M.B. Stammers v Broadbridge, W.H.

[1987] FCA 144

CATCHWORDS

ADMINISTRATIVE LAW - Provision of postal services - Decision

to close post office - Allegation that decision-maker took

account of irrelevant circumstances: political complexion of

the area and the effect of closure on staff - Allegation of

failure to take account of relevant circumstances:

alternative provision of agency services currently offered by

post office and possibility of establishing post office agency

- Authority of decision-maker to make decision having regard

to limitations in his delegated authority - Consistency

between decision and policy guidelines of Australian Postal

Commission.

PRACTICE AND PROCEDURE - Standing oE applicant to bring

proceedings - Applicant postmaster who would be transferred

and removed from accommodation-if closure proceeded.

Postal Services Act 1 9 7 5 ss.5, 6, 7, 9, 1 2 , 36, 49, 76.

Administrative Decisions (Judicial Review) Act s.5.

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	) No. NSW G.626 Of 1987
1

DIVISION GENERAL )

BETWEEN: MALCOLM BARRY STAMMERS

Applicant

AND: W H BROADBRIDGE

First Respondent

AUSTRALIAN POSTAL

COMMISSION

Second Respondent

CORAM :	WILCOX J
PLACE :	SYDNEY
DATE :	1 APRIL 1987

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The respondents' objection to competency be

dismissed.

2. The decision made by the first respondent on or about

21 November 1986 to close Watsons Bay post office

with effect from 30 January 1987 be quashed.

2.

3. The respondents and each of them refrain from taking

any action in relation to the implementation of the

said decision.

4. The respondents pay the costs of the applicants of

the proceeding.

Note :

Settlement and entry of orders is dealt with i n Order

36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )

)

NEW SOUTH WALES DISTRICT REGISTRY	)	NO. NSW G.626 Of 1987
1

DIVISION GENERAL )

BETWEEN: MALCOLM BARRY STAMMERS

Applicant

AND: W H BROADBRIDGE First Respondent AUSTRALIAN POSTAL

COMMISSION

Second Respondent

CORAM :	WILCOX J
P	LACE :	SYDNEY
DATE :	1 APRIL 1987

REASONS FOR JUDGMENT

Draped along the foreshores of Sydney harbour, in the lee of South Head, is the small settlement of Watsons Bay.

Now long since a Sydney suburb, Watsons Bay started life as a

watchpost and fishing village, in the earliest days of the European colonization of Australia. More recently, it has

become widely known for its fish restaurants and through the

early works of Christina Stead, who lived there as a teenager

and young woman,

. L.

The evidence indicates that a post office was opened at Watsons Bay in 1854, when the first public postal service

was established by the government of the Colony of New South

Wales. At Federation control of the postal service passed from the Colony to the new Commonwealth government: and in

1975 it was vested in the Australian Postal Commission, better

known as "Australia Post". During all of that time, Watsons

Bay retained a small post office. However, in November 1986,

Mr W H Broadbridge, the Deputy State Manager, Metropolitan

Services and Chief Nanager, Operations, of the Commission,

decided to close the post office. H I S decision has provoked

much local agitation and this proceeding.

The proceeding is an application for review pursuant to the Administrative Decisions (Judicial Review) Act 1977.

It is conceded by counsel €or the respondents, who are

respectively NK Broadbridge and the Commission, that Mr

sroadbridge's decision, which was purportedly made pursuant to

an authority delegated to him by the Commission itself, was a

"decision of an administrative character made, proposed to be

made, or required to be made ... under an enactment".	The
applicant puts two broad contentions: that the making	of the

decision -- if within the delegated power -- was an improper

exercise of the power conferred by the relevant enactment, the

Postal Services Act 1975; and that the decision made by Mr

Broadbridge was not within his delegated power. I shall

return in due course to the legislation and to those arguments. But, first, it is desirable to deal with a

preliminary matter: the respondents' challenge to the

standing of the applicant to bring the proceeding.

3 .

The standinq of the applicant

The applicant, Malcolm Barry Stammers, has been the

Post Master at Watsons Bay since August 1976. He and his

wife, who works as a part time postal officer, are the only

employees at the Watsons Bay post office. They live, with

their family, in attached accommodation. If Watsons Bay post

office is closed, Mr Stammers will be redeployed by the

Commission. His wife will be offered part time work elsewhere

and accommodation will Se made available to the family, for	a
limited period, at Woollahra.

Mr Stammers' motive in bringing this Application

seems to be substantially altruistic. He appears to be

concerned about what he regards as the threatened denial to

Watsons Bay residents of an adequate postal service. But he

is also personally affected by the threatened closure.

Notwithstanding the promises that have been made, he is likely

to be worse off under the new arrangements. There is nothing

to indicate that he and his wife will be employed at the same

post office, or whether their new accommodation will be handy

to their new place or places of employment. Moreover, the Woollahra accommodation is to be made available for only two

years: whereas Mr and Mrs Stammers could have expected continue until retirement to

at Watsons Bay.

4 .

Counsel for the respondents submits that, in

considering Mr Stammers' standing, no account may be taken of

the matters to which I have just referred. A distinction must

be made, he says, between the decision to close the post

office -- the decision under current challenge -- and any

subsequent decisions relating to the transfer and the

reaccommodation of staff. But this approach is highly

artificial. The necessity to redeploy and reaccommodate Hr and Mrs Stammers is an inevitable and direct result of the

decision to close the post office. It has been seen as such

by the officers of Australia Post who have dealt with the

proposed closure, as their various memoranda -- and Mr

Broadbridge's oEficial advice to Mr Stammers -- all indicate. The question of standing should be approached by reference to the realities of the situation and the direct consequences to the applicant of the decision he seeks to challenge.

Section 5 of the Administrative Decisions (Judicial Review) Act permits a "person who is aggrieved" to challenge

in this Court a decision to which that Act applies. The

content o € that phrase was recently discussed by a Full Court

in Ogle v Strickland (13 February 1987 , not reported). All

members of the Court agreed that the phrase "person who is aggrieved" should be construed so as to accord standing no

less generously than under the equitable rules developed in

connection with applications €or injunctive relief. In

particular, each member of the Court drew upon the principles

applied by the High Court of Australia	in Onus v Alcoa of
Australia Limited (1982) 1 4 9 CLR 27.

5.

There is no factual similarity between the present

case and ogle. Here, there is no question of cultural or

spiritual concern. In connection with standing the case is

not put as public interest litigation at all. But nonetheless

Ogle is important, as an indication that, at least, a

plaintiff who would be accorded standing in injunction proceedings will be regarded under the Administrative Decisions (Judicial Review) Act as a "person who is

aggrieved".

There are numerous cases decision upon the personal in which the effect of a

and material interests of a

plaintiff has been examined for the purpose of deciding

whether he or she possessed the necessary standing to seek

injunctive or declaratory relief. An example of that type of

case, in the High Court, was Robinson v The Western Australian

Museum (1977) 138 CLR 283. The Court there held that the

plaintiff, who had found the remains of a Dutch vessel wrecked

oEf the Western Australian coast in the 17th century, had

standing to challenge the validity of Western Australian

legislation which, if valid, would have prevented him from

removing or dealing with the wreck. FOUK members of the Court

held that the plaintiff had standing. Barwick CJ at

pp.292-293 posed the test whether the plaintiff had "no

greater interest than any other member of the public" to

contest the validity of the Act. His status as finder of the

wreck and his interest as salvor was said to be enough. Nason J at p.327 stated the test a little more widely. He referred

6.

to the necessity €or the plaintiff to show "that he will derive some benefit or advantage over and above that to be derived by the ordinary citizen if the litigation ends in his

favour". At p.328 his Honour said:

"Here the legislation, if it is valid, deprives

the plaintiff of a right of reimbursement

which he would otherwise have or be entitled

to claim. It also imposes obligations upon

him to which he would not otherwise be

subject. This is enough to support locus

standi in an action for	a declaration of
invalidity."

Jacobs J at p.340 said that the plaintiff's right to claim

salvage was enough to support his standing. Murphy J at

pp.344-345 referred to the interference by the statute with

the plaintiff's right to work the wreck and with his salvage

claim,

Although the facts of Robinson are well removed from

those in the present case, the test there applied is equally appropriate. Having regard to later cases, especially Onus,

it is probably better to avoid the word "interest" -- with its

property overtone -- and to enquire, with Mason J, whether

success in the litigation would confer upon the plaintiff a

benefit or advantage not shared by citizens generally. Such a

question must be answered a€firmatively. For Mr Stammers

there are material advantages i n the retention of the Watsons

Bay post office which are different in kind from the

advantages which would be obtained by citizens generally; or

even by residents of Watsons Bay. The challenged decision, if

it is valid, deprives him of two entitlements: the

opportunity to continue in the post and the right to reside

indefinitely in his present accommodation.

7 .

The statutory provisions

The Postal Services Act establishes the Australian

Postal Commission (s.5). Section 6 confers upon that

Commission the following functions:

"(a) to operate postal services for the

transmission of postal articles within places outside Australia;

(b) to operate such other services as the Commission is authorized by this Act to operate;

(c) to provide, at the request of the

Australian Government, technical assistance outside Australia in relation to the planning and operation of postal services in countries outside Australia and the prescribed external Territories; and

(d) to do anything Incidental or conducive to

the performance of any of the preceding

functions. "

By s.7(I) it is commanded that the "Commission shall

perform its functions in such a matter as will best meet the

social, industrial and commercial needs O E the Australlan

people for postal services and shall, so far as it is, In its

oplnion, reasonably practicable to do so, make its postal

services available throughout Australia for all people who

reasonably require those services." Section 7 ( 2 ) requires,

inter alia, that, in performing its functions in accordance

with sub-s(l), the Commission shall have regard to "the need

to operate its services as efficiently and economically as

practicable". Section 9 allows the Commission to do all

.

8.

things necessary or convenient to be done for or in connection

with, or as incidental to, the performance of its functions. A power to provide services for the transmission of money is

specifically conferred. Section 12 makes provision for the

Commission to carry out agency functions	on behalf of any
government.

Part VI of the Act deals with finance. It includes and as far as practicable, to pursue a policy directed towards earning revenue sufficient to meet all expenditure and to provide a proportion of capital expenditure calculated in s.76(1), which requires the Commission, in each financial year

accordance with a specified formula. Sub-section ( 2 ) of that

section requires that the Commission, in the performance of

Its functions, "operate as efficiently as possible and make

available services provided by the Commission ... at rates and

charges that are as low as practicable" consistently with	its
duty under sub-s.(l).
The making of the decision

In its reports dealing with the two most recent

increases in the basic postal rate, the Prices Surveillance Authority has commented that the postal service in New South

Wales is substantially more costly than that in other mainland

States. The Australian Postal Commission has reacted to these

comments by adopting a plan to move its business performance

in New South Wales to a break-even trading result, while

maintaining satisfactory service levels. On 2 4 April 1986 the

9.

Commission set management the target of improving the direct

trading result in New South Wales by $18 million within two

years. It fell to MK Broadbridge, as Deputy State Manager, Metropolitan Services, to ensure that an appropriate

contribution to this target was	made by Sydney metropolitan
post offices.

As part of his economy drive Mr Broadbridge called

for reports on the two grade 1 post offices in his area: one

of which was that at Watsons Bay. The Divisional Manager,

Sydney City Division, Mr A K Cumberland, reported on 12 May

1986 upon the volume of business transacted at this post

office. The report showed that the number of "work units" effected at Watsons Bay had risen steadily over the past flve

years, from 166131 in 1979/80 to 219722 in 1984 /85 . ["Work

units" is a concept devised to enable comparisons of volume.

Each of the services offered by a post office is given a

weighted value and the total number of work units for a

particular office is calculated by multiplying the number of

each particular type of transaction effected by that office by

the weighted value of that transaction.] However, despite the

increased volume of business, there was, according to Mr

Cumberland, a loss of $15,437 on counter activities for

1984/85.	Mr Cumberland recommended closure of the office.
[The fact that there is stated to be a loss on

counter activities does not mean that outgoings relating to

the office exceed takings at that office. For the purposes of

the calculation only a proportion of earnings in respect of

c

10.

particular items -- in some cases, a very small proportion --

is brought into account as revenue. The balance of the

receipt is treated as being expended in providing the service

eg delivering the letter for which the stamp was purchased.]

Over the following months there were exchanges memoranda between Mr Broadbridge on the one of

hand and Mr

Cumberland and his assistants on the other. Mr Broadbridge

was seeking more detailed information upon several subjects.

During this period Mr Broadbridge received information

regarding the financial performance of Watsons Bay post office

in the financial year 1985-86. Total revenue was $34,842.

Total direct labour costs were $40,670. If, as Mr Broadbridge

contends, it is proper to add to the direct costs a loading of

72.5% to cover this post office’s contribution to general

overheads, the total cost was $70,156;	a loss of over
$35,000.

No final decision had been taken by 13 October 1986.

Upon that day Mr Broadbridge wrote to Mr Cumberland informing

hlm that an enquiry as to the position had been received from

a local newspaper. He instructed Mr Cumberland to vlsit the

local Federal member “so he is aware of the background to the

case and reasons for closure consideration before he is

inundated with representations”. Mr Cumberland did contact

the local member, Mr Peter Coleman MP; apparently by

telephone. After some explanations were made to him arrangements proposed for future services he, according as to the

to M r

Cumberland, “did not seem perturbed“.

11.

Before Mr Broadbridge made his final decision he

visited Watsons Bay. He found the shopping centre contained,

besides the post office, a gift/souvenir shop, a take away

food shop, a delicatessen/groceries shop, an architect's

office, a milk bar/mixed business, a garage, a restaurant, a

coffee lounge/video shop, an antique shop, a pizza shop, and

one vacant shop. Within 300 metres were an hotel, two

restaurants and a take away seafood shop. Mr Broadbridge

failed to notice a TAB office and a supermarket in an arcade

in the shopping centre. The opinion he formed was described

in this way in his affidavit:

"It was clear to me that many goods and

services were not available to residents on

site at Watsons Bay and as a consequence T

formed the view and made the assessment that

residents would need to attend other shopping

locations (at which there would likely be

postal facilities) on some regular basis to

satisfy their consumer needs."

On or about 21 November 1 9 8 6 Mr Broadbridge decided

to proceed with the closure. On that day he wrote to inform

Mr Stammers that the office would be permanently closed on 30

January and to inform him of the manner in which he would

be affected personally.

The fact of the decision quickly became known in

Watsons Bay. Representations were received from several local

residents. A public protest meeting was held. But Nr

Broadbridge adhered to his decision. On 2 9 January 1 9 8 7 the

Application in this proceeding was filed. Thereupon the

respondents agreed to defer the closure until the resolution

of the case.

1 2 .

Improper exercise of the power: irrelevant circumstances

Upon the assumption that the decision of Mr

Broadbridge to close Watsons Bay post office was one within his authority as a delegate of the Commission, the applicant

contends that it amounted to an improper exercise of the power

to close a post office conferred by the Postal Services Act.

This is a ground of review assigned by s.5(l)(e)	of the
Administrative Decisions (Judicial Review) Act.	Section 5(2)

of that Act provides that a reference to that ground includes

a reference, amongst other things, to taking an lrrelevant

consideration into account in the exercise of the power

(s.5(2)(a)) and to failing to take a relevant consideration

into account (s.5(2)(b)).	Reliance is placed upon each of
these paragraphs.

The complaint of irrelevant conslderations Eastens upon two matters mentioned in the memoranda exchanged between

Mr Broadbridge and Mr Cumberland. The first matter was the

political representation o€ the district. The penultimate

paragraph of Mr Cumberland's first memorandum, of	12 May 1966,
was as follows:

"Watsons Bay is in the Federal Electorate of is Vaucluse and was held by Mrs Rosemary Foote

Wentworth, William P Coleman [Liberal] 15

until her recent resignation. A by-election

will be held shortly. The area of course is

blue ribbon Liberal territory."

13.

The identity of the local federal and State members

was not itself irrelevant. The Commission's policy guidelines

regarding closures require consultation with both the local

members before a closure. However, as is common ground, the

political affiliation of those members is irrelevant. But the

applicant's difficulty is to show that the political

persuasion of the electorate was taken into account in making

the decision. In his reply to Mr Cumberland Mr Broadbridge

made no comment about the quoted paragraph. As I have already

indicated, it was not until five months later that he

requested i4r Cumberland to contact Mr Coleman, and in that

context there was no reference to his party affiliation. The

evidence discloses no intermediate reference to the identity

of any local member. Not only is there no evidence to suggest

that Mr Broadbridge was influenced in any way by the political

preference of the local community: he has sworn to the

contrary. Mr Broadbridge said in evidence, the accuracy of which was not challenged: "The question of closure of post offices is not based on the party which holds the electorate.

Closures are taking place in electorates held by members of all parties".

The second matter of complaint is a strange one,

particularly coming from the present applicant. It is that Mr Broadbridge gave consideration, in making his decision, tQ its

effect upon Mr Stammers. There is no doubt that he did

address his mind to that matter. So, in my opinion, he should

have done. Any decision to close an operating post office must necessarily have ramiflcations for its current staff.

14.

Good management practice and proper industrial relations both

dictate that, in making such a decision, the effect upon staff

should be considered. It is perhaps unlikely that the effect

upon staff will determine an ultimate issue of closure or

non-closure; but the effect upon staff may be important in

relation to the manner and timing of any closure or other

reduction of services. Staff management is not merely an

incidental function of the Commission: see s.6(d) of the

Postal Services Act. It is a subject upon which extensive

provision is made by Part V of that Act. In particular s . 4 9

empowers the Commission to "appoint a person as an ofEicer, or

transfer or promote an officer, to fill a vacant position in

the Service".

There is no substance in either allegation of taking

into account irrelevant circumstances.

Failure to take account of relevant circumstances

The essence of the complaint made under this heading is that Mr Broadbridge failed to take into account the

desirability of providing an adequate postal service at

Watsons Bay. There is no doubt that this was a relevant matter €or his consideration. Section 7(1) of its Act

requires the Commission to "make its services available

throughout Australia €or all people who reasonably require those services". That obligation is subject to the important qualification of reasonable practicality, in the opinion of

the Commission, but the assessment of practicality necessarily

15.

requires the Commission to consider what services ought

ideally to be provided and how far it is practicable to go in

providing those services. In that connection it is bound by

s.7(2)(b)(ii) to have regard to "the need to operate its

services as efficiently and economically as practicable".

The issue between the parties Broadbridge considered the extent is whether Mr

of the service which it was

reasonably practicable to provide to the people of Watsons

Bay, having regard to the goals of efficiency and economy. It

is common ground that, if he did, his decision is not open to

further challenge on this ground: the ultimate judgment of

reasonable practicality is for the Commission or its delegate,

and not for the Court.

It is not suggested that Mr Broadbridge failed to give any consideration to the types o € service which would be

available after closure to the Watsons Bay community. In

Eairness to Mr Broadbridge it should be said at once that such a submission would be untenable. Over a period of some months

Mr Broadbridge considered the particular services which could

be made available, addressing himself to such matters as the

provision of additional private letter boxes at Vaucluse post

office, the licensing of additional stamp vendors and the

sufficiency of the street letter boxes provided in Watsons

Bay. The complaint is more specific. It is said that Mr

Broadbridge's consideration of the matter was too narrow.	The
complaint is that he unduly circumscribed the range of

16.

services to be considered and that, in looking at postal

services, he failed to consider the possibility of their

provision by means of an agency.

A number of affidavits sworn by residents of Watsons

Bay were read in the applicant's case. Each deponent referred

to those services, currently offered by the post office, which

he or she used. Reference was made, in many cases, to the

difficulty which the deponent expected to face if the post

office was closed. In his affidavit, Mr Broadbridge dealt

with these references. Upon a number of occasions he disposed

of the matter by saying that "it is not a statutory function under the Act" for the Commission to provide the particular service; the references being to the provision of banking

services as an agent of the Commonwealth Rank of Australia, to

the receipt of payments on behalf of various statutory authorities such as the Metropolitan Water Sewerage and

Drainage Board, the Maritime Services Board of New South Wales

and Telecom and to the sale of Lotto coupons on behalf of the

New South Wales Lotteries office. In his affidavit Mr

Broadbridge said that agency services are provided by the

Commission at post offices "on the basis that they can be

conveniently provided in conjunction with the performance of

the Commission's statutory functions. The availability of

agency services through postal facllities is not a

consideration in the Commission's policy in relation to the

provision and withdrawal of a postal facility". That was the

approach which Mr Broadbridge applied in the present case,

although he did ask the Divisional Manager to contact the

17.

Commonwealth Bank about the possibility of the bank appointing

a private agent at Watsons Bay in substitution for the post

office.

Counsel for the applicant submit that the agency services offered by the Watsons Bay post ofEice were material

to the decision which Mr Broadbridge had to make. It is

incorrect, they say, to regard the provision of these services

as not being a statutory function oE the Commission; s.12

makes specific provision for the Commission, by arrangement,

to act as the agent of a Commonwealth or State

instrumentality. It follows, in counsels' argument, that such

services are statutory €unctions which must Se taken into

account in considering whether to close a post office.

It is a nice question whether the provision services pursuant to an agreement made under s.12 should be of agency

regarded as a "function" of the Commission €or the purposes O E

s . 7 . The answer to that question depends upon the applicability of s.6(b) to s.12. This is a matter upon which

my mind has fluctuated; there are arguments each way. But I do not find it necessary to reach a conclusion on that matter because the command of s.7 is directed only to satisfying the

need €or postal services. The term "postal services" 1 s not

defined by the Act but a guide to the meaning of that term is Eurnished by Part 111 of the Act, entitled "Postal Services". The activities referred to in that Part are all activities

traditionally associated with a mail delivery servlce. In

normal parlance, of course, the services referred to by the

various deponents would not be described as "postal services".

1 8 .

It follows that, in my opinion, nothing in s.7

required Mr Broadbridge to consider the effect of closure upon

the availability for customers of the mentioned agency

services. I think that he was entitled to take that matter into account, if he wished, because the provision of those

services was authorized by the Act. But he was not bound to consider this matter: so that his failure to do so does not result in legal invalidity.

I turn to the question of substituting an agency.

This is, of course, a matter directly related to the provlsion

of postal services. It appears from Mr Broadbrige's oral

evidence that two different types of agency are conducted on

behalf of Australia Post. A "full-time self-contained" agency

looks like a post office. It offers only services -- perhaps

including agency services -- commonly associated with post offices. People must be engaged full-time merely to provide those services; with consequential diseconomies if there is insufficient business to justify their full-time employment.

The second type of agency does require the full-time services of anyone. not necessarily

A "non

self-contalned" agency is conducted in conjunction with some other, compatible, business; such as a newsagency or a glft shop. The agent carries out postal functions as required by

customers from time to time but, at other times, is free to

attend to the principal business. Although the details were

not spelled out in evidence, I gather that the remuneration of

19.

the agent is related to the volume of business undertaken at

the agency subject to certain guaranteed amounts €or salary

and accommodation.

The possibility of establishing an agency service at

Watsons Bay was fleetingly referred to in the memoranda exchanged between Nr Broadbridge and Mr Cumberland. In his initial memorandum, of 12 May 1986, Mr Cumberland suggested

only two options: to close the post office and sell the

property and to close the post office and leave Mr Stammers in

the residence. He did not canvass either the possibility of

making the existing post office more cost-efficient or the

possibility of substituting an agency. In his reply Mr

Broadbridge commented "there is a major omission in your

assessment of the options associated with Mr Stammers'

quarters" but he did not raise other options for providing a

continuing service. However, he did ask:

"9. What are the rules relating to conversion

to agency? No of units?"

Mr W A Eddleston, who responded on behalf of Mr Cumberland on

27 May 1986, answered:

"91 The policy relating to conversion to

Agency is as follows :

An official post office may be considered for change to agehcy operation when the following conditions are met :

11 for each of two consecutive years, an official post office has less than the equivalent of a full-time workload on counter and office mail

processing activities for one person

in office hours [or less than

125,000 agency work units earned for

postal business].

20.

21 the business offering is not likely

to increase significantly in the

foreseeable future.

31 the Postmaster and other regular

staff can be suitably placed.

NOTE : Subject to the approval of the

Managing Director, change to agency

operation may also occur when the

business level exceeds that

specified above but there is

community acceptance or support for

the conversion.

Watsons Bay meets 2 and 3 of the crlteria but not 1."

None of the subsequent memoranda contain any reference to a possible agency. Even after his oral evidence

I am uncertain as to the extent of the thought which Mr

Broadbridge gave to the possibility of conversion to an

agency. At an early stage of his evidence he was referred to

para.1.2.2 of the Commission's Field Manual, Part 4 . That

document sets out the policy of the Commission on the opening

of post offices (Section 1) and upon their withdrawal (Section

4 ) . Para.1.2.2 refers to four items of business: mail

needing to be posted over the counter, postage stamp sales, money orders being issued and paid and telegrams being lodged

and received f o r dellvery. Mr Broadbridge was asked whether

it would have been practicable to have these functions

performed at Watsons Bay by an agency. Ne said that this

would have been a possibility but that he rejected it on

financial grounds.

21.

There was considerable evidence from Mr Broadbridge about the possibility of an agency. Much of this evidence was

given in response to questions asked by me because I found

considerable difficulty in understanding the Commission's

approach to the use of agencies. Since the hearing I have

re-read the whole of Mr Broadbridge's evidence but my

difficulty remains.

As Mr Gddleston's memorandum -- in which he quotes

from para.7.1 of the Manual -- reveals, the Commission's

policy does contemplate the possible conversion of an official

post office to an agency; but, ordinarily, only where the

workload is less than one full-time job, equivalent to 125,000

work units. Where the volume of business is greater -- as in the case of Watsons Bay -- the available choice, according to

the policy, is between keeping open a full post office --

perhaps uneconomically -- or closing down altogether. It

seems that, within a certain range of figures, the greater the

demand for postal services in an area the less chance there	is
of their being provided,

Mr Broadbridge pointed out that the range of services

provided by a a typical agency was narrower than that which

would be provided by an official post office. This must mean

a diminution in revenue but, as he said, costs would also

decrease. Although no detailed figures were given, it does

appear likely that the costs attendant upon the provision of a Eull-time self-contained agency at Watsons Bay would Se much the same as those applying to an official post office: so the

22.

s e r v i c e may b e u n e c o n o m i c . B u t , s u b j e c t t o o n e q u a l i f i c a t i o n ,

t h e r e is n o t h i n g t o i n d i c a t e t h a t a non s e l f - c o n t a i n e d a g e n c y ,

c o n d u c t e d b y a l oca l s h o p k e e p e r and r e s t r i c t e d t o b a s i c

s e r v i c e s , w o u l d b e u n e c o n o m i c . By " b a s i c s e r v i c e s " I mean t h e

f o u r s e r v i c e s r e f e r r e d t o i n p a r a . 1 . 2 . 2 of t h e p o l i c y , p e r h a p s

t o g e t h e r w i t h t h e p r o v i s i o n o f p r i v a t e b o x e s . T h e s e s e r v i c e s

a r e , a p p a r e n t l y , c o m m o n l y p r o v i d e d b y a g e n t s . T h e y a r e t h e

s e r v i c e s -- e x c l u d i n g a g e n c y s e r v i c e s p u r s u a n t t o s.12 of t h e

Act -- whose loss will, u p o n t h e e v i d e n c e , c a u s e most

d i f f i c u l t y t o W a t s o n s B a y r e s i d e n t s a n d b u s i n e s s p e o p l e .

T h e q u a l i f i c a t i o n m e n t i o n e d i n t h e p r e v i o u s p a r a g r a p h

is t h a t Mr B r o a d b r i d g e d i d make a g e n e r a l o b s e r v a t i o n i n h i s

e v i d e n c e t h a t . i f h e c o n v e r t e d t o a n a g e n c y , h e w o u l d h a v e t o

s p e n d two d o l l a r s f o r e v e r y d o l l a r g a i n e d i n r e v e n u e . He g a v e

n o d e t a i l s o f a n y c a l c u l a t i o n t o t h i s e f E e c t . I n d e e d , h e d1d

not e v e n s a y t h a t h e h a d made s u c h a c a l c u l a t i o n . D u r i n g t h e

c o u r s e of h i s e v i d e n c e I r e f e r r e d t o my d i f f i c u l t y i n

a c c e p t i n g t h a t h e c o u l d no t g e t a l oca l b u s i n e s s p e r s o n who

w o u l d b e p r e p a r e d t o u n d e r t a k e t h e b a s i c s e r v i c e s , w i t h o r

w i t h o u t p r i v a t e b o x e s , a t a cost w h i c h p r o v i d e d A u s t r a l i a Post

w i t h a commercial r e t u r n . Mr B r o a d b r i d g e r e s p o n d e d : " I t is

n o t a n e g o t i a b l e p r i c e . I t is s e t o u t i n c o n d i t i o n s .

Paymen t s are d e t e r m i n e d . I am not a f r e e agent t o nego t i a t e

on a n i n d i v i d u a l c o n t r a c t b a s i s " . He s a i d t h a t a v e r y l a r g e

number o f agencies I n N e w S o u t h Wales o p e r a t e a t a loss.

23.

My interpretation of this evidence is that the

Commission has committed itself to a series of conditions

governing agencies which are such as to make it difficult, if

not impossible, for them to operate otherwise than at a loss to the Commission. Watsons Bay currently does almost twice

the volume of business which	is regarded as raising the
question of conversion to an	agency. Substantial portions of

this business would be lost upon conversion to an agency but, even so, it appears likely that the remaining buslness would

exceed 125,000 work units. It seems to me a matter of public

concern if it is not possible for the Commission profitably to

operate an agency at this volume of business, serviced by

vehicles stationed at Vaucluse which, in any event, have to

travel daily to Watsons Ray; to deliver mail to HMAS Watson

and to clear the street letter boxes. There appears to Se a

strong case for the Commission to revise its approach to the

matter of conditions, so as to make it possible for officers

such as Mr Broadbridge flexibly to negotiate appropriate

arrangements with local shopkeepers.

However these matters may be, it is another question

whether there was a failure by Mr Broadbridge to give

consideration to the possibility of converting to an agency.

I do not think that he gave this course any extensive

consideration. He said in evidence that he did not consider

taking advantage of the exception to criterion I of

para.7.1.1 of the policy which is contained in the note to

that paragraph. But I see no reason to doubt the evidence of

Mr Broadbridge that he did consider, and reject upon financial

24.

grounds, the possibility of an agency. It would be more

satisfying if the evidence showed that he had considered a

calculation of the likely revenue and expenses resulting from

an agency operation. However, it is not essential, in point

of law, that a decision-maker in the position of Mr

Broadbridge descend to that degree of detail. Where a

decision-maker is bound in law to consider a matter, he or she

must give the matter genuine, as distinct from nominal or

perfunctory, consideration. But decision-makers are entitled

to rely upon their general experience and knowledge. As would

be expected of anyone in his position, Mr Broadbridge has

considerable general knowledge of the financial ramifications,

to the Commission, of operating agencies. Having regard	to
that matter I am not persuaded that his fairly summary

dismissal of this option represented a failure to take into

account the possibility of satisfying in this manner the need

of the Watsons Bay community for postal services. The wisdom

of the decision, and the wisdom of the policies which make

difficult the establishment of non self-contained agencies,

are not, of course, matters for determination by the Court.

See Minister for Aboriginal Affairs	v Peko Wallsend Ltd (1986)
6 6 ALR 299 at pp.309-310.

In the result I reject both of the arguments based on failure to take into account a relevant matter.

25.

Mr Broadbridge’s authority

Section 36 of the Postal Services Act provides that

the Commission may, by instrument under its seal, delegate

inter alios to an officer, either generally or as provided by

the instrument of delegation, all or any of its powers under

the Act, except the power of delegation. By an instrument

dated 15 March 1 9 8 4 the Commission delegated to the officers

in its service occupying certain specified positions,

including Chief Nanager, Operations, in New South Wales all of

the powers that had been delegated to the occupant o€ the

office of State Manager, New South Wales. The applicant

accepts that these powers include the provision and withdrawal

of postal facilities in a particular location. However, the

instrument of delegation provides that the exercise of the

delegated powers is subject, amongst other things, “to any

direction which may be issued from time to time by the guidelines”.

Counsel for the applicant contend that the Field

Manual issued by the Commission is a direction or a policy wlthin the meaning of the instrument of delegation, so that Mr

Broadbridge’s decision was a valid decision only if it was

consistent with the Field Manual. I think that this is

correct. The status of the document opening sentence of its Foreward: “This manual presents is made clear by the

Australia Post’s policy on a number of facilities and services

the enterprise provides”. It is a standing statement of

policy amended from time to time.

26.

Counsel for the respondents disputes this He says that the document merely provides contention.

non-binding

guidelines for decision-makers. A comparison is made with the

Administrative Procedures considered in Australian

Conservation Foundation v Commonwealth of Australia (1980) 146

CLR 493. In that case the High Court of the procedures did not create any rights relevant held that contravention

to the

standing of the plaintiff.

It seems to me doubtful whether the case could

have any relevance to the present controversy at all, the

applicant being accorded standing; even if the decision to

close the post office had been made by the Commission itself

rather than Its delegate. But it clearly offers no answer to

a claim of excess of authority. :4r Broadbridge's authority to

make a closure decision was limited, by the instrument of

authority itself, to closures which complied with the policy.

Once it be made to appear that a particular closure fails to

comply with that policy, the decision is one which Mr

Broadbridge had no authority to make. The policy is more than

a guide. It is a limitation of power.

If Mr Broadbridge's decision was not one which he was authorized to make, s.S(l)(c) of the Adminlstrative Decisions

(Judicial Review) Act applies. The decision -- being a

decision required to be made under an enactment -- was one

which "the person who purported	to make the decision did	not
have jurisdiction to make".

27 *

As previously mentioned Section 4 of the Manual

relates to the withdrawal of postal facilities. Paragraph

4.1.1 sets out the following general policy:

"4.1.1	The general policy of Australia Post is
to provide, relocate, withdraw or
otherwise vary the provision of counter facilities to meet changing community needs for services in a cost-effective
and efficient manner."

Reference is made to withdrawal policies in

para.4.2.1, the relevant policies for urban areas being in Attachment 1 and for rural areas in Attachment 2. Attachment

1 sets out three cases in which a post office or agency in an

urban area may be considered for withdrawal. The only

arguably relevant case is the first, namely "the circumstances

do not meet the provision policy (see paragraph 1.2.2 of

Section l)". Paragraph 1.2.2, under the heading "Provision

Policy" , states :

"1.2.2	In urban areas the establishment	O E a new
facility may be considered where:

. selected will develop into a main

it is clear that the location

shopping area justifying a post

office in the foreseeable future,

and an agency is necessary to avoid

inconvenience to a substantial

number of customers

. alternative facilities are not reasonably accessible and the extent of retail trading is such that an agency is expected to earn an annual level of 60,000 agency work units within 2 years of opening, for the following items of business -

at subsidiary shopping centres where

28.

. the counter

mail needing to be posted over

. postage stamp sales expected

.	issued and paid
.	and received for delivery

money orders likely to be

telegrams likely to be lodged

. shopping centres there is clear evidence that the lack of a counter facility is inconveniencing a substantial number of customers, because of the distance to be travelled to the nearest counter facility and its inaccessibility by public transport.

in special case at other subsidiary

The Attachment also deals with community

consultation:

"Before a final decision is taken to withdraw

or relocate a counter facility, the likely

local reaction is to be ascertained by

informing the local Federal and State Members

of Parliament, representatives of Local

Government or other appropriate responsible community groups, and the Post Office Agent,

of the reasons prompting the change and the

alternative facilities which will be available

to local residents. As far as it is reasonaly

practicable to do so, the proposal is to be

discussed with these community representatives

but, in all cases, the matter is to be

discussed with the Federal Member who also

is

to be informed officially of the final

decision well before a change takes place."

Thls requirement is supplemented by para.4.3.4 which provldes

that, "where there has not been adequate consultation with the

local Federal Member and other community representatives,

closure is to be deferred, if practicable, until this has been

done".

Finally, para.4.3.3 provides:

"4.3.3

Unless there are compelling reasons to

the contrary, post offices or full-time

service agencies in urban areas within

2km of another counter facility, should

be accorded a low priority for

withdrawal, except as part of a clearly

defensible and approved local group

restructuring program.

Three contentions, arising out are advanced on behalf of the applicant. of these provisions,

First, it is said

that the circumstances at Watsons Bay meet the provision

policy in para.1.2.2, with the result that none of the cases

in which a post office may be considered for withdrawal apply. Secondly, complaint is made of the failure of Mr Broadbridge to comply with the consultation requirements of the policy.

Finally, it is said that there is no "clearly defensible and

approved local group restructuring program". I think that

there is substance In each of these submissions.

Paragraph 1.2.2 provides for consideratlon of the

establishment of a new facility in each of two different types

of location: at potential main shopping areas, and at existing subsidiary shopping centres. The assumption is

apparently made that there will already be postal facilities

at existing main shopping areas. It is not argued that

Watsons Bay is either an existing or a potential main shopping

area; so the first sub-paragraph of para.1.2.2. is

irrelevant. In his evidence Mr Broadbridge expressed the opinion that Watsons Bay could not be described as a

"subsidiary shopping centre". I reject that view. IQ the

vicinity of the post office there are situate no less than 17

3 0 .

commercial establishments, most of them retail shops. In the

absence of a relevant definition in the Manual, the term

"Subsidiary shopping centre" must be accorded its ordinary

meaning. In ordinary language the place where the post office is located is a shopping centre. It is subsidiary, in the

sense that it provides a lesser range of goods and services --

day to day shopping rather than comparison shopping -- than

the main shopping centres of the area, such as Double Bay,

Bondi Junction and, perhaps, Rose Bay.

There is no doubt that Watsons Bay achieves over

60,000 work units for the four specified items of business.

The remaining question is, then, whether alternative

facilities are reasonably accessible. Upon this question

there was considerable evldence as to which, in the end, there

was no dispute.

The nearest post office to Watsons Bay is at

Vaucluse. The distance between the two post offices, measured

-

in a straight line, is 1.6-1.7km. But the two offices are

separated by a steep incline and the distance between them, by

the most direct road route, is about 2 . 3 km. There is a bus

service from Watsons Bay to Vaucluse but a change of bus is

necessary to travel from Watsons Bay to the Vaucluse post

office. It is possible, without changing buses, to reach Rose Bay post office but this involves a much longer journey.

. 31.

In any old suburb there are likely significant number of long-time residents, now of advanced to be a

years. The evidence indicates that this is the position in

Watsons Bay. But the number of elderly residents has recently

increased. On 6 November 1986 the Catholic Church opened retirement village around the corner from the post a

office.

This village has 34 units and it is expected that it will

eventually accommodate about 50 people. The evidence o€ Mr F

C Guigni, who interviewed the applicants for accommodation, is

I..

that the proximity of services -- including the post office --

was an important factor in the minds of those who applied to

enter the village. He said that the occupants of only five

out of 14 units which were occupied at the date of his

affidaoit continued to drive a car: that three of the current

residents would be incapable of enduring a bus ride to

Vaucluse post office and that another five residents would

experience substantial discomfort and distress in undertaking

such a journey. Several elderly deponents referred to the

difficulty and expense of a bus trip to the post office. None

of this evidence was challenged.

In determining whether, €or the purposes of

para.1.2.2 of the Nanual, alternative facilities are "reasonably accessible" consideration must be given to a range

of potential customers; not merely to the young and mobile.

There are, of course, some people so confined that no

facilities wlll be reasonably accessible to them but it seems

to me that facilities so remote as to occasion the type of difficulties mentioned in the evidence to an appreciable

. 32.

number of people cannot be described as “reasonably

accessible”. It follows that Watsons Bay falls within the

second category of cases mentioned in para.1.2.2. Therefore

it meets the provision policy in that paragraph; with the

further result that it does not qualify for consideration for

withdrawal under Attachment 1 to Section 4 of the Manual.

In addition to contending that, on the facts,

para.1.2.2 is inapplicable to the present case counsel €or the

respondent relies on para.1.2.5. This paragraph states that

“the establishment of any new post office agency is subject

to” various matters. He contends that, these matters not

being applicable, the case falls outside the provision policy,

so that it is one in which withdrawal may be considered under

Attachment 1. However, I do not think that this reference

assists his case. In the first place it is far from clear that para.1.2.5 has any relevance. Attachment 1 identifies

the provision policy to which it refers as para.1.2.2 of

Section 1. It does not refer to the whole of Section 1 or to any other paragraphs in that Section. Moreover, para.1.2.5 is

limited, in terms, to the establishment of a new post office

agency. It is not concerned with a counter facility at a post

office. But, in the second place, para.1.2.5 the establishment of a new post office agency	does envlsage
in an urban area

within 2km radial distance of an existing counter facility

where there are special reasons for so doing. An example of

such a special reason is stated to be: “the presence of

physical geographical barriers which effectively divide the urban development and restrict access t3 an extent that would

3 3 .

substantially increase the distance travelled to reach the

agency for a large proportion of customers". On the evidence,

having regard to the steep incline between Watsons Bay and

Vaucluse post office and the fact that the shortest road

distance is almost half as great again as the radial distance,

this is not an inapt description of the subject situation.

In relation to consultation, Broadbridge had no contact with any State member the evidence is that Yr

and that his

only contact with the local council was a conversation with

the mayor at a function. There is no evidence as to what was

said. It does not appear that the matter was raised formally

either with the mayor or with the council as a whole. The

only contact with the federal member was Mr Cumberland's

telephone conversation with Mr Coleman in October 1986. That

contact was primarily aimed at providing M r Coleman with

material with which he might respond to any protests he might

receive. Mr Broadbridge deliberately refrained from speaking

to Mr Stammers about the matter, believing that he knew his

view. There is no evidence of any other local

despite the fact that there is no suggestion of any problem

about wider consultation.

consultation:

In my view the desultory contacts which occurred fall well short of the consultation required by Attachment 1 to be

undertaken before closure of a counter facility. Mr

Broadbridge did not attempt to gauge the likely local reaction.

34.

In cross-examination Mr Broadbridge was asked about

the existence of an approved local group restructuring

program. In reply he referred to the "program of financial

improvement applying to the whole of New South Wales"; that

is the plan to improve the trading result by $18 million. He

was asked how this satisfied the requirements of para.4.3.3 of

the Mannual. His reply was as follows:

"For the metropolitan area, yes -- for various

areas of the metropolitan area. For the area

involving Vaucluse, Bondi and Watsons Bay,

yes, because that is the mechanism by which I

am seeking to reduce the poor financial

performance we have at the moment."

It is, I think, apparent that para.4.3.3 has in mind something much more sophisticated and precise than a general

plan to effect economies. I understand the phrase "clearly

defensible and approved local group restructuring program" to

refer to a carefully prepared rationalisation program which

can be demonstrated to provide an acceptable level of service

in a local area. One example would be a case where one post

office took over the functions previously being undertaken by

two. Another would be a case where services previously provided by one or more post offices were reorganized so as to

be provided by one or more agencies, or vice versa. The mere

closure of a facility, leavlng some basic postal services

unavailable, cannot properly be described as a "restructuring"

program.

Paragraph 4.3.3 office may not be closed in the absence of a local group does not, of course, say that a post

restructuring program; merely that its closure should be

3 5 .

accorded a low priority. But in this case there is no

suggestion that the closure of Watsons Bay post office was a

low priority step. On the contrary the investigation of the

closure of this office was one of the first results of the

Commission's directive.

The procedural deficiencies which I have discussed

may have been important in the ultimate decision. I have no

doubt that Mr Broadbridge -- concerned to effect savings --

made a considered decision on the matter. How much reduction

in loss would result from closure is not clear. The 7 2 . 5 %

loading added by Mr Broadbridge includes a contribution -- the

amount of which is unspecified -- to the costs of the

Divisional and State offices. It is difficult to see that

those costs would be reduced by closure. Rut I do accept that

Yr Broadbridge was actuated, and only actuated, by the

laudable purpose of attempting to reduce the Commission's

losses in the Sydney metropolitan area. The difficulty is

that his inadequate consultatlon deprived him of knowledge of

a number of matters which must be important in making the

balanced judgment required by s . 7 of the Act. He was not

aware of the full extent of the shopping centre: a matter

which he regarded as very important in considering whether

customers would be inconvenienced by closure. He seems to

have had little, if any, appreciation of the problem likely to

be faced by elderly people by withdrawal of facilities which,

on the evidence, are important to them: especially the

opportunity to send parcels and to purchase and cash money

orders. He was not aware of the opening of the retirement

36.

village. The obvious purpose of the consultation requirement of Attachment 1 is to ensure that the decision on closure is

informed on matters such as these. The obvious purpose of

para.4.3.3 is to ensure that if, notwithstanding such matters,

a closure decision has to be made, it will be made -- and will

be seen to have been made -- as part of a re-thinking of the

pattern of local services in a local area whereby, to

paraphrase S.?, the Commission makes its postal services

available to the people	of that area so far as is reasonably
practicable.

For each of the three reasons argued, I am of the

opinion that the decision made by Mr Broadbridge fell outside the power delegated to him by the Commission. The decision is

invalid in law and must be quashed. The respondents must pay

the costs o f the applicant of the proceeding.

I certify this and the thirty-five (35)

preceding pages to be a true copy of

the Reasons for Judgment of

his Honour Mr Justice Wilcox.

Counsel for the Applicant: Mr A P Whitlam QC with

Mr P P Costello

Solicitors for the Applicant: HE AN^^, R L L ~ ~ A R D ~ A + E E A ~ E Y

Counsel €or the Respondents: Mr D K Catterns

Solicitors for the Respondents: Australian Government Solicltor

of Date hearing: 25 February 1987

IN THE FEDERAL COURT OF AUSTRALIA ) )

NEW SOUTH WALES DISTRICT REGISTRY NO. NSW G.626 Of 1987

1

DIVISION GENERAL 1

BETWEEN: MALCOLM BARRY STAMMERS

Applicant

AND: W H BROADBRIDGE

First Respondent

AUSTRALIAN POSTAL

COMMISSION

Second Respondent

CORRIGENDUM

Correction to the judgment of his Honour Mr Justice Wllcox of

1 April 1987:

page 11	In the penultimate paragraph, fourth line, please
substitute "1987" for "1986" where there appearing.

Associate: &wow* 2 2 April 1987.

CATCHWORDS

Bankruptcy - appllcatlon to set aside bankruptcy notlce -

appllcation for declaratlon that Court 1s satlsfied that applicant has cross demand equal to or exceedlng amount payable to respondent under final orders - power to grant temporary

extenslons of time for compllance wlth bankruptcy notice -

Bankruptcv Act 1966: s.4O(l)(g), s.41(6A), 5.41(7); Bankruptcy

. rule 103 (1 1.

RE: KEVIN LEONARD MORGAN

NO. B 5354 O f 1986

Beaumont, J.

Sydney

I s L April 1987

I N THE FEDERAL GENERAL DIVISION COURT OF AUSTRALIA

BANKRUPTCY DISTRICT OF NEW SOUTH WALES

AND THE AUSTRALIAN CAPITAL TERRITORY

No. B. 5 3 5 4 of 1 9 8 6

-	RE :	KEVIN LEONARD MORGAN
J O H N FAIRFAX AND SONS LIMITED

- Ex P a r t e :

MINUTES OF ORDER

J u d g e m a k i n g order: Beaumont , J.

Date o r d e r m a d e : 1st A p r i l 1 9 8 7

Where made : S y d n e y

THE COURT ORDERS THAT:

1. Declare t h a t t h e C o u r t is s a t i s f i e d t h a t t h e a D p l i c a n t

h a s a cross d e m a n d e q u a l t o or e x c e e d i n g t h e a m o u n t of

t h e sum payab le by h im t o t h e r e s p o n d e n t u n d e r t h e f i n a l

o r d e r s m e n t i o n e d i n b a n k r u p t c y n o t l c e No. B . 5 3 5 4 Qf

1986, viz, $7,316.27.

2. The respondent pay the applicant's costs of the

application.

Note: Settlement and entry of orders is dealt with In

Bankruptcy R u l e 124.

No. B. 5354 of 1986

RE : KEVIN LEONARD MORGAN

Applicant

Ex Parte:

JOHN FAIRFAX AND SONS	LTD.
Respondent

Coram: Beaumont, J.

Date: 1st April 1987

REASONS POF JUDGEMENT

This is an appllcation for a declaration that the applicant, Kevir. Leonard Morgan ("the debtor"), has a cross demand equal to

or exceeding the total amount payable to John Fairfax and Sons

Limited ("the credltor"), under four orders for the payment of

costs made by the Supreme Court of New South Wales being a cross demand that the debtor could not have set up In the action or proceedings In which the orders were obtained for the purposes

of s.4O(l)(g) of the Bankruptcy Act 1966 ("the Act").

The debtor commenced proceedings against the creditor in the

Supreme Court In November 1983 claiming damages for a defamation.

The debtor claimed that the creditor defamed him in an article

published in the Australian Financial Review on 17th Sovcmber

1983. Several Interlocutory applications were heard and

determined by the Supreme Court in relation to discovery,

Interrogatories, pleadings and particulars. Orders for costs

were made against the debtor for certain of the applications.

The orders In question were made in April and May 1985 and were in the total sum of S6,837.64.

The trial of the action took place in February and March 1986.

Towards the end of the hearing, the trlal ~ u d g e ordered that the

L.

jury be discharged and that there be a new trlal. The debtor was

ordered to pay the creditor's costs of the trial. The debtor

sought leave to appeal from the decision awarding costs against

him. In April 1986, the Court of Appeal granted leave to appeal. It is anticipated that the appeal will be heard in the middle of 1987.

On 28th November 1986, on the application of the credltor, the

Deputy Registrar issued a bankruptcy notice addressed to the debtor. The notice recited that the creditor claimed the sum of

$6,837.64 together wlth lnterest making a total of $7,316.27 was due by the debtor to the creditor under final orders obtained by

the creditor against the debtor in the Supreme Court in April and

May 1985. The notice required compliance with its terms withln

14 days after its service. Notlce was served on the debtor on

28th January 1987. On 10th February 1987 (i.e. before the

expiration of the 14 day period stipulated in the bankruptcy

notlce had expired) the debtor	flled an application seeking the
following orders:

"1. That the Bankruptcy Notice issued by and on behalf 3f

John Fairfax and Sons Limited on 28 November 1986 be set aside.

2. That the time in which the ADpliCant 1s to comply wlth

the said Bankruptcy Notice be extended untll after the

determlnation of the appeals between the parties in the

Court of Appeal (New South Wales Court of Appeal No. 78 of 1986 and 103 of 1986).

3 . For such other or further orders as to this Honourable

Court shall be deemed necessary ...."

No affidavit was then filed but the application stated that,	on
the hearing of the application it was intended to use an

affidavit sworn by the debtor. The application was set down for

hearing on 9th March 1987. On 10th February 1987 the Deputy

Registrar made an order in the following terms:

"Upon condition that the bankruptcy notice in this matter was

served on the debtor on 28 January 1987 pursuant to section 41(6B) o€ the Bankruotcv Act 1966, I extend the time allowed for Compliance wlth <he-requiremen.ts of the bankruptcy notice

to 9 March 1987".

3 .

On 9th March 1987, the matter came before me in the general

bankruptcy list. I was then informed by counsel for the debtor

that the application to set aside the bankruptcy notice was not

pursued but that the debtor was seeking a declaration that he had

a cross demand of the kind contemplated by s.40(1)(g) of the Act. Counsel for the credltor indicated that the debtor's application was opposed. As it appeared that the hearing of the matter would take some time as a contested application, I directed that it be fixed for hearing as a special fixture on 23rd March 1987. I

Indicated that I proposed to further extend time for compliance

with the bankruptcy notice up to and including 23rd March. to any such extension on substantial grounds. In particular, he

foreshadowed a submisslon, to be dealt with later in these

reasons, that the Deputy Reglstrar had no power to grant the

extenslon of time granted on 10th February 1987. He further

submitted that I had no power to grant any further extension. In

essence, his contention was that time for compliance wlth the

bankruptcy notice had already explred and that the Court then had

no power, retrospectively, to grant any extension. In the

clrcumstances, I indicated that I granted further extension of

time for compliance with the notlce up to and including 23rd

March but did so on the footing that I was not to be taken as

flnally deciding the question of the power of the Deputy

Registrar or of myself to grant the extensions in question.

On 23rd March 1987, the debtor's application was heard. In

support of the debtor's application, counsel for the debtor read an affidavit sworn by the debtor on 12th February 1987 and an

aEfidavit sworn by John Harris, a law clerk employed by the

debtor's solicitors. In these affldavits, the history of the

defamation proceedings as summarised above is stated. Reference

is made Financial Review of which complaint is made. That material, in that evidence to the material publlshed in the

which is annexure A to the debtor's Amended Statement of Claim	is
annexed to these reasons.

Before turning to the submlsslon foreshadowed by the creditor

4.

that an act of bankruptcy has already been committed and that the

Court has no power to deal with the present application, I will consider first the debtor's contention that the Court should now declare that the debtor has a cross demand of the klnd required by s.4O(l)(g).

In Re Judd, Ex parte Pike (1924) 24 S.R. (NSW) 537, Maughan A. J.

held that the term "cross demand" included a claim for unliquidated damages for the tort of slander in a precursor of s.40(1) (g)

(at pp 539-40). See also Re Brink: Ex parte Commercial Banklnq

Company of Sydney (1980) 30 A.L.R. 433 at pp.436-7; Re Gould; Ex

parte Skinner (1983) 72 F.L.R. 393 at pp.406-7.

For the purposes of S. 40 (1) (g), the Court is not to attempt a

trial in advance of the debtor's defamation claim. However, the

debtor must show that he has "a prima facie case, even if then and there he does not adduce the admissible evidence whlch would make out a prima facie case before a court trying the issues that

are involved in thls cross demand" (see Ebert v Union Trustee

Company of Australia Ltd (1960) 1 0 4 C.L.R. 346 at p.350. In - Re

Srink, supra, Lockhart, J. said that for present purposes, the

Court must be satisfied that the debtor has "a fair chance of

success" (at p. 439).

In the present case, I am satisfied, on the available material

that the debtor has a fair chance of succeeding on the issue of

liability in his defamation action. On the auestion of quantum,

I am satisfied that the debtor has a falr chance	of recovering a
verdict in excess of $7,316.27.

It 1 s a requirement of s.4O(l)(g) that the cross demand for

damages for defamation could not be set up in the interlocutory proceedings in which the subject costs orders were made. This requirement 1s satisfied here.

It follows that, subject to consideration of the content~ons

foreshadowed by the creditor,	I	would propose to make the
declaration sought by the debtor.

5.

I turn now to the credltor's contentions. In the first place,

the creditor submits that because the Deputy Registrar	had	no
affidavit before him on 10th February 1987 to support the

debtor's appplication, the Deputy Registrar lacked power to grant

the temporary extension. Alternatively, it is said that the

exercise of power to extend was voidable because it was something

done arbitrarily in that there was no evidence to support the

appllcation.

In my opinlon, these submlssions should not Se accepted.

Although there was no affidavit then before the Deputy Reglstrar,

the formal application on them filed Indicated that It was

intended to file an affidavit by the debtor. Moreover, the

extension granted was for a short period only. It is true that

r.103(1) requires that any application be supported by an affldavit stating the facts upon whlch the applicant proposes to rely. However, there is nothlng in the rules to suggest that if

an affidavit is not flled at the time the appllcatlon is filed,

the proceedlngs are a nullity. On the contrary, r.103(1) should

Se construed as sublect to the usual Implication that lts

requirements be performed wlthln a reasonable time (see Koon Wing

- Lau v Calwell (1949) 80 C.L.R. 533 at p.573). The debtor's

affidavit sworn 12th February 1987, was flled on 13th February.

In my view, it was filed within a reasonable tlme.

There is no suggestion of bad falth on the part of the Deputy

Registrar. Xor could It be suggested that he exercised his power

capriciously or fancifully (c.f. The Queen v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 C.L.R. 177 at p.189). There is a presumption of regularity and in the absence of any material

whlch could reasonably put the Deputy Reglstrar upon notlce that

the debtor's application was otherwise than bona fide, he was, in

my view, justified in assuming that the debtor intended to

l, prosecute in good faith an applicatlon to set aside the

' bankruptcy notice. On that assumption, 1t was proper, i n my

view, that a temporary extenslon of tlme comments could be made concerning the further temporary extension be granted. Similar

granted on 9th Narch. In each case, the court is intervening on

6.

short notice, on an emergency basis, to hold the status q u o

pending	a	full hearing of the respective contentions of the
parties.

It is prosecuted its'application to set aside the bankruptcy true that, in the final result, the debtor has not

notlce.

What 'it' now seeks is a declaration that the notice is "spent" 1

(see James v Abraham (1981) debtor's application as filed sought an order setting aside the 3 4 A.L.R. 6 5 7 at p.661). The

bankruptcy notice and also other or further orders as the Court

deemed necessary. Even if a declaration of the kind now sought

was, strictly speaking, not an order setting aside the notice, it

is open to the debtor to seek further or other orders as appropriate. is

By s.41(6A) compliance with the reauirements of of the Act, where, before the time fixed for

a bankruptcy notlce, an

application to set aside the notlce has been filed with the

registrar, the Court may extend the time for compliance with the

bankruptcy notice. In my view, this power was applicable In the

present case debtor's case: the condition precedent, notwithstanding the subsequent change in the

VIZ the filing of an

application to set aside the notice, was satisfied here at all materlal times (C.€. Streimer v Tamas (1981) 5 4 F.L.R. 2 5 3 ) .

It is true that s . 4 1 ( 7 ) of the Act, providing for an automatic

extension in certain circumstances, cannot apply here. But lt does not follow that a temporary extension cannot be granted pursuant to s.41(6A).

I propose to make the declaration sought, with costs.

7.

I certlfy that this and the

preceding ( 6) pages are a true copy of the Reasons for Judgement herein of his Honour Mr. Justice Beaumont.

Associate

Date: 1st April 1987

Counsel and Solicitors

for Applicant: C. Evatt instructed by Steve

Masselos & Co.

Counsel and Solicitors

for Respondent: S.D. instructed Rares by

Mallesons Stephen Jaaues.

hearing: of Date 23rd March 1987

Date Judgement Delivered: 1st April 1987

\ c li

1. The;P ' l a i n t l f f 1s an d h a s a t a t t e r l a l t ines . I 01

aprofess lona l consul tan t and commentator and a researct

, ! I

No. 17196 of 1983. Into telecommunlcatlons, flnances, economics and

E ;

cost ing. b !

.	I	,'
' F :

2 . The defendant i s and was a t a l l such times 3 comp31

KEVIh LEONARD MORGAN - duly incorporated and l i a b l e t o be sued i n and b y iI!S

P-lalntlff IG.

corporate	said	name	and	s t y l e .	1	%
I

3. The defendant i s and was the pub l i she r o f t he iH

JOHN FAIRFAX newspaper "The Austral ian Financial Review", which

& SONS LIMITED sa ld newspaper has a l a rge c i r cu la t ions and . f s

Defendant	read i n New South Wales and through the	Commonweal
Austral ia .

. .

4. In 'The Australian Fmancial Review"

November 17, 1983, the defendant published

concerning t h e p l a m t l f f c e r t a i n words

?l

here to and

MENDED STAEMENT OF CLAIM

Filed pursuant to Order S f 3 t out

of Davld Hunt J. made i 4 above hereof in' 0 1 rd inar

May 3, 1985.

conveyed t h e f o l l o i. e ach

defamatory of the

!

(a) . The p l a l n t i f f is not reputable .

(b)	'Ihe p l a i n t i f f i s dishonest.
(c)	The p l a i n t i f f is unfit t o b e a consul:

f P commentator.

j

(d) ?he p l a i n t i f f made phoney estimates o

f 1

and usage of the new satel l i te .

! 1

i	(e)	As a consul tant and commentator, the'
I	i s biased and not independent.

STEVE MASSELOS & Co.,

S o l i c i i o r s ,	(f)	The	p l a i n t i f f d o e s n o t c a r r y o u t h i s	:
,;

42-46 MartLn Place, researches properly.

Sydney. ,

Telephone [phone] (g) ?he P l a i n t i f f h a s d e l i b e r a t e l y ende?

,I

Reference SGM.vc

DX 305 Sydney. deceive and mislead the Government os

others. ~ ., and !

Page 2.

(h) The P l a i n t l f f is questionable i n h i s conduct.

6 . By reason whereof the Plamtlff has been great . d i n h l s :haracter.

c r e d i t and reputat ion and has been brought into publlc hatred, r idicule and

contempt.

7 . The P la ln t i f f c l a ims damages, general damages, aggravated damages and

I n t e r e s t .

PkTICULARs UhQER SCR PT 67 R(12)(b)

'lhe edi t lon of the "Austral ian Financial Review" containlng the mater ia l

compl_ained o f was publ i shed , d i s t r lbu ted and circulated throughout the

Commonwealth of Austral ia by the Defendant.

PARTICULARS OF IDENTIFICATION

- .

?he matter complalned of was published to persons with-knowledge of the

following:-

\" Y ' 0

by the Australian Telecommunications C $&n* &'m

s a t e l l i t e on behalf of the Telecom Unio

The above persons ident i f ied the Plaint i f f as being the person referr l

t o in t he ma te r i a l complained of .

GENERAL DAMAGES

'Ihe p l a i n t i f f ' s h u r t was increased by h i s i n a b i l i t y t o o b t a i n c o n s u l t ,

work a f t e r p u b l i c a t i o n and by h i s hav ing t o ob ta in a sa l a r i ed pos i t i o l

research of f icer wi th A E A i n September 1984. Ihe publication adversl

a f f e c t e d t h e p l a i n t i f f ' s r e p u t a t i o n so t h a t h e was unab le t o f i nd con!

work	and	w a s	eventua l ly ob l iged to ob ta in the sa la r ied pos i t ion .
-

Page 3 .

AGGRAVATED DAMAGES

(a) The P la ln t i f f ' s lmputations were hu r t and i n ~ u r y h a s I n c r e a s e d by h l s knowledge t h a t the

E

f a l s e .

i . I

(b) 'The Defendant's fldes as evidenced by.- conduct was improper, u n ~ u s t l f l a b l e and lacklng I n bona :F

- ( i ) Excessive and widespread publlcation of the material complalned

of and over-sensatlonal manner and method of p resenta t lon (pos l t lon

used). language i n newspaper, prominence and pi

( i l ) The material complained of was actuated by ill wlll and malice towards .

-

t h e (ill) ' h e Defendant was at tempting P l a l n t i f f . . I

to:-

a) Discredi t , a t tack and injure the Plaint i f f and/or int imldate or J

- . discourage hlm from con t lnu ing t o pe r seve re w l th h i s mews concerni

the p roposed sa te l l l t e .

b) Influence the Australian Government t o change o r r econs lde r certain

of i t s decisions concerning "Aussat".

c) Inf luence the 4ustral ian

t o be made by t e l ev i s ion

and 'Ihe Fairfax Group

(Par t icu lars are annexed

i v ) Conduct of the Defendant I n f i l i n g a

-	FILED
S o l l d t o r f o r t h e Plaint i f f

TO THE DEFENDANT John F a i r f a x 6 Sons Limlted bc

c / - gessrs. Stephen Jaques Stone Jame +

S o l l c l t o r s a ‘D

AMP Centre ,

S t r ee t , 50 Br ldge E

Sydney. 3,

You a r e l l a b l e t o s u f f e r judgment o r an o rde r aga lns t you un le s s t he p re sc r ibed :F

form of n o t i c e of your appearance is rece ived i n the Reg i s t ry w i th in fou r t een

( 1 4 ) d a y s a f t e r s e r v i c e o f t h i s s t a t s m e n t o f c l a i m upon you and you comply wlth ’! G

the Rules of Court re la t ing to your defence. I

H

Nominated P l a c e f o r Trlal: Sydney

I

P l a m t l f f Kevin Leonard Morgan

323 C a t h e r m e S t r e e t , 1 J

- . Lelchhardt . rc

S o l r c i t o r	S teve	GregOK). Nasse los
42-46	Martln Place,
Sydney.

Address	for	Servlce	Steve Masselos	& Co.,
S o l i c i t o r s ,

42-46	Martln Place,
Sydney.

Address of Registry Supreme Court of New South Wa

Queens	Square,
Sydney.

NOTICE FOR SERVICE AT DOCUMENT EXCHANGE

The P l a i n t i f f may be s e r v e d a t the following exchange box i n Sydney of the

Document Exchange Pty Limited.

STJWE MASSELOS h CO.,

Solicitors,

DX 305 Sydney.

-3 .. i

SATELtIlE DECISIONS

6c

The ~m decision by tho Labor $

Gucur endorsing tb Clbinet decision on

t ho futuro of the Aautralfm satel l i te must ‘D

be rolcmed ovon mm thm t h e decisian

on urpnim r M n g . 5

E

After al l , Ausmlin CM w i v o without b

the mln.in# and export of manila, but

*rime bcis im m the future of t o l e ~ u n i u t i o n s	‘F
could b. humful in a mueh

m a frmdrrantal mar. 10

’I G

The most i.rporcant aspect of th. >

ra tel l i ts decis ion is that it shovs thst the

Covenmmt has taken on board the advice

It has rocoivad about the pernicious

influence played in A 0 s t x a l i . a ~ ~ comarmiurtions 15

devolopmantr by Tcleccau.

The simple t r u t h i s that the Talecm

monopoly cannot ba trusted to operate the

facts of new

elpanding and innovator). rrpects of public presentation of the

teleumarmicttionr. The way in which

technology nnd thn s a t e l l i t e in the past is a

matter which in i t s e l f needs oxanination.

Evm more questionable is the role of the tolccormnunicntionr unions uhich M &termhod

t o maintain t lm monopoly w h l c h

they c m manipulate, and hop. t o suppros.

the extension of c q e t l t i v e te&.hnologiet,

regardlqrr of any concept of a general

public interest.

No surprisingly. the arguments of the

Te T ecm unions have hsd a strong influence

i n the councils of the Cavelwent.

Thsv have ban u#llfng *n produce totally.

pnony. ax€ina@5 of a and usage Oe the

new satell i te. aaplqyinq w s e d l y reputable

and independent cmmentators.

But (U y5t thoro has bean no p r q m

examination of th, econcdcm of the

sa te l l i t es . There b s bun a good deal of

- oppodtion earnatlng h Treasury,

which. typically of Treasury, hu aot ~ O Q

- Iddrsssed t o the major i s w s . Ihe uprrmsnt

against tba satel l i te Lceoading t o

fiearur). hu lmon basiu11y that th. public ~

will end up paying far nost of its cost m a11

tha public rector interasts, frcn the

E d u c a t i o n Dopartsent. through the nilituy

and on t o the dung boot10 program will

cl&! that they havo a right to utilise It at