Project Blue Sky Inc & Ors v Ausn Broadcasting Authority

[1997] HCATrans 109

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S219 of 1996

B e t w e e n -

PROJECT BLUE SKY INC

First Applicant

TOP SHELF PRODUCTIONS LTD

Second Applicant

COMMUNICADO LIMITED

Third Applicant

SOUTH PACIFIC PICTURES LIMITED

Fourth Applicant

GIBSON GROUP LIMITED

Fifth Applicant

FRAME UP FILMS LTD

Sixth Applicant

and

AUSTRALIAN BROADCASTING AUTHORITY

Respondent

Application for special leave to appeal

DAWSON J
TOOHEY J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 11 APRIL 1997, AT 9.31 AM

Copyright in the High Court of Australia

_____________________________

MR R.J. ELLICOTT, QC:   May it please the Court, I appear with MR D.M. YATES for the applicants.  (instructed by Minter Ellison)

MR R.V. GYLES, QC:   If the Court pleases, I appear with my learned friend, MS N.E. ABERDEE, for the respondent.  (instructed by the Australian Government Solicitor)

DAWSON J:   Mr Ellicott.

MR ELLICOTT:   Your Honours, in this matter the applicants are representative, in effect, of the New Zealand film industry which includes not only the producers but also the TV networks, who are members of Project Blue Sky, as it is called, and New Zealand funding agencies, which are quasi government bodies.  Below, Mr Gageler appeared to intervene on behalf of members of the Australian film industry.  The matter raises a very significant question as between the two industries, in effect, and indeed as between the two countries.  It is therefore a matter, we say, of considerable importance. 

The question of the closer economic trade agreement between Australia and New Zealand, which guarantees no less favourable treatment, et cetera, has also been the subject of considerable concern generally in Australia and in New Zealand because politicians make promises and sometimes they embody them in legislation.  Sometimes those promises are not fulfilled and we have a debate about Air New Zealand.  In other words, the issue is a current issue, but in this case it descends into the legal area.  In Teoh’s Case, of course, the Court said that in exercising administrative decisions, then one should take into account international obligations

entered into by Australia.  Here, the Parliament has deliberately said that the functions of the ABA shall be carried out consistently with these obligations and, indeed, in the explanatory memorandum, the relevant Minister has cited the Closer Economic Relations Agreement with New Zealand as an example of the treaty obligations which section 160(d) included. 

KIRBY J:   Are there any others that have been suggested, any other international agreements that would have to be taken into account by the section?

MR ELLICOTT:   I cannot answer that, your Honour, but so far as this particular treaty is concerned ‑ and I have no doubt there may well be others in relation to broadcasting, but I cannot immediately draw them to your Honour’s attention ‑ ‑ ‑

TOOHEY J:   In a sense that narrows the question, Mr Ellicott, does it not, to one of statutory construction, as opposed to, say, Teoh, where the Court was considering the implications of the international ‑ ‑ ‑

MR ELLICOTT:   This is the first occasion where ‑ I know there have been cases way back in relation to the external affairs power, the ICAO agreements, the 1935 case, I think, which deal with international obligations being implemented in various ways, but this is an occasion when the Parliament has actually said that an international obligation shall be taken account of and that the body in question shall act consistently with it.  In other words, that raises ‑ ‑ ‑

DAWSON J:   That does reduce it to a question of statutory interpretation, does it not?

MR ELLICOTT:   It is all a question of ‑ ‑ ‑

DAWSON J:   Why should we take on what is just simply a question of the interpretation of a statute?

MR ELLICOTT:   Because of its considerable importance, because two judges of the court below take one view and two judges take another view, and because we say that, in the interests of justice, the question should be entertained and because it affects the rights of one class of people, namely New Zealanders for whom I act, and another class of persons who are no doubt those who would be interested in Australian content as such. 

But quite apart from that, if the argument which succeeded below is correct, then the functions of the ABA, exercised under 122 of the Act or any other provision of the Act, those functions would have to be ‑ they would be looked at independently, we would say, of the paragraphs of section 160(a).  There would be a good reason for ignoring those subparagraphs, not only (d) which is the relevant one here, but also (a), (b) and (c).  Now, not because they are to be treated as directory, and not mandatory, but simply because the whole reasoning below indicates that sections 122 and 160 are to be regarded as so mutually inconsistent that you just have to ignore section 160(d).

TOOHEY J:   I can see the force of the argument that the implications flowing from the decision are important.  But so far as the question itself is concerned, it is a question of statutory construction, is it not, and does not, at least as I see it, draw in questions of international law ‑ ‑ ‑

MR ELLICOTT:   But it is not a mere question of ‑ ‑ ‑

TOOHEY J:   I did not use the term “mere”.

MR ELLICOTT:   No.  But I am referring there to the Court’s previous decisions in relation to special leave, where it is said that if it is a mere question of statutory construction, then it is a matter that the Court will not entertain, perhaps, but where the issue touches matters of public importance, and where it relates to the overall exercise of functions of a public authority such as the ABA in relation to Australian content, and where there is disputation, clear disputation between the relevant communities and concern about the issue, then it is one that we would submit, albeit a matter of statutory construction, that this Court should entertain.  It has a broad and serious effect ‑ I guess I could have thought of some other or searched for some other treaties that could be taken into account ‑ but I would submit that the section itself is so wide that it does embrace all sorts of treaties.  It is quite clear that it is any international obligation.  So, potentially for the past or the future, the case is important.  There may be another one tomorrow and it has to be taken into account.

If the decision below is wrong, then it has clearly failed to take into account Parliament’s intention on a serious matter of public importance.  It is not a mere matter between some individuals.  It is a matter that has ramifications elsewhere.

So far as the judgment itself is concerned, then we would submit it is either clearly wrong or it is seriously flawed.  If it is clearly wrong, then in the interests of justice, or if it is seriously flawed, it ought to be set aside in the interest of justice.  This sounds offensive, but the Court is a Court of justice and that should be a compelling circumstance in cases where the Court feels that there has been a failure to administer justice below.

DAWSON J:   What is the flaw in the reasoning?

MR ELLICOTT:   If your Honours would go to page 61 ‑ just to answer your Honour generally, the flaw in the reasoning is that in construing these sections they have said that you apply the principle of generalia specialibus non derogant, as if one is a general provision and the other is a special provision.  There just is not any room on those sections for the application of that provision.  There is no doubt about the principle.  But if one goes to the two sections, section 160 says:

The ABA is to perform -

they are mandatory terms, and there is no debate between Mr Gyles and myself as to the mandatory character of those words -

The ABA is to perform its functions in a manner consistent with:
.....
(d)  Australia’s obligations -

Then section 122:

(1)  The ABA must.....:

(a)  determine standards that are to be observed by commercial television broadcasting licensees; and
.....
(2)  Standards.....are to relate to -

mandatory words, but subsection (4) makes it absolutely clear:

(4)  Standards must not be inconsistent with this Act or the regulations.

So it is not as if section 122 is some special provision that is put there.  The parliamentary command is to do this, but to do it consistently with the Act.  You have the other provision saying you are to perform your functions in a manner consistent with.  Now, that is the fatal flaw, that they have come to the view that they can apply this particular provision, this particular principle.

DAWSON J:   They found themselves in having to do something because they found the two sections mutually inconsistent.

MR ELLICOTT:   Yes, but Parliament says that they shall do it.  There is a parliamentary command.

DAWSON J:   Yes, but if you find that you cannot do it, you cannot apply those sections ‑ ‑ ‑

MR ELLICOTT:   Nobody said they cannot do it.

DAWSON J:   They said they could not.

MR ELLICOTT:   This is the other flaw in the agreement.  They said it, but they are not the ones to determine it.  It is not the court’s function to act consistently, it is the ABA’s task.  What Mr Justice Davies was doing below was not getting all the possible cases ‑ I mean I could give some other standards, too, which would suggest some other standards which would ensure a minimum Australian content, but nevertheless give the New Zealanders an opportunity to have equal treatment.  One can conceive of all sorts of standards.  The court’s function below was to construe the section, not to go off on a frolic of its own, as it does in these passages. 

I would suggest what was said in Pemsel’s Case, although by Lord Halsbury in dissent, is fairly apposite. 

But I do not think it is competent to any Court to proceed upon the assumption that the legislature has made a mistake.  Whatever the real fact may be, I think a Court of Law is bound to proceed upon the assumption that the legislature is an ideal person that does not make mistakes.  It must be assumed that it has intended what it has said, and I think any other view of the mode in which one must approach the interpretation of a statute, would give authority for an interpretation of the language of an Act of Parliament, which would be attended with the most serious consequences. 

Now, they are salutary words, but they apply today and they apply, we would submit, to these words.  Now those said at that passage at page 61, the truth of the matter is that Parliament has given the ABA two mutually inconsistent instructions.  It is not for them to determine that fact.  The fact is that the two sections say one must be consistent with the other and there is no basis upon which to apply the principle of generalia specialibus non derogant.

The other passage is at page 62 and they pick up ‑ and I can quickly deal with this because, again, they are relying all the time upon an irreconcilable conflict, and they say that at line 41, having quoted the passage from Refrigerated Express, but when you look at the passages and the part that was underlined, it is all based on a view that one is a special section and the other is a general section.  I can say no more than say to your Honours there is a very serious question as to whether or not one is special and one is general.  It is almost a matter of impression and I would submit to your Honours that it is absolutely clear that it is not a case for the application of that principle and therefore they are flawed.   They also, at page 59, at line 15:

If the ABA specified the “Australian content” of television programs in such a way as to allow any of that required content to be satisfied by New Zealand programs, however they might be defined, it would fail to carry out its statutory task.

Hanging on to that page for a moment, if one goes back to page 13, line 10, in Mr Justice Davies’ judgment:

The ABA considered that there was no such possibility open to it.  One means of doing so, however, would be for the ABA to adopt a standard such as was adopted but to provide that the obligations under it were reduced to the extent to which New Zealand programs were broadcast during the specified period, 6 am to midnight.

Now, he says:

Such a standard would be within power for it would impose duties with respect to the Australian content -

that is clear enough.

It would impose no duty with respect to New Zealand programs.

That is clear enough.

The Standard would be consistent.....to the extent to which the ABA could so provide, New Zealand programs would have access to Australia’s domestic distribution system no less favourable than that accorded to Australian programs.

What their Honours have done, they have treated that as the high-water mark or the low-water mark, whichever way you look at it.  All his Honour was doing was saying, well, here is one way of doing it.  It was not for his Honour to prescribe that, but he gave an example.  So they say, based on that:

If the ABA specified the “Australian content” of television programs in such a way as to allow any of that required content to be satisfied by New Zealand programs.....it would fail to carry out its statutory task.

That is just a misconception because the example given by his Honour is not allowing New Zealand programs to fulfil Australian content at all.  That is not what it is doing.  What it is saying is, this standard relates to Australian content, that is clear enough on the face of it, but the Australian content in certain circumstances shall be limited to this period because, to some extent ‑ over the 50 per cent period which they prescribe ‑ because to some extent it is filled by New Zealand programmes.  That is not cutting down what was Australian content, that is simply defining what is to be the Australian content and it was defining it, as it can do it, by relation to other criteria, in this case New Zealand programmes.  They can do it by relation to non-Australian programmes.  They can say, no more than 50 per cent shall be non-Australian programmes.  But they are defining Australian content.  They can likewise do it by reference to New Zealand programmes.  That whole passage there, we submit, is completely misconceived.

TOOHEY J:   Mr Ellicott, could I just ask you what would be the outcome if special leave were granted and the appeal was successful?  The judgment of Justice Davies would be restored.  It is a judgment of a declaratory nature in general terms, is it not?  Looking at page 16 ‑ ‑ ‑

KIRBY J:   He postponed it originally and then, presumably, you went along and talked about the form of the orders.

MR ELLICOTT:   Yes.  The problem arose that the parties did not want the axe to fall immediately.  Therefore, it was postponed to enable the ABA to do something about it.  What they did was, of course, appeal.  But what was in contemplation was that if they did not appeal, then although it was a little bit of judicial assistance in a public interest area, because if it was invalid, it was invalid, and therefore there was no standard, it was not desirable not to have a standard around and the parties, I think with the assistance of his Honour, came to the view that that was the appropriate order to make.

KIRBY J:   It would go back to them to exercise their discretion and their powers to remove the misconstruction of the Act that you say has occurred.

MR ELLICOTT:   Yes.

KIRBY J:   This is the first CER case, is it, that comes to this Court?

MR ELLICOTT:   It is, your Honour.

TOOHEY J:   Is that right?  Would that be ‑ I am sorry, I did not mean in relation to your second comment, but in relation to your earlier one, Mr Ellicott, if the appeal was successful, would you see the appropriate relief simply being the restoration of Justice Davies’ order?

MR ELLICOTT:   Not precisely. 

TOOHEY J:   Leaving aside paragraph 2.

MR ELLICOTT:   But simply so far as this Court is concerned, it would go back to his Honour.  His Honour would then no doubt make an order which followed in principle the order that he made originally but set other dates, so that the ABA had the opportunity - it would keep the other standard on foot, but simply as a matter of public interest so that television stations were not there without any obligation in relation to Australian content - that was the abiding reason for that - but give the ABA the opportunity to consult again, if they wished, and to sit down and work out the consistent means of implementing ‑ ‑ ‑

KIRBY J:   It is a curious order, the second order, is it not?  It is a curious order.  It is like a prospective overruling, really.

MR ELLICOTT:   Yes.

KIRBY J:   Normally, if the authority has not taken into account a proper consideration, namely paragraph 160(d), then they have not performed their statutory functions as they should and their action falls.  But presumably orders could be spoken to later, if you succeeded.

TOOHEY J:   But you are not suggesting it would go back for a general reconsideration by Justice Davies, are you?

MR ELLICOTT:   Oh no.  He would simply make an order ‑ ‑ ‑

TOOHEY J:   To implement paragraph 2 or do something by reason of the time that has now elapsed.  Paragraph 1, I assume, you would ask to stand.

MR ELLICOTT:   Yes, your Honour.  I see my time has expired.

DAWSON J:   Thank you, Mr Ellicott.  Yes, Mr Gyles.

MR GYLES:   If your Honours please.  My learned friend’s initial difficulty is that the question of law is not a question of public importance, in my submission.  It is a question of statutory construction and the consequences do not carry it into the field of public importance so far as the criteria are concerned.

KIRBY J:   Is it not of public importance that Australia should conform to treaty obligations which the Parliament has taken the trouble to instruct the decision maker to take into account?  Is that not a matter of Australia’s public importance?

MR GYLES:   That really lies - the question is translated into a question of statutory construction, I would submit, and it may be important for Parliament to have done what it did but, having done so, it is no different to any other question of statutory construction and, in fact, no different to any other application of the rules about inconsistency within statutes.

KIRBY J:   It is an unusual provision, 160(d).  I do not remember seeing anything quite like it before and presumably Parliament meant it to have some meaning.

MR GYLES:   It no doubt does, your Honour.  It is just that in the particular circumstances which have here arisen, there is an irreconcilable conflict.  That, one imagines, would be quite rare in practice.  Taking the example of the section 122, we have in that:

(a)  programs for children; and
(b)  The Australian content of programs.

Now, no doubt in dealing with programmes for children the ABA will have to take account of things like the Covenant on Human Rights and the Covenant on the Rights of the Child and so on and there may, indeed, be provisions where the CER has to be given effect to under that provision also.  This decision does not, in any sense, render 160 nugatory, your Honours.

Indeed,  it is our submission that the decision below is plainly correct.  Assuming there to be an inconsistency - and we submit that there is ‑ then it is difficult, we would submit, to avoid the conclusion that section 160 is correctly entitled “General obligations of the ABA” and that as so understood it must yield to the particular of section 122.  But, in any event, that is a normal enough issue of statutory construction as to which there is no particular public importance attached.  It is merely an example.

Your Honours, the extent of the inconsistency and the contrary arguments can be seen - Mr Justice Northrop at page 36 of the book, line 10 and onwards, does not agree with the principle of generalia specialibus applying but does not posit any other means of avoiding the difficulty save to say that - he calls attention at line 21 to 122(2)(b) of the Act which is, of course, precisely what the Court is considering, and then refers to object 4(j).  Now, your Honours, there is no object 4(j) and it is extraordinarily difficult to work out precisely what his Honour had in mind, not just because he may have made a slip of the pen, but it is difficult to pick up precisely what, amongst the objects, his Honour was referring to.  He said this:

If this were done, it is possible that a standard based upon different criteria.....could result in no inconsistency

KIRBY J:   Is it possible to make the whole thing work by saying, “You have got certain Australian content obligations but because of 160, for “Australia” read “Australia and New Zealand”.

MR GYLES:   That, your Honour, is the argument which my learned friend has eschewed at all times.

KIRBY J:   Why?  New Zealand is very close.  It almost did join us.  It is still in the covering clauses.

MR GYLES:   Yes, and it is said, except in matters of rugby, they are quite close, your Honour.  But that is an argument my learned friend has not been prepared to embrace and, indeed, Mr Justice Davies - neither of the judges below who found his arguments to be correct, embraced that particular argument.  Mr Justice Davies came closest, I suppose, your Honours, at page 13 where, at line 10, he said:

The ABA considered that there was no such possibility open to it.  One means of doing so, however, would be for the ABA to adopt a standard such as was adopted but to provide that the obligations under it were reduced to the extent to which New Zealand programs were broadcast during the specified period,

and his Honour says:

There is no evidence before the Court which would suggest that a standard in those terms would frustrate the achievement of the object -

His Honour then came to one of the problems with that approach at the top of page 14:

If it were likely that New Zealand programs would be so popular as to overwhelm Australian programs and so frustrate the object sought to be achieved by s.3(e) and s.122, the Act would prevail over the Protocol.  But in the absence of evidence showing that that would be the case, and there is no such evidence before the Court or any such proposition referred to in the November 1994 working paper issued by the ABA, then it would appear that the making of a standard which is consistent with the Protocol is authorised, indeed required, by the BS Act.

Now, your Honours, we submit that the majority below adequately deal with that argument.  It is, in our submission, not logical to suggest that you can have Australian content fixed by a standard which fixes a particular level of Australian content but says you can satisfy that by New Zealand content.  We submit that that is logically and legally nonsensical.

KIRBY J:   That is a very powerful argument and appealed to two of the judges.  We have got two other judges taking another point of view.  There is a different construction arguably available.  It is a matter where Parliament has said the convention should be taken into account.  It is an unusual provision.  It affects our international obligations.  It does seem to be something that at least should be looked at.

MR GYLES:   Your Honour puts the argument, if I may say so with respect, very attractively, but at the end of the day ‑ ‑ ‑

KIRBY J:   What is the answer?

MR GYLES:   The answer, your Honour, is that ‑ ‑ ‑

KIRBY J:   From a special leave point of view, not from the view if you succeed ultimately.

MR GYLES:   From a special leave point of view, your Honour, that is to go behind the question for the Court, which is a question of statutory construction, and if your Honour were to go down that path it would be really to ultimately, if I may say so with respect, give advice to Parliament as to how it ought to frame its statutes.  That is really not a task for the Court to enter upon.  Section 160(d) has its place and has its work to do.  In one particular case it has been found to lead to the treaty not being given full effect, it would be said, in a particular circumstance.  That will have its political consequences.

KIRBY J:   It may be it is a provision which is a herald of a new time where Acts of Parliament will tell courts that they should take into account international obligations.  I mean, Parliament has said that.  It seems to me that arguably that is something we should consider, well, what did they mean?  How do you do it? 

MR GYLES:   The courts below have looked at that, your Honour, and neither of the judges my learned friend has referred to have come up with any viable solution, I would respectfully suggest, and neither has my learned friend.  He has been careful to avoid positing any way of doing it.

KIRBY J:   All the more reason why we should.  He may not be able to get away with that in this Court.

MR GYLES:   But with his well known ingenuity, if there is any way of doing it and it was legally possible, I am sure we would have heard, your Honour. 

The last point, your Honours, is the difficulty is pointed up by the order made by his Honour below, order 1.  It does not assist anybody, really.  It is either invalid or it is not.  That is ‑ ‑ ‑

KIRBY J:   I have never seen an order like that second order.  It is like a prospective overruling.

MR GYLES:   The second order, your Honour, is really - I suppose one sees it in stay applications.

TOOHEY J:    It is a mechanical provision designed to preserve the status quo.  But ‑ ‑ ‑

MR GYLES:   It is 1 that is the problem, your Honour.

TOOHEY J:   I share your concern about paragraph 1.  That is why I asked Mr Ellicott what the effect in the end would be of an appeal that succeeded in this Court.

MR GYLES:   Your Honour, order 1 does not really do anything, we would respectfully submit, or if it does it, it is extremely ambiguous.

TOOHEY J:   It could be that if that standard is declared invalid, then a new standard would have to be prescribed.  Unless the Court gave very careful guidance as to what that standard should do in order to be consistent with the Act, the whole situation might start all over again.

MR GYLES:   Indeed, and we submit that that is the difficulty in not ‑ assuming as we do that Mr Justice Davies’ solution is not viable, is not valid, that is call New Zealand content Australian content, we are left without any guidance from Mr Justice Northrop at all. And your Honours would then be placed in a position of in some way giving judicial advice to the ABA or, indeed, to Parliament.

KIRBY J:   I do not take that to be what Mr Ellicott is saying.  Mr Ellicott is saying that by refusing or failing to take into account a statutory command, the decision of the administrator miscarried.  Now, that is a very orthodox complaint of judicial review and that therefore it must be set aside.  What then happens is that courts will normally give some indication of how it ought to be done and that is what, presumably, would be thrashed out.

MR GYLES:   Your Honours, as one of my points I point to the difficulty inherent in order 1 and that, your Honour, is no surprise because the making of that order raised extremely difficult questions which were debated before the judge below and we submit the solution he found, which is unsatisfactory, reflected the difficulty of the argument my learned friend is advancing.  Your Honours, for those reasons we submit there is no special leave point.

DAWSON J:   We need not trouble you, Mr Ellicott.  There will be a grant of special leave.

AT 10.04 AM THE MATTER WAS CONCLUDED