Refusal to Grant Provider Approval (s.12): CZR v NSW Department of Education, Early Childhood Education and Care Directorate

This is a very significant case as it is the first review by an administrative body of a decision by a Regulatory Authority to not grant a provider approval to an applicant under section 12 of the National Law. It is also significant as the tribunal examined the breadth of the definition of "fit and proper person" under section 12 (the only other time this was considered was in CYD v Secretary of the NSW Department of Education, see my blog post).

The case, involved a review by the NSW Civil and Administrative Tribunal (NCAT) of a decision by the NSW Department of Education to not grant provider approval to the applicant, CZR. In brief, CZR participated in a compulsory assessment process conducted by the Department and assessed CZR as not demonstrating an adequate knowledge and understanding of the requirements of the National Law. It therefore concluded CZR was not a fit and proper person under section 12 and refused the application. The assessment process involved giving applicants one hour to complete two scenario questions under supervised examination conditions. CZR raised several issues about the the fairness of the process and its implementation. NCAT looked at the purpose of the legislation and the responsibilities of approved providers and concluded that: 

The Tribunal agrees with the respondent’s submission and finds that a ‘fit and proper person’ for the purposes of s.12 of the National Law must demonstrate detailed and accurate knowledge and understanding of the National law and the Regulation. While a knowledge of National Law is not expressly contemplated in s.13(1) and (2) of the National Law in determining ‘a fit and proper person”, s.13(3) of the National Law makes it clear that factors not expressly listed may be taken into account in determining whether a person is a fit and proper person. This construction is based on a detailed knowledge and ability being directly correlated to the well-being and safety of children and the other objects and guiding principles of the National Law. That is, the National Law and Regulations is the regulatory framework for family day care services. It sets out requirements for children’s health and safety issues, the physical environment, supervision of children, staff qualifications and training, staffing arrangements, record keeping, emergency and evacuation procedures, reporting, offences and compliance. This is not an exhaustive list. Any failure by an operator to acquire and possess this requisite knowledge and ability places children at risk. 
To the extent that the CZR did not demonstrate a sufficient knowledge of the National Law and Regulations, she is not a fit and proper person under section 12 of the National Law. This of course, does not prevent her from making a further application to the respondent for a provider approval in the future (paras. 37-39).

In relation to determining the scope of what a "fit and proper person" encompasses under the National Law, NCAT specifically said:

..."The expression “fit and proper person” “takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities”. Australian Broadcasting Tribunal v Bond (1980) HCA 33 170 CLR 380. 
In Hughes v Vale Pty Ltd v NSW (No.2) (1955) 93 CLR 127 the High Court considered that “fitness” had three components; honesty, ability and most relevantly, ‘knowledge’ in the sense of knowing what ought to be done (paras.35-36)