A judge has dismissed a proposed class action against the Commonwealth of Australia alleging it breached a contract to train enlisted Navy sailors to earn engineering degrees, ruling the contract void.
In tossing the case filed by class action firm Levitt Robinson, NSW Supreme Court Justice Desmond Fagan on Tuesday ruled that the training contract the Royal Australian Navy asked recruits to sign bound commanding officers and was therefore invalid.
“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,” Judge Fagan said.
“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.”
The case, brought by former Navy marine technician Clayton Searle, claimed damages for breach of the contract, under which sailors would be trained over four years to obtain a nationally recognised Certificate IV engineering qualification.
The Navy dropped the training in October 2012, a year into Searle’s service, after realising the apprenticeship was in conflict with the Navy’s own program for training marine technicians.
The case was brought as a class action, representing 200 Navy marine technicians who signed the training contract between 2011 and 2012.
The Commonwealth argued, among other things, that the contract bound the Navy to the four-year training, which therefore voided it “as a fetter on the Commonwealth’s executive power of command of the Defence Force”.
Searle, who left the Navy in 2015, argued that because the Commonwealth misrepresented that the contract would be legally binding it cannot, by the doctrine of estoppel, back out of that representation without fair compensation.
He claimed that his earnings would have been higher had he obtained the engineering qualification and was owed damages for future lost wages.
In siding with the Commonwealth, Judge Fagan said the contract placed an “impermissable fetter” on Naval officers’ command.
“A Training Contract having the effect of impeding Naval officers’ freedom of decision-making and command in these respects would compromise their ability to achieve efficiency in their service,” he said.
The judge further found that the government was precluded from “estopping itself” from backing out of the contract, as Searle contended.
“The Commonwealth could no more estop itself, by representation or conduct, from freely exercising its executive power of command over enlisted servicemen than it could bind itself by contract to restrict in advance the exercise of that power. What renders the Training Contract void is the principle which avoids a fetter on the full breadth and freedom of military command. The same principle of preservation of the exercise of executive power precludes the Commonwealth estopping itself from disavowing a contract which would constitute such a fetter,” he ruled.
But while the judge found for the Commonwealth, he reserved judgement on costs, saying the Navy was at fault in signing sailors up to the contracts.
“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,” Judge Fagan said.
The judge also criticised the Commonwealth for being “extremely tardy” in identifying legal doctrine in which it successfully argued the contract was void.
Searle’s lawyer, Levitt Robinson special counsel Brett Imlay, said his client was considering appealing the ruling.
The Commonwealth of Australia is represented by Norton Rose Fulbright.
The case is Searle v Commonwealth of Australia.
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