Our analysis
98 A possible understanding of s 9(2) of the TER Determination is that it is akin to provisions for rulings under income tax legislation and is to be understood as providing for the ACMA (the body that must make an "assessment" of eligible revenue under s 51 of the TCPSS Act) to state a position as to the application of s 9(1) to a particular category of revenue that can then be relied upon by a participating person (eg in making a return). On that understanding, s 9(2) would not confer any discretion to treat revenue as falling within s 9(1) when on the proper construction of the provision it does not. However, the ACMA did not proceed on the understanding that s 9(2) was so limited in its decision-making. The passage in the October letter set out above indicates that the ACMA regarded a case of doubt as to the proper characterisation of revenue as an example of circumstances where s 9(2) might be used, and otherwise treated the use of s 9(2) as a discretionary matter to be guided by policy. This understanding of the ACMA's reasoning is supported by the briefing prepared for the ACMA's meeting, which did not suggest that a declaration could not be made but instead canvassed the circumstances of the case in some detail.
99 The ACMA's submissions in the Court below did not contend that s 9(2) was unavailable as a matter of law in a case where it had a firm view that the revenue in question came within s 9(1).
100 Nor, as we read her Honour's reasons, did the primary judge adopt a construction of s 9(2) that rendered it unavailable in the present case as a consequence of the ACMA having assessed the APL infrastructure revenue as falling within s 9(1). Some aspects of the reasoning quoted above (such as the exegesis of s 9 at [159])) appear to lead towards a conclusion that the power in s 9(2) is limited to resolving cases where the characterisation of particular revenue for the purpose of s 9(1) is doubtful (so that it cannot be used as a discretionary tool to deem revenue to be non-telecommunications sales revenue). However, such a conclusion would have been a short and complete answer to Indara's submissions concerning s 9(2) and her Honour did not state a conclusion in such terms. Instead, her Honour referred at several points (at [159], [163] and [169]) to the "purpose" of s 9(2) as validating the policy adopted by the ACMA and resolving arguments concerning relevant and irrelevant considerations.
101 We read these references to the "purpose" of s 9(2) as invoking the concept of the "subject-matter, scope and purpose of the statute", which was referred to in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40 (Mason J) (a passage that her Honour set out at [156]) as a source from which implications may be drawn limiting the factors to which a decision maker may legitimately have regard (or indicating factors to which the decision maker must have regard). We therefore understand the primary judge to have concluded that the issues required and permitted to be taken into account by the ACMA under s 9(2) were controlled by the provision having a narrow "purpose", rather than that the provision only authorised action to be taken in a narrow class of case.
102 We therefore reject the second proposition in ground 8(a), which asserts that the primary judge proceeded on the basis that the power "may only be exercised where there is a question about the proper characterisation of 'non-telecommunications sales revenue'" (emphasis added). As we have noted, her Honour did not state a conclusion along those lines even though it would have swiftly and simply resolved this aspect of the case. We also reject ground 9, which is the corollary of this assertion. However, this does not dispose of all the issues raised by grounds 8 to 13 concerning relevant and irrelevant considerations.
103 "Subject-matter, scope and purpose" are to be ascertained from the terms of the statute, read in context. The first point that should be noted, therefore, is that there is nothing in the terms of s 9 itself that imposes a limit on the matters that can be taken into account in deciding whether to exercise the power in s 9(2). We note that the primary judge at [159] referred to what her Honour regarded as strong indicators that s 9(2) was not intended to confer a discretion. However, as we have noted above, her Honour's reasoning does not then proceed to the conclusion to which that consideration might be thought to lead (ie, that there was no power under s 9(2) to do what Indara asked). If s 9(2) is broader than a power to give a ruling on the application of the test in s 9(1) (and it appears to be common ground that it is), its terms are consistent with the vesting of a power in the ACMA to decide, on whatever grounds it considers appropriate, that a specified body of revenue is to be treated as "non-telecommunications sales revenue" even if it does not come within s 9(1). A declaration that an identified body of revenue "is" non-telecommunications sales revenue is not, in our view, materially different to a declaration that such revenue "is taken to be" non-telecommunications sales revenue: either form of words authorises a declaration that gives the revenue a particular status for the purposes of s 16 of the TER Determination.
104 It does not follow, of course, that the discretion thus conferred is at large. It must at least be exercised in good faith and for purposes compatible with the statutory scheme. One significant aspect of the scheme of the TCPSS Act is that it provides for a scheme in which a predetermined amount of revenue is to be collected from participating persons, so that a dispensation afforded to one participant directly affects the liabilities of others. It may well follow from that aspect of the statutory scheme that equal treatment as between participating persons is a mandatory consideration. There may also be considerations that are irrelevant (in the sense of extraneous) to the exercise of the power for this reason.
105 The Regulations to which the 1998 Explanatory Statement related (the 1998 Regulations) were part of a scheme that can properly be regarded as a predecessor of the current statutory regime. Sections 15 and 16 of those regulations performed a function analogous to s 9(1) and (2) of the TER Determination (although they contained no direct equivalent of s 9(4)). The relevant passages of the 1998 Explanatory Statement are quoted in the extract from the primary judge's reasons set out above. The reference there to using the declaration power to "fine tune" the definition of non-telecommunications sales revenue suggests that s 16 of the 1998 Regulations may have been intended to allow the ACA to modify the effect of s 15 rather than merely provide "certainty" as to its operation. This point has limited force, however, for at least the following reasons.
(a) The 1998 Regulations were made under what were then provisions of the Telecommunications Act. The primary legislation has been amended several times since then. The 1998 Regulations themselves were replaced by a Determination under the TCPSS Act (the Telecommunications Universal Service Obligation (Eligible Revenue) Determination 2002 (Cth)). That Determination was repealed and replaced by the Telecommunications Universal Service Obligation (Eligible Revenue) Determination 2003 (Cth), which was in turn replaced by the Telecommunications Universal Service Management Agency (Eligible Revenue) Determination 2013 (Cth) (the 2013 Determination). Each of these contained provisions in very similar form to the current s 9. The 2013 Determination was made under a different Act (the Telecommunications Universal Service Management Agency Act 2012 (Cth)) and vested power under what was now s 9(2) (in the same form as the present provision) in the ACMA. By the time the TER Determination was made, therefore, "eligible revenue" was no longer a "new approach"; and the intention of the makers of the 1998 Regulations was of diminished relevance.
(b) The Explanatory Statement for the TER Determination explained that it was made following the enactment of the 2015 Act (which among other things abolished the Telecommunications Universal Service Management Agency) and was "substantially similar" to the 2013 Determination. There was no material difference in the drafting of s 9. The Explanatory Statement for the 2013 Determination said nothing of present relevance specifically in relation to s 9. However, as to declarations more generally, it said that the 2013 Determination "enables the ACMA to make specific declarations in respect of revenue in light of practical experience and to address conduct of participating persons". The same statement appears in the Explanatory Statement for the TER Determination. A more complete review of the extrinsic materials thus suggests that the intended uses of s 9(2) were not limited to providing clarity in cases where the application of s 9(1) was doubtful; rather, the purposes included allowing the ACMA to mould the application of the Determination to meet new situations. We were informed that the primary judge was not taken to these materials.
(c) Caution is needed, in any event, as to the use of extrinsic materials to identify the "purpose" of legislation. Identification of relevant and irrelevant considerations by reference to the subject-matter, scope and purpose of legislation (including subordinate legislation) is part of the task of statutory construction and the fundamental principles of construction apply. Legislative intention resides in the text; subjective intentions of the legislators are not relevant: Saeed v Minister for Immigration and Citizenship [2010] HCA 23; 241 CLR 252 at [31]-[32] (French, CJ, Gummow, Hayne, Crennan and Kiefel JJ). Extrinsic materials, such as the Explanatory Statements for predecessors of the TER Determination, may be relevant as part of the context in which the statutory text is to be read in order to ascertain its meaning; however, they cannot be used to impose a meaning that the text cannot reasonably bear.
106 The extrinsic materials, to the extent that they assist, support the view that s 9(2) of the TER Determination was included in order to allow the ACMA to place specified amounts of revenue into the category of "non-telecommunications sales revenue" notwithstanding that they do not come within s 9(1) properly construed. In so far as the "purpose" of s 9(2) needs to be identified in order to form a view as to what considerations may properly be taken into account in its exercise, the provision of certainty in doubtful or debatable cases can be accepted as one of its purposes but is not the only purpose. To this extent, we respectfully differ from the primary judge's analysis of the provision and agree with the first proposition in ground 8(a) (that her Honour misconstrued s 9(2) by "finding that the purpose of a declaration under s 9(2) is clarificatory only" (emphasis added)). It does not follow, however, that any part of grounds 10 to 13 should succeed.
107 Ground 10 contends that the primary judge should have found that the ACMA erred by rejecting Indara's request for a declaration "on the basis that it was beyond the scope and purpose of the power conferred by s 9(2)".
(a) To the extent that it is submitted that the ACMA treated the power in s 9(2) as unavailable in the circumstances of the case, that submission is inconsistent with the evidence referred to above and must be rejected.
(b) We should note at this point that counsel for the ACMA sought leave to file a notice of contention in order to contend for the construction of its reasons that we favour. We do not understand the primary judge to have found that the ACMA understood s 9(2) to be unavailable except to resolve uncertainty. Instead, her Honour referred at [169] to the ACMA having adopted a policy that exercise of the power would generally not be appropriate except to resolve uncertainty. On this understanding, the notice of contention is unnecessary. However, against the possibility that we have misread her Honour's reasons, we will grant leave to file the notice of contention (which was not opposed by Indara).
(c) If the argument advanced by ground 10 is that the ACMA erred by considering the making of a declaration to be inappropriate, on the basis of an understanding as to the purposes for which s 9(2) should be used, it resolves into a disagreement about the merits which raises no issue of law. The ACMA was entitled to adopt policies concerning the kinds of cases in which the power in s 9(2) should be used, as long as those policies were not inconsistent with the legislation.
108 Ground 11 contends that the primary judge should have found that the ACMA erred by taking into account, as a reason not to exercise the discretion, that Indara was a licensed carrier during the eligible revenue period. It will be recalled that, as part of its third reason for not making a declaration, the ACMA observed that the APL infrastructure revenue was included in the calculation of Indara's eligible revenue because Indara was a licensed carrier, having made a commercial decision to acquire a licence.
109 Indara's status as a licensed carrier was, of course, the reason why an assessment of its eligible revenue needed to be undertaken in the first place. It was a background fact which would necessarily be present in any consideration of whether to exercise the discretion in s 9(2) and therefore, in itself, neutral. However, read in context, this passage of the October letter was evidently a response to arguments put forward by Indara. In the 16 August letter Indara's solicitors adopted the submissions made in earlier correspondence and advanced the following, among "compelling policy reasons" for the revenue to be deducted from Indara's eligible revenue.
• Axicom's tower business does not require a carrier licence, and the revenue it earns is analogous to that of any landlord whose tenants include telecommunications companies;
• Axicom's [sic] has operated its tower business for many years without a carrier licence and without any obligation to contribute to the TIL;
• The proposed venture to be established by Axicom Land, which does require a carrier licence has not, to date, generated any revenue;
• Axicom's tower business would face unfair competitive disadvantage if its existing revenue was subject to the TIL given its current business does not require a carrier licence and it faces actual and potential competition from competitors which are not carriers and are not subject to the TIL …
(Emphasis in original).
110 Read against this background, the relevant passage of the October letter is properly understood as rejecting an argument that the exposure of Indara to liability for TIL (based on the revenue earned by its related entities in the telecommunications industry) was anomalous and making the point that it was a normal and predictable consequence of Indara's decision to acquire a carrier licence. In making this point the ACMA did not misunderstand the nature or scope of the power whose exercise it was considering, or take into account an irrelevant consideration.
111 Ground 12 contends that the primary judge should have found that the policy or position adopted by the ACMA was inconsistent with the scope of the discretion conferred by s 9(2) in that "the scope of the discretion, properly construed, permitted a broader range of purposes than provided for in the [ACMA's] policy or position". We reject this contention for reasons already mentioned. It is apparent from the terms of the October letter that the ACMA regarded the resolution of doubt concerning the application of s 9(1) as an example of a situation in which a declaration would be appropriate, and did not treat the absence of such doubt as the end of the matter. Informed by a general view that the power should be rarely exercised, the ACMA grappled with the circumstances of the present case (including the fact that comparable revenue had been included in the telecommunications sales revenue of other participating persons for the purpose of calculating their eligible revenue). This reasoning did not place any a priori limit on the purposes for which a declaration might be made.
112 Ground 13 contends that the primary judge should have found that the ACMA did not take into account three mandatory considerations:
(a) the nature of Indara's business and the purpose for which it had obtained a carrier licence;
(b) aspects of APL's position (it was not a direct beneficiary of the "universal telecommunication services"; it had a history of earning revenue of the type in question without it being treated as eligible revenue; and there was no element of "avoidance" by it); and
(c) "the objects of the [TER] Determination", including the reason for the inclusion of the revenue of related parties.
113 Indara's submissions did not explain why these matters were mandatory considerations other than by a general reference to the "context and purpose of the scheme". In our view, there is no basis for the assertion that these are mandatory considerations other than an impression that they are matters which a decision maker might well have considered significant. That is not sufficient. While it can be accepted that the ACMA is required to turn its mind to the circumstances of the case and give genuine consideration to the merits, it does not follow that any particular aspect of those circumstances is therefore a mandatory consideration. The considerations that are mandatory in this sense are a function of the statute, not the circumstances of the individual case; and, in order for a failure to address a particular matter to rise to the level of legal error, the statute must expressly or impliedly require consideration of the matter at that level of particularity: see Foster v Minister for Customs and Justice [2000] HCA 38; 200 CLR 442 at [22] - [23] (Gleeson CJ and McHugh J); Buzzacott v Minister for Sustainability, Environment, Water, Population and Communities [2012] FCA 403; 291 ALR 314 at [80]-[84] (Besanko J) (reasoning which was not disturbed on appeal); R Lancaster and S Free, "The Relevancy Grounds in Environmental and Administrative Law" in N Williams (ed), Key Issues in Judicial Review (Federation Press, 2014) at 243.
114 Further, it has not been established that these issues were not considered by the ACMA. Each of these issues had been brought to the ACMA's attention either in Indara's email of 9 December 2020 or the 16 August letter from its solicitors, which adopted what had been said in the earlier email. Both documents were attached to the briefing prepared for the ACMA by its officers. The October letter, which set out the ACMA's reasons, confirmed that the ACMA had noted the matters submitted in support of Indara's request. The proper inference is that the ACMA considered these issues and did not think that they outweighed the matters to which it referred: indeed, as we have noted above, the third reason advanced by the ACMA in the October letter is in substance a rejection of Indara's arguments that treatment of the APL infrastructure revenue as part of its eligible revenue was anomalous or unfair.
115 In coming to the view expressed in the previous paragraph we are mindful that, although the October letter was framed in response to Indara's wish to receive a statement of reasons, it was not drafted in purported compliance with a statutory duty to provide a statement of reasons. The letter does not purport to list the evidence relied on, issues considered or submissions rejected in a comprehensive way. That makes it unsafe to infer, from mere silence in the October letter, that any particular issue was not considered: see, eg, Warren v Chief Executive Officer, Services Australia [2024] FCAFC 73 at [2] (Katzmann and Kennett JJ).
116 For these reasons, which differ to some extent from the reasoning of the primary judge, we consider that grounds 8 to 13 must be rejected.