Commercial Radio Australia Ltd v Phonographic Performance Company of Australia

[2013] HCATrans 187

[2013] HCATrans 187

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S37 of 2013

B e t w e e n -

COMMERCIAL RADIO AUSTRALIA LTD

Applicant

and

PHONOGRAPHIC PERFORMANCE COMPANY OF AUSTRALIA ACN 000 680 704

Respondent

Application for special leave to appeal

HAYNE J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 16 AUGUST 2013, AT 10.27 AM

Copyright in the High Court of Australia

MR N.C. HUTLEY, SC:   If your Honours please, I appear with my learned friend, MR J.M. HENNESSY, SC, for the applicant.  (instructed by Minter Ellison Lawyers)

MR R. COBDEN, SC:   May it please the Court, I appear with my learned friend, MR C. DIMITRIADIS, for the respondent.  (instructed by Gilbert & Tobin Lawyers)

HAYNE J:   Yes, Mr Hutley.

MR HUTLEY:   Your Honours, the case involved in point of fact the simulcast of programming by FM radio stations using the broadcasting services bands within the meaning of the Broadcasting Services Act, section 6 and streaming over the internet in a manner accessible via specified URLs or universe resource locators, and that is apparent from application book 22, paragraph 17, and paragraph 26 on page 23.

The issue was whether the licence agreements from copyright owners of sound recordings extended to the internet aspect of the FM station’s business.  The issue resolved into the question as to whether the supply of the internet stream was, or was an aspect of, a broadcasting service within the meaning of the Broadcasting Services Act, section 6 and I will take your Honours to that, of course, in due course, and that your Honours can see from the application book 51 in the Full Court, paragraphs 2 to 5.

The answer to that question in turn drove the construction of a Ministerial Determination under subclause (c) of the definition of broadcasting service in section 6 which operated to exclude a class of services from the meaning of broadcasting service. The definition your Honours will find in the judgments, at first instance, at application book 15, paragraph 52 in the judgment of Justice Foster, and the Ministerial Determination on page 17 of the application book.

The relevant facts concerning the production and demonstration of the simulcasts were not in dispute and appear in the Full Court judgment at application book 53, paragraphs 8 to 15.  I will not take your Honours through them.  They were all agreed.  The facts concerning the particular simulcast of sound recordings were agreed and those are in paragraphs 16 to 18, commencing at application book 55 in the judgment of the Full Court.

Whilst there was a deal of extrinsic material placed before the court, it was ultimately of little assistance to the court, as they found at application book 70, paragraph 59 and we, with respect, agree.  The question is solely one of statutory construction and as with the Full Court ‑ ‑ ‑

CRENNAN J:   You do not like the construction of paragraphs 68 and 69, I think, of application book 73.

MR HUTLEY:   I am sorry, your Honour.

CRENNAN J:   Paragraphs 68 and 69. 

MR HUTLEY:   Yes.  I am sorry, I missed the weight of your Honour’s question.  Yes, that is what we disagree with.

HAYNE J:   Why is it wrong?

MR HUTLEY:   Your Honour, we say it is wrong because the concept of service is a broader concept than solely the means of delivery.  Can I take your Honours through a few examples in the legislation?

CRENNAN J:   You seem to be going, in your submissions, in the direction of service equals service provider, or is there some other construction which you are urging?

MR HUTLEY:   No.  We say the service refers to the whole activity, including both the programs and means of delivery, of a broadcast.  It is not just, as the Full Court found, the means of delivery.

CRENNAN J:   The business of the service provider.

MR HUTLEY:   It is an abstract noun and it is not just the business.  It is, as it were, the production of both the product and means of delivery.  Can I give your Honours some examples of, going through the Act – and we accept this is purely a matter of construction – but one has to go through the legislation as the Full Court did.  The Full Court commenced by considering section 3 of the Act and we, with respect, would start at the same point.  If your Honours go to behind tab 2 to section 3, their Honours refer to section 3 at application book 70, page 61.  They refer in the three dot points to subclauses (a), (c), (f), and (g).  We draw your Honours’ attentions further to (e) which is:

to promote the role of broadcasting services in developing and reflecting a sense of Australian identity –

If broadcasting services are merely, in effect, the technological means, that is a somewhat, with respect, inapt usage of that concept.  If one goes to (i):

to encourage the provision of means for addressing complaints about broadcasting services –

If broadcasting services are purely, as it were, their technical characteristics, i.e. whether part of the broadband network or optic fibre or the like, we would again observe that is a singularly inapposite use for that purpose. Now, Justice Foster – can I take your Honours through a few – one then goes over to section 6 itself and your Honours have seen that. Your Honours will find that in the materials, to stay with it, broadcasting service is defined on page 6, I think, your Honours. Your Honours will see it:

means a service that delivers television programs –

Programs has a particular meaning for these purposes, which your Honours will find at page 17, it is 15 in the print.  Returning it is:

to persons having equipment appropriate for receiving that service. whether the delivery uses the radiofrequencies –

et cetera, and then down to the exception.  Their Honours have found that a service merely just means a means of delivery of a program.  So it says a broadcasting service means a means of delivery of a program that delivers, et cetera.

CRENNAN J:   Where do you get the notion of product out of that definition of broadcasting?  You are coming to that, are you?

MR HUTLEY:   Your Honour, I want to take your Honours through a couple of the usages to expose that the meaning chosen by the Full Court, with respect, cannot be right.  The question then is, what can be right?  I accept I bear the burden of that.  Can I take up the meaning of the concept of commercial broadcasting, radio broadcasting service?  It is important to note that a central provision in this Act is 133 which was referred to by the Full Court.  Your Honours will find that in the last page of the materials which I think is page 23 in the bottom right‑hand corner.  Their Honours referred to that and they say:

A person must not provide a commercial radio broadcasting service unless the person has a licence to provide that service. 

If your Honours go back to commercial broadcasting radio service, your Honours will find that at page 10 in the print, in the bottom right‑hand corner your Honour will find page 9 – I am sorry, your Honour, I mislaid something.  That takes one then to commercial radio service which is this, your Honour, on the preceding page.  Your Honours will find – I am sorry, I have just lost ‑ ‑ ‑

CRENNAN J:   The top of page 8, I think you are looking for.

MR HUTLEY:   Thank you, your Honour.

CRENNAN J:   At point 2.

MR HUTLEY:   Yes, “commercial radio broadcasting service”.  That takes one then to section 14, if your Honours would kindly go to that.  That says:

(1)       Commercial broadcasting services are broadcasting services:

(a)     that provide programs that –

having certain characteristics in (a) and (b) –

(c)     that are usually funded by advertising revenue; and

(d)that are operated for profit as part of a profit‑making enterprise –

Those characteristics, we say, are apt to relate to a broader concept than just the means of delivery of programs.  As we observed under 133, that is provision is made for the relevant service to require a licence.  Now, if the Full Court is correct, it would appear that each and every means or combination of means of delivery of relevant programs would require a specific licence. 

So, in other words, if broadcast services just means the means or particular individual combination of means, you would require a licence for each and every one of those means. Licences, your Honours, are allocated under section 36. In the first instance, if I could take your Honours to those. The former – that is section 36 – is concerned with broadcasting services utilising the broadcasting services bands. The definition of broadcasting services bands licence in section 6 can be referred to – and your Honours will find that at page 7 of your Honours bundle – in these terms:

broadcasting services bands licence means a commercial television broadcasting licence, a commercial radio broadcasting licence or a community broadcasting licence that uses the broadcasting services bands as a means of delivering broadcasting services.   

If broadcasting services means the means of delivery of programs, and one inserts that, the sentence becomes unintelligible because that means that a commercial television broadcasting licence – or radio broadcasting licence that uses broadcasting services bands is a means of delivering programs.  The usage throughout the Act, and that is just one example completely cognate with what we are concerned, the usage between the Act envisages

the broadcasting services is broader concept than the means of delivery and it is looking to – as we say in our written submission – the concept of the usage which one finds in, for example, the BBC service or the ABC broadcasting service. 

That is, looking at the totality of the product and the means of delivery of the product of “the service”. The conclusion that their Honours have come to, in our respectful submission, cannot stand with the usage throughout the Act of the defined term has, in our respectful submission, the consequence that any change in the means of delivery – the addition of a coaxial cable as part of the means of delivery of a broadcasting service – would require a further licence. Because each and every means, or combination of means, as your Honours see from section 6 is, according to the Full Court’s reasoning, a new and different service.

We submit that is simply wrong, cannot be correct, is inconsistent with the usage of the defined term throughout, in many parts of the Act, and we have only taken your Honours in the time allowed through one chain of reasoning but we will seek, on an appeal, to expose that the usage in various parts of the Act is completely inconsistent with the conclusion come to by the Full Court.  The Full Court’s conclusion was – and we agree – that the Ministerial direction decision used service in the same way as used in the Act.  That was common ground.

The decision of the Full Court that a service is a means of delivery led inexorably to the success for our learned friends because the internet is not a means of delivery.  The use of the broadcasting bands is a means of delivery and that was the criterion for determine of exclusion.  But if one moved to a broader concept, such as the trial judge Justice Foster applied, the contrary conclusion followed because the discrimen from being accepted for the exclusion was that your service was one which utilised the relevant bands which ours undoubtedly did.

So, in other words, the case in point of fact provides a perfect vehicle for this Court to elucidate the meaning of a fundamental term to a major piece of legislation.  In our respectful submission, the conclusion of the Full Court is wrong.  It does not stand with the usage which one finds throughout the legislation and in respect of sections which the Full Court itself referred to in section 133 which, when one traces through the implications of 133, the consequences are very significant because it changes the criterion for a requirement of a licence.  It is, in our respectful submission, an appropriate vehicle for consideration of that question by this Court and it is an important question.  If your Honours please.

HAYNE J:   Thank you, Mr Hutley.  Yes, Mr Cobden.

MR COBDEN:   May it please the Court.  In the respondent’s submissions, special leave should be refused because the Full Court’s construction – the definition of broadcasting service – is plainly correct.  No plausible alternative construction is proffered by the applicant, CRA, either here or below and nor, with great respect, was the construction proffered by the primary judge plausible or able to be administered, and as such there are insufficient prospects of success to warrant the grant of special leave.

CRENNAN J:   Do you have anything to say specifically about the sections to which our direction was ‑ ‑ ‑

MR COBDEN:   I do, your Honour.  I am doing that on my feet because as far as I can see that argument was not put forward in any of the written outlines.  Section 14 is mentioned in our learned friend’s reply outline at paragraph 7.  Just to point out that commercial broadcasting must be licensed under section 14, but the adverse consequences were not adverted to other than in very general terms and a late paragraph in the opening submission.

CRENNAN J:   The suggestion seems to be made that broadcasting service, as I put to Mr Hutley, is equal to broadcasting service provider.

MR COBDEN:   That is right.

CRENNAN J:   That is certainly what seemed to me anyway to emerge from the sections of the Act to which our attention was directed.

MR COBDEN:   The broadcasting service is not the provider. We are specific with great respect.

CRENNAN J:   Is the expression used differently in different parts of the legislation?

MR COBDEN:   Your Honours, the starting point, for example, to put the contrary position, would be to go back to the statutory extracts that my learned friends have sent up in a small bundle, and my learned friend took your Honours to parts of section 3, but can I identify other paragraphs in section 3(f):

to promote the provision of high quality and innovative programming by providers of broadcasting services –

So that providers in the Act are quite clearly distinguished from the broadcasting services.  The same phrase is used for datacasting services in (fa), the same in relation to certain types of broadcasting services in (g), and in (h) and in (j).  So the Act draws a clear distinction between the provider of a broadcasting service – the business activity that provides the broadcasting service – and the broadcasting service, itself ‑ ‑ ‑

CRENNAN J:   And (e) and (i) should be read in that context.

MR COBDEN:   Yes, quite so, your Honour.  Moreover, at other places in the Act which I did not take your Honours to but there are references to the licensee as holders of a licence in respect of a broadcasting service, whether it is a commercial broadcasting service or whatever.  Then, if one turns to the definition itself, which is usefully in the materials that I was just in at page 6 of the bundle or 7 of the Act.  The definition of broadcasting service critically in the heart of the definition is that the:

persons having equipment appropriate for receiving that service –

One cannot receive a business activity or a business entity, and it with great respect mischaracterises the Full Court’s holdings to say that it merely said that the broadcasting service was a means of delivery at paragraph 68 and 69 to which your Honour Justice Crennan directed attention which, at page 74, of the application book, the Full Court plainly said – paragraph 68, page 73, I am sorry, in the central sentence.  Going back a step – the Full Court identified that our learned friend, Mr Hennessey, submitted effectively that the service was the radio program itself.  That is found at page 56 of the application book at paragraph 21:

The essence of CRA’s contention is that the broadcasting service of DMG is the radio program itself –

So then in 68, having looked at the textual dictionary matters and at the definition in particular working from the text of the definition at 68, said – the Full Court said:

the word service signifies something other than the radio programs, being the content that includes, relevantly, the Foreign Land Recording.  Rather, service is the provision, by one means or another, such as the internet or terrestrial transmitters, of that radio program.  The same radio program may be delivered by different services.

And 69, this is the essence of it:

A broadcasting service is the delivery, in a particular manner, of a radio program, consisting of matter intended to entertain, educate or inform.

Back at paragraph 22, the Full Court had noticed a submission that we made which was that, in effect, the radio program – the services – the radio program wrapped up in a delivery mechanism and that is the provision of a broadcasting service.  It is not correct, with respect, to submit to say that the Full Court simply found it was a delivery mechanism.  It is a program wrapped up in the delivery mechanism.  When one sees it in that light, none of the provisions to which my learned friend took the Court, no violence is done to any of those provisions.  What one reads into, for example, section 14, on page 17 of those materials, is the definition of broadcasting services – a broadcasting service and other words.  So one reads into it the whole notion of being:

a service that delivers television programs or radio programs to persons having equipment appropriate for receiving that service, whether the delivery uses the radiofrequency spectrum, cable, optical fibre, satellite or any other means –

so it picks up all of those.  The question is, what does the Ministerial Determination do when one goes back to the statutory language and, as it were, slices and dices up parts of that chapeau to the definition and says, by Ministerial Determination, I am taking these things out.  There is no limitation on the Minister’s power as to how the Minister will do it.  It can be a service or a class of services as your Honours see and as the Full Court observed, there is no limitation on that power.  It can be done by reference to delivery mechanism.  It could be done by reference to protocol.  It could be done by reference to the Minister’s unfettered power to do it.

So when one then tracks the statutory materials through, and I think my learned friend took your Honours to them in Justice Foster’s judgment, what we do is start with, for the purposes of this case, the Copyright Act which is the definition that was picked up in the industry agreement and we see that at page 6 of the application book and it means:

broadcast means a communication to the public delivered by a broadcasting service within the meaning of the Broadcasting Services Act 1992.

Then one is taken to the Broadcasting Services Act definition which has that chapeau which is all inclusive.  Then two exceptions:

a service (including a teletext service) –

a teletext service describes a means of delivery; (b) another one that is excluded.  This is at page 15 of the application book in Justice Foster’s judgment:

a service that makes programs available on demand on a point‑to‑point basis –

That is a reference to some sort of technology or technological means, and finally:

a service, or a class of services, that the Minister determines, by notice in the Gazette, not to fall within this definition. 

The question here was a very narrow one in a sense.  It was not an opportunity to explore every dimension of the meaning of broadcasting service.  It was, where there is communication by three particular radio stations off three particular sound recordings, was it within or without the definition of broadcast.  It was plainly a communication and the declarations made by the Full Court accepted that – within or without – meaning the definition of broadcast, which took us straight into the Ministerial Determination.

It was, we submit – CRA submits otherwise – it falls within the first part of the Ministerial Determination.  That is to say, it would be excluded, primarily, because it makes available television programs or radio programs using the internet, but then it would only be brought back in if it is within the exception.  That is to say, it delivers television programs or radio programs using the broadcasting services bands.  That is, indeed, precisely the taxonomy, effectively, that the Full Court adopted at page 74 of the application book, paragraph 71:

a service might –

that is a service including, of course, the radio program wrapped up in the delivery mechanism be delivered by one of three ways –

including the broadcasting services bands –

that is radio broadcasting –

using the internet –

or using both.  Then –

The first and third are broadcasting services.  The second category is not –

There is was corrigendum in relation to this paragraph, your Honours, in the third‑last line of that paragraph – DMG’s service is in the second category, not the third category.  It was not within the licence.  Your Honours probably noticed that.

CRENNAN J:   Yes, we did.

MR COBDEN:   So the construction put forward by CRA, by the applicant, is with respect very uncertain because it puts, for example, the position at its reply submission which picks up something in its notice of appeal.  It is at application book page 109, paragraph 6:

CRA . . . contends for a construction of ‘broadcasting service’ that includes a business activity characterised by the means of delivery.

What we say about that is the definition of broadcasting service contains no reference to business activity, but even if that were an approach that had any attraction to it, the CRA’s definition has this notion as the business activity being characterised by the means of delivery and no suggestion is put forward as to how that characterisation should take place, except for the slightly tendentious use of radio station throughout the submissions to conflate the idea of the entity and the service.

HAYNE J:   Well, I think that the conflation, as you would have it, is perhaps to be understood as the provision of a programme, that is the provision of a single set of content by a different means of delivery is to be fitted into the definition of broadcasting service.

MR COBDEN:   Yes, but the Ministerial Determination, with respect, does then divide services up into services that are delivered by one means, internet, and services that include at one stage of the delivery the broadcasting services bands.  Why that was done is explained by the extrinsic materials which neither of us are taking your Honours to in the compass of today.  But the short answer, it was done because there was something recorded by Justice Foster at paragraph 86(h) in his acceptance of some evidence. 

There was something that was very big in people’s minds called data casting at about the year 2000, where people – and it was thought because it would use the very valuable broadcasting services band spectrum for which people paid a lot of money and which are the ones that are capable of being received by ordinary radio equipment, therefore, very broad reach, it was thought there must be regulation to stop people doing de facto broadcasting. 

So there was a reason for the Ministerial Determination.  In the end, it did not particularly eventuate in practical terms but it does, we respectfully submit, show that the two different services are being delivered, depending on – even of the exactly the same content depending on which delivery mechanism is used, with which delivery mechanism wraps up the content. 

We respectfully submit that the suggestion that it amounts to business activity or to business activities characterised by something, is just inconsistent with the words of the chapeau because such a, if you put those words in, you cannot have equipment that is generally – I will read the right  phrase from the definition, you would not have “equipment appropriate for receiving that service”, even less so would that be a computer receiving the internet or a radio receiving the broadcasting services bands.

We also submit, with respect, that the special leave questions identified by our learned friends do not – either do not arise or are inappropriately broad. The first one, what is a broadcasting service within the meaning of the Broadcasting Services Act? That is not really the question thrown up by this case. The question thrown up by this case was, was the communication of the particular sound recordings a broadcast within the meaning of the Copyright Act or not? The case would not be an opportunity to explore the meaning of broadcasting services, trawling as it were throughout the Broadcasting Services Act. 

The second asserted proposed special leave question is framed in such a way as to provide an answer favourable to our learned friends because it says, is a radio station simultaneous delivery of the same radio programme over the broadcasting service bands and the internet the act of one service or two services, but the word “radio station” does not appear anywhere on any of the statutory language and it, of course, simply then immediately identifies the service and the entity as being something that it is in the business of radio and therefore the tendency is to provide an answer favourable to our learned friends. 

I think if have dealt with all the matters about why our learned friend’s approach does not work.  With respect, the Full Court’s approach does work.  One can read it into those sections; that is to say, a commercial broadcasting service is a service which is, as the Full Court has described it, the delivery of a particular programme by a particular mechanism, and the rest of section 14(1) and 8(e) can all work taking that approach, with respect.

I think if have submitted to your Honours that already the non‑inclusions in the definition of broadcasting services, teletext and dial‑up service, do refer to means of delivery, so that supports the Ministerial Determinations approach.  Equally, there has been no submission made and indeed finding by Justice Foster, nothing put to the contrary, that the Ministerial Determination was validly made.  There is no

suggestion it was made beyond power by adopting the discrimination it did between internet services and broadcasting service bands delivery.

Our learned friends have pointed in their written submissions to various adverse consequences that would follow: we have covered in our written submissions the reasons why they would not follow and that is not a matter that would, in our respectful submission, support any grant of special leave.

HAYNE J:   Thank you Mr Cobden.  Yes, Mr Hutley.

MR HUTLEY:   Thank you, your Honours.  Can I take your Honours to paragraph 66 in their Honours reasons?  Their Honours commence by saying:

·A broadcasting service delivers radio programs to a person having the appropriate equipment:  clearly enough, the word service must mean something other than the radio program that is the subject of the delivery; thus, a service must be something that is capable of delivering a radio program. 

·That delivery uses the radio frequency –

et cetera, to the next paragraph.  Could I drop down to the end of the next dot point:

 the delivery constitutes the service.

·A broadcasting is not a service that makes radio programs available using the internet (due to the exclusion . . . ) unless it is a service that delivers radio programs using . . . 

et cetera.  The court clearly was saying, in our respectful submission, it is the means of delivery that constitutes the service and ‑ ‑ ‑

HAYNE J:   Well, there may be a difficulty in taking the separate elements of a composite definition and pulling them apart in the fashion you would say the Full Court has, but how do you make the definition work for you other than by injection of a notion of business activity?

MR HUTLEY:   We have put it in paragraph 6 – we say it is not referring, in effect, to the accounting department of a broadcaster, we accept that, your Honour.  What it is talking to is the product of the activity as a whole, and the product of the activity of a broadcaster as a whole in respect of a broadcast is, in effect, like the BBC service which is the totality of its

output, the means by which it delivers that output to the world, irrespective of the specific chosen means of doing so.

The licences of course can condition, for example they do with respect to broadband licence, that one means – a means – be by the bands.  But it does not say that that means that the service once you have a licence is just by the bands.  The service is a broader concept.  That, we say, otherwise leads to the consequence which my learned friend does not seem to dispute is that any change of means, any change of means, means that you are delivering a different service which – it logically follows from the Full Court’s judgment.  Any combination of means is a different service to a different combination of means.

CRENNAN J:   You made that point in‑chief.

MR HUTLEY:   Yes, anyway, I have attempted to answer your Honour.  We say once it has looked at that broader concept that ministerial direction merely was concerned to bring back in as a service those services which used the bands, for very good commercial reasons, thus allowing them to stream over the internet, and thereby not, as a by‑blow, make illegal or exclude them from so acting.  That is why we say it is a crisp point, it is a point of importance, and the Full Court’s judgment in its terms cannot be correct.

HAYNE J:   Thank you, Mr Hutley. 

An appeal to this Court would enjoy insufficient prospects of success to warrant a grant of special leave in this matter.  Special leave to appeal is refused with costs.

AT 11.04 AM THE MATTER WAS CONCLUDED