CHIEF EXECUTIVE OFFICER OF THE DEPARTMENT OF LOCAL GOVERNMENT AND COMMUNITIES and LADY BUG HOLDINGS PTY LTD
[2018] WASAT 8
•20 NOVEMBER 2017
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: EDUCATION AND CARE SERVICES NATIONAL LAW (WA) ACT 2012
CITATION: CHIEF EXECUTIVE OFFICER OF THE DEPARTMENT OF LOCAL GOVERNMENT AND COMMUNITIES and LADY BUG HOLDINGS PTY LTD [2018] WASAT 8
MEMBER: JUSTICE J C CURTHOYS (PRESIDENT)
HEARD: 20 NOVEMBER 2017
DELIVERED : 20 NOVEMBER 2017
PUBLISHED : 31 JANUARY 2018
FILE NO/S: VR 85 of 2017
BETWEEN: CHIEF EXECUTIVE OFFICER OF THE DEPARTMENT OF LOCAL GOVERNMENT AND COMMUNITIES
Applicant
AND
LADY BUG HOLDINGS PTY LTD
Respondent
Catchwords:
Failure to comply with notice - Penalty - Costs
Legislation:
Education and Care Services National Law (WA) Act 2012, s 5(2), s 8, s 177, s 188A, s 188B(2), s 188B(3), s 188B(3)(d), s 301
Education and Care Services National Regulations 2012 (WA)
Legal Practitioners (State Administrative Tribunal) Determination 2012
State Administrative Tribunal Act 2004 (WA), s 87
Result:
Respondent to pay applicant penalty of $2,000 for breach of s 177(3) of National Law
Respondent to pay applicant $3,000 toward its legal costs of proceedings
Summary of Tribunal's decision:
On 2 May 2017, the Chief Executive Officer of the Department of Local Government and Communities filed an application under s 188B(2) of the Education and Care Services National Law (WA) 2012, alleging that Lady Bug Holdings Pty Ltd, which operates a child care service in Western Australia, had failed, within a period of 14 days, to comply with all of the steps specified in a compliance notice issued to it by the Department.
In failing to comply with the notice by 14 October 2016, Lady Bug Holdings contravened s 177(3) of the National Law and pursuant to that section, a fine would need to be imposed by the Tribunal.
On the evidence before it, the Tribunal noted that, although Lady Bug Holdings had complied with some steps specified in the notice, it was not until 25 July 2017 that it fully complied with all of the issues raised in the notice. In addition, no review of the notice had been sought by Lady Bug Holdings, so the merits of the compliance issues the subject of the notice, were not reviewed by this Tribunal.
The health and safety of children under the supervision of a child care service are paramount and a failure to comply with a compliance notice has potential to expose children under that care service to injury. An appropriate fine and the fact that certain conduct had led to the issue of a compliance notice, were considered important in the Tribunal's dealing with the standards of child care services.
The Tribunal determined that the conduct was towards the lower end of the scale so an appropriate fine of $2,000 was one that met the need for general deterrence, the need to deter Lady Bug Holdings from failing to respond appropriately to a compliance notice and one which bore in mind that Lady Bug Holdings had ultimately complied with the issues identified. Lady Bug Holdings was also ordered to pay $3,000 to contribute to the applicant's overall costs of the proceedings.
Category: B
Representation:
Counsel:
Applicant: Mr DF Oliver
Respondent: Ms A Best (Acting as Agent)
Solicitors:
Applicant: Department of Local Government and Communities
Respondent: N/A
Case(s) referred to in decision(s):
Chief Executive Officer of the Department for Communities and Camp Australia Pty Ltd [2012] WASAT 56
Medical Board of Western Australia and Roberman [2005] WASAT 81(S)
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
On 2 May 2017, the Chief Executive Officer (CEO or applicant) of the Department of Local Government and Communities (the Department) filed an application with the Tribunal, under s 188B(2) of the Education and Care Services National Law (WA) 2012, (National Law) alleging that the facts gave rise to a need for disciplinary action against Lady Bug Holdings Pty Ltd (Lady Bug or respondent).
The applicant is the Regulatory Authority for the purposes of s 8 of the Schedule to the National Law.
Lady Bug holds and on all relevant dates held a service approval under the National Law to operate an education and care service at 39 Rome Road, Melville Western Australia (the Service), subject to the National Law and Education and Care Services National Regulations 2012 (WA) (National Regulations). As the Service is located in Western Australia, Lady Bug is a 'person linked to a WA service' as defined by s 188A of the National Law.
The CEO alleges grounds for disciplinary action exist under s 188B(2) of the National Law because of Lady Bug's failure to comply with the National Law as applying in Western Australia, and makes application to the Tribunal for orders under section 188B(3).
Under s 5(2) of the National Law, s 188B(2) applies with respect to failures to comply with the National Regulations made under s 301 of the National Law.
The alleged grounds for disciplinary action
In paragraph 6 of its application (Particulars of Grounds) dated 1 May 2017, the CEO alleges that Lady Bug contravened the National Law in that:
From 14 October 2016 [Lady Bug] contravened section 177(3) of the National Law by failing to comply with the steps specified in a compliance notice, issued on 28 September 2016 under section 177(2) of the National Law, within the period specified in the notice.
6.1.On 28 September 2016 the [CEO's] delegate gave [Lady Bug] a notice under section 177(2) of the National Law requiring [Lady Bug] to take the steps specified in the notice by 14 October 2016 in order to comply with section 167 of the National Law and regulations 103 and 104 of the regulations. A copy of the notice is annexed to these Particulars as 'Annexure 1'.
6.2.Among other matters the notice required that by 14 October 2016 [Lady Bug] provide the [CEO] with evidence of compliance with all the specified steps. Among the steps specified were the following:
6.2.1.'Must remove chemical found next to the nappy change table, and store in a locked cupboard, out of children's reach'.
6.2.2.'Must empty the water from the buckets stored in an unlocked cupboard in the nappy change area and ensure they are stored in a manner so as not to collect water'.
6.2.3.'Must provide evidence to show the premise has been professionally sprayed by 12 October 2016 and is clear of cobwebs and spiders, both inside and outdoors'.
6.2.4.'Must repair the fencing in the front play space to a standard that does not need cable ties or wire to hold it in place'.
6.2.5.'Must remove the signage from the front fence that is shaped like a rabbit, as it forms foot holds, allowing children to climb over it'.
6.3.[Lady Bug] failed by 14 October 2016 to provide any evidence of compliance with any of the steps specified in the notice.
6.4.Officers authorised by the [CEO] visited the Service on 23 November 2016. As of that date none of the specified steps set out in paragraphs 6.2.1 to 6.2.5 above had been taken.
Orders sought
The orders sought by the CEO are pursuant to s 188B(3)(d) of the Schedule to the National Law and under s 87 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) (see Medical Board of Western Australia and Roberman [2005] WASAT 81(S) at [30] and Chief Executive Officer of the Department for Communities and Camp Australia Pty Ltd [2012] WASAT 56 at [44] [45]).
The CEO also sought costs for work by a senior legal practitioner as per the Legal Practitioners (State Administrative Tribunal) Determination 2012.
Evidence
The following documents were admitted as evidence:
•Exhibit A - Applicant's Bundle of Documents dated 15 September 2017
•Exhibit B Applicant's Bundle of Statements dated 15 September 2017; and
•Exhibit C Respondent's Response and attached documents dated 24 September 2017
Ms Anne Best gave oral evidence on behalf of Lady Bug.
Relevant legislation
Section 188B(2) of the National Law provides:
If the Regulatory Authority of this jurisdiction considers that grounds for disciplinary action exist in respect of a person linked to a WA service, the Regulatory Authority may make an allegation to the relevant tribunal or court of this jurisdiction in respect of that person.
Section 188B(3)(b) of the National Law provides:
In proceedings commenced by an allegation under subsection (2) in respect of a person, the relevant tribunal or court of this jurisdiction, if satisfied that grounds for disciplinary action exist, may make one or more of the following orders
…
(b)subject to section 188C, an order requiring the person to pay a fine not exceeding $50 000[.]
Section 177 of the National Law provides:
(1)This section applies if the Regulatory Authority is satisfied that an education and care service is not complying with any provision of this Law.
(2)The Regulatory Authority may give the approved provider a notice (a compliance notice) requiring the approved provider to take the steps specified in the notice to comply with that provision.
(3)An approved provider must comply with a compliance notice under subsection (2) within the period (being not less than 14 days) specified in the notice.
Penalty:$6 000, in the case of an individual.
$30 000, in any other case.
The Tribunal's findings
The relevant tribunal is the State Administrative Tribunal and the five matters as identified in paragraph 6.2 of CEO's Particulars of Grounds are made out.
These are serious matters. The health and safety of children under the supervision of a child care service are paramount. Compliance notices are issued to ensure compliance with the health and safety of children. A failure to comply with a notice has potential to expose children under that care service to injury.
In this case, Lady Bug was given a period of 14 days to comply with the provisions as set out in Annexure 1 to the CEO's application dated 28 September 2016. Compliance was therefore required by 14 October 2016.
As set out above, paragraph 6.1 of the CEO's Particulars of Grounds alleges the giving of the compliance notice which the Tribunal finds proved.
Among other matters, the compliance notice required that by 14 October 2016 Lady Bug provide the CEO with evidence of compliance with all the specified steps set out in paragraphs 6.2.1 to 6.2.5 of the CEO's Particulars of Grounds. The Tribunal finds that those matters were set out in the compliance notice.
Paragraph 6.3 of the CEO's Particulars of Grounds alleges that Lady Bug failed by 14 October 2016 to provide any evidence in compliance with any of the steps specified in the compliance notice and that the officers were authorised by the CEO to visit the Service on 23 November 2016 and 4 January 2017. On both those dates, officers of the Department found that none of the specified steps had been taken as set out in paragraphs 6.2.1 to 6.2.5 of the Particulars of Grounds (see amended paragraph 6.4 in Department's letter to the Tribunal dated 17 October 2017).
In response to the CEO's application, Ms Best, on behalf of Lady Bug, stated that the issues had now been complied with. She did not as such, identify when compliance had taken place. However, Ms Best clarified that the steps set out in the compliance notice were not complied with until sometime after 25 July 2017. So there was a long delay in complying.
It was Ms Best's view that it was unnecessary to attend to these issues because the issues identified in the compliance notice had not previously led to any injury to children (T:6; 20.11.17).
The evidence as to the inspection and re-inspection of the Service appears in Exhibit B of the CEO's bundle of documents. This includes statements from a number of officers of the Department including: Ms Vicki Bors, Ms Lauren Clare Bowen, Ms Natalie Petrusich, Ms Tia Renae Norman, Ms Michelle NormaJean Jarrett; as well as further supplementary statements from Ms Petrusich, and Ms Bors and Ms Bowen.
Those officers of the Department carried out the re-inspection and gave evidence the compliance issues had not been attended to. For example, at page 8 in Ms Bowen's statement (Exhibit B), she notes that:
On Wednesday 23 November 2016, [sh]e returned to the service and spoke to Lisa Traianou, who [she knows] to be the nominated supervisor … and [she] took photographs.
Ms Petrusich gave evidence in her statement that she attended the Service on Wednesday 4 January 2017 and at paragraph 16 (Exhibit B), she noted particular matters that had not been attended to.
In Ms Norman's statement she gives evidence that she attended the Service with Ms Petrusich at 10 am on Wednesday 4 January 2017. She produced certain photographs. A further statement from Ms Jarrett gives evidence of having received information that a visit had taken place on 23 November 2016 with Ms Bors and Ms Bowen to determine if all the compliance issues had been complied with and that she met with Ms Bors to discuss the outcome.
There is a further supplementary statement of Ms Bors which again notes attending the Service on Wednesday 23 November 2016 and she produced a copy of the annotations made to the compliance notice. At paragraph 20 of her supplementary statement, Ms Bors noted that some of the ongoing noncompliance issues were identified and these were the issues that were raised in the CEO's Particulars of Grounds at paragraphs 6.1 to 6.5 (see also Exhibit B pages 33 to 34) where a tick indicates those steps which have been completed and where a circle identifies those steps that have not been taken by the Service. An inspection was also carried out by Ms Bowen on 23 November 2016.
The Tribunal is satisfied on the evidence of the witness statements and the photographs provided as part of the bundle of documents, that, as at 4 January 2017, Lady Bug had failed to comply with steps that it was obliged to do so by reason of the compliance notice issued to it.
The Tribunal does not find it a satisfactory explanation that noncompliance by the Service had not previously been identified as a reason for not complying with the notice.
The Tribunal is satisfied that the compliance notice was issued; that there was a failure to comply with it; and after the notice was issued on 28 September 2016 and following two inspections, there was a long period of noncompliance. The Tribunal therefore finds that the grounds for the imposition of a penalty under s 188B(3) of the National Law have been established.
What is an appropriate penalty?
At the hearing, counsel for the applicant submitted that:
1.This was the first time that Lady Bug had been brought to the Tribunal, so on that basis, there is no precedent for penalty;
2.The compliance notice also informed Lady Bug of a right to review. The queries Ms Best had about whether the Department was justified in setting down the steps for compliance could have been raised by applying for a review of the decision, and this was not done; and
3.These matters were also the subject of a 'show cause notice', where the Department considered suspending the service for the non-compliance.
4.The problem for the Department is that, if such an administrative sanction is used and the matters are fixed, there is no sanction for ignoring the Department's requirements for the matters to be done in the first place.
5.The Department, as a regulator, has a role to ensure that education and child care services meet the standards that are required under the National law. Administrative sanctions such as the compliance notice are used to ensure standards are met. However, when there is noncompliance with a compliance notice, a principle of general deterrence such as a significant sanction is necessary to send a message to the rest of the sector that compliance notices cannot be ignored.
(T:1112; 20.11.17)
Conclusion
The Tribunal notes Lady Bug's delay in complying with the compliance notice, although the actual delay that is the subject of CEO's complaint is the period from 14 October 2017 to 23 November 2017, which is the period of five to six weeks. However, the actual period of compliance took much longer. The Tribunal takes into account the fact that although Lady Bug did not comply with all compliance issues raised in the notice, Lady Bug did comply with many of the issues raised in the notice. It was not simply a blatant disregard of the compliance notice. The Tribunal noted, as the counsel for the CEO pointed out, that if Lady Bug sought to object to the compliance steps as set down by the CEO in the compliance notice, it could have sought a review. No review was sought so the merits of the compliance issues the subject of the notice were not reviewed by this Tribunal.
Nevertheless, in considering what is an appropriate penalty, the nature of the issues that were required to be complied with is relevant.
Overall, the matters identified in the CEO's Particulars of Grounds in paragraphs 6.2.1 to 6.2.5 are at the lower end of the scale. The Tribunal is also conscious that this is the first time Lady Bug has come before it and the fact that there is a penalty for non-compliance, will, of itself, serve as a general deterrence to others.
When dealing with the standards of child care services, the amount of the fine or the fact that such conduct led to the issue of a compliance notice is important. As the conduct is towards the lower end of the scale, an appropriate fine is therefore one that meets the need for general deterrence and the need to deter Lady Bug from failing to respond appropriately to a compliance notice when it involved five matters as identified in paragraph 6.2 of the CEO's Particulars of Grounds, and also one which also bears in mind that Lady Bug ultimately complied with many of the issues that were raised.
The Tribunal notes that there was quite a long list of issues raised by the CEO in the compliance notice as evidenced in Appendix A, Appendix B and Appendix C to that notice. The Tribunal should therefore recognise that this was not a blanket refusal by Lady Bug to meet compliance. In those circumstances, a fine of $2,000 is appropriate.
The CEO also seeks costs pursuant to s 87 of the SAT Act. There is no right to costs that comes with success in these matters and these are always matters where discretion must be exercised.
The presumption is that the costs will not be awarded. Had Lady Bug complied promptly with this matter, as with all the other matters, then all of this could have been avoided. The Tribunal notes the need to prepare the document, to take statements from witnesses and obviously, time that could have and should have been spent on other matters was taken up in the time preparing for this case. It is obvious from the file that a significant amount of work was done on this matter.
The Tribunal takes into account the fact that the Department is a government funded body and in that sense, it is somewhat different to the various professional bodies that exist. Nevertheless, government departments work on behalf of the taxpayers of Western Australia and therefore, it is appropriate to mark the fact that the CEO had to cover these costs with an order for costs. The Tribunal is not persuaded that it is an appropriate matter for full costs recovery.
The Tribunal accepts counsel's submission as to the CEO seeking costs of $5,000. In fact, it is likely to have cost far more than that. However, given that the Tribunal does not consider that full cost recovery is appropriate, it orders costs of $3,000.
The net effect overall is that a penalty of $2,000 will be issued under s 188B(3) of the National Law and $3,000 awarded in costs pursuant to s 87 of the SAT Act.
As noted above, the Tribunal does consider that a penalty of $3,000 necessarily covers all of the costs incurred by the CEO and the various officers of the Department who were engaged in this matter. However, it is appropriate that the Tribunal recognises that it was a matter for which there is ultimately no defence and that the CEO has been put to unnecessary cost.
Orders
1.Within 28 days of the date of this order, or within such other time as agreed in writing between the parties within the 28 days, Lady Bug Holdings Pty Ltd must pay to the Department a penalty of $2,000 for the breach of section 177(3) of the National Law.
2.Within 28 days of the date of this order, or within such other time as agreed in writing between the parties within the 28 days, Lady Bug Holdings Pty Ltd must pay to the Department a contribution of $3,000 toward the Department's legal costs of these proceedings.
I certify that this and the preceding [41] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
JUSTICE J C CURTHOYS, PRESIDENT
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