Stay of Cancellation of Child Care Benefit Approval: Recent Federal Court Cases

Recently a number of cases have been heard by the Federal Court of Australia relating to applications to suspend or stay (i.e. put on hold) the cancellation by the Commonwealth Department of Education and Training of provider approvals of child care services under section 195H(1)(b), A New Tax System (Family Assistance)(Administration) Act 1999 (Cth). 

In Azaria Family Day Care Pty Ltd v Secretary, Department of Education and Training, the Department cancelled the approval on the basis of non-compliance with the family assistance law. In particular, it was alleged Azaria (the applicant, family day care provider) had: 

• not maintained, in some cases, the required documentation in relation to sessions of care provided to children aged 14 years or older or attending secondary school and that the applicant had submitted 415 reports for sessions of care where no one was eligible to receive child care service payments under the family assistance law, and had failed to remit to the Secretary fee reduction amounts that could not be passed on to families

• submitted attendance reports in respect of 614 sessions of care where there was no eligibility because “child swapping” had occurred, (where the child of an educator is cared for by another educator), for the period 1 January 2016 to 24 April 2018,
• reported 574 sessions of care involving two educators during periods when the educators were overseas
• inaccurately reported 208 sessions of care when the children concerned were overseas
• in respect of 2,421 sessions of care reported to have been provided to children of either 14 years of age or older, or attending secondary school, the applicant failed to comply with its obligations to keep a register or documentary evidence.

Azaria made a number of arguments in relation to suspending the operation of the cancellation including that it had applied for internal review of the decision and the Court decided that:

The applicant has made out a sufficiently arguable case for final relief which, in combination with the prejudice that it is liable to suffer if an order is not made, and in combination with the undertaking as to damages which is offered, make it just that an order be made under s 15(1)(a) of the ADJR Act substantially in the terms sought by the applicant.(para.51)

Interestingly, one of the orders the Court made was to suspend the cancellation from the dare of the hearing (1 November) until 11 December, or further order, despite the fact that the cancellation had come into effect on 17 October. 

The other case heard by the Federal Court recently was Al-Huda Pty Ltd v Secretary, Department of Education and Training. This also involved a family day care service provider. In this case the Department decided to cancel the approval of Al-Huda (the applicant) for a number of reasons including because it: 

• attributed care to educators who were in fact overseas at the time the care was reported to have occurred.
• reported attendances for children who were in fact overseas at the time the care was reported to have occurred. The service did not report such care as an absence in accordance with the absence rules.

In this case the applicant had filed an application for judicial review with the Court prior to the cancellation coming into effect (on 8 October) as well as applying for internal review of the decision. The Court initially stayed the decision. This case considered an extension to this stay. The Court decided an extension was warranted:

A brief review of the Notices [for cancellation] given to Al-Huda and the responses provided exposed a prospect that the 21 September 2018 decision may have been taken without taking into account submissions which had been made.
The primary bases upon which the stay was granted, accordingly, was that the proceeding then presented as one in which there was at least some prospect of legal error being ultimately exposed upon a final hearing and because of the likely disruption to the business operations of Al-Huda and those using the services it provided if a stay was not granted. A stay until 5 November 2018, it was considered, would at least permit the prospect that the internal review process could by then be completed. Given that the concerns of the Department had arisen by no later than 20 April 2018, the further continuation of payments for a comparatively short period of time was considered the preferable course to risking the disruption to the business operations of Al-Huda and the disruption of the services it offered to others.(paras.9-10)