OUR TOWN FM PTY LIMITED v AUSTRALIAN BROADCASTING TRIBUNAL &

Federal Court of Australia|1987-09-04|Before: Wilcox J

The decision of the first respondent, the Australian Broadcasting Tribunal, made on 10 April 1987 to grant to the second respondent, Newcastle FM Pty Limited, a commercial radio licence for a period of five years

The applications made to the first respondent by the six applicants referred to in the report of the Tribunal dated April 1987 of its Inquiry into the Grant of a Commercial Radio Licence to serve the Newcastle and Surrounding Areas be referred back to the first respondent to be determined according to

The second respondent pay to the applicant 1ts costs

Liberty be granted to any party to apply by Notice of Motion, to be filed and served within 14 days of this order, for a variation of order 3 or for some

(b) if any Notice of Motion is filed pursuant to order 4 herein, until the

Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Administrative Decisions (Judicial Review) Act 1977 toa

decision made by the Australian Broadcasting Tribunal, the first respondent, to grant to Newcastle FM Pty Limited, the second respondent, a commercial FM radio licence to serve the Newcastle area. The applicants, Our Town FM Pty Limited and Newcastle Stereo Radio Pty Limited, are two of the five unsuccessful applicants for the licence; the first FM licence, and the fourth commercial radio licence, for the district. By consent of all parties the two matters were heard together, evidence tendered in either case being treated as admissible in both proceedings to the extent of its relevance. Although there are differences in the grounds of invalidity alleged in the two Applications, counsel for each of the applicants adopt the submissions made on behalf of the other applicant; so no useful purpose would be served by my distinguishing the grounds and arguments advanced by each particular applicant. I shall deal with each separate ground of attack seriatim, collecting together all submissions going to that ground regardless of source. However, it is first desirable to say something about the course of the inquiry

This was the first inquiry undertaken by the Tribunal

pursuant to the Australian Broadcasting Tribunal (Inquiries)

Regulations 1986. These Regulations were made on 23 May 1986, apparently in an endeavour to overcome some of the problems of the previous procedures. Those problems were graphically illustrated in the recent inquiry into the grant of a third commercial television licence for Perth: see the Tribunal's report on that inquiry, para.1.18 and appendices G and H. A central feature of the new procedures is a requirement for the Tribunal to create and maintain an "inquiry file", upon which must be placed, subject to certain specified exceptions, copies of all relevant documents. The inguiry file is made

The Regulations provide for the convening of conferences with parties, as well as for oral hearings. It appears that, in the present case, the Tribunal made extensive use of conferences to elicit additional information. This procedure seems to have worked well. It enabled the Tribunal to dispose of the matter relatively speedily and at modest expense to the parties; at least in connection with legal representation. It should be emphasized that none of the complaints made in the present case relate to the conduct of the inquiry, as distinct from the manner of taking the actual

The inquiry originated in a notice published by the Minister for Communications on 27 May 1986 inviting applications for the licence, the technical requirements of which were specified. As mentioned, six companies lodged applications. Various preliminary hearings were held, at which all the applicants were represented. Pursuant to directions made by the Tribunal, each party filed the documents upon which it intended to rely, together with statements of witnesses. These documents were served upon the other parties, who were permitted to file statements in response. A period of four days in December 1986 was allocated for oral hearings. During the first three days the Tribunal held conferences with the boards of directors and senior executives of each of the applicants, each conference lasting about half a day. The members of the Tribunal closely questioned the directors and the executives upon a wide range of matters, some of the topics apparently arising out of comments made in the submissions of other applicants. The other applicants and their representatives were entitled to he present at the conferences with their opponents. I gather that most did attend; but they did not actively participate in those conferences. No application was made to the Tribunal on behalf of any party to cross-examine any person. On the fourth day counsel for each applicant addressed the Tribunal regarding the merits of the various applications. The members of the Tribunal considered the matters put to them and

prepared a report in which they announced their decision.

The Tribunal's report is in evidence in these proceedings. It consists of a principal document containing 21 pages, signed at the foot by the three Tribunal members who sat upon the inquiry, together with various appendices, lettered from A to H. Appendix G purports to be a summary of the relevant provisions of the Broadcasting Act 1942. There

is a difficulty about this summary, to which I will return.

The grounds of invalidity of the Tribunal's decision depend upon the contents of, and omissions from, the Tribunal's report. It 1s therefore necessary to refer to the report 1n some detail; but it will assist the understanding of the reasoning of the Tribunal to first note the form of the

relevant legislation. This was the Broadcasting Act, as it

stood after the amendments which were made by the Broadcasting

and Television Amendment Act 1985. Those amendments involved

a change in the name of the principal Act, the words "and Television" being dropped out of the title. They included numerous amendments to Part IIIB of the Act, dealing with licences and licence renewals. Division 1 of that Part (ss.80-89D) deals with the grant, renewal and revocation of licences. Section 81 provides that, subject to the Act, "the Tribunal may grant or renew a licence upon such conditions, and in accordance with such form, as the Tribunal determines".

The section goes on to provide some restrictions on that power

calling of applications for licences. Sections 82A and 82B

relate to supplementary licences and are not presently

"83. (5) An shall, before in writing to is granted to

the licence is granted give an undertaking the Tribunal that he will, 1£ the licence him--

(b) in the case of a licence other than a re-broadcasting licence or a re-transmission licence;

provide an adeguate and comprehensive service pursuant to the licence; and

encourage the provision of programs wholly or substantially produced in Australia and use, and encourage the use of, Australian creative resources in and in connection with the provision of programs.

(6) The Tribunal shall not refuse to grant a licence to a person unless-~

of the licence would be contrary to a provision of this Act;

(c) in the case of a licence other than a remote licence -- it appears to the Tribunal, having regard only to the following matters or circumstances, that it is advisable in the public interest to refuse to grant the licence to the person;

(A) is a fit and proper person to hold the licence;

(B) has the financial, technical and management capabilities necessary to provide an

adequate and comprehensive service pursuant to the licence or, in the case of a re-broadcasting licence or a re-transmission licence, to provide the service to which the licence relates;

(A) the licence is a commercial licence whose service area 1s not a metropolitan service area; and

{B) the service area of the licence overlaps the service area of one or more licences of a kind to which sub-sub-paragraph (A) applies,

the need to avoid undue concentration of influence, whether direct or indirect, on the person and on the company or companies holding the other licence or licences;

(iii) where the service area of the licence overlaps the service area of another licence or other licences -- the need for the commercial viability of the service or services provided pursuant to the other licence or other licences;

of the kind contemplated by the matters (other than the outline of the technical conditions proposed to be included in the licence warrant) set out in a notice under paragraph 82(1)(a) or 82A(4)(a) should not be granted;

(7) ee (8)... (8A) ... (9) Where there are 2 or more applicants for a

licence, each of whom 1s a person to whom, but for this sub-section, the Tribunal would be.required to grant the

licence, the Tribunal shall grant the licence to the

most suitable applicant." Section 84 requires the Minister to determine the service specifications applicable to licences. The remainder of Div.1l

The Tribunal divided its report into three sections. After an introduction referring to the procedure which it had followed in the inquiry, the Tribunal set out in section 1 what it called an "outline of the applications", It explained in para.l.1:

proposals, and a summary of the applicant's strengths and weaknesses."

The Tribunal then dealt in turn with each of the six applicants. In each case the major shareholders were stated. The directors were identified, with a description of their backgrounds and areas of expertise. Reference was made to the philosophy underlying each application, with particular reference to the target audience envisaged by the particular applicant. Comments were made by the Tribunal in this section

about each applicant, not in a definitive way but, as the

Tribunal said, merely to identify certain "strengths and weaknesses". In view of one submission put on behalf of Newcastle FM, the second respondent, it is relevant to note that only that licence applicant defined its target audience as being the 25-34 age group. Other applicants indicated wider age groups: in the case of Our Town FM: 25-44 years, of Newcastle Stereo: 18-35 years, and in the cases of the

other applicants: 25-45 years, 18~34 years and 25-39 years.

comments made by the Tribunal concerning Newcastle FM, the

successful applicant. In para.1.20 the Tribunal dealt with

"'Newcastle FM' was incorporated on April 29, 1983 as a proprietary company limited by shares. There are 45 shareholders. The Triple M Broadcasting Company Pty Limited licensee of 2MMM Sydney holds 10.07 per cent of the shares while trustees for the Australian Labour (sic) Party and the Labor Council of NSW have a 13.52 per cent holding. The only prescribed interest in the holding is that of Limic Communications which holds 19.93 per cent of the shares. Limic holds the shares as trustee for the family of Michael and Lisa Webb."

identified, their occupations being set out. In para.1.22 the

Tribunal commented that three of the directors "have experience in commercial radio and all board members have a strong and relevant background in management or administration". The Tribunal then dealt with format, in

"'Newcastle FM' presented a format designed to fill a gap between the program services supplied by 2NX and 2KO. The core of its target audience were adults in the 25-34 age group. Programming would combine popular contemporary music with new releases. News stories would be supplied by CBC Network and reworked and integrated into local bulletins which were to be prepared by a news editor and three journalists."

There was reference to the relationship between the

board of directors and management. The Tribunal then referred

to a matter which had been agitated before 1t, and in

connection with which submissions have been put to this Court,

"1.25 The Tribunal questioned the board about two factors, the involvement of Triple M and the involvement of the NSW Branch of the Australian Labor Party and the Labor Council of NSW. Mr Steggles described the relationship with Triple M as follows:

MMM holds approximately 10 per cent of our shares, and in return we get from them advice, assistance, guidance, whatever we require in that direction, 1£ we require it.

We believe that MMM has been very generous in approaching it in this way. I understand that in the industry it would be expected that a company that is successfully operating is likely to ask for a much greater share of the operation of a new company than 10 per cent, and MMM has shown great restraint, and we are very pleased to be involved with MMM and have their assistance, if we require it: ...

An application is currently before the Tribunal for the approval of the purchase of all the issued shares of the Triple M Broadcasting Company Pty Ltd by Wheatley Communications Pty Ltd. A director of Wheatley Communications, Michael Max Heine, in his statement of evidence to this inquiry has stated that should the sale of shares in the Triple M

Broadcasting Company Pty Ltd to Wheatley Communications occur then there 1s no intention to increase Triple M's shareholdings in 'Newcastle FM' above the current level of 10.07 per cent of issued capital. Mr Heine also stated that Triple M would continue in its role of offering support and advice if this is called upon by 'Newcastle FM'. The Tribunal is satisfied that the arrangement proposed was essentially the same as the agreement that existed previously between Triple M and 'Newcastle FM'.

On 25 March 1987 the Tribunal received notice of a further series of share transactions proposed to be entered in respect of Wheatley Communications which would result in the Hoyts Corporation Pty Ltd acquiring a prescribed interest in Triple M. Mr Bruce Fink, a director of the Hoyts Corporation Pty Ltd provided the Tribunal with a statement of evidence dated 26 March 1987 which confirmed that should the transactions occur, there is no intention to increase Triple M's shareholding in 'Newcastle FM' above the current level of the 10.07 per cent of the issued capital and that Triple M would continue in its role of offering support and advice if this 1s called upon by 'Newcastle FM'. The Tribunal is again satisfied that the arrangement proposed is essentially the same as the original agreement between Triple M and 'Newcastle FM'. While Hoyts also have an interest in 2KO as a result of a shareholding in Wesgo, in the end neither Triple M nor any of its ultimate owners including Hoyts would hold a prescribed interest in "Newcastle FM' or 2KO. It is also important to note that even though changes in the ultimate ownership of the 10.07 per cent shareholding have occurred, the representation on the "Newcastle FM' board has remained constant in the person of Sir Ian Turbott who under the proposals would have no involvement in 2KO.

The ALP and Labor Council involvement in 'Newcastle FM' raised a question of possible conflicts of interest arising between the new station and the incumbent station 2HD, which is entirely controlled

At the conclusion of its separate comments upon each

by those investors. Mr Price, the board member who represents the ALP and the Labor Council, indicated that the potential for conflict was minimal. He said:

I have been appointed to take care of the investment of those two organisations which obviously are very closely allied. I do not see a conflict of interest situation

arising. The level of discussion and frequency of discussion between myself and those two organisations and their principals has been fairly brief. I keep them fully informed with regular reports, and the only issues that have really been under close scrutiny by both organisations have in fact been if there are changes to the articles of association - which is right and proper - I have received no influence whatsoever, or advice as to how to vote. I am seen to be custodian of those shares, and let us face it, I think on the basis of the fact that there is a large membership of both organisations resident within the broadcast area, and I am seen to be representative of that group and a member of both organisations....

The Tribunal is satisfied that Mr Price has no involvement with 2HD. Mr Steggles said that the Newcastle area 1s highly industrialised, and the ALP and Labor Council shareholding was as appropriate as the BHP superannuation fund shareholding in 'FM 2000'. The Tribunal recognises the relevance of this particular shareholding for the Newcastle area."

of the applicants, the Tribunal summarised the position,

indicating, in effect, its opinion that none of the six

applicants had failed to satisfy the requirements of 8.83(6)

"1.42 The applications before the Tribunal, as developed during the inquiry, were of a very high standard, which might not be encountered in smaller or less prosperous markets. Some of the applications had been planned for many years, in the expectation that an application for an FM licence 1n Newcastle would eventually be called. These remarks are made not to congratulate the applicants, but to draw attention to the special character of the contest between them in this Newcastle context, which was between well-prepared contenders for a comparatively wealthy prize. In this contest, all contenders passed the statutory 'qualifying round'. Careful analysis of each application has led to the conclusion that each of the applicants would be eligible for the grant of the licence because all applicants meet the necessary criteria laid down in the Act and set out in Appendix G; and in terms of the Act the Tribunal would be required to grant a licence to each of them, but for the fact that only one licence is available: s.83(9)."

Before turning to the selection of the most suitable applicant, as required by s.83(9), the Tribunal considered in section 2 of its report the question whether a licence should be granted at all; this question being discussed in terms of the audience need in the service area, the services offered by the existing licensees, the effect of a new FM service upon the existing licensees and the like. In the course of this discussion, in para.2.2, the Tribunal said: "The target market identified as most receptive to a new FM service is in the 25-34 age range", However, it is not clear whether this was intended as an indication of the Tribunal's own opinion as to the appropriate target audience or whether the Tribunal was

merely saying that these years had been identified by the

various applicants. It is the fact that these years, and only these years, were common to the assessments of all six

Section 2 of the report concluded with an expression of the Tribunal's opinion that "it is in the public interest

In section 3 of its report the Tribunal considered the selection of the most suitable applicant. It found, in para.3.1, that each applicant "had a sound and considered plan for identifying the needs of the service area" and that each "had financial, management and technical proposals and company structures adapted for this purpose". I will set out in full the remainder of the report. I do so because a major burden of the applicants' cases 1s that the Tribunal failed to explain why Newcastle FM had been preferred to the other

3.2 There were distinct differences in the substance of the applications. These included differences in the amount of local company control existing, involvement of existing broadcasters, different emphasis on research and variations in approaches to staffing and management arrangements. None of these broad differences in approach enabled any applicant to be eliminated as unsuitable. Each approach had 1ts strengths and weaknesses, and had been worked out in a rational and considered way in the context of the whole application. It could not be said that any of them was simply wrong, or potentially detrimental to the audience.

Management and financial capability, fitness, propriety and other considerations referred to in s.86 (sic, s.83(6) was apparently intended) of the Act were important in the comparative assessment of the applicants. Apart from the application of those considerations spelled out in the Act to each of the applicants on a comparative basis, there was no simple test in the circumstances of this inquiry for finding the most suitable one of the six. Rather, a detailed comparative judgment was made about the relevant qualities of each applicant.

The factors considered in the comparative judgments included: the qualities of the directors and major shareholders, the practical business relationships between shareholders, directors, management and sources of expertise and finance for each applicant; and enunciated policies and plans for serving the community and the basis for them. Judgments about these matters, and the combination of all of them, do not lend themselves to detailed written commentary, because they reguire assessment of the qualities of individuals and groups of individuals.

As the Tribunal said in the different context of 1ts report on the most suitable applicant for a television licence 1n Perth:

A licensee must be equipped to ensure that the proposals in its application are implemented; that it will act in the best interests of the community to be served by the station; and that it can adjust to social and technological changes. This requires an assessment by the Tribunal of the professional and personal qualities of the directors, particularly those who hold a dominant position in the applicant:

There are two applicants which appear to be outstanding, and significantly ahead of the other applicants, when all the factors mentioned are taken into account, namely 'Newcastle FM' and 'Our Town'.

For example: their directors, shareholders and proposed management all combine business experience, ability to

innovate and familiarity with media ina constructive balance. Both applicants have a stable shareholding and board membership, so that the implementation of their plans is less likely to be disrupted by struggles for control of the company or its management. They have both gone about identifying the needs of the Newcastle audience effectively, and they both have realistic plans for meeting those needs. Each had a capable technical plan for delivering its proposed service. They cogently defended and justified their plans through the processes of the inquiry.

In separating these two from each other the Tribunal found comparative strengths un the soundness of 'Newcastle FM's' Management and format concepts. In addition to board and management levels of direction and control, 'Our Town' proposed to continue to operate a system of five committees, one each for business and finance, programming, specific localism, technical matters and Australian resources. The direct and separate reportage of both senior executives and committee chairpersons to the board may contribute to cumbersome chains of management command and possibly to conflicting advice being tendered to the board. The practical working relationships between executives and committees were not sufficiently clearly enunciated to satisfy 'the Tribunal that this committee system would contribute to a station's best management.

'Our Town' proposed a format directed at a range of listeners in the 25 to 44 age groups. During the interviews with the directors a number of program ingredients were mentioned which were not, on the surface, compatible with this format. A number of specific program ideas were

directed at children, teenagers and younger adults. While the additions to the core format were designed to create a family life-style radio station they appeared to be attractive but insufficiently integrated notions.

The shareholdings in 'Newcastle FM' of Triple M, the ALP and the Labor Council, and the directors who correspond with those shareholdings (Szir Ian Turbott and

contribution of finance, skills and connections which are appropriate to the needs of a Newcastle radio station. The Tribunal questioned the board about the possibility of undue influence or conflict of interest arising from those shareholdings, but was satisfied by the answers that those situations are unlikely to arise without major departures from the current basis of the application, which is a stable one, as mentioned above. None of these shareholdings, which do involve interests ultimately connected to 2KO and 2HD as described above, is a dominant one.

3.9 Although both applicants were outstanding, 'Newcastle FM' was the superior. The board of the company, which has been described above, includes Mr Steggles, a chairman who is very experienced in business generally; and Mr Webb, a major shareholder and an active managing director with experience in radio and a commitment to the Newcastle area and to this applicant.

The board membership and share register incorporate a substantial commitment by local Newcastle interests, but not to the exclusion of interests based in Sydney or elsewhere which may be of use to the company. The specific plans and proposals of 'Newcastle FM' are summarised in Appendix A."

The applicants contend that, in reaching its decision, the Tribunal misdirected itself in law. They put two separate submissions, neither of which, in my opinion, has any substance. First, they point out that appendix G to the report purports to summarise the relevant requirements of the Act. They rightly say that this summary is erroneous in that 1t states the effect of the relevant provisions as they stood before the commencement of the 1985 amendments; whereas the Tribunal was bound to apply the legislation as it was after

those amendments. It is not apparent that the changed wording

of the Act, and in particular of s.83, was significant in terms of the issues before the Tribunal in this inguiry. But 1t is not necessary to determine whether, nevertheless, the decision is vitiated for error as to the applicable law. The evidence affirmatively establishes that the Tribunal was not under any misapprehension about the fact that the 1985 amendments applied to the inquiry it was undertaking. The Chairman of the Tribunal, Ms Deidre O'Connor, made an affidavit in which she stated that, after considering all of the material received during the course of the inquiry and the affidavits filed after the conclusion of the oral proceedings "the Tribunal held a meeting on 1 April 1987 to consider finalising the report of the inquiry". At that meeting the members of the division conducting the inquiry "settled in final form pages 1-21 of the report of the inquiry". At the same meeting the members discussed the proposed publication of the report with two members of the Tribunal staff. Ms O'Connor requested one member of the staff to prepare various appendices, for attachment to the report. She suggested that the format follow that used in connection with the Tribunal's report on the Perth television inguiry. The Perth inguiry had been based upon the pre-1985 legislation. Although Ms O'Connor does not say so in terms, 1t appears that the staff member simply adopted the relevant appendix to the Perth report, overlooking the change in the legislation. Whatever the explanation, the error did not affect the decision of the

Tribunal. Ms O'Connor concludes her affidavit by saying:

"In making the decision for the grant of a commercial FM radio service to Newcastle, New

South Wales and surrounding areas the division of the Tribunal considered only the Broadcasting Act 1942 and the relevant parts of s.83 of that Act. The Tribunal had come to its decision before the appendices in the form in which they appear in the published report of the inquiry were in fact created."

Ms O'Connor gave oral evidence before me, but there was no challenge to the statements in her affidavit. It must be concluded that, although appendix G erroneously summarizes the relevant law, there was no confusion by the Tribunal members themselves, in coming to their decision, as to the

In connection with error of law a second submission 1S put. Counsel say that, assuming that the members of the Tribunal in fact appreciated that they had to apply the amended Act, they nonetheless failed to do so. In para.3.6 of their report, already quoted, the Tribunal suggested, in relation to Our Town FM, that a committee system might not "contribute to a station's best management". Counsel point out that, as a result of the 1985 amendments, the Act no longer makes reference to stations. Whereas the old s.83(6)(c)(i)(B) spoke of the effective operation of "the relevant broadcasting station or television station", the current reference 1s to the provision of "an adequate and

The submission on this matter 1s an example of a pedantic approach to a tribunal's report which has frequently

been deprecated in this Court: see Repatriation Commission v Reid (1984) 54 ALR 157 at p.164, Tang v Minister for

Immigration and Ethnic Affairs (1986) 67 ALR 177 at p.192. In order to provide a television service, one must operate a television station. A station is only operated so as to provide a service. The subjects are interchangeable. It was not erroneous for the Tribunal to consider an aspect of the Management of a station in determining whether a particular

licensee was likely to be able to provide an adequate service.

The applicants refer to matters which, they say, the Tribunal failed to take into consideration. To some extent, their submissions are bound up with a more significant submission, to which I will come, regarding the adequacy of the reasons furnished by the Tribunal. But two aspects of the

First, it is submitted that the Tribunal failed properly to consider the question of undue concentration of influence. As counsel point out, s.83(6)(c)(ii) of the Act requires consideration of this matter in any case, relating to a non-metropolitan commercial licence; at least where some issue of concentration of influence arises. Counsel say that the Tribunal did not appreciate this. In the opening

decision." Accepting, for the purpose of the argument, that the Tribunal intended to refer to the Act as amended in 1985, counsel say that the statement is erroneous in suggesting that the relevant criteria are of optional, rather than mandatory, relevance. Furthermore they point out that the list of "important elements in the decision", which immediately

follows that statement, omits any reference to undue

The criticism is then made that no reference is made to undue concentration of influence, in connection with Newcastle FM, in the report prior to the conclusion at para.1.42 that all six applicants passed the "qualifying round" prescribed by s.83(6). The preceding discussion, at paras.1.25 and 1.26, dealt, it is said, only with the different questions of whether Triple M would hold a "prescribed interest" in Newcastle FM and whether the promised "support and advice" would survive the acquisition by Hoyts of an interest in Triple M. Counsel say that the discussion in para.l1.27, about the involvement of the Australian Labor Party and the Labor Council, relate only to "possible conflicts of interest arising between the new station and the incumbent

There is, in my opinion, much force in the criticisms made by counsel of the manner in which the Tribunal dealt with

the matter of undue concentration of influence. Two

shareholders, the ALP and the Labor Council, together accounted for 13.5% of the capital in Newcastle FM. Those two organizations owned the whole of the shares of a competitor station, 2HD. Further, the effect of the acquisition by Hoyts of shares 1n Triple M was that this company, which already held 14.9% of the capital of the company controlling 2KO -- a

competitor AM station -~ would control 10.07% of Newcastle FM.

There is no doubt that, under these circumstances, the Tribunal was bound to consider whether it was advisable in the public interest to refuse to grant a licence to Newcastle

FM by reason of the need to avoid an undue concentration --

there existed a concentration ~- of influence on the new station and 2HD and 2KO. The parties saw this as a major issue and put submissions accordingly. One would have

expected it to loom large in the reasons of the Tribunal.

But, although the matter of conflict of interest was referred

to at some length, concentration of influence -- which is, of course, a different thing -- was mentioned only once, in para.3.8.

I do not read the word "may" in the introductory paragraph of the report as implying that the Tribunal had a~- discretion regarding the relevance of undue concentration of influence. Rather, I think that the Tribunal was referring to matters which it was entitled to take into account; "may" being used in the permissive sense. It was not dealing with the separate question whether it was obliged to consider those

matters. Nor do I regard the omission of a particular subject

from the list of issues as demonstrating a view that that issue was irrelevant. This list was not intended to be exhaustive; although, having regard to 1ts importance to the application of Newcastle FM, it is surprising that the issue of undue concentration of influence did not find its way into the list. Too much should not be read into the fact that the Matter was not discussed in the report prior to para.1.42; although it would have been logical to do so. According to Ms O'Connor, the report was finalised at a particular meeting at which it was considered as a whole. If it appears from the report that a particular matter was considered before the final decision was made, I do not think that it can be said that the Tribunal failed to take that matter into account merely because it is not discussed at the most appropriate

"The Tribunal questioned the board about the possibility of undue influence or conflict of interest arising from those shareholdings, but was satisfied by the answers that those situations are unlikely to arise without major departures from the current basis of the application, which is a stable one, as mentioned above. None of these shareholdings, which do involve interests ultimately connected to 2KO and 2HD as described above, is a dominant one"

The stability "mentioned above" is stability in shareholdings and in board membership (para.3.5). Stability in board membership was, no doubt, relevant to the matter of conflict

of interest. It could hardly have much significance in

relation to concentration of influence. Tt must be assumed that any board member representing a particular shareholder will act in accordance with the wishes of that shareholder:

see Re News Corporation Limited (1987) 70 ALR 419 at

pp.436-437. But stability of shareholdings was relevant to concentration of influence. As the Tribunal dealt with both conflict of interest and concentration of influence ina single sentence, the references to stability may have been intended to be read distributively. So reading this sentence, it is possible to obtain from it an expression of the Tribunal's opinion that, having regard to the stability of shareholdings, the possibility of an undue concentration of influence upon Newcastle FM and the two relevant existing AM stations was unlikely to arise. That interpretation is supported by the following sentence, to the effect that none of the shareholdings is a dominant one. I think that the Tribunal meant that the lack of dominance in Newcastle FM by any shareholder connected with either 2HD or 2KO meant that it was satisfied that there was unlikely to be such a degree of concentration of influence as to make it contrary to the

public interest to refuse a licence to Newcastle FM.

Although the Tribunal's explanation of uts thinking, in respect of undue concentration of influence, leaves much to be desired, I am of the opinion that there is just enough in para.3.8 to show that the Tribunal did not overlook this

I should add that the agreement for Iloyts to take over Triple M was made after the completion of the oral hearings. The agreement was disclosed to the Tribunal, which, on 30 March 1987, invited submissions on the subject from all applicants. The solicitors for Our Town FM replied by letter dated 3 April, pointing out certain facts. Although no specific submission was put, the implication of the letter was that the concentration of ownership was unduly high. This letter was, of course, received after 1 April 1987 when, according to Ms O'Connor, the report was finalized. At one stage during the hearing, a suggestion was made that the Tribunal must, therefore, have failed to take into account the effect of the Hoyts acquisition. It seemed to me that this did not necessarily follow; the members of the Tribunal might have considered the letter but decided that it made no difference to their previous view. I thought that, if counsel had wished to make a suggestion that the submission was ignored, the matter should have been put directly to Ms O'Connor. I indicated that, if counsel so requested, I would have her recalled for that purpose. No such request was made and, in the end, counsel conceded that the soliticor's letter was considered before the final decision was taken, apparently

The second subject which the applicants contend to have been omitted from consideration is a Policy Statement (POS 06) issued by the Tribunal. That statement was issued by the Tribunal in 1983 in order to outline the principles which

the Tribunal would apply in respect of the provision by

licensees of an adequate and comprehensive service. It 1s suggested that the Tribunal must have ignored this policy;

the reason being that it failed to take into account adversely to Newcastle FM that, as it found, the plans of Newcastle FM "for encouraging Australian creative resources were less

I do not think that it is necessary to discuss this contention at any length. No doubt the encouragement of Australian creativity is an aspect of maintaining what the Policy Statement calls "the highest programme quality possible for the full hours of transmission". When considering a service so fundamental to Australian culture as radio, it is hardly possible to examine the quality of programs, considering them as a whole, without reference to their relationship to the Australian community. That relationship includes, but merely as one factor, the stimulation of Australian creativity and the presentation to listeners of the best that Australian artists are able to offer. But, of course, even that relationship is only one aspect of quality. Its overall importance was for the Tribunal to determine. In fairness, it should be added that the Tribunal did say, in para 1.29, that it was clear that Newcastle FM would have no

difficulty in meeting Australian content requirements.

"25B (1) Subject to sub-section (2), where the Tribunal has held an inguiry, the Tribunal shall--

(a) give to the Minister and to all parties to the proceedings; and

(b) cause to be made available to the public in such manner as it thinks fit, -

{d) the findings of the Tribunal and the reasons for those findings; and

(e) the decision or recommendations (if any) made by the Tribunal in consequence of those findings, and the reasons for any such decision or recommendations.

(2) In preparing a report under sub-section (1), the Tribunal shall have regard to any relevant direction given under section 19.

Section 19 deals with confidential evidence received in

Two comments may immediately be made about s.25B. First, 1t is couched in mandatory terms. Sub-section (1) provides that the Tribunal "shall" give to the Minister and to the parties, and to the public, a report containing the specified information. However, and this is the second

comment, s.25B does not, in terms, make the delivery of a

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report complying with its reguirements a condition precedent to a valid decision by the Tribunal, such as a decision under

There is no general rule of law imposing an obligation upon an administrative decision-maker to express

reasons for his or her decision: see Public Service Board v

Osmond (1986) 63 ALR 559. It has been held in the United

Kingdom that a decision of a statutory tribunal will be void

if adequate reasons are not given: see Alexander Machinery (Dudley) Ltd v Crabtree [1974] ICR 120 and R v_ Immigration

Appeal Tribunal; ex parte Khan [1983] 0B 790. Those

decisions equate the position of a tribunal to that of a

court: as to which see Pettitt v Dunkley [1971] 1 NSWLR 376,

Housing Commission of New South Wales v Tatmar Pastoral Co Pty

Limited [1983] 3 NSWLR 378 at p.385. However, in the light of Osmond, it is an open question whether the United Kingdom approach should be taken, in connection with an Australian

tribunal, where there is no statutory command to give reasons.

In the present case, there is a statutory obligation to express reasons. Moreover, the grounds of review available, in a proceeding under the Administrative Decisions (Judicial Review) Act, are prescribed by that Act itself. The applicants contend that the matter 1s covered by s.5(1)(b) of that Act. That paragraph prescribes as a ground of review "that procedures that were required by law to be observed in

connexion with the making of the decision were not observed".

So far as I am aware, the meaning and content of s.5(1)(b) has not so far been the subject of judicial exegesis. Nor are the background materials upon the Act very helpful. Both the Kerr and Ellicott Committees - respectively the Commonwealth Administrative Review Committee (1971) and the Committee of Review of Prerogative Writ Procedures (1973) -- speak simply of "failure to observe prescribed procedures". The Explanatory Memorandum to the Bill for what is now the

Administrative Decisions (Judicial Review) Act disposes of

para.(b) with the comment that the "ground appears self-explanatory". In some cases the application of the ground to a particular case will be obvious; for example, where the legislation -- expressly or by necessary implication -- makes the observance of a particular procedure a condition precedent to the taking of a particular decision. But, as already indicated, that is not this case. There 1s no doubt that s.25B of the Broadcasting Act specifies a procedure that is required by law to be observed by the Tribunal. But is it a procedure required to be observed "in connexion with" the

I have come to the conclusion that this question should be answered in the affirmative. The words "in connexion with" have a wide connotation, requiring merely a relation between one thing and another. They do not

necessarily require a causal relationship between the two

things: see Commissioner for Superannuation v Miller (1985)

63 ALR 237 at pp.238, 244, 247. They may be used to describe

a relationship with a contemplated future event: see Koppen v

Commissioner for Community Relations (1986) 67 ALR 215 at p.220, Johnson v Johnson [1952] P.47 at pp.50-51. In the

latter case the United Kingdom Court of Appeal applied a

decision of the British Columbia Court of Appeal, In re

Nanaimo Community Hotel Limited [1945] 3 DLR 225, in which the

question was whether a particular court, which was given

"jurisdiction to hear and determine all questions that may arise in connection with any assessment made under this Act", had jurisdiction to deal with a matter which preceded the issue of an assessment. The trial judge held that it did, that the phrase "in connection with" covered matters leading up to, or which might lead up to, an assessment. He said, at [1944] 4 DLR 639:

Counsel for the second respondent point out that a decision to grant a licence will logically precede the making of a report. They say that the obligation to report is not, therefore, a procedure "in connexion with the making of the decision". But the words "1n connexion with" do not import any particular temporal relationship. As Nanaimo makes clear, the phrase may cover the relationship between some present event and a contemplated sequel of that event. In its

s.5(1)(b) context, I think that the words extend to any

procedure required hy law to be followed as part of the decision-making process; and whether that procedure is required, or happens, to precede or to follow the actual making of the decision. Questions of degree may arise; but if, in a particular case, it can be seen that a particular procedure is part of the decision-making process prescribed by

law, it must be regarded as a procedure required "in connexion

Section 25B is contained in Div.3 of Part II of the Act. That Division 1s entitled "Inquiries by the Tribunal". An inquiry may arise because of a request by some person to the Tribunal, or a proposal by the Tribunal itself, to

exercise a substantive power: Broadcasting Act s.17C. It may

arise because of a direction by the Minister: s.18. In either case the proceedings must be held in public, subject to directions as to confidentiality: see s.19. Certain evidentiary provisions apply: see s.21-21AB. Specified persons have rights to appear as parties -~ see s.22AA -- and to be represented -- see s.22. Procedural provisions apply -- see 22A-25A ~=- including an obligation by the Tribunal to "make a thorough investigation into all matters relevant to an

inquiry under this Division". In The Queen v Australian

Broadcasting Tribunal; ex parte Hardiman (1980) 144 CLR 13 the High Court of Australia held that a failure to discharge

this last obligation had the effect of vitiating a Tribunal decision. Section 25B is the last section in Div.3, dealing with the last step in an inquiry: the delivery of a report.

Although, as I have said, the Tribunal will normally have

taken its decision as to the outcome of its inquiry before it prepares its report, the obligation to make the report

directly results from the entitlement to make the decision.

The conclusion that a failure to comply with s.25B in connection with a particular decision of the Tribunal invalidates the decision itself is, I think, a salutory one in policy terms. The decision to grant or to refuse a broadcasting or television licence 1s an important matter, both to the applicants for the licence and to the community generally. It is desirable that all concerned be aware of the basis of the decision. No doubt this is why s.25B was inserted in the Act, and framed in mandatory and comprehensive terms. The evident purpose of the Parliament would be defeated if the only remedy available, in a case where s.25B was not complied with, was an order for mandamus compelling the Tribunal to issue a proper report; but leaving the decision itself unaffected. I adopt, with appropriate modifications for the changed context, what was said by Burchett J, in relation to s.13 of the Administrative Decisions (Judicial Review) Act, in ARM Constructions Pty

Limited v Deputy Commissioner of Taxation (1986) 65 ALR 343 at p.349:

"Section 13 is a crucial provision designed to ensure that the basis upon which a decision is made is able to be seen, so that its legality can be determined. It should not be viewed by any decision-maker as a threat to be evaded by a camouflage of obscurity. All it requires to be set out is a statement of the matters the administrator must have considered in making the decision in the first place ~~ what he found the facts to be, what material he considered in arriving at those findings, and the reasons for his ultimate decision.

It would be wrong for courts to construe reasons in any overly critical spirit, forgetful that they are the reasons of an administrator, not of the draftsman of an Act. But it would be as bad to betray the aims of the Administrative Decisions (Judicial Review) Act, by ignoring what has been required by the Parliament to be disclosed in the interests of just and lawful (and not merely unassailable) administration."

There are, of course, limits upon the extent of the obligation arising out of s.25B. It is not necessary that the report deal with every matter which was, or which might have been, raised in the proceedings. It 1s enough that the findings and reasons deal with the substantial issues upon which the decision turned: see Tatmar at pp.385-386 and

Bisley Investment Corporation v Australian Broadcasting

At a glance

Court

Decision date

Before

Source

Judgment (275 paragraphs)

Parties

Cases Cited (15)

Cited By (3)