CATCHWORDS Administrative Law - Australian Broadcasting Tribunal - Regulation as to foreign content of advertising - Saatchi's Case - position of a regulation declared ultra vires, when that declaration is the subject of an appeal YOUNG & RUBICAN COWDREY PTY. LIMITED v AUSTRALIAN BROADCASTING TRIBUNAL No. G 25 of 1985 Morling J. 8 February 1985 Sydney IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G 25 of 1985 GENERAL DIVISION BETWEEN : YOUNG & RUBICAN COWDREY Pry. LIMITED Applicant AND: AUSTRALIAN BROADCASTING TRIBUNAL Respondent ORDER JUDGE MAKING ORDER : Morling J. DATE OF ORDER : 8 February 1985 WHERE MADE : Sydney THE COURT ORDERS AS FOLLOWS : 1. Application for interlocutory relief dismissed. IN THE FEDERAL COURT OF AUSTRALTA NEW SOUTH WALES DISTRICT REGISTRY No. G 25 of 1985 GENERAL DIVISION BETWEEN: YOUNG & RUBICAN COWDREY PTV. LIMITED. ~— Applicant AND: AUSTRALIAN BROADCASTING TRIBUNAL Respondent MORLING J. . . : 8 February 1985 REASONS FOR JUDGMENT The applicant seeks interlocutory orders against the Australian Broadcasting Tribunal for the purpose of, in effect, restraining the Tribunal from seeking to prevent the broad- casting by television stations of an advertisement for Volvo moter vehicles. The applicant carries on business as an advertising agent and Volvo (Australia) Pty. Limited is one of its clients. On behalf of Volvo it has produced a television commercial which is to be used in an Australia wide campaign for the promotion of its vehicles. It is intended that the first commercial should be telecast on the evening of Sunday, 10 February next. As I understand the evidence the proposal is that the commercial should be screened on television.stations in all mainland capital cities. 2. The relevant commercial contains more than 20% overseas content. It is the Tribunal's view that such an advertisement does not comply with standards that have been determined by it in relation to the broadcasting or televising of commercials. The licensee of a television station is obliged to comply with such standards laid down by the Tribunal - gee 8.100(4) of the Broadcasting and Television Act 1942. There is no doubt that the proposed Volvo advertise- ment does not comply with the Tribunal's standards, since it contains more than 20% overseas content. However, as I understand the evidence, there is no other feature about the advertisement which brings it into non-compliance with the standards. However, in Saatchi & Saatchi Coptom (Vic) Pty. Limited v Australian Broadcasting Tribunal & Anor. (23 November 1984) "Beaumont J. held that the determination of a standard requiring that an advertisement contain not more than 20% overseas content was beyond the powers conferred upon the Tribunal by s.100(4) of the Act. His Honour further held that no other provision in the Act provides an alternative source of power. An appeal against his Honour's decision has been filed and is listed for hearing in this court on 18 February. The Volvo commercial which it is proposed to telecast has been submitted to the Commercials Acceptance Division (CAD) of the Federation of Australian Commercial Television Stations ("FACTS") for approval to be shown on commercial television stations throughout Australia. FACTS has granted its approval to the commercial and has allocated a FACTS number to it. The practice in the advertising industry is that until a FACTS number is allocated to an advertisement, thus clearing it for broadcasting, it cannot be submitted to television stations for broadcasting. Immediately following the allocation of the FACTS number to the Volvo commercial the applicant submitted a tape of the advertisement to television stations for subsequent broadcasting. The Volvo advertisement appears to have been accepted by all television stations to which it was submitted. There is evidence that the cost of the advertising campaign featuring the advertisement is approximately $400,000 and firm bulk bookings have been made for the televising of the commercial. The applicant fears that action by the Tribunal may deter the managers of commercial television stations from televising the commercial. The action taken by the Tribunal consists of the sending of telexes to commercial television stations which are intending to broadcast the commercial. Ina telex sent to television stations last Wednesday the Tribunal said, inter alia: "The Tribunal has considered the matter again in the light of the advice from FACTS that the completed commercial has been submitted to CAD, and 4. that FACTS has received legal advice to the effect that it has no option other than to allocate an acceptance number. The Tribunal is still of the view that as a result of the use of greater than 20% imported footage, the commercial does not meet television program standard 39 as amplified hy Tribunal circular letter T10,. I am to say that if the particular commercial is televised by your station the matter will be considered by the Tribunal at the next review of the station's licence and in that context the Tribunal will take into account the provisions of Part 3.4 of Tribunal Practice Note PRN 06 of 20 December 1984," The reference to program standard 39 and circular letter T10 is a reference to the documents the validity of which were considered by Beaumont J. in his decision in the Saatchi Case. His Honour declared that those documents were void, but orders quashing them were stayed pending the hearing of the appeal to the Full Court. I may be wrong in that respect but that is what I understand to be the effect of the court's order. Part 3.4 of Tribunal Practice Note PRN 06 of 20 December 1984 is in the following terms: "3.4 Where the Tribunal is satisfied that a breach by a licensee was due to any one of the following: (a) reasonable mistake; (b) reasonable reliance on information supplied by another person; or (c) the act or default of another person, or any accident or other cause beyond the licensee's control; and the licensee took reasonable precautions and exercised due diligence to avoid the breach; 5. the breach will only be raised at a_ subsequent licence renewal inquiry if it is one of a number of breaches or alleged breaches which may be relevant, when taken as a whole, to the question of whether a licence should not be renewed, should be renewed for a period of less than three years, or should be renewed subject to a condition relating to those breaches." In a subsequent telex despatched to the general managers of commercial television stations early this afternoon the Tribunal said: "The Tribunal's telex of 6 February was not intended and should not be regarded as an attempt to prevent stations from showing the Volvo commercial. Nor should that telex be regarded as threatening sanctions under the Act if the Volvo commercial is shown. However, the Tribunal considers it proper to drawtethe attention of licensees the particular circumstances of this commercial, having regard to the Tribunal's standards pending the outcome of the appeal. The Tribunal wishes to make it clear that in its view it is a matter of individual judgment for each licensee as to whether, pending the outcome of that appeal and in the light of the information provided by the Tribunal concerning this commercial, the commercial should be televised. In the event that the appeal against Beaumont J's decision is successful the Tribunal would consider any transmission of the Volvo commercial by a licensee in accordance with its normal procedures as set out in Practice Note PRN 06." I would have been minded to grant interlocutory relief had I been of the opinion that the respondent was threatening sanctions against television stations if they broadcast the Volvo commercial. However, in the light of the telex sent this afternoon, I do not think that I should find that any such 6. threat exists. It is true that the concluding part of the telex states that in the event that the appeal against Beaumont J's decision is successful the Tribunal would consider any transmission of the Volvo commercial by a licensee in accordance with the procedures set out in Practice Note 06. But I do not think that I should make the assumption that the Tribunal will act unreasonably if and when it has to consider the position of a particular licensee who may have broadcast the Volvo commercial. Practice Note 3.4 provides that if the Tribunal is satisfied that a breach by a licensee was due to, inter alia, a reasonable mistake or reasonable reliance on information supplied by another person, the breach will only be raised at a subsequent licence renewal inquiry if it is one of a number of breaches which, when taken as a whole, may be relevant to the question whether the licence should not be renewed. As the law presently stands, it is as declared in the decision of Beaumont J. Licensees of television stations are entitled, indeed obliged, to treat his Honour's judgment as correctly stating the law. In these circumstances, should his Honour's decision be subsequently reversed it is unthinkable in my view that the Tribunal would not be satisfied that the broadcasting of the Volvo commercial by a licensee was due to reasonable reliance on his Honour's judgment. In my opinion that judgment would come within the phrase "information supplied by another person" as that phrase is used in Practice 7. Note 3.4 (b). Moreover, I would think it inconceivable that the Tribunal would take into account adversely to a licensee any action taken by it in conformity with and in reliance upon the decision of Beaumont J. until it is reversed, if indeed it is reversed. I should say that whilst it would be quite inappropriate for me in this application to express any view as to the correctness of his Honour's decision, it is plain froma reading of his careful reasons that they might find acceptance with the Full Court. I make this observation only for the purpose of supporting the view which I have already expressed, if such support be necessary, that licensees of commercial television stations are entitled to treat his Honour's decision as correctly stating the law pending the determination of the hearing in the Full Court. In these circumstances I would think it highly unlikely that any television station would decline to broadcast the Volvo commercial for fear that by doing so it might prejudice a future application for renewal of its licence. As I have already pointed out, the telex sent: this afternoon states that the Tribunal should not be regarded as attempting to prevent stations from showing the commercial. Nevertheless I can understand the concern that has caused the applicant to approach the court. It is apparent from Mr oo 8. Hutching's affidavit sworn today that the executives of Channel 9 and Channel 10 in Sydney and executives of television stations in other capital cities are in some doubt as to the action they should take in response to the telexes which they have received from the Tribunal. Whilst I do not think the case has been made out for the grant of interlocutory relief, I would hope that what I have said in these reasons would remove any uncertainty licensees may have had as to the propriety of acting in accordance with the decision in Saatchi's Case pending the hearing of the appeal to the Full Court. For these reasons I do not think I should grant the application for interlocutory relief. lils enour ele Bab oe i. Ow ve a ee mee later AuSO-Lw.8 Dated: 3[2)9¢~