Re Northern Rivers Fm Radio Limited v the Australian Broadcasting Tribunal and Northern NSW Fm Pty Limited [1990] FCA 229; 25 FCR 266 (12 July 1990)

FEDERAL COURT OF AUSTRALIA

Re: NORTHERN RIVERS FM RADIO LIMITED
And: THE AUSTRALIAN BROADCASTING TRIBUNAL and NORTHERN NSW FM PTY LIMITED
No. NG27 of 1990
FED No. 340
Administrative Law
[1990] FCA 229; 25 FCR 266

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Einfeld J.(1)

CATCHWORDS

Administrative Law - Whether Tribunal member making the original decision should conduct the review - natural justice - task of the Australian Broadcasting Tribunal - most suitable applicant - nature of a review - apprehended bias

Administrative Decisions (Judicial Review) Act 1977 S 16(1)(d)

Broadcasting Act 1942 SS 83A(4), 83A(9)

HEARING

SYDNEY
12:7:1990

Solicitors for the Applicant Blake Dawson Waldron

Counsel and solicitors for Mr D.M. Yates instructed
the First Respondent by the Australian

Government Solicitor

Counsel and solicitors for Mr T.J. Hancock

the Second Respondent instructed by Maxwell

Eyers and Miller
Solicitors

ORDER

Order that the member of the First Respondent who made the original decision to be reviewed should not conduct the review.

Order that each party pay its own costs.

Note: Settlement and entry of orders are dealt within accordance with Order 36 of the Federal Court Rules.

DECISION

By its amended application seeking an order of review under the Administrative Decisions (Judicial Review) Act 1977 (the ADJR Act), the applicant sought a review of a decision of the Australian Broadcasting Tribunal (the Tribunal) made on 18 December 1989 that a commercial FM radio licence be granted to Northern NSW Pty Ltd (the licensee) and not the applicant. The licence was to operate for five years in Lismore and surrounding areas. Prior to the hearing the parties agreed to the order of review, but the applicant sought an additional order that the member of the Tribunal who had made the original decision to be reviewed should not conduct the review on the ground of apprehended bias. The argument was that he had made a decision of fact that has been quashed, and that in the context and circumstances, natural justice requires that another member sit on the review on the ground that there had been a pre-determination of all or some of the issues which the review would have to consider. There was no dispute that under section 16(1)(d) of the ADJR Act the Court has jurisdiction to grant the order sought. Nor was there any suggestion that the Tribunal member is in fact now unable to give a fair or just decision, merely that a reasonable person may entertain a suspicion that he may not bring an unbiased mind to his task such that his determination might lack public and legal integrity.

2. The task performed by the Tribunal in the original hearing, and to be performed on the review, is defined by section 83A of the Broadcasting Act 1942, especially subsections (4) (in part) and (9). These are as follows:
(4) The Tribunal shall refuse to grant a commercial 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) if the licence's service area:
(i) is not a metropolitan service area; and
(ii) overlaps the service area of at least one other commercial
licence whose service area is also not a metropolitan service
area;
the need to avoid undue concentration of
influence, whether direct or indirect, on
the person and on the corporation or
corporations holding the other licence or
licences;
(c) where the service area of the licence overlaps the service area
of another nonlimited licence or other non-limited` licences -
the need for the commercial viability of the service or services
provided pursuant to the other licence or other licences.

3. (9) Subject to subsection (10), where there are 2 or more applicants for a commercial 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.

4. The "most suitable applicant" for the licence as determined by the Tribunal will then be the licensee subject to some technical requirements including the payment of the licence fee. As the Tribunal was satisfied in this case that both the applicant and the licensee met the requirements of section 83A, there devolved upon the Tribunal the task of determining the "most suitable" of them. In this regard, the Tribunal stated that the applicant was "not preferred" for the reasons set out in paragraphs 4.67 to 4.70 of its determination. These were as follows:
4.67 As Northern Rivers has still to issue a

significant proportion of its proposed
issued shares, there is a degree of
uncertainty regarding the final identity
of the company and its Board. The
Tribunal is satisfied that the
shareholding and Board as currently
constituted meets the requirements of
section 83A. However, the fact that the
identity of a large proportion of the
shareholding is unknown and that there can
be no degree of certainty that future
shareholders will not be in a position to
demand a seat on the Board, it is
obviously difficult for the Tribunal to
make firm judgements (sic) as to the
applicant's fitness and propriety, despite
the assurances given by Mr Haly.

4.68 Coupled with this are the Tribunal's

concerns that the Board displayed a lack
of cohesion on significant management
decisions and is dependent upon the
expertise of its consultants, Messrs
Hincks and Heming, and its ability to
appoint a chief executive who possesses a
range of experience currently not
represented on the Board.

4.69 Northern Rivers has based its choice of

target audience and program format on a
largely subjective and superficial
understanding of the needs and interests
of the service area population. The
limited professional research commissioned
by the applicant is also flawed due to its
extremely small sample size and the
unrepresentative nature of that sample.
As indicated earlier, the Act requires
applicants to ascertain the diversity of
needs and interests in the community to be
served.

4.70 In addition to this, Northern Rivers quite

clearly has no intention or commitment to
providing a service complementary to
existing services in the service area and
has put together a programming proposal
which largely duplicates the service
provided by 2LM. In view of this, the
Tribunal has little confidence that the
Northern Rivers programming proposal would
lead to the provision of an adequate and
comprehensive service. The Tribunal is
also concerned that Northern Rivers'
conservative expenditure and staffing
proposals may not be adequate for the
provisions of such a comprehensive
programming strategy.

On the other hand, the Tribunal found in relation the licensee as follows:
5.59 The Tribunal is satisfied that N-NSW

fulfils the requirements of s81AA(1) and
s.83A of the Broadcasting Act 1942. The
Tribunal finds that N-NSW is the most
suitable of the two applicants for the
following reasons.

5.60 The Tribunal has a greater degree of

certainty about the identity of the
applicant due to the advanced stage of the
share issue, despite the doubts raised by
2LM's and Northern Rivers in relation to
2LM continued presence as a share holder.
The N-NSW Board possesses a greater range
of broadcasting and management skills
appropriate to the operation of commercial
radio station, though, as stated earlier,
the Board would have been further
strengthened if it had access to sales,
marketing and technical expertise at Board
level, as well as through consultants and
professional staff.

5.61 The N-NSW Board is well balanced and

cohesive, is not dependent upon a single
director for broadcasting expertise and
was not significantly dependent on any of
its consultants. It is a stable Board
with each of the major shareholding
interests represented and a management
plan designed to make effective use of
expertise on the Board. Like Northern
Rivers, the N-NSW has strong ties on a
number of levels with the local community.

5.62 N-NSW has proposed a reasonably typical

target audience and program format for a
commercial FM station, however, this
choice is clearly based upon a
professional and objective examination of
the needs and interests of the service
area population. While the Tribunal has
identified some shortcomings with this
research, it is satisfied that the
research does confirm a need and interest
in a predominantly music oriented format
to serve the under 35 age-group.

5.63 Of the two applicants N-NSW has produced

the more professional and well research
application and demonstrated a greater
commitment to ascertaining the needs and
interests of the community to be served.
The Tribunal, therefore, has greater
confidence in N-NSW's ability to provide
an adequate and comprehensive service.

5. If it could be regarded as necessary, there was a consideration of the meaning of the concept of "most suitable applicant" by Wilcox J in Our Town FM Pty Ltd v. Australian Broadcasting Tribunal and Another (No 1) [1987] FCA 301; (1988) 77 ALR 577 at 594.21:

The Act does not specify the criteria to
be adopted by the tribunal in determining
which applicant is the "most suitable".
The situation is one to which may be
applied the principle stated by the High
Court in R v Australian Broadcasting
Tribunal; Ex parte 2 HD Pty Ltd (1979)
144CLR 45 at 49; [1979] HCA 62; 27 ALR 321 at 325: "the
discretion is 'unconfined except in so far
as the subject-matter and the scope and
purpose of the statutory enactments may
enable the court to pronounce given
reasons to be definitely extraneous to any
objects the legislature could have had in view'."
The Tribunal would be entitled, if it so
chose, to take into account all the
matters raised by s 83(6), selecting as
the most suitable applicant that company
which impressed most over the whole range
of these matters. Alternatively, it could
select a particular aspect of the relevant
service - for example, news coverage,
local content or target audience - which
it thought to be particularly important in
connection with that licence and judge to
be the "most suitable" that applicant
which best dealt with that aspect.

6. By these criteria with which I respectfully agree, the Tribunal clearly gave a fair and relevant consideration of what seems to be all or a balanced selection of the relevant issues.

7. The nature of a rehearing or review in matters such as this was considered in Our Town FM Pty Ltd v. Australian Broadcasting Tribunal and Another (No 2) ibid at 606.34 where Wilcox J. said:

The application of the principles
enunciated in Peko - Wallsend leads
inexorably to the conclusion that, before
making its final decision upon the grant
of the subject licence, the tribunal is
bound to take into account, first, any
facts which have arisen since its previous
consideration in April and, secondly, any
matters put before it which serve to
"correct, update or elucidate" anything
which it may have said in its earlier
report. In saying this, of course, I
refer only to material which is, at least
prima facie, reliable material upon a
question relevant for its consideration in
making its final decision; but it is not
suggested that any of the material as to
new events or to correct misunderstandings
is either unreliable or irrelevant.

8. The law relating to apprehended bias in relation to tribunals of this kind is well settled. In The Queen v The Commonwealth Conciliation and Arbitration Commission and Others; Ex parte The Angliss Group [1969] HCA 10; (1969) 122 CLR 546 at 553-4, the High Court defined the concept as follows for the then Conciliation and Arbitration (now Industrial Relations) Commission:

It is plain that when it is necessary to
consider a question of fairness in
relation to a tribunal the whole of the
circumstances in the field of the inquiry
are of importance. The nature of the
jurisdiction exercised and the statutory
provisions governing its exercise are
amongst those circumstances. It is
therefore important to bear in mind that
the Commission does not sit to enforce
existing private rights. Amongst other
things, it is its function to develop and
apply broad lines of action in matters of
public concern resulting in the creation
of new rights and in the modification of
existing rights. It is not necessarily
out of place, and indeed it might be
expected that a member of the Commission
from time to time in the course of
discharging his duties should express more
or less tentative views as to the
desirability of change in some principle
of wage fixation. The very nature of the
office of a member of the Commission
requires that he should apply his mind
constantly to general questions of
arbitral policy and consider the lines
along which the processes of conciliation
and arbitration for the prevention and
settlement of industrial disputes ought to
move. But allowing for considerable scope
for the formation and expression of
opinion upon such matters of public
interest and concern, it should not be
forgotten that the confidence with which
the Commission and its decisions ought to
be regarded and received may be
undermined, as much as may confidence in
the courts of law, by a suspicion of bias
reasonably - and not fancifully-entertained
by responsible minds.

9. The "reasonable person" was said in Livesey v. The New South Wales Bar Association (1983) 151 CLR at 298-9 to be ascertained in this way:

It was submitted on behalf of the
Association that a reasonable observer
would be aware of the ability of any judge
of the Court of Appeal to put from his
mind evidence heard and findings made in a
previous case and to decide the case at
bar impartially and fairly on the evidence
led in that particular case. As we have
already indicated however, we do not
consider that a case such as the present
is to be resolved by reference to the
ability of the members of a particular
court or the public confidence in the
integrity of the judiciary. What is in
issue in the present case is the
appearance and not the actuality of bias
by reason of prejudgment. The reasonable
observer is to be presumed to approach the
matter on the basis that ordinarily a
judge will so act as to ensure both the
appearance and the substance of fairness
and impartiality. But the reasonable
observer is not presumed to reject the
possibility of prejudgment or bias; nor is
the reasonable observer presumed to have
any personal knowledge of the character or
ability of the members of the relevant court.

10. And in Vakauta v. Kelly [1989] HCA 44; (1989) 87 ALR 633 at 645.50 Toohey J, when a member of this Court, referred to an incisive dictum of Kirby P in S and M Motor Repairs Pty Ltd v. Caltex Oil (Australia) Pty Ltd (1988) 12 NSWLR 358 at 375-6 as to the level of sophistication that should be attributed to the reasonable or fair minded observer. In relation to whether a Judge should sit to hear a case involving a party for whom the Judge had previously acted while at the Bar, Kirby P wrote, concerning the criteria for establishing the attributes and attitudes of this observer:

11. The Dialogue of citizens:

Since writing the above, I have read with
admiration the way in which Priestley and
Clarke JJA have explained the path by
which they come, on the same facts, to the
opposite conclusion.
I would only observe that the second
citizen to whose fictional conversation
their Honours refer, has had imputed to
him (or her) a sophistication and
knowledge about the law and its ways which
I believe to be quite atypical of the
general community. The dialogue, with
every respect, strikes me as more
reminiscent of the hushed tones and
cloistered atmosphere of a Bar common room
or judicial luncheon table than the robust
discussion between ordinary reasonable
citizens on the Emu Plains omnibus.
The knowledge of the second citizen about
legal retainers, in particular, goes far
beyond (as I would suggest) the knowledge
of the imputed reasonable person.
Moreover, the second citizen has to work
rather hard to bring his more typical and
even stubborn conversationalist any
distance towards his opinion. And in the
end, as I read the dialogue, he does not succeed.
It is not necessary, by the applicable
principles of law as I apprehend them, to
engage in such a painstaking process of
argument, cajoling and persuasion of that
which should, to the reasonable observer,
be manifest. The fast-talking second
citizen may not be nearby. Instead, there
may be reasonable but anxious citizens
who, faced with such a situation, are
likely to conclude:
"We just don't like it. Here is a small
trader. There is a large petrol company
seeking to exert its commercial will and
using contempt proceedings. The judge has
had a long and recent connection with the
company. So he would know the way the
petrol company operates. Maybe he even
advised them on these sorts of franchise
agreements. It's just not fair. The
traders may be in contempt. But it's a
very serious charge, after all. They may
even go to gaol for it. That makes it
very important that the judge should have
disclosed his long connection with the
petrol company at the beginning. They
were at least entitled to that. We just
don't feel easy about it. Better have it
done again. At least that way justice
will be seen to be done. Didn't someone
once say that about our system?"

12. In the interests of brevity, I do not set out the hypothetical conversation constructed by Priestley and Clarke JJA. It will suffice to say that I agree entirely with Kirby P's strictures and views about it, but I must confess to holding some reservations about a small clutch of elite lawyers such as the judiciary being in a position to speculate with accuracy on the likely conversations of public transport patrons. Those who live in Emu Plains might anyway prefer trains to buses, at least for journeys long enough to entice them to engage in deep philosophical contemplations of the kind in which their Honours indulged so learnedly. I forbear from adding my suggestion as to the likely conversation; apart from other reasons, I am doubtful that the publishers of law reports would print the language. See also Wattmaster Alco Pty Ltd and Others v. Button [1986] FCA 446; (1986) 13 FCR 253.

13. In Kaycliff Pty Ltd and Others v. Australian Broadcasting Tribunal and Another (1989) 90 ALR 310 at 317.44, a Full Court of this Court referred to R v Australian Stevedoning Industry Board; Ex parte Melbourne Stevedoning Co Pty Ltd. [1953] HCA 22; (1953) 88 CLR 100 at 116 where Dixon CJ, Williams Webb and Fullagar JJ wrote:

But when bias of this kind is in question,
as distinguished from a bias through
interest, before it amounts to a
disqualification it is necessary that
there should be strong grounds for
supposing that the judicial or quasi-judicial
officer has so acted that he
cannot be expected fairly to discharge his
duties. Bias must be 'real'. The officer
must so have conducted himself that a high
probability arises of a bias inconsistent
with the fair performance of his duties,
with the result that a substantial
distrust of the result must exist in the
minds of reasonable persons. It has been
said that 'preconceived opinions - though
it is unfortunate that a judge should have
any - do not constitute such a bias, nor
even the expression of such opinions, for
it does not follow that the evidence will
be disregarded.

14. In the light of these statements of principle, the applicant cited five distinctive features of this case which it says supports the order sought:
1. The competitive element involved between

the applicant and the licensee

2. The fact that the Tribunal determines the

elements of the dispute

3. The adversarial nature of the Tribunal's

procedures

4. The fact that there was consent to the

review on the ground of legal error

5. The Tribunal's original findings

concerning the applicant contain
impressionistic concepts which while not
defined exactly as issues of credit are
closely akin to such issues and resulted
from factual determinations requiring at
least a subjective qualitative evaluation
of the applicant's evidence. Examples
given included the Tribunal's comments on
the cohesiveness of the applicant's Board
of Directors, the Tribunal's apparent
rejection or diminished acceptance of the
applicant's undertakings to it, especially
regarding its shareholding, and the
Tribunal's conclusion that the applicant
will have to rely on the expertise of
experienced professionals and consultants
for its management decisions.

15. The Tribunal appeared before me to put some general submissions on the law relating to the way to approach such cases, but did not put a substantive submission. It said that it would not be embarrassing or problematic for the Tribunal whichever way this decision went. However, the licensee argued that this was demonstrably a decision made on the facts without the need to express a view on the credibility or credit worthiness of anyone. Taking up the view of the majority of S and M Motor Repairs Pty Ltd (supra) that the "reasonable observer" is the "informed" observer, the licensee argued that no such person could suspect a real likelihood of bias in this case.

16. On an issue which can credibly be argued either way, I am of the view that the applicant's arguments should prevail. The original determination demonstrates that the Tribunal's consideration of the matter was extensive, far reaching and lengthy. It seems to me unlikely that the member concerned would not have formed some views in the matter concerning the personalities involved and their competence and acceptability. These are among the key issues which the Broadcasting Act requires to be found before a licence is granted.

17. Indeed, the trenchancy of the Tribunal's conclusions on the applicant's statutory qualifications make doubtful how it could have found the applicant to be suitable for a licence at all. It is difficult to see how a reasonably perceptive outsider would fail to doubt that the writer of those words could be fully objective in a reconsideration of the same matters.

18. I think that there must be entertained a reasonable suspicion that a fully detached determination could not be made by the same person who formed such strong views on the applicant's compliance with the requisite criteria. I therefore accede to the applicant's application. In the circumstances I think that each party should pay its own costs.