Canberra Stereo Public Radio Inc. v Australian Broadcasting Tribunal

Case

[1985] FCA 227

5 Jun 1985

No judgment structure available for this case.

-

CATCHWORDS

Administrative law - judicial review

- public broadcastlng

licence granted to company the objects

of which were to foster

racing In the A.C.T. wlth consequential advantaae to Authority

conducting off-course betting facilities and to racing clubs

-

wh3ther objects of company Included acquisition of galn for the

benefit of its Individual members.

Broadcastinu and Televlsion Act

1942, ss. 81. 111A. IIIB and

-

IIIBA

Administrative Decisions (Judicial Review) Act

1977,

S .

5

CANBERRA STEREO PUBLIC

RADIO INC. v. AUSTRALIAN BROADCASTING

'!XIBUNAL and ANOR.

No. ACT G14 of 1985

Coram: Sheppard J.

Date:

5 June 1985

Place: Sydney

1.

IN THE F'EOW COURT OF AUSTRALIA )

)

AUSTRALIAN

CAPITSL

TERRITORY

)

No. ACT G14 of 1985

REGISTRY

DISTRICT

)

)

GENERAL DIVISION

)

BETWEEN :

-

CANBERRA STEREO PUBLIC

RADIO INC.

Applicant

m:

AUSTRALIAN BROADCASTING TRIBUNAL and

ANOR.

Respondents

CORAM: SHEFPARD J.

m: 5 JUNE 1985

REASONS FOR JUDGMENT

HIS HONOUR: This is

an application pursuant to

S .

5

of the

Administrative Declsions (Judicial

Review) Act

1977

for the

review of a declsion made by the Australian Broadcasting Tribunal

to grant a Public Broadcasting Station Licence

to

the second

respondent,

Canberra

and

District

Racing

and

Sporting

Broadcasters

Limited

(hereinafter

"the

respondent").

The

decision was made on

1 February 1985.

In order

t o understand the point at issue. it 1s necessary,

first of all, to refer

to a number of the provislons

of the

Broadcastinq and Television Act

1942.

Part 111

of the Act

formerly provided for the National Broadcasting Service and the

-.

2.

National

Television

Service.

That

Part

has

been

repealed

consequent

upon

the

passing

of

the

Australian

Broadcastlnq

Corporation

Act

1983, pursuant

to

which

the

Australian

Broadcasting Corporation was established. Part IIIA of the

I

Broadcastinu and Television Act provides for the establlshment

and carrying on

of

the Special Broadcasting Service, Part IV for

the Commercial Broadcasting Service and the Commercial Television

Service and Part

IVA for the Public- Broadcasting Service and the

Public Television Service. Sections

111A, lllB and lllBA appear

in Part IVA of the Act. Section IIIA provides that Part IVA

applies to a licence granted for a special purpose as specified

in the licence. It is a condition of such

a

licence that the

I

broadcasting station be operated only for such specified purpose.

Section IIIB provides that, subject to sections lllA and 111BA,

the other provisions of the Act apply, with such exceptions and

subject to such modifications and adaptations as are prescribed,

in

relation to public broadcasting stations, public televlsion

statlons.

public

broadcasting

licences,

public television

licences and the holders of such licences as they apply in

relation

to

commercial

broadcasting

statlons,

commercial

television stations, licences for such stations and the holders

of such licences. Section lllBA is as

follows:-

"111EbI. (1) In

this

section,

"licensee"

means

the holder of

a publlc broadcasting licence.

( 2 )

Subject to this section,

a

licensee shall

not broadcast advertisements.

I

( 3 )

Subject to this section, a licensee may, In

respect

of

the

broadcasting

of

a program

-

_, . . ........ .

.

-. -

5 .

sponsored

another

by

person,

broadcast

announcements speclfying only-

(a) the name and address of the sponsor; and

(b) a description,

made

in

accordance

wlth

directions

glven

by

the

Tribunal,

of

the

business,

undertaking

or activity

(if

any)

carried on by the sponsor.

( 4 ) A licensee shall comply with such directions

as are given by the Tribunal in relation to the

broadcastmg of sponsorshlp announcements."

Section lllB picks up other provisions of the Act. These

include provisions in Part

I11

dealing with the Commercial

Broadcasting and Television Services. There is to be found the central provision of the Act in question in this case, S . 81, the relevant parts of which are as follows:-

"81.

(1)

Subject to this Act, the Tribunal may

grant

or renew a licence upon such condltions,

and in accordance with such form, as the Tribunal

determines.

I

........ ........ ........ ........ ........ ........ .

( 4 )

A public broadcasting licence

or public

television licence shall not be granted except to

a

corporation formed within the limlts of the

Commonwealth or a Territory.

not

beina

a

corporation the obiects of which include the

acquisition of profit or aain for the benefit of

its lndivldual members.

........ ........ ........ ........ ........ ........

The emphasis is mine.

Sub-section 89B(2), which is referred

td in the

Tribunal's

4.

decision,

provides,

inter

alia,

that

a

public

broadcasting

service shall not be transferred to

a person. and a person shall

not be admitted to participate in any of the benefits

of such

licence, if the person would, by virtue

of sub-sec.

81(4), be

ineligible for the grant of the licence.

Section 83 provides for the consideratlon of applicatlons for licences by the Broadcasting Tribunal. Para. 83(6)(b) provides

that the Tribunal shall not refuse to grant

a licence to a person

unless it has held an inquiry into the grant of the licence and

the Trlbunal is satisfied that the grant of the licence would be

contrary

to a provlsion of the

Act.

The

paragraphs

of

sub-section 83(6) of the Act, other than para. (b), set out a

variety of other circumstances which oblige the Tribunal to

refuse

to

grant

a

licence.

If

none

of

these

circumstances

applies, the Tribunal is obliged to grant a licence. It is only

relevant to mention para. 83(6)(c) which,

so far as relevant,

provides that the Tribunal shall not refuse to grant

a licence to

a person unless it has held an inquiry into the grant

of

the

licence and it appears to the Tribunal, having regard only to a

number

of

specified

matters

or circumstances.

that

it

is

advisable in the public interest to refuse to grant the licence.

Amongst the specified matters

or

circumstances are that the

Tribunal is not satisfied that the person is

a fit and proper

person to hold the licence, has the financial, technical and

I

management capabilities necessary effectively to operate the

relevant

broadcasting

station

or IS otherwise

capable

of

5.

complying with the condltions

of the licence.

Sub-section 83(9)

of the Act provides that where there are

two or more applicants for a licence, each of whom is a person to

i

whom, but for the sub-section, the Tribunal would be required to

grant the licence, the Tribunal shall grant the licence to the

most suitable

applxant.

Both

the

applicant

and

the

respondent

were

competlnq

applicants for a public broadcasting licence in the Australian

Caital Territory. Both were found by the Tribunal to be fit and

proper persons

to

hold the licence and to have the other

qualifications and capabilities referred to in para. 83(6)(c).

The Tribunal decided, pursuant to sub-sec.

83(9) of the Act, that

the respondent was the most sultable applicant.

I should mentlon

that there were, in

all, four applicants. When the Tribunal came

to exercise its discretion under sub-sec. 83(9), three were still

In contest. The third is not involved in this applicatron.

In the submisslon of the applicant the Tribunal’s decision to

grant the licence to the respondent was contrary to law because

the respondent aid not comply with the provisions of sub-sec.

81(4) of the Act

in

that the respondent was a corporation, the

objects of which included the acquisition of profit or gain for the benefit of its indlvidual members. That submission was made

to the Tribunal which

re~ected it. In order to deal wlth the

submissions of the parties it is necessary to refer to some of

6.

the evidence which was before the Tribunal and to the Tribunal‘s

decision.

The respondent is a company incorporated in the Australian

Capital Territory. Paragraphs (a),

(bl, ( c ) and !.d) of

Clause 2

of its Memorandum are as follows:-

To apply for obtain and hold such licences

as

are

necessary

from

time

to

time

to

establish erect operate use maintain and

repair a broadcasting station;

To purchase or otherwise

apply

for

and

acquire land leasehold land and property and

the use of buildinqs offices and any other

structures as may be considered necessary to

carry out the objects

of the Company and for

such purposes to alter repair and maintain

the same:

To purchase or

otherwise acquire the use of

and to repair and maintain in good and

proper worklng order a broadcasting station

or stations

and

any

and

all

equipment

appurtenant thereto In any place

or places

I

within the Commonwealth

of

Australia

or

elsewhere;

To

carry on the business of

a broadcaster

which, but without limlting the generality

of the expression includes the receiving and

transmitting by any means whatsoever

of all

or any one or more of sporting programmes music and musical performances of all types

drama

poetry

readings

and

any

spoken

material whatever including talks lectures

sermons

speeches

news

broadcasts

whether

live or pre-recorded and whether by wireless

or television

or

any

other

method

of

broadcasting and whether

for

educational

purposes or otherwise

...‘I

The paragraphs of Clause 2 following these paragraphs contain a

.

l .

variety of objects and powers. some

of them expressed in very

wide terms, but to which it is unnecessary to refer in detail. I

should, however, mention

para. (cc) which is as follows:-

"The

Company

will

not

engage

.directly

in

commercial transactions."

Clauses 3 and 6 of the Memorandum are as follows:-

"3

*

The

mcome

and property of the Company

whencesoever

derived

shall

be

applied

solely

towards the objects of the Company as set forth

herein and no portion thereof shall be paid or

transferred directly or indirectly by way of

dividend bonus or otherwise howsoever by way of

i

profit to the persons who at any tune are or have

been members of the Company

or to any of them

or

to any person claiming through any of them

provided

that

nothing

herein

contalned

shall

prevent

the

payment

good

in

faith

of

remuneration to any employee of the Company

or to

any member thereof or other person in return for any services actually rendered to the Company.

I

........ ........ ........ ........ ........ ........ .

6. If upon the winding up or dissolutlon of the Company there remains after the satisfaction

of

all

its

debt whatsoever, the same

and

liabilities

any

property

shall

not be paid to

or

distributed among the members, but shall be given

or transferred

to

some

other

institution

or

institutions

having

objects

similar

to

the

ob3ects of

the Company

to be determlned by the

members of the Company at or

before the time of

dissolutlon and in default thereof by such Court

of the Australian Capltal Terrltory as may have

or acquire ~urisdictlon

in the matter."

Article 3

of the Articles

of Association of the respondent

provides for membership. It as follows:-

. .

.

.

8.

Subject

to

the

provisions

of

these

Articles the members of the Company shall consist of:-

The

subscribers

to

the

Memorandum

of

Association of the Company;

Horse

racing

companies

corporations

associations or organlsations

whether

Incorporated or

not and statutory bodies

which are non-profit sharing bodies and

which the Executive Committee shall admit

!

to membership in accordance with these

Articles;

Harness

raclng

companies

corporations

associations or organisations

whether

incorporated or

not and statutory bodies

which are non-profit sharing bodies and

which the Executive Committee shall admit

to membership in accordance with these

Articles;

Greyhound

racing

companies

corporations

associatlons or organisations

whether

incorporated or

not and statutory bodies

which are non-profit sharing bodies and

which the Executive Committee shall admit

to membership in accordance

with

these

Articles;

companies

corporations

Sporting

associations or organisations

whether

incorporated or

not and statutory bodies

which are non-profit sharing bodies other

than members who are uranted membership

pursuant to categories 3(b)(c) and

(d)

hereof which the Executive Committee shall

admit to membership In accordance with

these Articles;

Australlan Capltal Territory Gaming and

Liquor Authority;

Such

other

persons

as

the

Executive

Committee shall admit to membership in accordance with these Artlcles."

The subscribers to the Memorandum were eight Canberra residents.

9.

Article 29 provides

that

there

shall

be

an

Executlve

Committee of the Company which may exercise all such powers of the Company as are not by the Act or by the Articles required to

be exercised in general meetlng. Article 30

1 s as follows:-

"30. The Executive Committee shall consist of

a

Chairman, Vice-chairman and not less than seven (7) other members all of whom shall

be members as defined in Article 3.

The

nine (9

1 members

of

the

Executive

Committee shall be elected annually by members at the Annual General Meeting of the Company as follows:-

l

One

(1) member from the category

referred to in Artlcle 3(b) hereof;

One

(1)

member from the category

referred to in Artlcle

3(c) hereof;

One

(1)

member from the category

referred to in Artlcle 3(d) hereof;

Three (3) members from the category referred to in Article 3(e) hereof;

Two

( 2 ) members in respect of the

category referred to in Article 3(f)

hereof

who

shall

be

nominees

of

Australian Capital Territory Gamlng and Liquor Authority;

One

(1)

member from the category

referred to in Article

3(g) hereof."

The Australlan Capital Territory Gaming and Liquor Authorlty

("the

Authority") referred to In Articles 3(f) and 30(e) was

established by the Australian Capital Territorv Gaminq and Liquor

Authority Act 1981. The Act was repealed by S. 5 of the Statute

Law (Miscellaneous Provisions) Act (No. 1) 1983, but by sub-sec.

2 ( 2 2 ) of that Act the repeal is to come Into operation on a date

.

10.

to be flxed by Proclamation.

I

have been informed by counsel

that no such Proclamation has yet been made with the consequence

that the Authority's Act is still in force.

The Authority is established by

S. 4 of its Act. It consists

of five

members

appointed

by

the

Mlnister.

By

S. 14 the

Authority has

such

functions and duties as were, immediately

before the commencing

day, conferred or imposed on the Australian

Capital Territory Totalizator Agency Board established by the

Bettinq

(Totalizator

Aqencv)

Ordinance

1964 (A.C.T.).

The

Authority also has certain functions in relation to

hquor

licensing and poker machine licenslnq. The functions

of the

Board established by the Betting Ordinance were to conduct or provide totalizator betting facilities in respect of races held

within

or

outside the Australian Capital Territory either by

operating its

own totalizator or by means of agreements entered

into under S.

20 of the Ordinance. Sectlon 20 provided for the

entry by the Board into agreements with bodies in States

or other

Territories of

the Commonwealth whereby such bodies would place

bets on totalizators

conducted

In

those

States

or

other

Territories. Section

29

provided

for

payments

to

prescribed

clubs of

amounts equal

to two per cent of the amount of bets

accepted by the Board during the preceding accounting period.

In paras. (b), [c) and (d) of Article 3 provision I s made for

horse racing companies, harness racing companies and greyhound

racing companies to be members of the Company. Pursuant to these

..

11.

provisions, the A.C.T. Racing Club Inc., the Canberra Trotting

Club Inc. and the Canberra Greyhound Racing Club Inc. have become

member

s .

Each

is

incorporated

under

the

Associations

Incorporation Ordinance

1953 (A.C.T.).

The Tribunal dealt with the applicant's submission based on sub-sec. 81(4) of the Broadcastinq and Television Act in paras.

11.2 to 11.13

of its decision. It referred to the Authority as

GALA and to the respondent

as CDRSB. Mr. Matthews, referred to

in the decision,

1s

the chief executive of the Authority.

Paragraphs 11.7, 11.8, part of 11.9, 11.10. 11.11, 11.12 and

11.13 are as follows:-

"11.7 GALA

was

established

by

the

Australian

Capital

Territory

Gaming

and

Liquor

Authority Act

1981 (Exhibit 29).

It is

clear from section 4 of that act that GALA

statutory

is

a

corporation.

Further,

section 14

of this Act provides that GALA

is to assume the functions and duties of

the prevlous

TAB,

Liquor Licensing Board

and Poker Machine Licensing Board under the

relevant legislatlon.

The Tribunal accepts

the evidence

of

Mr. Matthews that GALA'S

statutory

functions

and

duties

do

not

include the acquisition of profit

or gain

for the benefit of its members.

11.8 In

the

Tribunal'

S new, GALA 1 s a

corporation the objects of which do not

include the acquisition of profit or gain

for the benefit of its individual members.

Therefore, the Tribunal believes that GALA

is not ineligible for the grant

of a publlc

broadcastinu

station

licence

under

sub-section 81(4) of the Act. Accordingly,

in the Tribunal's view, it would not be

contrary to sub-section 89B(2)

of

the Act

for CDRSB to admit GALA

to participate in

the benefits of the llcence.

12.

11.9

... The Tribunal understands from the ACT

Corporate

Affairs

Commission

that

these

clubs Cthe racing, trotting and greyhound

clubs

earlier

mentioned]

all

are

incorporated

under

the

ACT

Associatlons

Incorporation

Ordinance

1953.

Incorporation under that ordinance is only

granted

to

associations

which

are

not

formed

or carried

on for the purpose of

trading

or

securing pecuniary profit to

their members (sub-section

2(1)).

On this

basis the Tribunal does not believe that

the three racing clubs would themselves be

ineligible

for

the

grant

of

a public

broadcasting

station

licence

under

sub-section 81(4) of

the

Act

and

accordingly does not believe that

it would

be contrary to sub-section 89B(2) of the benefits of a licence granted to CDRSB.

11-10 Mr. Steele also submitted that if CDRSB was

granted a licence, the company would be in

breach of sub-sectlon

81(4) of the Act as

GALA and the three local racing clubs, as members of CDRSB, would gain financially

from

the operation of the station. This

submission is based on the fact that GALA

and the racing clubs may benefit from any

Increased TAB turnover

resulting

from

regular race broadcasts.

11.11

As already discussed, sub-section

81(4)

states that a public broadcasting llcence

shall not be granted to a corporation the

objects of which include the acquisition of

profit or g a m for the benefit of members.

11.12 It “objects” in sub-section

is the

Tribunal‘s vlew that the word

81(4) refers to

those formal objects which are set out in a

company’s memorandum of association, or in

an

association’s

consititution.

On

this

basis

CDRSB

complies

wlth

sG-sectlon

81(4).

11.13 For the

reasons

discussed

above,

the

Tribunal is satisfied that the grant

of a

licence to CDRSB would not be contrary to a

provision of the Act.“

Reference should also be made to paras.

11.54 to 11.60 of the

decision.

ACT

TAB

referred

to

therein

was

the

authority

established by the Betting Ordinance.

The paragraphs, omitting

para. 11.57, are as follows:-

"11.54

The Tribunal now turns to consider the

matter of the involvement of GALA in CDRSB

and the motivations for that involvement.

11.55

Mr.

Matthews was rather reticent under

cross-examination about the effect of the broadcasting of racing information on the turnover of the TAB. He said that when broadcast coverage in Victorla had been

expanded,

the

turnover

greyhound

on

meetlngs Increased, but turnover on harness

racing

had

either

remained

static

or

decreased.

He

said that GALA desired that

a broadcast racing service be available

because of its statutory responsibility to

provide

totalisator

betting

facilities

within the territory and the need of this

service

for

those

people

who

wish

to

.

utllise those betting services. He said

he

had no Idea what revenue increase would

accrue to 'GALA from the introduction of a

complete racing service in Canberra.

11.56 The Tribunal accepts that

the

statutory

responsibility of GALA (and

before it ACT

TAB) is to provide a service and that it is a 'non-profit' organlsation. Nevertheless,

it appears to

the Tribunal that,

on the

basis of the

evidence supplied by

GALA in

this Inquiry, the ACT TAB since

1978 was

especially concerned about the effects on

its

turnover

the

of

lack

race

of

broadcasts.

For example, in a statement to

inquiry

into

the

the

Tribunal's

public

grant of a category C public broadcasting

llcence for Canberra on 19

July 1978, Mr.

Matthews

on behalf of the ACT.TAB said,

inter alia:

"EFFECT ON TAB BUSINESS

The lack of mid-week broadcasts in

Canberra has a deleterious effect on

ACT.TAB

business.

Our

experlence

.

14.

since

2CA

discontinued

mid-week

broadcasts is that TAB

turnover has

been

reduced

by

10% on

Wednesday

afternoon meetings and 7% on Friday

evening

meetings. The

consequences

of this turnover reduction are:

(a) Reduced TAB

commission

and

profit. being made available to the Canberra racing industry;

(b) Reduced

TAB

commisslon

being

made

available

Canberra

to

charities; and

(c)

Reduced profitabllity of the TAB

as a whole,

since

expenses

cannot be reduced to compensate

for the reduction in income."

(Exhibit 2O(ii))

........ ........ ........ ........ ........ ........

11.58 The above

statements

accord

with

the

attitudes of Totalisator Agency Boards in

other states which have been made

known to

the Tribunal as a result

of issues relating

to race broadcasting or

the lack of .it.

11.59 The

Tribunal

believes

that

the

above

evidence shows that, in pursuing

a public

broadcasting station licence, one

of

the

prime

motivations

of the

TAB

was

to

protect

its

revenue

base

throuqh

the

restoratlon

of

full

racinu

broadcasts.

This is not to suggest that there was

anything improper in the TAB'S motives.

The Tribunal also accepts that the

TAB had

other motives in seeking a licence such as

enabling

it

to

fulfil1

its

statutory

responsibility

provide

to

totalisator

facllities in che

ACT

and to provide a

service

to

satisfy

the

needs

of

those

interested in cacing.

11.60

The Tribunal accepts that some of the

attitudes expressed In the past by ACT

TAB

and the level of involvement of ACT TAB and

GALA

in the processes which have led to

this licence application mav not have been

I

whollv consistent with the philosophies of

public broadcastinq. However the Tribunal

also appreclates that, given the nature

of

the

public

broadcasting

movement,

a

-

15.

potential publlc broadcasting group may, in

practice,

evolve

where

one

particular

interest acts

as a catalyst to the creation

of a prospective broadcaster with broader

interests which may embrace

or submerge the

interests

of

the

original

catalyst.

In

fact, a

number of very successful public

broadcastlnq

stations

have

developed

in

this manner.

'I

The emphasis is

mme.

I

have omitted paragraph

11.57.

It set out portion of a

letter

dated

3

June

1980

to

the

Minister

for

Post

and

Telecommunications from the Chairman of ACT TAB. The letter was

to the same effect as the letter of

19 July 1978 which

Mr.

Matthews had written and which is referred to in para. 11.56.

A succinct statement of what the respondent and Its members

Executive Committee of the respondent, in the course of his

evidence to the Tribunal. He said that he was a member of the

hoped to achieve was made by Mr. B.E. Owens, the Chairman of the would accrue to that association if a complete racing service

were provided

in the Australian Capital Territory. He said,

"I

would expect that the Club would ultimately gain

an increase in

commission or

a percentage each year from the turnover of the

TAB." He agreed that he would expect that if a complete racing service were provided in the Australian Capital Territory, the

mcreased

revenue which would accrue to the Authority would

result in increased benefit to the Racing Club. It is plain that

.

16.

the expectations of the trotting club and the greyhound club are

same. -- ..

the

In summary then, what the members of the respondent and the respondent itself hope to achieve from the grant of the licence

is that more extensive broadcasting

of

race descriptions and

racing results in the Australian Capital Territory will result in

more off course betting with the

TAB and increased attendances at

race meetings with the consequence of increased revenue to the

racing, trotting and greyhound clubs.

An lnitial question arises as to the meaninu to be given the words "the objects" in sub-sec.

81(4)

of the Broadcastinq and

Television Act. Does the expression refer only to the objects as

stated in the Memorandum of Assoclation

of

the Company, or does

it

refer to the purpose

or purposes for which the Company is

carried on or will be carried

on when it commences operatlons?

In the present case the Company has not commenced operations, and

so, if the latter view be correct, one would need to look for

guidance to the objects or purposes of those lntending to carry on the company's business. If one approached the matter by looking only at the objects of the Company as disclosed in its

Memorandum. one mlght well reach the conclusion that the Company

did not fall within sub-sec.

81(4) because it would not be a

corporation, the

ob~ects of which included the acquisition

of

profit or gain for the benefit of its individual members. Clause

Ztcc), Clause 3 , and, to an extent, Clause 6

of its Memorandum

-

17.

would tend to

support such

a

conclusion. That was the view

adopted by the

Tribunal with the result that

1t-f.o-qd that the

Company did not

fall within the provisions of the sub-section.

I think

there

is

much

to

be

said

for

this

approach,

particularly as an applicant, such as the Company here,

will very

often not have commenced any business at the time its applicatlon

for a licence

1 s being considered. Moreover, the use

of

the

words, "the objects". is capable of suggesting that the draftsman

of the legislation did have in mind the objects as stated in the

Memorandum. However, on reflection,

I do not think that thls is

the

meaning which the

words

were

intended

to

have.

The

Broadcastins and Television Act has, in Part IVA. provided for a

category of

licences known as public broadcasting licences and

public television licences. By sub-sec. lllBA(2) the licensee is

not to broadcast advertisements, although

It may have sponsors

whose names and businesses may be the subject of announcements; sub-sec. lllBA(3). Sub-section 81(4), whatever the limits of its provisions may be, plainly provides that the licensee must be a

corporatlon which wlll not Itself pass on any profits

or aams

whlch it

has acquired to members. No doubt the objects

of

a

company

seeking a public

broadcasting

licence

will

usually

restrlct the company's powers and activities

so that it cannot

lawfully

act

contrary

to

the

intendment

of the

sectlon.

Nevertheless, I think it unlikely that those responsible for the

drafting of the Act intended the objects

as

stated in the

Memorandum to be the sole polnt of reference

for determining

-

18.

whether the objects of a company seeking a public broadcasting licence were withln or outside the provismms of sub-sec. 81(4). Notwithstanding the provisions of the Memorandum, it would only

be when the Tribunal had a clear understanding of the scope of

the company's intended activities, that lt would be able to be

sure whether the company would be affected by the sub-section.

I

have accordingly reached the conclusion that the expresslon, "the

objects", should

be

construed

as

meaning,

"the

purpose

or

purposes".

There are many authorities which address the question of how

one determines what the purpose of a company is. In recent years

the High Court has been concerned in a number

of cases with the

question of the character of corporations in order to see whether

they were, for the purposes

of

the Constitution

or

certain

federal

legislation,

trading

or financial

corporations.

The

question of what the character of

a corporation is will often

involve a different inquiry from that lnvolving the ascertainment

of the purpose or purposes

of

a corporation. That is not

a

matter upon which

I

need dwell in this case.

The use of the

authoritles here is rather in the fact that there are dicta In

them which, in my respectful opinion, provide guidance as to the

way in which a court should go about the task of determininq what

the purpose of a corporation is.

In The Oueen v. The Judqes

of The Federal Court of Australla;

ex

parte

The

Western

Australlan

National

Football

Leauue

.

19.

(Incorporated) (1979) 143 C.L.R.

190,

(Adamson's case), Barwick

C.J.

said (p. 209) that for constitutional purposes a corporation

formed

within

the

limits

of

Australia

will

satisfy

the

description "trading corporation" if trading is a substantial

corporate activity. He added, "Its activlties rather

than-the

purpose

of

Its

lncorporation

will

designate

its

relevant

character". Gibbs J. (as he was), who dissented, put the matter

somewhat differently, but, to my mind, not significantly

so. He

said ( p . 213)

that the word "trading" was used in para.

(xx)

of

S. 51

of the Constitution as an

epithet describing a particular

kind of corporation. He said that it was not referring to what a

corporation does, or to what its maln activities happen to be.

He added, "Of course, what a corporatlon does may throw light on

what it is, and I do not intend to suggest that the Memorandum Association, or other constitutional document, of a corporation,

of

is the sole source of information as

t o whether it was formed for

the purpose of trading."

In Fencott v. Muller (1983) 46 A.L.R. 41

the High Court was

again divided on the question of whether a company was a tradlng

or financial corporation. In the loint judgment of the malority

(Mason. Murphy, Brennan and Deane

JJ.) the fact that the company

had not engaged in trading activities was referred to.

The joint

judgment proceeded (p. 6 2 ) : -

"And so the question arises whether a corporation

with objects and powers appropriate for a trading

or flnanclal corporation can bear that character

before it engages in any trading or financial

. 20.

activity.

That

question

did

not

arise

for

consideration in Adamson’s case. The

ma~orlty

judgments

in

tha-t-.case

which

held

that

the

established activities

of

the football league

concluded its character as a trading corporation

did not suggest that trading activities are the

sole

criterion

of

character.

Absent

those

activities, the character of

a corporation must

found

be

other

in

indicla.

While

its

constitution wlll never be completely Irrelevant,

it is in corporation has not begun, or has barely begun,

a

case such as the present where a

to

carry on business

that

Its

constitutlon,

including

its

objects,

assumes

particular

slgnificance as

a guide (see State Superannuatlon

Board v. Trade Practices Commission (1982) 44

A.L.R. 1 at p. 151.”

The minority comprised Gibbs C.J., Wilson

J. and Dawson J.

Gibbs C.J. sald (pp. 52-3) : -

“I have

said

that

the

purposes

for

which

a

corporatlon

is

formed

may

be

relevant

in

determlnlng

its

character.

That

will

be

particularly so when the corporation has not yet

begun, or has only just commenced, the activities

which it was intended to carry on. However, in

deciding

what

are

the

purposes

for

which

a

corporation is formed, the objects clause of Its

memorandum of associatlon is

an

inadequate and

may be a misleading guide. For many years it has been the practice of those drawlng memoranda of association to give to companies powers to engage

in multifarious activities, many

of which bear no

relation to the actual or intended affairs of the

company.

Over 60 years

ago

Lord

Wrenbury

referred to this practice when in Cotman v.

Brouqham C19183 A.C.

514 at 523, he said that

this ‘pernicious practlce’ which was m active operation when he was a junior at the bar ’has

arrived now at

a point at which the fact is that

the function of the memorandum is taken to

be,

not to specify, not to disclose, but to bury

beneath a mass of words the real object or

objects of the company with the intent that every

conceivable form of activity shall

be

found

included somewhere within its terms’. Barwick CJ

also recognized the existence of the practice

when he said, in the St. Georcre Countv Council

21.

case (130 C.L.R. at

542) :

'It is, in my opinion,

only necessary to recall the wide spread of the

objects of---- company formed under the Companies

Acts

as

expressed

in

Its

memorandum

of

association,

particularly

in

days

when

the

doctrine of ultra vires was more readily applied,

to appreciate the difficulties encountered in

attempting in all cases to attribute purpose to

incorporation.

Material

extrinsic to

the

memorandum might for some purposes be resorted to, to decide why and to what end a body was

incorporated. But it would

be, to my mind, most

unsatisfactory to have to follow such a course in

order

to

identify

the sub~ect matter of

constitutional power. Further, even

if an ob~ect

of

a company seemed

dominant at the date of

incorporation, in the

course of the company's

existence it may cease to have significance and

an

object

which

seemed

incidental

at

incorporation may become central to

its current

activities.'

The

learned

Chief

Justlce

was,

of

course,

speaking

in

support

of

the

view

that

the

~ ~ ~ ~ ~ V ~ L i l e s

ui the

coeporar,im

alone should be

regarded. But to accept that the intended as

well 8.4

the actual f m ~ ~ i o n 5

of the curporatlm

are relevant for the purpose of determining its character, does not mean that it is permissible

to

look at the memorandum of association alone

for that purpose.

The whole of the evidence as

to the intended operations of the corporation is

relevant and is likely to show, as it shows

in

the present case, that many of

the ob~ects

In the

memorandum were inserted out

of an abundance of

caution, with no intention

of

describing the

activities

In

whlch

the

company

1 s

actually

engaged or is likely to engage."

In relation to what the Chief Justice last said, it may

be

observed in passing that there is no longer any requlrement that

a company's objects be stated in its memorandum; see sub-sec.

37(1A) of the Companies Act and the Companies and Securities

Leqislation (Miscellaneous Amendments) Act 1983, S .

33 of which

omitted para. 37(l)(b) of the Companles Act. That paragraph had

22 -

previously provided for the statement

of the objects of a company

in its--memorandum. Since the amendment a company may state its

objects or not as its incorporators choose.

Wilson

J.

agreed

(p .

7 0 ) with what Gibbs C.J. had sald.

Dawson J.

concentrated his attention on the question with which

the Court was concerned - namely the characterlzation, or as he put it, classification of the corporation there in questlon: see p. 79.

As has been observed, the inquiry which the members of the

High Court were engaged upon in the Adamson case and in Fencott v. Muller, and also in some of those to which they referred, is

not the same Inquiry as that upon which

I

am engaged in this

case. Nevertheless,

I think, as I have said, that some

of the

dicta In the judgments are

of

assistance in determining the

approach which should here be adopted. Notwlthstandlng that the

passage is found in a dissenting judgment,

I propose to approach

the question of

purpose in the way that Gibbs C.J. has said the

matter should be approached in the passage cited from hls

judgment in Fencott v. Muller.

If I approach the matter in this

way, I do not think that I shall run counter to any of the views

of

the judges forming the majorities in the two cases.

I

am

strengthened In this view by what was said by Mason

J.

in

Brookton Co-operative Society Limited

v . Federal Commissioner of

Taxation (1981)

147 C.L.R. 441 at pp. 450-451.

2 3 .

It is clear that the purpose for which the Company was formed

---was to enable it to conduct

a radio station whlch would spend a

good deal of its broadcasting time in describing races run both

in the Australian Capital Territory and in other parts of

Australla and in providing-the results of those races. This was

by no means to be its only activity. It would broadcast news

about other sporting activities and results of those activities;

and it would also occupy a large part of its broadcastlng time

with matters not associated with sport such as the playing of

music.

But

there

can

be

no

question

that

the

evidence

establlshes that the prime purpose

of the company in seeking the

licence is to foster racing in the Australian Capital Territory.

It 1 s hoped that in this way the affairs

of the Authority, and of

the racing clubs which it supports and which are also members of

the Cbmpany, wlll be improved in greater use of off course

betting facilities and

by greater attendance at race meetings

held in the Australian Capital Territory. The consequence wlll

be increased revenue to the Authority and to the clubs. That

being the purpose

of the appllcant is it correct to say that its

objects include the acquisition of profit

or gain for the benefit

of its individual members and thus offend sub-sec.

81(4) of the

Broadcastinu and Television Act.

It is to be observed that

It is not the profit

or gain of the

Company which is in question;

It is the acquisition of profit

or

gain for the benefit of Its indivldual members, that is, In

the

present case, the acquisition of profit or

gain for the benefit

24.

of the Authority

or for the benefit of the three racing clubs to

which I have referred.

Counsel for the applicant drew my attention to the similarity of the wording of sub-sec. 81(4) of the Act with sub-sec. 33(3)

-

of the Companies Act 1981. That provision has

a long history in

company legislation

in the States and Territories

of Australi-a

and in the United Kingdom. Paragraph

(a)

of the sub-section is

as follows:-

"Subject to sub-section(4)

-

I

(a)

an association or partnership conslsting of

more than 20 persons that has for its

ob~ect

the acquisitlon of gain by the associatlon

or partnership or

individual members of the

association or partnership

shall

not

be

formed unless it is incorporated under this

Act or is formed pursuant to another Act

or

letters patent;

. .

. "

It is not relevant to refer to sub-sec. 33(4).

The sub-section in its modern form is not precisely the same

as

its

predecessors.

For instance, S . 14(3)

of

the

uniform

companies legislation of 1561 provided:-

"(3) No association

or partnership consisting of

more than twenty persons shall be formed for

the purpose of carryinq on any business which

I

has for its object the acquisition of gain by

the

association

or partnership or the

individual

members

thereof

unless

it is

incorporated

under

this

Ordinance

or is

formed in pursuance of some other Ordinance

or letters patent.

"

25.

See Companies Ordinance

1961 (A.C.T.).

Thus

the words "has for its oblect" in the

1981

Act were

previously "formed for the purpose of carrying on any business

which has for its Object". Furthermore, the company provisions,

whether in their old

or new form, do not correspond precisely

with sub-sec. 81(4) of the Broadcastinq and Television' Act. The

company provision refers to an

association that was formed for

the purpose of carrying on

a business that has

for its object,

or

an association that

has as lts oblect, the acquisitlon of gain by

the association

or partnership

or

individual members of the

association or partnership. The provision in question refers to "a corporation the objects of which include the acquisition of gain for the benefit of its individual members".

In counsel's submission the selection by the draftsman of language of sub-sec.

the

81(4)

showed that he Intended to pick up

meanings which have been ascribed to the words

of

the company

provision by courts when called upon to interpret it and that

those cases provide a guide as to the way in which the section

m

questlon here should be construed.

The flrst of the cases relied upon was In re Padstow Total

Loss and Collision Assurance Associatlon

(1882) 20 Ch.D. 137.

The rules of the Association, which was not registered under the Companies Act of the day, provided that all persons who effected

an insurance with the Association should be members.

No ship was

26.

to be Insured for more than three-fourths of its value. The person insuring paid a deposit of one pound five shillings per cent on the amount of the insurance, and' in case of the total loss of a vessel, the members were to pay the loser the amount for which he had insured It rateably, according to the amounts

assured to them respectively.

The Association consisted of more

than 20

members. A vessel insured by a membkr was lost. As a

result of the claim the Association was wound up. Another member

appealed.

It

was

held

that,

although

the

buslness

of

the

Association had not for its object the acquisition of gain by

the

Association, it had for its object the acquisltion -of gain by the

individual members and that as

it

consisted of

more than

20

members and was not registered its formation was forbidden by the

Companies

Act

1862, S . 4. The

Court,

therefore,

could

not

recognize it as having any legal existence and the order

for

windlng up was discharged. Jessel

M.R.

said that the Association

provided for two thlngs, first, the payment of the marine losses

sustained by a person insured and, secondly, the mutual guarantee

by the members of each other's solvency as regards

the making up

of the amount of the

loss.

He concluded

(p. 145)

that it was

plain that the object of the Association was the acquisition of

gain by the individual members. They paid

a

small sum with the

view of receiving a large one In case of the happenlng of an

uncertain event which might or might not happen, and which if it

did happen would otherwise cause them a large

loss.

His

Lordship

posed

the

questlon,

"Is it

the

less

an

27.

acquisition

of gain because the event which makes

it payable

happens to be a

loss?"

He said that it did not appear to him

that the word

"galn" could have any such limitation put upon

it.

He continued (p. 145):-

"According to the strict meaning of the word there

is a gain when the insured receives a large sum

in Consideration of his having'paid a small one,

and looking to the general object and intention

of the association and to the general purview of

the Act of Parliament, it appears to me that the

strict meaning of the term is its proper meaning

here. The object of the Act was that commercial

associations or companies consisting of more than

twenty members should be registered.

This is

clearly an association of that character, and

it

appears to me to come entirely within the general

purview of

the Act. We ought, as

it appears to

me, so to construe the Act as fairly and properly

to carry out its provisions without a too mlnute

or hypercritical consideration of its terms. For

these reasons it appears to me that the-order

ought not to have been made, and that thls appeal

ought to be allowed.

'I

Brett L.J. expressed similar views (p.

148)

as did Lindley L.J.

who said (p. 149):-

"If we looked at the question at the time when an

I

insurance was effected we mlght say that the

acquisition of gain was not the object, but

if we

look at it when the ship has gone to the bottom, and a loss has been incurred, the gain is obvious enouqh, because the owner gets back a large part

of its value by the insurance. In that point of view the object of the insured is to acquire

gain; from one point of view it is not,

but from

the other his object is

to acquire gain in the

sense of

diminution of the

loss which he would

otherwise suffer. Looking to the language of the

section, it appears to me that It is wlde enouqh,

and was intended to be wide enough

to include all

such associations as this, and that the language

properly construed applies to such associatlons

28.

as the present.

"

The next case relied upon was In

re Riverton Sheep Dip C19437

S.A.S.R. 344. There an unregistered associatlon of more than

twenty persons was formed in 1917

for establishing a sheep dip

for the use, subject to the payment of

a fee, of Its members and

other persons. The Association carried on the business of sheep

dipping for its members who were customers of the sheep

dip, and

I

for others, making charges to members and higher charges to non

members. It was held that the object of the Association was the

acquisition of gain, not by it as

a body, but by the individual

I

members, primarily, by the provislon of the sheep dip for their

individual use, and secondly by giving members a preference to

other customers as to charges. Mayo

J. said (p. 347):-

"'Gain' was said by Simonds

J. to

be a word that

was 'not susceptible of precise

or

scientific

definltion.'

He thought the test,

for such a

purpose as the present, was 'whether that which

is being done is what ordinary persons would

descrlbe as the carrying on a business for qain'

(Armour v. Liverpool -Corporation C19397

Ch.-422,

at P. 437. The most

appropriate definition to be

- -

-

found

in

a

dictionary

may

be

'Increase

in

resources o r

business advantages resulting from

business transactions or dealings.' In

S.

9(2)

the word is not limited to pecuniary gain,

or

confined

to

commercial

profits.

It

means

something obtpined, the acquisition of

somethlng

not before available

(Ian Waincr v. Bo Hein (1932)

I.L.R. 10 Man. 490.

) "

Armour v. Liverpool Corporation referred to by Mayo

J. was a

case where a submission that an association was an association

I

29.

formed for the acquisition of gain contrary to the provisions of

S. 357

of the Companies Act

1929 (U.K.),

failed. Nevertheless

Simonds J. (as he was) considered the meaning of

"gain", true it

IS,

in a case where it was the association, and not the

individual members of it, which was said to be carrying on a

business for gain. But what his Lordship

has

said about the

meaning of the word "gain" in a similar context provides, in my

respectful opinion, sound guidance as to the meaning of the word.

In re Southside Plaza Merchants' Association

C19653

N.S.W.R.

1454

McLelland C.J.

m-Eq. was concerned with an unregistered

association consisting of more than twenty members, the general

purpose of which was to aid shopkeepers in a suburban shopping

centre by joint advertising. -.The association incurred debts

which it was unable to pay. A petition was lodqed to wind it up

as an unregistered company. His Honour held that the association

was being carrled on for gain by the

indindual members, since

the campaign by advertising which was mutually carrled on was to

enhance the sale of goods by each of the individual members. His

Honour referred to re Padstow Total

Loss and Collision Assurance

Association (supra). His Honour said that the Association had

the general object of benefittinq the individual members having

shops in the same

vicinity.

It may be noticed that in

each

of the cases

to

which

reference has been made, the Court derived the purpose

or object

of the association prlncipally from a consideration of Its actual

30.

or intended activities and did not restrict the inquiry to the

terms of its consitltutional document. This was a matter whlch

had been referred to by Jessell

M.R.

In another case concerned

with a provision similar to para. 33(3)(a) of the Companies Act,

Scott v. Anderson

(1879) 15 Ch.D. 247. There his Lordship said

(p. 261):-

I

"Upon the other point, as to this company beinq

formed for the acquisition of qaln, can there be

any doubt about it?

The prospectus was not

stated in the statement of claim, but it was

admltted, and

Mr.

Chitty admltted it as if it

were stated,

so that it is before the Court and

may properly be looked into, for in ascertalninq

whether

the

association

was

formed

for

that

purpose nothing can be more Important than the

prospectus. It is not to be formed for the

purpose unless registered as

a company under this

Act, and the prospectus tells me exactly what It was formed for. -The prospectus is as good, or better evidence upon that point than the deed,

but

of

course they must both be looked at to

ascertain

for

what

purpose

the

company

was

i

formed

- "

His Lordship's decision was reversed on appeal (Ibid. at pp. 273

et seq.), but there was

no disapproval of the passage quoted from

his

~udqment.

Notwithstandlnq what his Lordship sald and the

apparent application of it In the later cases,

I have not thought

it apposite to apply it myself in relation to the Lhreshold

question of whether the words "the ob3ects" in sub-sec.

81(4) of

the Broadcastinq and Television Act refer only to the objects of

a company as stated in its memorandum or to the actual purpose

for which it was incorporated (supra pp. 16-18). That is because

of the dlfferent words of the company provision

with which the

31.

cases are concerned, particularly the words in that provlslon,

“formed for the purpose of carrying on any business which has for

its object

.

. .

members of the assoclations In the three cases relled

upon by counsel for the applicant, namely, In re Padstow Total

Lo’ss and Collision Assurance Associatlon (supra), In re Riverton

Sheep Dip (supra) and re Southside Plaza Merchants’ Associatlon

(supra), were all themselves engaged in commercial activities for

profit. In the first of the cases the members were shipowners

carrying on business for profit and would gain, within the

meanlng of the word as used in the relevant provision, if a ship

were lost and they were indemnified by the insurance which the

The

assoclation would provide. In the Sheep

Dip case the members

carried on business as graziers. They were provided wlth the

facillty of the sheep dip at charges less than those imposed on

non-members. In Southside Plaze Merchants the members were

shopkeepers who stood to gain from the advertising of the

assoclation.

In the present case the Authority is a non-profit making

body.

Two per cent

of Its surplus revenue goes to the racing

clubs. The racing clubs themselves

do not distribute profits to

members. Presumably, surpluses of revenue are used to improve

facilitles, to create or enlarge reserves and to increase prlze

money in order to attract a higher standard of competition.

Nevertheless, the clubs are engaged in trade

m lust the same way

32.

as the West Perth Football Club and the Western Australian

National Football League in Adamson's case were

so

engaged.

Plainly

the

clubs

stand

to

gain

from

the

conduct

of

the

respondent's

buslness

in

increased

revenue

flowing

to

them

directly from expected increased attendances and from increased

payments made to them by the Authority. In my opinion the

authorities to which I have referred and the ordinary meanlng of

the word

"gain" establish that there will be a gain, if

not a

profit, accrulng to them whlch

is a gain within the meaning of

sub-sec. 81(4)

of the Broadcastinu and Television Act. Clearly

the prlncipal object or purpose of the respondent, is to secure

that galn for the Authority and the clubs, each

of

which is an

individual member of it. If there were no other matter, it would

follow.that the applicant's submission should be upheld.

There

remains,

however,

a question

as

to

whether

the

respondent contravenes the sub-section, not because

of the ambit

of the word

"gain",

but for other reasons. If the words of the

sub-section corresponded exactly with the words of the company

provisions dealt with in the various authorities to which I have

referred, I would have little doubt that it did. But there are

important differences between the two provisions. I have earlier

referred to these but

I note them again. In doing so I refer to

the earlier form

of the company provision because the cases

which

I have cited were concerned wlth legislation In that form rather

than in the form of the

1981 Act.

The relevant words

of the

older provisions were, "formed for the purpose

of carrymg on any

33.

business whlch has for its object the acquisition of gain by

...

the individual members thereof". The corresponding words of they are, in my opinion, dlstinctions of importance. The words

sub-sec. 81(4) are "the objects of which include the acquisition

of profit or gain for the beneflt of its (the company's)

of the company provisions contemplate

a company being formed for

the purpose of carrying on a business having as an object the

acquisition of qaln by individual members. In contrast the words

of the Broadcastins and Televlslon Act contemplate the Company

having as an

ob~ect

"the acquisition of ... gain for the benefit

-

of its indlvidual members". The question is whether the use of

the words I have emphasized In con~unction with the word "acquisition", mean that the Company will only contravene the

Broadcastins and Televislon Act

if

the gain accrues to

the

company, albeit that

it is for the benefit of individual members.

I

If that is the meanlng to be attributed to the Broadcastina and

Televlsion Act, the section will not be contravened where, as

here,

the

gain

accrues,

not

to

the

company

(that

is

the

respondent), but to the members directly as a result of the

I

company's activlties.

In the end, of course, one has to concentrate one's attention

on

the

words

of

sub-sec.

81(4). There

is

a

limit

to

the

profitability

of

the

exercise

in

comparison

which

I have

undertaken.

But

the

exercise

can

do

no more

than

provide

guidance as to the way the section should be construed. The

. 34.

differences I have noted militate against the various authorities

on the company provision dictating the conclusion for which

counsel for the applicant contends. On the other

hand, I thlnk

it would be equally wrong to take the view that, because there

I

are essential dlfferences between the two provisions, one should,

for that reason, conclude that the applicant's submission should

be relected.

The difficulty with which the applicant's submission is at

first sight confronted lies, as I have indicated, In the use of

the words, "the acquisition of gain for the benefit of Its

indivldual members".

Do they contemplate that only companles

whose purpose or object is that they themselves will acquire galn

for the benefit of indlvidual members will be caught by the

provision? Having reflected on the matter,

I

have reached the

conclusion that the meaning of the sub-section should not be

limited in this way. If

it were,

the provision would have no

different

effect

from

one

which

required

a company's

incorporating document to provide that

it was not permitted to

distrlbute profits or gains to its members. If that were the

intention,

it seems unlikely to me that the legislation would

have taken its present form. Clearer and more direct words would

have been used. Furthermore, broader considerations indicate

that the distinction which would then arise would be

a

most

arbitrary one and might defeat the policy of the Act which seems

to me to be one which requires public broadcasting stations to

operate entirely in a non-commercial context. Plainly sub-sec.

I

35.

81(4) prevents them distrlbuting profits to members; and they may

not advertise, although they may have sponsors;

S.

IIIBA. A

slight alteration of the facts of the Southside Plaza Merchants'

case will show how the pollcy of the Act would be defeated if the

construction contended for by counsel for the applicant were not

adopted.

Suppose a shopping centre consisting of

an art gallery, a

bookshop, a record shop, a gourmet food restaurant,

a wine cellar

and an antique dealer. Further, suppose the proprletors of these

businesses form a company in order to seek a public broadcastlng

licence, the purpose of which is to lmprove the community's

knowledge of art, good books, good music, fine food and wme, and

antiques. In its applicatlon it projects a broadcasting station

which wlll provide frequent talks and information about these

matters. Each of the members of the company becomes

a sponsor of

it and, from time to time, has its name, address and the nature

of its business announced. Could there be any doubt that each

business would gain from the station's activities

or

that a

principal purpose of the station was to foster that gam.

Yet,

-

if the respondent's submission be right, the broadcasting company

would be outside the section because

the

gain was received

directly by the members, although as a result of the company's

activlties, and not by the company itself.

I know that one could

I

give examples of a different kind. Some were discussed in

argument. These included a group of charities seeking a licence,

hoplng that contributions to thelr funds would be increased and a

36.

group of churches with similar alms.

In the end considerations of thls kind recede Into the

background. The words of a statutory provision must govern its

constructlon. Nevertheless, the provision should be construed

aqainst the apparent policy of the enactment and not glven a

construction contrary to that policy unless the words can bear no

other meanlng. There can be no question but that the use of the

words "for the benefit of its individual members"

in con]unctlon

wlth the word "acquisition" does suggest that the galn must be

one acquired by the company to be held by

it for the beneflt for

its members. But it is the object or purpose of the company

which is at the heart of the matter. In my opinlon, the meaning

the provision was Intended to have was that the company was not

to have as an object the acquisition, either by itself or by Its

members, of profit

or

galn for the beneflt of those members.

Such a constructlon does not Involve any forcing of the lanquage.

All that 1 s required is that the words "acquisition of profit or

gain" be understood as meaning the acquisition of profit or gain

!

elther by the company or by the members themselves. Such

a

.-

meanlng wlll give effect to the policy of the Act as

I understand

it. The sub-section so construed will affect companies whether

their objects be themselves to make profits or gains for the

benefit of their members or so to conduct their activities as to

generate profits or galns for members directly.

In

the

result

I have

reached

the

concluslon

that

the

37.

submission made by counsel for the applicant

shouldbe upheld and

the Tribunal's decision set aslde.

I

do not propose today

to

make formal orders.

The matter will be adjourned for a short

tilue to enable counsel to consider what

I have said. Wheii It is

again in the list counsel

for

the applicant is to bring in short

minutes of order to give effect

to my declsion.

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_-

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!

I

I

h. .

_ . .-,

3 7 .

submission made by counsel for the applicant should be upheld and

the Tribunal's declsion set aside.

I

do not propose today

to

make formal orders. The matter will be adjourned

for

a short

tune to enable counsel to consider what

I have said. Wheri it is

again in the list counsel

for

the applicant is to bring in short

minutes of order to give effect to my decision.

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