Australian Broadcasting Authority v Project Blue Sky Inc & Ors

(1996) 71 FCR 465

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(Judgment by: Wilcox, Finn JJ)

Australian Broadcasting Authority v
Project Blue Sky Inc WN 610652, Top Shelf Productions Ltd WN 615072, Communicado Limited AK/117463, South Pacific Pictures Ltd AK/383620, Gibson Group Ltd & Frame up Films Ltd

Court:

Judges: Northrop

Wilcox
Finn JJ

Subject References:
Foreign Relations
Australia New Zealand Closer Economic Relations Agreement ("CER Agreement") requiring New Zealand services be given no less favourable access to Australian markets
Supply of television programs a service
Broadcasting Services Act 1992 requiring Australian Broadcasting Authority to set minimum Australian Content Standards for television broadcasts
Whether Standard can include New Zealand programs
Effect of inconsistency between Act and CER Agreement
Application of maximum generalia specialibus non derogant
specific requirements of Act prevails over general requirement
Media and Communications Law
Television Australian Content Standard under Broadcasting Services Act 1992
Whether Standard can include New Zealand programs
New Zealand programs not Australian for purposes of Act
Practice and Procedure
Application for admission of new evidence in appeal
Proposed contentious new evidence from intervening party

Legislative References:
Broadcasting Services Act 1992 - 3; 122; 160
Australia New Zealand Closer Economic Relations Trade Agreement, Arts. 2, 3, 4 and 5 -

Hearing date: 1 November 1996
Judgment date: 12 December 1996

Sydney

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Judgment by:
Wilcox
Finn JJ

The question that arises in this appeal is the validity of a standard relating to the Australian content of programs that was made by the Australian Broadcasting Authority ("the ABA") . The respondents, a group of companies involved in the New Zealand film industry, persuaded a Judge of this Court (Davies J) that the standard was invalid for failure to comply with the requirements of the CER agreement between Australia and New Zealand. The ABA challenges that conclusion.

The Convention

The full title of the Convention popularly called the "CER agreement" is Australia New Zealand Closer Economic Relations Trade Agreement. It was made in 1983.

The purpose of the Convention was to strengthen the relationship between Australia and New Zealand by expanding free trade between the two countries. It envisaged the gradual elimination of all trade barriers between Australia and New Zealand and the creation of a free trade area.

As part of an extensive review of the agreement, a Protocol on Trade in Services was signed on 18 August 1988. It entered into force on 1 January 1989.

Article 2 of the Protocol provided that it "shall apply to any measure, in existence or proposed, of a Member State that relates to or affects the provision of a service by or on behalf of a person of the other Member State within or into the territory of the first Member State". The Article made an exception of services inscribed by a Member State in the Annex to the Protocol, but that exception is not relevant to this case.

Article 3 defined the term "provision of services". It is not necessary to set out the definition. It is common ground between the present parties that the supply of material for television transmission is the "provision of a service" within the meaning of Article 2.

Article 4 was headed "Market Access" . It read:

"Each Member State shall grant to persons of the other Member State and services provided by them access rights in its market no less favourable than those allowed to its own persons and services provided by them."

Article 5 related to "National Treatment" . Relevantly, it provided:

"1.

Each Member State shall accord to persons of the other Member State and services provided by them treatment no less favourable than that accorded in like circumstances to its persons and services provided by them."

Australia and New Zealand are, of course, each a "Member State". The term "Person of a Member State" was defined by Article 3 so as to include a natural person who is a citizen of, or ordinarily resident in, that State; a body corporate established under the law of that State; and an association comprising or controlled by such natural persons or bodies corporate.

The Broadcasting Services Act

The "Broadcasting Services Act 1992 substantially replaced the Broadcasting Act 1942, pursuant to which the Australian Broadcasting Tribunal had from time to time determined standards to be observed by licensees in respect of the broadcasting or televising of programs: see, generally, Herald-Sun TV Proprietary Limited v Australian Broadcasting Tribunal (1985) 156 CLR 1 . The 1992 Act established the ABA (s 154) and gave it extensive regulatory functions including "(j) to develop program standards relating to broadcasting in Australia" .

Section 160 is headed "General obligations of the ABA" . It reads:

"160.

The ABA is to perform its functions in a manner consistent with:

(a)

the objects of this Act and the regulatory policy described in section 4; and

(b)

any general policies of the Government notified by the Minister under section 161; and

(c)

any directions given by the Minister in accordance with this Act; and

(d)

Australia's obligations under any convention to which Australia is a party or any agreement between Australia and a foreign country."

The present respondents emphasise para (d).

The ABA's power to determine program standards was conferred by s 122 of the Broadcasting Services Act . That section is contained in Part 9 of the Act, "Program Standards" , and is itself headed "Program standards for children's programs and Australian content" . The section reads:

"122(1)

The ABA must, by notice in writing:

(a)

determine standards that are to be observed by commercial television broadcasting licensees; and

(b)

determine standards that are to be observed by community television broadcasting licensees.

(2)

Standards under subsection (1) for commercial television broadcasting licensees are to relate to:

(a)

programs for children; and

(b)

the Australian content of programs.

(3)

Standards under subsection (1) for community television broadcasting licensees are to relate to programs for children.

(4)

Standards must not be inconsistent with this Act or the regulations."

Sections 123, 123A and 124 relate to codes of practice. Section 125 confers on the ABA a power to determine a standard in cases where a code of practice is not operating satisfactorily or no code has been developed. Section 126 requires the ABA to seek public comment before determining, varying or revoking a standard. Section 127 requires the gazettal of a determination, variation or revocation, and s 128 provides for amendment of a standard or code of practice by resolution of both Houses of the Parliament.

The Standard

On 15 December 1995, after extensive public consultation, the ABA determined the Australian Content Standard. It was to operate from 1 January 1996. The object of the Standard was stated in clause 3:

"3.

The object of this Standard is to promote the role of commercial television in developing and reflecting a sense of Australian identity, character and cultural diversity by supporting the community's continued access to television programs produced under Australian creative control."

Clause 4 summarises the content of the Standard:

"4.

This Standard:

(a)

sets minimum levels of Australian programming to be broadcast on commercial television; and

(b)

requires minimum amounts of first release Australian drama, documentary and children's programs (including children's drama, but excluding preschool programs) to be broadcast on commercial television; and

(c)

requires preschool programs broadcast on commercial television to be Australian programs."

Clause 5 contains some definitions. The word "Australian" was defined, in relation to a person, "as a citizen or permanent resident of Australia". The term "Australian program" was defined by reference to clause 7. Clause 7 provides that "an Australian program" is one that is "produced under the creative control of Australians who ensure an Australian perspective, as only evidenced by the program's compliance with subclause (2), subclause (3) or subclause (4)"; and is made without financial assistance from the Australian Commercial Television Production Fund administered by the Australian Film Commission. Subclause (2) refers to a program in relation to which the Minister for Communications and the Arts has issued a final certificate under Division 10BA of Part III of the Income Tax Assessment Act 1936, a certificate that is only available to films having a significant Australian content. Subclause (3) mentions a program made pursuant to an agreement between the Australian government (or an Australian government authority) and the government (or a government authority) of another country. Subclause (4) refers to a program that meets all of a number of specified criteria. It is unnecessary to set them out. They relate to the nationality of the individuals primarily responsible for production of the program, and the country of production and post-production.

Clause 9 of the Standard specifies the "Australian transmission quota":

"9.(1)

Subject to subclause (3), until the end of 1997, Australian programs must be at least 50% of all programming broadcast between 6.00am and midnight in a year that was made without financial assistance from the television production fund.

(2)

Subject to subclause (3), from the beginning of 1998. Australian programs must be at least 55% of all programming broadcast between 6.00am and midnight in a year that was made without financial assistance from the television production fund.

(3)

If an Australian program:

(a)

is first release sports coverage; and

(b)

begins before midnight and ends on the next day;

the part of the program broadcast between midnight and 2.00am is taken to have been broadcast between 6.00am and midnight."

Clauses 10 and 11 specify an Australian drama program requirement. An "Australian drama program" is an "Australian program" that meets certain criteria: see clause 5. Clauses 12 to 15 inclusive impose rules concerning the Australian content of children's programs. Clause 16 requires that at least ten hours of first release Australian documentary programs be broadcast each year.

The proceeding at first instance

On the day the Standard was determined, the respondents initiated this proceeding by filing a Writ of Summons in the High Court of Australia. They sought certain declarations and two orders: one, that the determination be set aside and the ABA ordered to determine an Australian Content Standard under s 122(1)(a) of the Broadcasting Services Act according to law, and two, an order restraining the ABA from implementing or giving effect to its determination. On 14 February 1996, by consent of the parties, Kirby J remitted the proceeding to this Court.

In an amended Statement of Claim filed on 29 March 1996 the respondents set out the essence of their claim:

"The effect of the said program standard is to prefer an Australian program as defined over other programs including programs made, produced or created under the creative control of New Zealanders or which are otherwise connected to New Zealanders or New Zealand in the same way as an Australian program is connected to Australians or Australia having regard to the criteria in paragraph 7 of the said program standard, and thereby to accord to persons of New Zealand and the services provided by them treatment which is less favourable than that accorded in like circumstances to persons of Australia and services provided by them."

They went on to allege that the Standard was not determined in a manner consistent with Australia's obligations under the CER agreement, contrary to the provisions of s 160 of the Broadcasting Services Act ; was therefore inconsistent with those provisions; and was unauthorised by the Act. The respondents also claimed that the determination was an improper exercise of the power conferred by s 122, in that it failed to take into account the provisions of s 160 of the Act and Articles 4 and 5.1 of the CER agreement, and/or that it involved an error of law, namely the proper construction of the Act.

When the case came on for hearing before Davies J, it became apparent that all these allegations revolved around a single issue: whether the Standard was invalid because it failed to impose the same requirement of preferential treatment of New Zealand programs that it imposed for Australian programs. The ABA accepted that the Standard failed to do this. Its case was that it was not possible for it to specify the minimum "Australian content" of programs on commercial television whilst, at the same time, according New Zealand programs "no less favourable" access. As Davies J expressed the argument in his judgment:

"the view of the ABA was that it was unable to bring in a Standard consistent with the Protocol as the object of the BS Act of promoting Australian identity, character and cultural diversity required it to prefer programs having Australian content to those with New Zealand content."

The object to which his Honour referred was that contained in s.3(e) of the Act:

"to promote the role of broadcasting services in developing and reflecting a sense of Australian identity, character and cultural diversity."

Davies J accepted the ABA's submission that it is not empowered by the Act:

"to define an Australian person as to include a New Zealand person or to define an Australian program as to include a New Zealand program. The ABA has no authority to lay down a standard with respect to the New Zealand content of programs".

However, his Honour said it did not necessarily follow that the ABA could not perform its function under s 122 in a manner consistent with Australia's obligations under the Protocol. He went on to explain:

"The ABA's power is circumscribed only by the description of the subject matter, 'the Australian content of programs', by the objects of the Act set out in s.3, by the requirement in s.122(4) that standards must not be inconsistent with the Act or the regulations and by s.160(d) which requires the ABA to perform its functions in a manner consistent with Australia's obligations and under international conventions. Accordingly, the question is whether the ABA could have exercised its power and duty under s.122 to determine a standard with respect to the Australian content of programs in a manner which was consistent with the Protocol.

The ABA considered that there was no such possibility open to it. One means of doing so, however, would be for the ABA to adopt a standard such as was adopted but to provide that the obligations under it were reduced to the extent to which New Zealand programs were broadcast during the specified period, 6 am to midnight.

Such a standard would be within power for it would impose duties with respect to the Australian content of standards. It would impose no duty with respect to New Zealand programs. The Standard would be consistent with the Protocol for the effect would be that, to the extent to which the ABA could so provide, New Zealand programs would have access to Australia's domestic distribution system no less favourable than that accorded to Australian programs."

Davies J found no evidence to suggest that a standard in those terms would frustrate the achievement of the object that s 3(e) and s 122 have in mind. He said:

"If it were likely that New Zealand programs would be so popular as to overwhelm Australian programs and so frustrate the object sought to be achieved by s.3(e) and s.122, the Act would prevail over the Protocol. But in the absence of evidence showing that that would be the case, and there is no such evidence before the Court or any such proposition referred to in the November 1994 working paper issued by the ABA, then it would appear that the making of a standard which is consistent with the Protocol is authorised, indeed required, by the BS Act."

On 26 August 1996 Davies J made a declaration that the Standard "is invalid to the extent to which it fails to be consistent with the Protocol ..." He ordered that "unless the Standard is revoked or varied in accordance with law by the (ABA) on or before 31 December 1996, the Standard is set aside with effect from 31 December 1996", and that the ABA pay the applicants' costs.

The appeal

The ABA appealed against the declaration and orders made by Davies J. On the hearing of the appeal Mr R V Gyles QC and Ms N Abadee appeared for the ABA and Mr R J Ellicott QC and Mr D Yates for the respondents. Mr S Gageler appeared for a group of eleven persons (organisations, individuals and companies) connected with the Australian film industry who sought leave to intervene or, alternatively, to be heard as amici curiae (friends of the court). Mr Gageler indicated that his clients wished to adduce additional evidence which, he conceded, might be contentious. He said any factual issues arising out of this new material could be resolved by remitting the matter to a single Judge for determination.

The Court allowed Mr Gageler's clients to intervene for the purpose of putting a legal submission. But the Court refused to admit the additional evidence. Even when tendered by a party, contentious fresh evidence is admitted by a Full Court only in special circumstances: see Order 52 rule 36 of the Federal Court Rules and the judgments of Dixon CJ in Council of the City of Wollongong v Cowan (1955) 93 CLR 435 at 444 and Lockhart J in Florance v Andrew (1985) 58 ALR 377 at 381. That being so, only in the rarest of cases would it be appropriate to allow an intervener to adduce contentious fresh evidence. In Bropho v Tickner (1993) 40 FCR 165 at 172-173, Wilcox J expressed concern about an amicus curiae tendering complex and controversial evidence and thereby effectively hijacking the parties' case, "taking it off into new factual issues which may greatly extend its length and thereby impose significant additional costs and disadvantages upon the parties". That comment applies with greater force at the appeal stage; and even more so in an appeal that ought to be determined urgently, before the primary Judge's order takes effect.

In the arguments put to this Court, it was common ground that the validity of the Standard could not depend upon the extent to which New Zealand programs might in fact be selected for transmission as "Australian content" programs. The validity of the Standard had to be determined as a matter of construction of the relevant instruments: the Act, the CER agreement and the Standard itself. The result would be the same whatever the percentage of "Australian content" programs that emanated from New Zealand. Counsel agreed that, although this would be extremely unlikely in practice, the Standard envisaged by Davies J would permit the whole of the designated "Australian content" to be taken up by New Zealand programs: its validity had to be addressed on that basis. The reason why this is so is that Davies J's envisaged standard would permit Australian programs to take up the whole of a licensee's "Australian content" screenings. So the provision of "no less favourable" treatment to New Zealand programs must offer them the same possibility. It was also agreed, as his Honour held, that the ABA had no power to determine the New Zealand content of programs.

The argument advanced by counsel for the ABA is that Davies J erred in holding that it was possible for their client to exercise, in a manner consistent with the Protocol, its power and duty under s 122 to determine a standard with respect to the Australian content of programs. They acknowledge that s 122(4) requires standards not to be inconsistent with the Act and that s 160(d) requires the ABA to perform its functions, including the making of standards, "in a manner consistent with ... Australia's obligations" under the CER agreement. But they say it is impossible to make a standard that gives preferential treatment to Australian programs over all other programs whilst according to New Zealand programs treatment that is "no less favourable" than that accorded to Australian programs. Counsel argue that the inconsistency between s 122 and the requirement of s 160(d), as applied to Articles 4 and 5.1 of the Protocol, must be resolved by applying the maxim expressed in the Latin tag generalia specialibus non derogant : where there is a conflict between general and specific provisions, the specific provisions prevail. Without fully conceding the point, counsel acknowledged it was "strongly arguable" that the ABA could - and, therefore, should - give effect to clause 5.1 of the Protocol in making its children's program standard. The distinction, they say, between an Australian content program standard and a children's program standard is that preference for Australian programs is an inherent requirement of the former, but not of the latter.

Counsel for the respondents emphasise the mandatory language of s 160: the ABA "is to perform its functions in a manner" . Consequently, they argue, it is the duty of the ABA to give effect to the Protocol; the Protocol is not an instrument to be considered and then put aside. Counsel maintain it is possible for the ABA simultaneously to give effect to its obligations to specify the minimum Australian content of programs and to apply the Protocol. The key to appreciating this, they say, lies in properly understanding the concept of a "standard" setting Australian content. Ordinarily, a standard will prescribe by reference to a fixed and invariable measure (or specified criteria), the Australian content required. However, prescription in that form is not necessarily required in setting a standard. Consistently with the Protocol, a standard can be set in a way that allows New Zealand programs to be treated no less favourably than Australian ones. A standard that allows for the pro tanto reduction of the otherwise fixed measure of Australian content to the extent that New Zealand programs are broadcast is such a standard. Counsel accept that, on their approach, the proportion of "Australian content" programs meeting the definition contained in clause 7 of the Standard will not be known in advance; nonetheless the ABA will have fulfilled its obligation of determining a standard relating to the Australian content of programs, and have done this consistently with the Protocol.

Mr Gageler supports the submissions put on behalf of the ABA. He also argues that, even if the ABA has failed to comply with s 160(d), the Standard is not invalid. There would be an irregularity that might lead to Parliament amending the Standard pursuant to s 128 of the Act and perhaps cause the Minister not to reappoint the responsible members on the expiration of their current terms of office; but the Standard itself would be unaffected. In this connection he referred to Australian Broadcasting Corporation v Redmore Proprietary Limited (1989) 166 CLR 454 and Yates Security Services Pty Limited v Keating (1990) 25 FCR 1 at 24-28.

Conclusion

We think the appeal must be allowed. With respect to Davies J, we do not think the solution offered by him satisfies the requirement of s 122 for the determination of a standard that relates to "the Australian content of programs". The term "Australian content" is not defined by the Act, so the two words must be given their ordinary meanings. The "content" of a program is that which is contained in it: see the primary meaning of the word, used as a noun, given by the Macquarie Dictionary. So the "Australian content" is the Australian element in a program. However one defines "Australian" in this context, the connotation is of something particular to this country. Australia and New Zealand have much in common: geography, history, ethnic background, language and culture. The two countries have shared the vicissitudes of peace and war. Their peoples are perhaps as close as the peoples of any two countries can be. Yet New Zealand is not Australia, and a New Zealand program is not an Australian program.

If the ABA specified the "Australian content" of television programs in such a way as to allow any of that required content to be satisfied by New Zealand programs, however they might be defined, it would fail to carry out its statutory task. It would not then be specifying the (minimum) Australian content of each licensee's program time, but rather the minimum Australian-New Zealand content, in whatever proportion the licensee thought fit. The only standard the ABA could set, consistent with the Protocol, would be one that which allowed for there to be no Australian content programs at all, provided that New Zealand programs were broadcast in lieu of programs having Australian content. While one may be able to describe this as determining a standard, it is not one that puts into effect the statutory obligation to determine a standard that relates to the Australian content of programs.

Counsel for the respondents argued this result would cause no problem for licensees, who would know the provenance of their programs and could ensure that the combined Australia-New Zealand programs met the stipulations of the Standard. We accept those submissions. We also accept the importance of licensees knowing where they stand in relation to compliance with standards. This was made clear in Herald-Sun TV at 5. But standards are important to other people as well. Some of those people are involved in the Australian film or television industries; they have a financial interest in knowing what proportion of television programs will be Australian-made, and in ensuring it is as high as possible. There are, possibly, many other people who have no financial interest to protect, but are nonetheless concerned that, in the words of s 3(e) of the Act, Australian commercial television programs play a role "in developing and reflecting a sense of Australian identity, character and cultural diversity". Under the proposal advanced by the respondents, and adopted by Davies J, there could be no assurance that they will do so; certainly there could be no way of knowing in advance the extent of their contribution.

In the course of submissions, Mr Ellicott drew attention to the Explanatory Memorandum issued in 1992 by the Minister in support of the Broadcasting Services Bill . In referring to clause 158 of the Bill, the provision that subsequently became s 160 of the Act, the Minister made a specific reference to the CER agreement. He said the clause:

"Requires the ABA to perform its functions in a manner consistent with various matters, including Australia's international obligations or agreements such as Closer Economic Relations with New Zealand."

In the light of this specific reference, it is fair to assume that, in enacting s 122, Parliament had the CER agreement in mind. That being so, if there was any available construction of s 122, however strained, that would yield a result giving effect to the CER agreement in relation to the Australian content of programs, we would adopt it. But not even a strained construction is open. The truth of the matter is that Parliament has given the ABA two mutually inconsistent instructions. It has said, first, that the ABA is to provide for preferential treatment of Australian programs, but, second, that it is to do so even-handedly as between Australia and New Zealand. The ABA has been put in the same position as the man instructed to be faithful to his wife and love her above all others but to accord her sister no less favourable treatment.

The principle generalia specialibus non derogant is often applied to reconcile the provisions of separate statutes, or other instruments. But it is not limited to that role. This was pointed out by Dixon J in Perpetual Executors and Trustees Association of Australia Limited v Federal Commissioner of Taxation (1948) 77 CLR 1 at 29. And Deane J, as a member of this Court, proceeded on that basis in Refrigerated Express Lines (Australasia) Pty Limited v Australian Meat and Livestock Corporation (1980) 29 ALR 333 . At 347 his Honour said:

"As a matter of general construction, where there is repugnancy between the general provision of a statute and provisions dealing with a particular subject matter, the latter must prevail and, to the extent of any such repugnancy, the general provisions will be inapplicable to the subject matter of the special provisions. 'The rule is, that wherever there is a particular enactment and a general enactment in the same statute, and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be taken to be operative ..." (per Romilly MR: Pretty v Solly (1859) 26 Beav 606 at 610). Repugnancy can be present in cases where there is no direct contradiction between the relevant legislative provisions. It is present where it appears, as a matter of construction, that special provisions were intended exhaustively to govern their particular subject matter and where general provisions, if held to be applicable to the particular subject matter, would constitute a departure from that intention by encroaching on that subject matter. A more fundamental example of such repugnancy is where the particular provisions prescribe or encourage conduct which the general provisions would render prima facie, though not irremediably, unlawful or where the particular provisions assume to be lawful conduct which the general provisions would render prima facie unlawful." (Emphasis added)

This approach must be applied in the present case. There being an irreconcilable conflict between the special provision constituted by s 122(2)(b) of the Act and the general provision of s 160(d), as applied to the CER agreement, the former must prevail.

Orders

It is unnecessary to express a view about the argument advanced by Mr Gageler. For the reasons stated above, the appeal should be allowed and the declaration and orders made by Davies J set aside. In lieu thereof it should be ordered that the application be dismissed. The respondents should pay the ABA's costs, both at first instance and on appeal. There should be no order in relation to the interveners' costs.