APPLICATION FOR STAY ORDER - radio communications license - 1620 license - license subject to condition of the location of the radio transmitter known as the "conditional site" - transmission of broadcast from site other than "conditional site" - the applicant's claim has reasonable prospects of success - evidence of prejudice to the applicants - applicants will suffer substantial and long-term detriment if stay not granted.

Administrative Appeals Tribunal Act 1975 s 41(2)

Broadcasting Services Act 1992 s 40a

Radiocommunications Act 1992 ss 5, 97,100(1), 103, 107, 107(1)(g), 108, 111, 112, 126, 128, 131AA and 131AB, 285(g), 290(2)

Civil Aviation Safety Authority v Hotop [2005] FCA 1023; (2005) 145 FCR 232

Re Cape York Airlines and Civil Aviation Safety Authority [2004] AATA 682; (2004) 80 ALD 364

Re Griffiths Grif-Air Helicopters Pty Ltd and Civil Aviation Authority [1993] AATA 274; (1993) 31 ALD 380

Shi v Migration Institute of Australia [2003] FCA 1304; (2003) 134 FCR 326

WorldAudio Ltd v Australian Communications and Media Authority [2006] FCA 8

Yolbir v Administrative Appeals Tribunal [1994] FCA 910; (1994) 48 FCR 246

The first applicant, WorldAudio Limited ("WAL"), is a public company whose principal business is the sale of broadcast airtime to advertisers. The second applicant, AusCoast Broadcasting Pty Limited ("AusCoast") is a wholly owned subsidiary of WAL and the holder of a medium frequency narrowband area service 1620 transmitter license issued under s 100(1) of the Radiocommunications Act 1992. That license is subject to the condition that transmitting be effected from a site imposed at the time of issue of the license, known as the "condition site".

On 30 June 2005, a delegate of the respondent, the Australian Communications and Media Authority, decided not to exercise ACMA's power to change the condition on the applicant's license as to the "condition site". That is the decision to be reviewed by the tribunal and the subject of the current application for a stay order by the tribunal.

The first applicant, WorldAudio Limited ("WAL") ("known as the broadcaster"), is a public company whose principal business is the sale of broadcast airtime to advertisers, through the medium of commercial radio, at some 50 locations around Australia. The second applicant, AusCoast Broadcasting Pty Limited ("AusCoast") has been a wholly owned subsidiary of WAL since February 2002 when WAL acquired the total shareholding in AusCoast. AusCoast is the holder of a medium frequency narrowband area service 1620 kHz transmitter license, being license no 1130030 issued under s 100(1) of the Radiocommunications Act 1992 (known as the "1620 license"). The broadcasting services of WAL are presently transmitted in the Brisbane area, Queensland, under the auspices of the 1620 kHz license. That license is subject, inter alia, to the condition that transmitting be effected from a site imposed at the time of first issue of the license in September 1995, being a transmitter located at 170 Kingsley Terrace, Manly, a suburb of Brisbane, known as the "condition site". That is in a residential area and the applicant argues that local authority approval to transmit from that site was unlikely to be forthcoming.

On 29 August 2003, the Minister for Communications, Information Technology and the Arts issued Direction 1 of 2003 Australian Communication Authority Direction (MF NAS Transmitter Licenses), the practical effect of which was that holders of MF NAS apparatus licenses, such as the 1620 license held by the applicant, would not be permitted to transmit a commercial radio broadcasting service under license unless the service was provided by 29 August 2004, that is within one year of the direction. On 5 November 2003, transmission commenced in accordance with Direction No 1 of 2003. At that time broadcasting did not, however, take place from the "condition site", but from a transmitter located some 5.7 kilometres distant from the condition site at 320 Fleming Road, Tingalpa (known as the "current site"). It uses a relatively low-powered 400 watt transmitter (most radio stations transmit at 2000 to 5000 watts).

On 6 August 2004, AusCoast applied to the then relevant authority to change the site condition of its license from Manly to its approved existing transmitter location, transmission site No 4142, at Tingalpa. On 16 August 2004 the authority responded that this change was unacceptable as it would put the station closer to two other channel services which operated at Mango Hill and Toowoomba and that the relocation would not meet the requirements of the "make it better" policy rule relating to clarity of transmissions. Between August 2004 and 30 June 2005, further communications ensued between the applicants and the relevant authority as to the physical location of the transmitter.

On 30 June 2005, a delegate of the respondent made a decision that AusCoast is not officially authorised to transmit the broadcasting service, or any other radiocommunication service, from the current site, as it is in breach of the conditional site condition of its 1620 license and that the authority would not use its discretionary power under s 111 of the Act to vary the license conditions.

On 21 July 2005, the applicants requested a reconsideration of this decision. On 18 August 2005, a decision was made not to reconsider the decision of 30 June 2005 pursuant to s 285(g) and s 290(2) of the Radiocommunications Act 1992. On 19 October 2005, the respondent is taken to have made a decision affirming the first decision on the basis that it did not inform the applicants of its decision on the reconsideration within 90 days after receiving the application for reconsideration.

On 9 November 2005, the applicants lodged an application for a review of that decision by the tribunal. At the same time, the decision also became the subject of proceedings in the Federal Court of Australia (WorldAudio Ltd v Australian Communications and Media Authority [2006] FCA 8). On 20 December 2005, the respondent informed the applicants that it was considering whether to cancel its license and that it would be given 60 days in which to make submissions for consideration by the respondent. On 27 January 2006, the matter came before me for a directions hearing. At that hearing, the applicants indicated that they wished to make an application for a stay order. In response to this, at the directions hearing, the respondent agreed to extent the period for the applicants to make submissions to the respondent to 74 days, this extended period to expire on 4 March 2006.

On 3 February 2006, the applicants filed an application for a stay order under s 41(2) of the Administrative Appeals Tribunal Act 1975 ("the Act"). In making the application, the applicants submitted:

1. The respondent, by letter dated 20 December 2005, proposed to consider cancellation of licence no. 1130030. This is an implementation of the decision made on 30 June 2005, which is the effective decision under review.

2. ... If the [stay] order is not made, the Applicants' business will suffer substantial damage and financial loss, with flow-on losses to its shareholders, and the retrenchment of 2 employees. On the other hand, neither the Respondent nor any third party will suffer any material detriment on the making of the order.

At the hearing of the stay application, the applicants were represented by Dr John Griffiths, of counsel, instructed by Blake Dawson Waldron, solicitors, and the respondent was represented by Stephen Lloyd, of counsel, instructed by the Australian Government Solicitor's office. The evidence before the tribunal comprised an affidavit sworn 13 February 2006 by Andrew Thompson, Chief Executive Officer of WorldAudio (together with a second confidential affidavit of Mr Thompson over which a s 35(2) confidentiality order was sought) filed on behalf of the applicants and an affidavit of Jane Hutchison, solicitor with carriage of the matter, sworn 10 February 2006, filed on behalf of the respondent.

The tribunal is empowered to make a stay order in proceedings before the Tribunal pursuant to s 41(2) of the Administrative Appeals Tribunal Act 1975. This states:

(2) The Tribunal or a presidential member may, on request being made, as prescribed, by a party to a proceedings before the Tribunal (in this section referred to as the relevant proceedings), if the Tribunal or presidential member is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relate or a part of that decision as the Tribunal or presidential member considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.

The principal legislation is the Radiocommunications Act 1992. Section 97 of the Act provides:

97. Transmitter licences and receiver licences

(1) The ACMA may issue:

(a) transmitter licences; and

(b) receiver licences.

(2) A transmitter licence authorises:

(a) the person specified in the licence as the licensee; and

(b) subject to Division 4, any person authorised by that person under section 114;

to operate specified radiocommunications transmitters, or radiocommunications transmitters of a specified kind.

...

(4) Operation of a radiocommunications device is not authorised by the relevant apparatus licence if it is not in accordance with the conditions of the licence.

The applicant's medium frequency narrowband area service ("MF NAS") is issued pursuant to s 100(1) of the Act.

Section 111 provides:

111. Changes to licence conditions

(1) The ACMA may, by notice in writing given to the licensee of an apparatus licence:

(a) impose one or more further conditions to which the licence is subject; or

(b) revoke or vary any condition imposed under paragraph (a); or

(c) revoke or vary any condition specified under paragraph 107(1)(g), 108A(1)(f), 109(1)(f) or 109A(1)(k); or

(d) if the licence is a transmitter licence, other than a licence issued under section 101A, 102 or 102A or a datacasting transmitter licence--vary a condition of the kind referred to in paragraph 108(2)(a), (b) or (c).

Note: Decisions under this section are reviewable under Part 5.6.

(2) The notice given under subsection (1) must specify that:

(a) the licensee may request a statement of reasons for the change; and

(b) a request must be made within 28 days of receipt of the notice.

(3) A person receiving a notice under subsection (1) may request a statement of reasons for the decision within 28 days of receiving the notice.

(4) If the ACMA receives a request in accordance with subsection (3), the ACMA must give the person a statement of reasons within 28 days of receipt of that request.

(5) If the ACMA is required, under a scheme in force under clause 6 or 19 of Schedule 4 to the Broadcasting Services Act 1992, to vary the conditions of a transmitter licence, the ACMA must, by written notice given to the licensee, vary those conditions accordingly.

Section 128 of the Act provide for cancellation of the licence:

128 Cancelling apparatus licences

(1) The ACMA may, by written notice given to the licensee, cancel the apparatus licence.

Note: Cancellations of apparatus licences are reviewable under Part 5.6.

(2) The notice must give the reasons for cancelling the licence.

128B Cancelling transmitter licences

(1) The ACMA must, by written notice given to the holder of the transmitter licence, cancel the transmitter licence.

(2) The notice must give the reasons for cancelling the licence.

285 Decisions that may be subject to reconsideration by the

ACMA

An application may be made to the ACMA for reconsideration of any of the following decisions:

...

(g) a decision under section 111 concerning the conditions of an apparatus licence;

...

The issue for the tribunal to determine in this case is whether, pursuant to s 41(2) of the Administrative Appeals Tribunal Act 1975, it is desirable to make a stay order "for the purpose of securing the effectiveness of the hearing and determination of the application for review". There are four sub-issues which the tribunal considers relevant to the determination of a stay order: first, the prospect of success or otherwise of the application; secondly, whether there will be prejudice to the parties if the stay is not granted; thirdly, the public interest, and fourthly, whether the review application, if successful, will be rendered nugatory if the stay is not granted (Re Griffiths Grif-Air Helicopters Pty Ltd and Civil Aviation Authority [1993] AATA 274; (1993) 31 ALD 380 at 385).

It was not disputed that, while the applicants' use of the Tingalpa site for transmission is in breach of a condition of its licence, the Tingalpa facility itself is an authorised transmission facility which is currently used by other broadcasters as well as the applicants. Nor have there been any complaints from third parties about transmission interference resulting from the applicants' use of the Tingalpa site.

A number of factual issues are in dispute between the parties, however, including the following:

(i) whether cessation of transmission from the Tingalpa site would deprive the applicants of effective penetration in the Brisbane area, given that the first applicant's transmitter at Mango Hill and the distribution of its broadcasts through Foxtel reach at least part of the Brisbane market,

(ii) the course of negotiations between the applicants and the respondents, including whether the decision under review was the culmination of nine years of correspondence and negotiation between the parties,

(iii) whether the respondent followed a recognised practice of granting new broadcasters a licence to transmit from a site that was regarded as nominal and provisional and, if so, what was the effect of that practice,

(iv) whether the commercial problems faced by the applicants should be viewed solely as a result of their taking a commercial risk that they would be unable to obtain a suitable transmitter site,

(v) whether the Tingalpa site results in an overall improvement in the geographical separation of transmitters in the South East Queensland area using the same or adjacent frequencies,

(vi) when the respondent first became aware that the applicants were transmitting from the Tingalpa site,

(vii) whether the use by the applicants of the current Tingalpa site adversely affects any third party, and

(viii) the effect of cancellation on the applicant.

It is not necessary to resolve those issues at this stage except to the extent required by the tests for the application of s 41(2). Before doing so, however, it is necessary to determine whether the tribunal has the power to grant a stay in the circumstances of the present case.

The applicants seek a stay order restraining the respondent from cancelling MF NAS Apparatus Licence No. 1130030 (the 1620 licence) pending determination of the review application by the tribunal. The decision under review is the decision made by the respondent's predecessor on 30 June 2005 not to vary the site condition of the 1620 licence. The applicants submit that the proposed stay is an order "staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates" (s 41(2)). As a practical matter, the applicant argues, the respondent's decision not to vary the site condition operates to provide a basis for the licence cancellation.

Alternatively, cancelling the licence on the basis of contravention of the site condition could be viewed as a form of implementation of the decision under review in the context of the relevant broadcasting legislation, which links contravention of the licence condition with possible licence cancellation. The applicants argued that the respondent's letter of 30 June 2005 makes it clear that consideration of licence cancellation is an implementation or putting into effect of the decision to refuse to change the condition. It is based upon, and flows wholly from, the decision under review.

The applicants relied on Civil Aviation Safety Authority v Hotop [2005] FCA 1023; (2005) 145 FCR 232, in which Siopis J granted a stay of an order refusing to issue a statutory licence to an existing statutory licence holder. His Honour held that s 41(2) is wide enough to include an order permitting the review applicants to continue in business until the hearing of the application because the tribunal's order in those terms would "affect the operation" of the impugned decision, which would otherwise operate to preclude the review applicant from continuing to carry on its existing business (at pp 204, 241).

The applicants also cited Yolbir v Administrative Appeals Tribunal [1994] FCA 910; (1994) 48 FCR 246, in which the court upheld the tribunal's stay of a decision of a delegate cancelling the applicant's pension, and Shi v Migration Institute of Australia [2003] FCA 1304; (2003) 134 FCR 326 in which Tamberlin J held that the tribunal had the power to stay an order refusing to renew the applicant's licence. In both cases the court expressed the view that s 41(2) should be given a liberal interpretation: Yolbir at p 249, Shi at p 332.

The respondent argued that the decision of 30 June 2005 was purely negative and had no need for any "operation" or "implementation". Consequently, the respondent was not putting into effect a proposal not to vary the applicant's licence condition. A cancellation decision would not be the implementation of the decision not to vary the decision, it would be appropriate conduct in light of the applicant's transmitting in breach of a licence condition. The applicants had no right to transmit unlawfully and the fact that they did so would not convert the cancellation process into the implementation of a decision to reject a variation. It would be a decision concerned with dealing with the applicant's past (and proposed future) contraventions of the Act. It would not be "integrally and necessarily connected" with the decision not to vary the applicant's licence condition. The respondent drew an analogy with Re Cape York Airlines and Civil Aviation Safety Authority [2004] AATA 682; (2004) 80 ALD 364 in which Senior Member McCabe concluded that he had no power to order CASA not to publish a cancellation decision that had been stayed.

The respondents distinguished cases such as Shi (supra) on the basis that the applicants in those cases were attempting to preserve the advantage of a statutory "deemed registration", whereas in the present case there was no equivalent to that right. Similarly, Hotop (supra) gave relief by way of extending a right that existed at the time of the decision under review so that an existing business would not have to cease pending the review's outcome. In this case, however, the applicants were seeking an order to preserve a business that had been commenced and operated unlawfully.

Even if s 41(2) were given a liberal interpretation, the relief must still be directed to staying the operation or implementation of "the decision", whereas here the applicants were seeking in effect to stay the implementation or operation of any cancellation decision that might be made. Even if the applicants were ultimately successful in the tribunal, that would not effect the respondent's power to cancel the licence, even as varied, on the ground of its past breaches of the site condition in its licence. A favourable outcome would therefore not resolve the cancellation issue.

In my view the tribunal does have power to make the order sought. The cases stress that s 41(2) is to be given a broad interpretation and have shown that it can be used to create for temporary purposes a right that would not otherwise have existed. The fact that the applicant's conduct is in breach of a licence condition and therefore presumably unlawful is a factor to be considered but is not necessarily conclusive when the illegality results from the breach of the varied condition that is the subject of the proceedings for review.

When the present case was before the Federal Court in January 2006, Conti J in his reasons noted the respondent's objection to relief by way of judicial review that the conduct being engaged in by the applicants was unlawful and improper and that relief should be refused as a matter of discretion. The applicants' conduct attracted the operation of the maxim of equity "he who comes to equity must come with clean hands". While making it clear that he was not required to decide the point for the purposes of the proceedings before him, Conti J noted that "The relief presently sought by the applicants is however in the nature of administrative and not equitable relief" (para 53). I take that as an indication that in His Honour's view the possible illegality of an applicant's conduct is not an automatic bar to interlocutory relief in limine.

Further, the decision under review is more "integrally and necessarily connected" with the issue of cancellation than was the case in Re Cape York Airlines (supra), in the sense that the one could provide a legal basis for the other, rather than being merely incidental to it. The fact that the respondent might have other grounds on which it could cancel the licence, such as past breaches of the site condition, does not deprive the tribunal of the power to stay. For example, it not infrequently happens in migration cases that the setting aside of a decision to cancel a visa on a particular ground still leaves the deciding authority with the power to cancel on a different ground. If the other requirements of s 41(2) are met, the tribunal in such cases could still stay cancellation pending a review of the decision. In this case the orders sought would affect the implementation of the respondent's decision of 30 June 2005, even though other facts provide a legal basis for achieving the same result.

In applying the test laid down in Re Griffiths (supra), it is first necessary to consider the application's prospects of success. In this case it is not possible to assess whether the applicants could be said to have made out a prima facie case, because while the proposed condition relocating the approved broadcast site to Tingalpa would result in improving some separation distances between transmitters, it would also reduce some other distances. The respondent concedes that the proposed relocation would improve the separation distance between co-channel MF NAS stations at Mermaid Beach by 1.3 kilometres and at Caloundra by 0.9 kilometres, but points out that it would reduce some other separation distances, most importantly with the existing adjacent 1629 kHz channel at Mango Hill. The current distance between the Manly and Mango Hill sites meets the minimum separation distance requirement of 30 kilometres, but relocation to Tingalpa would reduce it to 29.6 kilometres.

It would also reduce the separation from the adjacent Bracken Ridge 1611 kHz channel by 2.9 kilometres. That licence is held by Miss Flora Smith, under the name Queensland Hospital Radio, but it is not disputed that the channel has never operated and there appear to be no immediate plans for it to do so.

The applicants submit that the decision under review was based primarily on an unnecessarily strict application of the "30 kilometre rule", requiring transmitters operating on adjacent frequencies (i.e. 9 kHz apart) to be 30 kilometres apart in order to minimise interference. They contend that reducing the separation from the Mango Hill transmitter by 400 metres does not warrant refusal to vary the condition. They point out that a subsidiary of the first applicant operates the Mango Hill transmitter, which has been operating from that site since July 2004 without any evidence of interference between its broadcasts and those of the second applicant.

The tribunal when dealing with the substantive application will therefore need to weigh the losses in some directions against the gains in other directions and it is not possible even on a prima facie basis to predict the result of that consideration. It is possible to say, however, that the evidence adduced by both sides suggest that that applicant's claim is not hopeless and that it has reasonable prospects of success.

The second sub-issue, the question of prejudice to the parties, was the subject of Mr Thompson's second affidavit (Exhibit A2), in which he predicted that any decision by the respondent to cancel a licence held by a subsidiary of the first applicant, even if not implemented, would threaten the viability of the second applicant and irreparably damage the applicants' future business plans. As most of the second affidavit is the subject of a confidentiality order, it is not appropriate to detail its other contents.

Mr Thompson said that the applicants were interested in pursuing the possibility of purchasing the Queensland Hospital Radio licence from Miss Smith, but there would be a negotiation process involved and there could be no certainty about its outcome. At present there was nothing to indicate whether or not Miss Smith was interested in selling the licence. He conceded that investors must already be aware that the respondent had initiated cancellation procedures, but emphasised that actual cancellation is a very different matter. Investors would accept the risks involved in the ongoing administrative process, but not cancellation itself, even if its operation were suspended pending the outcome of these proceedings, as the respondent has undertaken to do.

Asked in cross-examination why his second affidavit gave much more detail than his first about the adverse consequences for the applicants of cancellation and added a prediction of possible financial collapse, he replied that in view of the way the review was proceeding in the tribunal, he had thought it necessary to make the likely consequences obvious. When it was put to him that when the applicants had acquired the 1620 licence, the problem of finding a suitable transmission site was a commercial risk that they must have accepted, Mr Thompson replied that the 1620 licence was the only one of the first applicant's 50 Australian radio stations that had given rise to any problems.

It was not suggested that the respondent would be prejudiced by the grant of a stay.

The third sub-issue to be considered is the public interest. A major factor under this heading, the respondent contended, is that the applicants have transmitted from the current site in breach of the law for about two and a half years and propose to continue to do so in the foreseeable future, notwithstanding that they have been directed repeatedly to desist. The applicants were seeking to preserve a status quo that they had built up entirely in breach of their statutory obligations, not in exercise of them. Mr Thompson's estimate of the substantial revenue loss that the applicants might sustain if required to cease transmission from the current site also provided a measure of what the applicants had gained from operating in breach of their licence condition in the past and what they expected to gain from doing so in the future. Any revenue that the applicants had accrued from that enterprise could be viewed as a loss to their competitors who were complying with their licence conditions.

At the same time, it appears that there have been no complaints from competitors or other parties about the applicant's use of the current site. That could perhaps be explained by the fact that while the losses from cancellation would be concentrated on the applicants, the costs of non-cancellation are spread over all the applicants' competitors in South East Queensland. Although they would no doubt welcome the applicant's withdrawal as an effective competitor in the region, the evidence does not suggest that they would individually be significantly prejudiced by the applicant's continued operation while the application for review is pending.

The respondent's argument for putting an end to a breach of a licence condition is a substantial one, but the present application is for purely interlocutory relief. If the substantive application is unsuccessful, the respondent's position will be vindicated within a relatively short time. It is also true, as the applicants point out, that the respondent's handling of the matter has not been without legal fault and its decision to refuse the variation requested involved a legal error.

The fourth sub-issue is whether the review application, if successful, will be rendered nugatory if the stay is not granted. As the tribunal said in Re Griffiths (supra), the question is whether the refusal of a stay is likely to cause the applicant companies serious irreparable harm (irreparable in the sense that no recompense for it can be obtained if the application for review is successful) and so affect adversely the effectiveness of the hearing and the determination of the application under review. Mr Thompson's evidence was that if the licence is cancelled, even if the cancellation is not implemented (and the respondent has undertaken to suspend the operation of such a decision until the substantive outcome of these proceedings is known), the applicants would suffer irreparable damage and the employment of some staff would need to be terminated. Even assuming that Mr Thompson's predictions err on the side of gloom, the evidence does suggest that if the licence is cancelled the applicants will suffer substantial and long-term detriment even if they are successful in the review proceedings. No recompense would be available to the applicants to make up those losses even if the site condition were varied in their favour.

I find on balance therefore that the first, second and fourth sub-issues in the Re Griffiths (supra) test favour the grant of a stay. The third issue weighs against the grant of a stay, but not unequivocally and it is in my view outweighed by the other considerations. I therefore conclude that the stay should be ordered as asked.

I certify that the 43 preceding paragraphs are a true copy of the reasons for the decision herein of Professor GD Walker, Deputy President

Signed: .....................................................................................

Associate

Date/s of Hearing 16 February 2006

Date of Decision 28 February 2006

Counsel for the Applicant Dr J Griffiths

Solicitor for the Applicant Blake Dawson Waldron

Counsel for the Respondent Mr S Lloyd

Solicitor for the Respondent Australian Government Solicitor's office