Defence Force Retirement and Death Benefit Authority v Britt

350

Administrative law -

Appeal from Administrative Appeals

Tribunal - Defence Force Retirement and

Death Benefits -

Authority "may" treat contributing member as

if retired

on ground

of invalidity

- Whether "may" permissive or

mandatory - Whether discretion vested	in Chiefs of Staff
or Authority
Words and Phrases - "may"

e Force Retirement and

Death Benef its Act 1973

(Cth) 8n.23, 24, 25, 26, 28, 29, 37, 38,	43A
SA G.15 of 1984

Fox, Woodward and Davies

30 October 1984

Canberra

COURT OF AUS-

)

No. SA G.15 of 1984

D I S m RFGISTRY)

)

B :	CE FORCE RETI-

AUTHORITY

Appellant

Respondent

O R D E R

-	I
I 30 October 1984

Fox, Woodward and Davies JJ

EwaLHwE

Canberra

I The decision of the

Administrative

Appeals Tribunal is set aside and the matter is renitted to the Tribunal to be reheard.

'SHE

COURT OF

)

SOUTH AII-IAN

DISTRICT

REGISTRY)

No. SA G.15 of 1984

)

DIVISIN

ON "

TRIBUNAL

IT AUTHORITY

Appellant

Respondent

: FOX, Woodward and Dnvles JJ

30 October 1984

!Chls

I s an appeal from a declslon of

the Administrative

Appeal8 Tribunal.

The short issue In the

appeal I s whether the word "may" in

0.37 of the w e

Force R

Art 1973

(Cth) ("the Act") con€ers

a wide discretion upon the Defence

Force Retirement and Death Benefits Authority ("the Authority") or whether it merely confers a power which the Authority is under

2. J

a duty to exercise if the other elements of the section be satisfied. It was in that latter aense that the Administrative Appeals Tribunal read the section, which provides I

"37. Where a contributing member has been retired otherwise than on the ground of invalidity or of physical or mental incapacity to perform his duties but, after his retirement, the Chief of Naval Staff, the Chief of the General Staff or the Chief of the Air Staff or a person authorized in writing by the Chief of Naval Staff, the Chief of the General Staff or the Chief of the Air Staff, as the case requires, informs the Authority that, at the time the member was retired, grounds existed on which he could have been retired on the

ground of invalidity or of physical or mental incapacity to perform hia duties, he may, for the purposes of this Act, be treated as if he had been

retired on that ground."

The principles to be applied were stated

v W i l l i w

(1955) 92 CLR 496 by Dixon CJ, Webb,	Fullagar, Kitto and Taylor
JJ at p.505-6 a6 follows :

"In considering the correctness of this interpretation it is necessary to bear steadily in mind that it is the real intention of the legislature that must be ascertained and that in ascertaining it you begin with the prima facie presumption that permissive or facultative expressions operate according to their ordinary

natural

meaning.

'The authorities clearly

indicate that it lies on those who assert that he word "may" has a compulaory meaning to show, as a matter of construction of the Act, taken as a whole, that the word was intended to have such a meaning' - per J. : Be Gleeson C19073 VLR

368, at p.373.

'The meaning of such words is the

same, whether there is or is

not a duty or

obligation to use the power which they confer. They are potential, and never (in themselves) significant of any obligation. The question whether a Judge, or a public officer, to whom a power is given by such words, is bound to use it upon any particular occasion, or in any particular manner, must be solved aliune, and, in general, it is to be solved from the context, from the

particular provisions, or from the

general scope

and

objects, of the

enactment

conferring

the

power' - per Lord Selborw : Juliya v. Bishop

Oxfora C18803 LR 5 AC 214,

p.235.

One

situation in which the conclusion is justified

that A duty to exercise the power or authority falls upon the officer on whom it is conferred ie described by Lord cairns in his speech in the same

case.

His Lordship spoke of certain cases and

said of them 'Ethey3 appear to decide nothing more than this a that where A power is deposited with a public officer for the purpose of being used for the benefit of persons who are specifically pointed out, and with regard to whom a definition is supplied by the Legislature of the conditions upon which they are entitled to call for its

exercise, that power ought

to be exercised.

and

the Court will

require it to be exercised' C18803

LR 5 AC, at p.225."

An example of the interpretation adopted by the Tribunal

may be seen in 1

v Federa&

(1971) 127 CLR 106.

Windeyer J, with

whom Barwick CJ agreed, said, at pp.134-5

"This does not depend on the abstract meaning of the Word 'may' but of whether the particular context of words and circumstance make it not only an empowering word but indicate circumstances in

which the power is to be exercised - so that in

those events the 'may' becomes a 'must'.

Illustrative cases go back to 1663 a 8 v Nrlow

(1663) Carth, 293 C90

ER 7733;

2 Salk.609 C91 ER

5163. Today it is enough to

cite

v UshoD

m C18803 5 App.Cas.214; and add in this	Court m v m ( 1955) 92 CLR 496, at
-~	pp.505-506. But I select one other reference out

of a multitude : Macdouuall v paterson (1851) 11 CB 755 C138 ER 6723. There Jervis C.J. said in

the course of

the argument (1851) 11 CB, at p.766

C138 ER, at p.6773 'The word

"may" is merely used

to confer the authority a and the authority

be exercised, if

the circumstances are such as to

call for its exercise'. And,

giving judgment, he

said (1851) 11

CB, at p.773

C138 ER, at p.6793 I

'Nc are of opinion that the word "may" is

not used to give A discretion, but to confer

A power upon the court and judges; and that

the exercise of such power depends, not w o n the discretion of the court or judge, but upon the proof of the particular case out of which such power arises.'

I consider that to be directly

applicable to the

present case. If the Commissioner, having considered the matter, is satisfied of facts out of which the pcwer to allow a rebate arises, he

cannot nevertheless refuse to allow

it."

In considering the issue, it

is necessary to turn to the

context in which 8.37 appears. The Act provides for retirement and death benefits for members of the Defence Forces and their dependants, establishes the Authority and confers upon it duties and discretions. As examples of the provisions conferring retirement benefits. we set out the proviaions of ss.23(1) and

24.(1)

"23.(1) Where a contributing member retires and is

not entitled to invalidity benefit and

(a)

on his retirement -

(1)

his total period of effective service

is not less than twenty years; or

(11)

his total period of effective service is not less than fifteen years and he has attained the retiring age for the

rank held by him immediately before

his retirement; or

(b)

had previously become entitled to

retiresent pay under this Act or pension, other than invalidity benefit, under the

previous legislation that

was

cancelled

under section 62 upon his becoming an

eligible member of the Defence Force,

he ie entitled, on his retirement, to retirement pay at the rate applicable to him in accordance with this section."

"24. (1) A recipient member

may, by notice in

writing given to the Authority, within a period of one year after becoming entitled to retirement pay, or within such further peric? as the Authority, in special circumstances, allows, elect to commute a portion of his retirement pay in

accordance with this section."

An invalidity benefit is conferred by 8.26. which reads :

"26. Subject to sections 27, 28 and 29, where a

contributing member is retired on the ground

of 8

invalidity or of

physical or mental incapacity to

perform his duties, he is entitled, on his retirement, to invalidity benefit in accordance

with this

Part."

One of a number of death benefits is provided by 8.38, which reads I

"30. m e r e a member of the scheme who is a

contributing member dies before retirement and is survived by a widow, the widow is entitled to a pension at a rate equal to five-eighths of the rate at which invalidity pay would have been payable to the deceased member if, on the date of his death, he had become entitled to invalidity benefit and had been classified as Class A under

section 30.

It will be noted that the

above provisions confer no

discretion upon the Authority to determine the type of benefit which is payable. !he nature of the benefit depends upon whether the member retired after certain service, whether he was retired

on the ground of invalidity or whether he died while in the

service.

Section 37, which we have set out above, in

terms confers a

discretion upon the Authority to treat a former contributing member as if he had been retired on the ground of invalidity though he was not in fact so retired.

Mr P. Heywood-Smith, of counsel, who appeared for the respondent, submitted that 8.37 imposes a duty upon the Authority to exercise the power once the elements of the section, including the notification from the Chief of Staff or other appropriate person, have been made out.

6 .

Mr Heywood-Smith submitted

that

the

Authority

inappropriate body to make a decision to treat a member as if he

had been retired on the ground of invalidity and that that

decision is

effectively made, for the purposes

of 6.37, in each

case by the Chief of Staff or other appropriate person. Nr function under the Act, that it has no power to retire a member on the ground of invalidity but determines matters such as the percentage of incapacity once the member has been so retired.

However, Mr Heywood-Smith's argument immediately confronts an obstacle which, in our view, it cannot overcome.

Section 37

does not confer upon the

Chiefs of Staff power to determine that

a person be treated as if

he had been retired on the ground of

invalidity. Section 37 confers on the Chiefs of Staff only the function of determining and informing the Authority that, at the time the merber was retired, grounds existed on which he could have been retired on the ground of invalidity. There remains a decision to be made, namely, whether, in the circumstance of the case, the member should be treated as if he had been retired on that ground.

Is tbat decision a utter of discretion? In

our opinion,

it is. Section 26 does not confer an invalidity benefit both upon a cantributing member who was, in fact, retired on the

ground

of invalidity, and

also up011 a contributing member who

could have been retired on that ground. It confers an invalidity benefit only upon the former. Section 37 uses the word "may" and, in the context in which It appears, we cannot read it as

7 .

doing other than conferring

discretion to treat a person who

could have been retired on the ground of invalidity as	having in
fact been so retired.

There are obviously sound reasons for the conferral

of the

discretion. Whereas

a retirement benefit may, at

the time of

retirement,

have

appeared

have

been

the

most

beneficial

benefit to the member,

medical condition which he

had at the

time of retirement may subsequently deteriorate so as to make an

invalidity benefit more beneficial to him. Moreover, there will

be other factors

to be taken into account, as, for example,

whether the former

member

has commuted a portion of his

retirement pay in accordance with s.24. However, Considerations of this type are not necessary to support a reading of 6.37 as conferring a discretion. In terms it does so and, having regard to the provisions of 9 . 2 6 , it would not be possible to read it in any other sense.

Is this discretion imposed upon the Chiefs

o Staff or upon

the Authority? In terms it

is imposed upon the Authority and

can see

no justification for reading the section

any other

way.

The section confers a specific function upon the Chiefs

Staff, that is, the function

determining whether the member

could have been retired on the ground

of invalidity and informing

the Authority of that fact.

This is a function properly imposed

upon the Chiefs

of Staff for they are aware of the requirements

of	service and are therefore able to determine whether the

member's medical condition was such as to justify his retirement on the ground that he was unable to perform his duties. But that

0 .

is the only function which 9.37 confers upon the Chiefs of Staff. It does not confer upon them the power to decide whether, in the whole of the circumstances of the case, the former member should

be treated as if he had been retired on the ground

of invalidity

or even the power to request that he be so treated.

The sectlon

makes the advice of a Chief

of Staff a pre-condition

of the

exercise of the discretlon whlch the section confers and not in

itself an exercise of that dlscretlon.

Mr Heywood-Smlth submltted that the Chiefs

Staff have

statutory power under other enactments to amend records

with

respect to retirement and the like. He submitted that 9.37 of the Act is ancillary to, and In aid of, those other provislons. However. we think that s.37 deals with a quite distinct subject

matter and ought

to be read havlng regard to

the context of the

Act and not by reference

to other enactments.

Hr Heywood-Smith further submitted that the Authority

has

only a limited functlon under the

Act

and is not qualified

make a decision of the type required to

be made by s.37. We

see

nothing in the Act whlch supports thls contention. The Act reposes in the Authorlty many important decision-making roles in addition to the assessment of incapaclty. Part V itself contains several such provisions. Sectlon 25 confers upon the Authority a

power to decide whether the invalidity was due to a wilful act on

the member's part for the purpose

of obtalning an invalidity

benefit. Section

28 empowers the Authorlty to decide whether the

invalidity was caused,

or was substantlally contributed to, by a

physical or

mental conditlon that exlsted at the time when the

member became a contributing member and

as to whether the

condition was materially aggravated by his service after becoming a contributing member. Section 29 empower8 the Authority to decide whether the invalidity was caused, or substantially

contributed to,

by an occurrence that happened at the time when

the member was absent without leave and had been so absent for a

period exceeding sixty

days.

These are but examples,

but they

u k e it clear that the Authority may be concerned with events which occurred prior to service and during service as well as aubsequent to retirement. Moreover, the Act imposes on the Authority significant discretions. For example, s.43A empowers the Authority to grant special pensions in the circumstances there specified "at such rate and on such conditions as the Authority, having regard to such matters (if any) as are prescribed and such other matters as it considers relevant, determines." In the light of these matters, we see no reason for concluding that 8.37 did not intend the Authority to exercise the significant discretion which in terms it confers upon the Authority.

It follows, in our opinion, that the interpretation which the Administrative Appeals Tribunal put upon 8.37 was incorrect and that the decision of the Tribunal should therefore be set aside and the matter remitted for hearing according to law. Save

as set out above,

the nature of the discretion and of the factors

to be taken into account in its exercise were	not discussed in
the appeal and we make no comment thereon.

10.

Hr B.H. Debelle, QC, senior counael for

the appellant, with

the

aubatance of

whoae 8ubmis8iOns we agree, did not

seek an

order for costa.

The order of the Court will be that the decision under

appeal be aet aaide and the matter remitted to the Administrative

Appeals Tribunal to be re-heard.

30//0/ep

[1984] FCA 350

30 Oct 1984