Canberra Stereo Public Radio Inc. v Australian Broadcasting Tribunal
[1985] FCA 227
•5 Jun 1985
| - | 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 |
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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
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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 | That | Part | has | been | repealed |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 | |||||
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| the Commercial Broadcasting Service and the Commercial Television | ||||||
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| in Part IVA of the Act. Section IIIA provides that Part IVA applies to a licence granted for a special purpose as specified | ||||||
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| 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, | |||||
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| licences and the holders of such licences as they apply in | ||||||
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| television stations, licences for such stations and the holders | ||||||
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| "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 |
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| _, . . ........ . | . | -. - |
| 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 | ........ ........ ........ ........ ........ ........ . | |||
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| television licence shall not be granted except to | ||||
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| 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 | |||||
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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 | |
|
| 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
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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 | ||||||
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| to any person claiming through any of them | |||||||
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| any member thereof or other person in return for any services actually rendered to the Company. | |||||||
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| 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:-
| . . | . |
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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; | |||
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| which are non-profit sharing bodies and which the Executive Committee shall admit to membership in accordance with these Articles; | ||||
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| which are non-profit sharing bodies and which the Executive Committee shall admit | ||||
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| Articles; |
| companies | corporations | Sporting | ||||
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| which are non-profit sharing bodies other | ||||||
| than members who are uranted membership | ||||||
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| hereof which the Executive Committee shall admit to membership In accordance with these Articles; | ||||||
| Australlan Capltal Territory Gaming and Liquor Authority; | ||||||
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| 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
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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 | |||||
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| clubs Cthe racing, trotting and greyhound | ||||||
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| Incorporation under that ordinance is only | ||||||
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| basis the Tribunal does not believe that the three racing clubs would themselves be | ||||||
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| 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 |
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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 | ||
| |||
| 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 | |
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| and the level of involvement of ACT TAB and | ||
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| this licence application mav not have been |
| I | whollv consistent with the philosophies of | ||||
| public broadcastinq. However the Tribunal | |||||
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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
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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 | |||
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| racing results in the Australian Capital Territory will result in | |||
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| race meetings with the consequence of increased revenue to the racing, trotting and greyhound clubs. | |||
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| Television Act. Does the expression refer only to the objects as | |||
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| 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 | |||
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| profit or gain for the benefit of its individual members. Clause | |||
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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 |
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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 |
|
| 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 | |
|
the acquisitlon of gain by the associatlon
| ||||
| ||||
| formed unless it is incorporated under this | ||||
| ||||
|
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 | ||||
| |||||
| |||||
| |||||
| formed in pursuance of some other Ordinance | |||||
|
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 | ||
| |||
| 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 | |||
| |||
| |||
| |||
| otherwise suffer. Looking to the language of the section, it appears to me that It is wlde enouqh, | |||
| |||
| 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 | |
| ||
| I | ||
| members, primarily, by the provislon of the sheep dip for their individual use, and secondly by giving members a preference to | ||
|
| "'Gain' was said by Simonds | J. to | be a word that | |
| was 'not susceptible of precise |
|
| 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 | ||||
| ||||
|
| I | If that is the meanlng to be attributed to the Broadcastina and Televlsion Act, the section will not be contravened where, as | ||||||||||
| |||||||||||
| 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 | |||||||
| |||||||
| whose purpose or object is that they themselves will acquire galn for the benefit of indlvidual members will be caught by the | |||||||
| |||||||
| conclusion that the meaning of the sub-section should not be | |||||||
| |||||||
| |||||||
| |||||||
| distrlbute profits or gains to its members. If that were the | |||||||
| |||||||
| have taken its present form. Clearer and more direct words would | |||||||
| have been used. Furthermore, broader considerations indicate | |||||||
| |||||||
| 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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Associate
!
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.
Associate
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