Coutts v Commonwealth
157 CLR 9159 ALR 699
(Judgment by: Wilson J)
Coutts
v Commonwealth
Judges:
Mason ACJ
Wilson JBrennan J
Deane J
Dawson J
Subject References:
Defence
Constitutional Law
Administrative Law
Judgment date: 20 June 1985
Sydney
Judgment by:
Wilson J
The deceased was appointed to be an officer in the Royal Australian Air Force on 19 April 1971 with the rank of Pilot Officer. He was promoted to Flying Officer in April 1972 and to Flight Lieutenant in October 1974. Although Australian Government Gazette No. 30 of 9 April 1974 (pp. 12-13) records his appointment to a permanent commission with the rank of Flying Officer from 15 March 1974, it would seem that the effect of reg. 45(1AA) of the Air Force Regulations ("the Regulations") is that his commission shall be deemed to date from 19 April 1971. He served at the air force bases at Amberley in Queensland, Butterworth in Malaysia and East Sale in Victoria before being posted in May 1979 to an administrative position at the Edinburgh base in South Australia. By letter dated 26 October 1979 the Senior Medical Officer at the base advised the deceased as follows:
"MEMBER'S STATEMENT -
REVIEW OF MEDICAL FITNESS
Your medical fitness and employment standard are to be formally considered. The purpose of this Statement is to provide you with an opportunity to comment on the effect of your medical disability on your medical fitness for referral to PMO/DGFHS (Principal Medical Officer/Director General Air Force Health Services) and/or the Employment Standard Committee."
The deceased responded to that invitation with a statement which in substance asserted that he was "fully fit for duty in the R.A.A.F. on any posting to any area".
Notwithstanding that response, the deceased was advised by letter dated 6 December 1979 written on behalf of the Chief of Air Force Personnel as follows:
"1. I regret to inform you that as a result of your medical disability it is not possible for you to continue service in the Royal Australian Air Force and action will be taken for your discharge under the provisions of Air Force Regulation 72(1) 'Medically Unfit for Further Service'.
2. Copies of your Final Medical Board will be forwarded to the Defence Force Retirement and Death Benefits Authority which is responsible for the administration of the DFRDB Act. The Authority will assess your degree of incapacity in relation to civil employment and determine any invalidity benefit which may be payable.
3. Your medical documents have been forwarded to your Unit Medical Officer and your Commanding Officer will arrange for him to discuss with you the medical aspects associated with your disability.
4. It is most unfortunate that your career is being curtailed in this manner, but I am sure that you realize the need for the maintenance of a high physical standard in any fighting force. May I take this opportunity to wish you every success in your resettlement in civil life."
On 27 March 1980 the Governor-General in Council approved a recommendation in the following terms:
"In accordance with Air Force Regulations 628(1) and 72(1) the appointment of Flight Lieutenant G. R. Coutts 044296 be terminated on medical grounds with effect the expiration of 29 April 1980.
In accordance with Air Force Regulation 86 Flight Lieutenant G. R. Coutts 044296 be placed on the Retired List with effect 30 April 1980."
The Regulations mentioned in this recommendation read as follows:
"628. (1) Where a member -
(a) is not in need of hospital treatment;
(b) is, in the opinion of the confirming medical authority, unfit for further service; and
(c) is capable at the time of engaging in civilian employment, the member shall be retired or discharged at the earliest possible date after the opinion of the confirming medical authority has been expressed."
"72. (1) An officer shall hold his appointment during the pleasure of the Governor-General, but the commission of an officer shall not be cancelled except for cause and after he has had notice in writing of any complaint or charge made, and of any action proposed to be taken against him and has been given the opportunity of making such statement as he thinks fit regarding the cause."
"86. (1) The Chief of the Air Staff may, by instrument in writing, place the names of officers or former officers on a Retired List.
(2) A person whose name has been placed on a Retired List under sub-regulation (1) is not, by reason only of being placed on that list, a member of the Air Force or the Defence Force."
The deceased subsequently instituted proceedings challenging the procedural propriety of the decision to terminate his appointment. He alleged that the grounds set out in reg. 628(1) were not satisfied in his case and that in any event the requirements of natural justice had not been observed. He sought, inter alia, damages for wrongful dismissal. In its defence, the Commonwealth inter alia raised an objection that the statement of claim was bad in law and disclosed no cause of action on the grounds that:
"(1) The plaintiff held his appointment in the Royal Australian Air Force solely at the pleasure of the Governor-General.
(2) The exercise of the powers of the Governor-General in terminating the plaintiff's appointment cannot be called in question or challenged in any way in a Court of law.
(3) That any procedures laid down by Regulation 628, by Regulation 72 and/or by any other Regulation in the Air Force Regulations relating to the termination of the appointment of an officer in the Air Force are only directory, and any failure of the defendant to comply with such Regulations does not enable the Plaintiff to call in question or to challenge the validity of the termination of his said appointment.
(4) That there was no contract of service between the plaintiff and the defendant which could be the subject of the plaintiff's claim for wrongful dismissal or for the other relief sought in his Statement of Claim herein."
These points of law were set down for hearing and determination as preliminary issues by the Full Court of the Supreme Court of South Australia. In the result, the Court by majority (Walters and Matheson JJ., Jacobs J. dissenting) (1983) 33 SASR 529 found in favour of the Commonwealth and dismissed the action. The matter came to this Court as an appeal from that decision. Following the hearing Flight Lieutenant Coutts died and his widow has now been substituted as the appellant pursuant to an order made by Mason J.
Mr. Doyle, counsel for the appellant, advances propositions which I think can fairly be summarized as follows:
1. Regulation 628(1) was the source of the power used to terminate the deceased's appointment. That regulation operates by reference to defined criteria and is a provision which, in accordance with ordinary principles, requires those who apply it to adopt procedures which will ensure natural justice to the member concerned. On this view, any reference to reg. 72(1) was unnecessary and of no effect.
2. If it was necessary to resort to reg. 72(1) to provide the power to give effect to reg. 628(1), then the same principles should be applied.
3. If the termination is sought to be justified by reference to reg. 72(1), independently of reg. 628(1), then notwithstanding the breadth of the right to dismiss at pleasure the appellant was still entitled to be heard before a decision was made.
In one respect, the submission of the learned Solicitor-General for the Commonwealth provides some support for the appellant's first proposition because he also argues for an operation of reg. 628(1) quite independently of reg. 72(1). In his submission the regulation is self-executing, requiring only administrative action to give effect to it when its conditions are satisfied. He draws an analogy with termination on expiry of a term appointment (reg. 46) or termination on reaching the age of compulsory retirement: reg. 88. I hasten to add that the Solicitor-General advances the argument in the context of a wider submission that the only relevant exercise of power in the present case was derived solely from reg. 72(1).
I have considerable difficulty with the argument that reg. 628(1) is self-executing. In the first place, the regulation gives no clue as to how the facts stated in par. (a) and par. (c) are to be determined. Paragraph (b) makes the opinion of the confirming medical authority the determinant of the member's unfitness for further service but this is not the case, apparently, with a determination of the member's need of hospital treatment or of his capacity for engaging in civilian employment. In the second place, if the regulation is self-executing in the case of officers who meet the prescribed criteria, then one would expect it to be self-executing in the case of airmen who find themselves in the same condition. It will be noticed that the regulation applies to "a member" - i.e., an officer or an airman (see reg. 4(1)) - and appropriately uses the phrase "shall be retired or discharged" to accommodate the two branches of the service, that is to say officers are retired and airmen are discharged. Yet satisfaction by an airman of the criteria in reg. 628(1) apparently does not bring about his discharge automatically because a discharge must be authorized by the Chief of the Air Staff (reg. 109(2)) and reg. 115 lists the reasons for discharge, including items (n) medically unfit for further service, (p) termination of period of enlistment, and (q) having reached the age for retirement. As at present advised, I do not understand how the retirement of an officer is to be actually effected or his appointment terminated otherwise than by an expression of the pleasure of the Governor-General pursuant to reg. 72(1). But I do not find it necessary to pursue the matter to a conclusion because I am satisfied that regardless of any part that reg. 628(1) may have played, the deceased's appointment was in fact terminated by the Governor-General pursuant to reg. 72(1).
In my opinion, the answer to the problem in the present case is dictated by the operation of well-established principles governing the relation to the Crown of members of the armed services. The historical background from which those principles emerge is discussed by the Court of Appeal in China Navigation Co. Ltd. v. Attorney-General [1932] 2 KB 197 , at pp 214-216, 225-229, 242-243 . As Dixon J. said in The Commonwealth v. Welsh (1947) 74 CLR 245 , at p 268 :
"The relation to the Crown of members of the armed forces is no new subject; the rules of the common law define it. The regulations are not to be read in disregard of those rules and of the long tradition to which they have contributed."
The fundamental feature of the relationship at common law is that members of the armed services hold their engagement at the pleasure of the Crown. In Marks v. The Commonwealth (1964) 111 CLR 549 , at p 586 , when speaking of the introductory words of s 16 of the Defence Act 1903 (Cth) as amended, (which words are similar to those now in question in reg. 72), Windeyer J. said:
"Servants of the Crown, civil and military, are by the common law employed only during the pleasure of the Crown. Except when modified by statute, that rule has an overriding place in all engagements to serve the Crown . . . . No doubt, the reason for enunciating the rule in the opening words of s 16 was to ensure that it was fully preserved, unaffected by the later and directory provisions of that section: see Cross v. The Commonwealth (1921) 29 CLR 219 . But it does not need a statute to bring the rule in. It would need a statute to put it out. Its consequence is that the Crown may dismiss its servants at will, without notice at any time. The line of well-known authorities which recognize and establish this may be found referred to and discussed in Fletcher v. Nott (1938) 60 CLR 55 and Kaye v. Attorney-General (Tas.) (1956) 94 CLR 193 in this Court, and by Jordan C.J. in Browne v. Commissioner for Railways (1935) 36 SR (NSW) 21, at p 24 ."
See also The Commonwealth v. Quince (1944) 68 CLR 227 , at pp 234, 241-242 ; Power v. The King (1929) NZLR 267 . Moreover, although always subject to modification by statute, the passage of time does not appear to have affected the strength of the Crown's common law prerogatives so far as the armed services are concerned. In the recent case of Council of Civil Service Unions v. Minister for the Civil Service [1984] AC 374 their Lordships unanimously dismissed an appeal brought by employees of the Government Communications Headquarters ("G.C.H.Q."), a government intelligence and security organization, concerning a decision made by the government, without staff or union consultation, to introduce with immediate effect new conditions of service for staff at G.C.H.Q. The effect of such conditions was that employees would no longer be permitted to belong to national trade unions. The principal question raised in the appeal was whether the instruction by which the government's decision was implemented was valid and effective in accordance with Art. 4 of the Civil Service Order in Council 1982. The appellant employees and trade unions maintained that it was invalid because there was a procedural obligation on the Minister to act fairly by consulting the persons concerned before exercising her power under Art. 4 of the Order in Council. The fundamental question was whether the court had jurisdiction to review such an instruction for want of procedural fairness, the decision being one made in the exercise of a prerogative power and concerning national security.
Lord Fraser of Tullybelton reviewed the history of the prerogative and summarized the array of authorities saying (1985) AC, at p 398 :
"As De Keyser's case (Attorney-General v. De Keyser's Royal Hotel Ltd. [1920] AC 508 shows the courts will inquire into whether a particular prerogative power exists or not, and if it does exist, into its extent. But once the existence and the extent of a power are established to the satisfaction of the court, the court cannot inquire into the propriety of its exercise. That is undoubtedly the position as laid down in the authorities to which I have briefly referred and it is plainly reasonable in relation to many of the most important prerogative powers which are concerned with control of the armed forces and with foreign policy and with other matters which are unsuitable for discussion or review in the law courts."
Nevertheless, his Lordship was clearly of the view that but for the considerations of national security the appellants would have had a legitimate expectation that the Minister would consult them before issuing the instruction. Lord Diplock dealt with the appeal by identifying three heads under which administrative actions may be subject to control by judicial review, namely, illegality, irrationality and procedural impropriety. His Lordship said that where the decision is one which does not alter rights or obligations enforceable in private law but only deprives a person of a legitimate expectation, "procedural impropriety" will normally provide the only ground on which the decision is open to review by the courts. However his Lordship (1985) AC, at p 411 emphasized that:
"what procedure will satisfy the public law requirement of procedural propriety depends upon the subject matter of the decision, the executive functions of the decision-maker . . . and the particular circumstances in which the decision came to be made."
The interests of national security were paramount and in relation thereto the executive government, not the courts of justice, must have the last word. Both Lord Scarman and Lord Roskill expressed a similar view. More particularly, Lord Roskill (1985) AC, at p 418 added that:
"Prerogative powers such as those relating to the making of treaties, the defence of the realm, the prerogative of mercy, the grant of honours, the dissolution of Parliament and the appointment of ministers as well as others are not, I think, susceptible to judicial review because their nature and subject matter are such as not to be amenable to the judicial process. The courts are not the place wherein to determine whether a treaty should be concluded or the armed forces disposed in a particular manner or Parliament dissolved on one date rather than another."
It is necessary then to examine the Regulations to see whether these common law rules have been developed or modified in such a way as would favour the appellant's claim to judicial review. Apart from his reliance upon reg. 628(1), Mr. Doyle was unable to point to any express provision that might serve such a purpose. Indeed, the indications are to the contrary, making it clear that the Regulations are intended to maintain the voluntary character of the Crown's engagement with its officers in the Air Force. Regulation 32 preserves the well-established common law rule governing the relationship between the Crown and members of the armed services. It provides:
"The appointment or promotion of an officer under these Regulations shall not create a civil contract between the Crown or the Commonwealth and the officer."
Again, the introductory words of reg. 72 are also a classic restatement of the basic common law rule. They stand in contrast to the following words in the regulation which outline the steps which are to be taken before the commission (as distinct from the appointment) of an officer is cancelled. It is not suggested that those words are of any relevance in the present case, save to emphasize the unfettered character of the power to terminate an appointment, for there was no move to cancel the deceased's commission during his lifetime.
It is urged for the appellant that the decision of this Court in F.A.I. Insurances Ltd. v. Winneke (1982) 151 CLR 342 upholding the right of an insurance company to be heard before the Governor in Council made a decision adverse to it under the Workers Compensation Act 1958 (Vict.) should encourage the Court to find inherent in the first part of reg. 72 an obligation on the part of the Governor-General in Council to observe the rules of natural justice. But there is no comparison to be drawn between the two cases. F.A.I. Insurances was a decision which turned on the construction of a particular Act with respect to its routine administration. The Act operated in a very different context to that of the present case.
The appellant's plea that considerations of natural justice should have entitled the deceased to the opportunity to be heard on the issue of his medical unfitness for further service before the Governor-General's pleasure was made known is very similar to an argument advanced on behalf of a dismissed member of the Queensland Police Force in Reedman v. Hoare (1959) 102 CLR 177 . The argument was summarily rejected by Taylor J., who said (1959) 102 CLR :
"As an independent argument it assumes that the right of the Crown to dismiss a person in its service is a right to dismiss for cause. It is, of course, nothing of the kind; it is a right to dismiss at pleasure and, accordingly, is not subject to any such condition or restriction as the argument suggested."
To say that an officer holds his appointment at the pleasure of the Governor-General means no more than that he could be retired without any reason being assigned for such action: Malloch v. Aberdeen Corporation (1971) 1 WLR 1578 , at pp 1582, 1588, 1594; [1971] 2 All ER 1278 , at pp. 1282, 1288, 1293. . In Ridge v. Baldwin [1964] AC 40 , at pp 65-66 , Lord Reid, speaking of one who holds an office at pleasure, said:
"It has always been held, I think rightly, that such an officer has no right to be heard before he is dismissed, and the reason is clear. As the person having the power of dismissal need not have anything against the officer, he need not give any reason.
. . . No doubt he would in many cases tell the officer and hear his explanation before deciding to dismiss him. But if he is not bound to disclose his reason and does not do so, then, if the court cannot require him to do so, it cannot determine whether it would be fair to hear the officer's case before taking action."
In my view, there is little comfort for the appellant in this passage from his Lordship's speech save for the possible significance that may attach to the qualification contained in the phrase "if he is not bound to disclose his reason and does not do so" (my emphasis). In Malloch, Lord Wilberforce, after noting that Mr. Malloch's appointment as a teacher was held during pleasure, observed (1971) 1 WLR, at p 1596; (1971) 2 All ER, at p 1295 :
"There is little authority on the question whether such persons have a right to be heard before dismissal, either generally, or at least in a case where a reason is in fact given."
His Lordship repeated Lord Reid's statement in Ridge v. Baldwin that such an officer has no right to be heard before being dismissed and continued (1971) 1 WLR, at p 1597; (1971) 2 All ER, at pp 1295-1296 :
"As a general principle, I respectfully agree: and I think it important not to weaken a principle which, for reasons of public policy, applies, at least as a starting point, to so wide a range of the public service. The difficulty arises when, as here, there are other incidents of the employment laid down by statute, or regulations, or code of employment, or agreement. The rigour of the principle is often, in modern practice mitigated for it has come to be perceived that the very possibility of dismissal without reason being given - action which may vitally affect a man's career or his pension - makes it all the more important for him, in suitable circumstances, to be able to state his case and, if denied the right to do so, to be able to have his dismissal declared void. So, while the courts will necessarily respect the right, for good reasons of public policy, to dismiss without assigned reasons, this should not, in my opinion, prevent them from examining the framework and context of the employment to see whether elementary rights are conferred upon him expressly or by necessary implication, and how far these extend."
In Malloch (1971) 1 WLR 1578 ; [1971] 2 All ER 1278 , a majority of their Lordships held that there was to be implied from the procedures which the legislation required an education authority to observe before exercising its undoubted right to terminate an appointment held at pleasure a right in the servant to put his case. It was a case in which the reason for the dismissal was known.
The case of Malloch is readily distinguishable from the present case. It concerned teachers in the employ of local education authorities. Although at common law public policy required all servants of the Crown to hold their offices during the pleasure of the Crown without distinction between those engaged in civil service and those engaged in military service (cf. Ryder v. Foley (1906) 4 CLR 422 , at pp 434-436 statutory provisions now reflect the greatly changed conceptions of what public policy requires in relation to the two services, resulting in greater statutory regulation of the former and a virtual disappearance in many sections of the civil service of the Crown's right to dismiss at pleasure. On the other hand, the disposition and membership of the armed services remains very much within the discretion of the Crown: "The members of the Forces are under a discipline that the others (civil servants) are not: they have duties and obligations more stern than theirs: and rights and privileges that they cannot claim": per Windeyer J. in Marks (1964) 111 CLR, at p 573 . Cf. D. W. Logan, "A Civil Servant and his Pay", Law Quarterly Rev., vol. 61 (1945), pp. 242-244. Regulation 72(1) embodies a power in the Governor-General to terminate an appointment which is unhindered by any procedural restraints, such as were present in Malloch. Regulation 32 ensures that no question of private right can accrue to an officer from his appointment. Any question of a claim for damages for wrongful dismissal, as made by the deceased in this case, cannot arise.
The fact that is central to the appellant's claim to a public right to procedural propriety or fairness is that a reason was assigned for the termination of the deceased's appointment. It is argued that the reference to reg. 628(1) in association with reg. 72(1) in the formal approval by the Governor-General in Council invests that decision with the character of a termination for cause. Be that as it may, in my view it is not sufficient to confer a right to be heard on the deceased. With respect, I agree with what Lord Morris of Borth-y-Gest said in his dissenting speech in Malloch (1971) 1 WLR, at p 1589; (1971) 2 All ER, at p 1288 :
"It is true that in the present case the reason for the dismissal was in fact known: it was in fact well known to the appellant. It might have been preferable if he had been heard. But if there could have been dismissal even for a bad reason and even for no reason at all I do not think that as a matter of strict legal entitlement there was a right to be heard."
Once it be established, as I believe it is, that the deceased's appointment was terminated by the Governor-General in exercise of a power found in reg. 72(1), then I think it is immaterial whether any cause is assigned. Here a cause, medical grounds, was assigned and reference was made to reg. 628(1). Let it be assumed that the assigned cause was misconceived. The fact remains that the deceased on becoming an officer accepted an appointment to be held at the pleasure of the Crown, an appointment which was liable to be terminated at any time for good or bad reason or for none. It has been terminated, whether the assigned cause be good or bad.
As at present advised, and if I be right in the doubts expressed earlier as to its self-executing character, I think there is much to be said for the view that reg. 628(1) is no more than directory simply because the only means provided for its implementation in relation to an officer is the unfettered and unreviewable discretion of the Governor-General pursuant to reg. 72(1). In Marks (1964) 111 CLR, at p 586 , Windeyer J. takes a similar view of the conditions precedent to the cancellation of a commission outlined in s 16 of the Defence Act, provisions which correspond with the second part of reg. 72(1): see also Cross v. The Commonwealth (1921) 29 CLR 219 ; Fletcher v. Nott (1938) 60 CLR 55 , at pp 69, 77 . In any event, I do not believe that on its proper construction reg. 628(1) can invest an officer with any rights. The regulation cannot give rise to the converse of what it expressly provides, that is to say, that the officer cannot be retired on medical grounds, or at all, unless the conditions set out in reg. 628(1) are first satisfied. It cannot do so, simply because the officer is not entitled to call into question the exercise of the Governor-General's pleasure. In my opinion, the conclusion is inescapable that, the Governor-General having made his pleasure known, neither that decision nor the procedural steps leading up to it are open to review by the courts.
I have been assisted in my consideration of this case by a stimulating article by Professor Nettheim, "Do Members of the Armed Forces Have Any Rights in Their Employment?", Federal Law Rev., vol. 5 (1973), p. 200. The learned author will no doubt be disappointed in my conclusion. I have been unable to reach a different conclusion in the present case because of the heavily entrenched principles, supported by tradition, authority and public policy, attaching to the concept of an appointment in the armed services being held at the pleasure of the Crown. I do not think that the Court is in a position to re-evaluate the considerations of public policy so as to open the way to a different result.
For these reasons, therefore, I conclude that the decision of the Governor-General in Council to terminate the appointment of the deceased is not amenable to judicial review. I would dismiss the appeal.