Cancellation of Service Approval (Breach of Condition): DBU v Secretary, Department of Education

This is another NSW case where a family day care provider has sought review by NSW Administrative and Civil Tribunal (NCAT) of the decision of the NSW Regulatory Authority under the National Law (Department of Education) to cancel its service approval for breach of condition.

The full decision can be found here. In June 2016 the approved provider (DBU) was granted service approval to operate a service in Sydney. DBU contacted the Department on several occasions in relation to the delay in getting Child Care Benefit (CCB) approval from the Commonwealth Government. About nine months after the approval had been granted, DBU was issued with a show cause notice of intention to cancel the service approval on the basis that ongoing operation of the service had not commenced within six months after the service approval as required by the condition in section 51. Following the applicant’s response to the show cause notice, the service approval was cancelled by the Department in April 2017, to come into effect from 12 May 2017. DBU then sought review by NCAT under section 192 of the National Law. There was some argument by the applicant (DBU) that in fact it was operating as contemplated by the National Law but the Tribunal found that DBU had breached the condition of the service approval under s.51(3)):

It is clear from the legislation that, once a service approval has been granted, the provider has six months within which to commence operations – unless, of course, that time is extended by the respondent. In this case, there was no such extension sought or granted. I agree with the submissions made by the respondent that for a family day care service to have commenced ongoing operations, it must have commenced in the way contemplated by the National Law. That is, it must actually be operating as a family day care service providing education and care to children through the use of two or more educators. This was the conclusion reached by the Tribunal in CVM v NSW Department of Education [2017] NSWCATAD 108 with which I respectfully agree. (para. 37)

The Tribunal considered whether it was appropriate the service approval was cancelled. The Tribunal was of the view that the condition was an important one:

Indeed, the objectives and guiding principles of the National Law as set out in s 3 make clear the law is directed towards facilitating the implementation of a quality framework for the delivery of education and care services for children on a national basis which has at its forefront the rights and best interests of those children. To further those aims it is important that compliance with the law be implemented thoroughly and consistently throughout all Australian jurisdictions. 
The applicant is in breach of the condition set out in s 51(3) of the National law. I agree with the submissions of the respondent that the condition is one of importance. Unlike some other conditions which may be imposed on an approval, this is a mandatory condition with legislative force. Furthermore, the importance of compliance with the condition is evident in the offence provision in s 173 and the penalties which may be imposed....
While I understand the practical issues raised by the applicant in commencing to operate the service without CCB approval, as stated above, there is no legal requirement that CCB approval be obtained before educators can be registered and children enrolled in the service (paras. 44-5, 47)

The Tribunal thought that in this case the decision of the Department should be upheld:

Since this application was lodged, the Commonwealth has made a decision to refuse the application for CCB approval. That decision indicates that the delay in the CCB approval process was substantially attributable to the applicant who submitted incomplete information and was required to provide amended documentation at several points in the process. 
The applicant is of the view that the decision will be overturned on review. The respondent, on the contrary, submits that there is no reason to expect that the Commonwealth will make a different decision. The Tribunal makes no comment on the applicant’s prospects of success in the review application. I have, however, considered, in light of that application, whether the decision under review should be set aside and the applicant, in effect, be given further time to commence operation. I am not satisfied that in the circumstances of this application that would be an appropriate course. The service approval was now granted more than 12 months ago on the basis of the information current at that time. That information may have changed. There are no children and parents who are affected by the cancellation of the approval as the service has not commenced. Members of the public are therefore not affected by the cancellation. 
I accept that the cancellation has been a severe blow to the applicant’s aspirations. She has made it apparent that she believes she can only successfully operate the service if she obtains CCB approval. If she is successful in her application for review of the CCB decision, while there may be some cost to her in reapplying for service approval, that course would appear to be open to her. 
Having considered all the evidence and competing submissions of the parties, under s 193(3) of the National Law, I confirm the decision under review (paras. 48-52).

In addition, this case highlights a deficiency in the National Law (which has been mentioned in previous NCAT cases as well (see paras. 8-26) . Under section 192 of the National Law the appropriate tribunal is to conduct a review of the decision made by the Regulatory Authority. However, what that review encompasses is not defined in the National Law. Therefore, NCAT itself has had to determine what a review under s.192 encompasses.