Canwest Global Communications Corp v Australian Broadcasting Authority [1998] FCA 4 (14 January 1997)

FEDERAL COURT OF AUSTRALIA

ADMINISTRATIVE LAW - Administrative Decisions (Judicial Review) Act 1977 (Cth) - review of decision by the respondent to extend period of time by which the applicant must comply with notices issued under s 70 of the Broadcasting Services Act 1992 (Cth) - extension granted by the respondent four months and 10 days - applicant seeking maximum possible extension of six months - whether the respondent misconstrued s 71 of Broadcasting Services Act 1992 (Cth) - whether respondent failed to take into account relevant considerations - whether exercise of power by respondent unreasonable - whether applicant denied natural justice.

Administrative Decisions (Judicial Review) Act 1977 (Cth), ss 5, 13

Broadcasting Services Act 1992 (Cth), ss 3, 4, 5, 57, 70, 71, 72, 160

Minister for Aboriginal Affairs v Peko Wallsend Limited [1986] HCA 40; (1986) 162 CLR 24, applied

Teoh v Minister for Immigration and Ethnic Affairs [1994] FCA 1017; (1994) 49 FCR 409, cited

Turner v Minister for Immigration (1981) 35 ALR 388, cited

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, cited

Attorney-General (NSW) v Quin (1990) 170 CLR 1, applied

Carltona Ltd v Commissioners of Works [1943] 2 All ER 560, cited

Flentjar v Repatriation Commission (Full Federal Court, 10 October 1997, unreported), cited

canwest global communications corp v

AUSTRALIAN BROADCASTING AUTHORITY

NG 1073 of 1997

BRANSON J

SYDNEY

14 JANUARY 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 1073 of 1997

BETWEEN:	CANWEST GLOBAL COMMUNICATIONS CORP. Applicant
AND:	AUSTRALIAN BROADCASTING AUTHORITY Respondent
JUDGE(S):	BRANSON J
DATE OF ORDER:	14 JANUARY 1998
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The applicant file and serve by no later than 4.00 pm on 20 January 1998 minutes of order in terms consistent with these reasons; and

2. The parties have liberty to apply at short notice to have the matter relisted for consideration of such minutes of order.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 1073 of 1997

BETWEEN:	CANWEST GLOBAL COMMUNICATIONS CORP. Applicant
AND:	AUSTRALIAN BROADCASTING AUTHORITY Respondent

JUDGE(S):	BRANSON J
DATE:	14 JANUARY 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

INTRODUCTION

This is an application under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") for an order of review. Although the amended application formally invokes s 39B of the Judiciary Act 1903 (Cth), no reliance was placed on the provision during oral argument or in the applicant's written submissions. I assume that reliance on this latter provision is not pressed.

The decision in respect of which an order of review is sought is a decision of the respondent ("the ABA") made under s 71 of the Broadcasting Services Act 1992 (Cth) ("the B.S. Act") whereby the ABA granted to the applicant an extension of the six month period specified in each of two notices dated 3 April 1997 given pursuant to s 70 of the B.S. Act ("the notices") as the period within which the applicant must take action to ensure that it is no longer in breach of subsections 57(1) and 57(3) respectively of the B.S. Act. The extension granted to the applicant by the ABA was an extension until 13 February 1998: ie. an extension of four months 10 days. The extension sought by the applicant was the maximum possible extension, namely, an extension of six months.

STATUTORY BACKGROUND

Broadcasting Services Act 1992 (Cth)

The objects of the B.S. Act are set out in s 3 of that Act. Such objects include that of ensuring "that Australians have effective control of the more influential broadcasting services" (s 3(d)). Section 4 of the B.S. Act expresses the intention of Parliament with respect to regulatory control of broadcasting services. Section 154 of the B.S. Act establishes the ABA as a body corporate with perpetual succession capable of suing and being sued in its corporate name. Section 155 of the B.S. Act provides that the ABA is to consist of a Chairperson, a Deputy Chairperson and no more than five other members. Section 5 of the B.S. Act is concerned with the role of the ABA. It provides as follows:

"(1) In order to achieve the objects of this Act in a way that is consistent with the regulatory policy referred to in section 4, the Parliament:

(a) charges the ABA with responsibility for monitoring the broadcasting industry; and

(b) confers on the ABA a range of functions and powers that are to be used in a manner that, in the opinion of the ABA, will:

(i) produce regulatory arrangements that are stable and predictable; and

(ii) deal effectively with breaches of the rules established by this Act.

(2) Where it is necessary for the ABA to use any of the powers conferred on it by this Act to deal with a breach of this Act or the regulations, the Parliament intends that the ABA use its powers, or a combination of its powers, in a manner that, in the opinion of the ABA, is commensurate with the seriousness of the breach concerned."

Part 5 of the B.S. Act is entitled "Control of Commercial Broadcasting Licences". Division 4 of Part 5, which is comprised of ss 57 and 58, is concerned to limit foreign control of television broadcasting in Australia. Section 57 provides as follows:

"(1) A foreign person must not be in a position to exercise control of a commercial television broadcasting licence.

(2) A foreign person must not have company interests in a commercial television broadcasting licensee that exceed 15%.

(3) 2 or more foreign persons must not have company interests in a commercial television broadcasting licensee that exceed 20%."

Division 8 of Part 5 of the B.S. Act, which is comprised of ss 70, 71 and 72, contains provisions intended to ensure compliance with Part 5. So far as is here relevant, Division 8 provides as follows:

"NOTICES BY THE ABA

70. (1) If the ABA is satisfied that a person is in breach of a provision of Division ... 4 ..., the ABA may, by notice in writing given to:

(a) the person; or

(b) if the person is not the licensee and the breach is one that can be remedied by the licensee - the licensee;

direct the person or the licensee to take action so that the person is no longer in breach of that provision.

(2) ...

(3) The notice is to specify a period during which the person must take action to ensure that the person is no longer in that position.

(4) The period must be one month, 6 months, one year or 2 years.

(5) If the ABA is satisfied that the breach was deliberate and flagrant, the period specified in the notice must be one month.

(6) ...

(7) If the ABA is satisfied that the person breached the relevant provision as a result of the actions of other persons none of whom is an associate of the person, a period of one year or 2 years must be specified, but such a period must not be specified in other circumstances.

(8) ...

EXTENSION OF TIME FOR COMPLIANCE WITH NOTICE

71. (1) A person who has been given a notice under section 70 may, within 3 months before the end of the period specified in the notice, apply in writing to the ABA for an extension of that period.

(2) ...

(3) The ABA is not required to grant an extension, but may do so if, in its opinion, an extension is appropriate in all of the circumstances.

(4) If the ABA considers that additional information is required before the ABA can make a decision on the application, the ABA may, by notice in writing given to the applicant within 30 days after receiving the application, request the applicant to provide that information.

(5) The ABA must not grant more than one extension, and the period of any extension must not exceed:

(a) the period originally specified in the notice; or

(b) one year;

whichever is the lesser.

(6) In deciding whether to grant an extension to a person, the ABA is to have regard to:

(a) the endeavours that the applicant made in attempting to comply with the notice; and

(b) the difficulties experienced by the applicant in attempting to comply with the notice; and

(c) the seriousness of the breach that led to the giving of the notice;

but the ABA must not have regard to any financial disadvantage that compliance with the notice may cause.

(7) ...

BREACH OF NOTICE UNDER SECTION 70 TO CONSTITUTE AN OFFENCE

72. A person who fails to comply with a notice under section 70 is guilty of an offence.

Penalty:

(a) if the breach relates to a commercial television broadcasting licence - $2,000,000; or

(b) ... ."

Administrative Decisions (Judicial Review) Act 1977 (Cth)

Section 5(1) of the ADJR Act authorises a person, who is aggrieved by a decision to which that Act applies, to apply to the Court for an order of review in respect of the decision on any one or more of the grounds specified in the subsection. It is not disputed in this case that the applicant is a person aggrieved by a decision to which the ADJR Act applies. The grounds upon which review of the decision of the ABA is sought are grounds specified in s 5(1) of the ADJR Act, namely those specified in paragraphs (a), (e) and (f) which are in the following terms:

"(a) that a breach of the rules of natural justice occurred in connection with the making of the decision;

...

(e) that the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made;

(f) that the decision involved an error of law, whether or not the error appears on the record of the decision;".

The ground of review specified in s 5(1)(e) is to be understood in the light of s 5(2) which, so far as is here relevant, provides as follows:

"(2) The reference in paragraph (1)(e) to an improper exercise of a power shall be construed as including a reference to:

...

(b) failing to take a relevant consideration into account in the exercise of a power;

...

(g) an exercise of a power that is no unreasonable that no reasonable person could have so exercised the power;

... ."

BACKGROUND FACTS

As is mentioned above, on 3 April 1997, the ABA issued to the applicant the notices. In separate proceedings, the applicant has challenged the validity of the decision of the ABA to issue the notices. The decision of the ABA to issue the notices has been upheld by a judge of this Court (Hill J), and the Full Court of this Court has reserved its decision on an appeal from that decision.

Notwithstanding its challenge to the issue of the notices, the applicant has sought to comply with the requirements of the notices. The steps taken by the applicant in its endeavours to comply with the notices are set out in its letter of application for an extension of the period within which it is required to comply with such notices which is dated 8 August 1997 and in a further letter dated 15 September 1997. It is not necessary to set out such steps here.

By the letter dated 8 August 1997, the applicant, by its solicitors, applied to the ABA for the time for compliance with the notices to be extended for a further period of six months to 3 April 1998.

By letter dated 4 September 1997, the ABA sought further information from the applicant in relation to its application.

On 9 September 1997, a "concept document", which was not binding on any of the parties to it other than in respect of an obligation as to confidentiality, was initialled on behalf of the applicant and three other parties including Telecasters North Queensland Limited ("TNQ"). The concept document outlines a proposal which, if implemented, it is agreed, would result in the applicant's complying with the notices ("the proposal").

On 10 September 1997, a meeting was held at the offices of the ABA at which were present officers of the ABA; representatives of the applicant, including one of its solicitors; and a solicitor acting for TNQ. The purpose of this meeting was to allow an opportunity for representatives of the applicant and TNQ to explain to officers of the ABA the proposal.

There is conflicting testimony as to the meeting of 10 September 1997. I accept that all of the witnesses who gave evidence concerning this meeting sought to do so frankly. However, none of them was assisted by contemporaneous notes made by him, although notes made by an officer of the ABA not called to give evidence were received in evidence.

Tom Strike ("Mr Strike"), Executive Vice-President of the applicant, gave evidence that a draft timetable was provided to the ABA at the meeting of 10 September 1997 and that statements were made at the meeting having regard to such timetable.

Rodney Turner Halstead ("Mr Halstead"), a solicitor for the applicant, who attended the meeting of 10 September 1997 as the applicant's legal representative, gave evidence that he recalled Mr Strike saying towards the end of the meeting words to the effect:

"If we don't do the deal by Christmas, we will need the full 6 months extension."

and

"If we do not complete the transaction by Christmas, we won't be able to take any action on it during January."

Mr Halstead did not recall a timetable being available at the meeting.

Yale Howard Lerner ("Mr Lerner"), Chief Executive Officer of CanWest International Communications Inc., was also present at the meeting held on 10 September 1997. He did not give evidence that he recalled Mr Strike making statements at the meeting to the effect of the statements deposed to by Mr Halstead. Nor did he give evidence on the issue of whether a timetable was available at the meeting of 10 September 1997.

Simon John Corker ("Mr Corker"), the principal legal officer of the ABA, was the only representative of the ABA present at the meeting of 10 September 1997 who gave evidence. His evidence was that a timetable was not provided to the ABA at the meeting. He further gave evidence that nothing was said at that meeting as to the role that the Christmas and January holiday period might play in relation to the completion of the proposal, and that nothing was said to the effect that if the "deal" was not done by Christmas, the full six months' extension would be required.

Having considered the whole of the evidence, including the nature and purpose of the meeting of 10 September 1997, I make the following findings. I find that no timetable was available at the meeting. I note that the timetable which it is agreed was provided to the ABA by Mr Halstead on 11 September 1997 includes the notation "VERSION 1 : 11 SEPT 1997", suggesting that there was no earlier version of the document available on 10 September 1997. I further note that no reason has been advanced for Mr Halstead's having provided a timetable to the ABA on 11 September 1997 if, in fact, a timetable had been provided to it the previous day.

I am not satisfied that Mr Strike made statements at the meeting to the effect deposed to by Mr Halstead. I find that it is more likely that not that Mr Halstead has made an honest error of recollection in this regard. In reaching these conclusions, I have had regard to the fact that there were representatives of the ABA present at the meeting of 10 September 1997 who did not give evidence and who have not been shown to have been unavailable to give such evidence. I note, however, that the contemporaneous notes of one such potential witness are in evidence and they provide no support for the contention that Mr Strike did make such statements.

I am satisfied that reference was made at the meeting of 10 September 1997 to the prospect of the implementation of the proposal outlined in the concept document being delayed by factors outside of the control of the applicant, including the need to obtain regulatory approvals from various bodies and the need for TNQ to obtain approval from its shareholders and the Court. I am further satisfied that Mr Corker appreciated as a result of things which he was told at that meeting that the proposal involved complex transactions and that it was difficult to be definitive about the date by which it would be completed.

As is mentioned above, on 11 September 1997, a timetable was sent by Mr Halstead to Mr Corker and another officer of the ABA by facsimile transmission. I find that this was done in response to a request for a firm timetable made by Mr Corker late in the meeting held on the previous day. I am satisfied that Mr Corker understood when he received the timetable, as was indeed apparent from the document itself, that the applicant was not seeking thereby to be definitive about the time needed to implement the proposal.

By letter dated 15 September 1997 from its solicitors, the applicant provided to the ABA the additional information sought by the ABA by its letter of 4 September 1997. This letter reiterates the request for a six months' extension within which to comply with the notices. By reason of the negotiations between the applicant and TNQ reflected in the concept document, the requested six months' extension was, by the letter of 15 September 1997, expressly linked to the time necessary to allow the proposal to be completed. The letter of 15 September 1997 contains an explanation of the proposal, and outlines its advantages to the applicant, TNQ, other parties and to the public interest. The letter refers to the steps needed to implement the proposal. Attached to the letter of 15 September 1997 is a timetable, apparently in identical terms to that provided to the ABA on 11 September 1997. The letter describes the timetable as "[a]n ambitious timetable for the completion of each of these steps", and goes on:

"Any attempt to compress it will impose unreasonable time constraints not only on the parties but on the authorities who will need to review the documents."

The letter closes, in effect, with a request that the six months' extension be granted as soon as possible to allow the proposal to be progressed and completed.

The timetable provided to the ABA on 11 September 1997, and again as an attachment to the letter of 15 September 1997, includes near its head the following note in bold typeface:

"Note: Dates which are shown in bold are critical dates which, if missed, will result in the timetable not being achieved."

Day 1 of the timetable is shown as 11 September 1997. The timetable runs to Day 105 being 23 December 1997, although effective implementation of the proposal is indicated by the timetable to be achieved on Day 98, being 16 December 1997. Nine dates in the timetable are shown in bold and are thus to be understood as critical dates within the meaning of the note at the head of the timetable. Some of the events shown by the timetable to occur on such dates are events outside of the control of the applicant, TNQ, or their respective legal representatives, such as the granting of approvals by regulatory authorities.

By a facsimile transmission dated 26 September 1997, the solicitors for the applicant advised Mr Corker of the progress being made in implementing the steps included in the timetable earlier provided to the ABA. The information contained in this facsimile transmission suggests that the timetable was not being fully met at this early stage. Information contained in a letter dated 29 September 1997 from the applicant's solicitors to officers of the ABA confirmed that the timetable was not then being fully met.

By letter dated 2 October 1997, the solicitors for TNQ advised Mr Corker that TNQ was prepared to enter into an agreement to implement the proposal and that it would execute the "Implementation Agreement" during the course of the morning of 2 October 1997. The letter includes the following paragraphs:

"We have commented to you previously that the timetable for the implementation of the proposals set out in the Implementation Agreement and Concept Document provided to us by Mr Halstead of Clayton Utz on 11 September 1997 is, taken as a whole, feasible although "tight" (in the sense that it does not allow much room for "slippage"). By "taken as a whole", we mean that we would not necessarily agree with the exact timing of every date, but rather the overall time periods covered by that timetable, and taking into account that there has already been some "slippage" in terms of review of the Transaction Documents and lodgement of them with the ASX. As we have commented to you, such "slippage" is in our experience inevitable but, as a matter of practice, it is desirable that a timetable based on optimistic expectations be adopted at the outset and adhered to as far as possible. I have also commented to you that compliance with timetable is in part in the hands of third parties over whom neither CanWest nor TNQ has control, and instanced by way of example (and only by way of example) the determinations and time taken [to] come to the determinations to be made by the court in relation to the TNQ/THL scheme of arrangement. In addition to obtaining the cooperation of the court to actually hear the two approval applications to be made in relation to such scheme at relevant times, the court also has in its discretion the timing of the meetings of shareholders required to effect such scheme. On these accounts alone, the timetable could conceivably require extension by three weeks or perhaps more.

Accordingly, while one might still expect completion of the sale of the TGL shares by the Selli and Donholken Groups of companies to occur by Christmas this year, taking into account inevitable "slippage" and the virtual impossibility of certain matters covered by the timetable taking place after Christmas and before the middle of January 1998, the only safe course to take would be to allow for the timetable to be completed as late as by the end of February 1998."

The Implementation Agreement was executed by both the applicant and TNQ on 2 October 1997.

On the same day (ie. 2 October 1997), the ABA met on two occasions to consider the applicant's application, and made the decision to grant the applicant an extension of the period specified in the notices until midnight on 13 February 1998. It is this decision which is the subject of this application for an order of review.

A document headed "DECISION AND REASONS" dated 2 October 1997 and signed by members of the ABA, includes the following paragraphs:

"The applicant has sought an extension of six months. However, the applicant has indicated in the timetable for its preferred option `TNQ Restructuring and Purchase of 37.5% of TGL', attached to the application, that the relevant transactions will be completed by 23 December 1997. Given the seriousness of the breach, the period granted should be no longer than the applicant has indicated is necessary to complete the transactions which it expects will remedy the breach, while allowing a reasonable period to accommodate unforeseen developments.

In these circumstances, and given that the ABA regards the breach as serious, the ABA, in terms of section 71(5), grants an extension until midnight on 13 February 1998, in which time CanWest must take action to ensure the breaches of sections 57(1) and 57(3) cease."

It is acknowledged that this document was prepared for the ABA by its officers in advance of the making by the ABA of its decision, and put before it with a recommendation that it be adopted.

On 11 November 1997, a telephone conversation took place between Mr Lerner and Mr Corker. Mr Corker's recollection of what was said during the conversation was assisted by a note made by him of the conversation. I accept his evidence that Mr Lerner said to him during this conversation words to the effect:

"We can't get the float off by Christmas. The underwriters advised me that as of two days ago, it is now not possible to get the transaction completed this year. The documents are a week short of completion. The underwriters say they can restart the process in the last week of January."

Mr Lerner's evidence is that, on a number of occasions before 2 October 1997, he had said to Mr Corker words to the effect:

"The underwriters have told us that if the TNQ transaction cannot be done before Christmas it will probably take until at least the middle of March to complete because business in Australia comes to a standstill from Christmas to the last week of January."

and

"The underwriters have said that if the Christmas deadline is not met, they could not get into marketing the float until the end of January and they would then need about 6 weeks to complete."

Mr Corker agrees that Mr Lerner did make statements to him to the effect of the two statements set out above. However, whilst he agrees that such statements could have been made to him earlier than 11 November 1997, he denies that they were made before 2 October 1997. No evidence is before me from the underwriters as to when, as I assume that they did, they provided the applicant with the advice which is reflected in the two statements made by Mr Lerner. On the balance of probabilities, I find that such statements were not made by Mr Lerner to Mr Corker before the extension decision was made by the ABA on 2 October 1997. In view of Mr Corker's concern immediately before 2 October 1997 with the issue of the likely timetable for completion of the proposal, which concern was reflected in his seeking information on the topic from the solicitors for TNQ, I am satisfied that if Mr Lerner had advised Mr Corker in terms of the above statements earlier than 2 October 1997, Mr Corker would have made a record of such advice.

It is now accepted to be the fact that implementation of the proposal will not be achieved until approximately late March 1998.

REASONS OF THE ABA

Pursuant to s 13 of the ADJR Act, the applicant, by letter dated 29 October 1997, sought from the ABA a statement of reasons for its decision. Section 13 of the ADJR Act requires such a statement to set out the findings on material questions of fact, referring to the evidence or other material on which those findings were based, and to give the reasons for the decision. The ABA provided a statement of its reasons pursuant to s 13 of the ADJR Act under cover of a letter to the applicant's solicitors dated 20 November 1997.

The statement of reasons of the ABA, after dealing with certain preliminary matters, sets out the terms of s 71 of the B.S. Act and certain background matters. Under the heading "Findings on Material Questions of Fact", the statement gives consideration to the matters to which s 71(6) of the B.S. Act required the ABA to have regard. The terms of s 71(6) of the B.S. Act are set out above. In assessing "the endeavours that the applicant made in attempting to comply with [each] notice" within the meaning of s 71(6)(a) of the B.S. Act, the ABA concluded:

"CanWest had made some attempts to remedy the breach. However, the majority of this effort occurred in the latter part of the period for remedying the breach, that is from June and July 1997 onwards."

This conclusion is not challenged.

In assessing "the difficulties experienced by the applicant in attempting to comply with [each] notice" within the meaning of s 71(6)(b) of the B.S. Act, the ABA accepted that the applicant did experience various significant difficulties, although it concluded that some of the difficulties experienced in developing proposals to remedy the breaches in accordance with the requirements of a number of different regulators were of the applicant's own making. This conclusion is not challenged.

The ABA assessed "the seriousness of the breach that led to the giving of the notice" within the meaning of s 71(6)(c) of the B.S. Act as a serious breach of the Act. This conclusion is not challenged.

In assessing whether to grant an extension of the period specified in the notices, the statement of reasons of the ABA indicates that the ABA also took into consideration the fact that the application to this Court under the ADJR Act against the decision of the ABA to issue the notices had the effect of reducing the time that the applicant had to reach commercial agreements needed to remedy the breach. No criticism is made of the ABA's having taken this matter into consideration.

The statement of reasons lists the evidence or other material relied upon in deciding whether an extension of time should be granted. Such evidence and other material comprised:

(a) the letter of 8 August 1997 by which the extension of time was sought;

(b) the letter of 15 September 1997 providing additional information and the schedules to that letter;

(c) certain media releases;

(d) the unreported decision of Hill J of 8 August 1997;

(e) the concept document as amended;

(f) the Implementation Agreement.

The letter of 2 October 1997 from the solicitors for TNQ, which had been sought by Mr Corker, is not listed as having been relied upon by the ABA, although Mr Corker gave evidence that such letter was before members of the ABA at the two meetings on 2 October 1997, when the application for an extension of time was considered by them. The facsimile transmission dated 26 September 1997 and the letter dated 29 September 1997, each from the applicant's solicitors to an officer of the ABA, are also not listed. Nor does the statement of reasons refer to any oral or written briefing of members of the ABA by officers of the ABA in respect of the meeting of 10 September 1997 or any other communications between the applicant or TNQ and officers of the ABA.

Under the heading "Reasons for Decision", the statement of reasons sets out its findings on the matters to which it was required by s 71(6) of the B.S. Act to have regard. It noted that:

"the TNQ proposal which was the applicant's preferred approach to remedying the breaches, and on which agreement had been reached with TNQ had a proposed timeline of completion of the transaction by 16 December 1997."

It further noted that:

"on 2 October 1997, TNQ and CanWest had entered into [a] binding agreement ... thus committing themselves to pursuing a course which seemed likely to rectify the breach."

The statement of reasons records that:

"Accordingly the ABA considered it was appropriate to grant an extension despite the seriousness of the breach."

In so far as the length of the extension to be granted is concerned, after noting that the ABA could only grant one extension, and that the period of such extension could not exceed the period originally specified in the notice, the statement of reasons records as follows:

"In determining the length of the extension to be granted:

7.11 The ABA noted that the applicant had sought an extension of six months.

7.12 The ABA also noted that the applicant had indicated in the timetable for its preferred option `TNQ Restructuring and Purchase of 37.5% of TGL', attached to the application, that the relevant transactions would be completed by 16 December 1997.

7.13 The ABA considered that given the seriousness of the breach, the period granted should not be longer than the period which was likely to be necessary to complete the transactions which the applicant expected would remedy the breach but allowing a reasonable period of time to accommodate any unforeseen developments (other than unfavourable market conditions).

7.14 Given the ABA regarded the breach as serious and having regard to all other relevant circumstances, the ABA pursuant to section 71(5) of the BSA, on 2 October 1997, granted an extension until midnight on 13 February 1998, in which time CanWest must take action to ensure that the breaches of sections 57(1) and 57(3) cease. The period between 16 December 1997 and 13 February 1998 was seen as a reasonable time to allow for unforeseen developments to be adequately dealt with. Regard was had to the Christmas-New Year holiday period and the difficulty of completing the proposed transaction early in 1998."

That it was the intention of the ABA to allow an extension of time sufficient to enable the proposal outlined in the concept document to be implemented is confirmed by a press release issued by the ABA on 2 October 1997. The press release included the following statements:

" `A key consideration in the ABA's decision to grant the extension was TNQ and CanWest today executing a binding agreement to give effect to and implement the transactions necessary to complete the restructuring of TNQ and the Ten Group Ltd, which includes a public offering of shares,' said Mr Peter Webb, ABA Chairman.

...

The ABA has taken into account the endeavors made by CanWest to comply with the ABA's notice, in particular through its negotiation with TNQ. The additional time will allow the proposed sale of CanWest's excess company interests in Ten to a restructured TNQ to be completed. The ABA will examine the final transaction documents for compliance with the Act.

The breach must be remedied by midnight, 13 February 1998. No further extensions can be granted."

CONTENTIONS OF THE APPLICANT

As the written outline of the applicant's submissions makes plain, the essence of the applicant's grievance is that the ABA, having determined to grant an extension of time sufficient to allow the proposal to be implemented, fixed a period which was insufficient to allow that to occur. The applicant contends that the ABA's decision is vitiated by the following errors:

(a) error of law in the construction of s 71 of the B.S. Act;

(b) failure to take into account or, alternatively, to give real and genuine consideration to various relevant considerations which the ABA was obliged to consider;

(c) an exercise of its power in a manner so unreasonable that no reasonable person could have so exercised the power;

(d) the absence of evidence or other material to support the finding that the proposal outlined in the concept document could be completed by 13 February 1998; and

(e) denial to the applicant of procedural fairness.

As to the alleged error of statutory construction, the applicant contends that the restriction contained in s 71(6) of the B.S. Act that "the ABA must not have regard to any financial disadvantage that compliance with the notice may cause" is to be understood as applying only to the threshold issue of whether the ABA should grant an extension of time, and not to the subsequent issue of the length of any such extension. It is suggested by the applicant that the ABA must have taken the view that any difficulties that might have attended the implementation of the proposal in January were to be disregarded as being financial disadvantages caused by compliance with the notice.

A difficulty in the way of the above suggestion is that the statement of reasons of the ABA states in para 7.14 that, in determining the length of the extension to be granted, the ABA did have regard "to the Christmas-New Year holiday period and the difficulty of completing the proposed transaction early in 1998". I do not accept that the ABA took the view that any difficulties which might attend the implementation of the proposal in January, should implementation still have been proceeding at that time, were to be disregarded as being financial disadvantages. It is therefore not strictly necessary for me to give consideration to the proper construction of s 71(6) of the B.S. Act. I note, however, that nothing in the wording of s 71 provides support for the contention that the ABA is required by the section to undertake a two stage process of determining, first, whether to grant any extension at all, and for this purpose only to have regard to the matters specified in s 71(6) subject to the restriction there set out, and secondly, of determining the length of any such extension. Logically, no doubt, it will in many cases be convenient for the ABA to consider a request for an extension of time for compliance with a notice under s 70 in two stages, namely, first, whether any extension should be granted and, secondly, if an extension should be granted, for how long should it be granted. Nonetheless, within the meaning of s 71 of the B.S. Act, each of these two stages is, in my view, an element of the decision whether to grant an extension.

I reject the contention that the ABA made an error of law in its construction of s 71 of the B.S. Act.

The relevant considerations which the applicant contends that the ABA failed to take into account or, alternatively, failed to give real and genuine consideration to, are as follows:

"(a) As at the date of the Decision the Respondent was aware that there already had been some slippage in the initial timetable for completion of the TNQ Proposal which had been annexed to the letter from Clayton Utz to the Australian Broadcasting Authority dated 15 September 1997 (the "Timetable") and that further slippage was probable because of the Respondent's requirement that there be certain amendments made to the Concept Document dated 2 October 1997;

(b) Prior to the date of the Decision the Respondent had been expressly notified by the Applicant's solicitors in their letter dated 15 September 1997 that the Timetable was "ambitious" and that failure to meet any one of certain critical dates would result in the Timetable not being met;

(c) Prior to the date of the Decision the Respondent was informed by representatives of the Applicant that there was some doubt that the Timetable would be achieved and that if completion did not occur before Christmas a full six months extension would be required because of the disruptions caused by the Christmas New Year Period;

(d) Prior to the date of the Decision the Applicant's representatives notified the Respondent that if the TNQ Proposal could not be completed by Christmas the underwriters had advised the Applicant that completion would probably take until at least the middle of March 1998 because the marketing of the float could not begin until the end of January;

(e) Prior to the Decision being made the Respondent had been informed by TNQ's solicitors in a facsimile sent to the Respondent on the morning of 2 October 1997 that an extension of time until the end of February 1998 was required to enable the TNQ Proposal to be completed within time;

(f) That realistically, and in view of the matters set out in paragraphs (a) to (e) above:

(i) it was extremely optimistic that the TNQ Proposal could be completed by Christmas; and

(ii) in the event the TNQ Proposal could not be completed by Christmas, it would not be possible to complete the TNQ Proposal before at least the middle of March 1998; and

(g) That the effect of sub-section 71(5) of the Act was to prevent the Respondent from granting the Applicant more than one extension of time."

The ground of review which appears in s 5(1)(e), read with s 5(2)(b), of the ADJR Act is substantially declaratory of the common law. The ground of failure to take into account a relevant consideration can only be made out if a decision maker fails to take into account a consideration which it was bound to take into account in making its decision (Minister for Aboriginal Affairs v Peko Wallsend Limited [1986] HCA 40; (1986) 162 CLR 24 per Mason J at 39). Section 71(6) of the B.S. Act specifies matters to which the ABA is bound to have regard in deciding whether to grant an extension of time for compliance with a notice under s 70 of the Act. The issue therefore arises of whether the subject matter, scope and purpose of the Act suggest that s 71(6) contains an exhaustive list of the matters to which the ABA is bound to have regard for this purpose, or whether the matters there listed are only some of those to which the ABA is bound to have regard. I incline to the view that s 71(6) contains an exhaustive list of the matters to which the ABA is bound to have regard for the purposes of deciding whether to grant an extension of time pursuant to s 71 of the B.S. Act, although not, of course, of the matters to which it may have regard. For present purposes, however, it is sufficient for me to give consideration to the matters put forward on behalf of the applicant as matters to which the ABA was bound to have regard (see above) to the extent that such matters are supported by my above findings of fact.

I turn to the last of those matters first. Any decision by the ABA made under s 71 of the B.S. Act is necessarily made against the statutory requirement contained in s 71(5) that only one extension can be granted to any person in respect of any s 70 notice. For the ABA to proceed on any other basis would involve a plain error of law, namely, an error of statutory construction. It may be doubted that an error of law of this kind is one appropriate to be considered under s 5(2)(b) of the ADJR Act. Even if this issue is put to one side, I see no justification for a conclusion that the ABA failed properly to take into account the effect of s 71(5) of the B.S. Act: its statement of reasons makes express reference to s 71(5) having the effect that "[t]he ABA must not grant more than one extension".

All of the other matters identified by the applicant as matters to which the ABA was bound to have regard in making a decision under s 71 of the B.S. Act relate to information provided to officers of the ABA relevant to the likelihood, in the circumstances which existed as at the date of the ABA's decision, of the applicant being in a position to comply with the requirements of the notices within the extended period which the ABA fixed by its decision.

The discretion vested in the ABA by s 71 of the B.S. Act is a wide one (see particularly s 71 (3)), albeit one to be exercised in a manner consistent with the objects of the Act as set out in s 3, the regulatory policy expressed in s 4 of the Act, and the other matters specified in s 160 of the Act. In many instances, and I turn below to consider whether this was one, information as to an applicant's capacity to comply with the requirements of a s 70 notice within a period of extension which might be allowed under s 71 of the B.S. Act, will be important information for the consideration of the ABA in the process of its reaching a decision under s 71. In such instances, in my view, a failure to have regard to such information will appropriately be considered as a natural justice issue under s 5(1)(a) of the ADJR Act, and not as an issue of an improper exercise of power within the meaning of s 5(2)(b) of the ADJR Act. However, cases can be envisaged in which, for example, the failure of an applicant to make, in a timely way, any realistic endeavours to comply with a s 70 notice, or the flagrant and serious nature of the breach which led to the issue of the s 70 notice, might make any issue as to the capacity of an applicant to achieve compliance with the s 70 notice within any period of extension of little, if any, relevance to the decision to be made by the ABA under s 71.

I reject the contention that the ABA failed to take into account or, what in fact amounts to the same thing, failed to give real or genuine consideration to any consideration which it was bound to take into account in making its decision (Teoh v Minister for Immigration and Ethnic Affairs [1994] FCA 1017; (1994) 49 FCR 409 per Black CJ at 414; Turner v Minister for Immigration and Ethnic Afairs (1986) 35 ALR 388 per Toohey J at 392; and Flentjar v Repatriation Commission (Full Federal Court, 10 October 1997, unreported) per Branson J at 5).

The ground of review which appears in s 5(1)(e), read with s 5(2)(g), of the ADJR Act is substantially declaratory of the principle enunciated in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. In that case, Lord Greene MR observed at 230:

"It is true to say that, if a decision on a competent matter is so unreasonable that no reasonable authority could ever have come to it, then the courts can interfere. That, I think, is quite right; but to prove a case of that kind would require something overwhelming ... ."

In Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 36-37, Brennan J emphasised the confined nature of the Wednesbury principle of unreasonableness. At 37, his Honour pointed out that:

"The repository of administrative power must often balance the interests of the public at large and the interests of minority groups or individuals. The courts are not equipped to evaluate the policy considerations which properly bear on such decisions, nor is the adversary system ideally suited to the doing of administrative justice: interests which are not represented as well as interests which are represented must often be considered. Moreover, if the courts were permitted to review the merits of administrative action whenever interested parties were prepared to risk the costs of litigation, the exercise of administrative power might be skewed in favour of the rich, the powerful, or the simply litigious."

Having regard to the statutory regime within which the ABA was operating in making the decision of which review is sought, and the factual background to the application pursuant to s 71 of the B.S. Act for an extension of time, it is difficult to conclude other than that a refusal by the ABA to grant any extension of time to the applicant would, in the absence of other errors of law by the ABA, have been difficult to challenge on the ground of unreasonableness. That being the case, formidable difficulty would appear to stand in the way of the applicant's successfully characterising a decision to grant an extension of more than two thirds of the maximum extension legally permissible as an exercise of power so unreasonable that no reasonable person could have so exercised the power.

In addition, it is to be borne in mind that the ABA had before it a timetable provided by the applicant, which although properly characterised by the applicant as an ambitious timetable, did disclose that it was at least theoretically possible for the steps outlined in it to be achieved during 1997. The "slippage" in the timetable which had occurred, and which had been brought to the attention of the ABA by 2 October 1997, was not of such a magnitude as to render unreasonable a view that the steps outlined in the timetable might be capable of achievement before the end of 1997. Indeed, the solicitors for TNQ, professional persons in a good position to make a judgment on the feasibility of the timetable, by letter dated 2 October 1997 addressed to Mr Corker, expressed the view, not that the timetable was unrealistic, but that it was "taken as a whole, feasible although "tight" (in the sense that it does not allow much room for "slippage")". The letter did go on to speak of "slippage" being in the author's experience inevitable, and it also expressed the view that "the timetable could conceivably require extension by three weeks or perhaps more". The letter closed with an expression of opinion that "the only safe course to take would be to allow for the timetable to be completed as late as by the end of February 1998". However, the ABA was under no obligation to adopt "the only safe course", or, to adopt the wording of the applicant's written submissions, to ascertain whether the TNQ proposal could be "assured of completion" within the period of extension which it determined to allow.

I reject the contention that the decision was an exercise of power that is so unreasonable that no reasonable person could have so exercised the power.

It remains to be considered whether the applicant was denied procedural fairness or, in the words of s 5(1)(a) of the ADJR Act, "that a breach of the rules of natural justice occurred in connection with the making of the decision".

In my view, a breach of the rules of natural justice will occur when a decision maker reaches a decision, or makes a significant finding upon which a decision is based, in disregard or ignorance of the most current and the best information actually or constructively available to the decision maker relevant to such decision or finding.

In Minister for Aboriginal Affairs v Peko-Wallsend Ltd, Mason J, at 45, commented in respect of a decision taken by a Minister of the Crown concerning the making of a land grant:

"It would be a strange result indeed to hold that the Minister is entitled to ignore material of which he has actual or constructive knowledge and which may have a direct bearing on the justice of making the land grant, and to proceed instead on the basis of material that may be incomplete, inaccurate or misleading. In one sense this conclusion may be seen as an application of the general principle that an administrative decision-maker is required to make his decision on the basis of material available to him at the time the decision is made. But that principle is itself a reflection of the fact that there may be found in the subject-matter, scope and purpose of nearly every statute conferring power to make an administrative decision an implication that the decision is to be made on the basis of the most current material available to the decision maker."

As his Honour's remarks at 45-46 indicate, the requirement that a decision be made on the basis of the most current information available to the decision maker is an aspect of natural justice.

The timetable, and the likelihood of its being achieved, were significant matters to which the ABA had regard in making its decision. The document prepared for the ABA by its officers headed "DECISION AND REASONS", which document members of the ABA signed on 2 October 1997, suggested that the applicant had indicated by the timetable that "the relevant transactions will be completed by 23 December 1997". The document went on to refer to "a reasonable period to accommodate unforeseen developments". In my view, it is not a fair reading of the timetable to say of it that it indicates that "the relevant transactions will be completed by 23 December 1997". In view of the number of events referred to in it the completion of which was beyond the control of the applicant, and the notation on it as to critical dates and the impact of their being missed, the timetable could only reasonably be understood as indicating no more than that it was possible that the relevant transactions could be achieved by 23 December 1997. Indeed Mr Corker, who apparently settled the "REASONS AND DECISIONS" document, was aware, as he said in evidence, that the applicant was not seeking by the timetable to be definitive about the time needed to implement the proposal; Mr Corker was alert to the fact that there were very real concerns about whether the timetable could be met and that such concerns needed to be taken into account in the decision that the ABA made. Nonetheless, as the ABA, in making its decision, had regard to the letter of 15 September 1997, which describes the timetable as ambitious, and to the timetable itself, with some hesitation, I have concluded that, standing alone, the wording of the "DECISION AND REASONS" document would not have resulted in a denial of natural justice to the applicant.

However, by the time of the meetings of the ABA on 2 October 1997, officers of the ABA had been provided with information by the applicant which indicated that the timetable might already not be being fully met, and Mr Corker had sought and received the letter from the solicitors for TNQ dated 2 October 1997. The letter of 2 October 1997 contains what may fairly be characterised as an expression of expert opinion on the question of the likelihood of the timetable being met, and if it were not met, as to the time frame within which the proposal outlined in the concept document might be completed. Mr Corker himself, in evidence, expressed the view that "the best evidence on those matters" would come from the solicitors for TNQ. Yet the statement of reasons of the ABA does not list the letter of 2 October 1997 from the solicitors for TNQ as part of the evidence or other material upon which it relied. The absence of any reference at all to this letter in the ABA's statement of reasons tends to confirm that the ABA did not have regard to it in reaching its decision.

In its statement of reasons, the ABA noted that the applicant had indicated in its timetable that the relevant transactions "would be completed by 16 December 1997". I have referred above to the understanding of Mr Corker, which derived from things said to him at the meeting of 10 September 1997, that the applicant was not seeking by the timetable to be definitive about the time necessary to complete the proposal. The statement of reasons indicates that the ABA sought to estimate "a reasonable time to allow for unforeseen developments to be adequately dealt with". The above aspects of the ABA's reasoning process were apparently undertaken in ignorance of advice provided to Mr Corker, and other officers of the ABA, by representatives of the applicant at the meeting of 10 September 1997, and of the advice received by officers of the ABA which indicated some early "slippage" in the timetable. As at 2 October 1997, this "slippage" was not properly characterised as "unforeseen developments" but rather as actual developments. Moreover, the expressions of opinion contained in the letter dated 2 October 1997, were plainly relevant to the task of estimating "a reasonable time to allow for unforeseen developments to be adequately dealt with", yet they were apparently not considered by the ABA.

In Minister for Aboriginal Affairs v Peko-Wallsend Limited at 65-66, Brennan J, in speaking of decision making by a Minister of the Crown, said:

"The Department does not have to draw the Minister's attention to every communication it receives and to every fact its officers know. Part of a Department's function is to undertake an analysis, evaluation and precis of material to which the Minister is bound to have regard or to which the Minister may wish to have regard in making decisions. ... Reliance on the departmental appreciation is not tantamount to an impermissible delegation of ministerial function. A Minister may retain his power to make a decision while relying on his Department to draw his attention to the salient facts. But if his Department fails to do so, and the validity of the Minister's decision depends upon his having had regard to the salient facts, his ignorance of the facts does not protect the decision. The Parliament can be taken to intend that the Minister will retain control of the process of decision-making while being assisted to make the decision by departmental analysis, evaluation and precis of the material relevant to that decision."

See also the remarks of Deane J in the same case at 70.

Whilst care must be taken with any analogy between administrative decision-making by a Minister of the Crown and administrative decision-making by a statutory corporation by reason of the special constitutional responsibilities of Ministers of the Crown (see Carltona Ltd v Commissioners of Works [1943] 2 All ER 560 at 563-564), it is to be recognised that Minister for Aboriginal Affairs v Peko Wallsend was concerned with a function which, as a matter of statutory construction, was to be exercised by the Minister personally unless delegated by the Minister pursuant to a statutory power to so delegate. No such delegation had been made in that case. The remarks of the members of the High Court in that case as to the legal obligation on the Minister to make his decision on the basis of the most current information actually or constructively available to him are, in my view, equally applicable to the ABA in the circumstances of this case. The ABA may be expected to be assisted in the exercise of its statutory functions by its officers. Administrative necessity indicates that the individuals who constitute the ABA must place reliance on such officers: it would be impractical for such individuals themselves to undertake all of the investigations, and make all of the inquiries, necessary for the proper performance of the functions of the ABA. Nonetheless, it remains necessary for the ABA itself to make decisions having regard to the best information actually or constructively available to it.

It may well be that the ABA, in the circumstances of this case, could validly have determined that it would not extend the time for compliance with the notices so as to allow a reasonable time for the proposal outlined in the concept document to be implemented. However, it was plainly within its power to determine that it would so extend the time. It determined to do so. Yet, in reaching a decision as to the length of the extension appropriate in such circumstances, it did not take into account the most current information available to it relevant to that decision, namely the communications from the applicant's solicitors of 26 and 29 September 1997 and the letter from the solicitors for TNQ dated 2 October 1997. As the ABA's statement of reasons recognises, the length of any extension granted to the applicant is obviously an important matter so far as the applicant is concerned. Failure by it to comply with the notices may leave it open to prosecution and the imposition of severe penalties. Additional adverse consequences to the applicant could flow should it be guilty of an offence under s 72 of the B.S. Act. Natural justice required, in such circumstances, that the ABA have regard to the most current information actually in its possession, or constructively in its possession through its officers, in considering the length of the period of extension to be granted under s 71 of the B.S. Act.

It is contended on behalf of the ABA that the evidence of Messrs Strike, Lerner and Halstead before the Court as to the likelihood of the timetable being met is markedly different to the reservations placed on the reliability of the timetable expressed in written material placed before the ABA by the applicant's solicitors by the letters of 8 August 1997 and 15 September 1997, and by the letter from the solicitors for TNQ of 2 October 1997.

Were the Court of the view that there had been an attempt by the applicant to withhold information from the ABA, or to mislead it in any way concerning the likelihood of the timetable being achieved, this would be a factor relevant to the exercise of the Court's discretion to grant relief. I am not of this view. The timetable provided to the ABA was marked as "VERSION 1 : 11 SEPT 1997": it had obviously been produced at the very beginning of the series of events with which it dealt. It indicated on its face that certain of the crucial events listed in it were outside the control, so far as timing was concerned, of the applicant. The letter of 15 September 1997 described it as ambitious, and by correspondence to the ABA, solicitors for the applicant provided advice to the ABA of steps actually taken towards completion of the events listed in the timetable. The difference in emphasis (which, in my view, is all that can be demonstrated) between the advice provided to the ABA by the applicant, before 2 October 1997, and the evidence given by Messrs Strike, Lerner and Halstead to the Court is, in my view, explicable on the basis that initially the representatives of the applicant were principally concerned to demonstrate, in the context of an application for a six months' extension of time, that the events listed in the timetable could reasonably be expected to be achieved within the period of time that such an extension would allow. That is, that there would be some point in granting such an extension. The letter of 2 October 1997 from the solicitors for TNQ expressly addresses the issue of the time likely to be needed for the events listed in the timetable to be completed. It appears that the estimate there made has, in the events which have happened, proved to be somewhat short. Having regard to the number of events listed in the timetable, the number of parties whose cooperation is required to complete such events, and the complexity of the overall transaction, I do not find this surprising. Nor do I consider that the differences between the expressions of opinion contained in this letter, and those contained in the evidence of Messrs Strike, Lerner and Halstead, are such as to support a finding of lack of frankness or bona fides in any of Messrs Strike, Lerner and Halstead.

The applicant has requested that if the Court is minded to grant an order of review, that an order be made granting to the applicant the maximum period of extension which the B.S. Act allows. I do not consider that it would be appropriate for me to exercise a discretion which Parliament has vested in the ABA. The matter must be referred, at least in part, to the ABA for its further consideration.

It is important that the order that the Court makes does not deprive the applicant of the benefit of the decision actually made by the ABA. It may be appropriate that the part of the decision of the ABA which fixes midnight 13 February 1998 as the end of the period by which the period specified in the notices is extended should be set aside with effect from 13 February 1998 or such earlier date upon which the ABA, following further consideration, redetermines the end of the period by which the period specified in the notices is extended. It may also be appropriate for the ABA to be directed to redetermine such period by no later than 13 February 1998 on the basis that if it does not do so it will be taken to have extended the period by the period originally specified in the notices (see s 71(7) of the B.S. Act). I propose, however, to allow the parties time to confer as to the precise terms of the orders which ought to be made in view of my above reasons.

The only formal orders which I propose to make today are that the applicant file and serve by no later than 4.00 pm on 20 January 1998 minutes of order in terms consistent with these reasons, and that each of the parties has liberty to apply at short notice to have the matter relisted for consideration of such minutes of order.

I certify that this and the preceding twenty-eight (28) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson

Associate:

Dated:

Counsel for the Applicant:	R.B.S. Macfarlan QC with J. Griffiths
Solicitor for the Applicant:	Clayton Utz
Counsel for the Respondent:	B.S. Oslington QC with N.J Williams
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	18, 19 December 1997
Date of Judgment:	14 January 1998