Administrative Decisions (Judicial Review) Act 1977 S 16(1)(d)

Counsel and solicitors for Mr D.M. Yates instructed

Government Solicitor

Counsel and solicitors for Mr T.J. Hancock

Order that the member of the First Respondent who made the original decision to be reviewed should not conduct the review.

Note: Settlement and entry of orders are dealt within accordance with Order 36 of the Federal Court Rules.

By its amended application seeking an order of review under the Administrative Decisions (Judicial Review) Act 1977 (the ADJR Act), the applicant sought a review of a decision of the Australian Broadcasting Tribunal (the Tribunal) made on 18 December 1989 that a commercial FM radio licence be granted to Northern NSW Pty Ltd (the licensee) and not the applicant. The licence was to operate for five years in Lismore and surrounding areas. Prior to the hearing the parties agreed to the order of review, but the applicant sought an additional order that the member of the Tribunal who had made the original decision to be reviewed should not conduct the review on the ground of apprehended bias. The argument was that he had made a decision of fact that has been quashed, and that in the context and circumstances, natural justice requires that another member sit on the review on the ground that there had been a pre-determination of all or some of the issues which the review would have to consider. There was no dispute that under section 16(1)(d) of the ADJR Act the Court has jurisdiction to grant the order sought. Nor was there any suggestion that the Tribunal member is in fact now unable to give a fair or just decision, merely that a reasonable person may entertain a suspicion that he may not bring an unbiased mind to his task such that his determination might lack public and legal integrity.

2. The task performed by the Tribunal in the original hearing, and to be performed on the review, is defined by section 83A of the Broadcasting Act 1942, especially subsections (4) (in part) and (9). These are as follows:

(4) The Tribunal shall refuse to grant a commercial licence to a person if 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) the Tribunal is not satisfied that the person:

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

(ii) has the financial, technical and management capabilities

necessary to provide an adequate and comprehensive service

pursuant to the licence; and

(iii) is otherwise capable of complying with the conditions of the

(b) if the licence's service area:

(i) is not a metropolitan service area; and

(ii) overlaps the service area of at least one other commercial

licence whose service area is also not a metropolitan service

area;

the need to avoid undue concentration of

influence, whether direct or indirect, on

the person and on the corporation or

corporations holding the other licence or

licences;

(c) where the service area of the licence overlaps the service area

of another nonlimited licence or other non-limited` licences -

the need for the commercial viability of the service or services

provided pursuant to the other licence or other licences.

3. (9) Subject to subsection (10), where there are 2 or more applicants for a commercial licence, each of whom is a person to whom, but for this subsection, the Tribunal would be required to grant the licence, the Tribunal shall grant the licence to the most suitable applicant.

4. The "most suitable applicant" for the licence as determined by the Tribunal will then be the licensee subject to some technical requirements including the payment of the licence fee. As the Tribunal was satisfied in this case that both the applicant and the licensee met the requirements of section 83A, there devolved upon the Tribunal the task of determining the "most suitable" of them. In this regard, the Tribunal stated that the applicant was "not preferred" for the reasons set out in paragraphs 4.67 to 4.70 of its determination. These were as follows:

significant proportion of its proposed

issued shares, there is a degree of

uncertainty regarding the final identity

of the company and its Board. The

Tribunal is satisfied that the

shareholding and Board as currently

constituted meets the requirements of

section 83A. However, the fact that the

identity of a large proportion of the

shareholding is unknown and that there can

be no degree of certainty that future

shareholders will not be in a position to

demand a seat on the Board, it is

obviously difficult for the Tribunal to

make firm judgements (sic) as to the

applicant's fitness and propriety, despite

the assurances given by Mr Haly.

concerns that the Board displayed a lack

of cohesion on significant management

decisions and is dependent upon the

expertise of its consultants, Messrs

Hincks and Heming, and its ability to

appoint a chief executive who possesses a

range of experience currently not

represented on the Board.

target audience and program format on a

largely subjective and superficial

understanding of the needs and interests

of the service area population. The

limited professional research commissioned

by the applicant is also flawed due to its

extremely small sample size and the

unrepresentative nature of that sample.

As indicated earlier, the Act requires

applicants to ascertain the diversity of

needs and interests in the community to be

served.

clearly has no intention or commitment to

providing a service complementary to

existing services in the service area and

has put together a programming proposal

which largely duplicates the service

provided by 2LM. In view of this, the

Tribunal has little confidence that the

Northern Rivers programming proposal would

lead to the provision of an adequate and

comprehensive service. The Tribunal is

also concerned that Northern Rivers'

conservative expenditure and staffing

proposals may not be adequate for the

provisions of such a comprehensive

programming strategy.

On the other hand, the Tribunal found in relation the licensee as follows:

fulfils the requirements of s81AA(1) and

s.83A of the Broadcasting Act 1942. The

Tribunal finds that N-NSW is the most

suitable of the two applicants for the

following reasons.

certainty about the identity of the

applicant due to the advanced stage of the

share issue, despite the doubts raised by

2LM's and Northern Rivers in relation to

2LM continued presence as a share holder.

The N-NSW Board possesses a greater range

of broadcasting and management skills

appropriate to the operation of commercial

radio station, though, as stated earlier,

the Board would have been further

strengthened if it had access to sales,

marketing and technical expertise at Board

level, as well as through consultants and

professional staff.

cohesive, is not dependent upon a single

director for broadcasting expertise and

was not significantly dependent on any of

its consultants. It is a stable Board

with each of the major shareholding

interests represented and a management

plan designed to make effective use of

expertise on the Board. Like Northern

Rivers, the N-NSW has strong ties on a

number of levels with the local community.

target audience and program format for a

commercial FM station, however, this

choice is clearly based upon a

professional and objective examination of

the needs and interests of the service

area population. While the Tribunal has

identified some shortcomings with this

research, it is satisfied that the

research does confirm a need and interest

in a predominantly music oriented format

to serve the under 35 age-group.

the more professional and well research

application and demonstrated a greater

commitment to ascertaining the needs and

interests of the community to be served.

The Tribunal, therefore, has greater

confidence in N-NSW's ability to provide

an adequate and comprehensive service.

5. If it could be regarded as necessary, there was a consideration of the meaning of the concept of "most suitable applicant" by Wilcox J in Our Town FM Pty Ltd v. Australian Broadcasting Tribunal and Another (No 1) [1987] FCA 301; (1988) 77 ALR 577 at 594.21:

The Act does not specify the criteria to

be adopted by the tribunal in determining

which applicant is the "most suitable".

The situation is one to which may be

applied the principle stated by the High

Court in R v Australian Broadcasting

Tribunal; Ex parte 2 HD Pty Ltd (1979)

144CLR 45 at 49; [1979] HCA 62; 27 ALR 321 at 325: "the

discretion is 'unconfined except in so far

as the subject-matter and the scope and

purpose of the statutory enactments may

enable the court to pronounce given

reasons to be definitely extraneous to any

objects the legislature could have had in view'."

The Tribunal would be entitled, if it so

chose, to take into account all the

matters raised by s 83(6), selecting as

the most suitable applicant that company

which impressed most over the whole range

of these matters. Alternatively, it could

select a particular aspect of the relevant

service - for example, news coverage,

local content or target audience - which

it thought to be particularly important in

connection with that licence and judge to

be the "most suitable" that applicant

which best dealt with that aspect.

6. By these criteria with which I respectfully agree, the Tribunal clearly gave a fair and relevant consideration of what seems to be all or a balanced selection of the relevant issues.

7. The nature of a rehearing or review in matters such as this was considered in Our Town FM Pty Ltd v. Australian Broadcasting Tribunal and Another (No 2) ibid at 606.34 where Wilcox J. said:

The application of the principles

enunciated in Peko - Wallsend leads

inexorably to the conclusion that, before

making its final decision upon the grant

of the subject licence, the tribunal is

bound to take into account, first, any

facts which have arisen since its previous

consideration in April and, secondly, any

matters put before it which serve to

"correct, update or elucidate" anything

which it may have said in its earlier

report. In saying this, of course, I

refer only to material which is, at least

prima facie, reliable material upon a

question relevant for its consideration in

making its final decision; but it is not

suggested that any of the material as to

new events or to correct misunderstandings

is either unreliable or irrelevant.

8. The law relating to apprehended bias in relation to tribunals of this kind is well settled. In The Queen v The Commonwealth Conciliation and Arbitration Commission and Others; Ex parte The Angliss Group (1969) 122 CLR 546 at 553-4, the High Court defined the concept as follows for the then Conciliation and Arbitration (now Industrial Relations) Commission:

It is plain that when it is necessary to

consider a question of fairness in

relation to a tribunal the whole of the

circumstances in the field of the inquiry

are of importance. The nature of the

jurisdiction exercised and the statutory

provisions governing its exercise are

amongst those circumstances. It is

therefore important to bear in mind that

the Commission does not sit to enforce

existing private rights. Amongst other

things, it is its function to develop and

apply broad lines of action in matters of

public concern resulting in the creation

of new rights and in the modification of

existing rights. It is not necessarily

out of place, and indeed it might be

expected that a member of the Commission

from time to time in the course of

discharging his duties should express more

or less tentative views as to the

desirability of change in some principle

of wage fixation. The very nature of the

office of a member of the Commission

requires that he should apply his mind

constantly to general questions of

arbitral policy and consider the lines

along which the processes of conciliation

and arbitration for the prevention and

settlement of industrial disputes ought to

move. But allowing for considerable scope

for the formation and expression of

opinion upon such matters of public

interest and concern, it should not be

forgotten that the confidence with which

the Commission and its decisions ought to

be regarded and received may be

undermined, as much as may confidence in

the courts of law, by a suspicion of bias

reasonably - and not fancifully-entertained

by responsible minds.

9. The "reasonable person" was said in Livesey v. The New South Wales Bar Association (1983) 151 CLR at 298-9 to be ascertained in this way:

It was submitted on behalf of the

Association that a reasonable observer

would be aware of the ability of any judge

of the Court of Appeal to put from his

mind evidence heard and findings made in a

previous case and to decide the case at

bar impartially and fairly on the evidence

led in that particular case. As we have

already indicated however, we do not

consider that a case such as the present

is to be resolved by reference to the

ability of the members of a particular

court or the public confidence in the

integrity of the judiciary. What is in

issue in the present case is the

appearance and not the actuality of bias

by reason of prejudgment. The reasonable

observer is to be presumed to approach the

matter on the basis that ordinarily a

judge will so act as to ensure both the

appearance and the substance of fairness

and impartiality. But the reasonable

observer is not presumed to reject the

possibility of prejudgment or bias; nor is

the reasonable observer presumed to have

any personal knowledge of the character or

ability of the members of the relevant court.

10. And in Vakauta v. Kelly [1989] HCA 44; (1989) 87 ALR 633 at 645.50 Toohey J, when a member of this Court, referred to an incisive dictum of Kirby P in S and M Motor Repairs Pty Ltd v. Caltex Oil (Australia) Pty Ltd (1988) 12 NSWLR 358 at 375-6 as to the level of sophistication that should be attributed to the reasonable or fair minded observer. In relation to whether a Judge should sit to hear a case involving a party for whom the Judge had previously acted while at the Bar, Kirby P wrote, concerning the criteria for establishing the attributes and attitudes of this observer:

Since writing the above, I have read with

admiration the way in which Priestley and

Clarke JJA have explained the path by

which they come, on the same facts, to the

opposite conclusion.

I would only observe that the second

citizen to whose fictional conversation

their Honours refer, has had imputed to

him (or her) a sophistication and

knowledge about the law and its ways which

I believe to be quite atypical of the

general community. The dialogue, with

every respect, strikes me as more

reminiscent of the hushed tones and

cloistered atmosphere of a Bar common room

or judicial luncheon table than the robust

discussion between ordinary reasonable

citizens on the Emu Plains omnibus.

The knowledge of the second citizen about

legal retainers, in particular, goes far

beyond (as I would suggest) the knowledge

of the imputed reasonable person.

Moreover, the second citizen has to work

rather hard to bring his more typical and

even stubborn conversationalist any

distance towards his opinion. And in the

end, as I read the dialogue, he does not succeed.

It is not necessary, by the applicable

principles of law as I apprehend them, to

engage in such a painstaking process of

argument, cajoling and persuasion of that

which should, to the reasonable observer,

be manifest. The fast-talking second

citizen may not be nearby. Instead, there

may be reasonable but anxious citizens

who, faced with such a situation, are

likely to conclude:

"We just don't like it. Here is a small

trader. There is a large petrol company

seeking to exert its commercial will and

using contempt proceedings. The judge has

had a long and recent connection with the

company. So he would know the way the

petrol company operates. Maybe he even

advised them on these sorts of franchise

agreements. It's just not fair. The

traders may be in contempt. But it's a

very serious charge, after all. They may

even go to gaol for it. That makes it

very important that the judge should have

disclosed his long connection with the

petrol company at the beginning. They

were at least entitled to that. We just

don't feel easy about it. Better have it

done again. At least that way justice

will be seen to be done. Didn't someone

once say that about our system?"

12. In the interests of brevity, I do not set out the hypothetical conversation constructed by Priestley and Clarke JJA. It will suffice to say that I agree entirely with Kirby P's strictures and views about it, but I must confess to holding some reservations about a small clutch of elite lawyers such as the judiciary being in a position to speculate with accuracy on the likely conversations of public transport patrons. Those who live in Emu Plains might anyway prefer trains to buses, at least for journeys long enough to entice them to engage in deep philosophical contemplations of the kind in which their Honours indulged so learnedly. I forbear from adding my suggestion as to the likely conversation; apart from other reasons, I am doubtful that the publishers of law reports would print the language. See also Wattmaster Alco Pty Ltd and Others v. Button [1986] FCA 446; (1986) 13 FCR 253.

13. In Kaycliff Pty Ltd and Others v. Australian Broadcasting Tribunal and Another (1989) 90 ALR 310 at 317.44, a Full Court of this Court referred to R v Australian Stevedoning Industry Board; Ex parte Melbourne Stevedoning Co Pty Ltd. [1953] HCA 22; (1953) 88 CLR 100 at 116 where Dixon CJ, Williams Webb and Fullagar JJ wrote:

But when bias of this kind is in question,

as distinguished from a bias through

interest, before it amounts to a

disqualification it is necessary that

there should be strong grounds for

supposing that the judicial or quasi-judicial

officer has so acted that he

cannot be expected fairly to discharge his

duties. Bias must be 'real'. The officer

must so have conducted himself that a high

probability arises of a bias inconsistent

with the fair performance of his duties,

with the result that a substantial

distrust of the result must exist in the

minds of reasonable persons. It has been

said that 'preconceived opinions - though

it is unfortunate that a judge should have

any - do not constitute such a bias, nor

even the expression of such opinions, for

it does not follow that the evidence will

be disregarded.

14. In the light of these statements of principle, the applicant cited five distinctive features of this case which it says supports the order sought:

concerning the applicant contain

impressionistic concepts which while not

defined exactly as issues of credit are

closely akin to such issues and resulted

from factual determinations requiring at

least a subjective qualitative evaluation

of the applicant's evidence. Examples

given included the Tribunal's comments on

the cohesiveness of the applicant's Board

of Directors, the Tribunal's apparent

rejection or diminished acceptance of the

applicant's undertakings to it, especially

regarding its shareholding, and the

Tribunal's conclusion that the applicant

will have to rely on the expertise of

experienced professionals and consultants

for its management decisions.

15. The Tribunal appeared before me to put some general submissions on the law relating to the way to approach such cases, but did not put a substantive submission. It said that it would not be embarrassing or problematic for the Tribunal whichever way this decision went. However, the licensee argued that this was demonstrably a decision made on the facts without the need to express a view on the credibility or credit worthiness of anyone. Taking up the view of the majority of S and M Motor Repairs Pty Ltd (supra) that the "reasonable observer" is the "informed" observer, the licensee argued that no such person could suspect a real likelihood of bias in this case.

16. On an issue which can credibly be argued either way, I am of the view that the applicant's arguments should prevail. The original determination demonstrates that the Tribunal's consideration of the matter was extensive, far reaching and lengthy. It seems to me unlikely that the member concerned would not have formed some views in the matter concerning the personalities involved and their competence and acceptability. These are among the key issues which the Broadcasting Act requires to be found before a licence is granted.

17. Indeed, the trenchancy of the Tribunal's conclusions on the applicant's statutory qualifications make doubtful how it could have found the applicant to be suitable for a licence at all. It is difficult to see how a reasonably perceptive outsider would fail to doubt that the writer of those words could be fully objective in a reconsideration of the same matters.

18. I think that there must be entertained a reasonable suspicion that a fully detached determination could not be made by the same person who formed such strong views on the applicant's compliance with the requisite criteria. I therefore accede to the applicant's application. In the circumstances I think that each party should pay its own costs.