1. At what point will a person who carries on a business of providing information contravene the norm of conduct
in s 52 of the Trade Practices Act 1974 (Cth) and its analogues by engaging in conduct in trade or commerce that is misleading or deceptive or likely to mislead or deceive?
After a number of decisions of the Federal Court held that the media, generally, were liable to actions under s 52 in respect of statements made in reporting of news and current affairs, the Parliament enacted s 65A of the Act. This provision
has been called a "media safe harbour", providing an exemption from liability for misleading or deceptive statements made when
publishing news and current affairs.
2. It is hardly necessary to tell a conference of defamation practitioners that, from time to time, members of
the media may engage in the propagation of misleading and deceptive statements about plaintiffs or applicants. But, since the
enactment of s 65A in 1984 until recently, the chilling effect of an action under s 52 has not been felt by the Australian media. They will await with anticipation to see whether life will change after the High Court
decides the appeal in Australian Competition and Consumer Commission v Channel Seven Brisbane Pty Limited, which was heard on 10 March 2009.
History and Policy: s 65A
History
3. In 1978 a Full Court of the Federal Court held in Universal Telecasters (Qld) Ltd v Guthrie, that by broadcasting an advertisement a television station "made" the statements in that advertisement, and was thus responsible
for the false or misleading representations it contained in contravention of s 53(e) of the Act. This result followed even though the impugned representations were put forth by or on behalf of another. There
is a possibility that the decisions in Yorke v Lucas and Butcher v Lachlan Elder Realty Pty Ltd may bear on whether a similar result would be arrived at today.
4. Next in 1984 another Full Court of the Federal Court, in Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd, looked at the ever topical question of whether a newspaper article about, then, Australian cricket captain, Kim Hughes, not
only defamed, but conveyed misleading and deceptive information about Jeff Thomson, a fast bowler in the Australian team. It
held that "Thommo" was entitled to proceed against the publisher under s 52. The Full Court said that "the meaning of s 52(1) cannot be controlled by the doctrine of freedom of speech, which incorporates freedom of the press".
5. The Parliament responded quickly later in 1984 by enacting the somewhat delphic words of s 65A. These seek
to balance the precepts of freedom of discussion of news and public affairs with the right of persons to be protected from contraventions
of the norm of conduct that, in trade or commerce, corporations should not engage in conduct that is misleading or deceptive
or likely to mislead or deceive.
The topic
6. Certainly, Alan Bond is no stranger to the media or its attentions. Mr Bond has been a media proprietor,
as well as the subject of its very considerable attention with respect to his many activities over many years. His most recent
foray into the world of litigation involving s 52 began in 2007 and concerned his adventures in Southern Africa and a company of which he was a director, Lesotho Diamond Corporation
Plc. He sued the freelance journalist Paul Barry and the editor of The Sunday Telegraph over an article which Mr Barry had been paid to write for that newspaper.
7. Earlier, in 2003 and 2004 Channel Seven had heavily promoted stories on its "Today Tonight" show involving two women who asserted that they were able to help other members of the fair sex become millionaires, supposedly
like them, through investment in property. The program’s compere introduced the first show:
"Depna Boholt and Sandy Forster are self-proclaimed wildly wealthy women on a mission to make other women filthy rich too."
8. Channel Seven keenly asserted that this and what followed in the program was "information" for the purposes of s 65A. Whatever the strength of that assertion in 2004, probably in these depressed times a get rich quick
venture might more easily been seen as newsworthy. The channel and the two women had made an arrangement for Today Tonight to broadcast programs on the womens mentoring program. The question was whether information published in accordance with that
arrangement was excluded from the general exemption from actions under s 52 by s 65A(1)(a)(vi).
9. At this moment I must confess and avoid. I was unsuccessful counsel for Channel Seven in its proceedings
in the Full Court of the Federal Court seeking to challenge notices issued by the ACCC under s 155 of the Act to discover whether the Commission could bring proceedings for a contravention of s 52 of the Act. It did, and those proceedings are the ones currently reserved by the High Court. As events turned out, Ms Boholt
and Ms Forster were not in fact as filthy rich as they appeared to suggest on the programme, they were dirt poor. But this was
only revealed just before the trial when they swore affidavits that they owned no real estate at all and had minimal assets.
Why is there a media safe harbour defence in the Trade Practices Act?
10. The second reading speech in the Senate by the Minister introducing the provision which became s 65A observed
that the government recognised the need to maintain a vigorous free press as well as an enforceable Trade Practices Act. The Minister noted the difficulties which the recent court decisions had created and explained the rationale for the new s
65A saying:
"These provisions ensure that information providers are not exempt from the consumer protection provisions of the Trade Practices Act in respect of the provision of information where they have what might be regarded as a commercial interest in the content of
the information. In such cases, information providers must take the same responsibility for the accuracy of information as any
other person who publishes information in trade or commerce. This can occur, for example, where a newspaper has agreed to publish
a ‘news’ item about a product in exchange for the product supplier taking out paid advertising in that publication ."
11. Thus, s 65A deals with the fine balance that must be struck between the important values of freedom of expression
and conformity with the norm of corporate behaviour embodied in s 52. Hopefully, the High Court will resolve how the less than pellucid words of 65A must be now read.
12. A number of gateways must be passed before s 65A becomes enlivened. The media organisation must engage in conduct
which is misleading or deceptive or is likely to mislead or deceive in contravention of s 52. If the media organisation’s conduct does not contravene s 52, for example because it would not be considered to be doing anything more than passing on information without adopting or endorsing
it, then the application of s 65A simply does not arise.
13. Whether the conduct in which the prescribed information provider engaged was misleading or deceptive or is likely
to mislead or deceive is assessed by having regard to the reaction to the publication of the ordinary reasonable member of the
class of readers, viewers or listeners. Persons whose reactions are extreme or fanciful do not provide a guide as to whether
conduct contravenes s 52: Campomar Sociedad Limitada v Nike International Limited.
14. To date the cases have given prescribed information providers considerable latitude to make misleading or deceptive
representations for the purpose of bolstering the entertainment value of their publications in the hope of capturing market share.
In essence, s 65A is intended to redress prescribed information providers’ concerns of being exposed to liability for contravening
s 52 as an alternative to an action for defamation without the protection of the defences which a publisher has under the Uniform Defamation Acts 2005 and 2006.
How s 65A is engaged
15. Section 85(3) of the Act provides a broad exemption to publishers of advertisements from the application of Pts V and VC (which deals with offences). It provides a defence if the person establishes that:
• his, her or its business is to publish or arrange for the publication of advertisements;
• he, she or it received the advertisement in the ordinary course of business and had no reason to suspect that
its publication would amount to a contravention of that part of the Act.
16. Ordinarily, it will be clear enough to a reader, viewer or listener of a media publication whether what he or
she is reading, seeing or hearing amounts to an advertisement for a third party advertiser or is part of a program. But what of
the situation in which a story is published in consequence of some arrangement between its subject and the publisher? Sometimes
it will be akin to an advertisement; sometimes it will have the character that the publisher, actually or apparently, endorses
or adopts the position the story’s subject puts forward.
17. In Yorke v Lucas, Mason ACJ, Wilson, Deane and Dawson JJ considered a situation where a corporation purported to do no more than pass on information
supplied by another in circumstances which made it apparent that the corporation was not the source of the information and either
expressly or impliedly disclaimed any belief in its truth or falsity. They said that if the corporation merely passed on the
information for what it was worth, it was doubtful that the corporation itself could be said to be engaging in conduct that is
misleading or deceptive. It was necessary to consider the conduct of the corporation as a whole in the context in which it occurred.
18. But, in ordinary life where a media outlet publishes an advertisement it is likely that readers, viewers or listeners
would understand that the outlet was not making any expression of its own belief as to the truth or falsity of the content of the
advertisement. They would understand that the advertisement was being paid for by the advertiser as a means of promoting its
product or service and using the facility offered by the media outlet to gain prominence and publicity for the product. In that
sense, ordinarily, the media outlet might be seen as doing no more than communicating what the advertiser was representing, without
adopting or endorsing it.
19. Unfortunately, the structure of s 65A is Byzantine. However, when it is unravelled, the section does not exclude
a publication of matter made in connection with the supply of goods or services from the reach of s 52 if that publication was made pursuant to a contract, arrangement or understanding with a person who supplied goods or services
of that kind. The last words are the key to the current uncertainty. What do they cover? If the publisher enters into a commercial deal (whether
enforceable as a contract or not) with the maker of widgets to publish a program about widgets if the maker places paid advertising
with the publisher then the publisher has no immunity under s 65A from the consequence of a contravention of s 52. This is because broadcasting the information is a publication in connection with the supply of the paid advertising. This advertising
is a service of the kind supplied by the advertiser.
20. The problem becomes more acute when it is not possible to identify whether the media outlet is providing its
own imprimatur to the "advertisement" or "advertorial". This is one context in which s 65A operates. A clear example of conduct not protected by s 65A was the swap of "news" type coverage for paid advertising, that was given as an example in the second reading speech for s 65A. In contrast, the "Wildly Wealthy Women" case raised a novel issue about the subject matter of the contract, arrangement or understanding with the two women. It was
whether the exception in s 65A(1)(a)(vi) of ‘goods or services of that kind’ related to the goods or services provided by the two women or to the defined term ‘relevant goods or services’ mentioned in s 65A(1)(a)(v) and defined in s 65A(3). Was Seven free to publish anything about the so called mentoring program
because it was "information" generally speaking, or did s 65A(1)(a)(vi) revive s 52 and cover information about the mentoring program because it was the subject of the arrangement?
21. And, not only the media are capable of being prescribed information providers. The class includes the Reserve
Bank of Australia, and credit reporting agencies within the meaning of the Privacy Act 1988 (Cth) when they are "providing information". The key to the broad protection is that a publication must be made by the person in the course of carrying on a business of
providing information although the radio and television media are specifically included in the definition in s 65A(3).
Publication of an advertisement (s 65A(1)(b))
22. Under s 65A(1)(b) "publication of matter in connection with … an advertisement" is not protected under s 65A. Surprisingly, there is a scarcity of authority on the scope of s 65(1)(b). In Channel Seven Brisbane Pty Ltd v Australian Competition and Consumer Commission Sundberg, Jacobson and Lander JJ said:
"The section does not define ‘advertisement’. Ordinarily, there will be no difficulty in determining what an advertisement is.
The advertisement will usually announce itself. An advertisement might include an advertorial or it might be that an advertorial
is the subject-matter of [s 65A(1)](a)."
23. Now, the publication of an advertisement is, of course, subject to the constraints in the consumer protection
provisions in Pt V, s 52 and its related sections, by force of s 65A(1)(b). For a publication to amount to conduct in contravention of s 52, the prescribed information provider must make a relevant representation or engage in the relevant conduct itself. It may not
be sufficient if the class of persons to whom the advertisement was published understood it to be a matter the publisher was
passing on for "what it was worth" without itself endorsing it.
Bond v Barry
24. Paul Barry was a journalist. While working freelance he researched and wrote an article about recent activities
of Mr Bond and his new business associates, Lesotho Diamond: that company held mining leases in the Kingdom of Lesotho in Southern
Africa. Mr Bond was a consultant to the company and both he and it commenced proceedings in the Federal Court claiming that
Mr Barry’s article contravened s 52 and its analogues.
25. Mr Barry was paid $15,000 and his travel expenses to England and South Africa to research and write the article
under an oral agreement with the editor of The Sunday Telegraph, Neil Breen, who was also the second respondent. Mr Barry sent the text of his article to Mr Breen by email. The Sunday Telegraph is a weekly newspaper published by Nationwide News nationally in Australia. After receiving the emails from Mr Barry, Mr Breen
was alleged to have sent the substance of the article to editors of other newspapers. The article was published on 3 June 2007
in at least three forms, first, on the news.com website, secondly, as the cover story of The Sunday Times in Western Australia under the heading "Bond the $1B Man" and last in The Sunday Telegraph under the heading:
"The greed that won’t let Alan Bond rest – Special Investigation – America’s Cup hero and convicted fraudster poised to become oil
and diamond billionaire."
26. Mr Bond and Lesotho Diamond sued Mr Barry, Mr Breen and a number of News Group companies in the Federal Court.
They argued that the article was misleading or deceptive or likely to mislead or deceive because a number of the statements in
it were allegedly false. As the trial judge, French J, noted the statements included that Mr Bond takes all the decisions of
Lesotho Diamond, maintains a lavish London office at the company’s expense and was locked in a bitter battle over Lesotho Diamond.
The article also alleged that Mr Bond had been accused by one of the founding shareholders of "rape and pillage" and that rebel shareholders in Lesotho Diamond accused him of paying himself massive fees, trying to sell dud assets into the
company and using shareholders’ money for personal advantage. Mr Bond also complained that the article stated that shareholders
had accused him of squandering up to $20 million of the $35 million that had been raised for the company. Mr Bond and Lesotho
Diamond claimed that unless restrained, Mr Barry intended to publish the article and that the various News outlets would aid and
abet him in doing so in contravention of s 52. They also claimed damages.
27. Mr Barry, Mr Breen and the News Group companies succeeded in their application for the proceedings to be dismissed
under s 31A of the Federal Court of Australia Act 1976 (Cth) because they had no reasonable prospect of success. They relied on the defence that s 65A and its analogues exempted them
from liability. French J pointed out that while s 65A provided an exemption from the application of s 52, it did not provide any exemption for a media organisation that was an accessory to a contravention not covered by s 65A. That
was a view he had expressed 20 years earlier. Hence, if a media publisher aided, abetted or induced somebody who was not covered
by s 65A to make statements in trade or commerce which were misleading or deceptive, thus contravening s 52, or one of the State Fair Trading Acts, then the news organisation may be "involved in" that contravention within the meaning of s 75B of the Trade Practices Act or its analogues. French J, noted that the media organisation would not necessarily be liable simply for reporting a statement
by a third party which was itself misleading or deceptive, but his Honour stopped there because he did not need to decide that
question.
28. Importantly, French J held that a freelance journalist was plainly within the class of persons described in s
65A(3). He followed an earlier decision of Levine J in Carlovers Car Wash Ltd v Sahathevan. He rejected the argument that Mr Barry’s contribution was "cheque book journalism". His Honour said that that expression was generally used to refer to payments to an individual non-journalist by media organisations
to relate their story in an interview format after he or she happened to have had a particular experience, generally involving
a notorious or tragic event. He said that such a practice did not amount to carrying on the business of providing information,
but remarked that it was quite different to the position of a freelance journalist selling their work.
29. French J also rejected the argument that sending drafts or versions of the article to a publisher was outside
the exemption in s 65A. His Honour held that the transmission to a media outlet of an article for publication by a freelance journalist
was "… so plainly within the intended purpose of the section that a construction covering it should be adopted provided that construction
is open". He held that such a publication was protected by s 65A. And he found that sending the article to the publisher was not a
publication within the exception to the exemption in s 65A(1)(a)(vi)(A).
30. French J said:
"The provision of a journalistic service by transmission of an article about alleged corporate misdeeds is not a publication in
connection with the supply of journalistic services."
31. He concluded that unless s 65A were construed in this way, media outlets could be exposed to liability as accessories
for publishing articles prepared for publication by freelance journalists in contravention of s 52 and its analogues. That result would be the consequence of a major and unintended gap in the legislation providing the exemption.
Accordingly, French J dismissed the proceedings as having no reasonable prospects of success.
32. Subsequently, the Court of Appeal of the Supreme Court of New South Wales held that French J’s decision on the
construction of s 65A protecting the transmission of drafts or articles from freelance journalists to media organisations was correct.
And, a Full Court of the Federal Court in turn applied that decision in affirming French J’s construction in Bond v Barry. There Sundberg, Jacobson and Lander JJ approved Spigelman CJ’s remarks that the protection of s 65A would be virtually non-existent
if a journalist, who would usually be an employee of, and identified by, the publisher could be successfully sued for supplying
an article, the publication of which was protected. The terms of the protection in s 65A suggested a close correspondence or
identity between the "publication of matter" and the description of the publication protected by the section as being one that "... was made by the prescribed information provider in the course of carrying on a business of providing information".
33. The Full Court approved the reasoning of French J that the provision of journalistic services by transmission
of an article about alleged corporate misdeeds was not itself a publication in connection with the supply of journalistic services.
They said, rather, what was provided by the journalist was the primary content of the published matter and the argument to the
contrary was untenable.
34. Sundberg, Jacobson and Lander JJ also said that there was a further obstacle to finding accessorial liability
when a media organisation publishes a freelance journalist’s article. In order to be liable as an accessory, it is essential that
the accessory has knowledge of the essential ingredients of the contravention of s 52. This was established in Yorke v Lucas. However, media organisations could become liable for online publications after they became aware that the article contained
false statements, although Sundberg, Jacobson and Lander JJ observed that this would be an unusual case.
35. This is perhaps, a revisitation of the old trap set by the Duke of Brunswick over 150 years ago. He sent an
agent to a newspaper’s office seeking a back copy of a paper published 17 years beforehand containing a libel on the Duke. When
the publisher sold the back copy, the Duke brought a fresh action and succeeded in obtaining a verdict for £500. That is the
leading case today on the principle that each publication of defamatory matter gives rise to a separate cause of action at common
law. For the moment, however, Mr Bond has desisted.
Wildly Wealthy Women
36. In late October 2003, Channel Seven’s Today Tonight advertised a program to be broadcast on 31 October 2003 featuring a so-called mentoring program marketed under the name "Wildly Wealthy Women". The first program was broadcast on 31 October 2003 and a subsequent program was broadcast, as a follow up story, on 30 January
2004. In addition, Today Tonight’s website published material relating to the subject matter of the programs.
37. In March 2004 the ACCC issued a notice under s 155(1) of the Trade Practices Act requiring Channel Seven’s parent company, Seven Network Limited, to provide a deal of information relating to the three publications
of the program and website material. The notice sought the name and address of the executive producer of each broadcast and
of the persons responsible for their content. It also sought the name and address of the comperes of the two items broadcast,
and of each person responsible for the text and the publication of the content on the website in respect of the Wildly Wealthy Women mentoring program.
38. The notice recited three matters that constituted or might constitute contraventions of s 52 of the Act identified by the chairperson of the ACCC who issued it. In essence, the contraventions alleged were that the broadcasts
and material placed on the website contained representations to the effect that:
• participants in the mentoring program would become wealthy through investing in properties;
• participants in the mentoring program would become wealthy by investing in property even if they have no money
at present;
• participants in the mentoring program would become millionaires by investing in property.
39. The notice alleged that Seven Network (or its subsidiary which published the material), Ms Boholt and Ms Forster
had no reasonable grounds for making those representations, and attached transcripts of the programs and website. Seven alleged
that matters identified in the s 155 notice were incapable of constituting contraventions of s 52 by reason of the exemption provided by s 65A for prescribed information providers. There was no issue that Seven and its subsidiaries
were prescribed information providers.
40. Tamberlin, Sackville and Emmett JJ rejected Seven’s challenge to the validity of the s 155 notice. Such notices have been held to be a powerful investigative tool for the Commission. And, it is an offence not to
comply with such a notice. Relevantly, s 155(1) of the Act provided that:
"if the Commission, [or] the Chairperson … has reason to believe that a person is capable of furnishing information … relating
to a matter that constitutes, or may constitute, a contravention of this Act … a member of the Commission, by notice in writing
served on that person, require that person to furnish the Commission … with any such information."
41. Sackville and Emmett JJ held that in order to determine the validity of a notice under s 155 the Court first considers whether, after allowing for undiscovered facts, the matters identified in the notice are incapable
of constituting conduct by the addressee that contravenes s 52 of the Act (as alleged in this case). They said that if the answer to that question was that the conduct was not capable of amounting
to a contravention then it was not necessary to consider any issue in relation to s 65A(1) at all. On the other hand, if the
matters asserted in the s 155 notice were capable of constituting contravening conduct, then when the addressee is a prescribed information provider, the question
is whether the matters identified, allowing for undiscovered facts, were capable of attracting one or more of the exceptions
to s 65A(1). If so, then Seven’s conduct, as a matter of law, could be capable of amounting to a contravention of s 52.
42. In other words, if there were some basis for considering that Seven’s conduct fell within one of the exceptions
to the general exemption of a prescribed information provider from liability in s 52, then the notice would be valid. And that is what the Full Court held, namely that the matter identified in the notice "may constitute" a contravention of the Act.
43. Sackville and Emmett JJ observed that s 65A was, in part, addressed to avoiding a construction of the Act that
both the advertiser and the publisher of a newspaper advertisement could each contravene s 52. They said, relying on Yorke v Lucas, that it was at least arguable that, subject to the operation of s 65A(1) that a television station broadcasting misleading statements
in the course of a program that promoted a particular product would be taken to have engaged in misleading or deceptive conduct
unless it purported to do no more than pass on information supplied by the promoters of the product and the content made apparent
that the station was not the source of the information. They held that the programs contained statements by the compere and
reporter which were capable of being understood as endorsements of the promoter’s representations about the Wildly Wealthy Women mentoring program and, thus, capable of constituting representations by Seven Network itself.
44. Hence, the Full Court approached the question whether the s 155 notice was valid in much the same way as the Court assesses the capacity of a matter complained of to convey the imputations
relied on by a plaintiff in a defamation suit. Nor is it necessary for a notice under s 155 to incorporate a reference to every factual issue that might be in dispute in legal proceedings. And the information sought by
the notice can equally go to establishing or undermining any claim for exemption under s 65A(1).
More Wildly Wealthy Women
45. Next, after the notice was eventually answered the ACCC began proceedings against the various licensees around
Australia responsible for broadcasting the Wildly Wealthy Women programs. At first instance, Bennett J found in favour of the ACCC, made declarations of contraventions of s 52 by each of the two programs broadcast, and granted injunctions restraining the Seven companies from making or causing to be made
any form of representation concerning the Wildly Wealthy Women, or representations with substantially the same effect.
46. Her Honour found that, viewed as a whole, the appellants had embraced and advanced the propositions contained
in the representations complained of. These included that the participants in the mentoring program would become wealthy through
investing in property even if they had no money at the time they began the mentoring program or the knowledge or ability to implement
the strategies taught in it, and that they would become millionaires through investing in property. These were found by Bennett
J to be representations as to future matters.
47. Bennett J held that before a media provider will be liable under s 52 it must be established that the media provider "assumed responsibility for or adopted or endorsed the information [or representation] so that it would be reasonable for a recipient
to rely" on it. She continued "[a]doption does not necessarily occur by the mere publication or broadcast of a statement", rather "there must be something referrable to the [media providers] … conduct ‘which is likely to lead a reader into error.’" An express or implied disclaimer or qualification can relieve the media outlet from liability under s 52.
48. Bennett J found that the programs contained representations to the effect that Ms Boholt owned in excess of 60
properties, Ms Forster had purchased over a million dollars worth of property using none of her own money and that Ms Forster was
a millionaire. She also found that at the time of publication of the first program Ms Boholt did not own over 60 properties,
while Ms Forster did not have any legal or other interest in real property and was not a millionaire.
49. However, her Honour found that these falsehoods were not representations as to future matters. She also found
that the disclaimer by the compere in the words "too good to be true? Well we’ll be following the scheme’s progress to let you know" evinced a sufficient disclaimer to indicate that Seven intended to test those representations and indicated a note of caution
in relation to the representations so as to disassociate itself from them.
50. Her Honour found that in the second program the compere once again, had adopted the representations as to the
actual wealth of Ms Boholt and Ms Forster. The compere had introduced the program saying:
"The women you are about to meet have made millions of dollars and now they want to share their money making secrets."
51. Bennett J rejected Seven’s argument that the statements, made by the reporter or compere of Today Tonight, "see if the two ladies behind the program can live up to their promises", constituted an implied disclaimer negating adoption of the representations made by Ms Forster and Ms Boholt. Bennett J found that
"[a]ccording to the reporter, the women are a ‘knowledgeable pair’. Ms Boholt is a ‘property guru’. Their success is to be attributed
to ‘shrewd investment’. These statements convey assessment, endorsement, adoption and promotion by the reporter of the women’s
status as wildly wealthy women as fact."
52. Bennett J found that the onus was on the ACCC, as the party seeking to rely upon an exception in s 65A(1) to
the general exemption to establish the applicability of the exception in the circumstances.
53. The Full Court upheld Bennett J’s factual findings that Seven had made the representations in the program.
The Full Court concluded, however, that because the goods or services promoted by Ms Boholt and Ms Forster were not of the kind
supplied by the Seven companies, the exemption continued to be enjoyed by the media outlet.
54. Seven had agreed in writing to produce a series of episodes focusing on Wildly Wealthy Women. There was no suggestion that Seven made any payment to Ms Boholt or Ms Forster as part of the arrangement. However, the arrangement
involved the mentoring program identifying seven women who would be chosen for "one on one mentoring" and would receive the mentoring course that ordinarily cost $3,000, for free. Today Tonight was to follow up in subsequent programs the progress of these apparently lucky seven ladies. Thus, the relevant arrangement or
understanding was at a general level and involved the co-operation of Ms Boholt and Ms Forster with Today Tonight in mentoring the seven women or assisting the monitoring of their progress by Today Tonight.
55. The ACCC argued that the programs were the publication of matter in connection with the supply or possible supply
of services where the publication was made on behalf of, or pursuant to a contract, arrangement or understanding with a person
who supplies services "of that kind …".
56. Lest one feels lost with how s 65A(1) operates, Gummow J observed during the recent argument that:
"You really have got to sit down and write about 12 sections out to know entirely what is happening through this complicated pattern
of disjunctions and qualifications."
57. Justice Bennett construed the expression "goods and services of that kind" in s 65A(1)(a)(vi)(A) as referring back to the expression "promotion by any means of the supply or use of goods or services" in s 65A(1)(a)(iii). When read in this way s 65A provides:
"(1) Nothing in section 52 … applies to a prescribed publication of matter by a prescribed information provider, other than … a publication of matter in
connection with … the promotion by any means of the supply of … services … where … the publication was made on behalf of, or pursuant
to a contract, arrangement or understanding with … a person who supplies goods or services of that kind."
58. Bennett J held that the phrase "of that kind" in par (vi) referred back to the goods or services identified in s 65A(1)(a)(i) and (iii), being the goods or services in connection
with which the publication of the matter occurred. In other words, the services were the subject of the alleged contravening conduct,
here the Wildly Wealthy Women mentoring program.
59. Her Honour held that as Seven had entered into an agreement to produce a number of episodes of Today Tonight with the Wild Wealthy Women, and misleading representations were made in connection with the promotion of the Wild Wealthy Women’s financial services, the exception in s 65A(1)(a)(vi)(A), as interpreted by her Honour, applied and Seven did not enjoy the protection
of s 65A.
60. The alternate construction is that par (vi), relates to "relevant goods or services" of a prescribed information provider. A publisher would, thus, fall outside the protection of s 65A if it published matter
in connection with the promotion or supply of, in substance, its own goods or services, or that of a related body corporate.
61. For the moment the answer to the conundrum is that provided by Sundberg, Jacobson and Lander JJ who allowed the
appeal. They said that the reference in s 65A(1)(a)(vi)(A) to goods and services "of that kind" is a reference to the goods or services of a kind supplied by the prescribed information provider, as defined in the expression
"relevant goods or services" in s 65A(3). To do this, they construed the expression "goods or services of that kind" in par (vi) as referring back to the words "relevant goods or services" used in par (v). And s 65A(3) defined "relevant goods or services", in relation to a prescribed information provider, to mean goods or services of a kind supplied by that provider.
62. One can certainly see that such a construction would serve the purposes of ss 52 and 65A, because it would prevent a prescribed information provider from engaging in misleading or deceptive conduct in publishing
a story in a news or current affairs context in order to promote its own goods or services or, in effect to self promote. But
that will not apply to all conduct of self promotion by a prescribed information provider.
63. In Seven Network, Bennett J said "a general commercial interest in publishing or promoting successful programs or programs which attract viewers is not a" supply or promotion of the information provider’s goods or services.
64. The reason for this is that such conduct is not caught either by par (v) or (vi) of s 65A(1)(a). It is not caught
by par (v) because of the reasoning which Wilcox J used in Horwitz Grahame in the first case to consider this topic. He said:
"It is, no doubt, true, in a general sense, that the publisher of a magazine, in inserting material … hopes to interest readers
in purchasing future issues. But, I suppose, that same statement may be made about everything which is published in a newspaper
or in a magazine, including ‘straight’ news items."
65. Misleading or deceptive statements made by an information provider to "stimulate interest and induce readers to purchase future issues" have been seen as being within the exemption in s 65A. Therefore, the exemption has applied even though an information provider
had a "commercial interest" in the publication or media that contained a misleading or deceptive representation. This reasoning proceeded on the assumption
that a wider market share is not "a supply of goods or services".
66. French J addressed this situation in Advanced Hair Studio. His Honour noted that removing sensationalised news from the protection of s 65A "robs s 65A of much, if not all, practical operation" and that such an interpretation:
"is inconsistent with the evidence purpose of that provision which, in the interests of a ‘vigorous free Press’, is to release
newspaper and electronic media proprietors from what were seen by the legislature as undesirable inhibitions on their activities
relating to the provision of news and information."
67. If, however, a misleading representation can be characterised as a "self-advertisement", or an "advertorial", it will be caught by the exceptions to s 65A contained in s 65A(1)(a) and (b).
68. Bennett J’s construction widens the reach of s 52, but only in the context where a contract, arrangement or understanding exists with the person, being a third party from the
prescribed information provider, whose goods or services were connected to the publication of the matter for the purposes of s
65A(1)(a)(i) or (iii).
69. The construction preferred by Sundberg, Jacobson and Lander JJ was that the prescribed information provider had
to make the publication on behalf of a person who supplied goods or services of the kind supplied by the prescribed information
provider or pursuant to a contract, arrangement or understanding with that other person. But in that case, they said that the
prescribed information provider and other person would both be supplying the kind of goods or services the subject matter of
the publication.
Some Possibilities
70. The construction preferred by Bennett J could have the effect of substantially weakening the exemption. It is
unnecessary to have a legally enforceable agreement in order to fall within the Trade Practices Acts penumbra of a "contract, arrangement or understanding". The question must arise as to whether a promise by the reporter to allow an interviewee to put his or her side of a story
in exchange for that person’s co-operation in participating in the program would bring what was said about the goods or services
offered by the interviewee within the exception in s 65A(1)(a)(vi)(A). Of course, before that position were reached there would
have to be a finding that the prescribed information provider adopted (or did not effectively disclaim) the statements which the
interviewee made.
71. It does not take much imagination to know that the cutting room floor is littered with statements by interviewees
which have been excised from a program that goes to air. A sympathetic current affairs program about the misfortunes of a small
business where the interviewer takes the side of the interviewee, after promising that if the interviewee co-operates the media
outlet will first go to his or her goliath-like opponent for comment, may be able to be construed as being an arrangement or
understanding. The fact that ordinarily, a journalist should seek the person’s comment may not detract from characterising this
particular promise as an arrangement or understanding with a view, inferentially, suggesting to the "goliath" that the story would be aired and offering it a chance to redeem itself before a predicably bad picture were painted of it.
72. On one view, a broad construction of the exception in s 65A(1)(a)(vi) may be seen as having a chilling affect
on the activities of the media. While on the other hand, it may be seen as upholding the values of straight and unbiased reporting.
However, the free press is one which recognises the right of publishers and those availing themselves of its columns or airwaves
to be biased and to express their own views.
73. If the High Court reverses the Full Court’s decision, it will be interesting to see how they express the bounds
of the wider construction. The primary purpose of s 65A was to protect prescribed information providers from actions in respect
of contraventions of s 52 because they made misleading or deceptive statements in reporting news or current affairs, including in instances of investigative
and editorial journalism.
ANNEXURE
65A Application of provisions of Division to prescribed information providers
(1) Nothing in section 52, 53, 53A, 55, 55A or 59 applies to a prescribed publication of matter by a prescribed information provider, other than:
(a) a publication of matter in connection with:
(i) the supply or possible supply of goods or services;
(ii) the sale or grant, or possible sale or grant, of interests in land;
(iii) the promotion by any means of the supply or use of goods or services; or
(iv) the promotion by any means of the sale or grant of interests in land;
where:
(v) the goods or services were relevant goods or services, or the interests in land were relevant interests in land, as
the case may be, in relation to the prescribed information provider; or
(vi) the publication was made on behalf of, or pursuant to a contract, arrangement or understanding with:
(A) a person who supplies goods or services of that kind, or who sells or grants interests in land, being interests of that
kind; or
(B) a body corporate that is related to a body corporate that supplies goods or services of that kind, or that sells or
grants interests in land, being interests of that kind; or
(b) a publication of an advertisement.
(2) For the purposes of this section, a publication by a prescribed information provider is a prescribed publication if:
(a) in any case—the publication was made by the prescribed information provider in the course of carrying on a business
of providing information; or
(b) in the case of a person who is a prescribed information provider by virtue of paragraph (a), (b) or (c) of the definition
of prescribed information provider in subsection (3) (whether or not the person is also a prescribed information provider by virtue of another operation of that
definition)—the publication was by way of a radio or television broadcast by the prescribed information provider.
(3) In this section:
prescribed information provider means a person who carries on a business of providing information and, without limiting the generality of the foregoing, includes:
(a) the holder of a licence granted under the Broadcasting Services Act 1992; and
(aa) a person who is the provider of a broadcasting service under a class licence under that Act; and
(ab) the holder of a licence continued in force by subsection 5(1) of the Broadcasting Services (Transitional Provisions and Consequential Amendments) Act 1992; and
(b) the Australian Broadcasting Corporation; and
(c) the Special Broadcasting Service Corporation.
relevant goods or services, in relation to a prescribed information provider, means goods or services of a kind supplied by the prescribed information provider
or, where the prescribed information provider is a body corporate, by a body corporate that is related to the prescribed information
provider.
relevant interests in land, in relation to a prescribed information provider, means interests in land, being interests of a kind sold or granted by the prescribed
information provider or, where the prescribed information provider is a body corporate, by a body corporate that is related to
the prescribed information provider.
