HAPPY HAVEN OSHC PTY LTD v EDUCATION AND EARLY CHILDHOOD SERVICES REGISTRATION AND STANDARDS BOARD OF SOUTH AUSTRALIA [2026] SASCA 58

On Appeal from SUPREME COURT OF SOUTH AUSTRALIA (THE HONOURABLE JUSTICE MCDONALD) CIV-23-014524 Appellant: HAPPY HAVEN OSHC PTY LTD Counsel: MR S OWER KC WITH MR L GENTRY - Solicitor: 1878 ELIX LAWYERS Respondent: EDUCATION AND EARLY CHILDHOOD SERVICES REGISTRATION AND STANDARDS BOARD OF SOUTH AUSTRALIA Counsel: MR M BOISSEAU - Solicitor: CROWN SOLICITOR (SA) Hearing Date/s: On the papers File No/s: CIV-23-014819 B SUPREME COURT OF SOUTH AUSTRALIA (Court of Appeal: Civil) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment 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 in which it was generated. HAPPY HAVEN OSHC PTY LTD v EDUCATION AND EARLY CHILDHOOD SERVICES REGISTRATION AND STANDARDS BOARD OF SOUTH AUSTRALIA [2026] SASCA 58 Judgment of the Court of Appeal (The Honourable President Livesey, the Honourable Justice S Doyle and the Honourable Justice Bleby) 26 May 2026 EDUCATION - INSTITUTIONS - EARLY CHILDHOOD EDUCATION AND CARE PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - APPEALS AS TO COSTS PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL RULE: COSTS FOLLOW EVENT - WHERE ACTION SETTLED OR OTHERWISE DETERMINED WITHOUT HEARING PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INTERLOCUTORY PROCEEDINGS - COSTS RESERVED - OTHER MATTERS The appellant has applied for an order that the respondent pay its costs of the appeal proceedings on a standard costs basis. The appeal concerned the dismissal of an application for an urgent stay or interlocutory injunction of administrative proceedings pending the hearing of an application for judicial review concerning those proceedings. The stay was sought pursuant to r 256.7(3)(a) of the Uniform Civil Rules 2020 (SA). The judicial review proceedings challenged proposed decisions by the respondent to suspend “service approvals” given to the appellant concerning various out of school hours care programmes it operated on school sites. -- 1 of 21 -- The proposed decisions were communicated in “show cause” notices issued pursuant to ss 71 and 72 of the Education and Care Services National Law. The judicial review proceedings challenged the legality of these notices. The appellant sought a stay of the operation of these notices pending the urgent determination of the judicial review proceedings. The primary judge refused to grant a stay or an injunction, and the appellant sought an urgent appeal. A few days before the hearing of the appeal, but after the appellant had raised new issues concerning particularity and procedural fairness, the respondent withdrew the notices and the appeal was discontinued by consent, with costs reserved. Held (per Livesey P): 1. The appropriate order is that there be no order as to the costs of the appeal proceeding. 2. It has not been demonstrated that the respondent has acted so unreasonably that the appellant should obtain the costs of the appeal proceeding, nor that the appellant was almost certain to succeed. 3. It is not appropriate for this Court to rule on the various issues underlying the appeal against the refusal to grant a stay under the guise of determining an application for costs. Held (per S Doyle and Bleby JJA, agreeing with Livesey P): 1. The respondent did not act so unreasonably that it should pay the costs of the appeal proceeding. It cannot be inferred (from the merits of the appeal or otherwise) that the respondent surrendered or capitulated in the face of an appeal that would inevitably have succeeded. District Court Act 1991 (SA) ss 42E, 42F; Education and Early Childhood Services (Registration and Standards) Act 2011 (SA) sch 1, ss 23, 70, 70(a), 71, 71(2)(d), 72, 73, 74, 79; Education and Early Childhood Services (Registration and Standards) Regulations 2011 (SA); Supreme Court Act 1935 (SA) ss 19C(1), 50(5)(c); Uniform Civil Rules 2020 (SA) rr 194.5(2), 212.4, 212.5, 212,5(2), 256.2, 256.7(3)(a), referred to. Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622, discussed. ALRM v State of South Australia and Anor (Unreported, Full Court of the Supreme Court of South Australia, 26 July 1995); Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194; Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; Chapman v Luminis Pty Ltd [2003] FCAFC 162; Coastal Ecology Protection Group Inc v City of Charles Sturt [2020] SASC 215; Croser v Croser [2025] SASCA 145; Edwards Madigan Torzillo Briggs Pty Ltd v Gloria Stack [2003] NSWCA 302; Ewins v BHP Billiton Ltd (No 2) [2005] SASC 164; FUD 18 v Minister for Home Affairs (2021) 285 FCR 505; George v Rockett (1990) 170 CLR 104; Hamilton v JJR Investment Holdings Pty Ltd [2023] SASC 40; Jun International Property Pty Ltd v Fullerton Property Pty Ltd [2019] NSWSC 450; Miller v Kirsten (No 2) [2023] FCA 1034; Moloney v 21-25 South Esplanade Pty Ltd (2024) 145 SASR 226; Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681; Nordburger Pty Ltd v Commissioner of Highways [2022] SASCA 17; One.Tel Ltd v Commissioner of Taxation (2000) 101 FCR 548; Prior v Mole (2017) 261 CLR 265; Queensland v Commonwealth (1987) 77 ALR 291; R v Ashworth Hospital Authority [2002] EWCA Civ 923; R v Secretary of State for Education and Science [1991] 1 QB 558; Randazzo Investments (NT) Pty Ltd v City of Palmerston [2018] NTSC 6; Secretary to the Department of Health v Victorian WorkCover Authority (No 2) [2021] VSC 776; Shellharbour City Council v Minister for Local Government [2017] NSWCA 256; Stampalia v Stewards of the Western Australian Trotting Association [1999] WASC 7; Thomas v Commonwealth (2022) 276 CLR 466; Town of Cambridge v Minister for Local Government, Heritage, Culture and The Arts [2020] WASC 350; Transfield Services (Australia) Pty Ltd v James Gaha [2012] NSWSC 865; Varnhagen & Anor v State of South Australia & Ors (No 3) [2022] SASCA 134; Zhao v Suzhou Haishun Investment Management Co Ltd [2020] VSCA 34, considered. -- 2 of 21 -- HAPPY HAVEN OSHC PTY LTD v EDUCATION AND EARLY CHILDHOOD SERVICES REGISTRATION AND STANDARDS BOARD OF SOUTH AUSTRALIA [2026] SASCA 58 Court of Appeal – Civil: Livesey P, S Doyle and Bleby JJA LIVESEY P: Introduction 1 The appellant has applied for an order that the respondent pay its costs of the appeal proceedings on a standard costs basis. The appeal concerned the dismissal of an application for an urgent stay or interlocutory injunction of administrative proceedings pending the hearing of an application for judicial review concerning those proceedings. 2 The stay was sought pursuant to r 256.7(3)(a) of the Uniform Civil Rules 2020 (SA) (UCR). 3 The judicial review proceedings challenged proposed decisions by the respondent Board to suspend “service approvals” given to the appellant under the Education and Care Services National Law (the National Law)1 concerning eight “education and care services” operated by the appellant, being various out of school hours care (OSHC) programmes conducted on school sites. 4 The proposed decisions were communicated in “show cause” notices issued pursuant to ss 71 and 72 of the National Law. The judicial review proceedings challenged the legality of these notices. The appellant sought a stay of the operation of the notices pending the urgent determination of the judicial review proceedings. 5 The primary judge refused to grant a stay or an injunction, and the appellant sought an urgent appeal. A few days before the hearing of the appeal, but after the appellant had raised new issues concerning particularity and procedural fairness, the respondent withdrew the notices and the appeal was discontinued by consent, with costs reserved. 6 For the following reasons, it has not been demonstrated that the respondent acted unreasonably or that the appellant was almost certain to succeed, and the appropriate order is that there be no order as to the costs of the appeal proceedings. As will be seen, it is not appropriate for this Court to rule on the various issues underlying the appeal against the refusal to grant a stay under the guise of determining an application for costs. 1 The National Law is sch 1 to the Education and Early Childhood Services (Registration and Standards) Act 2011 (SA). -- 3 of 21 -- [2026] SASCA 58 Livesey P 2 The composition of the Court 7 This application concerns the costs of an appeal which was listed to be heard before the Court of Appeal. Subject to the UCR, s 19C(1) of the Supreme Court Act 1935 (SA) stipulates that the Court of Appeal will be constituted of not less than three judges when hearing and determining any matter. Under UCR 212.4, the Court of Appeal will ordinarily be comprised of three judges but may be comprised of five or two judges as determined by the Chief Justice or the President. 8 UCR 212.5 provides that a single judge may make interlocutory and other orders ancillary to the hearing and determination of the appellate proceeding. There are a number of examples given. None apply to the costs of an appeal which was discontinued after being listed for hearing. In this case, on 4 January the appeal was listed for hearing on 17 January. The appeal was discontinued by consent and with leave on 17 January 2024, and the question of costs reserved. 9 In the circumstances, it may be doubted whether UCR 212.5(2) confers power on a single judge to constitute the Court of Appeal for the purposes of determining the appellant’s application for the costs of the appeal before the Court of Appeal.2 As the coram who comprised the appeal bench are available, it is convenient for that coram to determine the application for costs without determining that question. Background to the appeal 10 The appellant operated 57 services from school sites around South Australia. It employed over 700 people and approximately 4,750 children were enrolled in its services between the ages of three and 13.3 11 The respondent gave three show cause notices to the appellant on 4 December 2023, requiring a response in 30 days by 3 January 2024. The proposed periods of suspension were in each case 12 months, the maximum permissible period short of outright cancellation. 12 A description of one of these notices is sufficient for present purposes. A notice dated 4 December 20234 asserted that, between May 2022 and October 2023, there had been 44 confirmed breaches of the National Law and the Education and Early Childhood Services (Registration and Standards) Regulations 2011 (SA). On each occasion, the respondent provided the appellant with an opportunity to rectify the issues but they continued to occur. 13 During an unannounced monitoring visit during one after school care session, a compliance notice was issued for inadequate supervision of children, amongst 2 Respondent’s written submissions dated 4 March 2024 (FDN 16), [5]. 3 Affidavit of Nicholas Smith sworn 15 December 2023. 4 Exhibit NS-2 to the affidavit of Nicholas Smith sworn 15 December 2023. -- 4 of 21 -- [2026] SASCA 58 Livesey P 3 other matters. After that visit, an emergency action notice was issued for various issues, including an offence relating to protecting children from harm and hazards. 14 On another occasion, a notification was received concerning a child being turned away from care because the educator did not believe the child was booked in, leaving the child unsupervised. On another occasion, a caution letter was issued where a child was unaccounted for, for a period between 10 and 30 minutes. Finally, on a further occasion, a complaint was received after three children were released into the care of a Department of Child Protection employee without that employee being asked for identification. 15 The appellant’s affidavit evidence explained the view that if the 12-month suspensions took effect, the contracts under which services were provided would be terminated and another provider would need to be appointed. It was suggested that there was a “real risk” that there may be a period during which no OSHC services could be provided in the schools affected until an alternative service provider was appointed.5 The evidence referred to the likely impact on the communities, families and children that relied on the services provided and the prospect that the appellant would no longer be in a position to provide services at the various centres concerned.6 16 The appellant commissioned an independent review of its services and provided the respondent with a copy of a report which did not suggest that there was any danger or threat to children at the appellant’s services.7 17 After the appellant commenced judicial review proceedings on 15 December, on 18 December 2023 the respondent gave a further five show cause notices for five additional services requiring responses by 17 January 2024. Again, the proposed periods of suspension were in each case 12 months, the maximum permissible period. 18 The appellant feared that on the expiration of the response periods, and after considering the appellant’s responses, the respondent could have decided to suspend the eight services, giving only the maximum period of 14 days’ notice. 19 The application for a stay or an injunction was heard by the primary judge on 20 December 2023 and dismissed on 22 December. 20 On 4 January 2024, the appeal and any application for leave to appeal was listed for hearing on 17 January. 21 On 9 January, the respondent wrote to the appellant withdrawing each of the show cause notices.8 5 Affidavit of Nicholas Smith sworn 15 December 2023, [28]. 6 Affidavit of Nicholas Smith sworn 15 December 2023, [29]-[30]. 7 Affidavit of Nicholas Smith sworn 15 December 2023, [31]-[32]. 8 Exhibit DME-3 to the affidavit of David Elix sworn 9 February 2024 (FDN 14). -- 5 of 21 -- [2026] SASCA 58 Livesey P 4 22 On 17 January 2024, the Court granted the appellant leave to discontinue the appeal and any application for leave to appeal, and directions were given regarding the filing of any application and submissions concerning costs. Later, more time was sought and given to the parties. The cases on the appeal and any application for leave to appeal 23 There was some doubt about the extent to which the appellant had an appeal as of right or whether leave was required. Under s 50(5)(c) of the Supreme Court Act 1935 (SA), the refusal to grant an interlocutory injunction permitted an appeal as of right. For present purposes it is not necessary to consider the submissions made about leave, nor resolve whether in these circumstances the appeal against the refusal to grant a stay was subject to a leave requirement. 24 For the purposes of the appeal and the application for leave, the parties filed various materials and exchanged extensive written submissions. The relevant provisions of the National Law are as follows: Division 4—Suspension or cancellation of service approval 70—Grounds for suspension of service approval A Regulatory Authority may suspend a service approval if— (a) the Regulatory Authority reasonably believes that it would not be in the best interests of children being educated and cared for by the service for the service to continue; or (b) a condition of the service approval has not been complied with; or (c) the service is not being managed in accordance with this Law; or (d) the service has operated at a rating level as not meeting the National Quality Standard and— (i) a service waiver or temporary waiver does not apply to the service in respect of that non-compliance; and (ii) there has been no improvement in the rating level; or (e) the approved provider has contravened this Law as applying in any participating jurisdiction; or (f) the approved provider has failed to comply with a direction, compliance notice or emergency order under this Law as applying in any participating jurisdiction in relation to the service; or (g) the approved provider has— (i) ceased to operate the education and care service at the education and care service premises for which the service approval was granted; and -- 6 of 21 -- [2026] SASCA 58 Livesey P 5 (ii) within 6 months of ceasing to operate the service, has not transferred the service to another approved provider; or (h) the approved provider has not, within 6 months after being granted a service approval, commenced ongoing operation of the service; or (i) the approved provider has not paid the prescribed annual fee for the service approval. 71—Show cause notice before suspension (1) This section applies if the Regulatory Authority is considering the suspension of a service approval under section 70. (2) The Regulatory Authority must first give the approved provider a notice (show cause notice) stating— (a) that the Regulatory Authority intends to suspend the service approval; and (b) the proposed period of suspension; and (c) the reasons for the proposed suspension; and (d) that the approved provider may, within 30 days after the notice is given, give the Regulatory Authority a written response to the proposed suspension. 72—Decision in relation to suspension After considering any written response from the approved provider received within the time allowed by section 71(2)(d), the Regulatory Authority may— (a) if the suspension was proposed on the ground referred to in section 70(a), (c) or (d), accept an undertaking from the approved provider under section 179A; or (b) in any case— (i) suspend the service approval for a period not more than the prescribed period; or (ii) decide not to suspend the service approval. 73—Suspension of service approval without show cause The Regulatory Authority may suspend the service approval without giving the approved provider a show cause notice under section 71 if the Regulatory Authority is satisfied that there is an immediate risk to the safety, health or wellbeing of a child or children being educated and cared for by the education and care service. 74—Notice and effect of decision (1) The Regulatory Authority must give the approved provider written notice of the decision to suspend. (2) Subject to section 76, the decision under section 72 to suspend 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. -- 7 of 21 -- [2026] SASCA 58 Livesey P 6 (3) Subject to section 76, the decision under section 73 to suspend takes effect on the giving of the notice. (4) The notice of a decision to suspend must set out— (a) the period of suspension; and (b) the date on which it takes effect. (5) A suspension of a service approval also suspends the service approval to the extent that it relates to an associated children’s service. 25 In light of the submissions made on costs, it is appropriate to review the contentions and submissions of the parties before the primary judge and as finally developed on appeal, before addressing the reasons of the primary judge, the parties’ contentions about those reasons and finally their contentions on costs. 26 Whilst this application is only concerned with the costs of the appeal from the decision of the primary judge, the conduct of the hearing before the primary judge and the appeal were informed by the approach taken in the underlying judicial review proceedings. 27 The appellant’s judicial review proceedings sought orders pursuant to UCR 256.2 in the nature of a writ of prohibition as well as injunctive relief.9 28 The case for the appellant before the primary judge was that the show cause notices were affected by jurisdictional error and its case was sufficiently strong to warrant the grant of a stay or, alternatively, an interlocutory injunction pending an urgent hearing of the judicial review proceedings. 29 Broadly, the appellant contended that where the respondent had formed an intention to suspend a service under s 70, it must determine the period for the suspension and identify its reasons, which must correspond with one of the prescribed grounds set out in s 70 of the National Law. For example, under s 70(a), the appellant contended that the respondent must reasonably believe that it would not be in the best interests of children being educated and cared for by the appellant’s services to continue. 30 The appellant contended that the respondent must then give notice – the “show cause” notice – to the provider under s 71, and that this notice must include particulars. The notice must give the appellant an opportunity to provide a written response within 30 days.10 31 The appellant contended that when the respondent was considering an exercise of the power to suspend a service approval under s 72, it was required to consider its own reasons, as particularised, together with any written response 9 The appellant relied on cases such as Town of Cambridge v Minister for Local Government, Heritage, Culture and The Arts [2020] WASC 350, [95] (Tottle J). 10 National Law, s 71(2)(d). -- 8 of 21 -- [2026] SASCA 58 Livesey P 7 made by the appellant. The respondent then had the power to determine to suspend, not suspend or accept an undertaking under s 72 of the National Law. If the respondent determined to suspend, it could do so with effect from any period and, if no period is determined, the default period is 14 days. 32 The appellant also contended that, when contrasted with the power to cancel a service under s 79, it is evident that one of the purposes of suspension was to enable the service provider to rectify the reason for suspension. The appellant contended that the suspension should not operate as a form of de facto cancellation or punishment. 33 Before this Court, the appellant’s case was that the basis for the respondent’s decision must be made clear in the show cause notices, and that basis, together with the proposed period of suspension, must be determined reasonably.11 This must be evident on an objective examination of the reasons, as particularised in the show cause notices. The appellant contended that the facts disclosed were required to be sufficient to induce a reasonable state of belief in the mind of a reasonable decision-maker, and that this should be evident to the court.12 34 In essence, the appellant contended that the heart of its case “was always” a complaint about a lack of particulars demonstrating jurisdictional error or a failure to have a reasonable basis for forming a reasonable belief that there should be a suspension.13 35 The respondent submitted that the court had no jurisdiction to grant a stay that would have the effect of “stopping the clock” on the 30-day period prescribed by s 71 of the National Law because this would have the effect of staying the operation of a statute. 36 The respondent also submitted that the appellant was seeking to invoke an exceptional jurisdiction and was required to show more than that the balance of convenience favoured a stay. The respondent submitted that the appellant could not show, as was required under Castlemaine Tooheys Ltd v South Australia,14 a 11 George v Rockett (1990) 170 CLR 104, [112]-[113] (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ). 12 Prior v Mole (2017) 261 CLR 265, [4] (Kiefel and Bell JJ), [24] (Gageler J), [98] (Gordon J); Thomas v Commonwealth (2022) 276 CLR 466, [58] (Gordon and Edelman JJ). See also the appellant’s written submissions dated 2 January 2024 (FDN 6), [27]-[28]. 13 Appellant’s written submissions dated 19 February 2024 (FDN 15), [24]. 14 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 (Castlemaine), 153-154 (Mason ACJ). See also ALRM v State of South Australia and Anor (Unreported, Full Court of the Supreme Court of South Australia, 26 July 1995, Doyle CJ with whom Bollen J agreed), quoting Queensland v Commonwealth (1987) 77 ALR 291, 295 (Mason ACJ): “This is so particularly when the act sought to be restrained involves the making of a value judgment by government in the light of expert opinion and a variety of considerations on an issue which falls pre-eminently within the competence of government and the committee to determine”. That case involved the refusal of an interlocutory injunction to prevent the commencement of a Royal Commission. -- 9 of 21 -- [2026] SASCA 58 Livesey P 8 “probability, even a distinct probability of success” rather than merely a serious question to be tried. The reasons of the primary judge 37 After hearing argument, the primary judge soon gave reasons for dismissing the appellant’s application. Her Honour described the application as seeking to restrain a decision that may never be made. The primary judge relied on the decision of Mason ACJ in Castlemaine, a case concerning the grant of interlocutory injunctions in public law cases:15 The principles governing the grant or refusal of interlocutory injunctions in private law litigation have been applied in public law cases, including constitutional cases, notwithstanding that different factors arise for consideration. In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried … (2) that he will suffer irreparable injury for which damages will not be adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction. … [I]n some cases where the public interest would be adversely affected by the grant of an injunction the plaintiff may need to show a probability, even a distinct probability of success, in order to obtain an interlocutory injunction. The degree of likelihood of success in action is a factor that is related to the balance of convenience in a way shortly to be mentioned. 38 The primary judge addressed each of the matters mentioned, namely whether there was a serious question to be tried, whether there was injury for which damages would not be adequate and the balance of convenience. On the issue of a serious question, the primary judge said she could not say that the appellant did not “have at least an arguable case”. Although her Honour accepted that this was not the applicable test, she found that this issue would not ultimately impact on the determination of the applications.16 39 On the question whether there would be any injury for which damages would not be adequate, the primary judge took the view that the evidence from the appellant which assumed that a suspension would occur was not apposite. Her Honour explained that there were a number of steps to be taken before a decision would be made, and these included the appellant’s right of appeal to the District Court. The primary judge did not accept that the appellant would suffer any significant irremediable prejudice or damage if a stay was not granted at that time.17 40 As for the balance of convenience, the primary judge considered that the court should not lightly interfere with decision-making by an expert decision-maker in the area of public safety entrusted to it under the national scheme. After considering the submissions made by the respondent concerning its 15 Castlemaine (1986) 161 CLR 148, 153-154 (Mason ACJ). 16 Reasons of the primary judge (Reasons), AB 280. 17 Reasons, AB 281. -- 10 of 21 -- [2026] SASCA 58 Livesey P 9 decision-making, the primary judge found that the balance of convenience did not favour the making of an order for a stay.18 41 The appellant criticised the approach of the primary judge, contending that there had been a failure to apply the principles and authorities relating to the stays of administrative proceedings and, whilst they were similar to those applying to injunctive relief, a stay was not an injunction.19 The appellant contended that the test for an interlocutory injunction is usually only applied when considering a stay where the rights of third parties are directly affected.20 42 In addition, the appellant criticised the approach taken by the primary judge to issues such as failing to evaluate the strength of the appellant’s case,21 and applying the wrong test to the determination of irreparable injury and the balance of convenience.22 43 The appellant was particularly critical of the failure by the primary judge to find that its grounds of review were strong in circumstances where the exercise of power by the respondent to suspend for 12 months was legally unreasonable and tantamount to de facto cancellation or punishment.23 44 In addition, the appellant criticised the finding that the review available under ss 42E and 42F of the District Court Act 1991 (SA) was a more convenient and satisfactory remedy. The appellant contended that the right of review in the District Court only applied to decisions rather than proposed decisions and did not address any prejudice that may arise from the fact a decision was made, even if a stay could subsequently be granted.24 45 The respondent reiterated its approach to whether a stay or an injunction were available at law, and emphasised that the primary judge was right to find that the suspensions may never be made. 46 The respondent submitted that there was a strong public interest in permitting the Board to continue with its decision-making given its primary responsibility for the protection of a vulnerable class of the public and that the Board had made no decision to suspend, and may not suspend. Even if it did so, the appellant could apply to the District Court for an urgent stay as part of the review available in that court.25 18 Reasons, AB 281-282. 19 Relying on authorities such as R v Secretary of State for Education and Science [1991] 1 QB 558, 562 (Glidewell J); R v Ashworth Hospital Authority [2002] EWCA Civ 923, [42] (Dyson LJ); and Stampalia v Stewards of the Western Australian Trotting Association [1999] WASC 7, [9]-[11] (Owen J). 20 Appellant’s written submissions dated 2 January 2024 (FDN 6), [39]. 21 Appellant’s written submissions dated 2 January 2024 (FDN 6), [60]. 22 Appellant’s written submissions dated 2 January 2024 (FDN 6), [42], [49]. 23 Appellant’s written submissions dated 2 January 2024 (FDN 6), [68]-[70]. 24 Appellant’s written submissions dated 2 January 2024 (FDN 6), [79]-[80]. 25 Respondent’s written submissions dated 2 January 2024 (FDN 4), [12]. -- 11 of 21 -- [2026] SASCA 58 Livesey P 10 47 The respondent challenged the approach of the appellant that the reasonableness of the respondent’s decision-making had to be determined from material available within the “four corners” of the show cause notices.26 The contentions of the parties regarding the costs of the appeal 48 The appellant contended that, separately or cumulatively, the respondent had acted unreasonably in the timing and continued prosecution of the administrative proceedings, that it had effectively surrendered to the appellant and, in any event, the appellant was inevitably going to succeed.27 49 The appellant contended that there was a strong and “perhaps overwhelming” argument that the show cause notices were jurisdictionally bad because of a lack of particularity and criticised the timing of the notices, delivered during the Christmas/New Year break.28 Given the absence of proper explanation and particularity in the notices, and the timing of their service, the appellant contended that the conduct of the respondent was unreasonable. 50 The appellant contended that the respondent’s unreasonable conduct extended to refusing to consent to a stay of the notices, or their effect, pending the judicial review proceedings.29 51 The appellant then outlined the conduct of the parties during the judicial review proceedings and the stay application, emphasising that, in its written responses to the three initial show cause notices, it had explained the lack of particularity and the relevant principles concerning particulars, identified substantive information relied on by the respondent which had not been provided to the appellant and which rendered the notices procedurally unfair and explained the steps which it had taken in response to various incidents by way of risk mitigation, but which had not been mentioned. For example, in relation to some events relied on by the respondent in proposing suspension, the appellant said that these had already been marked up as resolved following steps taken by the appellant, and in those cases the relevant matter was “closed”. 52 Finally, the appellant criticised the correspondence from the respondent dated 9 January 2024, which purported to withdraw each of the show cause notices, but foreshadowed an intention to issue new show cause notices. The appellant highlighted a statement made in the letter by the respondent regarding the appellant’s request to be provided with additional information and to particularise 26 Relying on FUD 18 v Minister for Home Affairs (2021) 285 FCR 505, [122], [129] (Lee and Wheelahan JJ, with whom Wigney J agreed), where the Full Court of the Federal Court held that pre-emptory prohibition should be refused so as to enable the statutory decision-making process to continue. 27 Appellant’s written submissions dated 19 February 2024 (FDN 15), [2], [15], citing One.Tel Ltd v Commissioner of Taxation (2000) 101 FCR 548, [6] (Burchett J); and Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622, 624 (McHugh J) (Ex parte Lai Qin);. 28 Appellant’s written submissions dated 19 February 2024 (FDN 15), [24]-[30]. 29 Appellant’s written submissions dated 19 February 2024 (FDN 15), [32]. -- 12 of 21 -- [2026] SASCA 58 Livesey P 11 the matters considered when forming an intention to suspend. The appellant contended that this demonstrated that its complaint about particularity had been made good. 53 In its letter dated 10 January 2024, the appellant sought confirmation of the legal basis on which the respondent had reported to withdraw each of the eight show cause notices, but no response had been received.30 54 The appellant contended that the respondent must have determined that its initial notices were subject to jurisdictional error or that it had decided to exercise its power of amendment concerning provider approval under s 23 of the National Law, being sch 1 to the Education and Early Childhood Services (Registration and Standards) Act 2011 (SA). 55 Accordingly, the appellant contended that the inference which arose on the evidence before the Court is that the respondent determined to surrender when faced with the prospect of a hearing before the Court of Appeal, especially in the absence of any evidence about the respondent’s “motives or basis” when withdrawing the notices.31 56 The respondent submitted that it was appropriate that there be no order as to costs in circumstances where there had been no hearing on the merits as to whether the primary judge had erred in refusing to grant a stay and there was, in the circumstances, no reason to depart from the ordinary position that there be no order as to costs. The respondent submitted that there was no evidence of it having acted unreasonably or having surrendered.32 57 The respondent relied generally on what it contended was unreasonable conduct by the appellant, and its reasonable conduct in response. The respondent submitted that the appellant’s contention that it had always been concerned about particularity was not borne out by what had occurred in the litigation. 58 The respondent pointed to the timing of the allegations made by the appellant. In response to the first three show cause notices dated 4 December 2023, which required responses by 3 January 2024, and the further five show cause notices issued on 18 December 2023, which required responses by 17 January 2024, the appellant commenced judicial review proceedings on 15 December 2023. 59 No contact was made with the respondent before commencing proceedings. In particular, no concern was raised about the adequacy of the particulars in the 30 Appellant’s written submissions dated 19 February 2024 (FDN 15), [21]-[44]. 31 Appellant’s written submission dated 19 February 2024 (FDN 15), [51], [53], citing Randazzo Investments (NT) Pty Ltd v City of Palmerston [2018] NTSC 6, [22] (Kelly J); and Secretary to the Department of Health v Victorian WorkCover Authority (No 2) [2021] VSC 776, [118]-[119] (Keogh J). 32 Respondent’s supplementary written submissions dated 15 April 2024 (FDN 20), [3]. -- 13 of 21 -- [2026] SASCA 58 Livesey P 12 show cause notices or that proceeding with the notices denied the appellant procedural fairness.33 60 The respondent pointed to the initial Statement of Facts, Issues and Contentions which identified four bases for prohibition. These were, essentially, that the facts and matters stated in the notices did not provide reasonable grounds or a basis to exercise the power of suspension, and that the 12-month suspension period amounted to a permanent cessation or was legally unreasonable as being disproportionate. No complaint about particularity or procedural fairness was made. 61 The respondent submitted that this remained the position at the time of the argument before the primary judge on 20 December 2023, and at the time the appellant filed and served a notice of appeal on 24 December. 62 The respondent emphasised that the appellant did not communicate with the Board before commencing the appeal. 63 According to the respondent, it was only once the appellant provided its three responses on 3 January 2024 that the particularity and procedural fairness issues were raised. In response, on 4 January, the respondent offered to provide an undertaking to give the appellant time following the taking effect of any decision so as to enable an appeal to be brought in the Administrative and Disciplinary Division of the District Court.34 64 Later that day, at the hearing before this Court on 4 January, the appeal was listed with expedition at the appellant’s request. No orders were made on the interim stay application because the respondent provided an undertaking,35 modified from that which had been proposed earlier that day. 65 On Monday, 8 January 2024, the appellant filed a Further Amended Statement of Facts, Issues and Contentions which included a new ground that the show cause notices were defective for not providing particulars, nor the basic facts, concerning the specific incidents and alleged breaches of the National Law. 66 The respondent’s withdrawal of the show cause notices followed these events. The respondent withdrew the show cause notices by letter dated 9 January 2024, which explained that it would issue fresh notices with additional particulars to ensure that the appellant had the greatest possible opportunity to investigate and respond to the matters raised.36 33 Respondent’s written submissions dated 4 March 2024 (FDN 16), [22], relying on the affidavit of Sean Heffernan affirmed 16 February 2024 (FDN 17), [6]. 34 Respondent’s written submissions dated 4 March 2024 (FDN 16), [31], relying on exhibit SKH-2 to the affidavit of Sean Heffernan affirmed 16 February 2024 (FDN 17). 35 The terms of which are set out in the record of outcome dated 8 January 2024 (FDN 11). 36 Respondent’s written submissions dated 4 March 2024 (FDN 16), [2]. -- 14 of 21 -- [2026] SASCA 58 Livesey P 13 67 That submission was supported by an affidavit from Mr Sean Heffernan, Director, Regulatory Practice and Operations of the Board. He was acting Chief Executive and Early Childhood Services Registrar during portions of December 2023 and January 2024. He explained that after receiving and considering the responses provided by the appellant on 3 January, and the second Further Amended Statement of Facts, Issues and Contentions filed in the judicial review proceedings on 8 January 2024, he decided to withdraw each of the eight show cause notices:37 The purpose of withdrawing the Show Cause Notices was to provide further Show Cause Notices which dealt with the concerns raised by the Appellant in the Responses and the Further Amended Statement of Facts by setting out the facts concerning each incident and breach of the National Law relied on by the Respondent. While I had previously proceeded on the basis that the Appellant would have sufficient records to understand the matters referred to in the Show Cause Notices, in light of the Appellant’s representations I decided to err on the side of caution and to provide further detail to ensure the Appellant had the greatest possible opportunity to investigate and respond to the matters relied on by the Respondent. 68 Subsequently, the respondent filed a further affidavit from Mr Heffernan.38 In that affidavit, he explained that before any further show cause notices were to be issued, the respondent intended to undertake further investigatory steps to ensure that further notices reflected the regulatory concerns, and the evidential basis for those concerns, given the time elapsed since the initial show cause notices in December 2023. 69 Indeed, the respondent submitted that its decision to subsequently undertake further investigatory steps before determining whether to re-issue show cause notices was consistent with good administrative decision-making and its ongoing regulatory obligations “in the context of a dynamic and fluid compliance and investigation landscape”. The respondent submitted that this demonstrated that it was avoiding pre-judgment and ensured that any statutory action was based on the best available information and was justified and reasonable at the time it was taken. The determination of the application for costs of the appeal proceedings 70 The general costs principle that “costs follow the event” is embodied in UCR 194.5(2). Both parties relied on the influential decision of McHugh J in Ex parte Lai Qin. There, it was recognised that where there has been no trial of the merits, and no finalisation of the dispute by the making of orders, a “court is necessarily deprived of the factor that usually determines whether or how it will make a costs order”.39 As McHugh J explained:40 In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. 37 Affidavit of Sean Heffernan affirmed 16 February 2024 (FDN 17), [16]. 38 Affidavit of Sean Heffernan affirmed 28 March 2024 (FDN 18). 39 Ex parte Lai Qin (1997) 186 CLR 622, 624 (McHugh J). 40 Ex parte Lai Qin (1997) 186 CLR 622, 624-625 (McHugh J). -- 15 of 21 -- [2026] SASCA 58 Livesey P 14 The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. … Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. … If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the costs discretion will usually mean that the court will make no order as to the cost of the proceeding. This approach has been adopted in a large number of cases. (Citations omitted.) 71 A helpful statement of the relevant considerations appears in the earlier decision of Hill J in Australian Securities Commission v Aust-Home Investments Ltd:41 (1) Where neither party desires to proceed with litigation the Court should be ready to facilitate the conclusion of the proceedings by making a costs order. (2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. (3) In determining the question of costs it would be appropriate, however, for the Court to determine whether the Appellant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them. (4) In a particular case it might be appropriate for the Court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation. (5) Where the proceedings terminate after interlocutory relief has been granted, the Court may take into account the fact that interlocutory relief has been granted. (Citations omitted.) 72 These and other authorities demonstrate that, in many cases, the appropriate order will usually be that there be no order as to costs. That order reflects that the Court will not determine the issues the parties have decided not to litigate. Rather, the Court will usually facilitate the resolution of the matter by the parties and, if it is appropriate to do so, make the consent orders which reflect the parties’ 41 Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194, 201 (Hill J). -- 16 of 21 -- [2026] SASCA 58 Livesey P 15 resolution or compromise.42 In most cases those consent orders should include orders as to costs. 73 If, notwithstanding the resolution or compromise of a matter, a party wishes to press for costs, the circumstances before the Court must clearly demonstrate a proper basis for the exercise of discretion in favour of making an order for costs. That is particularly so following the resolution or compromise of an appeal. The party seeking a costs order must be in a position to demonstrate that there really has been unreasonable conduct by the other party, or that it is clear and obvious that the party seeking a costs order was almost certainly going to win and the other party was going to lose. 74 There are usually at least two difficulties confronting applications of this kind. The first, already mentioned, is that because the Court will not readily determine the matters formerly in issue, there must usually remain scope for uncertainty about the likely outcome.43 The second is that the question of costs should usually be approached in a broad, pragmatic way.44 75 There was some dispute between the parties about the significance of observations made by judges from time to time that it may be appropriate to make an order for costs in favour of the party receiving what amounts to an effective surrender by the other party. The appellant contended that this amounted to a discrete and separate basis for the award of costs following discontinuance or settlement.45 76 The respondent submitted that the balance of authority favoured the view that surrender or capitulation were merely matters relevant to whether the parties had acted reasonably or whether one party was almost certain to succeed.46 Both parties pointed to Hamilton v JJR Investment Holdings, where Stein J (as her Honour then 42 There being no issue about the appropriateness of making the order, Moloney v 21-25 South Esplanade Pty Ltd (2024) 145 SASR 226, [52]-[55] (Livesey P, Bleby and David JJA), nor about whether it reflected their settlement, Croser v Croser [2025] SASCA 145. 43 Cf Nordburger Pty Ltd v Commissioner of Highways [2022] SASCA 17 (Livesey P, Bleby and David JJA), where an unmeritorious appeal was pressed even after it became futile. 44 Ewins v BHP Billiton Ltd (No 2) [2005] SASC 164, [29] (Doyle CJ); Varnhagen & Anor v State of South Australia & Ors (No 3) [2022] SASCA 134, [37]-[39] (Livesey P, S Doyle and Bleby JJA). 45 One.Tel Ltd v Commissioner of Taxation (2000) 101 FCR 548, [6] (Burchett J). The appellant also relied on Chapman v Luminis Pty Ltd [2003] FCAFC 162, [7] (Beaumont, Sundberg and Hely JJ); Edwards Madigan Torzillo Briggs Pty Ltd v Gloria Stack [2003] NSWCA 302, [5]-[6] (Mason P, Meagher JA and Davies AJA); Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681, [3]-[9] (Basten JA), [30] (Payne JA, with whom Meagher JA agreed); Zhao v Suzhou Haishun Investment Management Co Ltd [2020] VSCA 34, [12] (Tate, McLeish and Hargrave JJA) and Coastal Ecology Protection Group Inc v City of Charles Sturt [2020] SASC 215, [38]-[39] (Livesey J). 46 Citing Transfield Services (Australia) Pty Ltd v James Gaha [2012] NSWSC 865, [27] (Ball J); Jun International Property Pty Ltd v Fullerton Property Pty Ltd [2019] NSWSC 450, [69]-[77] (Ward CJ In Eq); Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681, [6] (Basten JA), [30]-[35] (Payne JA, with whom Meagher JA agreed); Shellharbour City Council v Minister for Local Government [2017] NSWCA 256, [6]-[7] (Basten JA, with whom McFarlan JA and Sackville AJA agreed); Miller v Kirsten (No 2) [2023] FCA 1034, [67] (O’Sullivan J). -- 17 of 21 -- [2026] SASCA 58 Livesey P 16 was) referred to the absence of South Australian authority on the point and found it unnecessary to determine whether this amounted to a separate ground.47 77 In this case, it is unnecessary to consider whether surrender or capitulation represents a separate ground because the appellant principally relied on the cumulative effect of the respondent’s unreasonable conduct, the respondent’s effective surrender and that the appellant was likely to succeed.48 Certainly, and in any event, none of these grounds is, separately, sufficient to warrant an order for costs in this case. 78 The considerations raised by the parties appear to include the timing of the delivery of the show cause notices, the reasonableness of the prosecution of the judicial review proceedings and stay application and whether the appellant was almost certain to succeed on appeal. This last consideration includes whether the respondent effectively surrendered by its letter dated 9 January 2024. 79 Having identified these considerations, it is necessary to keep in mind that the only issue for determination is whether and in what form an order for the costs of the appeal proceeding should be made. 80 There is something to be said for the respondent’s submission that the appellant tended to conflate the merits of the judicial review proceedings and the merits of the appeal against the refusal to grant a stay. Whilst the prospects of success on the judicial review proceedings were relevant to whether a stay or an interlocutory injunction should be granted, the primary judge was never required to determine the merits as distinct from evaluating the apparent strength of the matters raised by the appellant. Likewise, it is not for this Court to determine the merits either. 81 In addition, the criticism made about the timing of the issuing of the show cause notices does not really inform the determination of the question of the costs of the appeal proceedings. The respondent may have had a number of reasons for issuing these when it did, including concerns about child safety and identifying a time when the least amount of disruption might be expected. To the extent that it is a relevant consideration, or not adequately addressed by the respondent, it is of slight weight. 82 As for the fate of the appeal, though there is merit in the appellant’s complaint that the primary judge may not have applied the correct test appropriately, it does not follow that the appellant was certain to succeed on appeal. Significant allowance must be made for the fact that the primary judge was required to address an application of some complexity quickly. In any event, it would be inappropriate 47 Hamilton v JJR Investment Holdings Pty Ltd [2023] SASC 40, [134]-[160] (Stein J). In that case, her Honour did not need to decide whether a capitulation and surrender represented a separate basis or was only relevant to whether a party would almost certainly have succeeded because she found that there had been no capitulation, [162]. 48 Appellant’s written submissions dated 19 February 2024 (FDN 15), [22]. -- 18 of 21 -- [2026] SASCA 58 Livesey P 17 to, in effect, determine the appeal for the purposes of determining costs. Whether and to what extent the many issues raised by the appellant about the show cause notices would have succeeded or at least been given greater weight on an appeal against the refusal to grant a stay or an injunction need not be determined. 83 What does seem clear, however, is that the appellant’s complaints about particulars and procedural fairness emerged clearly only after it had commenced judicial review proceedings, made an application for a stay and filed and served a notice of appeal. All of those events occurred during the last part of December 2023. The appellant’s complaints about particulars and procedural fairness first clearly emerged in early January 2024 in the three responses made to the first three show cause notices. 84 For whatever reason, the appellant’s concerns about particulars and procedural fairness were not clearly communicated to the respondent earlier, and before the judicial review or appeal proceedings were commenced. To identify this apparent change in strategy is not to criticise it. It may be that these issues formed part of the appellant’s earlier contentions but, if they did, they did not do so clearly. Other issues were raised. 85 After the appellant clearly identified concerns about particulars and procedural fairness, the respondent responded relatively swiftly – initially by offering an undertaking on 4 January – and ultimately by withdrawing the notices by letter dated 9 January 2024. 86 In the intervening period, the hearing of the appeal was set down on 4 January for hearing on 17 January 2024. 87 Whilst it seems clear enough now that the respondent was motivated by the appellant’s concerns about particulars and procedural fairness, it is far from clear or obvious that the appellant was almost certain to succeed if the appeal had proceeded to a hearing. 88 Accordingly, whilst the appellant could rely on its arguments about whether the primary judge had applied the wrong test for a stay, or at least applied the correct test for an injunction inappropriately, and there appeared to be merit in the complaints about particulars and procedural fairness for the purposes of an argument about the existence of a serious question to be tried, or a distinct probability of success, this is not one of those cases where it is obvious that the appellant was almost certain to succeed. These were not the only arguments on which the fate of the appeal rested.49 But, even if they were, there is something to be said for the proposition that the appellant’s case would then have turned on new arguments, additional to those first set out in the notice of appeal filed and served 49 For example, there was likely to be considerable debate about whether the appellant should be left to its remedy, if any, in the Administrative and Disciplinary Division of the District Court, cf Avaria Niles v Judicial and Legal Service Commission and Anor [2026] UKPC 15. -- 19 of 21 -- [2026] SASCA 58 Livesey P 18 on 27 December 2023, and that may have had some bearing on the extent of the appellant’s award of costs. 89 In these circumstances, the preferable view is that it has not been shown that either party failed to act reasonably. The respondent appears to have commenced the notice to show cause process with genuine concerns, the appellant raised a number of matters in response and, a little later, it clearly raised concerns about particulars and procedural fairness which were taken up by the respondent. It cannot be said that the respondent has acted so unreasonably that the appellant should obtain the costs of the appeal proceeding, nor that the appellant was almost certain to succeed on appeal. Conclusion 90 It is appropriate to make no order as to the costs of the appeal proceeding. -- 20 of 21 -- [2026] SASCA 58 S Doyle and Bleby JJA 19 91 S DOYLE AND BLEBY JJA: We agree with the reasons of Livesey P and the order he has proposed. 92 In particular, his Honour is right to emphasise the courts’ reluctance to engage in any detailed consideration of the merits of a matter which was resolved prior to a hearing, for the sole purpose of determining an application for costs. Having reviewed the parties’ submissions in the general or broad-brush manner appropriate for an application such as the present, we are not satisfied that the respondent acted so unreasonably that it should pay the costs of the appeal proceeding. Nor are we satisfied that it can be inferred (from the merits of the appeal or otherwise) that the respondent surrendered or capitulated in the face of an appeal which would inevitably have succeeded. In those circumstances, we too would refrain from determining whether such an inference might have provided a basis for awarding costs which would be separate from a conclusion that the respondent acted unreasonably. -- 21 of 21 --