Federal Court of Australia

Melbourne City Council v Telstra Corporation Limited [2020] FCAFC 200

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The declaration made by the primary judge on 10 March 2020 be set aside.

3.    The originating application in proceeding VID500/2019 be dismissed.

4.    The order for costs made on 17 March 2020 be set aside.

5.    The first respondent pay the costs of the appellant below and in this appeal.

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

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The declaration made by the primary judge on 10 March 2020 be set aside.

3.    The originating application in proceeding VID500/2019 be dismissed.

4.    The order for costs made on 17 March 2020 be set aside.

5.    The first respondent pay the costs of the appellant below and in this appeal.

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

REASONS FOR JUDGMENT

GLEESON J:

1    I have had the benefit of reading the draft judgments of Charlesworth J and O’Bryan J.

2    The first respondent to the appeals (Telstra) contends that the New Payphone Cabinets that it proposes to install at locations in Melbourne, Brisbane and Sydney, are “low-impact facilities” and consequently do not require planning approval, except to the extent that Telstra wishes to use the facilities to display commercial advertising. Clause 6 of Div 3 of Sch 3 to the Telecommunications Act 1997 (Cth), which relevantly permits the installation of a “low-impact facility” in certain circumstances, directs attention to the characteristics of a facility proposed to be installed, including its uses.

3    The primary judge’s finding, at [130] of his Honour’s reasons, that whether the New Payphone Cabinets will or will not be permitted to display commercial advertising is in the hands of the relevant local authority, tends to presuppose the future installation of the New Payphone Cabinets regardless of whether planning approval to display commercial advertising is obtained. That finding reflects the issue raised by the declaratory relief sought in the originating application, namely, whether the installation of the New Payphone Cabinets involves the installation of low-impact facilities.

4    As explained by O’Bryan J, the New Payphone Cabinets the subject of the appeal are proposed to be installed only after planning approval is obtained to display commercial advertising. In those circumstances and otherwise for the reasons given by O’Bryan J, I agree that the primary judge erred in failing to find that the New Payphone Cabinets proposed to be installed do not satisfy criteria (d) of the Telecommunications (Low-impact Facilities) Determination 2018 (Cth) and, accordingly, none of the New Payphone Cabinets is a “low-impact facility”.

5    I respectfully agree with the orders proposed by O’Bryan J.

Associate:

Dated:    17 November 2020

REASONS FOR JUDGMENT

CHARLESWORTH J:

6    The respondent to these appeals, Telstra Corporation Limited, is the holder of a carrier licence issued under the Telecommunications Act 1997 (Cth) (Telco Act). It proposes to install facilities referred to as New Payphone Cabinets in the central business districts of Australian capital cities. Telstra contends that the New Payphone Cabinets are low-impact facilities within the meaning of Sch 3 to the Telco Act and the Telecommunications (Low-impact Facilities) Determination 2018 (Cth) and that, accordingly, it is entitled to install the New Payphone Cabinets without first obtaining approvals under State planning and development laws. Telstra applied to this Court for a declaration of right in respect of that asserted entitlement.

7    The appellants, Melbourne City Council (MCC) and Brisbane City Council (BCC) (together, the Councils) are local government authorities responsible for administering and enforcing State planning laws within their respective municipalities. They were joined as parties to the proceedings at first instance by consent. Among other things, the Councils argued that the New Payphone Cabinets were not low impact facilities because (relevantly) it was Telstra’s present intention to use the facilities for the display of third party commercial advertising once they were installed.

8    The primary judge rejected the Councils’ argument and granted Telstra declaratory relief in the following terms:

The installation of New Payphone Cabinets is an activity authorised by Schedule 3 to the Telecommunications Act 1997 (Cth) because it involves the installation of ‘low-impact facilities’ within the meaning of Schedule 3 to the Telecommunications Act 1997 (Cth) and the Telecommunications (Low-impact Facilities) Determination 2018 (Cth).

See Telstra Corporation Limited v Melbourne City Council [2020] FCA 305 (Reasons).

9    The Councils have each commenced an appeal from that judgment on identical grounds (VID 232/2020 and VID 234/2020 respectively). For the reasons that follow, the appeals should be dismissed.

LEGISLATION

10    The “main object” of the Telco Act is to provide a regulatory framework that promotes (among other things) the availability of accessible and affordable carriage services that enhance the welfare of Australians: s 3(1). The “other objects” include those set out in s 3(2)(a), namely:

(a)    to ensure that standard telephone services and payphones are:

(i)    reasonably accessible to all people in Australia on an equitable basis, wherever they reside or carry on business; and

(ii)    are supplied as efficiently and economically as practicable; and

(iii)    are supplied at performance standards that reasonably meet the social, industrial and commercial needs of the Australian community;

11    Schedule 3 to the Telco Act applies by virtue of s 484. It confers powers and immunities on carriers, including in relation to the installation of facilities. Clause 6 of Div 3 relevantly provides:

(1)    A carrier may, for purposes connected with the supply of a carriage service, carry out the installation of a facility if:

…

  (b)    the facility is a low-impact facility (as defined by subclause (3)); or

…

(2)    If subclause (1) authorises a carrier to carry out a particular activity, the carrier may, for purposes in connection with the carrying out of that activity:

  (a)    enter on, and occupy, any land; and

(b)    on, over or under the land, do anything necessary or desirable for those purposes, …

…

(3)    The Minister may, by legislative instrument, determine that a specified facility is a low-impact facility for the purposes of this clause. The determination has effect accordingly.

12    The word “installation”, in relation to a facility, is defined in cl 2 of Sch 3 to include:

 (a)    the construction of the facility on, over or under any land; and

 (b)    the attachment of the facility to any building or other structure; and

(c)    any activity that is ancillary or incidental to the installation of the facility (for this purpose, installation includes an activity covered by paragraph (a) or (b)).

13    Division 7 of Sch 3 is headed “Exemptions from State and Territory Laws”. The general rule (established by cl 36(1)) is that Div 3 does not operate to authorise an activity to the extent that the carrying out of the activity would be inconsistent with the provisions of the law of a State. That general rule has effect subject to any exemptions that are applicable under cl 37. Clause 37(2) relevantly provides that a carrier may engage in an activity authorised by Div 3 despite a law of a State about such matters as town planning, environmental impacts, the protection of natural or cultural heritage, the powers and functions of a local government body and the use of land.

14    The Determination was made by the Minister in the exercise of the power conferred by cl 6(3). Part 6 of the Schedule to the Determination contains the following table:

15    By s 3.1(1) of the Determination, a facility described in column 2 of the table is a low-impact facility if it is “installed or to be installed” in an area mentioned in column 3. Those areas include local government areas in which the Councils have responsibility for the administration of State laws regulating the use of the land.

16    We are here concerned with Item 1. The phrase “public payphone cabinet or booth” in that item is not defined.

17    For the purposes of criterion (a) of Item 1, a “carriage service” is a service for carrying communications by defined means:  Telco Act s 7. Section 15 of the Telco Act defines a “content service” as:

(a)    a broadcasting service; or

(b)    an on-line information service (for example, a dial-up information service); or

(c)    an on-line entertainment service (for example, a video-on-demand service or an interactive computer game service); or

(d)    any other on-line service (for example, an education service provided by a State or Territory government); or

(e)    a service of a kind specified in a determination made by the Minister for the purposes of this paragraph.

18    For the purposes of criterion (d) of Item 1, “standard telephone services” relevantly means “a carriage service ... for the purpose of voice telephony”:  Telco Act, s 7, Telecommunications (Consumer Protection and Service Standards) Act 1999 (Cth), s 6.

19    The Determination restated (with minor amendments) the terms of the Telecommunications (Low-impact Facilities) Determination 1997. The amendments included the addition to para (d) of Item 2 the phrase “or displayed as part of the supply of a content service”. As can be seen, those words appear in the Determination in connection with a public payphone instrument but not in connection with a public payphone cabinet or booth. The explanatory memorandum to the Determination said this of the amendment:

Current arrangements do not permit the installation of public payphones as low-impact facilities if the payphone displays advertising other than advertising related to the supply of the standard telephone service.

However, technological change and customer demand will require payphones to contain, for example, interactive multimedia payphone instruments. In order to be able to supply such services, carriers will need to secure the involvement of commercial organisations, which will require commercial advertising on display screens or on the public payphone instrument.

This amendment enables carriers to advertise on a discreet screen or static display located on the payphone instrument. Advertising of this nature must not be used for general advertising purposes and must specifically relate to the content service of the commercial organisation.

Further, it is not considered appropriate that carriers be permitted to advertise on the actual payphone booth and therefore item 1 (d) of Part 5 [now Part 6 in the current Determination] remains unamended. Advertising on the payphone cabinet is highly visible and would require local government approval.

FACTS

20    The following objective facts are drawn from the reasons of the primary judge and are not subject to challenge.

21    Telstra is modernising its existing payphone network. The upgrade involves the replacement of existing and dated payphones and booths with the New Payphone Cabinets. The front view of the New Payphone Cabinets (depicted below) includes a shelf structure with open glass sides, housing a payphone and a digital screen.

22    The rear view (depicted below) is comprised of a digital LED screen.

23    The larger versions of the New Payphone Cabinets are more than 3m high and 1m wide.

24    In 2017 Telstra entered into an agreement with AdBooth Pty Ltd titled “out of Home Advertising Program Agreement” relating to the installation of cabinets having the same appearance and functions as the New Payphone Cabinets and the display of advertising on their digital screens. The primary judge described AdBooth’s responsibilities under that agreement as:

(a)    designing and developing the New Payphone Cabinets, in conjunction with Telstra;

(b)    producing/supplying the New Payphone Cabinets;

(c)    obtaining planning permits for the display of commercial advertising on the New Payphone Cabinets;

(d)    together with Telstra, selecting locations for the New Payphone Cabinets with regard to advertising value;

(e)    installing and maintaining the New Payphone Cabinets;

(f)    the production, installation, removal and management of all advertising (including STS related, or other Telstra, advertising) displayed on the 32” screens; and

(g)    all aspects of the sales, production, installation and removal of third-party commercial advertising on the 75” screens.

Reasons at [35].

25    Telstra’s responsibilities related to the installation and testing of the payphone and the installation of communications cables and pits.

26    Between June and October 2018, Telstra carried out the installation of 34 such cabinets within the central business district of the City of Melbourne without obtaining planning permits under the law of Victoria and without objection by MCC. Some years before the installation of those cabinets, AdBooth applied to the MCC on Telstra’s behalf for prospective approval to display third party commercial advertising on them. The permits were granted and Telstra proceeded to install the cabinets after serving statutory notices required under Sch 3 of the Telco Act.

27    In November 2018 Telstra, by its agent Urbis Pty Ltd, made 81 separate applications to MCC for planning permits to display advertising on 81 New Payphone Cabinets. It is common ground that Telstra has plans to install 1,800 such cabinets throughout Australia.

28    Each of the planning permit applications made to MCC contain statements to the effect that:

(1)    Telstra was partnering with JCDecaux, an “outdoor communications company” to provide, operate and service more than 1,800 New Payphone Cabinets throughout Australia.

(2)    Telstra could install and operate the New Payphone Cabinets as low-impact facilities with immunity from State laws and the powers of local government authorities pursuant to Sch 3 of the Telco Act.

(3)    The statutory right of installation included “the installation and use of” a digital screen for the purpose of advertising relating to the supply of standard telephone services.

(4)    The New Payphone Cabinets would initially be installed under Sch 3 of the Telco Act and the payphone would initially display advertising for standard telephonic services as permitted by the Determination.

(5)    Town planning approval was nonetheless required to use the digital screen for the purpose of displaying third party advertising content.

(6)    The scope of the application was expressed to be limited to “third party advertising content change only”.

(7)    Approval for the installation of the structure was not required, and therefore did not form a part of Telstra’s application to MCC.

29    Under the heading “Commonwealth Legislation”, the permit application stated:

In this instance, it is proposed that the Smart City Payphone will only display advertising related to the supply of standard telephone services (in compliance with the Low Impact Facilities Determination 2018 (Cth) during and upon the completion of the exercise of statutory right under Schedule 3 of the Telecommunications Act 1997 (Cth). Subject to the relevant planning approval being obtained to allow third-party advertising, this would then be introduced at a future point in time.

Introduction of an additional form of advertising content on the Smart City Payphone, after the completion of the compliant exercise of statutory rights under Schedule 3 of the Telecommunications Act 1997 Cth (and subject to town planning approval being procured for a change of content for the existing digital screen), does not invalidate the installation nor affect Telstra’s statutory powers and immunities in respect of the Smart City Payphone.

30    In addressing the planning assessment criteria, Telstra asserted that the change of the content of the advertising displayed on the New Payphone Cabinets would not materially affect the appearance of the streetscape because Telstra was entitled to install the facilities and display advertising for standard telephone services on their digital screens in any event. The planning impact, Telstra stated, must accordingly be assessed by reference to the degree of change in appearance of the material displayed and on the assumption that the structure that Telstra was authorised to install under immunity from State planning laws would otherwise be unaffected by the change in advertising content.

31    MCC refused all 81 applications under the Planning and Environment Act 1987 (Vic) and the Melbourne Planning Scheme on the bases that:

(1)    the proposed payphone and electronic promotional signs were not low-impact facilities as described in the Determination and were therefore subject to the Melbourne Planning Scheme; and

(2)    the New Payphone Cabinets were not considered to be acceptable under 21 separately identified clauses of the Melbourne Planning Scheme relating to urban design, built environment, safety (including traffic safety) and public amenity.

32    On the same day, MCC filed an application in the Victorian Civil and Administrative Tribunal (VCAT) seeking declarations under s 149A of the Planning and Environment Act that:

(a)    that the New Payphone Cabinets are not ‘low-impact facilities’ as described in the [Determination];

(b)    that the construction of a New Payphone Cabinet requires a planning permit;

(c)    that the construction of, and display of advertising on, each New Payphone Cabinet should properly be considered together, as part of the assessment of a single planning permit application for each New Payphone Cabinet …

33    Telstra, by its agent, JCDecaux made applications to VCAT under s 77 of the Planning and Environment Act for de novo merits review of 76 of MCC’s refusal decisions.

34    The VCAT applications are stayed pending the determination of the proceedings before the primary judge and now these appeals.

REASONing OF THE PRIMARY JUDGE

35    The primary judge concluded that the New Payphone Cabinets were “public payphone cabinets or booths” within the meaning of the chapeau to Item 1, rejecting MCC’s submissions that they were not sufficiently enclosed and that their size “has nothing to do with the asserted status of the structure as a cabinet for a public payphone … [and] everything to do with the intended use to display advertising”: [74] to [81]. That finding is not challenged.

36    The primary judge said that the Councils’ case was otherwise (at [113]):

… founded principally on the proposition that Telstra’s intention to display commercial advertising, if granted planning permission, operates to strip the New Payphone Cabinets of their otherwise proper characterisation as low-impact facilities, even before the consideration of any relevant planning application to display such advertising.

(emphasis in original)

37    That interpretation, his Honour said, derived no support from the language of the Telco Act.

38    His Honour said (at [114]):

… the relevant definitional criteria for a low-impact facility that is a public payphone cabinet, which appear under the heading ‘Facility’ in the Determination, are concerned with the function of those facilities not statements of future, conditional intention. As the High Court said in Hutchinson 3G Australia Pty Ltd v City of Mitcham [2006] HCA 12; (2006) 80 ALJR 711, 727 [85] (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ) ‘… the definition of the term ‘facility’ in the [Telecommunications] Act requires that attention be directed, not to the motive for the installation of a structure or thing but the function which that structure or thing serves or was designed to serve’.

39    The primary judge went on to say that none of the criteria “suggests that the proper characterisation of a public payphone cabinet or booth has anything to do with future intentions of the carrier – rather, they speak to the functions which the cabinet or booth serves or was designed to serve” (at [115]).

40    His Honour made the following findings in relation to the design of the cabinets (none of which is challenged):

(1)    One of the functions the New Payphone Cabinets was designed to serve was the display of commercial advertising (although whether they would in fact serve that purpose was a different question):  at [116].

(2)    The display of third party commercial advertising by Telstra fell within the definition of a “content service” or a “carriage service” and, accordingly, the New Payphone Cabinets did not fail to satisfy criterion (b) or criterion (c) by reason of their design:  at [116].

(3)    The inclusion of a USB charging port within the New Payphone Cabinets was a trivial variation that did not affect their compliance with criterion (a):  at [123].

41    As to temporal considerations, the primary judge rejected Telstra’s argument to the effect that the words “at the time of installation” must be inserted, by necessary implication, in criterion (d):  at [118]. His Honour accepted the submissions made on behalf of MCC on that issue, including its closing submissions as follows (at [119]):

Essentially, installation of the New Payphone Cabinets will stop at the point that they are ready to be ‘powered up’. However, at that point in time, they are not being ‘used’ and are not capable of being ‘used’ for anything. It is not until electricity flows to the structure that they can be ‘used. But at that point in time they are in operation, and the installation authorisation given by clause 6(1) has ceased to apply. It follows that the construction proposed by Telstra, as a matter of text, context, logic and evidence, is simply not supportable.

42    The primary judge went on to reject the Councils’ submission that Telstra’s intention to display third party commercial advertising on the New Payphone Cabinets after their installation operated to strip them of their status as a low-impact facilities (at [124]). The primary judge went on to conclude that the New Payphone Cabinets satisfied the definitional requirements of a low-impact facility on the balance of the Councils’ own case. His Honour said (at [126]) that the effect of the Telco Act and the Determination was that:

(1)    pursuant to Sch 3 to the Telco Act, Telstra may install a New Payphone Cabinet as a low-impact facility with immunity from State planning laws;

(2)    the statutory right permitted the installation and use of the digital screen (as part of the Cabinets) for the purpose of displaying advertising for standard telephone services, however;

(3)    Telstra required planning approval to use the digital screens to display commercial advertising other than advertising for standard telephone services, that is, to change the content of the advertising displayed on the digital screen.

43    Whether or not Telstra would be permitted to use the New Payphone Cabinets to display commercial advertising (other than advertising for standard telephone services) was, his Honour said, “in the hands of the relevant local authority” at [130]. Accordingly, it was not a matter of undisputed fact that the New Payphone Cabinets would be used for the display of third party advertising because whether or not they would be put to that use was “entirely contingent” upon the grant of approval by the local authorities, including the Councils.

44    His Honour concluded:

131    …. It follows that the legal questions whether, if planning permission to display commercial advertising were granted, (i) the New Payphone Cabinets would continue properly to be characterised as low-impact facilities, (ii) installation of any such cabinets would be ‘invalidated’, or (iii) Telstra’s statutory powers and immunities would be relevantly affected, may never arise.

132    Further, if such planning permission were granted, other fact dependent issues might also then arise, including:  (i) whether the local authority which granted such permission might be precluded (by operation of an estoppel, for example) from contending that its own decision to grant permission to display commercial advertising on a New Payphone Cabinet could affect its status as a lawfully installed low-impact facility and so on, and (ii) who else, if anyone, might have standing to agitate such questions.

133    It follows that these issues must await another day, because courts do not grant declarations in relation to circumstances that have not occurred, and might never happen:  see, eg, University of New South Wales v Moorhouse (1975) 133 CLR 1, 10 (Gibbs J); Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, 582 (Mason CJ, Dawson, Toohey and Gaudron JJ).

GROUNDS OF APPEAL

45    The Councils’ single ground of appeal alleges error in the conclusion that the New Payphone Cabinets “not used to display commercial advertising other than advertising related to the supply of standard telephone services” within the meaning of criterion (d) of Item 1. In construing and applying that criterion, the primary judge is said to have erred in the following respects:

(a)    in finding as a fact that Telstra’s intention was, or alternatively was only, a ‘future, conditional’ intention to display third party commercial advertising on the New Payphone Cabinets;

(b)    in failing to find that, prior to their installation, Telstra had a present intention to display third party commercial advertising on the New Payphone Cabinets which were designed for that purpose;

(c)    in any event, in mischaracterising the Appellant’s case as focussed upon an issue of Telstra’s ‘future, conditional intention’ to display third party advertising on the New Payphone Cabinets, rather than Telstra’s present intention about the future use of a facility designed to be used for the display of third party commercial advertising;

(d)    in law and in fact in failing to find that on the proper construction of Section 3.1 and criteria (d) of Item 1 of Part 6 of the Schedule to the Telecommunications (Low-impact Facilities) Determination 2018 (Cth), that where Telstra held the present intention referred to above (or in the alternative held the future or conditional intention referred to above) then the criteria in (d) would not be satisfied, and each New Payphone Cabinet was thereby not a ‘low impact facility’;

(e)    in law and in fact in failing to find that as a consequence of the failure to satisfy the criteria in (d) referred to above, that on the proper construction and operation of Clause 6.1 of Schedule 3 to the Telecommunications Act, Telstra was not authorised to carry out the installations of the relevant New Payphone Cabinets because it would not involve the installation of ‘low impact facilities’.

46    Paragraph (e) does no more than to state a legal conclusion that would follow should the remaining grounds be upheld.

CONSIDERATION

47    Four observations may be made from the outset.

48    First, Item 1 of the table in Pt 6 is to be understood as describing the features of a facility that is to be installed at a future time. The provisions conferring immunity from the operation of certain State laws could not have meaningful operation if the uses to which the facility is to be put were unable to be identified in advance of its installation. The prospective analysis ensures that there will be certainty as to the rights and obligations of the carrier at the time of the installation of the facility vis a vis others who may have a legal interest in opposing the installation.

49    It follows that the assessment of a facility against the criteria necessarily involves a prospective enquiry as to the uses to which the facility is to be put once it is installed. As part of that prospective assessment, criterion (b) directs attention to its design. In most cases, it will not be difficult to demonstrate that a carrier has the subjective intention to operate a facility to achieve the purposes for which it is designed. The subjective intent of the carrier may be relevant to the limited extent that it is manifested in the design intent under criterion (b).

50    Second, a facility that may be installed without first obtaining approval under State planning laws may then be used in the manner described in Item 1 without first obtaining approval under State law for that use.

51    Third, the words added by amendment to criterion (d) of Item 2 are relevant to the proper interpretation of Item 1, as the difference in text informs the question of what constitutes a “content service”. On one interpretation, text of the amendment tends to suggest that the display of commercial advertising is something that may occur incidentally in the course of providing a content service, but it is not to be regarded as the supply of a content service in and of itself.

52    Fourth, the question of whether the display of commercial advertising constitutes the supply of a “content service” necessarily impacts upon the interpretation and application of the criteria as a whole. If the display of commercial advertising is the supply of a content service (as opposed to something that may occur in the course of supplying a content service), then criterion (d) must be understood as prohibiting a use (commercial advertising for goods and services other than standard telephone services) that would otherwise be permitted under criterion (a), (b) and (c). On the other hand, if the display of commercial advertising is not a content service, then criterion (d) may be understood as permitting installation of a facility for a use (namely the display of commercial advertising for standard telephone services) that might otherwise fall foul of criteria (a), (b) or (c).

53    Having made those observations, it is necessary to emphasise the confines of the arguments advanced on the appeal.

54    There was no challenge to the conclusion that each of the New Payphone Cabinets met the description of a “cabinet”. More significantly, the grounds of appeal did not allege error in the conclusion that the New Payphone Cabinets satisfied criteria (a), (b) and (c). As at first instance, the Councils conceded that the display of commercial advertising per se constitutes the supply of a “content service” within the meaning of criterion (a).

55    It is unnecessary to decide whether that concession accords with the proper construction of the Determination. It is sufficient to note that on the Councils’ own case the New Payphone Cabinets are “used solely for carriage and content services” within the meaning of criterion (a) and “not designed for other uses” within the meaning of criterion (b) and “not fitted with devices or facilities for other uses” within the meaning of criterion (c). Unsurprisingly, the parties’ submissions as to the proper construction of criterion (d) assumed the correctness of those propositions.

56    Understood as a whole, the Councils’ submissions in relation to criterion (d) were to the effect that the Teleco Act ought not to be construed so as to confer on a carrier an immunity from State planning laws for the installation of a structure that has the appearance of a large digital billboard so obviously designed, and in fact intended to be used for, the display of third party commercial advertising for the generation of advertising revenue.

57    One need only refer to the image of the rear of the New Payphone Cabinets to recognise the force in that submission. The objects of the Telco Act are concerned with the efficient and economical provision of standard telephone services to the public, an objective to be met by minimising regulatory burdens that may arise under State laws. The objects are not concerned with the interests of carriers in generating advertising revenue by the display of unsolicited and visually intrusive advertising in public places irrespective of their impact upon such things as traffic safety, pedestrian movement and the overall appearance of the streetscape.

58    As to questions of fact, insofar as it is relevant, Telstra’s intention to use the New Payphone Cabinets for the display of third party commercial advertising is evidenced by its prior contractual arrangements with AdBooth and its present contractual arrangements with JCDecaux. Telstra’s intention is also made plain from the fact that it has made an application to MCC (by its agent JCDecaux) for approval to display commercial advertising (other than advertising for standard telephone services) on the digital screens. Telstra’s intention is also made manifest in the design of the structure itself. Telstra frankly acknowledges that it wishes to use the facilities for the purposes for which they were so obviously designed. On the undisputed evidence, it has arranged its commercial affairs accordingly. On any view of the facts a design intent of the New Payphone Cabinets is to maximise the impact of the commercial advertising displayed in the streetscape so as to generate advertising revenue. The commercial advertising for which the facilities are designed is not incidental to any use the end consumer may make of the standard payphone apparatus itself (compare para (d) of Item 2, as amended). Indeed, the rear facing digital advertising billboard may not be seen by, let alone “used” by, the end user of the payphone apparatus at all.

59    The grounds of appeal must nonetheless be rejected.

60    If it is assumed that a facility designed for the purpose of displaying third party commercial advertising does not offend criterion (b), then it is difficult to see how the existence of a subjective intention to use a facility for the very purpose for which it was designed could offend criterion (d). Expressed another way, to find that Telstra subjectively intended to use the facilities for the display of third party commercial advertising could (in light of the concession made in this case) amount to no more than a finding that Telstra subjectively intended to use the facilities to supply content services. It could not have been intended that the Telco Act and the Determination would operate to render the installation of a facility designed to be put to the uses stated in criterion (a) immune from State planning laws, and yet leave the question of whether the facilities could be operated for the purposes for which they were designed wholly dependent upon the grant of approval under State law. In my view, the points of construction underlying the grounds of appeal cannot be reconciled with the Councils’ concessions as to the meaning of criteria (a), (b) and (c) and the application of those criteria to the facts.

61    The Councils’ problem is most keenly illustrated in the ground of appeal in (b) with its focus on the cabinet design. If there was any occasion to take issue with the design of the New Payhone Cabinets it was in connection with criteria (a), (b) and (c) or in connection with the question of whether Item 1 applied at all. But there is no challenge to any of the findings of the primary judge in relation to those issues.

62    For the purposes of criterion (d) the primary judge did not err in considering, as a discrete question, whether the New Payphone Cabinets would be used for the purpose of displaying third party commercial advertising as a question of objective fact. Approaching the question objectively, the primary judge was correct to conclude that the ability to use the New Payphone Cabinets to display commercial advertising was dependent upon Telstra first obtaining any necessary approvals for the display of the third party advertising content. On the undisputed facts, Telstra did not intend to display third party commercial advertising on the facilities without first obtaining any necessary planning approvals to do so. To the extent that Telstra’s subjective intentions were relevant to criterion (d), it would not constitute an error to describe Telstra’s intentions as relating to a future time and as dependent upon the grant of approval under State law.

63    The appeals may be dismissed without expressing a concluded view as to the proper interpretation of the Determination for all purposes. The possibility that other interested persons, not privy to these appeals, may seek relief in respect of the proposed installation of the New Payphone Cabinets is reason enough to refrain from expressing a concluded view on any broader question.

64    To conclude, each ground of appeal is determined as follows.

65    Ground (a) fails because the question under criterion (d) was whether the facilities would be used for third party commercial advertising as a question of objective fact. On the facts of this case, proof of a subjective desire to use the facilities for that purpose would not yield the answer to that question. To the extent that Telstra’s intention was relevant, it would not be an error to describe the intention as future and conditional in any event.

66    Ground (b) fails both because Telstra did not have an unqualified “present intention” to display third party commercial advertising contrary to State law, and because questions relating to the design of the facilities arose for consideration under criterion (b) not under criterion (d).

67    Ground (c) fails because focusing on Telstra’s present intention about the future use of the facility would not yield an answer to the question arising under criterion (d) and because the implications of the fact that the facilities were designed for the display of third party commercial advertising fell for consideration under criterion (b) not under criterion (d).

68    Ground (d) fails because the construction of criterion (d) advanced by the Councils cannot be reconciled with their concession that the display of unsolicited third party commercial advertising to non-users of the payphone apparatus is the supply of a content service.

69    Ground (e) fails as a consequence of the rejection of the remaining grounds.

70    It follows that both appeals must be dismissed.

Associate:

Dated:    13 November 2020

REASONS FOR JUDGMENT

O’BRYAN J:

Introduction

71    I have had the considerable advantage of reading a draft of the reasons of Charlesworth J. Her Honour has set out the background to the appeals, and the reasoning and conclusions of the primary judge, which I gratefully adopt. Regrettably, I am unable to agree with her Honour’s conclusion as to the disposition of the appeals.

72    At the heart of these appeals is a relatively short question of statutory construction concerning Item 1 of Part 6 of the Schedule to the Telecommunications (Low-impact Facilities) Determination 2018 (Determination), which was made by the Minister for Communications pursuant to clause 6(3) of Schedule 3 of the Telecommunications Act 1997 (Cth) (Telco Act). Item 1 of Part 6 (which I will abbreviate to Item 6-1) describes a public payphone cabinet or booth that meets four conditions or requirements in the following terms:

Public payphone cabinet or booth:

(a)     used solely for carriage and content services; and

(b)     not designed for other uses (for example, as a vending machine); and

(c)     not fitted with devices or facilities for other uses; and

(d)     not used to display commercial advertising other than advertising related to the supply of standard telephone services.

73    The principal question raised by the appeals is whether the primary judge was correct in concluding that the public payphone cabinets proposed to be installed by Telstra within the municipal areas of the Cities of Brisbane, Sydney and Melbourne respectively (referred to as New Payphone Cabinets) fall within the description in Item 6-1. The area of dispute concerns the condition or requirement in paragraph (d) (which I will refer to as condition (d)) that the cabinets are not used to display commercial advertising (other than advertising related to the supply of standard telephone services).

74    Respectfully, I do not agree with the primary judge’s conclusion on that issue. In my view, the facts demonstrate that one of the functions that Telstra’s New Payphone Cabinets are designed to serve is the display of commercial advertising (not limited to advertising related to the supply of standard telephone services). In those circumstances, the New Payphone Cabinets are not a low-impact facility as described in Item 6-1 by reason of condition (d).

75    I would therefore allow both appeals.

Overview of the legislative and regulatory framework

Telco Act Schedule 3

76    The Telco Act regulates the Australian telecommunications industry, including particularly the supply of what are referred to as carriage services and content services in Australia. A carriage service is defined in s 7 of the Telco Act as a service for carrying communications by means of guided and/or unguided electromagnetic energy. A content service is defined in s 15 of the Telco Act as:

(a)     a broadcasting service; or

(b)     an on‑line information service (for example, a dial‑up information service); or

(c)     an on‑line entertainment service (for example, a video‑on‑demand service or an interactive computer game service); or

(d)     any other on‑line service (for example, an education service provided by a State or Territory government); or

(e)     a service of a kind specified in a determination made by the Minister for the purposes of this paragraph.

77    For reasons explained below, it is unnecessary to expand upon the meaning of the term “content service”.

78    The objects of the Telco Act are stated in s 3. Relevantly, the objects include the following:

(1)     The main object of this Act … is to provide a regulatory framework that promotes:

(a)     the long‑term interests of end‑users of carriage services or of services provided by means of carriage services; and

(b)     the efficiency and international competitiveness of the Australian telecommunications industry; and

(c)     the availability of accessible and affordable carriage services that enhance the welfare of Australians.

(2)     The other objects of this Act … are as follows:

(a)     to ensure that standard telephone services and payphones are:

(i)     reasonably accessible to all people in Australia on an equitable basis, wherever they reside or carry on business; and

(ii)     are supplied as efficiently and economically as practicable; and

(iii)     are supplied at performance standards that reasonably meet the social, industrial and commercial needs of the Australian community;

…

79    Schedule 3 to the Telco Act is entitled “Carrier’s powers and immunities”. It is given legal force by s 484 of the Telco Act. As the title implies, and as described in the simplified outline in clause 1, Schedule 3 confers certain powers and immunities on telecommunications carriers. A carrier is the holder of a carrier’s licence under the Telco Act. The requirement to hold a carrier’s licence is governed by Part 3 of the Telco Act. The powers and immunities conferred by Schedule 3 are to enter on land (belonging to other persons) and exercise the following powers:

(a)    the power to inspect the land to determine whether the land is suitable for the carrier’s purposes (governed by Division 2 of Part 1 of Schedule 3);

(b)    the power to install a facility on the land (governed by Division 3 of Part 1 of Schedule 3); and

(c)    the power to maintain a facility that is situated on the land (governed by Division 4 of Part 1 of Schedule 3).

80    The word “facility” is defined broadly in s 7 of the Telco Act as (a) any part of the infrastructure of a telecommunications network or (b) any line, equipment, apparatus, tower, mast, antenna, tunnel, duct, hole, pit, pole or other structure or thing used, or for use, in or in connection with a telecommunications network.

81    This proceeding is concerned with the power to install a facility on land (belonging to another). That power is addressed in Division 3 of Part 1 of Schedule 3 which is entitled “Installation of facilities”. Clause 6(1) (within Division 3) provides that a carrier may, for purposes connected with the supply of a carriage service, carry out the installation of a facility if, among other things, the facility is a low-impact facility as defined by clause 6(3). Clause 6(2) provides that, if clause 6(1) authorises a carrier to carry out a particular activity, the carrier may, for purposes in connection with the carrying-out of that activity:

(a)    enter on, and occupy, any land; and

(b)    on, over or under the land, do anything necessary or desirable for those purposes, including, for example, constructing, erecting and placing any plant, machinery, equipment and goods.

82    The foregoing provisions were considered by Kunc J in NBN Co Limited v Pipe Networks Pty Ltd [2015] NSWSC 475; 295 FLR 256 at [73] – [84]. His Honour observed that clause 6(1) confers a power for specified purposes on a carrier to “carry out the installation of a facility” if certain prerequisites are satisfied. Clause 6(2) involves two elements. First, it requires there to be a particular activity which clause 6(1) authorises the carrier to carry out. Second, if the particular activity is authorised by clause 6(1) then, for purposes in connection with the carrying out of that activity, clause 6(2) authorises the various activities described in paragraphs (a) and (b). Paragraph (a) is to enter on and occupy land and paragraph (b) is to undertake various activities on, over or under the land. His Honour observed that, by clause 6(2), the legislature has expressly authorised certain conduct that would otherwise constitute, amongst other things, the tort of trespass to land.

83    Clause 6(3) provides that the Minister may, by legislative instrument, determine that a specified facility is a low-impact facility for the purposes of clause 6. On 20 February 2018, the Minister for Communications made the Determination. The Determination will be considered in more detail below. It is sufficient to observe at this point that the Determination is an instrument that describes the types of facilities that are low-impact facilities for the purposes of clause 6 of Schedule 3 of the Telco Act. The principal provision in the Determination is s 3.1(1) which states:

A facility described in column 2 of an item in the Schedule is a low-impact facility only if it is installed, or to be installed, in an area mentioned in column 3 of the item.

84    Thus, for a facility to be a low-impact facility, it must be as described in column 2 of an item in the Schedule to the Determination. The Schedule to the Determination is divided into 8 parts which describe different types of facilities. This proceeding concerns Part 6 of the Schedule which is titled “Public Payphones”. Part 6 contains two items: a public payphone cabinet or booth and a public payphone instrument. The descriptions of those items contain conditions that are very similar but not identical. They are as follows:

85    This proceeding concerns Telstra’s proposed public payphone cabinets, and therefore the description in Item 6-1, and the application of condition (d) in that description. Condition (d) says that the cabinet is not used to display commercial advertising, other than advertising related to the supply of standard telephone services. Contextually, it is relevant to note that condition (d) in Item 6-2, which describes a public payphone instrument, is in slightly different terms. It contains an additional carve-out from the prohibition of the display of commercial advertising: in respect of a public payphone instrument, it is permissible to use the instrument to display commercial advertising as part of the supply of a content service. That additional carve-out was introduced in 1999 by way of amendment to the Telecommunications (Low-impact Facilities) Determination 1997 (the predecessor to the 2018 Determination). The purpose of the amendment was explained in an accompanying Explanatory Statement, which stated that technological change and customer demand will require payphones to contain “interactive multimedia payphone instruments” and that this would require commercial advertising on display screens. The Statement continued:

This amendment [viz, to Item 6-2] enables carriers to advertise on a discreet [sic] screen or static display located on the payphone instrument. Advertising of this nature must not be used for general advertising purposes and must specifically relate to the content service of the commercial organisation.

Further, it is not considered appropriate that carriers be permitted to advertise on the actual payphone booth and therefore item 1(d) of Part 5 [Part 6 in the 2018 Determination] remains unamended. Advertising on the payphone cabinet is highly visible and would require local government approval.

86    Thus, there is a clear and intended difference between condition (d) in respect of public payphone cabinets and public payphone instruments. In respect of the former, the Minister considered that it was not appropriate that carriers be permitted to advertise on the cabinet or booth. The statement in the Explanatory Statement that advertising on the payphone cabinet would require local government approval is considered further below.

87    Division 5 of Part 1 of Schedule 3 of the Telco Act stipulates various requirements that a carrier must comply with when seeking to engage in an activity under clause 6. Clause 15 stipulates that the Minister may, by legislative instrument, make a Code of Practice setting out conditions that are to be complied with by carriers in relation to the activities covered by Divisions 2, 3 or 4 and requires carriers to comply with the Code of Practice. Clause 17 stipulates that, before engaging in an activity under Divisions 2, 3 or 4 in relation to any land, the carrier must give written notice of its intention to do so to the owner and any occupier of the land. Such a notice is commonly referred to as a “land access and activity notice” (LAAN). Subject to exceptions that are not presently relevant, a LAAN must be given 10 business days before the carrier begins to engage in the activity.

88    As explained by the primary judge (Reasons [64]-[66]), the powers and immunities conferred by Schedule 3 to the Telco Act impact upon State (and Territory) planning laws (as well as other laws). Division 7 of Part 1 of Schedule 3 is titled "Exemptions from State and Territory laws". Within that Division, clauses 36 to 38 provide as follows:

36 Activities not generally exempt from State and Territory laws

(1)    Divisions 2, 3 and 4 do not operate so as to authorise an activity to the extent that the carrying out of the activity would be inconsistent with the provisions of a law of a State or Territory.

(2)    The rule set out in subclause (1) has effect subject to any exemptions that are applicable under clause 37.

37 Exemption from State and Territory laws

(1)     This clause applies to an activity carried on by a carrier if the activity is authorised by Division 2, 3 or 4.

(2)     The carrier may engage in the activity despite a law of a State or Territory about:

(a)     the assessment of the environmental effects of engaging in the activity; or;

(b)     the protection of places or items of significance to Australia’s natural or cultural heritage; or

(c)     town planning; or

(d)     the planning, design, siting, construction, alteration or removal of a structure; or

(e)     the powers and functions of a local government body; or

(f)     the use of land; or

(g)     tenancy; or

(h)     the supply of fuel or power, including the supply and distribution of extra‑low voltage power systems; or

(i)     a matter specified in the regulations.

(3)     Paragraph (2)(b) does not apply to a law in so far as the law provides for the protection of places or items of significance to the cultural heritage of Aboriginal persons or Torres Strait Islanders.

(4)     Paragraph (2)(h) does not apply to a law in so far as the law deals with the supply of electricity at a voltage that exceeds that used for ordinary commercial or domestic requirements.

38 Concurrent operation of State and Territory laws

It is the intention of the Parliament that, if clause 37 entitles a carrier to engage in activities despite particular laws of a State or Territory, nothing in this Division is to affect the operation of any other law of a State or Territory, so far as that other law is capable of operating concurrently with this Act.

89    A number of observations can be made about the above provisions in so far as they are relevant to the present proceeding. First, clause 36 provides that State and Territory laws are to have primacy over, relevantly, the powers conferred by Division 3 of Schedule 3, subject to clause 37. Second, clause 37 provides that the powers conferred by Division 3 of Schedule 3 are to have primacy over, amongst other laws, State and Territory town planning laws. Third, clause 38 provides that, whilst clause 37 confers primacy over State and Territory town planning laws, State and Territory laws continue to apply in so far as they are capable of operating concurrently with the Telco Act (relevantly here, with the powers conferred by Division 3).

Melbourne Planning Scheme

90    On the appeals, the parties did not address the applicable town planning requirements in any detail. Nevertheless, some background is relevant to the issues raised on the appeals. While the respondents in the proceeding below were the City Councils of Brisbane, Sydney and Melbourne, and the appellants on the two appeals are the City Councils of Brisbane and Melbourne, the proceeding below arose out of a decision of the Melbourne City Council to refuse Telstra’s planning applications in respect of the New Payphone Cabinets. Accordingly, it is only necessary to refer to the town planning law applicable to the City of Melbourne municipal area.

91    As discussed further below, in the belief that the New Payphone Cabinets are low-impact facilities within Item 6-1 of the Determination, Telstra did not seek to negotiate their installation within the City of Melbourne municipal area with the Melbourne City Council, nor seek town planning approval from the Melbourne City Council for their installation in the City of Melbourne municipal area. However, Telstra did seek town planning approval to display commercial advertising on the rear digital screen on the New Payphone Cabinets.

92    In Victoria, town planning is governed by the Planning and Environment Act 1987 (Vic). Part 2 of that Act provides for the approval of a planning scheme for a municipal area. Section 6(2) provides that a planning scheme may, amongst other things, regulate or prohibit the use or development of any land. The Melbourne Planning Scheme applies to the City of Melbourne municipal area.

93    The parties referred the Court to two clauses of the Melbourne Planning Scheme. The first was clause 52.05 which regulates the development of land for signs and associated structures, and particularly the circumstances in which a permit is required to construct a sign or put up a sign for display. Clause 73.02 of the Melbourne Planning Scheme defines a sign to include a structure specifically built to support or illuminate a sign.

94    The second was clause 52.19 which regulates telecommunications infrastructure and services. Subclause 52.19-1 provides as follows:

A permit is required to construct a building or construct or carry out works for a Telecommunications facility. This does not apply to buildings and works for:

•    A low-impact facility as described in the Telecommunications (Low-impact) Facilities Determination 1997 (Cth).

•    …

•    An activity authorised under clause 6(2) of Division 3 of Schedule 3 of the Telecommunications Act 1997 (Cth).

95    It can be seen that clause 52.19-1 refers to the Telecommunications (Low-impact) Facilities Determination 1997 (Cth), which preceded the 2018 Determination. Section 31 of the Interpretation of Legislation Act 1984 (Vic) would require the reference in the Melbourne Planning Scheme to the 1997 Determination to be construed as a reference to the 2018 Determination.

96    Clause 73.03 of the Melbourne Planning Scheme defines a “Telecommunications facility” as:

Land used to accommodate any part of the infrastructure of a Telecommunications network. It includes any telecommunications line, equipment, apparatus, telecommunications tower, mast, antenna, tunnel, duct, hole, pit, pole, or other structure or thing used, or for use in or in connection with a Telecommunications network).

97    Telstra submitted that, notwithstanding its view that the New Payphone Cabinets were low-impact facilities within Item 6-1, it required a permit under clause 52.05 to display commercial advertising on those facilities. The appellants did not contest that conclusion. The conclusion appears to be based on the view that, as commercial advertising is not a permitted feature or function of a public payphone cabinet as described in Item 6-1, the activity of commercial advertising does not benefit from the exemption afforded by clause 37 of Schedule 3 of the Telco Act or subclause 52.19-1 of the Melbourne Planning Scheme.

Factual findings

98    On the appeals, there was no challenge to the primary judge’s findings of fact save with respect to the proper characterisation of Telstra’s intentions with regard to the display of commercial advertising on the New Payphone Cabinets. By appeal grounds 1(a) and (b), the appellants contend that the primary judge erred in:

(a)    finding that Telstra's intention was a "future, conditional" intention to display third party commercial advertising on the New Payphone Cabinets; and

(b)    in failing to find that, prior to their installation, Telstra had a present intention to display third party commercial advertising on the New Payphone Cabinets which were designed for that purpose.

99    In support of those grounds of appeal, the appellants took the Court to parts of the evidence before the primary judge which provided context for, and to some extent an elaboration of, the primary judge’s factual findings. The evidentiary material included the affidavit of Rebecca Haagsma, who gave evidence for Telstra. Since October 2018 (and at the time of her affidavit), Ms Haagsma was an executive in Telstra’s Product and Technology Group and had responsibility for, amongst other things, Telstra’s public payphone upgrade project. The material also included documents exhibited to Ms Haagsma’s affidavit and other documents of Telstra in evidence. Telstra did not suggest that the evidence was unreliable in any way.

100    The following summary of the facts is based on the findings of the primary judge, but with additional matters sourced from the evidence before the primary judge.

The New Payphone Cabinets

101    Telstra is in the course of modernising its existing payphone network by replacing its existing payphones with the New Payphone Cabinets. It is the first major upgrade in the design and functionality of such payphones since the 1980s (Reasons [15]). The upgrade project involves the removal of existing payphones and the installation in their place of New Payphone Cabinets, which incorporate a payphone, fixed and mobile telecommunications network connections to the payphone cabinet, a mobile device charging port, and front and rear facing electronic LCD screens through which digital content can be delivered using fixed and mobile network connections (Reasons [16]). The front view of the New Payphone Cabinets is depicted below:

102    The rear view is depicted below.

103    It is an obvious feature of the New Payphone Cabinets that the rear screen offers a large advertising space – a digital billboard. Plainly, the rear screen does not provide a service to payphone users, who would interact with the payphone on the front side of the cabinet. It provides a digital advertising space able to be viewed by members of the public passing by.

The Advertising Program Agreement

104    The primary judge found that Telstra was a party to a 2017 agreement called an “Out of Home Advertising Program Agreement” with AdBooth Pty Ltd (AdBooth), which is a wholly owned subsidiary of the advertising agency JCDecaux Australia (which I will refer to as the Advertising Program Agreement) (Reasons [35]). His Honour found that, under that agreement, AdBooth was responsible for:

(a)    designing and developing the New Payphone Cabinets, in conjunction with Telstra;

(b)    producing and supplying the New Payphone Cabinets;

(c)    obtaining planning permits for the display of commercial advertising on the New Payphone Cabinets;

(d)    together with Telstra, selecting locations for the New Payphone Cabinets with regard to advertising value;

(e)    installing and maintaining the New Payphone Cabinets;

(f)    the production, installation, removal and management of all advertising (including standard telephone service related, or other Telstra, advertising) displayed on the 32” screens (ie the screens on the front of the New Payphone Cabinets); and

(g)    all aspects of the sales, production, installation and removal of third-party commercial advertising on the 75” screens (ie the screens on the rear of the New Payphone Cabinets).

105    His Honour found that Telstra’s responsibilities under the Advertising Program Agreement related to the installation and testing of the payphone and the installation of communications cables and pits (Reasons [36]).

106    We were referred to a copy of the Advertising Program Agreement that was in evidence, which was the foundation for the primary judge’s findings. The document was undated and unsigned, but neither party suggested that there was any error in his Honour’s finding that the document recorded an agreement between Telstra and AdBooth. The document was heavily redacted, purportedly on the basis of relevance and confidentiality, rendering the document unintelligible in many respects. It is difficult to understand the basis for many of the redactions. For example, the redactions extended to the recitals, most of the definitions and most of the operative clauses including many boilerplate clauses. Nevertheless, from what was left unredacted, the following matters can be noted.

107    Clause 8 of the Agreement stipulated that AdBooth must ensure the services to be performed under the Agreement and the “OOHA Assets” complied in all respects with the Design Specifications, the Service Specification and the Scope of Work. I infer that “OOHA” is an acronym for “out of home advertising”. It is apparent from the parts of the Agreement that were not redacted that “OOHA Assets” was the name given to the New Payphone Cabinets in the Agreement.

108    Schedule 4 contained the Design Specifications for the OOHA Assets. As the primary judge recorded, paragraph 2(b) of Schedule 4 stipulated that the OOHA Assets must “maximise advertising revenue”. Paragraph 4.2 of Schedule 4 stipulated that:

Each OOHA Asset should have two digital screens implemented. Screen 1 should be a prime messaging platform and be oriented in the axis of pedestrian movement. A second screen (touch interactive in future versions) should be smaller, related and adjacent to (in future replace) the payphone telephone service.

Screen 1 (Digital Adv Screen) must at minimum have the following specifications:

(a)     1920x1080 displaying full HD motion or high resolution static content.

(b)     Touch Screen potential

(c)     The screen is designed to be visible outdoor in direct sunlight.

(d)     Min Size: 72"

(e)     Brightness: Maximum daytime brightness level 2000 Cd/m2 (nits), night time maximum is 600 Cd/m2 (nits) as per ILP recommendations

(f)     Excellent visibility in all conditions, even under direct sunlight.

(g)     Brightness levels to respond and adjust to ambient lighting.

(h)     No glare risk

(i)     Height shall be such that its centre to top third falls 1.5m above the ground line, (pedestrian eye-line). This ensures any content relates 'eye to eye' with pedestrians.

109    I interpolate that “Screen 1” referred to in paragraph 4.2 of Schedule 4 is the rear screen of the New Payphone Cabinet.

110    It is not clear what the “Service Specification” refers to. If there was a definition of that term in the Agreement, it has been redacted.

111    Schedule 5 of the Agreement contained the Scope of Work. As found by the primary judge, under that Schedule AdBooth had extensive obligations in relation to the installation and management of the New Payphone Cabinets. Those obligations included the following:

(a)    in conjunction with Telstra, select appropriate sites for advertising;

(b)    when instructed by Telstra, obtain all Council approvals in regard to necessary advertising permits;

(c)    supply and install the OOHA Assets;

(d)    maintain and clean the OOHA Asset;

(e)    promote in a manner agreed by Telstra the internal and external placement of Advertising Material on OOHA Assets;

(f)    procure advertisers for the placement of Advertising Material inside OOHA Assets; and

(g)    on obtaining all required approvals from Council and Telstra, install the Advertising Material.

112    Clause 9.1 of the Agreement stipulated (relevantly) that AdBooth will be exclusively responsible for the sale, production, installation and removal of “Content” or “Advertising Material” for display in relation to the OOHA Assets as set out in the Scope of Works. Content is defined as any content, not being Advertising Material, which is displayed. Advertising Material is defined as material advertising a good or service displayed using an OOHA Asset. Clause 9.2 stipulated that, in its treatment of the OOHA Assets and sale of Content and Advertising Material contemplated by the Agreement, AdBooth will act in a fair and equitable manner in the discharge of its obligations under the Agreement relative to its broader “out of home” advertising business such that, amongst other things, the OOHA Assets will be sold together with all other digital or other OOH assets held by AdBooth as a single network.

113    Unsurprisingly in light of the terms of the Advertising Program Agreement, both the evidence of Ms Haagsma and documentary evidence that was tendered (including Telstra’s planning applications) referred to JCDecaux (the parent of AdBooth) as Telstra’s “partner” in the payphone upgrade project. It is apparent from the Advertising Program Agreement that the rollout of the New Payphone Cabinets involves a joint commercial undertaking between Telstra, as provider of telecommunications services, and JCDecaux, as provider of “out of home” advertising agency services, where the New Payphone Cabinets are intended by the partners to provide both types of commercial services.

Planning and Operations Process

114    Ms Haagsma adduced in evidence a presentation entitled ‘'Detailed E2E Planning and Operations Process + Flow” dated 31 October 2018 (which I will refer to as the Process Presentation). I infer that “E2E” means “end to end”. Ms Haagsma explained that the document recorded “Telstra’s process for installing New Payphone Cabinets, for the provision of only STS [standard telephone service] advertising and for the switch from only STS advertising to other forms of advertising”. In her oral testimony, Ms Haagsma confirmed that the document recorded the proposed process that JCDecaux and Telstra would follow in respect of the New Payphone Cabinets the subject of these appeals. The document set out the following process:

(a)    Step 1 required a site visit at which, amongst other things, the relevant representatives of JCDecaux and Telstra would “carry out a site analysis in order to ascertain the positioning of the site with regards to advertising value”.

(b)    Step 2 required JCDecaux to draft site drawings.

(c)    Step 3 required Telstra to undertake a site qualification/due diligence process to determine if the proposed site adhered to legislated siting requirements and legal obligations such as occupational health and safety and environmental issues.

(d)    Step 4 required the lodgement of the appropriate planning permit application with the relevant Council. This was to be arranged by JCDecaux through Urbis Pty Ltd (planning consultants). The application would then be tracked. If the application was rejected, an appeal could be lodged by JCDecaux and Urbis Pty Ltd, but subject to Telstra’s approval.

(e)    Step 5 required Telstra to update its site database with respect to planning progress. The output for that step was the release of sites for “LAAN progression” (see step 7 below).

(f)    Step 6 required Telstra to coordinate any public consultation required for the planning process. Again, the output for that step was the release of sites for “LAAN progression” (see step 7 below).

(g)    Step 7 required Telstra to lodge a LAAN under the Telecommunications Act with the owner/occupier of the proposed site for the New Payphone Cabinet. This step also dealt with any objections to the LAAN under the Telco Act. If no objection is made, the step required the construction of the New Payphone Cabinet.

(h)    Step 8 required JCDecaux to undertake the final installation. The step stipulated that installation involved “installation of asset at site, turning on of STS advertising following [sic] by turning on of 3rd Party Advertising”.

115    In relation to Step 8, I note that in the proceeding below Telstra advanced an argument that the question whether a facility is a low-impact facility within the Determination is to be assessed at the time of installation of the facility and not at a later point in time. On the basis of that contention, Telstra planned to switch on the New Payphone Cabinets upon installation and restrict the display of advertising to standard telephone services for a period of 28 days. After that time, Telstra would display commercial advertising. Telstra submitted in the proceeding below that, by that process, the New Payphone cabinets would be low-impact facilities. That contention was rejected by the primary judge (Reasons [117]-[119]). Telstra did not re-agitate the point in the appeals and it can be disregarded.

116    The significance of the Process Presentation is that it sets out a process whereby the “partners”, Telstra and JCDecaux, would first apply for a planning permit to display commercial advertising on the proposed New Payphone Cabinets; second lodge a LAAN to install the New Payphone Cabinets; and third install and activate the New Payphone Cabinets. It is implicit from the Advertising Program Agreement and the Process Presentation that the New Payphone Cabinets are not proposed to be installed unless and until planning approval is obtained to display commercial advertising.

117    Telstra submitted that there is no contractual agreement between Telstra and Adbooth requiring Adbooth to obtain planning approval to display commercial advertising prior to the installation of the New Payphone Cabinets. Telstra conceded that, as a matter of practice, planning permission has previously been sought prior to installation. However, Telstra submitted that this has occurred as a matter of practice and not as a matter of contractual obligations. In relation to the Process Presentation, Telstra referred to Ms Haagsma’s evidence in cross-examination that the Process Presentation was “the proposed process flow as of its inception … but it’s a process, and processes can change”. Telstra submitted that Ms Haagsma was not challenged as to this response or part of her evidence.

118    As to the first of Telstra’s submissions concerning the contractual obligations in the Advertising Program Agreement, no such finding was made by the primary judge and it is not possible on the state of the evidence to conclude that the submission is correct or incorrect. So much of the Agreement has been redacted (by Telstra) that it is not possible to determine whether it contains an express or implied contractual obligation, or a contractual incentive, for Adbooth to obtain planning approval to display commercial advertising prior to the installation of the New Payphone Cabinets. For that reason, the submission has not been made good on the evidence in circumstances where the relevant evidence was wholly within Telstra’s control to adduce. As to Telstra’s submission that the procedures outlined in the Process Presentation, and which have been implemented by Telstra to date, might change in the future, I consider that the submission carries little weight. First, the prospect and likelihood of that occurring, and particularly Telstra installing the New Payphone Cabinets before obtaining planning permission to display commercial advertising, is subject to the express or implied contractual obligations and contractual incentives in the Advertising Program Agreement which are unknown (due to Telstra’s redactions). Second, Ms Haagsma’s evidence was given at the highest level of generality, stating that “any processes can change”. Ms Haagsma did not proffer any opinion on the likelihood that the process would change such that Telstra would serve LAANs and proceed to install a New Payphone Cabinet before Adbooth had obtained planning approval to display commercial advertising on the Cabinet.

Planning application

119    The primary judge found that, in November 2018, Urbis Pty Ltd, as Telstra’s agent, made 81 separate applications (to the Melbourne City Council) for planning permits to display promotional signage (ie commercial advertising) on 81 proposed New Payphone Cabinets (Reasons [25]). Telstra intends to make similar applications in Brisbane and Sydney, and to install 1,800 New Payphone Cabinets throughout Australia.

120    In the planning applications, Urbis Pty Ltd stated that Telstra did not require planning approval to install the New Payphone Cabinets because those payphone facilities were low-impact facilities within the Determination. For that reason, the planning applications were confined to the display of commercial advertising on the rear screen. His Honour extracted the following statements from the planning applications (Reasons [26]) (the New Payphone cabinets are referred to as “Smart City Payphones” in the application):

Telstra is partnering with JCDecaux, the world’s largest outdoor communication company, to provide, operate, service and maintain over 1,800 new Smart City Payphones areas [sic] across Australia …

Telstra can install and operate the Smart City Payphones as a ‘low-impact facility’ with immunity from state law and the powers and functions of local government, pursuant to of [sic] Schedule 3 of the Telecommunications Act 1997 (Cth). This statutory right includes the installation and use of a digital screen (as a part of the Smart City Payphone) for the purposes of advertising, related only to the supply of standard telephone services and display of information. However, town planning approval is required to use the digital screen (as a part of the Smart City Payphone) for third party advertising content purposes.

The introduction of an additional form of advertising content on the Smart City Payphone, after the completion of the compliant exercise of statutory rights under Schedule 3 of the Telecommunications Act 1997 Cth (and subject to town planning approval being procured for a change of content for the existing digital screen), does not invalidate the installation nor affect Telstra’s statutory powers and immunities in respect of the Smart City Payphone.

…

This application seeks consent for the change of content from Telstra Standard Telephone Service (STS) advertising, to allow third-party advertising on the Smart City Payphone. …

…

As a result of the installation of the Smart City Payphone, approval is sought for the change of content from Telstra Standard Telephone Service (STS) advertising, to allow third-party advertising.

The scope of this application is limited to the third-party advertising content change only (detailed on plan TEL-001 contained at the back of this submission). Approval for the structure is not required pursuant to Schedule 3 of the Telecommunications Act 1997 Cth and therefore is not part of this proposal.

Dimensions for the signage are 1,678mm height and 970mm width. The proposed signage dimensions will remain consistent with the existing sign dimensions as the same digital screen will be utilised …

…

The Smart City Payphone (including digital screen) will be initially installed under Schedule 3 of the Telecommunications Act 1977 Cth and will display Telstra STS related advertising (in accordance with Telecommunications (Low-impact Facilities) Determination 2018.

…

All digital infrastructure is remotely monitored and controlled by JC Decaux staff via an internal content management software system.

121    His Honour also extracted the following statements that appeared under the heading “Commonwealth Legislation” (Reasons [28]):

Telstra can install and operate the Smart City Payphones as a ‘low impact facility’ with immunity from state law and the powers and functions of local government pursuant to of [sic] Schedule 3 of the Telecommunications Act 1997 (Cth). This statutory right includes the installation and use of a digital screen (as part of the Smart City Payphone) for the purposes of advertising, related only to the supply of standard telephone services and display of information. However, town planning approval is required to utilise the digital screen, (as part of the Smart City Payphone) for non-Telstra related (third-party) advertising.

In this instance, it is proposed that the Smart City Payphone will only display advertising related to the supply of standard telephone services (in compliance with the Low Impact Facilities Determination 2018 (Cth) during and upon the completion of the exercise of statutory right under Schedule 3 of the Telecommunications Act 1997 (Cth). Subject to the relevant planning approval being obtained to allow third-party advertising, this would then be introduced at a future point in time.

Introduction of an additional form of advertising content on the Smart City Payphone, after the completion of the compliant exercise of statutory rights under Schedule 3 of the Telecommunications Act 1997 Cth (and subject to town planning approval being procured for a change of content for the existing digital screen), does not invalidate the installation nor affect Telstra’s statutory powers and immunities in respect of the Smart City Payphone.

122    Finally, his Honour also referred to the following statements that appeared under the heading “Planning Assessment” (Reasons [29] and [30]):

The Smarty [sic] City Payphone structure is to be erected pursuant to Schedule 3 of the Telecommunications Act 1997 (Cth). This statutory right includes the installation and use of a digital screen (as a part of the Smart City Payphone) for the purposes of advertising, related only to the supply of standard telephone services and display of information. However, town planning approval is required to utilise the electronic advertising screen, (as a part of the Smart City Payphone) for non-Telstra related (third-party) advertising. The planning merits of the proposal are therefore to have regard to this permit requirement.

The application has been assessed against relevant planning policies and considerations, and is summarised as follows:

•    The proposed signs are permissible under the planning controls applying to the site.

•    The size, design and character of the proposed signs, is considered to appropriately address relevant planning controls and policies.

•    The vitality of the area will remain unchanged as the third-party signage will replace the Telstra Standard Telephone Service (STS) advertising, therefore avoiding visual pollution.

•    The light spill and architecture of the surrounding buildings and the surrounding streetscape character remains unchanged.

•    The signs are confined within the Smart City Payphone, replace the Telstra Standard Telephone Service (STS) advertising and does not protrude above surrounding buildings or tree canopies.

•    The scale and form of the proposed signs is appropriate to the streetscape, and remains unchanged from the Telstra Standard Telephone Service (STS) advertising.

•    The signs are high quality materials and remain physically unchanged from the Telstra Standard Telephone Service (STS) advertising.

•    The signs facilitate visual communication of a scale and extent that does not to result in adverse visual effects or clutter.

•    The internal illumination of the signs remains unchanged from the Telstra Standard Telephone Service (STS) advertising, complies with relevant Australian Standards, and does not result in glare or other effects that compromise the safety of pedestrians, bicyclists and vehicles.

•    The proposed signs are indistinguishable from the Telstra Standard Telephone Service (STS) advertising signs and do not detract from the overall amenity and character of the area and do not adversely impact any residences or other sensitive land uses in the area.

•    Important views, vistas or viewing rights of other advertisers are unaffected by the non-Telstra related (third-party) advertising.

•    The sites are suitable for the proposed change to third party advertising given their existing use as Smart City Payphone facility.

123    Three aspects of the planning applications can be noted. First, the planning applications are to allow third party commercial advertising on the New Payphone Cabinets in place of standard telephone service advertising. Second, the planning applications are phrased in a manner to imply that the New Payphone Cabinets will initially be installed and offer standard telephone service advertising, and subsequently offer commercial advertising if planning permission is given. For example, the applications refer to the “introduction of an additional form of advertising content on the Smart City Payphone, after the completion of the compliant exercise of statutory rights under Schedule 3 of the Telecommunications Act 1997 Cth (and subject to town planning approval being procured for a change of content for the existing digital screen)”. Third, and as a consequence of the second point, the planning applications contend that granting permission for the display of commercial advertising will not have detrimental planning impacts because the structures will already exist and display standard telephone service advertising and all that will change is the display of commercial advertising in place of standard telephone service advertising.

124    Those statements are not entirely consistent with the commercial arrangements contemplated by the Advertising Program Agreement and the Process Presentation. As noted above, the Advertising Program Agreement, which governs the rollout of the New Payphone Cabinets, involves a joint commercial undertaking between Telstra and JCDecaux where the New Payphone Cabinets are intended by the joint partners to provide both telephone and commercial advertising services. The Process Presentation indicates that the New Payphone Cabinets will not be installed unless and until planning approval is obtained to display commercial advertising. The proposition advanced in the planning applications, that Telstra is intending to install payphone cabinets displaying standard telephone service advertising as low-impact facilities under the Determination and is seeking planning permission to display commercial advertising on those cabinets, is artificial to say the least. The whole of the evidence establishes that Telstra is seeking to install payphone cabinets that display commercial advertising. There is nothing in the evidence to suggest that Telstra would install the New Payphone Cabinets if it does not receive planning permission to display commercial advertising.

Refusal of the 81 applications

125    In March 2019, the Melbourne City Council refused each of the 81 applications (Reasons [31]). A copy of one of the notices of refusals (titled “Refusal to Grant a Permit”) was in evidence. Under the heading “What are the reasons for refusal?”, the notice set out 3 reasons. The first reason was as follows:

The proposed payphone and electronic promotional sign is not a low-impact facility as described in the Telecommunications (Low-impact Facilities) Determination 2018 (Cth) and is therefore subject to the Melbourne Planning Scheme.

126    The second and third reasons related to planning issues arising under the Melbourne Planning Scheme.

127    On the same day that the Melbourne City Council refused the 81 applications, it filed an application in the Victorian Civil and Administrative Tribunal (VCAT) seeking declarations under s 149A of the Planning and Environment Act 1987 (Vic) in the following terms:

(a)    that the New Payphone Cabinets are not ‘low-impact facilities’ as described in the [Determination];

 (b)    that the construction of a New Payphone Cabinet requires a planning permit;

(c)    that the construction of, and display of advertising on, each New Payphone Cabinet should properly be considered together, as part of the assessment of a single planning permit application for each New Payphone Cabinet …

(Reasons [32]).

128    JCDecaux (on behalf of Telstra) subsequently lodged applications for de novo merits review of 76 of the 81 refusal decisions with VCAT pursuant to s 77 of the Planning and Environment Act 1987 (Vic) (Reasons [33]).

129    The VCAT applications were, by agreement between the parties, stayed pending the determination of this proceeding (Reasons [34]).

The appellants’ submissions

130    The appellants advanced the following principal submissions on the appeals.

131    First, the appellants submitted that the primary judge erred in characterising Telstra’s intentions with respect to the display of commercial advertising on the New Payphone Cabinets as a future, conditional intention. The appellants argued that the evidence shows that, at all relevant times, Telstra had a present intention to display commercial advertising on the New Payphone Cabinets, albeit that Telstra accepted that it required planning approval to do so. In that respect, the appellants relied on the contents of the Advertising Program Agreement and the Process Presentation and the conduct of Telstra and AdBooth in progressing planning approval for commercial advertising before the New Payphone Cabinets are installed.

132    Second, the appellants submitted that clause 6(1) of Schedule 3 of the Telco Act requires the assessment of whether a facility is a low-impact facility to be undertaken before the facility is installed. In so far as the facility is described in the Determination by reference to its use (as is the case with public payphone cabinets described in Item 6-1 of the Determination), the operation of clause 6(1) of Schedule 3 necessarily requires a consideration of the future use of the facility. In that regard, relevant considerations include the design of the facility for the use in question, the intention of the installer with respect to the use in question and the steps taken by the installer in aid of the use in question.

133    Third, the appellants submitted that, in the present case, the evidence supported the conclusion that the New Payphone Cabinets were to be used “to display commercial advertising other than advertising related to the supply of standard telephone services”. The appellants relied on the facts that: the Cabinets were designed for that use; Telstra (and AdBooth) intended the Cabinets to be so used; and Telstra and AdBooth had applied for planning approval, prior to the installation of the Cabinets, to enable such use.

Telstra’s submissions

134    Telstra advanced the following principal submissions on the appeals.

135    First, Telstra submitted that the primary judge was correct to conclude that Telstra’s intention to use the New Payphone Cabinets to display commercial advertising was not relevant to the application of the Determination (and specifically condition (d) in Item 6-1). In that respect, Telstra supported the primary judge’s reliance on the statement of the High Court in Hutchison 3G Australia Pty Ltd v City of Mitcham [2006] HCA 12; 80 ALJR 711 (Hutchison) at [85] (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ) that: “... the definition of the term ‘facility’ in the [Telecommunications] Act requires that attention be directed, not to the motive for the installation of a structure or thing, but the function which that structure or thing serves or was designed to serve” (Reasons [114]).

136    Second, Telstra submitted that even if Telstra’s intention to use the New Payphone Cabinets to display commercial advertising was relevant to the application of the Determination in the present case, the primary judge was correct to characterise that intention as a future, conditional intention. The evidence showed that Telstra’s intention was conditional on obtaining planning approval to display commercial advertising.

137    Third, Telstra submitted that the primary judge was correct to conclude, in relation to condition (d), that whether the New Payphone Cabinets would display commercial advertising would ultimately depend on whether permission is granted by the relevant local authority and this meant that it was not an undisputed fact that the Cabinets would in fact display such advertising (Reasons [130]-[131]). It followed that, until such permission was granted, condition (d) was not satisfied.

Consideration

An apparent paradox

138    Telstra’s submissions, and the conduct of its planning application, creates an apparent paradox. On the one hand, Telstra argues that its New Payphone Cabinets are a low-impact facility, satisfying the description in condition (d) of Item 6-1 (not used to display commercial advertising) on the basis that Telstra does not yet have planning permission to display commercial advertising and Telstra will not display commercial advertising until it has planning permission. On the other hand, Telstra has applied for planning permission to display commercial advertising on the New Payphone Cabinets before it has exercised any rights or powers conferred by Schedule 3 of the Telco Act. In particular, Telstra has applied for planning permission to display commercial advertising before taking the first step towards exercising such powers, being the step required by clause 17 of Schedule 3 to serve a LAAN on the relevant municipal authority. According to the process being followed by Telstra, it will not serve a LAAN under Schedule 3 until it has obtained planning permission to display commercial advertising on the New Payphone Cabinets. However, at that time, on no view could commercial advertising be regarded as contingent. It follows that, by the time Telstra serves a LAAN in respect of the New Payphone Cabinets, and necessarily by the time Telstra seeks to exercise powers under Division 3 of Part 1 of Schedule 3 to install the Cabinets, they will not be a low-impact facility because they will no longer meet the description in condition (d) of Item 6-1.

139    It is passing strange that Telstra has applied to the Melbourne City Council for planning permission to display commercial advertisements on its proposed New Payphone Cabinets while asserting that the New Payphone Cabinets are low-impact facilities which, relevantly, are required to be facilities that will not be used for commercial advertising.

140    Telstra’s primary answer to this apparent paradox, advanced during oral submissions, is the contention that the purpose of condition (d) is to ensure that the States and Territories retain control over the display of commercial advertising under applicable planning laws. Telstra submitted that, provided that Telstra seeks and obtains planning permission to display commercial advertising on the New Payphone Cabinets, the purpose of condition (d) is satisfied. It follows, on Telstra’s argument, that the primary judge was correct to declare that the New Payphone Cabinets are low-impact facilities in circumstances where Telstra had applied to the Melbourne City Council for planning permission to display commercial advertising and Telstra would not display commercial advertising without that permission.

141    The difficulty with Telstra’s answer is that the text of Item 6-1 does not support its contention. Condition (d) stipulates that, for a public payphone cabinet to be a low-impact facility, it must not be used to display commercial advertising. The condition does not add a rider to the effect “unless approved under applicable planning laws”. Nor is the contention supported by contextual considerations. It may be accepted that one of the immunities conferred by Schedule 3 of the Telco Act is immunity from State and Territory planning laws. That is made express by clause 37(2)(c) of Schedule 3. However, it cannot be said that immunity from planning laws is the central concern of Schedule 3. Planning laws are only one of the categories of laws for which immunity is given. More significantly, the principal right (in terms of powers and immunities) conferred by Schedule 3 is the right to enter another person’s land and install a facility. It is to do an act that would otherwise constitute a trespass to land. If a facility is not a low-impact facility, Schedule 3 confers no right to enter another person’s land and install the facility. In the present case, if Telstra’s New Payphone Cabinets are not low-impact facilities, Telstra has no right to serve a LAAN on the appellants and no right to install the facilities. Condition (d) cannot be construed so as to confer such rights provided Telstra applies for planning permission to display commercial advertising. The effect of Schedule 3 of the Telco Act is that, if the proposed facility is not a low-impact facility within the meaning of the Determination, the person wishing to install the facility must negotiate with the land owner to do so (as well as comply with applicable laws, including planning laws).

142    Telstra submitted that its construction of condition (d) is supported by the statement in the Explanatory Statement that accompanied the 1999 amendment to the Telecommunications (Low-impact Facilities) Determination 1997 that “[a]dvertising on the payphone cabinet is highly visible and would require local government approval” (which was referred to earlier). It is trite law that extrinsic materials cannot be used to displace the clear meaning of the legislative text: Nominal Defendant v GLG Australia Pty Ltd [2006] HCA 11; 228 CLR 529 at [22] (Gleeson CJ, Gummow, Hayne and Heydon JJ) and at [82]–[84] (Kirby J). The Explanatory Statement is undoubtedly correct to state that, if a person seeking to install a public payphone cabinet wishes to display commercial advertising on the cabinet, planning approval will be required. However, the Explanatory Statement does not suggest that, if such planning approval is obtained, the public payphone cabinet would then qualify as a low-impact facility. For the reasons already given, the legislative text and context deny such a conclusion.

143    Respectfully, and for the reasons explained further below, I consider that the primary judge erred in declaring that the installation of New Payphone Cabinets is an activity authorised by Schedule 3 of the Telco Act. The declaration concerns a future state of affairs – an activity intended to be undertaken by Telstra under Schedule 3 of the Telco Act in the future. In my view, the evidence shows that, at the time that the activity is expected to be undertaken, the activity will not be authorised by Schedule 3 of the Telco Act.

Context in which the declaration is sought

144    The legal dispute between the parties arose from planning applications made on behalf of Telstra to the Melbourne City Council for permits to display commercial advertising on 81 proposed New Payphone Cabinets. The planning applications asserted that the proposed New Payphone Cabinets were low-impact facilities. The planning applications also argued that the Council should allow commercial advertising on the proposed payphones because the structures will already exist and will display standard telephone service advertising and all that will change is the display of commercial advertising in place of standard telephone service advertising. The Melbourne City Council rejected the applications. One of the reasons for rejecting the applications was that the New Payphone Cabinets will not be low-impact facilities and therefore their installation will not be exempt from the applicable planning laws. The Melbourne City Council then filed an application in VCAT seeking declarations that the New Payphone Cabinets are not low-impact facilities.

145    In that way, the question whether the proposed New Payphone Cabinets will be low-impact facilities within the meaning of the Determination became a matter of controversy between the Melbourne City Council and Telstra in two distinct ways. In the first way, the question was relevant to the Melbourne City Council’s decision to refuse a planning permit to display commercial advertising. Telstra had made the question relevant by asserting that the proposed New Payphone Cabinets would be low-impact facilities, and that Telstra had the power to install them without planning permission under Schedule 3 of the Telco Act, and then basing its town planning arguments in favour of permission to display commercial advertising on the fact that Telstra had the power to install the payphones and they would be installed. If the asserted fact was incorrect, it affected many of Telstra’s town planning arguments in favour of permission to display commercial advertising. In the second way, the Melbourne City Council had commenced what might be described as a pre-emptive application in VCAT seeking a declaration that the New Payphone Cabinets will not be low-impact facilities, no doubt with the intention of requiring Telstra to negotiate with the Council, and seek planning permission, to install them.

146    Given that context, it might have been thought appropriate for the question whether the proposed New Payphone Cabinets will be low-impact facilities within the meaning of the Determination to be determined by VCAT as part of the appeal from the decision of the Melbourne City Council and the separate application commenced by the Melbourne City Council. Instead, Telstra commenced a proceeding in this Court seeking declaratory relief in respect of the question. The primary judge recorded the parties’ agreement, which his Honour accepted, that there was a controversy between them whether the proposed New Payphone Cabinets will be low-impact facilities and therefore may be installed without planning permission (Reasons [72]). Having concluded that there was a controversy arising under a Commonwealth law, the primary judge determined that the Federal Court had jurisdiction to determine the controversy and give declaratory relief. As stated by the plurality (Mason CJ, Dawson, Toohey and Gaudron JJ) in Ainsworth v Criminal Justice Commission [1992] HCA 10; 175 CLR 564 at 582, the purpose of declarations is to declare the Court’s determination of a right, duty or liability that was the subject of controversy between the parties.

147    In their written submissions, the appellants submitted that the question sought to be resolved by declaratory relief in the proceeding in this Court was hypothetical. They argued that the primary judge disregarded Telstra’s intention to display commercial advertising on the New Payphone Cabinets because the intention was a future, conditional intention (being conditional on receiving planning permission to do so). Even if the intention was conditional, it meant that in the future there was a prospect that Telstra would display commercial advertising and a prospect that it would not. The appellants argued that the question whether the proposed New Payphone Cabinets will be low-impact facilities cannot be resolved by ignoring one of two possibilities, and the fact that the future involved two possibilities demonstrated that the question was hypothetical.

148    Telstra objected to that submission because it was not advanced as a ground of appeal. In response, the appellants sought leave to raise the point.

149    Ultimately, it has not been necessary for me to determine that issue. I consider that the evidence supports the conclusion that the proposed New Payphone Cabinets will not be low-impact facilities and that the primary judge erred in granting the declaration sought by Telstra. However, it is appropriate to indicate that I would not have been inclined to accept the argument. It can be accepted that the question in issue has not arisen in connection with a purported exercise of power under Schedule 3 of the Telco Act. There is yet to be any purported exercise of power under Schedule 3. Instead, the question has arisen in connection with the exercise of power by the Melbourne City Council under the Melbourne Planning Scheme to approve or not approve the planning applications before it (to display commercial advertising), and to take action in respect of threatened conduct (installing the New Payphone Cabinets without planning permission) which the Melbourne City Council considers would be in breach of Victoria’s planning laws. The question raises a legal controversy in connection with the exercise of powers, albeit the powers of the Melbourne City Council under planning law.

150    The question as raised is necessarily forward-looking, as most planning questions are, because it requires a statutory description (contained in the Determination) to be applied to a proposed facility. In that sense, the question as raised under the Melbourne Planning Scheme is similar in nature to the question that would arise under Schedule 3 of the Telco Act if Telstra purported to take steps and exercise powers under Schedule 3. When a LAAN is served as the usual first step in exercising powers under Schedule 3, the proposed facility is yet to be built. In that context too, the question whether the facility the subject of the LAAN is a low-impact facility is a forward looking question.

Schedule 3 of the Telco Act and the Determination

151    As noted earlier, clause 6(1) of Schedule 3 provides that a carrier may, for purposes connected with the supply of a carriage service, carry out the installation of a facility if, among other things, the facility is a low-impact facility as defined by clause 6(3). Clause 6(2) amplifies the rights and powers conferred by clause 6(1) by stating that, if clause 6(1) authorises a carrier to carry out a particular activity, the carrier may, for purposes in connection with the carrying out of that activity enter on, and occupy, any land and do anything necessary or desirable for those purposes on, over or under the land. Clause 17(1) stipulates that, before engaging in such activities in relation to any land, a carrier must give written notice of its intention to do so to the owner and/or occupier of the land. Subject to exceptions which are not presently relevant, clause 17(4) stipulates that the notice must be given at least 10 business days before the carrier begins to engage in the activity. Thus, it is usually the case that it is necessary to determine whether a facility is a low-impact facility before the facility is installed and before it is operational.

152    There are various kinds of low-impact facilities that are described in the Schedule to the Determination. The descriptions contain a number of different descriptive conditions, where the conditions are of different kinds or characters. Some of the conditions relate solely to the physical features of the facility. For example, Item 8 of Part 1 describes a radiocommunications facility which has a separate antenna not more than 1.2 metres long and a cabinet that does not exceed 1 cubic metre in volume. Some of the conditions refer to the function of the facility. For example, Item 10 of Part 1 refers to an in-building coverage installation to improve cellular coverage to mobile phone users operating inside a building and wholly contained and concealed in a building. Some of the conditions refer to the use of the facility. For example, Item 8 of Part 3 describes external building connection equipment the substantive volume of which is not more than 0.59 cubic metres and that is, or is to be, part of a national network used, or for use, for the high speed carriage of communications, on a wholesale-only and non-discriminatory basis.

153    The present proceeding is concerned with Item 6-1 which describes public payphone cabinets that satisfy certain conditions. It is convenient to repeat the description:

Public payphone cabinet or booth:

(a)     used solely for carriage and content services; and

(b)     not designed for other uses (for example, as a vending machine); and

(c)     not fitted with devices or facilities for other uses; and

(d)     not used to display commercial advertising other than advertising related to the supply of standard telephone services.

154    It can be seen that the above description contains four conditions, with the conditions having different characteristics: conditions (a) and (d) each concern the use of the payphone cabinet; condition (b) concerns its design; and condition (c) concerns the devices or facilities with which it is fitted. In context, each of the conditions conveys the future tense in the passive voice. The phrase “to be” or “that will be” (or the negative forms “not to be” or “that will not be”) is implied before each of the verbs in each of the conditions (used, designed and fitted) because it is necessary to know whether a facility meets the description before it is installed. The use of the past participle form of the verbs in each of the conditions (used, designed and fitted) combined with the future tense conveys a future passive voice. Logically, the relevant future time is the time when it is expected that the facility will be installed and the description is directed to the facility as it is proposed to be installed. The foregoing observations are consistent with the principle, referred to by the primary judge (Reasons [67]), that the Determination “is addressed to practical people skilled in the particular trade or industry” and “ought to be construed in light of practical considerations, rather than by a meticulous comparison of the language of [its] various provisions, such as might be appropriate in construing sections of an Act of Parliament”: Gill v Donald Humberstone & Co Ltd [1963] 1 WLR 929 at 933-934; [1963] 3 All ER 180 at 183 (Lord Reid); DBB16 v Minister for Immigration and Border Protection [2018] FCAFC 178; 260 FCR 447 at [94] (Perram, Wigney and Lee JJ).

155    It is necessary to focus on the “use” conditions, as the relevant condition for present purposes is condition (d). Ultimately, how something is to be used is a question of fact. Contrary to Telstra’s submissions, the decision of the High Court in Hutchison does not reject the intention of the user of the proposed facility as a relevant consideration in applying the descriptions in the Determination.

156    Hutchison concerned the interaction between Schedule 3 of the Telco Act and the Development Act 1993 (SA), the South Australian planning law. Hutchison was a licensed carrier under the Telco Act and wished to install “downlink sites” for its mobile telecommunications network. The downlink sites were installed on electricity poles (known as stobie poles) owned by the South Australian electricity distributor, ETSA. That was done pursuant to an agreement entered into between Hutchison and ETSA. As part of the installation, and in accordance with the agreement, ETSA replaced a number of the stobie poles on which the downlink sites were installed at the cost of Hutchison. Those poles (and downlink facilities) were within the municipal boundaries of the City of Mitcham. The City of Mitcham argued that the erection of the poles with the downlink facilities required planning approval. Relevantly for present purposes, one of the questions considered by the High Court was whether the new stobie poles with the downlink sites were “facilities” within the meaning of s 7 of the Telco Act, specifically whether they were “for use … in connection with a telecommunications network”. The Court answered that question in the negative, stating (at [85]):

[85] However, merely establishing that ETSA erected stobie poles at the relevant sites in order to permit installation by Hutchison of its facilities does not necessarily demonstrate that those poles were intended for such use. This is because the definition of the term “facility” in the Telco Act requires that attention be directed, not to the motive for the installation of a structure or thing, but the function which that structure or thing serves or was designed to serve.

[86] The definition of the expression “telecommunications network” has previously been set out in these reasons. That definition contemplates a “system” or a “series of systems” engaged in the carrying of communications by means of guided and/or unguided electromagnetic energy. In attempting to characterise the function which was served or sought to be served by the replacement poles, the question thus arises: were the replacement poles intended for use in connection with a “system”?

[87] The Case Stated indicates that the poles were replaced in order to meet the structural demands of carrying such facilities as the three panel antennae, the microwave dish and the mounting pole which together form part of a downlink site. In other words, the replacement poles were designed, in part, to accommodate the physical act of installing telecommunications equipment. However, there is nothing to suggest that, as such, they were intended to satisfy the requirements of a “system” or a “series of systems” of the sort described in the definition of “telecommunications network”.

[88] The locations of the poles, though conducive to the operation of a telecommunications network and recognised by Hutchison as such when it selected them as sites for the installation of its downlink facilities, were not selected in order to facilitate that operation. Instead, ETSA had erected poles at those locations as part of its electricity distribution business.

157    While there are a number of obvious differences in the factual circumstances and the legal question that arose in Hutchison compared with the present case, the case was concerned with the notion of the “use” of a telecommunications facility in the Telco Act. In that context, the High Court emphasised that the question is to be answered not by reference to the motive for the installation of the facility, but by reference to the function which the facility serves or was designed to serve. It is clear from the High Court’s reasoning, reproduced above, that in determining the function that a facility is designed to serve, it is relevant to consider the intended use of the facility. In each of the above paragraphs, the relevant enquiry is directed to the intended use of the replacement stobie poles (applying the synonyms “intended for use” and “in order to”). Ultimately, the High Court concluded, as a question of fact, that ETSA had erected the poles not for use as part of a telecommunications network but for use as part of its electricity distribution business.

158    The ordinary meaning of the implicit phrases “to be used” or “will be used” in Item 6-1 of the Determination, and the reasoning of the High Court in Hutchison, support the conclusion that conditions (a) and (d) are to be construed as referring to the function which the proposed public payphone cabinet will serve or is designed to serve. In applying the Determination and answering that question, it is relevant to consider both the physical features and technical capability of the proposed public payphone cabinet and the intended use of the cabinet by the entity wishing to install and use it. For those reasons, I respectfully disagree with the conclusion of the primary judge that none of the conditions stated in Item 6-1 of the Determination “has anything to do with future intentions of the carrier” (see Reasons at [114] and [115]).

Application of conditions (a), (b) and (c)

159    The primary judge accepted Telstra’s submission that commercial advertising, displayed on the rear digital screen of the New Payphone Cabinets, is either a carriage service or a content service within the meaning of the Telco Act (Reasons [116]). The appellants did not appeal that conclusion and it is therefore unnecessary to consider it. Two observations, however, should be made.

160    First, conditions (a), (b) and (c) are drafted in broad language. Condition (a) requires that the public payphone be used (solely) for carriage and content services. The word “for” conveys the sense “for the purpose of”. If a telephone call is made to or from the public payphone, it can be said that the payphone is being used “for” a carriage service in the sense that the payphone is a facility that is required in order to complete the carriage of the communication, being a carriage service. So too, if the rear digital screen of the New Payphone Cabinet is used to display digital advertising, the screen completes the carriage of the communication comprising the advertisement and therefore the screen is being used “for” a carriage service. The language of condition (a) does not require that the payphone itself constitute a carriage service – it merely requires that the payphone is to be used for carriage services. Conditions (b) and (c) adopt the same language, requiring that the payphone not be designed for other uses and not be fitted with devices or facilities for other uses.

161    The second observation is that it is clear from the text of Item 6-1 to the Determination that each of the conditions (a), (b), (c) and (d) must be satisfied in order for a public payphone cabinet to be a low-impact facility. Thus, digital advertising may be a use of the public payphone cabinet for carriage and content services within condition (a), but it is nevertheless a prohibited use under condition (d) if it is commercial advertising.

Application of Condition (d)

162    In my view, the evidence establishes that the New Payphone Cabinets, which are proposed to be installed by AdBooth and Telstra pursuant to the Advertising Program Agreement, are not low-impact facilities because they fail to satisfy condition (d) of Item 6-1 of the Determination. In short, one of the functions which the proposed New Payphone Cabinets is designed to serve is the display of commercial advertising other than advertising related to the supply of standard telephone services. That conclusion is supported by the following facts and circumstances.

163    First, the New Payphone Cabinets are being designed and will be installed pursuant to a commercial agreement between Telstra and AdBooth, a subsidiary of the advertising agency JCDecaux. While the whole of that Advertising Program Agreement was not in evidence, the parts of the agreement in evidence support the parties’ own description of themselves as partners in the roll out of the New Payphone Cabinets.

164    Second, pursuant to the Advertising Agreement, AdBooth is to design the New Payphone Cabinets with a large screen at the rear of the Cabinet, which faces away from the user of the payphone and to the public at large passing the cabinet. The acronym for the New Payphone Cabinets in the agreement is “OOHA Assets” which I infer means out of home advertising assets. The acronym is apt. The design specifications for the “OOHA Assets”, with which AdBooth is required to comply, includes “maximise advertising revenue”. The scope of work to be undertaken by AdBooth includes:

(a)    in conjunction with Telstra, selecting appropriate sites for advertising;

(b)    when instructed by Telstra, obtaining all Council approvals in regard to necessary advertising permits;

(c)    promote in a manner agreed by Telstra the internal and external placement of advertising material on the “OOHA Assets”;

(d)    procuring advertisers for the placement of advertising material inside the “OOHA Assets”; and

(e)    on obtaining all required approvals from Council and Telstra, install the advertising material.

165    Third, and consistently with the Advertising Program Agreement, the New Payphone Cabinets have been designed with a large rear screen for the purpose of advertising.

166    Fourth, the rollout process agreed between AdBooth and Telstra, and recorded in the Process Presentation, is for AdBooth and Telstra to seek and obtain planning approval to display commercial advertising on the proposed New Payphone Cabinets before a LAAN is given to a Council to install the cabinet.

167    Fifth, and consistently with the Process Presentation, Telstra has applied to the Melbourne City Council for planning approval to display commercial advertising on the proposed New Payphone Cabinets before a LAAN has been given to the Council and before the cabinets have been installed.

168    Sixth, there is no evidence to suggest that Telstra and AdBooth will proceed to install a New Payphone Cabinet if planning approval to display commercial advertising is not forthcoming.

169    In my view, the evidence adduced at trial requires a conclusion that the proposed New Payphone Cabinets are not low-impact facilities because the function they are designed to service is the display of commercial advertising. As stated earlier, Item 6-1 of the Determination must be construed in a practical manner and, by the same reasoning, must be applied in a practical manner. It can be accepted that a future use of the proposed New Payphone Cabinets to display commercial advertising that is remote or speculative would not satisfy condition (d). However, in this case, commercial advertising is not remote or speculative. Such use is one of the central functions that the New Payphone Cabinets is designed to serve.

Conclusions

170    In conclusion, I would uphold the appeals broadly on the grounds stated in paragraphs 1(a), (b), (d) and (e) of the notices of appeal.

171    As to grounds 1(a) and (b), I consider that the primary judge erred in characterising Telstra’s intended use of the New Payphone Cabinets as a future, conditional intention to display commercial advertising. Telstra’s intended use of the New Payphone Cabinets was to display commercial advertising as evidenced by the commercial arrangements for their design and installation and the steps taken to implement those arrangements.

172    As to grounds 1(d) and (e), I consider that the primary judge erred in failing to find that one of the functions that the proposed New Payphone Cabinets were designed to serve is commercial advertising not limited to standard telephone advertising and, for that reason, the proposed Cabinets did not satisfy condition (d) of Item 6-1 and were not low-impact facilities.

173    On that basis I would order that the declaration made by the primary judge on 10 March 2020 and the order for costs made on 17 March 2020 be set aside, that Telstra’s originating application be dismissed and that Telstra pay the costs of the appellants below and of these appeals.

Associate:

Dated:    16 November 2020