Australian Competition and Consumer Commission [2009] HCATrans 40 (10 March 2009)

Last Updated: 10 March 2009

[2009] HCATrans 040

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S506 of 2008

B e t w e e n -

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Appellant

and

CHANNEL SEVEN BRISBANE PTY LIMITED

First Respondent

CHANNEL SEVEN SYDNEY PTY LIMITED

Second Respondent

CHANNEL SEVEN MELBOURNE PTY LIMITED

Third Respondent

CHANNEL SEVEN PERTH PTY LIMITED

Fourth Respondent

FRENCH CJ
GUMMOW J
HAYNE J
HEYDON J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 10 MARCH 2009, AT 10.17 AM

Copyright in the High Court of Australia

__________________

MR S.J. GAGELER, SC (Solicitor-General of the Commonwealth of Australia): If the Court pleases, I appear with MR S.T. WHITE, SC and MS J.S. GLEESON for the appellant. (instructed by Australian Government Solicitor)

MR T.E.F. HUGHES, QC: May it please the Court, I appear with MR A.S. BELL, SC and MR P. ZAPPIA for the respondents. (instructed by Freehills)

FRENCH CJ: Yes, Mr Solicitor.

MR GAGELER: Your Honours, I propose to mention fairly briefly the facts and then go in order to the text, the policy and the context of section 65A of the Trade Practices Act. Your Honours might note in passing that a decision on the construction of section 65A has slightly wider ramifications in that there is what appears to us to be a materially identical provision in the ASIC Act; that is section 12DN of the Australian Securities and Investments Commission Act 2001.

Your Honours, I go to the facts for the reason that they, in our submission, squarely illustrate the mischief to which section 65A(1)(a)(vi) of the Trade Practices Act is directed. There are two things that I wish to highlight in the facts. The first is the content of the two broadcasts, and the second is the terms of the arrangement pursuant to which those broadcasts were made.

Your Honours have the broadcasts set out in full no less than three times in the appeal book. It is perhaps useful to look at the versions that are annexed to the statement of claim at pages 31 to 35 and 53 to 57 of the appeal book and to read the transcripts there set out in the light of the findings of the trial judge which are crystallised in the declarations made at orders 2 and 3 at page 183 of the appeal book. In the broadcast of 31 October 2003, which begins at page 31, the reporter at page 32, line 30, says:

Through shrewd investment in real estate the pair -

The pair being Ms Boholt and Ms Forster - - -

have become millionaires -

Read in the light of declaration 2.3 at page 183 of the appeal book, it is apparent that that statement was misleading and deceptive in its reference to Ms Forster, as she says in her affidavit at page 124 and as found by the trial judge by reference to that affidavit at pages 154 to 155, she was not a millionaire; indeed she was a person of quite modest means. Then the reporter, on the same page – 32 – just after line 40, says of Ms Forster:

In eight months she’s bought more than $1 million worth of property with no money whatsoever.

Read in the light of declaration of 2.2, at page 183, that statement was misleading and deceptive in that, as she says in her affidavit, again at page 124, and as the trial judge found, again at pages 154 to 155, as at 31 October 2003, the date of this broadcast, she owned no real property at all. Then, at page 33, line 30, the reporter says of Ms Boholt:

She now owns more than 60 properties all around Australia.

Read in the light of declaration 2.1 at page 183, it is apparent that that statement was misleading and deceptive in that, as Ms Boholt says in her affidavit at page 117 and as found by the trial judge at page 154, line 20, she did not own more than 60 properties. In the broadcast of 30 January which begins at page 53, there is at about line 35 a statement by the compère that:

The women you’re about to meet have made millions of dollars -

implicitly in the context of the program, through investing in property. Read in the light of declaration 3 at page 183, that was misleading and deceptive in its reference to Ms Forster, who, as we have already noted had not made millions of dollars from investing in property or at all.

They are the broadcasts. Now, the arrangement to which the broadcasts were made was the subject of the evidence of Ms Bermingham at pages 105 to 114 and the subject of findings of the trial judge based on that evidence at pages 155 to 158. What the trial judge said at page 158 in paragraph 63 was this:

There is no dispute that there was a general arrangement, a contract or understanding between Seven, Ms Boholt and Ms Forster to broadcast the Episodes (‘the arrangement’). The only goods or services said to be the subject of the arrangement were the services of Ms Boholt and Ms Forster and not the services of Seven Network or the Seven Licensees. The Commission does not contend that the arrangement extended to the broadcast of precise statements or the specific representations complained of. The arrangement did, however, extend to the general content of the Episodes and to the subject matter in some detail.

That detail is set out in a letter which her Honour extracted, but you see in the original form at page 113.

FRENCH CJ: There was some reference in the negotiations I think to exclusivity. Did that find its way into the arrangement or understanding?

MR GAGELER: Yes, very much part of the arrangement or understanding. You see the exclusivity element, your Honour, at the top of page 107, line 12, where Mr Gipps said:

Today Tonight would require exclusive rights to your story -

That was the basis upon which the deal proceeded. So very much, although no money changed hands, this was a mutually beneficial commercial arrangement. What Seven was getting was a packaged story, getting content ready made, on an exclusive basis, and what the women were getting was, on any view, publicity for their venture. The precise arrangement one sees at page 113. This is a letter which as explained in the body of the affidavit was sent by way of confirmation of the arrangement - - -

GUMMOW J: To whom is it addressed?

MR GAGELER: It was addressed to Ms Bermingham, who was authorised to act on behalf of Ms Boholt and Ms Forster, and it was sent by a Mr Gipps, a representative of Seven. It is sufficient to look at what is said about the first story, which did air in October 2003, and add also what is said about the second story which in fact went to air a month or so later than had originally been anticipated. In respect of the first story - - -

GUMMOW J: What happened to the third and the rest?

MR GAGELER: I do not think that is disclosed by the evidence, your Honours. What is said about the first story is it was to be an initial story on the founders regarding their own stories, and you will also note that it was to contain:

an offer to all Australian women to register on line at www.wildlywealthywomen.com –

You can see that that deal was pretty faithfully adhered to if you turn back to the first broadcast at page 31 and following. What you do see in it, with the inaccuracies that I pointed out, is a story about the founders “regarding their own stories” – I am paraphrasing the letter at page 113. Then if you turn to page 34, about line 40, you see the reporter saying:

For your chance to learn how to be a property millionaire log on to wildlywealthywomen.com.

Now, that is what I wanted to say about the facts. Can I ask your Honours to turn to the text of section 65A? The relevant reprint of the Trade Practices Act as at the time of the conduct was Reprint No 10, but section 65A has been there since 1984 and it has not changed so your Honours can look at - - -

HEYDON J: There have actually been a couple of minor amendments, but they do not affect the present controversy.

MR GAGELER: No. Your Honours really can look at any version for present purposes. What I want to say is something about the operation of subsection (1) as a whole. I then want to say something about paragraph (b), and then I want to focus on paragraph (a).

If you look at the chapeau of subsection (1), then the first thing to note is that it is concerned with a prescribed publication of matter by a prescribed information provider and when you trace through the definitions of “prescribed publication” in subsection (2) and “prescribed information provider” in subsection (3), what you see is that the exemption covers a very wide range of publications.

It covers specifically a radio or television broadcast by a radio or television licensee, but it covers generally any publication made in the course of carrying on a business of providing information by any person who carries on a business of providing information, whether it be on the Internet by way of newsletter and irrespective of its subject matter. “Publication” of course in this context as your Honour Justice French said in Bond v Barry means simply dissemination to the public or, as your Honour did not say but is clear enough, a section of the public.

The second thing to note about subsection (1) is that it is addressed to a situation where sections 52, 53, 53A, 55, 55A or 59, basically the general consumer protection provisions set out in Division 1 of Part V, under the heading “Unfair practices” would otherwise apply. So it is addressed to the case where the prescribed information provider goes beyond simply reporting a statement of someone else and where the prescribed information provider in the publication engages in conduct proscribed by one or more of those sections by himself, herself or itself making, endorsing or adopting a representation that is false or misleading.

The relevant recent authority in this Court which emphasises the inapplicability of section 52 to a case of merely passing on information your Honours will recall as Butcher v Lachlan Elder Realty [2004] HCA 60; 218 CLR 592, the relevant paragraphs being 38 to 40 in the joint judgment and 124 in the judgment of Justice McHugh. That point was well made by the trial judge in the present case at page 141 of the appeal book at about line 18 and following. The trial judge found that in these broadcasts there were representations made by Ms Forster and Ms Boholt which could not be attributed to Seven. Indeed, her Honour’s findings in the present case illustrate that point.

The third thing to note about the operation of section 65A(1) is that where it applies it gives a blanket exemption from the operation of each of those consumer protection provisions to which it refers. That is, it gives a blanket exemption - - -

GUMMOW J: Justice McHugh was dissenting in Butcher.

MR GAGELER: Yes, but the point that he made in paragraph 124 really is the same point as the majority is making. He is dissenting in the application.

GUMMOW J: I am old fashioned; I would like to know what the majority said.

MR GAGELER: I hope I gave you that reference at 38 to 40. I am a bit traditional myself in that respect, your Honour. The point that I was making is that where subsection (1) applies, what it gives is a blanket exemption from the norm of conduct which is prescribed by each of those provisions to which it refers. It is then subject to two exceptions, that is that blanket exemption is subject to two exceptions and it is obvious – I think this is actually a matter of strict logic – that the narrower the exception, the broader the exemption and the broader the exemption the less fully will the statutory object of consumer protection, now articulated in section 2 of the Act, be realised.

Now, what necessarily follows from that is that to the extent that there is ambiguity in section 65A, then a purposive construction consistent with section 15AA of the Acts Interpretation Act favours a construction of the exceptions in paragraph (a) and paragraph (b) that is broader rather than narrower.

GUMMOW J: Why is that?

MR GAGELER: Because the narrower the exception is, the broader the exemption - - -

GUMMOW J: Yes, I understand that - - -

MR GAGELER: The broader the - - -

GUMMOW J: But why does one incline one way rather than the other?

MR GAGELER: Because of section 15AA, because the narrowing of the exemption more fully accords with the object of consumer protection which is the central object of the Act.

FRENCH CJ: One has to bear in mind the purpose behind 65A - - -

MR GAGELER: One certainly does and all I am suggesting - - -

FRENCH CJ: - - - which obviously has regard to the burdens imposed, if you like, on information providers by the risk of litigation over things that they say in the course of providing information.

MR GAGELER: Absolutely. Section 65A strikes a balance and it is a question of how that balance is to be interpreted to the extent that there is ambiguity.

FRENCH CJ: Sometimes the more narrowly you construe things, the more room there is for argument and, therefore, the greater the burden. It is just a question which impacts upon the approach you take to construction.

MR GAGELER: Here, all I was really seeking to point out was that one has an approach to construction set out in section 15AA of the Acts Interpretation Act – that is, one favours in a case of ambiguity, a construction that will further the object.

GUMMOW J: How does one apply 15AA to that particular statute, which introduced 65A? Do you see what I mean? There are two purposes. There is the general purpose in the section up the front of the Trade Practices Act and there is the purpose of what they were doing in the amending Act, which introduced 65A. That gives rise to the questions the Chief Justice is putting to you.

MR GAGELER: Yes, and I would get there the same way – without 15AA, just simply using CIC Insurance as the general provision. But 15AA is concerned with the interpretation of a provision of an Act. The provision here was inserted by an amending Act, I accept, but it is now a provision of the Trade Practices Act and was inserted for that purpose. One gives it a construction that best serves the purposes of the Act as a whole in a case of ambiguity. That is as far as I can take it.

HEYDON J: Is that not so vague, though? It is so vague and vapid. We have section 65A, which may not be easy to read, but it seems to have been drafted by people concerned to establish a very precise structure.

MR GAGELER: Yes.

HEYDON J: For my part, I just do not see any power in this case in the use of section (2) as an aid to construction.

MR GAGELER: I think I have explained it as best I can, your Honour.

HEYDON J: Yes, I think I understand the argument – there is no problem about that.

MR GAGELER: If your Honour understands the argument, that is as much as I can ask. Can I turn to paragraph (b), and then go through to paragraph (a). Paragraph (b) is concerned to give an exception to the exemption, and therefore to allow sections 52 and others to be applicable to the publication of an advertisement. There are two things to note about paragraph (b). The first is that the reference to an advertisement is unqualified; it is not confined to an advertisement of the goods or services of someone in particular, and certainly it is not confined to the publication of an advertisement of the goods or services of someone other than the prescribed information provider. It is just an advertisement.

The second thing to note is that the word “advertisement” is an ordinary English word, and what amounts to an advertisement in any particular case is essentially a jury question. That was the point made in the decision of the High Court in Director of Public Prosecutions v United Telecasters [1990] HCA 5; 168 CLR 594 at page 598.

What the cases cited in United Telecasters at page 598 not so much establish about that jury question but illustrate about that jury question are two things. One is that whether or not a particular matter amounts to an advertisement is something that falls to be determined on the face of the matter published. It has nothing to do with the actual intention of those concerned with its production or transmission. That is the first thing they illustrate. The other thing, which probably flows from the first, is that the existence or non-existence of any contract, arrangement or understanding between the publisher and any persons whose goods or services might be advertised is simply irrelevant to whether or not a particular publication amounts to an advertisement.

Your Honours have, I think, a little bundle called “Appellant’s Additional Material” and within that bundle behind tab 4 your Honours see one of the cases referred to in United Telecasters. That is the decision of the Full Court of the Federal Court in Rothmans of Pall Mall [1985] FCA 91; 5 FCR 330. You see the point I have just made at pages 338 and 339. These cases come from varying context and they are concerned with the general meaning of the word “advertisement”. At page 338 there is a quotation from Justice Gibbs in the Rotary Offset Press Case. The first sentence of that quotation is that:

The question whether a periodical is ‘advertising matter’ seems to me to depend on whether the periodical, viewed objectively and without regard to the actual intentions of those publishing it, answers that description .

On the next page at the end of the long quote from his Honour, it is said:

His Honour’s reasoning was approved, on appeal, by the Full High Court -

He has then said the approach is equally applicable to the provision being construed there. The issues then identified in these terms:

That issue is to be obviously determined; the question being whether the material, on its face and without reference to the actual intentions of those concerned with its production or transmission, appears to be designed or calculated to draw public attention to, or to promote the sale or use of -

the articles in question. That is paragraph (b).

FRENCH CJ: There is no argument run that this was an advertisement?

MR GAGELER: No, there was not an argument. Your Honour, perhaps an argument may have been available. It is a jury question. That is paragraph (b). You are looking at the face of the thing published.

GUMMOW J: If it had been an advertisement, that might have had some consequences for the broadcasting legislation, would it not? I do not know. Are there not time restraints and the amount of television time that can be consumed by advertisements? Does that still exist?

MR GAGELER: They still exist, yes.

FRENCH CJ: They are in guidelines or standards, are they not?

MR GAGELER: Standards, yes.

GUMMOW J: They find their way attached ultimately in some way or other to licences.

MR GAGELER: Yes, that is right.

GUMMOW J: So you would not want to say you have a 15 minute advertisement, I image, and you get lots of other undoubted advertisements.

MR GAGELER: Possibly, possibly not.

HEYDON J: But it would have suited you to contend that this was an advertisement?

MR GAGELER: In the present case.

HEYDON J: Because it would have taken them out of the - no, it would be an exception to the immunity, yes.

MR GAGELER: Yes, your Honour, I am not saying that there may not have been an argument in the present case, that what was presented was an advertisement.

FRENCH CJ: I mean, one sees sometimes in the print media lengthy articles and then in the small print at the top the word “advertisement” appears, which have some of the flavour of what appears in this script.

MR GAGELER: Indeed. The point I was making was purely one of construction for present purposes and that is that whether or not something is an advertisement is a determination that falls to be made as a jury question by reference to the face of it then that is published. That is what paragraph (b) is concerned with.

HAYNE J: Just before you part from that, this repeated reference to it being a jury question I think may tend to obscure more than it illuminates. It does not address whether the practice, for example, of product placement, common enough practice these days, constitutes advertisement or not and simply saying, well, that is a jury question tells you nothing.

MR GAGELER: Your Honour, in a sense that is what United Telecasters was about, product placement, but I can avoid the use of the word “jury”. It is a question of fact to be determined by reference to the face of the thing published. That is all I wanted to say about paragraph (b). But why I am emphasising that is that paragraph (a) is obviously concerned with looking beyond the face of the advertisement and with capturing within the scope of the exception and therefore within the scope of sections 52 and following what is the potentially more pernicious case of a publication which on its face does not appear to be promotional. The circumstance which is covered by paragraph (a) is where there is:

a publication of matter in connection with –

relevantly –

(i) the supply or possible supply of goods or services . . .

(iii) the promotion by any means of the supply or use of goods or services –

and where either of two possibilities exist. The first of those possibilities is where:

(v) the goods or services –

that is obviously a reference to the goods or services in connection with which the matter was published, it is a reference back to (a)(i) or (iii) as the case may be –

were relevant goods or services –

an expression that has to be read in the light of the definition in subsection (iii) and when read in the light of that definition what it means is goods or services of a kind – another way of saying “of a class” – supplied by the prescribed information provider or a related body corporate. That is (v). Then the second of the two possibilities, (vi), is where:

the publication was made –

the publication, what publication? Obviously the publication of matter in connection with, relevantly, (i) or (iii), where that publication was made “on behalf of” someone being either:

(A) a person who supplies goods or services of that kind . . .

(B) a body corporate that is related to a body corporate that supplies goods or services of that kind –

So there is the “on behalf of” limb, or was made:

pursuant to a contract, arrangement or understanding with:

(A) a person who supplies goods or services of that kind . . .

(B) a body corporate that is related to a body corporate –

within that category.

GUMMOW J: Does “where” mean “if”?

MR GAGELER: Yes, it is a condition for the application of the - - -

GUMMOW J: It is a disjunctive condition?

MR GAGELER: Yes, that is right. The way it works is you have (a)(i), (ii), (iii) or (iv) plus - - -

GUMMOW J: It is a bad form of drafting to have kept the roman numerals through (i) to (vi) because (v) and (vi) are not on the same level as (i) to (iv).

MR GAGELER: No. It is not pretty.

HEYDON J: On any view (v) and (vi) are trying to narrow (i) to (iv), are they not?

MR GAGELER: Yes, of course.

HEYDON J: The question is how much they narrow. There is a large class and then there is a reduction.

MR GAGELER: That is right, and, your Honour, I will come to this in a moment, but really one way of putting the question is you have – perhaps taking my cue Justice Gummow – the structure of the thing is. for (a) to apply you have to have (i), (ii), (iii) or (iv) plus either (v) or (vi). I am not sure that I would say it is narrowing; it is just adding an extra element for the application of the exception, (i), (ii), (iii) or (iv), plus (v) or (vi).

HEYDON J: If (v) or (vi) did not exist the paragraph would be very different in it meaning.

MR GAGELER: Of course, yes. Of course, we are concerned in the appeal with the meaning of the words “of that kind” as they appear in (vi), and your Honours - - -

GUMMOW J: The question becomes the relationship, if any, here between (v) and (vi).

MR GAGELER: Yes. I am going to come to that because that is the key - - -

GUMMOW J: Paragraph (vi) in some way hooks back into (v), whether it hooks backs into (i) to (iv).

MR GAGELER: Absolutely, and it is our case, of course, that it hooks back into (i) to (iv). It is freestanding, but I will make that case in just a couple of increments, your Honour. The natural meaning, or at least a natural meaning of goods or services of that kind, in our submission, is one that links back relevantly to (a)(i) or (iii), that is to say, that you have (a)(i) or (iii) plus (v) as a freestanding exemption, or you have (a)(i) plus (i) or (iii) plus (vi) as a separate freestanding exemption.

That is a perfectly sensible and coherent scheme that is then produced, in our submission. Paragraph (a), so read, covers two distinct circumstances each of which in a particular case may overlap with (b) depending on the face of the thing that is published.

FRENCH CJ: You say (vi) is a genus of which advertisement is a species?

MR GAGELER: Yes, and similarly with (v), although there may well be advertisements which are not pursuant to any contract, arrangement or understanding with the person whose goods or services are advertised but are pursuant to a contract, arrangement or understanding with someone else and, therefore, there will not be a complete subsuming of paragraph (b) within (v) or (vi) on any view. They are overlapping. That is the point.

But what one gets from a reading of paragraph (a) of that nature is that it really covers, broadly, two things. One is the publication of matter in connection with the possible supply or the promotion, supply or use of goods of a kind supplied by the prescribed information provider, if you like, to give it a label, self-promotion. That is paragraph (v).

GUMMOW J: So how would paragraph (v) work by way of example in this business situation?

MR GAGELER: Paragraph (v) would be an announcement that at the ABC Shop you can purchase goods of a particular description or promotion of a CD available at the ABC Shop. In fact, one of the cases deals with something very similar to that.

FRENCH CJ: We have to bear in mind also that the range of prescribed information providers is wider than the specific examples given in the definition which is inclusive, so you might have somebody offering – I know this falls probably into the ASIC Act, financial advisory services with a newsletter of some kind and promoting its own services.

MR GAGELER: Exactly, yes. Yes, precisely. So that is – I have given it the label “self-promotion”, it is not perhaps - - -

GUMMOW J: Would it include an announcement of a forthcoming program, an encouragement to watch it?

MR GAGELER: Yes, it would cover that as well. So that is paragraph (v). Then paragraph (vi), your Honours, can really be labelled third party promotion, that is, where you have a:

publication of matter in connection with:

(i) the supply or possible supply of goods or services -

or with -:

(iii) the promotion by any means of the supply or use of goods or services . . .

where:

(v) the goods or services –

are of a kind supplied by some other person for whom, that is, “on behalf of” whom, using the statutory language, the information provider is acting, or with whom the information provider has a “contract, arrangement or understanding” pursuant to which the information provider is making the publication.

Now, a contract, arrangement or understanding, as the Full Court of the Federal Court has repeatedly emphasised, is something that involves a commitment to act. The cases, your Honours, are collected in the Leahy Petroleum Case, which is on our learned friend’s list of authorities - your Honours need not go to it but it is [2007] FCA 794; 160 FCR 321, particularly at paragraphs 35 to 36. I should say my client struggled against that fairly strict notion of a contract, arrangement or understanding for some time, and your Honours will see in Leahy Petroleum it was keeping its options open even at that time, but one has to accept that the tide is out and that that is the well-established view of a contract, arrangement or understanding. It is something that involves a commitment to act.

So for a publication to be pursuant to a contract, arrangement or understanding, as recognised by the trial judge here, and this point she made at page 162 about line 38, what one needs to find is that the publication is:

“according to” or “conformable with” the arrangement -

In other words, it is according to or conformable with a commitment that is embodied in the arrangement. Now, your Honours, that, in our submission, produces a perfectly coherent and extremely sensible operation for paragraph (a), which is overlapping with paragraph (b) in both respects, that is, both in respect of (i) to (iv) read with (v), or (i) to (iv) read with (vi).

GUMMOW J: When you say “overlapping”, there will be some circumstances that fall in both and some circumstances that fall in one but not the other. Is that right?

MR GAGELER: Exactly; yes. The alternative view is that which was acted upon by the Full Court in the present case. You see the Full Court’s construction at page 208 in paragraph 47, and you see then four textual reasons which are given in support of that construction at paragraphs 48 through to 52. We have dealt with those textual arguments in our written submissions. I do not propose dwell on them in oral submissions.

HEYDON J: Is it convenient for me to ask a question?

MR GAGELER: Yes, of course, any time.

HEYDON J: There is a possible argument that I did not see ventilated in the Full Federal Court, nor by the trial judge. The definition of “relevant goods and services” as you pointed out a little while ago is that they mean goods or services of a kind. The word we are trying to construe in subparagraph (vi)(A) is goods or services of that kind or interests in land of that kind. Does not that arguably establish a linkage between relevant goods or services in subparagraph (6), which would cause one to favour the Full Federal Court’s conclusion rather than the trial judge’s conclusion?

MR GAGELER: Your Honour, there is an element of that reasoning perhaps in one or two of the reasons given by the Full Court at page 209. Our point is not that such a textual reading is not open. Our point is that such a reading, although open – and each of the points made by the Full Court at page 209 is open textually. There are arguments against it but each point is open textually. Our point is that they are not compelling when regard is had to the consequence to which they lead and the consequence is that which the Full Court recognised at paragraphs 55 and 56.

So, your Honour, we accept that it is possible to read the reference to goods of that kind in the way your Honour suggested; it is not the best reading. If one looks at the consequence, what they say – and this is really the position that they are driven by that construction – is that the opening line of 55 – paragraph (vi) complements paragraph (v). That means it adds a little bit to paragraph (v) – not much, though; just a tiny bit. The tiny bit that it adds you see then identified in paragraph 56, where they say the purpose of paragraph (vi) is to extend the exception – that is the paragraph (v) exception:

to not only include the publication of matter in connection with the supply or possible supply of goods or services by the prescribed information provider itself, but also to goods or services of the kind supplied by the prescribed information provider but, in fact, supplied by some other person on its behalf or pursuant to a contract, arrangement or understanding with that other person.

It is a bit hard to understand precisely what that factual scenario encompasses but - - -

HAYNE J: Can I just attempt to make it concrete by way of an example, SBS advertised translation services. Is it is said in paragraph 55 that a publication made of behalf of another provider of translation services, which is a publication made on SBS, falls outside?

MR GAGELER: I think so.

HAYNE J: It seemed to me that that was a reading of what their Honours were saying, though. I would be interested to know whether you adopt that or - - -

MR GAGELER: I can say I think that is what they are saying, your Honour.

HAYNE J: Regardless of what is the competing construction that is advanced against you, a construction that would lead to that conclusion, at least as you understand it.

MR GAGELER: I believe so, your Honour. It is really brought out in those two paragraphs and brought out by your Honour’s illustration. What the Full Court’s construction – open textually but no compelling – leads to is that subparagraph (vi) is little more than a gloss on subparagraph (v).

GUMMOW J: Another way of looking at it is to say (v) and (vi) are disjunctive, (v) is qualifying, or whatever word you use, telling you something more about the expression “goods or services” which appears in (i) and (iii). Paragraph (vi) is telling you something about the phrase “a publication”, the opening in (a).

MR GAGELER: Yes, that is I hope not another way of putting it, I hope that is what - - -

GUMMOW J: You have really got to sit down and write about 12 sections out to know entirely what is happening through this complicated pattern of disjunctions and qualifications.

MR GAGELER: Indeed. The point that you get to, and your Honour is absolutely right, is that the paragraph (a) exception applies in two circumstances; (i) or (iii) plus (v), completely freestanding application, or (i) or (iii) plus (vi), another freestanding application. You do not read (vi) as simply adding a little bit to (v), because if you do that, what you do is you are effectively writing out of the section third party promotion at all except to the extent that it might be on its face an advertisement and so as to fall within paragraph (b). That is what you end up doing. You also get to the very bizarre - - -

GUMMOW J: It may be, Mr Solicitor, that if one sits down notionally and writes out these 12 sections, you are left with no ambiguity at all.

MR GAGELER: You might be right. I have not actually done that exercise.

GUMMOW J: I know. I am surprised your helpers have not done that for you.

FRENCH CJ: If in (vi)(A), instead of using the words “of that kind”, one said “who supplies those goods or services”, I suppose the construction argument we are having would not go away because there would be an argument that “those” refers to relevant services.

MR GAGELER: That is right.

FRENCH CJ: What is the function of “of that kind” on your construction? What work is it doing in relation to (A)? Is it seeking to avoid an argument that the contract, arrangement or understanding may be of a generic character and does not relate to the particular goods or services that are the subject of the broadcast, for example?

MR GAGELER: Whether the expression is “goods of a kind” or “goods of that kind”, it is referring to - - -

GUMMOW J: If we sat down and wrote it out as I suggested, “of that kind” in (vi)(A) would immediately hook back into (a)(i) and (a)(iii), would it not?

MR GAGELER: Yes, and I wish I had done that, your Honour.

FRENCH CJ: But it covers a contract, understanding or arrangement which may range wider than the subject matter of the particular broadcast, I suppose, if that linkage is correct.

MR GAGELER: Yes. I am not sure I am answering your Honour the Chief Justice’s question, perhaps “of a kind” is sufficient to pick up a disparaging broadcast, that is, disparaging similar goods of someone else as much as a promotional broadcast of the goods of the information provider or the third person, as the case may be.

FRENCH CJ: The trouble is, is it not, that your construction, given the nature of the contract, arrangement or understanding in this case, might pick up a broadcast which is a kind of warts and all broadcast which is both laudatory and critical, in other words, falling within the area of comment?

MR GAGELER: No, for two reasons. One is that to get within section 52 at all - - -

FRENCH CJ: We have to make or adopt - - -

MR GAGELER: You have to make or adopt it. That is one point. Secondly, to come within the exception in (vi), therefore, again to get through the exemption and be within 52 in such a case, it is necessary, relevantly, for the broadcast to be made pursuant to the commitment that is in the contract, arrangement or understanding. So there has to be two things present, relevantly. One is the making or adoption by the broadcaster and, two, that the broadcast itself occurs pursuant to a commitment to broadcast. Those two things would not be ordinarily present in the warts and all presentation - - -

GUMMOW J: This motion of adoption, is that why your client fixes upon statements by the so-called reporter?

MR GAGELER: My client, as it presented the case, had a few other representations which her Honour did not accept as having been made by the broadcaster. So it was attempting to fix some broader statements saying that they were, in effect, adopted by the broadcaster, but they had not been.

HEYDON J: By a failure to dissociate from what the women were saying.

MR GAGELER: Correct, yes.

GUMMOW J: You have not got a notice of contention on that, have you?

MR GAGELER: No, we accept her Honour’s findings.

GUMMOW J: Her Honour then is conscious of the significance that it was the reporter saying these things.

MR GAGELER: Yes. It was really just an application of the principle in Butcher - - -

GUMMOW J: Which she gets from Butcher v Lachlan Elder Realty.

MR GAGELER: Yes, in Butcher v Lachlan Elder Realty, It is simply a factual application of that. The Full Court agreed with her findings and we have not sought to disturb any of that. Your Honours, apart from just - - -

GUMMOW J: It depends though, in answer to the Chief Justice’s question, that some particular care is required, is it not, to avoid adoption? You can fall in or out of liability, depending upon the astuteness of the reporter.

MR GAGELER: If you are simply reporting both sides of an issue of current significance, then there should be no problem. If you adopt one side and if you enter into an arrangement with one side under which you commit to publish something on that topic, then you could be in trouble.

GUMMOW J: Going back to page 32, suppose the last sentence was not the statement, “In eight months she’s bought more than $1 million” but “she says that in eight months” or “she claims that in eight months”, that would not be an adoption, would it?

MR GAGELER: Probably not. Of course, it would have to be read in context. Maybe you would have to look at the eyebrows. Your Honours actually have the broadcast - - -

GUMMOW J: I thought you were coming to that.

MR GAGELER: I have looked at them, your Honours, and it helps to put the text in the form in which it would have been seen by the public. So, your Honours, the only other thing that I wanted to mention in the appeal were the matters of context, that is, the history and the purpose of the section as disclosed by the extrinsic material. Can I just say this and I will do it very, very briefly.

The history was really completely surveyed by your Honour the Chief Justice more than 20 years ago in Advanced Hair Studio 18 FCR 1 at 6 to 10, and your Honour, as your Honour will recall, returned briefly to the history in Bond v Barry (2007) ATPR 42-187 at paragraphs 30 to 32. For present purposes, your Honours ought look very briefly at the explanatory memorandum, which is in that little white folder at tab 3, and also at the second reading speech in the Senate, which is in that folder at tab 2. Within the explanatory memorandum what you see at page 62 - - -

HEYDON J: Page 64, I think. Your submissions say 62 but it is actually 64.

MR GAGELER: That is weird. I have another version of the explanatory memorandum where it is on page 62.

FRENCH CJ: How many explanations were necessary?

HAYNE J: This is the authentic version, is it, Mr Solicitor?

MR GAGELER: I have got it for the House of Representatives, your Honours have it for the Senate, that is the difference.

GUMMOW J: The Attorney was in the Senate.

MR GAGELER: It is better in the Senate, for present purposes anyway.

HEYDON J: The Attorney General did not have responsibility for this amendment, did he?

MR GAGELER: I do not know the answer to that.

FRENCH CJ: I think he put out the green paper.

MR GAGELER: He certainly put out the green paper, but I do not know the answer to your Honour’s question.

GUMMOW J: Well, in the lower House - - -

HEYDON J: Senator Evans was responsible for the restrictive trade practices provisions discussed in the green paper. Mr Cohen was responsible for the consumer protection provisions and of course there is a gulf between the green paper and what actually was introduced in section 64 - - -

FRENCH CJ: What was proposed was meaningless, I think.

MR GAGELER: Your Honour said that and your Honour was no doubt right, and that is no doubt why it was not enacted.

HEYDON J: What precise words in the explanatory memorandum support either construction though?

MR GAGELER: No, I do not think so, I think they support only our construction.

HEYDON J: In which respect do they say, which words support your construction?

MR GAGELER: The second sentence on page 64 in the Senate:

Proposed paragraph 65A(1) (a) provides that the exemption does not operate in relation to –

and your Honours can insert (v) –

publication in connection with the supply or promotion of relevant interests in land, relevant goods or services or –

and your Honours can insert (vi) –

where publication is pursuant to a contract, arrangement or understanding with the supplier, or a related body corporate, of lands, goods or services.

It supports our construction. It does not make sense - certainly the second part of it does not appear to make sense on the Full Court’s construction. In relation to the second reading speech, which is the other tab, tab 2, your Honour Justice Heydon would be absolutely correctly in saying that there is a passage in the second reading speech at the beginning of the paragraph that begins “New section 65A” that is itself ambiguous and would support either construction, but our point – and this is where we get some assistance from the second reading speech is if you look at the example that is given at the end of that paragraph, it is rather telling. The second last sentence is that:

In such cases -

that is, in cases covered by the exception –

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.

That example would not be caught by paragraph (a) on the Full Court’s construction supported by the respondent in the present case.

It would only be caught if perhaps the thing published could be characterised as an advertisement within the meaning of paragraph (b). It is a very odd case. The more deceptive the thing published is, the less likely it falls within the scope and the provisions designed to prevent misleading and deceptive conduct. That is the consequence of that construction, and the example would not be fulfilled. Your Honour the Chief Justice in Bond v Barry (2007) ATPR 42-187 at paragraph 31 - - -

GUMMOW J: What was the nature of the dispute in Bond v Barry?

FRENCH CJ: It is really whether a story by a freelance journalist fell outside the exemption.

MR GAGELER: Yes. Your Honour held that the publication by the freelance journalist fell within the scope of the exception. Your Honour called it the “media safe harbour”. At paragraph 31 your Honour set out extracts from the second reading speech. After the reference to the example which your Honour set out, right at the end of paragraph 31, your Honour said:

No doubt so called “advertorial” content would, on that basis, fall outside the intended limits of the exemption.

FRENCH CJ: In context, of course, that was obiter dicta, or an observation even.

MR GAGELER: All we want to say is your Honour is right. Obiter or not, your Honour was right. Call it advertorial, call it infotainment, if it is promotion dressed up as news or current affairs, then it is squarely within the intended scope of the exception to the exemption.

HEYDON J: Mr Gageler, you did not comment, either today or in your written submissions in reply, on part of the second reading speech a sentence that begins with the words “The exemption is not available”. The respondents quoted that passage in their written submissions. Does that not support their construction?

MR GAGELER: No. It is equally ambiguous, your Honour.

HEYDON J: What about the word “such”, four or five words before the end of the sentence?

MR GAGELER: Absolutely ambiguous. I am not sure if that is a contradiction in terms.

HEYDON J: Does not “such” refer back to publication of information relating to goods, services or land of a kind supplied by the information provider?

MR GAGELER: Your Honour, I will go so far as to accept that that is one construction of that sentence standing alone. If it were to be construed that way, the example given at the end of the paragraph of which it occurs would not fall within the scope of the exception. It is very difficult to treat it as statutory language. It is hard enough to interpret the statutory language that is there - - -

HEYDON J: I am entirely sympathetic with that submission, but you took us to this material. You take us to section 2, the explanatory memorandum, the second reading speech. Is it not an available view that they are basically all useless and it is simply a question of reading the words of section 65A?

MR GAGELER: No, I do not accept that. Obviously it is - - -

HEYDON J: You like one sentence, but you say another sentence has to be ignored.

MR GAGELER: Your Honour, I never seek to be that cute. I accept that one sentence read alone in the second reading speech can be interpreted as supporting the Full Court’s construction. I have no difficulty accepting that. That one sentence appears in a paragraph that has a very clear
example at the end of it, which in its context must contradict that reading of the sentence.

HEYDON J: We are dealing with a Minister who is passing on very briefly some thoughts about section 65A which was introduced as part of an Act dealing with many, many, many different federal statutes, small amendments to many different federal statues. Do you not think it is possible that the example at the end of that long paragraph is really a reference to the impact of paragraph (b) of 65A(1)?

MR GAGELER: Absolutely not. It cannot be, your Honour.

HEYDON J: Have you read the House of Representatives second reading speech?

MR GAGELER: Yes, I have.

HEYDON J: Have you noticed how jumbled it is and how - - -

MR GAGELER: Indeed.

HEYDON J: This one has got a spelling mistake in it. It all looks rather perfunctory, does it not, and endeavouring to do tasks which are quite different from what we are doing today.

MR GAGELER: It certainly was not constructed with the care which a speech of a similar nature would be constructed today, I accept that your Honour. But do I get nothing out of this? No, I get a little bit out of it. Do I get more out of reading the text of the section in accordance with section 15AA and in the light of the object identified in section 2 of the Act? Yes, I get more out of that and it is more a more vigorous approach. If the Court pleases, those are out submissions.

FRENCH CJ: Thank you, Mr Solicitor. Yes, Mr Hughes?

MR HUGHES: Section 65A, your Honours, is a provision of dense and intricate structure. That it is so is hardly surprising because the section is designed to accommodate and reconcile two vividly competing public interests; on the one hand, the need for consumer protection and, on the other, the interest of the public in prompt access to news and information. The contextual background to the enactment of section 65A, your Honours, was a series of decisions of the Federal Court that held section 52, for example, to be applicable to news stories daily published in the press.

The leading case was Australian Ocean Line 58 ALR, a judgment of Justice Toohey in that Court. His Honour held that factually inaccurate reporting of the applicant’s activities in providing passengers with accommodation on an ocean cruise constituted, not only a contravention of section 52, but actionable defamation, and his Honour awarded damages. I am not going to weary your Honours with an attempt to recite or summarise the many factual elements in Australian Ocean Line, but it was a very strong case of misleading conduct because the voyage in question was described as a nightmare voyage, and that on the basis of interviews with only 12 out of 160-odd passengers on the voyage.

FRENCH CJ: On any view, would you agree it would have fallen within the – if I can use the term – “media safe harbour” provided by 65A if it arose today?

MR HUGHES: Yes, indeed – strong case as it was. It is important to remember in the context of this discussion that section 52 applies on the cases only where there has been an express or implied adoption of misleading statements made by a third party.

GUMMOW J: Was that doctrine fully understood at the time of the Ocean Line Case – the requirement for adoption in order to found liability?

MR HUGHES: It was. It was such a case that the text of the newspaper articles clearly indicated that the reporters and, therefore, the publisher of the newspapers – there were two newspapers - were adopting what in fact a minority of passengers had raised by way of strong complaint against the conduct of the shipping line conducting the voyage. Indeed, if one looks, your Honours at the long judgment of Justice Toohey, your Honours will see that some of the statements by passengers were treated as having been adopted by the publisher, others not and, therefore, insofar as not adopted, not a basis of section 52 liability.

FRENCH CJ: At 587 his Honour made reference to a statement that:

a majority or very large number . . . had made particular criticisms . . . a statement suggesting that the criticisms . . . at large were well founded - - -

MR HUGHES: Yes. So the learned trial judge, Justice Toohey, was appreciative of the need for adoption in one form or another to found liability under section 52.

FRENCH CJ: In fact, his Honour went further in that passage and said:

In each case the statement goes beyond the mere reporting of opinions by others and contains a representation by the newspaper itself.

MR HUGHES: Yes. So in short, your Honours, the concept of adoption is not a new development, it goes right back to the first case that provoked in due or undue course proposals for amendment of the Trade Practices Act which culminated in section 65A. Global Sportsman [1984] FCA 180; (1984) 2 FCR 82, your Honours, is another case in this area. Its effect was to expose to section 52 liability publications in two newspapers, The Weekend Australian and The Australian, to liability for inaccurate reportage, including expressions of opinion concerning the alleged conduct of international cricketers.

Parliament, your Honours, we would venture to submit, in responding to these decisions was concerned with what was called in New York Times v Sullivan the chilling effect of imposing on the media an absolute liability of the kind provided by section 52. In his second reading speech as set out on page 204, line 30 of the appeal book, the Minister expressly referred to recent decisions of the Federal Court - well, they were recent, one was in 1984 and the other in 1985.

The tension between the competing elements of public interest to which I have alluded was resolved by providing an exemption from liability qualified by a carefully drafted series of exceptions to that exemption, and the dichotomy between paragraph (v) and paragraph (vi) on the one hand and subsection (1)(b) on the other hand is, we suggest, between what we would call publications in the pursuit of the self-interest of the prescribed information provider on the one hand and the indirect self-interest on the other hand which is provided for in paragraph (vi).

There is a symmetry and a logical sequence to (a)(v) and (a)(vi). Paragraph (v) we say is concerned with the promotion by the prescribed information provider of its own goods or services, defined in subsection (3) as “relevant goods or services in relation to a prescribed information provider”. So they must be goods or services of the kind provided by the prescribed information provider. By reason of that definition of “relevant goods and services in relation to a prescribed information provider”, (a)(v) is also concerned with the provision of goods or services by a body corporate that is related to the prescribed information provider. Thus, we submit, the provision of such goods or services by such a related body corporate is treated as a provision of them – that is, those goods or services – by the prescribed information provider.

GUMMOW J: Mr Hughes, you have been talking about “the media”, but I think it is the old media, is it not?

MR HUGHES: Yes.

GUMMOW J: Google, for example, undreamt of at the time of the introduction of this section, would be a person who carries on a business of providing information.

MR HUGHES: Yes.

GUMMOW J: So we have to bear in mind that the construction we are giving to these provisions operates well beyond the world of technology and of regulation understood more than 20 years ago.

MR HUGHES: It has to be read primarily, one would venture to suggest, your Honour.

GUMMOW J: That is why I am not particularly swayed by suggestions of legislative purpose. The legislature was legislating for a world that was going to change and has changed, and the Act now has to be interpreted.

MR HUGHES: In the light of the changed world.

GUMMOW J: I suppose, yes.

MR HUGHES: We cannot cavil at that proposition, but one still goes back to the text and interprets the text in the light of the interrelationship in the section of these rather complicated concepts – interlocking definitions and so forth. We say that (a)(vi) is concerned with the promotion by the prescribed information provider, your Honours, on behalf of – that is one concept – or, another concept, pursuant to a contract, arrangement or understanding with a third party of the third party’s goods or services.

Where – and this is the important qualification – those goods or services are of the same kind as those provided or sold by the prescribed information provider.

An example, your Honours, of such a case, a case covered by (vi), would be where Channel Seven had a line of merchandise related to one of its programs and that same line of merchandise was sold by the one of the supermarket chains, promotional t-shirts for example. Channel Seven could in that situation be said to have an indirect self-interest in the promotion of the supermarket chain’s goods because the promotion of the those goods would also promote Channel Seven’s goods because they were of the same kind as goods marketed by Channel Seven. Your Honour Justice Hayne provided another example which would fall within (vi), that is the example concerning SBS translation services.

HAYNE J: What is the point of the operation of the provision that you advance in such a case?

MR HUGHES: I will come to that in a moment, if I may.

HAYNE J: Of course.

MR HUGHES: Well, I will come to it now. The object of (vi) is to bring within the exception, thereby negating the exemption, cases in which the prescribed information provider had a self-interest, either direct or indirect, in the very publication. The second reading speech is of considerable assistance, after all they are the Minister’s words, not words to be imputed to the Minister. I know that one can be cynical about that.

GUMMOW J: You have direct experience of it, Mr Hughes.

MR HUGHES: I used to write my own second reading speeches for that purpose.

FRENCH CJ: But generally they are written by the department, are they not?

MR HUGHES: I regret to say, yes, but presumably with the approbation of the Minister before he utters the words. One cannot carry cynicism to undue lengths, your Honours. The Minister in this case did indicate in his second reading speech at pages 204 and 205 of the appeal book in his reference to “such goods” recorded at line 25, and in the next sentence he said:

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.

The last few lines that I have read are plainly enough a reference to paragraph (b).

KIEFEL J: Is the commercial interest that the section may be concerned with assumed to exist for the purposes of (vi) because of the existence of a contract, arrangement or understanding with respect to the publication? Do those words connote or assume perhaps in a rebuttable way?

MR HUGHES: My answer to your Honour would be not necessarily because certainly – the better criterion is promotion of self-interest. Commercial interest is a slippery word.

KIEFEL J: All right. If we find some neutral phrase to suggest that a concern with the information provider having some self-interest in the publication of the matter, is that reflected or is that assumed in the manner in a way of construction by the insertion of the words “pursuant to a contract, arrangement or understanding”? Is that what those words are directed towards?

MR HUGHES: It is done by the words “of that kind” which sends you back or takes you back to (v).

KIEFEL J: But the alternative, of course, is that that takes you back to any goods or services that may be the subject of the publication or, more particularly, of a kind the subject of the publication, if the matter that (vi) is concerned with is the publication pursuant to a contract or understanding rather than the goods or services themselves?

MR HUGHES: Your Honour, I am indebted to you for raising that question. The importance of the words “of that kind” is a grammatical and syntactical one and I would like, if I may, to invite your Honours’ attention to a dictionary page that we have provided. It is the page in the Shorter Oxford, third edition, which deals with the word “that” as a demonstrative pronoun and as a demonstrative adjective. It is page 2276, and I think your Honours have got it. Down at the bottom of the middle column on page 2275, your Honours, treatment of the word “That” begins, and the first meaning is that of a demonstrative pronoun. The first meaning is:

Denoting a thing or person pointed out or present, or that has just been mentioned.

Treatment of the word as a demonstrative adjective, which is the relevant treatment in this section, is two-thirds of the way or just below halfway down the third column on that page:

Demonstrative Adjective. 1. The simple demonstrative used (as adj. in concord with a sb.), to indicate a thing or person either as being actually pointed out or present, or as having just been mentioned –

One comes, in the light of that particular dictionary meaning, its meaning as a demonstrative adjective, to apply it to the expression “of that kind” in paragraph (vi). Immediately preceding reference to any kind, indeed, the only other reference in the section to a kind, apart from the definition in subsection (3), is to the kind of goods or services that are goods or services in relation to the prescribed information provider. So we seek to lay emphasis on the expression “of that kind” because that takes you back, we suggest, to the kind of goods or services just mentioned in paragraph (v).

KIEFEL J: Do you say that the goods or services referred to in (a)(i) are too remote from the discussion in (vi)?

MR HUGHES: That is, with respect, one way of putting it, your Honour. We would say, perhaps going a little further, that there is no kind of goods or services referred to in paragraphs (i) to (iv). One does not get to the designation of any kind of good or service until (v), and then (v), the meaning of the reference to a kind of good or service in (v) is transmitted verbally by the draftsperson to (vi).

FRENCH CJ: Mr Hughes, if one were trying to approach the question of construction by reference to the broad purpose of the section and what inspired its enactment, one sees that that was the need to maintain a vigorous free press and to avoid what you described, I think in your opening remark, as the chilling effect of litigation about things which are published. I wonder whether one cannot, having regard to that broad purpose, see that the maintenance of a vigorous free press is the maintenance of an independent press, obviously, but that the protection does not apply where the press or the relevant media, is pursuing its own commercial interests, as in (v), it is to do with goods or services that it is itself promoting.

If one takes that approach, can one not just see (vi) as covering that sort of case in which the information provider, in this case the relevant broadcasters, are not at arm’s length from the providers of goods or services in respect of whom they are publishing information and they are not at arm’s length because they are acting either on behalf of them or pursuant to a contract, arrangement or understanding with them?

MR HUGHES: Yes.

FRENCH CJ: One can see a perfectly rational policy for (vi) on that basis without having to narrow it down further to goods or services of the kind which the information provider themselves provides, which is your case, as I understand it.

MR HUGHES: Yes, but, your Honour, one cannot escape the reference more than once to the need in (v) between the connection between the prescribed information provider and particular goods or services. The words “contract, arrangement or understanding” are very broad. They would attract the exemption because in most interviews the interviewee is at large to speak his or her mind without pre-arrangement. Take, for example, although this is not a commercial situation, Kerry O’Brien’s program on ABC, The 7.30 Report. There is no pre-arrangement between Mr O’Brien and the interviewee as to what the interviewee will say or, for that matter, what Mr O’Brien will say, but there is an arrangement that the interviewee will go on the program for the purposes of a publication. Perhaps these ideas shade into our notice of contention point, to which I will come in a minute, but “arrangement or understanding” are words of the widest import and do not involve a commercial or legal consideration.

KIEFEL J: Could it be that the reference to “of that kind” in paragraph (vi) was intended to be of deliberately wide purport so as to capture goods or services of any description but which would fall within the types of goods or services the subject of the publication? What I have in mind is that the connections required by (vi) might simply be the publication without identifying particular goods or a particular supplier, the publication concerning goods or services of a particular kind together with a contract, arrangement or understanding with the supplier as sufficient to indicate the self-interest that would lose the immunity and so in that rather lengthy way, I am sorry, the reference to “of that kind” is simply referable to the qualitative description of the goods used in the publication.

MR HUGHES: The difficulty, we would venture to submit, about that approach is that it ignores or does not pay regard to the force of the use of the demonstrative adjective. As we put in our written submission, the use of the expression “of that kind” prompts the question in the mind of the reader of what kind?.

KIEFEL J: I am sorry, I should have said in that respect (vi) needs to be read with (a)(i) so that one is taken back to publication of a matter in connection with the supply or possible supply of goods or services and when you consider then that the publication was made in connection with an arrangement or understanding you ask, with respect to what goods or services, you say “of the kind” referred to back to the publication in (i).

MR HUGHES: Your Honour, the difficulty that we would respectfully raise in regard to that approach is that one can search paragraph (a) for any description of a kind of good or a kind of service and find none. You do not get to “a kind” until one comes to (v) and (v) takes you to the definition which uses the word “kind”, that is in subsection (iii). That was the point that your Honour Justice Heydon tentatively raised in the course of discussion with my learned friend, the Solicitor.

The other difficulty, if I may venture to suggest it with the tentative approach propounded by your Honour Justice Kiefel, is that it may lead one into what we say is a cardinal error on the part of the learned trial judge when her Honour said – this is paragraph 16 of our written argument and I quote, line 7, page 6 of our written argument – this is what her Honour said:

“(v) and (vi) are alternatives: If (vi) is read in the absence of (v), “goods or services of that kind” would refer to the goods or services of the kind to be supplied, described in paragraph (a).”

That is what her Honour said at page 167 of the appeal book. The point we made in our written argument which we would ask your Honour Justice Kiefel to consider in respect of your Honour’s specific question, is that the Full Court was correct to reject her Honour’s reasoning. Her Honour was not entitled, as the Full Court said, to read (vi) in the absence of (v).

The combination of (vi) and (v), the connection, is a very strong one. They are, in a sense, statutory Siamese twins. You cannot pull them apart because there is an internal reference in one to the other. The natural reading of the expression “of that kind” in its context is to look for a specific kind of service elsewhere mentioned. The only specific kind of good or service elsewhere mentioned is mentioned in (v), read in conjunction with the statutory definition of “relevant goods or services” in relation to a prescribed information provider. I am sorry, that is a rather longwinded way of trying to answer your Honour, but I hope that will be of some help.

KIEFEL J: Thank you.

MR HUGHES: Your Honours, the other matter I should mention – and this is not a matter of criticism – is that not much attention has so far been paid to the words “on behalf of” in (vi). The words “on behalf of” occur in (vi):

the publication was made on behalf of, or pursuant to a contract, arrangement or understanding with -

(A) or (B), and “on behalf of” does not connote necessarily any self-interest at all. There is a dictionary treatment of the word “behalf”. I do not think we have supplied this in advance. It is the Oxford Third Edition, page 207. It is in the middle of the second column on the page, your Honours. These are the meanings:

a As the agent or representative of (another); in the name of. ME. b On the part of, or proceeding from.

The third meaning, c, is:

In the interest or for the benefit of –

In the case of Walplan Pty Ltd v Wallace (1985) 5 FCR 27 at page 38 – we will provide copies of this – Justice Lockhart, sitting in the Full Court, said in the second paragraph:

Although for some purposes of company law it may be sufficient to show that conduct of an agent was “on behalf of” the corporation if it is established that it was for the benefit of the corporation I see no justification for importing this concept into the construction of section 84(2). It would unduly restrict the ordinary and natural meaning of the language -

One would venture to suppose or suggest that the reference to “on behalf of” was either a prefatory explanation of what was about to follow in the words “pursuant to a contract, arrangement or understanding” or, if one eschews the concept of tautology, which is sometimes to be found exemplified in parliamentary speech and parliamentary enactments, the words “on behalf of” add something different to the words “pursuant to” a contract, arrangement or understanding. If the words “on behalf of” add something else, it would be an appropriate conclusion that they refer to unilateral action taken by the prescribed information provider and not necessarily for its benefit – maybe, eschewing cynicism for a moment, for the benefit, the prescribed information provider may see it, of someone else. But the words “on behalf of” do not hurt the essential structure of the argument that we have endeavoured to propound in our written submissions and in this attempt to deal with salient points in the case in my attempted oral presentation.

Those words perhaps tend against the idea that (vi) is dealing with cases generally of where there is a commercial interest by the other contract, arrangement or understanding in question. I am reminded that there is a finding by the primary judge that the respondent had no commercial interest in the transmission of this program.

KIEFEL J: You mean there was no payment made?

MR HUGHES: No payment. The finding is paragraph 100 at page 170, your Honours:

However, in the present case, the Commission does not suggest that Seven has any commercial interest in either the publication or the content. If the Commission were required to establish that a commercial interest was necessary for the exception to apply, it has failed to do so. If that were the case, Seven would have the benefit of the exemption.

One of the problems, and a very big problem we would venture to suggest, with the primary judge’s interpretation of section 65A is that her Honour’s approach to the interpretation of it, that is, of section 65A, really causes the exception to devour the exemption, as the Full Court pointed out, correctly we would say, at appeal book page 210, paragraph 57. I think we have already said this, that another and major problem created by her Honour’s reasoning is that her Honour fell into the error of interpreting a particular statutory provision, namely, (vi)(A) as though paragraph (v) were absent. That error, we venture to say, was particularly significant given that the demonstrative adjective “that” in the expression “of that kind” refers to the kind of services that had just been mentioned, adopting the Shorter Oxford Dictionary definition of “that”.

We can go to another point now. I would ask your Honours to note that the only possible relevant exception to the exemption created by section 65A depended in this case on the applicability to the facts established by the evidence of paragraph (vi)(A). Our case is that the facts established by the evidence were incapable of engaging the operation of the only exception on which the ACCC relied because the relevant publication of matter was made “on behalf of” or pursuant to a contract, arrangement or understanding with persons, namely, Ms Boholt and Ms Forster, who did not supply services of the kind supplied by the respondents as prescribed information provided.

The respondents were in the business of supplying services as providers of television programs, whereas those two ladies, Ms Boholt and Ms Forster, were suppliers of services that could be best described, your Honours, perhaps, as services advising people how to become rich from dealing in land.

GUMMOW J: Advising for consideration. They took money for this advice they gave people, did they not?

MR HUGHES: Boholt and Forster?

GUMMOW J: Yes.

MR HUGHES: I can now go to another point. Perhaps it is summarising what we have already tried to say. The grammatical and syntactical makeup of the section point against the appellant’s proposed interpretation of it. The appellant’s interpretation is that the reference to the supply of “goods or services of that kind” in subparagraph (vi)(A) is to goods and services in connection with which the publication was made. The grammar and the syntax point against that view.

I refer to the definition of subsection (3). The combination of (v), (vi) and subsection (3) one reaches the conclusion, we submit, that to attract the operation of the exception in (vi)(A) there must be an identity in kind between the goods or services, the subject of the relevant contract, arrangement or understanding and the goods or services provided by the prescribed information provider and, as we have endeavoured to point out, there is simply no such identity. I have dealt with the second reading speech. We say that on the appellant’s construction the words “of that kind” render redundant paragraph (b) and we have developed that point, your Honours, in paragraph 17 of our written submissions. Every advertisement would fall within the extended meaning sought to be attributed by my learned friend’s argument to paragraph (vi)(A).

I will not re-read what we have said in paragraph 16 of our written submissions. Typically, of course, an advertisement would be pursuant to a contract, arrangement or understanding and it will always be on behalf of the person who asks for the advertisement to be published. I will come now, if I may, to the notice of contention point.

FRENCH CJ: Do I understand correctly that the core of your submission here is that the contract, arrangement or understanding found was of a level of generality that takes it out of the kind of contract, arrangement or understanding contemplated by the section, that is, a contract, arrangement or understanding related to the publication of the particular matter?

MR HUGHES: Yes.

FRENCH CJ: That was the subject of a section 52 action?

MR HUGHES: Yes, your Honour, and the interpretation propounded by her Honour the primary judge suggesting that it is sufficient if the publication relates to or is tied to or connected with a contract, arrangement or understanding in a general sense – those were her Honours words. “in a general sense” – propounds too nebulous and too uncertain a basis for the determination of liability under section 52 in terms of whether the exception to the exemption is applicable. Here we come to another example of the exception gobbling up, as it were, the exemption.

We rely on our written argument on the notice of contention point and we say if, as the appellant contends, all that is required to trigger the exception to the statutory exemption is an agreement, arrangement or understanding “in a general sense” relating to the publication of what is later to become the foundation of section 52 proceedings, such a norm of liability or criterion of liability is too uncertain, too nebulous, to be legally meaningful. More importantly, your Honours, the breadth of the concept, contract, arrangement or understanding and the width of the expression
chosen by her Honour “in a general sense” deprived the supposed criterion of any certain meaning and is an example of the exception consuming the exemption.

To the appellant’s point that the phrase “of matter” does not appear in paragraph (vi), we venture to suggest, with respect, that the obvious answer is supplied by reason of the use of the definite article before the word “publication”. That is obviously a reference back to the expression “publication of matter” in the opening words of section 65A. So that expression “the publication” means the publication of matter earlier mentioned in the section which, relevantly, is the matter that but for the exemption would attract the operation of section 52.

We do make a response to paragraph 13, which I will itemise shortly, of the appellant’s reply submission. Paragraph 13 of the appellant’s reply submission reads, the appellant seeks to deny the application of the exemption created by section 65A to any case in which the prescribed information provider was in a position to test the veracity of third party statements in its reports. That was the position in the Australian Ocean Line Case where the newspaper reporters were in a position to check accuracy before they reported by speaking to the management and to the passengers. That particular part of paragraph 13 is an attempt to return to the pre-section 65A legal position and, we would venture to suggest, that cannot be right. For those reasons, we submit that the appeal should be dismissed.

FRENCH CJ: Thank you, Mr Hughes. Mr Solicitor.

MR GAGELER: Your Honours, in respect of the issue of construction on which issues joined in the appeal, the strongest textual argument in favour of the Full Court’s view is that goods or services “of that kind” in paragraph (vi) necessarily refers to goods or services of a kind mentioned in subsection (3) because subsection (3), when read into paragraph (v) is the first and only preceding reference to goods of any kind. That, in essence, I think is the argument - - -

HAYNE J: It is an argument of linguistic proximity.

MR GAGELER: Yes. But that is - - -

HAYNE J: “That” is a reference to the “that” which appears linguistically most proximate and the question tendered for our decision is whether in a provision having a number of discrete and disjunctive provisions with multiple intersections, linguistic proximity is the relevant consideration.

MR GAGELER: Indeed, and a problem with the argument is that it ignores the fact that goods or services mentioned in (i) or (iii), as the case may be, are necessarily themselves goods of a kind, that is, goods that by reference of their characteristics fall within a class or genus and, really, in our submission, the reference to goods or services “of that kind” in (vi) serves exactly the same purpose as the reference to goods or services “of a kind” in (iii) when read into (v). Both are referring back to the goods or services of the kind that are the subject of the publication.

GUMMOW J: Just going back to what Justice Hayne put to you, I have an idea that on other occasions, certainly in the Federal Court, probably in this Court too, we have had to grapple with statues drafted in the same fashion with this multiple operation with disjunctive operations. You cannot think of any offhand can you?

MR GAGELER: No.

GUMMOW J: It does not matter, I suppose, but we have lamented this before, I suspect.

MR GAGELER: It arises in almost every tax case, your Honour, but I cannot think of a - - -

GUMMOW J: Possibly so.

HAYNE J: The question becomes whether in identifying the reference of that, one does it by taking the particular operation of the provision that is engaged or one sits and treats subsection (1), and the many lines it occupies, as being a single rather complex thought.

MR GAGELER: With two distinct strands.

HAYNE J: More than two. How is linguistic proximity engaged, if at all, in understanding the use of the demonstrable pronoun “that”?

MR GAGELER: Yes. We have said what we want to say about that.

GUMMOW J: We also need to know, I think, the extent to which this provision is repeated in the State Fair Trading Acts.

MR GAGELER: We can provide your Honour with a note - - -

FRENCH CJ: I think there are equivalent provisions in each of the Acts, are there not?

MR GAGELER: Some of them avoid the difficulty encountered in construction in the present case. There is a New Zealand provision, we can give your Honours a note on that, if it would be of assistance. The only other thing that I wanted to say in respect of the issue before I come to the notice of contention is this. The example of a case that would be covered by (vi) on the Full Court’s construction as proffered by my learned friend was a case where Channel Seven has itself a line of merchandise and the same line of merchandise is sold by a supermarket chain and Channel Seven publishes a promotion of the goods as sold by the supermarket chain. It was said that would be covered by (vi) because that was a case where Seven had an indirect self-interest in promoting the goods of the supermarket chain.

Our responses to that are twofold. One is that is difficult to see why such a case is not already covered by (v) in that the promotion would be the promotion of goods or services of a kind, that is, of a class or genus supplied by Channel Seven itself. That is one response, and the second response is that if such a case were meant to be covered by (vi), then it is difficult to see why (vi) would be confined to circumstances where the promotion by Channel Seven was pursuant to a contract, arrangement or understanding with the supermarket chain. It simply does not make any sense as a matter of policy that the provision would be so confined to those circumstances. That is really the point we made in paragraph 29 of our written submissions.

Your Honours, moving to the notice of contention, the respondent’s proposition really comes down to saying that for (vi) to be engaged, the contract, arrangement or understanding has to extend to the publication of the precise representation that gets caught by section 52, or one of those other provisions. In our submission, that is wrong for two reasons. If you just look to the text of (vi), what you need to find is a contract, arrangement or understanding and a publication pursuant to that contract, arrangement or understanding, that is, the publication is giving effect to the commitment involved in the contract, arrangement or understanding. There is simply no textual basis, in our submission, for saying that the contract, arrangement or understanding must itself extend to the prescription or definition of the matter published.

Can I take an example. If there were an understanding pursuant to which a radio broadcaster committed itself to look after a program sponsor, then whatever might be said by the radio broadcaster giving effect to that understanding, in our submission, is called and ought to be called as a matter of policy on a literal reading of the exception. That is all the more so if what is said is dressed up not as an advertisement but as news.

FRENCH CJ: The scope of the term “arrangement” is, I suppose, the troublesome thing here. Let us go back to Advanced Hair Studio. Suppose in answer to Mr Dunwoody’s strident complaints about his hair replacement therapy, Advanced Hair Studio had been invited – they may even have, on the facts – on to the program to say something about the nature of their services and defend themselves. Putting aside for the moment questions of adoption of anything they said, if the relevant broadcaster said to Advanced Hair Studio, “Come on, we will give you an opportunity to put your case in reply to your customer’s complaints”, would the subsequent broadcast have constituted a broadcast of matter pursuant to an arrangement within the meaning of the section?

MR GAGELER: Only if the deal – if I can use a perfectly neutral term – was that the broadcast would occur, “Whatever you say in this interview we will broadcast”. It is the element of commitment that is critical.

FRENCH CJ: The commitment is to give you a chance to defend yourself, put your case, we will broadcast it.

MR GAGELER: It is the “we will broadcast it” is the relevant commitment. The broadcast needs to be pursuant to the commitment, yes. So they are the two elements, the adoption and the commitment to broadcast. It is only when those two elements are there that liability will arise.

FRENCH CJ: In that event, and the whole class of case which falls into that sort of broad genus of arrangement, the broadcaster has to be careful not to step into, by expressly or by implication, adoption of the things that are said by the party which may be misleading or deceptive.

MR GAGELER: The broadcaster is then in exactly the same position as anyone else making a representation in trade or commerce about goods or services, yes.

GUMMOW J: But in this case, if one looks at page 34, the reporter said:

For your chance to learn how to be a property millionaire log on to wildlywealthywomen.com.

MR GAGELER: That is right, yes. That was part of the deal, for that to be said. That was part of the arrangement, to be said, yes. So that really does bring me to the last point, that is, even if the contract, arrangement or understanding needs to extend to the prescription or definition of the matter published, the word “matter” invokes a pretty broad notion. That is what the trial judge said at page 162 at line 30 of the appeal book and that broad
notion of matter was well and truly encompassed within the deal that was made in the present case. If the Court pleases.

FRENCH CJ: Thank you, Mr Solicitor. Could we have that information that you have promised us within seven days?

MR GAGELER: Yes, your Honour.

MR HUGHES: Your Honours, Mr Bell will reply very briefly on the notice of contention.

FRENCH CJ: Yes, thank you. What are you responding on, Mr Bell?

MR BELL: On the notice of contention solely, your Honour, which I think was not addressed by the Solicitor in-chief.

FRENCH CJ: Yes.

MR BELL: Your Honours, four points. The first point the Solicitor made conjured up the cash for comments scenario where there was an arrangement by which there may be passed off as news the promotion of goods or services of a person who had paid for or arranged a company to pay for it or had arranged. Your Honours, that, in our submission, would be held without any real difficulty by a court to be an advertisement within subparagraph (b), just as – and this is contrary to the obiter observation of your Honour Justice French – an advertorial. Just as Justice Gummow said, things have changed and the nature of technology has changed, so has the nature of marketing, and a court, especially in the absence of a definition of “advertisement”, would, in our submission, have no difficulty characterising the example the Solicitor gave as illustrating the work (vi) has to do.

GUMMOW J: .....a mischievous change too.

MR BELL: But a court would have no difficulty, in our submission, in characterising that as an advertisement. What is interesting and important about this case – and it is really a response with respect to your Honour Justice Gummow’s observation by reference to page 34 of the appeal book about the invitation – for whatever reason, the ACCC has consistently throughout this case eschewed the opportunity to run by way of alternate argument the submission that this was an advertisement.

Had it done so, your Honours, apart from the Broadcasting Act implications, there would also be available under section 85(3) of the Act a defence, the special advertising defence. None of that was explored; forensic decisions were made, et cetera, by reference to the definite decision to eschew any alternate argument. So, with respect to your Honour, that material which the Solicitor took the Court to is irrelevant insofar as it may have related to an alternate characterisation of the conduct in this case.

The third point, your Honours, is this. It really relates to the key phrase “pursuant to”. Publication of matter, we say “publication” must mean publication of matter; that which attracts the operation of section 52. The words “pursuant to” points to a close conformity between that which was agreed - - -

GUMMOW J: Why?

MR BELL: Why? One of the reasons, your Honour, is this difficult line-drawing exercise. What the ACCC propounded and what her Honour held was sufficient was a contract, arrangement or understanding in a general sense. That phrase “in a general sense”, with full respect to her Honour, is a word of incredibly uncertain ambit. In an area where parties, prescribed information providers, whether they be licence holders or not, ought be able to arrange their commercial affairs and no doubt their insurance, et cetera, by reference to a clear understanding as to whether they are within or without the strict liability, effectively, operation of section 52 – strict liability in the sense of no intention being required.

KIEFEL J: But we are not here concerned with the liability of the supplier of goods whose is a party to the contract or understanding as you would be under the various provisions of the Act concerned specifically with their liability. Rather, the question is, what connection is required between the interest of the information provider and the publication?

MR BELL: That is the principal question on the appeal, but if on the notice of contention it is sufficient, assuming the appeal point was resolved against us – the notice of contention does not arise if the appeal point is resolved in our favour, but if it is resolved against us, one has on the one hand any kind of goods or services or the goods or services the subject of publication which are not the goods or services of the broadcaster, and one has that broad concept allied with the equally broad contract, arrangement or understanding made even more broad by the only requirement being that it be a contract, arrangement or understanding in a general sense, one has the uncertainty for the broadcaster as to whether or not it is in or outside of the exception to the exemption.

This is illustrated by the point the Chief Justice made, which is, I think, the final point I wish to come on to in reply. Arrangements, understandings must be as a matter of course reached everyday by journalists, investigative journalists, when they prepare to report a story and typically whether it is explicit or implicit, it would be understood as a result of those arrangements or understandings, it would be understood that we want to interview you, we want to speak to you for the purposes of a publication, after all, that is what journalists do.

The Solicitor’s response to your Honour the Chief Justice in respect of the Advanced Hair Studio was very, very revealing. The ACCC would say that the important exemption which was introduced by section 65A in circumstances where somebody is asked onto a program on the understanding – and it need not be express, under contract, arrangement or understanding which suggests that is could be informal or implied and it could be implied even if it were contractual – that the publication would follow as a result of the interview. Mr Dunwoody in that case was invited onto an interview on the understanding that it would be broadcast and that is referred to in the report.

Just as in the AOL Case, your Honour – the Australian Ocean Line, which had been the subject of complaint, they had been the subject of the criticism – the directors contacted the publishers and said “We want to tell our side of the story”. There was an arrangement or at least an understanding and an arrangement – it was not a contract, but it was an arrangement or understanding which was reached, “All right, we will hear what you have to say and we will carry the story through in light of what you say.”.

If the contract, arrangement of a general sense is adequate and if the words “pursuant to” are not, as I have submitted and in answer to what your Honour Justice Gummow put to me why, why should the words “pursuant to” be indicative of a requirement of linking the subject matter of the publication, ie, the matter being that which would otherwise attract section 52 to the agreement pursuant to which the publication occurred, then one has, with respect, a situation where what the legislature plainly intended to do – because they were responding to Australian Ocean Line and they were responding to Global Sportsman – they recognised that Australian Ocean Line involved a case of the public being misled and a corporation losing money in the award of damages. Notwithstanding that, they went with a policy decision. It was whether you agree with it or not, that was the purpose.

The point of our notice of contention submission, and also the point of our appeal submission, is that the very broad interpretation either as to “of that kind” or as to the ambit of the contract, arrangement or understanding, whether either is given, will operate seriously to undermine the purpose which we say underpinned the legislation. With respect, we do not see that that purpose, the commitment to a vigorous free press, et cetera, has ceased to exist because of technological change. We accept technological change certainly, but it is a fairly fundamental public policy consideration at a very high level of principle and that, in our submission, is
what still drives the Act and what should still drive our arguments or the outcome of the arguments on the notice of contention and on the appeal.

FRENCH CJ: Thank you, Mr Bell. The Court reserves its decision. The Court will adjourn to 2.15 pm this afternoon.

AT 12.51 PM THE MATTER WAS ADJOURNED