Commonwealth of Australia v Human Rights & Equal Opportunity Commission & Anor (includes corrigendum dated 2 June 1998) [1998] FCA 138 (27 February 1998)

Last Updated: 11 August 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	ng 671 of 1996

BETWEEN:	THE COMMONWEALTH OF AUSTRALIA Applicant
AND:	HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION First Respondent ROGER MULLER Second Respondent

JUDGE:	MOORE J
DATE:	2 JUNE 1998
PLACE:	SYDNEY

CORRIGENDUM

In the reasons for judgment delivered by Justice Moore on 27 February 1998:

1. On page 11, the final sentence of the first paragraph should read "A majority decided that it did not have that discriminatory effect though the persuasive judgment of Thomas J has much to commend it."

Associate

Date: 2 June 1998

FEDERAL COURT OF AUSTRALIA

HUMAN RIGHTS - Whether failure to pay allowance to an officer of the Australian Public Service who was in a stable homosexual relationship constituted discrimination - construction of definition of "spouse" in determination made under the Public Service Act 1922 - whether Human Rights and Equal Opportunity Commission has misconstrued definition.

Public Service Act 1922 , s 33, s 90

Audit Act 1901 s 34A

Quilter and Ors v The Attorney General 17 December 1997, New Zealand Court of Appeal, unreported referred to

YZ Finance Company Pty Ltd v Cummings [1964] HCA 12; (1964) 109 CLR 395 referred to

Baehr v Lewin 852 P2d 44 (Hawaii 1993) referred to

THE COMMONWEALTH OF AUSTRALIA v HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION and ROGER MULLER

NG 671 of 1996

MOORE J

SYDNEY

27 FEBRUARY 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 671 of 1996

BETWEEN:	THE COMMONWEALTH OF AUSTRALIA Applicant
AND:	HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION First Respondent ROGER MULLER Second Respondent
JUDGE:	MOORE J
DATE OF ORDER:	27 FEBRUARY 1998
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The decisions of the Human Rights and Equal Opportunity Commission of 17 July 1996 that:

(i) the Department of Foreign Affairs and Trade's and the Department of Industrial Relation's practice of interpreting Determination 15 of 1983 so that same sex partnerships would not be recognised for the purposes of the allowances in question was a practice which constituted discrimination on the ground of sexual preference, and

(ii) it is recommended that the Department of Foreign Affairs and Trade and the Department of Industrial Relations pay the second respondent $16,161.20 compensation for loss of allowances suffered by reason of the discriminatory conduct of the Departments;

are set aside.

2. Subject to order 4, the matter is remitted to the Human Rights and Equal Opportunity Commission for further consideration according to law.

3. No order as to costs.

4. Order 2 is to take effect on 27 March 1998 unless, by further order of the Court and the consent of the parties, that order is revoked.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 671 of 1996

BETWEEN:	THE COMMONWEALTH OF AUSTRALIA Applicant
AND:	HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION First Respondent ROGER MULLER Second Respondent

JUDGE:	MOORE J
DATE:	27 FEBRUARY 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

This is an application by the Commonwealth for judicial review under the Administrative Decisions (Judicial Review) Act 1977 of a decision of the Human Rights and Equal Opportunity Commission ("the Commission").

The impugned decision of the Commission arose from a complaint by Mr Roger Muller made in correspondence to the Commission in 1992. The complaint concerned his treatment as an officer in the Department of Foreign Affairs and Trade ("the Department"). Mr Muller had been posted to London in January 1990. In April 1990 he formed a homosexual relationship and commenced living with his partner in London. In February 1992, Mr Muller wrote to the Department inquiring about the pay and conditions applicable to officers of the Department in same sex relationships. In a response dated 4 March 1992, he was informed that "the Department still does not recognise same sex relationships". The letter was accompanied by a minute of the Department of 21 October 1987 from the Acting Assistant Secretary of the International and General Legal Branch. The memorandum contained a conclusion that a companion of the same sex as a Departmental officer did not qualify for overseas allowances as a "spouse" of that officer.

That response led to several letters from Mr Muller to the Commission which were ultimately treated by the Commission as a complaint. It is unnecessary to detail in its entirety the course the consideration of the complaint took. It is sufficient to recount that on 17 July 1996 the Commission published a notice under s 35(2) of the Human Rights and Equal Opportunity Commission Act 1986 ("the Act") which contained the impugned decision. It was that the Department and the Department of Industrial Relations, both of which where identified as the respondents to the complaint, had interpreted Determination 15 of 1983 so that same sex partnerships would not be recognised for the purposes of the allowance in question, such that the practice constituted discrimination on the ground of sexual preference. The Commission also decided to recommend an award of compensation in the sum of $16,161.30 reflecting the detriment suffered by Mr Muller. Both decisions are challenged by the Commonwealth but I have, for convenience, treated them as the one decision.

In order to understand the approach taken by the Commission, it is necessary to set out the relevant legislative provisions and instruments made under them concerning employment in the Australian Public Service ("the Service"). Section 82D of the Public Service Act 1922 empowered the Public Service Board ("the Board") to determine, by an instrument in writing, the terms and conditions of employment, including employment overseas, of officers and employees of the Service. At the time Mr Muller made his inquiry in February 1992, a determination had been made under s 82D which provided for an Overseas Living Allowance to be paid to an officer posted overseas. It was Determination 15 of 1983. The rate at which the allowance was paid depended on whether the officer was an attached and/or accompanied officer. At the relevant time, cl 3.1.2 defined "accompanied officer" in the following terms:

"`Accompanied Officer' means an officer -

(a) who is posted for a period not less than 12 months; and

(b) whose spouse -

(i) resides with the officer at the officer's locality of posting; or

(ii) is not absent from the locality for more than four weeks."

This definition was introduced into Determination 15 of 1983 by Determination 229 of 1990 and was for the purposes of Part 3 of Determination 15 of 1983 which concerned conditions of service for officers on long term postings.

Earlier that year, Determination 15 of 1983 had been amended by Determination 61 of 1990. It would appear that amending determination introduced a number of definitions into Determination 15 of 1983 for the purposes of the determination as a whole. This included a definition of spouse in the following terms:

"`Spouse' in relation to an officer includes a person who is living with the officer as a spouse on a bona fide domestic basis although not legally married to the officer".

It can be seen that an officer living overseas is entitled to an Overseas Living Allowance if, amongst other things, his or her spouse resides with the officer at his or her locality of posting and that person is living with the officer as a spouse on a bona fide domestic basis although not legally married to the officer.

The reasons of the Commission commenced with a discussion of its jurisdiction. The Commission went on to discuss the nature of discrimination for the purposes of the Act. It referred to the definition in s 3 and the definition of discrimination in Article 1(1)(a) of the Convention Concerning Discrimination in Respect of Employment and Occupation which is Schedule 1 to the Act. It then referred to the consideration of the definition in the Convention by the International Labour Conference Committee of Experts on the Application of Conventions and Recommendations and the view that had been adopted by that committee of the three elements of the definition of "discrimination" in the Convention. The Commission appears to have taken the approach that the views of that committee were relevant in construing the definition in the Act. It then discussed the complaint of Mr Muller and the steps taken to resolve the complaint by conciliation. The Commission referred to the procedures it adopted to enable the parties to make submissions.

It then set out its findings and its reasons for them. It identified three elements within the definition of discrimination. It noted that there was no issue about an aspect of the first, namely that the complaint related to a practice in employment or occupation.

The Commission went on to discuss the second element of discrimination, as defined, namely, whether there had been a distinction based on sexual preference. The Commission summarised the submissions of the parties. Mr Muller had put in issue whether Determination 15 of 1983 must be interpreted so as to exclude same sex partners. The respondents had submitted that Determination 15 of 1983 limited payment of allowances to officers who could establish one of two domestic relationships, a marriage or a de facto marriage. Those relationships required the parties to be of a different sex, and marriage is the union of a man and woman as husband and wife.

The Commission then considered the meaning of the word "spouse" as defined. It focused on the words "living as a spouse". It commenced this part of its reasons with the observation that despite the respondents' submission, it did not consider that the determination must be interpreted so as to refer only to a heterosexual relationship. It approached the matter on the footing that even if the word "spouse" is restricted to a person of a different sex to the officer, the expression "living as a spouse", comprehended a wider class of person. The Commission concluded "the phrase [living as a spouse] can be read as including a relationship or partnership that, though not a legal marriage, is nevertheless of a like nature." The Commission observed that this interpretation was strengthened by the fact that the alternative interpretation was clearly inconsistent with Government policy. It then proceeded to discuss, in a section headed "Government Policy", submissions made by the complainant about Government policy. The Commission noted that Mr Muller had submitted that the Board first adopted a policy against discrimination towards homosexual men and women in the Service in 1978. The Commission noted that in December 1984, s 33(3) of the Public Service Act 1922 commenced. That section required that appointments, transfers and promotions in the Service should occur without discrimination on the grounds of, inter alia, sexual preference. The Commission also noted that on 10 November 1986, the Board had issued a policy circular to all departments and statutory authorities entitled "Guidelines on the Elimination of Discrimination Against Homosexual Men and Women and in the Australian Public Service". The Commission also noted that regulations were made in December 1989 which included sexual preference as a prescribed ground of discrimination for complaint to the Commission.

The Commission then considered the relationship between the Public Service Act 1922 and Determination 15 of 1983. In substance the Commission concluded that Determination 15 of 1983, if construed in the way advanced by the respondents, would involve a breach of s 33. It did so because it viewed Mr Muller as having been denied certain benefits associated with his transfer to London that would have been available to him had he been in a heterosexual, rather than a homosexual, relationship. The Commission concluded that "on that basis the interpretation of Determination 15 of 1983 that I have taken is to be preferred to that advanced by the respondents as it preserves the validity of the Determination".

The Commission then considered whether Mr Muller had been the subject of direct discrimination. It first considered a submission of the respondents that it was necessary for the Commission to be satisfied that the Department had "the intention, purpose and motive to discriminate against Mr Muller by reason of his sexual preference". The Commission referred to the judgment of Lockhart J in Human Rights and Equal Opportunity Commission v Mt Isa Mines Ltd (1993) 46 FCR 301. It concluded that the complaint it was dealing with was one where intention, purpose and motive were of little, if any, significance. It then said:

"Bearing in mind the clear thrust of the government's policy to sexual preference based discrimination in employment, as represented, in particular by its enactment of section 33 of the Public Service Act and the making of the HREOCA regulation in question, DFAT was obliged to interpret and apply the Determination in a way that would not discriminate on the ground of sexual preference.

I find the respondents' practice of interpreting Determination 15 so that same sex partnerships would not be recognised for the purposes of the allowances in question was a practice which constituted discrimination on the ground of sexual preference."

After expressing this conclusion the Commission then considered what it described as the failure of the Commonwealth to direct a change of practice. It concluded that the failure of the Commonwealth to "ensure a non-discriminatory interpretation and application of the Determination, or take other appropriate action, in [the] face of the current application's clearly discriminatory effect, in itself constituted an act of discrimination grounded on sexual preference."

The Commission went on to consider whether there had been indirect discrimination, though it noted that it was not necessary to decide this point in view of its finding of direct discrimination. It nonetheless concluded that there had been indirect discrimination. It went on to consider the last aspect of the definition of discrimination, namely, whether there had been nullification or impairment of equality of opportunity in employment. It found there had been. It then considered what recommendation should be made. It noted that it was unnecessary to make recommendations for changes to terms and conditions of Federal public sector employment because an industrial agreement applying to officers of the Department, which had been concluded in 1994, extended the same conditions of service applying to officers in heterosexual relationships to officers in same sex relationships. It noted an award applying generally in the Service contained an anti-discrimination clause that would operate to ensure that the situation that led to Mr Muller's complaint would not recur elsewhere in the Service. Such a provision also operated in relation to officers in the senior executive service of the Service.

The Commission then considered the question of compensation. It concluded that "in view of the interpretation of the Determination I have taken and of the fact that if it were not for the discrimination the complainant would have received the allowances denied to him the respondents' submission [that the payment of compensation would involve the retrospective payment of allowances not legally payable] cannot be sustained." The recommendation for compensation in the sum of $16,161.30 was then made.

In its application the Commonwealth identified the following errors of law:

"(a) In deciding that the Determination No 15 of 1983 ("the Determination") made under subsection 82D(1) of the Public Service Act 1922 ("the Public Service Act") authorised payment of an overseas living allowance to an officer at the rate applicable to an accompanied officer where the homosexual partner of the officer resided with that officer, the First Respondent:

(i) adopted a construction of the term "spouse" which was inconsistent with the definition of that term contained in sub-clause 1.2.1(1) of the Determination; and

(ii) failed to apply the definition of the term "spouse" contained in subclause 1.2.1(1) of the Determination.

(b) In deciding that subsection 33(3) of the Public Service Act ("subsection 33(3)") required that the Determination be interpreted in the manner referred to in particular (a) above, the Respondent:

(i) misconstrued subsection 33(3); and

(ii) failed to hold that subsection 33(3) has no application to the making of the Determination or to the payment of overseas living allowances.

(c) In deciding that the Applicant had failed to ensure the non-discriminatory application of the Determination, the First Respondent failed to hold that, according to its terms, the Determination did not make any distinction, exclusion or preference, having the effect of nullifying or impairing equality of opportunity in employment or occupation, on the ground of sexual preference.

(d) In deciding that the Act applied to indirect discrimination as well as to direct discrimination, the First Respondent:

(i) failed properly to construe and apply the definition of "discrimination" contained in subsection 3(1) of the Act;

(ii) had recourse to the opinion of the International Labour Conference Committee of Experts in order to displace the definition of "discrimination" contained in subsection 3(1) of the Act."

The principal relief sought by the Commonwealth was:

"1. An order quashing or setting aside the decision.

2. A declaration that the applicant has not engaged in an act or practice that constitutes discrimination on the ground or (sic) sexual preference within the Act and the Regulations."

The first error of law identified by the Commonwealth assumes that the Commission positively determined that the word "spouse" had a meaning other than the meaning attributed to it by the Department and on which the Department acted. On one view of its reasons the Commission accepted that the word "spouse" may, properly construed, have the meaning given to it by the Department, but took the view that the Department should have preferred the meaning which conferred an entitlement on an officer in a same sex relationship. However, the approach adopted by counsel for Mr Muller in these proceedings was to accept that the Commission had given the word "spouse" the wider construction and then to argue that it was the correct construction. Accordingly it is necessary to determine whether the construction adopted by the Commission was the correct one.

I have already referred to the introduction into Determination 15 of 1983 of the definition of "spouse" by Determination 61 of 1990. I should refer briefly to the history of Determination 15 of 1983. Determination 10 of 11983 prescribed a number of conditions of employment for members of the Service employed in Australia. When Determination 15 of 1983 was first made, it rendered applicable certain provisions in Determination 10 of 1983 to staff performing duties overseas. This was achieved, in part, by cl 2.2(1) of Determination 15 of 1983 which identified a number of clauses of Determination 10 of 1983 that would apply to the performance of duties overseas by an officer. One of the clauses was cl 1.2.1. That clause contained a number of definitions including a definition of spouse in the following terms:

"`Spouse' in relation to an officer, includes a person who is living with the officer as his spouse on a bona fide domestic basis although not legally married to him".

It can be seen that the definition of "spouse" imported into Determination 15 of 1983 when it was first made is in substantially the same terms as the definition in the determination itself at the time an issue arose about Mr Muller's entitlements. It can also be seen that the original definition is not gender neutral. That is, it speaks of "his spouse" and "married to him". This reflects the language of Determination 10 of 1983 when it was first made. It refers repeatedly to an officer in the masculine, though it would plainly be construed as applying to officers who were female.

I think it can fairly be said that the word "spouse" has historically been a reference to a married woman in relation to her husband or a married man in relation to his wife. This is the principal meaning of the word in the Shorter Oxford English Dictionary, and in, substance, the meaning in the Macquarie Dictionary. Indeed, so much appears to have been accepted by counsel for Mr Muller who pointed to the use of the word "includes" in the definition. It indicated, it was submitted, an intention to confer a meaning on the word "spouse" beyond its ordinary meaning see: YZ Finance Company Pty Ltd v Cummings [1964] HCA 12; (1964) 109 CLR 395 at 398-399. The critical question thus becomes whether the enlargement of the meaning of the word was intended to embrace same sex partners living in a way that might be expected of a heterosexual married couple.

The Commission's view of the scope of the definition appears to have been substantially influenced by the use of the expression "living as a spouse" which it treated as an expression of some width. It had noted that the definition did not refer to a person "who is a spouse". However, had the definitions spoken of "who is a spouse" then it would have been, in large measure, a circular definition. One of the defined characteristics of a spouse would have been that the person was a spouse. The expression "living as a spouse" was, in my opinion, intended to signify that the nature of the relationship of a person who was a spouse in the defined sense, was substantially the same as the relationship between an officer and a spouse, in the sense of a married partner, who were living together. While the elements of such a relationship would vary, it could be expected that it would often, though by no means invariably, involve emotional and sexual intimacy and a measure of interdependence in dealing with the demands of daily living. The expression "living as a spouse" introduced these notions into the definition of spouse.

In my opinion, the scope of the definition is substantially determined, for present purposes, by the use of the words "although not legally married to the officer" in the definition. It appears to me that the definition, in extending the ordinary meaning of the word spouse, was conferring the status of spouse on a person who was in a relationship with the officer which might be, but was not, one in which they could be legally married. That is to say, they were not married but could be. The Marriage Act 1961 authorises the marriage of males to females and females to males but not otherwise: see ss 46(1) and 69(2). It also permits, in a conditional sense, the marriage of a male and a female where one or both are married to another. By that I mean a married person can marry again if the subsisting marriage is terminated. However, the Marriage Act 1961 does not authorise the marriage of people of the same sex. Thus, in my opinion, the premise implicit in the definition cannot be satisfied in relation to same sex couples.

It is to be recalled that Determination 15 of 1983 originally drew upon the definition of spouse in Determination 10 of 1983 which, as I just discussed, is in substantially the same terms as the definition as it applied at the time Mr Muller claimed the allowance at the higher rate. The view I have taken of the definition is that it was intended to confer entitlements on an officer even though the officer was not legally married to his or her de facto partner. The introduction of such a definition in 1983 is consistent with developments in the law more generally. Much of it is discussed in the Issues Paper and Report on De Facto Relationships of the New South Wales Law Reform Commission published in 1981 and 1983 respectively. Those reports led to the enactment of the De Facto Relationships Act 1984 (NSW). It is difficult to recreate the legal and normative environment in which a provision such as the one presently being considered was adopted. However, I rather apprehend that the definition was adopted, as I construe it, as part of a general acceptance by significant sections of the community of heterosexual relationships which were marriages in substance but not in legal form.

The conclusion I have reached about the meaning of the word "spouse" in Determination 15 of 1983 is not intended to imply that in another context the word "spouse" or the notion of marriage might not be taken to comprehend same sex partners in a relationship which, apart from their sex, had the characteristics of a heterosexual marriage. The legal status of same sex relationships and whether they can or should constitute a marriage is an issue that has been the subject of public discussion and debate for some time: see, for example, Kramer L, "Same Sex Marriage, Conflict of Laws and the Unconstitutional Public Policy Exception", 106 Yale LJ 1965 (1997); Strassberg M, "Distinctions of Form or Substance: Monogamy, Polygamy and Same Sex Marriage" 75 North Carolina L Rev 1501 (1997); Ruskay-Kidd S, "The Defense of Marriage Act and the Overextension of Congressional Authority" 97 Col L Rev 1435 (1997).

It has also been the subject of litigation. An illustration is the judgment of the Supreme Court of Hawaii in Baehr v Lewin 852 P2d 44 (Hawaii 1993). In that case, proceedings had been instituted by a number of same sex couples whose applications for marriage licences had been rejected. The constitutional challenge to the rejection was summarily dismissed. In issue on appeal to the Supreme Court was whether it should have been. The Court decided it should not have been. In the course of reaching this conclusion, the majority rejected the suggestion that same sex couples had a fundamental constitutional right to same sex marriage arising from the right to privacy or otherwise. Nonetheless the majority concluded the relevant law was presumed to be unconstitutional unless it could be demonstrated that legislation authorising only heterosexual marriages was justified by compelling state interests and was narrowly drawn to avoid unnecessary abridgments of the constitutional rights of same sex couples who were seeking to be married. A District Court subsequently declared the law to be unconstitutional in December 1996. A recent consideration of broadly similar issues and whether the Marriage Act 1995 (NZ) permits the marriage of people of the same sex was undertaken by the Court of Appeal of New Zealand in Quilter and Ors v The Attorney General, 17 December 1997, not yet reported. The Court was divided on the question whether, by being denied the right to marry, same sex couples were discriminated against. A majority decided it did not though the persuasive dissenting judgment of Thomas J has much to commend it.

In view of the conclusion I have reached about the proper construction of the definition it is not necessary to deal comprehensively with the Commonwealth's submission that the Commission had erroneously relied upon s 33(3) of the Public Service Act 1922 . However, I agreed that it did and should briefly explain why. That section provides:

"(3) ... powers under this Act in respect of appointments, transfers and promotions shall, subject to subsection (4), be exercised without:

(a) discrimination on the ground of political affiliation, race, colour, ethnic origin, social origin, religion, sex, sexual preference, marital status, pregnancy, age or physical or mental disability;

(b) discrimination that is unlawful under the Racial Discrimination Act 1975 or the Sex Discrimination Act 1984; or

(c) any other unjustified discrimination.

.....

(6) A reference in this section to the exercise of a power under this Act includes a reference to the making of a report of recommendation in relation to the exercise of such a power."

The Commission appears to have assumed that the relocation of Mr Muller to London was itself a transfer. However, having regard to subdivision D of Part III of the Public Service Act 1922 , the reference in s 33(3) to transfers is intended to be a reference to a transfer to an office, not a location. I accept, however, that it is probable that Mr Muller's transfer to London in the temporal sense would have involved a transfer to an office, though no finding to this effect was made by the Commission and I was informed from the bar table that there was no material before the Commission that would have established that this was so.

More importantly, however, is that though s 33(3) should not be narrowly construed given its apparent beneficial purpose, it is not apparent how there was any discrimination "in respect of (the) transfer(s) ... on the ground of sexual preference". The purpose of s 33(3) is to ensure that the powers that are exercised under the Public Service Act 1922 in respect of transfer are not to be exercised in a way that is discriminatory. Nothing was pointed to by the Commission that involved the exercise of a relevant power under the Public Service Act 1922 nor was there anything pointed to by counsel for Mr Muller. Indeed, she did not seek to defend, or at least defend strenuously, the reliance the Commission placed on s 33. In my opinion, the failure to pay Mr Muller the allowance at the higher rate or the formulation and promulgation of the provisions in the determination that had the effect of denying Mr Muller the allowance at the higher rate, did not involve the exercise of a power "in respect of a transfer" on which s 33(3) was intended to operate.

The erroneous construction of Determination 15 of 1983 adopted by the Commission results in its decision being attended by reviewable legal error and would justify an order quashing it. However, as I noted earlier, the Commonwealth also seeks a declaration that: "the applicant has not engaged in an act or practice that constitutes discrimination on the ground (of) sexual preference within the Act and the Regulations". During the hearing of these proceedings, counsel for both the Commonwealth and Mr Muller touched upon the question whether, apart from any obligation derived from Determination 15 of 1983, the Commonwealth could or should have paid Mr Muller an allowance of the type prescribed by the determination at the higher rate. Written submissions were subsequently made of this and related issues. Those issues, in my opinion, bear upon whether a declaration should be made of the type sought by the Commonwealth or the matter remitted to the Commission.

In the written submissions both the Commonwealth and Mr Muller contended that the matter should not be remitted to the Commission though for quite different reasons. It was submitted on behalf of Mr Muller that the Commonwealth could have paid the allowance at the higher rate to Mr Muller even though it was not obliged to do so by Determination 15 of 1983. It was submitted that such a payment could have been made under s 90(3) of the Public Service Act 1922 or s 34A of the Audit Act 1901 . It was submitted that any error in the reasons of the Commission was not a material error in the sense that it did not affect the outcome determined by the Commission. Indeed the submission went further and contended that even if the Commonwealth had no capacity lawfully to pay the allowance at the higher rate then it nonetheless constituted a distinction, exclusion or preference that had the effect of nullifying or impairing a quality of opportunity or treatment in employment or occupation and thus constituted discrimination. I immediately add, I doubt this could be so.

Each of these contentions was put in issue by counsel for the Commonwealth in his written submissions.

Section 90 of the Public Service Act 1922 provides:

"(1) Nothing in this Act shall authorize the expenditure of any greater sum out of the Consolidated Revenue Fund, by way of payment of any salary, than is from time to time appropriated by the Parliament for that purpose.

(3) Payments of money to officers or employees, other than for salary or for allowances or expenses which may be paid under the regulations or under determinations in force under subsection 9(7A) or section 82D, shall be made only under the authority of the Board".

It was submitted by the Commonwealth that subsection 90(3) of the Public Service Act 1922 did not (and does not now) provide any authority for the payment of overseas living allowance outside the circumstances covered by Determination No 15 of 1983. That is because, it was submitted, the class of payments authorised did not include payments for salary, allowances or expenses. However, the reference in subsection 90(3) to salary, allowances or expenses is a reference to those which may be paid under either regulations or determinations. It thus appears to be a power authorising payment of money which is either not in the character of a salary, allowance or expense, or is not a salary, allowance or expense payable under a regulation or determination. However, even if the power conferred by the subsection is as broad as I have just stated it, the question remains whether funds were available that had been appropriated for the purpose of payments under subsection 90(3) during the period Mr Muller claims the allowance should have been paid to him at the higher rate and what administrative constraints, if any, existed that might have precluded the payment of this allowance at the higher rate. I simply do not know the answer to those questions and they involve, in part, issues of fact.

Slightly different issues arose in relation to the provisions of the Audit Act 1901 which was the Act applicable at the time the discriminatory conduct is alleged to have occurred. It is a matter now dealt with by the Financial Management and Accountability Act 1997 . Section 34A(1) of the Audit Act 1901 relevantly provided:

"Subject to subsection (2), where an authorized person is satisfied that, by reason of special circumstances, it is reasonable to do so, he may direct:

(a) that an amount proposed to be paid to a person by the Commonwealth;

...

be treated as properly payable notwithstanding that the amount is, or the amounts are, not payable in pursuance of the law or under a legal liability, but this subsection does not authorize a payment or payments otherwise than out of moneys that are lawfully available for that purpose".

It was submitted on behalf of the Commonwealth that the issue before the Commission had been the Commonwealth's administration of Determination 15 of 1983 and that no suggestion had been made before the Commission that the Commonwealth's administration of s 34A(1) of the Audit Act 1901 was discriminatory. The difficulty with this submission, however, is that the correspondence from Mr Muller which was treated as a complaint (at least that part of it which is in evidence) and the consideration of the complaint by the Commission, was in language that lacked precision and particularity. The complaint was not in terms that would have precluded a consideration of any power the Commonwealth had under the Audit Act 1901 and certainly the consideration of the complaint by the Commission was not in terms that suggested it would not have been within the purview of the complaint as the Commission perceived it. However, the capacity of the Commonwealth to have made payment under s 34A of the Audit Act 1901 depended on funds being lawfully available for the purpose of making such a payment. Again, whether funds were available for that purpose I do not presently know.

It appears to me that the Commonwealth may have had a capacity to pay the allowance at the higher rate though whether it could have paid it, depends upon the resolution of matters earlier referred to. For this reason alone the proper course would be for me to remit the matter to the Commission for further consideration. Moreover, the decision of the Commission to recommend the payment of compensation to Mr Muller was based on the erroneous view that the respondents have failed to meet obligations under Determination 15 of 1983 as the Commission construed it. The proper construction of Determination 15 of 1983 was the principal focus of the Commission in its consideration of the complaint and the formation of the opinion founding the service of the notice under s 35(2).

For the preceding reasons it is appropriate to set aside the impugned decision of the Commission. The Commonwealth has not affirmatively established a basis for making the declaratory order sought. Neither party suggested the matter should be remitted to the Commission. The Commonwealth plainly did so because it believed, on its legal analysis, that course could not be followed because there would be nothing more for the Commission to consider. For different reasons the same submission was made on behalf of Mr Muller. It may additionally be that both the Commonwealth and Mr Muller would wish to see issues arising from Mr Muller's complaint resolved finally in these proceedings. For reasons given, I presently do not see how they can be. However, neither may wish to have the matter further considered by the Commission with the attendant costs including personal exertion. Conceivably, the matter could be settled. Accordingly I propose to order that the decision of the Commission be set aside and, subject to one qualification, the matter be remitted to the Commission for further consideration. The qualification is that the parties may consent to a course that would result in the matter proceeding no further. If agreement is reached to that effect then the matter would, subject to any rights the parties have arising from this judgment, proceed no further.

I certify that this and the preceding fourteen (14) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore

Associate:

Dated: 27 February 1998

Counsel for the Applicant:	Mr P Hanks
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Respondent:	Ms S Winters
Solicitor for the Respondent:	Gilbert & Tobin
Written submissions completed:	20 February 1998
Date of Hearing:	3 December 1997
Date of Judgment:	27 February 1998