Happy Haven OSHC Pty Ltd v Education and Early Childhood Services Registration and Standards Board of South Australia

[2024] SADC 146

DISTRICT COURT OF SOUTH AUSTRALIA

(District Court Administrative and Disciplinary Division)

HAPPY HAVEN OSHC PTY LTD v EDUCATION AND EARLY CHILDHOOD SERVICES REGISTRATION AND STANDARDS BOARD OF SOUTH AUSTRALIA

[2024] SADC 146

Judgment of his Honour Judge Burnett  

8 November 2024

ADMINISTRATIVE LAW - ADMINISTRATIVE TRIBUNALS - STATUTORY APPEALS FROM ADMINISTRATIVE AUTHORITIES TO COURTS

ADMINISTRATIVE LAW - JUDICIAL REVIEW - REVIEWABLE DECISIONS AND CONDUCT - REVIEWABLE CONDUCT

The appellant, Happy Haven OSHC Pty Ltd, is the operator of 58 outside of school  hours care services in South Australia. It is an approved provider under the Education and Care Services National Law (the National Law) and is authorised to operate an approved education and care service and associated children’s service. The respondent is the regulatory authority established under the Education and Early Childhood Services (Registrations and Standards) Act 2011 (SA)(the Act) .

The respondent had concerns in relation to the performance of the appellant in its operation of the services and issued a show cause notice to the appellant in which it set out the further conditions that it proposed to impose on the provider approval of the appellant. The appellant contested the adequacy of that notice and made submissions that the conditions should not be imposed. A delegate of the respondent made a decision to impose the proposed conditions (with one exception). That decision was a reviewable decision for internal review pursuant to s 190 of the National Law. The appellant instituted that review. The internal review committee of the respondent confirmed the decision to impose the further conditions. The decision of the internal review committee is a reviewable decision for external review pursuant to s 192 of the National Law. The appellant has instituted an appeal to this Court against the decision of the internal review committee.

The appellant contended that the decision should be rescinded, set aside, or remitted because: (1) it was denied procedural fairness; (2) the decision to impose the further conditions was disproportionate; (3) the decision to impose the further conditions was legally unreasonable; and (4) the internal review committee failed to have regard to a relevant consideration.

Held:

(1)The appeal is dismissed. The decision of the internal review committee is confirmed.

(2)Cogent reasons are required under s 42E of the District Court Act 1991 (SA) to depart from the decision under appeal. If the error is a process error of the type identified in House v The King (1936) 55 CLR 499, the mere establishment of such an error is not sufficient unless the appellant also demonstrates that there should have been a different outcome: Commissioner for Consumer Affairs v McMurray (2017) 128 SASR 1 applied.

(3)A denial of procedural fairness is a jurisdictional error such that it is sufficient that the appellant establish that there was a realistic possibility that the decision-making process could have resulted in a different outcome if the appellant had been provided with procedural fairness: Nathanson v Minister for Home Affairs (2022) 276 CLR 80 applied.

(4)Section 23 of the National Law (being the section of the law which provides for the power to impose conditions), requires procedural fairness to be provided. There are no express words excluding the requirement and the imposition of the conditions may have an impact on the business of the provider: Re Minister for Immigration and Multicultural Affairs ex parte Miah (2019) 206 CLR 57; Nathanson v Minister for Home Affairs (2022) 276 CLR 80 applied. Procedural fairness is concerned to avoid practical injustice and to give the affected person the opportunity to ascertain the relevant issues and comment on adverse materials: AYX16 v Minister for Immigration, Citizenship and Multicultural Affairs [2020] FCAFC 99 applied. A defect in providing procedural fairness at the initial hearing, may be cured on review: Twist v Randwick Municipal Council (1976) 136 CLR 107 applied.

(5)The appellant was provided with procedural fairness. The show cause notice  sufficiently raised the ongoing concerns that the respondent had with the performance of the appellant. If that notice was inadequate, any defect in the information provided to the appellant was cured on the review to the internal review committee by provision of the specific reasons relied upon by the respondent in its initial decision for the imposition of the conditions.

(6)A disproportionate response in the exercise of a discretion is an indicator of unreasonableness. The evaluation of whether a decision is reasonable is conducted by reference to the relevant statute, its terms, scope and purpose and explicit and implicit values. The decision must have a rational foundation. It is not for the court to assess what it considers to be reasonable: the critical question is whether the decision-maker could have reasonably come to the conclusion that they did: Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1 applied. The internal review committee could have reasonably come to the conclusion that the conditions assisted in ensuring that the objectives of the National Law were achieved and were necessary for that purpose.

(7)The appellant has not established that the internal review committee failed to take into account a relevant matter.

District Court Act 1991 (SA) 42A,42B, 42C, 42D, 42E, 42F, 42G, 42E(3); Education and Early Childhood Services (Registrations and Standards) Act 2011 (SA) 9, 15, 16, 20, 72, 161, 167; the Education and Care Services National Law 10, 12, 13, 15(3),19, 23, 23(1),23(4),161, 190(b), 190(c) 191, 191(2), 191(4), 191(7)(B), 192, 193, 193 (3), 194, referred to.
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 ; Baker v Gough [1963] NSWR 1345 ; Baker v University of Ballarat (2005) 225 ALR 218. ; Coal and Allied Operations Pty Ltd v Australian Industrial Relations Committee (2000) 203 CLR 194. ; Clements v Independent Indigenous Advisory Committee (2003) 37 AAR 309 ; Commissioner for Consumer Affairs v McMurray (2017) 128 SASR 1; SASCFC 16 ; Commissioner for the Australian Capital Territory Revenue v Alphaeone Pty Ltd (1994) 49 FCR 576. ; CYD v Secretary of the Department of Education NSW [2017] NSWCATAD 190 ; Edwards Lees Imports Pty Ltd v Department of Finance Services and Innovation [2020] NSWSC 256 ; Escobar v Spindaleri (1987) 7 NSWLR 51 ; Firearms v Marksman Training Systems Pty Ltd (No 2) [2016] SASCFC 72; [2001] HCA 22 Gleeson CJ and Hayne J. ; Gribbles Pathology (Vic) Pty Ltd v Cassidy (2002) 122 FCR 78 ; House v The King (1936) 55 CLR 499 ; Kioa v West (1985) 159 CLR 550 ; Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 ; Minister for Immigration and Multicultural l Affairs and another ex parte Miah (Miah) (2001) 206 CLR 57 ; AYX16 v Minister for Immigration, Citizenship and Multicultural Affairs and Anor (2020) 279 FCR 326; [2020] FCAFC 99. ; Nathanson v Minister for Home Affairs (2022) 276 CLR 80; [2022] HCA 26 ; Preston v Carmody (1993) 44 FCR 1 ; Twist v Randwick Municipal Council (1976) 136 CLR 107 ; Wigg v Architects Board (SA) (1984) 36 SASR 111 , applied.

HAPPY HAVEN OSHC PTY LTD v EDUCATION AND EARLY CHILDHOOD SERVICES REGISTRATION AND STANDARDS BOARD OF SOUTH AUSTRALIA
[2024] SADC 146

Administrative and Disciplinary Division

Introduction

1. The appellant has appealed to this Court, sitting in its Administrative and Disciplinary Division. The appeal is against a decision made by the respondent on 24 July 2023 on internal review under s 191 of the Education and Care Services National Law (the National Law)[1] by which it confirmed a decision made by a delegate of the respondent pursuant to s 23 of the National Law to impose conditions on the provider approval of the appellant. The appellant sought orders on the appeal that the decision of the internal review committee confirming the decision of the delegate be rescinded or alternatively there be a substituted decision setting aside the delegate’s decision or in the further alternative that the matter be remitted to the respondent to determine according to law whether to amend the provider approval by the imposition of the conditions.

   [1]    The Education and Early Childhood Services (Registrations and Standards) Act 2011 (SA), s 10 applies the National Law as a law of this jurisdiction.

2. There are four reasons why the appellant contends that the decision should be rescinded or set aside or remitted to the respondent for a decision according to law. The appellant contends:

   (1)It was denied procedural fairness when the decision was made by the internal review committee because it was not provided with adequate information about the concerns of the respondent and the details of the matters adverse to the appellant that the internal review committee proposed to take into account when making its decision. The appellant therefore contends that it did not have a reasonable opportunity to respond and rebut that information or make submissions in relation to the concerns that were raised;

   (2)The decision to impose the further conditions was disproportionate to the purpose of exercising the power and the imposition of the conditions was not rationally connected to the fulfilment of those purposes and/or was not necessary;

   (3)The decision to impose the further conditions was legally unreasonable;

   (4)The internal review committee failed to have regard to a relevant consideration.

3. The respondent denies that there are any grounds for making the orders sought by the appellant and contends that the Court should confirm the decision of the internal review committee.

4. The parties requested that the Court determine the appeal even though the conditions that were imposed by the internal review committee had been complied with and had no or little further application. I am satisfied that there are proper reasons for the Court to determine the appeal. There are reputational considerations for the appellant. The regulatory relationship between the appellant and the respondent is ongoing and it is appropriate in those circumstances that this appeal be resolved as the actions taken by the respondent may be a relevant consideration if, at any time in the future, further regulatory action is being considered or proposed.

5. The appeal before the Court did not involve any oral evidence. Both the appellant and the respondent tendered an affidavit which annexed relevant documentation. Both affidavits were not tendered for the truth of the underlying matters which led to the regulatory action being taken but only as to the course of the decision-making process, as evidence of the decisions that were made, and the documents that were before the delegate and the internal review committee.

   Background facts

6. The appellant, Happy Haven OSHC Pty Ltd, is an approved provider under ss 15, 16 and 20 of the Education and Early Childhood Services (Registrations and Standards) Act 2011 (SA) (the Act) and is authorised to operate an approved education and care service and associated children’s service. Under this approval, the appellant operates 58 outside of school hours care services (OSHC) within South Australia and has approximately 720 employees and 4,850 children enrolled in its OSHC services. 

7. The respondent, the Education and Early Childhood Services Registration and Standards Board of South Australia, is the regulatory authority established under the Act. It is the authority that determines an application for a provider approval and also is responsible for ensuring that providers such as the appellant comply with the Act and the National Law and the provider approval conditions.

8. The respondent had concerns with the performance of the appellant and on 11 May 2023, issued a “Show Cause Notice: Provider Approval Amendment” (Show Cause Notice) in which it set out its concerns and the conditions that it proposed to impose on the appellant’s provider approval. The appellant has contested the adequacy of the Show Cause Notice.

9. The Show Cause Notice stated that:

   (1)Ongoing non-compliance with the National Law and the Education and Early Childhood Services (Registration and Standards) Regulations 2011 (SA)(the Regulations) had been identified across many of the appellant’s services and that intervention by the respondent, through educative and directive approaches, had been ineffective and non-compliance had continued. The Show Cause Notice stated that the appellant had been provided with information about its regulatory performance;

   (2)The Board (the respondent) and the appellant had met four times since July 2022 at which meetings areas of non-compliance, including inadequate risk assessment, inadequate supervision and protecting children from harm and hazard, had been discussed;

   (3)Two emergency action notices had been issued on 7 November 2022 in relation to services at Mark Oliphant College and Ocean View College and the respondent had assessed the responses to those notices as inadequate. There had been further serious incident notifications of inadequate supervision since that date;

   (4)At a meeting in February 2023, expectations were set by the respondent and the appellant was informed that it was not meeting high performance standards. The respondent sent the appellant a letter dated 6 March 2023 in which it set out the discussion notes of that meeting;

   (5)Since 1 March 2023, there have been a further 19 reported cases of unsupervised children, 7 cases of children’s behaviour posing a risk to staff, 4 cases of inappropriate staffing, and 7 reports of service closures;

   (6)4 direct complaints had been received since 14 April 2023 about supervision and poor service quality at 4 different services;

   (7)Observations were made in relation to a monitoring activity at Mark Oliphant College in April 2023 that risk mitigation strategies in response to an emergency notice were not being adhered to by the appellant and there was an unacceptable risk of harm and hazard to children attending that service. The most recent enforcement actions, conditions on service, and compliance notices in relation to Mark Oliphant OSHC were not acknowledged by the respondent. The respondent had sent the appellant an email dated 25 April 2023 in which it discussed those observations;

   (8)Applications for waivers, service approvals, or service amendments were often incomplete;

   (9)The appellant had demonstrated low willingness and ability to understand and address non-compliance and improve service quality during a meeting on 10 May 2023. The appellant’s behaviour and attitude to non-compliance did not meet expectations.

10. The respondent proposed six new conditions to mitigate against the risks that had been identified and to ensure that every reasonable precaution had been taken to protect children from harm. Those conditions were:

    (1)For 12 months commencing on 1 June 2023, the appellant must not operate more than the current 58 approved services;

    (2)For 12 months commencing on 1 June 2023, should the appellant permanently cease to operate any of the 58 approved services, the appellant may not increase the number of approved services to higher than the remaining number of approved services;

    (3)For 12 months commencing on 1 June 2023, current enrolment numbers must not grow and remain capped at 1 June 2023 numbers;

    (4)By 30 June 2023, the appellant must engage an independent early childhood consultant for a period of not less than six months, to assist in lifting its compliance with the National Law and Regulations, with the consultant to conduct a quality and compliance review of the appellant’s systems, policies and practices and to provide a written plan to identify a list of target areas for improvement and action;

    (5)The appellant must provide the plan to the respondent;

    (6)The appellant must provide a monthly report to the respondent on progress against the plan.

11. The appellant provided submissions by letter dated 26 May 2023 on the Show Cause Notice. In that letter the appellant, inter alia, complained about the vagueness of the notice and lack of specificity and stated it was provided with little detail about the matters referred to in the Show Cause Notice. The 26 May 2023 response letter made submissions on a number of issues including risk assessments conducted by the appellant, reported incidents since 1 March 2023, staffing levels, Mark Oliphant College in April 2023, the 10 May 2023 meeting and quality and compliance generally.

12. On 13 June 2023, the delegate of the respondent (the Original Decision Maker) notified the appellant that she had decided to impose the conditions set out above (with the exception of condition numbered 3) on the provider approval that had been granted to the appellant (the Original Decision). The letter stated that the Show Cause Notice had afforded the appellant the opportunity to respond to the proposed amendments despite there being no legal obligation for such an opportunity to be given. The letter went on to state that the content of the requirements for procedural fairness had been circumscribed by the statutory scheme. The letter set out the reasons for imposing the conditions as being:

    (1)Since July 2022, the appellant had self-reported 221 serious incidents to the respondent;

    (2)Since July 2022, 176 breaches had been recorded across 32 services (those breaches were set out in an attachment). These breaches included ten or more breaches being recorded at seven services and 75 substantiated breaches of failing to protect children from harm and hazard;

    (3)

    Since July 2022, the appellant had made 88 applications for waiver with 33 applications incomplete, with missing or inadequate evidence.

    
    

    A further attachment set out details of those applications;

    (4)The respondent had provided to the appellant information relating to breaches that had been substantiated which had further defined and clarified regulatory requirements and deficiencies in the appellant’s performance, but that performance had not improved;

    (5)The appellant had failed to act on the information that had been provided by the respondent to address the deficiencies that had been identified;

    (6)In the meetings, the respondent communicated its concerns about the appellant’s performance as set out in a further attachment and compliance had remained poor;

    (7)The processes outlined in the appellant’s letter dated 26 May 2023 would not be effective in enabling the appellant to achieve a satisfactory level of performance and to respond to the concerns raised by the respondent.

13. The letter stated that by temporarily limiting growth in services and by the engagement of the independent consultant, the conditions sought to restore high standards of competence and conduct.

14. Under s 23(4) of the National Law, the variation of approval (by the insertion of the new conditions) took effect 14 days after the respondent has notified the appellant of the variation. The Original Decision, as it amends a provider approval and imposes conditions on provider approval, is a reviewable decision for internal review pursuant to s 190(b) and (c) of the National Law. Section 191 provides:

    191—Internal review of reviewable decisions

    (1)person who is the subject of a reviewable decision for internal review may apply to the Regulatory Authority in writing for review of the decision.

    (2)An application under subsection (1) must be made—

    (a)     within 14 days after the day on which the person is notified of the decision; or

    (b)     if the person is not notified of the decision, within 14 days after the person becomes aware of the decision.

    (3)The person who conducts the review for the Regulatory Authority must not be a person who was involved in the assessment or investigation of the person or service to whom or which the decision relates.

    (4)The person conducting the review may ask the person who applied for the review for further information.

    (5)A review under this section must be conducted within 30 days after the application is made.

    (6)The period specified in subsection (5) may be extended by up to 30 days—

    (a)     if a request for further information is made under subsection (4); or

    (b)     by agreement between the person who applied for the review and the Regulatory Authority.

    (7)The Regulatory Authority may, in relation to an application under subsection (1)—

    (a)     confirm the decision; or

    (b)     make any other decision that the Regulatory Authority thinks appropriate.

1. On 27 June 2023, the appellant made an application pursuant to s 191 of the National Law for an internal review of the Original Decision. The appellant provided a letter dated 27 June 2023 which accompanied its application for review in which it set out the basis for its contention that the review should be allowed and the Original Decision set aside. The letter addressed, inter alia, the reasons that had been provided in the Original Decision.

2. The internal review committee of the respondent undertook a review of the Original Decision. The minutes of the internal review committee dated 24 July 2023 record that, from a compliance perspective, the committee was satisfied that the correct course of action was being taken against the appellant. The minutes also record that the committee discussed the conditions imposed and agreed that they were reasonable and not excessive. By letter dated 24 July 2023, the respondent, through the internal review committee, advised the appellant that the committee confirmed the Original Decision. In that letter, the internal review committee said that it had considered the information used in making the Original Decision, the application for internal review and the correspondence accompanying the application. The internal review committee gave the following reasons for its decision:

   (1)The committee was satisfied that the correct course of compliance action was taken in response to systemic regulatory compliance issues identified across multiple services, and posing a high risk to the safety, health, and wellbeing of children;

   (2)The committee agreed that the conditions were appropriate and reasonable and not overbearing, burdensome and excessive;

   (3)The committee did not agree and did not accept that procedural fairness had not been afforded to the appellant. The appellant was provided with more than reasonable opportunities to provide evidence that they were meeting their legislative obligations and did not provide such evidence;

   (4)The committee agreed that the original decision-maker had sufficient evidence to form a reasonable belief that the recent legislative breaches warranted an amendment to the approval and the imposition of conditions at the time of making the Original Decision.

3. It is this decision of the internal review committee which is a reviewable decision for external review pursuant to s 192 of the National Law.

   The appellate jurisdiction of the Court

4. The appellate jurisdiction of this Court in relation to this appeal is conferred by s 72 of the Act and s 193 of the National Law which appears as Schedule 1 of the Act. 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.

5. In South Australia, under s 72 of the Act, the relevant tribunal or court to which the appeal is made is the District Court. The appeal is conducted pursuant to s 42A to 42G of the District Court Act 1991 (SA).

6. Section 42E provides:

   42E—Conduct of appeal

   (1)The Court must, on an appeal, examine the decision of the original decision-maker on the evidence or material before the original decision-maker but the Court may, as it thinks fit, allow further evidence or material to be presented to it.

   (2)The Court, on an appeal—

   (a)     is not bound by the rules of evidence but may inform itself as it thinks fit; and

   (b)     must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.

   (3)The Court must, on an appeal, give due weight to the decision being appealed against and the reasons for it and not depart from the decision except for cogent reasons.

7. Section 42F provides that the Court may, on appeal –

   (a)     affirm the decision appealed against;

   (b)     rescind the decision and substitute a decision that the Court considers appropriate;

   (c)     remit matters to the original decision-maker for consideration or further consideration in accordance with any directions or recommendations of the Court.

   Cogent reasons

8. The Full Court of the Supreme Court in Registrar of Firearms v Marksman Training Systems Pty Ltd (No 2) (Marksman)[2] discussed what was meant in s 42E(3) by “cogent reasons”. Stanley J (Gray J agreeing) held that:

   Section 42E(3) is a mandatory provision requiring the Court on appeal to give due weight to the decision being appealed against and the reasons for it, and not to depart from the decision except for cogent reasons. There are two critical features to the operation of s 42E(3). First, the nature of the appeal being conducted by the Court is limited. The Court is not to allow the appeal except for cogent reasons. I consider that the purpose of s 42E(3) is to indicate that the appeal, while it is to be conducted in accordance with the terms of s 42E(2), is not an ordinary merit review of the decision that is the subject of the appeal. The Court on appeal is not to merely substitute its view for that of the original decision maker. It is only to depart from that decision where cogent reasons exist. “Cogent” means “compelling, convincing, powerful”. Second, in the context of this appeal, the decision being appealed against is the decision of the Registrar, affirmed by the Committee, to cancel the respondent’s licences, and the Court is required in conducting the appeal from that decision, to give due weight not only to the decision but to the reasons for it. Those reasons include not only the reasons of the Registrar but, for the reasons explained above, the reasons of the Committee.

   [2] [2016] SASCFC 72, [315] (‘Marksman’).

9. In Commissioner for Consumer Affairs v McMurray[3] (McMurray), after quoting the above passage, Blue J held:[4]

   The deference to be accorded to the underlying decision on an appeal governed by section 42E depends on the nature of the asserted error in the decision and reasons for the decision.

   Where the asserted error relates to the exercise of a discretion or the making of an evaluative judgment or policy decision, it will be necessary for the appellant to establish a process or outcome error of the type identified by the High Court in House v The King,[5] and the mere establishment of a process error will not avail the appellant unless the appellant also demonstrates that there should have been a different outcome.

   [3] (2017) 128 SASR 1; [2017] SASCFC 16 (‘McMurray’).

   [4] Ibid, [44] and [45].

   [5] (1936) 55 CLR 499, 505-506 per Dixon, Evatt and McTiernan JJ.

10. The reference to House v The King is a reference to the well- known passage in which the High Court sets out the circumstances in which an appellate court may overturn a decision involving the exercise of a discretion. In a joint judgment, Dixon J (as he then was), Evatt J and McTiernan J held:[6]

    It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.

    [6] Ibid.

11. Hinton J in McMurray stated that the appellant had to demonstrate convincingly that had the decision maker proceeded correctly, they would have arrived at a different conclusion.[7]

    [7]    McMurray (2017) 128 SASR 1, [84]; [2017] SASCFC 16.

12. It is clear from the quoted passage from Blue J in McMurray that if the error is only a process error of the type described in House v King (as distinct from an outcome error), the appellant must also establish that there should have been a different outcome. Insofar as the appellant has contended that the decision of the internal review committee was disproportionate or legally unreasonable, such grounds raise outcome errors and as the decision maker has wrongly decided the outcome, it is determinative of the result and no question of deference to the decision of the decision-maker arises.[8] Insofar as the appellant has contended that the internal review committee failed to take into account a relevant consideration, that is clearly a process error of the type described in House v King and therefore, in accordance with the decision in McMurray, the appellant must also show that there should have been a different outcome if that consideration had been taken into account.

    [8] Ibid, [47].

13. The position in relation to the contention that the appellant did not receive procedural fairness is not so straightforward. The denial of procedural fairness does not fit neatly into a process and outcome error dichotomy of the type referred to in McMurray. In one sense, it is a process error in that it affects the process by which the respondent arrived at its decision and not necessarily the outcome. It may mean that the tribunal did not take into account a relevant matter. The respondent made a submission to that effect and submitted that Blue J in McMurray was distinguishing between a process error and an outcome error, and that procedural fairness fell into the former category.

14. On the other hand, a denial of procedural fairness means the internal review committee was acting in excess of jurisdiction.[9] It was not a decision according to the statute and leads to an outcome that is beyond jurisdiction. Procedural fairness is implied into the process of statutory construction to reduce the risk of the decision-maker reaching an unsound conclusion.[10]  In Marksman,[11] Stanley J, having found that the decision was affected by jurisdictional error, held that the decision had to be set aside and it was not necessary to decide the merits of the appeal.

    [9]    Re Minister for Immigration and Multicultural l Affairs and another ex parteMiah (2001) 206 CLR 57, [26] per Gleeson CJ and Hayne J; [2001] HCA 22 (‘Miah’).

    [10] Nathanson v Minister for Home Affairs (2022) 276 CLR 80, [51] per Gageler J; [2022] HCA 26 (‘Nathanson’).

    [11] Marksman [2016] SASCFC 72, [321], [326].

15. However, before a conclusion is reached in a particular case that a denial of procedural fairness constitutes a jurisdictional error, the appellant must satisfy the threshold of materiality[12] and prove on the balance of probabilities the historical facts necessary to enable the court to be satisfied that there was a realistic possibility that a different decision could have been made had there been compliance with that condition.[13] Kiefel CJ, Keane and Gleeson JJ held in Nathanson v Minister for Home Affairs (Nathanson) (which was a case involving jurisdictional error and prerogative writs):[14]

    There will generally be a realistic possibility that a decision-making process could have resulted in a different outcome if a party was denied an opportunity to present evidence or make submissions on an issue that required consideration. The standard of "reasonable conjecture" is undemanding. It recognises that a fundamental purpose of affording procedural fairness is to afford an opportunity to raise relevant matters which are not already obvious, or not liable to be advanced by the apparently persuasive "story" of the opposing party. Where a Tribunal errs by denying a party a reasonable opportunity to present their case, "reasonable conjecture" does not require demonstration of how that party might have taken advantage of that lost opportunity. Nothing said in MZAPC denies this. To the contrary, the standard of "reasonable conjecture", correctly applied, proceeds on assumptions that are derived from the rationale for procedural fairness, namely that, if given a fair opportunity to present their case, a party will take advantage of that opportunity and that, by doing so, the party could achieve a favourable outcome.

    (citations omitted)

    [12]  Nathanson v Minister for Home Affairs (2022) 276 CLR 80, [52] per Gageler J; [2022] HCA 26.

    [13] Nathanson v Minister for Home Affairs (2022) 276 CLR 80, [32]; [2022] HCA 26; MZAPC v Minister for Immigration and Border Protection (2021) 273 CLR 506, [39], (‘MZAPC’).

    [14] Nathanson, [33].

16. The materiality required in Nathanson (reasonable conjecture) imposes a lower burden than demonstrating on the balance of probabilities that there should have been a different outcome. Sometimes, as in Nathanson, the realistic possibility of a different outcome, will be demonstrated from the Tribunal’s reasons without the need for further evidence. The statements do not fit in easily with the explanation given by the Full Court in Marksman and McMurray which required in the case of process errors, that the appellant demonstrate that there should have been a different outcome for there to be a cogent reason to depart from the decision of the original decision-maker. However, the statements of Blue J in McMurray were referrable to process errors identified in House v King.

17. It appears to me that once the appellant has proved on the balance of probabilities that there is a realistic possibility that a different decision could have been made, there is a jurisdictional error and therefore an outcome error of the type referred to by Blue J in McMurray. In such circumstances, there is a cogent reason to depart from the original decision. This accords with authority that a denial of natural justice is an error of law that deprives a tribunal of jurisdiction.[15]

    [15]  Escobar v Spindaleri (1987) 7 NSWLR 51, 57, 50 and 60; Clements v Independent Indigenous Advisory Committee (2003) 37 AAR 309; [2003] FCAFC 143, [8], [35], [41]

    Powers of the court on appeal

18. A further issue relating to the appeal concerns the powers of this Court on appeal. Section 193(3) of the National Law provides that after hearing the matter, the court may confirm or amend the decision of the regulatory authority or substitute its own decision for the decision of the regulatory authority. There is no power in s 193 to remit the matter to the regulatory authority for further consideration. Section 42F of the District Court Act does include a power to remit the matter. Section 194 of the National Law provides that Part 8 of the law (i.e. the Part that deals with a reviewable decision) applies despite any provision to the contrary in the Act that establishes the tribunal or court but otherwise does not limit that Act. The effect of s 194 is that the National Law will prevail to the extent of any inconsistency but that the powers granted by the District Court Act may be used, provided they are additional to and not inconsistent with any provision in the National Law. The tribunal in CYD v Secretary of the Department of Education NSW[16] reached the same conclusion.

    [16] [2017] NSWCATAD 190, [25].

19. Therefore, the issue is whether there is an inconsistency between the powers referred to in s 193(3) of the National Law and the powers under s 42F. I do not consider there to be such an inconsistency. Section 193(3) is silent on the power to remit and in the absence of any other provision, it is to be interpreted as being exhaustive of the powers that may be exercised. However, s 194 allows for additional powers to be exercised if those powers are set out in the District Court Act. In those circumstances, s 193(3) cannot be considered to be a code. It follows that the Court has the power to remit the matter if it considers that it is appropriate to do so.

    Appeal by way of re-hearing

20. The appeal from the decision of the internal review committee to this Court is by way of re-hearing. In McMurray, Hinton J considered the various types of appeal and ultimately came to the conclusion that an appeal under s 42E of the District Court Act was an appeal by way of a rehearing.[17] Hinton J referred to the decision of Wigg v Architects Board of South Australia[18] where Cox J described the various types of appeal in the following way:

    The word “appeal” is itself a word of flexible meaning (McCullin v. Crawford). In Builders Licensing Board v. Spurway Constructions (Syd.) Pty. Ltd. Mason J. described the different kinds of appeal that may be created by a legislature with respect to the decisions of judicial and administrative tribunals. See also Victorian Stevedoring and General Contracting Co. Pty. Ltd. v. Dignan and Ex parte Australian Sporting Car Club; Re Dash. The first kind is an appeal strictly so called. Here the question

    is simply whether the judgment complained of was right when given: Ponamma v. Arumogam. There is no question of introducing fresh evidence in the appeal court. All that will be decided is whether the court below came to the right decision on the material that was before it. Dignan's case, which dealt with an appeal to the High Court under s. 39 of the Judiciary Act against a conviction recorded by a Magistrate for a Commonwealth offence, is an example of this sort of appeal. Next, there is the appeal by way of rehearing, of which the appeal to the Court of Appeal in England, modelled on the old Chancery appeal, is typical. See the Supreme Court Practice, 1979, vol. I, pp. 876-877. This is a rehearing on the documents, but with a special power to receive further evidence on the appeal. The latter power is necessary, because the question on a rehearing of this kind is whether the order of the court below ought to be affirmed or overturned in the light of the material before the appeal court at the time it hears the appeal. Cf. the appeal in this State from the decision of a Master under 0.54, r. 22: In re Flinders Trading Co. Pty. Ltd. Thirdly, there may be an appeal de novo in which the appeal court hears the matter afresh. Mason J. gives as an example of a hearing de novo the appeal from a court of summary jurisdiction to Quarter Sessions under the Justices Act of New South Wales. There, even if it be the defendant who appeals, the informant or complainant starts again and has to call his witnesses and make out his case. Cf. Sweeney v. Fitzhardinge.
    The appeal in England from a magistrate's court to the Crown Court is
    evidently an appeal of this kind (Supreme Court Practice, loc. cit.). See also McCullin v. Crawford; Phillips v. The Commonwealth. Which type of appeal is given by a particular Act will depend upon its construction. The use of the word “rehearing” will not be decisive, because that is a word to which different meanings have been given. Powell v. Streatham Manor Nursing Home; Builders Licensing Board v. Sperway Constructions (Syd.) Pty. Ltd. It will be a matter of discerning Parliament's intention from an examination of the legislation as a whole. In the Builders Licensing Board case the High Court held that the appeal created by the New South Wales Act in question was an appeal de novo, notwithstanding the description of it in the legislation as an appeal “by way of rehearing.”

    
    (footnotes omitted).

    [17]  McMurray (2017) 128 SASR 1, [76][80]; [2017] SASCFC 16.

    [18] (1984) 36 SASR 111,112-114.

1. The ability to receive further evidence on the appeal as provided for by s 42E(1) excluded the appeal being an appeal in stricto sensu and the dispositive powers set out in s 42F excluded the appeal from being a hearing de novo.[19] In Coal and Allied Operations Pty Ltd v Australian Industrial Relations Committee,[20] Gleeson CJ, Gaudron and Hayne JJ held:

   If an appellate tribunal can receive further evidence and its powers are not restricted to making the decision that should have been made at first instance, the appeal is usually and conveniently described as an appeal by way of rehearing. Although further evidence may be admitted on an appeal of that kind, the appeal is usually conducted by reference to the evidence given at first instance and is to be contrasted with an appeal by way of hearing de novo. In the case of a hearing de novo, the matter is heard afresh and a decision is given on the evidence presented at that hearing.

   Ordinarily, if there has been no further evidence admitted and if there has been no relevant change in the law, a court or tribunal entertaining an appeal by way of rehearing can exercise its appellate powers only if satisfied that there was error on the part of the primary decision-maker. That is because statutory provisions conferring appellate powers, even in the case of an appeal by way of rehearing, are construed on the basis that, unless there is something to indicate otherwise, the power is to be exercised for the correction of error. However, the conferral of a right of appeal by way of a hearing de novo is construed as a proceeding in which the appellate body is required to exercise its powers whether or not there was error at first instance.

   (citations omitted)

   [19] Ibid, [80].

   [20] (2000) 203 CLR 194, [13]-[14]; [2000] HCA 47.

2. In relation to the internal review of the Original Decision, the appellant submitted that the review was no more than a review on the material before the Board subject to s 191(4) and was not a de novo hearing or a full merits review. The appellant submitted that, subject perhaps to s 191(4), the review could not cure a denial of natural justice. The appellant submitted that in the circumstances of this case, the appellant was not given the opportunity to provide further evidence.

3. I do not accept that the appeal was no more than a review on the material before the Board. There are a number of matters which indicate that the internal review that was conducted by the internal review committee was not limited in the manner suggested by the appellant. First, there is a power under s 191(4) for the review committee to receive further evidence. There is no limitation on the information that the appellant may provide that accompanies the application for review. In fact, in this case the appellant provided the letter dated 27 June 2023. Secondly, there is no indication that the appellant was not able to provide further information if it chose to do so. Thirdly, the committee has a broad power under s 191(7)(b) to make any other decision that it considered appropriate. Therefore, it could substitute its own decision for the Original Decision. The Full Federal Court in Baker v University of Ballarat[21] considered the nature of the hearing on an internal review. It considered as relevant the matters referred to above.[22] The court concluded that the review was in the nature of a re-hearing and was not confined to examining the procedures adopted by the original decision-maker.[23]

   [21] (2005) 225 ALR 218; [2005] FCAFC 210.

   [22] Ibid, [27].

   [23] Ibid, [26], [36].

4. The terms of the decision by the internal review committee dated 24 July 2023 indicate that the committee was satisfied that it was correct to impose conditions and agreed that the conditions were appropriate and reasonable and not overbearing. That is the decision that the committee has made.

   Determination of procedural fairness

5. The contention by the appellant that the decision of the internal review committee of the respondent dated 24 July 2023 in which conditions were imposed on the provider approval of the appellant should be rescinded  or set aside  because the appellant was not afforded procedural fairness requires determination of the following issues:

   (1)does s 23 of the National Law (which provides the power to impose conditions on a provider approval), exclude a requirement to provide procedural fairness?

   (2)what does procedural fairness require in the circumstances of this case?   This requires consideration of the history of the relationship between the appellant and the respondent and whether any deficiency at the time of the making of the Original Decision had been cured by the provision of reasons for that decision prior to the decision of the internal review committee;

   (3)did the appellant receive procedural fairness in relation to the internal review decision?

   Does s 23 of the National Law exclude procedural fairness?

6. Under section 10 of the National Law, a person may apply to the regulatory authority (in South Australia, the respondent) for provider approval. The regulatory authority must, under ss 12 and 13, be satisfied that the applicant is a fit and proper person. Pursuant to s 19, the provider approval may be granted subject to conditions.

7. The power to amend an approval and impose further conditions is provided in s 23 of the National Law. Section 23 states that:

   (1)The Regulatory Authority may amend a provider approval at any time without an application from the approved provider.

   (2)Without limiting subsection (1), an amendment may vary a condition of the provider approval or impose a new condition on the provider approval.

8. The respondent submitted that the use of the words “at any time” in s 23(1) indicated that the respondent did not need to provide procedural fairness when making a decision to impose new conditions on an approved provider such as the appellant. The respondent also referred to further textual indicators that it submitted supported an inference that no procedural fairness was required.

9. These textual indicators were:

   (1)    the lack of any requirement for the provision of a notice as a precondition for the imposing of conditions;

   (2)    no requirement to provide reasons;

   (3)    the coherence between the 14 day period for the decision to take effect         under s 23(4) and the 14 day period to apply for internal review under      s 191(2);

   (4)    the ability of the internal review committee  to make any decision it     thinks appropriate indicating a de novo review, and the limited time for    the making of a decision when granting the initial provider approval        under s 15(3).

10. The construction of the statute will determine whether the rules of natural justice, including procedural fairness apply.[24] In Re Minister for Immigration and Multicultural Affairs ex parte Miah, McHugh J held at :

    It is highly improbable that the legislature intended to exclude all the common law requirements of natural justice from subdiv AB. There are no clear words to that effect. Where Parliament has wanted to exclude common law rules from applying to the administration of the Act, it has not hesitated to do so in clear words. Moreover, subdiv AB is headed "Code of procedure for dealing fairly, efficiently and quickly with visa applications". It therefore assumes that the "code" will operate fairly. The subdivision sets out various formal procedures which the Minister may or must follow to ensure fairness to applicants. But subdiv AB does not declare that they exhaustively define the content of fair procedure. The subject matter of the Act, the fact that it implements Australia's international obligations, and the omission of words unambiguously pointing to an intention to exclude all the common law rules of natural justice indicate that the exercise of power under subdiv AB is conditioned on the observance of those rules except where the provisions of the Act specifically supersede them.

    [24]  Re Minister for Immigration and Multicultural Affairs ex parte Miah (Miah)(2001) 206 CLR 57 [53]; [2001] HCA 23.

11. In Nathanson, Edelman J held:[25]

    Procedural fairness is based upon natural justice. One of the innate, or natural, elements of justice is that a person should have a reasonable opportunity to respond to adverse allegations. This basic requirement is so fundamental, and is such a strong expectation of a reasonable person to whom the relevant legislation applies, that it has repeatedly been held that the implication of procedural fairness in an administrative hearing can only be removed by Parliament using "plain words of necessary intendment". In simple terms, Parliament must be extremely, "unambiguously, or "unmistakeabl[y] clear before defeating such a basic principle of justice. In a number of recent decisions, this Court has eroded the bedrock of natural justice that is ordinarily implied in statute as a reflection of reasonable and widespread expectations. This appeal concerns the extent to which further erosion can be prevented.

    (citations omitted)

    [25] (2022) 276 CLR 80, [88]; [2022] HCA 26.

12. In the present case, there is no express or clear wording in s 23 which excludes a requirement for procedural fairness. The words “at any time” do not import such an exclusion. Those words are equally consistent with the granting of a power to impose conditions during the course of the period in which a provider approval operates, when necessary. The words do not say anything about the procedure that should be followed when the regulatory authority considers the imposition of the new conditions. There is nothing in the subject matter of  s 23 and the imposing of conditions that suggest that procedural fairness should not be provided. In fact, the imposition of conditions may (as in the present case) have a financial impact on the business of a provider such that it would be expected that the provider should be able to make submissions or about whether there was an established need for the imposition of conditions and if so, whether the proposed conditions were suitable. Where the exercise of the statutory power deprives a person of some right or benefit, generally speaking they are entitled to know the case against them and to be given an opportunity of responding to that case.[26]

    [26]  Kioa v West (1985) 159 CLR 550, 582 (‘Kioa’).

13. I do not consider the other matters raised by the respondent, although relevant to the consideration of whether or not the requirement for procedural fairness has been excluded under s 23, are determinative or outweigh the need for clear and unambiguous language to exclude that requirement. In reaching that conclusion, I also take into account the potential consequences of a decision to impose conditions of the provider approval. I also do not accept that the review by the internal review committee is a de novo hearing. I have already set out my conclusion that the review by the internal review committee is conducted by way of a  rehearing. There is nothing in the language of s 191 that suggests that this appeal is a de novo appeal.

14. In my opinion, the respondent is required to provide procedural fairness before amending a provider approval to impose new conditions. It follows that the Original Decision Maker was wrong in her conclusion that procedural fairness did not apply.

    Content of procedural fairness

15. The High Court has emphasised that it is not possible to precisely and exhaustively state what the repository of a statutory power must always do to satisfy a requirement to provide natural justice.[27] The content of the legislation is the starting point to determine what is required to satisfy a requirement that the principles of natural justice be observed.[28]  It is the potential to affect the rights and interests of a person who is likely to be affected by an exercise of power that requires that person to be given procedural fairness.[29] The person must be given the opportunity to deal with relevant matters adverse to his or her interests.[30] That does not mean that all material must be disclosed but an opportunity must be given to deal with adverse information that is credible, relevant and significant.[31]

    [27]  Kioa v West (1985) 159 CLR 550, 611; see Miah (2001) 206 CLR 57 [129]-[130]; [2001] HCA 23.

    [28]  Miah (2001) 206 CLR 57 [30], [129]-[130]; [2001] HCA 23; Kioa v West (1985) 159 CLR 550, 614.

    [29] Miah, [31].

    [30] Ibid, [140].

    [31] Ibid.

16. The Full Federal Court in AYX16 v Minister for Immigration, Citizenship and Multicultural Affairs and Anor[32] provides guidance as to how to assess what information must be provided to a person so that the requirement to provide procedural fairness is met. The Court held:[33]

    Procedural fairness is concerned with, and requires, a fair procedure, and not a fair outcome: SZBEL at [25]. Fairness is not an abstract concept, and the concern of procedural fairness is to avoid “practical injustice”: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex Parte Lam [2003] HCA 6; (2003) 214 CLR 1, [37] (Gleeson CJ). In the context of the present appeal, the assessor conducting the ITOA was required to adopt a procedure that was “reasonable in the circumstances” and which did not “so constrain the opportunity of the person [the appellant] to propound his or her case for a favourable exercise of the power to amount to a ‘practical injustice’”: SZSSJ at [82]. The content of the obligation to afford procedural fairness must be assessed in its legal and factual context. The real question is what is required to ensure that the decision is made fairly in the circumstances having regard to the legal framework within which it is to be made: Minister for Immigration and Border Protection v WZARH [2015] HCA 40; 256 CLR 326at [30] (Kiefel CJ, Bell and Keane JJ).

    [32] [2020] FCAFC 99.

    [33] Ibid, [67].

17. The Court went on to hold:

    The obligation to afford procedural fairness includes a general requirement to give a person who is the subject of a decision the opportunity to ascertain the relevant issues and comment on any adverse information before the decision is made. As with the content of the obligation to afford procedural fairness generally, the content of this particular requirement to put adverse information must be assessed in its legal and factual context. An often cited formulation, to which the parties in this appeal referred, is that “an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made”: Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 629 (Brennan J). That formulation has been cited with approval on many occasions: see, for example, Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72; (2005) 225 CLR 88 at [15]-[17] (the Court); Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010); 242 CLR 252, [2] (French CJ, Gummow, Hayne, Crennan and Kiefel JJ).

18. The Full Federal Court in Commissioner for the Australian Capital Territory Revenue v Alphaeone Pty Ltd[34] expressed the requirement in similar terms, emphasising the requirement that a person being able to put information and submissions to the decision-maker, rebut or qualify or comment upon adverse material and the decision-maker being required to identify any issue critical to his or her decision.

    Curing deficiency in procedural fairness

    [34] (1994) 49 FCR 576.

19. Also relevant to an assessment of whether procedural fairness was provided is that the decision that is being appealed against in these proceedings is the decision of the internal review committee and not the Original Decision. Therefore, it is necessary to consider the information before the internal review committee. A failure to provide procedural fairness before the original decision-maker is not determinative. Mason J in Twist v Randwick Municipal Council[35] held that a de novo appeal to the Court, where the court acts fairly and does not depart from the rules of procedural fairness, may cure a defect at first instance.

    [35] (1976) 136 CLR 107, 116

20. Brennan J made a similar observation in Ainsworth v Criminal Justice Commission[36] when he held:

    It has been held, at least in some cases, that a want of procedural fairness may be "cured" by an appeal to a tribunal which does accord procedural fairness and exercises the power according to its own view of the merits, not being bound by the decision of the first repository of the power.

    [36] (1992) 175 CLR 564, 593. Quoted with approval in Baker v University of Ballarat [2005] FCAFC 210, [23].

21. This passage makes clear that the mere existence of the right of appeal will not always cure a lack of procedural fairness at the initial hearing.[37] In Twist v Randwick Council (which was a full appeal on facts and law with the right to call further evidence),[38] Mason J said that if the appeal authority acted fairly and did not depart from the rules of natural justice, then the defect might be cured. In Preston v Carmody,[39] Wilcox J observed that there were limits on when a denial of natural justice at the first instance could be cured by a review from the initial tribunal. He said a curing of such a denial depended on two circumstances: first, a full hearing on the review with an entitlement to present additional evidence; and secondly, the reviewing tribunal having the power to substitute its own decision for the original decision. It is this first limitation that the appellant submits was not present on the appeal in this case. The appellant further submits that even if the Act required a merits appeal (i.e. a rehearing on the merits or a de novo appeal), the respondent did not conduct such an appeal.

    Determination of procedural fairness

    [37] See also Twist v Randwick Municipal Council (1976) 136 CLR 106, 116.

    [38] Ibid.

    [39] (1993) 44 FCR 1, [17].

22. The determination of whether the appellant was denied procedural fairness is assessed by the procedure adopted by the internal review committee. That determination in this case is made by first considering the information provided to the appellant at the original hearing and then considering whether any deficiency has been cured on the review process. It is important to note, as the appellant and the respondent both agreed, that ultimately the question is whether, in the totality of the circumstances surrounding the internal review, the appellant was provided with procedural fairness. The appellant contends that it was not provided with procedural fairness at the Original Hearing as the allegations in the Show Cause Notice were vague. The appellant further contends that as the review was limited and not an appeal by way of rehearing or a de novo appeal, any deficiency in the Original Decision could not be cured, or put another way, in the totality of the circumstances there was a denial of natural justice.

23. In the Original Decision given on 13 June 2023, the Original Decision Maker stated that she had afforded the appellant the opportunity to respond to the proposed conditions despite there being no legal obligation to do so. The Original Decision Maker also stated that the requirements for procedural fairness had been circumscribed by the statutory scheme. These statements make it clear that the Original Decision Maker did not consider herself bound to provide procedural fairness but had in any event, given the appellant had the opportunity to respond to the proposed conditions.

24. The subjective opinion of the Original Decision Maker as to the requirement to provide procedural fairness is not irrelevant, but the relevant enquiry is an objective question: did the Original Decision Maker provide procedural fairness.

25. The Show Cause Notice was the means by which the appellant was provided information about the concerns held by the respondent which led to the Original Decision. I agree with the submission of the respondent that the adequacy of the information must be assessed by reference to the background dealings and communications between the appellant and the respondent. The degree of precision required will vary according to the type of case and the allegation that is made or the matter which is to be determined.[40] The recipient of the notice must be given sufficient particulars to be able to respond in a meaningful way.[41] The recipient should not have to strain for meaning.[42]

    [40] Baker v Gough [1963] NSWR 1345, 1360.

    [41] Edwards Lees Imports Pty Ltd v Department of Finance Services and Innovation [2020] NSWSC 256, [112].

    [42] Gribbles Pathology (Vic) Pty Ltd v Cassidy (2002) 122 FCR 78, [143].

1. The concerns raised in the Show Cause Notice falls into three categories:

   ·first, general concerns about ongoing non-compliance with the National Law and Regulations and the failure of the respondent to address those concerns. The concerns set out in paragraphs 1 and 8 of the Show Cause Notice (see paragraph 9 above) fall into this category;

   ·secondly, the concerns raised at meetings between the appellant and the respondent where issues of non-compliance were discussed. The concerns set out in paragraphs 2, 4 and 9 of the Show Cause Notice (see paragraph 9 above) fall into this category;

   ·thirdly, concerns about specific matters which the respondent said had not been addressed by the appellant. The concerns set out in paragraphs 3, 5, 6, and 7 of the Show Cause Notice (see paragraph 9 above) fall into this category.

2. The appellant submitted that the information provided to it in the Show Cause Notice was too vague such that it could not properly respond and therefore was denied procedural fairness at the Original Hearing. The appellant further submitted that the letter dated 13 June 2023 which contained the notification of the Original Decision and the conveying of the reasons for that decision demonstrates the inadequacy of the Show Cause Notice.

3. The nature of the concerns must be considered. The respondent was not raising concerns about a specific incident which led to it proposing the imposition of further conditions on the provider approval. Instead, it was raising ongoing concerns, which had not been addressed. These concerns were raised in circumstances where there had been since July 2022:

   (1)self-reporting by the appellant to the respondent of 221 serious incidents (which are required to be notified by the appellant under s 174 of the National Law);

   (2)the respondent had found substantiated 176 breaches;

   (3)there were 33 incomplete or inadequate waiver applications.

4. These matters were known to the appellant. In the circumstances, I consider that the respondent has given the appellant adequate information for it to respond to the Show Cause Notice. I agree with the submission of the respondent that the Show Cause Notice must be construed against the background of the communications between the appellant and the respondent. Mr Smith is and was the chief executive officer of the appellant and also the nominated supervisor for each of the 58 services pursuant to s 161 of the Act. The appellant submitted that its knowledge of the issues to be relied upon by the respondent is not sufficient and the respondent must advise of the particular issues that it relies upon. I agree that the appellant’s knowledge is not sufficient by itself but it is relevant in construing the adequacy of the notice that has been given.

5. It is the aggregate of the conduct and actions of the appellant that has led to the Show Cause Notice and the imposition of the further conditions. The appellant was provided with adequate information to respond to these aggregated concerns. Although in its reasons provided on 13 June 2023, the respondent has been more specific and provided attachments which set out the individual matters which constituted self-reporting, breaches, waiver applications and concerns expressed in meetings about the appellant’s performance and compliance, that level of specificity was not required in the Show Cause Notice. The appellant was able to provide details of the actions that it had taken since July 2022 in relation to the concerns that had been expressed about its non-compliance with the National Law and the Regulations.  I do not accept the submission of the appellant that the matters set out in the reasons could not have been in the contemplation of the appellant when it considered how it should respond to the Show Cause Notice.

6. In the Show Cause Notice:

   (1)paragraph 1 deals with ongoing non-compliance and states that the intervention by the respondent had not been effective and non-compliance had continued. It is clear from that description that the non-compliance has been the subject of discussion between the appellant and the respondent such that the appellant has sufficient information to be able to respond to that concern;

   (2)paragraph 2 deals with 4 meetings since July 2022 where areas of non-compliance were discussed including inadequate risk assessment, inadequate supervision and protecting children from harm. Paragraph 4 deals with a meeting in February 2023 where expectations were set. Paragraph 9 deals with a meeting on 10 May 2023 in which non-compliance and improving service quality were discussed. These paragraphs set out the topics of concern to which the appellant is able to respond;

   (3)paragraphs 3, 5, 6 and 7 deals with specific notices, reports, complaints and observations made at a monitoring activity. These matters deal with communications that were common to the parties or within the knowledge of the appellant;

   (4)paragraph 8 deals with waivers and applications for service approvals being incomplete. These waivers and applications have emanated from the appellant and therefore contain matters within the knowledge of the appellant.

7. The conclusion that the appellant had received procedural fairness at the stage of the Original Hearing necessarily means that the appellant received procedural fairness at the hearing before the internal review committee. In fact, the appellant received further information (by the provision of the reasons for the Original Decision) by the time that the matter came before the internal review committee.

8. Even if, contrary to my conclusion, the appellant had received inadequate information at the time of the Original Hearing, the next  question for consideration is whether that deficiency was cured by the letter dated 13 June 2023 which set out the specific reasons relied upon by the respondent for the imposition of the conditions. The respondent submitted that the appellant was provided with procedural fairness taking into account the Show Cause Notice, read in the context of the regulatory relationship between the parties, the reasons given in the Original Decision and hearing of the internal review.

9. The appellant submitted that the deficiency could not be cured by the internal review because of the limited nature of the review that was conducted by the respondent. I have already rejected the submission that the review was a review in stricto sensu. I have found that the internal review committee conducted the hearing by way of a rehearing. In those circumstances, any defect in the provision of procedural fairness could be cured on the review.

10. Therefore, at the time of the hearing by the internal review committee, the appellant had the Show Cause Notice and the reasons for the Original Decision which were communicated by the 13 June 2023 letter from the respondent. The appellant provided submissions in relation to those reasons in the letter that accompanied the application for internal review. As Kiefel CJ, Keane and Gleeson JJ held in Nathanson, the principles of procedural fairness proceed on the basis that if given a fair opportunity to present their case, a party will take advantage of that opportunity.[43]

    [43]  Nathanson v Minister for Home Affairs (2022) 276 CLR 80, [33]; 2022] HCA 26.

11. In the totality of the circumstances at the internal review committee, the appellant had been provided with adequate information to be able to respond to the concerns raised by the respondent. The 13 June 2023 letter included three attachments which set out specific details of the alleged breaches. Further reasons dealt with matters either coming from the appellant (self-reporting) or information provided by the respondent to the appellant about the substantiated breaches and the appellant’s failure to act on this information to address these deficiencies.

12. The appellant addressed these reasons in its letter dated 27 June 2023 which accompanied its application for internal review. In its decision dated 24 July 2023, the internal review committee stated that it had considered this letter.

13. I do not accept the submission from the appellant that the internal review committee did not consider itself bound to provide procedural fairness. There is nothing in the letter dated 24 July 2023 from the respondent to the appellant (in which notice of the decision was conveyed to the appellant) that suggests that the internal review committee considered that it did not have to provide procedural fairness to the appellant. The letter records that the committee did not agree with or accept that procedural fairness was not afforded to the approved provider and that the approved provider was provided with more than reasonable opportunities to provide evidence that they were meeting their legislative requirements. The minutes of the meeting of the internal review committee held on 24 July 2023 record similar statements.

14. I also do not consider that the internal review committee misconceived the requirements of procedural fairness. The committee, in the statements referred to in the previous paragraph, demonstrates that it considered that procedural fairness required the appellant to be given a reasonable opportunity to respond to the issues that it had raised. As stated previously, the subjective view of the decision maker is not determinative: what the court must decide is whether the appellant was provided with procedural fairness.

15. Even had I found that the respondent had not provided procedural fairness, and applying the standard set out in Nathanson, the appellant has not proved on the balance of probabilities that there was a realistic possibility that a different decision could have been made. The appellant has not adduced any information that it says it would have put before the internal review committee to show that there was a realistic possibility that the internal review committee would have made a different decision had it known of that information. There is nothing in the documentation itself which would lead to such a finding.

    Conclusion regarding procedural fairness

16. It follows for the reasons which I have set out, that the appellant was provided with procedural fairness at the hearing conducted by the internal review committee. The appellant was provided with an adequate opportunity to address the concerns that had been raised by the respondent.

    Disproportionate response

17. In Minister for Immigration and Border Protection v Stretton (Stretton),[44] Allsop CJ approached the issue of a disproportionate response in the exercise of a discretion as being an indicator of unreasonableness rather than as ground for review in itself. He held:[45]

    The difficulty with the reasoning is that it is expressed as the primary judge’s view as to what was reasonable. He, himself, makes an evaluation of what is necessary for the protection of the Australian community, principally, if not wholly, however, by reference to the young children in Mr Stretton’s immediate family. It would seem that this approach was brought about by a view of the need for the assessment to be objectively unreasonable. This does not carry with it the authority for the Court to reach its own view of what is reasonable or not, or what is necessary, and then, without more, to supplant the view of the Minister. It is not a correct approach for the Court on judicial review to assess the lawfulness of the decision under s 501 by asking whether the exercise of discretion was necessary for the purpose. That an assessment whether the decision-maker’s conclusion was legally unreasonable may involve some consideration of disproportionality does not authorise the Court to decide for itself what is necessary for the relevant purpose and to declare a decision beyond that assessment as unreasonable. The correct question, or perspective, if one is looking at the outcome in question, is not whether the Court thinks the decision is reasonable, or necessary for the purpose, or not, as the case may be; rather it is whether a decision-maker could reasonably come to the conclusion. Depending upon the nature of the decision, its attendant considerations and the statute in question, the Court may or may not have a degree of familiarity and confidence in assessing how a decision-maker ought to approach the matter. The decision and statutory context in Li was an example of this. Here, the decision was not a procedural decision; it was a substantive one concerned with an evaluation of the protection of the Australian community by a Minister of the Crown, personally.

    [44] (2016) 237 FCR 1, [11] (‘Stretton’).

    [45] Ibid, [21].

18. In Minister for Immigration and Citizenship v Li,[46] French CJ reached a similar result and held that a disproportionate exercise of a discretion may be characterised as irrational and unreasonable on the basis that it exceeds what is necessary, on any view, of the purpose it serves.

    [46] (2013) 249 CLR 332, [30].

19. I therefore propose to analyse the asserted disproportionality by the respondent in the context of unreasonableness.

    Legally unreasonable

20. The appellant has submitted that the decision of the respondent to impose the further conditions was legally unreasonable. It submitted that the conditions had no rational connection with the breaches.

21. Legal reasonableness is an essential element in the lawfulness of decision-making. Parliament is taken to intend that statutory power will be exercised reasonably.[47] Allsop CJ in Stretton [48] held that the evaluation of whether a decision was reasonable is conducted by reference to the relevant statute, its terms, scope and purpose and explicit and implicit values. The task is one of characterisation and whether, without being exhaustive, the conclusion is reached that it is unreasonable as lacking in sufficiently rational foundation or an evident or intelligible justification or is plainly unjust or capricious or lacking common sense having regard to the terms, scope and purpose of the statutory source of power.[49] It is not for the court to assess what it considers to be reasonable. As Allsop CJ held in Stretton:[50]

    Crucial to remember, however, is that the task for the Court is not to assess what it thinks is reasonable and thereby conclude (as if in an appeal concerning breach of duty of care) that any other view displays error; rather, the task is to evaluate the quality of the decision, by reference to the statutory source of the power and thus, from its scope, purpose and objects to assess whether it is lawful. The undertaking of that task may see the decision characterised as legally unreasonable whether because of specific identifiable jurisdictional error, or the conclusion or outcome reached, or the reasoning process utilised.

    [47] Minister for Immigration and Citizenship v Li (2013) 249 CLR 332, [26], [29], [63], 88]; Stretton (2016) 237 FCR 1, [4]; [2016] FCACFC 11.

    [48] Stretton, [11].

    [49] Ibid, [11].

    [50] Ibid, [12].

22. The critical question therefore is whether the decision-maker could have reasonably come to the conclusion that they did.[51]

    [51] Ibid, [21].

23. Section 3 of the National Law provides:

    (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 of children attending education and care services;

    (c-f)     …

    (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 children are paramount;

    …

24. Section 9 of the Act sets out the objects of the Act which includes providing for the regulation of the provision of education and early childhood services in a manner that maintains high standards of competence and conduct by providers. 

25. Section 167 of the Act requires that the appellant, as an approved provider of education and care services, must ensure that every reasonable precaution is taken to protect children being educated and cared for by the service from harm and from any hazard likely to cause injury.

26. In the 13 June 2023 letter, the Original Decision-Maker set out her reasons for imposing the further conditions. She stated that she considered that the conditions were compatible with and promoted the principles of the National Law, having regard to the appellant’s history of compliance and the potential significant harm posed by the systemic risks to children’s health safety and wellbeing manifest in the number of incidents and substantiated breaches. The Original Decision-Maker went on to state that by temporarily limiting growth and by requiring the appellant to engage an independent consultant to assess current performance and identify and remove barriers to improving quality and compliance, the conditions sought to lead to higher standards of competence and conduct.

27. The internal review committee in its 24 July 2023 letter stated that it agreed that the conditions imposed were appropriate and reasonable and could not be considered as overbearing, burdensome or excessive. The internal review committee further stated that the Original Decision-Maker had sufficient evidence to form a reasonable belief that the breaches warranted the imposition of the conditions.

28. The appellant characterised the decisions as the respondent being dissatisfied with the administration and paperwork of the appellant. That is not the basis for the Original Decision or the decision of the internal review committee. The Original Decision states that the conditions were imposed because of the potential of significant harm by the systemic risks to the children’s health, safety and wellbeing because of the number of incidents and substantiated breaches. The Original Decision sets out the reasons for this conclusion (which are set out in paragraph 12 above), only one of which might be described as administrative in character being the application of waiver and new service approvals or amendments. When read as a whole, the reason for the imposition of the conditions was the history of breaches and non-compliance that led to the potential or risk of harm to the safety and wellbeing of children and the failure of the appellant to address those breaches and risk. The decision of the internal review committee also emphasised that the committee was satisfied that correct course of compliance action (i.e. the imposition of conditions) was taken in response to systemic regulatory compliance issues that posed a high risk to the safety, health and wellbeing of the children in the care of the appellant.

29. The conditions requiring the engagement of an independent consultant, the conducting of a quality and compliance review of the appellant’s systems, policies, practices and the preparation of a written plan identifying a list of target areas for improvement and actions to be undertaken and monthly reporting to the respondent against the plan are directly related to the concerns that the respondent had expressed about the systemic non-compliance by the appellant. Those conditions are all directed at improving the performance of the appellant. They are directed to ensuring the objectives of the National Law, including in particular, the safety, health and well-being of the children. The decision-maker could have reasonably come to the conclusion that the conditions would have assisted in ensuring the objectives of the National Law were achieved and were necessary for that purpose.

30. The first two conditions relate to the limiting of childcare services to 58 (or if a service is cancelled, to the number of services remaining after that cancellation) for a period of 12 months commencing 27 June 2023. As at 27 June 2023, the appellant was operating 58 childcare services. The appellant submitted that these conditions had no rational connection to the concerns held by the respondent as to the safety and well-being of children in the care of the appellant.

1. The conditions were premised on the appellant’s compliance and systems not being adequate to deal with the demands of operating 58 services. There had been substantiated breaches of the National Law including substantiated breaches of failing to protect children from harm and hazard. Therefore, it was reasoned that the temporary freeze on the number of services for 12 months (when coupled with the conditions regarding the engagement of the consultant and the preparation of plans to address deficiencies) would ensure that the appellant concentrated on and gave priority to compliance issues rather than expansion issues. Given the paramount objective under the National Law being the safety and wellbeing of the children, it is reasonable for the decision-maker to give impose a condition that will assist in ensuring that objective is met. The conditions place a temporary freeze and thus were not excessive. This is particularly the case when the chief executive officer of the appellant was also the nominated supervisor under s 161 of the National Law.

2. The decision-maker could have reasonably come to the conclusion that the first two conditions would have assisted in ensuring the objectives of the National Law were achieved and were necessary for that purpose. The conditions were a proportionate response to the concerns that the respondent had identified. They did not interfere with the existing operations of the appellant. They operated only for a limited period. 

3. It follows that the conditions that were imposed by the internal review committee were not legally unreasonable.

   Failing to take into account a relevant consideration

4. The appellant submitted that the Original Decision Maker failed to take into account a relevant consideration, namely the submission contained in the letter from the appellant to the respondent dated 26 May 2023 which referred to the breakdown in communications between the appellant and the respondent. In the letter to the respondent dated 13 June 2023, the Original Decision-Maker referred to having considered the response of the appellant dated 26 May 2023. The minutes of the internal review committee dated 24 July 2023 refer to having discussed the appellant’s claim of ineffective communications. The letter dated 24 July 2023 from the respondent to the appellant in which it communicates the decision of the internal review committee refers to having considered the written submissions and communications of the appellant.

5. In these circumstances, I accept the submissions of the respondent that the appellant has not established that the Original Decision-Maker or the internal review committee failed to take into account this matter when making their respective decisions.

6. A failure to take into a relevant consideration is a House v King type error. In those circumstances, the appellant must show, in accordance with the decisions in McMurray and Marksman, that a different decision should have been reached had that matter been taken into account. The appellant has not adduced any evidence to show how that there either was a breakdown in communications or that breakdown could have led to a different. That would have required, for example, showing that the breakdown in communications led to the appellant or the respondent either misapprehending some issue of substance or the respondent not receiving submissions or evidence about such an issue or properly taking into account submissions made by the appellant about an issue. There is no evidence about any of these matters.

7. The appellant has not established that the respondent failed to take into account a relevant matter or that any such failure would have resulted in the internal review committee making a different decision. It follows that the appellant has not established that this ground of the appeal provides a basis for rescinding or setting aside the decision of the internal review committee or remitting the matter back to the committee or to a delegate of the respondent for further determination.

   Conclusion

8. For the reasons which I have expressed, the appeal of the appellant is dismissed and the decision of the internal review committee  to impose the further conditions is confirmed.