Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Anchor Consolidated Holdings Pty Ltd v Secretary, Department of Education [2023] NSWCATAD 279 Hearing dates: On the papers Date of orders: 26 October 2023 Decision date: 26 October 2023 Jurisdiction: Administrative and Equal Opportunity Division Before: S Higgins, Senior Member F Duffy, General Member Decision: The decision of the respondent, made on 29 July 2022, to cancel the applicant's provider approval is confirmed. Catchwords: ADMINISTRATIVE LAW – Child Protection – Children (Education and Care Services) National Law – cancellation of provider approval – Whether the applicant did not operate any education and care service for a period of more than 12 months – Whether cancellation decision should be confirmed as a matter of discretion Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Children (Education and Care Services) National Law (NSW) Education and Care Services National Regulations (2011 SI 653) Cases Cited: Al Hamid (t/as Paradise for Children) v Secretary, Department of Education [2018] NSWCATAD 74 CVM v Secretary, Department of Education [2017] NSWCATAD 108 CVT v NSW Department of Education & Communities, Early Childhood Education & Care Directorate [2017] NSWCATAD 74 CTG v NSW Department of Education, Early Childhood and Care Directorate [2017] NSWCATAD 60 DBU v Secretary, Department of Education [2017] NSWCATAD 257 Forever Family Day Care Pty Ltd v Secretary, Department of Education [2022] NSWCATAD 185 Long Life Family Daycare v Director-General, Education Directorate [2016] ACAT 69 Two Cubed Pty Ltd v Secretary of the Department of Education NSW [2019] NSWCATAD 122 Texts Cited: None cited Category: Principal judgment Parties: Anchor Consolidated Holdings Pty Ltd (Applicant) Secretary, Department of Education (Respondent) Representation: Solicitors: R Soryal, agent (Applicant) Crown Solicitor (Respondent) File Number(s): 2022/00248574 Publication restriction: Nil reasons for decision 1. In July 2017, pursuant to s 15 of the Children (Education and Care Services) National Law (NSW) (National Law), the respondent, the Secretary of the Department of Education, granted the applicant, Anchor Consolidated Holdings Pty Ltd, a provider approval. Almost one year later, on 15 June 2018, pursuant to s 48 of the National Law, the respondent granted the applicant service approval for an education and care service, namely a family day care service, trading under the name of 'Kidspace Family Day Care Services'. 2. Having been provided a service approval the applicant, as an approved provider, was authorised to 'operate' its family day care service from the date of service approval (that is from 15 June 2018): National Law s 18. 3. The sole director of the applicant is Raefat Soryal (Mr Soryal). At all times he has been the person nominated as having the management and control of the family day care service that was to be operated by the applicant. 4. On 28 February 2022, pursuant to s 32 of the National Law, a delegate of the respondent issued a 'Show Cause Notice' (Show Cause Notice) to the applicant, giving notice of her intention to cancel the applicant's provider approval under s 31(f) of the National Law, which provides as follows: 31 Grounds for cancellation of provider approval The Regulatory Authority may cancel a provider approval if— … (f) the approved provider has not operated any education and care service for a period of more than 12 months (including any period of suspension); or … 1. The applicant was given 30 days to respond to the Show Cause Notice. On 16 March 2022, Mr Soryal wrote to the respondent in response to the Show Cause Notice. 2. On 29 July 2022, another delegate of the respondent notified the applicant of her decision to cancel the applicant's provider approval, under s 33(1)(a)(i) of the National Law, on the grounds set out in s 31(f) of that Law. 3. On 16 August 2022, the applicant lodged this application seeking review of the cancellation decision. Jurisdiction of the Tribunal 1. The National Law implements a comprehensive and uniform national scheme for the regulation of education and care services, which includes family day care services: National Law s 5(1). The National Law was adopted as a law of New South Wales under s 4 of the Children (Education and Care Services National Law Application) Act 2010 (Application Act). In New South Wales, the respondent is the Regulatory Authority, for the purposes of that Law: see Application Act s 9. 2. Sections 192(b)(ii) and 193(1) of the National Law provides that a decision of a Regulatory Authority to cancel a person's provider approval is a reviewable decision for external review to the relevant tribunal. In New South Wales, the relevant Tribunal is the Civil and Administrative Tribunal: see Application Act s 8(b). 3. In this case, the applicant, having made its application for review within the prescribed time, has a right to seek review of the respondent's cancellation decision. 4. It is well established that: 1. the Tribunal's jurisdiction to review a reviewable decision made pursuant to the National Law falls under the Tribunal's general jurisdiction in s 29 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) and not the Tribunal's administrative review jurisdiction under s 30 of that Act: DBU v Secretary, Department of Education [2017] NSWCATAD 257 (DBU) at [22]; and 2. the role of the Tribunal on review of a reviewable decision made under the National Law is to determine, as at the time of hearing or closing of submissions, the correct and preferable decision having regard to the material before it and the applicable law: Two Cubed Pty Ltd v Secretary of the Department of Education NSW [2019] NSWCATAD 122 at [87]. 1. The orders the Tribunal can make on external review are those set out in s 193(3) of the National Law: 193 Application for review of decision of the Regulatory Authority … (3) After hearing the matter, the relevant tribunal or court may— (a) confirm the decision of the Regulatory Authority; or (b) amend the decision of the Regulatory Authority; or (c) substitute another decision for the decision of the Regulatory Authority. Matters in issue 1. The issues for determination in these proceedings are: 1. whether, as at 29 July 2022, the applicant had 'not operated any education and care service' for a period of more than 12 months (including any period of suspension). Ultimately, this is a question of fact; and 2. in the event (1) is established, whether the discretion in s 33(1)(a) of the National Law be exercised to cancel the applicant's provider approval, or not to cancel the applicant's provider approval. 1. For the reasons we are about to give, we find that the applicant has 'not operated any education and care service' for a period of more than 12 months and that the discretion in s 33(1)(a)(i) should be exercised to cancel the applicant's provider approval. 2. That is, having regard to the material before the Tribunal and the applicable law, we find that the correct and referable decision is to confirm the decision of the respondent. Proceedings before the Tribunal 1. The applicant's application was listed for hearing before us on 7 December 2022. 2. At the commencement of the hearing, the solicitor for the respondent appeared in person. However, there was no appearance by or on behalf of the applicant. 3. We noted that, on 9 November 2022, the Tribunal had granted Mr Soryal's request of 6 November 2022 for leave to appear by AVL at the hearing. In earlier correspondence to the Tribunal, Mr Soryal had explained that he had been living overseas since November 2021 to look after his sick son and would not be returning to Australia before November 2022. His 6 November 2022 request was based on his son still being unwell and his inability to return to Australia. 4. We also noted that, on 1 December 2022, Mr Soryal sent an email to the Tribunal requesting an adjournment of the hearing as he was unwell. Attached to his email was a medical report, dated 30 November 2022, which said that Mr Soryal was unwell and advised to rest for 21 days and not to travel. 5. The Tribunal refused Mr Soryal's application for an adjournment on the same day and confirmed the & December 2022 hearing date. The Tribunal also noted that if Mr Soryal still felt unable to attend on that day he was at liberty to make a further application for adjournment. 6. During the evening of 6 December 2022, Mr Soryal sent a further email to the Tribunal requesting an adjournment of the hearing as he was unable to concentrate because of his ill health. Attached to this email was a further copy of the 30 November 2022 medical report. 7. In the absence of any objection by the respondent, we granted the applicant's adjournment application and made the following order: (2) subject to considering any written submissions or other material provided by the applicant within 10 working days of this order, a hearing of the applicant's application will be dispensed with and the matter will be determined on the papers in accordance with section 50(2) of the Civil and Administrative Tribunal Act 2013. 1. We also noted that: 1. the respondent was of the opinion that the matter was suitable for determination on the papers without the need for a hearing; 2. the material before the Tribunal provided by the applicant were the written submissions of Mr Soryal dated 13 September 2022, 18 October 2022 and 13 November 2022; and 3. the material before the Tribunal provided by the respondent was the affidavit of Sam Goldsmith affirmed on 11 November 2022, the respondent's bundle of documents (35 tabs and 169 pages) and the respondent's written submissions dated 11 November 2022. 1. On 14 December 2022, the Tribunal received Mr Soryal's written submissions (dated 11 December 2022) in response to the respondent's 11 November 2022 written submissions. 2. On 27 January 2022, the Tribunal received a letter from Mr Soryal which had attached to it an offer of employment, to Ms R Shenouda, for the position of Service Co-ordinator with the applicant's family day care service. The offer is dated 21 January 2023 and counter signed by Ms Shenouda on the following day. 3. On 3 February 2023, we made the following orders in chambers: (1) By 9 February 2023, the respondent is to provide any evidence or submissions in reply to the material provided by the applicant on 14 December 2022 and 27 January 2023. (2) Leave is not granted to the applicant to provide any further material in support of its case. In the event further material is provided, it will not be taken into account in determining the applicant's application. (3) Pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013, a hearing of the applicant's application is dispensed with as the Tribunal is satisfied that the matters in issue in this application can be adequately dealt with on the material before the Tribunal, including any evidence or submissions the respondent provides in response to order 1. 1. On 9 February 2023, the respondent advised that no further evidence or submissions would be filed. 2. In a letter dated 8 February 2023, Mr Soryal advised that he would be returning to Australia on 22 February 2023. Attached to the letter was a flight itinerary for Mr Soryal, for a flight back to Australia on 22 February 2023. The itinerary was issued on 5 February 2023, but did not record that the flight had been paid for and confirmed. The National Law 1. The Second Reading Speech of the Bill that became the Application Act and applied the National Law as a law of New South Wales (NSW Legislative Council, Parliamentary Hansard 23.11.2010), described the Act as laying the: … legislative foundation for nationally consistent standards to ensure quality education and care is provided by long day care, family day care, preschool and outside school hours care services. These national standards were agreed by the Council of Australian Governments in December 2009. 1. That is, the National Law as it applies in New South Wales replicates corresponding legislation enacted in other Australian jurisdictions. Objects and principles of the National Law 1. The objects and principles of the National Law are set out in s 3 of that Act, which include: 3 Objectives and guiding principles (1) The objective of this Law is to establish a national education and care services quality framework for the delivery of education and care services to children. (2) The objectives of the national education and care services quality framework are— … (b) to improve the educational and developmental outcomes for children attending education and care services; (c) to promote continuous improvement in the provision of quality education and care services; … (3) The guiding principles of the national education and care services quality framework are as follows— (a) that the rights and best interests of the child are paramount; (b) that children are successful, competent and capable learners; … (f) that best practice is expected in the provision of education and care services. 1. The national education and care services framework is defined in s 5(1) of the National Law to mean: 1. the National Law; 2. the National Regulations; 3. the National Quality Standard; and 4. the prescribed rating system. 1. The National Quality Standard is that prescribed in Schedule 1 of the Education and Care Services National Regulations (2011) (National Regulations). It is these standards, relating to seven quality areas, which are to be used in assessing an education and care service and rating that service under Part 5 of the National Law. The quality areas are: 1. educational program and practice 2. children's health and safety 3. physical environment 4. staffing arrangements 5. relationships with children 6. collaborative partnership with families and communities 7. governance and leadership 1. Chapter 3 of the National Regulations outlines the assessment and rating processes for an education and care service that applies to all approved education and care services. The rating levels are set in reg 57 of that Chapter as follows: (a) Significant Improvement Required; (b) Working Towards National Quality Standard; (c) Meeting National Quality Standard; (d) Exceeding National Quality Standard (the second highest rating level); Note— The second highest rating level is referred to in section 152(5) of the Law. (e) Excellent rating (the highest rating level). Note— The criteria for an excellent rating are determined by the National Authority. See section 153 of the Law. A co-regulatory system 1. Under the National Law, a person is unable to 'operate' an education and care service unless they are an approved provider, under s 15 of the National Law, and the holder of a service approval, under s 48 of the National Law, for the type of education and care service that the person operates or intends to operate: National Law s 18. 2. The power to grant a provider approval and a service approval for an education and care service is vested in the Regulatory Authority of the state where the approved provider and its approved service(s) operate or are intended to operate. As noted above, in New South Wales, the respondent is the appointed Regulatory Authority. 3. The same Regulatory Authority is also vested with the power to: 1. suspend or cancel a person's provider approval: National Law ss 25-30 and 31-34. A decision to cancel a person's provider approval has the effect of cancelling all service approvals held by the person whose provider approval has been cancelled, which means that the person whose provider approval is cancelled can no longer operate its approved education and care services that are connected to that provider approval: National Law s 34(1); 2. suspend or cancel a person's service approval: National Law ss 70-74 and 77-79. A cancellation of a person's service approval does no cancel the person's provider approval or any other service approvals the person may hold; 3. assess and rate the education and care service of an approved provider: Part 5 of the National Law; and 4. to otherwise do all things that are necessary or convenient to be done for, or in connection with, or that is incidental to the carrying out of its functions under that National Law: s 261 of the National Law. These functions are prescribed in s 260 which include: (a) to administer the National Quality Framework; (b) to assess approved education and care services against the National Quality Standard and the national regulations and determine the ratings of those services; (c) to monitor and enforce compliance with this Law; … 1. As noted below, a person who has been granted a provider approval and one or more service approvals by the relevant Regulatory Authority, it is the person who is provided the provider approval who must ensure that it, its approved service(s) and those it engages of registers for the delivery of its approved service (co-ordinator(s), nominated supervisor(s) and educators) comply with the specific national quality area requirements prescribed in the National Law and the National Regulations. These requirements are very detailed and prescriptive, and it is accepted that it calls for strict compliance by the approved provider and those persons engaged or registered with the provider's service(s): DPW v Secretary, Department of Education [2018] NSWCATAD 257 at [29]; CTG v NSW Department of Education, Early Childhood and Care Directorate [2017] NSWCATAD 60 at [45]. Application for and grant of a provider approval and service approval Provider approval 1. Section 10 of the National Law makes provision for a person(s) to make an application (containing the prescribed information and meeting the prescribed requirements) to the Regulatory Authority for a provider approval. 2. The information to be included in the application for a provider approval is set out in reg 14 and 15 of the Education and Care Services National Regulations (National Regulations). 3. After receiving an application for a provider approval, the Regulatory Authority is required to decide, within 60 days, whether to grant or refuse to grant the provider approval: National Law s 15(3). The 60-day period can be extended by 30 days, if the person applying for approval agrees: National Law s 15(4) 4. If the Regulatory Authority decides to grant the person with a provider approval, that approval is subject to the following conditions: 19 Conditions on provider approval (1) A provider approval may be granted subject to any conditions that are prescribed in the national regulations or that are determined by the Regulatory Authority. (2) Without limiting subsection (1), a provider approval is subject to the condition that the approved provider must comply with this Law. (3) A condition of a provider approval applies to the provider as the operator of any education and care service or associated children's service, unless the condition expressly provides otherwise. (4) An approved provider must comply with the conditions of the provider approval. Penalty— $10 000, in the case of an individual. $50 000, in any other case. 1. Once granted, a provider approval continues in force until it is cancelled or surrendered under the National Law: National Law s 17. Service approval 1. Section 43 of the National Law makes provisions for an approved provider, or a person who has applied for a provider approval, to make an application to the Regulatory Authority for a service approval of an education and care service that is or will be operated by the approved provider. 2. Section 44(1) of the National Law sets out what must be included in an application for a service approval, which includes the prescribed information and the nomination of one or more individuals to be nominated supervisors of the service, together with the written consent of each nominated supervisor. 3. The prescribed information that is to be contained in an application for service approval of a family day care service is set out in reg 26 of the National Regulations. In July 2017, when the applicant lodged its application for service approval, that regulation relevantly provided (italics added): 26 Application for service approval—family day care service An application under section 43 of the Law for a service approval for a family day care service must include the following information— (a) the applicant's full name and— … (b) the name of the proposed family day care service; (c) the proposed date on which the family day care service will commence operation; (d) if known, the contact details, including after-hours telephone number, for the proposed principal office of the service; (e) the proposed hours and days of operation of the family day care service including whether the service proposes to engage or register family day care educators who will provide overnight or weekend care; (f) the proposed location and street address of the principal office of the family day care service; (g) the proposed number of family day care educators expected to be engaged by or registered with the proposed family day care service within 6 months of commencement of the service; (h) the jurisdictions and proposed local government areas in which the family day care educators expected to be engaged by or registered with the proposed family day care service will provide education and care; (i) the proposed number of family day care coordinators expected to be engaged by the proposed family day care service within 6 months of commencement of the service; (j) a statement that the applicant has prepared the policies and procedures referred to in regulation 168; (k) a copy of the proposed policies and procedures referred to in regulation 169; … (m) in relation to the certified supervisor nominated to be the nominated supervisor— (i) the full name and contact details, including after-hours telephone number, of the certified supervisor; (ii) the supervisor certificate number of the certified supervisor, unless the applicant is nominated to be the nominated supervisor and has applied for a supervisor certificate but the application has not been decided. 1. After receiving an application for service approval, the Regulatory Authority has 90 days within which to decide whether to grant or refuse to grant the service approval applied for by the person: National Law s 48(2). This 90-day period does not include the time taken for the applicant to respond the any request by the Regulatory Authority for further information: National Law s 45(2). It can also be extended with the agreement of the applicant: National Law s 48(3). 2. If the Regulatory Authority decides to grant a service approval, that approval is subject to the conditions set out in s 51 of the National Law, which provides as follows (italics added): 51 Conditions on service approval (1) A service approval is granted subject to the condition that the education and care service is operated in a way that— (a) ensures the safety, health and wellbeing of the children being educated and cared for by the service; and (b) meets the educational and developmental needs of the children being educated and cared for by the service. (2) A service approval for a family day care service is granted subject to a condition that the approved provider must ensure that each family day care educator engaged by or registered with the service is adequately monitored and supported by a family day care co-ordinator. (2A) A service approval for a family day care service is granted subject to a condition that each family day care residence, and any approved family day care venue of the service, are to be located within this jurisdiction. (3) A service approval is granted subject to a condition that the service must commence ongoing operation of the service within 6 months after the approval is granted unless the Regulatory Authority agrees to an extension of time. (4) A service approval is granted subject to a condition that the approved provider must hold the prescribed insurance in respect of the education and care service. (4A) … (5) A service approval is granted subject to any other conditions prescribed in the national regulations or imposed by— (a) this Law; or (b) the Regulatory Authority. (6) … (8) An approved provider must comply with the conditions of a service approval held by the approved provider. Penalty: $10 000, in the case of an individual. $50 000, in any other case. Cancellation of a provider approval 1. Section 31 of the National Law gives the Regulatory Authority the power cancel a provider approval on one or more of the grounds set out in that section, which relevantly provides as follows: 31 Grounds for cancellation of provider approval The Regulatory Authority may cancel a provider approval if— (a) the Regulatory Authority is satisfied that the approved provider or a person with management or control of an education and care service operated by the approved provider is not a fit and proper person to be involved in the provision of an education and care service; or (b) the Regulatory Authority is satisfied that the continued provision of education and care services by the approved provider would constitute an unacceptable risk to the safety, health or wellbeing of any child or class of children being educated and cared for by an education and care service operated by the approved provider; or (c) the approved provider has been found guilty of an indictable offence or an offence that if committed in this jurisdiction would be an indictable offence; or (d) the approved provider has been found guilty of an offence under this Law as applying in any participating jurisdiction; or (e) the approved provider has breached a condition of the provider approval; or (f) the approved provider has not operated any education and care service for a period of more than 12 months (including any period of suspension); or (g) … 1. Before a Regulatory Authority decides to cancel a person's provider approval, the Regulatory authority must first give the approved provider a Show Cause Notice that informs the approved provider of its' intention to cancel the person's provider approval, the reasons for the proposed cancellation and giving the person 30 days within which to respond to the proposed cancellation: National Law s 32. 2. Section 33 of the National Law relevantly provides: 33 Decision in relation to cancellation (1) After considering any written response from the approved provider received within the time allowed under section 32(2)(c), the Regulatory Authority— (a) may— (i) cancel the provider approval; or (ii) suspend the provider approval for a period not more than the prescribed period; or (iii) decide not to cancel the provider approval; and (b) must give the approved provider written notice of the decision. (2) The decision to cancel the provider approval takes effect at the end of 14 days after the date of the decision or, if another period is specified by the Regulatory Authority, at the end of that period. (3) The notice of a decision to cancel the provider approval must set out the date on which it takes effect. … 1. Where, after having issued a Show Cause Notice, the Regulatory Authority decides to cancel a person's provider approval, that decision has the effect of also cancelling all service approvals held by that person: National Law s 34(1). Background 1. As noted above, the applicant was granted service approval on 15 June 2018. The conditions of the service approval were as follows: - The approved provider must comply with the conditions of section 51 of the Children (Education and Care Services) National Law, and the requirements of the Education and Care Services National Regulations. - The approved provider must ensure that the maximum number of family day care educators employed or engaged by the service does not exceed 12. - The approved provider must employ at least one full-time family day care co-ordinator for every 15 family day care educators providing education and care to children. - The approved provider must notify the Regulatory Authority within 5 days of commencing operation of the family day care service. - The approved provider within 5 days of the commencement of the operation of the family day care service must submit to the Regulatory Authority: … 1. On 8 January 2019, an officer of the respondent Department, authorised under s 195 of the National Law (authorised officer), telephoned Mr Soryal. There was no answer, and the authorised officer left a message for Mr Soryal to return her call. Mr Soryal returned the call on the following day and is recorded as having informed the authorised officer that the applicant had registered one educator, but no children were registered with its family day care service as the applicant was awaiting Commonwealth approval of its service under the Commonwealth Child Care Subsidy scheme (CCS). 2. On 1 February 2019, two authorised officers visited the principal office of the applicant's family day care service. The authorised officers noted that the office was locked and there was no one present. 3. On 4 February 2019, an authorised officer spoke to Mr Soryal by telephone. Mr Soryal is recorded as having informed the authorised officer that the applicant was not operating its approved family day care service as it was still awaiting CCS approval. 4. On 6 February 2019, the applicant lodged an application for voluntary suspension of its provider approval. One week later, on 13 February 2019, the applicant lodged an application for voluntary suspension of its service approval. Included in the reasons the suspension was that CCS approval had not been granted and the parents of the children wishing to use the applicant's service were not prepared to pay full fees – Mr Soryal went on to say the parents were only interested in using the applicant's service once it was CCS approved. 5. On 6 March 2019, the respondent advised Mr Soryal, by email, that the applicant's application for voluntary suspension of its provider approval had been approved and that it was effective as of 6 March 2019 until 5 March 2020. The respondent also advised that notwithstanding the voluntary suspension all annual fees remained payable. 6. On 4 December 2019, Mr Soryal sent an email to the respondent Department to advise that the principal office of its family day care service would be relocated to another address from 9 December 2019. Mr Soryal explained that the reason for the move was that the existing office was being renovated. On the same day, an authorised officer telephoned Mr Soryal. During the telephone call Mr Soryal is recorded as having confirmed that the applicant was not operating its service – it was simply moving the office. 7. On 5 March 2020, the Approvals and Services Team of the respondent Department sent an email to Mr Soryal in which it was noted that the voluntary suspension for the applicant's approved service had expired and that the applicant's 'service is taken to be operating'. Mr Soryal was also advised that if the applicant no longer wished to operate its service a 'Surrender of Service Approval' notification could be submitted. Mr Soryal was also given a telephone number to call if he had any questions. 8. On the same day, Mr Soryal sent an email to the respondent Department in which he thanked the respondent Department for letting him know that the applicant's service was active from 6 March 2020. He also advised that the applicant's service had not received CCS approval and asked if it would be possible to voluntarily suspend the applicant's service for a few months until CCS approval is received. 9. The respondent Department replied on 19 March 2020. In the reply, the respondent Department confirmed that the applicant was able to submit another application for voluntary suspension, which would be assessed accordingly. The respondent Department also noted that CCS approval is not a requirement under the National Law. 10. In February 2021, the applicant applied for the amendment of its provider approval. The amendment sought was a change in the address of the principal office of the applicant. One month later the applicant applied for the same amendment to its service approval. That application was approved in late June 2021 after Mr Soryal provided the requested information and a visit by an authorised officer to the original address and then the new address. During the visit to the new address the authorised officer spoke to a neighbour who said that she had not seen any children at the new address. 11. In February, April and May 2022, the respondent Department sent an email to the applicant to advise that there were COVID-19 RAT tests available for its collection at the local post office. 12. As noted above, on 28 February 2022, the respondent issued a 'Show Cause Notice' to the applicant in which the respondent said it intended to cancel its provider approval. The reasons for the proposed cancellation were: 1. a failure to pay the prescribed annual fees; and 2. a failure to operate any education and care services for a period of more than 12 months. 1. In his 14 March 2022 response, on behalf of the applicant, Mr Soryal said: 1. no notification to pay fees had been received and if he were provided with an invoice of what was outstanding, he would pay it; 2. he had tried to do marketing since the applicant was registered but found that CCS approval was essential. He had also tried to engage qualified educators, but COVID-19 had kept parents worried about sending children to educators and educators were also worried about educating and caring for children. However, 'it is our goal now to enrol children soon after easing the COVID-19 restrictions on 28th February as parents have started to make enquiries and COVID-19 cases are under control'. 1. On 30 June 2022, two authorised officers visited the principal office (that is the new office) of the applicant's approved service. They knocked on the door and there was no answered. They also saw no movement in or around the house. The authorised officers then called Mr Soryal on his mobile phone. There was no answer. The authorised officers then called the nominated supervisor of the applicant's service. The nominated supervisor is recorded as having said that: 'the service has no children registered in the scheme, no children ever registered in care'. The nominated supervisor is also recorded as having advised that Mr Soryal was currently overseas caring for a sick son, and he was looking to selling the business but as he was overseas nothing has happened. 2. As noted above, on 29 July 2022, a delegate of the respondent decided to cancel the applicant's provider approval. In the 'Notice of Cancellation' the delegate noted that officers of the respondent Department had telephoned Mr Soryal on his mobile phone on 8 March 2022, 6 April 2022 and 9 May 2022 and on each occasion, there was no answer. The visit by authorised officers to the applicant's principal office on 30 June 2022 was also noted. The only reason given for the cancellation of the applicant's provider approval was the applicant's failure to operate its approved service within a period of 12 months or more. It was noted that the applicant's service had not operated since June 2018, which was a period of four years. The applicant's case 1. In his written submissions of 12 September 2022, Mr Soryal said: 1. in October 2021, his son, who was overseas, ran into some health problems and he had to travel overseas to look after him. His son's health had in the meantime not improved in order for him to return to Australia; 2. the 'service is a great service and we intend to provide that service …'; 3. he has not received any calls from the respondent Department, even though his phone is on roaming; 4. his wife was unfortunately out when the authorised officers visited on 30 June 2022; 5. he has not listed his business for sale, because he has worked so hard on preparing the policies and paperwork; and 6. if his provider approval is restored, he will dedicate his time for the applicant's service when he returns in October 2022 after the doctors give his son the final approval to return to Australia. 1. In his submissions of 11 December 2022, Mr Soryal said: 1. the period during which the applicant's provider approval was suspended should not be counted; 2. in the excise of the discretion in s 31(f) of the National Law, the Tribunal should consider the 'extreme circumstances that forced them (sic) not to be able to run the service'. In this regard Mr Soryal submitted that: 1. since being registered, the applicant had demonstrated a serious approach to offer its service and keep its currency and abide by 'all the Department's regulations'; 2. at the beginning the applicant tried to market and employ staff but found the CCS approval was essential. Then, COVID-19 kept parents and educators away for fear of contacting the virus; 3. while it is easy to apply the law and cancel the applicant's provider approval, forcing the applicant to re-apply should be avoided by giving the applicant another chance to commence operation after the Christmas break; 4. the applicant has not risked the welfare or lives of any children – the only challenge facing the applicant is its failure to comply with the commencement condition in s 51(3) of the National Law, which may be pardoned by the harsh circumstances of COVID-19 and his family circumstances, which could happen to anyone; 5. he is a fit and proper person to be involved in the provision of an education and care service and he will provide the necessary documentation once he returns to Australia. He is also a man of good character, and his credentials remain current; 6. the physical environment of his premises is suitable for children and the applicant has adequate policies and procedures, which were included in the bundle of documents submitted by the respondent on 21/10/2022; 7. it is unfair to cancel the applicant's provider approval given the harsh circumstances of COVID-19 and the serious illness of his only son while out of Australia; 8. he would be returning to Australia in mid-January 2023 and the applicant's service would be operative from the beginning of February 2023 if the Tribunal 'is kind enough and change the date of the decision'; 9. the local community where the service is to operate from 'are well-informed' and while there is no legal requirement for an education and care service to obtain the Commonwealth Subsidy (CCS) before it can commence operation, all parents had asked for it. Hence, it is 'unreasonable, in fact, it is impossible that a family day care service can run without that approval'; and 10. 'the effect of the provider approval cancellation on the community is not as serious as it is on the applicant who will lose a lot of money, time and effort the decision of cancellation of the provider approval is confirmed … The respondent's case 1. As noted above, in support of his case, the respondent relied on the affidavit evidence of Sam Goldsmith (Mr Goldsmith). In that affidavit, Mr Goldsmith gave evidence of a letter he sent to Mr Soryal on 3 November 2022 and Mr Soryal's email response on the same day. 2. He also gave evidence of his telephone call with Mr Soryal the following day in which Mr Soryal confirmed that, for the reasons he had given previously, the applicant had never provided care to children since June 2018. 3. In its submissions the respondent contended that, based on the evidence before it and the proper construction of ss 31(f) and 51(3) of the National Law, the Tribunal must conclude that the applicant never operated any education and care service for a period of more than 12 months because: 1. the activities of the applicant since it received service approval does not amount to the applicant having operated any education and care service: citing DBU at [33]-[34] and [37] and Forever Family Day Care Pty Ltd v Secretary, Department of Education [2022] NSWCATAD 185 (Forever Family Day Care); 2. Mr Soryal, on behalf of the applicant, has admitted that the applicant has never provided education and care to any children; and 3. Mr Soryal's stated intentions as to the operation of the applicant's service when he returns to Australia (for example, enrol children for its service, appoint a full time co-ordinator, advertise for staff and to move into a formal office), are the subjective intentions of Mr Soryal and do not amount to the applicant having operated any education and care service: citing Forever Family Day Care at [53] and [55] and DBU at [38]. 1. The respondent also submits that, if the Tribunal finds that the applicant has not operated an education and care service for more than 12 months, then the discretion to cancel its provider approval is enlivened and in the exercise of that discretion, the Tribunal should uphold the cancellation decision because: 1. unlike the remaining grounds for cancellation of a provider approval, s 31(f) of the National Law is not enlivened by any wrongdoing or impropriety on the part of the approved provider. Instead, it is enlivened solely by the approved provider failing to operate an education and care service for 12 months or more. It is a regulatory tool for those circumstance where, due to inactivity by the approved provider, the Regulatory Authority has been unable to assess the continuing currency of the provider's credentials and rate the service against the National Quality Standards. These credentials were assessed at the time provider approval and service approval was granted to the applicant which, due to inactivity during the subsequent years are out of date and possibly lost; 2. the applicant would be free to re-apply for a provider and a service approval and the decision of the Tribunal in confirming the decision to cancel its provider approval does not of itself put at risk the applicant's ability to operate an education and care service in the future. In November 2022, the cost of reapplying, for the approvals were $219 for a provider approval and $658 for service approval; 3. the very extended period of the applicant's inactivity weighs heavily in favour of exercising the discretion, especially as the applicant has never operated an education and care service in more than five years – citing Jessica Education Centre Ltd (KA Family Day Care) v Secretary, Department of Education [2020] NSWCATAD 99 at [22] and [38]; 4. minimal weight should be given to any impact of COVID-19 on the applicant's business as other family day care services in NSW were equally impacted and continued to operate by making appropriate adjustment to their respective services. In any event, it was not until around February 2020 that Australia and NSW felt the impact of COVID-19 and at that time the applicant had been an approved provider for two and a half years, which was sufficient grounds to enliven the cancelation of its provider approval under s 31(f) of the National Law; and 5. the difficult circumstances in which Mr Soryal found himself in were acknowledged, but they must be weighed against the intended scope of the application of s 31(f) of the National Law, the policy considerations that underlie that section and the lengthy period in which the applicant had not commenced operating; 6. there is no legal requirement for an education and care service to obtain the CCS subsidy before it commences operation. Hence it does not justify an indefinite suspension of the service while it awaits approval: citing Forever Family Day Care at [70]; DBU at [47] and Al Hamid (t/as Paradise for Children) v Secretary, Department of Education [2018] NSWCATAD 74 (Al Hamid) at [77]; 7. a cancellation of the applicant's provider approval will not cause any inconvenience to the local community as the applicant has at no time operated its service; and 8. given the long period of time that the applicant has not operated, a decision to set aside the cancellation decision would require additional monitoring by the respondent which is resource intensive and contrary to the intent of s 31(f) of the National Law and the intent of Parliament for a co-regulatory system, whereby an approved provider has a regulatory function of those persons it employees or registers for its service. Consideration Has the applicant not operated any education and care service for a period of more than 12 months? 1. In our view this is a simple question, and the starting point is the terms of the relevant provisions of the National Law. 2. First, as we have already noted, s 18 of the National Law provides that (bold added): A provider approval authorises the approved provider to operate an approved education and care service … if the approved provider is the holder of the services for those services. 1. The term 'education and care service' is defined in s 5(1) of the National Law. That definition relevantly provides: education and care service means any service providing or intended to provide education and care on a regular basis to children under 13 years of age other than— (a) a school providing full-time education to children, … 1. The term 'family day care service' is also defined in s 5(1) of the National Law as follows: family day care service means an education and care service that— (a) is delivered through the use of 2 or more educators to provide education and care to children; and (b) operates from 2 or more residences; 1. This meaning of 'family day care service' falls within the meaning of an 'education and care services' and is not included in the exceptions that follow. 2. The word 'operate' is not defined in the National Law and should be given its ordinary meaning. 3. The on-line Macquarie Dictionary defines the word 'operate' to mean: operate /ˈɒpəreɪt/ (say 'opuhrayt) verb (operated, operating) –verb (i) 1. to work or run, as a machine does. 2. to work or use a machine, apparatus, or the like. 3. (sometimes followed by on or upon) to act effectively; exert force or influence: now the same causes are operating for war. 4. to perform some process of work or treatment. 5. Surgery to perform some manual act or series of acts upon the body of a patient, usually with instruments, to remedy deformity, injury, or disease. 6. (of medicines, etc.) to produce the effect intended. 7. Navy, Military a. to carry on operations in war. b. to give orders and accomplish military acts, as distinguished from doing staff work. 8. to carry on transactions in securities, or some commodity, especially speculatively or on a large scale. –verb (t) 9. to manage or use (a machine, etc.) at work: to operate a switchboard. 10. to keep (a machine, apparatus, factory, industrial system, etc.) working or in operation. 11. to bring about, effect, or produce, as by action or the exertion of force or influence. [Latin operātus, past participle, having done work, having had effect] –operatable, adjective 1. In our view, in the context of the National Law, the ordinary meaning of the word 'operate' is the carrying on of an education and care service, including a family day care service. 2. In this regard, s 18 of the National Law authorises an approved provider to operate (carry on) an education and care service where the authorised provider has received service approval from the Regulatory Authority for the service the subject of its application for service approval under s 43 of the National Law. That is, a grant of service approval by the Regulatory Authority respondent is what gives the approved provider the ability to commence operating its education and care service: see DBU at [38]. As explained by the Tribunal, a grant of service approval is the initial step, but does not mean that the approved service is actually operational. In the case of an approved family day care service this requires the approved service to have engaged or registered two or more family day care educators who are to provide education and care for children at their respective approved residence as part of the approved service of the approved provider: see DBU at [37] and CVM v Secretary, Department of Education [2017] NSWCATAD 108 (CVM) at [45]. 3. Section 31(f) of the National Law, on the other hand is directed at an approved provider who has not operated 'any' education and care services for a period of 12 months or more. The period of 12 months or more in s 31(f) is specific and expressly includes any period of suspension of the provider's approval. 4. Furthermore, s 31(f) of the National Law applies equally where an approved provider has not sought or been granted service approval for an education and care service. 5. In this case, there is no evidence of the applicant having carried on (operated) its intended and approved family day care service. In our opinion, in the absence of any evidence of the applicant having engaged or registered two family day care educators, the applicant's 21 January 2023 offer of employment to Ms Shenouda as Service Co-ordinator was no more than a desperate attempt to have the applicant's provider approval restored. However, it did not evidence the applicant having commenced operation. 6. Nor does Mr Soryal contend to the contrary. Instead, he acknowledged on several occasions that the applicant has not at any time operated an education and care services since 15 June 2018. In our view, that admission is appropriately made. The reasons given by Mr Soryal for the applicant not having commenced operation are, in our opinion, matters to be considered in the exercise of the discretion in s 33(1) of the National Law and are of no relevance to the question as to whether the applicant has not operated any education and care service for 12 months or more. 7. Accordingly, we find that, as at the date on which the applicant's provider approval was cancelled (29 July 2022) the applicant had not operated any education and care service for 12 months or more. 8. We also find, having regard to the terms of s 31(f) which expressly provides that any period of suspension is included, that, as at the date of the respondent's decision to cancel the applicant's provider approval, the applicant had not operated any education and care services for four years. Again, the reasons for the suspension are matters which may be considered in the exercise of the discretion in s 33(1) of the National Law. Discretion – should the applicant's provider approval be cancelled? 1. As noted by the respondent in exercising its discretionary power under s 33(1) that power must be exercised reasonably having regard to the objects and principles of the Act and in accordance with the scope and purpose of that section and other relevant provisions in that Act. In our view, matters relevant to the exercise of the discretion in s 33(1) include the following: 1. the objects and principles of that Act, the nature of the co-regulatory scheme within that Act and the legislative purpose of s 31(f) of that Act; 2. the period of time since the approved provider obtained service approval for its education and care service; 3. the steps taken by the approved provider during this period of time to commence operating the education and care service for which it received approval; 4. the reasons given by the approved provider as to why it has not commenced operating the education and care service for which it received approval; and 5. any other relevant matter (for example the applicant's history of compliance with the National Law and National Regulations). Objects and principles of the National Law 1. In DBU, at [43], the Tribunal cited the following remarks of the ACT Civil and Administrative Tribunal in Long Life Family Daycare v Director-General, Education Directorate [2016] ACAT 69 at [12]: [I]t is evidence (sic) that the providers of child care services are responsible for the health and welfare of the children in their care. This … must require a high degree of probity, trustworthiness and compliance with the National Law.: 1. In DBU, at [44], the Tribunal went on to say: 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. 1. We agree with the Tribunal's remarks. As noted above, the focus of the national quality framework is on the delivery of education and care services nation-wide, and the continuous improvement in the provision of the quality of those services. As set out in s 3, the object of such delivery and continuous improvement is so that the educational and development outcomes for all children attending education and care services regulated under the National Law and the National Regulations are improved and that the quality of those services are continually improved. 2. As we have already noted, under-pinning the very detailed and prescriptive provisions of the National Law and the National Regulations is the National Quality Standard for the operation of an education and care service regulated under that Law and Regulations together with the assessment and ongoing assessment of those services against the rating levels prescribed in the Regulations. 3. The delivery of education and care services under the National Law is by approved providers who are authorised to provide the education and care services regulated under the National Law and National Regulations. 4. To achieve the early delivery and ongoing deliver of such education and care services, Parliament has made provision for strict time frames within which the Regulatory Authority is to consider and determine an application for provider approval (60 days) and service approval (90 days). Parliament has also made provision for a strict time frame within which an approved provider is to commence operating its approved service (6 months). 5. In CTG v NSW Department of Education, Early Childhood and Care Directorate [2017] NSWCATAD 60, at [59], the Tribunal made the following observation about the time frame in s 51(3) (the 6 month commencement requirement) and generally within the National Law: 59 The purpose of the time frames is to provide currency to the approval process, and avoid a situation whereby one set of regulatory compliance is satisfied whilst another parallel regime could (in some instances) remain in abeyance for considerable time, if not indefinitely. Currency of credentials, approvals, training and even some certainty of what is to be regulated or oversighted are in my view significant matters of public interest. They are matters consistent with the role for which approval is sought and in this instance the specific requirements of the Legislature in setting such specific standards. 1. A provider approval, once granted, remains in force until cancelled: s 17. However, this approval does not facilitate the delivery of an education and care service. This is facilitated through the approved provider obtaining service approval for the education and care service the provider intends to operate. And to ensure that there is an early delivery of service approval of an education and care service the approved provider intends to provide, the provider is required to commence operating that service within 6 months. These approval processes and time frames accord with the objectives and guiding principles in s 3 of the National Law. 2. Consistent with the objects of the Act and the other time frames within the National Law and National Regulations, Parliament has made a deliberate choice, that the Regulatory Authority be given the power to cancel a person's provider approval where the provider fails to operate any education and care services for 12 months or more. That power being s 31(f) of the National Law. 3. The circumstances where that power may arise are where the approved provider fails to seek or obtain any service approval, fails to commence operating its approved service, or ceases to operate its approved services. That is, Parliament's intent, as expressed in s 31(f), is that an approved provider who does not provide any education and care service for 12 months and more may have its provider approval cancelled. The period of time since service approval was granted 1. As at the time of hearing it was almost four and a half years since the applicant was granted service approval for its family day care service. This is three years more than the time within which the applicant was to commence operating its approved family day care service as required under s 51(3) of the National Law and expressly stated in the notice of service approval provided to the applicant. It is also three and a half years more than the 12-month period prescribed in s 31(f) of the National Law. 2. n our view, in this application, a period of four and a half years where the applicant has not provided any education and care service is very substantial. 3. While the period of suspension is to be included in the calculation the period during which the approved provider did not provide any education and care service, in our view, the two and a half years after the applicant's voluntary suspension had expired in March 2020, is also a very substantial period of time during which the applicant did not provide any education and care service. Steps taken by the applicant during this time to commence operating its approved service 1. On the material before the Tribunal, we are not persuaded that, from the time it was granted service approval, the applicant took any steps towards being able to commence operating its approved family day care service. In this regard, other than mere assertion, Mr Soryal, on behalf of the applicant, did not provide any evidence of having advertised its service generally or otherwise, having approached any potential family day care educators to be engaged or registered with its service, or that the applicant was approached by parents wishing to register their child(ren) with its service. 2. The only steps taken by Mr Soryal, on behalf of the applicant, appear to be an application to the Commonwealth for Commonwealth CCS approval. The National Law, as explained by the respondent, does not require Commonwealth CCS approval to: 1. commence the operation of an approved education and care service; or 2. continue the operation of such a service. 1. In our view, Commonwealth CCS approval was clearly a business decision taken by Mr Soryal on behalf of the applicant. We are not critical of that decision. However, under the National Law it is not a matter relevant to the applicant's obligation to commence operating its approved education and care service within six months of approval or otherwise. 2. The only other step taken by the applicant concerning its approved service was notifying the respondent, in early 2021, of the change of address of the principal office of its service. That notification was approved by the respondent. However, in the respondent's inspection of the new principal office of the applicant there was no evidence of any children having been educated or cared for by the applicant's approved service. Reasons given by the applicant as to why it had not commenced operating its service 1. As noted above, in seeking approval for a voluntary 12-month suspension in early 2019, the reasons given by Mr Soryal, on behalf of the applicant, was a failure to receive the Commonwealth CSS approval. As we have explained above, this has clearly been a business decision Mr Soryal made around the time the applicant was granted service approval (June 2018) and is one that he has maintained throughout these proceedings. Again, we are not critical of Mr Soryal. 2. However, as the objects of the National Law are directed towards facilitating the implementation of a quality framework for the delivery of education and care services and the strict time frames prescribed in that Law, we find, given the long period of time the applicant has not operated any education and care service, this business decision of Mr Soryal to await CCS approval should be given little, if any, weight in considering whether the discretion should be exercised in favour of the applicant. 3. The other reasons for not having commenced operating its approved education and care service is COVID-19 and Mr Soryal's absence overseas. Again, for the same reasons set out above, little, if any, weight should be given to these reasons. 4. COVID-19 impacted everyone. Yet essential services such as approved education and care services continued to operate to some extent to support essential workers during this difficult time. Again, in our view, Mr Soryal, made a business decision, on behalf of the applicant, not to commence the operation of the applicant's approved education and care service during this time. As we have noted, in March 2020, Mr Soryal asked if a further suspension could be made on behalf of the applicant. He was advised he could do so, but at no time did he do so or seek to have the period of time within which to commence operation of the applicant's service to be extended. Again, we are not critical of Mr Soryal and the business decisions he has made. However, it was this business decision which prevented the applicant from commencing its operation for more than two and a half years and not anything arising from the application of the National Law during the period of COVID-19. 5. We accept the evidence of Mr Soryal that he needed to travel overseas and care for his son who was ill. This, however, was not a reason given by Mr Soryal in his March 2022 response to the respondent's Show Cause Notice. Nor had he informed the respondent of his absence, instead the respondent was advised of his absence during a compliance visit, on 30 June 2022, to the applicant's principal office. It is of concern that Mr Soryal had not informed the respondent of his absence earlier around the time he left for overseas in November 2021. 6. In any event, at the time written submissions closed in this matter, Mr Soryal remained overseas and on the information before the Tribunal, at best, Mr Soryal had obtained a flight itinerary for a return to Australia on 22 February 2023. Even if Mr Soryal did return to Australia on this day, there is no evidence, other than mere assertion that the applicant could and would commence operation on Mr Soryal's return. Given the length of time since the applicant was granted approval of its intended education and care service and the lengthy inaction in preparing to commence operating that service, we can only conclude that the applicant was in no position to commence operation on Mr Soryal's return to Australia, or at any time prior thereto. Any other matter 1. We accept that there has been no adverse finding made against the applicant or Mr Soryal. However, a decision to cancel the applicant's provider approval is not dependent on making such a finding. 2. However, we agree with the respondent that, given the long period of time since the applicant obtained both provider and service approval together with its almost total inaction during that time, its 2017 and 2018 approvals are no longer current. In our view, for the reasons we have already given, this lack of currency is also inconsistent with the objects and principles of the National Law, including the principle that the rights and best interests of the child are paramount. 3. Finally, as noted by the respondent, a cancellation of the applicant's provider approval does not prevent the applicant from making a fresh application for a provider approval and a service approval sometime in the future. While Mr Soryal argues that this is a waste of time and money, this might be so from his point of view. However, this would ensure the currency of the applicant's approvals, as intended by Parliament in adopting the National Law. Conclusion 1. Accordingly, based on our findings set out above, we have decided that the discretion in s 31(f) should be exercised by cancelling the applicant's provider approval. Conclusion and Order 1. For the reasons we have given above, we find that the correct and preferable decision is to cancel the applicant's provider approval. Hence, the appropriate order is to confirm the decision of the respondent under s 193(3)(a) of the National Law. 2. We make the following order: 1. The decision of the respondent, made on 29 July 2022, to cancel the applicant's provider approval is confirmed. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 October 2023