Telstra has lost an appeal in a case brought by Melbourne, Sydney and Brisbane city councils over a planned upgrade of its payphone network across Australia, with an appeals court pointing to an “apparent paradox” in the telco’s claim it did not need planning permits to install its next generation digital phone booths.
Federal Court Justices Jacqueline Gleeson and Michael O’Bryan ruled it was “passing strange” that Telstra applied for permits from the cities to display commercial advertisements on its proposed new pay phones while simultaneously asserting the booths were low-impact facilities, which are required by law to be facilities that will not be used for commercial advertising.
Federal Court Justice Natalie Charlesworth dissented, holding that the councils’ appeal should be tossed and Justice David O’Callaghan’s October ruling that Telstra’s new payphones and booths were authorised by the federal Telecommunications Act be upheld. Justice O’Callaghan found that because the booths were low-impact facilities under the law Telstra was not required to get planning permits under relevant state laws.
The planned payphone upgrade is the first major revamp of Telstra’s existing payphone network since the 1980s, involving the removal of 15,900 old-style phone booths. The next generation payphone booths include a mobile charging port, electronic LCD screens and Wi-Fi.
In 2018, Telstra installed 34 new payphones in Melbourne’s CBD without obtaining permits from Melbourne City Council, and AdBooth, a subsidiary of billboard behemoth JCDecaux Australia, applied to MCC on Telstra’s behalf for advertising approval on electronic screens on the payphones.
MCC refused a further 81 phone booth permits on the grounds they were not low-impact facilities and were not acceptable under Melbourne’s planning scheme. Telstra intended to make similar applications in Sydney and Brisbane, and to install a total of 1,800 new payphones across Australia.
Telstra won its Federal Court battle after arguing the new payphones did not need permits because they were low-impact on the basis they were not used to display advertising “at the time of their installation”.
But the councils’ appealed the decision on several grounds, including a failure to find that prior to installation, Telstra had a “present intention” to advertise on the pay phones , which were designed for that purpose. The councils also argued Justice Callaghan erred in failing to find the telco’s desire to advertise was only a “future, conditional” intention.
Writing for the majority Friday, Justice O’Bryan said Telstra’s submissions and its planning application created 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,” he said.
“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.
“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.”
Telstra’s primary answer to this, advanced during oral submissions, was the purpose of imposing a commercial advertising condition is to ensure states retain control over advertising under planning laws. Telstra said if it sought planning permission to display commercial advertising on the new phones, then the purpose was satisfied, and Justice Callaghan was correct.
But Justice O’Bryan said the “difficulty” in Telstra’s argument was that the condition stipulated that for a public payphone to be a low-impact facility, it must not display commercial advertising.
“The condition does not add a rider to the effect “unless approved under applicable planning laws”’, he said.
In dissenting, Justice Charlesworth said on the “undisputed facts”, Telstra did not intend to display third party commercial advertising on the pay phones without first obtaining the necessary planning approvals to do so.
She said Telstra did not have a “present intention” to advertise contrary to state law, and that the appeal should be shot down.
Telstra is represented by Stuart Morris QC and Roshan Chaile, instructed by King & Wood Mallesons. Melbourne City Council, City of Sydney Council and Brisbane City Council are represented by Tom Sullivan QC and Michael Batty, instructed by City Legal and inhouse lawyers.
The appeal is Melbourne City Council v Telstra Corporation Limited.
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