Refusal to Grant Provider Approval (Section 15): Two Cubed Pty Ltd v Secretary of the Department of Education NSW

This case was heard by NSW Civil and Administrative Tribunal and related to the decision by the NSW Regulatory Authority (Department of Education) to not grant provider approval to the applicant (Two Cubed Pty Ltd). The provider approval application was refused under section 15(2), National Law on the basis that the applicant was not a fit and proper person to be involved in the provision of an education and care service. On 20 August 2018 the Department of Education affirmed the decision made on 8 May 2018 following an internal review.

In the case the Tribunal assessed the fitness and propriety of the person who was to have management or control of the family daycare service to be operated by the applicant:

The Regulatory Authority submits that the internal review decision should be confirmed because Ms Chumakova as the person with management or control of the family day care service to be operated by the applicant, is not a fit and proper person to be involved in the provision of an education and care service.
The phrase “fit and proper” has been the subject of a number of decisions including decisions in the High Court. The context in which the person is or will be engaged in the underlying principles and objects of the legislation give the phrase meaning in particular circumstances: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 380. A definition of fitness and propriety at least includes “honesty, knowledge and ability”: Hughes & Vale Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127 at 156.
An assessment of fitness and propriety “also includes public confidence that the person is able to maintain high standards of rectitude and that they likely future conduct will keep to that standard”: CYD v Secretary of the Department of Education NSW [2017] NSWCATAD 190 at [89].
In the regulatory regime surrounding provider approvals, the term “fit and proper” in context refers to the provision of education and care services to children under 13 years of age. An applicant’s fitness and propriety may well be dependent then on an adequate knowledge and understanding of the responsibilities of an approved provider, whether the applicant acts in accordance with those responsibilities and whether the applicant has sufficient moral integrity and character to be entrusted with the provision of education and care services: Tanyous v Secretary, Department of Education [2018] NSWCATAD 197 at [31]; Brandusoiu v Commissioner of Police [2015] NSWCATAD 204 at [91]-[92].
Compliance with the National Law is a mandatory consideration in the assessment of the applicant’s fitness and propriety because of the conditions attached to provider approvals. A person’s management capability to operate an efficient education and care service in accordance with the National Law is a relevant consideration in assessing whether a person is a fit and proper person to be engaged in education and care services.
The objectives of the National Law are promoted where persons with management or control of an education and care service have knowledge and understanding of the National Law and Regulations: CYU V Secretary Department of Education [2017] NSWCATAD 290 at [53]-[54]; DPW v Secretary Department of Education [2018] NSWCATAD 257 at [40], [42]-[43].
Ms Chumakova has approximately more than 3 years’ experience as a family day care educator under 4 different provider schemes.
Efficient management of educators and assessing their practices in compliance with the National Law is a key indicator of competence and knowledge. However, Ms Chumakova identified in the evidence before the Tribunal that she would monitor educators through videos and photos which she would review to determine whether the practice of the educators was appropriate. This process would not ensure that educators themselves will understand their obligations, and physical visits to a family day care residence or venue to observe interactions with the children and to check that food being provided to them was actually nutritious, was not part of the response to questions posed to her at interview. Whilst technology may be useful it is not likely to adequately determine whether appropriate care is provided unless there are physical visits and in-person assessments.
Ms Chumakova, as part of the interview and assessment process undertaken by the Regulatory Authority, was said to have exhibited a lack of understanding as to the complaint process and reporting obligations under the National Law and Regulations. The Tribunal accepts that as an accurate assessment of the evidence. Ms Chumakova failed to identify the records which are required to be kept for all individuals who reside at or otherwise visit a family day care residence.
It is accepted by the Tribunal from the evidence before it that Ms Chumakova had a limited understanding and could not properly identify the requirements regarding information that has to be displayed at the premises of family daycare residences. Those requirements include the provider approval, service approval, the rating of the service, the hours and days of operation of the service, the name and telephone number of a person to whom complaints can be addressed and the contact details of the Regulatory Authority. Information about the contents in operation of the educational program for the service should also be displayed.
Ms Chumakova could not identify, in the evidence before us, how she would ensure that the programs delivered by educators meet the educational and developmental needs of the children other than relying upon resources provided by the Department, webinars, samples of planning, and observation rather than, by way of example, actually reviewing an educator’s programs.
Ms Chumakova exhibited to the Regulatory Authority an inadequate understanding of strategies to manage and support family daycare educators in her answers during interview and the second assessment session. It was assessed that she did not understand the strategies for managing and supporting family daycare educators or how she would monitor and evaluate educators and that she had to develop a relationship with the educators. Ms Chumakova failed to outline any improvement strategies in relation to a hypothetical scenario at an education and care service: see Exhibit R1, pages 101, 108, 115, 118, 230. The Tribunal accepts that evidence before us.
Family daycare educators must have, or must be actively working towards, at least a certificate III level education and care qualification that has been approved by the Australian Children’s Education and Care Quality Authority. An educator is actively working towards a qualification if they are enrolled in a course for the qualification and provide an approved provider with documentary evidence from the course provider that the educator has commenced the course, and is making satisfactory progress towards completion of the course, and meeting the requirements for maintaining the enrolment: National Regulations, regulations 4 (1), 10, 127, 137. On 5 July 2018 Ms Chumakova attained her certificate III qualification: Exhibit A2 p 87. It is apparent from the documentation in Exhibit A2 that Ms Chumakova enrolled in a master of teaching in 2015 or 2016 and completed some subjects. However, from mid-2017 until mid-2018 Ms Chumakova was not making satisfactory progress towards completion of the Masters program because she did not complete any subjects for the program. In those circumstances, she was enrolled but not actively working towards a certificate III qualification for a period of approximately one year: Exhibit R1, p 20. Ms Chumakova says that she was told on the telephone that she had 5 years in which to complete the study. Ms Chumakova says that she applied on 14 June 2018 for the certificate III of early childhood education presumably on the basis of her completed subjects in the Masters course.
In the second assessment session Ms Chumakova failed to identify all of the minimum qualifications of persons involved in the provision of a family daycare service, and her insistence that she was fully qualified as a family day care educator evidences a lack of understanding about qualifications of educators, particularly the concept of actively working towards a qualification. Ms Chumakova says that the questioning was conducted in an adversarial and aggressive manner which impacted upon her performance. It is a necessary quality of an approved provider that she ensures that family daycare educators, educator assistants and family day care coordinators meet the qualification requirements for their respective roles: National Law sections 163, 169; National Regulations, regulation 136; Exhibit R1 p 251. Ms Chumakova could not provide assurance that she understood the requirements.
Ms Chumakova also represented on the Grammar’s house website that she had a “Master degree in Teaching”: Exhibit R1 pp 152, 209. Ms Chumakova does not hold this qualification. When asked whether she considered this to be misleading, at interview she stated that she had not updated the website for some time. Ms Chumakova says that the website is no more than an online business card and has not substantially changed since 2015. It is a clearly misleading statement whether updated or not because she has never held a master degree in teaching. The honesty and knowledge of Ms Chumakova is thus deficient.
Ms Chumakova says that she utilised Google advertising which was paused from 3 June 2018 until 26 August 2018. The website however was still up and accessible and providing an advertisement of the services irrespective of Google advertising.
Between June 2018 and 10 August 2018 Ms Chumakova cared for children even though she did not have registration with a family day care service. This is operating a family day care service without provider approval: Exhibit R1, pages 17-18, 157, 159. Ms Chumakova said that she had a “personal arrangement” with families involved. Ms Chumakova said that was an informal arrangement and she was not advertising a service. It was also established that she temporarily lowered her fees because the families were not entitled to a government rebate: Exhibit R1 p 3; Exhibit R2, interview 16/8/2018, p 31. A “personal arrangement” arises where a friend of a family personally provides education and care to the child that family under an informal arrangement where no offer to provide that education and care was advertised: National Law, section 5 (1). Ms Chumakova was not a friend of the families of the children to whom she provided care during the relevant period. There was continued advertising during the relevant period. These were simply children to whom she had previously provided education and care. Ms Chumakova also invoiced the parents under an ABN so that it could not accurately be said it was a personal arrangement.
Ms Chumakova also admitted to Mr Lalor on 9 August 2018 when he attended Grammars House, and it was noted in his notebook, that she was not operating under a provider approval and that she knew it was illegal: Exhibit R2 Affidavit of Brett Lalor: Annexure A. This admission was subsequently denied by Ms Chumakova at her interview.
Even if it were accepted that the service was a personal arrangement Ms Chumakova could also be considered to have been operating a “home-based education and care service” at that time in contravention of the Children (Education and Care Services) Supplementary Provisions Act 2011 (NSW) sections 3 (1), 4, 8 (1), 9. The provisions of the National Law regarding provider and service approval apply, as modified, to State regulated education services: National Law, sections 11, 13, 17.
The service that was being offered by Ms Chumakova at that time was an education and care service at her home for children under the age of 6 years, who did not ordinarily attend school. Accordingly, she was operating a “home-based education and care service”. The service was also being advertised on the Grammars House website. This is in contravention of the legislative scheme since she did not have provider approval or service approval at that time.
Ms Chumakova submissions identify in chronological order what she contends occurred. It is pointed out by Ms Chumakova that she scored an average of 80.4% and has 3 ½ years’ experience within the family day care industry, that there is community support for and a demonstrated need for her services, and that she has “knowledge and education of family day care industry”. The assessment result of an average of 80.4% was said to be ordinarily sufficient along with her experience and management capability for approval: Exhibit R1 p 249. This result was the third assessment undertaken by Ms Chumakova and predated the interview which occurred on 16 August 2018. The matters which were raised in interview with Ms Chumakova have been previously referred to in these reasons. It was ultimately assessed that Ms Chumakova did not have a sufficient understanding of the role and responsibility of an approved provider, as opposed to an educator. From the perspective of knowledge about a provider’s obligations it was considered that Ms Chumakova was not a fit and proper person to be involved in the provision of an education and care service. There was also concern expressed about the misleading statements about Ms Chumakova’s qualifications. There was an absence of the requisite formal recognition of qualification during a period of about 12 months.(paras.53-73).

Based on this assessment the Tribunal concluded that:

The determination of the correct and preferable decision must regard the rights and best interests of the child who may receive the benefit of the service as paramount and to ensure the safety, health and wellbeing of children attending education and care services.
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 objectives of the National Law are promoted where persons with management or control of an education and care service have knowledge and understanding of the National Law and Regulations.
An assessment of fitness and propriety at least includes “honesty, knowledge and ability” and “also includes public confidence that the person is able to maintain high standards of rectitude and that they likely future conduct will keep to that standard”.
Having regard to all of the evidence, the submissions of Ms Chumakova and those on behalf of the Regulatory Authority and for the reasons previously identified in these reasons, it is considered that the applicant and the person with management or control of the applicant is not a fit and proper person to be involved in the provision of an education and care service.(paras.82-6)