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[2000] FCA 190
Federal Court of Australia
2000-03-10
Hely J, Merkel JJ
Original judgment source is linked above.
Introduction 1 In July and August 1999 procedures were initiated under the Public Service Act 1922 (Cth) ("the Act") by the Secretary to the Department of the Prime Minister and Cabinet which led to the termination of the appointment of Paul Hunter Barratt as Secretary to the Department of Defence. Mr Barratt filed two successive pre-emptive applications to endeavour to prevent those procedures from continuing. In the first application, he contended that he was entitled to procedural fairness which, he said, was being denied to him; he further contended that his appointment could be terminated only if it were shown that there was some fundamental fault on his part. In the second application, which followed judgment on the first, he said he was entitled to particulars of allegations against him and should be given an opportunity to respond to them. At first instance Hely J found, on the first application, that Mr Barratt was entitled to procedural fairness. However, his Honour rejected Mr Barratt's other contentions and dismissed the second application. Mr Barratt now appeals against those decisions. Since the appeals were initiated, his appointment has been terminated. 2 It is common ground that the termination of Mr Barratt's appointment as Secretary to the Department of Defence was not related to his competence nor to any misconduct on his part. The factual background which follows is based on material not in dispute before the trial Judge.
Factual Background Leading to the First Application 3 By instrument of appointment dated 31 December 1997, made under ss 36(1) and 37(2) of the Act, the Governor-General appointed Mr Barratt to the office of Secretary to the Department of Defence for a term of five years commencing on 5 February 1998. At the time of his appointment, Mr Barratt held office as Secretary to the Department of Primary Industries and Energy. He had a long history of senior appointments in the Australian Public Service, interrupted by a term as the Executive Director of the Business Council of Australia, which he held from 1992 to 1996. Following the election of October 1998, in which the Government was returned, there was a Cabinet reshuffle, but all Secretaries of Departments were left in place. At this time the Hon John Moore MP was appointed Minister for Defence. 4 On 21 January 1999, Mr Barratt and Mr Moore met to discuss pending matters and a proposal by Mr Barratt to travel overseas. Mr Moore expressed concern about the travel proposal because Parliament was about to sit and he wanted to progress the pending matters. He asked Mr Barratt whether he thought he could deal with them before going overseas. Mr Barratt said he believed he could, but he would think about whether he should go overseas. At the end of their meeting, Mr Moore said that because he thought the matters were important, he had written Mr Barratt a letter about them. He handed Mr Barratt a letter dated 21 January 1999. 5 The letter opened as follows: "Since becoming Minister for Defence, we have had a number of discussions on issues I believe to be of importance for the Department and on the most appropriate way of dealing with those issues. I thought it might be useful for me to summarise those issues and my expectations in relation to them. Before doing so there is an important general point I would like to make. It is the strong view of the Government that two important fundamentals of the Government/Defence relationship in a democratic society are firstly, the responsibility of the Government to Parliament for the actions of the Department and secondly, in the ultimate, the importance of civilian control of the military. The need for all important matters of policy to be discussed and agreed with the Minister is therefore clear, as is the need for the Minister to be fully and appropriately briefed. I also support the joint approach to most issues which you and the CDF have taken since assuming your respective roles. I believe this to be particularly important in presenting a clear direction to members of the military and the Department and to the general public. However, it is also my expectation that, on occasion, I will receive advice directly from you as Secretary of the Department which may be separate from, contradictory to, or even not discussed with the military branch or generally within the Department. I would particularly (but not exclusively) expect this advice in relation to management, administrative and structural matters in the Department and the military, and personnel matters." 6 The reference to "CDF" was a reference to Admiral Barrie, the Chief of the Defence Force. 7 The letter went on to address the specific issues which they discussed at the meeting and which it is not necessary to set out for present purposes, although one of them referred to the need for the Department to adopt a much more contemporary and professional approach to public affairs and to develop a public affairs strategy. 8 On 21 January 1999, Mr Moore met with the Secretary to the Department of the Prime Minister and Cabinet, Mr Moore-Wilton. Mr Moore said: "I have substantial reservations about the Secretary's commitment to actively manage the Department in pursuing the Government's reform agenda. He does not appear to want to drive issues to a conclusion. I asked for comprehensive reports on the Collins Class submarine project and they still have not arrived. Moreover he appears to be prepared to 'reign' over Defence rather than manage actively. I am also concerned that the CDF's spouse is Mr Barratt's personal assistant." 9 On 22 January 1999, in the course of a further conversation, Mr Barratt said to Mr Moore that he wanted to be sure that their discussion on the previous day did not indicate a lack of confidence in him on Mr Moore's part. Mr Moore replied by saying that he had been disappointed, as there were some things which he had asked for that had not happened as quickly as he would have liked. He referred to a request to Mr Barratt to arrange economic advice for him on a continuing basis, that was very important to him. He said he was being very blunt, but that was the way he was. Mr Barratt said he was sorry the request had not been dealt with more quickly: he had been "flat out" with the process of compiling a report on the sixteen year history of the Collins Class submarine project to that date. He reminded Mr Moore that he had wanted Mr Barratt to accept full responsibility for the accuracy and comprehensiveness of the report. Mr Barratt said he was giving it a lot of care and attention but, as discussed on the previous day, he would deal with the economic reporting and other matters as quickly as was practicable. Mr Barratt went on to say that they needed to work hand in glove and that if ever Mr Moore were dissatisfied with the advice or service he was receiving, he should just pick up the phone. Mr Moore replied that Mr Barratt might get a lot of phone calls. Mr Barratt said that that was what he was paid for. At the conclusion of the meeting he told Mr Moore that he was sorry to have jumped his diary, but had thought it important to resolve those issues quickly. Mr Moore said words to the effect of "Not at all. Good idea. Glad you came." 10 On 27 January 1999, Mr Moore-Wilton repeated to Mr Barratt the substance of what the Minister had told him on 21 January 1999. He had spoken to Mr Barratt previously about the issue of the CDF's spouse being his personal assistant, observing that it was inappropriate. Mr Moore-Wilton said to Mr Barratt: "In my view the situation is unsatisfactory and you should discuss with your Minister an improved basis for carrying out your duties." 11 In the months that followed, Mr Moore and Mr Moore-Wilton had a number of brief conversations in the Cabinet Room following meetings of Ministers. On one occasion, Mr Moore said that he considered Mr Barratt was not making sufficient effort to manage effectively the Department's reform agenda as set by him. On that or another occasion, he said that he did not have confidence in Mr Barratt's capacity to carry the Government's reform program through. Mr Moore evidently did not make any further expression of dissatisfaction to Mr Barratt between January and June, save for an incident in March relating to a minute signed by the Deputy Secretary Acquisitions, Garry Jones, and countersigned by Mr Barratt. 12 Mr Barratt and Mr Moore travelled together as part of an eight day delegation to China, Korea and Japan in May. Mr Barratt sat next to Mr Moore on the flight from Beijing to Seoul. In the course of that flight, they discussed Mr Barratt's proposed goals under new performance arrangements which the Government was introducing at the time. Mr Moore asked Mr Barratt to send him a copy of a draft he had prepared in that regard. However, following a meeting of the National Security Committee of Cabinet on 28 June 1999 to consider the McIntosh/Prescott report on the Collins Class submarine, Mr Moore told Mr Moore-Wilton that he was giving consideration to the need for a new appointment to the position of Secretary as well as taking forward the recommendation from the McIntosh/Prescott report that a new more senior defence acquisition appointment be made. 13 On 2 July 1999, Mr Barratt and Mr Moore-Wilton met again. Mr Moore-Wilton told Mr Barratt that his relationship with Mr Moore was "just about terminal". He told Mr Barratt that the Minister was giving serious consideration to recommending significant changes to the top level management structure of the Department of Defence, including Mr Barratt's own position as Secretary. He said to Mr Barratt: "This is getting very serious. We are now at the situation where the Minister is actively looking at alternatives for two senior positions in the Department of Defence - the Secretary's position and the new position of Junior Secretary for Defence Acquisition as recommended by the McIntosh/Prescott report. The PM and I are going overseas on Monday and nothing further will be done while he is away but I want you to be aware that you are facing potentially a very serious situation." 14 He asked Mr Barratt what his position was. Mr Barratt said he didn't see that he hadn't carried out his duties to the fullest extent. He said he had carried out the Government's directions and made a number of significant improvements in the management of the Department. He wished to continue in his position as Secretary. As it happened, Mr Barratt saw Mr Moore at a luncheon on 7 July which they both attended with members of a delegation from New Zealand. Mr Barratt asked Mr Moore if there was anything he wished to discuss with him. Mr Moore replied in the negative, saying everything was fine. After that evening, Mr Barratt did not have any further contact with Mr Moore or Mr Moore-Wilton again until 21 July 1999. 15 Mr Moore-Wilton telephoned Mr Barratt on 21 July 1999, while Mr Barratt was waiting at Sydney International Airport to board a flight to the Philippines. Mr Moore-Wilton told him that he would be meeting the following day with the Prime Minister and the Minister for Defence in Canberra to discuss the management of the Department. He advised Mr Barratt that the meeting had been called at short notice and asked him whether there had been any discussions or developments since their previous conversation. He reminded Mr Barratt that he had previously indicated the Minister's concerns and that Mr Barratt's position was under active consideration. Mr Barratt said "Can you give me something specific that I have done?" Mr Moore-Wilton said "No, just things in general. Have you spoken again to the Minister or has he spoken to you?". Mr Barratt said "I have not spoken to him about this". Mr Moore-Wilton asked whether he had spoken to the Minister at all since their previous conversation. Mr Barratt said that he had, but that the matter of his position had not been raised. Mr Moore-Wilton said that it was a pretty hopeless situation. Mr Barratt reiterated that he wished to continue to carry out his duties as Secretary to the Department of Defence. 16 On the following day, Mr Barratt telephoned Mr Moore-Wilton from Manila. Mr Moore-Wilton said that the Prime Minister had authorised him to explore with Mr Barratt an appointment as Australian High Commissioner to New Zealand. He did not have to give an answer immediately, because the Prime Minister had requested that the Minister for Defence meet with Mr Barratt on Monday immediately upon his return to discuss his position. Mr Barratt said he did not need any time to think about New Zealand. He was determined to continue as Secretary to the Department of Defence. Mr Moore-Wilton said: "Mr Moore will be discussing the Government's position with you but, in my personal view, it would not be tenable for you to continue as Secretary to the Department of Defence if you and Mr Moore are unreconciled. If the impasse continues after your discussions with Mr Moore, the only alternative appears to be to initiate the process to terminate your position as Secretary some time in August. Moreover, it is likely that the matter will be raised under-the-line in Cabinet on Tuesday 27 July in view of the press speculation. Consideration is being given to appointing McIntosh as Secretary on a short-term basis and recruiting John White to fill the acquisition role on a short-term basis."
The First Application 17 On 28 July 1999, Mr Barratt filed an application in this Court. Consistent with the process for termination of appointment in the Public Service, the relief sought would have restrained the Secretary to the Department of the Prime Minister and Cabinet from giving a written report to the Prime Minister recommending termination of his appointment. Alternative relief was, in effect, sought which would restrain action being taken adverse to Mr Barratt until he was afforded procedural fairness, including a reasonable opportunity to be heard. It would have restrained the Prime Minister from recommending the termination of his appointment to the Governor-General and would have restrained the Governor-General from terminating his appointment. Associated declaratory relief was also sought. An order that the Prime Minister be restrained from recommending to the Governor-General that his appointment as Secretary to the Department of Defence be terminated "except for cause shown" was sought. 18 After an urgent hearing, his Honour made a declaration in the following terms: "Before any report is made by [Mr Moore-Wilton] to [Mr Howard] pursuant to subsection 37(12) of the Public Service Act 1922 advising that [Mr Howard] recommend to the Governor-General that [Mr Barratt's] appointment as Secretary to the Department of Defence be terminated, [Mr Barratt] is entitled to: (a) written notice of the grounds or reasons upon which the recommendation is proposed to be made; and (b) a reasonable opportunity to make written submissions in relation to that report." 19 The judgment was delivered on 19 August 1999 and the formal order made on 20 August. A notice of appeal was filed by Mr Barratt on 8 September 1999.
Factual Background Leading to the Second Application 20 Following the judgment delivered on 19 August 1999, Mr Moore-Wilton wrote to Mr Barratt on 20 August as follows: "1. In accordance with my obligations as declared by the judgement of His Honour Justice Hely delivered on 19 August 1999 I now advise you that it is my intention to consider whether or not I should report to the Prime Minister under sub-section 37(12) of the Public Service Act that he should recommend to His Excellency the Governor-General that His Excellency should direct that your appointment as Secretary to the Department of Defence be terminated on the following grounds: (a) that the Minister for Defence has lost trust and confidence in your ability to perform the duties of Secretary to the Department of Defence; and (b) that this lack of trust and confidence is detrimental to the public interest because it is prejudicial to the effective and efficient administration of the Department of Defence. 2. The material upon which I propose to make a decision, subject to any further material you may choose to put before me, is such of the material set out in the affidavits (including annexure PHB2 to your affidavit of 5 August 1999 and annexures A and B to my affidavit of 2 August 1999 but no other annexures) which was admitted into evidence in the proceedings before Justice Hely and the oral evidence given in those proceedings. For your convenience I attach a list of the paragraphs of each of the four affidavits which were so admitted. I will also take into account the fact that yesterday the Minister for Defence said to me that he had lost confidence in you. 3. As you are aware from the Federal Court proceedings, I had previously formed certain views on the material then available to me. As those views were formed without your having any opportunity to comment on them, I propose to disregard them and reconsider the whole matter without taking my former views into account. 4. If you wish to place any material before me to be taken into consideration by me in making my report to the Prime Minister, I invite you to do so in writing by 5pm on Tuesday 24 August next. If no material is placed before me by then, I propose to make a decision on the basis of the material referred to above." 21 The material referred to in para 2 of this letter included the material from which the undisputed factual background outlined earlier has been taken. Mr Barratt replied to Mr Moore-Wilton by letter of the same date as follows: "I refer to your letter dated 20 August 1999. 1) In paragraph 2 of your letter, you state that, in considering whether to report to the Prime Minister under s 37(12) of the Public Service Act 1922, you intend to have regard to the oral evidence in the proceedings before Mr Justice Hely and to a conversation that you had with the Minister for Defence on 19 August 1999. 2) To enable me properly to consider and respond to the material to which you will have regard, and to compile the material which I may wish to put before you, I ask that you identify parts of the oral evidence that you propose to consider. I also request that you set out with particularity the substance of your conversation with the Minister for Defence on 19 August 1999. 3) I refer to paragraphs 1(a) and (b) in which you refer to a loss of 'trust and confidence'. As this ground is currently phrased, I am unable to respond, as the terms are so broad as to preclude me from responding in any adequate fashion. Please indicate with specificity the issues, events or other matters that you allege contribute to the substance of this ground. 4) I note that in paragraph 3 of your letter you state that you had 'previously formed certain views' and that you propose to disregard those views when you reconsider the matter. Would you please indicate the content of the views previously formed by you. By way of further clarification would you please indicate whether those views included the views stated by you: a) in our conversation on 21 July 1999, referred to in paragraph 5 of my affidavit sworn on 28 July 1999, namely that John Moore did not have an particular problem with my performance, but rather it was 'things in general'; b) in you[r] draft letter to the Prime Minister dated 23 July 1999 that is Annexure C to your affidavit sworn on 2 August 1999, namely that my performance as Secretary of the Department of Defence was in some fashion inadequate; c) in your draft letter to me dated 27 July 1999 produced by you pursuant to the Notices to Produce in the proceeding, namely that there is an 'irreconcilable conflict' between the Minister for Defence and myself; d) in the Respondent's Statement of Issues dated 2 August 1999 filed in the Federal Court proceedings, namely there is an 'irreconcilable conflict' between the Minister for Defence and myself. 5) If the views to which you refer in paragraph 3 of your letter do not include these views, do you propose to disregard these views too? 6) For the record I wish to state that I fail to understand how it is that you can 'disregard' the views you have already formed in this matter given that the material to which you will have regard is substantially the same as that previously considered by you. 7) As revealed by the matters referred to in paragraph 4, the 'reasons' proffered for the termination of my appointment as Secretary to the Department of Defence have radically changed in a relatively short period. In light of this, I ask that you confirm that the ground that you are considering as the basis for the recommendation by you to the Prime Minister for the termination of my appointment is in fact 'irreconcilable conflict' between myself and the Minister for Defence. 8) In light of the further information that is required to enable me to respond, I request that you extend the time for me to provide my submission to you to 5pm on Friday 27 August 1999." 22 Mr Moore-Wilton responded to Mr Barratt by a letter dated 23 August as follows: "I refer to your letter of 20 August 1999 in which you raised various matters relating to my earlier letter to you of the same date. My responses to the matters raised by you are as follows: Paragraph 2 I propose to consider the whole of the oral evidence. My conversation with Mr Moore took place after the Federal Court decision had been handed down and I was considering whether or not I should make a report to the Prime Minister under subsection 37(12) of the Public Service Act in relation to your appointment as Secretary to the Department of Defence. For that purpose, I said to Mr Moore words to the effect: 'What is your current view of your relationship with Mr Barratt in relation to the management of the Department of Defence?' Mr Moore replied to the following effect: 'I have no confidence in Mr Barratt.' Paragraph 3 In paragraph 2 of my letter of 20 August, I indicated the material on which I proposed to rely, subject to any further material you may choose to put before me. Paragraph 4 My previous views were set out in Annexure C to my affidavit sworn on 2 August 1999. In relation to the individual sub-paragraphs, my responses are: (a) Yes, although, of course, this referred to my understanding of Mr Moore's view that he was dissatisfied generally with your administration of the Department of Defence. (b) I did not express such a view. (c) Yes. (d) Yes. Paragraph 5 I propose to disregard the entirety of the views that I had previously formed by 23 July 1999. Paragraph 6 Noted. However, I can assure you that I will disregard the views I previously formed. Paragraph 7 The grounds upon which I am considering making a report to the Prime Minister are set out in paragraph 1 of my letter of 20 August 1999. Accordingly, I cannot provide the confirmation you seek in the second sentence. Paragraph 8 Taking into account the time that has elapsed; this response to your letter of 20 August 1999; and the urgency of the matter, I am prepared to extend the time for your response to 5pm on Wednesday, 25 August 1999."
The Second Application 23 Following the correspondence with the Secretary to the Department of the Prime Minister and Cabinet on 20 and 23 August 1999, Mr Barratt filed a second application, on 25 August 1999, seeking declaratory relief in the following terms: "A declaration that in the circumstances procedural fairness requires that prior to [Mr Moore-Wilton] giving a report to [Mr Howard] pursuant to section 37(12) of the Public Service Act 1922 advising or recommending that the appointment of [Mr Barratt] as Secretary for the Department of Defence is terminated, [Mr Barratt] is entitled to a statement of the grounds upon which the Minister for Defence states that the Minister has no trust and confidence in [Mr Barratt]."
24 The second application was dismissed by Hely J on 26 August 1999. A notice of appeal against the second judgment was filed by Mr Barratt on 8 September 1999 along with the notice of the appeal from the first judgment.
Statutory Framework 25 The relevant statutory framework is provided by the Act although, since the events which have led to this litigation, the Act has been repealed by the Public Service Act 1999 (Cth), with effect from 5 December 1999. 26 The chief object of the Act is set out in s 6: "The chief object of this Act is to constitute a public service for the efficient, equitable and proper conduct, in accordance with sound management practices (including personnel management practices), of the public administration of the Australian Government and this Act shall be construed accordingly." 27 Section 25 of the Act provides for the office of Secretary of Department. The basic provision is found in the opening words of s 25(1): "The persons for the time being holding the several offices specified in Schedule 3 shall be Secretaries of Departments." 28 Schedule 3 sets out a list of Secretaries of Departments including the Secretary to the Department of Defence. Subsection 25(2) provides: "The Secretary of a Department shall, under the Minister, be responsible for its general working, and for all the business thereof, and shall advise the Minister in all matters relating to the Department." 29 The Secretary is responsible for the preparation of an annual report on the operation of his or her Department which is to be tabled in Parliament by the Minister (ss 25(6) and (8)). 30 Division 4 of Part 3 of the Act is concerned with appointments, transfers and promotions in the Public Service. Subdivision A includes provision for the application of a merit principle and the prohibition of patronage and unfair discrimination in the exercise of powers in respect of appointments. Subdivision B deals specifically with the appointment of Secretaries of Departments. Section 36 provides for appointments in the following terms: "36(1) The Governor-General may, in writing, appoint a person to an office of Secretary. (2) The power of the Governor-General to appoint a person to an office under subsection (1) shall be exercised only in accordance with advice that is consistent with a recommendation by the Prime Minister." 31 The Prime Minister cannot make the relevant recommendation until he has received a written report in relation to the filling of the vacancy from the Secretary to the Department of the Prime Minister and Cabinet (s 36(3)). The person preparing the report for the Prime Minister must first consult with the relevant Minister (s 36(4)). 32 Section 37 provides for fixed term appointments. The relevant parts of s 37 are set out below: "37(1) Where a person is appointed to an office of Secretary, the instrument of appointment may provide that the person is appointed to hold office as Secretary for such period (not exceeding five years and not extending beyond the day on which the person will attain the age of sixty five years) as is specified in the instrument of appointment and, where the instrument of appointment so provides, the appointment is a fixed-term appointment for the purposes of this section. …. (4) A person appointed to an office of Secretary under a fixed-term appointment holds the office on such terms and conditions (if any) relating to matters not provided for by or under this or another Act as are determined in writing by the Governor-General. (4A) A determination under subsection (4) must be in accordance with advice that is consistent with a recommendation by the Commissioner. (5) If: (a) a person holds an office of Secretary under a fixed-term appointment; and (b) one of the following events occurs: (i) the office is abolished; (ii) the period for which the appointment was made expires; (iii) the Governor-General directs that the appointment be terminated on a specified day, being a day not earlier than the day on which the direction is given; and (c) immediately after the event referred to in (b) occurs, the person does not hold another office of Secretary; the person is retired from the Service by force of this subsection. …. (7) The Governor-General shall not direct under subsection (5) that the appointment of a person to the Service be terminated by reason only of the fact that the person has done, or omitted to do, an act or thing in respect of which a charge could be laid against the person under Division 6, or on the ground that a court has convicted the person of a criminal offence within the meaning of that Division or found, without recording a conviction, that the person has committed such an offence. …. (11) A power of the Governor-General under this subsection (other than subsection (4)) shall be exercised only in accordance with advice that is consistent with a recommendation by the Prime Minister. (12) The Prime Minister shall not recommend, for the purposes of subsection (11), the taking of an action under this section unless the Prime Minister has received a written report in relation to the taking of the action from: (a) in the case of action in relation to the office of Secretary to the Department of the Prime Minister and Cabinet - the Commissioner; and (b) in any other case - the Secretary to the Department of the Prime Minister and Cabinet." 33 By virtue of the operation of s 41, the provisions of s 33 relating to the application of the merit principle, the prohibition of patronage and the exclusion of unfair discrimination, do not apply to appointments under the subdivision relating to Secretaries. 34 Division 6 of Part 3 of the Act (ss 55 - 65) deals with discipline. In s 55 the term "misconduct" in relation to an officer is defined as "a failure of the officer to fulfil his duty as an officer". The term "failure to fulfil duty as an officer" is itself defined widely in s 56. It is convenient to set out this provision in full: "56. For the purposes of this Subdivision and Subdivisions B, C and E, an officer shall be taken to have failed to fulfil his duty as an officer if and only if: (a) he wilfully disobeys, or wilfully disregards, a direction given by a person having authority to give the direction, being a direction with which it is his duty as an officer to comply; (b) he is inefficient or incompetent for reasons or causes within his own control; (c) he is negligent or careless in the discharge of his duties; (d) he engages in improper conduct as an officer; (e) he engages in improper conduct otherwise than as an officer, being conduct that affects adversely the performance of his duties or brings the Service into disrepute; (ea) the officer engages in conduct (including patronage, favouritism or discrimination) in breach of section 33; (f) he contravenes or fails to comply with: (i) a provision of this Act, of the regulations or of a determination in force under subsection 9 (7A) or section 82D, being a provision that is applicable to him; or (ii) the terms and conditions upon which he is employed; or (g) he has, whether before or after becoming an officer, wilfully supplied to an officer or another person acting on behalf of the Commonwealth incorrect or misleading information in connexion with his appointment to the Service." 35 Subdivision B of Division 6 (ss 56A - 60) deals with the application of disciplinary procedures to Secretaries of Departments and certain unattached officers. A Minister who has reason to believe that an officer may have failed to fulfil his duty as an officer may, by notice in writing delivered to the officer, suspend him from duty and charge him with the failure (s 57(1)). The notice is required to specify particulars of matters alleged to constitute the failure and the suspension and charge is to be reported to the Board (s 57(2)). There is provision for the officer charged with misconduct to make written submissions to the Board that the charge should be dismissed; or to furnish a notification to the Board, in writing, admitting the truth of the matters alleged to constitute the misconduct (s 57(3)). Where the misconduct is not admitted, a Board of Inquiry is required to inquire into the charge and report to the Board whether it finds the charge to be proved with reasons for the finding (s 57(5)). Where there is an admission or a finding that a charge of misconduct is proved, the Board is required to recommend to the Governor-General the action to be taken in respect of the misconduct, whether by way of admonition, transfer, dismissal or no action (s 57(7)). The Board is to inform the officer beforehand of the recommendation it proposes to furnish to the Governor-General; and to provide the officer with an opportunity to furnish any submission that the officer wishes the Governor-General to consider in relation to the recommendation (s 57(9)). The Governor-General is then empowered to take one of the specified kinds of action, or no action, in respect of the misconduct (s 57(10)). If the Governor-General decides not to give effect to the Board's recommendation, a copy of the statement setting out his or her reasons for not giving effect to it is to be laid before each House of Parliament (s 57(11)). Provision is also made for action to be taken where an officer has been convicted of a criminal offence, or where there has been a finding, without recording a conviction, that an officer has committed such an offence (s 58). The term "criminal offence" is very broadly defined, with no lower threshold of seriousness (s 7). In that case, there is provision for a recommendation to the Governor-General, an opportunity for submissions to the Board by the officer affected, and an opportunity for the officer to make submissions to the Governor-General on the Board's recommendation. There are also provisions in Subdivision B relating to the suspension of Secretaries of Departments (ss 59 and 60). 36 Division 8A deals with the retirement and redeployment of Secretaries of Departments (ss 76A - 76G) other than those appointed for a fixed term. In particular, s 76D provides for retirement on the grounds of inefficiency or incompetence; or where the Secretary is, because of physical or mental incapacity, incapable of performing the duties of the office. Distinct from retirement is the process of termination of appointment for Secretaries provided in s 76E. The process for termination resembles that provided for Secretaries on fixed term appointments under s 37. The power of the Governor-General to terminate an appointment under s 76E(1) shall be exercised only in accordance with advice that is consistent with a recommendation by the Prime Minister (s 76E(2)). No such recommendation can be made unless the Prime Minister has received a written report in relation to the termination from the Secretary to the Department of the Prime Minister and Cabinet (s 76E(3)(b)). On termination, the office becomes vacant; and unless the person continues to hold another office of Secretary, the person becomes an unattached officer (s 76E(4)).
Statutory History 37 The Court was taken through elements of the recent legislative history of the Act affecting the tenure of Heads of Department. In our view, nothing critically turns upon that history. In summary, the position until 1977 was that the office of Secretary of a Department was, in effect, a permanent appointment, subject only to dismissal by the Governor-General for an "offence" as defined in s 55 of the Act. From 28 February 1977, an appointment could be terminated by the Governor-General on the recommendation of the Prime Minister of a different political party from that which had appointed the Secretary. On that basis, a previously "permanent officer of the Service" would become an unattached officer. Anyone else so terminated was retired - Public Service (First Division Officers) Act 1976 s 3. The Public Service Amendment Act 1978 introduced new provisions for dismissal for failure to fulfil the duties of an officer or for conviction for a criminal offence. Those provisions remained unchanged until the repeal of the Act. The Commonwealth Employees (Redeployment and Retirement) Act 1979 provided that the Governor-General, on report from the Board, could compulsorily retire a Secretary for inefficiency, incompetence, incapacity and the like. 38 The Public Service Reform Act 1984 introduced a new s 37 which provided for fixed-term appointments of persons who were not officers, to the office of Secretary. It also provided that the Governor-General, on the recommendation of the Prime Minister, upon report from the Chairman of the Board, could terminate the appointment of a Secretary who had a fixed-term appointment with the result that the Secretary became either unattached (from the office, s 37(5)) or retired (from the Service, s 37(6)). By the Prime Minister and Cabinet (Miscellaneous Provisions) Act 1994, s 37 of the Act was amended so as to apply to all Secretaries with fixed-term appointments, and the two methods of terminating a fixed-term appointment became a single power to terminate the appointment to the office, with the automatic consequence of retirement from the Service.
Reasons for Judgment on the First Application 39 The learned trial Judge in his reasons for judgment on the first application identified the issues in the case as: 1. Whether the Secretary to the Department of the Prime Minister and Cabinet, before providing a written report to the Prime Minister in relation to the termination of Mr Barratt's appointment, and/or the Prime Minister before advising or recommending to the Governor-General that the appointment be terminated, was obliged to afford procedural justice, including a reasonable opportunity to be heard. 2. Whether the power of termination may only be exercised for cause shown. 40 On the first issue, his Honour observed that the removal of Mr Barratt from office would only occur in the exercise of a statutory power. That exercise was subject to general law principles governing administrative discretions. The history of the legislation was of little assistance in determining the question of an entitlement to procedural fairness. On the present state of the Act, the effect of a recommendation by the Prime Minister would be to deprive Mr Barratt of his livelihood and possibly adversely affect his reputation. Prima facie, he was entitled to procedural fairness, unless there could be found in the provisions of the Act a legislative intent to exclude natural justice. His Honour rejected an expressio unius argument that the presence of procedural protections associated with ss 56 and 57 and their absence in s 37 indicated the existence of such a legislative intention. Nor was the discretionary nature of the power and the public interest aspect of its exercise sufficient to exclude the duty to extend procedural fairness, which is itself referrable to a general duty of good administration. His Honour referred to s 6 of the Act which he held reflected the same principles as underpin the common law requirements of natural justice. In the event, his Honour concluded that Mr Barratt was entitled to procedural fairness before the Prime Minister made a recommendation pursuant to s 37(11). This involved an entitlement to be told the grounds or reasons upon which a recommendation was proposed and an entitlement to be heard in relation to them. His Honour found no need to decide an alternative case based upon the contention that Mr Barratt had a legitimate expectation arising from conduct apart from the terms of his appointment. 41 On the second issue, whether termination could only be for cause shown, his Honour observed that s 37 does not limit the circumstances in which the Prime Minister may make a recommendation for termination. He accepted that the relationship between a Minister and a head of Department should be one in which the Minister has trust and confidence in the head, and that policy or political considerations may have a bearing upon the selection process. Those factors could also explain why the Act contains provision for the premature termination of a term of office. The power in the Prime Minister to recommend termination of a Secretary's appointment was one which was exercisable having regard to the public interest. His Honour concluded that Mr Barratt had failed to make out his case that the power of termination under s 37(5) could only be exercised for cause, in the sense of some fault or incapacity of a fundamental nature going to his fitness to continue to occupy his office for the remainder of the term.
Reasons for Judgment on the Second Application 42 In his judgment on the second application, delivered on 26 August 1999, his Honour dismissed the application with costs. After referring to the exchange of correspondence in August between Mr Barratt and Mr Moore-Wilton, his Honour said that if Mr Moore-Wilton's report to the Prime Minister or the Prime Minister's recommendation to the Governor-General were to be wholly or partially based upon some perceived fault of insufficiency on the part of Mr Barratt, then he was entitled to know what the fault or insufficiency was said to be, so that he could respond to it. On the other hand, if the report and recommendation were to be based solely on the fact that the Minister "rightly or wrongly and for whatever reason" had lost confidence in Mr Barratt's ability to perform his duties as Secretary and some consequential detrimental effect upon the efficient administration of the Defence Department, then the position was otherwise. In such a case, considerations of procedural fairness did not require that Mr Barratt be told why the Defence Minister had lost confidence in him, as this would not be a matter informing or playing a part in the decision-making process of either Mr Moore-Wilton or the Prime Minister. His Honour said: "It is a matter for the [Secretary to the Department of the Prime Minister and Cabinet] to decide whether the expression of lack of trust or confidence in the applicant by the Defence Minister, and any consequential impact which that has had upon the effective working of the Defence Department, is a sufficient basis on which to make his report to the Prime Minister with respect to the removal of the applicant from office, without enquiry as to the reasons for, or justification for that lack of confidence. It is a matter for the Prime Minister to decide whether a report confined in that way, provides a sufficient foundation for him to recommend to the Governor-General that the applicant's appointment as Secretary be terminated, without enquiry as to the reasons for, or the justification for, the Defence Minister's lack of confidence." 43 His Honour held that the reason identified by Mr Moore-Wilton for his report on termination was capable of being responded to in terms of accuracy and sufficiency.
The Appeals 44 Mr Barratt's notice of appeal against the first judgment challenged his Honour's decision in a number of respects. The two live contentions arising out of the first appeal were that: 1. Mr Barratt had a legitimate expectation that he would be afforded procedural fairness before a decision was made to terminate his appointment, and that his appointment would not be terminated without valid reasons. 2. The appointment could not be terminated without cause shown, and that the cause must be some conduct or incapacity on his part sufficient to justify that termination. 45 At the time the notices of appeal were filed, no termination had occurred, so the relief sought was prospective, that is to say, by way of a declaration that the termination of his appointment "would be void", unless justified by reasons or grounds which rendered him unfit to continue in the office. 46 The second appeal attacked his Honour's conclusions in some ten separate grounds. Their principal thrust was that Mr Barratt was entitled, as a matter of procedural fairness, to be informed of the reasons or grounds upon which it was alleged that the Minister had lost trust and confidence in his ability to perform the duties of Secretary to the Department of Defence. This became the third main issue raised for our consideration. 47 It should be noted at this stage that, by reason of s 3(5) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("ADJR Act"), a report under s 37(12) and a recommendation under s 37(11) of the Act are decisions for the purposes of the ADJR Act. The grounds relied upon by Mr Barratt to review those "decisions" fell under s 6 of the ADJR Act, being conduct relating to making those "decisions".
Procedural Fairness under the Statutory Framework 48 There was no challenge by the respondents to the conclusion in the first judgment that Mr Barratt was entitled to receive from the Secretary to the Department of the Prime Minister and Cabinet written notice of the grounds and reasons upon which the proposed recommendation was based, together with a reasonable opportunity to make submissions. The existence and content of the procedural fairness requirement, and the question whether termination can only be made for cause, are interrelated in the sense that they each depend upon the construction of the statute - Salemi v MacKellar (1977) 137 CLR 396 at 401, 419 and 460. Further, the question whether termination must be for cause, and the class of cause that will justify termination, affect the content of the procedural fairness requirement. It is appropriate therefore to begin consideration of those issues by reference to the basis upon which the requirement of procedural fairness rests in this case. 49 As a general proposition it is not lightly to be supposed, absent express provision, that legislators have conferred a power affecting rights, privileges or liabilities, which is able to be exercised in a way that is unfair. Whether they have will depend upon the attributes of the power concerned. These will include its width, purpose and subject matter and the consequences of its exercise. 50 The purpose of the power to terminate the appointment of a person as Secretary under s 37(5) is not specified. It must be read, however, as advancing the chief objective of the Act defined in s 6, that is to say: "…the efficient, equitable and proper conduct, in accordance with sound management practices (including personnel management practices), of the public administration of the Australian Government…." 51 Efficiency, equity and proper conduct are all elements of that object. It is not a tenable proposition, having regard to those elements, and particularly that of equitable conduct, that the Parliament would have intended the exclusion of procedural fairness from the processes prescribed for the premature termination of the fixed term appointments of the most senior officers of the Australian Public Service. Importantly, equity is not the only consideration to be seen to support procedural fairness. Fairness is not a moral fetter on efficiency. Fairness, expressed in recognition of the right to be heard and want of bias on the part of the decision-maker, operates in aid of informed decision-making that has regard to relevant criteria and so advances the statutory purpose. So equity serves efficiency. Section 6, by itself, says enough to negative any legislative intention to exclude the application of procedural fairness in relation to the power to terminate Secretarial appointments. 52 The subject matter of the power is an office held by an individual which will ordinarily be the source of that individual's livelihood and public standing. The consequence of termination will be loss of that livelihood, loss of the associated public standing and possible damage to reputation. 53 The width of the power to terminate Secretarial appointments is not confined by specific criteria, but the Act conditions its exercise. It requires a report by the Secretary to the Department of the Prime Minister and Cabinet to the Prime Minister, a recommendation by the Prime Minister to the Governor-General and a decision by the Governor-General, acting on the advice of the Executive Council. The exercise of the power is treated in the Act as one of the most serious moment. In accordance with the considerations mentioned, having as their aim that such a decision should be properly informed, procedural fairness is a prerequisite of its exercise. It is also important, as an element of the objectives set out in s 6 of the Act, that such a decision have a high level of credibility and legitimacy. Procedural fairness is of importance in securing that objective. 54 The conclusion that procedural fairness is to be observed in the exercise of the power to terminate a Secretary's appointment does not carry with it any conclusion about how that fairness is to be achieved. Its content depends upon the statutory framework. It also depends upon the particular circumstances of the case which fall for decision. The factors cited earlier going to whether procedural fairness applies, are also relevant in assessing its content. So Brennan J said in National Companies and Securities Commission v The News Corporation Ltd (1984) 156 CLR 296 at 326: "The terms of the statute which creates the function, the nature of the function and the administrative framework in which the statute requires the function to be performed are material factors in determining what must be done to satisfy the requirements of natural justice." 55 See also Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475 at 503 - 504 (Kitto J).
Legitimate Expectation 56 It is appropriate at this point to deal with Mr Barratt's contentions based on the concept of legitimate expectation. He had submitted on the first application that he had a legitimate expectation that: (i) he would remain in office until the expiration of his five year term or, alternatively, at least until the end of 1999; or (ii) alternatively, that the Prime Minister would make no recommendation to the Governor-General that his appointment be terminated unless there was a significant change in circumstances and in any event, not on the ground of any differences between him and the Minister for Defence; or (iii) alternatively, that the Secretary to the Department of the Prime Minister and Cabinet would not report to the Prime Minister recommending the termination of his appointment unless the grounds thereof were first articulated to him by the Secretary and he was given an opportunity to respond. 57 Mr Barratt submitted on the appeals that his Honour, who did not deal with this alternative submission, should have held that he had a legitimate expectation in the terms asserted. That expectation was said to arise from each of a variety of matters. They comprised his appointment to each of the positions of Secretary to the Department of Primary Industries and Energy and Secretary of the Department of Defence for a fixed term of five years; the fact that each such appointment was on the recommendation of the Prime Minister, itself based on a report from the Secretary to the Department of the Prime Minister and Cabinet; the fact that he had relinquished a lucrative position in the private sector to take up the appointment; and express or implied representations given to him by the Secretary to the Department of the Prime Minister and Cabinet. Also relied upon was the failure of the Minister at any time to contact him personally relating to his position as Secretary, or to notify him of any criticism of his conduct or any difficulty in their relationship. He relied upon public statements of the Minister on 11 March 1999 and 11 May 1999 and a ministerial document entitled "Defence Achievements under the Howard Government" indicating the Minister's satisfaction with the performance of the Department. Statements by the Secretary of the Department of the Prime Minister and Cabinet in March 1999 that there would be no changes to Secretarial appointments at that time; and statements in July 1999 that the Prime Minister would not sack Mr Barratt and that the Secretary to the Department of the Prime Minister and Cabinet could "hold the line" until Christmas are also relied upon. 58 On those facts it was submitted that Mr Barratt was led to believe that his office would not be terminated on the basis of his conduct during the period in question. It was submitted that, in the circumstances, he had a legitimate expectation that "prevented his termination in the manner adopted and on the grounds relied upon". 59 In our opinion, these submissions were based upon a misconception of the concept of legitimate expectation and sought to elevate it to the level of a substantive administrative estoppel. 60 The term "legitimate expectation" was adopted by Lord Denning MR in Schmidt v Secretary of State for Home Affairs [1969] 2 Ch 149 at 170 when he said: "The speeches in Ridge v Baldwin [1964] AC 40 show that an administrative body may, in a proper case, be bound to give a person who is affected by their decision an opportunity of making representations. It all depends on whether he has some right or interest, or, I would add, some legitimate expectation, of which it would not be fair to deprive him without hearing what he has to say." 61 In Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487 at 508, Aicken J (Stephen and Mason JJ agreeing) referred to a "reasonable expectation" of some entitlement as "an expectation that some form of right or liberty will be available, or will not be taken away without an opportunity for the subject to put his case to the relevant governmental authority armed with the compulsory power in question". It is not necessary to review here the many authorities that have considered and developed the concept since the term was coined by Lord Denning. It is and was from the outset "a foundation for attracting a duty of procedural fairness" which extended legitimate expectations beyond enforceable legal rights - Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 20 (Mason CJ) and the authorities there cited. 62 The doctrine of legitimate expectation has not been extended in Australia to afford substantive protection of the rights the subject of the expectation. In Quin, Mason CJ identified, as an objection to substantive protection arising from a legitimate expectation, that it would entail curial interference with administrative decisions on the merits by precluding the decision-maker from ultimately making the decision which he or she considered most appropriate in the circumstances. Nevertheless, his Honour was prepared to allow the possibility "that there may be some cases in which substantive protection can be afforded and ordered by the Court, without detriment to the public interest intended to be served by the exercise of the relevant statutory or prerogative power" (at 23). Brennan J rejected the notion of substantive protection outright at 39: "That theory would effectively transfer to the judicature power which is vested in the repository, for the judicature would either compel an exercise of the power to fulfil the expectation or would strike down any exercise of the power which did not." 63 See also Dawson J at 54. 64 In Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 291, Mason CJ and Deane J said: "The existence of a legitimate expectation that a decision-maker will act in a particular way does not necessarily compel him or her to act in that way. That is the difference between a legitimate expectation and a binding rule of law. To regard a legitimate expectation as requiring the decision-maker to act in a particular way is tantamount to treating it as a rule of law." 65 Their Honours went on to observe, in accordance with established principle, that if a decision-maker proposes to make a decision inconsistent with a legitimate expectation, procedural fairness requires the person affected be given notice and an adequate opportunity of presenting a case against the taking of such a course. Also see Toohey J at 299 and 302 and McHugh J at 313. 66 The weight of authority lies against the use of legitimate expectation to support enforcement of substantive rights. Rather, it generates an entitlement to procedural fairness. But that entitlement in this case, for reasons already outlined, conditions the exercise of the power of termination as a matter of construction of the Act.
The Grounds for Termination under Section 37 67 The second issue raised by these appeals, which impacts on the third relating to the content of procedural fairness, is the basis upon which the power to terminate the Secretary's appointment under s 37 can be exercised. It was submitted for Mr Barratt that the subject matter of the power strongly suggests that it is to be exercised only for cause constituted by some fault or incapacity of a fundamental nature. The subject matter is termination of what is specifically described in s 37 as a "fixed term" appointment. It is not termination of an appointment expressed to be at will. The power was characterised by Mr Barratt's counsel as final and devastating in its effect. The propounded construction was said also to be strongly supported by the words in s 37(7) "by reason only". The stress on the word "only" is that it is not enough that one of these other sets of provisions has been brought into play by serious misconduct or commissions of an offence. There must be something in addition. This would suggest, it was said, that the ground relied on must be serious indeed. The Governor-General's power therefore can only be exercised, the argument ran, if there are facts and grounds to justify it. Parliament did not intend that notwithstanding a fixed term appointment, the appointment could be terminated at pleasure. Also invoked were the objects set out in s 6 of the Act. 68 It was submitted on behalf of Mr Barratt that there can be no failure on the part of a Secretary to fulfil his duty as an officer without some finding of fault on his part. Reference was made to s 56(f)(ii) which includes, within the concept of failure to fulfil his duty as an officer, a failure to comply with the terms and conditions upon which he is employed. So it was submitted that if, as in the present case, the Minister asserts that he has lost trust and confidence in the ability of the incumbent to perform the duties of Secretary he should proceed under s 57(2). The section, it was said, is specifically directed to Secretaries, covers the subject matter of their inability to fulfil their duties and provides a procedure for dealing with it. The holding of a subjective view by the Minister on such a matter, not grounded in any reasonable belief, could not have been intended to provide a means of avoiding the procedural protections of s 57. Alternatively, it was submitted that any ground of termination under s 37 must be based on fault in the Secretary, for s 37(7) carves out from the power under s 37(5) the power to terminate an appointment on disciplinary grounds only, dealt with separately under s 58. In so doing, it was submitted, s 37(7) makes it clear that for there to be a "reason" or "ground" justifying dismissal by the Governor-General, there must be something over and above that which would justify disciplinary action under Division 6. The clear contemplation of s 37(7) was said to be that for fault to constitute a "reason" or "ground" for termination, the fault must be fundamental and that requirement was not met by fault judged upon the subjective view of the Minister. 69 Reliance was also placed upon ss 76D and 76E. It was submitted that the power conferred by s 37(5) in relation to fixed term appointees is analogous in consequence to the power conferred by s 76D, rather than that conferred by s 76E. And what s 76D shows, it is contended, is that a Secretary who is allegedly inefficient or incompetent can only be terminated after investigation and report by the Board. It was said to be illogical that a fixed term appointment could have been intended to be subject to termination on such a ground under s 37 without a similar procedure, or without the ground being made out in fact. 70 In our view, the touchstone for the consideration of these submissions is again the language of s 37 and its statutory context. The section provides for fixed term appointments. It is submitted by the Solicitor-General that the meaning of that term is to be derived from the content of the section itself, including its provision for termination. But the language which describes appointments under s 37 as "fixed term" must be given weight preferably in accordance with its ordinary meaning. It is incompatible with the notion of a fixed term appointment that it is terminable at pleasure - see the observations of von Doussa J on the words "contract of employment for a specified period of time" in Article 2 of the Termination of Employment Convention, Andersen v Umbakumba (1994) 126 ALR 121 at 125 - 126 and see Cooper v Darwin Rugby League (1994) 57 IR 238 per Northrop J. 71 The procedural requirements of s 37 comprising a report from the Secretary to the Department of the Prime Minister and Cabinet to the Prime Minister and a recommendation from the Prime Minister to the Governor-General are powerful indicators of the seriousness with which the legislature viewed termination of an appointment to the office of Secretary. This is reflected in other provisions of the Act which have been mentioned already in relation to termination processes affecting this class of public office. While it is possible to argue that termination at pleasure is compatible with such provisions, the better view, in our opinion, is that the requirement for report and recommendation contemplates that some positive ground or grounds for termination will be identified before the power is invoked. The report must have some subject matter, and plainly the recommendation of the Prime Minister, while not bound to adopt the report, is intended to be made following a consideration of its contents. The prohibition in s 37(7) requiring that the power of termination not be exercised "by reason only" of the fact that it is based on misconduct or criminal convictions which attract the operation of Division 6, also supports the implication that there will be some identifiable ground or grounds for termination under s 37. Such grounds, it is to be noted, may include grounds of the kind contemplated in Division 6 provided they are not limited to such grounds. 72 In our opinion therefore, termination of a fixed term appointment under s 37(5) must be based on some ground or grounds. A fixed term appointment is not held at pleasure. Moreover, the discretion to terminate which is conferred by s 37 is to be exercised like all statutory discretions "according to the rules of reason and justice, not according to private opinion; according to law, and not humour, and within those limits within which an honest man, competent to discharge the duties of his office, ought to confine himself" - R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177 at 189 (Kitto J); R v The Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 144 CLR 45 at 49. 73 The question then arises, what, if any, constraints are there upon the range of grounds which may be relied upon in the exercise of the power under s 37(5)? The answer, in our opinion, is to be found in s 6 in defining the chief object of the Act. The discretion to terminate must be exercised to protect, maintain or advance the efficient, equitable and proper conduct, in accordance with sound management practices, of the public administration of the Australian Government. The range of permissible purposes of termination in advancement of that object is wide. It is not confined to considerations of management or administrative issues, but is referable also to the subject matter of the administration which is the Australian Government. So political and policy considerations may be legitimate aspects of the basis upon which the power may be exercised. The discretion thus widely defined will nevertheless exclude criteria for termination which are extraneous to those objectives or otherwise capricious or whimsical. 74 It follows that we reject the contention made on behalf of Mr Barratt that termination can only be effected under s 37(5) where there has been some "fundamental fault" demonstrated on the part of the Secretary. On that basis, senior counsel for Mr Barratt had sought to equate the statutory grounds for termination to those required by the common law as grounds for dismissal of an employee - conduct incompatible with the fulfilment of an employee's duty on important matters or involving an opposition or conflict between the employee's interest and duty to the employer, impeding the faithful performance of the employee's obligations or destructive of the necessary confidence between employer and employee - Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 81. But there is nothing in the language of s 37 that suggests that termination is to occur only where unsuitability or unfitness for office or other culpable conduct is established. The permissible purposes of termination under s 37 run far wider than those served by that ground. There is no basis demonstrated for importing into the statutory scheme common law principles relating to the lawful termination of employment as limiting the circumstances in which termination of the appointment of a Secretary can occur under s 37. 75 Sections 57 and 58 deal with termination for misconduct or for the commission of criminal offences. The definition of misconduct in s 56 encompasses a range of acts or omissions, each of which involves an element of fault. It is reasonable to suppose that the classes of misconduct or criminal offences within that range which will attract the ultimate sanction of termination will be at the more serious end of it, and involve significant culpability on the part of the officer concerned. An adverse finding under those provisions associated with termination of office, quite apart from the sanctions it may attract, will also significantly affect the reputation of the individual concerned. It is not surprising that there should be a special scheme of procedural fairness in those circumstances. But its existence in relation to termination for misconduct or criminal offences does not support an implication that termination under s 37 can only be for some form of misconduct, albeit more "fundamental" than that covered by ss 57 and 58. The clear intent of s 37(7) is that, if the only reason for action to be taken under s 37(5) is conduct the subject of ss 57 and 58, s 37(5) must not be resorted to, as to do so will undermine the carefully prescribed statutory procedures in Division 6 to deal with such conduct. Sections 57 and 58 lend no support to the submission on behalf of Mr Barratt on this point. Nor do ss 76D and 76E, which deal with the retirement and termination of office of Secretaries appointed other than for fixed terms, support any such implication.
The Sufficiency of the Ground for Termination 76 It is no function of the Court to determine whether the ground of the proposed termination will or is likely to achieve the object set out in s 6. It is sufficient that the Court is satisfied that the ground or reason relied upon is capable of being related to the object, and is not extraneous to it. It is in that context that the ground proposed for termination, set out in the letter of 20 August 1999, must be considered. It has two elements: 1. that the Minister has lost trust and confidence in Mr Barratt's ability to perform the duties of Secretary of the Department of Defence; and 2. that this lack of trust and confidence is detrimental to the public interest, because it is prejudicial to the effective and efficient administration of the Department. 77 In preparing his report, the Secretary to the Department of the Prime Minister and Cabinet is not only to be required to consider whether the proposed reason for termination has been established to his satisfaction, but also whether the circumstances relied upon warrant a recommendation that the Secretary's appointment be terminated. Mr Barratt was entitled to be heard in respect of all aspects of the report. 78 If all that were relied upon was the nature of a Minister's personal relationship with his or her Department Secretary, there might be substance in the contention advanced for Mr Barratt that a recommendation for termination would not be made on a purely subjective ground without any factual basis being ascribed for it. Such a ground is inherently capable of being capricious and arbitrary and therefore extraneous to the object stated in s 6. 79 In the present case, however, the ground relied upon is not based upon purely subjective considerations without foundation. Rather, what is relied upon is a loss of trust and confidence in the Secretary's ability to perform his duties and the consequential detriment that has to the public interest because of its prejudicial consequences for the administration of the Department. The letter of 20 August 1999, by identifying the material upon which the report of the Secretary to the Department of the Prime Minister and Cabinet is to be based, informed the appellant of the reasons ascribed for the Minister's loss of trust and confidence. This is because the material contained statements by the Minister which, for example, included: "I have substantial reservations about the Secretary's commitment to actively manage the Department in pursuing the Government's reform agenda. He does not appear to want to drive issues to a conclusion. I asked for comprehensive reports on the Collins Class submarine project and they still have not arrived. Moreover he appears to be prepared to 'reign' over Defence rather than manage actively. I am also concerned that the CDF's spouse is Mr Barratt's personal assistant." 80 The material as a whole, places the ground to be relied upon in an historical perspective that fairly demonstrates the reasons why the Minister was contending that he had lost confidence in Mr Barratt's ability to discharge his duties of office. 81 In our view, the ground relied upon is plainly capable of being related to the object in s 6; and it has not been established that it is extraneous to that object. Put another way, we are not satisfied that the object in s 6, or the provisions of s 37, limit the grounds for termination to those based upon the conduct of the Secretary or other matters establishing his or her unfitness for office. 82 Why there is a lack of trust and confidence is a matter that is relevant to the exercise of the discretion to make a recommendation but is not, of itself, determinative of whether the ground is made out or whether the recommendation should be made. It is open to the Secretary, in preparing his report, to enquire into why the Minister's trust and confidence were lacking, but he is not required to determine whether, on an objective basis, the reason has been established to be well founded. It is because the reason relied upon is the Minister's loss of trust and confidence, and not that the loss of trust and confidence is well founded. 83 Likewise, when the Prime Minister comes to consider whether he makes the recommendation under s 37(11), he is not obliged to consider whether the reason for loss of trust and confidence is well founded. He is required to consider whether what is relied upon has been established, and if so, whether it is appropriate for him to make the recommendation for termination. In considering those matters, the Prime Minister would be required to take into account whether the termination is consistent with the object set out in s 6. This is a relevant consideration to which the Secretary is obliged to have regard: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 43 - 44 per Mason J. The Content of Procedural Fairness - Right to Particulars 84 It was submitted that the objectives of fairness in this case required that Mr Barratt be given an opportunity to understand the general nature of the considerations personal to him which grounded the proposal for termination of his appointment and an opportunity to respond to those considerations. It was said that the fact that they might have involved elements of policy or political considerations did not exclude the duty to afford procedural fairness. It was pointed out that the trial Judge had found that Mr Barratt was entitled to be informed of the reasons why his termination was proposed, and to be given an opportunity to respond. This was not "an empty formality". The trial Judge had found that the process in s 37 indicated that Parliament intended the Prime Minister should have drawn to his attention all considerations relevant to the efficient, equitable and proper conduct of the public service in so far as the continued employment of the Secretary was concerned. To give meaning to that requirement, and in the circumstances where the sole ground for the recommendation was the statement by the Minister that he had lost trust and confidence in the Secretary, it was necessary, the argument went, that the Prime Minister be made aware of the basis of the Minister's loss of confidence. The Secretary to the Department of the Prime Minister and Cabinet was, it was said, bound to inquire of the Minister the reasons or grounds for his loss of trust or confidence. If no such inquiry were made at that level, the Prime Minister was under a similar obligation to inquire as to the factual basis of the Minister's statement. 85 The trial Judge was said to have erred in the second judgment in finding that it was a matter for the Secretary to the Department of the Prime Minister and Cabinet to decide whether an alleged loss of confidence by the Minister was a sufficient basis on which to recommend termination of the appointment. The statutory discretion was to be exercised rationally, by reference to reasons and grounds to which Mr Barratt was to have a reasonable opportunity to respond. It was said that a recommendation that a Secretary's appointment be terminated which was based only on an expression by the Minister of a loss of confidence, coupled with a perceived consequential detrimental affect on the administration of the Department, would be unreasonable and a denial of procedural fairness. 86 These submissions, in our view, conflate the question of what would constitute a proper basis for the exercise of the discretion to terminate and the content of procedural fairness. Accepting, as we have, that loss of trust and confidence on the part of the Minister in the Secretary's ability to carry out his duties and the resulting detriment to the public interest is, of itself, a sufficient ground for termination, the submissions as to the content of procedural fairness fall away. For the reasons already given, the ground relied upon, having regard to the material cited in the letter of 20 August 1999, is capable of being related to the chief objective of the Act as defined in s 6. The Secretary of the Department of the Prime Minister and Cabinet is not required to establish that the reasons for the Minister's loss of trust and confidence were well founded. It is a corollary of that conclusion that he was not required to provide further and better particulars of the basis upon which the loss of trust and confidence on the part of the Minister rested. That is not to say that it was not open to Mr Barratt to canvass all such issues as he thought relevant in reply including whether, in his view, there was any proper basis for the Minister's attitude, whether it was affected by transient factors and whether the necessary relationship could be restored in the short term without detriment to the public interest. But, given that the reason for termination stated in the letter of 20 August was itself sufficient to ground a recommendation under the Act, there was no requirement for inquiry as to whether the reason for the loss of confidence is well founded or for the delivery of further particulars on that issue.
Conclusion 87 For these reasons, both appeals must be dismissed, with costs.
I certify that the preceding eighty-seven (87) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.
Counsel for the Appellant: R J Ellicott QC J E Richardson S C Dowling
Counsel for the Respondents: D M J Bennett QC, Solicitor-General for the Commonwealth S J Archer
Solicitor for the Respondents: Australian Government Solicitor
Date of Hearing: 21 and 22 February 2000
Barratt
Howard
(1977) 137 CLR 396
(1984) 156 CLR 296
(1963) 113 CLR 475
(1977) 137 CLR 487
(1990) 170 CLR 1
(1995) 183 CLR 273
(1924) 126 ALR 121
(1994) 57 IR 238
(1965) 113 CLR 177
(1979) 144 CLR 45
(1933) 49 CLR 66
(1986) 162 CLR 24
(1994) 126 ALR 121