Tiny Town Childcare Centre (Portjazz Pty Ltd) v Secretary, Department of Education

[2023] NSWCATAD 321

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Tiny Town Childcare Centre (Portjazz Pty Ltd) v Secretary, Department of Education [2023] NSWCATAD 321

Hearing dates:

8 November 2023

Date of orders:

8 November 2023

Decision date:

12 December 2023

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

Cole DCJ, Deputy President

Decision:

(1) Pursuant to s 43(3) of the Civil and Administrative Tribunal Act, the decision of the respondent dated 25 October 2023 is stayed until further order on condition that the applicant:

(a) Comply with the Children (Education and Care Services) National Law (NSW) and the Education and Care Services National Regulations (NSW).

(b) Not accept new enrolments of children at the service.

(c) Not provide education and care services to more than 15 children at any point in time from 31 December 2023.

(d) Not conduct any excursions outside the centre premises.

(e) Arrange for a professional cleaner to:

i. Clean the indoor and outdoor environments of the centre premises prior to any further education and care service being provided;

ii. Provide evidence of compliance with condition 4(d)(i) to the NSW Department of Education.

(f) Undertake a comprehensive assessment of the indoor and outdoor areas, furniture and equipment to ensure that it is safe, clean and in good repair and provide evidence to the Department by 5pm on 17 November 2023.

(g) Undertake a review of the staffing arrangements to ensure that the educator child ratios are maintained in accordance with regulation 126(1)(a) of the Regulations and provide evidence to the Department by 5pm on 17 November 2023.

(h) Provide training to the staff on the service’s safe sleep and rest policy, and provide evidence to the Department, by 5pm on 22 November 2023.

(i) Conduct safe sleep and rest audits each month to ensure staff are following the policy, and submit a copy of the audit to the Department at the conclusion of each month.

(j) Ensure all staff have undertaken training in the appropriate management of children’s behaviour by a recognised training organisation and provide evidence to the Department by 5pm on 30 November 2023.

(k) Ensure that Ms De Klerk undertake the Quality Support Program, delivered by Australian Children's Education and Care Quality Authority at the next available opportunity, and provide evidence of enrolment in the program by 30 November 2023.

Catchwords:

ADMINISTRATIVE LAW — Children (Education and Care Services) National Law (NSW) — decision to cancel provider approval by the regulatory authority — stay sought — relevant principles — stay granted on conditions.

Legislation Cited:

Children (Education and Care Services) National Law (NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Education and Care Services National Regulations (2011)

Cases Cited:

Mother’s Choice Family Day Care Pty Ltd v Secretary, Department of Education [2020] NSWCATAD 194

Category:

Procedural rulings

Parties:

Tiny Town Childcare Centre (Portjazz Pty Ltd) (Applicant)
Secretary, Department of Education (Respondent)

Representation:

Solicitors:
Birchgrove Legal (Applicant)
Crown Solicitor (Respondent)

File Number(s):

2023/00351726

Publication restriction:

None

REASONS FOR DECISION

1. Portjazz Pty Ltd (‘Portjazz’) conducts the business of a childcare centre called ‘Tiny Town Childcare Centre’ under the Children (Education and Care Services) National Law (NSW) (‘the National Law’).

2. By letter dated 25 October 2023 to Portjazz a delegate of the Secretary, Department of Education, referred to a show cause notice dated 2 June 2023 which had been given to Portjazz, and informed Portjazz that a decision had been made to cancel its service approval for the Tiny Town Childcare Centre under s 79(1)(a)(i) of the National Law, with effect on 9 November 2023, 14 days after the date of the letter.

3. On 6 November 2023, Portjazz filed in the Tribunal an application for administrative review of the decision to cancel the service approval. On the same day, Portjazz also filed an application for the stay of the decision to cancel the service approval, pending the outcome of the administrative review.

4. The application for a stay was heard on 8 November 2023. The applicant provided an affidavit of Ms De Klerk, the director of Portjazz, sworn on 7 November 2023. The respondent provided a bundle of documents. Both parties provided written submissions and made oral submissions.

5. At the conclusion of the hearing, an order was made staying the decision of 25 October 2023 to cancel Portjazz’s service approval, subject to specified conditions, until further order. This decision sets out the reasons for the making of that order.

The National Law

6. The National Law is part of the national scheme for the regulation of the education and care of children.

7. The objectives and guiding principles of the National Law are set out in s 3 as follows:

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.

8. The National Law provides, in s 4:

4   How functions to be exercised

An entity that has functions under this Law is to exercise its functions having regard to the objectives and guiding principles of the national education and care services quality framework set out in section 3.

9. I have had regard to the objectives and guiding principles set out in s 3 of the National Law in deciding this matter.

10. A person must obtain a ‘provider approval’ under Part 2 of the National Law together with a ‘service approval’ under Part 3 of the National Law in order to be able to operate an education and childcare service lawfully in New South Wales (see s 103 of the National Law). A service approval is subject to the conditions set out in s 51 of the National Law. Under s 51(5) of the National Law, a service approval is subject to any conditions prescribed by the national regulations. This is a reference to the Education and Care Services National Regulations (2011) (‘the National Regulations’) which provide, among other things, for a National Quality Standard (see Schedule 1) and for prescribed rating levels (see reg 57, Part 3.2)

11. As to the cancellation of a service approval, the National Law provides as follows:

77   Grounds for cancellation of service approval

A Regulatory Authority may cancel a service approval if—

(a)  the Regulatory Authority reasonably believes that the continued operation of the education and care service would constitute an unacceptable risk to the safety, health or wellbeing of any child or class of children being educated and cared for by the education and care service; or

(b)  the service has been suspended under section 72 or 73 and the reason for the suspension has not been rectified at or before the end of the period of suspension; or

(c)  the service approval was obtained improperly; or

(d)  a condition of the service approval has not been complied with.

78   Show cause notice before cancellation

(1)  This section applies if the Regulatory Authority is considering the cancellation of a service approval under section 77.

(2)  The Regulatory Authority must first give the approved provider a notice (show cause notice) stating—

(a)  that the Regulatory Authority intends to cancel the service approval; and

(b)  the reasons for the proposed cancellation; and

(c)  that the approved provider may, within 30 days after the notice is given, give the Regulatory Authority a written response to the proposed cancellation.

79   Decision in relation to cancellation

(1)  After considering any written response from the approved provider received within the time allowed by section 78(2)(c), the Regulatory Authority—

(a)  may—

(i)  cancel the service approval; or

(ii)  suspend the service approval for a period not more than the prescribed period; or

(iii)  decide not to cancel the service approval; and

(b)  must give the approved provider written notice of the decision.

(2)  Subject to section 81, the decision to cancel the service approval takes effect—

(a)  at the end of 14 days after the date of the decision; or

(b)  if another period is specified by the Regulatory Authority, at the end of that period.

(3)  The notice of a decision to cancel must set out the date on which it takes effect.

(4)  A cancellation of a service approval includes the cancellation of the service approval to the extent that it relates to an associated children’s service.

(5)  This Law applies to a suspension of a service approval under this section as if it were a suspension under section 72.

12. Portjazz’s right to seek the external review of the cancellation of its service approval is provided for in s 192(b)(iv) of the National Law, which says:

192   Reviewable decision—external review

A reviewable decision for external review is—

…

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

…

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

13. The Tribunal has power to stay the decision to cancel Portjazz’s service approval pursuant to s 43 of the Civil and Administrative Tribunal Act 2013 (NSW):

43   Effect of pending general applications and appeals

(1)  This section applies to the making or lodgment of any of the following (a pending general application or appeal)—

(a)  a general application for the review or other re-examination of a decision made by an external decision-maker,

(b)  an external appeal,

(c)  an internal appeal.

Note—

See Division 2 of Part 3 of Chapter 3 of the Administrative Decisions Review Act 1997 for the effect of pending administrative review applications on administratively reviewable decisions and the making of orders staying or otherwise affecting such decisions.

(2)  A pending general application or appeal does not affect the operation of the decision to which the application or appeal relates, or prevent the taking of action to implement the decision, unless the Tribunal makes an order staying or otherwise affecting the operation of the decision.

(3)  The Tribunal may make such orders (whether with or without conditions) staying or otherwise affecting the operation of a decision to which a pending general application or appeal relates as it considers appropriate to secure the effectiveness of the determination of the application or appeal.

Applicable principles

14. The principles applicable to an application for a stay of the cancellation of a service approval were set out in Mother’s Choice Family Day Care Pty Ltd v Secretary, Department of Education [2020] NSWCATAD 194 at [16]-[18]:

16.   In Bentran Pty Ltd v Sabbarton [2014] NSWCATAP 37 Wright J at [9] summarised the principles applicable to the exercise of the Tribunal’s discretion to decide whether a stay of a decision should be granted under s 43 of the NCAT Act (citations omitted):

(1) Generally a successful party is entitled to the benefit of the decision or orders that the party has obtained at first instance, but a stay may be granted where the appellant has demonstrated an appropriate case to warrant the exercise of discretion in its favour – s 43(2) and (3) of the Act.

(2)   In practical effect the onus is on an applicant for a stay to make out a case that it is appropriate for the court to make such an order.

(3)   The mere lodgement of the notice of appeal is insufficient, of itself, to demonstrate that it is an appropriate case to warrant the granting of a stay.

(4) An order staying the operation of a decision or orders will generally be appropriate where such an order is reasonably necessary to secure the effectiveness of the appeal – s 43(3) of the Act. This is similar to, if not the same as, the considerations applied by the Courts that where there is a risk that an appeal will prove abortive if the appellant succeeds and a stay is not granted, or where unless a stay is granted an appeal will be rendered nugatory, the discretion should generally be exercised in favour of granting a stay.

(5)   The Tribunal may also take into account the strength or otherwise of the case of the party seeking the stay. This consideration may be particularly relevant when it is plain that an appeal, which does not require leave, has been lodged without any real prospects of success and simply in the hope of gaining a respite against immediate execution of the decision.

(6)   The Tribunal's power to grant a stay includes a power to make such an order subject to such conditions as the Tribunal specifies.

(7)   In exercising the discretion, the Tribunal will also weigh the balance of convenience and the competing rights of the parties and may impose appropriate conditions so as to achieve a result that is fair to all parties.

(8)   Finally, the overriding principle in an application for a stay is to ask what the interests of justice require.

17.   In applying these principles, it is necessary to have regard to the statutory context in which the decision was made (Liu v Chinese Medicine Council of NSW [2019] NSWCATOD 13). In the context of the National Law, this includes that the rights and best interests of the child are paramount and that best practice is expected in the provision of education and care services.

18.   In addition, in New South Wales Bar Association v Stevens [2003] NSWCA 95 Spigelman CJ explained that, in an application for a stay where the issues involve the protection of the public, the public interest is entitled to significant weight.

Events leading to cancellation

15. Portjazz obtained a provider approval and a service approval to operate Tiny Town Childcare Centre – Armidale (‘Tiny Town’) in 2009.

16. The service approval was limited to a maximum of 66 children.

17. Tiny Town provides long day care. It is the only service operated by Portjazz.

18. In the folder of documents, the respondent provided evidence of numerous inspections, assessments and complaints in relation to the operation of Tiny Town, from 21 November 2019 to 30 October 2023.

19. In the respondent’s submissions, the following summary was given:

49. By way of overview, since 1 January 2019, the Department has identified 189 breaches of the National Law and National Regulations; issued 18 compliance actions; and visited the service 17 times.

20. A considerable volume of information was provided to me with respect to the past breaches of the National Law and the National Regulations. I have regard to all of it, and I will not set it out here in detail.

21. The breaches identified by the investigators from 2019 to 2023 show that Tiny Town needed to deal with a broad range of compliance issues in that period of time. I will not set out every alleged breach, but the breaches included the following:

• an incident on 11 November 2019 in which an 8-year-old scaled a fence and left the Tiny Town premises during a lock down rehearsal,

Inspections in October 2020 disclosed the following

• practices for the management of illness and injury were not consistent and did not follow the policies and procedures which were in place. The content of some first aid kits had expired,

• the practices and procedures for illness and injury were not in accord with service policies, the National Regulations or recommended guidelines,

• there were ongoing, systemic failures to address grievances and complaints and to notify the Regulatory Authority of changes to the operation of the service, serious incidents and complaints about breaches of the National Law. The Director of Tiny Town was unaware of her reporting responsibilities,

• a room used to store alcohol, chemicals, power boards with appliances, hair dye, spray paint and old food could be reached through any of three unsecured doorways,

• children were playing on an unsafe metal structure,

• a damaged fence panel had been replaced with a temporary panel with footholds which made it easy to scale out to a busy street,

• the exit through the laundry contained hazardous items, including chemicals and broken building materials which prevented children exiting during emergency procedures. The gate leading to the nursery playground and the gate exiting the service were therefor inaccessible from this exit,

• the emergency evacuation gate had a combination lock, but the lanyards available in the rooms gave the wrong combination for the lock,

• there was a climbing structure more than 60cms high without the required soft fall area,

• the babies outdoor play space soft fall material was a choking hazard.

In April 2021, the following issues were identified

• information about a recent infectious disease outbreak had not been given to families,

• whilst the menu was adequate overall, individual children’s needs were not provided for,

• issues concerning hazards and evacuation procedures had not been adequately addressed. The approved provider was unaware of the applicable child protection policies and some types of reportable conduct,

• the outdoor play equipment was inadequate for the number of children,

• an educator was observed lifting a child by his wrists to discipline him (she was subsequently cautioned).

In the period from August and October 2021, the following issues were identified:

• unsafe sleep practices, involving infants being left in prams to sleep,

• a two year old was restrained in a pram to stop him biting other children,

• a breach of the supervision ratios occurred,

• the outdoor area contained broken and unsafe materials, two toilets were not working in the children’s bathroom and boxes were stacked high on desks and tables in the foyer and the reception area,

• an educational leader had not been designated in writing. On one visit, 28 children were being education with no early education teacher in attendance.

In July 2022, the following issues were identified:

• a child was observed sleeping with a soft toy, in breach of safe sleep practices.

In February 2023, the following issues were identified:

• practices inconsistent with policies and procedures were followed with respect to the administration of medicine and the management of injuries. First aid kits contained some expired items. Safe practices for the preparation and storing of food were not in place,

• harms and hazards were present and supervision was inadequate,

• the outdoor environment was not maintained in accordance with service policies,

• staffing was inadequate. The approved provider was observed working alone with children when she does not hold and is not working towards an approved child related qualification.

In August 2023, the following issues were identified:

• the service could not produce the required documentation with respect to excursions,

• an enrolment form for a child with epilepsy did not contain emergency contact details.

22. The National Regulations provide, in reg 57, for five ratings. Listed from worst to best, the ratings are:

• Significant Improvement Required,

• Working Towards National Quality Standard,

• Meeting National Quality Standard,

• Exceeding National Quality Standard,

• Excellent.

23. In the period from October 2020 to November 2023, Tiny Town has had the following ratings:

• Significant Improvement Required (October 2020),

• Working Towards National Quality Standard (April 2021),

• Significant Improvement Required (February 2023),

• Significant Improvement Required (October 2023).

24. During the same period, a number of formal processes have been initiated under the National Law in relation to various issues of concern.

Portjazz’s case

25. Ms de Klerk, the Director of Portjazz, provided an affidavit dated 7 November 2023.

26. Ms de Klerk said that, as at the date of her affidavit, Tiny Town had seven staff, three of whom are carers and four of whom are administrative staff, and 26 children in care, from 25 families. All but one of the children are eligible for childcare subsidies.

27. Some of the families are single parent families, and some of the parent require mental health support.

28. Portjazz would lose all of the revenue from Tiny Town without a final hearing unless the decision to cancel the service approval is stayed. Parents are likely to seek out other childcare options before a final decision in the matter. Some parents may find it difficult to get access to other childcare options. Ms de Klerk set out Tiny Town’s fixed expenses in her affidavit, and noted, in effect, that those expenses would not be able to be met from revenue if the service could not operate.

29. Ms de Klerk aspires to meet and exceed the requirements of the National Law.

30. Ms de Klerk said that action had been taken in relation to many of the issues raised; educators have been trained to identify hazards and minimise them, families have been consulted about behavioural issues and medical conditions, excursions have been suspended pending a full review of policies and procedures, parental consent information has been reviewed and rest and sleep policies have been amended in line with the National Regulations.

31. Ms de Klerk denied the allegation that Tiny Town was unable to produce the emergency contact details for the child with epilepsy. There was an electronic file, but a hard copy was unable to be printed at the required time. The child’s emergency contact details were available in several places accessible to staff.

32. Ms de Klerk also denied that the excursion risk assessment could not be produced. She said that it was produced the day after it was requested.

Consideration of the stay application

33. In considering the factors set out in the cases cited above at [14], I bear in mind the statutory context of the decision subject to the application for review and bear in mind the objectives and guiding principles of the National Law, which are set out in s 3.

Is a stay reasonably necessary to secure the effectiveness of the appeal

34. I accept the evidence of Ms de Klerk that, if a stay is not granted, the service may not be able to continue even if Portjazz succeeds in having the decision to cancel the service approval set aside. This is so because the fixed expenses of Tiny Town would not be able to be met from revenue, and also because a significant number of the families presently using Tiny Town would be likely to find other ways of dealing with their childcare needs before the final decision is delivered in this matter.

35. A stay is necessary to secure the effectiveness of the appeal.

What is the strength of the applicant’s case

36. Ms de Klerk put forward a plausible response to the issues raised in August 2023. I do not have sufficient information to assess the strength of the case in relation to the history of the facility, though it seems from Ms de Klerk’s affidavit that some measures have been taken to address many of the issues.

Balance of convenience

37. Twenty-six families relied upon Tiny Town for childcare as at early November 2023. It is likely that the sudden inability of Tiny Town to offer a service would be a significant inconvenience for many of those families.

38. On the information before me, it did not appear that there is a current issue with the state of the premises or the operation of the service which could not be addressed on an interim basis by the imposition of conditions.

39. Although there may, in the past, have been safety issues, there do not seem to be any threats to the safety of the children cared for at Tiny Town at present.

Public Interest

40. The public has an interest in the availability of childcare, but it must be childcare which is focussed upon the safety, health and wellbeing of the children. The educational and development needs of the children need to be met.

41. At present, Tiny Town has the capacity to provide childcare in accordance with the National Law, if it complies with conditions.

Conclusion

42. At the hearing of the stay application, I concluded that it was appropriate to grant a stay of the decision to cancel the service approval, subject to conditions. Accordingly, on 8 November 2023, the following order was made:

(1) Pursuant to s 43(3) of the Civil and Administrative Tribunal Act, the decision of the respondent dated 25 October 2023 is stayed until further order on condition that the applicant:

(a) Comply with the Children (Education and Care Services) National Law (NSW) and the Education and Care Services National Regulations (NSW).

(b) Not accept new enrolments of children at the service.

(c) Not provide education and care services to more than 15 children at any point in time from 31 December 2023.

(d) Not conduct any excursions outside the centre premises.

(e) Arrange for a professional cleaner to:

i. Clean the indoor and outdoor environments of the centre premises prior to any further education and care service being provided;

ii. Provide evidence of compliance with condition 4(d)(i) to the NSW Department of Education.

(f) Undertake a comprehensive assessment of the indoor and outdoor areas, furniture and equipment to ensure that it is safe, clean and in good repair and provide evidence to the Department by 5pm on 17 November 2023.

(g) Undertake a review of the staffing arrangements to ensure that the educator child ratios are maintained in accordance with regulation 126(1)(a) of the Regulations and provide evidence to the Department by 5pm on 17 November 2023.

(h) Provide training to the staff on the service’s safe sleep and rest policy, and provide evidence to the Department, by 5pm on 22 November 2023.

(i) Conduct safe sleep and rest audits each month to ensure staff are following the policy, and submit a copy of the audit to the Department at the conclusion of each month.

(j) Ensure all staff have undertaken training in the appropriate management of children’s behaviour by a recognised training organisation and provide evidence to the Department by 5pm on 30 November 2023.

(k) Ensure that Ms De Klerk undertake the Quality Support Program, delivered by Australian Children's Education and Care Quality Authority at the next available opportunity, and provide evidence of enrolment in the program by 30 November 2023.

**********

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: 12 December 2023