Herald and Weekly Times Ltd v The Commonwealth

[1966] HCA 78

HIGH COURT OF AUSTRALIA

McTiernan, Kitto, Taylor, Menzies, Windeyer and Owen JJ.

HERALD AND WEEKLY TIMES LTD. v. THE COMMONWEALTH

(1966) 115 CLR 418

30 November 1966

Constitutional Law (Cth)

Constitutional Law (Cth)—Broadcasting and Television—Licences to transmit television programmes—Licences confined to companies—Conditions attached to licences—Prohibition of control of more than prescribed number of licences—Control—Interest—Circumstances deemed to constitute control—Whether prohibition valid—The Constitution (63 &64 Vict. c. 12), s. 51 (v.)—Broadcasting and Television Act 1942-1965 (Cth), ss. 91 (2), 91A, 92, 92A, 92B, 92C.

Decisions

November 30.
The following written judgments were delivered: -
McTIERNAN J. The question for decision is whether Div. 3 of Pt IV of the Broadcasting and Television Act 1942-1965 is constitutional legislation. The heading of Div. 3 is - "Limitation of Ownership or Control of Commercial Television Stations". The meaning of "commercial television station" is ascertained by reading together the definitions of "commercial television station" and "television station", which are to be found in s. 4 (1) of the Act. The commercial television service for which the Act provides is a "service" to which s. 51 (v.) of the Constitution extends. This service is carried on by companies holding licences granted for commercial television stations by the Minister in pursuance of s. 81 of the Act. (at p432)

2. I am unable to uphold any of the points raised by the plaintiffs against the constitutional validity of Div. 3. In my opinion each and every provision which they attack is in substance a law which s. 51 (v.) of the Constitution empowers Parliament to make with respect to the commercial television service for which the Act provides. The defendant's demurrer to the statement of claim should be allowed. (at p432)

KITTO J. This is a demurrer to a statement of claim which seeks a declaration that the whole or some parts of Div. 3 of Pt IV of the Broadcasting and Television Act 1942-1965 (Cth), a division enacted by s. 7 of the Act No. 38 of 1965, and amended by the Act No. 120 of 1965, is or are invalid as being unsupported by any legislative power of the Commonwealth. On the argument of the demurrer the plaintiffs limited their attack to some parts only of the division. (at p432)

2. The argument presented for the Commonwealth in support of the validity of the whole division relies upon s. 51 (v.) of the Constitution, by which the Parliament is given power to make laws with respect to postal, telegraphic, telephonic and other like services. The Court has held that the transmission of television programmes by means of wireless telegraphy is a "like service": Jones v. The Commonwealth (No. 2) (1965) 112 C.L.R. 206. Accordingly the question here is whether the impugned provisions are laws with respect to that subject. (at p432)

3. It is a subject upon which there are in force and were in force at the commencement of the provisions certain Commonwealth laws setting up a licensing system for commercial television stations. By s. 6 (1) (b) of the Wireless Telegraphy Act 1905-1950 (Cth) a person is forbidden to transmit messages by wireless telegraphy except as authorized by or under the Act, and Jones's Case (1965) 112 CLR 206 establishes that the transmission of a television programme is the transmission of a message by wireless telegraphy. It is not now open to question that this general prohibition extends to television transmissions and is valid in its application with respect to such transmissions. (at p433)

4. It is upon this prohibition that the licensing system of the Broadcasting and Television Act takes effect. Section 81 empowers the Minister to grant to a company, and only to a company, a licence for a commercial television station upon such conditions as he determines, and provides that the establishment, erection, maintenance and use of such a station under the section shall not be deemed to be in contravention of the Wireless Telegraphy Act. Plainly, a law relaxing in this manner the prohibition of television transmission is a law with respect to television services; and, equally, any law regulating or qualifying the power to grant television licences, or subjecting television licences to conditions upon breach of which they may be suspended or revoked, is a law with respect to such services. (at p433)

5. The provisions now in question are superimposed upon this licensing system. At one stage of the plaintiffs' argument it was contended, in regard to such of the provisions now under attack as subject a licence to conditions, or as prescribe criteria for the eligibility of a company to receive a licence, that the question whether they are valid as having the character of laws with respect to television services depends wholly upon the nature of the conditions or criteria. To uphold this contention would be to overlook the fact that any provision which operates to create or delimit a power in given circumstances to relax in favour of a television station the general prohibition upon television transmission has, of necessity, by reason of the very fact that it has that operation, the character of a law with respect to television services. It is not necessary, in order that a provision so operating shall be within the constitutional power, that the persons, things, situations or events referred to in it shall themselves possess characteristics which supply a further link with the subject of television services. This was pointed out by Taylor J. during the argument in Television Corporation Ltd. v. The Commonwealth (1963) 109 CLR 59, at pp 66, 67 by reference to the cases of Huddart Parker Ltd. v. The Commonwealth (1931) 44 CLR 492 and Victorian Stevedoring and General Contracting Co. Pty. Ltd. and Meakes v. Dignan (1931) 46 CLR 73 The question is quite different from that which arises where a purported exercise of a statutory power to grant licences upon conditions is attacked as having been actuated by a purpose extraneous to the power. A law which qualifies an existing statutory power to relax a prohibition is necessarily a law with respect to the subject of the prohibition. Even if the qualification gives it the additional character of a law upon some other topic - even, indeed, if that other topic be not a subject of federal legislative power - it is still a law with respect to the subject of the prohibition, and is valid if that subject be within federal power: cf. Fairfax v. Federal Commissioner of Taxation (1965) 114 CLR 1 (at p434)

6. The main attack, however, is directed against so much of Div. 3 as, if valid, creates offences consisting of certain kinds of conduct on the part of persons who are not the holders of television licences. Plainly enough, the attack must succeed unless the conduct which is thus made unlawful is so relevant to the subject of television services that a law forbidding it is a law with respect to that subject. (at p434)

7. The central provisions of the division so far as offences by non-licenceholders are concerned, are to be found in ss. 92 and 92C. The former begins by providing that a person contravenes the section if, and so long as, he has a "prescribed interest" in each of three or more licences, in each of two or more licences for stations in a Territory, or in each of two or more licences for stations in a State and within a radius of thirty miles of the General Post Office in the capital city of the State: sub-s. (1). A penalty for contravention is provided: sub-s. (2); and then exemptions from the application of sub-s. (1) are created to apply in certain sets of circumstances: sub-ss. (3) and (4). If sub-s. (1) had referred only to a legal or beneficial interest in a licence, or even to such an interest (using the word in an economic rather than a legal sense) as a shareholder in a company has in a licence held by the company, there would be no difficulty in seeing the connexion between that which the section is doing and the subject of television services, or in upholding the evident view of the legislature that that connexion is sufficiently direct to give the section the quality of a law with respect to that subject. Its operation would plainly be to foster free competition in the exercise of licences; and, as the plaintiffs concede, a law operating only to dissociate television stations from one another as regards de jure or de facto control could not properly be denied the character of a law on the subject of television services. (at p435)

8. The division goes thus far by providing that for the purposes of the division a person has "a prescribed interest" in a licence (a) if he is the holder of the licence; or (b) if he is in a position to exercise control, either directly or indirectly, of the licence, that is to say if he is in a position to exercise control of the company that holds the licence, of the operations conducted under or by virtue of the licence, of the management of the licensed station, or of the selection or provision of the programmes to be televised by the station: see s. 91 (2) (a) and (b) and s. 92A (1). But this is only the beginning. By a series of far-reaching provisions, particularly those made by s. 91 (2), the concept of "a prescribed interest" in a licence is extended for the purposes of the division, so that for those purposes a person is to be taken to have such an interest in a wide variety of situations including some where he has no legal or beneficial interest either in the licence itself or in any share in the licensee company, and may not have - indeed in many cases is unlikely to have - any degree of control whatever of the company, of the operations under the licence, of the management of the station, or of the selection or provision of the programmes to be televised by the station. By other provisions (see ss. 92A and 92B), a person is to be deemed to be in a position to exercise control of a licence if he stands in any of a variety of situations not all of which are such as necessarily or ordinarily to give him any voice in the control of the licence. We have been given in the course of the argument a number of striking illustrations of the possible working of these provisions, and with their aid the contention has been strongly pressed upon us that a law which would be on the subject of television services if its operation were limited by reference to proprietary interests or to real control, but is expressed to operate by reference to situations where there is or probably is neither proprietary interest nor actual control, should be held not to be a law with respect to television services at all. (at p435)

9. The other section which I have mentioned as containing a central provision is s. 92C. That section, subject to a qualification, prohibits a person from being a director of two or more companies that are, between them, in a position to exercise control of three or more licences. The operation of this section is extended beyond the ordinary meaning of its words by the provision in s. 92A, which has already been mentioned, that for the purposes of ss. 91 and 92C a person shall be deemed to be in a position to exercise control of a licence if (inter alia) he is in a position to exercise control of the company that holds the licence; for s. 92B requires that a person be deemed to be in a position to exercise control of a company if he stands in any of a variety of specified situations which ordinarily would give him little say in the actual control of the company's affairs. (at p436)

10. It is unnecessary here to describe the challenged provisions in greater detail. One need only read them to agree with the plaintiffs that they cast a net so wide as to cover many a concrete case that may be imagined, where it is most unlikely that the person concerned would find himself in a position to exercise any form or degree of control, or even of influence, in relation to any television licence or television station. But it does not follow that for this reason they are beyond power, unless the assumption be accepted which the plaintiffs' argument in truth made, that a law cannot be with respect to television services unless there can be seen, in every kind of case that it covers, some likelihood of there being an opportunity of influence or control in respect of a television service. The assumption, in my opinion, unduly limits the notion of substantial connexion upon which the Constitution insists when it uses the expression "with respect to". Undoubtedly it is right to scrutinize minutely the effect of a challenged law in all the variety of cases to which it applies according to its term; but when that has been done the broader inquiry remains: what, then, is the law really doing by the operation which the scrutiny reveals that it has ? For it is the answer to that question that shows whether the law is really one "with respect to" the relevant subject matter of power. The answer to it here surely is that the offence provisions are setting up a barrier against, not indeed the probability, but the possibility that a person who may be able, by reason of any of a number of legal or business relationships, to influence the exercise of the rights conferred by one television licence may be able, by reason of such a relationship, to influence the exercise of the rights conferred by another television licence. If it were correct to say of any of the relationships that in no case could it carry with it a special opportunity to exert such an influence, the relevant provision would no doubt lack the necessary connexion with the subject matter of power. But this cannot be said of any of the relationships which the division describes. Each gives rise to a situation which according to ordinary experience may, in some cases at least, support an endeavour to effect the control or management of a television station or its operation under its licence. And, as everyone knows, even the faintest of voices may sometimes carry the day. (at p437)

11. Thus the provisions in question operate as part of a legislative plan to insulate the control and management of activities connected with the exercise of a television licence against the possibility of influence by a person who may occupy any of the specified positions of potential influence over like activities in relation to another such licence. It necessarily follows that the provisions are laws upon the subject of television licences and therefore upon the subject of television services. (at p437)

12. The plaintiffs contend, in effect, that the situations by reference to which the provisions are made to apply are so arbitrarily selected, and the possibility that any capacity for influence will actually arise or exist by reason of some of them at least is so remote, that the provisions cannot be regarded as in their entirety characterized by a purpose of preserving licences from influences tainted by associations with other licences. It may be conceded that in some of the cases to which they apply, the described situations will often, or even generally, afford no foothold at all for an exertion of influence. Yet it is impossible, in my opinion, to avoid the conclusion, even upon consideration of the most extreme illustrations of the working of the provisions, that together they form a means, and are enacted as a means, for effectuating a desired end which is within power, namely that of ensuring freedom of competition between television services. How far they should go was a question of degree for the Parliament to decide, and the fact that the Parliament has chosen to go to great lengths - even the fact, if it be so, that for many persons difficulties are created which are out of all proportion to the advantage gained - affords no ground of constitutional attack. (at p437)

13. It is perhaps desirable to refer specifically to a submission that was made in relation to provisions of which examples may be found in s. 91A (that for certain purposes of the division a person who has shareholding interests in a company that has shareholding interests in another company is to be deemed to have shareholding interests in that other company) and s. 91 (2) (c) (that for the purposes of the division a person has a "prescribed interest" in a licence if he is in a position to exercise control of more than five per centum of the maximum number of votes that could be cast on a poll at or arising out of a general meeting of a company holding the licence, whether he is in that position as regards all questions that could be submitted to such a poll or as regards one or more only of such questions). The submission was that the Parliament cannot turn a law which is not upon a subject matter of legislative power into a law which is upon such a subject matter by the simple expedient of creating a statutory fiction. This abstract proposition may be accepted at once, but it has no relevance to any of the provisions to which the plaintiffs' argument sought to apply it. Those provisions, whether expressed as deeming provisions (as s. 91A) or as direct enactments that in given situations the words of other provisions are satisfied (as s. 91 (2) (c)), extend the operation of the other provisions to which they apply, and must necessarily be taken into account in ascertaining the scope of the operation, and thus the character, of those other provisions. But the process leads to no other conclusion than that which I have stated. (at p438)

14. In my opinion the whole of Div. 3 is valid and the demurrer should succeed. (at p438)

TAYLOR J. In these proceedings by way of demurrer the plaintiffs seek a declaration that Div. 3 of Pt IV of the Broadcasting and Television Act 1942-1965 is, in whole or in part, beyond the legislative power of the Commonwealth to make laws with respect to "postal, telegraphic, telephonic and other like services". In Jones v. The Commonwealth (No. 2) (1965) 112 C.L.R. 206 it was held that this head of power authorizes the making of laws with respect to television broadcasting systems and with respect to "the choice of the persons who may make use of such a service either to send or to receive communications, to the conditions upon which persons may so use it, and to every aspect of the use and advantage they may have from it" (1965) 112 CLR, at p 226 This passage does not purport to define exhaustively the relevant content of the power but it was a sufficient statement upon which to found the decision in that case. (at p438)

2. The legislative provisions contained in Div. 3 purport to relate to "Limitation of Ownership or Control of Commercial Television Stations". The provisions are somewhat complicated but if on examination they are found to be measures the character of which is truly described by the heading of the division it is nothing to the point to say that they operate, or are capable of operating, unreasonably; it is sufficient, in my view, if it appears that the object of the measures is to secure a measure of independence in the ownership and control of commercial television stations. Parliament may - as was conceded - prescribe that a person shall not own or control a television station unless he is the holder of a licence. And it may prescribe conditions of eligibility for the grant of the licence. It may also provide that a person shall not own or be in a position to control any more than a stated number of commercial broadcasting stations. Indeed, it may go further and provide that no person shall have any interest, either directly or indirectly, in more than a stated number. But short of this I have no doubt that it may prescribe the type of interest, either direct or indirect, which a person shall not hold in more than a stated number of stations and provide sanctions for the observance of the legislation. (at p439)

3. In my view the arguments advanced on behalf of the plaintiffs merely asserted - and attempted to demonstrate the correctness of the assertion - that the provisions of Div. 3 are capable of operating unreasonably. But they were not arguments which were capable of supporting the proposition that any of the impugned provisions were not laws with respect to the legislative subject-matter. It is sufficient for me merely to add that I agree with Kitto J. that the demurrer should be allowed and with his reasons for that conclusion. (at p439)

MENZIES J. The power of Parliament to make laws with respect to television services - and I regard Jones v. The Commonwealth (No. 2) (1965) 112 C.L.R. 206 as establishing the existence of that power - extends to determining the description of those who will or may obtain licences to conduct television services and the circumstances in which a licence, having been granted, will or may be determined. (at p439)

2. The basic limitation upon this aspect of the Parliament's power for which the plaintiffs here contended was, in substance, that Parliament could not, in formulating such descriptions and circumstances, prescribe conditions not in themselves having a real connexion with the conduct of television services so that, for instance, whereas Parliament could deny a television licence to a person because of a conviction for blasphemy or obscenity - convictions bearing upon the suitability of a person to conduct a television service - it could not deny a licence to a person because of a conviction for manslaughter or housebreaking - convictions having nothing to do with the suitability of a person to conduct a television service. To recognize a limitation of this sort would be to depart from well-established canons of constitutional interpretation and would be contrary to authority: see Huddart Parker Ltd. v. The Commonwealth (1931) 44 CLR 492; Victorian Stevedoring and General Contracting Co. Pty. Ltd. and Meakes v. Dignan (1931) 46 CLR 73 A law for the granting of, or for the revoking of, a licence to conduct a television service is itself, without any further requirement, a law with respect to television services. It was inevitably conceded that s. 6 (1) (b) of the Wireless Telegraphy Act, forbidding the transmission of messages by wireless telegraphy without authority, is a valid law and it seems to me that if Parliament can prohibit any person from conducting a television service, it must follow that Parliament can also determine the persons to whom, and the conditions upon which, authority to transmit will, or may be, given and may be held, and it is not necessary for validity to find in any criterion which Parliament has adopted something which, in itself, relates to television services. Parliament can give and Parliament can take away upon its own terms. (at p440)

3. The rejection of what I regard as the plaintiffs' most fundamental and far-reaching proposition, although important not merely in relation to the proposition to which it was directly addressed, would not of itself, however, involve the failure of their action for, upon their behalf, it was further contended that among the provisions of Div. 3 of Pt IV of the Broadcasting and Television Act 1942-1965 (Cth) there are prohibitions upon persons not holding television licences which concern matters foreign to television services. Although it seems doubtful whether the plaintiffs have locus standi to attack all the prohibitions which counsel has sought to impugn, no objection was raised to the Court dealing with all the questions of validity which were raised. These prohibitions relate in the main to holding shares in, and lending money to (1) companies holding television licences; and (2) companies holding shares in such companies. Any person holding shares or debentures constituting what is described as a "prescribed interest" in a specified number of television licences commits an offence for which a penalty is provided. Restrictions are also imposed upon persons being directors of companies in a position to exercise control over television licences. These prohibitions are given farreaching operation by legislative extensions of what could be regarded as constituting a legal interest in a television licence or a legal power to control a television licence. In the result, the operation of the laws under consideration extends to remote interests in, and modest influences upon, companies holding television licences. The laws are concerned with matters of business influence rather than of legal power. A law governing a particular relationship may, however, be supported by a legislative power with respect to a subject matter notwithstanding that the connexion between the legal relationship and the subject matter of legislative power is of practical rather than of legal significance. Thus, a law prohibiting a member of the Federal Executive Council from holding shares in a company holding a television licence or a company holding shares in such a company would, I think, be valid as a law with respect to television services. (at p441)

4. It was conceded that the power of Parliament would extend to governing participation in a company holding a television licence of persons who, according to company law as it now stands, could, through their voting strength, exercise control of the company. It was contended, however, that Parliament's power stopped with a shareholder's power to control such a company and did not extend to governing participation in a company holding a television licence - and a fortiori to a company not itself holding a television licence - by persons without a controlling interest. The power of Parliament to control participation in companies taking part, directly or indirectly, in an enterprise within Parliament's power is not, however, to be limited by reference to existing laws relating to the control of companies through the exercise of voting power or other like considerations. The charts submitted by the plaintiffs in this and the succeeding case, Cairnton Pty. Ltd. v. The Commonwealth Unreported. Noted at 40 A.L.J.R. 457 - not inaccurately described as "family trees"- demonstrate, if demonstration be needed, that it is to the interest of a company holding a television licence to bring itself into a network with companies holding other television licences and that one way of establishing a desirable community of interest between companies holding television licences is by one such company taking shares in another such company or in companies holding shares in such a company. Another obvious means is through directors having a connexion with other companies having an interest in a television licence either directly or through some intermediate shareholding. (at p441)

5. If the power of Parliament were, by the Constitution, limited to dealing with legal relationships by reason of which control of companies holding television licences could be exercised, many of the provisions of the Act now attacked would be outside power; but the power of Parliament is not so narrowly confined. To decide that legal relationships, which could be - and it seems are regarded by those who are concerned with the conduct of television services as being - significant for the purposes of such an enterprise, are outside the control of Parliament because those relationships do not of themselves assure a legal power to control the conduct of a television service, would be to shut our eyes to matters which, to all but constitutional lawyers, would appear as matters of substantial importance, in relation to television services, to those who provide such services, and to those for whom they are provided. The charts to which I have referred perhaps illustrate why Parliament has found it expedient to deal with legal relationships which, taken in isolation, may seem remote from television services. These charts indicate how a remote connexion may nevertheless be a real connexion. (at p442)

6. In making laws Parliament can, as it were, enter the board room of an entrepreneur engaged upon an enterprise subject to control by Parliament and can be as long-headed as he is in selecting the means which it will employ to achieve an end that is within its legislative power. Parliament, in making laws with respect to a subject, may take into account matters of business, rather than of strictly legal, importance. A matter for legitimate control under the relevant power here under review is the nature and business extent of the television enterprise of companies holding television licences and of persons interested in such companies as shareholders, either directly or indirectly, or as lenders of money or as directors. The legislative power of Parliament extends to control relationships through which some power to influence companies providing television services can be exercised. In my opinion, the sections here impugned are, in the broad sense which I have indicated, laws with respect to television services. (at p442)

7. Having said so much in general terms, I will do no more than record that I have had the advantage of reading the judgment which Kitto J. has prepared. I accept his Honour's analysis of the Broadcasting and Television Act; I regard as completely satisfactory the manner in which he has dealt in detail with its provisions; and I agree with his conclusion and with the reasons which he has given for it, that the whole of Div. 3 is valid and that the demurrer should succeed. (at p442)

WINDEYER J. I agree in the conclusion and in the reasons of Kitto J. I do not wish to add anything beyond saying that I concur also in the observations of a general character which Menzies J. has made. (at p442)

OWEN J. I agree with the reasons given by my brother Kitto for holding that the whole of Div. 3 of Pt IV of the Bradcasting and Television Act 1942-1965 (Cth) is valid. (at p442)

Orders

Demurrer allowed. Order that judgment in the action be entered for the defendant with costs.