Wreb Co-Operative Ltd v Australian Broadcasting Tribunal

[1992] FCA 595

Re: WREB CO-OPERATIVE LTD
And: AUSTRALIAN BROADCASTING TRIBUNAL
No. G159 of 1992
FED No. 595
Administrative Law - Statutes
(1992) 36 FCR 597
(1992) 27 ALD 296
(1992) 27 ALD 745 (extract)

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Beaumont J.(1)

CATCHWORDS

Administrative law - application for review of decision of Australian Broadcasting Tribunal to grant remote radio licence - whether Tribunal made an error of law - whether Tribunal failed to provide reasons as required by s.25B of Broadcasting Act 1942.

Statutes - interpretation - ss.80B, 83D of Broadcasting Act 1942 - meaning of "commercially viable".

HEARING

SYDNEY

#DATE 29:5:1992

Counsel and Solicitors Mr M.J. Slattery and
for Applicant: Ms J.S. Gleeson instructed

by Boyd House and Partners

Counsel and Solicitors Mr S. Gageler instructed by
for Respondent: Australian Government Solicitor

ORDER

THE COURT ORDERS:

Application dismissed, with costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This is an application by Wreb Co-operative Limited for judicial review of a decision of the Australian Broadcasting Tribunal to grant to Ausradio Pty Limited a remote licence, "the licence", to provide a stereophonic radio service in the north-east region of Australia. The applicant, which is the holder of a public radio licence serving Bourke and surrounding areas in New South Wales, was a party to the inquiry held by the tribunal and objected to the grant of the licence. The service area of the licence overlaps the service area of the applicant.

1. By notice dated 24 January 1989, given pursuant to s.82 of the Broadcasting Act 1942, ("the Act"), the Minister of State for Transport and Communications invited applications for, or written submissions relating to, the grant of the licence. The licences are dealt with in Part IIIB of the Act.
   The grant of a licence is provided for by s.81(1) and (2) of the act as follows:
   

"81(1) Subject to this Act, the Tribunal may grant or renew a licence upon such conditions, and in accordance with such form, as the Tribunal determines.

(2) In determining the conditions upon which or the form in accordance with which a licence is to be granted or renewed, the Tribunal shall have due regard to the need for the commercial viability of the broadcasting services provided pursuant to other licences that are non-limited licences and that have service areas that overlap the service area of the licence."

1. Whether a service provided under a licence is commercially viable is dealt with by s.80B of the Act as follows:
   

"(1) For the purposes of this Part, the service provided under a licence is commercially viable if, and only if, the Tribunal is satisfied that, on the balance of probabilities, the service will continue to be provided under that licence until the licence's expiration.

(2) In considering whether it is so satisfied, the Tribunal must disregard:

(a) the effect, (if any) of the need to comply with any conditions of the licence imposed under section 81(1) or 85(1); and

(b) the effect (if any) of the need to comply with any undertakings given to the tribunal by the licensee, except an undertaking given under subsection 83(1) or 86(4).

(3) For the purpose of subsection (1), the provision of the service under a licence is not to be taken to be discontinued because only of a suspension of the licence under this Act."

1. The proper interpretation and application of s.80B is central to the present application. The criteria for the grant of a remote licence are stated in section 83D of the Act, as follows:
   

"(1) The Tribunal shall not refuse to grant a remote licence to a person unless it is required to do so by subsection (2), (3), (4), (5) or (7).

(2) The Tribunal shall refuse to grant a remote licence to a person if the person has failed to give an undertaking in accordance with subsection 83(1).

(3) The Tribunal shall refuse to grant a remote licence to a person if the tribunal is satisfied that the grant of the licence would be contrary to a provision of this Act.

(4) The Tribunal shall refuse to grant a remote licence to a person if it appears to the tribunal, having regard only to the following matters or circumstances, that it is advisable in the public interest to refuse to grant the licence to the person:

(a) the Tribunal is not satisfied that the person:

(i) is a fit and proper person to hold the licence;

(ii) has the financial, technical and management capabilities necessary to provide an adequate and comprehensive service pursuant to the licence; and

(iii) is otherwise capable of complying with the conditions of the licence;

(b) where the service area of the licence overlaps the service area of another non-limited licence or other non-limited licences - the need for the commercial viability of the service or services provided pursuant to the other licence of other licences;

(c) subject to the desirability of ensuring that, in all parts of Australia, there are available:

(i) at least one service provided pursuant to a commercial radio licence or remote radio licence; and

(ii) at least one service provided pursuant to a commercial television licence or remote television licence;

the need to avoid an undue concentration on the ownership or control, direct or indirect, of the media in the service area of the licence;

(d) the likelihood that, if the tribunal granted the licence, a person would, in relation to the licence or the holder of the licence, contravene an order of the Tribunal made for the purposes of section 92V;

(e) any relevant government policy statements;

(f) any matters prescribed by regulations for the purposes of this paragraph;

(g) any other matters or circumstances that the Tribunal considers relevant.

(5) The Tribunal shall refuse to grant a remote licence to a person if it appears to the Tribunal that a licence of the kind contemplated by the matters (other than the outline of the technical conditions proposed to be included in the licence warrant) set out in the notice under paragraph 92(1)(a) should not be granted.

(6) The reference in subsection (5) to the matters set out in the notice under paragraph 82(1)(a) is a reference to such matters as affected by any determination under subsection 83F(1).

(7) Where there are 2 or more applicants for a remote licence, each of whom is a person to whom, but for this subsection, the tribunal would be required to grant the licence, the Tribunal shall grant the licence to the most suitable applicant."

1. The decision now challenged was made by the tribunal in a report dated 28 February 1992 by Mr Bruce Allen, a member of the Tribunal. The provisions of the report which explain the background to the present dispute are as follows:
   1. The service to be provided under the licence was described as follows:
   

"The services to be provided under these licences are intended to be delivered by satellite, either directly to listeners authorised to receive them using appropriate equipment or to retransmitters which broadcast the signals in the normal way. This is done by exploiting spare broadcasting capacity on AUSSAT satellites. Specifically, the signals are multiplexed with those of the existing remote television services operating in three of the four satellite broadcast zones, using the B-MAC transmission system and the ancillary audio channels which that system provides; and transmissions are encoded."

1. The service area was described as follows:

"Based on Australian Bureau of Statistics estimates of population increase in the North East RCRS area since the 1986 Census, it appears that the service area encompassed around 172,000 residents of Queensland and northern New South Wales at June 1991. The rate of population growth in the Queensland part of the service area appears to be relatively high and increasing, while that for the New South Wales portion is declining.

While the area is characterised as remote, the degree of remoteness of the localities within it varies substantially. Many of the significant population centres lie not far from the Queensland coast and the services available there, but some (such as Bourke) are isolated. Nevertheless, at least 70 per cent of the people resident in the service area live in extremely low population densities outside those main centres.

The proportion of aboriginal and Islander residents is considerably higher in this RCRS area than for the country as a whole, and Ausradio has recognised that their numbers stand at over 40 per cent of all residents at some of its intended retransmission sites.

Reflecting government policy on remote radio, the RCRS area defined by the Minister in his notice does not overlap with the service areas of any existing commercial radio licensees. However, where people reside inside the North East remote television service area but outside the RCRS area, they will be permitted to receive the remote radio service if they have a domestic satellite receiver. ABC radio services are also available from the satellite in the RCRS area, and these are rebroadcast by terrestrial transmitters in many locations. The service area population has access to ABC television and either the range of commercial television network services provided to particular localities in Approved Markets A or B or remote television service QQQ (and, in New South Wales, remote television service Imparja). The region centred on Bourke is served by public radio 2WEB, and the Tenterfield Shire is served by public radio 2TEN."

1. The applicant operates public radio 2WEB from Bourke under a non-limited licence which will expire in June 1996. As has been said, the interpretation and application of s.80B are important for present purposes. The Tribunal dealt with the question of the "commercial viability of overlapping services" at some length in its report. Since, in one of the challenges now made by the applicants, it is submitted that the Tribunal failed to give adequate reasons for its decision, paragraphs 71 to 97 inclusive of the report have been annexed to these reasons for ease of reference. (Annexure A)

1. Two main submissions are now made on behalf of the applicant. In the first place, the applicant challenges in particular the reasoning in paragraph 96 of the report as follows:
   

"Table 3 indicates that 2TEN could sustain resourcing at its 1989-90 level and be commercially viable following entry of Ausradio through to 30 June 1996 at least, incurring a small deficit in 1992-93 only. 2WEB, on the other hand, may need to find cost savings averaging $17,500 per annum following Ausradio entry. It is therefore likely to need to reduce its level of resources, perhaps by one staff member. It can however be concluded that, even with the reduction in the level of service that would follow such a decrease in staff, the service of 2WEB will continue to be provided, in accordance with the licensee's undertaking until the licence's expiration in 1996."

1. It is submitted on behalf of the applicant that the Tribunal fell into legal error in this respect in several ways. It is said that the tribunal failed to take into account a relevant consideration that it was bound by law to take into account. Alternatively, the applicant contends that the Tribunal erred by failing to address the real, that is the correct legal, question (see Sinclair v. The Mining Warden at Maryborough, (1975) 132 CLR 473 at 480 to 483). The argument is that the Tribunal, having found that the grant of the licence would reduce the nature and level of the service to be provided by the applicant, failed to give this finding the significance that in law flowed from it, the argument ran, when the Tribunal decided to grant the licence to Ausradio.

2. The previous legislative scheme without s.80B which was inserted in 1991, was considered by a Full Court, Lockhart, Morling and Gummow JJ., in Australian Broadcasting Tribunal v. Wesgo Communications Pty Limited (1989) 88 ALR 502. The Full Court said at 510:
   

"In our view, when in s 83(6) the legislature directed the attention of the ABT to the need for the commercial viability of the service or services provided pursuant to other licences, it was dealing with a practical question which turned upon the financial feasibility of the operations conducted by the relevant licensee with respect to the relevant service. In one sense, it is true, as Wesgo emphasised, that the service comprises the programs that are broadcast. But the provision of the service is both the object of the activities of the licensee, and at the same time an integral part of them, such that the programs do not stand apart from the general conduct of the operations of the licensee pursuant to the licence. IT is too limited a reading of the expression in s 83(6) "the commercial viability of the service . . . provided pursuant to the other licence . . .", to treat it as referring merely to the program material provided to the listening public in the service area."

1. Their Honours went on to say, also at 510:
   

"The program material does not stand apart from the general conduct of the operations of the licensee. What is involved is a practical test designed to enable the ABT to look at the provision of the relevant service by a particular licensee, and to consider if it is commercial viable or not in the sense of financially sustainability."

1. Subsequently, as has been said, section 80B was inserted in 1991. In the second reading speech the minister explained the mischief at which the amendment was directed as follows:
   

"Experience has shown that much of the time taken in Broadcasting Tribunal inquiries into the introduction of regional commercial radio services stems from the current legislative requirements relating to the consideration of commercial viability. When making a decision to grant non-limited licences, the Tribunal must have regard to the need for the commercial viability of other services licensed to serve all or part of the same area. The tribunal must also have regard to commercial viability in fulfilling some of its other statutory licensing obligations. the provisions concerned can involve the Tribunal in wide ranging and exhaustive investigations on its own account or at the behest of the parties opposed to the introduction of a new service.

This Bill will reduce the Tribunal's current obligation to seek independent certainty in assessing commercial viability by inserting an interpretive rule which restricts the meaning of the term commercial viability for the purpose of the relevant provisions. The amendment provides that a service is commercially viable if, and only if, the Tribunal is satisfied that, on the balance of probabilities, the service will continue to be provided under the licence until its expiration.

The Bill will also place limitations on the consideration of commercial viability in Tribunal inquiries. In the past too much emphasis has been placed on the commercial viability criterion at the expense of other equally important considerations such as the desirability of introducing more services which would give the public more listening choice. The Tribunal will now not consider the need for the commercial viability of the service of an overlapping non-limited licence unless the licensee satisfies the Tribunal that the service would not be commercially viable after the grant of the proposed licence. For the Tribunal to consider the need for commercial viability of overlapping services, the affected licensees will be required to establish that a real problem exists. It will no longer be a potential opening for filibustering and procedural delay. With these amendments, the Government confirms its view that, in the interests of encouraging diversity of media ownership, it is preferable that a competitive service be introduced where it is reasonably practicable to do so."

1. I have difficulty in accepting the applicant's submission. It may be accepted that before the insertion of s.80B(1) there may have been room for argument here that the service provided by the applicant may not continue to be "commercially viable" using that phrase in its ordinary sense. But as the second reading speech makes plain, the parliament moved to eliminate argument about these matters so as to avoid delay in dealing with applications for licences.

2. In its term s.80B is a deeming provision which confines the relevant inquiry to one matter only. Will the service continue to be provided under the license? This is not in form or in substance an inquiry in any ultimate sense of an economic kind. What must be addressed is a different issue - the continuity of the service. This may of course involve questions of degree. If the characteristics of a service were to change to the extent that it were no longer possible to characterise the service as the same one as that previously provided it may be possible to say that for the purposes of s.80B there is no commercial viability. A mere reduction in the level of the service is not of itself enough nor is it enough to look at the projections of "commercial viability" in para 95 table 3 in the report.

3. In my opinion the appellant's first grounds for challenge fails. In my view in arriving at the conclusion expressed in paragraph 95 the tribunal did not fall into any relevant error of law in this regard. The second complaint made on behalf of the applicant is that the tribunal failed to provide reasons as required by section 25B of the Act. Reliance is placed by the applicant upon the decision of Wilcox J. in Our Town FM Pty Limited v The Australian Broadcasting Tribunal (1987) 16 FCR 465 where, at 481, His Honour said:
   

"There are, of course, limits upon the extent of the obligation arising out of section 25B. It is not necessary that the report deal with every matter which was or which might have been raised in the proceedings. It is enough that the findings and reasons deal with the substantial issues upon which the decision turned."

1. In Rich Rivers Radio Pty Limited v The Australian Broadcasting Tribunal (1989) 22 FCR 437 the Full Court, Lockhart, Neaves and Hill JJ. said at 447, speaking of the position in a similar context before the insertion of section 80B:
   

"In our opinion, in a case such as the present, it was sufficient that the Tribunal, on the basis of the evidence before it that revenue from advertising was unlikely to be affected, formed a conclusion that the appellant's commercial viability would be substantially unaffected by the grant of the FM licence without proceeding to a detailed funding of projected income and expenditure. We should say however that in most cases it would be desirable for the Tribunal to make findings of projected income and outgoings when considering the matter of the commercial viability of a service. As the Full Court of this Court said in Australian Broadcasting Tribunal v Wesgo Communications Pty Ltd (1989) 88 ALR 502 at 510 the legislature in the concept of commercial viability of a service was, '... dealing with a practical question which turned upon the financial feasibility of the operations conducted by the relevant licensee with respect to the relevant service.' By commercial viability is meant 'financial sustainability'. We should add that while it is clear the Tribunal did not accept the evidence of the appellant it was not, in our opinion obliged by s 25B of the Act to set out its reasons for failing to accept that evidence."

1. The applicant argues that the tribunal failed to articulate properly the reasoning process to justify its conclusions in paragraph 96. To place the conclusions in paragraph 96 in context it is first necessary to refer to paragraphs 31-38 of the report which are also annexed to these reasons. (Annexure B) They also are part of exhibit A. Further, paragraph 96 must be read in the light of what immediately preceded it. As counsel for the tribunal pointed out, table 3 in paragraph 95 indicates a deficit in terms of "commercial viability" of a total sum of $70,000 over the four years 1993 to 1996, that is, an average amount of $17,500 per annum being the figure mentioned in paragraph 96. In my opinion the applicant's challenge on this ground must fail also.

2. Finally, for the sake of completeness it should be noted that Ausradio indicated that it did not wish to be heard in these proceedings.

3. The application will be dismissed with costs and that is the formal order of the court.