JUDGMENT No. snd 8. unl wt Lon CATCHWORDS MEDIA LAW - regulation of programming - functions of regulatory bodies - attack on decision of Advertising Standards Council - declaration that advertisement does not seriously offend community values - principles to be applied in claim for declaratory relief. ster v Smith [1951] VL 16. y_Haymo. 1987 FLR 52. eski v Vasi 1). 1 NSWLR 267. Qd_ Transport Pty Ltd v Western Australian Government Railways L L 1 FCR 270. Pa ins Ltd v Th ommonwealth of Australia {1 1? L 643. to it rati Ltd v Lupi [1992 VR : Typing Centre of New South Wales _v Toose & Ors (unreported 15 ec [=] : i igin. Affairs v Pe Wallsend Ltd (1 2 CLR 24. ton v Minis of Pensions (No 2 1964] 1 All ER 448. 20. is ici [ty v Brettingham-Moore (1 16 LGRA 223. dv inti and Kindre dustries Union (New South Wales B. 7 NSWL 1. For: rev dod Aust Pty Lt 197 127 R_ 421. 'ro v Gr. 1967) 121 CLR 375. 7X. ite Co Ltd v Ministr £ Housing and Local Government [1960] Ac 260. Barraclough v_ Brown [1897] AC 615. Pharmaceutical Society of Great Britain v Dickson [197 Ac 403. Buckley v Tutty [1971] 125 CLR 355. RE E PTY LTD 4 4 2 and X EMERY PARTNERS (A FIRM) v THE HONOURABLE P B TOOSE CBE OC (who is sued on hi half d as representing the members £ the ivertisin tanda ce] il io of 1994 CORAM: RYAN J PLACE : MELBOURNE DATE: 09 DECEMBER 1994 16 DEC 1994 FEDERAL COURT OF AUSTRALIA PRINCIPAL REGISTRY INTHE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION No VG 405 of 1994 BETWEEN: DORF INDUSTRIES PTY LIMITED {ACN 004 394 923) and BOX EMERY §& PARTNERS (A FIRM) (Applicants) AND: HON B BE and (who _is_ sued on his own behalf and as epresenting the s of the vertisin Standards Council) (First Respondent) AND: AUSTRALIAN CONSOLIDATED PRESS LIMITED 4 52 2 (which is sued on its own behalf and as representing the members of the Media Council of Australia) (Second Respondent ) AND: NINE RK_Al IA _L N 713 d_GENE TE I CORPORATION PTY LTD (ACN 004 330 036) (Third Respondent) Coram: Ryan J Place: Melbourne Date: 09 December 1994 REASONS FOR JUDGMENT RYAN J: By an application filed in this Court on 15 November 1994 and amended by leave granted on 16 November 1994, the applicants sought various forms of relief in respect of television advertisements which had been produced under the auspices of the second applicant ("Box Emery") for the first applicant Dorf Industries Pty Ltd ("Dorf"). Box Emery had arranged for the advertisements to be transmitted by either or both the third respondents over what is called the Channel 9 -2- Network. I shall hereafter refer to the third respondents collectively as "the 9 Network". The advertisements have been produced in four segments. The longest, referred to as the "45 second commercial" depicts a youngish woman who, as an act of revenge before deserting the matrimonial home, turns on all the available taps and leaves them running into plugged handbasins, baths and sinks. Water is seen to begin flowing down the staircase of the house as the wife departs from the front door leaving a note addressed to "William". The two shortest segments, referred to as the "15 second commercials" each show aman, presumably the husband of the woman, returning, apparently after a considerable interval, to the home which has water trickling through the keyhole of the front door. The only difference between the two 15 second commercials is the sound of "the voice over" component. The other, "30 second commercial", consists of an edited version of the 45 second commercial concluding as the wife leaves the home. Box Emery is an advertising agent accredited by the Media Council of Australia ("MCA"). The MCA, as a representative organization of a large number of media and advertising outlets, has promulgated rules governing the conduct of advertising, including the Rules Governing Accreditation of Advertising Agencies and the Codes of Advertising. The preface to those Rules recites that the Rules and the Codes have been granted authorisation by the Trade Practices Commission. It continues: "The Rules and the Codes are binding on all members of the Media Council of Australia, on all members of those members and on all advertising agencies accredited to the Media Council of Australia". - 3 - In an earlier form Rule 31 of those rules concerned advertising standards and recited: "All advertising submitted to a Media Proprietor shall conform to the standards of the Media Proprietor concerned, and in addition - (a) shall be clean, honest and truthful advertising, and (b) ahall not be liable to misinterpretation either directly or by implication or by omission, and {c) shall not contain statements or visual presentations offensive to public decency and good taste, and (d) shall comply with all Commonwealth and State and Territory laws, ordinances, rules and regulations, and (e) shall conform strictly with any advertising standards or Code of Ethics which may be published by MCA from time to time." In its current form Rule 32 provides: "All advertising submitted to a Media Proprietor shall conform to the Codes of Advertising of the Media Council of Australia". The 9 Network is relevantly "a media proprietor" as it is a member of the Federation of Australian Commercial Television Stations ("FACTS") which organization is also a member of the MCA. The MCA has developed an Advertising Code of Ethics ("the Code") as part of a system of self-regulation within the media and advertising industries. In the preface to the Code it is provided that: "The Advertising Standards Council shall, in relation to matters placed before it, be responsible for (a) the interpretation of the Code and (Db) the determination of whether breaches of the Code have occurred." Clause 6 of the Code which forms the focus of these proceedings says: "Advertisements shall not contain anything which in the light of -4- generally prevailing community standards is likely to cause serious offence to the community or a significant section of the community." As a member of FACTS, the 9 Network is bound by the FACTS Code of Practice. Section 6 of that Code relates to classification and placement of commercials. Clauses 6.1 and 6.3 provide: "6.1 This Section is intended to ensure that: 6.1.1 television commercials are classified and broadcast appropriately, in the light of current community attitudes and of the need to limit the exposure of children to material intended for adult viewing; 6.1.2 commercials for products and services which are of particular concern or sensitivity are subject to additional placement restriction; 6.1.3 public health and safety messages are not unreasonably restricted; 6.1.4 viewers who are concerned about the content of television commercials are made aware that this is governed by Media Council of Australia Codes of Advertising and the Australian Broadcasting Authority's Children's Television Standards. 6.3 All commercials broadcast by licensees must comply with this Section, with Section 2: Classification and Section 3: Program Promotions, with applicable Media Council of Australia Codes of Advertising, with any relevant requirements of the Australian Broadcasting Authority's Children's Television Standards, and with relevant requirements of State and Federal law." In order to assist advertising agencies to comply with the requirements stipulated by the Code, FACTS provides, through its Commercials Acceptance Division ("CAD") a facility whereby an agency can obtain a clearance for a proposed television advertisement. Although television stations are not obliged to insist that a FACTS clearance be obtained before an advertisement is broadcast, as a matter of practice FACTS clearances are obtained and relied on as providing assurances that the relevant standards have been complied with. The present applicants assert as a matter of fact that the 9 Network would not have agreed to ~5 - broadcast the relevant advertisements had Box Emery not obtained a PACTS clearance. To obtain the clearance, Box Emery sent a script to Ms Trudi Bean, the Manager of CAD seeking initial consideration of whether the advertisement was likely to contravene the Code. In accordance with its practice to consider, but not to approve, a commercial by reference to the script alone, Ms Bean examined the script and advised as follows: "I don't have any major problems with this but I wonder if you will get complaints with the severe drought in NSW/gld as well as most Water Authorities having "Save Water" campaigns. Thies could really raise the ire of some people." After obtaining that initial indication, the television commercials were produced and a copy of them was sent in final form to FACTS for viewing. On or about 30 September 1994 the advertisements were cleared and each was allocated a FACTS clearance number. The commercials in various sequences were broadcast on the 9 Network in the weeks beginning 2 October, 9 October, 16 October, 23 October, 30 October and 6 November 1994. THE_ADVERTISING STANDARDS COUNCIL The Advertising Standards Council ("the ASC") was established by Charter in 1974. The parties to the Charter were the MCA, the Australian Association of National Advertisers and the Advertising Federation of Australia. The objects of the ASC are provided for in its Charter which provides: "The Charter of the Council is: (1) to advise the Media Council on the conduct, interpretation and possible improvement of the Code of Ethics of advertising, and (2) (3) (4) (5) (6) (7) (8) -6- other codes of the Media Council relating to advertising, which are subscribed to by advertising media and recognised advertising industry bodies; to bring to the attention of the Media Council and its various Code Committees breaches of advertising standards brought or coming to the notice of the Council; to advise and report to the Media Council of Australia, the Advertising Federation of Australia, the Australian Association of National Advertisers, the Australian Advertising Industry Council, and any other organisations which are directly involved in the creation and/or presentation of advertising, on any specific aspects of advertising which had been brought to the notice of Council as being the cause of material concern generally; to provide in the office of the Chairman, or his delegate, opportunity for discussion with Federal and State Ministers and those officers concerned with the policy and administration or regulations affecting advertising as the occasion demands; to provide in the office of the Chairman, or his delegate, an opportunity for consumer bureaux and like bodies in the various State of Australia, to bring to the attention of, and to discuss with the Council, problems which may overlap from their particular role in the area of advertising standards, and for report to the Media Council on the results of these discussions; to promote, and assist in, the maintenance and improvement of the standards and ethics of advertising by the provision of direct public access and involvement in the interpretation and application of such ethics and standards; and to publish annual reports recording the Council's work and reviewing developments in advertising ethics and standards. The Council ia not carried on for the purpose of profit or gain to the individual members of the Council." The membership of the ASC is drawn from both within and outside the advertising and media industries. It appears from the following that the Charter seeks to ensure a wide range of experience and expertise in the membership of the Council: "(1) The Members of the Council shall comprise: (a) A Chairman being a person otherwise unconnected directly with advertising. (b) Not more than two Deputy Chairmen appointed on the nomination of the Chairman from amongst those Members appointed pursuant to subclause (c) hereof. (¢) (i) Not less than seven or more than nine members of the public who are otherwise unconnected with the advertising industry and who are appointed by the Chairman. {i1) In making the appointments the Chairman shall use his best endeavours to maintain a soundly balanced -7- membership which possesses the capacity to work efficiently and effectively. (iii) In maintaining this balance the Chairman shall take into account the diversity of Australian society in matters of age, sex, background, ethnic origins, colour, regionalism and any other considerations deemed by the Chairman to be relevant and appropriate. (a) (i) Of the members appointed pursuant to subclause (c) of this clause, at least one member shall be selected on the basis of a background in consumer affairs, at least one member shall be selected with experience in public health and at least one member shall be selected with experience in the welfare of young children and adolescents. (ii) Before making appointments the Chairman shall consult with relevant Ministers of the Crown both State and Federal or the person or persons to whom such consultation is delegated by the respective Minister and any other public interest authority or person the Chairman considers appropriate. (e) Three members nominated by the Media Council of Australia, one each representing Print, Television and Radio. (£) One member nominated by the Advertisang Federation of Australia. (g) Two members nominated by the Australian Association of National Advertisers." The Charter authorizes the ASC to investigate and determine written complaints about advertisements. Those complaints are determined against the criteria promulgated in the Code. E IN_RELAT Ti E Ri Mr Colin Harcourt who is the Executive Director of the ASC has deposed that the ASC received its first complaint in relation to the advertisements on 7 October 1994. As a result of that and a number of other complaints, the ASC convened a meeting on 9 November 1994 at which time on the 45 second commercial was viewed and considered. At its meeting of 9 November 1994, the ASC considered the -g- complaints and submissions put in defence of the commercials by Box Emery and upheld the complaints on the basis that the content of the 45 second advertisement was such that in the light of generally prevailing community standards it was likely to cause serious offence to a significant section of the community. Box Emery were advised of the determination on 9 November. By letter dated 11 November 1994 Mr Harcourt advised Box Emery of the reasons of the ASC. That letter is lengthy but it is instructive to set it out in full: "Council met on 9th November 1994 and determined as follows: The Council viewed the 45 seconds duration commercial several times and considered the responses to the complaint, received from the advertiser, its advertising agency and the Commercials Acceptance Division of the Federation of Australian Commercial Television Stations (FACTS) which had cleared the commercial for "G" (General) viewing except in "C" (Children's) television program time. In addition FACTS warned atations to exercise care in placement in those "G" programs with a large child audience. The Council observed that not only had the commercial attracted more complaints than any other commercial so far in 1994, but the complaints had emanated from ail States except Tasmania and represented metropolitan and rural viewers. The commercial depicted an angry young woman leaving her partner and punishing him by stopping every plug hole in the house and turning on all the taps. Her action resulted in the water overflowing and running through house, finally cascading as a torrent down the stairs. The Council accepted the sincerity of the advertising agency in claiming that: "The concept is based on pure fantasy (War of the Roses) and is a reflection of the new way women see themselves, "in control of negative situations". The commercial 1s a tongue in cheek approach to communicating that wherever water falls in the wet areas of the home Dorf make products to suit...". The attention getting device of the woman punishing the man of the house was never structured to encourage water wastage or vandalism and is aimed at providing a humorous insight into an obviously failed relationship. The commercial was shot in a studio using different sets, the amount of water that is seen to be used is an illusion." "We believe the commercial is humorous, larger than life, and in most cases is not taken seriously." The Council considered that in time of normal weather patterns ordinary viewers might well see the lighthearted side of the commercial and not be overly concerned by the depiction of water wastage. However, these -9 - are not normal weather times. Much of Australia is severely drought affected; farmers are under siege and carting water at great cost; some large country towns in NSW and Queensland have already or are about to run out of water supplies; for the first time in many years, stringent water restrictions have been imposed on metropolitan usage. Governments and their agencies are mounting expensive advertising campaigns to increase awareness and concern for the problem and to get consumers to look for more ways of reducing their water consumption. Already there is widespread panic about the effect of the drought, not only in terms of survival until the rain arrives, but also the years it will take to fully recover and, indeed, whether some rural communities will ever fully recover. Water and its conservation have become a major talking point through the community. In this regard, the Councal considered that there is absolutely no doubt that community attitudes to the use and wastage of water have changed greatly in recent months. It also seems unlikely that attitudes will ever revert to the previous "couldn't care lese" and "it's not my problem" times. What has been regarded, hitherto, as an endless facility, will almost certainly be appreciated for the precious commodity that it is. In assessing the commercial now before it, and in addition to other considerations, the Council was required to take into full account its belief as to the prevailing community standards referred to above. In the Council's view, prevailing community standards were such that a significant section of the community was likely to be seriously offended by the depiction of such a wanton and irresponsible wastage of water. The Council was also concerned that the community would see the depiction as an act of malicious injury to property, which is a criminal offence. Furthermore, it was possible that the depiction might produce copy cat actions. Although the advertising agency's response included evidence that the amount of water used in making the commercial was less than half that used in a day by the average household, and also showed that the commercial was made in a studio and not a real domestic dwelling, these were not mitigating factors as far as the Council was concerned. They were irrelevant to the way the commercial would be perceived by its viewers. The Council determined that the commercial was in breach of the Advertising Code of Ethics and, in particular, Clause 6 which states: 6. Advertisements shall not contain anything which in the light of generally prevailing community standards is likely to cause serious offence to the community or a significant section of the community. The complaint was upheld. Whilst this Minute, incorporating the Council's reasons for decision, has been settled by the Chairman, the reasons (not the decision) are still subject to confirmation by the Council at its next Full Meeting. In the event that the Council makes any change to the reasons for its decision, as presented in this letter, you will be advised." CONSEQUENCES OF THE ASC DECISION CAD was advised of the decision of the ASC to uphold the complaints and, on 10 November 1994, Ruth Ward of CAD sent the - 10 - following by facsimile transmission to Box Emery: "This facsimile is to notify you that following the Advertising Standards Council's decigsion of November 9, 1994, to uphold the complaint against the Dorf television commercials, the clearance numbers for the following key numbers have been withdrawn. EMAOO8O EMAO148 EMA0149 EMAO124 Could you please advise us if there are any other commercials similar in content to the above, as they will alao be affected by Council's decision. If you have any questions regarding the Advertising Standards Council's decision please contact Colin Harcourt on (02) 954 9781." The commercial clearance procedures prescribed by FACTS provides for the withdrawal of clearance numbers either temporarily or finally in a range of specified circumstances. In the present case FACTS appears to have finally withdrawn clearance on the basis that the ASC had upheld a complaint against the advertisement. So much appears from a facsimile sent from Ms Bean to solicitors then acting for Dorf which is in these terms: "I refer to your telephone conversation with, and facsimile to, Ms Ruth Ward of the Commercials Acceptance Division of FACTS. I confirm that the withdrawal of a PACTS clearance number automatically follows a decision to uphold a complaint against the relevant commercial, by the Advertising Standards Council (ASC). I also confirm that a reversal of the ASC decision, for example following an appeal, or a court ruling that the decision was wrong, would result in an automatic reinstatement of FACTS clearance. An extract of the Commercial Television Industry Code of Practice is attached for your reference. (The complete document follows by mail.) I refer you to Section 6.3 which requires television licensees to ensure that all commercials they broadcast comply, inter alia, with the Media Council of Australia Codes of Advertising. Stations must withdraw advertisements that breach the Media Council Codes, whether it is station policy to require FACTS clearance numbers before broadcast or not. In my opinion, a successful appeal to the ASC or a court decision against the ASC's original decision, would reinstate the commercial to ite former status of being in compliance with the Media Council Code and therefore suitable for broadcast." - 1i11-<- As a result of the decision of the ASC and the resultant withdrawal of FACTS clearance, the 9 Network indicated that it would not broadcast the television commercials. PROCEEDINGS IN THIS COURT It is necessary to turn now to the brief but eventful history of proceedings in this Court. As indicated at the commencement of these reasons, an application for relief was filed in this Court on 15 November 1994. The respondents to that application were the Honourable Paul Toose QC, Chairman of the ASC, on his own behalf and as representing the members of the ASC; Australian Consolidated Press Ltd, ("ACP") on its own behalf and as representing the members of the MCA; and Nine Network Australia Ltd and General Television Corporation Pty Ltd to which I have already referred as "the 9 Network". The application claimed both declaratory and injunctive relief and damages. In relation to the determination of the ASC of 9 November a declaration was sought that each of the Dorf advertisements does not breach cl 6 of the Code and an order setting aside the decision of the ASC. As to the regulatory regime adopted by the members of the MCA, a declaration was sought that the necessity for approval by FACTS and the ASC before the broadcasting by members of FACTS constituted an unlawful restraint of trade. Declaratory relief was also claimed in respect of what the applicants alleged was the neglect, failure or refusal of the 9 Network to perform the contract between it and the applicants for the broadcast of the advertisements. - 12 ~- Injunctions were sought restraining all respondents from acting upon or enforcing both the determination of the ASC and the arrangements whereby it was said a FACTS clearance constituted a pre-condition to the acceptance for broadcast of advertisements. An injunction was sought to restrain the 9 Network from giving effect to the ASC decision. Moreover it was sought by what was, in effect, a mandatory injunction to compel the 9 Network to broadcast the advertisements. The application for interlocutory relief came on for hearing before me on 16 November 1994 at which time the applicants were represented by senior Counsel and the Nine Network appeared by Counsel. The first and second respondents did not appear. Notwithstanding that submissions were put by Mr Houghton of Counsel for the 9 Network, all respondents had, in my view, been effectively precluded by the shortness of service from filing affidavits and adequately preparing a defence. Accordingly, I treated the application as one made ex parte. In the result, I made the following orders: "(1) That until 4.15 pm on 21 November 1994 or further order the members as at the date of the issue of this order of the Advertising Standards Council of Australia ("the ASC") and the members as at the date of the issue of this order of the Media Council of Australia ("the MCA") whether by their members, servants, agents or otherwise and the Third Respondents ("the GTV9 companies") whether by their servants, agents or otherwise be restrained from: (i) directly or indirectly acting upon the decision of the ASC dated on or about 9 November 1994 that the television advertisements of the Applicant the subject of the clearance numbers EMAO090, EMAQ148, EMAO149 and EMAO124 of the Federation of Australian Commercial Television Stations ("FACTS") ("the television advertisements") breached cl.6 of the Advertising Code of Ethics dated 30 April 1993 as adopted and enforced by the MCA ("the code of ethics") ("the ASC decision"); and (ii) acting upon or enforcing the agreement, arrangement and/or understanding between the said members of the MCA which includes the members of FACTS (which include the GTV9 companies) to give effect to the code of ethica - in relation to the television advertisements." - 13 - At the time I pronounced brief reasons for granting the injunctions and I shall not repeat them now. At a directions hearing on 17 November, directions were given for the filing of affidavits in reply by the 9 Network. The first and second respondents did not appear on the directions hearing. On 21 November 1994 on the return of the adjourned application for interlocutory relief all parties were represented by Counsel. Mr Merkel QC, who appeared with Mr K Bell for the applicants, informed the Court that the applicants were seeking final relief in the form of paragraph 5 of the amended application which is in the following terms: "A declaration that the television advertisements do not contain anything which in the light of generally prevailing community standards is likely to cause serious offence to the community or a significant section of the community contrary to cl.6 of the code of ethics." No other relief was sought against any of the respondents. The Court was informed that the proceeding as against ACP on its own behalf and the 9 Network had been resolved between those parties and the applicants. With the consent of those respondents I granted leave to the applicants to discontinue their actions against them. Counsel for ACP and the 9 Network informed the Court that his clients would abide any order of the Court and that should the Court be persuaded to make the declaration sought by the applicants then the 9 Network would agree to broadcast the Dorf advertisements in the time slot previously booked by the applicants. After agreeing to discontinue against Channel 9, the applicants ~ 14 - maintained part of their claim against the ASC and against ACP in its representative capacity, that is as representing all the members of the MCA. The "live issue" arising from the remaining claims as identified by Counsel for the applicants was whether the transmission of the advertisement was capable of infringing cl 6 of the Code of Conduct. The sole relief pursued in the light of that contraction of the applicants' claim was a declaration in terms of paragraph 5 of the prayer for relief set out above. Counsel for the applicants expressly abandoned claims for any other relief, other than for representative orders necessary to give effect to the proposed declaration. P BSTANTIVE MENT _IN PPORT OF DECLARATION In support of their substantive contention that the advertisements are not capable, as a matter of law, of contravening cl 6 of the Code, Counsel for the applicants referred to Worcester v Smith [1951] VLR 316. That case concerned the carrying outside a building housing the United States Consulate of a banner which bore the legend "Stop Yank Intervention in Korea". There was also evidence that the defendant, in an exchange with a bystander, had expressed sentiments hostile to the United States. In deciding that the evidence did not disclose that the defendant had behaved in an offensive manner contrary to s 25 of the Police Offences Act 1928, O'Bryan J observed, at 317: "In my opinion, the whole of this evidence did not support the charge of offensive behaviour. This section is not directed to the peaceful and inoffensive statement either verbally or in writing of political views. There is nothing, in my opinion, in the wording of any of the banners which could reasonably be taken to be offensive. They are strong expressions of opposition to a political policy with which the great majority in this community would probably agree. The mere disagreement with that policy, while it may be in one sense offensive - 15 - to some people, is not, in my opinion, offensive in the sense in which this word is used in s 25. I agree with Mr Anderson's argument that words may be uttered in such a way and in such circumstances as to be offensive, and that circumstances, including the manner and place in which words are uttered, may turn words into offensive behaviour. It is to be remembered that this man is not charged with obstructing the footpath or with any other of a number of kindred offences which are created under city by-laws or police offences legislation. He is charged with having behaved in an offensive manner in a public place. The behaviour of the defendant in this case, in my opinion, fell far short of being offensive as that word is used in s 25. Behaviour, to be "offensive" within the meaning of that section, must, in my opinion, be such as is calculated to wound the feelings, arouse anger or resentment or disgust or outrage in the mind of a reasonable person. The mere expression of political view, even when made in the proximity of the offices of those who opinions or view are being attacked, does not, in my opinion, amount to offensive behaviour within the meaning of this police offence." That passage was applied in a similar statutory context by Asche J in Wurramura v Haymon (1987) 86 FLR 52 where his Honour observed, at 56: "The ultimate test is objective." Accordingly, it was argued, whilst exception might reasonably be taken by some viewers to the waste of water depicted in the advertisements, they could not, on any objective view, be regarded as offensive in the sense of tending to wound the feelings or arouse anger, resentment or disgust in the mind of a reasonable person. Indeed, it was suggested that the test was even higher than that posed in Worcester v Smith because the word "offensive" is qualified in cl 6 of the Code by the adverb "seriously". There is much force in this argument going to the merits of what might be called the application of cl 6, properly construed, to the advertisements. However, for the reasons indicated below, I consider it inappropriate in the present circumstances to come to a conclusion on those merits and it is preferable that I say no more about them in case they later - 16 - become the subject of fully argued submissions from both sides. T E TOR EF It was said that it was appropriate for the Court to determine summarily whether to grant a declaration in that form because it raised a pure question of law of the kind which courts frequently determine once and for all in the context of applications for interlocutory relief. By way of example, reference was made to Karaquleski v Vasil [1981] 1 NSWLR 267 where Powell J identified certain question of law going to the proper construction and exercise of an option and continued, at 269: "It is my view that, notwithstanding the general approach to be adopted by the Court on applications for an interlocutory injunction (see, for example, De Mestre v A D Hunter Pty Ltd (1952) 77 WN 143; Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; Firth Industries Ltd v Polyglas Engineering Pty Ltd (1975) 132 CLR 489) where, on such an application, such pure questions of law are raised, I am bound to determine them, and that I am not permitted the luxury of saying that since there is, or may be, a substantial argument as to the questions of law, the matter should go for trial: see, for example, the like approach adopted by Mason J in Administrative and Clerical Officers Association v The Commonwealth (1979) 53 ALJR 588." See also Od Transport Pty Ltd v Western Australian Government Railways Commission (1986) 13 FCR 270 at 274. On the question of whether declaratory relief was appropriate in the circumstances of the present case, Counsel for the applicants referred to Oil Basins Ltd v The Commonwealth of Australia (1993) 178 CLR 643 where Dawson J observed at 648: "Be that as it may, it is plain that the plaintiff has a real interest in obtaining a declaration that it is not liable to pay PRRT. In Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438, at p 448 in a passage cited in Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421, at pp 437-438, Lord Dunedin set out the requirements which must be satisfied before a court will exercise its discretion to make a declaration: "The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, some one Presently existing who has a true interest to oppose the declaration sought." And in Ainsworth v Criminal Justice Commission a majority in this Court said (1992) 175 CLR 564, at pp 581-582: "It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which *[ijt is neither possible nor desirable to fetter by laying down rules as to the manner of its exercise.' However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have 'a real interest' and relief will not be granted if the question 'is purely hypothetical', if relief is 'claimed in relation to circumstances that [have] not occurred and might never happen' or if 'the Court's declaration will produce no foreseeable consequences for the parties'." The question raised by the plaintiff 1s neither abstract nor hypothetical and the answer to that question will clearly produce consequences for the parties. In those circumstances I would, for my own part, doubt whether the failure on the part of the Commissioner to indicate whether or not he disputes the plaintiff's claim could preclude the plaintiff from seeking against him the relief which it does. The most that could be urged is that there is no proper contradictor, but I doubt whether that is so when the commissioner's participation in the action is likely to force him to abandon his present stand of neutrality. Even if he were to maintain that stand, I doubt whether that would prevent him from being a proper contradictor. He clearly has a true interest in the plaintiff's claim and, if he were to choose not to oppose it and to abide by any order which the Court might make, that might perhaps amount to no more than the performance of his role as a contradictor in a particular manner. But there is no need 1n this case to reach any conclusion whether the Commissioner is a proper contradictor because the producers obviously have a true interest in opposing the declaration sought. There is no requirement that all defendants in an action claiming a declaration must oppose the plaintiff. In Forster v Jododex Australia Pty Ltd, for example, the mining warden submitted to the order of the court (See Jododex Australia Pty Ltd v Forster [1971] 2 NSWLR 299, at p. 300), but the court made a declaration binding upon him where another party opposed the declaration being made." In the present case, it was urged that the parties which had a real interest in the question raised by the applications for a declaration were the 9 Network and the MCA. On the other hand, it was said to be inappropriate for the ASC to participate in these proceedings to the extent of seeking to uphold the correctness of its own decision. In this context, Counsel relied on the following passage from the judgment of O'Bryan J as a member of the Full Court of the Supreme Court of Victoria in Custom Credit Corporation Ltd v Lupi [1992] 1 VR 99 at 111: - 18 - "In R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 in the joint judgment of the court the following was said, at pp 35-6: "There is one final matter, [counsel] was instructed by the Tribunal to take the unusual course of contesting the prosecutors' case for relief and this he did by presenting a substantive argument. In cases of this kind the usual course is for a tribunal to submit to such order as the court may make. The course which was adopted by the Tribunal in this Court is not one which we would wish to encourage. If a tribunal becomes a protagonist in this Court there is the risk that by so doing it endangers the impartiality which it is expected to maintain in subsequent proceedings which take place if and when relief is granted. The presentation of a case in thie Court by a tribunal should be regarded as exceptional and, where it occurs should, in general, be limited to submissions going to the powers and procedures of the Tribunal." Again, in Queensland Wire Industries Pty Ltd v The Broken Hill Proprietary Co Ltd (1989) 167 CLR 177, the need for counsel for the Trade Practices Commission to make submissions as to the proper construction and operation of the Act it administers when counsel for one of the litigants had already done so led the court to refuse leave to the commission to intervene. In R v Registrar of Small Claims Tribunals & Roberts; Ex parte Consolidated Rutile Ltd [1986] 2 Qd. R. 282, Andrews CJ, presiding in the Court of Appeal observed, at p. 285: "It has been frequently said that this Court does not encourage courts and tribunals to which prerogative writs are directed to argue the correctness of their decisions..." The role of the tribunal in appearing to argue the correctness of a decision should be dictated by the appearance or non~appearance of the litigants at the hearing. Should no party appear to uphold the correctness of a decision it might be desirable that the tribunal be represented to present an argument to assist the court. Should a party appear to uphold the correctness of a decision it will usually be undesirable for the tribunal to play a role in the proceeding. In the present case the tribunal was represented by two counsel who took the side of the owners and did not advance any argument which would assist the plaintiff. The argument advanced by counsel for the owners canvassed very thoroughly the same ground. It 1s difficult to appreciate why the tribunal should consider it necessary to expend legal costs in this matter. The circumstances were not exceptional. In the future, 1n circumstances such as the present case, a court might decline to hear the tribunal as a separate party." See also per McDonald J at 125-127. In Typing Centre of New South Wales v Toose & Ors (unreported 15 December 1988) Mathews J of the Supreme Court of New South Wales examined the powers, functions and composition of the ASC and concluded, at p 20, that it must be treated as a public body and one which, is therefore, in appropriate cases, subject to judicial review. That was a case in which the ASC had upheld a - 19 - complaint in respect of an advertisement in the Press extolling the virtues of a business college. The ASC ruled that the advertisement was incorrect and misleading in contravention of cl 2.5 of the Advertising Code of Ethics. Her Honour saw the task of review on which she embarked in the exercise of the supervisory jurisdiction of the Court as involving an examination of certain rulings of the ASC as to what the advertisement meant and whether the plaintiff advertiser had been accorded natural justice. On the former question, her Honour said, at 38: -s- it is not a case of whether one agrees or disagrees with the construction which the A.S.C. placed upon the phrase "every student". So long as that construction was not manifestly irrational then there 1s no basis upon whach this court can intervene. And whilst I would not particularly agree with the A.S.C.'s interpretation of this phrase, I could certainly not describe it as manifestly irrational. After all, a "student" is normally an undergraduate, rather than a graduate." I take it to be implicit in that passage that her Honour regarded the meaning to be accorded to the relevant part of the advertisement as a question of fact on which she would not interfere with the ASC's finding unless it were not reasonably open to it. No issue arose in that case of the proper construction of a provision of the Code which, in one sense, I regard as a question of law. Nor do I consider the attack made by the present applicants as analogous to one on the exercise of a statutory discretion which may be set aside by a court as manifestly unreasonable in the manner outlined by Mason J in Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24 at 40-41 to which I was referred by Counsel for the MCA. - 20 - However, I consider that it would be an inappropriate exercise of this Court's discretion to proceed to hear and determine, in the circumstances of this case, the applicants' claim for a declaration standing alone. Were the Court to grant the declaration there would be inconsistent decisions on the same question of law, since the applicants have deliberately elected not to invoke the jurisdiction which, I agree with Mathews J, exists to review the decision of the ASC and, if necessary, quash it. Thus, to take the course urged by Counsel for the applicants would run counter to the principle illustrated by Healey v Minister of Health [1955] 1 QB 221 where a question had arisen as to whether a shoemaker employed in the shoemaker's shop of a mental hospital was a mental health officer within the meaning of the National Health Service (Superannuation) Regulations. By reg 60 of those Regulations it was provided: "Any question arising under these Regulations as to the rights or liabilities of an officer ... or of a person claiming to be treated as such ... shall be determined by the Minister." The Minister determined that the plaintiff was not relevantly a mental health officer. The plaintiff then, without attacking the validity of the Minister's decision, sought a declaration that he was a mental health officer within the meaning of the Regulations. In upholding a decision at first instance not to entertain the application, Denning LJ observed at 228: "The relief which is sought does not include a declaration that the Minister's determination was invalid. It seeks only a declaration that the plaintiff is and was a mental health officer. It is obvious that if the court were to consider granting this declaration it would have to hear the case afresh. Mr Healey would have to give evidence showing how he spent his time, and the Minister would have to be allowed to give evidence in answer to it. In short, the court would have to rehear the very matter which the Minister has decided. If the court were to embark on a rehearing of this sort there is no telling where it would stop. Every person who was disappointed with a Minister's - 21 - decision could bring an action for a rehearing. That would be going much too far. And suppose that the court did rehear the matter and decide in Mr Healey's favour, and grant the declaration for which he asks, what would happen to the Minister's decision? So far as I can see, it would still stand unless the Minister chose of his own free will to revoke it. There would then be two inconsistent findings, one by the Minister and the other by the court. That would be a most undesirable state of affairs. In my opinion, if the court were to entertain this declaration, it would be going outside its province altogether. It would be exercising a jurisdiction to "hear and determine" which does not belong to it but to the Minister. In conclusion I would say that the questions arising under these regulations are for the most part much more suited for determination by the Minister than by the court. The courts have ample powers to see that the Minister does his work properly, but they should not seek to do it for him, or to do it all over again, possibly with a different result. If a question of law should arise on which it is desirable that the opinion of the High Court should be taken, the Minister will no doubt give a reasoned decision, and the court can review it by the procedure laid down in Rex v Northumberland Compensation Appeal Tribunal, Ex parte Shaw (1952) 1 KB 338; [1952] 1 TLR 161; [1952] 1 All ER 122, or, alternatively, by a declaration. That has been done in many cases lately and very beneficial it has proved. If Mr Healey had asked for a reasoned decision in this case raising a point of law, I do not doubt that the Minister would have granted it, and it could have been reviewed; but, as he did not ask for it, I do not think we should permit him to question the correctness of the decision by these proceedings." To similar effect Morris LJ observed at 230: "It seems to me clear that what is claimed in the statement of claim is a review, by way of appeal, of the decision of the Minister. The court is being asked to decide a question which by regulation 60 is to be determined by the Minister. The court is not asked to revoke the Minister's determination; and if the court made a declaration as asked, the fate of the Minister's determination might remain obscure. But in substance what is undoubtedly sought is a declaration binding on the Minister which would reverse his previous decision. This can only mean that the plaintiff is seeking to appeal from the Minister. His action and his claim can have no other significance or intention. The plaintiff is asking the court to assume a jurisdiction to overrule the Minister." His Lordship then contrasted the non-existent appellate jurisdiction which the plaintiff had sought to invoke with the supervisory jurisdiction exercised by courts over inferior tribunals, saying at 231: "There has been no application for an order of certiorari, and it has not been suggested that any error of law is revealed on the face of the determination of the Minister as recorded in the letter of December 31, 1952. In the exercise of their supervisory jurisdiction over inferior courts, Her Majesty's courts are always strict in seeing that inferior - 22 - courts comply with and observe the law and that their proceedings are in order and within their powers. The powers which are exercised over inferior courts are supervisory and controlling powers. In the present case it is to be noted that there is no suggestion that the Minister lacked juriediction. It is not said that there was any irregularity of proceeding. It is not said that there was any failure to make due inquiry or that the Minister acted contrary to the principles of natural justice. There is no pleading that the determination of the Minister was wrong in law: whether if there had been any such pleading of error of law it could have assisted the plaintiff is not a matter which can be disposed of on the hearing of this defined preliminary issue." In Punton v Ministry of Pensions (No 2) [1964] 1 All ER 448 the plaintiffs had been held by the National Insurance Commissioner not to be entitled to unemployment benefits because they had not proved that none of themselves and certain of their fellow- workers had been directly interested in a dispute which had given rise to stoppages of work. The plaintiffs thereupon took out an originating summons which, as amended, sought a determination whether, on the facts found by the Commissioner, he had come to the correct decision in point of law. In upholding an exercise of discretion by Phillimore J at first instance not to entertain the summons for a declaration, Sellars LJ, with whom Davies and Danckwerts LJJ agreed, observed, at 451, of the question posed by the amended summons: "That question, I apprehend, would have been the precise issue if proceedings had been taken by way of certiorari and a decision could have been obtained in such proceedings which, if favourable to the plaintiffs, would have resulted in the commissioner's decision being quashed and of no effect. In that case an appeal would still have been pending and the quashed award could, and would no doubt in practice, have been replaced by a new order of the commissioner which would have given an effective award to the plaintiffs on which they could have recovered benefit." His Lordship then considered the circumstances in which a prerogative writ could have been sought by the plaintiffs, noting at 454, that: - 23 - "It is true that the Court of Queen's Bench has an inherent jurisdiction to control inferior tribunals in a supervisory capacity and to do so by certiorari (which would be the relevant procedure in this case) which enables the court to quash the decision if the inferior court can be shown to have exceeded its jurisdiction or to have erred in law. Neither certiorari nor mandamus usurp the function of a tribunal but require it, having quashed ite decision, to hear the case and determine it correctly. There may be many cases where a summons for a declaration is at least an adequate substitute for certiorari proceedings and where it may have advantages over it with no defects. That would be so where an authoritative statement of the law by the High Court will serve to undermine a decision or order so that it need not be complied with and could not in the light of the pronouncement of the law be successfully enforced." It was then observed, at 455: "Apart from certiorari there is no machinery for getting rid of the decision of the National Insurance Commissioner and, what is more important, no way of substituting an effective award on which the claims could be paid. It would be out of harmony with all authority to have two contrary decisions between the same parties on the same issues obtained by different procedures, as it were on parallel courses which never met or could meet, and where the effective decision would remain with the inferior tribunal and not that of the High Court. I conceive that to be the case here, and it seems to me to lead to a conclusion against the jurisdiction of the High Court in this particular matter. The tribunal is wholly independent and the commissioner or a deputy commissioner has to be a barrister or advocate of not less than two years' standing and an appeal may be heard if thought desirable by more than one member of the tribunal and we were told that the tribunal does sometimes sit in banc. It is a statutory judicial tribunal to deal with a special subject-matter where the decisions will frequently be on mixed law and fact and where finality and the minimum of delay are sought to be achieved. There is much to lead to the implication that the jurisdiction of the courts was intended to be excluded and very little to be set against such a conclusion. If the court has jurisdiction as claimed, counsel for the Plaintiffs conceded that an insurance officer as well as an insured pereon could proceed by summons for a declaration in respect of any decision with which he was dis- satisfied. This would be opening up a new field of litigation before the court, which in my view seems quite contrary to the intention of the statute and in no way envisaged by it." With respect, I take a similar view of the consequences of making a declaration to the effect sought in the present case. It would leave two contrary decisions, one by this Court and the other by a special tribunal in which the members of the MCA have, by contract, reposed a power to determine, with a minimum of delay and expense, complaints by members of the public. It is true that a declaration by this Court binding on the MCA and its members would prevent them hereafter from taking disciplinary - 24 ~ action under the rules against the applicants or the 9 Network by reason of their having transmitted the advertisements. However, to acknowledge that is not to assent to the proposition that the decision of the ASC, as a determination of the complaints before it or otherwise as an interpretation of the Code, was void. It is only when the supervisory, as distinct from an original determinative or appellate, jurisdiction of the Court is invoked that different discretionary considerations apply; see eg St Leonards Municipality v Brettingham-Moore (1968) 16 LGRA 223 at 234-35 and News Ltd v Printing and Kindred Industries Union (New South Wales Branch) {1975} 1 NSWLR 151 at 154. The declaration sought by the applicants, in its present form, does not raise a pure question of law as to the construction of cl 6 of the Code which, on the approach of Gibbs J (with whom the other justices in the majority agreed) in Forster v Jododex Aust Pty Ltd (1972) 127 CLR 421 at 438, would have suggested it to be a proper vehicle for the exercise of the discretion. This case, rather, involves the application of cl 6, properly construed to the advertisements. That I take to raise an ultimate question of mixed fact and law (cp Punton v Ministry of Pensions (No 2) (supra) at 456) but in saying that I should not be taken as acceding to the submission of Counsel for the MCA that what are "prevailing community standards" for the purpose of cl 6 at any given time is a matter capable of illumination by the calling of evidence. I prefer, with respect, the view of Windeyer J in Crowe v Graham (1967) 121 CLR 375 at 395 expressed in the context of a prosecution under the Obscene and Indecent Publications Act - 25 - 1901-1935 (NSW): The question still is - Does the publication, by reason of the extent to which and the manner in which it deals with sexual matters, transgress the generally accepted bounds of decency? That is a question of fact to be decided by the tribunal of fact. It is to be answered by reading the publication. Common sense and a sense of decency must supply the answer. Only within very narrow limits is evidence beyond the publication itself necessary or admissible. Bvidence of what has been published in other books or writings is not admissible. The court has to determine whether the publication before it is obscene having regard to the persons, classes of persons and age groups to whom or amongst whom the matter was published. The answer to that question is not to be had by a process of literary comparison. Nor it is to be had by calling witnesses - whether writers, publishers er psychologists - and asking them to give their opinion on the matter." By contrast, to answer the subsidiary question of whether an advertisement is likely to cause serious offence to a significant section of the community may well require evidence of the beliefs, customs or sensitivities of the section of the community said to be likely to be affected. Somewhat curiously, the ASC saw itself as required to answer that subsidiary question in the present case although it did so without identifying the relevant section of the community or receiving any evidence other than that contained in the complaints themselves. If one had to disentangle a question of law raised by the present claim for a declaration, it would be whether the television advertisement contains anything which in the light of prevailing community standards is capable of being likely to cause serious offence to the community. However, I do not regard that question as underlying in a sufficiently discrete way some right in the applicants that they should be afforded a remedy in the form of a declaration without more like those claimed in Pyx Granite Co Ltd v Ministry of Housing and Local Government [1960] AC 260. That case, it has been remarked by Aronson and Franklin, Review - 26 - of Administrative Action, p 433, is the antithesis of Barraclough v Brown [1897] AC 615 but even there, Viscount Simonds, at 287 and Lord Goddard, at 290 acknowledged the need, on occasions, to make a choice between certiorari and declaration which, as the latter remarked, are not mutually exclusive remedies. It should also be remembered that by reason of the course taken by the applicants, they are no longer seeking a declaration that the rules embodied in the Code are invalid. In that respect the present case is to be contrasted with Pharmaceutical Society of Great Britain v Dickson [1970] AC 403 and Buckley v Tutty [1971] 125 CLR 355 on which Counsel for the applicants relied. Whether a given television advertisement contains anything which in the light of generally prevailing community standards is likely to cause serious offence to the community is to be answered, as suggested by Windeyer J in Crowe v Graham, by viewing the advertisement. That is a task which I consider the Court should allow to be performed primarily by the specialist tribunal established for that purpose under the regulatory scheme of which cl 6 of the Code forms part. The preface to the Code makes clear that the relevant specialist tribunal is the ASC. A related consideration which has weighed with me in exercising the discretion in the way I have is the real doubt as to whether there is presently before the Court a proper contradictor. For reasons advanced by the applicants themselves in reliance on Custom Credit Corporation Ltd v Lupi (supra) and the authorities there cited, it would only be in exceptional circumstances appropriate for the ASC itself to argue for the correctness of ~27 - its own decision. Moreover, the ASC has expressly eschewed that task in this case. As well, the MCA has no identifiable interest in the Code being applied one way or the other to a particular advertisement. If anything, the MCA might think it appropriate to support the view which the evidence discloses was urged on the ASC by FACTS, one of the MCA's significant constituent members, that the advertisements did not contravene the Code. In the result, the MCA, like the ASC, deliberately refrained from making any submission on the merits of the question raised by the claim for a declaration. I do not regard the stance taken by either the MCA or the ASC as, in the words of Dawson J in Oil Basins as amounting to no more than "performance of [its] role as a contradictor in a particular manner". In my opinion, the persons with the strongest, if not the only, interest in opposing the making of the declaration sought by the applicants are the makers of the complaints which were upheld by the ASC. Were the applicants to seek a remedy in the nature of certiorari, challenging the ASC's determination, either alone or in conjunction with a declaration, directions would almost certainly be given with a view to affording those complainants, in some representative way, an opportunity of being heard. I have not been influenced, in exercising my discretion adversely to the applicants, by the submission, advanced primarily on behalf of the ASC, that the ASC had only made its determination in respect of the 45 second commercial, and that the applicants remained free to continue to transmit the 30 second commercial and either of the 15 second commercials which was all that they - 28 - remained entitled to do under their contract with the 9 Network. On my viewing of both of the longer commercials they are in all relevant respects indistinguishable. Moreover, the ASC's determination was acted on by FACTS to withdraw clearance numbers in respect of all four advertisements. If the ASC were to contend that, contrary to my impression, there may be some distinguishing element in the advertisements which it did not view, that could well provide a separate ground for impugning the decision complained of. I have accepted that if relief were not granted at this interlocutory stage the applicants would lose the value of the last part of their advertising campaign, or a substantial part of that value. I have also assumed for the purpose of exercising my discretion that damages may well not be an adequate remedy for the loss of that value. As well, I accept that the so-called "appeal" to the ASC under the practice adopted by that tribunal, if available at all, would probably not be determined in time to avert the loss to which I have just referred. However, these considerations, on balance, have not persuaded me to entertain an application for a declaration without more in circumstances raising real doubt as to the presence of a proper contradictor, and where, if the applicants succeeded, the decision of the ASC would not be quashed or set aside. CONCLUSION For these reasons I declined, on 30 November 1994 to grant the declaration sought. However, as then indicated, that course has been taken without prejudice to the applicants' right to revive - 29 - that claim, if so advised, in conjunction with any other form of relief which they may elect to pursue at trial. My tentative view is that the applicants should pay the costs of the MCA and the ASC of the interlocutory application. However, I shall hear Counsel on that question and any further directions which are thought to be necessary in relation to the substantive action. I certify that this and the preceding twenty eight (28) pages are a true copy of the reasons for judgment of his Honour Justice Ryan Date: a thoes om bey aay Counsel for applicants: Mr R Merkel QC with Mr K H Bell Solicitors for applicants: Clayton Utz Counsel for first respondent: Mr H Jolson QC Solicitors for first respondent: Barker Gosling Counsel for second respondent: Mr R W White Solicitors for second respondent: Boyd House & Partners Counsel for third respondent: Mr J G Santamaria Solicitors for third respondent: Arthur Robinson & Hedderwicks Hearing dates: 21-23 November 1994, 30 November 1994 and 09 December 1994