16 June 2017

Operation of Unapproved Education and Care Service: Secretary, Department of Education v Joys Child Care Ltd:

This is another interesting case from NSW. In this case the matter was heard by the highest court in NSW, the Supreme Court. The full judgement is available here.
The case concerned a service at Parramatta operating under the name “Joys”. Until earlier this year, the service was operated by the first defendant, Joys Child Care Ltd (JCC). Its ultimate holding company is the second defendant, Chinese Students Association Inc (CSA). 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. The plaintiff in this case was the NSW Department of Education which sort orders against the defendants.
By way of background, for reasons not detailed in the judgement, the
Department (as the NSW Regulator under the Education and Care Service National Law) cancelled JCC’s provider approval on 29 March 2017, effective from 12 April 2017. By operation of section 34(1) of the National Law, the service approval for Joys was also cancelled. 

JCC applied for a review of this decision to the NSW Civil and Administrative Tribunal (NCAT). However, before this matter was heard, the Department sort an order restraining JCC from operating the service until or unless an order in JCC’s favour is made by NCAT. NCAT found that it did not have such power and so the matter came before the Supreme Court (this case). It appears that the service had continued to operate since the decision to cancel its approval was notified to Mr Shang and had continued to operate since the approval was suspended. According to Mr Shang, although the service was still operating, it was not being operated by JCC but under an agreement between CSA and a third party, Divine Family Day Care Pty Ltd (Divine). The Department sought injunctions against JCC, CSA and Mr Shang as the continued operation of the service was a breach of section 103 of the National Law which should be restrained by the Court. During the proceeding, Mr Shang (who was representing all defendants)  said that JCC was not operating the service and would not do so unless it was successful in NCAT. He said that if the Court decided that the Service Agreement did not allow continuation of the service, it would cease to operate. On this basis the court rather than granting an injunction gave a summary judgement (paras 57-8):
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.
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.

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