FEDERAL COURT OF AUSTRALIA Chief of Defence Force v Clark [2000] FCA 103 ADMINISTRATIVE LAW – Leave without pay to accompany spouse member ("LWOPASM") granted pursuant to a determination made under Defence Act 1903 (Cth) s 58B(1)(d) – whether Chief of Defence Force has power to revoke retrospectively a grant of leave without pay to accompany spouse member. Defence Act 1903 (Cth), s 58B(1)(d) CHIEF OF DEFENCE FORCE v GARY JAMES CLARK N 1140 of 1999 BLACK CJ, SACKVILLE AND EMMETT JJ SYDNEY 10 FEBRUARY 2000 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1140 of 1999 BETWEEN: CHIEF OF DEFENCE FORCE APPELLANT AND: GARY JAMES CLARK RESPONDENT JUDGE: BLACK CJ, SACKVILLE AND EMMETT JJ DATE OF ORDER: 10 FEBRUARY 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be allowed. 2. The orders made by the primary judge, including the order for costs, be set aside. 3. The matter be remitted to the primary judge to determine whether the relief sought in paragraphs 3 (f), (g) and (h) of the respondent's amended application for an order of review should be granted. 4. There be no order as to the costs of the appeal. 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 N 1140 of 1999 BETWEEN: CHIEF OF DEFENCE FORCE APPELLANT AND: GARY JAMES CLARK RESPONDENT JUDGE: BLACK CJ, SACKVILLE AND EMMETT JJ DATE: 10 FEBRUARY 2000 PLACE: SYDNEY REASONS FOR JUDGMENT BLACK CJ: 1 This is an appeal from a judgment of Madgwick J in an application under the Administrative Decisions (Judicial Review) Act 1977 (Cth) for judicial review of what was said to be a "decision" of the appellant, the Chief of the Defence Force, not to revoke retrospectively a grant of leave without pay to the respondent, Mr Gary Clark. The application for judicial review followed a request by Mr Clark's solicitors to the Chief of the Defence Force that he exercise what was said to be a power under the Defence Act 1903 (Cth) to revoke the grant of leave to Mr Clark notwithstanding that his service with the Australian Defence Force ("ADF") had then come to an end. 2 The facts are set out in some detail in the judgment of the learned primary judge and it is necessary to make only brief reference to them in these reasons. The respondent joined the ADF in 1986 and was appointed to the Royal Australian Airforce ("the RAAF") as a Pilot Officer. He graduated in dentistry and was subsequently promoted to the rank of Flight Lieutenant. His duties were those of a Dental Officer. In 1993, the respondent's de facto marriage to another member of the ADF, Flight Lieutenant Kelly, was recognised by the RAAF. In 1994, the respondent applied for assistance to undergo postgraduate study in dentistry. This application was rejected by the RAAF. 3 In November 1994, the respondent was granted leave of a type known as Leave Without Pay Accompanying Spouse Member ("LWOPASM"). As the trial judge pointed out, leave of that nature is granted so that a member of the ADF may move to a new location to live with his or her spouse who is also a member until a posting is found for that member in the ADF at that new location. A document constituting the grant of leave to the respondent was in evidence. The evidence also showed that an application for a specific period of LWOPASM, that is to say one defined at either end by particular dates, had been requested but refused. Instead, the leave was granted to Flight Lieutenant Clark "from 6 March 1995 until he can be collocated with his spouse." 4 The respondent's LWOPASM was granted pursuant to the authority given by Determination 2608: Leave Without Pay ("the Leave Determination"), made under section 58B(1)(d) of the Defence Act on 30 November 1984. Clause 6 of the Leave Determination provides that: "the Chief of the Defence Force may, upon application by a member, grant the member a period of leave without pay specified in the approval not exceeding – (a) where the member has a spouse who is also a member and, because there is not available to the first-mentioned member a suitable posting which would enable that member to accompany his or her spouse on a posting, the purpose of the application for leave without pay by the member is to accompany his or her spouse on a posting – (i) the period during which such a posting remains unavailable; or (ii) the duration of his or her spouse's posting, whichever is less; (b) …" 5 Clause 8 of the same determination provides that a member who has been granted a period of leave without pay shall not be entitled to payment of any amount by way of salary in respect of that period. 6 On 22 July 1995, the respondent's de facto wife informed her Commanding Officer, who was also the Commanding Officer of the respondent, of the cessation of their de facto relationship. The respondent's claim before the primary judge was that from this date the basis for his leave without pay had ceased to exist, that he was then ready and willing to resume his normal duties and that he expected he would soon be returned to those duties. However, the specific application for revocation of leave without pay that was relied upon as the foundation of the proceedings for judicial review was not made at that time, and in fact was not made until after Mr Clark's resignation from the ADF had finally been accepted on 22 December 1996. 7 On 23 December 1997, that is to say a full year after the resignation had been accepted, the respondent's solicitors wrote to the Chief of the Defence Force requesting that the LWOPASM be revoked retrospectively from 22 July 1995 and that there be a payment of wages and ancillary benefits from that date. The relevant parts of the letter were in the following terms: "(a) it is apparent that Dr Clark was no longer lawfully entitled to LWOPASM from 22 July 1995; and (b) if you agree with this factual contention, it is incumbent upon you to exercise your powers under Determination 2608 to revoke the grant of LWOPASM effective from 22 July 1995. We therefore make application to you seeking that you exercise your power to make a determination revoking LWOPASM made on 14 November 1994 with effect from 22 July 1995. Thereafter we submit that our client's entitlement to wages and other ancillary benefits under Determination No 6 of 1992 and other relevant determinations between 22 July 1995 and 19 December 1996 should be calculated and paid to our client." 8 On 30 March 1998 the Chief of the Defence Force rejected the respondent's request. 9 In the course of argument before the primary judge, it was not disputed by counsel for the Chief of the Defence Force that there was power to revoke retrospectively the grant of leave without pay. Rather, it was contended that the Leave Determination imposed no duty on the Chief of the Defence Force either to grant the application or to revoke it. It was said that the power to revoke the respondent's LWOPASM involved a discretion to be exercised by the Chief of the Defence Force. In those circumstances, it is not in the least surprising that the trial judge considered the matter on the footing that there was the power retrospectively to revoke the grant of leave. 10 The trial judge went on to examine the surrounding facts and concluded that the Chief of the Defence Force was in the circumstances obliged to accede to the request to revoke retrospectively the leave without pay and thus that he had erred in law in failing to do so. His Honour held that the decision was unreasonable (in the Wednesbury sense) and, further, that the appellant's power had been exercised for a purpose other than that for which it was granted. 11 Having found that the decision was tainted with legal error and thus should be set aside, the learned primary judge then went on to make consequential declarations as to the entitlement of Mr Clark to salary and allowances. He did so by construing the relevant Determinations as imposing an obligation to pay remuneration to a person such as the respondent, who, on the basis that the leave had been revoked retrospectively, was under an obligation, so his Honour found, to render continuous full time service. It was that unqualified obligation that attracted an entitlement to pay. I should mention at this point that the correctness of his Honour's application of the principles in Gapes v Commercial Bank of Australia (1979) 31 FLR 27 was not argued before us and I express no conclusion on that point. It is perhaps significant, however, that the provisions of the relevant Regulations concerning the suspension of pay of ADF members when they are absent without leave and the forfeiture of pay in other circumstances were not, it seems, drawn to his Honour's attention. They may well have a bearing upon the overall construction of the obligation to pay and the circumstances in which it can arise which, of course, is at the heart of the decision of the Full Court in the Gapes Case. 12 When the appeal came on for hearing today Ms Henderson, who appeared for the Chief of the Defence Force, sought and was granted leave to amend her notice of appeal to argue, in effect, that his Honour was in error in finding, implicitly, that the appellant had the power retrospectively to revoke a grant of LWOPASM. She argued that on the true construction of the Leave Determination there was simply no room for any conclusion that there was a power to revoke retrospectively a grant of leave in circumstances such as have arisen in this case. She did not deny that there was a power to revoke as such, but submitted that this was a power to revoke prospectively, as would have been exercisable in this case had an application to revoke the grant of leave for the future been made upon the break up of the de facto relationship. 13 Mr Pearce, who appeared as counsel for the respondent, contended that there was power. He argued that what was in issue here was not a power retrospectively to revoke but rather a power to attach present and future consequences to past events. He relied in that submission on cases such as In re a Solicitor's Clerk [1957] 1 WLR 1219 and Walton v McBride (New South Wales Court of Appeal, unreported, 3 October 1989). 14 Mr Pearce submitted that, in any event, if one examined the way in which the Leave Determination operated there was a compelling, indeed irresistible, argument based upon convenience which gave rise to the implication of the existence of a power of retrospective revocation, however that power might be characterised. He said that such a power had to be implied from the fact of the determination itself because otherwise the determination would be unworkable in practice, and, on occasions, manifestly absurd in its operation. 15 The respondent's submissions must be rejected. Determination 2608, which was relied upon as the sole source of the power retrospectively to revoke LWOPASM, contains no express provision to that effect and there is no basis upon which such a power should be implied. Any inconvenience that might exist because of the absence of such a power is overshadowed by the manifest "inconvenience" that would arise if such a power were to be implied. This is because a power to revoke retrospectively would seem inevitably to carry with it a power, in effect, to make retrospectively something that was perfectly lawful when done – remaining on leave – into something that was unlawful – to be absent from duty without leave. 16 In these circumstances I conclude that the learned primary judge was in error in implicitly finding, as he did, that the Chief of the Defence Force had the power to revoke the grant of leave some two years after the occasion for the revocation was said to have arisen, after the leave had expired, and after the person to whom the leave had been granted had ceased to be a member of the ADF. To discern the existence of a power to act retrospectively in those circumstances would require specific language or very compelling indications from which such a power might be implied. As I have indicated, the existence of such a power was not made out. 17 Since the Chief of the Defence Force had no power to make the decision that he was asked to make, the respondent was not in a position to make out a case based upon his failure to grant the revocation of leave that he sought. Moreover, the absence of any power to make the decision makes it impossible to conclude that the decision is to be characterised as one that is so unreasonable that no reasonable person could have made it. 18 In the reasons given by the Chief of the Defence Force for his decision, he stated: "The LWOPASM was at Mr Clark's request, was properly authorised and took effect on 6 March 1995. Mr Clark's LWOPASM was approved leave from duty and was never revoked except to enable him to undertake discharge administration during the period 20-22 December 1996 inclusive." He then added: "Nothing in the material presented to me warrants retrospective action on my part." He therefore advised that he was unable retrospectively to revoke Mr Clark's leave. A lack of power to do so was not mentioned but nevertheless provides a complete answer, in my view, to the challenge that has been made to the Chief of the Defence Force's decision. 19 In these circumstances, I would set aside, at least in part, the orders made by the primary judge and would to that extent allow the appeal. In the event that the other members of the Court are of the same mind, we should hear further argument about the future course of the proceeding. 20 I need hardly add that my observations are confined to the particular type of leave in issue in this case. The powers with respect to other types of leave were not the subject of argument. SACKVILLE J: 21 I agree with the reasons of the Chief Justice and I agree with the orders proposed. 22 I add this further observation. In the light of the conclusion that there is no power retrospectively to revoke the grant of leave without pay, it seems to me very difficult to suggest that there was a "decision to which this Act applies", within the meaning of s 3 of the Administrative Decisions (Judicial Review) Act 1977 (Cth). The difficulty arises because the challenge before the primary Judge did not involve a decision of an administrative character made under an enactment. In any event, as the Chief Justice has said, the absence of power makes it impossible to conclude that the decision reached by the appellant in this case was so unreasonable that no reasonable person could have reached it. EMMETT J: 23 I agree with the reasons of Black CJ and Sackville J and would like to add just one or two propositions. The respondent is a member of the Air Force and therefore under section 4G of the Air Force Act 1923 (Cth) he is required to enter continuous full time Air Force service. 24 Under the provisions of Determination 6 of 1992: Salaries ("the Salary Determination"), made under s 58H(2)(a) of the Defence Act, a member of the permanent forces and any other member who is rendering continuous full time service is entitled to a salary. Whether a debt arises in respect of such salary may be a question of some complexity. Under the general law, a serving member of the Armed Forces had no right to sue for moneys payable for salary, at least until after discharge from the Forces (see, for example, Commonwealth v Welsh (1946) 74 CLR 245 at 260 per Latham CJ). It may be that the proper construction of sections 58B(1)(a) and 58H(2) of the Defence Act 1903 (Cth), whereby a determination of salary can be made, is to create an entitlement to be paid money. Section 117B of that Act confers a right to sue, thereby assuming that money is due presumably in respect of salary. 25 However, under the Leave Determination, the Chief of the Defence Force may, upon application by a member, grant the member a period of leave without pay in the circumstances set out, inter alia, in clause 6(a). During that period, the member would be excused from the obligation to perform duties in full time service. Further, under clause 8 of the Salary Determination, a member would not be entitled to a salary for any period for which the member is granted leave without pay. For so long as such leave subsists, the concomitant of a member not being obliged to perform duties is that the member is not entitled to receive salary. 26 It may be, and for present purposes it is not necessary to express a view, that any leave granted pursuant to clause 6(a) may be capable of revocation in futuro. Once the underlying basis for the leave given under 6(a) disappears it may be that there is an implied power of revocation of the leave in futuro. The consequence would be that the member would again become subject to the obligation to perform duties under such a provision as section 4G of the Air Force Act 1923 (Cth). Further, the member would then become entitled to whatever right to receive salary arises under the Act or under the general law. However, until such revocation occurs there is neither an obligation to serve nor an entitlement to any salary. 27 Even if leave might be revoked, it must be possible to point to some act or circumstance from the time of which leave is taken to be terminated. It may be that the Chief of the Defence Force would have power, for good cause, to decide not to take steps in respect of an absence without leave. To do so, however, would not be to revoke any leave that had been made given but simply to grant an indulgence. It is one thing for the Chief of the Defence Force to decide not to take steps in respect of an absence without leave. It is another thing altogether to say that the Chief of the Defence Force has power to give a member an entitlement to salary for a period of non service to which the member is not otherwise entitled. 28 It seems to me in the light of such an analysis that we are compelled to the conclusion that the so called decision to revoke retrospectively a grant of leave that had already been taken was one that could not have been made by the Chief of the Defence Force. The effect of such a revocation would be to render a member of the Defence Force in breach of his duties under section 4G, retrospectively. That is something that, for reasons generally indicated by the Chief Justice, the Chief of the Defence Force could not abide. 29 I agree with the conclusion that the appeal should be upheld, at least in part, subject to hearing submissions as to what the consequences should be. [The Court then heard further submissions.] BLACK CJ: 30 I shall ask Sackville J to deliver the first judgment on the outstanding issues. SACKVILLE J: 31 An issue remains as to the formal order that should be made by the Court. In particular, a question arises as to whether the proceedings should be remitted to the learned primary Judge for further consideration. 32 The effect of allowing the appeal is that this Court has determined the application for relief contained in par 2 of the Amended Application. This was not, however, the only relief sought by the respondent (the applicant below). 33 Paragraphs 3A to 3E concern a contention put forward by the respondent that the grant of leave without pay had been invalidly made at the outset. The primary Judge rejected the claim made in pars 3A to 3E of the Amended Application. No notice of contention has been filed in respect of that holding. There is, therefore, nothing further to be done so far as those paragraphs of the Amended Application are concerned. 34 Paragraphs 3F, 3G and 3H of the Amended Application, however, are framed in more general terms. They are sufficiently broad, for example, to support a contention that the grant of leave without pay terminated by virtue of the very language in which it was expressed (that is, in consequence of the ending of the respondent's de facto relationship). The paragraphs might, in the alternative, support a contention that the grant of leave without pay terminated when the respondent notified the Defence Force that he was available for service on a full time basis following the breakdown of his de facto relationship. 35 Mr Pearce very frankly acknowledged that these alternative ways of putting the respondent's case had not been explicitly advanced before the primary Judge. He says, however, that had the point upon which the appellant has succeeded been taken in a timely fashion before the primary Judge, the points I have identified may well have been put to the primary Judge. In other words, had the point upon which the appeal has been allowed been taken at the trial, then the course of the argument below on the other points may well have been quite different. 36 Ms Henderson has not disputed that the respondent may have taken a different course, had the point upon which the appeal has been allowed been taken in a timely fashion before the primary Judge. 37 In these circumstances, it seems to me that the appropriate course is that the orders made by the primary Judge be set aside and that the proceedings be remitted to the primary Judge in order to determine whether the relief claimed in pars 3F, 3G and 3H of the Amended Application should be granted. It will be necessary for the primary Judge to determine whether any further evidence should be permitted on these issues. It will also be a matter for his Honour to determine whether any further amendment to the pleading should be allowed, in view of the basis upon which the appeal has been allowed. 38 Accordingly, I propose the following orders: 1. Appeal allowed. 2. The orders made by the primary Judge be set aside. 3. The proceedings be remitted to the primary Judge for the purpose of determining whether the relief sought in pars 3F, 3G and 3H of the Amended Application should be granted. 39 I would also propose that, since the appellant has succeeded on a point not taken below, that there be no order as to the costs of the appeal. The order as to costs made by the primary Judge should, however, be set aside. BLACK CJ: 40 I agree. EMMETT J: 41 I agree. BLACK CJ: 42 The orders of the Court will therefore be as proposed by Sackville J. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. Associate: Dated: 10 February 2000 Counsel for the Applicant: Ms R M Henderson Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: Mr J H Pearce Solicitor for the Respondent: Matthews Folbigg Date of Hearing: 10 February 2000 Date of Judgment: 10 February 2000