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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Oakhaul Pty Ltd v Department of Education  QCAT 27
OAKHAUL Pty Ltd
department OF education
General administrative review matters
DATE OF ORDER:
9 January 2020
31 January 2020
On the papers
The decision of Department of Education made on 28 November 2019 to cancel the service approval of Oakhaul Pty Ltd is stayed until the Tribunal’s review of the decision has been completed, or until an earlier further order.
ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – where childcare regulator cancelled service approval on health and safety grounds – whether cancellation decision should be stayed pending review
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 22
Education and Care Services National Law (Queensland), s 77, s 79(1)
Deputy Commissioner Stewart v Kennedy  QCATA 254
R Hii, instructed by Groom and Lavers Solicitors
McCullough Robertson Lawyers
This matter was heard and determined on the papers pursuant to section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’)
REASONS FOR DECISION
- The applicant (‘Oakhaul’) operates a childcare centre in the town of Oakey. Ms Therese James is the company director of Oakhaul. The respondent Department is the regulator of childcare services in Queensland.
- The relevant childcare legislation is the Education and Care Services National Law (Queensland) Act 2011 (Qld) and the Education and Care Services National Law (Queensland) (‘National Law’). Under the legislation, the Department has the role of deciding whether a person should have, or should continue to hold, a ‘service approval’ to operate a childcare centre.
- On 28 November 2019, the Department decided to cancel Oakhaul’s service approval with effect from 27 December 2019. This meant that the centre would have to end its operation on that date. On 19 December 2019, Oakhaul applied to the Tribunal for a review of the Department’s decision, and also for a stay of that decision while the review is being determined.
- On 20 December 2019, the Tribunal held a stay hearing at which I decided to grant an interim stay, before considering the matter in more detail in the new year. Further evidence and submissions were subsequently filed. On 9 January 2020, for the reasons that follow, I decided to grant a stay to operate until the review has been completed or until earlier further order.
Brief summary of Department’s reasons for cancelling the service approval
- In August and September 2019, inspectors for the Department visited the centre on a number of occasions to carry out an assessment and rating process. They found shortcomings that breached regulations, including that:
- (a)some of the enrolment records did not contain all required information, including in some instances emergency contact details and medical information;
- (b)not all required medical management plans had been done;
- (c)one of the educators was unaware of how to access children’s emergency contact details;
- (d)evacuation plans and instructions were not displayed at emergency exits;
- (e)one of the emergency exits was padlocked;
- (f)risk assessments for evacuations had not been provided to the Department;
- (g)not all of the required authorisations from parents and guardians for transporting children had been obtained;
- (h)risk assessments had not been completed for the use of a jumping castle, woodwork tools and fire hoses, or for play with farm animals; and
- (i)the centre was unable to provide a copy of an educator’s blue card upon request.
- In August 2019 the Department sent Oakhaul a series of regulatory notices, including a follow-up action notice. These notices variously required Oakhaul to fix deficiencies and to provide evidence that associated steps had been taken such as staff retraining and advice to parents and guardians. Responses to the notices by Oakhaul were variously late or incomplete.
- The result of the assessment process was a rating of ‘significant improvement required’. This is the lowest available rating. There are two available ratings below ‘meeting National Quality Standard’: ‘working towards National Quality Standard’ and ‘significant improvement required’. The Department advised that of the over 3,000 approved services in Queensland, only one other has the lowest rating. Oakhaul’s 2019 rating was lower than its 2015 rating of ‘working towards National Quality Standard’.
- The Department also had regard to an earlier history of non-compliances by Oakhaul. The Department had sent a number of regulatory notices to Oakhaul between June 2015 and July 2019, in relation to a variety of matters, such as:
- (a)not ensuring that risk assessments had been carried out, or adequately carried out, for excursions;
- (b)not ensuring that written parent or guardian authorisations had been obtained or ‘properly obtained’ for a number of excursions;
- (c)failure to ensure that all enrolment and excursion authorisation forms met all legislative requirements;
- (d)not meeting all requirements in relation to anaphylaxis procedures and contact details for affected children;
- (e)failure to ensure that the supervisor had adequate understanding of the medical conditions of the children;
- (f)in 2018, in relation to a child who went missing from the centre, failure to ensure adequate supervision and failure to report the incident to the Department within the required timeframe;
- (g)not ensuring that premises and various pieces of furniture were clean, safe and in good repair;
- (h)not ensuring adequate outdoor space for children;
- (i)absence of blue card information in some staff member records;
- (j)not having a quality improvement plan or a compliance register available for inspection, and not reviewing and updating the quality improvement plan annually;
- (k)failure to ensure ‘adequate programming’ for children;
- (l)failure to ensure that the service approval certificate, and the name and position of the responsible person, were displayed; and
- (m)failure to recruit a new educational leader within two weeks of the previous one departing.
- Oakhaul attributed the later non-compliances to health problems of the centre director, and conceded that it had given too much leeway to staff. However, the Department noted, responsibility for ensuring compliance rests with Oakhaul.
- The Department acknowledged that Oakhaul said it intended to appoint a new ‘nominated supervisor’ to commence on 2 December 2019. However, Oakhaul had not provided the Department with evidence of that person’s capabilities. Whether she would be able to improve the performance of the centre is unknown. In any event, the Department did not consider that the appointment of a new supervisor would be enough to mitigate the ‘significant issues’ which Oakhaul had allowed to persist.
- Further, in light of the history of non-compliances, the Department did not consider that confidence could be placed in the assurances of Ms James that she had learnt a valuable lesson, would now become more involved in the operation of the centre, and that she had arranged a staff meeting to deliver training and retraining. While Oakhaul had attended to some of the matters canvassed in the regulatory notices of late 2019, this was reactive to demands of the regulator rather than indicative of proactive compliance. Even when made aware of non-compliance, Oakhaul had ‘not always taken adequate steps to rectify the matters’, and this was an ‘unsustainable and inappropriate operational model …’.
- Overall, the Department considered that cancellation was proper on the basis that:
- (a)Oakhaul’s failure to operate the centre in a way that ensured the safety, health and wellbeing of children constituted a breach of a statutory condition of the service approval;
- (b)the continued operation of the centre constituted an unacceptable risk to the safety, health and wellbeing of the children; and
- (c)Oakhaul had demonstrated unwillingness or inability to operate the centre in a compliant manner.
- The Departmental decision maker, Ms Catherine O’Malley, provided an affidavit of 7 January 2020 in which she indicated that events after the grant of the interim stay only reinforced her view that cancellation was the correct decision. One matter of concern was what Ms O’Malley regarded as a focus in Oakhaul’s submissions (of 2 January 2020) on the absence of injuries. Ms O’Malley regarded this as a failure to recognise the need for the removal or minimisation of risk, regardless of whether any actual injury results. Ms O’Malley also pointed to specific examples of observations of concern in the rating assessment process, relevant to health and safety. These included the failures to ensure complete medical information about children; problems with the emergency exits; a child whose amber bead teething necklace had not been removed during rest time; inadequate handwashing by an educator when serving food; unsatisfactory nappy-change procedures of some educators; children at times having to wait up to five minutes for drinking water; and chemicals and a sharp knife being kept in an unlocked storage unit, accessible to children, in the kitchenette in the school-aged area.
- Further, Ms O’Malley considered that Oakhaul had not provided satisfactory evidence that it had met all outstanding required remedial actions as at 6 January 2020, when a further departmental inspection occurred. For example, the Department considered a medical management plan for a particular child to be incomplete; it considered that some health-related information remained missing for some children; the emergency contact details for a child had not yet been obtained; and Oakhaul had not been able to provide evidence that evacuation plans had been reviewed in the last 12 months or that staff have been re-trained about evacuation.
- Ms O’Malley said that a number of other problems were observed during the visit on 6 January 2020, which was the day the centre reopened after its planned Christmas shut-down. The concerns referred to in the inspector’s notes included that the jumping castle, if inflated, would block access to an emergency exit; electrical cords posed trip hazards; electrical cords for the jumping castle and portable air conditioners made use of extension leads, posing an electrocution hazard; there was some exposed wiring in electrical cords; a number of power points in the sports hall did not have a safety plug; an unsecured basketball hoop pole had been left leaning against a wall in the shed; a ‘pool fencing’ perimeter gate was in poor repair and so could not be locked (though I do not understand it to be alleged that there is a pool in the vicinity); and some toilets and basins were unclean.
- It is noteworthy, however, that the ‘emergency action notice’ issued by the Department on 6 January 2020 required rectification only of the unsecured basketball pole.
- On the question of whether children have suffered harm at the centre, Ms O’Malley pointed to an incident in 2017 when a child suffered fractures while using a trampoline during an excursion. A risk assessment had not been carried out, and some of the permission forms did not list trampolining as an activity.
- Ms O’Malley noted that there is another childcare centre in Oakey. It has quite a number of vacancies, which should be sufficient (depending on the particular days required) to absorb the children who would need to relocate if Oakhaul’s centre closes. Ms O’Malley disputed Ms James’s evidence that the other childcare centre does not cater for early drop-offs.
- In relation to the effects on staff and families of the closure of the centre, Ms O’Malley said that a number of the staff travel from Toowoomba, where other employment opportunities can be found, and one staff member has already found employment at the other childcare centre in Oakey. If necessary, Ms O’Malley says, families could use childcare centres in Toowoomba, which is approximately 30 minutes’ drive from Oakey.
Brief summary of Oakhaul’s position
- Oakhaul contends that it responded appropriately to the earlier regulatory notices. It says that when comparing the 2015 and 2019 ratings it must be borne in mind that the centre in 2019 offered long day care, which it had not offered in 2015. Oakhaul attributes problems in the later months of 2019 partly to a change in data-management software but mostly to staffing problems. It speaks of the inactions of certain staff, including the then centre director who had commenced in early 2019, combined with assurances made by those staff to Oakhaul that the necessary steps were being taken to address the Department’s concerns. The centre director resigned in mid-November 2019. Since then, Oakhaul says, it has striven to ensure records are up to date and that required retraining has occurred. It has recruited a new centre director. Oakhaul argues that cancellation of the service approval was too severe a regulatory response in these circumstances. Ms James says that she believes that no child has suffered any actual harm at the centre. She acknowledges that there was an occasion when a child went missing, but she says it was only for a short period when he was not at the designated meeting point for after-school care.
- Oakhaul has not had an opportunity to respond to Ms O’Malley’s affidavit of 7 January 2020, which speaks of continuing problems as at 6 January 2020. It has therefore not, for example, commented on whether it agrees that information was still missing from some records or whether the jumping castle would be inflated in a position where it would block an exit.
- I note that the sports hall or shed that is used as part of the childcare operation functions at other times as an indoor sports centre open to the public. It may not have been intended for use by the childcare children on the first day back after the Christmas childcare shut-down period.
- Oakhaul says that its childcare operation generates the bulk of its turnover. It says that a number of families removed their children after being notified of the cancellation decision, but approximately 45 children remain. Cancellation of the service approval, Oakhaul says, will cause it extreme financial difficulty which may lead to shut-down of its trading, and deprive it of funds for the preparation of its case in the review proceeding. Oakhaul says it would have to retrench at least the ten childcare workers amongst its staff of approximately 15, many of whom are locals without other employment. It says it is unlikely that staff will be able to quickly find other employment, as there is only one other childcare centre in Oakey and not all staff would be in a position to travel to Toowoomba to pursue employment options there. The families of the enrolled children would need to find alternative arrangements. This would be particularly difficult, Oakhaul contends, for shift workers such as abattoir workers who drop children off very early. Oakhaul says that the other childcare centre in Oakey does not accept early drop-offs, and further that not all parents would choose to use the other centre.
Factors relevant to whether a stay should be granted
- Under section 22 of the QCAT Act, a stay may be ordered only if it is desirable after having regard to a number of factors: the interests of affected persons, submissions of the Department as decision-maker of the reviewable decision, and the public interest.
- It is relevant to also consider whether Oakhaul has an arguable case in the substantive review. It was observed in a review of a decision to suspend a service approval that suspension ‘is a serious matter not to be imposed lightly’. Cancellation, of course, is a more severe action than suspension.
- In a disciplinary context, it has been observed that the protection of the public and the need to maintain public confidence are relevant matters in deciding whether to issue a stay order. Further, interference with the livelihood of the affected person is not a sufficient basis to order a stay. A stay should not be lightly granted, especially when the reviewable decision resulted from ‘a regular investigation and determination’. Those observations would be no less applicable in a regulatory context such as childcare regulation.
- It is relevant to consider the potential length of the review proceeding. Conceivably this could be as short as a few months, for example if the parties are able to reach a resolution at the compulsory conference. However, if the matter proceeds to a hearing, it could easily be 12 months before a decision is reached.
- In conducting the review, the Tribunal will be required to conduct a fresh hearing on the merits, and to produce the correct and preferable decision.
Does Oakhaul have an arguable case in the substantive review proceeding?
- A decision to cancel a service approval is a discretionary decision.
- Presumably there are many centres which, when inspected, demonstrate less than full compliance with all regulatory requirements. Whether the most appropriate decision is to cancel the service approval in any particular case will be a matter of judgment, based on a range of factors.
- Whether Oakhaul has legitimate explanations for any non-compliances, to what extent it has responded adequately to requirements imposed by the Department to fix problems and to take related steps such as retraining staff, whether it is willing and able to conduct the centre in a satisfactory manner into the future, and so on, are matters that can only be fully assessed after all evidence has been filed and a review hearing has been held. However, my preliminary assessment of the evidence, including the evidence about the 6 January 2020 inspection, is that Oakhaul has an arguable position on these matters, and that it has realistic prospects of establishing that the correct and preferable decision would be a regulatory response less onerous than cancellation of the service approval.
The interests of affected persons
- Children who use or may use the centre are, of course, affected persons. I will consider the effect on them in discussing the public interest.
- Oakhaul is financially affected by the cancellation decision. I see no reason to doubt its submission that closure of the childcare centre is likely to be financially ruinous, and impair its capacity to pursue the review proceedings.
- I also accept that an effect of the cancellation would be the retrenchment of staff. Presumably many or all of the staff would in time find employment elsewhere, but undoubtedly the short to medium term impact on a number of staff would be significant.
- Ensuring the safety, health and wellbeing of children attending education and care services is an objective of the National Law. Guiding principles in administering the National Law include that the rights and best interests of the child are paramount, and that best practice is expected in the provision of education and care services. Another guiding principle is that the role of parents and families is respected and supported.
- The Department’s submissions proceed, in effect, on the basis that an unacceptable risk exists to the safety, health and wellbeing of children at Oakhaul’s centre. If that assessment is correct, then of course a stay could not be desirable.
- However, I consider the position to be less clear-cut than is asserted by the Department. The Department’s submissions paint a picture of extensive and persistent non-compliances and failures to remedy, without acknowledging the extent to which that picture is based on contested evaluations by the Department about the adequacy of remedial measures or the sufficiency of verification. Further, the inspector’s notes of the 6 January 2020 inspection indicate a number of specific concerns, but the decision to issue a regulatory notice in respect only of the basketball pole is difficult to reconcile with the submission of ongoing unacceptable risk.
- I do not regard Oakhaul’s comments about the lack of actual harm as indicative of indifference to the importance of minimising risk regardless of actual harm.
- The most recent injury is said to have been in 2017, when a child sustained fractures when using a trampoline. That is a fairly common type of injury, though of course parents and guardians should be given the choice about whether their children are exposed to the risk.
- Closure of the centre would disrupt children’s settled routines and familiarity with staff. It would inconvenience and curtail the freedom of choice of those families who have elected to keep their children at Oakhaul’s centre.
- When all of the circumstances are taken into account, the public interest factors do not all point in one direction.
Is a stay order desirable?
- The Department made the cancellation decision after detailed consideration. On the presently-available evidence, it is arguable that cancellation was the correct and preferable decision having regard to matters of safety, health and wellbeing of children. On the other hand, it is arguable that a lesser regulatory response was warranted: suspension or no further action.
- Oakhaul acknowledges that suspension of the service approval is an option that will be open on the review. Suspension too would lead to substantial disruption for children, families and staff, and have significant financial consequences for Oakhaul. Similarly, if the Tribunal ends up confirming the cancellation decision, disruption will inevitably flow. However, of course, it may turn out that the Tribunal will decide that there should be no cancellation or suspension.
- My preliminary assessment of the currently-available evidence and submissions leads me to the conclusions that Oakhaul appears to be committed to fixing any remaining deficiencies, and that there is no imminent or otherwise unacceptable risk to the safety of children. When all factors are considered, including the disruption to the lives of children, families, and staff, and the financial effects on Oakhaul, on balance I consider that a stay of the cancellation decision is desirable.
- Oakhaul offered an undertaking to submit fortnightly reports and evidence of compliance to the Department, and to be subject to unannounced inspections, during the period of any stay. However, I do not consider it appropriate to place the Department in the position of supervisor rather than regulator. The Department has carried out two inspections since cancelling the service approval, and presumably it will carry out more if it regards them as necessary.
- It is desirable to make a stay order to allow the centre to continue operating while the review is being determined, or until further order (in case some material change of circumstances warrants revocation of the stay order).
 Cancellation notice, 12.
 Probably immunisation details, but it is difficult to confidently interpret the non-compliances table.
 Pages 52-54 of the exhibit to Ms O'Malley’s affidavit of 7 January 2020.
 Deputy Commissioner Stewart v Kennedy  QCATA 254, .
 BKE Pty Ltd v Department of Education and Training  QCAT 343, .
 Deputy Commissioner Stewart v Kennedy  QCATA 254, -.
 Ibid, .
 Ibid, .
 Ibid, .
 QCAT Act, s 20.
 National Law, s 77, s 79(1).
 Ibid, s 3(2)(a).
 Ibid, s 3(3)(a).
 Ibid, s 3(3)(f).
 Ibid, s 3(3)(e).
- Published Case Name:
Oakhaul Pty Ltd v Department of Education
- Shortened Case Name:
Oakhaul Pty Ltd v Department of Education
 QCAT 27
09 Jan 2020