Payne was commanding the 212th Company of the 1st Mobile Strike Force Battalion when the battalion was attacked by a numerically superior North Vietnamese force. The two forward companies were heavily attacked with rockets, mortars and machine guns from three directions simultaneously. The indigenous soldiers faltered so Payne rushed about firing his Armalite rifle and hurling grenades to keep the enemy at bay while he tried to rally the soldiers. In doing so he was wounded in the hands, upper arm and hip by four pieces of rocket shrapnel and one piece of mortar shrapnel.

The battalion commander decided to fight his way back to base and this movement commenced by the only available route. With a few remnants of his company, which had suffered casualties, Payne covered the withdrawal with grenades and gunfire and then attempted to round up more of his company. By nightfall he had succeeded in gathering a composite party of his own and another company and had established a small defensive perimeter, about 350 metres north of the hilltop which had by now been captured by the enemy.

In darkness Payne set off to locate those who had been cut off and disoriented. At 9pm he crawled over to one displaced group, having tracked them by the fluorescence of their footsteps in rotting vegetable matter on the ground, and thus began an 800 metre traverse of the area for the next three hours. The enemy were moving about and firing, but Payne was able to locate some forty men, some wounded, some of whom Payne personally dragged out. He organised others who were not wounded to crawl out on their stomachs with wounded on their backs. Once he concentrated his party he navigated them back to the temporary perimeter only to find the position abandoned by troops who had moved back to the battalion base. Undeterred he led his party, as well as another group of wounded encountered en route, back to the battalion base where they arrived at about 3am.

Payne is the most recent recipient of the VC, and, as at June 2002, one of the two living Australian VC winners.

Current location of the VC
Maryborough Military and Colonial Museum