Australian Navy loses $300K in legal row over wrongful sailor pay

The Royal Australian Navy has lost a court battle to get back a salary paid to a sailor, his tailor and suspected ex-wife six years after he left service.

The Royal Australian Navy has lost its battle to claim back more than $300,000 in salary they paid to a sailor, his tailor, a lawyer and a suspected ex-wife for six years after he left service.

But such has been the complexity of the error, the court has had to go back more than 400 years and the reigns of Edward VI and Elizabeth I to unravel contract, constitution and statute of limitations laws for reclaiming a king’s ransom.

Former Sydney-based Able Seaman Jeremy Sims enlisted in the RAN in September 2000 and left nine years later, but the Commonwealth not only continued to pay him a salary but also $700 a fortnight direct payments to Natalie Dalton, who was his wife or ex-wife.

Royal Australian Navy wrongly paid a sailor, his tailor and an ex-wife for six years after he left service. Picture: Defence

The Commonwealth, at Mr Sims’ direction, also made direct $100 a fortnight payments to retailer Red Anchor Tailoring as well as payments to his nominated superannuation fund, the Australian Taxation Office and a law firm.

In the initial NSW District Court judgment in November 2021 the Commonwealth cited, and the court accepted, the “Auckland Harbour Board Principle” of 1924 whereby moneys paid out of consolidated revenue without lawful authority may be recovered by a government.

Mr Sims was then ordered to pay $316,032 for all erroneous payments made by the Commonwealth to him and all other parties after he left the RAN up to March 2015.

Criminal Defence lawyer Paul Blake, principal Blake Lawyers. Picture: Supplied

But the decision was this week reversed in the NSW Supreme Court of Appeal in a complex legal argument over whether a contract for payments with him and others existed and whether a statute of limitations applied.

The Appeal Court judges in their ruling accepted the Auckland Harbour principle however pointed out the principles that applied dated back to the 16th Century.

They cited the case of Sir Walter Mildmay, who in 1546 was appointed to examine the King’s Mints and report on the Crown’s revenues under King Edward VI, King Henry VIII’s son. Mildmay would later become chancellor of the exchequer to Queen Elizabeth I, but on his death in 1589 it was discovered moneys paid to him for 30 years “as a fee for his diet” was done so erroneously, and in 1653 his will’s executor and relative William Dodington was initially held liable.

Sir Walter Mildmay (c.1522-1589) was paid for 30 years incorrectly.

Aussie actor Margot Robbie as Queen Elizabeth I. Picture: Focus Features

Mr Sims’ lawyers argued there was no evidence payments were made to Ms Dawson at their client’s direction, nor that the payments were part of some sort of obligated settlement, nor that Ms Dawson was his estranged or even ex-wife at all.

Under another cited case from 1774, the weight on such evidence could only be made if proof was offered, and it was a legitimate tactical move “for forensic reasons” that it was not.

Mr Sims will pay up more than $75,000, an amount legally allowable to be claimed back and not contested, but other distributions will not. The Commonwealth will also have to now address significant costs.

“It was quite a complex case but we are very pleased with the result,” Blake Lawyers principal Paul Blake said outside court.

Originally published as Australian Navy loses $300K in legal row over wrongful sailor pay