Barrier Reef Broadcasting Pty Ltd v Australian Broadcasting Tribunal
[1992] FCA 333
•29 MAY 1992
Re: BARRIER REEF BROADCASTING PTY LIMITED
And: AUSTRALIAN BROADCASTING TRIBUNAL and TROPICAL FM PTY LIMITED
No. G30 of 1992
FED No. 333
Broadcasting
(1992) 27 ALD 730 (extract)
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Wilcox J.(1)
CATCHWORDS
Broadcasting - Application for commercial FM radio licence - Objection to application by incumbent AM radio licensee - Inquiry by Australian Broadcasting Tribunal - Question of commercial viability - Whether Tribunal denied natural justice to objector in relation to prediction of future market growth - Whether Tribunal discharged its obligation to give reasons for its findings - Whether Tribunal erred in law in considering the relationship between depreciation and commercial viability.
Broadcasting Act 1942, ss.25B, 83A
Administrative Decisions (Judicial Review) Act 1977, s.5.
HEARING
SYDNEY
#DATE 29:5:1992
Counsel for the Applicant: P. Mallam
Solicitors for the Applicant: Blake Dawson Waldron
Counsel for the First Respondent: J.S. Hilton and C. Griffin
Solicitors for the First
Respondent: Australian Government Solicitor
Counsel for the Second Respondent: D.K. Catterns
Solicitors for the Second
Respondent: Boyd House and Partners
ORDER
THE COURT ORDERS THAT:
1. The decision of the first respondent, the Australian Broadcasting Tribunal, to grant to the second respondent, Tropical FM Pty Limited, a commercial FM radio licence to serve the Mackay region of Queensland from a date to be determined be set aside.
2. The application of the second respondent for such a licence be remitted to the first respondent to be determined according to law.
3. The first and second respondent each pay to the applicant one-sixth of the applicant's costs of this proceeding.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
This is a challenge, pursuant to the Administrative Decisions (Judicial Review ) Act 1977, by Barrier Reef Broadcasting Pty Limited ("Barrier Reef") to a decision of the Australian Broadcasting Tribunal, the first respondent, granting an FM radio licence to Tropical FM Pty Limited, the second respondent. The applicant operates an AM radio service, 4MK, in a service area centred on Mackay, Queensland. The proposed licence relates to a service area overlapping that of the applicant. The applicant relies upon four separate grounds: breach of the rules of natural justice (s.5(1)(a) of the Administrative Decisions (Judicial Review) Act), failure to give adequate reasons (s.5(1)(b) and Broadcasting Act 1942 s.25B(1)(d)), failure to take into account a relevant consideration (s.5(1)(e) and 5(2)(b) of the Administrative Decisions (Judicial Review) Act), and error of law (s.5(1)(f)). There is, I think, nothing in either of the first two grounds. The third and fourth grounds, which coalesce in this case, raise a question of substance.
In order to put the legal submissions into context, some background material should be stated.
By a notice published on 30 August 1988, the Minister for Transport and Communications invited applications for the grant of a licence to operate an independent commercial FM radio service at Mackay. Two applications were received, from Tropical FM and one other company. In April 1989 the latter company withdrew its application, leaving Tropical FM as the sole applicant. However, Barrier Reef made submissions opposing the grant of an independent FM licence. Subsequently, the company became a party to the inquiry, its case being that the application should be refused pursuant to s.83A(4)(c) of the Broadcasting Act.
Amendments to s.83A have taken effect since the Tribunal's decision in this case, on 31 December 1991. At the time of the decision, and at all earlier material times, s.83A(1) provided that the Tribunal "shall not refuse to grant a commercial licence to a person unless it is required to do so by subsection (2), (3), (4), (5), (7), (9) or (10)". Each of these subsections commanded the Tribunal to refuse to grant a commercial licence if a particular fact was established. Subsection (4) relevantly provided:
"(4) The Tribunal shall refuse to grant a commercial licence to a person if it appears to the Tribunal, having regard only to the following matters or circumstances, that it is advisable in the public interest to refuse to grant the licence to the person:
(a) ...
(b) ...
(c) Where the service area of the licence overlaps the service area of another non-limited licence or other non-limited licences - the need for the commercial viability of the service or services provided pursuant to the other licence or other licences."
Barrier Reef contended that the effect of granting an FM radio licence would be to render its existing AM service commercially unviable; accordingly, the Tribunal should refuse to grant an independent licence and should recommend that the Minister refer to the Tribunal, for its consideration, Barrier Reef's own application for a supplementary licence.
It is not necessary to go to the detail of the Tribunal's inquiry. Both Tropical FM and Barrier Reef submitted a considerable body of information regarding the service area. This included information concerning population trends, the economic characteristics of the region, the two major regional industries, sugar and tourism and the revenues and costs of 4MK; with projections relating to all of these subjects for future years. Reference was made to the aggregation, on 1 January 1991, of television services within the region, whereby the three existing commercial services each became affiliated with one of the major national networks. Each party was given the opportunity to respond to the material provided by the other. No complaint is made about the fairness of the procedure adopted by the Tribunal in respect of opportunities to respond to opposing submissions.
On 2 December 1991, an officer of the Tribunal, Gavin Oakes, sent a letter to both parties enclosing "a final draft of the commercial viability chapter for this inquiry". Mr Oakes explained that, as the conclusions reached in the chapter had implications for the Tribunal's discussion of Tropical FM's financial capability, this material "and the relevant section of the financial capability chapter" were attached for comment from the parties. He requested comment by 9 December 1991. This date was later extended, until 20 December. Although the matter was not the subject of evidence, it was agreed before me that the solicitors acting for Barrier Reef, Blake Dawson Waldron, wrote to the Tribunal on 12 December requesting clarification of aspects of the draft report and that they received a response on the following day. On 16 December, Blake Dawson Waldron wrote a 14-page letter to the Tribunal commenting upon the draft. In this letter the solicitors criticised a number of the Tribunal's tentative conclusions. They suggested that some tentative conclusions were not supported by evidence, that others misunderstood the evidence and that others again were the products of errors of logic. On 31 December 1991, the Tribunal issued its decision, together with reasons. The decision was to grant to Tropical FM a commercial radio licence to serve the Mackay region for a period of five years from a date to be decided by the Tribunal after the relevant specifications have been determined by the Minister. The reasons broadly incorporated the draft material, but with alterations.
The applicant's natural justice argument arises out of its solicitors' letter of 16 December. One of the issues before the Tribunal was whether 4MK was under-performing, in revenue terms. The station's performance was criticised by Tropical FM and the draft report contained a lengthy discussion of these criticisms, with an indication that the Tribunal accepted that there was in fact an under-performance. The Tribunal suggested probable reasons, mainly changes in ownership and management during recent years. In para 4.35 of the draft report, at the beginning of its discussion of likely future market growth, the Tribunal commented: "Real radio advertising revenue has increased historically in Australia at a faster rate than growth in population". The Tribunal noted that, during the period 30 June 1986 to 30 June 1990, the population for the Mackay radio service area grew at an annual cumulative rate of 1.5%. On this basis, the Tribunal expressed the opinion "that 4MK could reasonably have achieved an annual growth rate of at least 1.5% for the period". The Tribunal then set out the potential advertising revenue for 4MK for relevant years, calculated in 1989 - 90 dollars, and compared these figures with the station's actual revenue. Its purpose, of course, was to quantify the suggested under-performance.
In their letter of 16 December, Blake Dawson Waldron commented upon this approach:
"We note that the Tribunal has been unable to identify any reason why 4MK should be underperforming. However, it has decided at paragraph 4.35 that 4MK's revenue potential should be increased by the rate of Mackay's population growth rate, on the basis that real radio advertising revenue has increased historically in Australia at a faster rate than growth in population. Our client strongly objects to this extremely simplistic approach. It is prone to the same difficulties which the Tribunal has identified in comparing 4MK with any other market or generalised group of markets. It fails to take the particular characteristics of the Mackay market into account. It also assumes some direct relationship between population growth and radio revenue, without any evidence having been given about that matter and without any opportunity for either party to give such evidence. In our submission it would be a denial of natural justice for the Tribunal to pursue this line of reasoning in those circumstances.
Furthermore, in the absence of an opportunity to review the data on which the Tribunal has based its thesis regarding population growth rates and radio revenue, our client does not necessarily agree with the proposition that real radio revenue increases at a greater rate than population growth. The relationship between population growth rate and real radio revenue, if it exits at all, is likely to be extremely complex and highly variable. For example, it is by no means clear that a market such as Mackay, which has a population growth rate significantly lower than the average, would necessarily increase its revenue. It may well be that markets with higher than average population growth rates generate disproportionate increases in revenue, to the detriment of markets with lower than average population growth. However, our client has not been provided with an opportunity to test this thesis or to generally adduce evidence on a matter which, it appears, will now be critical to the outcome of the inquiry."
Notwithstanding this submission, the Tribunal adhered to the opinion expressed in the draft report. Paragraph 4.38 of the final report is in these terms:
"4.38 I have already indicated above that on the basis of evidence about 4MK's performance it is reasonable to accept an argument about 4MK's under-performance, however, it is a difficult exercise to quantify this under-achievement. I have decided that the most appropriate method of quantifying under-performance is to relate market revenue growth to market population growth. Real radio advertising revenue has increased historically in Australia at a faster rate than growth in population. (For historical series on real growth in radio services, see Attachment 2 of Appendix to the Tribunal's Broadcasting Financial Yearbook 1988-89.) On the basis of this, I consider that it is not unreasonable to expect the revenue growth of 4MK to match the growth in the population of the service area. Table 1, above, shows that between 30 June 1986 and 30 June 1990 the population for the Mackay radio service area showed an annual cumulative growth rate of 1.5 per cent. My view, therefore, is that 4MK could reasonably have achieved an annual growth rate of at least 1.5 per cent for the period."
It will be noted that the penultimate sentence in the first quoted paragraph of the Blake Dawson Waldron letter refers to the lack of opportunity for either party to give evidence regarding the existence of a direct relationship between population growth and radio revenue. The letter goes on to say that it would be a denial of natural justice for the Tribunal to pursue this line of reasoning. The Tribunal having nonetheless adopted this line of reasoning in its final report, Barrier Reef now says that it was denied natural justice.
It seems to me that this claim is untenable. There is nothing before the Court which suggests a lack of opportunity for either party to give evidence concerning the relationship between population growth and radio revenue. I accept that the question whether there is normally a direct relationship between the two factors was not expressly raised at the inquiry prior to the Tribunal's draft report. But it was then directly raised, and in a manner which underlined its significance. It must have been obvious to Barrier Reef that, if it had evidence available on this matter, it should say so and make it available to the Tribunal. Barrier Reef does not suggest that the Tribunal would have been unwilling to receive any relevant material or that its procedures precluded its submission. Had there been available evidence, or a desire to obtain such evidence, but a difficulty in submitting it before 20 December, it would have been open to the solicitors to request an extension of time. They made no such request. Neither did they indicate that evidence regarding a direct relationship was available or could be obtained. These omissions are fatal to the complaint of denial of natural justice. Where a party is represented by competent lawyers, but makes no request for an opportunity to adduce additional evidence or for an adjournment to consider its position, it is difficult to hold that the making of a determination, without further evidence or an adjournment, constitutes a denial of natural justice.
I add that, despite my request for enlightment, the solicitor for Barrier Reef did not indicate what evidence might have been offered on this point. It could not be evidence related specifically to Mackay. It would have to be evidence of a general nature. There is apparently already some such material in existence; this was known to the Tribunal and cited in the final report. If the statement in the draft report that real radio advertising revenue had increased at a faster rate than population growth was under question, and their letter did not say that it was, the solicitors could have asked the Tribunal for its authority for that statement. No doubt the Tribunal would have responded by referring to its Broadcasting Financial Yearbook and the solicitors could have made any submission they wished concerning the statistics in that publication. It is not obvious to me that they could have done any more. If they could, the fault is theirs for not drawing the Tribunal's attention to their desire to present such evidence.
The second ground of challenge, failure to give adequate reasons, arises out of two separate findings in the final report. In the report, the Tribunal considered the effect upon radio revenue of the television aggregation which had commenced at the beginning of 1991. In para 4.43 the Tribunal referred to a study of a southern New South Wales aggregated market. This study found that aggregation stimulated commercial radio solus services but adversely affected multi-service markets; that is, markets containing more than one radio service in the aggregated television area. The latter situation was, of course, that which was relevant to consideration of a second Mackay radio station. However, the Tribunal pointed out that the southern New South Wales study dealt only with initial year impact. There was, apparently, no available information about the impact of aggregation in any subsequent year. The Tribunal commented: "I anticipate that the impact, if any, will be in the initial year or two only". In para 4.44 this hypothesis was related to the current case, the Tribunal stating that, if a new FM entrant commenced in Mackay in 1 July 1992, there would be an aggregation effect only in the first six months of that station's operations. The Tribunal applied this opinion in calculating future market growth. The complaint which is made under the rubric of failure to give adequate reasons is that the Tribunal did not say why it assumed that there would be a negative impact only in the first year or two. Barrier Reef had contended that aggregation would have a continuing effect, Tropical FM that there would be no adverse impact.
It is true that the Tribunal did not give any reason for its view that the impact would be limited to the first one or two years. But I do not think that it would be possible to demonstrate, by reasons, the correctness of that assessment. So far as Mackay is concerned, the issue must necessarily be one for speculation; there is no experience of the effect on a multi-service radio market of the Mackay television aggregation. Apparently, the only study which has been made is the southern New South Wales study. That was limited to the first year after aggregation. In the absence of empirical material, the Tribunal member could do no more than make an intuitive judgment about likely impact, based upon his general knowledge of the industry.
A similar position applies to the other complaint about reasons. A question which always arises in respect of applications for a second commercial radio licence in a particular region is whether the grant of the second licence will give rise to "one-off" growth. This phenomenon is explained in Appendix D to the Tribunal's report. In short, the Tribunal's belief is that the entry of a second operator into a particular market causes a shift of some advertising revenue from other media to radio. The increased programming diversity provided by a second station increases total listening hours, with a consequential increase in spending by radio advertisers.
In its draft report the Tribunal dealt with this matter by referring to its general experience and to the reasons for "one-off" growth. In para 4.40 it went on:
"As indicated in the preceding section, 4MK appears not to have serviced the market well, so there is scope for significant improvement in revenue by a more aggressive radio sector. (I do not consider the introduction of additional ABC and public radio services to be a significant factor for commercial radio revenue.) A one-off growth of 12.5% will be applied, made up of 7.5% in Year 1 and 5.0% in Year 2".
In their submission of 16 December, Blake Dawson Waldron criticised this tentative conclusion. They denied that there had been any under-performance by their client and argued that, in any event, the Tribunal's methodology involved double counting; the under-performance had been already taken into account. The solicitors said that, if 4MK's revenue is to be notionally increased between 1986 and 1990 to account for an under-performance:
"... then there should be either no capacity or minimal capacity for increasing that notionally inflated revenue by means of one-off growth, because revenue has already been increased on a level which (under the Tribunal's assumption's) would be achieved by an efficient operator".
The complaint about double counting seems to be justified. But it would not follow that, once the under-performance had been rectified, there was little or no capacity for one-off growth. One-off growth reflects the increase in revenue caused by the advent of a second operator. It applies even where the first operator is efficient.
In contrast to the submission by Barrier Reef that there would be little or no one-off growth, Tropical FM put submissions for a calculation of future annual revenue based upon a one-off growth allowance of 12.5%, together with growth from other causes; alternatively, a calculation based on one-off of 10%, but with a higher "real growth" factor.
In its final form, the Tribunal's report substituted for the draft para 4.40 a short para 4.42: "A one-off growth of 12.5% will be applied, made up of 7.5% in Year 1 and 5.0% in Year 2."
The applicant complains that para 4.42 does not reveal why the figure of 12.5% was selected. Moreover, it says that the report fails to relate that figure to the factors identified in Appendix D as likely to affect the extent of one-off growth in any particular case.
It might have been possible for the Tribunal to be more informative as to why it chose 12.5%, rather than some other figure. It would have been helpful to have had this figure related to the Appendix D factors. But it is another question whether the omission of this information means that the Tribunal failed to observe a procedure required by law. That question turns upon s.25B(1)(d) of the Broadcasting Act which requires the Tribunal, where it has held an inquiry, to report "the findings of the Tribunal and the reasons for those findings".
I accept the submission of counsel for the Tribunal that the word "findings", in S.25B(1)(d), does not refer to every conclusion of fact made by the Tribunal, but to its conclusions on the ultimate factual issues falling for determination. For example, where the question is whether the Tribunal "is not satisfied that (an applicant) has the financial, technical and management capabilities necessary to provide an adequate and comprehensive service" - see s.83A(4)(a)(ii) - the Tribunal is required to report its findings about the applicant's financial, technical and management capabilities and the reasons why it makes those findings. But I do not think that it is required to give reasons for each of the factual conclusions which it reaches along the way to its findings of ultimate facts. As counsel points out, the opposing view leads to a never ending process, each factual finding having to be supported by reasons which must be supported by factual findings, which must be justified by reasons, which must be supported by further factual findings, etc.
In the present case, the finding of ultimate fact, upon the matter committed to the Tribunal, is that the grant of Tropical FM's application would not lead to either service lacking commercial viability. The Tribunal gave detailed reasons for that finding. Those reasons indicate the facts found, and the assumptions made, by the Tribunal in computing the revenues likely to be available to the two services. The Tribunal was not bound, as a matter of law, to relate each figure adopted by it to the individual factors which might influence its size.
The third ground of attack on the decision is that the Tribunal failed to take into account the evidence of one Gregory Peter George. Barrier Reef tendered a statement of Mr George. It appears from that statement that Mr George has 11 years experience in merchant banking and that, during much of that time, he has been involved in providing advice - including financial advice - to institutions, corporations and individuals specialising in various fields, including the media industry. Mr George stated that he was asked to give an opinion on four questions - the first being whether the Tribunal, in considering the need for the commercial viability of a commercial radio service pursuant to s.83A(4)(c) of the Broadcasting Act, should take into account the accounting item of depreciation. In discussing this question, Mr George referred to the nature of depreciation, and to the decision of this Court in the Wesgo case (Wesgo Communications Pty Limited v Australian Broadcasting Tribunal (1989) 86 ALR 604 (Sheppard J); Australian Broadcasting Tribunal v Wesgo Communications Pty Limited (1989) 88 ALR 502 (Full Court)). Mr George criticised the distinction made in Wesgo between viability and profitability but he went on to agree that it is possible to distinguish the two concepts. However, he added:
"... from medium term and long term standpoints, it is my opinion the two must equate or an enterprise (or in this case, service) will not economically survive. Business decisions though are about the longer term and this is what (in my opinion) should be considered in this instance. The key component of long term survival is profitability. Part of the calculation determining profitability is depreciation. They are therefore dependent. By implication, therefore, depreciation is a determinant of the viability of a commercial radio service. If this is not the case, an asset will simply not attract investment funds or, ultimately, it will be over-capitalised."
It is contended by the present applicant that the Tribunal ignored this evidence.
In its final report, the Tribunal discussed the question of depreciation. In para 4.59 the Tribunal set out, as Table 16, the actual and projected expenditure of station 4MK for each of the financial years 1989-90 to 1996-97 inclusive. The table also showed projected expenditure (1991-92 to 1996-97) for Tropical FM, if granted a licence to commence operations during the financial year 1991-1992. In every case, the Table 16 expenditure figure included the cost of depreciation.
Paragraph 4.60 contains Table 17. This table states the actual and projected profitability for the two stations during the same years, taking as its basis the Table 16 expenditure. On these figures, Tropical FM would be unprofitable during each of the five years of its initial licence grant. Station 4MK would be unprofitable during years 2 to 4 of the initial grant period.
The report goes on:
"4.61 While it follows that if a market is profitable it is also commercially viable, under the Act commercial viability falls short of profitability. Barrier Reef has argued that depreciation should be included in an analysis of commercial viability (doc.213E). However, the Federal Court has ruled that viability concerns the ability of a service to continue to operate and nothing that has been presented to me in this inquiry leads me to believe that I should depart from this decision. The concept of commercial viability is outlined at APPENDIX D."
Paragraph 4.62 contains Table 18. This table refers to each of the years mentioned in Table 16 and shows the trading result for each station in each year if the relevant depreciation provision is added to the previously projected trading result. In other words, the table shows the position where expenses omit depreciation. The Tribunal commented:
"4.63 Table 18 shows that the Mackay radio market as a whole achieves a marginal operating cash surplus in the fourth year from the introduction of an independent FM service. 4MK is projected toincur an operating deficit only in the third year, and shouldoperate in surplus in each of the other four years of the initial licence grant period. Tropical FM is projected to operate in surplus from the fifth year after the grant of the licence.
4.64 On the basis of these figures, I conclude that the incumbent will continue to be viable and that the market as a whole will be commercially viable."
The document referred to in para 4.61 as "doc.213E" is Mr George's statement. Accordingly, it is impossible to argue that the Tribunal overlooked the existence of Mr George's statement. However, the applicant says that a reference to particular evidence does not necessarily answer a complaint of failure to take that evidence into account; it may appear from the terms of the decision that the evidence has been wrongly excluded from consideration. I think that this is correct, but, in the present case, it does not matter whether the applicant's complaint is put as a failure to take into account a relevant consideration or as error of law. Whilst the weight to be given to particular evidence is for the tribunal of fact, and not a matter reviewable in this Court under the Administrative Decisions (Judicial Review) Act, if a decision not to accord weight to evidence stems from an error of law, the decision is reviewable under s.5(1)(f) of that Act.
In the present case, the critical matter is the meaning of para 4.61 of the Tribunal's reasons. The parties agree that the reference in that paragraph to a ruling of this Court is a reference to Wesgo. Accordingly, I should refer briefly to that litigation. That case, like the present, concerned an application for the grant of a commercial FM radio licence in an area already served by an AM licence holder, Wesgo. The Tribunal having decided to grant the FM licence, Wesgo applied to the Court under the Administrative Decisions (Judicial Review) Act arguing three separate grounds. There was a division of opinion on one of these matters between Sheppard J. at first instance and the Full Court. But there was no difference of opinion on the presently relevant issue: whether the Tribunal was entitled to exclude depreciation in determining commercial viability. At 86 ALR 617, Sheppard J. held that, upon the evidence, it was so entitled:
"Notwithstanding the reference made by counsel for the applicant to certain statements and written submissions which were before the Tribunal, there is no indication that the Tribunal had before it any compelling opinion from an accountant that an assessment of commercial viability made without taking depreciation into account was so unsound that no person acting reasonably could follow such a course. Unless there were an opinion which compelled that conclusion, the Tribunal was entitled to act as I believe it did. There was no material of that kind tendered to the Tribunal or this Court."
The Full Court, at 88 ALR 511, held that Sheppard J. "was correct in finding that the ABT was not obliged, as a matter of law, to make an allowance for depreciation when assessing the future commercial viability of 2GO".
It seems that Mr George's statement was tendered in order to provide evidence along the lines mentioned by Sheppard J. Whether it achieved that objective, is a matter of fact to be determined by the Tribunal; I express no opinion on the question. However, the argument of the applicant is that the Tribunal did not consider that question because it wrongly thought that Wesgo compelled it to disregard depreciation, as a matter of law. Of course, Wesgo did not say that depreciation must be disregarded as a matter of law. The Court merely held that, on the evidence before the Tribunal in that case, it was not erroneous in point of law for the Tribunal to assess commercial viability without taking depreciation into account.
The applicant's submission depends upon the words used in para 4.61. Counsel for both respondents argue that the sentence referring to the Federal Court ruling should be understood only as a statement that, in the present case, there is no evidence warranting a different factual conclusion from that reached in Wesgo. They say that the words, "depart from this decision" refer to a departure from the factual conclusion in Wesgo, not a departure in law. It would be unthinkable, says counsel for Barrier Reef, for the Tribunal even to consider departing from the legal ruling given in Wesgo.
I accept that it is unlikely that the Tribunal would contemplate departing from a legal ruling of this Court, as it understood that ruling. But there is always the possibility of an error in understanding a legal ruling. Notwithstanding counsel's submissions, I am unable to construe the critical sentence as a reference to a factual conclusion. The sentence must be read in context. It immediately follows a sentence referring to Barrier Reef's argument that depreciation should be included in an analysis of commercial viability, with a reference to Mr George's evidence concerning the accounting justification for that course. If the Tribunal was dealing with the matter as one of fact, it would surely have included some discussion, however short, concerning the acceptability of Mr George's views. Instead, the author of the report immediately referred to the Wesgo decision, introducing that reference by the word "However"; as if there were a conflict between Mr George's document and the Federal Court ruling. The sentence ends with the statement "nothing that has been presented to me in this inquiry leads me to believe that I should depart from this decision"; thus suggesting that what was presented - that is, Mr George's statement - was an invitation to depart from Wesgo. The sentence is really only explicable on the basis that the Tribunal believed that the effect of Wesgo was to preclude consideration of depreciation as a matter of law; in which case, of course, it would be pointless to consider the factual matters raised by Mr George. If, as is the case, Wesgo did not preclude consideration of depreciation, that approach was erroneous in law. Similarly, although the Tribunal obviously remembered the existence of Mr George's statement, it erroneously excluded it from consideration. It thereby failed to take into account a relevant consideration.
It may be that, upon reconsideration of the matter, the Tribunal will conclude that it ought not to take depreciation into account in considering commercial viability. If it reaches that conclusion it will be because it is of the opinion that the evidence does not demonstrate that commercial viability depends upon the allowance of depreciation. I have no view as to whether or not that would be an appropriate factual conclusion; it is a question for the Tribunal, to be determined in the light of the whole of the evidence including Mr George's statement. If the Tribunal does reach that conclusion it may adhere to the findings set out in 4.64 of its report and again recommend the grant of a licence to Tropical FM. However, the possibility of this result is not a reason for refusing relief: see Our Town FM Pty Limited v Australian Broadcasting Tribunal (1987) 16 FCR 465 at 485-486. The appropriate order is that the decision of the Tribunal be set aside and the application of Tropical FM remitted to the Tribunal for determination according to law.
I think that the applicant is entitled to recover that proportion of its costs which pertains to the matter upon which it has succeeded. It ought not to recover the costs incurred in relation to the issues on which it has failed. Indeed, the costs order ought to reflect the fact that these issues were unjustifiably raised and that their effect was to extend substantially the hearing time. If the applicant had confined itself to the matter on which it was successful, the hearing would have been extremely short. The case would have been completed within one or two hours. As it was, the case occupied the whole of an extended sitting day. Accordingly, the applicant should recover only one-third of its total costs.
There is a difficulty as to who should pay the costs. The error was that of the Tribunal, not Tropical FM. On the other hand, counsel for Tropical FM led the unsuccessful defence of para 4.61. On the whole, I think it is fair to require each of the respondents to bear an equal share of the costs payable to the applicant. Each of them should be ordered to pay to the applicant an amount equal to one sixth of its costs of the application.
1
4
0