Re Sky Channel Pty Limited v Minister of Transport and Communications; Warren Snowdon and Southern and Western Community Broadcasters [1993] FCA 48 (19 February 1993)

FEDERAL COURT OF AUSTRALIA

Re: SKY CHANNEL PTY LIMITED
And: MINISTER FOR TRANSPORT AND COMMUNICATIONS; WARREN SNOWDON and SOUTHERN
AND WESTERN COMMUNITY BROADCASTERS
No. G 319 of 1992
FED No. 112
Number of pages - 12
Administrative Law - Judicial Review - Costs

COURT

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

CATCHWORDS

Administrative Law - Judicial Review - Approval of callsign for licensee of radio station by parliamentary secretary on behalf of Minister for Transport and Communications - approval not required by statute as represented - no rights created or immunity provided - invalid and ultra vires decision

Costs - unnecessary prolongation of proceedings - unreasonable action by first and second respondents towards other parties - indemnity costs

Judiciary Act 1903 (Cth) s 39B

Broadcasting Act 1942 (Cth) s 125D

Federal Court Act 1976 (Cth) s 43

ABC Staff Association v. Bonner [1984] FCA 220; (1984) 2 FCR 561

R v. Balfour ex parte Parkes Rural Distributions Pty Limited (1987) 17 FCR 26

Collector of Customs (NSW) v. Brian Lawlor Automotive Pty Limited [1979] FCA 21; (1979) 24 ALR 307

Fountain Selected Meats (Sales) Pty Limited v. International Produce

Merchants Pty Limited [1988] FCA 202; (1988) 81 ALR 397

Ainsworth v. Criminal Justice Commission [1992] HCA 10; (1992) 106 ALR 11

Council of the Municipality of Botany and Ors v. Secretary, Smith v. East Elloe District Council [1956] UKHL 2; (1956) AC 736

Sandvik Australia Pty Limited v. Commonwealth of Australia Full Court of the Federal Court, unreported 9 October 1990

Department of the Arts, Sport, the Environment, Tourism and Territories and Ors Gummow J., unreported 9 March 1992

HEARING

SYDNEY, 5 June 1992
19:2:1993

Counsel and solicitor Mr A Robertson instructed
for the applicant : by Blake Dawson Waldron

Counsel and solicitor Mr P Roberts instructed

for the respondents : by Australian Government

Solicitor

ORDER

The Court:

1. Declare that the decision or purported decision of the second
respondent on behalf of the first respondent of 5 May 1992 to
approve the use by the third respondent of the callsign 5 SKY for
its FM radio station was made without power and has been and is of
no legal effect.
2. First and second respondents to pay the applicant's costs on a
party and party basis and the third respondent's costs on an
indemnity basis.
3. The applicant to reimburse the first and second respondents with
half the costs of the third respondent.

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

DECISION

EINFELD J. In December 1991 the then Australian Broadcasting Tribunal (the Tribunal) granted an FM radio licence in Adelaide to the third respondent. On 17 January 1992 the third respondent applied to the Minister for Transport and Communications (the first respondent) for approval of the callsign 5 SKY for its proposed service. Later the same month the request for the callsign was sent to the Callsign Committee (the Committee) established by the Minister and on 5 May 1992 the Minister's parliamentary secretary (the second respondent) approved the callsign on the recommendation of the Committee. Thereafter the third respondent decided to commence its radio service with the approved callsign on 28 June 1992. On 1 June 1992 the applicant sought judicial review and an overturning under section 39B of the Judiciary Act of the second respondent's decision on a number of grounds. The substantive relief sought was the quashing or setting aside of the decision and an order for reconsideration. Interlocutory injunctions were sought to prevent the use of the callsign pending the review.

2. As it was the stated intention of the third respondent to commence broadcasting with the callsign from 28 June 1992, the applicant sought and was granted leave to serve short notice of the application. Rather than a hearing on the interim injunctions, an urgent hearing of the whole application was fixed for 5 June 1992. On that day the applicant and first two respondents were represented by counsel. The third respondent put some submissions in writing. The evidence proffered by the parties was taken, the applicant presented some draft orders and argument took place. The first and second respondents conceded that what had been done was misleading in that the callsign decision had wrongly been made to appear as authorised by section 125D of the Broadcasting Act when it was not, and as giving the Minister's approval to the use of the callsign which was not within the Minister's legal power. The Minister's counsel described what had occurred in the words: "the whole thing is a bit of a farce".

3. Towards the end of the day a temporary adjournment of the hearing was granted at the parties' request. Upon their return, I was informed that an interim or part settlement of sorts had been reached on some of the issues raised in argument. As a consequence I made a declaration by consent that the decision of the second respondent made on or about 5 May 1992 conferred no right on the third respondent to use the name 5 SKY nor did it affect in any way any right of the third respondent to use that name. The Department of Transport and Communications (the department) undertook to write to the third respondent by not later than 12 June in explanation of the events that had transpired in the matter.

4. As a consequence, the applicant dropped its request for an order to similar effect and a suggested injunction, but it pressed the Court for a declaration that the decision or purported decision in question was made without power and has been and is of no legal effect. As there was insufficient time for this matter to be argued fully at the hearing, written submissions were ordered and the decision reserved. These reasons for judgment deal with that matter alone as well as costs of the proceedings.

5. The respondents have not taken the point but I should first observe that the application for review does not seek a declaration in these terms although it seems clear enough that the ADJR Act permits relief of the kind envisaged. The applicant's argument is that the decision purported to approve, by reference to statutory powers, the application by the third respondent for the callsign. These powers were the basis of the administrative arrangements put in place by the Minister in respect of radio callsigns and circulated to the third respondent and each applicant for a licence. A letter from the department to the third respondent after its licence had been granted asserted statutory blessing for these arrangements, which included reference to the Committee. As part of their concession at the hearing that there was in fact no such statutory foundation, the first and second respondents said that no licensee has a statutory right to or interest in its callsign and no immunity if the callsign amounts to a breach of the law. The contrary indications given were erroneous. As it turns out, the only purposes of callsigns are actually administrative convenience to the department and the Tribunal, and promotional benefit and easy public identifiability for the licensees.

6. I raised this question with counsel in Chambers on the application for urgency on 1 June and again at the hearing. Counsel for the first and second respondents then said that his clients would probably agree to a declaration of the kind now sought because it is the law. They now argue the very opposite. The applicant says that the erroneous decision entitles it to the order sought. The first and second respondents say that the Minister does not need a statutory power to permit the allocation of callsigns for administrative purposes contrary to the implication of the order sought. Such an order would therefore, they say, not correctly reflect the legal position.

7. It is clear from the third respondent's submissions which were marked as an exhibit that it thought the effect of the decision was to grant a right to the callsign requested and approved. This illustrates the first important matter to be decided, viz. that the invalid decision is not patently invalid on its face: Smith v. East Elloe District Council [1956] UKHL 2; (1956) AC 736 at 769-10. Moreover in R v. Balfour ex parte Parkes Rural Distributions Pty Limited (1987) 17 FCR 26 at 33, Justice Wilcox said:

Although this was not so clear in earlier times, it is now
accepted that, however apparent the defect may be, an
administrative decision remains good in law unless and until
it is declared to be invalid by a court of competent
jurisdiction ...

See also the decision of a Full Court of this Court in Sandvik Australia Pty Limited v. Commonwealth of Australia (unreported, 9 October 1990).

8. It is clear that a Court order is permitted and may be necessary in such circumstances to declare and determine the invalidity. A purported decision which is in fact ultra vires is as reviewable as a decision intra vires: Collector of Customs (NSW) v. Brian Lawlor Automotive Pty Limited [1979] FCA 21; (1979) 24 ALR 307 at 314-5 and 331-40, even when the decision was incapable of being made under the relevant enactment: ABC Staff Association v. Bonner [1984] FCA 220; (1984) 2 FCR 561 at 566.

9. The first and second respondents originally claimed at the hearing that the Court had no jurisdiction to declare that there was no decision under an enactment but this submission is no longer maintained. But on the question of whether this order should be made, those respondents submitted that because it was permissible for the Minister to put in place administrative procedures, no order to correct the record that a formal decision had been made purporting to be under cover of a statute was available. This argument cannot be correct. This decision was invalid because it did not have the legal consequences it was held out and apparently intended to have. The order sought would take the decision as it stands and declare that its terms do not reflect the law because it was made without the power claimed for it.

10. The first and second respondents submitted that no order should or need be made even though the decision-maker has conceded fundamental error and that what was wrongly done has had the practical effect that the consent declaration and departmental undertaking were designed to remove. The applicant's alternative submission was that the order sought would on these concessions not be futile and would settle "a real and not theoretical question": Ainsworth v. Criminal Justice Commission [1992] HCA 10; (1992) 106 ALR 11 per Brennan J. at 33. This viewpoint must or should be accepted. I make the declarations sought.

11. The applicant seeks orders that the first and second respondents pay the applicant's and the third respondent's costs on an indemnity basis. Although not in express terms, the third respondent seeks the same order in respect of its own costs and makes a claim for damages which is not available in this type of case. Its claims are principally directed at the applicant. The first and second respondents concede that party and party costs of the declaration should be ordered but not more.

12. The facts relied on for indemnity costs, not apparently disputed by the first and second respondents, are these:

1. On 22 May 1992 the applicant's solicitors wrote to the department
urgently asking that the third respondent's entitlement to use 5
SKY as its callsign should be settled well before 28 June 1992.
For this purpose they sought the production of the relevant
documents that very day.
2. During the hearing in Chambers of 1 June and thereafter until well
into the hearing, including in written submissions ordered to be
made for it and presented before its commencement, the first and
second respondents were asserting that the decision was empowered
by the Broadcasting Act.
3. The admission that this was not so first occurred some 20 to 30
minutes after the hearing had commenced and only then in response
to questions raised by me. Later in the hearing it was conceded
by a departmental officer in the witness box that the department
had long been of the belief that decisions on callsigns were not
statutorily based.
4. Moreover, throughout the hearing, the first and second respondents
told the Court that the callsign was merely a means of identifying
or naming the departmental file. In the submissions made on the
declaration as to invalidity, this assertion is not persisted with
and alternative reasons and uses are given.
5. At the hearing, the first and second respondents argued that the
applicant did not have standing to bring this application. In the
submissions made on the declaration as to invalidity, this point
is conceded although without explanation or apology.

The applicant says that this is reprehensible conduct of litigation which has caused quite unnecessary confrontation and prolongation.

13. Rogers C.J. Comm D of the Supreme Court of New South Wales examine d the history and circumstances of costs orders in matters of a commercial kind and the circumstances which might warrant indemnity costs. This matter was also adverted to by Woodward J. in Fountain Selected Meats (Sales) Pty Limited v. International Produce Merchants Pty Limited [1988] FCA 202; (1988) 81 ALR 397 where he said:

I believe that it is appropriate to consider awarding
'solicitor and client' or 'indemnity' costs, whenever it
appears that an action has been commenced or continued in
circumstances where the applicant, properly advised, should
have know that he had no chance of success. In such cases
the action must be presumed to have been commenced or
continued for some ulterior motive, or because of some
wilful disregard of the known facts or the clearly
established law.

14. In Council of the Municipality of Botany and Ors v. Secretary, Department of the Arts, Sport, the Environment, Tourism and Territories and Ors unreported 9 March 1992, Justice Gummow said at page 8 that the discretion conferred by section 43 of the Federal Court Act, also relied upon in the present case, is not so circumscribed that an order for indemnity costs may be made only against an ethically or morally delinquent party. His Honour outlined certain criteria appropriate to the case before him, including:

1. whether the proceedings should ever have been instituted
2. whether other proceedings were contemplated at which the same
arguments were or could be put
3. whether there was any lack of candour with the court
4. whether there was undue delay in giving relevant notice to the
other party.

15. It is quite clear to me that the first and second respondents have not been frank with the Court or acted reasonably towards the other parties. The third respondent was and is known to be a small and relatively poor organisation, very susceptible to financial giants such as the applicant and the Commonwealth. That is why its interests were preferred to the Court's and other waiting litigants' in giving the immediate hearing two days after the filing of process.

16. Had the first and second respondents responded to the applicant's letter of 22 May 1992 and provided me in Chambers on 1 June 192 with an acknowledgment that the decision under review was made without power, the whole of the proceedings could and would most likely have been avoided and aborted before they commenced. The declaration of invalidity, having not been sought in the application for judicial review, would probably never have seen the light of day. The applicant might have commenced other proceedings as it subsequently did without involving the first and second respondents: Sky Channel Pty Limited v. Southern and Western Community Broadcasters Incorporated, Hill J., unreported 19 June 1992. The third respondent would not have been put to the extra stress and expense in relation to its opening with the 5 SKY callsign caused by these proceedings. The entire cost of these proceedings would more than likely have been avoided. Certainly the urgent hearing of this case would have been out of the question.

17. If for some reason the hearing had proceeded, much of the affidavit evidence and cross-examination would not have been necessary or relevant and the first and second respondents would not have been able to resist for the whole day the consent declaration made and undertaking given at the end of the day.

18. As I read the authorities, this is the stuff of indemnity costs for the third respondents. Even though they did not have legal representation, they were clearly put to expense by the proceedings. This expense was entirely futile and was caused by the first and second respondents.

19. As for the applicant, if it knew, as it clearly should have, that the decision was made without power, this should have been raised in Chambers or at the latest in its written submissions for the hearing. In fact the opposite was conceded or assumed and the only point taken in relation to power was that the second respondent was not authorised to act for the first respondent. The applicant should have opened the hearing with this assertion to enable me to call upon the first and second respondents to answer at the threshold. As it happened, I did so shortly afterwards anyway and the truth then commenced to emerge although it was some time before it did so definitively. Notwithstanding the statement by counsel for the first and second respondents early in the hearing that his clients would probably agree to the requested declaration because it was the law, most of the rest of the case was devoted to an argument for precisely the opposite. This is absurd, but the absurdity is almost as much the fault of the applicant as the first and second respondents. The applicant, a large nationwide operator, virtually hounded the third respondent, a small community-based broadcaster with a limited audience, with pointless proceedings, and put it to quite unjustified expense and stress.

20. The first and second respondents will pay the applicant's costs on a party and party basis and third respondent's costs on an indemnity basis. The applicant will reimburse the first and second respondents with half the costs of the third respondent.