Cancellation of Provider Approval: CYD v Secretary of the Department of Education NSW

This is another case from the NSW jurisdiction before the NSW Civil and Administrative Tribunal (NCAT) involving a review of a decision by the NSW Regulatory Authority to cancel an approval under the National Law.

CYD v Secretary of the Department of Education NSW involved cancellation of the provider approval of a family day care provider. Following a compliance visit a number of breaches of the National Law and Regulations were identified by the Department. These related to, amongst other things, working with children checks, qualifications, records,and excursions, which are all detailed in the judgement. In response to these breaches the Department issued a show cause notice cancelling CYD's provider approval on the basis of breach of the condition of provider approval requiring compliance with the National Law (s.19(2)) under s.25; and that the approved provider was not a fit and proper person under s.21. However, the Tribunal did not believe that these grounds were established and reinstated the provider approval. The Tribunal stated the following in its decision paras. 83-92):

The determination of the correct and preferable decision must regard the best interests of the child who may receive the benefit of the service as paramount.
The National Law also facilitates the provision of a national education and care services quality framework for the delivery of education and care services to children. The fact that the applicant received provider and service approval to run a Family Day Care Service is an indication that the applicant was considered capable of providing quality education and care services to children. It did so for a number of years.
The Tribunal is not confined in its consideration of this matter to the reasons identified in the Reasons for Decision. The initial examination by the Regulatory Authority was restricted to 3 out of 59 educators, and there have been significant enhancements to the administration, systems, policies and procedures which the applicant has implemented.
The applicant says that the remedied policies, systems and procedures now implemented by the applicant will be adequate to ensure that the children are not exposed to risk. That is likely to be so, and further compliance visits will ensure there is no repetition of identified failings.
The Tribunal accepts that there has been no deliberate non-compliance with the requirements of the National Law and any non-compliance was largely the result of an inadequate understanding of the relevant requirement, or deficiencies in the applicant’s processes arising from inadequate administration. The applicant identified in its evidence and submissions that many of these issues have been addressed as a result of an examination of procedures and the manner in which the family day care service is administered.
The evidence of the applicant is that any prior deficiencies have now been remedied. There is evidence that the applicant has acted with deliberate and thoughtful intent to improve its ability to provide appropriate care for the children in its education and care. Despite the inability of the director to be able to identify a specific policy in his oral evidence, it is clear that there are procedures and oversight implemented to address the deficiencies which have been acknowledged.
The assessment whether the applicant is a fit and proper person is a value judgment by the Tribunal; it takes its meaning from its context, the activities in which the person is engaged and the ends to be served by those activities......
The applicant and its director have properly acknowledged failings in compliance with the National Law and have taken reasonable steps to address those shortcomings. The matters raised in relation to other services which have had their provider approval cancelled or the approval for childcare meant benefits cancelled by the Commonwealth Department of education and the indication that the respondent is currently “considering” issuing a show cause notice to one of those services are matters which bear upon the general competence of the applicant and its director to adhere to the legislative scheme. In addition the respondent relies upon assessments undertaken of the Director in August 2016 and his knowledge of the law. It is asserted that the Director gave responses which were “inadequate”. The Director is not a lawyer. The Director was represented by lawyers before the Tribunal. The evidence is that the applicant has obtained the services of a consultancy to ensure it complies with the National Law. In a context where the highest standards of care are sought to be provided to children, and one of the roles of the National Law and the Regulatory Authority is to improve services currently provided to children, the actions of the applicant and the ends to be served by those actions indicate that at this time the applicant is a fit and proper person to hold a provider approval. There is insufficient evidence to conclude that the director of the applicant will not keep to the standards which he has outlined in his evidence to this Tribunal.
The Tribunal therefore finds that the applicant is currently a fit and proper person.
The role of parents is to be respected and supported under the principles to be applied by the National Law. It is in the best interests of children receive quality childcare and for their parents to the assured that their children are in safe hands. It is in the best interests of children to have improved early childhood education from providers who are able to analyse their deficiencies and take appropriate steps to improve the delivery of the service.

It is clear from this decision that the Tribunal regards the Regulatory Authority's power to cancel provider approval to be one of last resort or at least to be exercised where there is a clear risk to children. It should also be mentioned that this is the first case under the National Law that deals with the concept of "fit and proper person" under the Act, albeit briefly, see paras. 73-74, 89-91.