The NSW Civil and Administrative Tribunal recently in Anchor Consolidated Holdings Pty Ltd v Secretary, Department of Education heard a review of a decision of the Department of Education (NSW Regulatory Authority under the National Law) to cancel a provider approval. The background to the case was that in July 2017 the Department (respondent) granted the applicant, Anchor Consolidated Holdings Pty Ltd, a provider approval. Almost one year later, on 15 June 2018, 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. The sole director of the applicant was Raefat Sorya. 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. Subsequently, the Department cancelled the provider approval of the applicant under s.31(f), National Law: the approved provider has not operated any education and care service for a period of more than 12 months (including any period of suspension). In this case the service had not operated for over 4 years from approval as the applicant was awaiting Commonwealth approval of its service under the Commonwealth Child Care Subsidy scheme (CCS).
The Tribunal having considered all the background and facts affirmed the decision of the Department stating that (paras. 104-16):
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.
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.
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.
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....
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.
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.
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.
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.
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.
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....
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.
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.
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.
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