Re Alice Springs Commercial Broadcasters Pty Ltd v Australian Broadcasting Tribunal and Kim Wilson [1992] FCA 499 (14 October 1992)

FEDERAL COURT OF AUSTRALIA

Re: ALICE SPRINGS COMMERCIAL BROADCASTERS PTY LTD
And: AUSTRALIAN BROADCASTING TRIBUNAL and KIM WILSON
No. S G130 of 1990
FED No. 781
Costs

COURT

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
GENERAL DIVISION
O'Loughlin J.(1)

CATCHWORDS

Costs - application to a Tribunal for a licence refused - application for judicial review - thereafter unilateral decision by Tribunal to reconsider application - Tribunal's reason for reconsideration not a ground in applicant's grounds for review - whether Tribunal should pay the applicant's costs.

Broadcasting Act 1942: subs 83B(4)

Broadcasting and Television Act 1942: subs 83(6) O62 r3

R v Australian Broadcasting Tribunal and Others [1980] HCA 13; (1980) 29 ALR 289

South East Queensland Electricity Board v Australian Telecommunications Commission (Pincus J. unreported: judgment delivered 10 February 1989)

Trade Practices Commission v Nicholas Enterprises Pty Ltd and Others (1979) 28 ALR 201

HEARING

ADELAIDE
14:10:1992

Solicitor for the applicant: Baker O'Loughlin

Counsel for the respondents: Ms S J Singh

Solicitor for the respondents: Australian Government Solicitor

Counsel for the applicant: Mr A R Harris

ORDER

THE COURT ORDERS THAT:
1. The applicant's costs of these proceedings, including reserved costs up to and including 3 May 1991 be taxed and that 50 per cent of the sum so fixed be paid by the respondents to the applicant.

2. Each party pay its own costs thereafter.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

The parties agreed that this matter should be referred back to the Australian Broadcasting Tribunal ("the Tribunal") but were unable to agree the issue of costs; although these reasons are limited to the resolution of that issue, it will still be necessary to summarise the history of the matter.

2. In 1980 the Government announced its intention to introduce legislation to allow for the grant of supplementary FM radio licences to existing regional broadcasters in areas where an additional, independent station was unlikely to be commercially viable. In 1984 the applicant, Alice Springs Commercial Broadcasters Pty Ltd, the licensee of the radio station with the call-sign 8HA, applied for a licence to provide a supplementary service in Alice Springs. That application was ultimately disposed of on 27 September 1990 when the Tribunal - the first respondent constituted by Kim Wilson the second respondent - decided not to grant a supplementary licence to the applicant ("the decision").

3. The applicant primarily sought in this Court judicial review of the decision under the provisions of the Administrative Decisions (Judicial Review) Act 1977 (Cth); it also sought review of an ancillary decision that dealt with the Tribunal's recommendation to the Minister concerning a re-classification of the Alice Springs area. At the time when the applicant lodged its application for a supplementary licence, the relevant legislation was subs83(6) of the Broadcasting and Television Act 1942. Paragraph (c) of that sub-section addressed several matters, including issues of "public interest" and the "commercial viability" of overlapping services. Thus, for present purposes, the relevant passage in the legislation was:

"(6) The Tribunal shall not refuse to grant a licence (other than
a public licence) to a person unless -
(a) ...
(b) ...
(c) in the case of a licence other than a remote licence - it
appears to the Tribunal, having regard only to the following
matters and circumstances, that it would be in the public
interest to refuse to grant the licence to the person:
(i) it is satisfied that the person -
(A) is a fit and proper person to hold the
licence;
(B) has the financial, technical and
management capabilities pursuant to the
licence or, in the case of a
re-broadcasting licence or a re-transmission
licence, to provide the service to which
the licence relates;
(C) is otherwise capable of complying with the
conditions of the licence;
(ii) where -
(A) the licence is a commercial licence whose
service area is not a metropolitan service
area; and
(B) the service area overlaps the service area
of one or more licences of a kind which
sub-sub-paragraph (A) applies,
the need to avoid undue concentration of
influence, whether direct or indirect, on the
person and on the company or companies holding
the other licence or licences;
(iii) where the service area of the licence overlaps the
service area of another licence or other licences -
the need for the commercial viability of the service
or services provided pursuant to the other licence or
other licences; ..."

4. Subsequent to the lodgment of the application but before the Tribunal handed down its decision on 27 September 1990, several changes were made to the legislation. Among other things, the Act was renamed the Broadcasting Act 1942 and the provisions of paragraph 83(6)(C) were re-cast; they are now found in sub-s83B(4) and are in the following terms:

"(4) The Tribunal shall refuse to grant a supplementary radio
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 licence's service area 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 or licences."

5. The Tribunal, in arriving at its decision, relied upon the provisions of sub-s83B(4) of The Broadcasting Act 1942 - not upon the provisions of paragraph 83(6)(C) of the Broadcasting and Television Act 1942; so much is clear from the specific references to the current legislation that were made by the Tribunal in paragraphs 18, 20 and 23 of its reasons. Much later the Tribunal acknowledged that this was a mistake. By letter dated 3 May 1991, its solicitor wrote the applicant's solicitors in these terms:

"I write to advise that the Tribunal intends to vacate its
decision of 27 September 1990 and reconsider your client's
application for a supplementary license.
In reaching its decision of 27 September the Tribunal (and all
parties to the inquiry) proceeded on the basis that the relevant
section to applied in determining this matter was s.83B of the
Broadcasting Act 1942. The true position is that the application
fell to be determined by reference to s.83(6) of the Broadcasting
and Television Act 1942."

6. The chronology of events that preceded the letter of 3 May 1991 was quite unusual. First, the application for review (as amended) complained of the conduct of the Tribunal in numerous respects but it made no mention of the Tribunal proceeding under the wrong legislation. Secondly, the application was listed for argument in March 1991 but that hearing was cancelled at the last moment because of my hospitalisation. In the meantime however, and as an independent exercise, the applicant's solicitors had written the solicitors for the respondents by letter dated 7 March 1991 suggesting that the proceedings be adjourned sine die and that each party pay its own costs. The basis upon which the adjournment was suggested was in these terms:

"Our information is that in May 1991 it is expected that the
Minister of Transport and Communications will make a policy
statement concerning regional radio. We do not know whether or
not Alice Springs will be referred to particularly, however, it is
our understanding that the policy statement will canvass options
for the delivery of commercial FM radio to regional markets.
These options will include FM conversion, the supplementary
licence scheme, satellite delivery of FM services and possible
revision of existing service areas.
Even if Alice Springs is not dealt with specifically, it is plain
that the matters referred to above have relevance to the Alice
Springs market and, for that matter, the RCRS service area.
Our client has no wish to embark upon litigation at this time
which will be expensive and may not achieve any practical result.
The same consideration must also apply to the Australian
Broadcasting Tribunal and for that matter (though they have shown
no interest in the proceedings), Alice Springs FM Pty Ltd and
Imparja Television Limited. It is our view that it would be
preferable for the proceedings listed for hearing in the Federal
Court on 25 March to be adjourned to abide the event of the
ministerial statement expected in May. The parties will
thereafter be able to consider their position in light of the
statement of policy expected at that time. It seems to us that
there are very real advantages for everyone concerned with this
matter that it not proceed at this time.
Would you therefore be good enough to obtain the instructions of
the Australian Broadcasting Tribunal on an adjournment of the
current proceedings to a date to be fixed. Naturally, each party
would bear its own costs."

7. By letter, also dated 7 March 1991, the respondents rejected the applicant's proposal. Thereafter, as has already been stated, the hearing had to be vacated unexpectedly and the Tribunal made the unilateral decision to vacate its decision of 27 September 1990.

8. In these circumstances the applicant has claimed that, as an applicant seeking judicial review, it was the successful party and should therefore have its costs. In support of that claim it has argued that its grounds for review disclosed that it had a good case on the merits; it also argued that even though the Tribunal may have incorrectly referred to sub-s83B(4) of the current legislation, that was an error of no consequence as the provisions of paragraph 83(6)(C) of the former legislation and of the present sub-s83B(4) are virtually the same. The respondents have argued that there was no merit in the grounds set out in the application for review, that the applicant was unaware of the mistake that had been made by the Tribunal until it was drawn to the attention of its solicitors and that the mistake was so fundamental that it vitiated the first respondent's decision. In such circumstances, the respondents argued that the appropriate order should be that each party pay its own costs.

9. In my opinion, the proposition that the two passages of legislation have virtually the same effect must be rejected. I believe that there are, at least, three reasons for suggesting that the obligations that are now imposed upon the Tribunal when it is deliberating upon the application for a grant of a licence are more severe than previously existed. Although a question of onus does not arise, the first matter of note is that the Tribunal now commences its deliberations with the statutory mandate that it "shall refuse to grant a supplementary radio licence" if, having regard to the matters nominated in the legislation, the Tribunal reaches a particular conclusion; that approach is to be compared with the more moderate approach in the earlier legislation where the statutory mandate commenced with the words: "The Tribunal shall not refuse to grant a licence...".

10. The second matter concerns what I have earlier referred to as "the matters nominated in the legislation"; in the former legislation the Tribunal was to have regard to three matters. The first (sub-para 83(6)(C)(i)) dealt with the suitability and ability of the applicant for the licence whilst the third (sub-para 83(6)(C)(iii)) concerned the need for commercial viability of other licences where there was an overlapping of services. Both these matters reappeared, in slightly different form, in paras 83B(4)(a) and (b) of the Broadcasting Act 1942. However under the Broadcasting and Television Act 1942,the Tribunal was also required to have regard to "the need to avoid undue concentration of influence" with respect to some applications for a licence (sub-para 83(6)(C)(ii)); that requirement no longer appears: whereas the presence or absence of "undue concentration of influence" was one of three dominating factors in the Tribunal's former determinations, it is not now a matter that can be taken into consideration.

11. Finally, the former legislation required the Tribunal to come to a conclusion in terms whereby it appeared that "it would be in the public interest to refuse to grant the licence..."; the language of the legislation has changed and, in my opinion, materially so, for the current legislation has introduced a lower threshold; it is now sufficient if it appears that "it is advisable in the public interest to refuse to grant the licence..."

12. The cumulative effect of these three material differences in the legislation is such that one could easily hypothesise that the application which might have been successful under the earlier legislation might not necessarily be successful under the current legislation. It being conceded that in this case the Tribunal wrongly referred to the provisions of the Broadcasting Act (when its decision should have been based upon the provisions of the Broadcasting and Television Act) one is left to wonder whether the Tribunal applied the stricter tests that now reflect the provisions of the current legislation. The Tribunal recognised that it had acted in error and therefore made its decision to reconsider the subject application. In my opinion, it acted appropriately and is to be commended for initiating the action that it took.

13. It is no condemnation of the applicant, but it remains a fact that its grounds for review did not include a reference to the Tribunal's reliance upon the wrong legislation. It may be that there was substance in the applicant's stated grounds; Mr Harris of counsel for the applicant argued strongly that an assessment should be made of those grounds in support of his proposition that the applicant should have its costs. He also emphasised that until the Tribunal realised its error, it had adopted an active defensive position to the application for review. It had not taken a neutral stand of merely abiding the order of the Court. Mr Harris relied upon the remarks of the High Court in R v Australian Broadcasting Tribunal and Others [1980] HCA 13; (1980) 29 ALR 289 where in a joint judgment the Court said at p 306:

"There is one final matter. Mr Hughes QC was instructed by the
Tribunal to take the unusual course of contesting the prosecutors'
case for relief and this he did by presenting a substantive
argument. In cases of this kind the usual course is for a
tribunal to submit to such order as the court may make. The
course which was adopted by the Tribunal in this court is not one
which we would wish to encourage. If a tribunal becomes a
protagonist in this court there is the risk that by so doing it
endangers the impartiality which it is expected to maintain in
subsequent proceedings which take place if and when relief is
granted. The presentation of a case in this court by a tribunal
should be regarded as exceptional and, where it occurs should, in
general, be limited to submissions going to the powers and
procedures of the Tribunal."

14. The applicant also sought assistance from the unreported judgment of Pincus J in The South East Queensland Electricity Board v Australian Telecommunications Commission (judgment delivered 10 February 1989). In that case, after the appeal had been instituted, the respondent reversed its decision, claiming that it had changed its policy about the maintenance of PABX systems "to accommodate an imminent change in the law". This reversal was occasioned, so it was said, as a result of a Ministerial statement. Pincus J accepted "as a practical matter" that the statement brought about the "respondent's abandonment of its previous stance". He then went on to say:

"This is to be distinguished both from the case in which a
decision-maker just changes his mind, having reconsidered the
facts, and the case where the decision-maker is obliged to reach a
new and opposite conclusion by a change in external circumstances.
In the former case, but not necessarily in the latter, I should
think that the decision-maker would ordinarily pay the costs of
incomplete proceedings of this kind; the present situation falls
between the two categories just mentioned." (p6)

15. I cannot accept that this is a case where the decision-maker "just change(d) his mind"; that might have been the case if the applicant had raised the issue of the wrong legislation in its grounds for review. But it is the Tribunal alone who is entitled to credit for recognising the mistake that had been made; it is to be commended and litigants in its position are to be encouraged to act in a like fashion. Even so, the Tribunal cannot argue that it was forced to reconsider its decision by a change in external circumstances; its reconsideration was brought about by its independent recognition that it had made a mistake.

16. Pincus J was persuaded that the applicant had, in any event, "a fairly strong case - one more promising than that of the respondent"; that conclusion led to an order that the applicant have 80 per cent of its taxed costs. I would have had some difficulty in arriving at a similar conclusion without the benefit of full argument. Furthermore, the case for the applicant was not assisted by its argument that the Tribunal's reason for reconsidering its decision was without substance.

17. The general power to award costs is contained in s43 of the Federal Court of Australia Act 1977 (Cth) and O62 r3 makes it clear that the Court may "exercise its powers and discretions as to costs at any stage of the proceeding or after the conclusion of the proceeding". The discretion that is imposed in the Court is unfettered - so much so that in exceptional circumstances the Court has jurisdiction to order a successful party (such as the applicant in this case) to pay some or all of its opponent's costs (Trade Practices Commission v Nicholas Enterprises Pty Ltd and Others (1979) 28 ALR 201). However the discretion must be balanced and it must be exercised judicially. I disregard the applicant's willingness to adjourn off the proceedings upon the basis that each party pay its own costs just as I disregard the fact that the Tribunal, on its reconsideration of the application, granted the supplementary licence to the applicant. I do not consider that either of those matters is relevant to the exercise of the discretion. The first was predicated upon a belief that a change of policy was imminent - no such change had occurred by the time the Tribunal made its decision to review the application. The second was an accident in timing; normally the argument about costs would have been argued and decided long before the outcome of the Tribunal's reconsideration was known.

18. Balancing the encouragement that should be given to Tribunals to act appropriately at all times against the fact that in this case the admitted mistake of the Tribunal incurred the applicant in substantial expense, justice would be done if the Tribunal were ordered to pay a part of the applicant's costs up to 3 May 1991 - the date when the Tribunal advised, though its solicitors, that it would be reconsidering the application for a supplementary licence. Thereafter each party should pay its own costs.

19. It is ordered that the applicant's costs of these proceedings, including reserved costs, be taxed and that 50 per cent of the sum so fixed be paid by the respondents to the applicant. It is further ordered that each party pay its own costs thereafter.