Supreme Court New South Wales Medium Neutral Citation: Secretary, Department of Education v Joys Child Care Ltd [2017] NSWSC 749 Hearing dates: 17, 18, 19 May 2017 Date of orders: 13 June 2017 Decision date: 13 June 2017 Jurisdiction: Equity - Duty List Before: Parker J Decision: Declaration granted with liberty to apply for final injunctive relief Catchwords: EQUITY – injunctive and declaratory relief – statutory prohibition – standing – regulatory authority – discretionary considerations – interaction between equitable relief and criminal process – offence of strict liability CHILD WELFARE – child care centre – statutory regime – provider and service approvals – cancellation of approvals – service agreement with third party to operate centre – breach of statutory regime – declaration Legislation Cited: Administrative Decisions Review Act 1997 (NSW), s 60 Children (Education and Care Services National Law Application) Act 2010 (NSW), s 8 Children (Education and Care Services) National Law (NSW) ss 31, 34(1), 47(1)(b), 52(b), 70(g), 103, 217, 218 Civil and Administrative Tribunal Act 2013 (NSW), s 43 Civil Procedure Act 2005 (NSW), s 19 Corporations Act 2001 (Cth) Uniform Civil Procedure Rules 2005 (NSW), rr 7.1, 7.2 Cases Cited: Herron v McGregor (1986) 6 NSWLR 246 Peek v New South Wales Egg Corporation (1986) 6 NSWLR 1 Stafford Borough Council v Elkenford Ltd [1977] 2 All ER 519 Walton v Gardiner (1993) 177 CLR 378; [1993] HCA 77 Texts Cited: JD Heydon, MJ Leeming, and PG Turner, Meagher, Gummow and Lehane's Equity Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths) Category: Principal judgment Parties: Secretary, Department of Education (Plaintiff) Joys Child Care Ltd (First Defendant) Chinese Students Association Inc (Second Defendant) Jan Shang (Third Defendant) Representation: Third Defendant in person (and representing first and second defendants for the purposes of the application Counsel: J Emmett/S Johnson (Plaintiff) Solicitors: Crown Solicitors Office (Plaintiff) File Number(s): 2017/135902 Publication restriction: Nil Judgment 1. These proceedings concern a child care centre at Parramatta. The centre operates under the name "Joys". I will refer to it as "the Centre". 2. Until earlier this year, the Centre was operated by the first defendant ("JCC"). JCC is a company limited by guarantee. Its ultimate holding company is the second defendant ("CSA") which I assume is an incorporated association. The third defendant, Mr Shang, is one of the two directors of JCC. He is also registered as the public officer of CSA with the Australian Charities and Not-for-profits Commission. 3. The proceedings are brought in the name of the Secretary of the New South Wales government department responsible for administering the regulatory scheme which applies to child care in New South Wales. I will refer to the plaintiff as the "Department". Procedural matters 1. The Department brought the matter before the Court on an urgent basis seeking interlocutory injunctive relief. Relief was initially sought ex parte. I declined to grant relief, other than for short service, on that basis. The application next came before me in the Duty List on 15 May 2017. I fixed the application before me later in the week on 17 May. The argument did not finish on that day and continued on 18 and 19 May. 2. At the beginning of the hearing on 17 May, I indicated to Mr Shang that he needed leave from the Court to represent JCC and CSA, which are both corporations in the proceedings. I granted leave to Mr Shang for the purpose of the present application only. 3. In saying what I said I overlooked the detail of the provisions of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). The relevant rules are as follows: 7.1(2) A company within the meaning of the Corporations Act 2001 of the Commonwealth: (a) may commence and carry on proceedings in any court by a solicitor or by a director of the company, and … 7.1(3) In the case of proceedings in the Supreme Court, subrule (2) (a) authorises a company to commence proceedings by a director only if the director is also a plaintiff in the proceedings. 7.1(4) A corporation (other than a company within the meaning of the Corporations Act 2001 of the Commonwealth): (a) may commence and carry on proceedings in any court by a solicitor, and (b) may commence and carry on proceedings in any court (other than the Local Court) by a duly authorised officer of the corporation, and … 7.2(1) A person who commences or carries on proceedings in the Supreme Court or District Court: (a) as the director of a company within the meaning of the Corporations Act 2001 of the Commonwealth, or (b) as the authorised officer of a corporation (other than a company within the meaning of the Corporations Act 2001 of the Commonwealth), must file with the originating process, notice of appearance or defence, as the case may be, an affidavit as to his or her authority to act in that capacity, together with a copy of the instrument evidencing that authority. 7.2(2) The affidavit made by the director of a company within the meaning of the Corporations Act 2001 of the Commonwealth must contain: (a) a statement to the effect that: (i) the director is a director of the company, and (ii) the director has been authorised by a resolution of the directors duly passed at a meeting of directors held on a specified date (which must not be earlier than 21 days before the date of the affidavit) to commence and carry on the proceedings, as the case requires, and (iii) the authority has not been revoked, and (iv) the director is aware that he or she may be liable to pay some or all of the costs of the proceedings, or (b) a statement to the effect that: (i) the director is the managing or governing director of the company and has authority to exercise the powers of the directors, and (ii) the director is aware that he or she may be liable to pay some or all of the costs of the proceedings. 7.2(3) The affidavit made by the authorised officer of a corporation (other than a company within the meaning of the Corporations Act 2001 of the Commonwealth) must contain a statement to the effect that: (a) the officer is the holder of a specified office within the corporation, and (b) the officer has been authorised by the corporation to commence and carry on the proceedings, and (c) the authority has not been revoked, and (d) the officer is aware that he or she may be liable to pay some or all of the costs of the proceedings. 1. Civil Procedure Act 2005 (NSW), s 19, provides that "carry on proceedings" includes defending proceedings. It follows (as is reflected in r 7.2(1)) that although a company may not prosecute proceedings in this Court by a director (unless the director is also a plaintiff), it may defend proceedings in that manner. Accordingly, and contrary to what I said to Mr Shang, JCC has a right to defend proceedings by Mr Shang as director, provided that it complies with UCPR rr 7.2(1) and (2). Similarly, CSA has a right to defend the proceedings by its authorised officer provided that it complies with rr 7.2(1) and 7.2(3). 2. In the present case, Mr Shang asserted that he was in effective control of the affairs of JCC and CSA. However, the provisions of r 7.2 were not complied with for either JCC or CSA. In those circumstances, it remained appropriate for me to have granted leave to Mr Shang for the purposes of this application. If the matter proceeds further, then either JCC or CSA will need to be represented by a solicitor or the relevant rules will need to be complied with. 3. At the beginning of the hearing Mr Shang sought an adjournment. The application was based on a medical certificate dated 18 May from Dr Yamuna Navaratne of Argyle Street Medical Centre which stated: This is to certify that Mr Jan Shang is suffering from a medical condition and is unable to attend work from 18/05/2017 to 24/05/2017 inclusive. 1. I refused Mr Shang's application on 18 May. I did so for two main reasons. First, the certificate had little evidentiary weight. The opinion expressed in it contained no reasoning, recorded no clinical observations and advanced no diagnosis of any specific medical condition. The second reason was that neither the certificate nor the circumstances in which it was produced gave me any confidence that, if I adjourned the hearing of the application, it could have been completed at any particular later point in time. 2. As it happened, Mr Shang chose to remain in Court after I refused the application and to participate in the hearing. On the following day he presented his arguments against the application with no apparent difficulty; indeed he went so far as to thank me for refusing the adjournment application. Legislative and factual background 1. Child care centres are regulated by the Children (Education and Care Services) National Law (NSW) ("National Law"). The law provides for a system of approvals by the Regulatory Authority (in NSW, the Department). That system is underpinned by s 103 which provides: 103 Offence to provide an education and care service without service approval (1) A person must not provide an education and care service unless — (a) the person is an approved provider in respect of that service; and (b) the education and care service is an approved education and care service. Penalty: $20 000, in the case of an individual. $100 000, in any other case. (2) Subsection (1) does not apply to a family day care educator providing education and care to children as part of an approved family day care service. 1. The National Law contains detailed provisions for the grant of provider approvals (Pt 2, Div 1) and service approvals (Pt 3, Div 1). 2. In June 2014, the Department granted provider approval to JCC. The Department also granted a service approval covering the operation of the Centre. The service approval granted was for the then location of the Centre in Church Street, Parramatta. Subsequently the Centre was moved to Campbell Street, Parramatta. It appears that no formal amendment of the service approval was made to reflect this, but the Department was well aware of it as a result of dealings with JCC and no point is taken by the Department concerning JCC's operation of the Centre at the new address. 3. In December 2016, friction arose between Mr Shang and officers of the Department. The Department initially suspended JCC's approval by notice dated 23 December 2016. The Department cancelled JCC's approval on 29 March 2017, effective from 12 April 2017. For the purposes of these proceedings, the Department relies on the cancellation and I do not need to consider whether the revocation was lawful. In cancelling the approval, the Department acted pursuant to ss 31(a), (b), and (e) which provide 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 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 … (e) the approved provider has breached a condition of the provider approval; 1. The cancellation of JCC's provider approval resulted in the cancellation of JCC's service approval, pursuant to s 34(1): 34 Effect of cancellation (1) Subject to this section, if a provider approval is cancelled under section 33 of this Law as applying in any participating jurisdiction, all service approvals held by the person who was the approved provider are also cancelled. 1. JCC applied for the review of the Department's decision to cancel its approval. Under the Children (Education and Care Services National Law Application) Act 2010 (NSW), s 8, jurisdiction of review applications is conferred on the NSW Civil and Administrative Tribunal ("NCAT"). NCAT's powers on a review application extend to a full merits review of the decision in question. NCAT also has power to make interlocutory orders suspending the effect of any decision under review. There is a question as to the precise statutory basis for this power. One view is that it rests on the Civil and Administrative Tribunal Act 2013 (NSW), s 43, while the other view is that it rests upon the Administrative Decisions Review Act 1997 (NSW), s 60. 2. It is not necessary for present purposes to explore which of these provisions is applicable in the present case. It is clear that NCAT would have power, if invited to do so by JCC, to make an order suspending the operation of the cancellation, and thus entitling JCC to continue to operate the Centre until the merits review is completed. 3. JCC has made no such application. Instead, the Department made an application to NCAT for an order in the nature of an interlocutory injunction restraining JCC from conducting the Centre until or unless an order in JCC's favour is made by NCAT. However, on 2 May 2017 NCAT concluded (in an unpublished decision) that its statutory power to make an interlocutory order was framed in a manner which did not allow it to make the order sought by the Department. NCAT's conclusion was that its interlocutory power was limited to orders affecting the legal operation of a decision under review. 4. It was in these circumstances that the Department commenced the present proceedings seeking injunctive relief from this Court. 5. At the time the proceedings were commenced, the evidence as to what in fact was happening with respect to the operation of the Centre was unclear. However, it is now plain that the Centre has continued to operate since the decision to cancel its approval was notified to Mr Shang and indeed has continued to operate since the approval was suspended. Mr Shang conceded as much in the course of the hearing and the affidavit evidence presented for the defendants on the hearing emphasised the alleged hardship on those who work at the Centre and those who send their children there if the Centre ceases to operate. 6. Mr Shang says, however, that although the Centre is still operating, it is not being operated by JCC. He says that JCC ceased operating once its approval was cancelled, if not before. According to Mr Shang, the Centre is being operated not by JCC, but pursuant to an agreement between CSA and a third party, Divine Family Day Care Pty Ltd ("Divine"). The agreement in question is styled "Service Agreement". Under the Service Agreement, Divine has undertaken to CSA to provide certain services with respect to the Centre. The detail of the Service Agreement is discussed below. Issues for decision 1. The Department claimed final relief in the form of injunctions against JCC, CSA and Mr Shang. The Department's case is that the continued operation of the Centre is a breach of the National Law which should be restrained by the Court in its equitable jurisdiction. 2. As mentioned, in the present application the Department sought such relief on an interlocutory basis. At the hearing, the issues in dispute narrowed. Mr Shang said that he was a law abiding person. He said that JCC was not carrying on the Centre and would not do so unless it was successful in NCAT. He said that if the Court decided that the Service Agreement did not justify the continuation of the Centre, the Centre would cease to operate. 3. As a result of this development, the Department applied (at my invitation) to treat the application as being one for summary judgment. I took the step of allowing the Department to proceed with summary judgment because it appeared to me that it might be possible to dispose of the Department's claim on a final basis without imposing on the parties the expense and difficulty of a separate final hearing. I indicated to Mr Shang that I would not allow this unless he consented, given that the application had been brought forward as an application for interlocutory relief only. Mr Shang did consent to the Department seeking summary judgment as part of the application. The Department also indicated that if I concluded that summary judgment were appropriate, declaratory relief could be granted on the basis that Mr Shang had agreed to respect the Court's ruling. 4. It follows that there are three possible outcomes to the application. First, I may be satisfied that the Department's case is sufficiently clear to justify summary judgment in its favour in the form of final relief (certainly declaratory, and possibly injunctive as well). Second, I might refuse summary judgment but grant interlocutory injunctions as initially sought by the Department. Third, I might refuse both summary judgment and any interlocutory relief, leaving all issues to be determined at a final hearing. 5. It is well known that the test for the grant of summary judgment is a very demanding one. The Court must be satisfied to a degree of virtual certainty that if the matter were to proceed to a final hearing, final relief would be granted. In the present case, in order to accede to the Department's application, I would need to be satisfied to the requisite degree that the Department would obtain injunctive relief (or at least declaratory relief) at the final hearing. 6. This means that I would need to be satisfied to the requisite degree that the operation of the Centre pursuant to the terms of the Service Agreement constituted a breach of the National Law. In addition, I would also need to be satisfied that the Department had standing to obtain the relief sought and that it was appropriate to grant relief as a matter of discretion. 7. If I were not satisfied that summary judgment is appropriate then, if I were to grant an interlocutory injunction I would need to consider whether a sufficient prima facie case had been established and that, having regard to the balance of convenience and other relevant circumstances, an interlocutory injunction should be granted. Standing 1. Only the Attorney General has undoubted standing to bring an application for an injunction against conduct which is said to contravene a statutory prohibition. However, the Court may allow a person who has "sufficient interest" to bring such an application: Equity Doctrines and Remedies, [21-185]-[21-190]. 2. For example, in Peek v New South Wales Egg Corporation (1986) 7 NSWLR 1, the Court of Appeal held that the NSW Egg Corporation had standing to bring an application for an injunction against a producer of eggs who was alleged to have contravened provisions of the statutory marketing scheme. 3. Where a declaration is sought, the principles are similar to those which apply to an application for an injunction: Equity Doctrines and Remedies, [19-190]. Accordingly, the Peek decision is equally applicable to the question of whether the Department has standing to seek declaratory relief. 4. In Peek, the statutory scheme conferred certain monopoly powers on the Egg Corporation which gave it a direct financial interest in the sale of eggs in New South Wales. However, the Court of Appeal's decision was not based on that consideration alone. Glass JA stated (at 8-9): Assuming that the evidence established a claim that the defendants had converted the eggs of the Corporation, there could be no challenge to its standing to secure an injunction to restrain further conversion. Accordingly the argument must be limited to the Corporation's standing to obtain injunctive relief to restrain the breach of a provision of the public law that hens should not be kept at an unlicensed place (s 32). The Corporation will have standing for this purpose if it is able to demonstrate a special interest in the subject matter of the action over and above that enjoyed by the public generally: Day v Pinglen Pty Ltd (1981) 148 CLR 289 at 299. I have no doubt that a special interest of the Corporation in that sense was shown by pointing to the statutory scheme which charges it with the orderly marketing of eggs (s 17(2)), imposes upon it a duty to ensure the purity of eggs in the interest of public health (s 17(3)) and to procure the prescription and enforcement of standards of quality and grade (s 17(4)). A further special interest was shown in the financial loss which the Board would suffer if eggs not subject to quota were produced by unlicensed hens and sold. 1. Under the statutory scheme for the provision of child care established by the National Law, the Department has no direct role in the provision of child care services and no economic interest in the industry. However, it is established as the regulator of the industry within New South Wales. I am satisfied, on the authority of Peek, that the Department has the necessary standing to seek injunctive and declaratory relief in relation to alleged contravention of s 103. Discretionary considerations 1. The Courts have traditionally been very reticent in granting injunctive relief in aid of statutory prohibitions on conduct where criminal penalties apply to that conduct. The reason is that the grant of equitable relief in such circumstances can be seen as subverting the criminal process, both by providing additional remedies and sanctions (noting that an injunctive order is supported by the Court's power to punish for contempt) beyond those provided for in the relevant statute, and by circumventing the procedural safeguards which ordinarily attach to a criminal prosecution. 2. However circumstances may exist where the defendant's conduct reduces this reluctance. Stafford Borough Council v Elkenford Ltd [1977] 2 All ER 519 concerned legislation which prohibited Sunday trading. The defendant company had established a site where stalls were set up to allow Sunday trading to take place. The company charged the stall holders and its operation was a commercially significant one. The local council brought a prosecution against the company, but, although the prosecution succeeded, the company appealed and continued to operate. Oliver J granted an injunction. The fine imposed (£5) was clearly insufficient to deter the defendant from continuing to operate illegally, given the revenue being generated from the operation. His Lordship concluded (at 526) that the law would "continue to be deliberately and flagrantly flouted" unless the injunction were granted. 3. In this case, the Department sought to rely on this principle. The Department contended that JCC (or perhaps CSA) had failed to comply with its obligations to notify the parents of the cancellation of the approval; had failed to produce documents in accordance with statutory obligations (s 217); and had ordered Departmental representatives off the Centre's premises, thereby, it was alleged, obstructing them in the exercise of their duties (s 218). The evidence provided some support for the Department's allegations of failure to comply with the relevant statutory requirements. However, this is the first occasion on which proceedings have been brought against the defendants for disobeying the provisions of the National Law. Mr Shang said, as I have recounted, that he is a law abiding person. I see no reason not to take him at his word for the purposes of this application. His conduct may be the product of a genuine belief that he is entitled to operate and that the Department is in some way persecuting the Centre. I do not accept that such a belief is necessarily justified. Should the Court conclude that the continued operation of the Centre is a breach of the law and should disobedience persist thereafter, that might change, and Mr Shang would be wise to consider very carefully in the future whether he has a legal justification for failure to comply with demands the Department makes on him, whether pursuant to s 103 or otherwise. For the moment, however, I do not see this as a case where intervention is required to prevent the law being deliberately flouted. 4. This does not however mean that relief must be refused as a matter of discretion. There are two important features of this case which make the prospect of trespassing into the criminal area less of a concern. 5. First, the issue is whether the Service Agreement sustains the continued operation of the Centre by CSA/Divine following cancellation of JCC's approval. Contravention of s 103 is a matter of strict liability. It does not depend upon establishing that the defendants, through their management, acted intentionally or with knowledge of any particular matters. As such, it appears not to depend upon any contestable matters of fact. So far as I can see, it is essentially a matter of interpretation of the Service Agreement and construction of the relevant provisions of the National Law. It follows that concerns which might exist in other contexts about circumventing procedural and evidentiary safeguards in criminal cases are of minimal weight. 6. The second matter is that Parliament has conferred jurisdiction on NCAT to review cancellation decisions such as that made by the Department in the present case and to decide for this purpose whether to stay the Department's cancellation decision. NCAT has decided (and, with respect, this seems to me to be correct) that it has no incidental power to make an interim order requiring the operation of the Centre to cease. But it cannot be assumed that Parliament would have intended that a party who applies for a stay and is unsuccessful could render NCAT's decision nugatory by the simple expedient of continuing to operate. Nor could Parliament have contemplated that a party could improve its position in this regard by failing to apply in the first place. 7. Strictly speaking, the continued operation of the Centre is being undertaken by CSA/Divine, who are not parties to the NCAT proceedings. But clearly the Service Agreement represents a temporary expedient designed to hold the position following JCC's loss of its approval. If JCC were to succeed in NCAT, it will resume operation of the Centre and the regime of the Service Agreement will fall away. In these circumstances, the Court's intervention can be seen as acting in aid of the exercise of the jurisdiction conferred on NCAT to deal with the review application on its merits. The Court has a well-established jurisdiction to protect inferior tribunals from abuse of process: Herron v McGregor (1986) 6 NSWLR 246 at 251; Walton v Gardiner (1993) 177 CLR 378 at 391-2. In the circumstances of this case, the Court's intervention would not involve subverting Parliament's wishes. Indeed, the Court arguably would be assisting them. 8. For these reasons, traditional considerations militating against intervention are of little weight in this case. 9. Evidence was led on behalf of the defendants from persons involved in working in the Centre and parents whose children attend the Centre expressing confidence in the management of the Centre and concern at the prospect that the Centre could be shut down. Mr Shang contended orally that the Centre provided a very valuable service, particularly to members of the Chinese community who wished to have their children looked after in a bilingual environment. He suggested that the closure of the Centre could even have an adverse impact on Australia's relations with the Chinese Government. 10. These contentions cannot assist the defendants. The Sunday trading laws at issue in the Stafford Borough Council case were thought by many to be a relic of a bygone age with no place in a modern and secular society. But Oliver J said at (525): I do not know and need not enquire as to the philosophy behind the Sunday trading provisions of the Shops Act 1950. It may not, perhaps, be immediately apparent why the legislature should have chosen to permit the provision for the needs of the dead, whilst placing restrictions on catering for those of the living. But whether or not the object is one which commands the sympathy of traders or members of the public, it represents the will and (it must be assumed) the wisdom of Parliament and I really cannot accept that anyone can plead that the enforcement, in accordance with its spirit, of the provisions of an Act of Parliament can constitute a hardship justifying the withholding of injunctive relief. 1. So it is here. The National Law makes the ability to operate a child care centre dependent on satisfying the regulatory authority (in this case, the Department) that the provider should be permitted to do so. Whether the service has the confidence and support of parents does not matter; nor indeed does it matter whether or not such confidence is in fact justified. The only thing that matters is what the Department thinks. It is not for the Court to question the desirability or wisdom of this statutory scheme; the Court is obliged to give effect to the scheme as it stands. 2. For its part, the Department pointed to various child welfare considerations which the Department said were factors which supported the Department's case. The Department relied on the evidence of non-compliance to which I have already referred. The Department also relied on evidence, which, so the Department suggested, indicated that regulations designed to promote safety were not being fully complied with. The Department also referred to allegations about inappropriate discipline at the Centre (although counsel for the Department stressed that at this point these were merely allegations). 3. The Department also sought to bolster its case for an injunction by referring to the Court's parens patriae jurisdiction. Counsel for the Department stressed the importance of the role which this Court plays through this jurisdiction in ensuring the protection of children. 4. The Department's allegations of breach of the National Law are serious ones. If put forward as a separate basis for injunctive relief, they would raise in acute form questions as to whether the Court would be subverting the criminal process. 5. The evidence on the application was far from definitive. Nor do I think that I should ignore the fact that the children who attend the Centre do so because their parents are sending them there. I see nothing to suggest that the children's parents do not have the children's welfare at heart and, if there were any immediate danger to them, that the parents would not take action to protect them immediately. In my view, the evidence as presented falls far short of showing even an arguable case for intervention under the parens patriae jurisdiction. 6. The Department eventually disclaimed any suggestion that these were independent bases on which the Court could act in granting an injunction. Rather, they were said to be matters which supported the exercise of the discretion to make an order preventing contravention of s 103. I do not think these arguments assist the Department. If the Department were able to show that children in the Centre were in fact being mistreated or in immediate danger, I do not doubt that, if action needed to be taken, the Court would intervene under its parens patriae jurisdiction. But if the Department's evidence does not amount to a sufficient case to invoke that jurisdiction, I do not see how that evidence can bolster some other case in the name of discretion. 7. As I have pointed out, s 103 is a strict liability provision which does not depend upon showing the children are actually at risk. I do not see how it can be more important to enforce that provision just because the welfare of children is, in general terms, an important matter, when the Department has not demonstrated that the welfare of children is actually being imperilled in any concrete way. The fact remains that contravention of s 103 has got nothing to do with whether the children at the Centre are actually being properly looked after. The Department can no more bolster its case for an injunction in support of s 103 because the welfare of children at the Centre is important than the defendants can resist the injunction because, on their contention, the grant of the injunction would not promote the welfare of those children. 8. I therefore reject the additional discretionary matters put forward by the defendants and the Department. However, for reasons given earlier, I conclude that the usual discretionary factors against relief are not compelling in the present case. In my opinion, they are not sufficient to require refusal of injunctive relief as a matter of discretion. 9. The grant of a declaration does not give rise to the same discretionary reluctance as the grant of an injunction because of itself the grant of a declaration does not involve the potential for any contempt-based sanctions. Had I been of the view that there were discretionary reasons to refuse injunctive relief, I would not on that account have refused declaratory relief. Contravention of section 103 1. Mr Shang put that CSA is not in fact operating the Centre but rather that Divine is. I do not agree that that is the effect of the Service Agreement. The relevant provisions of the Service Agreement are as follows: RECITALS 1. PURPOSE OF AGREEMENT 1.1 Chinese Community Centre (CCC) is a registered charity with Australian Charities and Not-for-profit Commission which offers a range of services to members of the Chinese Community including day care venue (Venue) at Level 1 & 2, 60 Campbell Street, Parramatta. 1.3 Divine Family Day Care Pty Ltd (DIVINE) agrees to manage the Venue under its family day care service approval from 6 February 2017 to 6 August 2017. NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS: … 3. CCC OBLIGATIONS 3.1 CCC administers the enrolment, provision and payment of the day care service for all children enrolled at the Venue. 3.2 CCC agrees to pay a management fee which is 10% of the total child care benefit/rebate amount that are claimed through CCMS by Divine for all children enrolled at the Venue. 3.3 CCC agrees to submit the attendance on time and issue a tax invoice for the total amount received from Divine. 3.4 CCC ensures that all of its educators have a current and valid working with children check and possess & maintain a current first aid certificate. 3.5 CCC ensures that all of its educators have at least a CHC30113: Certificate III in Early Childhood Education and Care qualification or actively working towards the qualification. 3.6 CCC ensures that all of its educators take out $10 million public liability insurance. 3.7 CCC ensures that all of its educators are familiar with Divine policies and procedures. 4. DIVINE OBLIGATIONS 4.1 DIVINE administers the child care benefit/rebate claims through CCMS for all children enrolled at the Venue. 4.2 DIVINE agrees to retain a management fee which is 10% of the total child care benefit/rebate amount and repay the remain 90% to CCC's nominated bank account fortnightly. 4.3 DIVINE lodges a SA12 form to notify of the new family day care venue to the relevant regulatory authority upon the execution of this agreement. 4.4 DIVINE conducts a venue safety check to ensure that the venue meets Occupational Health and Safety regulations upon the execution of this agreement. 4.5 DIVINE provides ongoing support to CCC educators in relation to its policies and procedures. 1. As these provisions show, the role of Divine in the operation of the Centre is an extremely limited one. CSA provides the premises. CSA also supplies the staff of the Centre (or "educators"). CSA determines the enrolments, and therefore it is CSA which has the contractual relationship with the parents (as recital 1.1 acknowledges). CSA gets 90% of the revenue. All Divine does is provide some administrative assistance. In my opinion, the legal effect of the Service Agreement is that CSA is operating the Centre, not Divine. It follows that, CSA having no approval, operation of the Centre under the Service Agreement contravenes s 103. 2. Even if Divine were operating the Centre, it would need both provider and service approvals. It is clearly an integral part of a service approval that the service be provided at particular premises: National Law, ss 47(1)(b), 52(b), 70(g) . Any service approval Divine might have to operate at another address would not extend to operating the Centre at its present location. 3. In my opinion, it is quite clear that continued operation of the Centre under the Service Agreement contravenes s 103 and is unlawful. This conclusion is based on my interpretation of the statute, the Service Agreement and uncontested facts. In my view, the circumstances are sufficiently clear to justify summary judgment. 4. Given the Department's agreement in the first instance to proceed by way of declaration, I propose to make a declaration that operation of the Centre is unlawful unless and until JCC is successful in having its approval reinstated. I will, however, grant liberty to apply to seek injunctive relief if that subsequently proves necessary. Interlocutory injunction 1. In view of my conclusions on final relief, it is not necessary to deal fully with this issue. I should indicate, however, that had I considered summary judgment inappropriate for some reason, I would have granted an interlocutory injunction against CSA. This is because, for reasons which I have given, I consider it to be sufficiently clear that the operation of the Centre by CSA is a contravention of the law. 2. I would not, however, have granted an injunction against JCC on this basis. There is no satisfactory evidence that it is still operating the Centre and Mr Shang asserts it is not. 3. Nor would I grant an interlocutory injunction against Mr Shang personally. I asked counsel for the Department why it was necessary to make an order against Mr Shang personally when any order against any of the corporate entities would bind him in his capacity as an officer or agent of those corporate entities. Counsel argued that such an order was necessary because, so it was contended, Mr Shang was seeking to evade the operation of the National Law. For reasons which I have given, I do not consider that the evidence on this application establishes that this is so. Conclusion and orders 1. It follows that the Department succeeds in its application for summary relief. I will hear the parties on costs. 2. The Court orders are as follows: 1. Declare that the operation by the first defendant or the second defendant (including pursuant to the Service Agreement dated 2 February 2017 between the second defendant and Divine Family Day Care Pty Ltd) of the child care centre known as "Joys" at Campbell Street, Parramatta, has since 12 April 2017 constituted an unlawful contravention of Children (Education and Care Services) National Law (NSW), s 103. 2. Grant liberty to the plaintiff to apply for injunctive relief with respect to the continued operation of the Centre. 3. Grant liberty to the parties to apply with respect to costs, such liberty to be exercised within 28 days. ********* 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: 13 June 2017