she provided care during the relevant period. There was continued advertising during the relevant period. These were simply children to whom she had previously provided education and care. Ms Chumakova also invoiced the parents under an ABN so that it could not accurately be said it was a personal arrangement.
Ms Chumakova also admitted to Mr Lalor on 9 August 2018 when he attended Grammars House, and it was noted in his notebook, that she was not operating under a provider approval and that she knew it was illegal: Exhibit R2 Affidavit of Brett Lalor: Annexure A. This admission was subsequently denied by Ms Chumakova at her interview.
Even if it were accepted that the service was a personal arrangement Ms Chumakova could also be considered to have been operating a "home-based education and care service" at that time in contravention of the Children (Education and Care Services) Supplementary Provisions Act 2011 (NSW) sections 3 (1), 4, 8 (1), 9. The provisions of the National Law regarding provider and service approval apply, as modified, to State regulated education services: National Law, sections 11, 13, 17.
The service that was being offered by Ms Chumakova at that time was an education and care service at her home for children under the age of 6 years, who did not ordinarily attend school. Accordingly, she was operating a "home-based education and care service". The service was also being advertised on the Grammars House website. This is in contravention of the legislative scheme since she did not have provider approval or service approval at that time.
Ms Chumakova submissions identify in chronological order what she contends occurred. It is pointed out by Ms Chumakova that she scored an average of 80.4% and has 3 ½ years' experience within the family day care industry, that there is community support for and a demonstrated need for her services, and that she has "knowledge and education of family day care industry". The assessment result of an average of 80.4% was said to be ordinarily sufficient along with her experience and management capability for approval: Exhibit R1 p 249. This result was the third assessment undertaken by Ms Chumakova and predated the interview which occurred on 16 August 2018. The matters which were raised in interview with Ms Chumakova have been previously referred to in these reasons. It was ultimately assessed that Ms Chumakova did not have a sufficient understanding of the role and responsibility of an approved provider, as opposed to an educator. From the perspective of knowledge about a provider's obligations it was considered that Ms Chumakova was not a fit and proper person to be involved in the provision of an education and care service. There was also concern expressed about the misleading statements about Ms Chumakova's qualifications. There was an absence of the requisite formal recognition of qualification during a period of about 12 months.

Consideration

The objectives and guiding principles under the National Law are in subsections 3(2) and 3(3) stated to be: (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.
The rights and best interests of the children are paramount in implementing the National Law. Since section 4 of the National Law requires an entity that has functions under the law to exercise those functions having regard to the objectives and guiding principles set out in section 3, the Tribunal is required to regard the rights and best interests of the children as paramount in making a determination as to the correct and preferable decision in this matter.
Section 260 of the National Law identifies the functions of the Regulatory Authority as follows: 260 Functions of Regulatory Authority The Regulatory Authority has the following functions under this Law in relation to this jurisdiction- (a) to administer the National Quality Framework; (b) to assess approved education and care services against the National Quality Standard and the national regulations and determine the ratings of those services; (c) to monitor and enforce compliance with this Law; (d) to receive and investigate complaints arising under this Law; (e) in conjunction with the National Authority and the relevant Commonwealth Department, to educate and inform education and care services and the community in relation to the National Quality Framework; (f) to work in collaboration with the National Authority to support and promote continuous quality improvements in education and care services; (g) to undertake information collection, review and reporting for the purposes of- (i) the regulation of education and care services; and (ii) reporting on the administration of the National Quality Framework; and (iii) the sharing of information under this Law; (h) any other functions conferred on the Regulatory Authority under this Law.
In addition to its policing role the Regulatory Authority thus has an educative function and a function to implement improvements in the quality of education and care services.
The third assessment result of an average of 80.4% was said to be ordinarily sufficient along with experience and management capability for approval, however, it is also submitted by the Regulatory Authority that the director, Ms Chumakova, has not demonstrated an adequate knowledge and understanding of the National Law and Regulations. That demonstration of knowledge was expected during the course of the interview which occurred after the third assessment. It was deficient knowledge because Ms Chumakova didn't identify the information which must be clearly visible at the premises under the National Law and National Regulations. This is information which is for the benefit of the parents of children that outlines the method of making a complaint, information about the operation of the service and contact details for appropriate persons in authority, and contents and operation of the educational program for the service. There was no identification by Ms Chumakova of the method of testing and ensuring that educators meet the educational and developmental needs of the children. There was an inadequate understanding of strategies to manage and support family daycare educators and improvement of their capacities.
Secondly, Ms Chumakova had a fundamental misunderstanding as to the necessity for formal evidence of the minimum level of qualification required to operate in this environment. Without understanding this requirement, Ms Chumakova demonstrated that she has a lack of insight regarding the type of qualifications that are essential to operate a compliant service. The false misrepresentation of her own qualification on Grammars House website is an example of this.
Thirdly, Ms Chumakova operated a family day care service without proper approvals for a period between June 2018 and 10 August 2018. There was no "personal arrangement" as asserted by Ms Chumakova.
The objectives and guiding principles were appropriately sought to be enforced by the Regulatory Authority in its assessment of the services offered by and the knowledge of Ms Chumakova. The investigation was not conducted aggressively or unfairly.

Conclusion

The determination of the correct and preferable decision must regard the rights and best interests of the child who may receive the benefit of the service as paramount and to ensure the safety, health and wellbeing of children attending education and care services.
The National Law also facilitates the provision of a national education and care services quality framework for the delivery of education and care services to children.
The objectives of the National Law are promoted where persons with management or control of an education and care service have knowledge and understanding of the National Law and Regulations.
An assessment of fitness and propriety at least includes "honesty, knowledge and ability" and "also includes public confidence that the person is able to maintain high standards of rectitude and that they likely future conduct will keep to that standard".
Having regard to all of the evidence, the submissions of Ms Chumakova and those on behalf of the Regulatory Authority and for the reasons previously identified in these reasons, it is considered that the applicant and the person with management or control of the applicant is not a fit and proper person to be involved in the provision of an education and care service.
The Tribunal is not confined in its consideration of this matter to the reasons identified in the reasons for the original decision; Frugtnient v Administrative Decisions Tribunal (Appeal Panel) & Anor [2005] NSWCA 257 at [45].
The Tribunal members have had the benefit of hearing the oral submissions of the parties in addition to their written material. That additional material has been taken into account in addition to the reasons originally provided.
Having regard to all of the matters raised it is the Tribunal's decision that in all the circumstances the correct and preferable decision is that the decision of the Regulatory Authority is confirmed because the applicant and the person with management or control of the applicant is not a fit and proper person to be involved in the provision of an education and care service. Consequently, the application for review must be dismissed.

Order

The orders of the Tribunal are that: 1. The decision of the respondent on 20 August 2018 to refuse provider approval on the basis that the applicant is not a fit and proper person to be involved in the provision of an education and care service is confirmed. 2. The application for review filed 12 October 2018 is dismissed.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 June 2019

Children (Education and Care Services) Supplementary Provisions Regulation 2012(NSW)

Because the Children (Education and Care Services) Supplementary Provisions Act 2011(NSW)

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Judgment (16 paragraphs)

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