Shand, Paul Anthony v Chief of the Army [1998] FCA 265

FEDERAL COURT OF AUSTRALIA ADMINISTRATIVE LAW - discharge of soldier - whether irrelevant matters taken into account - effect of regulation depending on Chief of the Army being "satisfied" that a matter was "not in the interest ... of the Army" - whether the decision was governed by the rule that the meaning of ordinary English words is a question of fact - construction a matter of law - decision was open in law to the delegate - whether a "no evidence" point was available. Australian Military Regulations, r 176(1)(n) Defence Act 1903, ss 44(1), 124 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259, referred to Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280, referred to Regina v Brown (Gregory) [1996] 1 AC 543, applied Baxter Healthcare Pty Limited v Comptroller-General of Customs (1997) 72 FCR 467, applied NSW Associated Blue-Metal Quarries Ltd v Commissioner of Taxation (1956) 94 CLR 509, referred to Curragh Queensland Mining Limited v Daniel (1992) 34 FCR 212, applied PAUL ANTHONY SHAND v CHIEF OF THE ARMY NG 769 of 1997 Burchett J Sydney 26 March 1998

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 769 of 1997

BETWEEN: PAUL ANTHONY SHAND

Applicant

AND: CHIEF OF THE ARMY

Respondent

JUDGE: BURCHETT J

DATE OF ORDER: 26 MARCH 1998

WHERE MADE: SYDNEY

THE COURT ORDERS THAT:

The application be dismissed. 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 769 of 1997

BETWEEN: PAUL ANTHONY SHAND

Applicant

AND: CHIEF OF THE ARMY

Respondent

JUDGE: BURCHETT J

DATE: 26 march 1998

PLACE: SYDNEY

REASONS FOR JUDGMENT The applicant Private Shand was discharged from the Australian Army by a decision of a delegate of the Chief of the Army made under regulation 176(1)(n) of the Australian Military Regulations. Of that decision, he has sought judicial review under the Administrative Decisions (Judicial Review) Act 1977. Section 44(1) of the Defence Act 1903 provides for the discharge of soldiers by decision of the Chief of the Army (previously the Chief of the General Staff) for prescribed reasons. Reasons are prescribed by regulation 176(1) of the Australian Military Regulations, the making of which was empowered by s 124 of the Defence Act. Many reasons are prescribed, of which only that contained in paragraph (n) is directly in question in the present matter: "The Chief of the Army is satisfied that the retention of the soldier in the Army is not in the interest of Australia or of the Army." In order to understand why the delegate who made the decision in the present matter was so satisfied, it is necessary to summarise the Army's experience with Private Shand over a period of some seven years. There is no suggestion that he was incapable of performing any particular actions which, as a soldier, he was required to perform. Nor is there any suggestion that he was generally insubordinate. His unsuitability in the eyes of the decision maker (and of numerous officers who had reported on him over the years) centred upon his apparent incapacity to deal with his own domestic and financial problems, and his inability to avoid their becoming an administrative burden upon the Army, and a threat to its morale. As far back as 17 October 1990, a Major Bretherton warned Private Shand in writing that "financial and domestic circumstances ... have made you an administrative liability to the Army". He was then regarded as unsuitable to be a soldier, and was given six months to rectify his finances and show that he could order his personal affairs so as to be "not disruptive to [his] unit or to fellow Service personnel". At that time, several specific debts totalling over $500-00 had taken up a significant amount of administrative time and attention, and a few months before the date of the formal written warning, Private Shand had been described by a Lieutenant Commander in writing as "an extreme administrative liability". Despite the solemnity of the imposition of this formal requirement to rectify problems within six months, Private Shand did not, it appears, change his ways. He was the subject of numbers of complaints during the ensuing year which are recorded in a minute of 12 December 1991, and his conduct remained a concern thereafter. On 14 September 1992, he was given a further formal warning by a Major Overell, who stated: "You are considered to be inefficient because of your poor management of your personal finances which adversely affect your performance of your duties and results in the unnecessary involvement of other unit members." A Lieutenant Jarrett warned Private Shand again concerning a debt problem on 31 December 1992, and he was given a further warning of possible discharge on 15 February 1993 on the ground of administrative problems caused by him. On this occasion, there was reference to his driving of an unregistered vehicle and to various debts totalling over $1,000-00. Inability or unwillingness to regularise his debt position continued to be a feature of complaints concerning Private Shand during 1994 and 1995. On 6 October 1995, he was warned orally "that he was becoming an administrative liability due to his financial affairs", and that further administrative action might be taken against him. On 23 January 1996, Lieutenant Colonel Grierson, the Commanding Officer of the paratroop training school at Nowra, gave Private Shand a formal "Notice to Show Cause for Discharge". This document set out that he had been "repeatedly counselled on [his] inability to properly [manage his] financial affairs" which "ha[d] made [him] an administrative liability". Seven occasions of counselling, mostly regarding debts and the driving of an unregistered vehicle, were referred to during the period between 14 July 1995 and 6 December 1995. Lieutenant Colonel Grierson stated: "I propose to recommend to the discharge authority that you be discharged. The reasons for this proposal are: a. you have brought discredit upon this unit and yourself in the eyes of your creditors; b. your inability to manage your financial affairs has made you an administrative liability because of the time and staff effort required to counsel you and to deal with enquiries by your creditors; c. you have brought discredit upon yourself and this unit by continuing to break civilian law by driving an unregistered vehicle." The Lieutenant Colonel referred to regulation 176(1)(n). Private Shand's response was a submission dated 31 January 1996 alleging that his wife had had charge of his finances and he had "recently" discovered that she was addicted to gambling. He had "resolved to take charge of the family finances". Apparently, Private Shand's plea did not fall on deaf ears. On 3 February 1996, Lieutenant Colonel Grierson gave him a written warning, allowing him twelve months in which to rectify his domestic affairs, settle his debts, deal with the matter of the unregistered car, and "demonstrate your suitability within the Army". The reference to Private Shand's domestic affairs was nothing new. Complaints had been made over the years by other Service personnel living near Private Shand's married quarters concerning the screaming of abuse and obscenities which emanated from those quarters late into the night. Written complaint was made on 25 January 1996, and despite the further opportunity accorded Private Shand by Lieutenant Colonel Grierson on 3 February 1996, there were more complaints on 23 and 24 October 1996 and 31 January 1997. On 24 October 1996 there was an eviction warning, and on 18 November 1996 there was a notice to quit. There was a further notice to quit on 4 February 1997. It appears that at one stage Private Shand left his married quarters, on the basis that his marriage had irretrievably broken down, but he shortly afterwards returned. On 10 February 1997, a senior Navy psychologist recommended that Private Shand be discharged on the basis of "a definite inability to come to terms with the negative issues in his life", and his failure to appreciate "how these issues impinge on his Army service". The psychologist expressed the opinion: "He apparently deals with problems by simply denying their existence." Another counselling report dated 14 February 1997, referring to counselling for a period from 13 February 1996, which was placed on Private Shand's file, could not but be regarded as a serious indication of his complete unsuitability. It should be added that those who reported on Private Shand repeatedly accepted that a number of his problems did stem from his wife. However, it would seem to be an excessively charitable view, and one that the documents simply do not support, to suggest that his problems were not also the result of his own very serious shortcomings. In particular, reporting officers rebutted the idea that the soldier's wife was responsible for all his debt problems. On numerous occasions, he had undertaken to deal with those problems himself, and had then failed to do so. These occasions long ante-dated the occasion when he claimed to have discovered his wife's addiction to gambling. Private Shand's case was referred to a Major Hill, as a prescribed Discharge Authority. On 5 March 1997, he decided that the soldier should "be administratively discharged under the terms of AMR 176(1)(n) 'Retention in the Army not in the interest of the Army'." Major Hill's brief reasons included the statement: "I gave great weight to the recommendations of your CO, and the fact that you brought the Army into disrepute with your inability to control your finances over a considerable period of time." Private Shand pursued internal review procedures which were available to him, as a soldier in the Army, to challenge the decision that he should be discharged. He lodged a formal document known as an "Application for Redress of Grievance". In that document, Private Shand referred (inter alia) to a comment made by Lieutenant Colonel Grierson in his final recommendation in favour of the soldier's discharge. This comment was: "[Y]our claim that your wife wrote the dishonourable [sic] cheques from your joint account is irrelevant. This further indicates that you are incapable or unwilling to manage your financial affairs." Private Shand commented: "I cannot as a matter of law be held to be liable for any debt incurred by my wife or any other person without my authority. Further, I cannot be held responsible for the action of my wife in writing cheques to meet her commitments, albeit that such cheques were a then joint account of my wife and myself." One thing which should be noted is that there was no suggestion the joint account had been closed, or that Mrs Shand had written the cheques on an account that was no longer extant. Brigadier Webster, the delegate of the Chief of the Army reconsidered the whole matter, and then gave a decision in writing dated 14 July 1997. This is the decision the subject of the application for judicial review. In it, the delegate stated: "I accept that you were not legally responsible for any debts incurred by your wife, and consequently in reaching my decision I have disregarded those incidents in your Notice to Show Cause (NTSC) which relate to debts incurred by your wife. Never the less [sic] I find that you have demonstrated a clear and repetitive pattern over a substantial period of requiring continual guidance and extensive counselling to assist you to control your domestic and financial affairs. In particular, you did not take steps to close your joint cheque account against which your wife drew cheques which were subsequently dishonoured. It is evident to me that considerable time and effort has been spent with you by a large number of administrative staff and support agencies over an extended period of time, all to no avail. I have considered your service record throughout your career, but despite your soldiering ability, I find that you have been unable to fulfil your military potential as a direct result of personal and administrative difficulties. ... From the evidence before me, the extensive counselling you received regarding your personal and financial affairs, the repayment of debts that [has] only occurred after insistence by military authorities, the repeat problems involving your domestic life over many years and the breaches of formal administrative warnings, I find, on balance, that [the] decision to discharge you was correct." Given the material before him, it was for the delegate to decide whether he was satisfied of the matter upon which a decision under the regulation had to turn, that is, "that the retention of the soldier in the Army is not in the interest of Australia or of the Army." It is not, of course, any part of the Court's function to reach that decision. Provided the decision was open to be made upon the material, the making of it was for the delegate. In my opinion, the decision was plainly open. The regulation is framed in terms which make the test the satisfaction of the Chief of the Army, or of his delegate. Cf. Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 275-277. The issue upon which satisfaction must be attained by the decision-maker is whether the retention of the soldier in the Army is not in the interest of Australia or of the Army. That raises broad questions of fact and of evaluation of the facts. Necessarily, there is a wide ambit within which the decision-maker was entitled to come to a personal view. Provided a soldier's actions or attributes are capable of being seen as imposing an undesirable burden on the Army, or are capable of being seen as affecting the morale or well-being of other service personnel, or as in other ways affecting adversely the efficiency or the reputation of the Army, it would not be possible for the Court to find an error of law merely because (if it were the case) the Court might not itself have reached the same conclusion. I should make it clear that I do not reach this view on the basis (for which the respondent contended) of a narrow interpretation of the decision as a decision of fact on the meaning of the words, or of any of them, "the retention of the soldier in the Army is not in the interest of Australia or of the Army". It is true that these are ordinary English words, but I do not think it follows that the proposition that the meaning of an ordinary English word is a question of fact (see Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280) has anything to do with the problem. The regulation must be construed in its context. It is not just the sum of a series of fairly simple words. "The unit of communication by means of language is the sentence and not the parts of which it is composed," as Lord Hoffmann explained in Regina v Brown (Gregory) [1996] 1 AC 543 at 561. Construction is a matter of law, and the law determines the meaning of the requirement laid down in the regulation. Cf. Baxter Healthcare Pty Limited v Comptroller-General of Customs (1997) 72 FCR 467 at 471-474. However, I construe that legal meaning as conferring on the Chief of the Army the power to come to a determination of satisfaction, founded on a genuine consideration of the issues, that the retention of the soldier in the Army is not in its interest where he is satisfied of circumstances of the kind I have mentioned. He is entitled to take a broad view of what is in the interest of the Army. He cannot, of course, act on some personal opinion unconnected with the Army or with anything involved in the existence or functioning of the Army, nor can he act on the basis of something no reasonable person could regard as relevantly touching the interest of the Army. The discharge of Private Shand being a decision that was open in law, the question whether he should be discharged was one of fact for the delegate: NSW Associated Blue-Metal Quarries Ltd v Commissioner of Taxation (1956) 94 CLR 509 at 512, per Kitto J. As I understood the submissions put on behalf of Private Shand, none of this was seriously disputed. Counsel relied simply on three particular propositions. His first point was that the decision-maker had, as he claimed, taken into account an irrelevant consideration by having regard to the administrative liability borne by the Army through its own decision to take a role in the collection of debts by third party creditors. The second point was that, in so far as debts of Mrs Shand were taken into account, they constituted an irrelevant consideration. The third point was that the disruptive personal conduct of Private Shand and his wife during their arguments in married quarters was an irrelevant matter, since the week before the final decision was taken, Private Shand had ceased to live in married quarters, having been evicted because of this very conduct. Dealing first with the first of these three points, it seems to me that the Army was entitled to regard a debt situation of the magnitude and persistence of that which was involved in the present case as properly its concern. Of its nature, the Army is so organized as to involve concentrations of troops in particular establishments. These establishments must become well known in the areas where the service men and service women are. The Army itself will inevitably incur some of the odium if its members behave in a manner of which the community disapproves. That will affect both the reputation of the Army and the morale of its other members. It is not, of course, for me to attribute weight to the consideration I am discussing. The point is that it was there to be weighed in this case, and the decision-maker could properly take it into account, giving it such weight as he thought appropriate in the circumstances. There are, I think, other considerations which would justify the view taken of this particular aspect of the matter, but it is unnecessary to dilate upon them at length. I should point out, however, that the evidence plainly reveals the reality of the Army's concern, expressed by different commanding officers over a period of a number of years. Quite apart from the Army's morale and reputation, it seems to me they were entitled to look to the likely effect on Private Shand's own moral fibre, as a soldier, of a persistence in debt as a way of life. Whether or not some other view might have been taken, it could not be denied that Private Shand's conduct had actually given rise to administrative inconvenience of no small order. The second matter, the taking into account of debts incurred by Mrs Shand, does not even arguably involve, in my opinion, any error of law. Repeatedly, Private Shand had acknowledged responsibility for these debts. But, in any case, the delegate expressly put the debts incurred by Mrs Shand to one side, finding that Private Shand's own debts constituted ample reason for his decision independently of her debts. That being so, there can be no ground of complaint. I can find no error of law in relation to the third matter. It is true that, by the time the delegate's decision was made, Private Shand had been evicted from married quarters. That does not mean that his past disruptive conduct, reflecting on his attitude towards his comrades and his ability to preserve appropriate relations with them, ceased to be a legitimate matter to be taken into account. Army life involves a close interaction with others. It is not to the point that some soldiers choose not to live in married quarters. The fact is that Private Shand's conduct had made it impossible for him to do so. In my opinion this was relevant, both at the very time of decision, and also in any reasonable appraisal of the possible future. It might have been desired at some time to transfer him to some place where the provision of married quarters might have been the appropriate option, and the whole problem could then have arisen all over again. These were the three points taken on behalf of the applicant. None of them demonstrates any error of law. There was originally a fourth point, raised by a suggested error of fact on the part of the delegate. The delegate referred to an alleged failure of Private Shand to close a joint account on which his wife was drawing valueless cheques, Private Shand having been counselled to do so. It was said that evidence was available to show that this account was closed, and that some of the cheques were nevertheless drawn after it had been closed. I have not of course been given power to review the facts. This application is an application for judicial review of the legality of the process of decision and the legal availability of the grounds of decision. After some argument, counsel for the applicant conceded that Curragh Queensland Mining Limited v Daniel (1992) 34 FCR 212 at 220-221, a full court decision, provided an insurmountable obstacle to his argument. There was evidence available to the decision-maker, from which he could draw the inference he in fact drew, and it was accordingly not open to the applicant to challenge that inference by further evidence in court. For these reasons, the application must be dismissed.