REFERENCE UNDER S154 BY THE AUSTRALASIAN PERFORMING RIGHTS ASSOCIATION LIMITED RE AUSTRALIAN BROADCASTING COMMISSION

[1982] ACopyT 2

CATCHWORDS

Copyright -whether the Australian Broadcasting Commission is an instrumentality or agency of the Crown in right of the Commonwealth of Australia.

Copyright Act 1968 (Cth.) ss152, 154, 183

Broadcasting and Television Act 1942 (Cth.) ss64, 70A, 77, 78, 78A

COPYRIGHT TRIBUNAL

REFERENCE UNDER S154 BY THE AUSTRALASIAN PERFORMING RIGHTS ASSOCIATION LIMITED RE AUSTRALIAN BROADCASTING COMMISSION

LOCKHART J.
AT SYDNEY

FRIDAY 11 JUNE 1982

THE COPYRIGHT TRIBUNAL                NO. 2 OF 1981
  THE COPYRIGHT ACT 1968

REFERENCE UNDER SECTION 154
  BY THE AUSTRALASIAN
  PERFORMING RIGHTS
  ASSOCIATION LIMIYTED RE
  AUSTRALIAN BROADCASTING
  COMMISSION

REASONS FOR DECISION

AT SYDNEY

FRIDAY 11 JUNE 1982

LOCKHART J. Australasian Performing Right Association Limited ("APRA") formulated a licence scheme setting out the classes of cases in which it, as licensor, is willing to grant a licence to the Australian Broadcasting Commission (“the Commission") subject to certain conditions, including the payment of a licence fee calculated with reference to the Commission's gross operational expenditure incurred in the provision of radio and television broadcasting services.

APRA referred the licence scheme to this Tribunal pursuant to s154 (1) of the Copyright Act 1968 and purported to bring the scheme into operation on 20 February 1981 pursuant to s154 (6) (a).

The Commission has taken a preliminary objection to the Tribunal's jurisdiction to consider the schema and to make orders confirming or varying it under s154 (4), on a ground which involves the construction of s183 of the Copyright Act which, so far as relevant provides: -

"183 (1) The copyright in a literary, dramatic, musical or artistic work or a published edition of such a work, or in a sound recording, cinematograph film, television broadcast or sound broadcast, is not infringed by the Commonwealth or a State, or by a person authorized in writing by the Commonwealth or a State, doing any acts comprised in the copyright if the acts are done for the services of the Commonwealth or State.
…
5) Where an act comprised in a copyright has been done under sub‑section (1) of this section, the terms for the doing of the act are such terms as are, whether before or after the act is done, agreed between the Commonwealth or the State and the owner of the copyright or, in default of agreement, as are fixed by the Copyright Tribunal."

The Commission contends that it is an agency or instrumentality of the Commonwealth of Australia under s183 of the Copyright Act; that, in broadcasting and televising works in which copyright subsists, it is doing so as the National Broadcasting Service and the National Television Service; that accordingly it does not infringe copyright; that s183 provides an exclusive code (except for s152 which applies specifically to the Commission) for the fixing by the Tribunal of the terms on which the Commission may do acts comprised in a copyright; and that in the result, the Tribunal has no jurisdiction under s 154.

Although the question whether the Commission is an instrumentality or agency of the Commonwealth turns initially on the construction of s183, the answer rests essentially on the status of the Commission, which involves analysing the relevant provisions of the Broadcasting and Television Act 1942 for it is that Act which establishes the Commission to which I now turn.

The Commission is established as a body corporate with perpetual succession and a common seal, which power to hold and dispose of real and personal property and to sue and be sued in its corporate name (s 30 (2)).  It is empowered to acquire by lease or purchase any land buildings, easements or other property, rights or privileges which it     thinks necessary for the purposes of the Broadcasting and Television Act and to sell, exchange, lease, dispose of, turn to account or otherwise deal with any property, rights, or privileges of the Commission (s 61).

Section 31 (1) provides that the Commission shall consist of six Commissioners comprising, in respect of each State, a person ordinarily resident in that State; and not fewer than three nor more than five other Commissioners. At least two of the Commissioners must be women (s 31 (2)). The Commissioners are appointed by the Governor-General as part-time Commissioners (s 31 (3)); and the Governor-General appoints one Commissioner to be Chairman of the Commission and another Commissioner to be its Vice-Chairman (s 31(4)).  The Commissioners are to be appointed for terms not exceeding five years and are eligible for reappointment; and they hold office subject to good behaviour (s 32). The Minister may grant leave of absence to any Commissioner upon such conditions as he thinks fit (s 36).  The Governor-General may declare that the office of a Commissioner is vacant if - the Commissioner becomes permanently incapable of performing his duties; becomes bankrupt, applies to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounds with his creditors or makes an assignment of his remuneration for their benefit; being a Commissioner appointed by virtue of his being ordinarily resident in a particular State ceases to be ordinarily resident in that State; is absent, except on leave of absence granted by the Minister from all meetings of the Commission held during two consecutive months; or fails to comply with obligations imposed on him by the Act to disclose interests he has in contracts made or proposed to be made by the Commission (s 37).

The Commission holds such meetings as, in the opinion of the Chairman, or at least four other Commissioners, are necessary for the efficient conduct of its affairs (s 39 (1)).

The Commission is required to appoint a General Manager who is its Chief Executive Officer and holds office on such terms and conditions as the Commission determines; the Commission appoints such other officers as it thinks necessary; and those officers constitute the service of the Commission (s 43 (1), (2) and (3)). The Commission determines the terms and conditions of employment of officers appointed by it, but that determination must be with the approval of the Public Service Board (s 43 (6)). The Commission may declare that an officer is not to be paid salary where he refuses or fails to comply with a lawful direction (s 44 (1)).

The Commission may create positions in its service and determine the salary or the range of salary applicable to that position; it may abolish any position in its service; and may reclassify any position in its service by raising or lowering the salary or the range of salary applicable to the position (ss 45 and 46). A determination by the Commission of the salary or range of salary applicable to a position in its service, or a reclassification of such a position by raising the salary or range of salary, shall be made with the approval of the Public Service Board where the salary or any salary in the range of salary as so determined or raised is equal to or higher than the lowest salary for the time being applicable to an officer in the Second Division of the Australian Public Service (s 46A). The Commission may transfer or promote an officer to fill a vacancy in its service (s 47).

Section 59 is, in effect, the Commission's charter. It requires the Commission to: "provide... adequate and comprehensive programs" and to"...take in the interests of the community all such measures as, in the opinion of the Commission, are conducive to the full development of suitable broadcasting and television programs."

The Commission is also required or empowered to:

·     broadcast daily from all national broadcasting stations regular sessions of news and information about current events within Australia and in other parts of the world (s 66 (1);

·     employ an adequate staff in Australia and abroad to collect news and information (s 66 (2);

·     endeavour to establish groups of musicians for orchestral, choral and band music of high quality (s 66 (7) );

·     as much as possible, use Australians in the production and presentation of radio and television programs (s  114 (1);

·     devote not less than 5% of music program time to works by Australian composers (s 114 (2));

·     determine to what extent and in what manner political matter or controversial matter will be broadcast or televised (s 116);

The Commission is prohibited from broadcasting or televising advertisements (s 65 (1).

The Commission is required to broadcast or televise, free of charge, from all National Broadcasting Stations or National Television Stations ox from such of them as the Minister specifies, any matter the broadcasting or televising of which is directed by the Minister in writing as being in the national interest (s 64).

The Minister is empowered, from time to time, by telegram or in writing, to prohibit the Commission from broadcasting or televising any matter, or matter of any class or character, specified in the notice, or may require the Commission to refrain from broadcasting or televising any such matter (s 77 ).

The Commission is required, as soon as possible, but not later than six months after the expiration of each financial year, to forward a report on its operations during that year to the Minister for representation to both Houses of Parliament (s 78 (1)). The commission is required to include in that report particulars of each transmission arranged at the written direction of the Minister pursuant to s. 64; each case in which the Minister has exercised the powers conferred on him by s. 77; and any case in which the Minister has, otherwise than in pursuance of the provisions of the Act, issued directions concerning the broadcasting or televising by the Commission of any matter or prohibited the broadcasting or televising by the Commission of any matter (s 78 (3)).

Where the Minister has given a direction under s. 64 or has prohibited the broadcasting or televising of any matter or made any requirement under s. 77, he is required, within seven sitting days of giving such direction or notifying such prohibition or requirement, to report the same in writing to both Houses of Parliament and to give the reasons for such direction, prohibition or requirement (s 78A).

The Commission is required to provide such studios, offices and other accommodation as are necessary for the performance of its powers and functions under the Act, and such accommodation in relation to the studios as the Minister requires for the carrying out of certain technical services; and the location of any studios to be provided by the Commission is subject to the Minister's approval (s 63). The Commission is required to provide and operate all the technical equipment required for the purposes of performing its functions; and the Minister is required to arrange for the provision and operation, for the purposes of the performance by the Commission of its functions, of transmitting stations, broadcasting translator stations, television translator stations and television repeater stations, and technical equipment to connect a studio of the Commission to the local transmitting station (s 73 (1) and (2) ).

For the purposes of the exercise of its powers and the performance of its functions under the Act, the Commission is empowered, in such manner as it thinks fit: -

(a)to compile, prepare, issue, circulate and distribute such papers, magazines, periodicals, books, pamphlets, circulars and other literary matter as its thinks fit; and

(b)to make, promote, circulate, and distribute cinematograph films and sound recordings of or relating to programmes of the Commission and public concerts and other public entertainment which the commission arranges, organises or subsidises (s 60 (1)).

The Commission may, from time to time, determine charges payable in respect of any of the matters or activities referred to in s 60(1) with a view to raising as much net revenue as is practicable (s 60(2)).

The Commission is funded by moneys appropriated by Parliament for the purposes of the Commission; and the Minister of Finance may give directions as to the amounts in which and the times at which these moneys are to be paid to the Commission (s 68).  The Commission is required to pay all of its moneys into its bank accounts (s 69).  The moneys of the Commission must be applied only in payment of amounts properly payable in the performance of its functions and in payment of remuneration or allowances payable to Commissioners (s 70). The Commission is required to prepare estimates, in such form as the Minister directs, of its receipts and expenditure for each financial year and, if the Minister so directs for any other period specified by him, and the Commission is required to submit estimates so prepared to the Minister not later than such date as the Minister directs (s 70 A (i)). The moneys of the Con‑mission cannot be expended otherwise than in accordance with estimates of expenditure approved by the Minister (s 70 A (ii)).

The Commission is prohibited, without the Minister's approval, from entering into contracts involving the payment or receipt of amounts exceeding $250,000.00 or, if a higher amount is prescribed then that higher amount; but that prohibition does not apply to the receipt by the Commission of moneys for the sale of broadcasting or television programmes (s. 70B).

The Commission must cause to be kept proper accounts and records of its transactions and affairs and to do all things necessary to ensure that all payments out of its moneys are correctly made and properly authorised and that adequate control is maintained over its assets and over the incurring of its liabilities (s 71 ).

The Auditor‑General is required to inspect and audit the accounts and records of financial transactions of the Commission and records relating to assets of the Commission, and to draw the attention of the Minister to any irregularities disclosed by the inspection and audit.  The Auditor-General is required at least once each year to report to the Minister the results of his inspection and audit.  The Auditor-General is authorised, at all reasonable times, to have full and free access to all the Commission's records relating to the receipt or payment of moneys by it or to the acquisition, receipt, custody or disposal of its assets (s 71B).

The Commission is not subject to taxation under any law of the Commonwealth or of a State or Territory (s 72).

The Commission is required each year to present a financial statement in accordance with a form approved by the Minister for Finance, and to forward it, together with the report mentioned earlier on the operations of the Commission during that year, to the minister for presentation to both Houses of Parliament. Before forwarding the financial statements to the Minister, the commission is required to submit them to the Auditor-General (s 78).

The Commission is obliged to make available to commercial television stations at localities at which there is no National Television Station, such programs of the Commission as are specified by the Minister; and the licensee of the commercial television station is required to televise that program (s 113).

The Commission is prohibited from broadcasting or televising a dramatisation of any political matter which is then current or was current at any time during the last five preceding years (s 116(2)).

The Commission is prohibited at any time between the end of an election period and the close of the poll on the day on which the election is held, from broadcasting or televising election matter (s 116(4)).

The Governor‑General may, whenever in his opinion any emergency has arisen which renders it necessary in the public interest so to do, authorise the Minister to exercise, during the emergency, complete control over the matter to be broadcast from broadcasting stations or televised from television stations and, so long as the emergency continues, such persons as are authorised in writing by the Minister are empowered to have access to any premises controlled by the Commission and to exercise full authority over all rights and privileges possessed by the Commission (s 131).

Another Act of Parliament which bears on this question is the Parliamentary Proceedings Broadcasting Act 1946 which requires the Commission to broadcast the proceedings of the Senate and the House of Representatives. That Act specifies that proceedings of Parliament must be broadcast on an ABC medium wave broadcasting station in the capital city of each State, in the Australian Capital Territory, in Newcastle (New South Wales), and on one domestic short wave station as well as such other stations as may be determined by the Joint Committee of the Broadcasting of Parliamentary Proceedings and prescribed by regulation.

Those are the principal statutory provisions which bear on the question whether the Commission is an agency or instrumentality of the Commonwealth for the purposes of s 183 of the Copyright Act.

It is wrong to apply in a. mechanical fashion "tests" developed by the authorities to determine the character of public corporations; but they do provide a useful guide provided it is remembered that the primary task is to interpret the relevant statute.

Matters to be considered include the question whether the corporation fulfils a governmental or non‑governmental function; the capacity of the Government to control its activities; financial autonomy; the right of appointment and dismissal of the members of the body and of its staff by the Government; whether it has duties to furnish information or accounts to the Government; and its power over assets in its ownership or control.

The fact that the Commission is a statutory corporation is itself a neutral consideration. Although many statutory corporations have been regarded as independent of the Crown, there are a not inconsiderable number of cases in which the fact of incorporation as a statutory corporation has not been regarding as preventing the corporation from being equated to the Crown: one example is Public Works Commissioners v. Pontypridd Masonic Hall Co. [1920] 2 K.B. 233.

In my view, the determination of the true character of the Commission turns primarily on whether it is a body exercising functions

required and created for the purposes of the Commonwealth Government. Governmental purposes include the traditional activities of government; for example, defence, foreign affairs, national security, maintenance of law and order and the administration of justice. Since Victorian times, there has been a vast extension of the powers and purposes of government in all democratic countries, including Australia. Indeed, it is difficult in modern complex societies readily to discern any activity which could not constitute a purpose or function of government. Social services, public health, education and transport are but a few of the areas which Australians accept today as falling within the province of government.

In Australia, our awareness of government activity is heightened by the fact that we enjoy a Federal system with divisions of power between the Commonwealth and the States.

Distinctions between governmental and non‑governmental purposes are easily blurred. Although these distinctions are less readily perceived today, it is imperative that they be recognised where they in truth exist. Broadcasting and television are important instances of the distinction. Governments in Australia, be they Commonwealth or State, have never asserted that broadcasting or television should be within the province of government. The Commonwealth has exercised from time to time the powers conferred upon it by s 51(V) of the Constitution with respect to “postal, telegraphic, telephonic, and other like services". The Broadcasting and Television Act is one example. But the Commonwealth has never asserted a monopoly in respect of broadcasting or television. All that it has done is to provide .for the regulation of broadcasting and television by a system of licences for commercial broadcasting and television stations and by establishing the Commission as a statutory corporation.

There is a real distinction in a democratic society like Australia, between governmental regulation of an activity and governmental purposes which include that activity. When broadcasting and, more recently, television, became practical possibilities, it was for the Commonwealth Parliament to decide how to deal with them. It

could have followed the experience in the United States of America and left them to be developed substantially, if not entirely, by private enterprise.  It might, on the other hand, have made them specific functions of government. This is frequently done by totalitarian States whose very survival often rests on the control of broadcasting, television and the press through ministries of propaganda. Australia could have made broadcasting and television purposes or functions of government by, for example, requiring by statute the responsible Minister to establish government broadcasting and television services. I leave aside the question whether such attempts would have been constitutionally permissible. The Commonwealth did not take this purse. Instead, it established the Commission as an independent body created precisely for the reason that the Commonwealth desired to avoid any suggestion that broadcasting and television in Australia are instruments of government.

Counsel for the Commission, in support of his argument that the Commission was an instrumentality or agency of the Commonwealth, placed strong emphasis upon various sections of the Broadcasting and Television Act, in particular those relating to the power of the Minister to give directions to the Commission on certain matters, the funding of the Commission from consolidated revenue, and to the necessity for ministerial approval of expenditure by the Commission.

It is true that the commission is required to broadcast or televise any matter the broadcasting or televising of which is directed by the Minister as being in the national interest (s 64); and that the Minister may prohibit the Commission, or require it to refrain, from broadcasting or televising any matter (s 77). These are large powers indeed; but in my view they do not support the submission that the independence of the Commission depends on political convention rather than law.

The existence of these and other powers in the Commonwealth through the responsible Minister is not explicable merely on the ground that broadcasting and television are government purposes. Rather, one sees the Commonwealth seeking to strike a balance between an independent and autonomous statutory corporation performing its functions independently of government, yet susceptible to governmental direction and regulation especially on matters of national concern. Hence the Commission is bound to broadcast or televise any matter the broadcasting or televising of which is directed by the Minister as being in the national interest (s. 64). Also, as the Commission is funded primarily out of consolidated revenue, its annual estimates of receipts and expenses must be prepared in such form as the Minister directs; and the Commission's moneys cannot be expended otherwise than in accordance with the estimates of expenditure approved by the Minister (s 70A).

Notwithstanding the large power of the Minister under s. 77 to prohibit the Commission from broadcasting or televising any matter or to require it to refrain from broadcasting or televising any such matter, it is important to bear in mind that Parliament has imposed high restraints on the exercise of this and other powers. The Minister is required by s 78A, where he has given a direction under s 64, or has prohibited the broadcasting or televising of any matter, or made any requirement under s 77, within seven sittings days of giving such direction or notifying such prohibition or requirement, to report the same in writing to both Houses of Parliament, supported by his reasons therefor. Also the Commission is required by s 78(3) to include in its annual report on its operations, particulars of each transmission arranged at the written direction of the Minister pursuant to s 64, each case in which the Minister has exercised the power conferred on him by s 77, and any case in which the Minister has otherwise than pursuant to the provisions of the Act issued directions concerning the 'broadcasting or televising by the Commission of any matter or prohibited the broadcasting or televising by the commission of any matter.

These provisions reflect to my mind, the concern of Parliament to establish and maintain the Commission as a body independent of Government, notwithstanding the existence of large ministerial power with respect to the Commission to temper any excesses of ministerial power which may attempt to erode the independence of the Commission, by rendering the Minister answerable for his acts to the Houses of Parliament to whom he is ultimately responsible.

The Commission undoubtedly was created to carry out important public services; but it does not follow that a body created to carry cut public services is necessarily equated with Government. There is a certain measure of control by the Government through the responsible minister; and the operations of the Commission are financed out of public funds. It is understandable that the Government's concern for so important a public service as broadcasting and television finds expression in a number of statutory obligations imposed on the Commission, including the requirement to broadcast daily from all national stations regular sessions of news and information about current events in Australia and other parts of the world (s 66(1)), to, as much as possible, use Australians in the production and presentation of radio and television programs (s 114(1)); to devote not less than 5% of music program time to works by Australian composers (s  114(2)); and to endeavour to establish groups of musicians for orchestral, choral and band music of high quality (s 67).

The Commission controls its own day to day activities and its own property (subject to a limitation of entering into contracts involving more than $250,000.00 in certain circumstances – s 70B). It is required to provide and to broadcast or televise adequate and comprehensive programs; and to take, in the interests of the community, all such measures as, in its opinion, are conducive to the full development of suitable broadcasting and television programs (s 59(1)).

The Commission controls the appointment and dismissal of its own officers. It may create and abolish positions in its service or re‑classify any of those positions; but they are not unfettered powers. The Public Service Board must approve the terms and conditions of employment of the Commission's officers (s 43(6)). Any determination of salary or range of salary applicable to a position in the Commission's service or reclassification thereof by raising the salary or range of salary applicable to the position requires the approval of the Public Service Board in certain circumstances (s 46A).

I take into account, to some extent, the fact that the Commission is empowered to engage in entrepreneurial activity and to obtain revenue from sources other than public funds for this purpose (see in particular s 60); but plainly, Parliament intended         the Commission to be funded primarily from moneys appropriated by it for the purposes of the Commission.

My analysis of the status of the Commission has been primarily with reference to the Broadcasting and Television Act, although strictly the first inquiry is the construction of s. 183 of the Copyright Act. Little assistance is gained by an analysis of s 183 although I have considered it in the context of the Copyright Act as a whole. In particular, I have considered the submissions of counsel for both parties as to the effect of s. 152 of the Copyright Act. Section 152 is concerned with applications to the Tribunal for determination of amounts payable by broadcasters to the owners of copyright in published sound recordings in respect of the broadcasting of those recordings. The word "broadcaster" is defined by s 152(1) as meaning, amongst others, the Commission. Section 152 specifically mentions the Commission in the definition of "broadcaster" because that definition is intended to be exhaustive for the purposes of that section. Nowhere does one find in the other sections of the Copyright Act, which relate to the jurisdiction of the Tribunal in particular matters, a reference to the Commission. In my opinion, the fact that the Commission is specifically named in s 152 is a neutral matter which does not assist in resolving the question of the Commission's status. Ultimately the question falls to be determined with reference to the position and capacities of the Commission and limitations imposed upon it under the Broadcasting and Television Act.

I have not mentioned all the matters which are relevant to the question of the Commission's position in relation to the Commonwealth; but I have, I think, considered them all. I have specifically mentioned only those matters which are of especial importance. The argument of counsel for the Commission is formidable; but in the end, one which I cannot accept. In my opinion, the Commission is not an instrumentality or agency of the Commonwealth or equated with it.

I will not at this stage make any orders or answer any specific questions relating to the preliminary objection to jurisdiction of the Tribunal because counsel for both parties, mindful of the possible implications of s. 161 (2) of the Copyright Act, have requested me not to do so. All I will do at this stage is to adjourn the matter to a date to be fixed so that the parties may consider my reasons. I append a schedule of the principal references which I have read for the purposes of determining the preliminary question.

SCHEDULE OF REFERENCES

Public Works Commissioners v. Pontypridd Masonic Hall Co. [1920] 2 K.B. 233
Grain Elevators Board (Victoria) v. Shire of Dunmunkle (1946) 73 C.L.R. 70
Pfizer Corporation v. Ministry of Health [1963] 3 W.L.R. 999; and [1965] A.C. 512
B.B.C. v. Johns [1965] 1 Ch. 32
Inglis & Ancr. v. Commonwealth Trading Bank of Australia (1969) 119 C.L.R. 334
Commercial Oil Refineries Pty. Limited v State of South Australia (1974) 9 S.A.S.R. 88
Goodfellow v. C. of T. of Commonwealth (1977) 51 A.L.J.R. 437
Maguire & Anor. v. Simpson & Ors(1977) 139 C.L.R. 362
Superannuation Fund Investment Trust v Commissioner of Stamps (S.A.) (1979) 53 A.L.J.R 614
Bradken Consolidated Limited & Ancr. v. B.H.P. Co. Ltd. & Ors. (1979) 53 A.L.J.R. 452
F.Sharkey & Co. Pty. Limited & Ors. v. Fisher & Ors. (1980) 33 A.L.R. 173
Allied Mills Industries Pty. Limited v. T.P.C. (1981) 34 A.L.R. 105
State Superannuation Board v. T.P.C., a decision of a Full Court of this Court 15 April 1982, as yet unreported
Shield of the Crown Revisited by Professor Geoffrey Sawer 1957 1 Melbourne University Law Review 137