Sutton v The Commonwealth of Australia [2011] FCA 14 (14 January 2011)

Last Updated: 17 January 2011

FEDERAL COURT OF AUSTRALIA

Sutton v The Commonwealth of Australia [2011] FCA 14

Citation:		Sutton v The Commonwealth of Australia [2011] FCA 14
Parties:		DAVID ROY SUTTON v THE COMMONWEALTH OF AUSTRALIA
File number:		VID 4 of 2011
Judge:		JESSUP J
Date of judgment:		14 January 2011
Legislation:		Defence Act 1903 (Cth) ss 9A, 10A, 10, 31 and 32
Date of hearing:	12 & 13 January 2011
Place:	Melbourne
Division:	GENERAL DIVISION
Category:	No Catchwords
Number of paragraphs:	28
Counsel for the Applicant:	The Applicant appeared in person
Counsel for the Respondent:	Bryan Mueller
Solicitor for the Respondent:	Clayton Utz

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 4 of 2011

BETWEEN:	DAVID ROY SUTTON Applicant
AND:	THE COMMONWEALTH OF AUSTRALIA Respondent

JUDGE:	JESSUP J
DATE OF ORDER:	13 JANUARY 2011
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The claim for interlocutory relief be dismissed.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 4 of 2011

BETWEEN:	DAVID ROY SUTTON Applicant
AND:	THE COMMONWEALTH OF AUSTRALIA Respondent

JUDGE:	JESSUP J
DATE:	14 JANUARY 2011
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. On 13 January 2011, I dismissed the applicant’s application for interlocutory orders in this proceeding. These are my reasons for doing so.
2. The applicant is a Commissioned Officer in the Australian Regular Army. By application filed on 7 January 2011, he sought orders requiring the Army to extend his employment until such time as a Redress of Grievance lodged by him on 30 November 2010, and all subsequent referrals thereof to higher authority, had been heard and resolved. His interlocutory application, which first came before the court on 12 January 2011 and was adjourned to 13 January 2011, effectively sought orders that would require the Army to continue employing him beyond 16 January 2011.
3. On 22 November 2001, the applicant, then a captain in the Army Reserve, accepted a written offer of appointment in the Regular Army, under the conditions set out in the offer. At trial, the legal character of the applicant’s appointment in the Army Reserve at that time may be of some significance. However, there was no evidence of such matters led on the present interlocutory occasion. I am obliged to decide the application as though the transactions of November 2001 were the originating ones which effectively defined the applicant’s then status as an officer in the Regular Army.
4. The conditions to which the offer of employment made to the applicant in November 2001 was subject included the following:
   • The applicant was to be a General Service Officer;
   • The applicant’s commission was to be “Short Service Commission of four years with a probationary period of 18 months”;
   • The “date of transfer” was to be 7 January 2002;
   • The “expiry date” was to be 6 January 2006.
5. At the time, s 31 of the Defence Act 1903 (Cth) provided that the Army would consist of two parts, namely, the Regular Army and the Army Reserve. By s 32, the Regular Army was to consist of officers appointed to, and soldiers enlisted in, the Regular Army, officers and soldiers transferred to the Regular Army from the Army Reserve, and others not presently relevant. By s 10(1) of the Defence Act as it existed at the time:

(1) The Governor General may, in accordance with such conditions and subject to such qualifications or requirements as are prescribed or provided for by the regulations, by instrument in writing:
(a) appoint persons to be officers of the Army; and
(b) promote officers of the Army;
and may issue commissions to persons so appointed.

By s 120A, this power of appointment was delegable. Also at that time, s 10A(1) of the Defence Act provided:

(1) In appointing a person to be an officer of the Army, the Governor General (or his delegate under section 120A) shall specify the part of the Army to which the appointment is made and:
(a) may express the appointment to be for a specified period of service in that part of the Army; or
(b) may express the appointment to be for a specified period of service in one part of the Army, to be followed by a specified period of service in another part of the Army.

6. At trial, I apprehend that there will be a question as to whether the offer/acceptance document executed by the applicant on 22 November 2001 was an appointment under s 10(1) of the Defence Act, or a transfer from the Army Reserve as contemplated by s 32(b) thereof. On the limited state of the evidence and arguments advanced on the present interlocutory occasion, I am unable to venture an opinion on such questions, even were it desirable to do so.
7. However, instructions issued under the authority of s 9A of the Defence Act did, it seems, have a bearing on the way in which the offer of November 2001 was expressed. Under that section, the Secretary of the relevant department and the Chief of the Defence Force were to have “the administration of the Defence Force”. Instructions issued by them, or with their authority, were to be known as “Defence Instructions (General)”. The powers of the Secretary and the Chief of the Defence Force under s 9A extended to authorising a service chief of an arm of the Defence Force to administer matters relating to that arm. Instructions or orders issued or made by or with the authority of a service chief were to be known, in the case of the Army, as “Defence Instructions (Army)”.
8. In November 2001, there were Defence Instructions (General) made under s 9A entitled “Initial appointment to and enlistment in the Australian Defence Force from 1 July 1998 – Fixed Periods of Service”, referred to as DI(G) PERS 33-3. Clause 1 thereof provided as follows:
   1. Fixed Periods of Service (FPS) will be introduced with effect 1 July 1998 for new entrants to the Permanent ADF. Under FPS, all new entrants will be appointed or enlisted for a finite period of initial service, rather than on Permanent Appointment (PA) for officers or Open Ended Engagement (OEE) for other ranks (OR).
      

Clause 8 thereof provided as follows:

8. Members appointed to or enlisted in the Permanent Forces after 1 July 1998. All new members who join the Permanent Force on or after 1 July 1998 are to be offered employment under the provisions of FPS. Notwithstanding the scope of the legislative provisions noted in paragraphs 4. and 5. of this Instruction, new members are to be offered finite periods of initial service only. Subsequent periods of service will be managed under FCMS.

It was submitted on behalf of the respondent that these provisions required that any appointment offered to the applicant in November 2001 be for a fixed period only, as distinct from ongoing, or permanent, service. Particularly having regard to the heading to DI(G) PERS 33-3, it is not self-evident to me that these provisions had any application to the circumstances of an officer who was being transferred from the Army Reserve to the Regular Army. However, I am prepared to accept the submission of counsel for the Commonwealth that, rightly or wrongly, these provisions most probably explained the fixed-term nature of the offer made to the applicant in November 2001.

9. The applicant, who appeared in person, submitted that the conditions under which he was appointed in November 2001 were irregular because they did not comply with another instruction issued under s 9A of the Defence Act entitled “Career Management of Australian Army Officers”, and referred to as DI(A) PERS 47-1. The applicant relied upon cl 19(a) thereof which dealt with the position of General Service Officers (ie covering the applicant). The version of DI(A) PERS 47-1 placed before the court by the applicant was dated 31 July 2008, and he invited me to accept that the relevant provision, or a provision in corresponding terms, was extant in November 2001. The respondent raised no objection to that course. Clause 19(a) was as follows:

19. Officers will be appointed to one of three career divisions. Officers appointed to previous career divisions will transition to the [sic] one of the following:

1. General Service Officer (GSO). GSO are officers whose education, training and experience prepare them for a wide range of appointments in the core functions of the Army. GSOs are appointed on a Permanent Appointment. For the majority of officers, career progression should normally include a wide range of corps and non-corps regimental, training and staff appointments. GSOs are expected to undertake the suite of developmental courses of the All Corps Officer Training Continuum (ACOTC).
   

The applicant submitted that, as a General Service Officer, he could be appointed only on a permanent basis, and that, to the extent that the document which he signed in November 2001 provided otherwise, effect should not be given to it.

10. The difficulty with this submission made by the applicant is that, assuming cl 19(a) of DI(A) PERS 47-1 existed in November 2001, and assuming that cls 1 and 8 of DI(G) PERS 33-3 applied to his circumstances (an assumption which, on the present limited state of the evidence, I am obliged to make) there would have been an inconsistency between the two. By s 9A(4) of the Defence Act at that time –

(4) Where Defence Instructions (Navy), Defence Instructions (Army) or Defence Instructions (Air Force) are inconsistent with Defence Instructions (General), the Defence Instructions (General) prevail and the Defence Instructions (Navy), the Defence Instructions (Army) or the Defence Instructions (Air Force), as the case may be, shall, to the extent of the inconsistency, be of no effect.

On the assumptions referred to, this provision would have had the effect that cl 9(a) of DI(A) PERS 47-1 was of no effect. To the extent that the applicant now relies upon cl 9(a), on the material before the court, I take the view that no arguable case has been demonstrated.

11. Notwithstanding the limited terms of the applicant’s appointment in November 2001, it seems that 6 January 2006 came and went without comment. No suggestion was made that the applicant’s term of appointment had come to an end, and the applicant continued serving in the Army. It was not until 14 December 2009 that the Acting Director of Officer Career Management – Army wrote to the applicant in terms which included the following:
    1. The purpose of this letter is to confirm that your Short Service Commission expired on 6 January 2006. This letter outlines the arrangements for you to continue service in Army. I have reviewed your performance and current service needs and am offering you an extension to your Fixed Period of Service (FPS) until 16 January 2011.
       

The letter proposed that, if the applicant chose to accept the extension of his fixed period of service, he should complete an acknowledgement pro forma which was attached. No such pro forma accompanied the copy of the letter placed into evidence, and it is common ground that the applicant did not make any response to the letter of 14 December 2009.

12. On 7 July 2010, the Director of Officer Career Management – Army wrote to the applicant, in terms which included the following:

As you are aware, your current basis of appointment is for a Fixed Period of Service (FPS), which expired on 6 January 2006. In December 2009 the Directorate wrote to you and offered an extension of your FPS for the period from 6 January 2006 to 16 January 2011 (reference A), although I note that you have not yet responded to this offer. This letter is to advise you that I have reviewed the requirements of the Service, and I will not be offering you any further extension to your FPS. Consequently, your current period of service in the Australian Regular Army will conclude on 16 January 2011. My decision is grounded in the current personnel environment, which is characterised by previously unseen retention rates that have closed the asset/liability gap across all officer ranks. As such, there is no longer a service need to extend some officers whose basis of appointment is a FPS.

Probably prompted by this correspondence, on 12 July 2010 the applicant completed and signed an “Acknowledgment of Expiration of Fixed Period of Service”, which may have been the attachment to the letter of 14 December 2009. By that acknowledgement, the applicant stated that he wished to accept the offer of an extension of his fixed period of service.

13. On 26 November 2010, the applicant signed and lodged a form headed “Application for Resignation, Separation, Discharge or Transfer to the Reserves”. On that form, the applicant said: “I hereby submit my resignation effective on the above date for the following reason ....”. The “above date” was stated to be 16 January 2011. The “following reason” was “completed term of engagement”. In his affidavit sworn on 7 January 2011, the applicant said that he submitted this form “on demand from my supervisor in my chain of command that I needed to make a decision regarding my future with the ADF”. The applicant did not suggest that he was subjected to any pressure or undue influence with respect to the nature of the decision which he was then being asked to make.
14. On 30 November 2010, the applicant signed and lodged a “Redress of Grievance”. In that document, he stated that, until he received the letter of 7 July 2010, he had always believed that his service was to be until he attained the compulsory retirement age of 60 years (in 2016). He said that, should his service expire in January 2011, it would have “significant adverse and detrimental effects on my immediate future and lead to financial difficulties that have not been anticipated due to such short notice”. He provided particulars as to why he took the view that his appointment was a permanent one, relying on, amongst other things, DI(A) PERS 47-1.
15. The applicant’s Redress of Grievance was handled in accordance with Defence Instructions (General) issued on 8 September 2010, entitled “Redress of Grievance – Tri-Service Procedures”, referred to as DI(G) PERS 34-1. Consistently with those instructions, the Redress of Grievance was submitted to the applicant’s commanding officer, Lt Col Read, who was required to decide whether it could be “substantiated”. On 15 December 2010, Lt Col Read informed the applicant that his Redress of Grievance was not substantiated, and provided detailed reasons for that conclusion. On 22 December 2010, the applicant requested that his Redress of Grievance be referred to the Chief of Army for further inquiry, as was his entitlement under cl 34 of DI(G) PERS 34-1.
16. By email dated 7 January 2011, Mr Michael McCulloch, Legal Officer, Fairness and Resolution, Department of Defence, advised the applicant that his section had received the Redress of Grievance referred to the Chief of Army. He explained the procedures that would thenceforth apply to the Redress of Grievance. Amongst other things, Mr McCulloch said:

I note that you have requested executive action be suspended during the inquiry into your ROG in accordance with the DI(G) PERS 34-1 – Redress of Grievance – Tri-Service Procedures. The suspension of executive action primarily relates to termination decisions. As your fixed period of service is due to expire, ie: your service is not being terminated, there is no executive action being exercised. Accordingly, your service in the Australian Regular Army will end on 16 January 2011. Despite this, your ROG will progress in the extant process and a decision will be made on the substance of your grievance. If your ROG is upheld, action can be taken to provide you with an appropriate remedy.

Mr McCulloch was here referring to cl 50 of DI(G) PERS 34-1, which provides as follows:

50. When a ROG relates to a termination or discharge decision, that termination or discharge action should normally be suspended until at least three working days after the member has been notified of the ROG decision. The underlying principle is that decision-makers should not take irrevocable or pre-emptive action that would prejudice an appropriate remedy if a member’s ROG were subsequently upheld; these decisions are to be made on a case-by-case basis.

17. The applicant referred to cl 33 of Annex B to DI(G) PERS 34-1 which provides as follows:

33. A member may make a request (including reasons for the request) to the decision-maker, through their CO, that any action arising from, or as a consequence of, a decision, act or omission be suspended if the:
a. decision, act or omission is the subject of the ROG;

2. action may be irrevocable, pre-emptive or cause undue hardship to the member.
   

In his application in court, the applicant alleges that the army’s unwillingness to extend his date of separation until after his Redress of Grievance is finalised is “contradictory to” this provision. However, the role of Annex B to DI(G) PERS 34-1 is explained in cl 7 thereof. It is said that the instruction “details the guiding principles associated with the handling of ROGs”. It is said that Annex B provides instructions for members. Consistently, Annex B is expressed as instructions directed to those who would lodge a Redress of Grievance. Clause 33 indicates the circumstances in which such persons may request that the decision in question be suspended. I do not consider that this clause should be treated as binding on the commanding officer obliged to handle the grievance, nor as specifying comprehensively the circumstances in which decisions etc must be suspended.

18. In a written outline of submission filed on 13 January 2011, the following was stated on behalf of the respondent:

The Applicant lodged a Redress of Grievance application on 30 November 2010. Although expressed in terms of that he had been denied procedural fairness, the nub of the Applicant’s grievance was that in November 2001 he was permanently appointed as an officer of the Regular Army. His contention appears to be that the legal instruments that governed officer appointments at that time, properly construed, dictate the conclusion that his appointment was a permanent appointment, and that he has proceeded on that basis during his service.

At the hearing of his interlocutory application, the applicant accepted that this represented a fair summary of the nature of his case.

19. As so understood, I do not think the applicant’s case is a reasonably arguable one. On any view, the one thing which did not happen in November 2001 was the permanent appointment of the applicant as an officer in the Regular Army. For this aspect of his case, the applicant relied upon cl 19(a) of DI(A) PERS 47-1, the effect of which was, in presently relevant respects, at least problematic because of the operation of s 9A(4) of the Defence Act. The only evidence of any instrument by which the applicant was constituted an officer in the Regular Army at that time is the offer which he signed. There is, in my view, no construction of that offer arguably available which would yield the result that the applicant was thereby appointed to permanent office.
20. For those reasons, I take the view that the applicant’s case, as outlined in the extract set out in para 17 above, is not a seriously arguable one. I would, on that ground alone, reject his interlocutory application. Additionally, however, there are discretionary factors which, in my view, count against the grant of the interlocutory relief which the applicant seeks.
21. Although the applicant gave evidence, and stated in his submissions, that he was always of the view that he held office in the Army until the customary date of retirement, all the objective indications, in and since November 2001, suggest that the applicant’s service was for a fixed period only, and was known by him to be thus. I accept that there may have been a period between January 2006 and December 2009 when the applicant’s position was somewhat ambiguous, since no-one appears to have appreciated that his fixed period of service had expired. I accept that, within this period, the applicant had at least some colourable basis for surmising that the Army might take the view that he held a permanent office. However, the applicant could not put the possibilities any higher than that and, in my view, in the light of the document which he signed in November 2001, it effectively lay upon the applicant to clarify the situation if he had any doubt.
22. However that may be, when the applicant received the letter of 14 December 2009, he could have been left in no doubt but that the view was taken by the Army that he was appointed for a fixed period of service. Although he did not then return the acknowledgement enclosed with that letter, neither did he seek clarification of the nature of his appointment, or voice any protest as to the position which was expressed in the letter. Indeed, when reminded of the matter in July 2010, he signed the acknowledgment, thereby giving rise to the clearest assumption on the part of the Army that he accepted that his service would terminate, by effluxion of time, on 16 January 2011.
23. As the applicant explained it, the decision which he sought to review when he lodged his Redress of Grievance was that made on 7 July 2010. Yet he lodged the Redress of Grievance itself on 30 November 2010. When it was pointed out in the course of hearing that this involved a considerable delay – particularly given the time that would necessarily be occupied dealing with the Redress of Grievance, and with any referrals which the applicant was minded to initiate – he said that, in July 2010, he was serving in a responsible position in the United Kingdom, and that he had no practical capacity to lodge a Redress of Grievance. This was not the subject of evidence, and the respondent had no reasonable chance to deal with the point. I am not prepared to accept that the applicant had any legitimate justification for delaying until 30 November 2010 before lodging his Redress of Grievance.
24. The result is that only about six weeks were available for the Redress of Grievance itself, and for any referrals initiated by the applicant, to be dealt with. The Redress of Grievance itself was dealt with in a little over a fortnight. The applicant did not make any complaint – at least of a kind that would be justiciable in this court – as to that part of the process. He did, however, seek to have the Redress of Grievance referred to the Chief of Army, and that was done. It was and is within the power of the relevant decision-maker to suspend the operation of the original decision the subject of the Redress of Grievance pending the outcome of the referral. However, the view has, apparently, been taken that there was no act in the nature of a termination of the applicant’s employment which could be suspended. I am not prepared to hold that, on the evidentiary case put before the court on this interlocutory occasion, that view was not reasonably open. Indeed, on the evidence before the court, it appears to be the correct one.
25. The view also appears to be taken that, if the applicant is ultimately successful in his Redress of Grievance, “action can be taken to provide [him] with an appropriate remedy”. This being a statement made on behalf of the Commonwealth, I can feel confident that it would be honoured, in good faith, should the applicant’s Redress of Grievance ultimately be upheld.
26. It is true, of course, that, if the applicant’s employment ends on 16 January 2011, he will not only be without a job, but will also be required to vacate the residential premises which he occupies at Puckapunyal. I accept that this will be a source of hardship for the applicant. However, given the history of the matter to which I have referred above, the applicant is hardly in any position to say that he did not see this coming. The seriousness of the consequences of the applicant losing his employment with the Army appear to me to give added emphasis to the inappropriateness of the applicant leaving it until 30 November 2010 before raising any objection to the Army’s view that his employment would come to an end on 16 January 2011.
27. As against those considerations of hardship, if I were to provide the applicant with interlocutory relief which had the effect of requiring the Army to retain him as a commissioned officer until the conclusion of the present proceeding, it is not at all clear what would be the legal effect or consequences of the act which I then took. If it be the fact that the applicant’s appointment will come to an end on 16 January 2011, I cannot see what the court could do to alter that fact. The court has no authority to appoint the applicant, or to extend his appointment, as a commissioned officer. If I were to require the respondent to continue providing to the applicant the remuneration, and other benefits, apposite to the position of a Major in the Regular Army, one might have the unsatisfactory position of a person appearing to be a Major, and receiving public monies for that circumstance, without him being a Major in fact. This could have all manner of consequences which were not explored on the present occasion.
28. Taking all the matters to which I have referred into account, I formed the view that the discretionary – or “balance of convenience” – considerations which appear to be relevant on the present occasion do not favour the grant of interlocutory orders of the kind sought by the applicant. It was for that reason also that I dismissed his application.
29. As will be apparent from what I have written earlier in these reasons, ultimately the nature and strength of the applicant’s case may have little to do with the events of November 2001, but may depend upon the position which he occupied immediately prior to those events. Particularly towards the end of his submissions on the present occasion, the applicant made it clear that he wanted to contend that he had an on-going appointment in the Army Reserve prior to November 2001, and that the only thing which happened then – and the only thing which could have happened – was that he was transferred from one part of the Army to the other. As I have said above, the evidence was not such as permitted me to consider these aspects of the applicant’s foreshadowed case. If there is any substance in a case along these lines, I feel confident that the matter will be appropriately investigated in the context of the consideration by the Chief of Army of the applicant’s Redress of Grievance. In these respects, the case which the applicant foreshadowed is, in my view, one which is readily able to be considered in that context and, if it has substance, is one which has the potential to provide for the applicant a form of relief no less efficacious than that which could be provided by the court. For this reason too, I took the view that the interlocutory application should be dismissed.
    

I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.

Associate:

Dated: 14 January 2011