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[1982] FCA 57
Federal Court of Australia
1982-04-19
Ellicott J
Original judgment source is linked above.
Administrative Law - Order of Review - Interlocutory Relief - Royal Commission under Commonwealth and Victorian Letters Patent into conduct by Federated Ship and Painters and Dockers Union - Disposition of shares as part of tax minimisation transaction - Possible involvement therein
of union members - Inquiry by Royal Commission into minimisation transaction concerning applicant Heap - Whether consideration thereof relevant to inquiry by
Royal Commission under Commonwealth Letters Patent - Whether decisions to issue summonses and inquire of an administrative character - Whether made under an enactment - Whether decisions to which the Act applies or conduct engaged in or proposed to be engaged in for the purpose of making such a decision - Whether terms of reference of Commonwealth Letters Patent beyond constitutional power.
Administrative Decisions (Judicial Review) Act, 1977 sa. 5, 6, 3.
Commonwealth Constitution, ss. 51(1), 51(xxxix), 51 (xxxv)
Companies Act, 1961 (N.S.W.) s.67 Judiciary Act, 1903 s.78B
ALAN MAXWELL ROSS, JOHN STAFFORD HEAP v. FRANCIS XAVIER COSTIGAN No. G.30 of 1982
IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY ) No. G30 of 1982 GENERAL DIVISION
AND: FRANCIS XAVIER COSTIGAN and THE ATTORNEY-GENERAL OF THE COMMONWEALTH OF AUSTRALIA
JUDGE MAKING ORDER: Ellicott J. WHERE MADE: Sydney DATE: 19 April 1982 THE COURT ORDERS THAT:
be dismissed. 2. The applicants pay the costs of the
IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) NO. G30 of 1982
AND: FRANCIS XAVIER COSTIGAN and THE ATTORNEY-GENERAL OF THE COMMONWEALTH OF AUSTRALIA
This is an application for interlocutory relief in proceedings brought by Alan Maxwell Ross and John Stafford Heap ("the applicants") under the Administrative Decisions (Judicial Review) Act 1977 ("the Act") against Francis Xavier Costigan ("the respondent") in which they seek an order of review of decisions alleged to have been made and conduct alleged to have been engaged
ian by the respondent as Royal Commissioner appointed by the
Commonwealth to enquire into certain conduct by the Federated Ship
Painters and Dockers Union ("the Union"). The Commonwealth
On 1 October 1980 another Royal Commission appointing
the respondent as Commissioner and relating to the Union was
The scope of these two commissions differ and I shall
The respondent has been conducting inquiries pursuant to the respective Letters Patent since October 1980. In the course of those inquiries questions have been asked under oath concerning transactions entered into by the applicant, John Stafford Heap and others relating to the disposition of shares in certain asociated companies in relation to which transactions he was advised by the applicant, Alan Maxwell Ross. Counsel assisting the Commission indicated that he proposed to question witnesses with a view to ascertaining whether either of the applicants by engaging in these transactions had been party to a breach or involved in a criminal conspiracy to breach s.67 of the Companies Act 1961 (N.S.W.). Counsel also indicated an intention in due course (no doubt if he thought the evidence warranted it) to submit that the Commissioner
should recommend to government that these persons be prosecuted.
The applicants claim that the respondent as Royal Commissioner under the Commonwealth Letters Patent, following a ruling given by him on 4 March last, intends to inquire into these matters and to issue summonses to witnesses for the purpose and
that, pursuant to the Act, they are entitled to orders directing
that he not do so. They claim that to the extent relied on for the purpose of making the inquiries the Commonwealth Letters Patent are invalid not being supported by Commonwealth power and that even if valid they do not authorise the respondent to conduct the inquiry. Because the case to some extent could involve matters arising under the Constitution or anvolving its interpretation notice was given under s.78B of the Judiciary Act 1903 to both the Attorney-General of the Commonwealth and the Attorney-General of New South Wales. The latter appeared through the State Crown Solicitor and indicated he did not wish to add anything to what would be put on behalf of the Attorney-General of the Commonwealth. Counsel for the respondent appeared as well for
Being interlocutory in character, the applicants are required to make out a prima facie case in the sense that if the evidence remains as it is there is a probability that at the trial of the action the applicants will be entitled to relief. (See
World Cricket v. Parish (1977) 16 A.L.R. 181 per Bowen C.J. at
The facts which are critical to the determination of
this interlocutory application are not, in my view, seriously in dispute nor, so far as I am aware, is it likely that there will be
serious dispute as to them if the matter goes to a final hearing.
The applicant, Mr Ross, is an accountant who at all relevant times acted for the applicant, Mr Heap, and for companies associated with him. In February 1979 the shares in two companies associated with Mr Heap, namely, J.S. Heap Pty. Limited and Culloden (No. 1) Pty. Limited were sold by him and the other shareholder to a company, Camper Timber and Trading Pty. Limited. The sale of the shares 1s said to have followed the form of the transactions referred to in Slutzkin v. Federal Commissioner of Taxation ((1977) 140 C.L.R. 314). The agreements for sale dated
Evidence has already been given before the respondent regarding the transactions, the effect of which is that the sale of the shares was implemented consequent upon the advice of senior counsel, that the agreements for the sale of the shares contained a warranty by the purchasers that the provision of s.67 of the Companies Act would be observed, that it was a condition of the sale that the purchase price was to be provided at settlement in
the form of bank cheques drawn upon the purchaser's bank and that
this bank was a different bank from that at which the accounts of
the two companies were maintained and that the applicants had no
knowledge of any event that occurred after settlement of the sale of the shares concerning the disposition of the funds of the
No evidence to the contrary has yet been given before the respondent, nor has it yet been disputed by counsel assisting the respondent. The applicant, Mr Ross, has confirmed in evidence before me that neither he nor Mr Heap has or has had any connection with Ward Knight & Dunn Limited (a company with which Camper Timber and Trading Pty. Limited is associated), nor has he ever made any payment to Camper Timber and Trading Pty. Limited,
Ward Knight & Dunn Limited or any member or official of the Union.
Mr Ross has given evidence on affidavit as to the steps taken to implement the transaction involving the sale of the shares in Culloden (No. 1) Pty. Limited and J.S. Heap Pty. Limited. I shall not set them out in detail. It 1s sufficient to say that they took place on 2 February 1979. He affirmed that in acting for the applicant Mr Heap and the other shareholder he dealt with, either Mr Ward or Mr Knight of Ward, Knight & Dunn, and had no contact with nor did he meet any of the directors or shareholders of Camper Timber and Trading Pty. Limited. Neither he nor Mr Heap has met or knows the persons who have been directors of that lastmentioned company since 1978, one of whom
Counsel assisting the Commission has not yet contended
that either of the applicants has had any connection whatever with the Union or any member thereof or has ever made any payments to
any member or official of the Union or of the Union itself.
Suggested Union connections with these and similar transactions
The Union was established in 1900. It covers employees an ship building and ship repair in shipyards slipways and
shipping companies. Two of the biggest work locations at which
members have been employed are the naval dockyards at
Williamstown, Victoria, and Garden Isiand, New South Wales.
At an early stage the respondent began investigating a
company called Macbell Minerals Pty. Limited which became interested 1n obtaining contracts to supply lagging (that is the provision and fitting of insulation around pipes and boilers) to the naval dockyard at Williamstown. Evidence already before the Commission appears to establish that the membership and board of that company was changed in 1976, that most of the new members and directors were members of the Union or closely associated with it, that some of them had criminal records, that although it had no prior involvement in lagging it made determined attempts to secure the contract at Williamstown, that the Union gave strong support to these attempts and that it apparently did not seek to obtain
In the course of inspecting the office of Guy Keith Campbell, a director of Macbell Minerals Pty. Limited, documents were found relating to the company, Camper Timber and Trading Pty. Limited and the Commission then began investigating its activities. To date documents tendered and evidence given have revealed in relation to this company that in 1978 there were changes in its membership and board, that thereafter the directors included Campbell, Durston, Tariszynos/Sterling as well as a man called Alfred William John Johansen who was also a director of Macbell and a member of the Union, that, although its returns as filed show no assets or liabilities, approximately $9M passed through its bank accounts between September 1978 and June 1979 and that Ward, Knight and Dunn Pty. Limited acted for it in a number
Evidence has been placed before the Commission by Counsel assisting with a view to establishing that approximately $1.5M of the $9M was money which came to Camper Timber and Trading Pty. Limited through transactions which were effected on 2 February 1979 involving the payment of amounts totalling that sum by J.S. Heap Pty. Limited and Culloden (No. 1) Pty. Limited to Pliton Finance Pty. Limited and the payment of that sum by Pliton Finance Pty. Limited to Camper Timber and Trading Pty. Limited. It is also suggested by counsel assisting that the balance of the S$9M came from other tax minimisation schemes arranged by Ward Knight and Dunn Pty. Limited in which Camper Trading and Timber
On 27 October and 25 November 1981 summonses were issued
by the respondent pursuant to s.2 of the Royal Commissions Act 1902 (Commonwealth) requiring the applicant, Mr Heap, to attend to
He subsequently gave evidence before the respondent in the course of which he indicated he relied heavily on the advice of his accountant, the first applicant, Mr Ross. Counsel for Mr Heap then offered to ask the applicant, Mr Ross, to give evidence about the transaction involving Mr Heap and Camper Timber and Trading Pty. Limited and later the applicant, Mr Ross, came before
the Commission and gave evidence. The evidence which has been
given before the Commission establishes that Ward, Knight & Dunn Pty. Limited acted for Camper Timber and Trading Pty. Limited in relation to various so-called tax minimisation schemes of which
Tax minimisation schemes involving painters and dockers
In an interim report (No. 3) under his Commonwealth Commission dated 18 December 1981, the respondent referred to the involvement of the Union in relation to tax minimisation schemes,
particularly those falling within Slutzkin's Case. Paragraphs
Following Slutzkin it seems that many contrived situations have come into existence. Evidence before the Commission indicates that the ability to contrive such situations attracted the attention of antelligent but less than honest members of the community and that they relied upon the services of ship painters and dockers to give effect to their schemes. I will return to the role of the painters and dockers a little later in this report. A scheme was devised which gained superficial support from the decision in Slutzkin's case but which I preferred to describe in public session of the Commission as fraudulent. The substance of the scheme can be described shortly. Two companies are brought into existence (or shelf companies acquired) to facilitate the scheme's execution: one is a finance company, the other is a purchasing company. Agreements are made between the purchasing company and the shareholders of the target company (i.e. the company which has income in its hands) whereby the shares are sold for a percentage (say 90 percent) of the income generated by the target company. If the income is, for example, $1,000,000 then the shares are sold for $900,000. Settlement takes place with all parties including bank managers being present. The directors of the target company (being either the shareholders in it or their representatives) on receipt of the bank cheque being the purchase price of the shares immediately change the bank authority of the target company so that such bank account can be at once operated by the agent of the purchasing company. That agent then causes the target company to transfer $1 million to the finance company which in turn transfers the same $1 million to the purchasing company. That company then applies $900,000 to purchase bank cheques to be handed over to the original shareholders in exchange for their shares and the remaining $100,000 is paid to the promoters of the scheme. All relevant shares are transferred. The entire transaction is completed within minutes.
In the result the target company is left with its income of $1 million but now has no assets save for the 'loan' due to it by the finance company. It has new shareholders and directors, both of whom are closely connected with the directors and shareholders of the finance company. The 'loan' is not repaid and in fact
the finance company 1s sold to another company. This company fails to submit annual returns and
other returns required by the Companies Act. Notices are sent out by the Corporate Affairs office. There is no compliance with these notices save for the response that the directors
address'. This information should cause no surprise. The names are false. The addresses are false. In at least one significant company the directors are painters and dockers. In due
course the Corporate Affairs office loses patience and the finance company is struck off. The 'loan' to the original target company remains unpaid. The company records- disappear.
The device adopted by the promoters of these schemes bears no resemblance to the facts presented to the Court in Slutzkin's case. It 1s a deliberate attempt by the promoters to avoid the payment of tax by the use of fraudulent, illegal and dishonest techniques. The techniques are illegal in that they are based upon a clear breach of section 67 of the Companies Act. They are dishonest in that the transfers of money described in the books of account as 'loans' were never intended to be repaid. Moreover there was the destruction or disappearance of company records, deliberate transgression of the requirements of the Companies Act in relation to returns coupled with the obvious intention to have the companies struck off the Register of Companies and thus make more difficult action by the Commissioner of Taxation. The ultimate sale of companies to fresh companies which had as their directors painters and dockers with false names and false addresses is further evidence of the clear intention to eliminate their activities from any official scrutiny. Fortunately the investigative techniques employed by the Commission have enabled it to attack these activities from an unsuspected direction and to lay bare what it was undoubtedly hoped would never see the light of day.
The statement by counsel assisting the Commission that he was considering submitting that there had been a conspiracy to breach s.67 of the Companies Act was made on 17 February 1982 and on the following day counsel for the applicants submitted that an inquiry by the Commissioner into whether the applicants had breached or been a party to a breach of s.67 was beyond his terms of reference and that he should neither so enquire or make any recommendations relating to the prosecution of the applicants. The statement on 17 February was, apparently, the first indication by counsel assisting of an intention to suggest that the
applicants had been involved in a conspiracy to breach s.67.
Following these submissions the respondent, on 4 March 1982, handed down a ruling rejecting the submissions and stating that he would allow the evidence to be adduced. It as not necessary for me to set out the ruling at length but in the course of it the Commissioner referred to the fact that a number of painters and dockers had been used as directors of companies which were an integral part of the Slutzkin type schemes and that in order properly to understand their involvement it had been necessary for him to consider the detail of the arrangements surrounding these schemes and to follow their implementation step by step. He set out a number of questions in which this had been involved including ~- How was the taxpayer (or his accountant
and/or lawyer) introduced to the scheme?; Did the taxpayer know
of the involvement of painters and dockers in the scheme?; Was he
aware of the fact that the scheme involved one or more
illegalities? Such questions were directed, he said, to the basic inquiry as to whether painters and dockers were involved in these
Having referred to the terms of reference of the two Commissions, he pointed out that the debate on the submissions had
proceeded on the basis that he should have regard to the terms of both and demonstrated that the width of his task by reference to the Victorian Commission which he said required him to ascertain whether any member of the Union had engaged in any illegal
He rejected the submission requiring him to limit his
"In so far as the evidence before me discloses an involvement by painters and dockers in tax minimisation schemes and illegalities associated with them (including breaches of the Companies Acts Of various States and the Income Tax Assessment Act) it is incumbent upon me to understand as fully as possible the ramifications of such schemes (and possible illegalities) so that I can direct my mind to the way in which the Union may have been used for such purposes, and whether, and by whom, any payments have been made to members of the Union. In an inquiry of this kind it 1s impossible to lay down in advance the limits of investigation. And yet this 1s what the submission made to me would require me to do. Is not one view of the evidence that the payment made to a painter and docker company director came to him (at least indirectly) from a taxpayer? At the very least am I not bound to iunquire into this matter? If the evidence should disclose that a taxpayer either knew or ought to have known that his tax was being minimised by the use of painters and dockers as company directors, am
I not obliged to inquire as to whether this falls within the concept of 'use of the union for illegal activities'? I am not making any findings on these matters at this stage and will not until the evidence is complete and submissions have been advanced on that evidence by those who wish to make them. But it is not possible to limit my inquiries into these areas by
producing a conclusion mid-way through those inquiries." As to the submission that he should not make any
recommendation on these matters he rejected this too and in the
"My task is quite different. It is to inquire into muititudinous factual situations so as to discover the truth. For this purpose I am granted under my
Commission 'full power and authority to call before me such person or persons as I shall judge likely to afford me any information upon the subject of my Commission.' When I have collected all such information I would expect to hear submissions from Counsel assisting me and from Counsel appearing for other parties as to the conclusions I should come to in my report. If the evidence then before me raises for example a question of criminal conspiracy I would expect to hear submissions from all inrterested parties as to whether I should draw that conclusion. If the conclusion is based on evidence admissible in a Court of law sufficient to place such persons on trial for that offence, 1t 1s my view that I would be required under my Commission to recommend the appropriate action."
The Commonwealth Letters Patent in their terms are issued "in pursuance of the Constitution......the Royal
Commissions Act 1902 and other enabling powers." The Commissioner
"To inquire for the purpose of the exercise and performance of the powers and functions of the Parliament and Government of the Commonwealth whether
the Federated Ship Painters and Dockers Union (hereinafter referred to as 'the Union') or any officer or member of the Union is engaged in illegal activities
in relation to Shipping engaged in trade and commerce between Australia and places outside Australia or among the States or ships operated by, or on behalf of, the Commonwealth or in relation to any naval establishment within the meaning of the Naval Defence Act 1910;
AND without restricting the scope of your inquiry, we direct you, for the purpose of your inquiry, to give particular attention to the following questions:- -
(a) whether any executive administrative or other body forming part of, or established by the Union, has been used, or is being used, for the purposes of illegal activities, other than activities involving only breaches of laws, whether of the Commonwealth or a State relating to trade unions."
There then followfurther paragraphs which also set out
specific matters which are to be the subject of inquiry.
The Victorian Commission is wider in terms and directs
"Whether (the Union) or any officer or member of the Union in the course of or in relation to the affairs of the Union has engaged in any illegal activities (other than activities involving only breaches of law whether of the Commonwealth or a State relating to trade unions).
And without restricting the scope of your inquiry, we direct you, for the purpose of your inquiry, to give particular attention to the following questions:-
There then follow, as 1n the Commonwealth Commission, a series of lettered paragraphs referring to specific matters which
On 1 April 1982 the Commonwealth Letters Patent were
"so as to require that, to the extent that you are not required to do so by those Letters Patent, you inquire -
(a) whether the Union or any officers or members of the Union have engaged in illegal activities, other than activities in relation to shipping or any naval establishment;
(b) whether any person, group of persons or body established by, or associated with, the Union or its members is engaged 1n illegal activities; and
(c) whether any person 1s using the Union or its members for the purpose of illegal activities:
AND WE DECLARE that, for the purposes of these Our Letters Patent, 'illegal activities' means:-
(d) activities involving any breach of a law of the Commonweaith or a Territory;
(e) activities in, or in relation to, trade and commerce between Australia and places outside Australia, among the States or between a State and a Territory, being activities which are contrary to a law of the Commonwealth, a State or a Territory; and
(£) activities that have the effect of, or are directed to, impeding, preventing or defeating, or that tend to impede, prevent or defeat, the operation, implementation or enforcement of a law
AND WE FURTHER DECLARE that, for the purposes of the Letters Patent issued on 10 September 1980, without limiting the meaning of the expression 'illegal activity', that expression includes any activity that is an illegal activity for the purposes of these Letters
The originai Letters Patent contained a direction regarding findings concerning criminal conduct. Under the
variation it was declared that the original Letters Patent should
have effect as if the relevant words were omitted and the
"AND WE FURTHER DIRECT that a finding that the union or a person has engaged in conduct amounting to a criminal offence be made only on evidence, admissible in a Court of Law, sufficient to place the union or that person, as the case may be, on trial for that offence."
The Administrative Decisions (Judicial Review)Act 1977
The applicants rely on ss. 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977. Section 5 entitles a person who 1s aggrieved by a decision to which the Act applies to apply to the Court for an order of review of the decision. Section 6 enables a person aggrieved to apply to the Court for an order of review in respect of conduct where a person has engaged, is engaging or proposes to engagee in conduct for the purpose of making a decision to which the Act applies. Both ss. 5(1) and 6(1) set out the grounds on which an order of review may be
By s.- 3 "a decision to which this Act applies" is defined to mean a decision of an administrative character made, proposed to be made or required to be made as the case may be (whether in the exercise of a discretion or not) under an
enactment. It does not include a decision by the Governor-General
or a decision included in any of the classes of decisions set out
"(3) Where provision is made by an enactment for the making of a report or recommendation before a decision is made in the exercise of a power under that enactment or under another law, the making of such a report or recommendation shall itself be deemed, for the purposes of this Act, to be the making of a decision.
(a) a reference to a person aggrieved by a decision includes a reference -
(i) to a person whose interests are adversely affected by the decision; or
(iz) an the case of a decision by way of the making of a report or recommendation - to a person whose interests would be adversely affected
if a decision were, or were not, made 1n accordance with the report or
(b) a reference to a person aggrieved by conduct that has been, is being, or is proposed to
be, engaged in for the purpose of making a decision or by a failure to make a decision
includes a reference to a person whose interests are or would be adversely affected by the conduct or failure.
(5) A reference in this Act to conduct engaged in for the purpose of making a decision includes a reference to the doing of any act or thing preparatory to the making of the decision, including the taking of evidence, or the holding of an inquiry or investigation."
The applicants claim that each is a person aggrieved and
is entitled to make the application either under s.5 or s.6 of the
The applicants' claims to relief 1s based solely on the Act and there is no need to discuss any other possible form of relief. They must therefore show that the respondent made a decision to which the Act applies or has engaged, 1s engaging or
proposes to engage in conduct for the purpose of making such a decision, that one of them at least is a person aggrieved and that one of the stated grounds exists for granting an order of review
Has the respondent made or 1s he proposing to make a decision to which the Act applies?
The first question is whether the respondent has made or
1s about to make a decision to which the Act applies . This in turn depends on whether the alleged decision or proposed decision 1s of an administrative character made or proposed to be made or
The applicants claim that the ruling of the respondent of 4 March 1982, the decision to require the attendance of Mr Ward on 9 March 1982 for examination on the matters referred to and the decisions made in October and November 1981 to issue summonses to Mr Heap, Mr Ward and other persons are, each, a decision to which
the Act applies. It is also claimed that the conduct of the
Commissioner in taking or proposing to take evidence relating to the matters referred to is conduct engaged in for the purpose of
recommendations, reliance being placed on s.3(3) of the Act.
The respondent's counsel has submitted that none of this constitutes a decision to which the Act applies or conduct engaged
The origins, nature and scope of Royal Commissions has been discussed at length in a number of cases. (See Clough v.
Leahy (1904) 2 C.L.R. 139; Colonial Sugar Refining Co. Ltd. v. Attorney-General (1912) 15 C.L.R. 182 (High Court) (1913) 17
C.L.R. 644 (P.C.). McGuinness v. Attorney-General of Victoria
(1940) 63 C.L.R. 73; Lockwood v. Commonwealth (1954) 90 C.L.R.
177; Johns and Waygood Ltd. v. Utah (1963) V.R. 70; R.V. Collins
Ex parte ACTU-Solo Enterprises Pty. Limited (1976) 8 A.L.R. 691).
There is a full discussion and summary of the position in the
judgment of Stephen J. in Colliins' Case and I have no need to
It 1s clear that there is no limit to the inquiries which the Commonwealth Executive may make by Royal Commission, Committee, or otherwise for the purpose of informing itself provided the information is sought on a voluntary basis. In substance it is in no different position to the ordinary citizen.
Its action in so doing involves no breach of the law and no
infringement of legal rights. However when it seeks, e.g. through a Royal Commissions Act to use coercive powers to compel the attendance of witnesses to give evidence before such a Commission, questions of limitation on the power of inquiry may arise. This was found to be so in the C.S.R. Case. The Commonwealth Parliament cannot compel attendance of witnesses before a Royal Commission where the terms of reference cover matters about which the Commonwealth cannot legislate. That was a case where the
The question can arise however where a Royal Commission seeks to use the coercive powers to compel answers to questions which are not relevant to or do not touch or concern or are not likely to afford any information about its terms of reference. W1i1l the Courts interfere to keep the Commission within its terms of reference. I have not been referred to any case in Australia
where that has happened although Sholl J. in John Waygood v. Utah
(supra at p.75) suggested that the Courts might. The question arises in this case and if this Court has the power it must be
In the absence of statute a Royal Commissioner has no powers to compel the attendance of witnesses. In the case of Commonwealth Commissions the Royal Commissions Act 1902 provides them. The powers conferred are extensive. The Commissioners may, in writing, summon any person to attend the Commission at a time
and place named in the summons to give evidence and to produce any
books, documents or writings in his custody or control which he is required by the summons to produce (s.2). The witness may be examined on oath (s.3). There 1s a penalty for failure without reasonable excuse to attend or to produce the documents etc. unless the defendant proves in the case of a failure to produce
documents etc. that they were not relevant to the inguiry (s.5).
"If any person appearing as a witness before the Commission refuses to be sworn or to make an affirmation or to answer any question relevant to the inquiry put to him by any of the Commissioners he shall be guilty of an
Every witness summoned is required to attend from day to day unless excused or released from further attendance by the
"OFA. Any barrister or solicitor appointed by the Attorney-General to assist a Commission, any person authorized by a Commission to appear
before it, or any barrister or solicitor authorized by a Commission to appear before it for the purpose of representing any person, may, so far as the Commission thinks proper, examine or cross-examine any witness on any matter which the Commission deems relevant to the inquiry,
and any witness so examined or cross-examined shall have the same protection and be subject to
the same liabilities as if examined by any of the Commissioners, or by the sole Commissioner, as the case may be.
6H. Any witness before a Royal Commission who knowingly gives false testimony touching any matter, material in the inquiry being made by the Commission, shall be guilty of an indictable offence. Penalty: Imprisonment for five years.
This short analysis of the powers conferred by the Royal
Commissions Act shows that a Commissioner 1s armed with considerable power to call people before him. It is based on the power to issue and cause a summons to be served on people and 1s enforced through imposing an obligation, under threat of penalty, on the person served to attend produce documents and give evidence. That obligation however appears to be confined to documents and evidence "relevant to the inquiry". The question of relevance is not one solely for the Commissioner for, clearly
enough, it is a matter which would have to be tested in
prosecution proceedings if a witness refused to answer. (See McGuinness v. Attorney-General (supra)). To this extent,
therefore, the power to compel attendance and answers is qualified. At the same time, although his office as Commissioner is dependent on the Letters Patent, his power of compulsion regarding witnesses 1s dependent on the statute. When he decides to summon a witness he does so under the Royal Commissions Act. When the witness attends he may decide to examine the witness on oath or put particular questions to him or allow counsel to put particular questions to him. Once questions are put the witness is bound to answer the question if 1t is relevant to the inquiry. All these decisions, 1t seems to me, are decisions made by the
Commissioner under the Royal Commissions Act. Because they are
decisions made as a Commissioner appointed by the Executive Government in carrying into effect the instructions contained in the Letters Patent they are decisions of an administrative
In the present case the respondent has by his ruling of 4 March last said that he will allow evidence to be adduced regarding the transactions arranged or entered into by the applicants in February 1979. It is no doubt implicit in that ruling that he will, if he thinks it necessary, seek that
information from or allow questions to be put about the matter to witnesses already summonsed including Mr Ward or the applicant, Mr Heap or will summons other witnesses to attend for that purpose. Having regard to what I have already said, I think that the decisions involved in adducing the relevant evidence are in exercise of the coercive power conferred on him by the Royal Commissions Act. They are not mere voluntary enquiries of persons asked to attend. The form of summons clearly shows that. They are decisions which, because they are made in exercise of the coercive power are intended to impose obligations or duties on the persons
In my view therefore they are, or would be, if made, decisions of an administrative character made under an enactment, namely, the Royal Commissions Act and not being excluded are decisions to which the Administrative Decisions (Judicial Review)
Questions could arise as to whether the respondent has
yet made "a decision". In relation to the Act 1t may well be that
the word "decision", means an ultimate or operative determination not a mere expression of opinion or a statement which can of
itself have no effect on a person. (cf. Director-General of
Social Services. v. Chaney (1980) 31 A.L.R. 571 per Deane J. at
pp- 590-3). Section 3(3) also assists this view. If this be correct 1t could be argued that the respondent's ruling of 4 March and possibly his decisions to issue summonses are not "decisions"
However, if this were correct I would nevertheless be of the opinion that the ruling and the existing or intended summonses to witnesses for the purpose of adducing the evidence in question constitute conduct engaged 1n or proposed to be engaged in for the purpose of making a decision. The "decisions" for this purpose would be the decisions which the respondent would clearly have to make that the particular questions were relevant when he places a witness on oath, if not already sworn, and asks or allows the questions to be asked of the witnesses. Such decisions would impose a Jegal duty and liability on the witness. He would be open to prosecution 1f he refused to be sworn or refused to answer
For the purposes of this interlocutory hearing, I would prefer to base my decision on the view I hold that there is a probability that at the hearing what the respondent has done or evinced an intention to do would be held to be conduct engaged in or proposed to be engaged in for the purpose of making decisions to which the Act applies and that therefore one condition for the
It was argued that because of the provisions of s.3(3) of the Act the making of a report and recommendation pursuant to the Letters Patent is "a decision" and that combined with s.3(5) the conduct of the respondent to which I have referred is conduct engaged in or proposed to be engaged in for the purpose of making
I do not think that s.3(3) has that effect in this case. In my view it contemplates a case where there is provision in an enactment for a specific report or recommendation as a condition precedent to the making of a decision under that enactment or some other. An example of such a case is illustrated by the
circumstances in Beetingham-Moore v. St. Leonards Municipality
(1969) 121 c.L.R. 509. This 1s not such a case. I therefore do not propose to grant any interlocutory relief in relation to the making of a report or recommendation in relation to the matter in question. This does not mean that in my view, upon full
consideration a Court could not come to the conclusion that a
decision of a Royal Commission such as this to report or recommend
was a decision for the purposes of the Act. If it did, however,
1t would not do so, in my view, because of the operation of s.3(3)
On the basis that s.6 applies to the respondent's conduct in the manner I have indicated, I think that each of the applicants 1s a person aggrieved by the conduct within the meaning of s.6. Each of them is liable to be called as a witness and one of them, Mr Heap, has been summonsed and has not been excused from further attendance. They are aggrieved in my opinion because, if the proposed inquiry is beyond the terms of reference it could whether confined to them or to other witnesses, subject them to unjustified inconvenience or their affairs to unwarranted
Are there any grounds for making an order of review?
Having formed the view that 1f final relief were granted it would be granted under s.6 and not s.5 it remains to consider whether there is a probability that any of the grounds set out in s.6(1) of the Act would be established. Those suggested are those
contained in s.6(1)(b)(c)(d)(e)(£) and (3) and are as follows:-
(b) that procedures that are required by law to be observed in respect of the conduct have not been, are not being, or are likely not to be, observed;
(c) that the person who has engaged, is engaging, or proposes to engage, in the conduct does not have jurisdiction to make the proposed decision;
(da) that the enactment in pursuance of which the decision is proposed to be made does
not authorize the making of the proposed decision; (e) that the making of the proposed decision
would be an improper exercise of the power conferred by the enactment in pursuance of
which the decision 1s proposed to be made; (£) that an error of law has been, is being, or is likely to be, committed in the course of the conduct or is likely to be
(3) that the making of the proposed decision would be otherwise contrary to law."
Having regard to the manner in which this interlocutory application has been argued, I think the existence of one or more of these grounds depends on the answer to two questions, first, whether the terms of reference of the Commonwealth Letters Patent are in relevant respects beyond power, and secondly whether the subject matters proposed to be investigated are outside the terms
The attack on validity was ultimately confined to a consideration of paras. (b) and (c) of the variation to the
Letters Patent. It was argued that these paragraphs could only be
valid if a valid law of the Commonwealth could be passed covering their subject matter and that no such law could be passed. Such a law, 1t was said, would not be a law with respect to trade and commerce but so far as it related to State acts would be a law with respect to them. Gazzo v. _Comptroller of Stamps (Vic.) (56 A.L.J.R. 143) was relied upon. In my opinion this argument is unsound. Paragraphs (b) and (c) are supportable in relation to State law by the trade and commerce power (s.51(1))} either alone or in combination with the incidental power s.51(xxxix). They are also supportable by reference to the conciliation and arbitration power (s.51(xxxv)) as they relate to enquiries as to the activities, albeit under State law, of persons or bodies established by or associated with an organization registered under the Conciliation and Arbitration Act. In my view the original and varied Letters Patent are in all relevant respects clearly within
power. No basis therefore exists for relief on this ground.
This leaves for consideration whether the subject matter
proposed to be inquired into 1s relevant to the inquiry.
There is, I think, a discrepancy between the matter which the respondent in fact intends to inquire into and that specified by the applicants in their application. In the application the matter specified, which, 1t is said, he has no power to inquire into, 1s "whether the applicants or either of them has committed a breach of s.67.....0r conspired so to do."
This does not appear to me to be an accurate description of the
respondent's intention. In his ruling of 4 March he referred to tax minimisation schemes following the Slutzkin pattern and set out a number of questions which he thought would require
"There are many other similar questions which could be
framed, all directed to the basic inquiry as to whether
the painters and dockers were involved in these schemes
When the question of conspiracy was raised by Mr Meagher, counsel assisting, on 17 February 1982, he referred to a conspiracy to commit illegal acts involving the painters and dockers and their associates, Mr Ward and Mr Knight and their clients (who would include, I assume, one or both of the
applicants). He also mentioned the breach of s.67 of the Companies
As I understand the evidence, the respondent is not claiming to consider in isolation the alleged breach of or a conspiracy to breach s.67 by the applicants but an alleged breach of or conspiracy to breach s.67 to which the painters and dockers as well as the applicants were party in the course of implementing a tax Minimisation scheme. It is in relation to an intention to
consider this subject matter that I propose to consider the
If I am to grant interlocutory relief I should, I think, be satisfied that there is a probability that at the hearing the applicants would be able to satisfy the Court that this matter is
In determining what 1s relevant to a Royal Commission inquiry, regard must be had to its investigatory character. Where proad terms of reference are given to it, as in this case, the Commission is not determining issues between parties but conducting a thorough investigation into the subject matter. It may have to follow leads. It is not bound by rules of evidence. There 1s no set order in which evidence must be adduced before it. The links in a chain of evidence will usually be dealt with separately. Expecting to prove all the links in a suspected chain of events, the Commission or counsel assisting, may nevertheless fail to do so. But if the Commission bona fide seeks to establish a relevant connection between certain facts and the subject matter of the inquiry, it should not be regarded as outside its terms of reference in doing so. This flows from the very nature of the
"The Royal Commissioner was appointed to inquire into a specified subject matter, namely, the suggested bribery of members of Parliament. He was not appointed to determine an issue between the Crown and a party, or between other parties. The commission was appointed to conduct an investigation for the purpose of discovering whether there was any evidence of the suggested bribery. Such an investigation may be, and ought to be, a searching investigation - an inquisition as distinct from the determination of an issue. In the course of such an tnquiry it would or at least might be a valuable step forward if the identity of the persons giving information to the editor of the newspaper could be discovered so that they could be summoned for the
purpose of giving evidence on oath as to their knowledge, or as to the source of their information if
they had no direct personal knowledge of the matters in question."
This does not mean, of course, that a Commission can go
However, I think a Court if it has power to do so, should be very slow to restrain a Commission from pursuing a particular line of questioning and should not do so unless it is satisfied, in effect, that the Commission is going off on a frolic of its own. If there is a real as distinct from a fanciful possibility that a line of questioning may provide information directly or even indirectly relevant to the matters which the Commission is required to investigate under its Letters Patent, such a line of questioning should, in my opinion, be treated as relevant to the inquiry. The names of informants, for instance, may have no direct relevance to the subject matter of the inquiry
but as in McGuinness' Case they could be relevant to providing the
indicated he proposes to investigate are relevant to the inquiry which the Commonwealth Letters Patent in both their original and amended form require him to conduct. They concern possible 1llegal activities by the Union, its members and officers, albeit in association with the applicants and others. The fact that the lllegal activities suggested are contrary to State law does not, in my view, make them irrelevant to the inquiry. Indeed, although the inquiry under the original Letters Patent refers to illegal activities in relation to interstate and overseas shipping and
naval establishments, the activities are not confined to those
Paragraph (a) of the original Letters Patent makes it clear that possible breaches of State law other than those relating to trade unions are contemplated. What the respondent is now proposing to do involves a consideration of whether State law has been breached and this it seems to me is at least a first step in an inquiry. The next step may be to investigate the connection with shipping and naval establishments. It may be found that there is none but this does not mean that it is irrelevant to the inquiry to consider whether the Union, its members and officials have been involved in a breach of s.67. By itself it might show a propensity on their part to be involved in illegal activities and
Para (b) of the original Commonwealth Letters Patent refers to the receipt of payments. This conceivably might also provide a basis for inquiring into the matters in question but because of my view as to paragraph (a) I do not need to consider
The Letters Patent as varied also justify the investigation of these matters. They would be relevant to an inquiry into the matters specified in paragraphs (a) and (e) of the amended Letters Patent. It is alleged that the suggested breaches occurred in connection with tax minimisation schemes. On this basis the inquiry into them could also be relevant to paras (a) and (f). They could be investigated for instance with a view to establishing whether they have the effect of impeding, preventing or defeating the operation or implementation of the
investigation of these matters 1s relevant to the inquiry.
It must follow from this that in my opinion the applicants are not entitled to interlocutory relief because, if the facts remain the same, I do not think it probable that the
Court w21l at the final hearing intervene to restrain the inquiry.
The varied Letters Patent were not in existence when this matter came before the Court. However, they are now in existence and are available to justify any future inquiry. Even if I had thought that the original Letters Patent did not justify the inquiry intended, I would not have intervened because the variation to them in my view clearly does and in the exercise of
I would add that no reliance has been placed on the Victorian Letters Patent. As it turns out it is unnecessary to do so. This does not mean that I do not regard their existence and
the powers they confer as being irrelevant to the question whether the applicants are entitled to relief. I have preferred to deal
with the matter on the basis of the Commonwealth Letters Patent.
I cerwify that this and the preced.ug pages are a true copy of the Reasons for Judgment herein of his Honour
Administrative Law - Broadcasting and Television Act 1942 -
ownership and control of television and broadcasting stations
and licences ~ applicants acquire shareholdings requiring Broadcasting Tribunal's approval pursuant to ss. 903, 92F of the Act - consideration of meaning of "control" in the context of "prescribed interests" under the Act ~- whether applicants bear any onus of proof - whether acquisition of "prescribed interest" prima facie contrary to public interest - whether ~ 77 possibility of control of a company holding a licence a relevant field of inquiry - whether Administrative Appeals Tribunal's judgment included findings on material questions of fact or references to the evidence on which those findings were based - whether relevant to have regard to contraventions of the Act by the applicants.
Broadcasting and Television Act 1942 (Cth.) ss. 90 - 92KA.
Administrative Appeals Tribunal Act 1974 (Cth.) s. 43 (2)
BISLEY INVESTMENT CORPORATION LIMITED & ANOR. v. THE AUSTRALIAN
) NEW SOUTH WALES DISTRICT REGISTRY )NO. G 139 OF 1981
ON APPEAL FROM ADMINISTRATIVE APPEALS TRIBUNAL GENERAL ADMINISTRATIVE DIVISION
JUDGES MAKING ORDERS: LOCKHART, SHEPPARD & MORLING J. WHERE MADE: AT SYDNEY
) NEW SOUTH WALES DISTRICT REGISTRY )NO. G 139 OF 1981
ON APPEAL FROM ADMINISTRATIVE APPEALS TRIBUNAL GENERAL ADMINISTRATIVE DIVISION
LOCKHART J.: This appeal involves consideration of the labyrinthine and somewhat tortuous provisions of ss. 90-92KA
of the Broadcasting and Television Act 1942 ("the Act") which
relate to the ownership and control of broadcasting and television stations and of commercial broadcasting and
A brief reference at this stage to some sections of the Act
Sections 90-92KA define the meaning of ""control" of
broadcasting and television stations and of licences. The sections
also attempt, by tracing controlling interests through chains of
shareholdings and series of companies, to defeat various schemes
devised and employed by people desirous of acquiring interests in a plurality of stations and anxious to avoid the provisions of the Act which limit the number of broadcasting and television stations that may
be controlled by any one persen or persons in the one interest.
The particular sections of the Act most directly involved in this appeal are ss. 90J and 92F relating respectively to broadcasting and television licences. There are few differences between sections 90
to 90R dealing with broadcasting stations and sections 91 to 92KA relating to television stations; but those few differences are important and I shall refer later to one of them which is material to
Section 92F (s. 900 broadcasting licences ) deals with changes in the ownership of shares in a company holding a licence and in a company holding a shareholding interest in such a company, as a result of which a person acquires a "prescribed interest" in a conmercial
television licence or an interest in excess of a "prescribed interest".
Where a transaction takes place whereby a person becomes the
holder of a "prescribed interest" in a licence, he may apply to the Broadcasting Tribunal for approval of the transaction and 1t may grant
or refuse approval: s. 92F (1) and (2); s. 903 (1) and (2) in the
The expression "prescribed interest" is central to the
operation of ss. 90-92KA. A shareholding interest constituting more than 5% of the total paid-up share capital in a company holding a television licence is a "prescribed interest" (s. 91 (2) (e) ). The
percentage 1s 15% in the case of broadcasting licences (s. 90 (2) (c)).
The Australian Broadcasting Tribunal ("the Broadcasting
Tribunal") shall not refuse to grant approval of such a transaction
(a) it is of opznion that a contravention of s. 932 (s. 90 in the case of broadcasting licences), which aun effect prohibits the holding of "prescribed interests" in more than a specified number of
(b) it considers it necessary to do so in order to maintain such ownership and control of the company holding the licence as in the opinion of the Broadcasting Tribunal "best accord with the public
The appeal is brought pursuant to s. 44 of the Administrative Appeals Tribunal Act 1975 from a decision of the Administrative Appeals Tribunal ("the Tribunal") which affirmed a decision of the Broadcasting
(a) refusing approval of the acquisition by Bisley Investment Corporation Limited, the first applicant ("Bisley") of 20.37% of the issued capital of Country Television Services Limited, the second respondent ("Country Television") and of the proposed acquisition by Bisley of a further 2.69% of the issued share capital of Country Television;
{b) approving the acquisition by Bisley of up to 15% of the issued share capital of Country Television.
With this background I turn now to the facts and the curial
Country Television is the licensee of commercial television stations CBN-& Central Tablelands area (Orange) and CWN-6 Central Western Slopes (Dubbo) and the owner of all the issued share capital of the licenge of commercial broadcasting station 2GZ Orange which in
turn holds all the issued share capital in the licensee of commercial
In or about 1935 a company called Country Broadcasting Services Limited obtained the licence to conduct radio station 2GZ at Orange. The shareholders were the Graziers' Association of New South Wales and other representatives of rural interests, especially those
associated with the areas served by the radio station.
When it was announced that television would be introduced into Australia, Country Broadcasting Services Limited caused Country Television to be incorporated for the purpose of applying for and holding, if successful, the licence for the commercial television
station proposed to be established in the Orange area. In due course
the lacence was granted to Country Television to operate the station.
Associated with Country Broadcasting Services Limited in the application for that licence were various companies, all having close links with the areas to be served by the licence, including Email Limited which 1s the largest employer in Orange.
Upon the licence being granted, 1,695,196 shares of five shillings each were alloted ,of which 1,140,000 were held by Country Broadcasting Services Limited and the companies associated with it in the application for the licence; the remainder being alloted to the public, preference being given to residents of the area to be served by
All shares in the capital of Country Television have equal
With few exceptions, the directors of Country Television have always been associated with rural interests and, in many cases, with the particular areas served by Country Television's radio and television stations. There are at present seven directors, of whom
Although 50% of the shares in Country Television were initially held by persons residing in or otherwise associated with the area served by Country Television's radio and television stations, that percentage has now been reduced to 248%; although 1,064 persons
residing in those areas are still shareholders and they represent 47.7%
Prior to the acquisition by Bisley of shares in Country Television, the issued share capital of Country Television comprised 2,787,664 ordinary stock units of 50 cents each full paid. No zndividual shareholder held shares in Country Television which constituted control of the company under s. 92B of the Act. There were nine major shareholders, Email being the largest shareholder with 373,560 stock units or 13.4% of the issued capital. None of the other shareholders sought representation on the Board of Country Television or participated in its operations or affairs; so that the board of directors, having predominately rural and local interests, was able to give effect to policies which enabled Country Television to identify
itself with the relevant areas and to cater for the interests of the
Country Television has liquid assets in excess of $4,000,600 comprising;shares in lasted public companies - $1.7 million, moneys on deposit - $1.5 million and industrial real estate - $750,000.00. These
assets have been earmarked by the board for possible future expansion
Rene Rivkin, a graduate in law and a partner in the firm of stockbrokers, Rivkin & Co., together with other interests associated with that firm, control a company - Lytona Pty. Limited, the second applicant ("Lytona"). Their interests in Lytona were acquired for the purpose of enabling Lytona itself to acquire an interest in Bisley. About April 1979 Lytona acquired 45% of the issued share capital in Bisley, then known as Bisley Clothing Limited, a well established company manufacturing menswear. Following the acquisition of this 45%
of Bisley's share capital, three representatives of Lytona, including
Mr. Rivkin, were appointed to Bisley's Board of Directors.
As at 20 August 1980 (the date on which Mr. Rivkin's statement was tendered to the Broadcasting Tribunal during a public anquiry to which I shall refer later) Lytona owned 37.5% of the issued
share capital in Bisley. Lytona's only activity is its investment in
Since Lytona's involvement in Bisley, the latter's business has diversified. It is not only a manufacturer of menswear but carries
on the business of "commodities, futures and moneymarket broking and
Mr. Rivkin said in his statement to the Broadcasting Tribunal that Bisley was interested in the "electronic media" because it
believed that it would be a very strong growth area during the "80's
In January 1980 Mr. Rivkin became aware that a parcel of shares 1n Country Television was available for sale. On 4 January 1980 Bisley purchased 113,500 shares (pre-bonus) 1n Country Television. Thereafter Bisley continued to purchase shares in Country Television, so that as at 20 August 1980 it owned 757,144 shares, 20.3% of the issued share capital in Country Television, of which 10,166 shares (.27%) were acquired after 20 May 1980. 470,983 of the 757,144 shares
were purchased from three major shareholders in Bisley.
By letter dated 28 May 1980, Bisley sought approval from the
Broadcasting Tribunal for the following transactions involving the
(a) the acquisition of 446,783 (16.63%) (pre-bonus)
(b) the transfer of 114,050 (4.09%) (pre-bonus) shares from Rivstock Nominees Pty. Limited, a company
Under the proposed arrangement, Bisley would hold 640,683 (22.99%) (pre-bonus) shares in the capital of Country Television and therefore would have a prescribed interest in the licences of stations ~-7--
An undated application of Bisley and Lytona received by the
Broadcasting Tribunal on 13 August 1980 and subsequently amended by
telephone sought approval of the Broadcasting Tribunal for the
(a) the purchase by Bisley of 20.37% of the capital of
(b) the purchase by Bisley of a further 2.62% of the
At an extraordinary general meeting of stockhclders of Country Television held on 21 July 1980 a recommendation to make a bonus issue of shares on the basis of 1 bonus share for each three stock units held on 1 August 1980 was approved. The new shares were
alloted on 15 August 1980 and converted to stock units.
Following that allotment, the issued capital of Country
Television became $1,858,443 comprising 3,716,886 fully paid ordinary
On the day of the extraordinary general meeting Mr. Rivkin met Sir Alvin Burton-Taylor, the chairman of directors of Country
Television, and other directors of that company. They discussed
Bisley's purchase of shares in Country Television. Mr. Rivkin said that, in addition to the shares already acquired, it was not inconceivable that "we" (Bisley) "would like to go to 30%". He told Sir Alvin that it would be "nice" if Bisley could have two directors on the board of Country Television. Sir Alvin replied that 1t was a matter for the Board and that he could not himself conceive of two directors, but "one maybe". In a later conversation that same day, Mr. Rivkin was informed that the Board of Country Television had met and was happy for "one of us" to join the Board at an appropriate time, and that at the Annual General Meeting the shareholders would be asked
to increase the number of directors to eight, thus allowing Bisley to
The acguisition by Bisley of its shareholding in Country
Television required the approval of the Broadcasting Tribunal pursuant
to s. 303 of the Act as it constituted a "transaction" as a result of which Bisley became "the holder of shareholding interests" in Country
Television "amounting to a prescribed interest in the licence" for
Both Bisley and Lytona required the approval of the
Broadcasting Tribunal pursuant to s. 92F of the Act in respect of their
respective "prescribed interests" in the television licences of CBN
By press announcements published on 24 June 1980 the Broadcasting Tribunal invited comments from members of the public on
Bisley's applications for approval. The Broadcasting Tribunal received __
eight submissions which in essence objected to a non-local shareholder gaining control of the television and broadcasting stations and expressed fears that the services provided by them to the local rural community
By notice dated 24 July 1980 the Broadcasting Tribunal gave
notice that it intended to hold an Inquiry pursuant to ss. 90J and 92F
of the Act into the applications of Bisley with respect to the following
"(i) whether, as a result of the transactions, the applicant, or any other person, has or will have a prescribed interest in _ (a) more than four commercial broadcasting stations in any one State or
(b} more than eight commercial broadcasting stations in Australia;
(ii) whether, as a result of the trans@ctions,the applicant, or any other person, has or will have a prescribed interest in each of three or more commercial television station licences;
changes in the ownership and control of the licensee (whether direct or indirect) that have occurred, or will occur, as a result of the transactions accord, or will accord,;with the public anterest;
(iv) the effect of the transactions on the commercial broadcasting services provided by commercial broadcasting stations 2GZ Orange and 2NZ Inverell, and
(v) the effect of the transactions on the - -- commercial television services provided ~ - - by CBN-8 Orange and CWN-6 Dubbo".
On 20 August 1980, the Vice-Chairman of the Broadcasting Tribunal, Mr. James Oswin, sitting as a Division of that Tribunal pursuant to s. 15¢c (1) of the Act, conducted 4n Inguiry at Orange into the applications. After the conclusion of the Inquiry the Broadcasting Tribunal (3 members including Mr. Oswin) considered the applications further and on 24 December 1980 delivered its decision and, by majority (Mr. Oswin and Mr. Moremon, Mr. Jones, the Chairman, dissenting) decided -
"1. To refuse to approve pursuant to s. 92F of the Act in so far as it affects Bisley Investment Corporation Limited and Lytona Pty. Limited and pursuant to s. 903 of the Act in so far as it affects Bisley Investment Corporation Limited the .- acquisition by Bisley Investment Corporation Limited of 20.37% and the proposed acquisition by that company of a further 2.62% of the issued ordinary capital in Country Television Services Limited.
Bisley Investment Corporation Limited of up to 15% of the issued ordinary capital in County Television Services Limited."
Bisley and Lytona then appealed to the Tribunal which decided
on 15 September 1980 to affirm the decision of the Broadcasting~
At the hearing before the Tribunal the material before the Broadcasting Tribunal when reaching its decision was tendered, apparently without objection. That material included submissions from varlous local people and viva voce evidence of Mr. Rivkin, Sir Alvin
Burton-Taylor and Archdeacon Kempson - Anglican Rector of the Parish of
Other evidence before the Tribunal included the affidavits of Sir Alvin Burton-Taylor, Archdeacon Kempson and Mr. West - Member of
the Legislative Assembly of New South Wales for the Electoral District of Orange; further viva voce evidence of Sir Alvin Burton-Taylor and
The primary submission of the appellants was that the Tribunal erred in regarding as relevant for the purposes of s. 92F (4A) (s. $03 (4A) as to broadcasting stations) provisions of the Act relating to statutory or deemed control. It was submitted that
statutory control is relevant solely to determine whether a person has
a "prescribed interest" in a licence and that the whole machinery of the Act relating to "prescribed interests" exists readily to
ascertain if a person has contravened s. 92 (s.90C in the case of broadcasting stations) which limits the number of licences in which
that person may have a "prescribed interest". The Act fastens on the
acquisition of a "prescribed interest" as activating the provisions of the Act (s.92F for television stations and s. 90J for broadcasting _ stations) which require the approval of the Broadcasting Tribunal of transactions involving the transfer of shares; but it serves no other
purpose under s. 92F (or s. 90J). The control referred to ins. 92F
(4A) (b) 1s said to be commercial control, not statutory or deemed
The appellants submitted that the Tribunal not only regarded statutory control as a relevant consideration under s. 92F @A)(s. 90d 4A)); but assumed that the holding of a "prescribed interest" was prima facie contrary to the public interest; and that an onus lay upon the appellants to prove that it would best accord with the public interest that they acquire a"prescribed interest" in a commercial television licence. It was submitted by the appellants that the Tribunal fell into further error by wrongly thinking that the "prescribed interest",
as to television licences, was the holding of a shareholding interest
exceeding 15% of the paid up share capital, not 5% as it 1s in fact.
It 1s necessary to examine the provisions of the Act dealing
with ownership and control of television and broadcasting stations and
For almost 50 years Commonwealth law has limited the number of broadcasting stations which may be controlled by any one person or persons in the one interest. As long ago as 1935 the number of broadcasting licences which could be controlled by the one interest was
limited by Commonwealth Regulation to eight (Statutory Rule No 120 of 1935
made under the Wireless Telegraph Act 1905). Since 1925 Commonweaith --
legislation relating to this question has increased considerably. The Act now contains elaborate and detailed provisions defining what is
meant by control: ss. 90-92KA (divisions 2 and 3 of Part IV).
The Act limits the total number of broadcasting and television licences which may be controlled by the one interest: gs broadcasting and 2 television licences. The Act does not stop there. For example, it prohibits the holding of prescribed interests in more than four broadcasting licences in any one State, more than four metropolitan broadcasting licences in Australia and more than one
metropolitan broadcasting licence in any one State (s. 90C (1) ).-
The Act forbids the holding of prescribed interests in two television licences in the same State capital and two television
The Act generally speaks of deemed control rather than actual control. The two concepts are different and 1t 1s important to keep
this distinction in mind. The definition of "prescribed interest" is
common to many of the provisions relating to ownership and control and
links those provisions to s. 92 (broadcasting licences s. 90F) which prohibits the holding of "prescribed interests" in more than a
Section 91 (2) (broadcasting licences s. 90 (2) ) states five
tests for determining whether a person has a "prescribed interest".
Two of these tests depend upon control of the licence itself (being the holder of the licence or being in a position to exercise
control, either directly or indirectly, of the licence). Section 92A
(broadcasting licences s- 90D) defines "control of a licence" in terms
of being the licence holder; being in a position to exercise control
of the company that holds the licence; or being in a position to exercise control of the operations conducted under the licence or of the management of the station or of the selection or provision of
"Control of a company" is given an extended meaning by s. 92B
(broadcasting licences s. 90E). A person is deemed to be in a position
(b) of any votes, in respect of another company, of which that company is in a position to exercise control; and
if he is in a position to exercise control of more than 15% of the voting power in the company or has "shareholding interests" in a company including shareholding interests exceeding in amount 15% of the
total of the amounts paid on all shares in the company.
A person has a "shareholding interest" 1n a company if he is beneficially entitled, to or to an interest in, shares in the company 77
provided the value of the shares is equal to the amount paid up on the
The three other tests for the existence of a "prescribed interest" in s. 91 (2) depend on the person being in a position to exercise control of more than 5% of the voting power of the company; or the person being the holder of interests in the company holding the licence exceeding in amount 5% of the total of the amounts of all the interests 1n that company that would exist if ss. 91A and 91B had not been enacted;or the person being the holder of shareholding interests in the company holding the licence exceeding in amount 5% of the total of
Section 91 (1) (s. 90 (1) as to broadcasting stations) defines "control" as including "control as a result of, or by means of,
trusts, agreements, arrangements, understandings and practices, whether
or not having legal or equitable force and whether or not based on
Shareholding interests may be traced down the line through a
series of companies to a company which 1s the licengee. It is by means of these tracing provisions (ss. 91A television and 90B broadcasting)
that a company which does not hold shares in a company holding a
licence may nevertheless be deemed to have a shareholding interest in
Section 92C (broadcasting stations 90F) limits the number- of ~~
directorships of "television" companies which a person may hold.
Section 92D (broadcasting stations 90G) lamits non-resident ownership
The Act deems a person to be in a position to exercise control of a television licence or of the company holding the licence if, for example, he 1s beneficially entitled to more than 5% of the paid-up shares in the company holding the licence (control of the licence) or is in a position to exercise control of more than 15% of the voting power of a company or has shareholding interests in a company exceeding 15% of the total of the paid-up share capital of the company (control of the company and therefore the licence) - ss. 928
and 92A. Similarly, in the case of broadcasting licences, except the
With a percentage as low in some cases as 5%, it is plain
that many people will be deemed to be in a position to exercise control
This suggests that the draftsman of the Act intended to
cast a very wide net and include all cases of actual control as well as the larger class of potential controllers. The following passage from
the judgment of Kitto J. in The Herald and Weekly Times Limited v. The
Commonwealth (1966) 115 C.L.R. 418 and p. 436-437 is in point:-
",..the offence provisions are setting up a barrier against, not indeed the probability, but the possibility that a person who may be able, by reason of any of a number of legal or business
relationships, to influence the exercise of the rights conferred by one television licence may be
able, by reason of such a relationship, to influence the exercise of the rights conferred by another television licence".
His Honour said that each of these relationships gave rise to
"...a situation which according to ordinary experience
may, in some cases at least, support an endeavour to affect the control or management of a television station or its operation under its licence. And, as everyone knows, even the faintest of voices may sometimes carry the day."
The policy of the Act 1s to secure freedom of competition and
diversity of control among the important national services of television and broadcasting. Hence, the prohibition on the control by
any one person or persons in the one interest of more than a specified
Human ingenuity being what it is, the Act contains complex provisions to defeat schemes designed to circumvent these prohibitions by interlocking companies and arrangements of various descriptions. Once a person acquires a prescribed interest in a licence (even a
shareholder holding as little as 5% of the paid up capital in the
company holding the television licence) the Act treats him as being a
potential controller of the licence or of the company that
It 1s not entirely clear why Parliament chose a shareholding
of 15% in the case of broadcasting licences and 5% for television licences.
Probably it was thought that radio stations are more often family interests and that their share capital generally is The Act selects the Broadcasting Tribunal as the body to determine whether a person should hold more than a interest: s. 92F (broadcasting stations s. 90J). Where a transaction takes place whereby a person
holder of prescribed interest in the licence, he may apply
owned by local more closely held appropriate prescribed becomes thé
Broadcasting Tribunal for approval of the transaction in so far as it
affects him; and the Broadcasting Tribunal may grant or refuse approval
(s. 92F (1} and (2) ) (broadcasting stations s. 90J (1) and (2) ).
Sub-sections (4) and (4A) of s. 92F (sub-ss. (4) s. 90J in the case of broadcasting stations) provide:-
are determined by the Tribunal to be relevant to the application of this sub-section and sub-section (4A) in relation to the transaction.
(4A) The Tribunal shall not refuse to grant approval under this section, and shall not give a notice under sub-section (3), unless the Tribunal -
has resulted or would result in a contravention by the person concerned of section 92; or
The definition of "control" in s. 91 (1) (broadcasting s. 90
(1) ) applies not only to deemed or statutory control but also to
the control of which sub-s. (4A) speaks. The definition in s. 91
(1) (and s. 90 (1) ) is an inclusive definition. It is necessary to first inquire as to the ordinary meaning of the word and then apply the statutory extensions mentioned in this section. So understood, control in sub-s. (4A) means control in the sense of control according to its ordinary meaning whether it results from or by means of legally binding
agreements or informal arrangements or understandings or practices.
But this is not to say that deemed or statutory control is irrelevant for the purposes of sub-s. (4A). It is the acquisition of a "prescribed interest" that enlivens the Broadcasting Tribunal's jurisdiction to approve or refuse to approve the transaction. The Broadcasting Tribunal must approach its task on the footing that Parliament regards the acquisition of a "prescribed interest" (as low as 5% in the case of the television station) as conferring a potentiality for subsequent control. But the Broadcasting Tribunal should not approach its task on an assumption that a "prescribed interest" 2s inimical to the public interest. To do so would be a misconception of the role played under the Act by the acquisition of a "prescribed interest". Also it would be contrary to the requirements of sub-s. (4A). It is only if the Broadcasting Tribunal considers it necessary to refuse approval on the grounds specified in the sub-section that it may do so. If, for example, the Broadcasting Tribunal is left in doubt whether it is necessary to refuse approval, 1t must grant approval. This is inconsistent with any assumption that
a "prescribed interest" is against the public interest.
It 1s also erroneous to talk of the appellants as bearing any
onus of proof for the purposes of sub-s. (4A). The concept of onus of proof has its place primarily 1n civil and criminal proceedings before
Courts. It may apply to proceedings before Administrative Tribunals in
some cases, but not relevantly to sub-s. (4A). The Broadcasting Tribunal
is required to hold an inquiry into such matters as are determined by it to be relevant to the application of sub-ss. (4) and (4A) in relation to the transaction; and it shall not refuse to grant approval unless it considers it necessary to do so in order to maintain the ownership ~ and control mentioned in sub-s. (4A) (b). Doubtless the person seeking approval for the transaction will produce material before the Broadcasting Tribunal so that a decision can be made by it; but it does not follow that any onus of proof lies upon him in the sense of either an ultimate onus or an evidentiary onus.
I agree with the following passage from the decision of the Tribunal (Morling J.) in Control Investments Pty. Limited v. The
Australian Labor Party, decision given 17 December 1981 at p. 215-6:-
onus of proof, depending upon the particular issues - in the case.
However, accepting that there is no onus in the usual sense, I think there is much to be said for the argument, pressed by the applicants, that the effect of s. 92F (4A) is to require the Tribunal to approve an application unless it is satisfied of one or other of the matters referred to ins. 92F
(4A) (a) or (b). If, having made inquiry, the Tribunal is left in doubt whether it should come to the opinion referred to in s. 92 (4A) (a), or whether it 1S necessary to refuse the application in order to maintain the ownership and control referred to in s. 92F (4A) (b), then 1t 1s under an obligation not to refuse approval."
As I understand the Tribunal's reasons for its decision, it did not regard the appellants as bearing any evidentiary onus of proof during the conduct of the Inquiry before the Broadcasting Tribunal; indeed, the Tribunal expressly disclaimed any notion that an onus of proof lay upon the
appellants. I have not found it easy to decide whether the Tribunal regarded the appellants as bearing any ultimate onus of proof; but I have come to
the conclusion that this was not the Tribunal's view.
I turn to the submission of the appellants that the Tribunal ---
embarked upon its task on the assumption that it was prima facie contrary to the public interest that Bisley and Lytona acquired a "prescribed interest" and, that this assumption coloured the whole approach of the Tribunal to the Matter before it. This submission is essentially different from the submissions in relation to onus of proof.
"My view is that on a consideration of the whole section and the interests to be protected, a pre- condition of refusal to approve a transaction is
that there 1s held the ss. (4) inquiry. That . inquiry is concerned with the public interest.
prima facie notion, I suggest, that a shareholding acquisition of or beyond the prescribed interest
is to be assumed in accord with public interest; = but rather the reverse.
Then 1t is to be investigated whether the applicant 1s to have the approval he seeks; i.e. if to
refuse 1s necessary to maintain the relevant ownership and control; or whether there should be
an approval granted to the applicant in aid of its maintenance."
In my view the Tribunal did conduct the appeal before it on the assumption that prima facie the holding by the appellants of
shares, at least sufficient to constitute "prescribed interests", was
-24- not in accord with the public interest. I am conscious that, when
making its ultimate findings, the Tribunal did not say that any such
prima facie assumption had not been rebutted. Also, I do not think
that it is a correct apprOach for a court, hearing an 'appeal on a
question of law from the Tribunal, to expect every process of
reasoning, no matter how minute, to be expressed in the reasons for
decision. But the passage Just cited from the Tribunal's reasons seems to me to be a plain assertion of the assumption in question. I see nothing else in the reasons pointing clearly to the contrary. Indeed,
I have the impression from a reading of the Tribunal''s reasons as a
With respect to the Tribunal, in my opinion, that assumption is erroneous. I said earlier that there 1s no onus of proof in the strict sense cast upon the person seeking approval. Nor is there room for any prima facie assumption that the acquisiton of a "prescribed interest" 1s not in accord with the public interest. The acquisition of a "prescribed interest" is the incident fastened on by the Act to
indicate a potentiality for future control of the company holding the
Such acquisition gives rise to the necessity to seek the approval of the Broadcasting Tribunal for the acquisition. The Broadcasting Tribunal is then charged with the duty of granting or refusing approval. It shall not refuse to grant approval unless it is of the opinion that the transaction has resulted or would result in
the contravention by the person concerned of s. 90 (2) or 90C; orit
maintain such ownership and control, whether direct or indirect, of the company holding the licence as,
in the opinion of the Tribunal, best accord with the public interest."
The structure and language of sub-s. (4A) are inconsistent
I am satisfied that the Tribunal erred in law and that it~.
cannot be said with confidence that the Tribunal would have come to the same conclusion if it had not made that assumption. That being so the
appellants are entitled to have their application for review
redetermined: Collins v. Minister for Immigration and Ethnic Affairs (1981) 36 A.L.R. 598 at p. 603.
I turn to the criticism of the Tribunal's reasons that it regarded a "prescribed interest" in the television licence as being the
holding of 15% of the paid-up capital of the company holding the
Whether through oversight, or a slip of the pen, I am
satisfied that the Tribunal did fall into error in this respect.
Earlier I thought that a combination of ss. 92B (1), 92A (1)
(b) and 91 (2) (b) might suggest that the Tribunal's reference to a "prescribed interest" 1n a company holding a television licence being 15% of the total of the amounts paid on all shares in the company was accurate. However, a fair reading of the relevant parts of the
Tribunal's reasons leaves me with the impression that the Tribunal
momentarily overlooked the fact that a 5% shareholding is sufficient
for a "prescribed interest" in a licence for a television station.
This 1s an error of law; but it does not necessarily follow
that the matter must be sent back to the Tribunal for re-consideration
on this ground. In my opinion the Tribunal would have come to the same
conclusion as it did if it had not placed any weight at all upon its
view that a 15% shareholding was necessary for a "prescribed interest" in a television licence. Indeed, if the error played any part at all in the Tribunal's decision, it would have operated in favour of the
appellants. This error affords no basis for sending the matter back to
the Tribunal for reconsideration: Collins v. Minister for Immigration
It was next submitted by the appellants that the Tribunal
"I consider that it is not possible exactly to anticipate what might be the result in the future of permitting Bisley to hold more than 15% of Country Television shares. With a holding of shares beyond that percentage there is a real possibility in the future there could well be exerted control or a degree of control by Bisley inhibiting the discharge by Country Television of its responsibility according to its present high or appropriate standards to the people of the area reached by its signalS- The possibility of controi would increase if Bisley in any effort itmight make towards greater influence were to be assisted by a 'friendly' shareholder or group."
The appellants submitted that it was irrelevant for the
Tribunal to consider the future possibility of control of Country
Television; that only present control was relevant, and that even if
such possibility was relevant, there was no evidence to support those findings of the Tribunal.
I reject the argument that the possibility of control of a company holding a television (or broadcasting) licence is an irrelevant field of inquiry for the Broadcasting Tribunal under s. 92F (4A) and s. 903 (4A).
The overriding concern of the Act is to ensure the preservation of freedom of competition and diversity of control. ™ The Act selects criteria including a shareholding interest of 5% in the case of television licences and 15% in the case of broadcasting licences as indicative of a potentiality for possible future control. This points strongly to the conclusion that it 1s within the scope of the Broadcasting Tribunal's inquiry under sub-s. (4A) to examine
Matters touching the possibility of future control of the company
Contrary to the argument advanced by the appellants, the existence in the Broadcasting Tribunal of powers to vary or revoke conditions of licences or to impose further conditions (s. 85) or ~ to suspend or revoke licences (s. 88) does not support a conclusion that the possibility of future control is an impermissible field
In R. v. Australian Broadcasting Tribunal; ex parte 2HD Pty. Limited (1979) 144 C.L.R. 45 the High Court considered s. 89 (1) of the
Act which provided, inter alia, that the licensee of a commercial broadcasting station might transfer the licence with the consent in writing of the Broadcasting Tribunal; but without that consent it should not do so. The High Court held that the subject matter, scope
and purpose of the Act suggested that the Broadcasting Tribunal's discretion to refuse consent to a transfer of a licence extended to Matters of public interest and was not confined to cases where the transfer would bring about a contravention of the Act; and that the7 _-- concentration of ownership below the limit fixed by s. 90C might give rise to a possibility of influence and control prejudicial to the
public interest and that the Broadcasting Tribunal might take that possibility into account when deciding whether to consent to the transfer
It would be anomalous if the possibility of control prejudicial to the public interest is a permissible ground for refusing consent to a transfer of the licence itself (s. 89A); but is not a permissible ground for refusing consent to a transfer of shares in the company holding
The wide discretion conferred upon the Broadcasting Tribunal by s. 92F together with s. 17 (1) which provides that, for the purpose of exercising its powers and functions under the Act, the Broadcasting Tribunal should have power to do all things as it thinks fit confirms my view that the Broadcasting Tribunal's discretion cannot be fettered in the way sought by the appellants.
I turn to the submission that there is no evidence to support the
-29- Trabunal's findings relating to the possibility of future control. The evidence shows that Bisley was a manufacturer of menswear until Mr. Rivkin and his associates assumed control of it. Thereafter it became, 1n addition, a financial entrepreneur. Mr. Rivkin told Sir Alvin Burton-Taylor that "it was not inconceivable that we " (Bisley) "would like to go to 30%". Bisley wished to have two of its representatives on the Board of Country Television. Bisley continued to acquire shares in Country Television after it acquired a prescribed interest thus acting contrary to law (s. 92F (5) and s. 907 (5) ). Country Television has liquid assets upwards of four million dollars. Bisley has no rural interests whether in the Orange/Dubbo district or otherwise. It has nothing to contribute to Country Television except perhaps financial and accounting advice - advice which Sir Alvin Burton- Taylor, the Chairman of Directors of Country Television, said could be readily purchased elsewhere if Country Television's existing sources of advice and expertise needed supplementing. Sir Alvin Burton~Taylor gave evidence which was accepted by the Tribunal that a holding by Bisley of 203% of the capital of Country Television with the support of Bisley's-friends holding less than a "prescribed interest" (say 4.9%) could ensure control of Country Television. Bisley sought not merely a holding of 308; it wanted also some measure of control of Country Television's affairs.
This is not the only evidence touching the question of the possibility of future control of Country Television by Bisley; but I have referred to sufficient of the evidence to demonstrate that there was evidence on which the Tribunal could make the finding it did relating to this question. The submission fails.
Finally as to this aspect of the matter, it was submitted by the appellants that the Tribunal failed to give any, or any real, weight to
the "undertaking" of Mr. Rivkin given by counsel for Bisley to the
Tribunal during the course of the hearing before it.
Bisley's shareholding in Country Television at some
future time should it, contrary to present intentions, be disposed to sell the shares, they
area or areas of the licencee company at the price offered to Bisley; further, that in the event of
would attempt to have the value of Baisley's shareholding in Country Television independently assessed and offered separately to the residents of - the viewing area or areas to which I have referred. os I would merely point out, your Honour, that the
minority shareholders would have to be considered."
The Tribunal set out the terms of the "undertaking" in its reasons for decision; but did not refer to it otherwise. This does not avail the appellants. It is an "undertaking" as to Bisley's intentions if it wishes to sell its shares in Country Television in the
future. It says nothing as to the circumstances in which Bisley may acquire further shares in Country Television. Indeed, it is difficult to see what status this "undertaking" has at all. It 1S called an "undertaking"; but in so far as it referred to any takeover offer for shares in Bisley itself it could not be given as a "firm undertaking" as Bisley is a public company and the views of minority shareholders
would have to be considered. It has not been shown that the
The appellants referred to the following passage in the
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now could have long term results on _ the Bisley-Country Television relationship; and that
Bisley 1s a company the attitudes and intentions of
This passage was contrasted with a later passage in the
obligations under the Act. Strict adherence to the law must, it seems, yield to other considerations.
Such conduct reduces one's confidence in evaluating
These were said to be inconsistent statements. Even if they are inconsistent statements I am far from persuaded that they demonstrate an error of law or, if there was an error of law, that it affected the Tribunal's decision. But to my mind the statements have not been shown to be inconsistent. When the Tribunal made the statement first cited, 1t was in the context of its finding that there was a real possibility of future control of Country Television by Bisley. The statement was merely that Mr. Rivkin or Lytona may not
always control Bisley and that this added another element of
uncertainty 1n defining the future intentions of Bisley.
The second statement cited earlier was made by the Tribunal as part of its reasons for exercising its discretion against approval
of the acquisition. The Tribunal said in effect that Bisley
contravened ss. 92F (5) and 9073 (5), preferring other considerations to
strict adherence to the law; and that, because of this, the Tribunai's
confidence in the propriety of Bisley's future role in the affairs of
I do not construe the Tribunal's reasons in these two passages as saying on the one hand that Bisley, Mr. Rivkin and Lytona are deserving of admiration and on the other hand that they are not. Even if this is the proper construction of the passages, I do not think
that it avails the appellants. The submission fails.
Then it was submitted by the appellants that the Tribunal erred in giving weight to the views expressed by eight people who made submissions to the Broadcasting Tribunal. The people concerned had some association with the Orange/Dubbo areas and expressed concern about the prospect of Bisley's acquisition of shares in Country
Having summarised these submissions the Tribunal said:-
"I consider some weight should be given to the views expressed by these persons."
This statement was criticised by the appellants on the ground that no weight should have been given to the submissions at all; alternatively, that the Tribunal failed to state what weight it gave
to them and; alternatively, that the Tribunal surrendered its judgment
Seven of the eight people made written submissions which were
tendered before the Broadcasting Tribunal and before the Tribunal itself,
apparently without objections. The Tribunal was entitled to read and consider the submissions. The very purpose of an inquiry under ss. 92F (4) and 903 (4) 1s to allow people interested in the subject matter of the inquiry to give their views and information to the Broadcasting Tribunal
so that it may carry out its duties. The ventilation of feelings by members of the public is at the heart of the purpose of sub-s. (4). Neither the Broadcasting Tribunal nor the Tribunal itself are bound by the rules
of evidence and each body may inform itself on any matter in such
Manner as it thinks appropriate (s. 25 of the Act and s. 33 (1) of the
What weight if any the Tribunal should have given to the submissions 1s, of course, another question. If the submissions took into account matters irrelevant to the inguiry or plainly overlooked relevant considerations, generally, little, if any, weight would be given to them. Viewed broadly, the submissions do not deal with matters irrelevant to the inquiry. The tribunal was entitled to give some weight to the views expressed in them. The Tribunal did not say what weight it gave to these views; but a reading of the Tribunal's reasons does not show that anything said in the submissions led the Tribunal into error. The passage in the Tribunal's reasons which 1s impugned by the appellants was a general statement recognising that a representative group of local objectors had expressed concern about Bisley's acquisition of shares and,
in particular, concern that the quality of the television programmes of
Country Television would suffer if control passed to Bisley.
By not stating what weight the Tribunal gave to the submissions it was submitted by the appellants that the Tribunal had failed to comply with s. 43 (2) of the Administrative Appeals Tribunal Act 1975 which provides that:-
"...the Tribunal shall give reasons in writing for its decision and those reasons shall include its
In view of my analysis of the impugned statements of the Tribunal, this criticism has not been made out.
The appellants submitted that the only reasons given by the Tribunal for its decision are to be found in the last few pages of its reasons and that they do not include findings on material questions of fact or a reference to the evidence on which those findings were based,
In these circumstances it is said that the Tribunal failed to comply with
the requirements of s. 43 (2) of the Administrative Appeals Tribunal Act
1975, The particular passages which were said to comprise the only reasons given by the Tribunal are as follows:-
of permitting Bisley to hold more than 15% of Country Television shares. With a holding of shares beyond that percentage there is a real possibility in the future
there could well be exerted control or a degree of control by Bisley inhibiting the discharge by Country Television of its responsibility according to 1ts present high or appropriate standards to the people of the area reached by its signals. The possibility of control would increase
if Bisley in any effort it might make towards greater influence were to be assisted by a "friendly" shareholder or group. It is necessary to bear in mind that an approval now could have long term results on the Bisley- Country Television relationship; and that Bisley
May not always be those of Mr. Rivkin or Lytona....
To grant the approval sought might involve the disregard of a persistent course of illegal acquisition; nevertheless in my opinion, as earlier stated, this can and should be done where appropriate. To allow the concentration of voting power for which approval is sought by Bisley would in circumstances which may well arise permit a significant degree of control by an entity which does not even pretend to be able to assist Country Television in the exercise of its primary function. Any contribution Bisley could make by way of financial or investment advice, so Mr. Rivkin assured the Tribunal in emphatic terms, will be available anyway, i.e. if Bisley retains the 15% shareholding; or obtainable otherwise. - 7 Lee
In my opinion the disregard by Bisley of the ss. (5) in its acquisition of shares provides some evidence showing Bisley's attitude to its obligations under the Act. Strict adherence to the law must, it seems, yield to other considerations. Such conduct reduces one's confidence in evaluating what might he the future course of Bisley in its participation in the affairs of Country Television.
Quite apart from the decisions cited as to illegality
and whatever disadvantage in this exercise should be
acquiring shares in the fact of the wording- of s. 900 (5)
and s. 92F(5), I am of opinion that in order to maintain
such ownership and control of Country Television as best
accords with public interest it is necessary that the .
approval sought beyond that granted by the A.B.T. decision
I do not accept that the only reasons of the Tribunal for its decision are to be found in those passages; but I agree that they encompass the principal conclusions of the Tribunal.
It is for the appellants to satisfy this Court that the Tribunal erred in law. There 1s no presumption that the Tribunal has failed to discharge its duty under s. 43 (2).
It is true that in the course of its lengthy reasons for decision the Tribunal did not say expressly that it made particular findings of fact;
but it referred to many matters of fact relevant to the issues before it.
Plainly the Tribunal regarded these matters as relevant and material;
otherwise it is difficult, if not impossible, to conceive why any reference was made to them at all.
We were referred to no case where it has been held that an Administrative Tribunal has overlooked or treated as irrelevant or immaterial matters expressly referred to in its reasons for decision and not there expressly stated to have been treated as irrelevant or immaterial.
A reading of the reasons of the Tribunal as a whole establishes to my satisfaction that the matters of fact referred to by it in those reasons were considered by it to be both relevant and material. I do not proposed to refer to these matters of fact or to summarise them. They were fully canvassed in argument and were summarised by the respondent in written submissions. I am satisfied that the Tribunal's reasons do include findings on material questions of fact and a reference to the evidence on which the findings were based. .
Another submission of the appellants was that the Tribunal erred in failing to take into account or, to take properly into account, "established and consistent policy" of the Broadcasting Tribunal. This policy was said to arise from decisions of the Broadcasting Tribunal in earlier cases which came before it. The appellants placed heavy reliance
upon the decision of Brennan J. (then the President of the Tribunal) in
Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) 1979 1
A.A.T. 634. Drake (No. 2) was concerned with the policy of the Minister
for Immigration and Ethnic Affairs formed and promulgated to guide the exercise of his discretion under ss. 12 and 13 of the Migration Act 1958 especially in relation to the deportation of persons convicted of drug offences. it says nothing as to the "policy" which it is said that the Broadcasting Tribunal, an administrative tribunal, has evolved in
Further, there is no relevant "policy" to be gleaned from the Broadcasting Tribunal's decisions. They are simply decisions of the Broadcasting Tribunal in a variety of cases, each of which is distinguishable from this case. If the argument of the appellants is taken to its logical conclusion it must follow that this "policy" binds the Tribunal itself, whose very function 1s to review decisions of the
Broadcasting Tribunal - a proposition which 1 find fundamentaily --
I need not pause to refer to the particular aspects of the Broadcasting Tribunal's "policy" which were said to be involved in the present case. They were discussed between counsel for the appellants and the Bench and were disposed of in the course of argument. All I will refer to is what was said to be the first instance of this alleged "policy" namely, the fact that the person seeking the approval of the Broadcasting Tribunal under s. 92F has contravened s. 92F (5) is an ™
irrelevant consideration for the Broadcasting Tribunal when determining
whether to approve or not approve the transaction in question. Not only can no such policy be gleaned from the earlier decisions of the Broadcasting Tribunal to which we were referred but, even 1f it could, it must be wrong. It must be relevant for the Broadcasting Tribunal, and a fortiori, the Tribunal itself, to have regard to contraventions of s. 92 F and s. 90F by the very person seeking approval of the transactions the subject of the contravention. That is not to say that
the contraventions must disentitle that person to approval; but
Other submissions were made by the appellants; but I need not repeat them as they were dealt with in the course of argument and, in
I would allow the appeal and remit the matter to the Tribunal for re-determination. It will be a matter for the Tribunal to determine
Country Television must pay the appellants' costs of the appeal. There should be no order as to the costs of the Broadcasting Tribunal, the first respondent, in relation to the appeal as it played no part in
I certify that this and the preceding thirty-seven (37) pages are a true copy of the Reasons for Judgment of his Honour Mr. Justice Lockhart.
IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G 139 of 1981
ON APPEAL FROM ADMINISTRATIVE APPEALS TRIBUNAL GENERAL ADMINIS- TRATIVE DIVISION
BETWEEN: BISLEY INVESTMENT CORPORATION LIMITED First Applicant - -- and - - -
AND ~~ THE AUSTRALIAN BROADCASTING TRIBUNAL First Respondent and
In this matter I have had the advantage of reading the gudgments to be delivered by Lockhart and Morling JJ. I agree generally with their reasons and with their conclusions.
I feel bound to say that for a time I found it difficult to perceive,from the mass of submissions and criticisms of the decision which were made,what the essential complaints made by
the applicants atout the decision were. The reduction of the
applicants' submissions to writing did not provide the clarification which might have been expected.
But, as I understand the matter, the essential com- plaint which the applicants make is that the Administrative Appeals Tribunal ("the Tribunal") in reaching its conclusions
took into account matters of which there was no evidence or
which were no more than possibilities, themselves depending upon so many contingencies and so much speculation that they were fanciful or unreal. Despite the length of the Tribunal's decision the essence of its reasoning is to be found in the passages quoted by Lockhart J. at pp.34-35 of his judgment. In my opinion the matters there referred to, possibilities though they are, are matters upon which the Tribunal was entitled to rely in reaching its decision,
That conclusion is, I believe, in accord with the decision
of the High Court in The Queen v. The Australian Broadcasting
Tribunal; ex parte 2 HD Pty. Limited (1979) 144 C.L.R.45.
The Court was there concerned with the interpretation of s.89A(1) of the Broadcasting and Television Act 1942 ("the Act") and with the question of whether The Australian Broad- casting Tribunal ("the Broadcasting Tribunal") was to be concerned with matters relating to the public interest when
deciding whether or not to consent to the transfer of a
licence, There is no mention of public interest in the section. Nevertheless the Court considered that the Broadcasting Tribunal was entitled to take into account
under s.89A of the Act any matter affecting the public
interest (pp.50-53). In the present case the Tribunal waS ex-
pressly concerned with the public interest - sub.sections (4A) of
ss.90J and 92F. Contrary to the submission of counsel for the applicants, the 2 HD case is thus in point in the present
case, The relevant dictum in the judgment of the Court
"When the purpose of the statute is to promote and protect the public interest the statutory discretion, if not relevantly confined, should be read as enabling the Tribunal to protect the public against the possib- ility of prejudice or detriment. The Tribunal was rightly concerned with the possibility of influence that might arise from the concentration of ownership which it found to exist as a matter relevant to the public interest. It was entitled to refuse the ~ application in order to eliminate the possibility of that influence. There is, in our opinion, no sound reason for concluding that the exercise of the Tribunal's power to refuse consent should be con- ditioned by a finding expressed in the terms that there is a probability, rather than a possibility, that a - concentration of ownership will give rise to a situation of influence resulting in a lack of autonomy and independence",
The approach of the Tribunal in its reasons earlier referred to was to take into account possible future conduct of the applicant which might lead to the undesirable results
there postulated. Behind these reasons was evidence given
by the chairman of the respondent, Sir Alvin Burton-Taylor, and the shadows cast by ss.90(1) and 91(1) of the Act in which the expression "control" is defined to include control as a result of, or by means of, trusts, agreements, arrange- ments, understandings and practices, whether or not having legal or equitable force and whether or not based on legal" or equitable rights.
If there were no more, I would have been of the opinion that the appeal to this Court should be dismissed. Regrett- ably, nowever, I have reached the conclusion that a material error of law is disclosed in the Tribunal's reasons with the result that the matter should go back for a further hearing. Before I proceed to say why I am of that opinion, I should make it clear that what I nave earlier said is not intended to bind or limit the Tribunal in what it may do when the matter is heard afresh. What I have said is that the Tribunal was entitled to take the matters of possibility upon which 1t has relied into account. If matters remain as they are when the applications are heard again, that will still be the position. But 1t will be for the Tribunal to make up its own mind as to the significance to be given the possibilities taken into account by the Tribunal in the
decision appealed from bearing in mind the whole of the
circumstances of the case as it is then presented by all parties, What I am anxious to emphasise is that the fact that 1t is proper to take into account the matters relied
upon by the Tribunal to refuse consent does not mean that
the Tribunal is bound to give them the same weight when
the matter is heard afresh. What significance they will - - then have will be a matter entirely for the Tribunal.
The reason why I think the decision cannot stand is founded upon tne apparent view of the Tribunal that a share- holding interest in excess of a prescribed interest as defined in the legislation is not to be assumed to be in accordance with the public interest. The critical words in the decision of the Tribunal are, "There 1s no prima facie notion, I suggest, that a shareholding acquisition of or beyond the prescribed interest is to be assumed in accord with public interest; but rather the reverse",
Much discussion took place as to what was really meant -- by the words, "but rather the reverse". To me their natural meaning is to invert the earlier assumption which the Tribunal had apparently been asked to make. The words suggest that the Tribunal proceeded upon the basis that it should be assumed that a shareholding interest in excess of
a prescribed interest was not in accord with the public
interest. In my opinion there is not disclosed in the legislation any intention that assumptions or presumptions to this effect should apply. By reason of the wording of the
relevant sub-sections (of ss.90J and 92F) it might be
thought that any assumption should be as was apparently contended by the applicants before the Tribunal. That is _. because of the way the sub-section commences, "The Tribunal shall not refuse to grant approval .... unless .....". That is not a matter which was fully argued and it is not a matter upon which I would express a concluded opinion, It is
enough to say that there 1s clearly no room for an assumption of the kind the Tribunal apparently considered should be
made. Certainly nothing in the Act suggests that an
interest in excess of a prescribed interest is prima facie contrary to the public interest. Both Tribunals are bound
to make a decision on that question upon the basis of the evidence and other material which is before them. It may _ be that the Tribunal here meant to do no more than to say
what I have myself said. But I do not feel confident that that is the case. If a misunderstanding of the law is a
real possibility - 1n this case I think it more a probability -
a danger of misdirection arises and it becomes unsafe
Sent og, te neay ef ne s- le : wanye ee) Me? etal a Sea sap aoe eae ae Teale ez BS sce Si Se aes ene ee on et
In reaching my conclusion I have given anxious consideration to the question of whether it can truly be said that the Tribunal's misunderstanding of the law played any part in the decision meking process, The offending statement is some pages earlier than those which contain the essential reasons why approval was not granted. No reference is there made to such statement. Nevertheless I feel unable to be sure that the Tribunal did not proceed to its final analysis of the problem under the misappre- hension that a shareholding in excess of the prescribed interest was prima facie against the public interest or to be assumed to be so unless other matters in the case ought lead to a contrary conclusion, Such a misapprehension could, in a real sense, be relevant to and have a close connection with the matters taken into account as reasons why approval should be refused,
In Vocisano v. Vocisano (1974) 130 C.L.R.267, Barwick C.J., dealing with a case 1n which evidence had been wrong- fully admitted, said that before a new trial is ordered in a case where the verdict is 1n accordance with the evidence, 1t should be seen that the inadmissible matter has been used by the gudge 1n reaching nis verdict (p.275). The Chief Justice's reasons were agreed 1n by both Stephen and Jacobs JJ (p.275).
I have considered the application of the principle there
stated to the circumstances of this case. After due reflection I have reached the conclusion that this case differs from Vocisano because of the real possibility, if not the probability, that the apparent error of law
pervaded the Tribunal's ultimate reasons and conclusions.
Of the remaining submissions relied upon by the applicants I would say little. It was submitted that it is erroneous in point of law for the Tribunal to take into account, as one of the matters militating against the grant of approval, the circumstance that some of the first applicant's acquisitions of shares involved it in breaches of s.92F(5) of the Act which makes it an offence to acquire more tnan a prescribed interest without the approval of the Broadcasting Tribunal. I would reject that submission. The fact that an applicant for approval has been guilty of illegal conduct under the sub-section, although not con- clusive, must be a matter which 1t is relevant for both
Tribunals to take into account when considering whether
approval should be granted, That was the conclusion of
the High Court 1n The Queen v. The Australian Broadcasting
Tribunal; ex parte Hardiman (1980) 144 C.L.R. 13 at pp.33-34. Then it was submitted that the Tribunal had erroneously
placed an onus of proof upon the applicants. I agree that
in some paragraphs of its reasons the Tribunal would appear to be doing so. But ultimately the reasons contain a clear statement that the applicants bear no onus.
Next it was argued at greath length that the Tribunal had failed to comply with s.43(2) of the - Administrative Appeals Tribunal Act 1975 which obliges the Tribunal to give reasons in writing for its decision. its reasons are to include its findings on material questions of fact and a reference to the evidence or other material on which its findings are based. Detailed written submissions handed up by counsel for the respondent demonstrate, in my opinion, that this submission is without foundation, The Tribunal's decision does include its findings on material questions of fact and does refer to the evidence or other material on whicn its findings are based. I have already said enough to indicate that it has given written reasons for its decision. The section does not impose upon the Tribunal, which is often composed of members who are not trained in the law, any standard of perfection, I consider the provisions of the section tc be directory rather than mandatory. Substantial com- pliance is what is required and clearly that is here present.
I prefer that approach to the question of what is required
of the Tribunal by the section to that, upon which counsel for the respondent relied, which involves the application of the maxim "omnia preesummuntur rite esse
acta", On this aspect of the case I would add that I
am in complete agreement with what was said by Fisher J.
in his judgment in Blackwood Hodge (Australia) Pty. - - Limited v. Collector of Customs (N.S.W.) (1980) 47 F.L.R.
In relation to the remaining matters relied upon by the applicants, I would not wish to add anything to what Lockhart J. has said.
In the result, I am of opinion, as I have said, that the appeal should be allowed. The matters should be remitted to the Tribunal to be heard and decided by the Tribunal again. I would leave to the Tribunal the question
1 certify that this ard the | preceding pages are a true copy of tho reasons for judgment herein of The Honourable
) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G 139 of 1981 ) GENERAL DIVISION )
MORLING J. : Country Television Services Limited (Country Television) is the licensee of commercial television stations CPN-8 Central Tablelands and CWN-6 Central Western Slopes. These stations transmit in the areas of Orange and Dubbo respectively.
The company 1s also the licensee of commercial radio stations 2GZ
Crange and 2NZ Inverell. Bisley Investment Corporation Limited ("Brsley") has acquired 20.3% of the capital of Country Television, and proposes to acquire a further 2.69% of the
capital. The Broadcasting and Television Act 1942 (Cth) makes it
obligatory for Bisley to obtain the approval of the Australian
Broadcasting Tribunal of the acquisition and proposed acquisition of the shares in Country Television. Lytona Pty. Limited ("Lytona") holds 36.4% of the capital of Bisley. By reason of the provisions of Fart IV of the Act, it 1s also incumbent upon Lytona to obtain the Broadcasting Tribunal's approval of Bisley's share purchases and proposed purchases. Accordingly, both companies applied to the Broadcasting Tribunal for its approval.
When the applications for approval came before the Tribunal they were opposed by Country Television and other interested parties. Country Television's ownership of the commercial television licences obliged both Bisley and Lytona to seek the Broadcasting Tribunal's approval pursuant to s.S2F of the Act. Because of Country Television's ownership of the radio licences, s.S0J of the Act also required Bisley (but not Lytona) to seek the Board's approval.
Bisley 1s an investment company controlled by persons resident in Sydney. It has no experience or expertise in broadcasting or television, nor does it have any association with or interest in commercial or other activities in the Central
Western district of New South Wales. It purchased the shares in
Country Television as an investment because it saw the electronic
media as being a growth industry which provided good investment
opportunities. These circumstances were relied upon by Country Television and other interested parties as demonstrating that approval of the applications would not lead to such ownership and control of the company holding the television and broadcasting licenses, i.e. Country Television, as would best accord with the public interest (see s.92F(4A)(b)) of the Act. They therefore submitted that the Tribunal was entitled to, and should, refuse the applications. ™ The Broadcasting Tribunal was constituted by a quorum consisting of Mr David Jones, Chairman, Mr James Oswin, Vice- President, and Mr Keith Moremon, Member. The Tribunal, by majority (Messrs Oswin and Moremon, Mr Jones dissenting) refused to grant approval pursuant to s.92F of the Act of the share transactions in so far as they involved the acquisition or the proposed acquisition by Bisley of shares representing approx- imately 23% of Country Television's capital. However, it granted its approval pursuant to s.92F and 90J to the acquisition by Bisley of up to 15% of Country Television's capital. Mr Jones would have approved all the applications in their entirety. ~ Bisley and Lytona applied to the Administrative Appeals Tribunal for a review of the Broadcasting Tribunal's decision. In accordance with the provisions of s.119A(3) of the Broad- casting and Television Act the applications for review were heard by a Deputy President of the Tribunal who affirmed the decision under review. From this latter decision the applicants appealed
to this court. The appeal is confined to questions of law - see
s.44(1) of the Administrative Appeals Tribunal Act 1973.
Before considering the merits of the appeal, it is convenient to refer to some of the more relevant provisions of the Broadcasting and Television Act. It is unnecessary, for present purposes, to refer in detail to all of the complex provisions in Part IV of the Act dealing with the limitation of ownership or control of commercial broadcasting and television
stations. A brief outline of these will suffice. Division 2-of
Part IV places restrictions upon the ownership and control of broadcasting stations. Section 90(2) provides that a person has a prescribed interest in a licence for a commercial broadcasting station if he holds shares exceeding 15% of the capital of the company holding the licence. Provision 1s made for the tracing of shareholding interests through a series of companies (s.90B). Section 9CC restricts the number of prescribed interests in licences which may be held by one person. By the combined effect of ss. 90D and 90E a person who is in a position to exercise control of more than 15% of the votes at a general meeting of the company is deemed to be in a position to exercise control of a licence held by that company. Section 90J provides that where a transaction in relation to which the section applies to a person is proposed or has taken place, that person may apply to the Broadcasting Tribunal for approval of the transaction in so far as it affects him. The section is expressed, by s.90J(1) to apply to a person in relation to a transaction where the transaction is in respect of shares in a company holding a broadcasting licence and where, as a result of the transaction,
the person becomes the holder of shares amounting to a prescribed
interest in the licence. The provisions of s. 90J are broadly similar to the provisions of s.92F (dealing with television licences) to which I shall later refer in more detail.
Division 3 of Part IV contains provisions limiting ownership or control of commercial television stations. S.$1(2) provides that a person has a prescribed interest in a television licence 1f, inter alia, he is in a position to exercise control of the licence or if he holds shares exceeding 5% of the capital of the company holding the licence. Section 91A (like s.90B) makes provision for the tracing of shareholding interests through a series of companies, and s.92 places restrictions on the number of prescribed interests which a person may have in television licences. By the combined effect of ss. 92A and 92B, a person is deemed to be in a position to exercise control of television licence if, inter alia, he holds 15% of the shares in the company holding the licence. Section 92F 1s central to the applications which are the subject of the present appeal. The section provides, in part, as follows:
section applies to a person in relation to a trans-
action (whether or not the person is a party to the transaction) where -
(a) the transaction is in respect of shares in a company holding a licence, or shares in a company having a shareholding interest in such a company, and, as a result of the
transaction - (2) that person becomes the holder of shareholding interests in the company holding a licence
{including any interests previously held) amounting to a prescribed interest in the licence; or
(i1) that person, being already the holder of shareholding interests in the company holding a licence amounting to a prescribed interest in the licence, becomes the holder of a further shareholding interest, or an increase in the amount or proportion of his shareholding interests, in that company; or
(b) the transaction is in respect of shares in, or debentures of, a company holding a licence and, as a result of the trans- action -
(1) that person becomes the holder of interests in the company holding a licence (including any interests previously held) amounting to a prescribed interest in the licence; or
(ii) that person, being already the holder of interests in the company holding a licence amounting to a prescribed interest in the licence, becomes the holder of a further interest, or an increase in the amount or proportion of his interests, in that company.
(2) Where, on or after the date of commence- ment of the Broadcasting and Television Act 1965, a transaction in relation to which this section applies to a person is proposed or has taken place, that person may apply to the Tribunal for approval of the transaction in so far as it affects that person, and the Tribunal may, subject to this section, grant or refuse approval.
(4) The Tribunal shall not refuse to grant approval under this section unless it has held an inguiry into such matters as are determined by the Tribunal to be relevant to the application of this sub-section and sub-section (4A) in relation to the transaction.
(4A) The Tribunal shall not refuse to grant approval under this section, and shall not give a notice under sub-section (3), unless the Tribunal -
(a) is of the opinion that the transaction has resulted or would result in a contravention by the person concerned of section 92; or
(b) considers 1t necessary to do so in order to maintain such ownership and control, whether direct or indirect, of the company holding the licence as, in the opinion of the
(5) A person who becomes a party to, or accepts benefits under, a transaction, being a trans- - - action in relation to which this section applies to eee him, without the approval of the Tribunal having been given to the transaction in so far as it affects that person 1s guilty of an offence against this section."
The arguments advanced by Mr Shand Q.C. on behalf of the applicants ranged over a wide field. The reasons of Lockhart J. (which I have had the benefit of reading in draft form and with which I generally agree) deal with all the substantial points raised. I cannot usefully add much to what his Honour has said about most of them. But I shall state my own reasons for rejecting some of Mr Shand's principal submissions, and for
accepting the submission that leads to the result that the appeal
It was submitted by Mr Shand that his Honour's reasons for judgment disclose a misunderstanding of what constitutes a prescribed interest in a broadcasting or television licence. He argued that it could be seen from his Honour's reasons that he was of the erroneous view that it was necessary for a share- holding in a company holding a licence to reach 15% before the shareholder became the holder of a prescribed interest. It was
said that this view appears from the following passage in the
"The attainment by a person without approval of a prescribed interest in a licensee company (share- holding exceeding the 15% figures of the total of the amounts paid on all shares in that company) can attract that the person is to cease to have shareholding interest in the licensee company
amounting to a prescribed interest, e.g. s.90J, 92F."
It is true that the reference to a 15% shareholding. is inapposite in that, in the case of a television licence, a person has a prescribed interest if he holds 5% of the shares in the company holding the licence - see s.91(2). But I do not think it is correct to treat this slip as manifesting a basic misunderstanding of the relevant provisions of the Act. I think that the absence of a reference to a 5% shareholding constituting a prescribed interest in the case of a company holding a television licence is explicable if one bears in mind that his Honour was not necessarily intending to refer exhaustively to prescribed interests in the opening words of the above quoted passage from his judgment. I do not think that a fair reading of the whole of the judgment discloses that his Honour was under any misapprehension as to the provisions of the Act dealing with
shareholdings that give rise to prescribed interests.
In any event, in so far as any error was made by his Honour in this regard, it could only have operated in favour of the applicants. It can reasonably be assumed that his Honour would have concluded that the applicants had stronger cases for approval had he been of the view that it was necessary for a
shareholding in a company holding a television licence to exceed
15% before the shareholder obtained a prescribed interest. Put another way, it is clear that if there were error (which I do not accept) it played no part in his Honour's decision to refuse the applications. In these circumstances there is no basis for the making of an order that the applications should be re-determined. See Vocisano v Vcocisano (1974) 130 C.L.R. 267 at 274-5 and
Rose-Beresford v The Commonwealth (1971) 45 A.L.J.R. 178. -
Mr Shand also submitted that, although his Honour did not say so in so many words, his reasons disclose that he was of the view that the applicants carried the onus of establishing that their applications should be approved. He claimed this was an error of law which vitiated the decision. He fastened upon the following passage in his Honour's judgment, in which he makes
"My view is that on a consideration of the whole section and the interests to be protected, a pre-condition or (sic) refusal to approve a transaction is that there 1s held the subsection IV enquiry. That enquiry is concerned with the public interest. The moving party subject to what appears below, is the person seeking approval. There 1s no prima facie notion, I suggest, that a shareholding acquisition of or beyond the prescribed interest is to be assumed
in accord with public interest; but rather the reverse."
Following this passage in his judgment, his Honour referred to the provisions of s.25(3) of the Broadcasting and Television Act which provides that the Broadcasting Tribunal "shall ensure that every person having an interest in the proceedings before the Tribunal at an enquiry is given a
reasonable opportunity to present his case ...". The judgment
"The use of the expression in s.25(3) 'to present his case' does support that the applicant bears the duty of persuasion. However, having regard to the use of the term 'thorough investigation' and the observations made in R. v Australian
Broadcasting Tribunal & Ors; ex parte Hardiman & Ors (1979) 29 A.L.R. 289, it is open to
of proof in the ordinary sense once the A.B.T. is required itself to make such an investigation.
"I consider there is no onus of proof in the sense in which that expression is ordinarily used on
in appropriate circumstances be drawn against a party where, e.g. there is a failure to provide
information which might be thought to have been peculiarly within the knowledge of that party."
Read in their entirety, his Honour's reasons do not convey that he was of the opinion that the applicants carried any onus of proof. Nor do they convey that he determined any issue in the case by reference to an onus of proof that he placed on the applicants. The factual matters that seem to have weighed most heavily with his Honour in reaching his decision were not really in dispute. Those matters were that the applicants had no connection with the country areas where Country Television's programmes were broadcast, that Country Television's attraction to Bisley was that it was a good investment in a growth industry, and that Bisley had no expertise in the electronic media industry. His Honour's views on those matters were quite unaffected by any opinion he held as to any evidentiary onus of proof. Thus, even if his Honour had an erroneous view as to where the onus of proof lay, it played no part in his ultimate decision. This submission therefore also fails.
Mr Shand argued that even if his Honour did not hold
that the applicants carried an onus of proof in the conventional
sense, he nevertheless was of the erroneous view that there was a statutory presumption arising from s.92F(4A)(b) that the acquisition of a prescribed interest in a company holding a television licence was against the public interest. This result was said to flow from his Honour's observation that:
"There is no prima facie notion, I suggest, that a shareholding acquisition of or beyond the -
prescribed interest is to be assumed in accord __ with the public interest, but rather the reverse."
The crucial question in the appeal is the meaning of, and importance to be attached to these words. They were the subject of much debate before us. Mr Handley Q.C., who appeared for Country Television, submitted that they were capable of more than one meaning, and perhaps that is so. But I do not think he seriously contended that they were not capable of meaning that the acquisition of 5% or more of the shares in the capital of a company holding a television licence is assumed to be against the public interest. In my opinion it is clear that there is nothing in s.92F or elsewhere in the Act giving rise to a presumption that the acquisition of a prescribed interest is to be deemed to be against the public interest. I did not understand Mr Handley to submit to the contrary. Certainly the words used by his Honour seem to indicate he believed such a presumption existed. With respect, I adhere to the view I expressed in Control
Investments Pty. Ltd. Vv. Australian Broadcasting Tribunal
(17.12.61 at p.216) that if, having made inquiry, the Tribunal is
left in doubt whether it is necessary to refuse the application
in order to maintain the ownership and control referred to in s.92F(4A)(b), then it is under an obligation not to refuse
approval. Such an obligation is inconsistent with the notion
that there is a presumption that the acquisition of a prescribed interest is deemed to be against the public interest. Mr Handley argued that his Honour did not necessarily intend to convey in the words that he used that there was such a presumption. This may be correct, but I do not think that it can be safely assumed against the applicants that this was the case. Upon such a crucial matter, the applicants are entitled to rely upon the literal meaning of the words used.
The question therefore arises whether the erroneous statement that "there is no prima facie notion ... that a share- - holding acquisition ... beyond the prescribed interest is to be
assumed in accord with public interest; but rather the reverse"
amounts to such an error of law as to warrant the setting aside
of the decision. I confess that I have not found this question easy to decide. In Vocisano's Case (supra) Barwick C.J. said at p.275: ~
"In my opinion, before a new trial is ordered in a case where the verdict is in accordance with the evidence, it should be seen that the inadmissible
IMatter has been used by the judge in reaching his verdict."
The same principle was referred to, though with a slightly different emphasis, in Collins v. Minister for
Immigration and Ethnic Affairs (1981) 36 A.L.R. 598 at 603 where
it was said that an appellant who demonstrates that a matter has
wrongly been taken into account by the Administrative Appeals Tribunal is entitled to a redetermination of his application for review unless it can be said with confidence that the Tribunal would have come to the same conclusion in any event.
What has troubled me in reaching a decision on this
matter 1s whether it can be said that the presumption which his
Honour believed to exist took any part in his ultimate decision.
I was initially of the view that it did not because there is no reference to the presumption at the conclusion of the judgment where his Honour's reasons for rejecting the applications most clearly appear. But upon reflection I do not think it is possible to say that his Honour's belief in the existence of the supposed presumption was not relied upon by him in reaching his decision. Indeed, I think it probable that it was. The critical matter for decision was whether his Honour considered it necessary to refuse to grant approval for the reason referred to in s.92F(4A)(b). The supposed statutory presumption that the transactions for which approval was sought were against the public interest would have been seen as a weighty circumstance to be taken into account in determining whether it was necessary to refuse the applications. It may well have been the determining factor in the ultimate decision. In these circumstances the applicants have established their right to have' their applications for review redetermined.
As the matter must go back for redetermination I would add a few additional observations upon two matters argued before
us which may well again arise for consideration. In his reasons
Lockhart J. rejects the submission that the possibility of control of a company holding a television or broadcasting licence is an irrelevant field of enquiry for the Broad~ casting Tribunal under s.92F(4A) and s.90J(4A). I agree that this is so. I am of this opinion because the suit- ability and fitness of an applicant will always be relevant matters for consideration in an inguiry held pursuant to . s.92F(4). One matter which could properly be considered - - in determining the suitability of an applicant company
would be whether it has a policy of seeking to obtain controlling interests in other companies in which it invests. Such company policy, if established, could properly be
regarded as bearing upon its suitability as the owner of a substantial shareholding in a licensee company. It was
thus appropriate, in the present case, for the learned
Deputy President to take into account Bisley's expressed
desire to acquire up to 30% of Country Television's capital. But that is not to say that the inquiry was an inquiry into
an application for approval of a 30% shareholding in Bisley. ~~ It was not. If and when such an application is made, it
will have to be determined on its merits having regard to
the circumstances which then prevail. For example, it is possible that when such an application is heard and
determined relevant policy may have changed or changes may
have occurred in the ownership of shares in Country Television. It would not be proper to prejudge such an application by reference to the evidence and submissions in the current
I also agree with Lockhart J. that no error of law was made by his Honour in failing to take into account established policy of the Australian Broadcasting Tribunal. In relation to the decisions of the Broadcasting Tribunal which were said to be supportive of the applicants' case, the learned Deputy President said that he had not found them of great assistance. Plainly,
this finding cannot be said to be erroneous in law. But, for -
myself, I would prefer not to express any opinion about the content of any such policy or the weight which should be attached to it. These matters were not fully developed in argument before us and I would not wish to say anything about them which may influence further consideration of the applications when they are