Hutchison 3G Australia Pty Ltd v City of Mitcham

Hutchison 3G Australia Pty Ltd v City of Mitcham - [2006] HCA 12 - HCA 2006 case summary — Zoe

[28]

That case concerned the validity of certain provisions enacted by the legislatures of New South Wales and Victoria which empowered local authorities to impose rates and charges on activities relating to, and involving, telecommunications cables. This Court held that s 109 of the Constitution had been enlivened, and the State laws rendered inoperative, by the inclusion in the Telecommunications Act 1997 (Cth) ("the Telco Act") of a provision which denied the effect of any State law that discriminated against telecommunications carriers[2].
The present litigation concerns interaction between the Telco Act and legislation of South Australia. Whilst s 109 of the Constitution appears to have been invoked in the conduct of the case in the Supreme Court of South Australia, this was not decisive in the result reached there. In this Court, any reliance upon constitutional inconsistency was eschewed by the appellant and the appeal falls to be determined upon issues of construction of concurrently operating federal and State laws. However, the constitutional paramountcy of federal law is a contextual consideration that informs the resolution of the contested issues of interpretation argued in this appeal. Moreover, as will be shown[3], co‑operation between the relevant federal and State instrumentalities is a policy mandated by both federal and State law. At the conclusion of these reasons, we will return to this issue of interaction of the two systems of law[4].
The appellant ("Hutchison") is a licensed telecommunications carrier under the provisions of Div 3, Pt 3 of the Telco Act. Hutchison denies any application to it, in respect of its erection of certain telecommunications facilities, of the requirement for development approvals under the provisions of the Development Act 1993 (SA) ("the Development Act"). Those facilities are known as "downlink sites" and were installed by Hutchison during 2002 and early in 2003 as part of its mobile telecommunications network. The downlink sites are at five locations in suburban Adelaide which are referred to, for convenience, as the Colonel Light Gardens site, the Bellevue Heights site, the Torrens Park site, the Kingswood site and the Clarence Gardens site.
All five of these locations fall within the area of the first respondent, the City of Mitcham ("the Council"). Pursuant to s 34 of the Development Act, where a proposed development is to be undertaken within the area of the Council, the Council is, for the purposes of Div 1, Pt 4 of that statute, the "relevant authority" and thus empowered by s 33 to assess, and to grant or refuse approval to, the proposed development.
The second to sixth respondents entered a submitting appearance to the appeal. They are a group of companies trading together as ETSA Utilities ("ETSA") under the terms of a licence which authorises the operation of an electricity distribution network. The licence was granted by the Essential Services Commission ("the Commission") pursuant to Pt 3 of the Electricity Act 1996 (SA) ("the Electricity Act"). As will become apparent, the facilities established by Hutchison were installed upon structures which ETSA either had already erected or replaced in pursuance of an arrangement with, and at the cost of, Hutchison itself.

[29]

Between August 2002 and February 2003, Hutchison notified the Council of its intention to install its downlink facilities by a letter in respect of each of certain locations. However, neither Hutchison nor ETSA applied to the Council for development approval in respect of the downlink sites.
In April 2003, pursuant to s 84 of the Development Act[5], the Council issued a series of enforcement notices addressed to Hutchison relating to each downlink site and requiring Hutchison to cease work that had not been approved by the Council under the provisions of the Development Act.
Hutchison challenged the notices by proceedings in the Environment, Resources and Development Court of South Australia ("the Environment Court"). The sole ground of challenge was that the downlink sites were low‑impact facilities within the meaning of Sched 3 to the Telco Act, and, as such, did not require development approval under the Development Act.
By a separate proceeding instituted in the Supreme Court on 18 December 2003, the Council sought declarations to the effect that each downlink site did require development approval under the provisions of the Development Act. The Council also sought injunctions requiring Hutchison to lodge development applications in respect of those downlink sites and to remove the facilities from the stobie poles on which they had been erected.
Subsequently, the Council agreed with Hutchison to suspend the notices and to permit Hutchison to complete the installation of the downlink sites. Those parties also agreed that the proceedings in the Environment Court would be stayed pending the hearing and determination of the action in the Supreme Court.
By an order dated 19 January 2004, and with the concurrence of all parties, Debelle J referred to the Full Court of the Supreme Court a case stated pursuant to r 72.01 of the Supreme Court Rules (SA) ("the Case Stated")[6]. In the proceedings before that Court, the Council was plaintiff, and both Hutchison and ETSA were defendants.
The Full Court directed that notice of a constitutional matter be given to the Attorneys-General of the Commonwealth and the States pursuant to s 78B of the Judiciary Act 1903 (Cth) ("the Judiciary Act"). In response to that notice, the Attorney-General for South Australia intervened in the proceedings before the Full Court in support of the case advanced by the Council. That intervention was described on the subsequent special leave application to this Court as having been supported by the Crown Proceedings Act 1992 (SA)[7] ("the Crown Proceedings Act"). The Supreme Court was exercising federal jurisdiction and a State statute such as the Crown Proceedings Act could not apply of its own force[8]. The Solicitor-General submitted that the Crown Proceedings Act had been "picked up", presumably by s 79 of the Judiciary Act[9], and applied in the exercise of federal jurisdiction by the Full Court.
However, the operation of s 79 is expressed to be subject to "the laws of the Commonwealth". Section 78A(1) of the Judiciary Act is one such law. That provision states:

[92]

To that it may be added that both the federal scheme, evidenced by the Code of Practice, and the State scheme, evidenced by the Transmission Code, postulated co‑operation between parties in the position of Hutchison and ETSA. That is an important consideration for the issues of statutory construction upon which the appeal turns. Co‑operation is what occurred. ETSA and Hutchison entered in April 2001 into what is called the Facilities Access Agreement ("the Agreement"). The Agreement provides for a procedure by which Hutchison may seek of ETSA consent to its having access to ETSA's facilities for the purpose of erecting telecommunications equipment.
Pursuant to cl 2.1 of the Agreement, Hutchison may at any time apply in writing to ETSA for access to any one of its facilities, by which is meant "poles, structures, buildings, towers and land owned or leased by ETSA", in order to fulfil that purpose. The application must specify what, if any, "Make Ready Work" is required for the installation to be effected and must contain an offer to carry out that work. The term "Make Ready Work" is defined in the Agreement to mean any work that is reasonably necessary to be undertaken to allow Hutchison's equipment to be installed on ETSA's facilities.
Clause 2.4 provides that ETSA may either accept, or reject in "exceptional circumstances", an application from Hutchison. If it does reject an application, ETSA must specify reasons for so doing and, where reasonably possible, offer an alternative facility for Hutchison's equipment (cl 2.4.2). If, on the other hand, ETSA accepts the application, it is obliged to grant to Hutchison a site licence or site licences for the period or periods over which Hutchison is to have access to the facility in question (cl 2.6).
Where the application specifies any Make Ready Work necessary for the installation of Hutchison's equipment, the Agreement requires that ETSA either accept the offer to carry out that work at a cost which is either specified in the application or negotiated between the parties, or advise Hutchison that it does not intend to carry it out (cl 2.5). In the event that ETSA so advises, Hutchison itself may have that work performed.
Bleby J described the effect of the Agreement as being "to do no more than implement a statutory scheme by taking a commercially realistic approach"[18], bearing in mind the cost and time involved in the parties availing themselves of the dispute resolution mechanisms offered by both the Transmission Code and the Code of Practice. His Honour said[19]:

[98]

As was required by the Agreement, Hutchison applied in writing to ETSA for permission to use the stobie poles it had identified. The respective heights of the stobie poles located at the Bellevue Heights site, the Kingswood site, the Torrens Park site and the Clarence Gardens site were 14.25 metres, 20.13 metres, 19.7 metres and 17.92 metres. ETSA undertook a structural analysis of these stobie poles in order to determine whether they were suitable for the purposes of both ETSA and Hutchison. The result of that analysis was that each stobie pole, with the sole exception of that which was located at the Clarence Gardens site, was determined to have been in need of replacement in order for the installation by Hutchison of its equipment to proceed. Those poles were replaced at the cost of Hutchison. The stobie pole at the Clarence Gardens site had previously been replaced by ETSA as part of an upgrade program and was determined to be structurally adequate to accommodate the downlink site.
Following the replacements, the heights of the stobie poles located at the Bellevue Heights site, the Kingswood site and the Torrens Park site were 14.9 metres, 20.1 metres and 19.4 metres respectively. It was contended by the Council that these replacement poles were facilities within the meaning of the Telco Act, as they had been erected by ETSA with the purposes of Hutchison in mind. More specifically, it was submitted that the poles and those at the Colonel Light Gardens site were towers for the purposes of Div 3, Pt 1 of Sched 3, and because they were neither attached to a building nor of a height less than 3 metres each, they were not low‑impact facilities.
Something should be said at this point about the components of each downlink site. Panel antennae are erected at the top of each stobie pole. This is effected by attaching the panel antennae to a mounting pole which, in turn, is attached to the stobie pole, with the result that part of the mounting pole and the whole of the panel antennae protrude above the top of the stobie pole. It is agreed between the parties that the distance from the top of each stobie pole to the top of the panel antennae erected on that pole is greater than 3 metres. However, the distance from the top of the stobie pole to the base of the antennae is less than 3 metres. The relevance of this lies in the circumstance that, as has already been stated in these reasons, Pt 1 of the Schedule to the Determination provides that an antenna attached to a structure cannot be a low‑impact facility unless it protrudes from that structure by not more than 3 metres.
Each downlink site also comprises an equipment shelter. The shelter is located on ground level and contains electrical equipment necessary for the operation of the downlink site. Because a constant temperature must be maintained within an equipment shelter, each shelter is equipped with two air conditioning units, both of which emit noise.
The equipment shelters for the Clarence Gardens site and the Kingswood site are located within existing ETSA substations, whereas the stobie poles are located on the adjacent road reserves. In contrast, the equipment shelters for the Bellevue Heights site and the Torrens Park site are located on land owned by Australian Rail Track Corporation Ltd and TransAdelaide respectively. However, as with the Clarence Garden and Kingswood sites, the stobie poles at these locations are situated on adjacent road reserves. The entire Colonel Light Gardens downlink site is located within an ETSA substation.
In respect of those sites where the stobie poles had been replaced, the total apparent volume of the facilities installed by Hutchison on the replaced pole constitutes no more than a 25 per cent increase in the apparent volume of the new pole. However, the combined volume of those facilities and the new pole does constitute an increase in the apparent volume of the original stobie pole of more than 25 per cent. The Case Stated indicates that in respect of the Clarence Gardens site, where the stobie pole in question was not replaced, the total apparent volume of the co‑located facilities constitutes no more than a 25 per cent increase in the apparent volume of the stobie pole.

[120]

When read in the light of this last proposition, the reasoning which was accepted by the Full Court discloses an assumption that the application of Item 2 in Pt 7 of the Schedule to the Determination involves the following three steps: first, the identification of a "facility" as consisting of all those elements necessary for the operation of telecommunications equipment installed at a particular site; secondly, a determination as to whether any one of those elements has been installed on or within either an original facility or a public utility structure; and, thirdly, if so, the extension of the requirements set down in Item 2 to cover all of the elements identified in the first step as being part of a "facility", notwithstanding the possibility that they may be free‑standing.
However, to reason in this manner applies the definition of "co‑located facilities" without regard to the definition, provided for in the Telco Act, of the term "facility". That definition is imported into the Determination by reason of cl 6(3), Pt 1 of Sched 3 to the Telco Act, which provides that only a "facility" may be determined by the Minister to be a low‑impact facility. Significantly, there is nothing in the definition to suggest that necessity for the operation of telecommunications equipment at a particular site is a criterion for determining what collectively may constitute a "facility" for the purposes of either the Telco Act or the Determination.
On the contrary, the definition indicates that several things or structures capable of having little independent function beyond supporting the operation of telecommunications facilities at a given site are themselves to be treated as facilities, and not parts of facilities. These include masts, holes, pits and poles.
In Hutchison 3G Australia Pty Ltd v Director of Housing[22], a decision of the Court of Appeal of Victoria, Morris AJA suggested that he had found the definition of "facility" in the Telco Act to be of little assistance in applying Pt 7 of the Schedule to the Determination. This was because that definition was itself:

[126]

It should also be borne in mind that Item 2 in Pt 7 of the Schedule does not merely address the situation of co‑located facilities per se. Rather, it is concerned with facilities mentioned in Pt 1, 5 or 6 or in Item 3 of Pt 4 of the Schedule, where those facilities have been installed on or within either an original facility or a public utility structure. It is the specific reference to such facilities, rather than the general definition in cl 1.3 of the Determination, which gives content to the phrase "co‑located facilities", as it appears in Item 2. That phrase is prefixed by the definite article, implying a degree of specificity which corresponds with that with which the facilities enumerated in Item 2 by reference to other provisions in the Schedule are identified.
Accordingly, the reference in Item 2 to "the levels of noise that are likely to result from the operation of the co‑located facilities" must be taken to be a reference to the levels of noise that are likely to result from the combined operation of (a) a facility mentioned in Pt 1, 5 or 6 or in Item 3 of Pt 4 of the Schedule; and (b) any original facility or public utility structure on which it is installed. This would necessarily exclude any noise emitted by an equipment shelter, regardless of whether or not it is part of a co‑located facility. Such noise would therefore not prevent a co‑located facility from being a low‑impact facility for the purposes of the Determination.
The result is that question 2 in the Case Stated was answered incorrectly by the Full Court. That question should have been answered in the affirmative. The reasons for so answering, as stated above, lead also to the conclusion that question 1.2 should have been answered to like effect. As at the Clarence Gardens site, the equipment shelters situated in the locations covered by question 1.2 were not installed on or within an original facility or a public utility structure. Those shelters were not part of the co‑located facilities formed by the installation of panel antennae upon stobie poles at each of the locations in question.
It remains then to consider the consequences attendant upon the replacement by ETSA of its poles at the Colonel Light Gardens site, the Bellevue Heights site, the Torrens Park site and the Kingswood site and the installation of downlink facilities thereon.

[141]

In its submissions to this Court, the Council fixed upon the words "an existing (non purpose-built) pole" in the passage just quoted, contending that the replacement poles installed by ETSA were not existing poles, but were instead built with the purposes of Hutchison in mind. The poles were therefore "for use ... in connection with a telecommunications network".
However, merely establishing that ETSA erected stobie poles at the relevant sites in order to permit installation by Hutchison of its facilities does not necessarily demonstrate that those poles were intended for such use. This is because the definition of the term "facility" in the Telco Act requires that attention be directed, not to the motive for the installation of a structure or thing, but the function which that structure or thing serves or was designed to serve.
The definition of the expression "telecommunications network" has previously been set out in these reasons. That definition contemplates a "system" or a "series of systems" engaged in the carrying of communications by means of guided and/or unguided electromagnetic energy. In attempting to characterise the function which was served or sought to be served by the replacement poles, the question thus arises: were the replacement poles intended for use in connection with a "system"?
The Case Stated indicates that the poles were replaced in order to meet the structural demands of carrying such facilities as the three panel antennae, the microwave dish and the mounting pole which together form part of a downlink site. In other words, the replacement poles were designed, in part, to accommodate the physical act of installing telecommunications equipment. However, there is nothing to suggest that, as such, they were intended to satisfy the requirements of a "system" or a "series of systems" of the sort described in the definition of "telecommunications network".
The locations of the poles, though conducive to the operation of a telecommunications network and recognised by Hutchison as such when it selected them as sites for the installation of its downlink facilities, were not selected in order to facilitate that operation. Instead, ETSA had erected poles at those locations as part of its electricity distribution business.
Moreover, it was not the set of requirements attendant upon the operation of a system which prompted the need for poles of a larger cross‑section at the Colonel Light Gardens site, the Bellevue Heights site, the Torrens Park site and the Kingswood site. It was instead the requirements attendant upon the task of installing individual items of equipment on those poles.
Accordingly, question 1.1 in the Case Stated should have been answered in the negative. The replacement poles erected by ETSA were not facilities within the meaning of the Telco Act. Because of this, and because of the affirmative answer already given to question 1.2, Hutchison is entitled, in respect of the installation of its downlink sites, to the benefit of an exemption from the operation of the Development Act, as provided for in the Telco Act[36].
To say this, however, is not to dispose fully of question 1.3 in the Case Stated. We turn now to consider the position of ETSA under the provisions of the Development Act.

[153]

However, s 49A(1) of the Development Act does not confer an exemption from the process of assessment and authorisation of proposed developments. Instead, it provides for the operation of such a process, albeit by means other than those contemplated by the general regime established by Div 1, Pt 4 of the Development Act (ss 32‑45A), where the proposed development is sought to be undertaken by a prescribed person for the purposes of the provision of electricity infrastructure. Consequently, to give the phrase "development for the purposes of the provision of electricity infrastructure" a broad construction, specifically one which recognises the possibility of such a development serving multiple purposes, would not in any way frustrate the subjection of a development proposed by a prescribed person to the requirements of an assessment and authorisation process.
Furthermore, s 49A(3) of the Development Act confers an exemption from approval, in circumstances where approval would otherwise be required, not merely pursuant to s 49A(1), but under any provision in the Development Act. Section 49A(1) is therefore subject to s 49A(3). It cannot be said to set down a threshold requirement which a development must satisfy before it can receive the benefit of the exemption in s 49A(3). If the notion of sole purpose is to be recognised, it must be on the basis of Sched 14A to the Development Regulations, reference to which is mandated by s 49A(3).
However, construction of that Schedule must begin with further consideration of s 49A as a whole. As noted above, that section provides for a process of assessment and approval of development involving electricity infrastructure. The circumstance that such development is subject to an assessment process separate from that outlined in Div 1, Pt 4 of the Development Act is itself indicative of a legislative recognition that the objectives and obligations of those who provide transmission and distribution services are not shared by others in the community and as such need to be accommodated in that process, particularly in certain circumstances through an exemption of the sort conferred in s 43A(3).
One of these obligations is imposed by cl 12 of the Transmission Code, to which reference has already been made in these reasons. That provision obliges a transmission entity and distributor to make, on reasonable commercial terms, an offer to a person who requests rights to use or have access to its transmission system or distribution system (as the case may be) for telecommunications purposes. A consequence of cl 12 is that a distributor is required to be mindful of the susceptibility of its infrastructure to use for the purposes of a telecommunications carrier. Indeed, the obligation set down in cl 12 may even encourage distributors to erect infrastructure designed, not merely for the purpose of supplying, converting, transforming or controlling electricity, but also to accommodate those telecommunications purposes.
If, as the respondents contend it should be, Sched 14A to the Development Regulations were construed to impose a "sole purpose test" for determining the applicability in any given case of the exemption conferred in s 49A(3) of the Development Act, there would result a tension in the combined operation of the Development Act and the Transmission Code. On the one hand, s 49A is intended to accommodate, through both a separate development assessment regime and an exemption from all such assessment regimes, the obligations and objectives attaching to the supply, conversion, transformation and control of electricity. But, on the other hand, an attempt by a licensed operator of an electricity distribution network to facilitate compliance with its obligations under cl 12 of the Transmission Code by erecting infrastructure which serves a dual purpose would deny that distributor the benefit of the exemption in s 49A(3). In this way, the evident purpose of s 49A would be frustrated.
Schedule 14A to the Development Regulations should not be construed to favour persistence of that tension. That item does not impose a sole purpose requirement as a pre‑condition to enlivening the exemption conferred by s 49A(3) of the Development Act. Such a construction accords with the natural meaning of the language of the item.
One final point should be made concerning the terms in which Sched 14A was drafted. On its face, the item requires that focus be directed to whether the building or equipment sought to be developed will be used for or in association with the supply, conversion, transformation or control of electricity. It is the purpose of the building or equipment developed, and not that of the development, upon which the availability of the exemption provided for in s 49A(3) of the Development Act is dependent. For this reason, the circumstance that the stobie poles were replaced by ETSA only because Hutchison had requested access to them is an irrelevant consideration.
It is true that the replacement stobie poles erected by ETSA were designed, among other things, to allow for the installation by Hutchison of its downlink facilities. However, this did not mean that those poles were not "used for or associated with the supply, conversion, transformation or control of electricity". Perry J accepted that the poles were, in part, "used for or associated with" that purpose. That circumstance alone is sufficient to bring those poles within the meaning of Sched 14A to the Development Regulations, thus enlivening the exemption from the development approval process provided for in s 49A(3) of the Development Act.
Question 1.3 in the Case Stated should be answered in the negative.

[154]

We part from this appeal with a final observation. The appeal was argued in this Court on the basis that the provisions of federal law, mentioned in these reasons, did not "cover the whole field"[39] of the regulation of the installation of Hutchison's facility and telecommunications equipment to the exclusion of the Development Act of South Australia. In this sense, the argument followed the conclusion reached in the Supreme Court of South Australia that s 109 of the Constitution did not apply to render invalid the provisions of State law affecting the operations of Hutchison, acting in conjunction with ETSA.
From the earliest days of telecommunications law in the Commonwealth, it has been a purpose of federal law to encourage the use for telecommunications of suitable facilities belonging to non‑federal bodies, generally subject to regulation by State law. Part VII (ss 140‑150) of the Post and Telegraph Act 1901 (Cth) was headed "Protection of Telegraph Lines from Injurious Affection by Electric Lines or Works" and later was supplemented by the Telegraph Lines Protection Regulations[40].
The policy behind such federal provisions includes the efficient establishment and maintenance of nationwide and international telecommunications facilities in Australia as the Constitution envisages in s 51(v); the economic use of existing infrastructure facilities; and, more recently, the minimisation of environmental concerns. To the extent that federal law so provides, State law, including any with respect to town planning, may not validly detract from, or inconsistently burden, the federal regulation[41].
We have been content to approach the issues in the present appeal on the basis chosen by both parties. However, in another case, the more fundamental question of constitutional inconsistency may need to be reconsidered, to decide whether it affords a more direct route to the conclusions now reached in this appeal. Assuming, as the parties did, that the federal law and the State Development Act can operate together without direct constitutional collision or incompatibility[42], the answers to the questions in the Case Stated are those now offered. Those answers happen to be consistent with a conclusion that upholds the primacy of the federal law and avoids any conflict with its provisions caused by the operation of the South Australian Development Act. It is therefore unnecessary to consider the deeper constitutional questions that might otherwise have arisen. They can be put aside to another day. This Court normally approaches such questions only when other solutions, based on the elucidation of statutory language, do not yield answers as they do, adequately, in this case[43].

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