FEDERAL COURT OF AUSTRALIA Chief of the Defence Force v Gaynor [2016] FCA 311 Appeal from: Gaynor v Chief of the Defence Force (No 3) [2015] FCA 1370 File number: NSD 1685 of 2015 Judge: GLEESON J Date of judgment: 30 March 2016 Catchwords: PRACTICE AND PROCEDURE – interlocutory application that the first instance order for reinstatement be stayed – power of the Court to grant such a stay – no substantial disadvantage to the respondent if the stay is continued – grounds of appeal are reasonably arguable – risk of further dispute between the parties if the stay is not granted – appropriate that the stay be continued Legislation: Federal Court of Australia Act 1976 (Cth) Administrative Decisions (Judicial Review) Act 1977 (Cth) Defence (Parliamentary Candidates) Act 1969 (Cth) Defence (Personnel) Regulations 2002 (Cth) Federal Court Rules 2011 Cases cited: Coshott v Prentice [2013] FCA 1085 Huang v University of New South Wales [2010] FCA 738 McCloy v New South Wales [2015] HCA 34; (2015) 89 ALJR 857; (2015) 325 ALR 15 Wotton v Queensland [2012] HCA 2; (2012) 246 CLR 1 Date of hearing: 11 March 2016 Registry: New South Wales Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 41 Counsel for the Appellant: Mr JK Kirk SC Solicitor for the Appellant: Australian Government Solicitor Counsel for the Respondent: Mr PE King Solicitor for the Respondent: Robert Balzola and Associates ORDERS NSD 1685 of 2015 BETWEEN: CHIEF OF THE DEFENCE FORCE Appellant AND: BERNARD GAYNOR Respondent JUDGE: GLEESON J DATE OF ORDER: 30 MARCH 2016 THE COURT ORDERS THAT: 1. Until the determination of the appeal or until further order, Order 1 in proceedings NSD692/2014 made on 4 December 2015 be stayed, save that: a. The PMKeyS record management system is to have an entry added with respect to Mr Gaynor to the effect of him having been 're-hired' on the day of his termination, and a note added recording the outcome of the decision of Buchanan J, such that his records are formally re-activated, but without thereby according him substantive rights as a member of the Army Reserve. b. Mr Gaynor is entitled to pursue any administrative rights in respect of any decisions to withhold any payment claimed by him, but without thereby according him substantive rights as a member of the Army Reserve. c. In accordance with Part 7, Chapter 1 of the Military Personnel Policy Manual (MILPERSMAN), Mr Gaynor be entitled to: i. Provide written notification to his commanding officer that he is intending to run for political office; ii. Apply to the relevant approving authority through his chain of command to transfer to Standby Reserves; and iii. Provide any written notification to his commanding officer or any other relevant authority to ensure that he does not receive any payment or allowance from the Commonwealth during the time of the election or once elected; but without thereby according him substantive rights as a member of the Army Reserve. 2. Costs be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT GLEESON J: 1 The appellant ("CDF") has appealed from orders made by Buchanan J on 4 December 2015 in Gaynor v Chief of the Defence Force (No 3) [2015] FCA 1370. Those orders included an order that the CDF's decision to terminate the service of the respondent ("Mr Gaynor") in the Australian Defence Force ("ADF"), be set aside ("Order 1"). 2 By interlocutory application dated 18 December 2015, the CDF applied for a stay of Order 1 pending the outcome of the appeal. Alternatively, the CDF sought orders, until further order, that: (a) Mr Gaynor be restrained from taking any steps to exercise any rights that he is entitled to assert pursuant to or in reliance on Order 1; and (b) CDF not be required to take any steps to give effect to Order 1. 3 On 22 December 2015, I adjourned a hearing of the interlocutory application to 29 January 2016 on the application of Mr Gaynor and made the following order, with the consent of the CDF: Until 29 January 2016, Order 1 in proceedings NSD692/2014 made on 4 December 2015 be stayed, save that the PMKeyS record management system is to have an entry added with respect to Mr Gaynor to the effect of him having been 're-hired' on the day of his termination, and a note added recording the outcome of the decision of Buchanan J, such that his records are formally re-activated, but without thereby according him substantive rights as a member of the Army Reserve. 4 On 28 January 2016, by consent, the 29 January 2016 hearing was vacated and adjourned to a date to be fixed by the Court. Order 1 was stayed until further order. 5 On 24 February 2016, the appeal was listed for hearing before a Full Court in Sydney on a date to be fixed during the Full Court sitting period 2 – 27 May 2016, with an estimate of two days. On 3 March 2016, the appeal was listed for hearing on 5 and 6 May 2016. The two day listing reflects the complexity and novelty of the issues raised by the appeal. 6 On 11 March 2016 I heard the interlocutory application. At the conclusion of the hearing I reserved my decision, but varied the stay order made on 28 January 2016, with the consent of the CDF, to read: 1. Until further order, Order 1 in proceedings NSD692/2014 made on 4 December 2015 be stayed, save that: a. The PMKeyS record management system is to have an entry added with respect to Mr Gaynor to the effect of him having been 're-hired' on the day of his termination, and a note added recording the outcome of the decision of Buchanan J, such that his records are formally re-activated, but without thereby according him substantive rights as a member of the Army Reserve. b. Mr Gaynor is entitled to pursue any administrative rights in respect of any decisions to withhold any payment claimed by him, but without thereby according him substantive rights as a member of the Army Reserve. c. In accordance with Part 7, Chapter 1 of the Military Personnel Policy Manual (MILPERSMAN), Mr Gaynor be entitled to: i. Provide written notification to his commanding officer that he is intending to run for political office; ii. Apply to the relevant approving authority through his chain of command to transfer to Standby Reserves; and iii. Provide any written notification to his commanding officer or any other relevant authority to ensure that he does not receive any payment or allowance from the Commonwealth during the time of the election or once elected; but without thereby according him substantive rights as a member of the Army Reserve. The parties' respective positions on the interlocutory application 7 The CDF seeks a continuation of the order made on 11 March 2016, until further order. 8 On behalf of Mr Gaynor, Mr King of counsel argued that the interlocutory application should be dismissed, with the result that the 11 March 2016 order would be discharged. The Court's power to grant a stay 9 The CDF relied on two sources of power being: (a) Rule 36.08(2) of the Federal Court Rules 2011, which provides that an appellant may apply to the Court for an order to stay the execution of the proceeding below until the appeal is heard and determined; and (b) the Court's implied power to grant a stay in appropriate circumstances: see for example, Huang v University of New South Wales [2010] FCA 738 at [3] and Federal Court of Australia Act 1976 (Cth), s 23. 10 Mr Gaynor did not dispute the Court's power to make the orders sought nor did he dispute the CDF's identification of the considerations relevant to an exercise of the discretion to grant a stay pending the determination of an appeal. 11 The relevant principles were set out by Perry J in Coshott v Prentice [2013] FCA 1085 at [36]–[38], as follows: 36. The discretion is a broad one which does not require that special or exceptional circumstances be shown in line with the approach adopted in Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 694. Rather, as Mahoney JA held in Re Middle Harbour Investments Ltd (In liq) (unreported, Court of Appeal, NSW, 15 December 1976) with the concurrence of the other members of the Court and in a passage approved by the Full Court of the Federal Court in Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65 at 66: "Where an application is made for a stay of proceedings, it is necessary that the applicant demonstrate an appropriate case. Prima facie, a successful party is entitled to the benefit of the judgment obtained by him and is entitled to commence with the presumption that the judgment is correct. These are not matters of rigid principle and a court asked to grant a stay will consider each case upon its merits, but where an applicant for a stay has not demonstrated an appropriate case but has left the situation in the state of speculation or of mere argument, weight must be given to the fact that the judgment below has been in favour of the other party." 37. Furthermore, as was held in Alexander v Cambridge op cit at 694: "The onus is upon the applicant to demonstrate a proper basis for a stay that will be fair to all parties ... The mere filing of an appeal will not, of itself, provide a reason or demonstrate an appropriate case, nor will it discharge the onus which the applicant bears ... The Court has a discretion whether or not to grant the stay and, if so, as to the terms that would be fair. In the exercise of its discretion, the Court will weigh considerations such as the balance of convenience and the competing rights for the parties before it ... Even where no order is made for the payment of part of a verdict, it is not at all unusual for the Court, in the exercise of its discretion, to grant a stay on terms that the appellant give to the judgment creditor security in terms defined by the Court as appropriate to the fair adjustment of the rights of the parties." (citations omitted) 38. In determining whether or not to grant a stay of first instance orders where appeal proceedings are pending, clearly one important factor is whether the grounds of appeal are reasonably arguable. However, in line with the approach endorsed in Powerflex Services, neither that factor nor any other single factor is necessarily determinative. Background to the interlocutory application 12 Mr Gaynor, formerly a major in the Australian Army Reserve, had his commission as an officer terminated by the CDF with effect from 11 July 2014. The termination decision was made on 10 December 2013. 13 Mr Gaynor sought judicial review of the termination decision. 14 On 4 December 2015, Buchanan J handed down the decision under appeal. His Honour found, in Mr Gaynor's favour, that the termination decision was invalid and should be set aside (at [290]), on the ground that it contravened the implied constitutional freedom of communication on government and political matters. 15 In reaching his decision, the primary judge found that Mr Gaynor held strong views which, relevantly, were expressed as an antipathy to overt tolerance or support of homosexuality or transgender behaviour as well as statements critical of adherents to Islam (at [11]). 16 In around mid-2010, Mr Gaynor became involved in the establishment of a political party. Around the same time, Mr Gaynor informed his chain of command of his intention to transfer from full time service in the Australian Army to the Army Reserve. 17 In January 2013, Mr Gaynor nominated to be endorsed as a Katter's Australian Party Senate candidate in Queensland at the next Federal elections due in 2013. On 20 January 2013, Mr Gaynor launched a webpage, Twitter page and Facebook page to promote his candidature. Although within days Mr Gaynor ceased to be a nominee to be a Senate candidate, he continued to publish his personal, political, social and religious views in a variety of ways. It was the publication of statements on social media which brought Mr Gaynor into conflict with his superiors in the Army and the ADF. 18 Mr Gaynor contended, both to his superiors and to Buchanan J, that instructions that he should refrain from public comment were unlawful. Buchanan J described Mr Gaynor's conduct as "a calculated course of defiance" (at [96]). His Honour found that Mr Gaynor commenced to openly and publicly challenge and ridicule cultural changes within the Army and the ADF, asserting a moral and legal right to do so, regardless of any instruction to the contrary. 19 Buchanan J referred to references to the Deputy Chief of Army in a tweet by Mr Gaynor as "obviously intended to ridicule and mock that officer and to make it apparent that his written instruction … would not be observed" (at [125]). His Honour observed "It is not possible to see this as other than a deliberate and calculated course of open defiance by [Mr Gaynor] of his superior officer, of the Army and of the ADF". 20 At [283], the primary judge described Mr Gaynor's conduct as "defiant and intractable". Contribution to Army Reserve prior to termination decision 21 The primary judge's reasons included reference to a "Quick Assessment Report" which stated, concerning Mr Gaynor's contribution to the Army Reserve: 5. MAJ Gaynor is an ARES [Army Reserves] member posted to LIW [Logistics Information Warehouse] who has provided limited service to DIntTC [Defence Intelligence Training Centre]. During 2012 MAJ Gaynor only attended his promotion parade and his last contribution to training within DIntTC was one week during the ROBC in Nov 2011. 6. As an RTI trained member MAJ Gaynor provides limited instructor value to LIW. Given the expense of employing a MAJ on ARTS it is unlikely that MAJ Gaynor would be used to provide training support to future activities. 22 At [288], the primary judge stated: There may be other grounds upon which the applicant's commission may have been terminated. It does not appear as though the applicant was making a useful contribution to the ADF in other respects, or was likely to in the future. 23 In opposition to the stay, Mr Gaynor gave the following evidence concerning his contribution to the Army Reserve prior to the termination decision: (a) during his transition to the Army Reserve commencing 19 June 2010, he was not required to attend unit activities relating to proficiency, readiness or employment standards; (b) he met his requirement to parade for at least 20 days per financial year in the year 2011/12; (c) in the first half of the 2012/13 financial year, he was unable to parade due to private work commitments; (d) in the second half of 2012/13, he was prevented from providing service "due to hostility to political beliefs … expressed as a private citizen". Candidacy with the Australian Liberty Alliance 24 Mr Gaynor is endorsed as the lead Senate candidate in Queensland for the Australian Liberty Alliance. 25 Part 7, Chapter 1 of the Military Personnel Policy Manual (MILPERSMAN) contains a section entitled "Defence members nominating for Federal, State/Territory or Local Elections". Paragraph 1.13 refers to the Defence (Parliamentary Candidates) Act 1969 (Cth) as providing the framework for the cessation of full-time duty of Defence members who are seeking to contest an election. 26 Paragraphs 1.20 and 1.21 concern reserve members nominating for Federal or State/Territory elections and provide: 1.20 Reserve members are to have their continuous full-time service (CFST) terminated. On cessation of CFST, the provisions of paragraphs 1.14 to 1.16 are to apply. 1.2 Reserve members are to follow the instructions for nominations as per Permanent Defence members. 27 Paragraphs 1.14 to 1.16 provide: 1.14 For a Defence member to nominate as a candidate in a Federal or State/Territory election, full-time duty must cease as follows: a. Defence members who are officers are to be transferred to the Standby Reserve. b. Defence members other than officers are to resign. 1.15 Defence members are to provide their Commander/Manager with written notification that they are intending to run for political office prior to pre-selection. In addition, Defence members are to apply to the relevant approving authority through their chain of command to resign or transfer to the Standby Reserve as appropriate, specifying which election and seat they intend to contest. The application is to be made prior to the candidate's nomination to the Divisional Returning Officer (DRO) (for the House of Representatives) or the Australian Electoral Officer (AEO) (for the Senate). This timing is important because the point at which nominations close and are declared is the first possible moment where a candidate, if unopposed, could be declared to have been elected. On receipt of the application and if the application is approved, the approving authority is to formally advise the Defence member of their obligations and service requirements using the letter format in Annex B. 1.16 Defence members who transfer to the Standby Reserve are not to be in receipt of any payment or allowances from the Commonwealth, other than expenses, following their nomination as a candidate, during the time they are involved in the election, or once elected. 28 At the hearing, Mr King acknowledged that a Federal election is impending. Prejudice to Mr Gaynor if stay is continued 29 In his 10 March 2016 affidavit, Mr Gaynor asserted that "[a]s outlined in my first affidavit" the CDF's failure to afford him substantive rights as a member of the Army Reserve since the primary judge's decision "causes me substantial disadvantage financially and in relation to my career". Mr King did not point to any part of Mr Gaynor's first affidavit in support of this assertion and did not make any submission about the nature or extent of any prejudice to Mr Gaynor from a continuation of the stay, beyond the important fact that it would deprive Mr Gaynor of the benefit of the judgment in his favour. 30 Mr Gaynor is willing to meet proficiency, readiness and employment standards required to serve in the Army Reserve. He has completed all courses required to maintain competency and required qualifications. Mr Gaynor swore: If I return to my duties I will obey Defence policy and orders as I always have. I support Defence policy in relation to political activity and I will not carry out political activity at my workplace or in my capacity as a Defence member. 31 Whether Mr Gaynor would be able to provide service to the Army Reserve, if the stay were terminated, will be a question for his Commanding Officer. Such a decision would be made after taking into account the unit's needs and availability of funding. Mr Gaynor would be able to request service days and expect to receive them if there is funding and a need from his unit. 32 Taking these matters into account, I am not satisfied that the stay sought by the CDF would cause Mr Gaynor any substantial disadvantage. Prejudice to the ADF if stay is not continued 33 Evidence was given on behalf of the CDF of the various proficiency, readiness and employment standards required to serve in the Army Reserve. It may be futile for the ADF to provide Mr Gaynor with opportunities to meet those standards, and to parade for service, if the appeal is upheld. On the other hand, such opportunities may be relatively limited if an election is called and Mr Gaynor is required to transfer to Standby Reserve. 34 On behalf of the CDF, it was submitted that there is, at the very least, a real risk that, if reinstated, Mr Gaynor may continue to behave in the manner which he did prior to his termination. Based on the findings of the primary judge set out above, and the absence of any undertaking by Mr Gaynor to the contrary, I accept this submission. 35 The CDF put the following submission: No doubt Mr Gaynor will argue that he is entitled to express his views in the strong and defiant manner that he has done. And perhaps the Full Court will uphold that view. But it places the CDF, and the Army, in a very difficult position in the interim. It would be a significant matter to place such a person back into the military command structure, after both the Chief of Army and CDF had reached the conclusion his retention was not in the interests of the Australian Army. Doing so is all the more significant when based upon an arguably surprising conclusion in an area raising novel questions of law. If Mr Gaynor is reinstated, and if he maintains his practice of provocative and defiant public commentary (as he has steadfastly done to date), this may well lead to complaints about his behaviour, leading to the possibility of further disciplinary or employment processes having to be undertaken, or at least considered. The military hierarchy will then be placed in an invidious position of potentially having to consider similar arguments again, by reference to new public statements, whilst this appeal is underway. That is not in the interests of the ADF. It is not in the interests of the administration of justice. It is difficult to see that it would be in the interests of Mr Gaynor. Consideration 36 The CDF's grounds of appeal are reasonably arguable. Mr Gaynor's counsel, Mr King, did not contend to the contrary. 37 In particular, the appellant argues that the primary judge's decision was based on a finding that the termination decision was not "adequate in its balance". I accept the submission made on behalf of the CDF that this test, drawn from McCloy v New South Wales [2015] HCA 34; (2015) 89 ALJR 857 at [2] ("McCloy"), self-evidently raises issues of judgment and degree, where it is reasonably open to argue that his Honour's balancing evaluation was incorrect. 38 I also accept that the decision raises the following novel legal questions, identified on behalf of the CDF: (1) The relevant test to apply in determining whether the exercise of a discretionary or evaluative power under power, such as the power in reg 85 of the Defence (Personnel) Regulations 2002 (Cth) which founded the termination decision, infringes the implied freedom of political communication. The issue was raised in Wotton v Queensland [2012] HCA 2; (2012) 246 CLR 1, and a question arises as to the application of the principles set out in [22] and [23] of that decision to the construction of reg 85; (2) Buchanan J's reference to the question whether the termination of Mr Gaynor's commission was "adequate in its balance" (and to "suitability" and "necessity") is a reference to the discussion in the judgment of French CJ, Kiefel, Bell and Keane JJ in McCloy at [2] of a "proportionality test" to be applied to determine whether an impugned legislative provision contravenes the implied freedom of political communication. It is not a criterion which had been applied by the High Court, at least in express terms, prior to the decision in McCloy. Therefore, there is not a body of case law that considers the application of the test as to whether a legislative provision is "adequate in its balance". 39 The following considerations militate against granting the CDF's application: (1) Generally a successful litigant is entitled to the fruits of their judgment. (2) It is evident that Mr Gaynor is keen to resume his position in the Reserve. 40 On the other hand, Mr Gaynor's circumstances do not reveal any reason why he needs to be immediately and substantively reinstated to the Army Reserve. As a Reservist, Mr Gaynor did not derive his primary income from his position as a Major prior to his termination. Further, it seems very likely that Mr Gaynor will be required to transfer to Standby Reserve within months (or possibly weeks) when a Federal election is called (which Mr King acknowledged is impending). 41 Mr Gaynor is reasonably likely to engage in conduct of the kind that led to his termination pending the determination of the appeal. A stay of Order 1 would prevent a repetition of circumstances that the CDF contends, on the appeal, are circumstances that warranted Mr Gaynor's termination on the basis that his conduct was contrary to the interests of the ADF. Accordingly, the CDF has strong reasons for preventing a repetition of those circumstances, albeit that those reasons were found by Buchanan J not to have justified the termination decision. In my view, the arguable grounds of appeal provide a sufficient basis for a stay to preserve the status quo where the stay will not cause substantial disadvantage to Mr Gaynor. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson. Associate: Dated: 30 March 2016