Television Corporation Ltd v Commonwealth; Amalgamated Television Services Pty Ltd v Postmaster-General

Television Corporation Ltd v Commonwealth; Amalgamated Television Services Pty Ltd v Postmaster-General - [1963] HCA 30 - HCA 1963 case summary — Zoe

[12]

The conditions are lengthy, and I refrain from setting them out in full. They consist, apart from definition provisions, of a paragraph containing prohibitions upon the licensee company, to apply to it during the currency of the licence, and a paragraph describing a number of things by which the condition is not contravened. The words of prohibition could hardly be wider: "will not obstruct, prejudice or interfere with, or cause, permit or encourage another person to obstruct, prejudice or interfere with, or become a party to an agreement, arrangement or understanding that will or is likely to have the effect of obstructing, prejudicing or interfering with" - and then follow four descriptions of things to which each of these prohibitions applies. The first is the exercise, by the licensee of another commercial television station not within thirty miles of the station to which the subject licence applies, of the rights and privileges conferred by the licence held by that other licensee. Not much need be said about this. The rights and privileges conferred by a licence appear to consist in nothing but freedom (limited to television) from the prohibition in s. 6 of the Wireless Telegraph Act of establishing, erecting, maintaining or using a station or appliance for the purpose of transmitting messages by means of wireless telegraphy, and of transmitting messages by wireless telegraphy. What could interfere with that freedom I do not profess to understand. "Jamming" would interfere with reception, not with transmission. But I turn to the next: "the business of such a licensee in connexion with its licence". So the licensee company which is to be made subject to the proposed conditions must not (to take an example) become a party to an understanding that is likely to have the effect of prejudicing its competitor's television business. What does that mean? If it enters into an understanding with a city store to the effect that at the expiration of a current contract under which the store gives all its television advertising to the licensee's competitor the store will not renew the contract but will share its television advertising between the two licensees, the understanding will surely be likely to have the effect of prejudicing the competitor's business; but is that the kind of prejudice that is meant? Counsel for the Minister assured us that it was not. I may not have grasped precisely what it was that they said was meant, but the general idea seemed to be that all uncertainty would disappear if only it were understood that the obstructing, prejudicing and interference to which alone the condition was intended to refer did not include conduct, however damaging or destructive, which was in the normal conduct of a television business. I am afraid I am still at a loss. If a competitor employs an efficient and popular announcer, is it a breach of condition for the licensee to win him over by offering better terms of employment? Is it a breach of condition for the licensee to acquire for its own purposes premises next to its competitor's studios, when the competitor wants the premises for extension of its television studios? Or to buy up some kind of television electrical equipment at a time when there is only enough immediately available on the market for one licensee's requirements? In short, are all the manifestations of competition within the prohibitive clause, and permissible only if they can be brought within the provisions as to what will not contravene the condition? Little need be said about the next subject. It may be briefly described as the making or performance of agreements by or with the competitor for the purpose of its television business, and, in particular, agreements for the use of programme material. To illustrate the uncertainty here it will suffice to ask whether there will be a breach if, both parties being anxious to get a lease of particular premises for television purposes, the licensee who is subject to the condition prejudices the making of a lease of those premises to its competitor by offering a higher rental. The final subject is "the availability to such licensee (i.e. the competitor) of any programme material". The prohibition of this is cut down by the provision as to what is not a contravention; but what does it mean? I cannot see any possibility of saying with any confidence at all what are the limits of the conduct which is referred to by the description "obstructing, prejudicing or interfering with the availability of programme material". Taking the proposed conditions as a whole, it seems to me that not a month, perhaps not a day, could go by without some question arising in the licensee's business which no one could fairly be expected to answer with assurance, as to whether a particular course of action would imperil the licence or no.

[15]

In these two cases we are called upon to consider whether the power of the Postmaster-General, pursuant to s. 108 of the Broadcasting and Television Act 1942-1960, to "impose further conditions" upon the holders of licences for commercial television stations will be validly exercised by the imposition of the conditions specified in the notice of 25th January 1963 given in compliance with sub-s. (2) of that section. There is, of course, a direct relationship between the provisions of s. 108 of the Act and those of s. 81. The latter section authorizes the Minister to grant licences for commercial television stations "upon such conditions, and in accordance with such form", as he determines whilst the former section provides that he may "during the currency of a licence, by notice in writing to the licensee, vary or revoke any of the conditions upon which the licence is granted (not being conditions applicable by virtue of section one hundred and twenty-nine of this Act) or impose further conditions". As will be seen from a perusal of the two sections both the power to prescribe and the power to impose further conditions is, except for the bracketed words in s. 108, given without any express limitation. That the legislature should have given the power in this form rather than attempt a complete definition in advance of the matters relevant to the exercise of the power is readily understandable. But, nevertheless, the power in either case is inevitably subject to limitations which arise from the fact that it rests ultimately upon the authority of the Parliament of the Commonwealth to make laws with respect to a specified subject-matter, i.e. with respect to "Postal, telegraphic, telephonic and other like services". As Dixon J. (as he then was) said in Shrimpton v. The Commonwealth [1] concerning the "absolute discretion" which reg. 9 (2) of the National Security (Economic Organization) Regulations purported to repose in the Treasurer of the Commonwealth: "In the next place, I think the word "absolute" is actually concerned, not with insuring that the purposes for which the Treasurer may use his discretion are unlimited, but rather with the finality or conclusiveness of his decision. But finality, in the sense of complete freedom from legal control, is a quality which cannot, I think, be given under our Constitution to a discretion, if, as would be the case, it is capable of being exercised for purposes, or given an operation, which would or might go outside the power from which the law or regulation conferring the discretion derives its force. An exercise of a power, whether legislative or administrative, cannot rise higher than its source, viz., the power itself, and an attempt under the power to make unexaminable what is done in ostensible pursuance of a further delegation of authority must, to that extent, fail. Regulation 9 (2) should be construed down, and the discretion understood as relating to the purposes which in point of constitutional validity justify the regulation and as being "absolute" only within those limits" [2] . No question of the constitutional validity of any provision of the Act under consideration in this case, however, arises; the only question is whether the statutory grant of authority to impose further conditions extends to the imposition of the specified conditions. The answer to this question must depend, initially, upon whether the specified conditions are within the object and purpose for which the power was created, that is to say, whether the contemplated exercise of power is "for the purpose of attaining the object and securing the purpose" of the legislation, "such object and purpose being ascertained by an examination of the terms" of the legislation (per Latham C.J. in Shrimpton's Case [1] ). Secondly, it is beyond doubt that the power conferred by s. 108 does not extend to the imposition of conditions which are themselves repugnant to or inconsistent with the provisions of the Act. We do not understand either of these propositions to be disputed by the defendants but we have stated them because it is desirable that the basis upon which the argument proceeded should be defined.

[18]

It is convenient to deal first of all with s. 105A. It is a very lengthy section and it is accurately enough described by the marginal note as directed to the "Monopolizing of television programmes". Its leading provision is contained in sub-s. (1) though sub-s. (6) and sub-s. (7) contain what may be called subsidiary leading provisions. We may, however, devote our attention primarily to sub-s. (1). This sub-section provides that the Board - which pursuant to s. 16 (1) (c) is vested with the function of ensuring that adequate and comprehensive programmes are provided by commercial television stations to serve the best interests of the general public - "may, upon the application of the licensee of a television station, by order addressed to a person who - (a) has the right, by virtue of ownership or otherwise, to make a television film available, or to procure another person to make a television film available, to that licensee for use by that station; and (b) has not complied with a request by that licensee that he make the film so available, or procure the film to be made so available, or has, in response to such a request, required the licensee to accept terms or conditions that are not acceptable to the licensee, direct that person to make the film so available, or to procure it to be so made so available, in accordance with the order and on terms and conditions specified in the order, being terms and conditions that appear to the Board to be just and reasonable in all the circumstances". Standing alone the sub-section clearly intends that the licensee of a television station shall have the right to have a television film or films (as defined by sub-s. (15)) made available to him upon terms, which if not agreed upon, shall be determined by the Board and that this right may be enforced against any person, whether another licensee or not, who has the right to make the material available or the right to procure another person to make it available. But it is of importance to notice that the right which is so given is not absolute in character. There is no such right if the Board is satisfied that the person against whom the order is sought has a reasonable ground of objection to the making of the order (sub-s. (3)). What may constitute a reasonable ground of objection is by no means exhaustively defined but it includes the matters specified in sub-s. (4) (a), (b), (c) and (d). Sub-section (4) relates to television films made or procured for the use of, or previously made available or contracted in the ordinary course of business to be made available for the use of a particular television station or of particular television stations and the person against whom an order is sought in respect of any such material is to be taken to have reasonable ground of objection to the making of an order if he satisfies the Board of any of the matters specified in pars. (a), (b), (c) and (d) of that sub-section. That is to say, he has a reasonable ground of objection if the making of the order would - "(a) enable the television film to be used by a television station serving an area coinciding to a substantial extent with the area served by that particular station or one of those particular stations; (b) enable the film to be used in Australia before there had been a reasonable opportunity for it to be used by that particular station or all those particular stations; (c) prevent the film from being available at a time when it was bona fide required for use by that particular station or one of those particular stations; or (d) cause a breach of a reasonable condition imposed by agreement by an advertiser or other person who had sponsored the television of that film by that particular station or one of those particular stations". Again, by sub-s. (5), the person against whom the order is sought is to be taken to have a reasonable ground of objection to the making of an order if he satisfies the Board that his failure to comply with the request of the licensee was not, or the terms or conditions that he required the licensee to accept were not, in any wise related to an intention or attempt to obtain, for himself, either alone or in association with another person or persons, or for some other person or persons, control, either in whole or in part, of, or of the management of, or of the selection of the programmes of, any television station or stations.

[19]

As we have already said the provisions of sub-s. (1) of s. 105A apply whether or not the person to whom the request is made is another licensee but in the present cases we are concerned with the sub-section only in so far as it purports to specify the conditions under which the holder of the licence for a television station may refuse to make television films available to another licensee. He may refuse if he has a reasonable ground of objection to the making of an order and so satisfies the Board; he has a reasonable ground of objection if the making of the order would bring about any of the situations described in sub-s. (4) and to that extent interfere with or prejudice his own business; and he has a reasonable ground of objection if his failure to comply with the request is not in any way related to an intention or attempt to interfere with the enterprise of the licensee making the request in any one of the ways specified in sub-s. (5). That is to say, if his refusal was not in any way related to an intention or attempt to obtain for himself, or for himself and others, or for others, control, either in whole or in part of (1) any television station or stations, (2) the management of any television station or stations, or (3) the selection of the programmes of any television station or stations. But it is of importance to notice that the specification in sub-s. (4) and sub-s. (5) of particular matters which shall be taken to constitute a reasonable ground of objection in no way detracts from the generality of sub-s. (3) so that, in some measure at least, it is left to the Board, subject to an ultimate appeal to the Commonwealth Industrial Court, to say what additional matters may be regarded as constituting a reasonable ground of objection. Further, it should be observed, it is left to the Board again, subject to appeal to the Court, to determine - if it thinks an order should be made - the terms and conditions upon which any particular film shall be made available.

[21]

When we come to consider the conditions specified in the notice of 25th January 1963 we find that not only are the words of prohibition - "obstruct, prejudice or interfere with, or become a party to an agreement, arrangement or understanding that will or is likely to have the effect of obstructing, prejudicing or interfering with" - extremely wide and indefinite but also that most of the various subject-matters to which the words of prohibition are addressed are sufficiently comprehensive to embrace every activity which might be undertaken in, and in relation to, the conduct and management of a television station. The comprehensiveness of sub-cl. (1) of the proposed conditions is, if it be possible, further emphasized by the provisions of sub-cl. (1) (2) which purports to specify conduct which shall not constitute a breach of the earlier sub-clause. In particular, sub-cl. (1) (2) (b) provides that the earlier sub-section shall not be contravened by certain conduct in relation to "overlapping stations" as defined by cl. 3 and with respect to sponsored programme material. In effect it provides that the licensee may do any of the otherwise prohibited acts if they are done and are reasonably necessary for ensuring that such programme material is not available to the licensee of such a station during the relevant protection period, otherwise than under the same sponsorship, or, within six months after the relevant protection period, under the sponsorship of a person whose business, or the sale or supply of whose goods or services, is carried on in whole or in part in direct competition with any business that has, or with the sale or supply of any goods or services that have, been advertised by or in connexion with the use by the licensee of that programme material. The expression "the relevant protection period" is defined by cl. 2 as meaning, in the case of some programme material, six months, and in relation to programme material of another character, a period of twelve months, or in either case such longer period as the Board has fixed on the application of the licensee as being the period of protection that the Board considers reasonable in all the circumstances. But apart from these exceptions, sub-cl. (2) contemplates that any refusal to make programme material available to another licensee shall constitute a contravention of sub-cl. (1) and the extremely wide language of that provision was clearly intended to cover such a refusal. Indeed, we do not think it is seriously open to question that such a refusal would, in the language of sub-cl. (1), "obstruct or prejudice" the business of or "the availability of any programme material" to a licensee who had made a request for particular television material to another licensee. Such a refusal, constituting a breach of sub-cl. (1) of the further conditions, would render the latter's licence liable to cancellation, notwithstanding the fact that the Board may have held upon an application under s. 105A that a reasonable ground of objection to the making of any order under the section had been established. It is obvious that the exceptions specified in sub-cl. (1) (2) can in no way be equated to the circumstances which s. 105A (4) provides shall be taken to constitute a reasonable ground of objection and the proposed conditions give the go-by completely to the provisions of s. 105A (5) and to any other circumstances that might appear to the Board to provide a reasonable ground of objection. In our view, the proposed conditions in the main present themselves as an attempt to create, as between licensees, more extensive rights and more stringent obligations than those declared by s. 105A of the Act itself with respect to existing programme material of which one of such licensees has control. In so far as they purport to do this they are, in our view, inconsistent with the provisions of s. 105A and may not validly be imposed. We should add that the conditions specified in sub-cl. (1) (1) (c) and (d) would also appear to be in direct conflict with the provisions of sub-s. (6) and sub-s. (7) of s. 105A to which a passing reference was earlier made.

[26]

In the exercise of our jurisdiction it is necessary to examine the Act to discover its purposes. The starting point of the enquiry is the Wireless Telegraphy Act 1905-1936 which forbids any person except as authorized therein to establish, erect, maintain or use any station for the purpose of transmitting messages by wireless telegraphy or to transmit any such messages. One of the principal purposes of the Act is to lift that restriction by both permitting and requiring those to whom licences for commercial television stations are granted to commence and maintain television services (ss. 81, 89 and 99). The power to grant licences is conferred by s. 81 (1) in these terms: - "The Minister may, subject to this Act, grant to a person a licence for a commercial broadcasting station or for a commercial television station upon such conditions, and in accordance with such form, as the Minister determines". It is plain that no person has any right to a licence for a commercial television station and that it is for the Minister alone to determine the conditions upon which a licence will be granted. Those conditions, it may be expected from a perusal of the Act, would be directed towards ensuring inter alia that the members of the public who have television receivers will have the opportunity of seeing and listening to programmes which they like from a television station of their own choosing. Conditions, therefore, would be likely to impose obligations upon the holders of television licences and, if a prospective licensee does not desire a licence upon the Minister's lawful conditions, it is not obliged to accept it. A prospective licensee has, of course, no power to compel the issue of an unconditional licence or a licence upon conditions more to its liking. Moreover, looking at s. 81 and s. 108 I see no reason why a condition lawfully imposed under the former could not be imposed under the latter, for the power in each case is conferred unconditionally. Failure to comply with a condition is a ground for the suspension or revocation of the licence (s. 86). The foregoing provisions show how large is the discretion which Parliament has committed to the Minister. There are, however, safeguarding provisions. The Act establishes the Australian Broadcasting Control Board which is empowered to make recommendations to the Minister with regard, inter alia, to the issue of commercial television licences and before granting a licence the Minister must obtain a recommendation of the Board made upon enquiry (s. 83). The Board has also power to make recommendations to the Minister about conditions to be imposed (s. 16 (2)). A licence cannot be revoked, except for nonpayment of fees, unless the Minister has first received a report from the Board recommending revocation upon a particular ground previously notified by the Minister to the Board and enquired into by the Board (ss. 86 and 87). An appeal to the Commonwealth Industrial Court against revocation of a licence is provided (s. 87A). Furthermore, in addition to making recommendations to the Minister, the Board has the functions enumerated in s. 16 (1) of the Act, of which the most important for present purposes are as follows - "(a) to ensure the provision of services by broadcasting stations and television stations in accordance with plans from time to time prepared by the Board and approved by the Minister; (c) to ensure that adequate and comprehensive programmes are provided by commercial broadcasting stations and commercial television stations to serve the best interests of the general public".

[30]

Having made this survey of so much of the Act as seems material for present purposes, it is necessary to examine the conditions which the Minister has notified his intention to impose and which the plaintiffs by these actions resist. The scheme of what is proposed is to impose conditions prohibiting certain acts followed by a qualifying provision setting out acts which will not contravene the conditions. Words of wide import are used in the conditions to the effect that the licensee will not itself "obstruct, prejudice or interfere with" what is set out in 1 (1) (a) (b) (c) and (d) or aid or abet any one else in doing so or become party to any understanding, etc. which will or is likely to have the effect of doing so. Then follows an enumeration of what is safeguarded from interference, etc., viz. - "(a) the exercise by the licensee of another commercial television station, not being a station within a distance of thirty miles of the station to which this licence applies, of the rights and privileges conferred by the licence held by that other licensee; (b) the business of such a licensee in connexion with its licence; (c) the making or performance of agreements by or with such a licensee for the purposes of its business in connexion with its licence, and in particular, agreements for the use of any programme material for the purposes of that business; or (d) the availability to such a licensee of any programme material." The relieving provision 1 (2) negatives contravention of the conditions by a licensee - (a) by the ordinary televising of programmes or advertisements, (b) by ensuring that programmes are not available to overlapping stations during stipulated periods, or (c) by doing or not doing anything in relation to programme material produced by the licensee itself or theatrical feature films acquired on a group or "package" basis. (The terms of art are defined but nothing here turns on their meaning). The provisions of 1 (2) make clear what, without them, might have been doubtful - viz. that 1 (1) (d) above relates to programme material in the hands of or under the control of the licensee itself and is not confined to availability from third persons.

[33]

There is, however, what appears to me a more difficult problem which is in substance whether the proposed conditions are wholly or in part inconsistent with s. 105A of the Act. There can be no question that it is beyond the power of the Minister either by a condition to forbid what the Act authorizes or by a condition to add to a restriction imposed by the Act which is intended to be exhaustive of the particular subject matter. To discover whether the Minister's conditions are inconsistent in either way with s. 105A it is necessary to ascertain the operation of s. 105A itself. In short, it provides a method for compelling a person who controls the availability of television film to make it available upon terms to any licensee who requires it in specified circumstances. The method is by order of the Board which is subject to an appeal to the Commonwealth Industrial Court. The licensee wanting the film must make an application and the Board is forbidden to make an order granting that application if it is satisfied that the person against whom the order is sought "has a reasonable ground of objection to the making of the order". Particular reasonable grounds of objection are set out in sub-s. (4) and it is expressly provided in sub-s. (5) that, if the person against whom an order is sought satisfies the Board or the Court "that his failure to comply with the request of the licensee was not, or the terms or conditions that he required the licensee to accept were not, in any wise related to an intention or attempt to obtain, for himself, either alone or in association with another person or persons, or for some other person or persons, control, either in whole or in part, of, or of the management of, or of the selection of the programmes of, any television station or stations ", he shall be taken to have a reasonable ground of objection. The section also forbids, subject to exceptions, a person acquiring the right to use a television film for television purposes from making an agreement preventing the granting of rights to others to use the film. It is to be observed that the section deals with "a television film" which for its purposes means any film, etc., "from which images can be reproduced and which is intended for use for televising images". Subject to safeguards, it provides for a licensee obtaining the use of such a film and it imposes certain limited obligations in connexion with refusing or preventing the use of a film. The Australian Broadcasting Commission is brought within the ambit of the section and the Commission may obtain orders and have orders made against it thereunder. As a matter of construction, I see no compelling reason why any licensee of a commercial broadcasting station could not have an order made against it under the section and it is, of course, expressly provided that such a licensee may obtain an order. From this examination it is apparent that the section relates to any television film and it provides within limits a means whereby a particular licensee can obtain the use of a film which another person has available. I find nothing in this section to indicate that, save as therein provided, a person subject to the section cannot by other means be required to make programme material available to licensees or other licensees. It is apparent that the section is not exhaustive because s. 113 itself imposes further obligations upon the Commission to make programmes available. From its words and context I see no reason why any conditions imposing obligations upon a licensee with respect to making programme material available to other licensees are excluded from ss. 81 and 108 by virtue of the provisions of s. 105A relating to television films. Nor do I find anything in the proposed conditions actually inconsistent with s. 105A. This is quite obvious in relation to conditions 1 (1) (a) and (b). For instance s. 105A has nothing to say in relation to inducing an advertiser to break his contract with another licensee but condition 1 (1) (b) would apply. There is hardly less room for doubt with regard to the condition constituted by 1 (1) (c) which forbids one licensee from interfering with another in making or performing agreements for the purposes of its business in connexion with its licence including but extending beyond agreements for the use of programme material. It is apparent that the condition constituted by clause 1 (1) (d), which forbids interference or aiding or abetting interference or being party to an agreement having the effect of interfering with the availability to another licensee of any programme material, could be used to compel the making available of programme material beyond the films which may be obtained under s. 105A, but I find no actual inconsistency between the condition and the section. The requirement in s. 105A is, of course, narrower than that of the condition, but the condition does not take away any right or privilege conferred by s. 105A nor would any construction of an ambiguous condition that would do this be permissible. The condition would, of course, prohibit the holding back of programme material which another licensee might not be able to obtain under s. 105A but, because I have already decided that s. 105A is not an exhaustive statement of all that may be done to prevent monopolization of television programmes, the circumstance that the effect of one of the proposed conditions would go beyond the operation of s. 105A does not of itself spell its invalidity and certainly not the invalidity of the other proposed conditions dealing with matters other than the monopolization of television films.

At a glance

Court

Decision date

Before

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Judgment (35 paragraphs)

Cited By (2)