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

Zahra Family Day Care Pty Ltd v Secretary, Department of Education - [2022] NSWCATAD 298 - NSWCATAD 2022 case summary — Zoe

[3]

The legislative scheme

The National Law establishes a uniform national scheme for the regulation of education and care services for children, including family day care. A family day care service is an "education and care service that ... is delivered through the use of 2 or more educators ... and [that] operates from 2 or more residences": s 5(1). In order to operate an education and care service a person must hold both a provider approval and a service approval issued under the National Law. Zahra has the necessary approvals as outlined above.
The National Law gives the "Regulatory Authority", who in NSW is the Secretary, Department of Education, power to grant, refuse or cancel a provider approval or a service approval: s 9 of the Children (Education and Care Services National Law Application) Act 2010 (the Application Act).
The National Law provides that the Secretary may cancel a provider approval on various grounds, including where the approved provider has breached a condition of the provider approval: s 31(e). Under s 19(2) of the National Law, a condition of provider approval is that the approved provider must comply with the National Law and the Education and Care Services National Regulations (the Regulations). The National Law imposes a large number of regulatory requirements and requires strict compliance: 3 Angels Family Day Care Pty Ltd v Secretary, Department of Education [2017] NSWCATAD 265 at [22]; DPW v Secretary, Department of Education [2018] NSWCATAD 257 at [29]; Faaea v Secretary, Department of Education [2018] NSWCATAD 85 at [25].
If the Regulatory Authority is considering cancelling an approval, a show cause notice must be issued. Where the provider gives any written response, that response is required to be taken into account before a decision is made to cancel the approval.
The decision to cancel the provider approval is a reviewable decision for external review under s 192(b)(ii) of the National Law. 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: s 193 of the National Law. In NSW this Tribunal is the relevant tribunal by reason of s 5 of the National Law and s 8(b) of the Application Act.

[6]

The cancellation decision

The Cancellation Notice sets out many non-compliance issues identified at visits at the service in 2022, including in relation to several provisions that had been breached at the 2021 visits (the Repeat Breaches). The Respondent in written submissions summarises those Repeat Breaches to include: (a) breaches of the obligation to protect children from harm and hazards pursuant to S. 167(1) of the National Law at seven educators' residences, including: the unsafe sleep practices referred to at [40(a)] above; an unlocked refrigerator accessible to children that contained large amounts of medication; an unsecured and unsteady cupboard that was not anchored to the wall; and loosely fitted car restraints in an educator's vehicle. Breaches of s. 167 had previously been identified at one of these educators' residences during the 2021 visits; (b) breaches of cls. 102B, 102C and 102D referred to at paragraphs [40 (b)] and [40(c)] above. Breaches of cls. 102B and 102D had previously been identified at one of these educators' residences during the 2021 visits; (c) deficiencies in enrolment records and attendance records at 15 educators' residences in breach of s. 175. For example, several records contained incomplete information about children's emergency contacts immunisation statuses and other health records, and persons authorised to collect or transport children. Breaches of 1. 175 had previously been identified at three of these educator's residences during the 2021 visits; (d) breaches at four educators' residences of the requirement in S. 172 in conjunction with c. 173 to display prescribed information, for example in relation to the rating levels for the quality areas under NQS. Breaches of s. 172 previously been identified at three of these educator's residences during the 2021 visits; (e) breaches at two educators' residences of the requirement to ensure that first aid kits are kept in accordance with cl 80, Where first aid kits were inadequately stocked and one included opened, unsterile bandages and an expired mouth to mouth mask. Breaches of cl. 89 had previously been identified at one of these educators' residences during the 2021 visits; (f) breaches at six educators' residences of the obligation under el. 97 to ensure that emergency and evacuation procedures are rehearsed every three months and documented, and that related instructions are prominently displayed. Breaches of cI. 97 had previously been identified at one of these educators' residences during the 2021 visits; (g) one educator's failure to ensure that a glazed shower screen and sliding glass door used safety glass, were treated with a product to prevent shattering, or were guarded by barriers to prevent a child from striking or falling against the glass, in breach of cl. 117: and (h) breaches at three educators' residences of the requirement under cl. 170(2) to ensure that policies and procedures are followed. For example, failure by one educator to maintain a current copy of a child's medical management plan in relation to a mosquito allergy, administration of unlabelled medications, and heating milk bottles in the microwave. Breaches of cl. 170 had previously been identified at one of these educators' residences during the 2021 visits.
The Department also found additional areas of non-compliance with respect to: (a) s. 165, under which it is an offence to inadequately supervise children, at two educators' premises, including where one educator left three children unattended out of sight and hearing distance for approximately three minutes (Thi Mai Nguyen); and (b) failure to ensure that children were not transported without authorisations as required by cl. 102(4), and failure to ensure that a risk assessment was conducted within 12 months of an excursion in breach of cls. 100(1) and (4), where one educator took a child to a house inspection without appropriate authorisation
The Cancellation Notice also records the respondent's opinion that the applicant had not satisfactorily addressed each element of non- compliance set out in the Show Cause Notice, and further non-compliance was continuing. In particular: a) the measures the applicant proposed in the Show Cause Response to address non-compliance, such as terminations and suspensions, were inadequate to prevent or detect the same or similar breaches from occurring again; (b) the Repeat Breaches indicate that the applicant's governance and management systems were inadequate to ensure compliance with the National Law and National Regulations, contrary to the applicant's assertion in the Show Cause Response; and (c) there was no evidence that a consultant had been engaged in the manner proposed in the Show Cause Response.

[7]

Zahra's contention

In response to the show cause notice, Zahra denied some of the allegations and in relation to others stated that it had taken extensive steps to ensure it remains fully compliant with the law.
The evaluation of Zahra and the assessments undertaken are made on the basis that it is neither possible nor appropriate to conclusively determine one way or the other, whether there exists a proper basis for finding that the alleged contraventions occurred: Early Childhood Education [2020] NSWCATAD 118 at [36].
A number of the contraventions identified by the respondent relate to record keeping or substantiation contraventions. These include: (a) The allegations as to out of date risk assessments and authorisations for transporting children is a record keeping contravention which can be remedied forthwith. (b) The allegations as to incomplete enrolment records is a record keeping contravention which can be remedied forthwith. (c) The allegations as to failure to display prescribed information is a record keeping contravention which can be remedied forthwith. (d) The allegation that educator Aya Elkordy was unable to produce evidence that one cot which was not in use at the time of the inspection, complied with Australian Standards is a contravention by failing to produce substantiating evidence: Oman #1 [87(b) Evidence has been produced in this application that the cot complied with the Australia Standards: Exhibit ZO-1 at 236-238.
Whilst Zahra accepts the importance of its record keeping and substantiation obligations, for the purposes of this stay application the Tribunal may have proper regard to the fact contraventions of this nature are unlikely to pose direct serious harm to children. In order address record keeping and substantiation obligations, Zahra will: (a) Continue an increased frequency of inspections: Osman #1 [94(b)]. (b) Provide ongoing and further training to all educators and staff to ensure staff educators have a fulsome understanding of the obligations and expectations imposed them by Zahra: Osman #1 [94(c)]. Zahra has otherwise suspended or terminated educators who it regards as presenting a risk to the safety, health and wellbeing of children in its care: Osman #1 [93].

[8]

The relevant principles

The review proceedings fall within the Tribunal's general jurisdiction, under s. 29 of the Civil and Administrative Tribunal Act 2013 ("the CAT Act"), and not the Tribunal's administrative review jurisdiction. As Senior Member Ransome explained, in DBU v Secretary, Department of Education [2017] NSWCATAD 257 ("DBU") at [22]: "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 s29 of the Tribunal Act."
Although the Tribunal is not exercising jurisdiction under the Administrative Decision Review Act 1997, the nature of the jurisdiction being exercised is similar. In DBU, the Tribunal said: "the Tribunal is required to perform essentially the same task .., it is required to make the correct and preferable decision on the material before it", and that material "may include new or additional material that was not before the original decision maker…"
Where an application is made to the Tribunal for review of a decision made by the Secretary to cancel a provider approval, that application does not affect the operation of that decision nor prevent the taking of action to implement that decision unless the Tribunal makes an order staying or otherwise affecting the operation of that decision: s 43(2) of the Civil and Administrative Tribunal Act 2013 (NCAT Act). Section 43(1)(c) states: The Tribunal may make such orders (whether with or without conditions) staying or otherwise affecting the operation of a decision to which a pending general application ... relates as it considers appropriate to secure the effectiveness of the determination of the pending general application...
In Bentran Pty Ltd v Sabbarton [2014] NSWCATAP 37 Wright J at [9] summarised the principles applicable to the exercise of the Tribunal's discretion to decide whether a stay of a decision should be granted under s 43 of the NCAT Act (citations omitted): (1) Generally a successful party is entitled to the benefit of the decision or orders that the party has obtained at first instance, but a stay may be granted where the appellant has demonstrated an appropriate case to warrant the exercise of discretion in its favour - s 43(2) and (3) of the Act. (2) In practical effect the onus is on an applicant for a stay to make out a case that it is appropriate for the court to make such an order. (3) The mere lodgement of the notice of appeal is insufficient, of itself, to demonstrate that it is an appropriate case to warrant the granting of a stay. (4) An order staying the operation of a decision or orders will generally be appropriate where such an order is reasonably necessary to secure the effectiveness of the appeal - s 43(3) of the Act. This is similar to, if not the same as, the considerations applied by the Courts that where there is a risk that an appeal will prove abortive if the appellant succeeds and a stay is not granted, or where unless a stay is granted an appeal will be rendered nugatory, the discretion should generally be exercised in favour of granting a stay. (5) The Tribunal may also take into account the strength or otherwise of the case of the party seeking the stay. This consideration may be particularly relevant when it is plain that an appeal, which does not require leave, has been lodged without any real prospects of success and simply in the hope of gaining a respite against immediate execution of the decision. (6) The Tribunal's power to grant a stay includes a power to make such an order subject to such conditions as the Tribunal specifies. (7) In exercising the discretion, the Tribunal will also weigh the balance of convenience and the competing rights of the parties and may impose appropriate conditions so as to achieve a result that is fair to all parties. (8) Finally, the overriding principle in an application for a stay is to ask what the interests of justice require.
In applying these principles, it is necessary to have regard to the statutory context in which the decision was made (Liu v Chinese Medicine Council of NSW [2019] NSWCATOD 13). In the context of the National Law, this includes that the rights and best interests of the child are paramount and that best practice is expected in the provision of education and care services.
In New South Wales Bar Association v Stevens [2003] NSWCA 95 Spigelman CJ explained that, in an application for a stay where the issues involve the protection of the public, the public interest is entitled to significant weight.

[9]

Consideration

A significant public interest exists in ensuring the safety, health and well-being of children attending family day care services. As to the seriousness of the non-compliance issues that have been raised in the suspension and cancellation decisions, I find they are serious.
I accept Zahra's evidence that it has taken steps to remedy its breaches and as part of the conditions below it will engage an external consultant to assist it in continuing to change its practices to meet the National Quality Standard (NQS).
I accept that Zahra employs 32 active educators and has 182 children enrolled in its care. Where the stay is refused, many educators will be out of work and children will not have day care arrangements in place. I have given weight to this in deciding whether to grant the stay and whether to maintain the status quo, pending final determination of the application on its merits.
In detailed submissions, Zahra responded to some of the more serious instances of non-compliance detailed in the suspension and cancellation decisions. Zahra contends that the available material indicates that many of those alleged contraventions have been addressed by, among other things, terminating the services of some its educators. In addition, Zahra contends that the evidential basis for some of the alleged contraventions is not strong. I accept that there are at least reasonable prospects of success on Zahra's application for review of the suspension and cancellation decisions.
I have considered, and I accept Zahra's evidence, that if the stay is not granted its business will cease and the decision in the substantive decision would be rendered nugatory, if, Zahra was ultimately successful. Zahra's ongoing financial obligations should it not continue to trade will be approximately $39,999 per month [Osman #1 at [49]. I have considered the respondents arguments concerning how these costs could be reduced where a stay is not granted and the business ceases trading. In my mind, such an outcome may render Zahra incapable of being able to commence trading should it be success in the review application.
I have considered the respondent's submissions concerning the seriousness of the alleged contraventions of the National Law and the nature of harm that might be cause to children. They are indeed valid considerations which I have given weight.
I am satisfied, in weighing the balance of convenience and considering the risk of harm to, and the safety of, children, that by placing strict conditions on Zahra's authorisation, the risk to children can be significantly reduced, the status quo is preserved and the public interest is served by allowing the service to continue operating.
I have considered the Respondent, while maintaining her objection to the stay application, submitted that the relevant conditions agreed by consent could be made if the stay was to be granted. Having considered the protective purposes of the National Law, of which I give significant weight, the paramountcy of the interest of the child and the relevant alleged breaches of the National Law, the conditions attached to the approval ameliorate against such risk.

[10]

Conclusion

The ultimate determination of the correct and preferable decision must have regard to the best interests of the child who may receive the benefit of the service as paramount. The National Law facilitates the provision of a national education and care services quality framework for the delivery of education and care services to children. The fact that the applicant received service approval to run a Family Day Care Service is an indication that the applicant was considered capable of providing quality education and care services to children.
The applicant says that the administrative review will be rendered nugatory if there is not a stay. The respondent says that there was an unacceptable risk of harm to the children because of the reasons set out above.
A successful review would be useless or futile unless the stay was granted. In all of the circumstances, including that factor, a stay of the operation of a decision pending the review is indicated. The overriding principle in any stay application is that of upholding the interests of justice in the particular circumstances, and the interests of justice in this matter require that the decision not be acted upon until the review is determined.
An order under s 43 of the NCAT Act to stay the operation of the decision is desirable to do so after taking into account the principles in Bentran. In particular it is in the interests of the applicant for the service to continue to operate unimpeded until a final determination is made. It is in the interests of the parents and children for the service to continue to operate until a final decision is made. It is in the public interest for the service to continue to operate provided it operates properly and within the National Law. Since it is in dispute as to whether there is compliance by the applicant with the National Law, in relation to some of the breaches alleged, and there are concessions made in relation to some other breaches alleged the proposals made for remedying those alleged breaches, it is not in the public interest to reach a precipitous and potentially terminal conclusion before considering all of the evidence.
It was for these reasons that a stay was granted on 12 May 2022, subject to the following conditions.

[11]

Conditions

The Respondent contends for the following conditions to attach to any order made for a stay which I accept. I also not the parties agreed upon the terms of the conditions by consent.
I find the following conditions ought to be included in an order granting the stay: 1. the applicant is prohibited from providing care to any child under the age of three; 2. the number of family day care educators engaged by or registered with the applicant must not exceed 20; 3. within five business days of the date of these orders, the applicant is to provide to the respondent a copy of its educator register with no more than 20 educators; 4. the applicant is not to enrol more than 140 children; 5. the applicant is to employ at least one full-time qualified family day care co-ordinator for every 10 family day care educators providing education and care to children; 6. the applicant is not to reinstate any educators whose engagement or registration was previously suspended or terminated; 7. within 12 business days of the date of these orders, the applicant is to conduct an audit of each registered educator's sleep and rest practices for compliance with the National Law, including by conducting visits during sleep and rest periods, and provide to the respondent a report setting out the findings of the audit, including any instances of non-compliance; 8. the applicant is to provide to the respondent a sleep and rest plan for all children to whom it provides education and care within five business days of commencing providing education and care; 9. within 12 business days of the date of these orders, the applicant is to provide to the respondent copies of transport authorisations for all children identified in Attachment A to the Cancellation Decision, and who remain in care with the Applicant, as having been transported without written authorisation in accordance with the Education and Care Services National Regulations (National Regulations); 10. within 12 business days of the date of these orders, the applicant is to provide to the respondent copies of risk assessments for all children identified in Attachment A to the Cancellation Decision, and who remain in care with the Applicant, as having been transported without a risk assessment carried out in accordance with the National Regulations; and 11. the applicant is not to transport any children until conditions (k) and (l) have been complied with.

[12]

Orders 1. Leave is granted to the applicant to amend the application filed on 5 May 2022 to include administrative review of the decision of the respondent on 4 May 2022 as set out in order 2(b) below. 2. The decisions of the Respondent made on: 1. 28 April 2022 to cancel the applicant's provider approval under s. 33(1)(a)(i) of the Children (Education and Care Services) National Law (NSW) (National Law) (Cancellation Decision); and 2. 4 May 2022 under s. 191(7) of the National Law to confirm the decision made on 31 March 2022 to issue a notice under s. 28 of the National Law suspending the applicant's provider approval, 3. are stayed pending further order of the Tribunal on the following conditions: 4. the applicant is prohibited from providing care to any child under the age of three; 5. the number of family day care educators engaged by or registered with the applicant must not exceed 20; 6. within five business days of the date of these orders, the applicant is to provide to the respondent a copy of its educator register with no more than 20 educators; 7. the applicant is not to enrol more than 140 children; 8. the applicant is to employ at least one full-time qualified family day care co-ordinator for every 10 family day care educators providing education and care to children; 9. the applicant is not to reinstate any educators whose engagement or registration was previously suspended or terminated; 10. within 12 business days of the date of these orders, the applicant is to conduct an audit of each registered educator's sleep and rest practices for compliance with the National Law, including by conducting visits during sleep and rest periods, and provide to the respondent a report setting out the findings of the audit, including any instances of non-compliance; 11. the applicant is to provide to the respondent a sleep and rest plan for all children to whom it provides education and care within five business days of commencing providing education and care; 12. within 12 business days of the date of these orders, the applicant is to provide to the respondent copies of transport authorisations for all children identified in Attachment A to the Cancellation Decision, and who remain in care with the Applicant, as having been transported without written authorisation in accordance with the Education and Care Services National Regulations (National Regulations); 13. within 12 business days of the date of these orders, the applicant is to provide to the respondent copies of risk assessments for all children identified in Attachment A to the Cancellation Decision, and who remain in care with the Applicant, as having been transported without a risk assessment carried out in accordance with the National Regulations; and 14. the applicant is not to transport any children until conditions (k) and (l) have been complied with.

At a glance

Court

Decision date

Source

Judgment (13 paragraphs)

Parties

Cases Cited (8)