Jessica Education Centre Pty Ltd (KA Family Day Care) v Secretary, Department of Education

[2020] NSWCATAD 99

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Jessica Education Centre Pty Ltd (KA Family Day Care) v Secretary, Department of Education [2020] NSWCATAD 99
Hearing dates:	11 February 2020
Date of orders:	08 April 2020
Decision date:	08 April 2020
Jurisdiction:	Administrative and Equal Opportunity Division
Before:	C Ludlow, Senior Member
Decision:	The decision of the Regulatory Authority cancelling the applicant’s provider approval is confirmed.
Catchwords:	ADMINISTRATIVE LAW – review of decision cancelling family day care service provider approval – whether conditions of approval breached – whether failed to operate a service for more than 12 months – whether a fit and proper person – correct and preferable decision
Legislation Cited:	A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) Children (Education and Care Services) National Law (NSW) Education and Care Services National Regulations (NSW)
Cases Cited:	DBU v Secretary, Department of Education [2017] NSWCATAD 257 Jessica Education Centre Pty Ltd and Secretary, Department of Education and Training [2019] AATA 3739 Jump Start Family Day Care Pty Ltd v Department of Education and Training (Review and Regulation) [2019] VCAT 1631 Kendrick v Secretary of the Department of Education NSW [2019] NSWCATAD 45 Moonlight Family Day Care Pty Ltd and Secretary, Department of Education and Training [2018] AATA 2706 Two Cubed Pty Ltd v Secretary of the Department of Education NSW [2019] NSWCATAD 122
Category:	Principal judgment
Parties:	Jessica Education Centre Pty Ltd (KA Family Day Care) (Applicant) Secretary, Department of Education (Respondent)
Representation:	Solicitors: Y Choi (Agent) (Applicant) Crown Solicitor (Respondent)
File Number(s):	2019/00347324
Publication restriction:	Nil

REASONS FOR DECISION

Background

1. This is an application for review of the decision by the respondent to cancel the applicant’s provider approval. The decision was made pursuant to s 31(a) of the Children (Education and Care Services) National Law (NSW) (“the National Law”) on 3 October 2019.

2. The applicant held a service approval to operate a family day care service from 10 February 2014 following approval by the respondent to transfer the service approval from “Korean Australian Family Day Care” to the applicant. The service was known as “KA Family Day Care”.

3. The following facts are not in dispute. On 8 November 2017 the Australian Department of Education and Training issued a Notice of Intention to cancel the applicant’s approval under the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (“the Administration Act”) (known as a child care benefit or CCB approval). This followed findings made by the delegate of the Secretary of the Department that the service had not complied and continued not to comply with conditions for its continued approval under the following provisions of the Administration Act:

1. Section 196(1) making it a condition that the service satisfies any eligibility rules applying to it under paragraph 205(1)(b);

2. Section 196(2) making it a condition that the service not contravene an obligation imposed on it by the Administration Act; and

3. Section 196(3) making it a condition that the operation of and provision of care by the service comply with all applicable requirements imposed by a law of the Commonwealth or the State or Territory in which it operates.

4. The Department again wrote to the applicant on 7 March 2018 advising that it had received additional information from the NSW Department of Education relating to visits made in December 2017, which had allegedly identified a number of discrepancies in the applicant’s attendance reports. In particular since the notice of intention to cancel was issued, the applicant had continued to fail to comply with a number of its obligations including reporting attendances for children who were in fact overseas, failing to report attendances within the required timeframe, reporting absences after care for the child had ceased, and reporting educators providing care for more than 7 children at one time.

5. The applicant was invited to make further written submissions on these matters no later than 16 March 2018.

6. On 3 April 2018 the Department cancelled the approval of the applicant under the Administration Act with effect from 13 April 2018. The effect of this decision was that families would no longer be able to receive Australian Government child care fee assistance for care provided by the applicant.

7. The applicant sought a review of this decision in the Administrative Appeals Tribunal (AAT) but it was affirmed (Jessica Education Centre Pty Ltd and Secretary, Department of Education and Training [2019] AATA 3739).

8. On 4 June 2018 the respondent sent a Compliance Notice to the applicant under s 177 of the National Law requiring it to take steps outlined in the notice to comply with various provisions of the National Law or the Education and Care Services National Regulations (NSW) (“the National Regulations”) at a number of its family day care locations and provide written evidence of its compliance by 22 June 2018.

9. The non-compliance issues identified in the Notice included the following:

1. numbers of children,

2. coordinator to educator ratios,

3. proper supervision of children,

4. safe storage of cleaning chemicals and safe premises,

5. working with children checks for persons residing at educators’ residences,

6. display of approvals and supervisors on the premises,

7. keeping of prescribed documents available for inspection,

8. health and hygiene practices,

9. first aid kits,

10. emergency and evacuation procedures,

11. risk assessments and written authorisations for excursions,

12. assessments including risk assessments of each residence and/or venue for day care,

13. safety of glass accessible to children or 0.75 m or less above floor level,

14. approval of family day care assistants,

15. attendance records, and

16. systems for ensuring that supervisors, staff members and educators follow the policies and procedures required under Regulation 168 and 169.

10. I note that the applicant disputes that there was non-compliance with some of these matters.

11. On 22 June, 27 July, 31 August, 21 September, and 26 October 2018 the applicant applied to the respondent to grant voluntary suspension of its service approval. On each occasion the application was refused.

12. On 27 July 2019 the respondent issued a Show Cause Notice to the applicant giving notice that it intended to cancel its provider approval on the following grounds:

1. It was satisfied that the applicant was not a fit and proper person to be involved in the provision of an education and care service;

2. The approved provider had breached a condition of the provider approval, namely regulations 124 and 177(2).

13. On 16 August 2019 the applicant provided a written response.

14. On 3 October 2019 the approval was cancelled.

Relevant legislation

The National Law

15. A family day care service is an “education and care service” that is “delivered through the use of 2 or more educators” and which “operates from 2 or more residences” (s 5(1) of the National Law).

16. A person must have been granted provider approval and service approval under the National Law in order to operate a family day care service. The respondent is the regulatory authority with the power to grant, suspend and cancel such approvals.

17. The objectives and guiding principles are contained in s 3 of the National Law and an entity with functions under the National Law is to exercise its functions having regard to the objectives and guiding principles of the national education and care services framework (s 4).

3 Objectives and guiding principles

(1) The objective of this Law is to establish a national education and care services quality framework for the delivery of education and care services to children.

(2) The objectives of the national education and care services quality framework are—

(a) to ensure the safety, health and wellbeing of children attending education and care services;

(b) to improve the educational and developmental outcomes for children attending education and care services;

(c) to promote continuous improvement in the provision of quality education and care services;

(d) to establish a system of national integration and shared responsibility between participating jurisdictions and the Commonwealth in the administration of the national education and care services quality framework;

(e) to improve public knowledge, and access to information, about the quality of education and care services;

(f) to reduce the regulatory and administrative burden for education and care services by enabling information to be shared between participating jurisdictions and the Commonwealth.

(3) The guiding principles of the national education and care services quality framework are as follows—

(a) that the rights and best interests of the child are paramount;

(b) that children are successful, competent and capable learners;

(c) that the principles of equity, inclusion and diversity underlie this Law;

(d) that Australia’s Aboriginal and Torres Strait Islander cultures are valued;

(e) that the role of parents and families is respected and supported;

(f) that best practice is expected in the provision of education and care services.

18. Section 12 provides:

12 Applicant must be fit and proper person

(1) An applicant who is an individual must satisfy the Regulatory Authority that the applicant is a fit and proper person to be involved in the provision of an education and care service.

(2) If the applicant is not an individual, the applicant must satisfy the Regulatory Authority that—

(a) each person who will be a person with management or control of an education and care service to be operated by the applicant is a fit and proper person to be involved in the provision of an education and care service; and

(b) the applicant is a fit and proper person to be involved in the provision of an education and care service.

(3) The head of a government department administering an education law of a participating jurisdiction is taken to be a fit and proper person for the purposes of this Part.

19. Section 18 provides that a provider approval authorises the approved provider to operate an approved education and care service and an associated children’s service, if the approved provider also holds the service approval for those services.

20. Section 31 sets out the grounds on which a provider approval may be cancelled:

31 Grounds for cancellation of provider approval

The Regulatory Authority may cancel a provider approval if—

(a) the Regulatory Authority is satisfied that the approved provider or a person with management or control of an education and care service operated by the approved provider is not a fit and proper person to be involved in the provision of an education and care service; or

(b) the Regulatory Authority is satisfied that the continued provision of education and care services by the approved provider would constitute an unacceptable risk to the safety, health or wellbeing of any child or class of children being educated and cared for by an education and care service operated by the approved provider; or

(c) the approved provider has been found guilty of an indictable offence or an offence that if committed in this jurisdiction would be an indictable offence; or

(d) the approved provider has been found guilty of an offence under this Law as applying in any participating jurisdiction; or

(e) the approved provider has breached a condition of the provider approval; or

(f) the approved provider has not operated any education and care service for a period of more than 12 months (including any period of suspension).

21. Section 13 provides the matters to be taken into account in assessing fitness and propriety:

13 Matters to be taken into account in assessing whether fit and proper person

(1) In determining whether a person is a fit and proper person under this Division, the Regulatory Authority must have regard to—

(a) the person’s history of compliance with—

(i) this Law as applying in any participating jurisdiction; and

(ii) a former education and care services law of a participating jurisdiction; and

(iii) a children’s services law of a participating jurisdiction; and

(iv) an education law of a participating jurisdiction; and

Note. If a person has been served with an infringement notice for an offence under this Law, and the person has paid the penalty, the Regulatory Authority cannot consider that conduct when determining whether the person is fit and proper. See section 291(5).

(b) any decision under a former education and care services law, a children’s services law or an education law of a participating jurisdiction to refuse, refuse to renew, suspend or cancel a licence, approval, registration or certification or other authorisation granted to the person under that law; and

(c) either—

(i) any prescribed matters relating to the criminal history of the person to the extent that history may affect the person’s suitability for the role of provider of an education and care service; or

(ii) any check of the person under a working with vulnerable people law of a participating jurisdiction; and

(d) whether the person is bankrupt, or has applied to take the benefit of any law for the relief of bankrupt or insolvent debtors or, in the case of a body corporate, is insolvent under administration or an externally-administered body corporate.

(2) Without limiting subsection (1), the Regulatory Authority may have regard to—

(a) whether the person has a medical condition that may cause the person to be incapable of being responsible for providing an education and care service in accordance with this Law; and

(b) whether the financial circumstances of the person may significantly limit the person’s capacity to meet the person’s obligations in providing an education and care service in accordance with this Law; and.

(c) whether the person has the management capability to operate an education and care service in accordance with this Law; and

(d) any of the following actions taken under the A New Tax System (Family Assistance) (Administration) Act 1999 of the Commonwealth in relation to a child care service approved under that Act, operated by the person or in relation to which the person was a person with management or control—

(i) any sanction imposed under section 200 of that Act;

(ii) any suspension imposed under section 201A of that Act;

(iii) any infringement notice given under section 219TSI of that Act.

(3) Nothing in subsection (1) or (2) limits the circumstances in which a person may be considered not to be a fit and proper person to be involved in the provision of an education and care service.

22. Section 33 provides the power to cancel a provider approval after considering the provider’s response to a show cause notice. Section 34 provides that if a provider approval is cancelled under s 33, all service approvals held by the person who was the approved provider are also cancelled.

23. Sections 192 and 193 deals with review of a decision to cancel such an approval.

192 Reviewable decision—external review

A reviewable decision for external review is—

(a) a decision of the Regulatory Authority made under section 191 (other than a decision in relation to the issue of a compliance direction or a compliance notice); or

(b) a decision of the Regulatory Authority under this Law as applying in any participating jurisdiction—

(i) to suspend a provider approval under section 27; or

(ii) to cancel a provider approval under section 33; or

(iii) to suspend a service approval under section 72; or

(iv) to cancel a service approval under section 79 or 307; or

(v) (Repealed)

(vi) to direct the approved provider of a family day care service to suspend the care and education of children by a family day care educator; or

(vii) to give a prohibition notice or to refuse to cancel a prohibition notice.

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.

The National Regulations

24. The following regulations are relevant in these proceedings.

124 Number of children who can be educated and cared for—family day care educator

(1) A family day care educator must not educate and care for more than 7 children at a family day care residence or approved family day care venue at any one time.

(2) In determining the number of children who can be educated and cared for by a family day care educator for the purposes of subregulation (1)—

(a) no more than 4 can be preschool age or under; and

(b) if the children are being educated and cared for at a residence, the educator’s own children and any other children at the residence are to be taken into account if—

(i) those children are under 13 years of age; and

(ii) there is no other adult present and caring for the children.

(3) No more than 7 children can be educated and cared for as part of a family day care service at a family day care residence or an approved family day care venue at any one time.

(4) Subregulation (3) does not apply to children visiting a family day care residence or an approved family day care venue as part of an excursion.

Note. A visiting family day care educator must do a risk assessment for the excursion under regulation 100.

(5) Despite subregulations (1) to (4), the approved provider of a family day care service may approve, in writing, a family day care educator to educate and care for more than 7 children, or more than 4 children who are preschool age or under, at any one time, in exceptional circumstances.

(6) For the purposes of subregulation (5), exceptional circumstances exist if—

(a) all the children being educated and cared for by the family day care educator are siblings in the same family; or

(b) a child to be educated and cared for is determined to be in need of protection under a child protection law and the family day care educator is determined to be the best person to educate and care for the child; or

(c) the family day care residence or approved family day care venue is in a rural or remote area and no alternative education and care service is available.

158 Children’s attendance record to be kept by approved provider

(1) The approved provider of an education and care service must ensure that a record of attendance is kept for the service that—

(a) records the full name of each child attending the service; and

(b) records the date and time each child arrives and departs; and

(c) is signed by one of the following persons at the time that the child arrives and departs—

(i) the person who delivers the child to the education and care service premises or collects the child from the education and care service premises;

(ii) a nominated supervisor or an educator.

(2) A preschool program provided by a school is not required to comply with subregulation (1) if it keeps attendance records in accordance with the education law, or Government education department policy, of the participating jurisdiction.

177 Prescribed enrolment and other documents to be kept by approved provider

(1) For the purposes of section 175(1) of the Law, the following documents are prescribed in relation to each education and care service operated by the approved provider—

(a) the documentation of child assessments or evaluations for delivery of the educational program as set out in regulation 74;

(b) an incident, injury, trauma and illness record as set out in regulation 87;

(c) a medication record as set out in regulation 92;

(d) a record of assessments of family day care residences and approved family day care venues conducted under regulation 116;

(e) in the case of a centre-based service, a staff record as set out in regulation 145;

(f) a record of volunteers and students as set out in regulation 149;

(g) the records of the responsible person at the service as set out in regulation 150;

(h) in the case of a centre-based service, a record of educators working directly with children as set out in regulation 151;

(i) a record of access to early childhood teachers as set out in regulation 152;

(j) in the case of a family day care service, a record of staff engaged or employed by the service kept under regulation 154;

(k) a children’s attendance record as set out in regulation 158;

(l) child enrolment records as set out in regulation 160;

(m) a record of the service’s compliance with the Law as set out in regulation 167;

(n) a record of each nominated supervisor and any person in day-to-day charge of the education and care service under section 162 of the Law.

(2) The approved provider of the education and care service must take reasonable steps to ensure the documents referred to in subregulation (1) are accurate.

Penalty: $2000.

(3) Subject to Subdivision 4, the approved provider of the education and care service must ensure that—

(a) subject to subregulation (4), the documents referred to in subregulation (1) in relation to a child enrolled at the service are made available to a parent of the child on request;

(b) the record of compliance referred to in subregulation (1)(m) is able to be accessed on request by any person.

Penalty: $2000.

(4) If a parent’s access to information of the kind in the documents referred to in subregulation (1) is limited by an order of a court, the approved provider must refer to the court order in relation to the release of information concerning the child to that parent.

(5) An approved provider of a family day care service is not required to keep a document set out in subregulation (1) if an equivalent record is kept by a family day care educator under regulation 178.”

The issues to be determined

25. The Tribunal must determine what is the correct and preferable decision having regard to the material before it, as held in DBU v Secretary, Department of Education [2017] NSWCATAD 257 at [24]-[26]. It is not confined to the material before the original decision maker or the reasons identified in the decision under review (Two Cubed Pty Ltd v Secretary of the Department of Education NSW [2019] NSWCATAD 122 at [28], [41], [87]).

26. The Tribunal may confirm or amend the decision under review, or substitute another decision for the decision under review (s 193 National Law).

27. There is no onus of proof upon either party - Kendrick v Secretary of the Department of Education NSW [2019] NSWCATAD 45 at [32]-[38].

The respondent’s case

28. The respondent submits that the applicant’s approval should remain cancelled based on the following grounds:

1. The applicant has failed to operate an education and care service for more than 12 months (s 31(f));

2. The applicant breached a condition of its provider approval by repeatedly failing to comply with the National Law (s 31(e) read with s 19(2)).

3. The applicant is not a fit and proper person to operate an education and care service (s 31(a)).

29. In relation to (1), the respondent submitted that the applicant had stated on a number of occasions to the respondent, the AAT and in these proceedings that it has not operated since April 2018. Therefore it had not been in operation, at the time of the hearing, for just under 22 months.

30. The reason stated for this was that its child care benefits approval had been cancelled, but the respondent submitted that this did not prevent the applicant from operating. The applicant still does not, however, possess that approval and seems unlikely to operate without it based on its statements to the respondent.

31. With regard to (2), it was submitted that the compliance notice of 4 June 2018 identified a series of wide ranging breaches of the National Law to which the applicant did not reply at the time. In addition, the AAT found that the applicant repeatedly breached the Administration Act and the National Law on 5,790 occasions with regard to educator ratios and 1,637 instances of failing to maintain accurate documentation.

32. With regard to (3) the respondent submitted that the Tribunal could take into account the person’s history of compliance with the National Law, the person’s management capability and any sanction under the previous s 200 of the Administration Act, as well as whether its financial circumstances significantly limited its capacity to meet its obligations in providing a service under the National Law (s 13). Where, as here, the applicant is a body corporate, it must satisfy the Regulatory Authority that each person who will have management and control of the service is a fit and proper person to be involved in the provision of an education and care service (s12(2)) (Two Cubed at [48]).

33. The respondent submitted that the volume and systemic nature of the breaches by the respondent identified before the AAT, and the sanction imposed under the Administration Act, indicates a lack of knowledge of the National Law and ability to implement measures to meet its obligations.

34. It also relied on Jump Start Family Day Care Pty Ltd v Department of Education and Training (Review and Regulation) [2019] VCAT 1631 in which it was held that cancellation of a provider’s CCB approval pointed against the provider being a fit and proper person (at [60]). It submitted that the applicant had shown failure to take responsibility for its deficiencies, had inadequate knowledge, oversight and support and inadequate management capability.

The applicant’s case

35. The applicant through one of its directors, Ms Choi, agreed that there were flaws in its processes but submitted that these were by error and not deliberate. It submitted that conditions should be imposed upon its approval rather than the approval being cancelled. It relied on a position statement responding to the claimed breaches.

36. Ms Choi explained that since the AAT decision it could not afford to operate and had lost staff and clients. There were a number of educators hoping that it would be able to operate again. (The evidence was that the applicant could employ 12 educators).

37. The points made by the applicant were:

1. It did not intend to flout the law by failing to provide accurate information to the Department regarding its educators. The software system which it was using failed to provide instructions on how to update change of educator information. The applicant said that due to the lack of information provided by the software manufacturer, it did not update the changes on the system used by the Department and the Department relied on old information, leading to its officers conducting inspection visits to premises where educators no longer resided. This in turn resulted in the Department making some findings of non-compliance. The applicant said it was not aware that the Department’s information had not been updated as its own portal reflected the correct information.

2. It submitted that the majority of inaccurate reports were due to administrative error and staff misinterpreting what was required. It believed that there was no lack of compliance in educator - child ratios in fact.

3. The proportion of Commonwealth child care subsidies that were received in breach of the Administration Act was very small, approximately 0.13% of the total subsidies received. It was acknowledged that the service lacked appropriate governance mechanisms to oversee non-compliance, but it had implemented strategies to deal with this.

4. It disagreed that the service had contravened its reporting obligations with respect to reporting attendance.

5. Some of the matters in the notice had been withdrawn by the Department regarding child ratios and absences.

6. In 2013 when rated and assessed by the Department, the service met two of the seven quality areas and exceeded one of the quality areas. It disputed that it was not able to appropriately supervise or care for children.

7. The service had taken extensive steps to rectify the identified issues. It was unable to do so immediately because of the “enormity of the data that was identified”. The steps taken included:

1. An internal audit;

2. Requesting advice from the Department on how to refund the incorrectly paid subsidies;

3. Developing a compliance strategy to mitigate the risk of non- compliance in submitting attendance records which it submitted “drastically reduced” the instances of error. Furthermore the approval of subsidies for three weeks after the service’s cancellation proved that the strategies were effective;

8. As a service working with Culturally and Linguistically Diverse (CALD) communities and staff, the service claimed that there were increased risks of misinterpreting the legislation and regulations and breakdowns in communication. The issues arose from unforeseen circumstances arising from miscommunication; and

9. CALD communities obtained benefits from the service which could understand their unique cultural and linguistic needs. The service had provided bilingual education and care to the Korean Australian community for over ten years and had brought many benefits for children and parents.

Consideration of grounds

Whether the applicant has failed to operate an education and care service for more than 12 months

38. It is not disputed that the applicant has not operated an education and care service for more than 12 months. Moreover the applicant states that it cannot afford to operate unless it is eligible to receive subsidies under the Commonwealth legislation, which currently it is not.

Whether the applicant breached a condition of its provider approval by repeatedly failing to comply with the National Law

39. The breaches relied upon by the respondent are those listed in the notice of 4 June 2018. The applicant did not respond to the 4 June notice at the time. There were several thousands of instances.

40. The applicant does not dispute that it failed to comply with the National Law in some respects but it disputes a few matters, and claims there were explanations or mitigating circumstances for others. The applicant blames the software manufacturer for not providing information on how to update the information on the Department’s system. I am not satisfied, however, that this failure was responsible for more than a small proportion of the breaches which related to actual operations at the centres.

41. The AAT was satisfied that the applicant had breached multiple conditions for the continued approval of a child care service under the Administration Act and that the breaches were not an isolated event. Those breaches related to failure to provide accurate reports of child care under s 219N of the Administration Act; and contravening s 196(3) of the Administration Act by:

1. Instances where the required educator to child ratio was not met;

2. Not registering information regarding relief educators;

3. Not accurately keeping attendance records.

42. I note that the applicant does not accept the findings regarding ratios and attendance records. In the AAT decision it is recorded that the applicant blamed clerical errors by the educators. However there is no evidence to support these claims, and in any event it is the provider’s responsibility to meet the conditions. As noted in Moonlight Family Day Care Pty Ltd and Secretary, Department of Education and Training [2018] AATA 2706 the obligation was on the applicant, not its educators. I do not agree that any language issues which might cause delays or difficulties in ensuring that CALD educators understood instructions given to them by the applicant was unforeseen, as the applicant claims.

43. The applicant submitted that it had implemented measures to address the breaches and showed improvement over three months, but there was no clear evidence of this.

44. Some breaches concerned whether educators responsible for caring for children had proper oversight and instruction, and whether children’s whereabouts were known and recorded. These are very significant issues.

45. I am satisfied that the applicant breached a condition of its approval by repeatedly breaching the National Law.

Whether the applicant is a fit and proper person

46. On the issue of “fit and proper” the Tribunal said in Two Cubed at [54]-[58]:

“The context in which the person is or will be engaged in the underlying principles and objects of the legislation give the phrase meaning in particular circumstances: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 380. A definition of fitness and propriety at least includes “honesty, knowledge and ability”: Hughes & Vale Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127 at 156.

An assessment of fitness and propriety “also includes public confidence that the person is able to maintain high standards of rectitude and that they likely future conduct will keep to that standard”: CYD v Secretary of the Department of Education NSW [2017] NSWCATAD 190 at [89].

In the regulatory regime surrounding provider approvals, the term “fit and proper” in context refers to the provision of education and care services to children under 13 years of age. An applicant’s fitness and propriety may well be dependent then on an adequate knowledge and understanding of the responsibilities of an approved provider, whether the applicant acts in accordance with those responsibilities and whether the applicant has sufficient moral integrity and character to be entrusted with the provision of education and care services: Tanyous v Secretary, Department of Education [2018] NSWCATAD 197 at [31]; Brandusoiu v Commissioner of Police [2015] NSWCATAD 204 at [91]-[92].

Compliance with the National Law is a mandatory consideration in the assessment of the applicant’s fitness and propriety because of the conditions attached to provider approvals. A person’s management capability to operate an efficient education and care service in accordance with the National Law is a relevant consideration in assessing whether a person is a fit and proper person to be engaged in education and care services.

The objectives of the National Law are promoted where persons with management or control of an education and care service have knowledge and understanding of the National Law and Regulations: CYU V Secretary Department of Education [2017] NSWCATAD 290 at [53]-[54]; DPW v Secretary Department of Education [2018] NSWCATAD 257 at [40], [42]-[43].”

47. Section 13(1) of the National Law also provides that in determining whether a person is a fit and proper person I must have regard to the applicant’s history of compliance with the National Law. I would normally interpret this to mean proven non-compliance prior to the incidents relied on in these proceedings. There is no evidence of a history of prior non-compliance.

48. In addition I may have regard to:

1. whether the financial circumstances of the applicant may significantly limit the person’s capacity to meet their obligations in providing an education and care service in accordance with the National Law;

2. whether the applicant has the management capability to operate an education and care service in accordance with the Law; and

3. any sanction imposed under s 200 of the Administration Act (s 13(2)).

49. The applicant’s decision not to operate for the past 22 months and the applicant’s statement that it needed child care benefit subsidies to operate indicate that its current financial circumstances would not allow it to meet its obligations in providing an education and care service in accordance with the National Law.

50. As to the applicant’s management capability, there are factors which indicate that this capability is weak, such as:

1. The quantity and repeated nature of the matters identified in the 4 June notice, acknowledged by the applicant;

2. The fact that many go beyond administrative errors and relate to matters of safety;

3. The steps taken to remediate the identified issues included an audit and governance measures. However most of these governance measures involved checking for errors in attendance record keeping and did not address the other substantive identified risks. There was no evidence available as to whether the measures are effective. Given the large numbers of breaches, such evidence is necessary if the Tribunal is to have confidence that the applicant is a fit and proper person to operate the service.

51. I have also had regard to the sanction of cancellation imposed under the Administration Act and which was upheld by the AAT. This sanction was imposed because of the large scale of the breaches and failure to properly educate and supervise staff, in the context of a service involved in caring for children.

52. Ms Choi, a director of the applicant, clearly desires to assist the Korean community and there was evidence of her good character and diligence. The evidence, however, supports a finding that the applicant’s knowledge and understanding of the responsibilities of an approved provider is inadequate and the applicant has not acted in accordance with those responsibilities.

53. While there is no evidence to suggest that Ms Choi individually is not of good character, the available evidence indicates that she and the applicant lack the knowledge and ability to operate the service in compliance with the National Law and therefore are not fit and proper within the meaning of the National Law.

Whether cancellation is the correct and preferable decision

54. The applicant suggested that conditions would be a more appropriate sanction than cancellation. Given the history of the matter, I am not satisfied that conditions would be effective. In addition, in my view any conditions would require extensive oversight and would be unduly onerous for the respondent to monitor.

55. I am also mindful of the objective of the national education and care services quality framework under the National Law to ensure the safety, health and wellbeing of children attending education and care services and the guiding principle that the rights and interests of children are paramount.

56. Given my findings, I am satisfied that the correct and preferable decision is to confirm the Regulatory Authority’s decision to cancel the approval.

Order

1. The decision of the Regulatory Authority cancelling the applicant’s provider approval is confirmed.

**********

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 08 April 2020