FEDERAL COURT OF AUSTRALIA

Channel Seven Adelaide Pty Limited v Australian Communications and Media Authority [2014] FCA 667

THE COURT ORDERS THAT:

1.    The Application be dismissed.

2.    The applicant pay the respondent’s costs of and incidental to the Application as taxed or agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    In 2011, Channel Seven Adelaide Pty Limited (Seven) operated the commercial television station known as SAS Adelaide.

2    For some years prior to mid-2011, the Seven Network had broadcast a half hour current affairs program on weeknights at 6.30 pm known as Today Tonight.

3    On 25 July 2011, Seven broadcast a segment (the segment) as part of the Today Tonight program which went to air on that day which addressed a skin treatment known as Intense Pulsed Light (IPL) treatment. In particular, the segment focussed on the experiences of a particular patient (A) who had been treated with IPL treatment at a particular clinic (the clinic) with disastrous results. The segment was very critical of the clinic.

4    IPL treatment is a technology aimed at producing light of high intensity for a short period of time. It is used to remove body hair and is an alternative to laser hair removal. It is also used as a skin treatment in a process known as photo-rejuvenation. It is intended to remove unsightly pigmentation and to give skin a smoother more even appearance.

5    On 25 October 2011, the Australian Communications and Media Authority (the ACMA) received a complaint about the segment.

6    The complainant, who was the sole director of the corporation which owned and operated the clinic, alleged that:

(a)    The segment contained several inaccurate statements about the clinic.

(b)    In the segment, Seven had failed to represent viewpoints fairly or to correct significant errors of fact when Seven was made aware of those errors.

(c)    Seven had breached cl 4.3.7 of the Commercial Television Industry Code of Practice 2010 (the Code) in the broadcast. It was said that Seven had unfairly identified and singled out the clinic for criticism when commenting in the segment on the use of IPL as a skin treatment by unqualified persons.

7    The complaint was then investigated by the ACMA.

8    On 14 June 2012, prior to finalising its Investigation Report, the ACMA provided a Preliminary Investigation Report to Seven and sought comments from Seven in relation to that Preliminary Investigation Report.

9    By Investigation Report 2712 dated 6 July 2012 (the Report), a delegate of the ACMA determined that Seven, in relation to the segment:

(i)    Had breached cl 4.3.1 of the Code in relation to:

(a)    A statement about tests performed prior to IPL treatment; and

(b)    A statement about the regulation of IPL treatment; and

(ii)    Had breached cl 4.3.11 of the Code in that it had failed to correct two inaccurate statements in the broadcast when it was made aware of those errors.

10    The delegate made no finding in relation to a statement made in the segment about A’s initial reason for visiting the clinic and concluded that Seven had not otherwise breached the Code.

11    Seven was dissatisfied with one of the determinations made by the delegate in the Report. The determination which the delegate made with which Seven was dissatisfied was that it had breached cl 4.3.1 of the Code in relation to a statement about tests performed prior to A receiving IPL treatment at the clinic.

12    In the Report, that statement is described as Statement 5: Performance of patch test. The relevant statement was made by the reporter during the segment in the following terms:

The recommended patch test to a small section of the skin to assess the body’s reaction was not performed …

This remark was made as part of a longer observation which was in the following terms:

Reporter: The recommended patch test to a small section of the skin to assess the body’s reaction was not performed, and at the end of the painful session, A was shocked by what she saw.

13    On 7 September 2012, Seven commenced the present proceeding in this Court in which it sought judicial review of the ACMA’s determination in the Report in relation to Statement 5. In broad terms, Seven contended that the ACMA had committed errors of law in making that determination and had misconstrued the task which it had been obliged to perform. It also argued that the delegate’s decision in relation to Statement 5 was perverse, irrational, illogical and not reasonably open.

14    Seven did not challenge the other unfavourable determinations made by the delegate in the Report. The sole matter of concern in the present proceeding is the ACMA’s determination in relation to Statement 5.

The Report

15    On p 1 of the Report, the delegate set out her conclusions.

16    On p 2 of the Report, she described the complaint, the Today Tonight program and, in very broad terms, the process which she had undertaken in assessing the complaint.

17    On p 3 of the Report, the delegate said:

‘Ordinary, reasonable’ viewer test

In assessing content against the Codes, the ACMA considers the meaning conveyed by the relevant material. This is assessed according to the understanding of an ‘ordinary, reasonable’ listener or viewer.

Australian Courts have considered an ‘ordinary, reasonable’ reader (or listener or viewer) to be:

A person of fair average intelligence, who is neither perverse, nor morbid or suspicious of mind, nor avid for scandal. That person does not live in an ivory tower, but can and does read between the lines in the light of that person’s general knowledge and experience of worldly affairs (Amalgamated Television Services Pty Limited v Marsden (1998) 43 NSWLR 158 at pp 164–167).

The ACMA considers the natural, ordinary meaning of the language, context, tenor, tone, inferences that may be drawn, and in the case of factual material, relevant omissions (if any).

Once this test has been applied to ascertain the meaning of the broadcast material, it is for the ACMA to determine whether there has been a breach of the Code.

18    After referring to the “ordinary, reasonable” viewer test on p 3, the delegate commenced her consideration of the issues raised by the complaint.

19    Under Issue 1, the delegate addressed certain matters which she said had general application in relation to nine separate statements (including Statement 5) which she had under consideration. For this reason, I set out the balance of p 3 of the Report together with remarks made by the delegate in respect of Issue 1 on p 4 under the heading “Reasons Accuracy”.

Issue 1: Accurate presentation of factual content and fair representation of viewpoints

Relevant Code provision

News and Current Affairs Programs

4.3     In broadcasting news and current affairs programs, licensees:

4.3.1     must present factual material accurately and represent viewpoints fairly, having regard to the circumstances at the time of preparing and broadcasting the program;

4.3.1.1     An assessment of whether the factual material is accurate is to be determined in the context of the Segment in its entirety.

The following additional parts of the Code are relevant to this assessment.

Compliance with Code

1.5     Licensees must seek to comply fully with the Code, but a failure to comply will not be a breach of the Code if that failure was due to:

…

1.5.2     reasonable reliance on information supplied by another person.

1.5.4    an act or failure to act which, in all the circumstances, was clearly peripheral or incidental, and unlikely to offend or materially mislead viewers.

The considerations which the ACMA generally applies in determining whether or not a statement complained of was compliant with [Seven’s] obligation to present factual material accurately are set out at Attachment B.

…

Reasons

Accuracy

The accuracy requirements under clause 4.3.1 of the Code apply to factual material.

With the exception of Statements 3, 4 and 6 (dealt with below), the statements complained about were presented in an unequivocal and unquestioning manner without allusion to individual opinion and without any use of qualification or comparison. The ACMA is satisfied that they would have been understood by the ordinary, reasonable viewer as statements of fact.

The ACMA has assessed whether the statements were presented accurately, having regard to the circumstances at the time of preparing and broadcasting the segment.

20    Attachment B to the Report is in the following terms:

The following principles are applied by the ACMA in assessing content against the obligation in clause 4.3.1 of the Code:

•    The ACMA must assess whether the relevant statement would have been understood by the ordinary, reasonable viewer as a statement of fact or an expression of opinion. A definition of the ‘ordinary, reasonable viewer’ is set out at the commencement of this report.

•    The primary consideration would be whether, according to the natural and ordinary meaning of the language used and the substantive nature of the message conveyed, the relevant material presents as a statement of fact or an expression of opinion.

°    In that regard, the relevant statement must be evaluated in its context, i.e. contextual indications from the rest of the broadcast (including tenor and tone) are relevant in assessing the meaning conveyed to the ordinary reasonable viewer.

°    The use of language such as ‘It seems to me’, ‘we consider/think/believe’ tends to indicate that a statement is presented as an opinion. However, a common sense judgment is required as to how the substantive nature of the statement would be understood by the ordinary reasonable viewer, and the form of words introducing the relevant statement is not conclusive.

•    Inferences of a factual nature made from observed facts would usually still be characterised as factual material (subject to context); to qualify as an opinion/viewpoint, an inference reasoned from observed facts would usually have to be an inference of a judgmental or contestable kind.

•    In situations where witnesses (to an event or circumstance) give contradictory accounts and there is no objective way of verifying the material facts, the obligation for the reporter to present factual material accurately which ordinarily require that the competing assertions of fact be presented accurately as competing assertions.

•    While licensees are not required to present all factual material available to them, if the omission of some factual material means that the factual material presented is not presented accurately, that may amount to a breach of the clause.

•    The identity of the person making the statement would not in and of itself determine whether the statement is factual material or opinion, i.e. it is not possible to conclude that because a statement was made by an interviewee, it was necessarily a statement of opinion rather than factual material.

•    Statements in the nature of prediction as to future events would nearly always be characterised as statements of opinion.

21    In expressing her conclusion in relation to Statement 2 on p 6 (the statement which was made by the reporter as to the reason why A had gone to the clinic in the first place), the delegate said:

In these circumstances, the ACMA makes no finding in relation to the accuracy of Statement 2.

That said, the ACMA notes that [Seven] made an assertion of fact apparently based solely on the testimony of A. As will be argued later in this report (see Statement 5 below), the ACMA does not consider [Seven’s] reliance on A’s testimony to be ‘reasonable’ reliance. It would have been more prudent for [Seven] to have framed this information as an allegation made by A (as with Statement 4 below), rather than making an assertion of fact.

22    The delegate commenced her consideration of Statement 5 on p 8 of the Report.

23    After setting out the submissions made by each of the complainant and Seven, the delegate said:

The ACMA considers that the material was inaccurate. Even if, as [Seven] submitted, the test was done on A’s collarbone and with a different IPL machine from that used on her face, the fact remains that the [clinic] carried out at least one test patch for IPL treatment on A’s skin.

The ACMA has therefore proceeded to consider the defence put forward by [Seven]. [Seven] has argued, in effect, that its failure to comply with the Code was not a breach of the Code because it was due to ‘reasonable reliance’ on information supplied by A, under clause 1.5.2 of the Code.

[Seven] has argued that this reliance was reasonable in the absence of any meaningful response from the Complainant to [Seven’s] communications with him. The ACMA has accordingly examined [Seven’s] communications with the Complainant over the period leading up to the broadcast. While several matters are in dispute (including exchanges between [Seven and the complainant]) with respect to this, it is not in dispute that:

•    the Complainant contacted [Seven] from overseas, over the period 22–25 July 2011, advising that he would be back in Australia on 27 July 2011 and requesting that the Segment not be broadcast before his return, to enable the complaint to be considered by him;

•    [Seven] sent the Complainant an email on 25 July 2011, which relevantly included:

Clearly you have an issue with the conduct of your staff, what their roles are and their understanding of the correct channels through which to direct enquiries. We offered you the chance of a phone interview on Friday (Presumably Friday 22 July 2011 [ACMA note]) and you too declined.

I note in your latest email you say you haven’t been offered an opportunity to comment. That is simply not true. However if you are now offering to make a comment then please go ahead;

and

•    later on 25 July 2011, the Complainant sent [Seven] an email, which included that the [clinic] was conducting a ‘full investigation regarding the matter’ and that it was ‘premature for the [clinic] to make any further comment in relation to the matter’ until it had completed its investigation.

The ACMA’s view is that, in these circumstances, [Seven’s] reliance on A’s testimony was not ‘reasonable’. The Complainant had – reasonably, in the ACMA’s view – indicated that he was not yet in a position to comment. It was reasonably foreseeable that the Complainant might have a different view on this point about the patch test, and/or evidence to the contrary. In light of this, at the time of broadcast, [Seven] was obliged, at the very least, to present the statement as a claim or allegation, and not as unequivocal fact.

24    The delegate also noted (at pp 9–10) that Seven had also raised a defence under cl 1.5.4 of the Code.

25    On p 10 of the Report, the delegate concluded that Statement 5 had been presented as a statement of fact and had not been framed as A’s version of events.

26    The delegate then considered further submissions made by Seven in answer to observations made by her in her Preliminary Report. At pp 10–11 of the Report, the delegate expressed her ultimate conclusions in the following terms:

At the time of making and presenting the broadcast, on [Seven’s] own submissions, [Seven] could not be sure whether the issue of the ‘patch test’ had been put to the complainant previously, and what evidence it may have had to the contrary. It had not succeeded in its attempts to verify the account. It was [Seven’s] obligation in this respect to be clear that this statement was an allegation only, or the claim of A.

[Seven] also submitted that, should the ACMA consider the material was inaccurate, a no breach finding should be made under clause 1.5.3.

Clause 1.5.3 provides that ‘a failure to comply will not be a breach of the Code if that failure was due to an act or failure to act of another person, or an accident or some other cause beyond the licensee’s control, provided that the licensee took reasonable precautions and exercised due diligence to avoid the failure’.

Nothing in the information provided by [Seven] adds to the ACMA’s assessment of its efforts to obtain substantive comment from the complainant. For the same reasons as 1.5.2, the ACMA does not consider that [Seven] took reasonable precautions and exercised due diligence to avoid the failure.

Accordingly, [Seven] breached clause 4.3.1 of the Code in relation to the presentation of Statement 5 in the Segment.

27    The segment occupied approximately 10 minutes of the Today Tonight program on 25 July 2011. It began with the reporter interviewing A and emphasising the apparently severe damage caused to her by the IPL treatment which she had received at the clinic. There was then an interruption to the flow of the interview with A when the segment cut to an interview between the reporter and a cosmetic medical practitioner (Dr M) who (apparently) had particular views about unqualified persons administering IPL treatment. The reporter concluded the interview with Dr M by saying: “But A says she wasn’t warned about any of the possible risks.” After that, the segment returned to the interview with A who resumed her account of what had occurred. It was at this point that the reporter (not A) made Statement 5. It was made as a voice over. It was not apparently made in the presence of A. A then resumed her account of events by describing her face and neck after the IPL treatment. She said nothing about any patch tests.

28    Earlier in the segment, the reporter had also said in a voice over that A had gone to the clinic for laser hair removal treatment and had been persuaded, while there, to undergo IPL treatment.

29    After the reporter had made Statement 5, the reporter continued talking with A until the interview was again interrupted by a return to Dr M.

30    The segment then moved to a warehouse and retail premises where the reporter was chasing someone who had apparently made contact on behalf of the clinic in relation to A’s circumstances.

31    The delegate attached the complainant’s Submissions to the Report. She also attached Seven’s Submissions. These were Attachments C and D respectively.

32    It is not necessary to consider other portions of the Report for present purposes.

The Regulatory Framework

33    Under the Broadcasting Services Act 1992 (Cth) (BSA), the ACMA is given a particular statutory function (s 5). That function is a broad one involving the monitoring of (inter alios) the broadcasting industry.

34    Under s 42 of the BSA, each commercial television broadcasting licence is subject to the specific conditions referred to therein. Under s 43, the ACMA may impose additional conditions.

35    Part 9 of the BSA deals with program standards.

36    Section 123 of the BSA, which is found in Pt 9, is in the following terms:

123    Development of codes of practice

(1)    It is the intention of the Parliament that radio and television industry groups representing:

(a)    commercial broadcasting licensees; and

(b)    community broadcasting licensees other than providers of services targeted, to a significant extent, to one or more remote Indigenous communities; and

(ba)    community broadcasting licensees whose services are targeted, to a significant extent, to one or more remote Indigenous communities; and

(c)    providers of subscription broadcasting services; and

(d)    providers of subscription narrowcasting services; and

(e)    providers of open narrowcasting services;

develop, in consultation with the ACMA and taking account of any relevant research conducted by the ACMA, codes of practice that are to be applicable to the broadcasting operations of each of those sections of the industry.

(2)    Codes of practice developed for a section of the broadcasting industry may relate to:

(a)    preventing the broadcasting of programs that, in accordance with community standards, are not suitable to be broadcast by that section of the industry; and

(b)    methods of ensuring that the protection of children from exposure to program material which may be harmful to them is a high priority; and

(c)    methods of classifying programs that reflect community standards; and

(d)    promoting accuracy and fairness in news and current affairs programs; and

(e)    preventing the broadcasting of programs that:

(i)    simulate news or events in a way that misleads or alarms the audience; or

(ii)    depict the actual process of putting a person into a hypnotic state; or

(iii)    are designed to induce a hypnotic state in the audience; or

(iv)    use or involve the process known as subliminal perception or any other technique that attempts to convey information to the audience by broadcasting messages below or near the threshold of normal awareness; and

(f)    in the case of codes of practice developed by commercial broadcasting licensees—broadcasting time devoted to advertising; and

(g)    in the case of codes of practice developed by commercial radio broadcasting licensees—the broadcasting of Australian music; and

(h)    methods of:

(i)    handling complaints from the public about program content or compliance with codes of practice; and

(ii)    reporting to the ACMA on complaints so made; and

(i)    captioning of programs for the hearing impaired; and

(j)    in the case of codes of practice developed by community broadcasting licensees:

(i)    the kinds of sponsorship announcements that may be broadcast by those licensees; or

(ii)    the kinds of sponsorship announcements that particular kinds of program may carry; and

(k)    in the case of codes of practice developed by subscription broadcasting licensees—dealings with customers of the licensees, including methods of billing, fault repair, privacy and credit management;

(l)    such other matters relating to program content as are of concern to the community.

(3)    In developing codes of practice relating to matters referred to in paragraphs (2)(a) and (c), community attitudes to the following matters are to be taken into account:

(a)    the portrayal in programs of physical and psychological violence;

(b)    the portrayal in programs of sexual conduct and nudity;

(c)    the use in programs of offensive language;

(d)    the portrayal in programs of the use of drugs, including alcohol and tobacco;

(e)    the portrayal in programs of matter that is likely to incite or perpetuate hatred against, or vilifies, any person or group on the basis of ethnicity, nationality, race, gender, sexual orientation, age, religion or physical or mental disability;

(f)    such other matters relating to program content as are of concern to the community.

(3A)    In developing codes of practice referred to in paragraph (2)(a), (b) or (c), industry groups representing commercial television broadcasting licensees and community television broadcasting licensees must ensure that:

(a)    for the purpose of classifying films—those codes apply the film classification system provided for by the Classification (Publications, Films and Computer Games) Act 1995; and

(b)    those codes provide for methods of modifying films having particular classifications under that system so that:

(i)    the films are suitable to be broadcast; or

(ii)    the films are suitable to be broadcast at particular times; and

(c)    those codes require that films classified as “M” may be broadcast only:

(i)    between the hours of 8:30 pm on a day and 5 am on the following day; or

(ii)    between the hours of noon and 3 pm on any day that is a school day; and

(d)    films classified as “MA 15+” may be broadcast only between the hours of 9 pm on a day and 5 am on the following day; and

(e)    those codes provide for the provision of advice to consumers on the reasons for films receiving a particular classification.

(3B)    In developing codes of practice referred to in paragraph (2)(a), (b), or (c), industry groups representing commercial television broadcasting licensees and community television broadcasting licensees must ensure that films classified as “M” or “MA 15+” do not portray material that goes beyond the previous “AO” classification criteria.

(3C)    In developing codes of practice referred to in paragraph (2)(a), (b) or (c), industry groups representing providers of open narrowcasting television services must ensure that:

(a)    for the purpose of classifying films—those codes apply the film classification system provided for by the Classification (Publications, Films and Computer Games) Act 1995; and

(b)    those codes provide for methods of modifying films having particular classifications under that system so that:

(i)    the films are suitable to be broadcast; or

(ii)    the films are suitable to be broadcast at particular times; and

(c)    those codes require that films classified as “M” may be broadcast only:

(i)    between the hours of 8.30 pm on a day and 5 am on the following day; or

(ii)    between the hours of noon and 3 pm on any day that is a school day; and

(d)    films classified as “MA 15+” may be broadcast only between the hours of 9 pm on a day and 5 am on the following day; and

(e)    those codes provide for the provision of advice to consumers on the reasons for films receiving a particular classification.

(3D)    In developing codes of practice referred to in paragraph (2)(a), (b) or (c), industry groups representing providers of open narrowcasting television services must ensure that films classified as “M” or “MA 15+” do not portray material that goes beyond the previous “AO” classification criteria.

(3E)    A code of practice referred to in paragraph (2)(i) has no effect to the extent to which it is inconsistent with a standard determined under subsection 130ZZA(1).

(4)    If:

(a)    a group representing a particular section of the broadcasting industry develops a code of practice to be observed in the conduct of the broadcasting operations of that section of the industry; and

(b)    the ACMA is satisfied that:

(i)    the code of practice provides appropriate community safeguards for the matters covered by the code; and

(ii)    the code is endorsed by a majority of the providers of broadcasting services in that section of the industry; and

(iii)    members of the public have been given an adequate opportunity to comment on the code;

the ACMA must include that code in the Register of codes of practice.

(5)    To avoid doubt, a reference in this section to broadcasting operations includes a reference to each commercial television broadcasting service provided by a commercial television broadcasting licensee.

(6)    To avoid doubt, a reference in this section to broadcasting operations includes a reference to each commercial radio broadcasting service provided by a commercial radio broadcasting licensee.

(7)    To avoid doubt, a reference in this section to broadcasting operations includes a reference to each community radio broadcasting service provided by a designated community radio broadcasting licensee.

37    The Code is a code of practice developed and promulgated pursuant to s 123 of the BSA.

38    While s 123(2) is not intended to constitute an exhaustive list of the kinds of matters that may be addressed in codes of practice, s 123(2)(d) specifically identifies one aspiration of such codes as promoting accuracy and fairness in news and current affairs programs.

39    The Code was ultimately registered in the Register of codes of practice pursuant to s 123(4) and s 124 of the BSA.

40    Under s 125 of the BSA, the ACMA may determine program standards where codes of practice fail or where no code of practice is developed. Further, either House of Parliament may amend a code of practice which has been developed under s 123 of the BSA (s 128).

41    Section 148 of the BSA provides:

148    Complaints under codes of practice

If:

(a)    a person has made a complaint to a provider of broadcasting services on a matter relating to:

(i)    program content; or

(ii)    compliance with a code of practice that applies to those services and that is included in the Register of codes of practice; and

(b)    if there is a relevant code of practice relating to the handling of complaints of that kind—the complaint was made in accordance with that code of practice; and

(c)    either:

(i)    the person has not received a response within 60 days after making the complaint; or

(ii)    the person has received a response within that period but considers that response to be inadequate;

the person may make a complaint to the ACMA about the matter.

42    Under s 149, the ACMA must investigate any complaint made pursuant to s 148.

43    Section 170 of the BSA authorises the ACMA to conduct investigations for the purposes of the performance or exercise of any of its broadcasting functions under the BSA. Under s 178, the ACMA may prepare a report in relation to such an investigation. Under s 179, such a report may be published. Under s 180, a person adversely affected by an ACMA report is to be given an opportunity to comment before publication.

44    The relevant version of the Code for the purposes of the present case is that which was promulgated in January 2010.

45    Section 1 (Introduction) contains various provisions which have general application under the Code.

46    Clauses 1.1 to 1.10 provided:

Objectives

1.1    The Code is intended to:

1.1.1    regulate the content of commercial television in accordance with current community standards;

1.1.2    ensure that viewers are assisted in making informed choices about their own and their children’s television viewing;

1.1.3    provide uniform, speedy and effective procedures for the handling of viewer complaints about matters covered by the Code;

1.1.4    be subject to periodic public review of its relevance and effectiveness.

Regulatory Framework

1.2    The Code covers the matters outlined in s.123 of the Broadcasting Services Act 1992, and other program content matters that are of clear concern to the community. It operates alongside:

1.2.1    the Australian Communications and Media Authority’s (the ACMA’s) standards which regulate programs for children and the Australian content of programs and advertisements;

1.2.2    any Codes of advertising authorised by the Australian Competition and Consumer Commission, which govern the content of television commercials and advertising in other media, and other voluntary advertising codes to which advertisers have regard;

1.2.3    the Commercial Television Industry Advisory Notes, which are designed to help and encourage industry employees to understand and be responsive to community concerns about reality television, privacy, the portrayal of Aboriginal and Torres Strait Islander Peoples, cultural diversity, women and men, people with disabilities and commercials or community service announcements directed to children.

1.3    The Broadcasting Services Act 1992 empowers the ACMA to:

1.3.1    impose a condition on a licensee requiring it to comply with the Code (ss.43 and 44). A licensee which does not comply with such a condition may be subject to a range of penalties under the Broadcasting Services Act 1992); or

1.3.2    determine a standard in relation to a matter if it is satisfied that there is convincing evidence that the Code is not operating to provide appropriate community safeguards (s.125).

Scope and Interpretation of the Code

1.4    Where the intent or scope of the Code is in doubt, it must be interpreted in the light of the objectives set out in Clause 1.1.

Compliance with Code

1.5    Licensees must seek to comply fully with the Code, but a failure to comply will not be a breach of the Code if that failure was due to:

1.5.1    a reasonable mistake;

1.5.2    reasonable reliance on information supplied by another person;

1.5.3    an act or failure to act of another person, or an accident or some other cause beyond the licensee’s control, provided that the licensee took reasonable precautions and exercised due diligence to avoid the failure;

1.5.4    an act or failure to act which, in all the circumstances, was clearly peripheral or incidental, and unlikely to offend or materially mislead viewers.

1.6    Where it is possible to remedy a failure to comply with the Code resulting from one or more of the circumstances in Clause 1.5, licensees must do so promptly.

1.7    To avoid doubt, Clause 1.6 does not apply to errors of fact in news and current affairs programs, which are subject to Clause 4.3.11.

Introduction and Future Review of the Code

1.8    This Code has been registered by the ACMA and came into effect on 1 January 2010. This Code replaces the Commercial Television Industry Code of Practice 2004. It will be formally reviewed after three years. If any substantive changes to the Code are needed before then, members of the public will be given an adequate opportunity to comment on those changes.

1.8.1    For the avoidance of doubt, the Multi-Channel Appendix may be amended pursuant to Clause 2 of that Appendix.

Proscribed Material

1.9    A licensee may not broadcast a program, program promotion, station identification or community service announcement which is likely, in all the circumstances, to:

1.9.1    simulate news or events in such a way as to mislead or alarm viewers;

1.9.2    depict the actual process of putting a subject into a hypnotic state;

1.9.3    be designed to induce a hypnotic state in viewers;

1.9.4    use or involve any technique which attempts to convey information to the viewer by transmitting messages below or near the threshold of normal awareness;

1.9.5    seriously offend the cultural sensitivities of Aboriginal and Torres Strait Islander people or of ethnic groups or racial groups in the Australian community;

1.9.6    provoke or perpetuate intense dislike, serious contempt or severe ridicule against a person or group of persons on the grounds of age, colour, gender, national or ethnic origin, disability, race, religion or sexual preference; or

1.9.7    present participants in reality television programs in a highly demeaning or highly exploitative manner.

Demeaning: A depiction or description, sexual in nature, which is a serious debasement of persons, or a group of persons, within a program.

Exploitative: Clearly appearing to purposefully debase or abuse a person, or group of persons, for the enjoyment of others, and lacking moral, artistic or other values.

1.10    Except for Clause 1.9.3, none of the matters in Clause 1.9 will be contrary to this Section if:

1.10.1    said or done reasonably and in good faith in broadcasting an artistic work (including comedy or satire); or

1.10.2    said or done reasonably and in good faith in the course of any broadcast of a statement, discussion or debate made or held for an academic, artistic or scientific purpose or any other identifiable public interest purpose; or

1.10.3    said or done in broadcasting a fair report of, or a fair comment on, any event or matter of identifiable public interest.

47    In my judgment, the concept of “reasonable reliance” on information supplied by another person in cl 1.5.2 focusses on the position of the licensee (in this case, Seven). In order to engage that subclause, the licensee must persuade (or satisfy) the ACMA that its failure to comply fully with the Code was due to:

(a)    The fact that it actually relied upon information supplied by one or more other persons; and

(b)    In all of the circumstances of the particular case, to have so relied was reasonable. That is, objectively speaking, the actual reliance was reasonable.

48    For cl 1.5.3 to be engaged, the failure must be due to an act or failure to act on the part of some other person or an accident or some other cause beyond the licensee’s control. Once one or other of those threshold requirements has been satisfied, the licensee must also demonstrate that it took reasonable precautions and exercised due diligence to avoid the failure to comply.

49    Under cl 1.19.3, current affairs program had the meaning given in cl 4.2 of the Code. In the Code, the draftsman consistently distinguished between news programs and current affairs programs.

50    Section 4 of the Code dealt with news and current affairs programs.

51    Clauses 4.1, 4.2 and 4.3.1 were in the following terms:

Objectives

4.1    This Section is intended to ensure that:

4.1.1    news and current affairs programs are presented accurately and fairly;

4.1.2    news and current affairs programs are presented with care, having regard to the likely composition of the viewing audience and, in particular, the presence of children;

4.1.3    news and current affairs take account of personal privacy and of cultural differences in the community;

4.1.4    news is presented impartially.

Scope of the Code

4.2    Except where otherwise indicated, this Section applies to news programs, news flashes, news updates and current affairs programs. A “current affairs program” means a program focussing on social, economic or political issues of current relevance to the community.

News and Current Affairs Programs

4.3    In broadcasting news and current affairs programs, licensees:

4.3.1    must broadcast factual material accurately and represent viewpoints fairly, having regard to the circumstances at the time of preparing and broadcasting the program;

4.3.1.1    An assessment of whether the factual material is accurate is to be determined in the context of the segment in its entirety.

…

52    Clauses 4.3.11, 4.4 and 4.5 were in the following terms:

4.3.11    must make reasonable efforts to correct significant errors of fact at the earliest opportunity. A failure to comply with the requirement in clause 4.3.1 to broadcast factual material accurately will not be taken to be a breach of the Code if a correction, which is adequate and appropriate in all the circumstances, is made within 30 days of the licensee receiving a complaint or a complaint being referred to the ACMA (whichever is later).

4.4    In broadcasting news programs (including news flashes) licensees:

4.4.1    must present news fairly and impartially;

4.4.2    must clearly distinguish the reporting of factual material from commentary and analysis.

4.5    In broadcasting a promotion for a news or current affairs program, a licensee must present factual material accurately and represent featured viewpoints fairly, having regard to the circumstances at the time of preparing and broadcasting the program promotion, and its brevity. A licensee is not required by this clause to portray all aspects or themes of a program or program segment in a program promotion, or to represent all viewpoints contained in the program or program segment.

53    The Code required that:

(a)    Both news and current affairs programs be presented accurately and fairly;

(b)    News also be presented impartially;

(c)    In both news programs and current affairs programs, factual material be broadcast accurately and viewpoints be represented fairly, having regard to the circumstances at the time of preparing and broadcasting the particular program and, in the case of factual material, accuracy is to be determined in the context of the segment in its entirety.

54    I agree with the submission made by Senior Counsel who appeared on behalf of Seven that the Code does not require that a current affairs program (as defined in cl 4.2 of the Code) be presented impartially. However, such programs must be presented fairly and points of view which are expressed in the program must be represented fairly, having regard to the circumstances at the time of preparing and broadcasting the program.

55    In the present case, Seven accepts that Statement 5 was inaccurate. It also accepts that, if it is not successful in its judicial review challenge to the ACMA’s finding that it was not entitled to rely upon cl 1.5.2 of the Code (reasonable reliance upon information supplied by another person), the ACMA’s determination in respect of Statement 5 will stand.

56    Thus, it is the ACMA’s approach to the interpretation and application of cl 1.5.2 of the Code that is at the heart of Seven’s challenge to the ACMA’s determination in relation to Statement 5 in the present case.

Consideration

57    Seven relied upon s 5(1)(e) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) and s 39B of the Judiciary Act 1903 (Cth) in various ways.

58    Section 5(1)(e) of the ADJR Act provides:

5     Applications for review of decisions

(1)    A person who is aggrieved by a decision to which this Act applies that is made after the commencement of this Act may apply to the Federal Court or the Federal Circuit Court for an order of review in respect of the decision on any one or more of the following grounds:

…

(e)    that the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made;

…

59    In submissions made to the Court in support of its application, Seven appeared also to rely upon s 5(1)(f) of the ADJR Act. That section is in the following terms:

5 Applications for review of decisions

(1)    A person who is aggrieved by a decision to which this Act applies that is made after the commencement of this Act may apply to the Federal Court or the Federal Circuit Court for an order of review in respect of the decision on any one or more of the following grounds:

…

(f)    that the decision involved an error of law, whether or not the error appears on the record of the decision;

…

60    Presumably, s 39B is the principal foundation for Seven’s challenges to the ACMA’s determination in respect of Statement 5 based upon alleged errors of law and irrationality.

61    In its Amended Originating Application for Judicial Review, Seven relied upon six grounds of review. I shall deal with each of those grounds in turn.

Ground 1 – Failure to Consider the Broadcast as a Whole

62    Seven submitted that the ACMA failed to take into account the segment in its entirety when considering whether Statement 5 was accurate. It submitted that all that the ACMA did was to consider the statement itself in isolation and nothing else. Seven then submitted that it was readily apparent from a fair consideration of the whole segment that Statement 5 was based solely on A’s account of events and that the clinic had not provided its version of events to Seven. It was then submitted on behalf of Seven that to tell a story based upon another person’s account of relevant events is to rely upon what that person says. To characterise Statement 5 as an unqualified statement of fact was to ignore the context in which it was made and thus was to approach a consideration of the complaint by not paying due regard to the requirements of cl 4.3 of the Code and, in particular, to the requirements of cl 4.3.1.1 of the Code.

63    Seven contended that this fundamental error in approach was an error of law, an improper exercise of power and a jurisdictional error.

64    The ACMA submitted that, in respect of the complaint about Statement 5, the ACMA had to assess how the relevant statement would have been understood by ordinary reasonable viewers of the program. The ACMA applied its own guidelines to that question viz the ordinary reasonable viewer test which it set out in the Report and in Attachment B. Notwithstanding that those guidelines are somewhat prescriptive, they remain flexible and sensible. The mere fact that other characterisations of Statement 5 in the context of the segment as a whole might have been available does not mean that the ACMA failed properly to apply cl 4.3.1 of the Code (including cl 4.3.1.1).

65    Several voice over statements made by the reporter were not qualified by a specific reference that A had made those statements. Those statements were not attributable to any particular source.

66    In my judgment, Seven has failed to make out ground 1.

67    In order to do so, it must demonstrate that the ACMA did not apply cl 4.3.1 of the Code (esp cl 4.3.1.1). There is no basis for the Court to make such a finding. The ACMA referred to cl 4.3.1 (at p 3 of the Report) when addressing the question of accuracy of factual content. It interpreted Statement 5 as an unequivocal statement of fact. That interpretation was open to it. In the segment, the assertion contained in Statement 5 was not sourced back to A, either by the use of words of qualification in respect of Statement 5 or by reference to other parts of the segment. Statement 5 was made as a voice over unconnected directly to A or to her image on the screen. The concluding remarks made by the presenter of the program were not such as to inevitably lead to the conclusion that Seven was asserting in the segment that Statement 5 was based on A’s account, and only on A’s account. For these reasons and for the reasons submitted by the ACMA, the ACMA’s conclusion that Statement 5 was an unequivocal statement of fact was clearly open to it.

68    I reject ground 1.

Grounds 2, 3 and 4 – Reasonable Reliance under Clause 1.5.2 of the Code

69    Seven submitted that the ACMA accepted that, in making Statement 5, Seven had, in fact, relied upon information supplied by A. The issue raised by these grounds is whether that reliance was reasonable.

70    Seven next submitted that information supplied by only one person may reasonably be relied upon even if that information later turns out to have been inaccurate or false. It argued that the ACMA had reasoned that information supplied by only one person in circumstances where Seven had not heard from the other side of things (the clinic) could not be reasonably relied upon. This line of argument culminated in the proposition that it is always unreasonable to rely upon one person’s information unless that information has already been shown to be correct or unless there is no foreseeable prospect of a contrary account. Seven went on to submit that the ACMA asked itself the wrong question in dealing with Statement 5. Instead of asking whether it was reasonable for Seven to have relied upon the information provided by A, the ACMA asked itself whether the information provided by A should have been presented in a different way. This was an error of law, so it was submitted.

71    Seven also submitted that another way of expressing the ACMA’s error is that it took into account a consideration which, on the proper construction of the Code, it was precluded from taking into account, namely whether the factual material in question could or should have been presented in a different way.

72    These submissions now made on behalf of Seven ignore the way in which it sought to secure the benefit of cl 1.5.2 before the ACMA. In its submissions to the ACMA, Seven said that it was reasonable for it to have relied upon information supplied by A alone because the clinic had not made any meaningful response to its reporter’s enquiries and exhortations within the time frame unilaterally set by Seven. But the ACMA thought otherwise. It closely examined the communications between Seven and the clinic in the period between 22 July 2011 and 25 July 2011 and concluded that Seven’s reliance on information supplied by A alone was not reasonable. This was because, on 25 July 2011, the clinic had sent an email to Seven in which the clinic said that it was conducting a full investigation into the matter and that it was premature for the clinic to comment further until that investigation had been completed. In those circumstances, the ACMA concluded that it was not reasonable for Seven to have accepted and acted solely on A’s version of events without giving the clinic a fair opportunity to respond. If it had truly been important for the program to go to air before that response was to hand, then the statement should have been qualified.

73    This approach was not incorrect and does not reveal reviewable error. By taking this approach, the ACMA was not dictating to Seven the terms in which it should present its program. Nor did the ACMA usurp a role which it did not truly have. All that it did was form a view on the facts known to it that, in the circumstances which obtained when the program went to air, it was not reasonable for Seven to have relied on A as its sole source of information about the relevant events. This conclusion was clearly open to it.

74    As submitted on behalf of the ACMA, the ACMA did not intend to foreclose that, in other circumstances, reliance on third party information alone might be reasonable notwithstanding the absence of third party verification. Here, a contrary account to that proffered by A was at least on the cards. For that reason, reliance by Seven on A alone was not reasonable.

75    I reject grounds 2, 3 and 4.

Grounds 5 and 6 – Perversity and Irrationality

76    These grounds should be rejected as having no merit.

77    If Seven cannot succeed with grounds 2, 3 and 4, there is no possibility that it can succeed on these grounds. Neither the principle in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223 nor that developed in Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 at 647–650 [130], [133] and [135] (per Crennan and Bell JJ) are engaged in the circumstances of this case.

Conclusions

78    Seven has failed to make out any of the grounds relied upon in support of the relief which it claims in its Amended Originating Application. Accordingly, that Application must be dismissed with costs.

79    There will be orders accordingly.

Associate:

Dated:    24 June 2014