Simpson Networks v Secretary, Department of Education and Training
[2019] FCCA 804
•29 March 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SIMPSON NETWORKS v SECRETARY, DEPARTMENT OF EDUCATION AND TRAINING | [2019] FCCA 804 |
| Catchwords: ADMINISTRATIVE LAW – Decision that no child care benefit fee reduction payments were applicable in respect of attendance reports submitted by applicant – failure of decision maker to take into account relevant considerations – decision unreasonable – decision quashed. |
| Legislation: Administrative Decisions (Judicial Review) Act 1977 (Cth), ss.6, 16 |
| Cases cited: Scammell (G.) & Nephew Ltd v Ouston [1941] AC 251 |
| Applicant: | SIMPSON NETWORKS TRADING AS MELBOURNE SCHOOL HOLIDAY CLUB |
| Respondent: | SECRETARY, DEPARTMENT OF EDUCATION AND TRAINING |
| File Number: | BRG 1026 of 2017 |
| Judgment of: | Judge Egan |
| Hearing date: | 22 March 2019 |
| Date of Last Submission: | 22 March 2019 |
| Delivered at: | Brisbane |
| Delivered on: | 29 March 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr S. Keim SC with Mr C. Curtis |
| Solicitors for the Applicant: | Simpson Quinn Lawyers |
| Counsel for the Respondent: | Mr P. Hack QC with Ms K. Slack |
| Solicitors for the Respondent: | Sparke Helmore |
IT IS ORDERED THAT:
The decisions of Ms Blight to:
(a)Determine that no Child Care Benefit fee reduction payments were applicable in respect of the attendance reports submitted by the applicant for the periods 3 July 2017 to 7 July 2017 and from 10 July 2017 to 14 July 2017, as listed in the spreadsheets sent by the applicant to the Department on 30 July 2017;
(b)Determine that, in respect of each of the applicant’s proposed attendance reports, the amount in which fee reduction was applicable was nil;
be quashed.
The matter to which the decision related be referred back to the Secretary for further consideration in the light of the findings and reasons of the Court.
Pursuant to s. 79(3) of the Federal Circuit Court of Australia Act 1999 (Cth) and r. 21.02(2)(c) of the Federal Circuit Court Rules 2001 (Cth), the respondent pay the applicant’s costs of and incidental to the application to be taxed on a party and party basis under Part 40 of the Federal Court Rules2011 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 1026 of 2017
| SIMPSON NETWORKS TRADING AS MELBOURNE SCHOOL HOLIDAY CLUB |
Applicant
And
| SECRETARY, DEPARTMENT OF EDUCATION AND TRAINING |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicant is a company which provided child care services. It was an approved child care service provider. [1]
[1] S 3 of A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
The amended application filed on behalf of the applicant seeks orders pursuant to the provisions of s.16 (1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (‘ADJR Act’) for the setting aside of a decision made by the Secretary, Department of Education and Training on 14 August 2017 (as contained in a letter from the department to the applicant dated 15 August 2017). The reasons for such decision appear as annexure TB-16 to the affidavit of Tanya Blight filed on 14 November 2018. [2]
[2] Page 1679 of Annexure TB-16 to Blight Affidavit.
By that decision, Ms Blight calculated a nil amount and a zero rate of Child Care Benefit (‘CCB’) fee reduction in respect of attendance reports submitted by the applicant for the care provided by it to at least one hundred and forty six (146) children over the weeks spanning the periods from 3 July 2017 – 7 July 2017 and 10 July 2017 – 14 July 2017. Had it been decided that a fee reduction of a duly assessed amount did apply to the care provided to the subject children, a corresponding monetary benefit would have flowed to the applicant.
A consideration of the facts of the case can only be made after an examination of the legislative framework within which fee reduction for such care is provided for.
Legislative Framework
Under Division 4 of Part 3 of the A New Tax System (Family Assistance) Act 1999 (Cth) (‘Assistance Act’), a CCB is payable. Section 41 of the Assistance Act makes provision for a person’s eligibility to receive the benefit of CCB and is as follows:
“Division 4—Eligibility for child care benefit
41 Overview of Division
(1) This Division deals with eligibility for child care benefit. Before a person may be determined under Division 4 of Part 3 of the Family Assistance Administration Act to be entitled to be paid child care benefit, the person must first be eligible for it.
Eligibility of individual for child care benefit
(2) An individual may be eligible for child care benefit:
(a) by fee reduction for care provided by an approved child care service (see section 43, Subdivision A); or
(b) for a past period for care provided by an approved child care service (see section 44, Subdivision B); or
(c) for a past period for care provided by a registered carer (see section 45, Subdivision C); or
(d) by single payment/in substitution because of the death of another individual (see section 46, Subdivision D).
Before an individual can be eligible under section 43, the individual must be conditionally eligible under section 42.
Eligibility of an approved child care service for child care benefit
(3) An approved child care service may be eligible for child care benefit by fee reduction for care provided by the service to a child at risk (see section 47, Subdivision E).”
The matter before the Court involves a consideration of the circumstances in which an individual may be eligible for CCB under s.41(2)(a) of the Assistance Act, by fee reduction, in respect of care provided to children by the applicant. It also involves a consideration of amounts able to be claimed by the applicant in respect of the provision of such child care.
The children who had care provided to them were the subject of care arrangements agreed to between either their parents, their carers, or their grandparents of the one part, and the applicant of the other part. Relevantly, two types of care claims for payment were submitted by the applicant to the respondent. The first was a claim for eligibility in respect of children at risk (referred to as Special Child Care Benefit or ‘SCCB’) under s.47 of the Assistance Act which is as follows:
“47 When an approved child care service is eligible for child care benefit by fee reduction for care provided to a child at risk
(1) An approved child care service is eligible for child care benefit by fee reduction for a session of care provided by the service to a child if:
(a) at the time the care is provided, the service believes the child is at risk of serious abuse or neglect; and
(b) the care is provided in Australia; and
(c) the child meets the immunisation requirements set out in section 6.
Section subject to Subdivisions F and G
(2) This section is subject to Subdivisions F and G (which deal with limits on eligibility).”
The second was a claim for eligibility in respect of children in the care of grandparents (referred to as Special Grandparent Child Care Benefit or ‘GCCB’) under s.50S of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (‘Administration Act’) which is as follows:
“50S Eligibility for special grandparent rate
(1) An individual is eligible for the special grandparent rate for a child if:
(a) the individual, or the individual’s partner, is receiving:
(i) a social security pension; or
(ii) a social security benefit; or
(iii) a service pension; or
(iv) an income support supplement under Part IIIA of the Veterans’ Entitlements Act 1986; and
(b) the individual, or the individual’s partner, is the grandparent or great‑grandparent of the child; and
(c) the individual, or the individual’s partner, is the principal carer of the child.
(2) For the purposes of subsection (1), a person is the principal carer of another person (the child) if the person:
(a) is the sole or major provider of ongoing daily care for the child; and
(b) has substantial autonomy for the day‑to‑day decisions about the child’s care, welfare and development.
(3) An individual is also eligible for the special grandparent rate for a child if the individual, or the individual’s partner, is eligible under subsection (1) for the special grandparent rate for another child.”
Section 43 of the Assistance Act makes provision for when an individual is eligible for CCB by fee reduction for care provided by an approved child care service, and is as follows:
“43 When an individual is eligible for child care benefit by fee reduction for care provided by an approved child care service
(1) An individual is eligible for child care benefit by fee reduction for a session of care provided by an approved child care service to a child if:
(a) when the session of care is provided, a determination is in force under Part 3 of the Family Assistance Administration Act with the effect that the individual is conditionally eligible for child care benefit by fee reduction in respect of the child; and
(b) the care is provided in Australia; and
(ba) the care is not provided as part of the compulsory education program in the State or Territory where the care is provided; and
(c) the individual, or the individual’s partner, has incurred a liability to pay for the session (whether or not the liability has been discharged).
Section subject to Subdivisions F and G
(2) This section is subject to Subdivisions F and G (which deal with limits on eligibility).”
Section 9(1) of the Assistance Act obliges the Minister, by legislative instrument, to determine what constitutes a ‘session of care’ for the purposes of the Assistance Act.
On 12 September 2016 the relevant Minister made the Child Care Benefit (Session of Care) Determination 2016 (Cth) (‘the Determination’), which by s. 6 provided as follows:
“Part 2 Sessions of Care
6 What constitutes a session of care
(1) Subject to section 11, for the purposes of the Act, a session of care is the minimum period of time in respect of which an approved child care service imposes a liability on an individual by charging a fee for providing child care.
(2) To avoid doubt, a genuine legal liability must arise in respect of the fee referred to in subsection (1) under an arrangement which requires an individual to pay the fee irrespective of any payment made by the Secretary under the family assistance law to discharge some or all of that liability.
(3) A session of care may start on one day and end on the next day, however, a session of care must not exceed 12 hours.”
It is of note that s. 6 of the Determination relevantly provided that a session of care must not exceed 12 hours.
The rate of CCB payable was determined under Part 4 of the Assistance Act. A higher rate of benefit was payable for SCCB (s. 76 of Assistance Act) and GCCB (s. 82A of Assistance Act) as opposed to the rate which applied to children who were not at risk or not living with their grandparents.
Section 71 of the Assistance Act imposed weekly limits upon child care benefits payable in the event of there being eligibility under s. 43 of the Assistance Act, and s. 72 of the Assistance Act also imposed similar limitations where a person was deemed conditionally eligible for care provided by an approved child care service.
The Administration Act dealt with the practical aspects of claiming, calculating and paying CCB. Section 48 of that Act relevantly provides as follows:
“48 Overview of process if individual is conditionally eligible for child care benefit by fee reduction
(1) An approved child care service is obliged to notify the Secretary if an individual enrols a child for care by the service.
(2) Once that enrolment is confirmed by the Secretary, the service is obliged to give weekly reports to the Secretary about the care provided to the child.
(3) If a report is given, and a determination of conditional eligibility under section 50F is in force in respect of an individual and a child with the effect that the individual is conditionally eligible for child care benefit by fee reduction for care provided by the approved child care service to the child in a week, the Secretary will calculate the amount by which the fees charged by the service for the care are to be reduced.
(4) The amount by which the fees are to be reduced is referable to the amount of child care benefit that would be paid in respect of the sessions if entitlement to an amount of child care benefit was determined under section 51B in respect of the income year in which the week falls. The amount of fee reduction is calculated by the Secretary using the provisions of the Family Assistance Act.
(5) The service must pass on to the individual the amount of the fee reduction calculated by the Secretary. If the service has already reduced the amount of fees charged to the individual for care provided to the child in anticipation of the calculation by the Secretary, the service is taken to have passed on a fee reduction equal to the amount by which the fees have already been reduced.
(6) When the determination of entitlement is made, if the amount of the entitlement is greater than the amount of the fee reductions already received by the individual in respect of the sessions in the income year, the amount of the entitlement consists of the amount of the difference together with the amount of fee reductions received by the individual.
(7) When the determination of entitlement is made, if the amount of the entitlement is less than the amount of the fee reductions already received by the individual in respect of the sessions in the income year, the amount of the entitlement is the amount of the fee reductions less the amount of the difference.
(8) Payments in respect of fee reduction are made to the service by the Secretary to enable the service to pass on to the individual the amount of fee reductions as calculated (see Division 2 of Part 8A).”
By s. 219A (1) of the Administration Act, an approved service must notify the Secretary of the enrolment of a child by an individual for care by the service. By s. 219A (2), a child is enrolled by an individual for care by an approved child care service if the individual enters into an arrangement with the service for the provision of care to the child by the service. The Secretary, by s. 219AE, must provide confirmation to the approved child care service of the receipt of a notice given under s. 219A. It is not in issue in this case that the subject 146 children were “enrolled” pursuant to the abovementioned provisions.
Subsequent to the obligations last referred to having been complied with, the approved child care service was required, pursuant to the provisions of s. 219N of the Administration Act, to provide weekly reports recording sessions of care provided to an enrolled child whose enrolment had been duly noted to the Secretary, and where notice of such enrolment had been confirmed by the Secretary. That section required the provision of information to the Secretary which was relevant to a determination by the Secretary as to whether a fee reduction was applicable or not, and if so, the rate and amount of any such fee reduction. Section 219N provides as follows:
“219N Obligation to give reports to Secretary
(1) For each week in which a session of care is provided by an approved child care service to a child in relation to whom an enrolment has been:
(a) notified to the Secretary in accordance with sections 219A and 219AB; and
(b) confirmed by the Secretary in accordance with section 219AE;
the service must give the Secretary a report in accordance with this section.
(2) For each week in which a session of care is provided by an approved child care service to a child in relation to whom an enrolment has been:
(a) notified to the Secretary in accordance with sections 219AA and 219AB; and
(b) confirmed by the Secretary in accordance with section 219AE;
the service must give the Secretary a report in accordance with this section.
(3) The report must be made in the form, and in the manner or way, approved by the Secretary.
(4) The report must include:
(a) any information required by the Secretary that is relevant to:
(i) determining whether a fee reduction is applicable in relation to the care and, if so, the rate and amount of that fee reduction; or
(ii) making a determination of entitlement, or no entitlement, in relation to the care under Division 4 of Part 3; and
(aa) any information required by the Secretary that is relevant to:
(i) determining whether an individual is eligible to receive child care rebate; or
(ii) determining the amount in which child care rebate is applicable in respect of an individual and a child for care provided for the child by an approved child care service in a week, a quarter or an income year; or
(iii) making a determination of entitlement in relation to the care under Division 4AA of Part 3; or
(iv) determining any other matter in relation to the payment of child care rebate to an individual; and
(b) any other information required by the Secretary.
(5) Subject to subsection (5AA), the report must be given no later than:
(a) if the week in which the session of care was provided fell wholly before the day on which the enrolment was confirmed—the period of 7 days after the day on which the enrolment was confirmed; and
(b) otherwise—the end of the second week immediately following the week.
(5AA) If:
(a) a payment is made to the service under section 219RD in relation to a period (the initial period) notified to the service under subsection 219RD(4); and
(b) the payment is made because of the service’s failure to give a report under subsection (1) or (2) of this section within the period applicable under subsection (5) of this section;
the report must be given no later than:
(c) 7 days after the end of the initial period; or
(d) if one or more other periods (that are consecutive with the initial period) are notified to the service under subsection 219RD(4)—7 days after the end of the last of those periods.”
By s. 50Z of the Administration Act, the rate and amount of fee reductions was to be calculated by the Secretary. That section provides as follows:
“50Z Calculating the rate and amount of fee reductions—individual conditionally eligible
(1) If:
(a) a determination of conditional eligibility for child care benefit by fee reduction under section 50F is in force in respect of an individual (the claimant) and a child for a session or sessions of care provided by the service in a week; and
(b) the service gives a report under subsection 219N(1) in respect of the individual and the child in respect of the week;
the Secretary must calculate the rate at which, and the amount in which, the Secretary considers fee reduction is applicable in respect of the session or sessions of care provided in the week.
Note: The rate may be a zero rate and the amount a nil amount (see section 4A).
(2) In calculating the rate and amount, the Secretary must take into account all of the following decisions:
(a) determinations made under this Act and under the Family Assistance Act by the Secretary in respect of the claimant and the child;
(b) certificates given by the service in respect of the claimant and the child that relate to a weekly limit of hours under subsection 54(10), 55(6) or 56(3) of the Family Assistance Act;
(c) certificates given by the service setting a rate of fee reductions under subsection 76(1) of the Family Assistance Act in respect of the claimant and the child.
(3) The Secretary must notify the approved child care service of the rate and amount calculated.
(4) The notice must be given in the form, and in the manner or way, approved by the Secretary.
(5) Without limiting subsection (4), the Secretary may approve notification of the rate and amount by making the information available to the approved child care service using an electronic interface. In that case, the approved child care service is taken to have been given the notice on the day on which the information is made available.”
It was conceded by the respondent that the provisions of s. 50Z (1)(a) and (b) had been fulfilled in this case.
Sections 219BB and 219BC of the Administration Act impose an obligation upon the approved child care service not to charge more than what was said to be a “usual fee” for services provided.
Sections 219B and 219BA of the Administration Act relate to passing on obligations of service providers to claimants (namely parents/carers, guardians or grandparents) or to themselves in respect of fee reductions where individual claimants were conditionally eligible for CCB, or where an approved child care service was eligible under s. 47 of the Assistance Act for CCB by fee reduction.
The Facts
The Department conducted a review of the applicant’s compliance with its statutory obligations as an approved child care service provider between May 2016 and August 2016. Such review was said to have revealed non-compliance on the part of the applicant. [3]
[3] See paragraph [5] of Blight Affidavit filed on 14 November 2018 (‘Blight Affidavit’).
After a further compliance audit was conducted in March 2017, on 30 March 2017 a notice of intention to cancel the applicant’s approval as a child care service provider was sent to the applicant. [4]
[4] Annexure TB – 3 to Blight Affidavit.
The Department received submissions from the applicant in response to its receipt of the notice of intention to cancel. On 6 July 2017, the Department cancelled the approval of the applicant, such approval to take effect as and from 15 July 2017. [5]
[5] Annexure TB – 5 to Blight Affidavit.
On 7 July 2017, Ms Tanya Blight asked that outstanding s.219N reports be provided to the Department by the applicant for manual assessment. [6]
[6] Annexure TB – 6 to Blight Affidavit.
By email dated 30 July 2017, the applicant provided s. 219N reports in the correct format originally requested by Ms Blight. [7]
[7] Annexure TB – 9 and TB – 10 to Blight Affidavit.
On 3 August 2017, the applicant requested external review of the cancellation decision dated 6 July 2017.
On 14 August 2017, Ms Blight was provided with a minute of one Ivan Murray, a senior compliance officer in the Victorian State Office of the Department of Education and Training. At page 3 of such minute, [8] Mr Murray made a recommendation to Ms Blight, in respect of the applicant, under the heading “Recommendation 1”, as follows:
“Recommendation 1
I recommend that you exercise your powers under section 50Z of the Administration Act and determine a nil rate at which fee reduction is applicable in respect of the sessions of care claimed to have occurred for the periods from 3 July 2017 to 7 July 2017 and from 10 July 2017 to 14 July 2017, and that a nil amount is calculated on these claims.
Agreed/Not Agreed”
[8] Page 1647 of Annexure TB-14 to Blight Affidavit
Attached to that minute of 14 August 2017 was the notice of cancellation of the applicant’s approval as a child care service provider dated 6 July 2017 signed by one Jacqueline –Su Cockfield, [9] together with an Attachment A, being the reasons for the approval cancellation decision. [10] Relevantly, those reasons, at [47] and [48], [11] make a comparison of GCCB and SCCB fees charged by the applicant with those fees charged by all of the other 483 approved Victorian Outside School Hours Care (OSHC) Vacation Care services. Paragraphs [47] and [48] are as follows:
“47. As set out in the notice, I considered a number of factors in reaching my decision to consider cancelling the CCB approval of the service. One of those factors was the comparison of fees reported by all 483 CCB approved Victorian Outside School Hours Care (OSHC) Vacation Care Services. I believe this to be a reasonable comparison.
48. The results of this comparative analysis, as outlined in Table 1 and Table 2 below, show that the service’s reported fees are markedly different to those charged by all other Vacation Care services. It also demonstrates that no other service charges fees where it could be said there was not a genuine liability on the part of the eligible individuals to discharge some or all of those fees.
[9] Pages 1649 – 1650 of Annexure TB-14 to Blight Affidavit
[10] Pages 1651 – 1667 of Annexure TB – 14 to Blight Affidavit.
[11] Page 1659 of Annexure TB-14 to the Blight Affidavit.
Table 1: Comparable GCCB fees charged by all Vacation Care services in Victoria during the December 2016 and January 2017 period
Melbourne School Holiday Club
All other Vacation Care in Victoria (Lowest)
All other Vacation Care in Victoria (Highest)
Maximum Weekly Fee
$5107.00
$60.00
$570.00
Average Weekly Fee
$4588.93
$60.00
$570.00
Maximum Hourly Rate
$102.98
$4.00
$15.50
Average Hourly Rate
$100.87
$3.84
$13.41
Table 2: Comparable SCCB fees charged by all Vacation Care services in Victoria during the December 2016 and January 2017 period
Melbourne School Holiday Club
All other Vacation Care in Victoria (Lowest)
All other Vacation Care in Victoria (Highest)
Maximum Weekly Fee
$5107.00
$82.24
$450.00
Average Weekly Fee
$4614.12
$79.74
$333.07
Maximum Hourly Rate
$115.50
$4.60
$16.17
Average Hourly Rate
$100.63
$3.99
$11.67
…”
On 14 August 2017, Ms Blight, as a delegate of the Secretary, determined that no child care benefit fee reduction payments were applicable in respect of the s. 219N reports submitted by the applicant for the periods from 3 July 2017 to 7 July 2017 and from 10 July 2017 to 14 July 2017. Ms Blight decided that the fees submitted by the applicant did not meet the requirements of s. 219BB and s. 219BC of the Administration Act, as well as s. 6 of the Determination. Ms Blight’s written record of decision is attached to the amended application filed on behalf of the applicant, and also appears as part of TB-14. [12]
[12] Page 1668 of Annexure TB-14 to Blight Affidavit.
Ms Blight set out the reasons for her decision pursuant to a request for such reasons made on behalf of the applicant by its legal representatives on 22 August 2017. [13]
[13] Annexure TB – 16 to the Blight Affidavit.
In paragraph [4] of her reasons, Ms Blight said as follows:
“I was particularly concerned with whether there was any underlying fee liability incurred in respect of the sessions of care in the July period, and whether any “sessions of care” occurred at all, as defined under the family assistance law.”
Ms Blight did not there give reasons as to what gave rise to her being concerned as to whether there was any underlying fee liability, nor did she given reasons as to why she was concerned as to whether any sessions of care had occurred at all.
In paragraph [6] of her reasons, Ms Blight said as follows:
“The fees reported by the service for the July period appeared to be deliberately inflated simply to attract high rates of SCCB and GCCB and I did not consider them to reflect an underlying and genuine fee liability incurred by any individual. Because I did not consider that the relevant individuals incurred any fee liability in respect of care, I considered that no amount was payable in respect of the reported sessions of care.”
Ms Blight claimed that the fees charged had been deliberately inflated so as to attract high rates of SCCB and GCCB, considering such claims as not reflecting an underlying and genuine fee liability. She then went on to determine that because of that, the parents/carers/grandparents had not incurred “any fee liability in respect of care”, and that no amount was payable by them in respect of the claimed sessions of care. Ms Blight seems also to have mistaken reference in the Determination to genuine legal liability with the words genuine fee liability, those being the words used by her in the above paragraph of her reasons.
In paragraph [7] of her reasons, Ms Blight said as follows:
“I also considered that no “sessions of care” were provided, as defined under the family assistance law. A session of care is defined in section 6 of the Child Care Benefit (Session of Care) Determination 2016, by reference to the need for a “genuine legal liability” to arise in respect of the fee, under an arrangement which requires an individual to pay a fee irrespective of any payment made by the Secretary under the family assistance law to discharge some or all of that liability. My view was that, based on the information available to me, no individual had actually incurred a liability to pay a fee of $98.80 per hour, especially given that hourly fees at that rate could add up to extraordinarily large fee liability across a week for which I considered that no one would agree to pay.”
Documentation Relating to Provision of Care
Exhibit 1 in the proceedings was a copy of the affidavit of James Robert Simpson filed on 6 August 2018 on behalf of the applicant.
By paragraphs 3 – 8 inclusive and 10 of affidavit of Mr Simpson, Mr Simpson sets out the manner in which children were enrolled for care by the applicant.
Annexure JRS-1 to the affidavit of Mr Simpson is what was referred to as a ‘sample enrolment package’ used by the applicant for the purpose of enrolling a child for care. Relevant features to that package are as follows:
a)The front page of the Annexure (brochure/package) document is entitled ‘Melbourne School Holiday Club’ – ‘Fee Breakdown’ – ‘Where do the Fees Go?’
b)The first two sentences on the page numbered 7 are as follows:
‘Our service is unique in so many ways. Whilst we are open to all children we specialise in children who are identified as at risk or vulnerable within their home environment. …’
c)At page 12 of the document under the heading ‘Opening Hours’, there appears the following – ‘Melbourne School Holiday Club operates every school holidays from 8am until 6pm. Melbourne Camp Club offers care from 6pm until 8am at no charge.’
d)At page 15 of the document under the heading ‘Child Care Benefit’ there appears the following:
“Child Care Benefit*
Who can get Child Care Benefit?
You can get Child Care Benefit if;
- you are a parent, foster parent or grandparent with a child in your care who is attending child care services approved by, or registered with, the Government.
- you have a child in your care who meets the immunisation requirements (or have an exemption)
- you or your partner (if you have one) meet residency requirements (or have an exemption)
- your child attends approved or registered care and you have the liability to pay for the cost of your child care
- you meet the income test
Please note: If your employer contributes towards some or all of your child care costs through salary sacrificing or salary packaging, you will need to determine who has the liability for the costs. The issue of liability depends on who is obligated to pay for the child care fees.
How can I get Child Care Benefit?
You can claim Child Care Benefit by completing and lodging a claim form at any Family
Assistance Office, located at Centre link Customer Service Centres or by using online services. Full fee is $988 per day Note: You need to claim for Child Care Benefit even if you are assessed at the zero rate so that you can also receive your Child Care Rebate.
If you receive Family Tax Benefit as a fortnightly payment, you can lodge a claim for Child
Care Benefit by calling 13 6150.
e)At page 27 of the document, reference is made to CCB assistance which is available to families in respect of child care. The document at that page provided as follows:
“What assistance does the Australian Government give me for the costs of child care?
Fact sheet 1
The Australian Government is committed to ensuring that Australian families are able to access affordable, flexible and high quality child care. To help you with the cost of your child care, the Government provides the following assistance.
Child Care Benefit
Child Care Benefit (CCB) is an income-tested payment which reduces the cost of your total child care fees. It is available to you if you are a parent, foster parent or grandparent with a child in your care who is attending child care approved for the purposes of CCB by, or registered with, the Government. There are certain eligibility requirements you must meet to get CCB.”
f)At page 28 of the document, reference is made to GCCB and SCCB as follows:
“Grandparent Child Care Benefit
Grandparent Child Care Benefit (GCCB) helps grandparents who are primary carers for their grandchildren and who receive an income support payment. GCCB pays the full cost of child care fees for each child in Child Care Benefit approved care for up to 50 hours a week.
Grandparents must meet the CCB eligibility requirements to claim GCCB.
Special Child Care Benefit
Special Child Care Benefit (SCCS) can help where there is a:
- child at risk of serious abuse or neglect, or
- family with an exceptional case of short term financial hardship which has substantially reduced their capacity to pay child care fees.”
g)At pages 31 and 32 of the document, relevant headings are as follows:
What is Child Care Benefit?
Fact sheet 2
Who can get CCB?
What eligibility requirements do I have to meet to get CCB?
Is there an exception to the eligibility requirements?
How much CCB can I get?
h)At page 33 of the document, the following heading and table appears:
What are the maximum CCB rates for the 2016-17 financial year?
Table 1: Maximum CCB Rates for 2016-17 financial year
Number of non-school children in CCB approved care
Maximum amount of CCB for 50 hours of CCB approved care for non-school children, including the multiple child loading
2016-17
Maximum amount of CCB per hour per non-school child including the multiple child loading
2016-17
One
$212.00
$4.24
Two
$443.03
$4.43
Three
$691.31
$4.60
Each Additional Child
$230.43
$4.60
Note: The multiple child percentage is a higher rate of CCB paid to families with two or more children in CCB approved child care. The maximum rate information for two, three or more children in the table above has the multiple child percentage already applied. The formula to calculate the higher rate of CCB for more than one child in CCB approved care includes the standard hourly rate and the family’s CCB percentage as advised by the Department of Human Services. The standard hourly rate for 2016-17 is $4.24. Depending on your circumstances (e.g. your income, what type of child care service you use and the number of hours) you may be entitled to a different rate than stated. You should contact the Department of Human Services for a more accurate assessment.”
i)At pages 49 – 52 inclusive of the document, there appear the first 4 pages of a document entitled ‘Enrolment Form.’ Those pages seek necessary details for enrolment, including those relating to name, address, contact details, medical information, health and immunisation details and emergency contact details and consents. Provision is made for the signing of such document by a parent/guardian by way of acknowledgement on page 4 of the form. Page 5 of the enrolment form is entitled ‘Parent/Guardian Authorisation Form.’ It made provision for the naming of the person to be held responsible for the weekly payment of fees. Provision was made at the bottom of such page for the parent/guardian to sign the page by way of acknowledgement.
j)At page 54 of the document, provision is made for the signing of that page by a parent/guardian of an acknowledgement that they had received the parent pack, and that the pack contained information “relating to enrolment into the service, fees and other relevant information pertaining to the Child Care Benefit and Special Child Care Benefit. I have read and understood all the information supplied in the pack. I am aware that MSHC are claiming CCB and or SCCB on my behalf and have read and understand what the fee is.”
There is no evidence that copies of the sample enrolment package were not duly signed by any of the parents/carers/grandparents of the 146 children the subject of the claims made by the applicant.
On 30 July 2017, the applicant submitted its s.219N reports [14] in respect of the 146 children the subject of its claims.
[14] Annexure TB-9 to Blight Affidavit.
The documents for the period from 3 July 2017 – 7 July 2017 and for the period from 10 July – 14 July 2017 are annexed to the affidavit of Ms Blight. [15]
[15] Annexure TB-10 to Blight Affidavit.
Analysis
Ms Blight acknowledged, in [3] of her statement of reasons, that a delegate of the Secretary had accepted applications under s. 81(5) of the Assistance Act for sessions of care provided to the 146 children, by the applicant, on the basis that the delegate was satisfied that each child was at risk of serious abuse or neglect.
It is clear from Ms Blight’s reasons that she considered that the applicant’s claim for daily care of each child during the two periods in question in the amount of $988.00 was so excessive that no ‘genuine fee liability’ could have been incurred by any parent, carer or guardian. She found, as a consequence, that no ‘sessions of care’ had been provided. She bound the two findings together based upon her conclusion that no genuine fee liability had arisen. At the hearing it was not in issue that the sessions of care as claimed in the s.219N reports of the applicant had been provided.
As stated above, the words ‘genuine fee liability’ relied upon by Ms Blight ought to be seen as a reference to the words ‘genuine legal liability’ as they appear in s.6(2) of the Determination made on 1 July 2017. The words ‘genuine’ and ‘legal’ import no more than the requirement that, at law, an enforceable liability arises. If liability is found, it is to be inferred that such liability was a genuine liability based on sound legal principles.
Nor do those words materially affect the construction of s.43(1)(c) of the Assistance Act, whereby eligibility for CCB by fee reduction is conditional upon an individual…having incurred liability to pay for the session of care.
Section 43 does not stipulate by what means ‘a liability to pay for the session’ might arise. It does not require any liability to be based upon the provisions of a written contract. The contract giving rise to the liability might be oral. It may be that a term of any such oral contract as to payment might be implied based upon what is a reasonable fee, or otherwise, what might be determined to be ‘the going rate.’ The contract might make no reference to the time at which payment for care is to be made, in which case a term might be implied that payment is to be made within a reasonable time after the rendering of the service. There would still be, notwithstanding such omissions, a liability to pay for such care as was provided.
The affidavit of Mr Simpson was unchallenged concerning the way in which children were enrolled for care by the applicant, and as to what the applicant’s full CCB daily fee was, namely the sum of $988.00. It was silent, however, as to what fees were payable to the applicant in respect of its care of children who fell under either the SCCB or GCCB categories, into which the subject 146 children fell.
Insofar as the applicant’s enrolment package (Annexure JRS-1 to Exhibit 1) failed to set out what either the daily fee or session fee was for SCCB or GCCB care, such written contractual document was deficient. No other term of the contract provided the means of ascertaining what such daily fee or session fee ought to be. The contract fell into the category of contract described by Lord Wright in Scammell (G.) & Nephew Ltd v Ouston where, as in this case, the language employed by the parties was, in respect of the fee to be paid for SCCB or GCCB care, ‘so obscure and so incapable of any definite or precise meaning that the court is unable to attribute to the parties any particular contractual intention.’ [16]
[16] [1941] AC 251 at 268 which statement was approved by the High Court in Upper Hunter
County District Council v Australian Chilling and Freezing Co. Ltd. [1967] 118 CLR 429 at
437.
The subject contract was illusory as to an essential term. As Lord Wright also said at 268 – 269:
”There are many cases in the books of what are called illusory contracts, that is, where the parties may have thought they were making a contract but failed to arrive at a definite bargain. It is a necessary requirement that an agreement in order to be binding must be sufficiently definite to enable the Court to give it a practical meaning. Its terms must be so definite, or capable of being made definite without further agreement of the parties, that the promises and performances to be rendered by each party are reasonably certain.”
Alternatively, the agreement was so uncertain as to an essential term – namely the hourly or daily rate for the provision of GCCB or SCCB care - that there could be no recovery by the applicant against any parent or guardian for any sum certain, under the contract, for the provision of such care. [17] The written contract was void for uncertainty and unenforceable for that reason. No construction of the contract could be adopted which identified what the parties intended to be the agreed rate of GCCB or SCCB care, particularly in circumstances where such care was acknowledged by the parties as being different to, and charged at a different rate to, CCB care.
[17] Meehan v Jones [1982] 149 CLR 571 at 589 per Mason J.
In circumstances where services have been provided pursuant to the terms of an unenforceable written agreement, the party providing the services is nonetheless entitled to bring a claim for recovery of a reasonable sum representing the value of the services provided. A cause of action based on quantum meruit is one such claim. It is based upon the principle of unjust enrichment. As was said by Mason and Wilson JJ in Pavey & Matthews Pty Ltd v Paul: [18]
[18] [1986] 162 CLR 221 at 227 – 228.
“Deane J., whose reasons for judgment we have had the advantage of reading, has concluded that an action on a quantum meruit, such as that brought by the appellant, rests, not an implied contract, but on a claim to restitution or one based on unjust enrichment, arising from the respondent’s acceptance of the benefits accruing to the respondent from the appellant’s performance of the unenforceable oral contract.
…
Once the true basis of the action on a quantum meruit is established, namely the execution of work for which the unenforceable contract provided, and its acceptance by the defendant, it is difficult to regard the action as one by which the plaintiff seeks to enforce the oral contract. True it is that proof of the oral contract may be an indispensable element in the plaintiff’s success but that is in order to show that (a) the benefits were not intended as a gift, and (b) that the defendant has not rendered the promised exchange value. Fuller and Perdue, loc. Cit., p. 387 n. 125. The purpose of providing the contract is not to enforce it but to make out another cause of action having a different foundation in law.
If the effect of bringing an action on a quantum meruit was simply to enforce the oral contract in some circumstances only, though not in all the circumstances in which an action on the contract would succeed, it might be persuasively contended that the action on a quantum meruit was an indirect means of enforcing the oral contract. So, if all the plaintiff had to prove was that he had fully executed the contract on his part and that he had not been paid the contract price, there would be some force in the suggestion that the proceeding amounted to an indirect enforcement of the contractual cause of action. However, when success in a quantum meruit depends, not only on the plaintiff proving that he did the work, but also on the defendant’s acceptance of the work without paying the agreed remuneration, it is evident that the court is enforcing against the defendant an obligation that differs in character from the contractual obligation had it been enforceable.”
The refusal by Ms Blight to accept the validity of a $998.00 daily fee as being reasonable, or one giving rise to a genuine legal liability on the part of a parent/carer or guardian to pay such amount for a full daily session of care in respect of each of the subject 146 children, did not mean that any such parent/carer or guardian did not have a residual liability to pay a reasonable fee for the provision of the applicant’s services as rendered.
The applicant’s residual claim, based on quantum meruit principles, constitutes a legal liability to pay for the applicable sessions of care as countenanced by s.43 of the Assistance Act.
That Ms Blight failed to recognise that the applicant had a residual claim for payment, in all of the circumstances, constituted a failure on her part to take into account all relevant considerations. She failed to appreciate that the Secretary’s mandatory obligation to exercise the power under s.50Z of the Administration Act, to calculate the rate at which, and the amount in which, the Secretary considered fee reduction was applicable, could have been undertaken having regard to what was the ‘going rate’ for fees charged by other child care service providers in like circumstances. She had that information before her. [19] She did not need to agree that the amount claimed by the applicant was reasonable for the purpose of the Secretary’s calculation of the amount of fee reduction applicable for the care which was admitted to have been provided to the subject 146 children. That was a relevant matter for her consideration.
[19] Paragraphs [47] and [48] of the Reasons for the cancellation of approval – page 1659 of TB-14
The test for determining whether a matter was one which was required by a decision maker to be taken into account and considered was discussed by Mason J in Minister for Aboriginal Affairs v Peko-Wallsend [20] where it was said at 39 – 41:
[20] (1986) 162 CLR 24 at 39
“(1) Failure to take into account a relevant consideration
The failure of a decision-maker to take into account a relevant consideration in the making of an administrative decision is one instance of an abuse of discretion entitling a party with sufficient standing to seek judicial review of ultra vires administrative action. That ground now appears in s. 5(2)(b) of the ADJR Act which, in this regard, is substantially declaratory of the common law. Together with the related ground of taking into account irrelevant considerations, it has been discussed in a number of decided cases, which have established the following propositions:
(a) The ground of failure to take into account a relevant consideration can only be made out if a decision-maker fails to take into account a consideration which he is bound to take into account in making that decision (Sean Investments Pty Ltd v. MacKellar [1981] FCA 191; (1981) 38 ALR 363, at p 375; CREEDNZ Inc. v. Governor-General (1981) 1 NZLR 172, at pp 183, 196-197; Ashby v. Minister of Immigration (1981) 1 NZLR 222, at pp 225, 230, 232-233). The statement of Lord Greene M.R. in Associated Provincial Picture Houses Ltd v. Wednesbury Corporation [1947] EWCA Civ 1; (1948) 1 KB 223, at p 228, that a decision-maker must take into account those matters which he "ought to have regard to" should not be understood in any different sense in view of his Lordship's statement on the following page that a person entrusted with a discretion "must call his own attention to the matters which he is bound to consider".
(b) What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If the statute expressly states the considerations to be taken into account, it will often be necessary for the court to decide whether those enumerated factors are exhaustive or merely inclusive. If the relevant factors - and in this context I use this expression to refer to the factors which the decision-maker is bound to consider - are not expressly stated, they must be determined by implication from the subject matter, scope and purpose of the Act. In the context of judicial review on the ground of taking into account irrelevant considerations, this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except in so far as there may be found in the subject matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard (see Reg. v. Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd [1979] HCA 62; (1979) 144 CLR 45, at pp 49-50, adopting the earlier formulations of Dixon J. in Swan Hill Corporation v. Bradbury (1937) 56 CLR 746, at pp 757-758, and Water Conservation and Irrigation Commission (N.S.W.) v. Browning (1947) 74 CLR 492, at p 505). By analogy, where the ground of review is that a relevant consideration has not been taken into account and the discretion is unconfined by the terms of the statute, the court will not find that the decision-maker is bound to take a particular matter into account unless an implication that he is bound to do so is to be found in the subject matter, scope and purpose of the Act.
(c) Not every consideration that a decision-maker is bound to take into account but fails to take into account will justify the court setting aside the impugned decision and ordering that the discretion be re-exercised according to law. A factor might be so insignificant that the failure to take it into account could not have materially affected the decision (see, for example, the various expressions in Baldwin & Francis Ltd v. Patents Appeal Tribunal (1959) AC 663, at p 693; Hanks v. Minister of Housing and Local Government (1963) 1 QB 999, at p 1020; Reg. v. Chief Registrar of Friendly Societies; Ex parte New Cross Building Society (1984) QB 227, at p 260). A similar principle has been enunciated in cases where regard has been had to irrelevant considerations in the making of an administrative decision (Reg. v. Bishop of London (1889) 24 QBD 213, at pp 226-227; Reg. v. Rochdale Metropolitan Borough Council; Ex parte Cromer Ring Mill Ltd (1982) 3 All ER 761, at pp 769-770).
(d) The limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising a discretion which the legislature has vested in the administrator. Its role is to set limits on the exercise of that discretion, and a decision made within those boundaries cannot be impugned (Wednesbury Corporation, at p.228).”
It was also unreasonable, and unfair, for her to calculate a nil amount and zero rate of CCB fee reduction in such circumstances. To do so would plainly result in the applicant receiving no benefit for its due provision of child care services. Such unreasonableness went to the core of her decision and constituted jurisdictional error. The decision was legally unreasonable and lacked an evident and intelligible justification, as such respective concepts were considered in Minister for Immigration and Citizenship v Li [21] where it was said:
“[66] This approach does not deny that there is an area within which a decision-maker has a genuinely free discretion. That area resides within the bounds of legal reasonableness134. The courts are conscious of not exceeding their supervisory role by undertaking a review of the merits of an exercise of discretionary power135. Properly applied, a standard of legal reasonableness does not involve substituting a court's view as to how a discretion should be exercised for that of a decision-maker. Accepting that the standard of reasonableness is not applied in this way does not, however, explain how it is to be applied and how it is to be tested.
…
[76] As to the inferences that may be drawn by an appellate court, it was said in House v The King that an appellate court may infer that in some way there has been a failure properly to exercise the discretion "if upon the facts [the result] is unreasonable or plainly unjust". The same reasoning might apply to the review of the exercise of a statutory discretion, where unreasonableness is an inference drawn from the facts and from the matters falling for consideration in the exercise of the statutory power. Even where some reasons have been provided, as is the case here, it may nevertheless not be possible for a court to comprehend how the decision was arrived at. Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification.”
[21] (2013) 249 CLR 332 at [66] and [76].
Remedy and Orders
The applicant has demonstrated jurisdictional error on the part of the respondent.
The parties agreed that the Court has jurisdiction to hear and determine the application before it. The parties also agreed that the Court’s powers were as set out in s.16 of the ADJR Act, by which s.16(1) provides as follows:
“(1) On an application for an order of review in respect of a decision, the Federal Court or the Federal Circuit Court may, in its discretion, make all or any of the following orders:
(a) an order quashing or setting aside the decision, or a part of the decision, with effect from the date of the order or from such earlier or later date as the court specifies;
(b)an order referring the matter to which the decision relates to the person who made the decision for further consideration, subject to such directions as the court thinks fit;
(c) an order declaring the rights of the parties in respect of any matter to which the decision relates;
(d) an order directing any of the parties to do, or to refrain from doing, any act or thing the doing, or the refraining from the doing, of which the court considers necessary to do justice between the parties.”
It is appropriate, in the light of the above reasons, that the decision of Ms Blight to:
a)Determine that no Child Care Benefit fee reduction payments were applicable in respect of the attendance reports submitted by the applicant for the periods 3 July 2017 to 7 July 2017 and from 10 July 2017 to 14 July 2017, as listed in the spreadsheets sent by the applicant to the Department on 30 July 2017;
b)Determine that, in respect of each of the applicant’s proposed attendance reports, the amount in which fee reduction was applicable was nil;
be quashed.
As a consequence of the quashing of the said decision, it is appropriate that it be ordered that the matter to which the decision related be referred back to the Secretary for further consideration in the light of the findings and reasons of the Court.
Costs
Both parties were represented during the course of the hearing by senior and junior counsel. That was a clear recognition of the fact that this was a complex matter involving substantial sums of money.
Pursuant to s.79(3) of the Federal Circuit Court of Australia Act 1999 (Cth), the Court is given a wide discretion as to what costs order ought to be made in a proceeding.
Rule 21.02(2)(c) of the Federal Circuit Court Rules 2001 (Cth) specifically empowers the Court to refer the costs of a proceeding for taxation under Part 40 of the Federal Court Rules 2011 (Cth).
The power to make such a costs order was exercised by His Honour Judge Simpson in Brewer & Anor v Martin & Ors (No.2) [2014] FCCA 1341 at [14] – [17] inclusive.
Senior Counsel for the respondent did not oppose a costs order being made against the respondent. Further submissions were received on behalf of each party on the question of costs.
Notwithstanding that the findings were not on all fours with the submissions made on behalf of the applicant, the findings did reflect the complaints made by the applicant about the respondent’s decision making and associated processes. The applicant succeeded entirely in its application. Those combined reasons justify an assessment of costs in favour of the applicant as assessed under the Federal Court Rules.
This is therefore an appropriate matter, due to its complexity, for costs to be taxed under Part 40 of the Federal Court Rules 2011, unless otherwise agreed, on a party and party basis, and it is so ordered.
I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of Judge Egan
Associate:
Date: 29 March 2019
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