Holding Space where the Quality of Mercy Is Most Definitely Strained

Mediating Discretion in the Shadow of Administrative Power

“The quality of mercy is not strain’d.
It droppeth as the gentle rain from heaven
Upon the place beneath. It is twice bless’d:
It blesseth him that gives and him that takes.”

— Shakespere, The Merchant of Venice, Act IV, Scene I

How Have We Arrived Here?

We do not mediate because the law has failed. We mediate because the law has finished—and something still remains to be done.

In recent weeks, I’ve been laying the foundation for a relational justice approach to veterans' dispute resolution, drawing on an ethic of care and an understanding of moral repair that operates beyond adversarial models. In Field Notes 4 and 5, I explored how relational justice is not a theory of restitution, but a foundation for care-full presence in situations where trust has been broken, meaning lost, and systems have gone silent – or never had anything to say to begin with.

We now turn to the terrain in which much of this work must unfold—the discretionary administrative space where veterans seek recognition, redress, or simply some acknowledgment that what they experienced mattered.

This note is not a critique. It is a mapping. We are not yet asking what ought to be done differently. We are first asking: What exactly is the space we are being asked to enter as mediators?

The Permissive Frame

One of the most difficult zones in that space is the act of grace payment scheme established under section 65 of the Public Governance, Performance and Accountability Act 2013 (Cth). This provision allows the Finance Minister—or their delegate—to authorise a payment if they consider it “appropriate” because of “special circumstances.” No right to a payment exists. The provision is explicitly permissive, not mandatory. It creates no entitlement, only the possibility that discretion may be exercised.

This possibility is further shaped by a policy document: Resource Management Guide No. 401 (RMG 401). RMG 401 does not create legal obligations. It offers internal guidance for how public officials should interpret and apply the act of grace provision. It is, in effect, the framework through which discretion is taught, tempered, and defended.

And in its own terms, it is remarkably clear:

The act of grace mechanism is permissive. It enables decision-makers to approve payments but does not obligate them to do so. There is no entitlement to an act of grace payment.

This sentence tells us much about the world we are stepping into.

RMG 401 nominally acknowledges that lawful decisions can produce unintended and inequitable results—but offers no relational or participatory process for recognising or responding to the harm caused thereby. The framework is risk-managed and inward-facing, not dialogic. Fairness is referenced, but never relationally realised.

A Procedural Frame Without Ethical Presence

This scheme does not lack logic. It is internally coherent. But it places mediators—and applicants—in a profoundly constrained position. The decision-maker is not required to be responsible or competent in addressing harm. The applicant is not invited into dialogue. No principles of recognition, reciprocity, or care animate the process.

This is not just theoretical. Consider the case of James Ashby, a former political staffer who applied for an act of grace payment after years of litigation related to his sexual harassment claim against a senior parliamentarian. He was not seeking further remedy under the Fair Work Act. That matter had settled. He was instead seeking discretionary recognition of the burden he bore in bringing the matter forward—at great personal and financial cost—while the Commonwealth had indemnified the alleged wrongdoer.

The decision-maker considered the matter and declined the payment. Crucially, the act of pursuing litigation itself was weighed against him. There were “other workplace rights” he could have exercised, the delegate reasoned. He chose instead to go to court. That choice—lawful, principled, and in the public interest—was seen not as evidence of deservedness, but as a factor mitigating against the exercise of discretion.

There was no error of law. The decision fell squarely within the bounds of RMG 401 and s 65. But for the applicant—and for those who supported him—the outcome feels misaligned with what many Australians would consider a “fair go.”

As Rock & Weeks (2018) observe:

Though few would dispute the intuitive appeal of the sentiment that wrongs should not go unremedied, the question of how harm arising from maladministration could, or should, be repaired remains unresolved.

This is the space mediators must enter: where lawful decisions leave ethical questions unanswered – even unasked, and where the applicant’s need is not just for entitlement, but also for acknowledgment.

Recognition Without Remedy

A second example, drawn from Ogawa v Minister for Finance, illustrates how even the findings of respected institutions like the Australian Human Rights Commission carry no determinative weight in the act of grace context. Dr Ogawa was found by the Commission to have experienced arbitrary detention, contrary to Article 9 of the International Covenant on Civil and Political Rights. The Commonwealth considered the finding. But the delegate was not bound to act on it—and chose not to. The Court upheld that decision. There was no obligation, only discretion.

Again, lawfulness prevailed, but relational justice was denied.

There is no fault to find here in the courts or the delegates. What there is instead is a systematic narrowing of the space in which ethical discernment and relational justice might otherwise occur.

The Veterans’ Dilemma

For many veterans, the experience of administrative silence or procedural defensiveness is not just disappointing—it is disorienting. They come seeking something that the structure cannot provide: recognition of their story, acknowledgment of harm, and some small act of moral accompaniment from the institution they served.

In cases like Dobie v Minister for Finance, we see this dynamic starkly. Mr Dobie had served 321 days in prison following a conviction that was ultimately quashed. His application for an act of grace payment was considered and refused. The delegate reasoned that the evidence might still have supported a conviction, and that no unlawful act had occurred. The Court upheld the reasoning. The presumption of innocence, a bedrock of criminal law, was deemed irrelevant in the administrative context.

The system had functioned correctly. But the harm remained unmet.

The Mediator’s Dilemma

This is the challenge mediators face when they are asked to work in discretionary space under the shadow of the law: the system has spoken—but has not responded. The pathway is procedurally complete—but morally unrepaired.

And yet it is precisely in this space that post-law peacemaking begins.

This field note does not propose a solution. It simply names the problem: that mediation in these settings is not supported by the system. But it is still necessary. Because law has reached its limit—and something remains to be done.

In the next field note, we begin to explore what that “something” might be.

References

Legislation & Policy

Public Governance, Performance and Accountability Act 2013 (Cth)

Dep’t of Finance Requests for discretionary financial assistance under the Public Governance, Performance and Accountability Act 2013: Resource Management Guide No. 401

Cases

Ashby v C'th of Australia [2021] FCA 40

Ashby v Minister for Finance (No 2) [2021] FCA 830

Ashby v Commonwealth of Australia [2022] FCAFC 77

Ogawa v Finance Minister [2021] FCAFC 149

Ogawa v Secretary, Department of Finance (No 2) [2022] FCAFC 145

Dobie v Minister for Finance [2022] FCA 528

Articles

Rock, E; Weeks, G. Monetary Awards for Public Law Wrongs: Australia's Resistant Legal Landscape [2018] UNSWLawJl 40

Wood A (2025) Field Notes from Post-Law Peacemaking: Towards a Theory & Practice of Relational Justice in Veterans’ Mediation: Mediation Program Design within an Ethic of Care Framework https://andrew267.substack.com/p/towards-a-theory-and-practice-of

Wood A (2025) Field Notes from Post-Law Peacemaking: Finding Room for Courage: Discretion and Relational Justice in Veterans' Disputes: Mediating with Moral Presence in Institutional Disputes https://andrew267.substack.com/p/finding-room-for-courage-discretion

Wood A (2025) Field Notes from Post-Law Peacemaking: "It's Not Fair!" A Supplementary Field Note on the Jurisprudential Foundations of WorkAccord's Veterans' ADR Program https://andrew267.substack.com/p/its-not-fair