No. 5 Squadron was disbanded in May 1919. Along with many other Australian Flying Corps personnel, including Colonel Watt, Major King, and Captain
Les Holden, Malley returned to Australia aboard the troopship
Kaisar-i-Hind, disembarking in Sydney on 19 June. He subsequently toured the country to promote the
Peace Loan. He was uninjured but had to return to Melbourne and eventually made his way north by train. Resuming his aerial program, he was reported on 17 September as having "thrilled" lunch-time crowds in Sydney the previous day with "three daring spiral dives" over
Hyde Park. Malley was discharged from the AIF on 4 October 1919, and commissioned a captain in the
Commonwealth Military Forces Reserve on 1 July 1920. On 25 January 1922, Malley married Phyllis Kathleen Dare in Mosman. Malley was acknowledged as both a source and a reviewer by F.M. Cutlack in the latter's volume on the Australian Flying Corps, first published in 1923 as part of the official history of Australia in the war. (far left) and other members of No. 3 Squadron, RAAF Richmond, 1925|alt=Four men, each wearing a flying helmet and goggles Malley relinquished his appointment in the Commonwealth Military Forces on 18 June 1925. He served as a pilot with
No. 3 Squadron, which operated
Airco DH.9s and
Royal Aircraft Factory S.E.5s. Formed at
RAAF Point Cook, Victoria, the squadron transferred to the newly opened
RAAF Richmond, New South Wales, on 30 June. From 1925 to 1928, Malley was vice president of the Australian Flying Corps Association. In January 1928, he was promoted to honorary
squadron leader, and temporarily commanded No. 3 Squadron in March–April. In January–February 1929, he again temporarily commanded No. 3 Squadron. Les Holden eventually located the missing airmen near the
Kimberley region. In 1930, Malley transferred to the (inactive)
RAAF Reserve. On 1 February 1937, through the influence of the British
Foreign Office, Malley's status was enhanced when he was made an honorary
wing commander in the RAAF Reserve. He was by now serving as adviser to Madame Chiang Kai-shek,
Soong Mei-ling, in her capacity as secretary-general of the aeronautical commission that directed
China's air force; May-Ling extended to Malley her "warmest congratulations" for his "well deserved" promotion. One of the tasks she assigned him was investigating corrupt procurement practices in the government. Malley found that the air ministry was being defrauded by foreign agents and Chinese officials colluding to charge inflated prices for military equipment. Malley's stay increasingly involved him in the
fighting in China; his wife would relate three years of night-time air raids to her friends upon the couple's return to Australia in 1940. Williams and other members of the RAAF may have perceived Malley as exaggerating the importance of his role in China, particularly given his apparent delight in its ceremonial aspects. In one letter, he regaled Williams with stories of an inspection tour around the country, declaring: "I ... can just imagine how much you would have enjoyed it – landing on aerodromes that were all polished up for inspection. Being met by provincial dignitaries and lavishly entertained. I had to drink every conceivable Chinese wine that was ever made, and to eat foods unheard of in Australia!" At any rate, Malley's reports of Japanese air tactics, and the value his observations might have held for Australia in the event of war in the Pacific, were largely discounted by his home government. ==World War II and later life==