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Re Defence Force Retirement and Death Benefits Authority v Douglas Harry Britt [1984] FCA 313; 57 ALR 199 (30 October 1984)

FEDERAL COURT OF AUSTRALIA

Re: DEFENCE FORCE RETIREMENT AND DEATH BENEFITS AUTHORITY
And: DOUGLAS HARRY BRITT
No. SA G.15 of 1984
Administrative Law
 [1985] VicRp 11 ; 57 ALR 199

COURT

CATCHWORDS

Words and Phrases - "may"

Defence Force Retirement and Death Benefits Act 1973 (Cth) ss.23, 24, 25, 26, 28, 29, 37, 38, 43A

HEARING

ORDER

DECISION

2. The short issue in the appeal is whether the word "may" in s.37 of the Defence Force Retirement and Death Benefits Act 1973 (Cth) ("the Act") confers a wide discretion upon the Defence Force Retirement and Death Benefits Authority ("the Authority") or whether it merely confers a power which the Authority is under a duty to exercise if the other elements of the section be satisfied. It was in that latter sense that the Administrative Appeals Tribunal read the section, which provides :

"37. Where a contributing member has been retired

otherwise than on the ground of invalidity or of
physical or mental incapacity to perform his
duties but, after his retirement, the Chief of
Naval Staff, the Chief of the General Staff or the
Chief of the Air Staff or a person authorized in
writing by the Chief of Naval Staff, the Chief of
the General Staff or the Chief of the Air Staff,
as the case requires, informs the Authority that,
at the time the member was retired, grounds
existed on which he could have been retired on the
ground of invalidity or of physical or mental
incapacity to perform his duties, he may, for the
purposes of this Act, be treated as if he had been
retired on that ground."

"In considering the correctness of this
interpretation it is necessary to bear steadily in
mind that it is the real intention of the
legislature that must be ascertained and that in
ascertaining it you begin with the prima facie
presumption that permissive or facultative
expressions operate according to their ordinary
natural meaning. 'The authorities clearly
indicate that it lies on those who assert that the
word "may" has a compulsory meaning to show, as a
matter of construction of the Act, taken as a
whole, that the word was intended to have such a
meaning' - per Cussen J. : Re Gleeson (1907) VLR
368, at p 373. 'The meaning of such words is the
same, whether there is or is not a duty or
obligation to use the power which they confer.
They are potential, and never (in themselves)
significant of any obligation. The question
whether a Judge, or a public officer, to whom a
power is given by such words, is bound to use it
upon any particular occasion, or in any particular
manner, must be solved aliunde, and, in general,
it is to be solved from the context, from the
particular provisions, or from the general scope
and objects, of the enactment conferring the
power' - per Lord Selborne : Julius v. Bishop of
Oxford (1880) LR 5 AC 214, at p 235. One
situation in which the conclusion is justified
that a duty to exercise the power or authority
falls upon the officer on whom it is conferred is
described by Lord Cairns in his speech in the same
case. His Lordship spoke of certain cases and
said of them '(they) appear to decide nothing more
than this : that where a power is deposited with
a public officer for the purpose of being used for
the benefit of persons who are specifically
pointed out, and with regard to whom a definition
is supplied by the Legislature of the conditions
upon which they are entitled to call for its
exercise, that power ought to be exercised, and
the Court will require it to be exercised' (1880)
LR 5 AC, at p.225."

"This does not depend on the abstract meaning of
the word 'may' but of whether the particular
context of words and circumstance make it not only
an empowering word but indicate circumstances in
which the power is to be exercised - so that in
those events the 'may' becomes a 'must'.
Illustrative cases go back to 1663 : R v Barlow
[1741] EngR 139; (1663) Carth, 293 (90 ER 773); 2 Salk.609 (91 ER
516). Today it is enough to cite Julius v Bishop
of Oxford (1880) 5 App.Cas.214; and add in this
Court Ward v Williams [1955] HCA 4; (1955) 92 CLR 496, at
pp.505-506. But I select one other reference out
of a multitude : Macdougall v Paterson (1851) 11
CB 755 [1851] EngR 970; (138 ER 672). There Jervis C.J. said in
the course of the argument (1851) 11 CB, at p.766
(138 ER, at p.677) 'The word "may" is merely used
to confer the authority : and the authority must
be exercised, if the circumstances are such as to
call for its exercise'. And, giving judgment, he
said (1851) 11 CB, at p.773 (138 ER, at p.679) :

'We are of opinion that the word "may" is
not used to give a discretion, but to confer
a power upon the court and judges; and that
the exercise of such power depends, not upon
the discretion of the court or judge, but
upon the proof of the particular case out of
which such power arises.'

I consider that to be directly applicable to the
present case. If the Commissioner, having
considered the matter, is satisfied of facts out
of which the power to allow a rebate arises, he
cannot nevertheless refuse to allow it."

"23.(1) Where a contributing member retires and is
not entitled to invalidity benefit and -

(a) on his retirement -

(i) his total period of effective service
is not less than twenty years; or

(ii) his total period of effective service
is not less than fifteen years and he
has attained the retiring age for the
rank held by him immediately before
his retirement; or

(b) he had previously become entitled to
retirement pay under this Act or pension,
other than invalidity benefit, under the
previous legislation that was cancelled
under section 62 upon his becoming an
eligible member of the Defence Force,

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

"24.(1) A recipient member may, by notice in
writing given to the Authority, within a period of
one year after becoming entitled to retirement
pay, or within such further period as the
Authority, in special circumstances, allows, elect
to commute a portion of his retirement pay in
accordance with this section."

"26. Subject to sections 27, 28 and 29, where a
contributing member is retired on the ground of
invalidity or of physical or mental incapacity to
perform his duties, he is entitled, on his
retirement, to invalidity benefit in accordance
with this Part."

"38. Where a member of the scheme who is a
contributing member dies before retirement and is
survived by a widow, the widow is entitled to a
pension at a rate equal to five-eighths of the
rate at which invalidity pay would have been
payable to the deceased member if, on the date of
his death, he had become entitled to invalidity
benefit and had been classified as Class A under
section 30."

7. Section 37, which we have set out above, in terms confers a discretion upon the Authority to treat a former contributing member as if he had been retired on the ground of invalidity though he was not in fact so retired.

8. Mr P. Heywood-Smith, of counsel, who appeared for the respondent, submitted that s.37 imposes a duty upon the Authority to exercise the power once the elements of the section, including the notification from the Chief of Staff or other appropriate person, have been made out.

9. Mr Heywood-Smith submitted that the Authority is an inappropriate body to make a decision to treat a member as if he had been retired on the ground of invalidity and that that decision is effectively made, for the purposes of s.37, in each case by the Chief of Staff or other appropriate person. Mr Heywood-Smith submitted that the Authority has only a limited function under the Act, that it has no power to retire a member on the ground of invalidity but determines matters such as the percentage of incapacity once the member has been so retired.

10. However, Mr Heywood-Smith's argument immediately confronts an obstacle which, in our view, it cannot overcome. Section 37 does not confer upon the Chiefs of Staff power to determine that a person be treated as if he had been retired on the ground of invalidity. Section 37 confers on the Chiefs of Staff only the function of determining and informing the Authority that, at the time the member was retired, grounds existed on which he could have been retired on the ground of invalidity. There remains a decision to be made, namely, whether, in the circumstance of the case, the member should be treated as if he had been retired on that ground.

11. Is that decision a matter of discretion? In our opinion, it is. Section 26 does not confer an invalidity benefit both upon a contributing member who was, in fact, retired on the ground of invalidity, and also upon a contributing member who could have been retired on that ground. It confers an invalidity benefit only upon the former. Section 37 uses the word "may" and, in the context in which it appears, we cannot read it as doing other than conferring a discretion to treat a person who could have been retired on the ground of invalidity as having in fact been so retired.

12. There are obviously sound reasons for the conferral of the discretion. Whereas a retirement benefit may, at the time of retirement, have appeared to have been the most beneficial benefit to the member, a medical condition which he had at the time of retirement may subsequently deteriorate so as to make an invalidity benefit more beneficial to him. Moreover, there will be other factors to be taken into account, as, for example, whether the former member has commuted a portion of his retirement pay in accordance with s.24. However, considerations of this type are not necessary to support a reading of s.37 as conferring a discretion. In terms it does so and, having regard to the provisions of s.26, it would not be possible to read it in any other sense.

13. Is this discretion imposed upon the Chiefs of Staff or upon the Authority? In terms it is imposed upon the Authority and we can see no justification for reading the section in any other way. The section confers a specific function upon the Chiefs of Staff, that is, the function of determining whether the member could have been retired on the ground of invalidity and informing the Authority of that fact. This is a function properly imposed upon the Chiefs of Staff for they are aware of the requirements of service and are therefore able to determine whether the member's medical condition was such as to justify his retirement on the ground that he was unable to perform his duties. But that is the only function which s.37 confers upon the Chiefs of Staff. It does not confer upon them the power to decide whether, in the whole of the circumstances of the case, the former member should be treated as if he had been retired on the ground of invalidity or even the power to request that he be so treated. The section makes the advice of a Chief of Staff a pre-condition of the exercise of the discretion which the section confers and not in itself an exercise of that discretion.

14. Mr Heywood-Smith submitted that the Chiefs of Staff have statutory power under other enactments to amend records with respect to retirement and the like. He submitted that s.37 of the Act is ancillary to, and in aid of, those other provisions. However, we think that s.37 deals with a quite distinct subject matter and ought to be read having regard to the context of the Act and not by reference to other enactments.

15. Mr Heywood-Smith further submitted that the Authority has only a limited function under the Act and is not qualified to make a decision of the type required to be made by s.37. We see nothing in the Act which supports this contention. The Act reposes in the Authority many important decision-making roles in addition to the assessment of incapacity. Part V itself contains several such provisions. Section 25 confers upon the Authority a power to decide whether the invalidity was due to a wilful act on the member's part for the purpose of obtaining an invalidity benefit. Section 28 empowers the Authority to decide whether the invalidity was caused, or was substantially contributed to, by a physical or mental condition that existed at the time when the member became a contributing member and as to whether the condition was materially aggravated by his service after becoming a contributing member. Section 29 empowers the Authority to decide whether the invalidity was caused, or substantially contributed to, by an occurrence that happened at the time when the member was absent without leave and had been so absent for a period exceeding sixty days. These are but examples, but they make it clear that the Authority may be concerned with events which occurred prior to service and during service as well as subsequent to retirement. Moreover, the Act imposes on the Authority significant discretions. For example, s.43A empowers the Authority to grant special pensions in the circumstances there specified "at such rate and on such conditions as the Authority, having regard to such matters (if any) as are prescribed and such other matters as it considers relevant, determines." In the light of these matters, we see no reason for concluding that s.37 did not intend the Authority to exercise the significant discretion which in terms it confers upon the Authority.

16. It follows, in our opinion, that the interpretation which the Administrative Appeals Tribunal put upon s.37 was incorrect and that the decision of the Tribunal should therefore be set aside and the matter remitted for hearing according to law. Save as set out above, the nature of the discretion and of the factors to be taken into account in its exercise were not discussed in the appeal and we make no comment thereon.

17. Mr B.M. Debelle, QC, senior counsel for the appellant, with the substance of whose submissions we agree, did not seek an order for costs.

18. The order of the Court will be that the decision under appeal be set aside and the matter remitted to the Administrative Appeals Tribunal to be re-heard.