The Tribunal's decision
19 Before the Tribunal, Calvista sought a permission in the following terms:
Any "film", as defined in regulation 4A(1) of the Customs (Prohibited Imports) Regulations 1956 (the Regulations), that describes, depicts, expresses or otherwise deals with matters of sex and/or violence in such a way that it offends against the standards of morality, decency and propriety generally accepted by reasonable adults to the extent that it should not be imported, being a film from any one of the following named studios:
Digital Sin and Smash Pictures:
but not including any film that would fall within regulation 4A(1)(b) [sic] of the Regulations.
20 Calvista also proposed that the permission be subject to the following conditions and any other reasonable conditions proposed by the Director:
(a) the Applicant may import films that are objectionable goods only for the purpose of submitting those films to the Classification Board for classification;
(b) the Applicant must, at least 10 days prior to each importation, provide written notice to the Respondent of the Applicant's intention to import unclassified films that may be objectionable goods (Notice);
(c) the Notice must specify the date of importation and include a list of all titles that the Applicant intends to import;
(d) the Applicant must provide the Notice and a copy of the permission to import objectionable goods to the Australian Customs and Border Protection Service at the point of importation;
(e) the Applicant must ensure that the objectionable goods are modified in a bona fide attempt to comply with classification requirements and submitted for classification to the classification Board within three months of importation;
(f) the Applicant must not reproduce any material contained in the objectionable goods that is likely to be refused classification, unless necessary for the purpose of modifying that material to comply with classification requirements;
(g) the Applicant must not release into the community any objectionable goods containing material that is likely to be refused classification;
(h) the Applicant must, within one month of receiving notice from the Classification Board that the objectionable goods have been refused classification:
(i) destroy the objectionable goods; or
(ii) modify the objectionable goods to be resubmitted for classification;
(i) the Applicant must, within three months of importation, destroy any material that is likely to be refused classification;
(j) the Applicant must, on request from the Respondent:
(i) report on any aspect of compliance with the permission to import objectionable goods; or
(ii) provide the Respondent with a list of all films imported under the permission to import objectionable goods.
21 However, as a result of an agreement between the parties, the Tribunal did not consider in detail what, if any, conditions should be imposed. The parties agreed that if the permission sought by Calvista could be granted and if it was appropriate to grant permission then the Tribunal should remit the decision to the Director, to enable the parties to negotiate and agree upon suitable conditions.
22 The Tribunal decided, at [51], that the permission sought could not be granted. The Tribunal's reasoning was as follows:
[42] On the plain language of s 50, the discretion to grant import permission under regulation 4A extends to "the goods or a class of goods in which the goods are included" [s 50(3)]. It follows that permission may be granted to import goods within a class of goods under any combination or subset of subregulations 4A(1A)(a) to (f). Even though there is no express limit on the number or the kinds of objectionable goods that may be permitted to be imported under regulation 4A, the use of the definite article suggests that specificity is required in respect of "the goods" in each case.
[43] The requirement for specificity is reinforced by the exceptional nature of the discretion. It requires the Attorney-General or an authorised person to determine whether the goods intended for importation should be excepted from the prohibition that otherwise would apply. This requires consideration of the particular goods to which the permission sought relates. It is not a decision that can simply be surrendered or devolved to the importer. Doing so may abrogate the statutory duty of the person authorised to exercise the discretion and it would, in effect, transform the exception into the default position for the importer. Even if Calvista was able to strictly comply with stringent conditions and its reputation was unimpeachable - a question to which we will come below - such a self-regulatory scheme is not consistent with the statutory scheme governing prohibited imports or with the underlying legislative policy.
[44] It does not follow, however, that the discretion should only be exercised in exceptional circumstances - the discretion is not expressly fettered in that way. Each case must be assessed on its merits, having due regard to all the matters set out in regulation 4A(2AA).
[45] Thus, in principle, while there is no legislative bar that precludes the grant of permission to import goods within a class of "objectionable goods" under regulation 4A, specificity is required in respect of the particular goods to be assessed when deciding whether to permit their importation. Proper exercise of the discretion is preconditioned by sufficiently detailed and reliable information concerning the particular goods to which the permission sought relates. The decision-maker must be reasonably satisfied that the goods the prospective importer seeks permission to import are prohibited imports within the terms of the permission sought. Sufficient information about the goods must be provided to enable the decision-maker to assess all matters that are relevant to exercise of the discretion under regulation 4A(2).
[46] Calvista's application refers, generally, to a class of goods, being "objectionable" films from nominated studios that deal with matters of sex and/or violence in a manner that offends against the standards of morality, decency and propriety generally accepted by reasonable adults, within the terms of regulation 4A(1A)(a). Conceivably, films of this nature may have sufficient characteristics in common to constitute a class of goods that is essentially defined and delineated from other goods or classes of goods (including other species of film) by the characteristics of its content.
[47] No specific information about the actual films that Calvista seeks permission to import has been provided. Under the conditions Calvista has proposed, notice of its "intention to import unclassified films that may be objectionable goods", including the title of each film, would be provided 10 days prior to importation. It is difficult to understand how any film could reliably be placed within the proposed class of goods, and hence within the terms of the permission sought, without an assessment of its contents prior to importation. This would need to be undertaken on a case by case basis.
[48] Take for example a film containing a depiction of a revolting or abhorrent phenomenon that is within the terms of regulation 4A(1A)(a), or a film containing a depiction of a person who is or who appears to be under 18 engaging in sexual activity that is within the terms of regulation 4A(1A)(b). These films would not be within the class of goods covered by Calvista's application and they would not be permitted to be imported. In order to make that assessment and to decide whether to permit the film to be imported, it would be necessary to have regard to the content of the film prior to importation.
[49] Similarly, a film containing real depictions of actual sexual activity between consenting adults that is or would be classified X18+ would not be within the terms of regulation 4A, or within the terms of the permission sought. It would not be appropriate for Calvista to seek permission under regulation 4A to import a film of this kind, and it would not be permissible for an authorised person to grant permission under regulation 4A for it to be imported. But the proper characterisation or class of the film would not be known, and a decision about whether permission may be granted to import the film could not be made, until an assessment of its content had been undertaken.
[50] Thus, in order to exercise the discretion, and to ascertain whether or not any particular film is within the class of goods Calvista seeks permission to import, it is necessary for an assessment of the content of the film to be made. In our opinion, this cannot properly be addressed in general terms. Films are unique artefacts. Unless Calvista makes a properly formed concession that each film is "objectionable" for the purposes of the Regulations and that the film conforms to the particular class of goods it seeks permission to import, it is difficult to see how the decision-maker could exercise judgment in relation to these threshold questions. It is one thing to seek permission to import a class of goods described by reference to some of the terms of regulation 4A; determining whether the particular goods that would be imported conform to the class description and may be permitted to be imported is entirely another. These matters cannot properly be decided in the abstract, without reference to the particular goods. The terms of the present proposal make no provision for this to occur.
[51] The answer to the first question of principle, can the permission sought be granted, is No.
(Footnotes omitted, italics in original.)
23 In case the conclusion that the permission sought could not be granted was wrong, the Tribunal went on to consider whether the permission sought should be granted and concluded, at [94], that it should not. The Tribunal's reasons were as follows, having regard to the mandatory considerations in reg 4A(2AA).
24 The Tribunal said, at [56], that in considering whether to grant the permission sought it had assumed that the permission would be subject to conditions at least as stringent as those proposed by Calvista in the proceedings before it.
25 The Tribunal considered the purposes for which the films were to be imported. It said:
[57] Calvista contends that the purpose of seeking the permission to import objectionable films containing offensive depictions of sex and/or violence is solely to excise the objectionable material and to submit the edited film for classification.
[58] It is self-evident that Calvista's purposes are primarily commercial. It is in the business of importing and distributing films for commercial gain. In order to do so lawfully, the films must first be imported and classified in a category that may be legally be reproduced, sold and distributed. Calvista's purpose in seeking permission to import films dealing with sex and/or violence within the terms of regulation 4A includes the commercial purpose of bringing into existence film products that it can lawfully sell and distribute in Australia. It is also seeking to "avoid any inadvertent breach of the customs legislation".
[59] Although Calvista's application relates only to master or time-code copies of individual films, the precise number of individual films that would be imported under the permission, if granted, is not presently established. Thus, in short, for what are ultimately commercial purposes, Calvista proposes to import potentially large numbers of individual "objectionable" films for modification and classification by the Classification Board.
[60] In Re Moore and Attorney-General's Department (No 2) (1995) [39 ALD 655] Mr Moore sought permission to import commercial quantities of a book for general release. The Deputy President said that the regulation does not contemplate the granting of permission "to allow wholesale importation such as that sought by Mr Moore" for the "very general purposes proposed", as to do so "would ultimately lead to circumvention of the legislative scheme that is designed to prohibit the importation of goods classified in this category".[at 658] While Calvista's proposal to import objectionable goods may have a commercial character and scale, it is distinguished from Moore's case in one important regard - Calvista is not proposing to release or distribute prohibited imports into the Australian community. Under its proposal, only modified and properly classified films would ultimately be released for sale in full compliance with Commonwealth, State and Territory laws.
[61] Calvista contends that a public benefit would flow from the granting of the permission sought: it is said that permitting Calvista to import objectionable films for the purpose of editing and submitting them to the Classification Board will result in objectionable content being excised and such products being lawfully available to Australian consumers. This, it is claimed, will support the national classification arrangements under the cooperative Commonwealth, State and Territory legislative scheme and thereby protect the community at large from the risk of exposure to material that offends against the standards of morality, decency and propriety generally accepted by reasonable adults. It may also protect consumers of adult sexual films from exposure to material that may be harmful or abhorrent.
[62] Calvista maintains that the full range of sexual material, including the most heinous and abhorrent content, is openly available on the internet, including on foreign services available in Australia, and that unclassified films are distributed by unscrupulous operators, including grey importers and black market traders, operating outside the classification regime without prosecution and in breach of copyright. It asserts that the grant of permission in the terms proposed may assist to counter activities of this kind, and is in the public interest.
[63] The stated purpose for which the goods are to be imported in our view weighs in favour of the grant of the permission sought.
(Footnotes omitted, italics in original.)
26 The Tribunal next considered the extent to which Calvista conducted activities of an artistic or educational, or of a cultural or scientific, nature to which the goods related. It considered, at [70], that conceivably the editing and classification of films for public sale and national distribution, even pornographic films without any artistic merit, may be within the meaning of cultural activity or scientific activity. The Tribunal said if that was correct, those considerations weighed in favour of the application.
27 The Tribunal then considered the reputation of Calvista and concluded, at [81], that Calvista's reputation, generally and in relation to the activities set out in reg 4A(2AA)(b), did not weigh in favour of the grant of permission.
28 The Tribunal then considered the ability of Calvista to meet conditions that may be imposed. At [86], the Tribunal concluded that, on balance, Calvista's past conduct raised serious questions about its ability to comply with conditions that may be imposed. This weighed against the grant of the permission sought.
29 The Tribunal considered lastly any other relevant matters. One such matter was the extent to which the permission sought was consistent with the harmonised Commonwealth, State and Territory legislation governing the sale and distribution of films in Australia. The Tribunal said, at [89], that under the terms of Calvista's proposal, public authorities would have little or no control over the potentially large volume of objectionable goods that would be permitted to be imported, and would exercise a monitoring role in respect of compliance. There was a risk that objectionable material may be imported and released. It was far from clear that the level of risk was consistent with the purposes of the national regulatory scheme for films (and related public expectations).
30 The Tribunal stated its conclusion as follows:
[90] In our opinion films regarded as so offensive to contemporary community standards as be [sic] adjudged "objectionable" for the purposes of the Customs Act and Regulations ought only be permitted to be imported under very strict conditions by persons or bodies who may be trusted to comply fully with those conditions. It is self-evident that if those conditions were not met, there is a risk that "objectionable goods" imported under the permission might be released to the Australian market.
[91] A key factor in considering whether to grant the permission sought is, therefore, the likelihood that the conditions would be complied with. Calvista's reputation and willingness and capacity to meet any proposed conditions are highly relevant to that determination. While it would be in Calvista's self-interest to ensure that the conditions were met, if for no other reason than to ensure that the permission is not revoked, a number of factors lead us to conclude that there is a risk that this might not occur. These include as discussed above the lack of judgement demonstrated by Calvista staff in submitting for classification films that plainly exceed the X18+ classification standard and Calvista's conduct in importing objectionable goods without permission over an extended period.
[92] Calvista contends that the permission would facilitate its ability to make available to consumers of adult films in Australia properly classified films of that kind. To the extent this might deter consumers from turning to unclassified material, this arguably bolsters the regulatory regime designed to protect consumers of such products and the community in general. Furthermore, Calvista asserts that its activities asserting copyright in respect of the films it imports may deter unscrupulous operators from trading in grey imports that have not been classified. To the extent that this is correct, it may support the national regulatory arrangements for films and the protections they provide. While this factor favours Calvista's application, it is outweighed in our opinion by the risk that, inadvertently or otherwise, the conditions imposed might not be complied with.
[93] Weighing all these considerations we conclude that the scales are tipped against the exercise of the discretion. Negative aspects of Calvista's reputation, and doubts about its ability to comply with conditions, outweigh the positive aspects we have identified. For these reasons we have decided that the preferable decision it [sic] to refuse to grant the permission sought.
[94] The answer to the second question, should the permission sought be granted, is No.