Searle v Commonwealth of Australia

[2018] NSWSC 1017

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Searle v Commonwealth of Australia (No 2) [2018] NSWSC 1017

Hearing dates:

19 – 23 February 2018, 1 March 2018

Date of orders:

03 July 2018

Decision date:

03 July 2018

Jurisdiction:

Common Law

Before:

Fagan J

Decision:

The plaintiff’s claim is dismissed.

Catchwords:

CONTRACTS – parties – the Crown – purported training contract between Navy and enlisted serviceman – prerogative of command of armed forces – Commonwealth Constitution, s 68 – “command” – whether contract an impermissible fetter upon prerogative of command – contract void – claim for breach dismissed

 

CONTRACTS – formation – consideration – absence of consideration – enlistment in armed forces – purported contract between Navy and enlisted serviceman – where training to be offered and undertaken pursuant to purported “training contract” – whether no effective consideration due to serviceman’s terms of service of enlistment – no effective consideration

 ESTOPPEL – estoppel by representation – against public authorities – the Commonwealth – whether estoppel can bind Commonwealth to a contract to fetter exercise of prerogative of military command – no estoppel

Legislation Cited:

Air Force Act 1923 (Cth)
Australian National Training Authority Act 1992 (Cth)
Bill of Rights 1689, 1 William & Mary Sess 2, c2
Customs (Prohibited Imports) Regulations 1956 (Cth)
Defence Act 1903 (Cth)
Defence Force Regulations 1952 (Cth)
Defence (Personnel) Regulations 2002 (Cth)
Education and Training Reform Act 2006 (Vic)
Local Government Act 1993 (NSW)
Migration Act 1958 (Cth)
Naval Defence Act 1910 (Cth)
The King’s Sole Right over the Militia Act 1661, 13 Charles II, c6

Cases Cited:

Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54; [1977] HCA 71
Attorney-General (NSW) v Quin (1990) 170 CLR 1; [1990] HCA 21
Barton v Commonwealth (1974) 131 CLR 477
C v Commonwealth of Australia [2015] FCAFC 113
China Navigation Co v Attorney-General [1932] 2 KB 197
Commonwealth v Quince (1944) 68 CLR 227; [1944] HCA 1
Commonwealth v Welsh (1947) 74 CLR 245; [1947] HCA 14
Coutts v Commonwealth (1985) 157 CLR 91; [1985] HCA 40
Dunn v The Queen [1896] 1 QB 116
Maritime Electric Co Ltd v General Dairies Ltd [1947] AC 610
Marks v Commonwealth (1964) 111 CLR 549; [1964] HCA 45
Minister for Immigration Local Government and Ethnic Affairs v Kurtovic (1990) 21 FCR 193; [1990] FCA 22
Mitchell v The Queen [1896] 1 QB 121
NSW Rifle Association Inc v Commonwealth [2012] NSWSC 818
Peregrine Mineral Sands Pty Ltd v Wentworth Shire Council [2014] NSWCA 429
Southend-on-Sea Corporation v Hodgson (Wickford) Ltd [1962] 1 QB 416

Texts Cited:

James Stellios, Zines’s The High Court and the Constitution (6th ed, 2015, Federation Press)

Category:

Principal judgment

Parties:

Clayton William Searle (plaintiff)
The Commonwealth of Australia (defendant)

Representation:

Counsel:
Mr Nicholas Kidd SC/Mr Timothy Kane (plaintiff)
Mr Gregory Sirtes SC/Ms Jodi Steele (defendant)

  Solicitors:
Levitt Robinson Solicitors (plaintiff)
Norton Rose Fulbright Australia (defendant)

File Number(s):

2016/045027

Judgment

1. The plaintiff enlisted in the Royal Australian Navy on 17 January 2011 at the age of 18 years for an initial period of service of four years, in the role of Marine Technician. Within a few months he was invited by his superiors to sign a “Training Contract” which purported to be legally binding between himself and the Navy and to provide that he would undertake a course of training towards a Certificate IV in Engineering, a nationally recognised vocational qualification.

2. The plaintiff signed the Training Contract on 20 June 2011. He claims in these proceedings that the Navy breached it by failing to provide the training necessary for him to attain the Certificate IV. The plaintiff was discharged from the Navy on 19 December 2015 without having achieved the qualification. He has brought these proceedings against the Commonwealth (the legal entity of which the Navy is an emanation) claiming damages for breach of contract.

3. The Commonwealth denies it ever became legally bound by the Training Contract. It contends that the plaintiff’s considerable obligations and limited rights as an enlisted member of the Navy were exclusively defined by the common law and by legislation. The Commonwealth says the Contract purports to bind the Navy as to what training it must provide to the plaintiff and require him to undertake and that it is therefore void as a fetter on the Commonwealth’s executive power of command of the Defence Force.

4. The plaintiff accepts that as an enlisted serviceman his relationship to the Commonwealth was not contractual. He concedes that his enlistment did not create a relationship of employer and employee and that the legal incidents of his position were as prescribed by the common law and by statute. But he contends the Training Contract was nevertheless binding and that it constituted an additional legal relationship superimposed upon his underlying status as a member of the Navy.

5. A second basis upon which the Commonwealth denies it is bound by the Training Contract is its contention that the plaintiff was at the time of entering into it already bound by his terms of service to undertake any and all training which the Navy might direct or provide. It is said that he therefore gave no effective consideration by promising to undertake the course of training necessary for the Certificate IV in Engineering and that promises by the Navy contained in the Contract are unsupported by consideration and on that account unenforceable.

6. The plaintiff counters these defensive arguments with a claim, in the alternative, of estoppel. It is argued that the Commonwealth held out to the plaintiff that the Training Contract would be legally binding. He contends the Commonwealth knew that on the faith of that understanding he was altering his position to his detriment. The plaintiff says it is unconscionable for the Commonwealth now to resile from its representations of June 2011 that the Contract gave rise to enforceable obligations and that it should not be permitted to do so without paying equitable compensation.

7. The plaintiff gave evidence of his employment and earnings since leaving the Navy. He has endeavoured to show that his earnings would have been higher had he attained the Certificate IV in accordance with the Training Contract. He claims the alleged shortfall up to the date of trial plus a projection of shortfall into the future as his damages caused by the Commonwealth’s alleged breach of the Contract or, alternatively, as the appropriate level of equitable compensation.

8. I find that the Training Contract purported to have the effect of fettering the plaintiff’s commanding officers in what they could order him to do, both with respect to the nature of training they might require him to undertake and with respect to the performance of other duties which might interrupt his training. I hold that it was beyond the power of the Commonwealth to fetter Naval officers in their command of an enlisted sailor by such a contract. The Contract was beyond the power of the Commonwealth to make and it is void.

9. My reasons for this conclusion follow, together with relevant findings of fact, organised under the following headings:

1 The plaintiff’s enlistment – [10]-[13]

2 Initial training in service and signing the Training Contract – [14]-[16]

3 The Certificate IV national qualification – [17]-[23]

4 The Navy’s authority to award a Certificate IV – [24]-[26]

5 The MT2010 program and log – [26]-[41]

6 The plaintiff’s postings to HMAS Kuttabul and HMAS Melbourne – [42]-[47]

7 The Navy’s review of apprenticeship agreements with MTs – [48]-[58]

8 The plaintiff’s training for a Certificate III in Refrigeration – [59]-[62]

9 Common law and statute concerning Defence Force members – [63]-[96]

10 Statute law governing enlisted service as at June 2011 – [97]-[101]

11 MT training was prescribed by military command – [102]-[105]

12 The terms of the Training Contract – [106]-[110]

13 The Commonwealth cannot fetter executive power – [111]-[116]

14 The Training Contract is void as a fetter on command – [117]-[125]

15 Absence of consideration and uncertainty – [126]

16 Estoppel – [127]-[137]

17 Damages – [138]-[156]

18 Common questions and costs – [157]-[167]

19 Orders – [168]

1 The plaintiff’s enlistment

10. The plaintiff applied to join the Navy in about April 2010. He thereafter undertook an aptitude test and was interviewed by a recruiting officer. By letter of 19 July 2010 from the senior military recruiting officer for North Queensland he was offered enlistment on 17 January 2011 “in the role of Marine Technician”. The offer was subject to medical and fitness tests, which he passed, and other requirements all of which were fulfilled.

11. The letter of offer was accompanied by an acknowledgement of conditions of service. The plaintiff signed this on 3 August 2010 and returned it, thereby accepting the offer. The acknowledgement was as follows:

… having been accepted as competitive for entry as a Marine Technician in the Royal Australian Navy, [I] acknowledge that if offered a position in the Navy, I will have no right after enlistment to change my category. I acknowledge however, that the Navy is not bound nor limited to employing me in my chosen category and that I may be employed in any element in the Navy if the Navy considers such employment to be in its interest.

I … acknowledge that if offered a position in the Navy, my failure to pass any module of my training, including swimming test, could lead to my discharge.

12. On 17 January 2011 the plaintiff travelled from his home in Rockhampton to the recruitment office in Townsville and there signed a series of further acknowledgements. These included acknowledgements that he might be required to perform combat or combat-related duties, that he might be required to serve either within or beyond the territorial limits of Australia and that, whilst he had agreed to serve as a Marine Technician, from time to time he might be required to undertake duties, tasks and roles outside “the strict bounds of that employment”.

13. On 17 January 2011 the applicant also made an affirmation of allegiance in accordance with reg 24 of the Defence (Personnel) Regulations 2002 (Cth), whereby his enlistment took effect as provided in reg 25. This committed him to four years’ initial minimum period of service. As will be seen, his enlistment in the Navy did not give rise to a contractual relationship between himself and the Commonwealth. The acknowledgements he signed on 17 January 2011 are not of legal significance. The matters he acknowledged were terms of his service by force of statute and regulations and by reason of him being subject to the command of officers in exercise of the Commonwealth’s executive power, not by force of the acknowledgements themselves.

2 Initial training in service and signing the Training Contract

14. Immediately after enlistment the plaintiff was transferred to HMAS Cerberus, a Naval training facility on the Mornington Peninsula in Victoria. He underwent approximately ten weeks of Recruit School comprising physical training, general instruction about the Navy and weapons training. There were numerous other recruits undergoing this initial phase of training at the same time including between fifteen and twenty who had been accepted into the Navy as Marine Technicians (“MTs”).

15. When Recruit School concluded on 1 April 2011 the plaintiff commenced Initial Technical Training in the Engineering Faculty at HMAS Cerberus. This continued until 31 October 2011. The plaintiff was trained in a class with instruction given in modules, each dedicated to the use of certain tools or the functioning of a particular piece of machinery. The plaintiff passed each module and moved on to the next.

16. In June 2011 the plaintiff and the other MT recruits in training were asked by officers of the Engineering Faculty staff to sign a Training Contract. On 20 June 2011 the plaintiff signed such a Contract and a Mr Palmer signed on behalf of the Navy. I will return to the terms of the plaintiff’s Training Contract in detail later in these reasons. For present purposes it is sufficient to note that it purported to be an agreement between the Royal Australian Navy and the plaintiff to “negotiate and sign a Training Plan” in accordance with which the Navy would train the plaintiff to achieve the qualification of Certificate IV in Engineering, over an “expected duration” of 48 months from 4 April 2011. It was in effect an apprenticeship agreement.

3 The Certificate IV national qualification

17. The competencies required to be achieved in order to attain the Certificate IV in Engineering are set out in a 36-page syllabus published by the Commonwealth Department of Education, Employment and Workplace Relations. The parties did not explore, either in evidence or in submissions, the source of the content of this specification or the status of the document. It appears to be one of a large number of such specifications, with varying degrees of specialisation, complexity and difficulty of attainment, which form a “Metals and Engineering Training Package”. Each of the numerous specifications within this Package was designated by a serial number commencing with the prefix “MEM”. The Certificate IV in Engineering was MEM40105. By way of example there were specifications for a Certificate II in Engineering MEM20105 and a Certificate III in Engineering – Mechanical Trade MEM30205.

18. These specifications were drawn up, approved and developed progressively over the years by national bodies the first of which was established under the Australian National Training Authority Act 1992 (Cth). There are similar “training packages” comprising graded specifications for attainment of competency, more or less specialised, in fields other than engineering such as automotive, construction, community services, health, timber-working and many others. Such specifications have been adopted and placed on a register by successive national bodies. The responsibility for adoption and registration has been conferred on those bodies under Commonwealth legislation, apparently with the approval of the States through the Council of Australian Governments. The registered specifications constitute a national scheme of standardised vocational training and certification.

19. The Training Contract provided that it was to be registered under legislation of one of the States or Territories and that the parties would be bound by the legislation of the State in which registration was effected. It was lodged with the Department of Education and Early Childhood Development of Victoria (“the Victorian Education Department”) pursuant to s 5.5.12(1)(a) of the Education and Training Reform Act 2006 (Vic). That section referred to lodgement of contracts with the Victorian Skills Commission “or a person or body nominated by the Commission”. I infer that the Victorian Education Department had been so nominated. No direct evidence was adduced about this. The Department wrote to the Navy on 7 July 2011 confirming that the Training Contract with the plaintiff had been registered. A letter substantially to the same effect was sent by the Department to the plaintiff on 12 September 2011.

20. Agreements could be registered under the Education and Training Reform Act if they provided for training of employees in accordance with “approved training schemes”. In the Act these agreements were referred to as “training contracts”. In the evidence they were called apprenticeship agreements. By s 5.5.2 the Victorian Skills Commission was empowered to approve a “specified training scheme” by publishing notice of a determination in the Victorian Government Gazette. On 12 February 2009 the Commission published in the Gazette approval of a long list of specifications for competency-based training, including the Certificate IV in Engineering and many others in the Metals and Engineering Training Package. The specification for the Certificate IV national qualification, MEM40105, thereby became an approved training scheme in Victoria.

21. The Act also prescribed (by ss 5.5.4, 5.5.5 and Schedule 4) certain minimum terms in favour of the apprentice or trainee to be incorporated in a registrable training contract. Schedule 4 contained cl 4 as follows (emphasis added):

4 Training conditions

(1) The employer must during the duration of the training contract provide a level of supervision that is in accordance with that agreement and the approved training scheme.

(2) Training must be directed at enabling the apprentice to attain the standards of skill and knowledge required by the approved training scheme to be attained by persons undertaking the scheme.

22. This was substantially duplicated in s 5.5.8, with penal consequences for non-compliance (again, emphasis added):

5.5.8 Employer's obligations under a training contract

(1) An employer who employs an apprentice under a training contract—

(a)   must ensure that the apprentice is trained in accordance with an approved training scheme; and

(b)   must allow the apprentice to comply with the approved training scheme without hindrance if that scheme or any part of that scheme is conducted during normal working hours.

Penalty: 10 penalty units for a natural person and 50 penalty units for a body corporate.

23. It was by a combination of express terms in the Training Contract signed by the plaintiff and provisions of the Education and Training Reform Act that the Contract purported to bind the Navy, as summarised at [16] above, to train the plaintiff to attain a Certificate IV and to devise and agree with him a Training Plan under which that could be achieved.

4 The Navy’s authority to award a Certificate IV

24. From the terms of the Victorian Education Department’s letters to the Navy and to the plaintiff it appears the Navy itself was a Registered Training Organisation (or “RTO”) under s 4.3.14 of the Education and Training Reform Act. As such the Navy was able to recognise “the award, conferral or issue of a registered qualification that it is registered to award, confer or issue”: s 4.4.5. “Qualification” is defined in s 4.1.1 as including “a nationally endorsed training package for which details of the qualification have been registered by the Commonwealth”. This description captures the specification for a Certificate IV in Engineering (and all the other specifications in the Metals and Engineering Training Package). Hence, the Navy had authority under the Victorian statute to award a Certificate IV in Engineering to any sailor MT who attained the necessary competencies during his service. (Inappropriately the Department’s letter to the Navy of 7 July 2011 stated “the RTO is to assist you and your apprentice to develop a training plan that reflects the apprentice’s job role”, as if there were a registered training authority separate from the Navy itself for the purposes of this Contract. In fact the Navy was its own RTO.)

25. The requirement of the Training Contract that the parties “negotiate and sign a Training Plan with the chosen RTO” reflected a statutory obligation of the employer under s 5.5.13, as follows:

5.5.13 Apprentice to be enrolled in training

The employer must arrange for—

…

(b) a training plan to be signed by—

(i)   the employer; and

(ii)   the apprentice; and

(iii)   the registered education and training organisation; and

(c) a copy of the training plan referred to in paragraph (b) to be lodged with the Commission, a person or body nominated by the Commission or an approved training agent within 3 months after the date of commencement of the training contract.

26. It is common ground that no such training plan was ever drafted by the Navy or by the plaintiff or discussed between them. There was never settled or agreed or lodged with the Victorian Skills Commission any plan pursuant to which the parties would achieve completion by the plaintiff of the units of competency for a Certificate IV in Engineering. The Commonwealth has not argued that the Contract was void for uncertainty, as a mere agreement to agree, in the absence of a mutually accepted Training Plan.

5 The MT2010 program and log

27. Throughout his service the plaintiff and others who had enlisted as MTs at the same time as him were trained according to a program devised by the Navy in 2010, designated MT2010. This replaced an earlier MT training program which had been designated Technical Training Plan 92 (“TTP92”). In accordance with the MT2010 program, at the completion of his Initial Technical Training the plaintiff and other MTs in his class were posted from HMAS Cerberus to other Naval facilities to gain on-the-job experience and further training. This was to be continued on a ship as each MT could be posted to one. This depended upon berths on ships becoming available.

28. The MT2010 program was the subject of an audit during 2013 which resulted in a report dated 19 July 2013. This provided a history of the introduction of the program and an appraisal of its performance during the first three years of implementation. The program was developed from early 2009 in response to a directive from the Chief of the Navy to the Chief Naval Engineer “to re-evaluate MT training and employment to ensure that the category would be sustainable to deliver optimum maritime capability and to gain maximum skills utilisation”. This directive followed a report which had indicated that over time the training and utilisation of MTs had prioritised the operation of machinery and systems at the expense of maintenance functions. The report had assessed that maintenance skills had been degraded in the category.

29. “Category” and “rating” are equivalent terms used to describe a class of sailors trained in a specialisation. The position of Director of Navy Category Management is held by a senior officer under whose direction there exist groups of Navy personnel referred to as Category Sponsors, based in Canberra. Each such sponsor is responsible for oversight of the training of seamen in its category, to ensure that the category is at sufficient strength and that adequate skills are being acquired to meet the Navy’s needs.

30. Pursuant to the directive from the Chief of the Navy referred to at [28] it appears the Director of Navy Category Management caused the MT2010 program to be developed. The changeover from TTP92 to this program was referred to in the Navy as the MT Category Restructure. The program provided for the sequence in which each intake of MTs recruits would undertake Recruit Training, Initial Technical Training, posting to a shore facility for on-the-job experience and consolidation of learning, posting to a ship, return to HMAS Cerberus for further coursework and simulator training and so on. The whole program is represented in a flowchart which is Annexure B to the report of 19 July 2013 referred to above.

31. The plaintiff and other MTs graduating from Initial Technical Training were each issued with a pre-printed MT2010 log for the recording of work experience and competencies they were expected to gain from that time onwards. The MT2010 log is one of the more detailed parts of the overall program. It was divided into two parts, the first being a “Trade Experience Journal”. In this the MT could record his mechanical work experience in the course of his service. The Journal was in sections, the first four of which concerned basic generic skills such as manual handling of equipment and heavy items, working safely with industrial chemicals and operating load-shifting equipment. Each section in turn was broken up into components which described in detail the work experience the sailor was expected to acquire. Next to each component was a box to be completed by a supervisor who would confirm that the experience had been gained and who would then enter the date and remarks and a signature.

32. After the four sections of the Trade Experience Journal dealing with these basic skills there were further sections on such topics as routine manual arc welding, routine oxyacetylene cutting and heating, routine MIG welding and so on, progressing through to pages concerned with more complex tasks of planned maintenance of marine systems and corrective maintenance of plant and machinery. Each section followed the pattern of having a box printed beside it, to be completed by a supervisor with date and remarks, to confirm performance.

33. At intervals throughout the Trade Experience Journal there were Log Progression Sheets required to be completed by a Training Coordinator and by an officer or other responsible member of the Competency Management Cell at HMAS Cerberus, to confirm satisfactory completion of the sections of the Journal up to that point. For example, there was a sequence of fully detailed mechanical experiences designated ME-11 to ME-15 covering such things as fault diagnosis, installation and removal of bearings, installation and removal of mechanical seals, gland packing and so on. Immediately after section ME-15 there appeared a Log Progression Sheet which was to be completed by the Training Coordinator and the Competency Management Cell to confirm successful completion of ME-11 to ME-15.

34. The second part of the MT2010 Log was entitled “Operator Competency Task Journal”. This specified work experience required to be undertaken by the MT in order to achieve successive grades of Naval service capability as follows: Engineering Harbour Watchkeeping Certificate (“EHWC”) Phase 1; Marine Systems Technician; EHWC Phase 2; Marine Systems Controller; EHWC Phase 3 and, finally, Marine Systems Manager. The Task Journal specified coursework and on-the-job proficiencies which had to be undertaken to achieve certification in each of these levels of capability, some of which could only be completed at sea. The grades referred to were purely Naval designations, not part of the system of national qualifications referred to earlier.

35. An introduction to the MT2010 Log contained the following information (using the expression “Work Experience Log” to describe the part of the document which is in fact entitled “Trade Experience Journal”, as described above):

1. The purpose of this log is to manage the MT2010 Marine Technician through on-job-training during their initial engagement in the Royal Australian Navy. The log is designed to provide a list of tasks to be completed in the workplace to provide the sailor with the practical skills to assist with maintenance in the Marine Engineering environment and monitor progression of the apprenticeship Trade skills.

2. The Work Experience Log [ie Trade Experience Journal] is structured to provide a framework for the gathering of evidence of the on job abilities. Tasks in this Log address specific technical areas of the job as specified in the MT Job Scalar, and should be completed over a period of time in a technical workplace – either at sea or ashore.

…

RELATIONSHIP TO OPERATOR JOURNAL

4. The MT2010 Operator Competency Task Journal, issued with this Experience Log, may be completed concurrently with this Work Experience Log; it is to take precedence for completion when at sea.

APPRENTICESHIP

5. Sailors have been signed to an apprenticeship and as such are required to demonstrate progression of their trade. Apprentices will receive government incentive payments during their apprenticeship which is managed by the Competency Management Cell at HMAS Cerberus.

…

TRAINING PLAN

14. Workplace Supervisors in consultation with Training Coordinators will develop a training plan with you to monitor your task progression.

RECORDING AND REPORTING

15. To provide a record of Apprenticeship progression there are 3 perforated progress sheets in the Mechanical Experiences section [ie Trade Experience Journal] of this Log that are to be returned to the [Competency Management Cell] for recording to the progression database.

36. The descriptions of coursework, training and proficiency in the MT2010 Log did not conform directly to the units of competency which were required for the attainment of a Certificate IV in Engineering as prescribed in the nationally registered specification for that qualification. The first part, the Trade Experience Journal, appears to have been largely for the sailor’s own benefit to enable him to keep a record of the general development of his skills. The second part, the Operator Competency Task Journal, was primarily for the Navy’s purposes to measure progress towards the various levels of certification. Evidence was given by Mr Palmer concerning the Navy’s attempts to correlate parts of the training and experience a sailor would gain by working through the MT2010 Log with units of competency required for nationally recognized qualifications such as the Certificate IV in Engineering.

37. Mr Palmer served in the Navy in technical and engineering capacities for a total of 26 years, over two periods. He served as a petty officer and chief petty officer. He ceased to be a member of the Navy in 2007. From 2010 he was employed by Scientific Management Associates (Operations) Pty Ltd. This company was engaged by the Navy to manage the functions of the Competency Management Cell based at HMAS Cerberus. Mr Palmer managed the Cell from 2010 until June 2015 when he retired and moved to Cairns.

38. Mr Palmer gave evidence that the content of the log was monitored and revised from time to time according to directions from the Category Sponsor for the MT rating. The entire MT2010 program, including the log, was drawn up, approved and implemented in accordance with the judgment and orders of senior officers, with the objective of raising and maintaining the MT category to the standard of competence and proficiency required to support naval capability.

39. According to Mr Palmer, following implementation of the MT2010 program from September 2010 the Competency Management Cell attempted to achieve “alignment” of the capabilities the Navy required of its MTs (through the MT2010 log) with units of competency which would count towards nationally recognised trade qualifications such as the Certificate IV in Engineering. He said the “alignment” was carried out:

so that the Navy as a Registered Training Organisation could claim that the National Units of Competency had been achieved when the Naval capabilities were met.

40. The Commonwealth did not, through evidence or submission, attempt to establish that any such correlation could be made or, if it could, to what extent. It did not, for example, provide evidence to explain or elaborate upon the work designated on a particular page or pages of the Operator Competency Task Journal in order to demonstrate equivalence to one or more of the units of competency in the specification for the Certificate IV. Despite the references to “apprenticeship” in pars 5 and 15 of the introduction to the MT2010 log (quoted at [35]) the evidence does not satisfy me that Naval personnel in the Competency Management Cell or elsewhere actually recorded the plaintiff’s experiences noted on progress sheets in the MT2010 log against the requirements of the Certificate IV. Clearly the MT2010 log itself did not constitute or function as the Training Plan for attainment of the Certificate IV as envisaged in the Training Contract.

41. The Competency Management Cell was tasked to collect assessments made of individual servicemen, including MTs, by Naval personnel qualified to assess their progress and achievements. The Cell was required to process the progressive assessments onto internal Navy personnel records for each sailor. This was for the purpose of monitoring the progress of MTs, amongst others, towards attainment of the capabilities the Navy required of them. If fully carried out this should also have enabled verification of the completion of units of competency according to nationally recognised specifications, such as the Certificate IV in Engineering, for the purpose of the Navy as a Registered Training Organisation awarding such qualifications. But I am not satisfied that such verification was carried out and it is clear that in fact not all the competencies in the Certificate IV specification were attained during the plaintiff’s training under the MT2010 Log.

6 The plaintiff’s postings to HMAS Kuttabul and HMAS Melbourne

42. After receiving his MT2010 log at HMAS Cerberus in late October 2011 the plaintiff was posted to the Fleet Support Unit at HMAS Kuttabul in Sydney. He remained there until September 2012. At this facility he was given very little work to do. He estimates that he was assigned on average only one job per fortnight. Consequently he had very few opportunities to complete any of the competencies in the MT2010 log and made very little progress towards attaining his EHWC Phase 1 or his Marine Systems Technician qualification under the Navy’s MT2010 scheme. He sought out work but little was available. At HMAS Kuttabul the plaintiff completed courses of instruction conducted by the Navy whilst he waited for work opportunities or for posting to a ship.

43. The MT2010 audit report of 19 July 2013 corroborates the plaintiff’s evidence concerning delay in posting him to a ship and the insufficiency of work to keep him occupied. In 2012 and 2013 there were insufficient sea berths to permit the Navy to post all MTs to ships at the rate they were passing through HMAS Cerberus.

44. On 17 September 2012 the plaintiff was posted to HMAS Melbourne. The plaintiff remained with that ship for 19 months until April 2014 during which time the vessel was deployed to waters near the Middle East for some months and at other times was alongside. In the 19 months of this posting the plaintiff completed the requirements of the MT2010 Log to qualify as a Marine Systems Technician. That certification was awarded to him on 26 October 2013 specific to the type of vessel upon which he had served, namely, a frigate. During the plaintiff’s service on HMAS Melbourne he also advanced his experience and training towards completion of the EHWC Phase 1 requirements, which in due course he satisfied.

45. In January 2014 whilst the plaintiff was still serving aboard HMAS Melbourne he lodged a request for discharge to take effect in January the following year. That would be at the completion of his mandatory initial period of service of four years. He was required to give 12 months’ notice in order to be discharged at that time. By January 2014 the plaintiff was frustrated by the lack of training or experience he received relative to a trade qualification which he could use in the civilian workforce upon leaving the Navy.

46. In April 2014 the plaintiff left HMAS Melbourne and took post-deployment leave. Whilst on leave he was offered by the Navy training for a Certificate III in Refrigeration which would take two years. This required that the plaintiff revoke his request for discharge. He agreed to do so and commenced the course on 28 February 2014. It included an initial four months of coursework at HMAS Cerberus, then some months of further coursework at the Ultimo Campus of the New South Wales Technical and Further Education College, followed by 12 months of workplace consolidation.

47. From the sequence of events up to mid-2014 it is clear that during the three years after the Training Contract was signed not only had the Navy failed to propose, negotiate or agree a Training Plan to enable the plaintiff to attain a Certificate IV in Engineering but it had proceeded to train him to its own requirements without attempting to satisfy those of the Certificate IV. If any of his attainments under the MT2010 Log happened to coincide with units of competency in the specification for the Certificate IV in Engineering, they could be counted towards that qualification. If the Competency Management Cell fully performed its duties, this would be recorded. However, such progress towards a Certificate IV would be purely incidental. There is no evidence that anyone in the Competency Management Cell actually did record any progress that he made through the Certificate IV units. Certainly there was no supervision or direction of him towards systematically working through the Certificate IV competencies.

7 The Navy’s review of apprenticeship agreements with MTs

48. According to the 19 July 2013 audit report on the MT2010 program, MTs who commenced at the time of the plaintiff’s enlistment were scheduled to attain the first stage of certification under the log (EHWC Phase 1 and Marine Systems Technician – see [34] above) by about the end of their second year of service. This required that they should have served about twelve months on a ship by that stage. They would then be posted ashore and would work through further sections of the Operator Competency Task Journal and undertake simulator training, towards certification at the level of Marine Systems Controller. Further sea time for consolidation of skills taught ashore would be required before that certification could be attained. The program envisaged that this would take MTs to the end of their four years’ Initial Mandatory Period of Service and that “trade training” would begin only then. Up to July 2013, when no sailors had yet been trained under the MT2010 program to the stage at which trade training was to commence, it still had not been determined by the officers in charge of implementing the program exactly what the trade training was to be. The author of the audit report expected it to be training under the national system to Certificate III in Diesel, Electrical, Refrigeration or Fabrication.

49. The incompatibility of the MT2010 program apprenticeship contracts commencing in the MTs’ first year of service was recognised in October 2012, as explained in the audit report at par 4-3:

As of Oct 2012, the Deputy Director Training Authority Engineering directed that the Competency Management Cell cease this process [of signing apprenticeship contracts], as the MT2010 sailors were unable to achieve a Cert IV in 48 months, noting the backlog of getting sailors to platforms to achieve their [Marine Systems Technician], [Marine Systems Controller] qualification and trade specific training within the four years, as the MTE career continuum has them undertaking their trade training after the four year mark.

50. The audit report of 19 July 2013 stated at par 4-18 that the MT2010 sailors would be awarded a Certificate IV in Engineering “on completion of their trade training” which meant, necessarily, well beyond their initial four years of service. Obviously that meant the timeframe of the Training Contract was in fundamental conflict with the MT2010 program. Although the evidence did not descend to a detailed comparison of the competencies an MT would satisfy through the MT2010 log with those required by the Certificate IV syllabus, this part of the report makes very clear that there were major differences.

51. On 14 February 2014 a senior officer prepared a decision brief for the Chief of the Navy concerning MT training. This was the commencement of a process to reconfigure the program to have MTs undertake a national system qualification more suitable to the Navy’s purposes than the Certificate IV and to schedule training for that qualification at a stage in the overall program which would be consistent with Navy training requirements. This decision brief included the following information:

The attainment of [a Certificate IV in Engineering] in that timeframe [four years commencing in the first year of service] was never achievable nor does it align with the original MT2010 career continuum.

The proposed alternative of undertaking a Certificate III trade contract will provide a specific trade.

[S]hould the [apprenticeship] contracts be varied to a Certificate III trade contract, with the current overlap of MT2010 and TTP92 training, it is forecast the final affected MT2010 sailors will not complete their “trade training” until as late as Q1 2017.

52. The evidence suggests that the Certificate III syllabus could be undertaken with specialisation in either Diesel, Electrical, Fabrication or Refrigeration such that it would constitute a qualification of greater utility for civilian trade employment than the Certificate IV. In memoranda and reports during 2013 and 2014 senior officers either asserted or assumed this difference between the two qualifications. Mr Palmer expressed a similar view in email correspondence with some of the MTs at that time. The parties did not explore in evidence the comparative details of the specifications for the two Certificates. The evidence is not sufficient for me to conclude which was the more marketable in civilian employment. But the case can be decided without resolving that issue.

52. An attachment to the decision brief, also dated 14 February 2014, stated that:

The … MT2010 career continuum developed … in 2009 proposed that Certificate III trade training be delivered post the four-year mark from initial enlistment, on promotion to [Leading Seaman]. This put trade training beyond the Initial Minimum Period of Service, which was changed from six years to four years … .

54. In another passage of this attachment it was stated that from the first implementation of the MT2010 program MTs were to be “qualified at sea” by the end of two years from enlistment, having by that stage completed shore based instruction and been posted to a ship for about twelve months. The attachment noted that the program envisaged them remaining at sea for the next two years, being “essentially the ‘return on investment’ for their training”. Only after that would they commence trade training in Certificate III. It can readily be seen that this program would suit the Navy’s requirements for manning its ships and, equally clearly, that an apprenticeship for a Certificate IV commencing six months from enlistment would not fit the program and would be of no use to the Navy.

55. On 13 June 2014 Rear Admiral Uzzell wrote to MTs who had signed Training Contracts, in the following terms:

1. The MT2010 career scheme policy was introduced in October 2010, with the first training occurring at the Engineering Faculty, HMAS Cerberus in February 2011. You are a part of this scheme.

2. Navy has identified some conflicting information concerning the introduction of the MT2010 career scheme policy. This information relates to the particular level of trade training that was offered to you and the time in which that trade training would be completed.

3. As trade training attracts financial assistance under State and/or Commonwealth programs, a “training contract” was provided to you for the purpose of allowing you to access any relevant trade training financial assistance under those programs. That contract specified that a Certificate IV in Engineering would be obtained within a period of forty-eight months. It did not reflect the MT2010 career scheme policy. Verbal advice from the Competency Management Cell staff at Cerberus at the time should have indicated to you that the contract was necessary to enable you to access trade training financial assistance, that the Certificate IV level was not achievable in the forty-eight months time frame, and that an amended training contract for a Certificate III would be offered once a suitable trade stream had been identified for you.

4. Navy acknowledges that the conflict between the training contract you were provided to enable access to trade training financial assistance and the MT2010 career scheme policy has caused confusion, and that the verbal advice at the time may not have been understood.

5. [The letter promised that resolution of “this contract issue” was being pursued and that individual MTs would be updated on progress].

6. You should be aware that nationally recognised Certificate III Electrical Fitter training has commenced at Cerberus and local TAFEs. The commencement of courses for Diesel Fitter, Fabrication and Welding and Refrigeration trades is imminent. These courses will enable you to achieve a nationally recognised Certificate III in your trade stream as was intended by the MT2010 career scheme policy. This is considered more beneficial than the Certificate IV trade in Navy Engineering under your present “training contract” which does not feature the same degree of national recognition.

56. The plaintiff received at this time a letter to similar effect but cannot recall if it was in terms identical to what I have quoted above. I am satisfied that a letter was sent out in these terms to all MTs who had signed Training Contracts and that therefore the plaintiff received such a letter. He disputes that he was orally informed at the time the Training Contract was signed or at any time before receipt of this letter that a Certificate IV in Engineering was not achievable within 48 months.

57. Some of Mr Palmer’s evidence tended to suggest that the purpose of certain Navy personnel in having the Training Contracts executed and registered was to enable the MTs to obtain financial assistance in the form of a “tools allowance”. Such an allowance was available to apprentices who had entered into registered agreements, to a total of about $5500 payable in instalments. The evidence does not reveal the details of the administration of this financial assistance scheme or identify the authority whose vote of public money funded it. There is not sufficient evidence to enable me to attribute to the Navy itself a purpose of having apprenticeship contracts signed in order to make MTs eligible to receive the tools allowance. It is not apparent what basis Rear Admiral Uzzell had for stating that that was the purpose.

58. In any event, whether or not the obtaining of a tools allowance for MTs was a purpose of the Navy in having these Training Contracts signed, the evidence does not show that the Navy intended the Contracts should not take effect according to their terms. If the latter intention was held by any person whose state of mind could be attributed to the Navy, it would not be an answer to the case brought by the plaintiff because there is certainly no evidence that he shared any such intention.

8 The plaintiff’s training for a Certificate III in Refrigeration

59. In July 2014 officers of the Navy’s Career Management Agency addressed the plaintiff and a number of other MTs who at that time were undertaking Certificate III courses in Refrigeration, Diesel Fitting and Electrical at HMAS Cerberus. The officers stated that the Certificate IV would never have been attainable in 48 months. The plaintiff understood what he was told at this time as having the effect that in order to be awarded the Certificate III he and the other MTs present would each have to sign a variation of Training Contract and commit to a further two years of service. According to the plaintiff the sailors present voiced dissatisfaction with this and they were shortly afterwards advised that they need not commit to two years’ return of service.

60. Mr Palmer gave evidence that the MTs did not have to vary their Training Contracts in order to complete the Certificate III. He said they were told that they only needed to sign variations if they wished to complete that Certificate under the “envelope” of an apprenticeship. He said the Navy was able to monitor attainment of the competencies for a Certificate III and in due course to award the Certificate without there being in place a varied Training Contract to cover this. On the balance of probabilities I accept Mr Palmer’s recollection of this conversation. He appeared to me to be a disinterested and forthright witness. In comparison to the plaintiff he would have had a considerably greater depth of understanding of the necessity or otherwise of signing a variation to the Training Contract. I accept that in fact and in law it was not necessary for the Training Contract to be varied, even assuming it was valid, in order for the Navy as a Registered Training Organisation to tick off the competencies and in due course award the Certificate. I consider it highly likely that Mr Palmer would have conveyed this position accurately to the MTs. The plaintiff could readily have misunderstood what he was told in this regard. In the end my resolution of this difference of recollection is not significant to the outcome of the case. As I find that the Training Contract did not bind the Commonwealth it makes no difference to the plaintiff’s position that he signed a variation of it, whether under the inducement of a representation (as he recalls), or not.

61. On 4 August 2014, the day the plaintiff completed the first component of his Certificate III in Refrigeration at HMAS Cerberus, Mr Palmer invited him to sign a form of Application for Approval to Vary the Training Contract. The only variation was deletion of “Certificate IV in Engineering” and substitution of “Certificate III in Engineering Mechanical Trade (Refrigeration)”. The plaintiff signed but expressed to Mr Palmer his dissatisfaction that, after more than three years in the Navy, he was only now commencing trade training. Other MTs who were present that day were invited to sign an Application for Approval to Vary, which some did and some did not. The difference in recollection between the plaintiff and Mr Palmer referred to at [60] above also applies to the conversation on 4 August 2014 and I resolve it the same way.

62. The plaintiff proceeded with his coursework for the Certificate III (Refrigeration) and completed it in September 2014. He was then posted back to the Fleet Service Unit at HMAS Kuttabul for two months. In early December 2014 he was informed that he would be posted to HMAS Newcastle from January the following year. He applied to be discharged from the Navy in 12 months’ time, effective 15 December 2015. He served out most of calendar year 2015 on HMAS Newcastle, working as a refrigeration mechanic on air-conditioning and cooling units. As earlier mentioned he was discharged on 19 December 2015.

9 Common law and statute concerning Defence Force members

63. The Commonwealth contends that the Training Contract is an agreement “fettering executive action or statutory duties or powers” and on that ground “void against public policy”. In order to see what executive or statutory duties or powers of the Commonwealth may be fettered by the Contract it is first necessary to restate briefly the law governing the relationship between the Commonwealth and an enlisted member of the Navy. The historical legal status of the armed forces in the common law of England has been treated by the High Court as the base position with respect to the armed forces of the Commonwealth of Australia, subject to the Constitution and Federal legislation.

64. In China Navigation Co v Attorney-General [1932] 2 KB 197 the history of the relationship between the Crown, the armed forces (specifically, the Army) and Parliament was examined. Their Lordships quoted a recital to an Act of 1661 (13 Charles II, c 6) by which Parliament acknowledged the Crown’s prerogative of command of the forces. This recital had been expressly preserved in subsequent enactments and was still law in 1932. The recital is in these terms:

Forasmuch as within all His Majesty’s realms and dominions, the sole supreme government, command and disposition of the militia, and of all forces by sea and land, and of all forts and places of strength, is, and by the laws of England ever was, the undoubted right of His Majesty, and his Royal predecessors Kings and Queens of England; and that both, or either of the Houses of Parliament cannot nor ought to pretend to the same …

65. The Court of Appeal also referred to the declaration embodied in the Bill of Rights at the time of the accession to the throne of William and Mary in 1689, that:

the raising and keeping a standing Army within the Kingdom in time of Peace, unless it be with Consent of Parliament, is against Law.

66. From 1689 the army had “only continued to exist by virtue of the annual renewal of the sanction given by Parliament”: at 226 (Lawrence LJ). The common law position from 1661 was summed up as follows at 239 (Slesser LJ):

This short investigation of the history of the relations of Parliament and the army shows clearly that at no time has Parliament derogated from the prerogative with regard to the command of the forces as it was declared in the time of Charles II. It has declared the standing army illegal in time of peace without the consent of Parliament, but has abstained from interfering with the command by the Crown over a legalised army.

67. An aspect of the Crown’s relationship to the armed forces, according to the common law of England as declared by Lord Esher MR in Mitchell v The Queen [1896] 1 QB 121, is that:

all engagements between those in the military service of the Crown and the Crown are voluntary only on the part of the Crown, and give no occasion for action in respect of any alleged contract.

68. That case was decided in 1890 and is reported as a note at the citation given above. The claimant in that case (referred to as “the suppliant”) was a retired officer of the army who alleged that an amount awarded to him had not been correctly calculated in accordance with a Royal Warrant (apparently having the status of a regulation made by the executive, namely the War Office). Lord Esher MR continued:

The suppliant is not, it must be remembered, suing in respect of a matter which is provided for by an Act of Parliament, but of a matter which arises under the War Office Regulations. It is a matter which arises between him and the Crown in consequence of certain regulations which the Crown has made with regard to its officers. It has been decided over and over again that, whatever means of redress an officer may have in respect of a supposed grievance, he cannot as between himself and the Crown take proceedings in the courts of law in respect of anything which has happened between him and the Crown in consequence of his being a soldier. The courts of law have nothing whatever to do with such matter.

69. Fry and Lopes LJJ concurred, the former stating:

I am clearly of opinion that no engagement between the Crown and any of its military or naval officers in respect of services either present, past, or future can be enforced in any court of law. That being so, I entirely agree with the Master of the Rolls.

70. This decision was cited in Dunn v The Queen [1896] 1 QB 116 for the proposition, simply stated, that:

all engagements between those in the military service of the Crown and the Crown are voluntary only … and give no occasion for action in respect of any alleged contract.

71. In Australia the non-contractual nature of the relationship between the Commonwealth on the one hand and officers and enlisted personnel of the armed forces on the other hand has been recognised by the High Court on the basis of the English authorities. It has also been restated in Commonwealth Acts and regulations which govern terms of service.

72. In Commonwealth v Quince (1944) 68 CLR 227; [1944] HCA 1 the Commonwealth sought to recover damages for loss of the services of an airman in the Active Citizen Air Force. He had been injured in a motor accident for which the defendant was liable in negligence. The Court was divided as to whether the action per quod servitium amisit would lie. Four of the justices expressed opinions in very similar terms concerning the nature of the relationship between the enlisted airman and the Commonwealth.

73. At 234-235 Latham CJ said:

… the relation between an airman and the Commonwealth is not contractual in character. The relation is constituted by the airman taking an oath of enlistment. … Upon taking the oath [the airman] became a member of the Active Citizen Air Force [by the operation of r 95 of the then Statutory Rules which] provides:- “The oath of enlistment shall bind the person taking it to serve in the Air Force in accordance with the tenor of the oath until he is discharged, dismissed, or removed therefrom, or until his resignation is accepted.” … An airman cannot terminate his service at his own will, but he may be discharged at any time for any reason as the Air Board may think fit … . Thus the general rule of law that members of the forces hold their positions at the pleasure of the Sovereign, who may dismiss them at any time, has not been altered in its application to airmen: Dunn v The Queen; Mitchell v The Queen; Leaman v The King [1920] 3 KB 663.

The oath of enlistment imposes an obligation to render service, but that obligation is created by law, and does not depend upon any contract to which the airman and the Crown are parties. The airman becomes subject to military discipline; but in enforcing discipline officers in the forces are not performing or acting under a contract; they are performing duties incidental to their position. ... The airman, in rendering service in the military forces, is performing a national duty, now largely defined by statute, and is not performing a contract made with the Commonwealth. The Commonwealth in relation to the airman acts in pursuance of statutory and common law powers, and is not engaged in performing any contract with him.

74. Starke J (at 245) and McTiernan J (at 250) described the legal nature of the relationship between the Crown and an enlisted member of the Australian armed forces in similar terms. When the plaintiff in the present case enlisted, regs 24 and 25 of the Defence (Personnel) Regulations 2002 had the same effect concerning enlistment by the taking of an oath as r 95 of the Statutory Rules to which Latham CJ referred.

75. In Commonwealth v Welsh (1947) 74 CLR 245; [1947] HCA 14 regulations made under the Air Force Act 1923 (Cth) prescribed rates of deferred pay to which the respondent, an officer, would be entitled with interest at the completion of his commission. He served from October 1939 until his discharge in September 1945. An amending regulation made in April 1943 purported to have the effect that the respondent was deprived of his deferred pay in respect of the period from his enlistment in October 1939 until the date he was deployed overseas in September 1942. The question whether the amending regulation had valid retrospective operation turned upon whether the respondent had accrued rights as at the date of promulgation which would be prejudicially affected.

76. Regulation 31 conferred upon a member of the Air Force the right to sue for “any monies which under his engagement or by any agreement with the Commonwealth are due to him” but this right was exercisable only upon cessation of membership. Regulation 32 was in these terms:

32   The appointment or promotion of an officer under these Regulations shall not create a civil contract between the King or the Commonwealth and the officer.

77. During the service of the plaintiff in the present case, the effect of reg 32 quoted in the preceding paragraph was replicated in reg 117 of the Defence (Personnel) Regulations, together with express disavowal of any contract being made by “the enlistment of an enlisted member” (see [100] below). In Commonwealth v Welsh it was necessary for the High Court to examine what, if any, rights a member of the Air Force had against the Commonwealth in respect of deferred pay as it accrued and prior to cessation of membership of the service. Latham CJ said (at 257):

Regulation 32 … states the principle of the common law applying to the relation between a member of the armed services and the Crown. The engagement of a member of the Forces does not result in the creation of a contract between him and the Crown. He holds his position at the pleasure of the Sovereign; he may be dismissed at any time; he can bring no action for damages for wrongful dismissal, nor can he claim to be discharged from his obligations by reason of any alleged breach of duty on the part of the Crown (Dunn v. The Queen; Leaman v. The King; Commonwealth v. Quince).

78. At 258 Latham CJ held that the respondent’s claim based upon an agreement with the Commonwealth had been correctly rejected in the court below. His Honour said:

The plaintiff became bound, by reason of the law applying to service and the forces, to perform the duties of his position, but the Crown made no promises to him. There was no agreement which he can say binds the Crown. His claim depends upon the existence of rights under the Air Force Act and the regulations made thereunder.

79. Starke J (at 264) held that the respondent’s claim could not be supported on a contractual basis, citing Mitchell v The Queen and Dunn v The Queen. His Honour said:

This principle is enforced by the Air Force Regulations which provide (reg 72) that an officer shall hold his appointment during the pleasure of the Governor-General and (reg 32) that the appointment or promotion of an officer under the regulations should not create any civil contract between the King or the Commonwealth and the officer and also (reg 541) that a member or other person for whom provision is made by the regulations should not be recognised as having any vested rights to any rate of pay, deferred pay, allowance rather a monument except especially provided therein.

150. The plaintiff gave evidence that his Naval training is not directly applicable to his present position but that the mechanical aptitude he acquired and demonstrated during his service assists him in a general way to perform his duties. In the interval between his discharge and the engagement by Fire and Safety Industries in November 2017 he did not acquire any additional training or qualification relevant to this current position. The plaintiff’s earnings as a fire services technician are in the order of 50% greater than what he earned with Ergon Energy. The two rates are not directly comparable because the terms of his present employment may be regarded as more onerous; for example, he works seven days on and seven days off from a base which is two hours’ drive from his home.

151. Taking all these considerations into account I infer from the evidence in the plaintiff’s case taken at its highest, that notwithstanding the lack of a Certificate IV, his earning capacity during the two and a half years since he left the Navy is unlikely to have fallen short of what it would have been if he had held the qualification by any more than about $15,000 per annum. This is so notwithstanding that the plaintiff accepted significantly lower-paying employment for the first 20 months of that period. It is the shortfall in earning capacity to which I must have regard, not the shortfall in actual earnings. The latter may be attributable to limitations of the employment market in the Rockhampton region and other factors not causally related to the lack of a Certificate.

152. It would not be sound to assess damages on the basis that any shortfall is fixed and perpetual. As the plaintiff has matured and gained work experience up to the present time I conclude it is likely that his earning capacity has increased. I infer this process is likely to continue into the future so that accumulated experience will progressively compensate for the absence of the formal qualification which in any event, on Mr Leck’s evidence, has a highly uncertain correlation with earning capacity.

153. Thus I can assess damages only on the basis that holding the Certificate IV in Engineering would have accorded some marketability or potential to secure a higher paying job for which the plaintiff has been ineligible without it. The economic value of this potential is amenable to only the crudest numerical estimation. On such uncertain evidence I can award damages only in a nominal lump sum to represent the lost chance, with its indeterminate degree of possibility, that some margin of higher earnings might have been attained. I assess damages on that basis at $60,000.

18 Common questions and costs

157. These proceedings have been pleaded as a class action in which the plaintiff’s claim has many points in common with similar claims by a large number of other MTs who signed Training Contracts in 2011 and 2012. Counsel accepted during the hearing that I should in the first instance decide the plaintiff’s claim only. The parties would then consider to what extent my judgment resolves or simplifies the claims of other class members. Accordingly, I have not endeavoured to formulate answers to common questions. When these reasons have been considered by the parties the proceedings will be relisted for that purpose and to address the further conduct or disposition of the other class members’ claims.

158. Although the Commonwealth has successfully defended the claim it does not necessarily follow that it should have an order against the plaintiff for its costs. I will reserve that question and hear argument from the parties in light of my findings and reasons. Two considerations which will have to be addressed in submissions on costs are as follows.

159. First, the Navy was at fault in signing sailors up to these agreements. In the internal reports of 2014 senior officers fairly acknowledged the Navy’s error, recognising that a Certificate IV apprenticeship was inapt and unworkable in the context of the Navy’s program for instruction of Marine Technician ratings. There was also a failure of legal control and system in that these agreements were apparently made without advice and without an understanding that apprenticeships under the general law of contract and under State legislation could have no role for enlisted servicemen. The personnel who purported to commit the Navy to these contractual obligations would not have done so if they had accurate knowledge of the law or if they had obtained competent advice, particularly with respect to principles peculiarly applicable to military service.

160. Each of the affected sailors was a young man who had no reason to doubt that when his superiors asked him to sign an apprenticeship agreement it would be a proper engagement, that it would mean what it said and that it would be honoured by the Navy. False expectations were carelessly created. Disappointment followed when the contracts were disavowed in 2014, not on the legal basis I have upheld in these reasons but because Certificate IV training would have conflicted with the Navy’s MT2010 program, both in content and in timing. This litigation has ensued from the sense of grievance these spurious apprenticeships engendered.

161. The second matter which must be addressed in submissions on costs is that the Commonwealth has been extremely tardy in identifying the legal doctrine upon which it has contended, successfully, that the Training Contract is void. In par 6 of its defence to the second further amended statement of claim the Commonwealth denied generally that the Contract had been entered into. The defence continued to the effect that the Commonwealth:

(b)   says that the Training Contract was a nullity or invalid or otherwise unenforceable as the Plaintiff had no contractual relationship with the Defendant pursuant to such document or otherwise;

(c) says that the relationship between the Plaintiff and the Defendant is governed by section 61 of the Commonwealth of Australia Constitution Act, the Defence Act 1903 (Cth) and the regulations promulgated thereunder including regulation 117, all being laws of the Commonwealth;

(d)   says that the Training Contract cannot establish a relationship of employee and employer between the Plaintiff and the Defendant when there is not one at common law; and

(e)   further says that the Training Contract is not supported by consideration and is void.

162. Neither in this paragraph nor elsewhere in the defence was it specified that the legal doctrine according to which the Training Contract was alleged to be void was that which forbids a fetter upon the Commonwealth’s power of command. Nor was this principle identified in the defendant’s opening submissions. On the first day of the hearing (Tcpt pp 62-67) I invited counsel for the Commonwealth to cite the authorities relied upon for the proposition that the Training Contract was “a nullity or invalid”. I informed counsel of my initial surprise that such apparently formal agreements should have been entered into by the Navy and subsequently disclaimed by it. In the discussion which followed counsel did not submit that invalidity arose from a fetter on military command.

163. Even when counsel provided to the Court on the second day of the hearing a folder of authorities which included Ansett Transport Industries v Commonwealth (Tcpt p 98), the aspect of that decision relied upon was not explained. The case dealt with a number of legal issues other than the principle which the Commonwealth has ultimately deployed. I was invited to concentrate upon three other authorities in the Commonwealth’s list as establishing, in counsel’s words:

… the non-existent characterisation of the relationship between a member of the ADF and the Crown as one of employer and employee and why we say that, it simply was not possible for the Commonwealth to even agree to alter the nature of its relationship by entering into the training contract in that regard.

164. For the Commonwealth to resist enforcement of the Training Contract it was never enough simply to say that enlisted service is non-contractual and that the Contract could not alter the character and status of that underlying relationship. The plaintiff’s case always was that a separate, additional legal relationship could be created in contract, parallel with or superimposed upon the engagement of service under common law and statute, without altering that engagement. The plaintiff’s question throughout the hearing was: what, if anything, renders the separate contractual relationship a nullity?

165. The first expression of an argument that the Training Contract was void as a fetter on executive power came in a single paragraph, par 28, of the Commonwealth’s closing submissions dated 27 February 2018. In oral argument on 1 March 2018 the plaintiff’s counsel stated that that issue had:

… only been identified to us for the first time in the submissions that we received two days ago.

The Commonwealth’s counsel did not challenge that statement when he developed the point, very slightly, in oral argument on the same day (Tcpt pp 350-351).

166. The plaintiff has submitted the Commonwealth should not be permitted to rely upon the principle in Ansett Transport Industries v Commonwealth because that was not pleaded. But the Commonwealth did plead that the Trading Contract was a nullity and late identification of the principle supporting that contention is only a matter of legal argument. The plaintiff has not been prejudiced except possibly as to costs. His counsel has been able to respond to the Commonwealth’s submissions concerning the point both orally on 1 March 2018 and in detailed supplementary written submissions dated 6 March 2018. The plaintiff has not contended that he would have run a different evidentiary case if he had been notified earlier that the Commonwealth would invoke this legal doctrine. The core facts which engage it are incontrovertible.

167. Unless additional evidence should now be called to show that the timing of emergence of this argument was different from what I have summarised above, prima facie the Commonwealth’s failure to nominate at the beginning of the proceedings the legal doctrine upon which it has ultimately succeeded would have a strong bearing upon the incidence of costs.

Orders

168. For these reasons the order of the Court will be:

1. The plaintiff’s claim is dismissed.

The proceedings will be listed on a date to be fixed for argument with respect to costs and for the making of orders with respect to the claims of remaining members of the class, including the provision by the Court of answers to any common questions in the proceedings.

**********

Amendments

04 July 2018 -

[82]: delete 'plaintiffs' substitute 'plaintiff's'; insert 'a' before 'member

[114]: delete 'to discharged' substitute 'to be discharged'

[129]: delete 'Court of Appeal' insert 'Queen's Bench Division'

[132]: delete 'and been made' substitute 'had been made'

04 July 2018 -

[160]: delete 'men' substitute 'man'

28 June 2023 - Judgment to be numbered (No 2)

Decision last updated: 28 June 2023