Jarratt v Commissioner of Police (NSW) & Anor

[2005] HCATrans 347

[2005] HCATrans 347

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S593 of 2003

B e t w e e n -

JEFFREY THOMAS JARRATT

Applicant

and

COMMISSIONER OF POLICE FOR NEW SOUTH WALES

First Respondent

STATE OF NEW SOUTH WALES

Second Respondent

Application for special leave to appeal

GLEESON CJ
McHUGH J
GUMMOW J
HAYNE J
CALLINAN J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 26 MAY 2005, AT 10.04 AM

(Continued from 25/5/05)

Copyright in the High Court of Australia

__________________

GLEESON CJ:   Yes, Mr Kenzie.

MR KENZIE:   Thank you, your Honour.  Overnight, if it please the Court, we have obtained some material in response to the matters raised by your Honour the Chief Justice relating to the history of the legislation.  We have prepared some bundles which have been given to your Honours’ associates.

GLEESON CJ:   Thank you.

MR KENZIE:   Your Honour, I will not go to them in detail, but if I could just indicate generally that they are there to indicate the relationship between the interim report, that is, the Interim Wood Report which came down in November of 1996 and the 1996 Act which brought the provisions into their existing form which was passed immediately thereafter and there are, if I could just give your Honours a reference, in the integrity report which might be of assistance in relation to the matters that were the subject of submissions. 

They include that part which relates to the Police Commissioner as employer in Part 9 of the report.  A discussion of the supersession of the Police Board and its role in paragraphs 10.7 through to 10.9 and your Honours may note - I will not read it now - but the report noted that the previous Police Board process had prevented the expeditious filling of important positions and had a disruptive effect on the service and that it was involved in a large number of largely irrelevant reports and assessments made and the like.

The recommendations are those in Part 16 and they include 16.4(1) and (2), your Honours, and they were the recommendations that were virtually instantly transformed into the legislation.  The bundle of documents includes the second reading speech which plainly links the Integrity Commission report with the amendments that took place, your Honours.

GLEESON CJ:   Mr Kenzie, we got to the point last night, I think, of endeavouring to relate section 40 of the Police Service Act with section 51.

MR KENZIE:   Yes.

GLEESON CJ:   Could I ask you this question.  Put to one side the procedural issue with which we are ultimately concerned, that is, whether there has to be notice of the hearing, and put to one side for the moment, please, questions of Crown service.  If a bank appointed a senior executive to a position for a term of five years and the contract between the bank and the executive contained a provision saying that the executive could be removed from office at any time, that would of course mean removed from office at any time during the period of five years.

MR KENZIE:   It would.

GLEESON CJ:   What would be the circumstances in which such power of removal by the employer might be possible?

MR KENZIE:   Your Honour, that would be a matter and it would have to be dependent on considerations relating to the contract as a whole.

GLEESON CJ:   One possible circumstance would be breach of contract by the employee.

MR KENZIE:   Yes.

GLEESON CJ:   But going beyond that, it would include, for example, somebody better coming on the scene.

MR KENZIE:   Well, in our submission, yes, your Honour.  The question your Honour asks relates essentially to that part of our submission that was made to her Honour the trial judge as to what would be the position if you had to consider the contract as a contract which (a) was described as a fixed term contract, but (b) contained a provision whereby it was terminable at any time.  We put submissions to the court to the effect that that position, if one was taken away from Crown service and was looking at employment in private industry, would involve a circumstance in which it would not be appropriate to proceed on the basis that the employee had the right of a fixed term contract, because although it was fixed in terms of its term unless otherwise interrupted, it was capable of being interrupted at any time and the provision to that effect would be a provision that was designed to obviate any requirement, for example, for notice which might otherwise be implied.

GLEESON CJ:   Please put to one side procedure and look at substance.

MR KENZIE:   Yes, your Honour.

GLEESON CJ:   What are the rights of the employee in a situation where you are employed for a term, but the employer has a right to remove you at any time?

MR KENZIE:   Yes.

GLEESON CJ:   No doubt the employer could remove you for breach of your contract.

MR KENZIE:   Yes.

GLEESON CJ:   Could the employer remove you upon reasonable notice?

MR KENZIE:   In our submission, the employer could remove at any time regardless of notice, your Honour.  If you had an agreement that there was going to be a contractual relationship that was going to subsist for, say, five years and you had a clause within that contract that said “Provided that you are subject to dismissal at any time”, they would have to be read together.  The way in which you would read those together would be that that represented an agreement between the parties whereby dismissal could take effect at any time but, if it did not take effect at any time during the five years, the contract would end after five years.

GUMMOW J:   So what you are saying is five years is the cutting off point for what in that five‑year period is a peril of termination.

MR KENZIE:   That is right.  Five years is the period but, if you had a contract ‑ ‑ ‑

GUMMOW J:   It is not really for a term of five years.

MR KENZIE:   Precisely so, your Honour.  That is why it is incorrect to proceed on the basis that the position is one in which you can remunerate or compensate on the basis that you are dealing with a fixed term of five years.  It is a term that will last for five years unless otherwise interrupted in accordance with its terms.  A contract may have terms which provide that it will go for five years provided that it is terminable by six months notice.

GLEESON CJ:   When Justice Simpson worked out the damages that were awarded to the present applicant, how, if at all, did she take account of section 51(1)?  Did she simply award the damages on the assumption that the contract would last for the rest of the five years?

MR KENZIE:   She did.  Your Honour, I was going to come to this, but this is dealt with in paragraph 57 of her Honour’s judgment at pages 119 and 120.

GLEESON CJ:   Well, it just occurs to me that the question of how you calculate the damages is intimately related to the question of what are the substantive rights of the parties.

MR KENZIE:   Yes, your Honour, and these were matters that were addressed before the trial judge. Our position before the trial judge was this, your Honour, that there was a statutory scheme and if you were terminated under section 51 then section 53 represented the measure of compensation that was appropriate in those circumstances. Section 40 had to be read together with section 51. The result is that although the legislation speaks and spoke of a fixed‑term contract, it was nonetheless operating in circumstances where the contractual provisions were expressly subordinated to those provisions relating to appointment, including section 51, and accordingly, it was quite inappropriate to regard the position as one in which Mr Jarratt had an entitlement at any day during his appointment to go on for five years. He did not.

The second part of our submissions to her Honour were these, that even if it were correct to move to contractual principles, which we said it was not, but even if it was, our submission was that it was quite inappropriate to approach this matter on the basis that we were dealing with a fixed‑term contract.  You could not do that because you had to have regard, as Justice Brennan clearly said in Suttling, to the relationship between the contract and the statute and if the statute ultimately regulated rights, well the contract could not give you higher rights.  In this scheme the senior executive officer had a right to a contract.  That contract could not determine the term.  The legislation was specific about that.  The rights as to term, and I mean by that term of office or term of being there, were those determined by the overriding provisions of the Act and, therefore, he was subject to removal at any time, whatever that means, your Honour, but his rights were affected and curtailed by that overriding consideration.

McHUGH J:   It may be that the judge went about it the wrong way in awarding damages because it is not a case for damages at all, but given the time that has passed, the contract would have expired in any event on 5 February 2005.

MR KENZIE:   Yes.

McHUGH J:   So if the applicant’s office or service was not lawfully terminated and he remained in office, he is entitled to his full salary for the present, so it is all academic, is it not?

MR KENZIE:   Yes, your Honour.  Had the matter proceeded in what might have been presumed to be the normal way, that is, had the applicant been going to court to get a declaration or relief to the effect that, or based on the proposition that, the dismissal was invalid and, accordingly, the applicant sought orders to get his job back, to return to work, then one would have been in that arena.  But this proceeding was unusual in this respect – and I am going to take your Honours in a moment to the transcript – that what happened here was that the applicant sought a declaration, but he did not seek a declaration with a view to giving rise to what was described by his counsel before the trial judge as anything in the nature of specific performance or a return to work.  The applicant put to the court that resumption of the contract was not appropriate, or indeed possible, and the applicant was seeking declaratory relief as a gateway, and a gateway only to obtaining contractual relief.

GLEESON CJ:   An employee can never force himself on an employer.  He can just get damages for wrongful dismissal.

MR KENZIE:   That is so.

GLEESON CJ:   In calculating the damages for wrongful dismissal, as in working out the procedural requirements for dismissal, you have to decide first the substance of the rights between the parties.

MR KENZIE:   I accept that clearly, your Honour.

GLEESON CJ:   Ridge v Baldwin makes it perfectly clear that before you decide what, if any, obligations of procedural fairness exists, you have to decide the rights and obligations of the parties.

MR KENZIE:   Your Honour, that proposition is, first of all, accepted by us and, indeed, is the foundation of all of the submissions we have earlier made about the “at pleasure” principle.  We accept that and, indeed, we put to the trial judge that this task, the task of determining what entitlement, if any, existed, could not be addressed without having regard to the impact of the statutory scheme on the contract. 

The submissions that we made were that on no account could an order for damages be made on the basis that we had breached a fixed‑term contract and the applicant was entitled to contractual damages based on the expiry of the term.  The reason for that is because that would be, and would have been, by order of damages, to place the applicant in a position that he did not occupy.  At no point of time was he in a position where he could say, “Look, I am here and I am here as of right for five years”.

McHUGH J:   Yes, I know, but he could say, could he not, that he was there for five years, subject to the risk of his employment being terminated and, therefore, there should be a discount because of the risk?

MR KENZIE:   Well, arguably so, your Honour, and, indeed, we submitted to the court that – it was our subsidiary submission that if the court was otherwise against us in relation to contractual damages, it could not be damages ordered but would have to be based on considerations including the consideration that reflected his capacity to be dismissed.

GLEESON CJ:   That is right, but you cannot evaluate the risk of his removal without forming a view on the circumstances in which he might be removed.  Was it only for breach of contract on his part that he could be removed, for example?

MR KENZIE:   Yes well, your Honour, our submissions were predicated, and are predicated, on the basis that section 51 is not so confined.  Indeed, our submissions to her Honour were based on the proposition that although the regime referred to fixed‑term contract, it had a major qualification in it, and that major qualification did not involve the proposition that he was safe save only for matters relating to his personal conduct and the like.

GLEESON CJ:   So whichever way you turn you have to form a view on the relationship between section 40 and section 51.

MR KENZIE:   You do.

GLEESON CJ:   What I had in mind was the question of construction that was raised with your opponent at the beginning of the argument yesterday.

MR KENZIE:   Yes, your Honour.

GLEESON CJ:   What are the circumstances in which the power of removal given by section 51(1) may be exercised, not what are the procedures to be followed; that is an anterior question ‑ ‑ ‑

MR KENZIE:   No, your Honour.

GLEESON CJ:    ‑ ‑ ‑ and an important one, but what are the circumstances?

MR KENZIE:   Your Honour, could I put this.  If one moved away from the police service and away from the Crown, if there was a contract between private individuals and it was a contract for five years, provided that I can sack you at any time - I could sack you at any time.  It would qualify the term.

McHUGH J:   Would you accept that there was a good faith condition involved, that you had to act in good faith?

MR KENZIE:   I am not seeking to back away from that question, your Honour.  That is a large question that I think has not been ‑ ‑ ‑

GUMMOW J:   I know, but maybe it has to be.

MR KENZIE:   Yes it may be, your Honour.  It is in the wings.  But it is a large question.  I think it is ‑ ‑ ‑

GUMMOW J:   And it was also thrown up by ground 21 of your appeal to the Court of Appeal, at page 128, which you disputed the damages on this, the footing.

MR KENZIE:   Yes, your Honour.

GUMMOW J:   But the Court of Appeal did not deal with it.

MR KENZIE:   No, it did not - the last paragraph of the court’s judgment.

GUMMOW J:   That is right.  So if we were to grant you special leave you would need a notice of contention point, would you not?  Then there would be a real question about whether we, at the damages level, got into it without the Court of Appeal having dealt with it.

MR KENZIE:   Yes, the court did not address our submission at all.

GUMMOW J:   That is right.

GLEESON CJ:   Although you would not be seeking to actually uphold the decision of the Court of Appeal, would you?

MR KENZIE:   No, your Honour.

GLEESON CJ:   You would be seeking to say if you get to this point there is simply an unresolved issue.

MR KENZIE:   That is right.

GLEESON CJ:   And the matter would have to go back.

GUMMOW J:   Yes, I think so.

MR KENZIE:   That is correct, your Honour.

GUMMOW J:   But, as has been put to you, the same nub of the problem appears at the earlier stage, right at the beginning, namely, the interrelation between these two sections.  Then that brings us back to what Justice McHugh has been putting to you.

MR KENZIE:   Your Honour, our answer to that is that the approach to section 51 would be no different from the approach that would be taken in a contract between private individuals, which included a term whereby the employer could dismiss at any time.

GUMMOW J:   Without cause.

MR KENZIE:   Without cause, your Honour.  Without cause because it was a contractual relationship between parties, and the parties can do what they want.  The parties can agree that a fixed term contract will be subject to a provision whereby the employee or party is safeguarded, subject to provisions as to time or provisions as to circumstance, but if the parties agree – and I am looking at this as a matter of general law, your Honour – that they will nominate a term but they will preserve to themselves the freedom to terminate the contract within that term, then the contract would be given effect to in its terms.

GLEESON CJ:   If you are right about that, it may be that the only relevance of the so‑called “at pleasure” principle is that it explains the presence of section 51(1).

MR KENZIE:   Our case is that, your Honour.  Our case is that when section 51 was drafted it was drafted against a background of the “at pleasure” principle and reflects it.  That is our submission.  We say that the “at pleasure” principle - we say that when you come to construe the legislation you would have regard, as was said in Welsh, to the purpose.  You would look at the subject in terms of what was attempting to be dealt with, and your approach to the section would be conditioned or affected by that and we say that the approach to the section would be conditioned by the fact that this is a piece of legislation applying to police which builds upon many, many years of legislation and regulation of police which had been affected by the principle and that when you read section 51, there is not a reason why you would then move to the stage of reading it in a way that you would not read a private contract, or you would not approach it if it was a matter of dismissal at pleasure.  You would need words of qualification.

GUMMOW J:   That is your answer to the good faith point, is it?  The “at pleasure” principle.

MR KENZIE:   Ultimately it is, your Honour.

GUMMOW J:   I think it must be.

MR KENZIE:   Yes, it is and must be.  If it is founded on the “at pleasure” principle, the “at pleasure” principle is careless of such matters - good reason, bad reason or no reason.

McHUGH J:   But it is the exercise of a statutory power, Mr Kenzie.  Could the Commissioner dismiss the Assistant Commissioner or recommend his termination on the ground that he parted his hair on the left side or the right side?

MR KENZIE:   Your Honour, there is the divide, if I might say so respectfully, because if we are right, then you are into the territory addressed by the Court most recently in Coutts where they describe the effect of the “at pleasure” principle, good reason, bad reason or no reason and such inquiries would be irrelevant.  If you cross to the other side, which is what our friend’s new approach to construction invites, then you move to the arena that your Honour is talking about.  Your Honour, you have moved to the arena discussed by Justice Hely in Barratt and that judgment includes an analysis of the principles that dictate that when you are operating in a statutory context, you are not free to act in the way that ‑ ‑ ‑

McHUGH J:   But is that not against you, because you are not exercising a common law or contractual power to dismiss or terminate?  You are using a statutory power.  Your submission means that Sharpe v Wakefield is of no relevance, that you can dismiss for arbitrary reasons.

MR KENZIE:   In our respectful submission, the issue that is now being addressed inevitably throws up the approach discussed by Justice Brennan in Coutts where he dealt with the intersection of the right to dismiss at pleasure on the one hand and the natural justice authorities and the general approach to statutory construction on the other.  One either accepts at this point that there is an exception, that there is a different approach because of 100 years of history or one does not.  If one does not then, your Honour, I throw up my hands.

GLEESON CJ:   Let it be supposed that there is a requirement of good faith – and I am a little surprised at the moment that you do not embrace that – there was no challenge to good faith in these proceedings, no finding of lack of good faith.  Let us suppose that there is a requirement but only a requirement of good faith.  What effect would that have on considerations of procedural fairness?  If the power of removal is unqualified by any limitation other than that it be exercised in good faith, what would you be hearing the employee about?

MR KENZIE:   You would only be hearing the employee about that matter if the employee was aware of circumstances giving rise to an allegation that the dismissal had been in bad faith and then you would be into the arena of whether a requirement for good faith carried with it a requirement to be heard.

HAYNE J:   No, let us point the question a little more sharply.  Good faith, which may be no more than a restatement of Klein v Domus exercise power for the purposes, et cetera, for which it is given, would encompass presumably removal for want of confidence, the Barratt‑type case.  If natural justice is required, is there not something on which the employee, the office holder, can be heard, namely, “Is your want of confidence in me warranted?”?

MR KENZIE:   Yes, your Honour, but ‑ ‑ ‑

HAYNE J:   Let it be further supposed that it encompasses “There is a better person out there who could do this job better than you.  You are doing it satisfactorily but X is brilliant and we need to have X”.  Could not the office holder be heard on that question?

MR KENZIE:   Yes, your Honour.  You do not need to go to bad faith to make good that proposition; I accept that.

HAYNE J:   But if, therefore, good faith is required – and I think I presently would prefer to see it as a statutory power exercisable only for the purposes of the statute – is there not an issue that inevitably could be the subject of useful application of natural justice principles?

MR KENZIE:   Your Honour, could I put this to answer your Honour’s question in a sense against us, that it may be said that there is always something that can be said by a person who is affected by a decision that affects that person.

McHUGH J:   But there was one consideration that stares you straight in the face, and that is that, having been employed under a contract at least theoretically for five years, why do you not have a right to have an opportunity to argue that the power should not be exercised so as to terminate before the five years, whatever the grounds, even if it is because you have red hair?

GLEESON CJ:   Or because you have some children to support.

MR KENZIE:   Indeed.  You might be deemed to be unsuitable for a host of very unfair reasons.  Your Honour, you do not have to search and you do not have to drill down this far in order to identify considerations that there may be utility in hearing from the person.  It has been accepted – and this was again dealt with in Barratt – that even though you have decisions that might be made as a matter of general policy, they can still have effects on people.  You could have a decision to restructure but it affects Joe Blow and Joe Blow might be affected by a decision to restructure, meaning that it is either him or someone else, and Joe Blow might want to say something too.  At the very least he might want to say, “Look, if you’ve got to do this to me, don’t do it now.  Please do it next week”, your Honour.

McHUGH J:   Exactly.  Even if it be assumed in your favour that you can exercise the power for any reason whatever, why does not natural justice not at least require you to give notice of your intention to exercise the power?

MR KENZIE:   Your Honour, if we are wrong in our submissions as to the approach to the statute, many of these conclusions follow.  If you approached this matter on the basis that you were not looking at a position affected by the “at pleasure” principle, you would approach it on the basis that you have a well‑developed authority culminating in Kioa and Annetts and you would approach it in that way and you would not need to do too much work to reach the conclusion that even though a decision might be one that might be taken on an apparently general rather than a particular or personal basis, that you would not need to do too much work in applying those principles to get to that result. 

It would not be very hard to discern circumstances – it may not be very useful for an employee or a person affected to make submissions but the authorities countenance that, so you do not need to go to bad faith for these purposes.  But fundamentally, once you introduce the context in which this section appears, then there has to be addressed the question, in our submission, that Justice Brennan was wrestling with in Coutts.  He was addressing this question, “Look, are we dealing with a world over here that actually still survives and survives in a way that is relevant to the approach to a statute?  Is it an exception or has it been overtaken by events?”  And unless it has been overtaken by events, the sort of events that have been the subject of submissions in this case, it is there.

GLEESON CJ:   But it is one thing to say the “at pleasure” principle explains the presence of section 51.  It is a different thing to say section 51 is a statutory embodiment of the “at pleasure” principle.

MR KENZIE:   It is a different thing to say, your Honour, but the recognition of the “at pleasure” principle leads to this consequence, that you need to then find a statutory indication that that is to be taken away.  A neutral position will not do.  The authorities are clear in this.  It is not simply the existence of the principle; it is its impact on statutory construction.

GLEESON CJ:   Well, I would not require much persuading at all that the explanation of the presence of section 51 in the Act is the “at pleasure” principle, but it does not by any means seem to me to follow from that that there is no limit – no limit – on the power of removal.

MR KENZIE:   Our submission is this, your Honour, that if you accept step one, then step two will follow unless you find words that provide a solid basis – express words or an implication that can be derived from the legislation.

HAYNE J:   Can I just understand that in Klein v Domus terms.  Do I understand the step that you would take is to read this power to remove as being exercisable for no reason?

MR KENZIE:   Yes.

HAYNE J:   How does that fit with the ordinary proposition that you would read a statutory power, here a power of removal, as being exercisable by reference to the scope and purpose of the provision and its objects?

MR KENZIE:   Well, your Honour, the recognition of the ‑ ‑ ‑

GUMMOW J:   And you would have to look at section 8(2), would you not?  Klein v Domus would say have a look at section 8(2):

effective, efficient and economical management of . . . the Police Service.

That is what the Commissioner is about in exercising his power under 51.

MR KENZIE:   Indeed.  To say that you are picking up the “at pleasure” principle does not carry with it the conclusion that it is thereby immune from judicial challenge.  I mean, section ‑ ‑ ‑

HAYNE J:   But does it mean you can remove for no reason?

MR KENZIE:   Well, your Honour, if the authorities ‑ ‑ ‑

GUMMOW J:   Or for a reason that was suggestive, in effect, of inefficient and uneconomic management of the service.

MR KENZIE:   Well, yes.  It is perhaps not much of a restriction.  Your Honour, the significance of the “at pleasure” principle, in our respectful submission, is that the authorities consistently describe it in the broadest of terms, and I think I ‑ ‑ ‑

GUMMOW J:   Could I put this to you, I do not want to go back over the pleasure principle, but in Thompson v ACTV 186 CLR 574 in argument at 577, Justice Dawson referred to the maxim which produces the effect that a common law doctrine which depends upon something which has disappeared or, no longer of utility itself, collapses.

MR KENZIE:   Your Honour, if one accepted ‑ ‑ ‑

GUMMOW J:   Cessante ratione ‑ ‑ ‑

MR KENZIE:   Yes, your Honour.

GUMMOW J:   And that is the basis on which that case was decided.

MR KENZIE:   Your Honour, we have not come to argue that anyone can form a definitive view as to whether the basis of the principle has collapsed or not.  Minds might differ in relation to that, your Honour.  That is another large debate; it is one on which members of this Court have ‑ ‑ ‑

GUMMOW J:   Collapsed with the development of the modern bureaucratic state.

MR KENZIE:   Well, your Honour, it had not collapsed because of the development of the modern bureaucratic state until recently.

GUMMOW J:   You look at the volume of the Commonwealth statutes year by year, in very recent times it is one slim volume.

MR KENZIE:   I accept that it ‑ ‑ ‑

GUMMOW J:   Now, it is six or seven volumes a year.  It suggests something is going on.

MR KENZIE:   It is a microcosm of life, your Honour, like everything else.  It is getting more complex.

GUMMOW J:   Yes.

HAYNE J:   But one of the things that is going on is that it was seen necessary in the Police Service Act to provide explicitly for the subject of removal.  It was not sufficient to simply say a police officer or some police officers hold office at pleasure.

MR KENZIE:   No, and ‑ ‑ ‑

HAYNE J:   So that statute has intervened, have we not travelled a very long way from the “at pleasure” principle that yes, forms part of the historical background that the well-informed observer may be aware of.  But in the end, is not this power to remove to be exercised having regard to the scope and objects, et cetera.

MR KENZIE:   Well, your Honour, one needs to reflect on the fact that you have a statutory intervention in relation to one aspect of the “at pleasure” principle, that is, dismissal.  Why do you have that intervention, and you have ‑ ‑ ‑

HAYNE J:   Because you have a further intervention preceding it, namely, specification of a period for the holding of office, understanding as I do, that you say that is qualified in the various respects we have been debating.

MR KENZIE:   But also provides an explanation for its presence, your Honour. Why is there a statutory intervention in relation to this? It is a statutory intervention which exists in circumstances where Parliament wanted to erect a system of contracts; it wanted to erect a contractual regime for the purposes of dealing with its senior officers, senior executives. Whilst it wanted that regime to be contractual and to give rise to obligation, the one thing it did not want to do was to erect that regime and give it a status whereby the term of that contract could be regarded in any way as determinative of the individual’s right. The Act trumpets this, your Honour. In section after section, there is a subordination of the contractual regime to the regime in relation to appointment. Section 61 explicitly does so; section 40 ‑ ‑ ‑

McHUGH J:   Yes, but your argument comes to this, that section 40 and section 51 are expressed in a way that was completely unnecessary because the point that you seek to achieve could have been achieved by simply saying, “Subject to this Act an executive officer holds office at pleasure”.

MR KENZIE:   Your Honour, those words could have been used.

McHUGH J:   Well, they were not.

GUMMOW J:   They were not.

MR KENZIE:   No, they were not.

GUMMOW J:   They might have caused a fuss in the Legislative Council.

MR KENZIE:   They were not but, your Honour, what was happening was that they were erecting a contractual system and qualifying it.  That is what they were doing.  The fact that they did not use the words “at pleasure”, they were simply ‑ ‑ ‑

GUMMOW J:   See there is another view about all this.  This “at pleasure” principle may be very hostile to the notion in the modern day of an effective and efficient system because it is extraordinarily destructive of morale, at the highest level.

MR KENZIE:   Well, your Honour, one could debate that.

GUMMOW J:   Of course.

MR KENZIE:   One could have a discussion as to whether the “at pleasure” principle was supportive of efficiency or democracy ‑ ‑ ‑

GUMMOW J:   I am just referring to section 8(2), that is all.

MR KENZIE:   But it may or may not be, your Honour, is the answer to that.  It may or may not be.  Ultimately, your Honours, something has to be done about the principle in this regard.  It can be discarded if the legislation makes it clear that it is safe to do so if there is an implication, or it can be recognised as part of the background but modified in specific respects, or abrogated in part.  The Court of Appeal in this case said it had been abrogated in part because the legislation dealt with an aspect of the “at pleasure” principle and modified it.  It certainly modified it because it modified it, for example, in terms of its effect.

Yes, there is a right to dismiss at any time, but the consequences that would otherwise flow at common law do not flow because there is a statutory regime in section 53.  But that does not – any more than does the introduction of section 51 – indicate that the principle is out the window for the purposes of statutory approach.  That is no more than a reflection of the argument accepted by this Court in Kaye v Attorney‑General, where the Court very clearly stated that if you had a statutory regime which, for example, provided for a system of appeals from a dismissal, that did not mean that the “at pleasure” principle was set aside.  It meant that it was relevantly qualified.  The system had been carefully enshrined in statute but the principle still underpinned it.  It is no different here, in our respectful submission.

When you come to those words what is the court to do when it looks at those words “at any time”.  Those words can be seen – and our friend has been at pains to say this – you can make them do all sorts of work, but what is the court to do when it sees legislation that has been enacted in relation to a police service which has been historically and habitually said to be affected by the principle ‑ ‑ ‑

GLEESON CJ:   It is not so much the words “at any time” that matter, because those words appeared in Ridge v Baldwin.  It is the words that are missing that matter, “in what circumstances”.

MR KENZIE:   Your Honour, the Act provides the only circumstances, and what it needs is a confluence of action between the Commissioner, the Minster and the Governor.  That is what the Act stipulates.  It does not stipulate, as was the case in the Public Service Act (Cth) considered in Barratt that there needs to be anything done at any stage.  It does not stipulate that there needs to be a report.  It does not stipulate that matters have to go off and be referred to a board for comment, like the old 1990 Act did before it was streamlined after Wood.  It simply requires that the Commissioner recommend the Minister backs him or her in and the Governor does it.  It does not stipulate any substantive step along the way when those individuals are, or the Crown - the Governor is acting.  That is the substantive step which can take place at any time.

GLEESON CJ:   I think you told us that the current form of the legislation specifically states that the person can be removed for no reason, is that right? 

MR KENZIE:   It was amended after Justice Simpson’s decision.

GLEESON CJ:   But is that what it now says?

MR KENZIE:   Yes, I think it ‑ ‑ ‑

HAYNE J:   Or any or no reason and without notice was what we were told.

MR KENZIE:   Yes, your Honour.

GLEESON CJ:   So it is the words “without notice”.  I was going to say, if those words had not been there it would still be the case that a person who was not entitled to know the reason for the removal could still have got some benefit from saying “I need the money to send my children to hospital”, or whatever the case may be.

MR KENZIE:   Yes, your Honour.

GLEESON CJ:   Or “please delay this for two weeks”.

MR KENZIE:   Yes, your Honour.  Your Honour says those words “at any time” are not necessarily the most significant, and maybe one needs to look at the absent words.  But the “at pleasure” principle has been described in many ways over the years, but it has very frequently been described by this Court and other courts as a principle which involves the capacity to dismiss at any time.  This Court did not hesitate, back in O’Rourke v Miller, to read those words “at any time” found in a statute as giving rise to a right to dismiss without notice or without hearing at all.

GLEESON CJ:   Is your argument that section 53 exclusively defines the rights of a person who has been removed?

MR KENZIE:   Yes, 52 and 53, your Honour. 

GLEESON CJ:   And what does section 53 have to say about the case of a person who has been invalidly removed?

MR KENZIE:   Well, your Honour, section 53 in its terms says in subsection (1):

This section applies to:

(a)an executive officer who is removed from office under section 51 and who ceases to be an executive officer as referred to in section 51(4) ‑ ‑ ‑

McHUGH J:   You seem to say that there can never be a case of an invalid removal.

MR KENZIE:   Well, there could be a removal that was invalid because the steps that were required to be taken under section 51 could be demonstrated not to have been taken, your Honour.

GLEESON CJ:   But it is a general principle of employment law, is it not, that if an employer in breach of contract purports to dismiss an employee, the employee is effectively dismissed but has a right of action for damages for wrongful dismissal?  You cannot get specific performance in a contract of employment.

MR KENZIE:   No, that is so.

GLEESON CJ:   You cannot force yourself on an employer who does not want you.

MR KENZIE:   No.  If we were operating outside the statutory world and in the world of employment and there was a dismissal of an employee who had a fixed‑term contract and that fixed‑term contract was breached during its term, that fixed‑term contract not providing either relevantly for - or in circumstances where there was no cause but cause was required and the like, that would sound in damages, and that happens every day.  If the contract provided for a period of notice but the employee was dismissed on shorter notice or no notice, then the employee would have contractual rights.

GLEESON CJ:   But how does this statutory scheme relate to that general principle of employment law?  Suppose there is, for whatever reason, an invalid removal from office.  What role does that leave section 53?

MR KENZIE:   Your Honour, that would raise the question as to whether 53(1)(a) is to be read as confined or relating only to valid removals as opposed to valid or purported removals.  If it related to valid or purported removals, it would constitute a code for compensation in relation to anyone who was affected or purportedly affected by section 51 action.  If that not be the case, then one is in the arena discussed in Quin where you are dealing with, for example, a failure to observe the rules of natural justice.  Administrative law remedies would be available and you would not be able to get relief unless you could point to an independent entitlement to relief.  That is the approach that the court recognised in this case.

GUMMOW J:   Is that right?  Should one not look at McVicar 83 CLR 521 at 528, for example, which adopts the dismissal methodology of the common law to these statutory situations of office holders? I am looking at McVicar at 528, about line 10:

Upon this footing the case for the appellant is that the refusal to allow him to perform his duties and receive his remuneration as an officer . . . was without justification and amounted to a wrongful dismissal.

Then there is a citation in particular of Lucy v Commonwealth 33 CLR 229 at 248 which I think contains a clear explanation by Justice Higgins.

MR KENZIE:   Yes.  Your Honour, could I submit that that ‑ ‑ ‑

GUMMOW J:   This is an old problem with statutory office holders and the principles of unjust dismissal have been adapted.

MR KENZIE:   But that must be affected, we do submit, by the statutory scheme in which we are operating here.

GUMMOW J:   Sure.  The hypothesis is that 53 does not meet the case because it is a special regime for compensation in cases of valid removals.

MR KENZIE:   Accepting that that is the basis on which we are working, your Honour, the aspects of the scheme that I had in mind were the aspects of the scheme discussed by the Court of Appeal which recognised not only section 53 but the complete subordination of the contractual regime.  So what you are dealing with is the regime again which has your contractual rights at this level, your statutory rights up here.  So, accepting what your Honour has to say, once you get away from contractual relief, you are inevitably driven up the line to the statutory relief and effectively you are driven back to Quin, in our respectful submission.  Indeed, I am anticipating the last submission.

GUMMOW J:   There is some principle of no damages in administrative law for denial of natural justice.

MR KENZIE:   Quin would tell you that the denial of natural justice will not give rise to damages unless you can find an independent basis.

GUMMOW J:   The argument against you is that there is such a basis through these other cases.

MR KENZIE:   Yes, your Honour, and the argument in response is that that has to be considered against the particular statutory background which subordinates the contractual regime.  Damages in the nature of wrongful dismissal are damages which reflect your complaint about being wrongfully dismissed.

GUMMOW J:   There is then a big question about the measure of damages. 

MR KENZIE:   And section 51 again, your Honour, all of that and ‑ ‑ ‑

GLEESON CJ:   Justice Simpson quantified damages without taking any account of section 51.  She quantified damages on the assumption that he would be there for another five years.

MR KENZIE:   She did.  Her Honour rejected specifically our submissions that the Court of Appeal ‑ ‑ ‑

GLEESON CJ:   I am sorry, for the rest of the five years.

MR KENZIE:   Yes, your Honour, two or three years.  Her Honour rejected our submissions ‑ ‑ ‑

GUMMOW J:   And your complaint about that has not been adjudicated in the Court of Appeal.

MR KENZIE:   No, your Honour, that is so.  We raised those matters again before the Court of Appeal but the Court of Appeal found that section 51 was the answer and the answer was the answer and ultimately did not get around to dealing with that matter.  So, your Honour, I have strayed a little into the last matter, the damages matter – and your Honours, I see the time.  Could I deal as briefly as I can with some of the aspects of the damages matter.

It is necessary in relation to that area to say something about the course of the proceedings.  If your Honours go to application book page 160, your Honours will see that the order that was made and the order that the Court of Appeal was addressing was order 2 at page 160, line 10.  Justice Simpson made a declaration relating to the contract in the following terms:

that in terminating the Plaintiff’s contract of employment . . . the First Defendant acted contrary to the requirements of the Police Service Act, 1990 and in breach of that contract.

So her Honour made an active order that we had breached the contract and, of course, there were fundamental difficulties with that order, as we submitted.  The most fundamental of those difficulties was that that order proceeded on the basis that there was actually an entitlement, not only an entitlement to complain about the breach of contract because contractually the applicant had a term, had a contract with an enforceable term, but not only that, the applicant was proceeding on the basis and the order proceeded on the basis that that term was a fixed and full five year term.

GLEESON CJ:   But putting aside special statutory provisions about reinstatement and the like, where an employer repudiates a contract of employment by wrongfully dismissing an employee, that is an exception, is it not, to the general rule that an unaccepted repudiation is a thing writ in water?

MR KENZIE:   Yes.

GLEESON CJ:   Leaving aside special cases, ordinarily that is a circumstance in which the employee has to accept the repudiation and is relegated to his or her right to damages for wrongful dismissal.

MR KENZIE:   Rights to damages, yes, which are contractual.  Yes, your Honour, damages for wrongful dismissal based on the repudiation of the contract and for circumstances that, other than exceptional circumstances, involve the employee in having to accept the repudiation, yes, your Honour.

CALLINAN J:   With a duty to mitigate?

MR KENZIE:   With a duty to mitigate and all of the above and obviously damages assessable on the basis of all of the terms of the contract, including the ‑ ‑ ‑

CALLINAN J:   Having regard to contingencies in any assessment.

MR KENZIE:   Yes, your Honour.  Now, the problem here was that her Honour had proceeded in the manner that was indicated and what the Court of Appeal was doing – I am sorry, your Honours, I neglected to do one thing.  I should for completeness and with very many apologies for the form show your Honours two pages of the transcript of proceedings before her Honour Justice Simpson.  I will do this very briefly.  It is pages 61 and 62 and I apologise for the – it was the only copy that we could find.  We tried to find a clear copy.

GLEESON CJ:   We do not have those in our application book?

MR KENZIE:   The associates have those, your Honour.  We found these last night because it became apparent that there was to be some discussion about the course of the proceeding.  Mr Tobin appeared for the applicant before her Honour and he attempted to put in context what they were seeking to do.  At page 61, where it is underlined, your Honour, he referred to the declarations, but they were declarations and obviously were not intended to give rise to any form of result because the applicant did not want a result which saw him back in a position.  What he wanted was what followed.  He wanted to get declarations so as to provide the basis for monetary relief, as was set out in the paragraphs below 35.  As he said in line 49:

Consequent upon that, in our contention, is not that the contract be restored, rather that the contract can’t be restored.  My client does not seek specific performance of the contract, he seeks damages and that course of action is sanctioned by –

he mentioned Ainsworth.  Then over the page her Honour asked whether that might mean reputational damage and Mr Tobin said:

No.  We only claim contractual damage –

Again, in the underlined part at lines 15 or 16:

the first order sought which is a declaration of invalidity with regard to the order in council clears the way, in our submission, for your Honour to consider the damages issue and that your Honour would consider the damages issue in the context of the ordinary law, that is a breach of contract and the settlement of damage occasioned by the breach to put the plaintiff back into the position he would otherwise have been in –

which her Honour responded to.  Her Honour had made the declaration.  Her Honour then made order 2.  Order 2 had the problems that were identified in the Court of Appeal judgment, and those problems were dealt with in paragraphs 74 and 75 at pages 168 and 169 of the judgment, your Honours, where the Court of Appeal talked about the debate about the relationship between “fixed term” and “the Crown’s right under the principle”.  He referred to your Honour Justice McHugh’s judgment in Suttling:

This debate has no bearing on the present case, because the respondent’s Contract went out of its way to negate any suggestion that it was fixed as regards it term –

That is because it could not be fixed as regards its term –

Not only was the Contract silent as to any such provision.  More to the point, the Act stipulated most clearly that an executive officer’s term of office was not (ie could not be) fixed by the contract of employment –

reference to Suttling in this Court, where Justice Brennan said:

If the relationship is contractual, the contract must be consistent with any statutory provision which affects the relationship . . . To the extent that the statute governs the relationship, it is idle to inquire whether there is a contract which embodies its provisions.  The statute itself controls the terms of service.

Our submission was that the statute was controlling.  His Honour went on to say:

For this reason it was, in my view, not open for any declaration of breach of contract to have been made.  Nor should the case have proceeded as if contractual damages were to be assessed as on a wrongful dismissal.  An employee’s action for damages for wrongful dismissal is at bottom a claim based on beach of the employer’s promise of work for a fixed term or, alternatively, for an indefinite period terminable only upon due notice.  This contract had no such conditions -

because it was regulated by statute, because Parliament said, “Although we are going to create a regime of contracts, we are not going to have them provide the basis for anyone coming to court and saying, ‘What you call a fixed contract entitles me to come to court and get relief on the basis that it’s really fixed’.”  That is clear, in our respectful submission.  Her Honour’s judgment was flawed.

That was recognised by the Court of Appeal.  There is an argument as to whether, your Honour, section 53 is a code, that is, applying to valid and invalid action under section 51.  If it is a code it is a code.  If it is not a code, in any event it represents Parliament’s statement of the worth of the appointment or position in circumstances where it can be dispensed with at any time, and it makes it impossible to erect by some back door or alternate means an order for damages for five years, which is what the applicant ended up with at first instance, and which his appeal to this Court seeks to restore.

McHUGH J:   Except as I put to you earlier, the proper way of looking at it, given section 53, is that if your argument is wrong, he has remained in office until 5 February 2005.

MR KENZIE:   Yes, your Honour, except he has not - he sought relief on the basis that he has been deprived of the right to earn his contractual entitlements, and that is the basis upon which his claim was made and dealt with, as a breach of contract, not as a recovery for money earned.

McHUGH J:   The Crown would not dispute - if this Court held that he remained in office till 5 February 2005, I find it impossible to think that the Crown would not pay his salary entitlements less the moneys he received.

MR KENZIE:   I think the Court could very safely assume that the Crown would go along with anything that the Court did, your Honour.

GLEESON CJ:   Was there not someone else appointed in his place?

MR KENZIE:   Yes, your Honour, there was ‑ ‑ ‑

GLEESON CJ:   Well, there were not, I presume, three Assistant
Commissioners?

MR KENZIE:   No.  All a consequence of the way in which the applicant conducted the proceeding, your Honour, and that is why I took your Honours to the transcript.  He has sought the declaration, but he has sought it for a particular purpose and that purpose is misconceived because it was seen to be an avenue to general contractual damages.  The applicant has never asserted that he has actually been in office.  Indeed, he sought damages ‑ ‑ ‑

CALLINAN J:   Well, no, he did assert it in his claim.  At page 2, the declaration (b):

the Defendant failed to accord to the Plaintiff procedural fairness thus rendering the decisions to terminate the contract  . . .  null and void and of no effect. 

So there was no doubt at that stage.

MR KENZIE:   That is true.

CALLINAN J:   It is unmistakable.  He says he is still in office.

GLEESON CJ:   Well, that is expressed as a decision to terminate a contract.

MR KENZIE:   Yes, and thereafter the applicant sought compensation from ‑ ‑ ‑

GUMMOW J:   But he could not perform a contract unless he was an officer, is that not right?

MR KENZIE:   That is right.

GUMMOW J:   That is the way it works.

MR KENZIE:   That is the way it works, your Honour.  In any event, he conducted his case on the basis that we have indicated.  He sought those declarations.  He did, as your Honour Justice Callinan indicates, he ran his case, got and sought his declaration.  He went to SOORT and got compensation which was payable only to a person who accepted that they had been dismissed and has and retains that money.  The financial issue between the parties at this stage of proceedings, your Honour, we never took the point about SOORT.  It would have been open to us.  We never took that point.

GUMMOW J:   What, the election point?

MR KENZIE:   The approbation and reprobation point, your Honour.

GUMMOW J:   Yes.

MR KENZIE:   We never said, look, you cannot seek a declaration on the one hand and get money under SOORT on the other.  That point, as the Court of Appeal observed, was not taken.  What we did say is you are entitled to money under SOORT because we think you have been validly dismissed and there is no dispute about that.  But where we part company is when you assert that you have an overarching entitlement to contractual type relief over and above section 53 and, we submit, there is not such an entitlement because of our primary submissions about section 51.  But I have to accept that if your Honours accepted that there was a flaw in her Honour’s reasoning in relation to the acceptance of a five year term, the Court of Appeal did not agitate all of the issues that would be associated with an alternate approach to contract.

GLEESON CJ:   You mean that if we agreed with everything that Justice Simpson concluded except the quantification of damages, the matter would have to go back to the Court of Appeal?

MR KENZIE:   Well, it has never been dealt with, your Honour.

GLEESON CJ:   But there is an anterior question and that is that what Justice Simpson did and all Justice Simpson did was quantify damages for breach of contract.

MR KENZIE:   Yes.  Our friends seek a restoration of Justice Simpson’s order, as it were, but that would involve re-erecting an order that was based on a fundamentally fallacious basis, your Honour.  That anterior question has to be addressed.

HAYNE J:   Is one of the issues that remains undetermined in the Court of Appeal whether any discount is to be applied to the product of wages by unserved term?  In particular, discount for vicissitudes?

MR KENZIE:   Her Honour took all of those considerations into account.  Her Honour looked at the only evidence that ‑ ‑ ‑

HAYNE J:   Is it a vicissitude that is relevant to consider the possibility of lawful termination?

MR KENZIE:   Yes, your Honour.

HAYNE J:   Is that relevant for consideration in a case where there has been termination without proper procedures if it had been established that there was proper cause for termination?

MR KENZIE:   If it was established that there was proper cause.

HAYNE J:   If it had been established at trial that there was a proper cause for termination, and I am not sure that it was, would that have been a matter that ordinarily would have been taken into account in assessing the damages?

MR KENZIE:   It would certainly be one of the considerations that would be open.  At common law, there would be a variety of circumstances that would be considered.  At one end of the scale, you can be dismissed without notice for ‑ ‑ ‑

HAYNE J:   Wrongdoing.

MR KENZIE:    ‑ ‑ ‑ wrongdoing.  That is at one end of the scale.  Further up the scale there could be cause which does not amount to wrongdoing.  Someone else could be preferred to you; all of these things ultimately have an element of the personal in them.  All cases may be affected by considerations personal to the individual.

HAYNE J:   But those would be matters that, if they are to be taken into account, would have had to be established at trial.

MR KENZIE:   And your Honour, there was some cross-examination in evidence about that.  There was evidence as to Mr Jarratt’s attempts at ‑ ‑ ‑

GUMMOW J:   Was there any cross-examination of Mr Jarratt on his affidavit of 26 November which appears at page 26, and in particular, his account of the meeting of 27 July?

MR KENZIE:   No, your Honours.  We called no evidence ‑ ‑ ‑

GUMMOW J:   Which is not entirely consistent with what Commissioner Ryan was saying in his correspondence with the Tribunal.

MR KENZIE:   I understand that, your Honour.  No, that is clearly so.  We called no evidence, we did not cross-examine Mr Jarratt in relation to the substance of what he was saying, and her Honour proceeded accordingly.  Her Honour also proceeded on the basis of evidence as to what he had been doing since he had left the position in a substantive sense, and looked at those matters and came to the view that he was, at the end of the day, entitled to the sum that was awarded, based on the balance of the term.

GLEESON CJ:   That could produce an odd outcome; it could produce the result that both sides at trial took their stand on an erroneous basis.  A possible point of view, I am not saying it is right, but a possible outcome is a conclusion that at trial you took your stand on the basis that you were entitled to dismiss at pleasure and were simply not going to be drawn into the question of justifying the dismissal.

MR KENZIE:   Yes.

GLEESON CJ:   And your opponents took the stand that their rights were contractual, and made a claim for damages for breach of contract.

MR KENZIE:   And the ships truly passed in the night on that basis, your Honour.  Both missed the dock.

GLEESON CJ:   Yes, well both ships might have been – they could both have been in the wrong lane.

McHUGH J:   Yes.

HAYNE J:   It means that if there is a deficiency in the evidence, it falls at the feet of the party in whose interests that evidence might have been led and relevantly, to establish that there had been a cause for termination would fall at your feet.

MR KENZIE:   I do not contend to the contrary, your Honour.  We took our stand in the proceeding and we took it against a background that I think has been fairly well revealed by the submissions that we have made here.

CALLINAN J:   Mr Kenzie, if an officer is removed under section 51, there must necessarily then be a termination of his contract.  There is a contract; it is not a mere matter of form.  So that inevitably the contract goes.

MR KENZIE:   That is true, your Honour.

GUMMOW J:   Because he is no longer an officer.

CALLINAN J:   The language of contracts used by the appellant in the pleadings is not inappropriate in that respect.

MR KENZIE:   Your Honour, of course that in a sense puts the officer in the same position as someone who in private industry has his or her contract interfered with by repudiation, but the difference between the applicant here and the applicant in private industry is that in one way or another the individual will have recourse to that part of the contract which is of relevance in determining the overall rights, namely, an entitlement to insist on the maintenance of that contract for a particular term.

CALLINAN J:   It is rather like a Sam Goldwyn oral contract:  not worth the paper it is written on.

MR KENZIE:   But, your Honour, the Court of Appeal talked about this under the heading I think of injustice or perceived injustice.  Again, it depends on where you start.  If you start on the basis that if you look at a Crown servant going into the service of the Crown and if the matter is unaffected by statute, the Crown servant goes into the service of the Crown and the expectation is going to be that he is going to be treated as a servant of the Crown.

McHUGH J:   One possibility is that the contract may have been terminated but the office has not.  After all, section 41(2) makes it plain that the contract of employment is independent of the office.

MR KENZIE:   And subordinate.

McHUGH J:   It can be made before or after the appointment of the officer.

GLEESON CJ:   The right to remuneration is fixed by the contract, not by the statute.

MR KENZIE:   As observed by the Court of Appeal as one of the difficulties facing those who would say, “Well, there is an avenue here to recovery for damages in the nature of wrongful dismissal or breach of contract”, the Act casts those things in contractual terms and says, “Here are your rights but the one thing you can’t do is proceed on the basis that you’ve got a right to sue because it’s been interrupted because you’ve got a new term that’s been interrupted”.

McHUGH J:   I was assuming that the remuneration was fixed by the contract but it just occurs to me, Mr Kenzie, that that may not be right.  Because he is a statutory officer within the Tribunal, it may be that in some way his salary is the product of statute operating on the office which he holds.

MR KENZIE:   There is no doubt that the way in which it works is that the Statutory Offices Remuneration Tribunal fixes a range and that range is then able to be dealt with by the CEO, in this case the Commissioner, who determines during the course of the contract where in the range the individual stands.  Your Honour the Chief Justice asked a question about this yesterday.  I have neglected to deal with that.  It is partly by way of answer to Justice McHugh’s question.  Page 33 of the appeal materials relates to the process of providing the salary pursuant to a decision of SOORT.  This is a reflection of section 24 of the Statutory and Other Offices Remuneration Act.  Section 24A of the Statutory and Other Offices

Remuneration Act 1975 includes amongst those packages for chief executives and senior executive office holders a definition of “senior executive office holder” as meaning:

the holder of a position referred to in Schedule 2 to the Police Service Act 1990.

That is section 24A.  Pursuant to that Act, the way in which the system works, your Honour, is that SOORT determines a range.  You can see from page 33 that SOORT:

determined that CEO’s could determine a level of increment within a salary range consistent with work performance –

and then the following pages involve a series of determinations as to where Mr Jarratt fell within that range.  So the CEO says, “Well, you are in the range.  How are you going?  Where am I going to place you?”  And then later on SOORT will make another determination, your Honour, and the thing will start again and those pages reflect that.  As to the place of remuneration in the scheme of things, your Honour, the matters to be dealt with in the contract of employment pursuant to section 42(1) of the Act:

The matters to be dealt with in a contract of employment between an executive officer and the Commissioner include the following:
. . . 
(b)      the monetary remuneration and employment benefits for the executive officer as referred to in Division 5 (including the nomination of the amount of the remuneration package –

et cetera.  So this is why the Court of Appeal correctly identified the remuneration entitlements and the like as essentially being contractual and, therefore, inevitably led you to have to deal with the scheme of the Act.  Your Honours ‑ ‑ ‑

GLEESON CJ:   Thank you, Mr Kenzie.  Yes, Mr Einfeld.

MR EINFELD:   May we deal with the last matter first, your Honours, relating to the damages questions.  May we correct perhaps one misapprehension, the summons in its admitted form sought not just relief with respect to breach of contract but in paragraph 4 on page 2 of the application book a declaration to the effect that (a) the termination of the contract was wrongful but also (b) the statutory requirements were also not met, so that there was expressly a request for declaratory relief beyond merely the scope of the breach of contract as may have been suggested just recently by our learned friends.

GLEESON CJ:   And then there is a claim for damages.

MR EINFELD:   Then there is a claim for damages.

GLEESON CJ:   Damages for what?

MR EINFELD:   Two matters, damages for breach of contract and damages for the wrongful dismissal by statute, bearing in mind two factors.  Firstly, the agreement by the parties noted, as we pointed out yesterday in the judgment of the President at page 184 of the application book, to the effect that if the court was satisfied that there had been a wrongful dismissal so that Mr Jarratt was wrongfully deprived of the balance of the fixed term of his office as fixed by the statute, the way in which the parties would proceed, his Honour noted, both at trial and again on appeal, would be that the measure of those damages would be as on assessment for damages for breach of contract.

GLEESON CJ:   He was wrongfully deprived of his office on your theory because they went about it the wrong way.

MR EINFELD:   Yes.

GLEESON CJ:   When you are assessing damages for that, how do you allow for the possibility that next time they might go about it the right way?

MR EINFELD:   The question, if we may say so with great respect, in the circumstances of this case is an academic one and not the right question for the reasons I will indicate in a moment – indeed, do so now.

HEYDON J:   But is not answer to the theoretical question that where no hearing has been given you cannot assume the result which would flow if a proper hearing were given?  Mr Justice Megarry in John v Rees pointed out that there are lots of unanswerable cases that were answered ‑ ‑ ‑

MR EINFELD:   Yes, your Honour.

HEYDON J:   ‑ ‑ ‑ open and shut cases which were not open and shut.

MR EINFELD:   Open and shut, indeed.

HEYDON J:   So it is wrong, is it not, would you not say this as a submission, to discount for the possibility that a proper hearing would have led to a dismissal?

MR EINFELD:   Yes, certainly, and there is an additional reason in this case and it is as follows.  We led evidence at trial of the entitlements for breach of contract on the agreed basis, being the measure of remuneration which would have been achieved by Mr Jarratt for the balance of his fixed term.  The respondent chose to lead no evidence and ask no questions direct to vicissitudes, made no submission to the court to the effect that any award to be made by her Honour should be discounted for vicissitudes, accepted that the concession made by Mr Tobin – in the second page of the transcript that has been handed up, that there was required to be, and would be, a deduction – that it was appropriate to allow for earnings of the Deputy Commissioner since his purported dismissal.  So a discount was given on account of earnings.

His Honour Justice Callinan is right.  In the ordinary course of assessment of damages of course it would have been necessary to take into account mitigation of damages, had that become an issue at the trial.

HEYDON J:   But the judge did that.

MR EINFELD:   Quite.  That is the point.  So that the matters that have fallen from our friends about erroneous basis of the calculation of damages as for breach of contract go by the board, the ships passing in the night passed for a very good reason; that is, we propounded a case, it was accepted, her Honour proceeded upon that basis without demur, no point was taken about it on appeal, no cross-appeal or notice of contention was filed either there or here ‑ ‑ ‑

GUMMOW J:   Wait a minute.  There is a ground of appeal, is there not?

MR EINFELD:   I am sorry, your Honour?

GUMMOW J:   The last ground of appeal in the Court of Appeal deals with these questions, does it not?

MR EINFELD:   Not ‑ ‑ ‑

GUMMOW J:   There may be a clear answer to it, I do not know.  But I do not think you can say it was acquiesced in after the event.

MR EINFELD:   Can your Honour just pardon me, I will just turn it up.

HEYDON J:   Page 128.

MR EINFELD:   That was addressed to the Rankin point, your Honour.  That was not addressed to the question of quantification by reference to vicissitudes of life or, in this case, of employment or the like.  The point that we wish to make is that in answer firstly to Justice Callinan about mitigation, it was an issue that was accepted.  As we say, in the passage of the transcript that was just handed up, page 62, lines 39 and following, the concession was made that allowance had to be provided for earnings.  That was done.  The question raised by Justice Hayne as to vicissitudes of life was a matter that was never the subject of cross‑examination or, more importantly, evidence led on behalf of the Commissioner to suggest that there ought – and no submission was made to the effect that some discount ought be brought to bear for such matters.  We made the submission yesterday having regard to the nature of the agreement as to the basis on which damages ‑ ‑ ‑

GLEESON CJ:   Leaving aside vicissitudes of life such as the possibility that Mr Jarratt might have become ill, what about the vicissitude of section 51?

MR EINFELD:   That is equally – or other early termination.  It was not propounded, your Honour, that the measure of damages ought be reduced by reason of the fact that the Commissioner would have just gone back and ‑ ‑ ‑

GLEESON CJ:   But on this point and whichever way you turn in this case, you have to form a view as to what are the circumstances that might lead to termination.

MR EINFELD:   Indeed.  Can we come to that in a moment.

GLEESON CJ:   Your theory was and is, is it not, that it would have to be for cause, for breach of contract by your client or for incapacity on the part of your client?

MR EINFELD:   We did not in fact pitch our mark so high, your Honour.  We would accept that matters, for example, those that were adumbrated this morning ‑ ‑ ‑

GUMMOW J:   Well, take the Barratt v Howard situation.

MR EINFELD:   Yes.

GUMMOW J:   That sort of incompatibility, would that be available here?

MR EINFELD:   Yes.  Yes, we would submit that a suggestion that we would be replaced by a preferable candidate would be the very sort of matter upon which a deputy commissioner, having regard to all of the matters we discussed in-chief yesterday, would be certainly entitled to notice and to be heard.

GLEESON CJ:   No, that is not the question.  It may be a question that arises later, but the question is this.  Would the power of removal under section 51 be available to be exercised at any time, perhaps or perhaps not after notice, on the basis that somebody better or somebody who was regarded by the Commissioner as better, had turned up on the horizon?

MR EINFELD:   I think we would accept that the answer is that the power was available to be exercised in such a circumstance.  Needless to say, we would then add in such a circumstance we are entitled to have notice and be heard.

GLEESON CJ:   Quite, but in such a circumstance at any time?

MR EINFELD:   Yes.  The power, subject to the provisos that have been discussed this morning, good faith, and in effect for the purposes of the statute about which we will say something in a moment, if we may.  Your Honours, can I just finish what we wanted to say about damages and then go back to, as it were, the beginning.  What we were saying was that the point that our learned friends raised this morning suggestive of the possibility that matters might have to go back for reassessment, we respectfully submit, just do not arise in this case at all, having regard to the history of the litigation.

So far as the transcript is concerned, that was provided this morning, it is clear from its terms, in our submission, that what senior counsel for Mr Jarratt was there identifying to the Court was the fact that specific performance was not sought for the very reason given by the Chief Justice this morning, namely it would simply not be available. The decision was invalid. It would not have been possible to enforce the contract of service. That simply meant that the only available remedy was damages and that was the remedy appropriate to be sought, and that is the very circumstance that led to the acceptance by the respondents of the proposition that provided we established (a) that the “at pleasure” principle did not operate; (b) that led to the invalidity of the recommendation and therefore, the approval or removal itself, so that the fixed term otherwise provided by section 40 was interfered with, the measure of damages would be as we have discussed. So much is what was being asserted by Mr Tobin in the transcript.

Now your Honours, I think that, in effect, deals with the damages issues, save for one last matter and that is we, of course, respectfully embrace what fell from his Honour Justice McHugh earlier that the term has now completed, has now finished, and in the event that the amount awarded by her Honour was to be held to have been on an erroneous basis in terms of the matters that were put, nevertheless, the term has now expired and the sum is readily measurable.  We were entitled to and are entitled to retain an award of damages for the balance of the term which is the same as that awarded by her Honour.

May we return then to some of the matters that were raised yesterday as expeditiously as we can.  The respondent’s recitation of the old authorities, if I may describe them, such as Fletcher v Nott, O’Rourke v Miller, Kaye v The Attorney‑General and the like, culminating, our friends said, in the decision of this Court in Coutts ‑ ‑ ‑

McHUGH J:   The statement of Chief Justice Gibbs in O’Rourke v Miller is not against you; it is rather in your favour, is it not?

MR EINFELD:   Quite.  On one view it was obiter but to any extent it is in our favour, but the recitation of those authorities by our friends said to resolve this appeal, in fact, we submit, does not provide any solution to the present problem at all.  It merely is the platform from which and out of which the present problem springs.  It is not in point to say that 50 or 100 or however many years ago some of the matters we are now raising were considered, culminating in the decision in Coutts.  It is for that reason that we submit that the Court ought now review the formulation recited by the Chief Justice in Fletcher v Nott to which Justice Gummow referred yesterday in argument and in the course of discussion with our learned friends.

GLEESON CJ:   It is not inconsistent with your argument, is it, that there may be circumstances in which, notwithstanding a general requirement of procedural fairness, a person can be instantly dismissed?  As I think Mr Kenzie said, you do not have to have a very vivid imagination to think of circumstances that anybody would agree would call for the peremptory dismissal of a deputy commissioner of police.

MR EINFELD:   Undoubtedly that is so.  The answer to that proposition is fairly simple.  It is allied with the submission made today reflected in something that fell from your Honour the Chief Justice a little earlier to the extent that your Honour would not take much convincing that the prerogative “at pleasure” principle provided the background to the drafting of section 51.

GLEESON CJ:   No, explains it.

MR EINFELD:   Or explains it.  We would respectfully submit that that proposition ought be rejected.  The reason is simple enough to understand.  Were that prominent in the minds or even present in the mind of the draftsperson, it is almost impossible to understand why language would not have been used such as has been used in so many other New South Wales statutes ‑ ‑ ‑

GLEESON CJ:   Then what is your explanation of the insertion of a statutory power to remove at any time?  What is your explanation?

MR EINFELD:   Can I break it into two parts.  The explanation of the statutory power to remove is simply a statutory embodiment of the implication otherwise provided by the Interpretation Act ‑ ‑ ‑

GLEESON CJ:   What is your explanation of the statutory power to remove at any time?

MR EINFELD:   Again, it is a mere reflection of the identical language used in section 47(1)(b) of the Interpretation Act which was brought into effect three years earlier than the Police Service Act.  The point being that there are statutes – they are contained in our list in Annexure D to our submissions – which expressly, even as recently as the 1980s and, indeed, even in 1987, expressly use the expression that “nothing in this Act shall abrogate or remove the power at common law to” ‑ ‑ ‑

GLEESON CJ:   It is not just a power to remove somebody from office; it is a power to remove at any time from an office for a term.

MR EINFELD:   Yes, your Honour.

GLEESON CJ: Section 40 says you are appointed for a term, section 51 says you can be removed at any time.

MR EINFELD:   Yes, your Honour.

GLEESON CJ:   What is the relationship between section 41 and section 51?

MR EINFELD:   In our submission, there is really no mystery about that. It is simply section 40 fixes the term – and perhaps this is just to restate the effect of the sections, but section 40 fixes the term. By section 51, the Governor is made the repository of a power to dismiss, that is, not the Commissioner, nor the Minister, but the Governor. It is an embodiment of the principle of the seriousness of the office which is to be fulfilled by the office holder of the Deputy Commissioner’s office, as was discussed yesterday in a reflection of expressions that were used in Barratt v Howard by the Full Court. 

All that the combination and the relationship produces is, in section 36, the power to employ or retain, engage; section 40, the requirement for the fixing of a stipulated or fixed term; section 51, any removal is to be exercised by the Governor, as it is said, at any time, subject to the preceding procedural requirements, that is, section 40 fixes. But if there is to be a removal, there are a number of prescribed prerequisites that must be met into which, we say, are now to be imported the requirements of procedural fairness. Whether the sections could have been either better expressed or differently located is not in point, but we submit that that is the import and the relationship between the two sections.

McHUGH J:   But given the background against which section 51 was enacted, why does it not mean that despite there being a fixed‑term contract, an executive officer may be removed at any time?  It does not mean that it necessarily brings in the “with pleasure” principle or that you can remove for purposes outside the Act.

MR EINFELD:   Quite so.

McHUGH J:   You have to give the words “at any time” some meaning.

MR EINFELD:   Well, as we said yesterday, it is difficult to do so, for example, in section 41(4) of the Act.  It is very difficult to do so in the other statutes to which we took the Court yesterday, to which, in our submission, we do not now need to return.  What is the meaning to be given to the term “when a power is given to be exercised from time to time” or, indeed, where clearly the term is temporal and has a meaning quite unrelated to Crown service the words “at any time” are used, but they do not add anything because the power is there to be exercised at any time whether the Act says so or not.

Your Honours, we do invite the Court’s attention to the passage in the judgment of the Chief Justice which Justice Gummow discussed with Mr Kenzie yesterday.  May we just very briefly invite the Court to turn to Fletcher v Nott in an attempt to just quickly look at what the expression of principle is said to be and then we will attempt to provide the Court with a formulation more apposite to present time.  The passage to which Justice Gummow referred yesterday in Fletcher v Nott 60 CLR 55 was at page 64, about point 3 on the page, noting that what his Honour the Chief Justice was there doing was reciting the passage from Ryder v Foley in 1906 whereby it was said:

“it is an implied term in the engagement of every person in the public service that he holds office during pleasure, unless the contrary appears by statute.”

Your Honours, we submit that that formulation is inapposite for twofold reason at the present time.  One, because it gives primacy by its very terms to the “at pleasure” principle, which for the reasons we have explained at length yesterday in our written outline ought now properly be seen as an anachronism, and, in effect, that formulation puts the presumption now the wrong way round, but we do not wish ‑ ‑ ‑

HAYNE J:   In considering that submission, it may be useful to look at what Justice Dixon says at 77 of the same report.  His Honour, at about point 5 of the page on 77, identifies the question as being whether the making of rules and the making of the Police Regulation (Appeals) Act concerning removal by the Commissioner dealt with the power which his Honour otherwise identified as remaining in Governor in Council.  But his Honour says:

No statutory provision invests the Governor in Council with a power of removing members of the police force from office.  But, on the other hand, none takes it away.

That is to say, his Honour appears to treat the rule as one concerning the powers of Governor in Council that exist if statute has not dealt with or interfered with that power, but in the present case, removal by Governor in Council of these particular ranks of officer is dealt with by statute.

MR EINFELD:   Yes.

McHUGH J:   I do not know what you are worried about the passage in Fletcher v Nott for. The statute deals first of all with the term of office in section 40 and it deals with the power of removal in section 51. The Governor in Council’s power is not at large, it can only be exercised in the case of a deputy commissioner after there has been a recommendation by the Commissioner and after that recommendation has been approved by the Minister. It is far removed from Fletcher’s Case.

MR EINFELD:   We deal with it because the proposition was put by Justice Gummow yesterday and adopted by our learned friends and we wanted to suggest that, for the very reasons your Honour indicated, it is inapplicable in the present case, but may we add one further factor.  Not only does it reverse what, we submit, is the appropriate presumption in light of the development of the procedural fairness document, it put it in a manner which has now been reversed, in our submission, by the development of that doctrine.  But it also focuses in its proviso upon a contrary appearance by statute and we merely wanted to interpolate a reference to the proposition that the observation that it might – if that is to be drawn from that proviso – be ameliorated merely or only by statute – is not now one that can continue to be recognised.

In Ryder v Foley itself, Justice O’Connor, at page 449, recognised a broader basis for the exclusion of the operation of the “at pleasure” principle being by statute or in any other way and similar formulations have been expressed subsequently, notably by Justice Taylor in Reedman v Hoare 102 CLR 177 at page 181, and the matter was discussed at some length by Justice McHugh in Suttling in the Court of Appeal at pages 445 to 447.

HAYNE J:   Is not the point you make sufficiently made by saying that it is necessary to avoid an elision of two separate questions:  one, a question of power to remove where “at pleasure” considerations may, they may not intrude still, I do not know, but the second question which is not to be elided with it is questions about procedures attending removal.  Here the power to remove is statutory.

MR EINFELD:   Certainly so. Your Honour, we suggest that in construing a provision such as section 51 and, for that matter section 40, an application of the notion that the “at pleasure” doctrine remains and is to be incorporated within the statute, a proposition still propounded by the respondents, unless excluded by the statute in which they say in this case cannot be found such an exclusion, is no longer apposite and we would respectfully submit that in lieu of the Chief Justice’s formulation in Fletcher v Nott it would now be appropriate for the Court to approach the construction of these provisions upon the basis adopting the language of some of the more recent authorities that where the repository of a statutory power exercises that power so that it would adversely affect livelihood or reputation or other rights or interests, that person must afford procedural fairness unless, either by express words or necessary intendment, (a) a right to dismiss at pleasure is incorporated into the statute and, (b) the rights to procedural fairness are excluded. 

Our learned friend suggested yesterday in answer to I think a question from Justice Callinan that the prerequisites specified in section 51 of the Commissioner’s recommendation, firstly, and, secondly, the Minister’s approval were merely procedural and, to use his expression, without content.  Our submission is that that cannot be so.  The requirements have real and particular content, as we submitted, certainly so at the recommendation stage.  We have propounded that procedural fairness ought to have been afforded by the Commissioner at the recommendation stage.  Yesterday Justice McHugh suggested that we were focusing rather on the removal itself of the Governor.  May we merely point out that in our summons we sought ‑ ‑ ‑

McHUGH J:   I know.  In your summons you concentrated on the recommendation.

MR EINFELD:   Indeed, such orders were made to that effect.  We certainly do not move at all from the proposition that at the very initiating stage of the removal process, indeed best at the initiating stage of the removal process, namely the Commissioner’s recommendation stage, is the point of time at which we ought to have been put on notice and had an entitlement to respond to what was propounded.

Your Honours, one matter that was raised during the course of discussion with Mr Kenzie was again the question of suspension.  Justice McHugh I think raised the provisions of section 8(3) of the Act and Justice Heydon again the imported power to suspend in section 47.  It is perhaps not persuasive of any point, but indicative of the availability of such opportunities that as we speak, there is a group I think of senior executive officers in the New South Wales police force who are being stood down from their duties while an investigation is undertaken I think in relation to leakage of information in relation to some club footballers or something of the kind, but it is undoubted that in the emergency circumstance it must be so, that the welfare of the State is at risk.  The Commissioner by direction or by exercise of the implied power of suspension can relieve a deputy commissioner of his office certainly for a period sufficient to permit the content and requirements of procedural fairness to be spelt out.

Your Honours, the last matter that we wish to address in reply relates to an observation again, I think, of Justice Gummow this morning in relation to the content of section 8(2) of the Act with respect to the requirement that a primary interest to be served is:

the effective, efficient and economical management of the functions and activities of the Police Service.

We mentioned in passing yesterday that such a notion is to be accepted, but has to bring to bear these days, if not always, the matters that were suggested by Justice Hely and again in the Full Court in Barratt v Howard, namely that those noble objective are very much served by certainty of tenure by proper conduct of the force, which involves a consideration of and acceptance of the expectation of senior officers, that in the event that, in this case performance related but perhaps much wider related, considerations may impact upon their office to the extent of, in this case, the severe and serious remedy of removal that such an officer would have an entitlement to be heard.

It is equally, is it not, beyond contemplation that an officer in fear of the fact that dismissal may fall upon him or her without, in relation to performance or any matters, having an opportunity to respond to it, may conduct him or herself in the performance of duties in a manner that may not serve the efficiency of the service for fear of peremptory dismissal.  We would have submitted that the efficiency and effective operation of the police services is much served by a senior officer having notice of dismissal

and being able to provide a response in advance of removal than by its denial, particularly as we say in the light of the power to stand down an officer from duties while such matters are attended to.

For those reasons, your Honour, we submit that the respondents have not made good a basis for support of the judgment of the court below.  If the Court please.

GLEESON CJ:   We will reserve our decision in this matter and we will adjourn for a couple of minutes to allow people to rearrange their papers.

AT 11.53 AM THE MATTER WAS ADJOURNED