Kimberley John Hughes v Western Australian Cricket Association (Inc.) and Mt Lawley District Cricket Club (Inc.) and others
[1986] FCA 357
Federal Court of Australia
1986-01-01
cited 16×
Justice Toohey
Leading authority
Treatment by later cases (20)
20 neutral
Citation timeline
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Applicant: Kimberley John Hughes
Respondent: Western Australian Cricket Association (Inc.) and Mt Lawley District Cricket Club (Inc.) and others
Ratio
The applicant, a professional cricketer, succeeded in establishing that the Cricket Council's amendment to rule 2:38:1 breached s.45(2)(a)(i) of the Trade Practices Act 1974 by containing an exclusionary provision restricting his supply of cricket services due to his South African tour participation, and that the rule was an unreasonable restraint of trade. However, he failed to establish substantially lessened competition, conspiracy, or other alternative grounds for relief. The W.A.C.A. was held to be a trading corporation, attracting federal jurisdiction, while the incorporated cricket clubs were not.
Outcome
Resolved
partial
Authority signal
Leading authority
Signal-weighted score: 21.6
Derived from how later decisions have treated this case. Dark green = leading authority,
green = positively treated, grey = neutral or sparse data,
amber = caution, red = treated negatively.
Concept tags · 4
Cases cited in this decision · 60
Cited
[1974] HCA 7
(not in corpus)
"…to emerge from them and then to apply those principles to the facts of the present case. 1. The mere fact that a corporation trades does not mean that it is a trading corporation. Reg. v. Trade Practices Tribunal; Ex...…"
Cited
(1974) 130 CLR 533
(not in corpus)
"…them and then to apply those principles to the facts of the present case. 1. The mere fact that a corporation trades does not mean that it is a trading corporation. Reg. v. Trade Practices Tribunal; Ex parte St....…"
Cited
[1979] HCA 6
— Western Australian National Football League (Incorporated) and West Perth...
"…it is a trading corporation. Reg. v. Trade Practices Tribunal; Ex parte St. George County Council [1974] HCA 7 ; (1974) 130 CLR 533 at 543, 562 ("St. George County Council"); Reg. v. Federal Court of Australia; Ex...…"
Cited
(1983) 57 ALJR 89
(not in corpus)
"…19, 234 ("Adamson") 2. The purpose of incorporation, propounded in St. George County Council, is no longer a valid test. The test is one of the current activities of the corporation. Adamson; State Superannuation...…"
Cited
[1983] HCA 21
(not in corpus)
"…ding activities should not be insubstantial (Murphy J. in Adamson at 239); the corporation must carry on trading activities on a significant scale (Mason, Murphy and Deane JJ. in State Superannuation Board at 96;...…"
Cited
(1983) 46 ALR 625
(not in corpus)
"…should not be insubstantial (Murphy J. in Adamson at 239); the corporation must carry on trading activities on a significant scale (Mason, Murphy and Deane JJ. in State Superannuation Board at 96; Deane J. in...…"
Cited
[1978] FCA 50
— Ku-ring-gai Co-operative Building Society (No. 12) Ltd and Dee Why...
"…nt a corporate body from being a trading corporation if its activities warrant that description. Adamson at 232. 7. Trading denotes the activity of providing, for reward, goods or services. Re Ku-ring Gai...…"
Cited
(1978) 22 ALR 621
(not in corpus)
"…ody from being a trading corporation if its activities warrant that description. Adamson at 232. 7. Trading denotes the activity of providing, for reward, goods or services. Re Ku-ring Gai Co-operative Building...…"
Cited
[1985] FCA 134
(not in corpus)
"…rading denotes the activity of providing, for reward, goods or services. Re Ku-ring Gai Co-operative Building Society (No. 12) Ltd. [1978] FCA 50 ; (1978) 22 ALR 621 at 624-625; St. George County Council at 569-570;...…"
Cited
(1985) 7 FCR 325
(not in corpus)
"…e activity of providing, for reward, goods or services. Re Ku-ring Gai Co-operative Building Society (No. 12) Ltd. [1978] FCA 50 ; (1978) 22 ALR 621 at 624-625; St. George County Council at 569-570; Bevanere Pty....…"
Cited
(1910) 1 KB 87
(not in corpus)
"…pation as a member club of the W.A. League in the competitions which it runs. Indeed, that is West Perth's major source of income. The comment which Fletcher Moulton L.J. made of the Crystal Palace Club in Walker v....…"
Cited
(1981) 148 CLR 457
(not in corpus)
"…sdiction to hear and determine not only claims arising under Part IV of the Trade Practices Act but also other claims, federal or non-federal, arising out of the same matter or controversy. Philip Morris Inc. v. Adam...…"
Cited
[1983] HCA 36
(not in corpus)
"…"in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Court is invoked". The exercise of this accrued jurisdiction is discretionary. Stack v....…"
Cited
(1983) 57 ALJR 731
(not in corpus)
"…atters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Court is invoked". The exercise of this accrued jurisdiction is discretionary. Stack v. Coast Securities...…"
Cited
[1934] HCA 50
(not in corpus)
"…attract the federal jurisdiction essential for the complete adjudication of the matter. Once jurisdiction is acquired, it is not lost by reason of the rejection of the claim or the matter attracting federal...…"
Cited
(1934) 52 CLR 221
(not in corpus)
"…eral jurisdiction essential for the complete adjudication of the matter. Once jurisdiction is acquired, it is not lost by reason of the rejection of the claim or the matter attracting federal jurisdiction R. v....…"
Cited
[1942] HCA 12
(not in corpus)
"…matter. Once jurisdiction is acquired, it is not lost by reason of the rejection of the claim or the matter attracting federal jurisdiction R. v. Carter; Ex parte Kisch [1934] HCA 50 ; (1934) 52 CLR 221 at 224; R. v....…"
Cited
(1942) 66 CLR 452
(not in corpus)
"…isdiction is acquired, it is not lost by reason of the rejection of the claim or the matter attracting federal jurisdiction R. v. Carter; Ex parte Kisch [1934] HCA 50 ; (1934) 52 CLR 221 at 224; R. v. Bevan; Ex parte...…"
Cited
[1980] FCA 38
(not in corpus)
"…45 of the Trade Practices Act finds its place in Part IV - Restrictive Trade Practices. By way of introduction I refer to some remarks of Deane J. in Refrigerated Express Lines (A/asia) Pty. Ltd. v. Australian Meat...…"
Cited
(1980) 44 FLR 455
(not in corpus)
"…Practices Act finds its place in Part IV - Restrictive Trade Practices. By way of introduction I refer to some remarks of Deane J. in Refrigerated Express Lines (A/asia) Pty. Ltd. v. Australian Meat and Live-stock...…"
Cited
[1983] FCA 93
(not in corpus)
"…f something that is enforceable at law. A number of decisions have tended to treat arrangement and understanding as synonymous, being something less than a binding contract or agreement. See Trade Practices...…"
Cited
(1983) 47 ALR 719
(not in corpus)
"…is enforceable at law. A number of decisions have tended to treat arrangement and understanding as synonymous, being something less than a binding contract or agreement. See Trade Practices Commission v. Tubemakers...…"
Cited
[1980] FCA 46
(not in corpus)
"…must be some communication between the parties concerned and each must raise an expectation in the mind of the others. Whether each must accept an obligation qua the others is debatable. In Morphett Arms Hotel Pty....…"
Cited
(1980) 30 ALR 88
(not in corpus)
"…munication between the parties concerned and each must raise an expectation in the mind of the others. Whether each must accept an obligation qua the others is debatable. In Morphett Arms Hotel Pty. Ltd. v. Trade...…"
Cited
(1985) 58 ALR 423
(not in corpus)
"…d have an understanding between two or more persons restricted to the conduct which one of them will pursue insofar as the other party or parties to the understanding are concerned". See also Trade Practices...…"
Cited
(1890) 25 QBD 391
(not in corpus)
"…the W.A.C.A. and the clubs, as opposed to their delegates, were the members of the Council. I am of opinion that, by appointing delegates, there was no "denudation of power and authority", to borrow the words of Lord...…"
Applied
[1971] HCA 71
(not in corpus)
"…ers? This must be a question of intention. Whether the rules of an organization form part of a contract between its members depends upon the existence of an intention that the rules "should give rise to enforceable...…"
Applied
(1971) 125 CLR 353
(not in corpus)
"…e a question of intention. Whether the rules of an organization form part of a contract between its members depends upon the existence of an intention that the rules "should give rise to enforceable legal relations"....…"
Cited
(1982) 41 ALR 613
(not in corpus)
"…be the only nor the dominant purpose. Various views have been expressed as to the meaning of "substantial" - see Festival Industries Pty. Ltd. v. Mikasa (N.S.W.) Pty. Ltd. (1972-1973) ALR 921 at 929; Peter Williamson...…"
Considered
[1979] FCA 85
(not in corpus)
"…liamson Pty. Ltd. v. Capitol Motors Ltd. (1982) 41 ALR 613 at 620-621. The term imports a notion of relativity and suggests something that is more than trivial or minimal. Tillmanns Butcheries Pty. Ltd. v....…"
Considered
(1949) 42 FLR 331
(not in corpus)
"…. v. Capitol Motors Ltd. (1982) 41 ALR 613 at 620-621. The term imports a notion of relativity and suggests something that is more than trivial or minimal. Tillmanns Butcheries Pty. Ltd. v. Australasian Meat Industry...…"
Cited
[1983] FCA 191
(not in corpus)
"…concert". In the T.N.T. case at 500 Franki J. said, in relation to para.4D(1)(b), that "the word 'purpose' is used objectively . . .". In regard to s.47 of the Trade Practices Act , Fox J. in O'Brien Glass Industries...…"
Cited
[1982] FCA 178
(not in corpus)
"…edged that if there was no evidence of an express purpose, purpose had to be implied by considering what was done and intended and what would be the natural consequences of that conduct. In Dandy Power Equipment Pty....…"
Cited
(1971) 45 ALJR 426
(not in corpus)
"…der a contract of service". 114. The applicant was not, at the relevant times, employed under a contract of service. A sportsman may be engaged under a contract of service - see for instance Commissioner of Taxation...…"
Cited
[1955] HCA 73
(not in corpus)
"…on". 115. The arrangement places no obligation on the applicant to play in any particular match. There are no provisions from which the right of control, which has been significant in such contract of service cases...…"
Cited
(1955) 93 CLR 561
(not in corpus)
"…rrangement places no obligation on the applicant to play in any particular match. There are no provisions from which the right of control, which has been significant in such contract of service cases as Zuijs v....…"
Cited
[1949] HCA 49
(not in corpus)
"…in any particular match. There are no provisions from which the right of control, which has been significant in such contract of service cases as Zuijs v. Wirth Bros. Pty. Ltd. [1955] HCA 73 ; (1955) 93 CLR 561 ;...…"
Cited
(1949) 79 CLR 389
(not in corpus)
"…r match. There are no provisions from which the right of control, which has been significant in such contract of service cases as Zuijs v. Wirth Bros. Pty. Ltd. [1955] HCA 73 ; (1955) 93 CLR 561 ; Humberstone v....…"
Cited
[1945] HCA 13
(not in corpus)
"…ficant in such contract of service cases as Zuijs v. Wirth Bros. Pty. Ltd. [1955] HCA 73 ; (1955) 93 CLR 561 ; Humberstone v. Northern Timber Mills [1949] HCA 49 ; (1949) 79 CLR 389 ; Queensland Stations Pty. Ltd. v....…"
Cited
(1945) 70 CLR 539
(not in corpus)
"…ontract of service cases as Zuijs v. Wirth Bros. Pty. Ltd. [1955] HCA 73 ; (1955) 93 CLR 561 ; Humberstone v. Northern Timber Mills [1949] HCA 49 ; (1949) 79 CLR 389 ; Queensland Stations Pty. Ltd. v. Federal...…"
Cited
[1985] HCA 65
(not in corpus)
"…45(2) of the Trade Practices Act . All were parties to the contravention so far as the understanding was concerned; hence s. 82 , in the case of the W.A.C.A., and s. 82 read with s. 75B in the case of the clubs,...…"
Cited
(1985) 61 ALR 307
(not in corpus)
"…de Practices Act . All were parties to the contravention so far as the understanding was concerned; hence s. 82 , in the case of the W.A.C.A., and s. 82 read with s. 75B in the case of the clubs, render all liable....…"
Cited
[1979] FCA 81
(not in corpus)
"…endered by persons not resident or not carrying on business in Australia". That provision has no relevance to the present proceeding. 125. It is as well to keep in mind some remarks by Northrop J. in Adamson v. West...…"
Cited
(1979) 27 ALR 475
(not in corpus)
"…ns not resident or not carrying on business in Australia". That provision has no relevance to the present proceeding. 125. It is as well to keep in mind some remarks by Northrop J. in Adamson v. West Perth Football...…"
Cited
[1978] FCA 21
(not in corpus)
"…. . . care must be taken to ensure that the use of the word 'competition' does not cause confusion". 126. At the heart of this limb of s.45 is the notion of market. In Trade Practices Commission v. Ansett Transport...…"
Cited
(1978) 32 FLR 305
(not in corpus)
"…be taken to ensure that the use of the word 'competition' does not cause confusion". 126. At the heart of this limb of s.45 is the notion of market. In Trade Practices Commission v. Ansett Transport Industries...…"
Cited
(1976) 25 FLR 169
(not in corpus)
"…n v. Ansett Transport Industries (Operations) Pty. Ltd. [1978] FCA 21 ; (1978) 32 FLR 305 at 311 Northrop J. referred with apparent approval to what had been said by the Trade Practices Tribunal in Re Queensland...…"
Cited
[1982] FCA 206
(not in corpus)
"…ade Practices Act does not define what is meant by "substantial lessening of competition". The term is one of relativity. Dandy Power Equipment Pty. Ltd. v. Mercury Marine Pty. Ltd. at 43,877-43,888; Radio 2UE Sydney...…"
Cited
(1978) 1 WLR 302
(not in corpus)
"…well established that the doctrine of restraint of trade may operate in the case of sports persons who derive income from the sport they play. Eastham v. Newcastle United Football Club Limited (1964) Ch 413 ; Buckley...…"
Cited
(1966) 2 QB 633
(not in corpus)
"…m v. Newcastle United Football Club Limited at 441-442; Buckley v. Tutty at 375; Greig v. Insole at 345; Foschini v. V.F.L. and South Melbourne Club Limited (unreported judgment of Supreme Court of Victoria delivered...…"
Distinguished
[1941] UKHL 2
(not in corpus)
"…s whose predominant motive is not self-interest but injury to the plaintiff or the promotion of some other 'unjustifiable' end". 194. While a malevolent intent is not an essential ingredient of the tort (Crofter...…"
Cited
[1966] HCA 40
(not in corpus)
"…claim for exemplary damages. Exemplary damages may be awarded in actions for tort if it appears that the respondents' conduct in committing the wrong exhibited a contumelious disregard of the applicant's rights. Uren...…"
Cited
[1966] HCA 37
(not in corpus)
"…appears that the respondents' conduct in committing the wrong exhibited a contumelious disregard of the applicant's rights. Uren v. John Fairfax & Sons Pty. Ltd. [1966] HCA 40 ; (1965-1966) 117 CLR 118 ; Australian...…"
Cited
(1968) 117 CLR 185
(not in corpus)
"…respondents' conduct in committing the wrong exhibited a contumelious disregard of the applicant's rights. Uren v. John Fairfax & Sons Pty. Ltd. [1966] HCA 40 ; (1965-1966) 117 CLR 118 ; Australian Consolidated Press...…"
Cited
[1972] HCA 61
(not in corpus)
"…ke declarations is not ousted by sub-s. 154(1) of the Equal Opportunity Act . A declaration does not impose a sanction or consequence; it simply involves a statement of the existing law. His counsel referred to...…"
Cited
(1972) 127 CLR 421
(not in corpus)
"…is not ousted by sub-s. 154(1) of the Equal Opportunity Act . A declaration does not impose a sanction or consequence; it simply involves a statement of the existing law. His counsel referred to Forster v. Jododex...…"
Cited
[1982] HCA 24
(not in corpus)
"…n tours. 226. Before a term may be implied in a contract, it must be necessary to give business efficacy to the contract. It is not enough that it be reasonable to imply the term. See Codelfa Construction Pty. Ltd....…"
Cited
(1983) 50 ALR 735
(not in corpus)
"…of action pleaded are very much the same. 231. It is unnecessary therefore to consider the doctrine of pendent party jurisdiction to which counsel for the applicant referred, relying upon Kennedy v. Australasian Coal...…"
Cited
[1984] FCA 244
(not in corpus)
"…ecessary therefore to consider the doctrine of pendent party jurisdiction to which counsel for the applicant referred, relying upon Kennedy v. Australasian Coal and Shale Employees Federation (1983) 50 ALR 735. See...…"
Cited
(1984) 9 IR 68
(not in corpus)
"…e to consider the doctrine of pendent party jurisdiction to which counsel for the applicant referred, relying upon Kennedy v. Australasian Coal and Shale Employees Federation (1983) 50 ALR 735. See the discussion in...…"
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Archived text (29034 words)
Re Kimberley John Hughes v Western Australian Cricket Association (Inc) and Mt Lawley District Cricket Club (Inc); Melville Cricket Club (Inc); North Perth Cricket Club (Inc); Subiaco Floreat Cricket Club (Inc); Bayswater-Morley Cricket Club (Inc [1986] FCA 357 (27 October 1986)
FEDERAL COURT OF AUSTRALIA
Re: KIMBERLEY JOHN HUGHES
And: WESTERN AUSTRALIAN CRICKET ASSOCIATION (INC.) and MT. LAWLEY DISTRICT
CRICKET CLUB (INC.); MELVILLE CRICKET CLUB (INC.); NORTH PERTH CRICKET CLUB
(INC.); SUBIACO FLOREAT CRICKET CLUB (INC.); BAYSWATER-MORLEY CRICKET CLUB
(INC.); PERTH CRICKET CLUB (INC.); FREMANTLE DISTRICT CRICKET CLUB (INC.);
CLAREMONT-COTTESLOE CRICKET CLUB (INC.); SOUTH PERTH CRICKET CLUB (INC.);
MIDLAND-GUILDFORD CRICKET CLUB (INC.); WANNEROO DISTRICT CRICKET CLUB (INC.)
and LESLIE ANNISON (sued on behalf of himself and all other members of the
Southern District Cricket Club); GREGORY BUNNEY (sued on behalf of himself and
all other members of the Scarborough Cricket Club); MICHAEL SNELL (sued on
behalf of himself and all other members of the Nedlands Cricket Club); PHILLIP
CLIFFORD (sued on behalf of himself and all other members of the University
Cricket Club) and KEVIN MORRIS TAYLFORTH (sued on behalf of himself and all
other members of the Cricket Council of Western Australia Australian Cricket
Association (Inc.)
No. WA G14 of 1986
Trade Practices
COURT
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Toohey J.
CATCHWORDS
Trade Practices - application under s.82 of Trade Practices Act and accrued
jurisdiction - alleged contravention by respondents
of s.45 of the Act - first
and second respondents incorporated under Associations Incorporation Act -
whether trading corporations
in terms of s.4(1) of Trade Practices Act -
summary of relevant principles - whether jurisdiction of the Court conditional
upon existence
of a trading corporation - disqualification of applicant from
district cricket consequent upon applicant's participation in South
African
cricket tour - applicant disqualified pursuant to amended Cricket Council rule
- no provision in original rule for disqualification
for breach of rule - rule
amended by resolution at Cricket Council meeting - Council's understanding of
operation of original rule
in relation to South African cricketers the subject
of a resolution at an earlier meeting - whether conduct of Council members at
relevant meetings constituted a contract arrangement or understanding in terms
of s.45 of the Act - resolution to amend found to
amount to an understanding
between first, second and third respondents - whether understanding contained
an exclusionary provision
in terms of ss.45 and 4D of the Act - meaning of
'purpose' in s.4D - competition between second and third respondents for
services
of cricketers - whether second and third respondents 'competitive
with each other' in terms of s.4D - disqualification provision
directed inter
alia at applicant and other 'rebel cricketers' - whether 'particular persons'
in terms of s.4D - exclusion of South
African cricketers from district cricket
competition as a result of rule - whether likely effect thereof to
substantially lessen
competition in terms of s.45 - meaning of 'substantial
lessening of competition' - consideration of relevant markets - decision by
Cricket Council to reject motion for reinstatement of applicant - whether
decision constitutes giving effect to an exclusionary provision
or a provision
likely to substantially lessen competition in terms of s.45 - contravention of
s.45 by first respondent - whether
second and third respondents involved in
the contravention in terms of s.75B - disqualification provision automatic in
operation
and indefinite in duration - whether unreasonable restraint of trade
- whether in breach of applicant's alleged right to work - rule
prohibits
participation in unrecognised matches without the consent of the Cricket
Council - permission to play in South Africa sought
by applicant - no reply
received - whether failure by Council to give any or proper consideration to
applicant's application for
consent - whether decision to disqualify ultra
vires - alleged agreement between respondents to injure or punish applicant by
disqualifying
him from district competition - whether a conspiracy between
respondents - whether respondents acted in bad faith or as a result
of bias -
allegation that applicant disqualified for political reasons - whether
disqualification contrary to the Equal Opportunity
Act - first respondent
party to deed in settlement of litigation concerning effect of South African
tour on applicant's participation
in test and interstate cricket - whether
disqualification of applicant from grade cricket in breach of express or
implied term of
deed - relief appropriate - measure of damages
HEARING
PERTH
27:10:1986
DECISION
Introduction
In this opening address, counsel for the applicant described this case as
one of immense technical difficulty but having at its
core the right of a
person to earn a living in a chosen trade or profession in the country and
state of his choice. By way of riposte,
counsel for the respondents said in
his opening address that the case had nothing whatsoever to do with the
applicant's right to
work, that it concerned the obligation of the applicant
to play the game of cricket according to its rules and that, notwithstanding
the applicant's attempt to dress up his case in a wide variety of the most
complex technical and legal attacks upon the conduct of
the respondents, it
would be found that the respondents were doing no more than exercising their
responsibilities in a democratic
fashion.
2. Of one thing there can be no argument. The applicant's case as presented
was indeed complex, both as to fact and law. It involved
the meaning and
operation of several difficult provisions of the
Trade Practices Act 1974
,
coupled with a detailed examination of a number of common law causes of
action, in particular restraint of trade, conspiracy, ultra
vires, bad faith
and bias and a claim under the
Equal Opportunity Act 1984
of Western
Australia. At the forefront of the proceeding was a challenge to the
jurisdiction of this Court to entertain the application.
3. The hearing occupied twenty-one days and was preceded by a number of
interlocutory applications relating to pleadings, discovery,
interrogatories
and the issue of a subpoena duces tecum returnable before the hearing. No
doubt the hearing would have been longer
had it not been for two
considerations. The first was that, by agreement between the parties, evidence
was admitted on affidavit.
Twenty-four affidavits were filed on behalf of the
applicant and twenty-seven on behalf of the respondents. Most of the deponents
were cross-examined and the respondents attacked much of the contents of the
affidavits filed on behalf of the applicant. As a result
a number of
paragraphs and parts of paragraphs were disallowed. The second consideration
related to the admission of documentary
evidence. The Court was presented with
files containing 459 documents which the parties had agreed as to
authenticity. However they
reserved their rights to object to the admission of
documents on the ground of relevance and otherwise. In a number of cases
objections
were made and upheld and in other cases counsel did not press for
the admission of documents. In the end 223 documents were tendered
in this
way; other documents were tendered through witnesses.
The parties
4. It is necessary now to say something about the parties to this litigation.
The applicant is a professional cricketer, that much
is admitted. It is also
admitted that he is and was at all material times engaged as a professional
cricketer by Subiaco Floreat
Cricket Club (Inc.), though the terms of his
engagement assume some importance. That is a matter to which I shall refer
later. He
first played A grade cricket as a sixteen year old in 1969. He first
played for Western Australia in the 1974-75 season and for Australia
in 1976.
He was captain of the Western Australian side in 1980-81 and thereafter until
the commencement of the 1985-86 season. He
captained Australia in the second
test against Pakistan in 1978-79 at the W.A.C.A. ground. The applicant's
reputation as a cricketer
is unquestioned.
5. The first respondent ("the W.A.C.A.") and the second respondents are
bodies incorporated under the provisions of the Associations
Incorporation Act
1895 of Western Australia. That Act provides for the incorporation of a range
of associations but it has no application
to "associations for the purpose of
trading or securing pecuniary profit to the members from the transactions
thereof" (s.2). One
question that will arise for consideration in these
reasons is the significance of incorporation under the Associations
Incorporation
Act for the argument that the respondents are trading
corporations within the
Trade Practices Act
. The W.A.C.A. is responsible for
the promotion of cricket in Western Australia.
6. Each of the second respondents is responsible for club cricket in a
particular district. The third respondents are cricket clubs
and are similarly
responsible but they are not incorporated. The fourth respondent, Mr.
Taylforth, is the chairman of the Cricket
Council and was sued in a
representative capacity. I shall refer to the fourth respondent as the Cricket
Council and to Mr. Taylforth
by name when it is his conduct that is under
consideration. The Cricket Council is established by r.35 of the rules of the
W.A.C.A.
which reads:
"There shall be a Cricket Council consisting of the
Chairman for the time being of the Council, the
delegates elected annually by the several clubs
associated with the Council (herein referred to as the
Associated Clubs), two delegates appointed by the
Executive, and such other delegates as the Council may
from time to time admit in accordance with the rules
framed by it under the power in that behalf herein
conferred on it".
7.
Rule 36
of the rules of the W.A.C.A. empowers the Cricket Council to make
by-laws and regulations for the control and management of matters
within its
own jurisdiction and to issue its own rules under separate cover.
Rule 37
sets
out the functions of the Cricket Council, the first of which is the control
and management of all associated club matches. (There
is a difference in the
numbering of these rules as they appear in Ex.10 and in "The Western
Cricketer", a publication of the W.A.C.A.
I have followed counsel in using the
numbering in the latter.) The second and third respondents comprise the
Associated Clubs. While
the Cricket Council is established by the rules of the
W.A.C.A., the executive of the W.A.C.A. appoints delegates to the Council.
It
was the applicant's case that the Cricket Council was an autonomous body and
that, while the first, second and third respondents
were responsible for
whatever was done by their delegates, the Council was not in any sense an
agent of the W.A.C.A. The respondents
did not appear to dissent from this view
of the matter. But they did contend that the members of the Cricket Council,
though appointed
by the W.A.C.A. and the Associated Clubs, were not their
agents.
8. The applicant alleges that the W.A.C.A. and the incorporated clubs are
trading corporations within the meaning of the
Trade Practices Act
. This is
denied by those respondents. The issue is quite crucial to the application of
the
Trade Practices Act
. The respondents say that it is crucial also to the
jurisdiction of this Court to entertain any of the applicant's claims. The
applicant
contends that the jurisdiction of this Court does not depend upon
upholding the claim that one or more of the respondents is a trading
corporation, so long as the Court is satisfied that the claim is a bona fide
one. This is a matter to which I shall return.
9. With four exceptions, the respondents were represented by the one firm of
solicitors and by the same counsel and have common interests.
The exceptions
are Subiaco Floreat Cricket Club (Inc.) (of which the applicant is a member),
Claremont-Cottesloe Cricket Club (Inc.),
Gregory Bunney who is sued on behalf
of members of Scarborough Cricket Club and Phillip Clifford who is sued on
behalf of University
Cricket Club. These four respondents were content to
abide by any order the Court might make. No claim for damages or costs was
pursued
against them but the applicant seeks to have them bound, together with
the other respondents, by any declaratory or injunctive relief
that may be
granted.
The applicant's concern
10. In essence the applicant's concern is that, by reason of his decision to
play cricket in South Africa between 1 November 1985
and 31 March 1986 and
again between 1 October 1986 and 31 March 1987, he has been barred from test
cricket, Sheffield Shield cricket
(that is, interstate cricket) and club or
district cricket. The playing of club cricket is not a legal prerequisite to
the playing
of shield and test cricket. But there is no doubt that a player
who is not available for club cricket may lose the chance to maintain
his
skills, is away from the eyes of the selectors and therefore has a reduced
chance of selection for shield and test cricket. And
in a more general way his
skills as a cricketer may suffer. I accept the applicant's statement in an
affidavit filed in these proceedings:
"District cricket not only provides me with valuable
match practice and training for the purposes of
pursuing my career generally but also affects my
capacity to fulfil sponsorship obligations and also to
attract future Australian sponsorship".
11. The applicant's disbarment from playing test and shield cricket was not
directly involved in these proceedings. It was however
the subject of
litigation in the Supreme Court of Victoria and the terms upon which that
litigation was settled have relevance to
the issues with which this Court is
presently concerned. The applicant's disbarment from playing club cricket,
which it is said resulted
from a decision of the Cricket Council, is the
matter of which direct complaint is now made.
Rules of the Cricket Council
12. To understand how the applicant's disqualification from club cricket is
said to have arisen, reference must be made to r.2:38:1
of the rules of the
Cricket Council. This rule was amended on 4 November 1985; it is necessary to
have regard to its original form
and its form as amended. Originally it
provided:
"No Club or Affiliated Association and no member of any
Club or Affiliated Association and no player registered
as such under these Rules shall arrange or take part in
any cricket match within or without the State of
Western Australia other than a match recognised by the
Australian Cricket Board or the Association without
first obtaining the consent in writing of the
International and Interstate Cricket Committee of the
Association provided that: This Rule shall not apply
to the arranging of or taking part in any match
declared by the International and Interstate Cricket
Committee to be a social match".
13. In its amended form, r.2:38:1 reads:
"No Club or Affiliated Association and no member of any
Club or Affiliated Association and no player registered
as such under these Rules shall arrange or take part in
any cricket match within or without the State of
Western Australia other than a match recognised by the
Australian Cricket Board or the Association without
first obtaining the consent in writing of the Cricket
Council of the Association provided that: This Rule
shall not apply to the arranging of or taking part in
any match declared by the International and Interstate
Cricket Committee to be a social match. Any player
found in breach of this rule is automatically
disqualified until reinstated by the Cricket Council".
14. The amended rule differs from the original rule in two important
respects. First, the amended rule substituted the Cricket Council
for the
International and Interstate Cricket Committee ("the I. and I. Committee") as
the body whose consent is required. The I.
and I. Committee is also a creation
of the rules of the W.A.C.A. It consists of seven members, to be elected
annually, and a general
manager (r.39). Its primary function is to arrange and
control all international and interstate matches, but it also appoints the
W.A.C.A. representatives to the Australian Cricket Board (r.42). The second
difference is that the original rule said nothing as
to the consequences for a
player who was in breach of the rule. The amended rule provides automatic
disqualification until the player
is reinstated by the Cricket Council.
15. Reference must also be made to r.2:39:5 of the Cricket Council rules,
which has not been amended. It reads:
"If a club allows a player disqualified pursuant to
these Rules or disqualified by order of the Council, to
play in a match in a team of that club after notice of
that player's disqualification has been received by the
club the club commits an offence and if the offence is
proved upon complaint to the Council the club shall be
liable to a fine and shall be deemed to have lost the
match to the opposing club. If the match is so lost
the Council shall declare the match to have been a
first innings win or an outright win with first innings
lead to the opposing club. A complaint under this Rule
may be lodged by the Grade Committee or the opposing
club".
16. As the rules of the Cricket Council stood before 4 November 1985 (and as
they stand now), there was provision for disqualifying
a player whose name
appeared in a list of defaulters furnished by the secretary of a club
(r.2:39). There was and is provision for
the prosecution of a player "for an
act or omission deemed to be an offence under these rules" (r.2:24).
Rule 2:24
contains the procedure which must be followed in such a case - a complaint,
followed by a hearing - and r.2:25:2 empowers the Council
to impose the
prescribed penalty or if none is prescribed "such penalty . . . as it thinks
fit". But none of these rules is relevant
to the situation of the applicant. I
conclude that before 4 November 1985 playing in an unrecognised match could
not result in disqualification
of the player from playing in club matches, at
any rate not without following the procedure in r.2:25. That procedure was not
followed
in the applicant's case.
The background
17. Despite the welter of evidence led on both sides, the events giving rise
to this application fall within a fairly narrow compass.
To a large extent the
facts are not in dispute though questions of credibility arise, particularly
in regard to meetings of the Cricket
Council held on 25 September, 4 November
1985 and early in 1986.
18. On 15 May 1985 the applicant executed an agreement with The South African
Cricket Union ("S.A.C.U."). He agreed to take part
in cricket tours in South
Africa during the periods 1 November 1985-31 March 1986 and 1 October 1986-31
March 1987. In addition to
meeting costs associated with the applicant's
movements to and from South Africa and costs associated with the tours,
S.A.C.U. agreed
to pay the applicant $A200,000. This amount was expressed to
be free of tax; it is unnecessary to mention the formula by which income
tax
was taken into account. Other Australian cricket players entered into
comparable agreements about the same time, probably a little
earlier.
19. In or about May 1985 the Australian Cricket Board (of which the W.A.C.A.
was a member along with other state cricket associations)
and Frederick
William Cecil Bennett, the Chairman of the Cricket Board, instituted
proceedings in the Supreme Court of Victoria.
There were two actions, No. 1497
of 1985 relating to players other than the applicant, and No. 1811 of 1985
relating to the applicant.
In each case the plaintiffs sought injunctions,
damages and other relief so as to restrain the defendants from giving effect
to their
agreements with S.A.C.U. The basis of the actions lay in the
contention that the defendants were then bound to the Cricket Board
and had
undertaken not to play in a cricket match, other than a match controlled by
the Cricket Board or one of its constituent members
or approved by the Cricket
Board, and in particular had contracted not, without the permission of the
Cricket Board, to play cricket
outside Australia. Those proceedings were
defended.
20. The Victorian actions were settled right at the death knock and a deed of
settlement dated 29 July 1985 was executed by all concerned
including the
applicant. It will be necessary, later in these reasons, to refer to certain
parts of the deed because one cause of
action upon which the applicant relies
is that the W.A.C.A. is in breach of the deed. For the purpose of this recital
of facts, it
is enough to note that a consequence of the deed was that the
applicant might participate in the South African tours without being
in breach
of any contract between himself and the plaintiffs in the actions (which
included the W.A.C.A.), but that he accepted the
lawfulness of bans imposed by
the Australian Cricket Board rendering him ineligible to be a member of a team
representing an Australian
state before 1 October 1987 and rendering him
ineligible to be a member of an Australian team before 1 October 1988. The
deed made
no reference to the playing of cricket at club level.
21. By letter dated 11 November 1985 Robert John Parry, who was the
applicant's business manager as well as being club coach for
Bayswater-Morley
Cricket Club (Inc.), wrote to the chairman of the Cricket Council. He did so
in the name of the applicant, pursuant
to a power-of-attorney which he held.
The applicant was then in South Africa. The letter read:
"I refer to Cricket Council Rule 2.38.1 concerning the
playing by a club member in a match other than one
organised by the Australian Cricket Board or your
Association.
Accordingly I wish to seek your Councils consent to
allow me to play in such games as have been organised
by The South African Cricket Union during this 1985/86
summer season."
22. Paragraph 26 of the statement of claim pleads that the fourth respondent
failed to reply to the applicant's request. Paragraph
27 pleads that the
fourth respondent failed to give any or any proper consideration to the
request. Paragraph 17 of the defence denies
paras.26 and 27. Such a denial,
without any positive affirmation that the fourth respondent did reply or did
give proper consideration,
offends the rules of pleading and would have been
struck out, had application been made to this end. No such application was
made.
It is quite clear that the Cricket Council did not reply to the request.
Whether it gave any or proper consideration thereto will
be looked at later in
these reasons.
23. By 11 November 1985 several important events had occurred. In particular
there had been two meetings of the Cricket Council,
one on 25 September and
one on 4 November. At the meeting on 25 September, which was a special
meeting, it was resolved:
"That the Cricket Council has come to an understanding
that the Rule regarding unrecognised matches cannot be
invoked until the players take part in such matches."
It was common ground that this was a reference to r.2:38:1. There was a
further resolution:
"The Cricket Council, at this time, does not intend
taking any action against the proposed South African
tour players. The Rules as they stand would prevent
them from playing upon their return; however, there has
been notice given of a proposed notice of motion to
review the applicable Rules prior to that time".
At the meeting on 4 November r.2:38:1 was amended in the two respects already
noted. First, the Cricket Council was substituted for
the I. and I. Committee
as the body whose consent to play in an unrecognised match was required.
Second, the following words were
added to the rule:
"Any player found in breach of this Rule is
automatically disqualified until re-instated by the
Cricket Council".
24. In its amended form r.2:38:1 gives rise to several questions. When is a
match "recognised" by the Cricket Board or the W.A.C.A.?
What is meant by
"found" in breach of the rule? What is meant by "automatically disqualified"?
These questions must be looked at,
but at this stage I shall continue with the
sequence of events.
25. As at 4 November 1985 the applicant had not (nor for that matter had any
of the players contracted to play in South Africa) taken
part in a tour match.
The first match he played in South Africa was on 9 November 1985.
26. There was an ordinary meeting of the Cricket Council on 6 January 1986. A
number of matters were canvassed. Towards the end of
the meeting there was a
motion by Mr. Burgess, the president of Subiaco Floreat Cricket Club (Inc.)
which was seconded by Mr. Bunney,
the president of Scarborough Cricket Club
(to which Thomas George Hogan and Gregory Shipperd, other South African tour
players belonged)
that:
". . . the South African tourists be re-instated to
W.A.C.A. Grade and Toyota Cup fixtures on their return
so that they may fulfil their obligations to their
clubs".
The minutes of the meeting report the fate of that motion in the following
terms:
"The Fremantle Club/A. Dougan was opposed to their
re-instatement this season.
F. O'Driscoll considered that re-instatement would be
in direct opposition to the motion carried by Council
on the A.C.B. Code of Behaviour.
P. Clifford supported the motion on legal grounds.
The motion was put and LOST."
Mr. Dougan was the delegate to the Cricket Council of Fremantle District
Cricket Club (Inc.). Mr. O'Driscoll was the President of
Mt. Lawley Cricket
Club (Inc.) and its delegate to the Council.
27. On 3 February 1986 there was held what the minutes describe as "special
and ordinary meetings of the Cricket Council". Item 26.2
of the minutes, under
the heading of "Special Business", deals with "Players undertaking unofficial
tours of South Africa". As to
that matter, the minutes record:
"MOVED (D. Fitzgerald/M. Parr) that T. Hogan, G.
Shipperd, K. Hughes and T. Alderman be reinstated so
that they may participate in Swan Gold League and
Toyota Cup following their return from South Africa and
enable them to fulfill their obligations to their
respective District Clubs.
In support of the motion D. Fitzgerald read from a
prepared statement. Following discussion the motion
was put and LOST (7/8).
The University, Scarborough, Subiaco-Floreat and
Claremont-Cottesloe delegates requested that the
minutes record that they had voted in favour of the
motion".
Mr. Fitzgerald was the delegate of Scarborough Cricket Club. Mr. Parr was the
delegate from Subiaco Floreat Cricket Club (Inc.),
the club to which the
applicant belonged. Mention has been made already of Messrs. Hogan and
Shipperd. Terrence Alderman was a member
of the applicant's club.
28. There was a further special meeting of the Cricket Council on 19 February
1986. The meeting was requisitioned when it was learned
that Charles Arthur
Bull, the delegate to the Cricket Council from South Perth Cricket Club
(Inc.), had at the meeting on 3 February
voted against reinstatement contrary
to the instructions of his club. At the meeting on 19 February Mr. Bull
explained that he had
misunderstood how he should vote. Mr. Taylforth, as
chairman of the meeting, ruled that the Cricket Council had "no authority or
power to deal with a matter concerning a delegate and his club and therefore
the matter . . . was outside the jurisdiction of the
Council". Mr. Burgess and
Mr. Bunney moved and seconded respectively a motion of dissent to the
chairman's ruling but that motion
was lost six votes to eleven. The chairman
then declared the meeting closed.
29. The circumstances in which Mr. Bull apparently misunderstood his club's
instructions and voted against reinstatement rather than
for it were not
explained satisfactorily. Mr. Bull gave evidence in which he denied that the
vote he cast in error was any more than
a misunderstanding of what had taken
place at the meeting of his club preceding the Cricket Council meeting on 6
January. It was
not his club's practice to arm its delegate with written
instructions as to how to vote on matters arising or likely to arise at
a
meeting of the Cricket Council. But its delegate was expected to vote in
accordance with the views of the club as made known at
its meetings. Despite
cross-examination and re-examination of Mr. Bull, I am by no means clear what
he meant by saying that he had
misunderstood his instructions. Did he mishear
what he was told at the meeting of the club, did he hear correctly and then
become
confused or did he simply forget what he had been told by the club?
Later in these reasons I shall say more about Mr. Bull's conduct,
in the
context that the members of the Cricket Council were acting in bad faith and
were biased. At this stage I voice my concern
that, on such an important
matter, the explanation forthcoming went little further than that there had
been a misunderstanding.
30. Had Mr. Bull voted in accordance with the views of his club, the motion
to reinstate the applicant would have been passed eight
votes to seven. While
one cannot forecast what might have happened thereafter, at least in terms of
r.2:38:1 and while the motion
for reinstatement stood the applicant would not
have been disqualified from playing for his club. This might have had the
further
consequence that this long and costly piece of litigation could have
been avoided.
Trading corporations
31. The jurisdiction of the Federal Court is attracted by reason of the claim
made under the
Trade Practices Act
. Put shortly, the claim is that the conduct
of the respondents at each of the meetings on 25 September and 4 November 1985
constituted
a contract, arrangement or understanding which contained an
exclusionary provision contrary to sub-para. 45(2)(a)(i) of the Act and
that a
provision of that contract, arrangement or understanding had as its purpose,
or had or was likely to have the effect, of substantially
lessening
competition in contravention of sub-para. 45(2)(a)(ii) of the Act.
Furthermore, it is said, their conduct thereafter gave
effect to each such
provision in contravention of sub-paras. 45(2)(b)(i) and (ii) of the Act.
32. Sub-section 45(2) strikes at conduct by a corporation. The applicant
contends that all the incorporated respondents are trading
corporations, hence
corporations within sub-s.4(1) the
Trade Practices Act
. But he says that in
any event it is sufficient if there be one corporation that engaged in conduct
in breach of the sub-section.
It is enough, he says, if the W.A.C.A. be a
trading corporation even if, contrary to his submission, the incorporated
clubs are held
not to be. The respondents, while recognising a distinction
between the activities of the W.A.C.A. and the clubs, contend that none
of the
incorporated respondents is a trading corporation.
33. The last few years have seen several decisions, particularly by the High
Court, in which the notion of a trading corporation
has been examined. It is
not my intention to refer to those decisions in great detail but rather to
state the principles that appear
to emerge from them and then to apply those
principles to the facts of the present case.
1. The mere fact that a corporation trades does not mean that it
is a trading corporation. Reg. v. Trade Practices Tribunal;
Ex parte St. George County Council
[1974] HCA 7
;
(1974) 130 CLR 533
at
543, 562 ("St. George County Council"); Reg. v. Federal Court
of Australia; Ex parte W.A. National Football League
[1979] HCA 6
;
(1978-1979) 143 CLR 190
at 219, 234 ("Adamson")
2. The purpose of incorporation, propounded in St. George County
Council, is no longer a valid test. The test is one of the
current activities of the corporation. Adamson; State
Superannuation Board v. Trade Practices Commission (1983) 57
ALJR 89 at 96 ("State Superannuation Board").
3. But the current activities test is not the sole criterion for
determining whether a corporation is a trading corporation.
Thus where a corporation has not begun to trade, its
character may be found in its constitution. Even when there
are current activities, the corporation's constitution is not
completely irrelevant Fencott v. Muller (1982-1983) 152
CLR 570 at 602.
4. Views as to the necessary extent of trading activity have
varied. It must be a substantial corporate activity (Barwick
C.J. in Adamson at 208); the trading activities must form a
sufficiently significant proportion of the corporation's
overall activities (Mason J. in Adamson at 233, with Jacobs
J. concurring at 237); the trading activities should not be
insubstantial (Murphy J. in Adamson at 239); the corporation
must carry on trading activities on a significant scale
(Mason, Murphy and Deane JJ. in State Superannuation Board at
96; Deane J. in Commonwealth v. Tasmania
[1983] HCA 21
;
(1983) 46 ALR 625
at 833).
5. An incorporated sporting body can be a trading corporation if
its activities meet the required test. Adamson.
6. In particular, incorporation under a statute such as the
Associations Incorporation Act does not prevent a corporate
body from being a trading corporation if its activities
warrant that description. Adamson at 232.
7. Trading denotes the activity of providing, for reward, goods
or services. Re Ku-ring Gai Co-operative Building Society
(No. 12) Ltd.
[1978] FCA 50
;
(1978) 22 ALR 621
at 624-625; St. George
County Council at 569-570; Bevanere Pty. Ltd. v. Lubidineuse
[1985] FCA 134
;
(1985) 7 FCR 325
at 330-331
8. The
Trade Practices Act
itself draws a distinction between
trading corporations and financial corporations; nevertheless
the two classes are not mutually exclusive. State
Superannuation Board at 96.
34. Adamson repays closer consideration for it is the nearest on the facts to
the case now before the Court. It concerned a professional
football player who
was registered with the West Perth Football Club (Inc.) ("West Perth"), a body
incorporated under the Associations
Incorporation Act 1895. The club was a
member of the Western Australian National Football League ("the W.A. League")
which was incorporated
under the same Act. Adamson received an offer inviting
him to play with the Norwood Football Club (Inc.) ("Norwood") in South
Australia,
a body which was incorporated under the Associations Incorporation
Act 1956 of that state and which was a member of the South Australian
National
Football League ("the S.A. League"), also incorporated under that Act. The
W.A. League and the S.A. League were members
of the National Football League
of Australia, a company limited by guarantee incorporated under the
Companies
Act 1961
of Victoria.
35. The case concerned the refusal of West Perth and in turn the W.A. League
to grant a clearance to Adamson to play for Norwood.
Adamson sued West Perth,
the W.A. League and the S.A. League in the Federal Court, alleging that they
were trading corporations and
that their actions in relation to the clearance
application were breaches of sub-s.45(2) of the
Trade Practices Act
. At this
point of these reasons for judgment, I am concerned only with the view taken
by the majority of the High Court - Barwick
C.J., Mason, Jacobs and Murphy
JJ., with Gibbs, Stephen and Aickin JJ. dissenting - that West Perth and the
W.A. League were trading
corporations.
36. Mention has already been made of the tests propounded in Adamson for
determining whether an incorporated body is a trading corporation.
In the
course of his reasons for judgment, Mason J. considered in some detail the
activities of the relevant bodies. It is in that
regard that the facts of
Adamson have particular application to the present case.
37. In finding that the W.A. League had trading activities so extensive as to
leave no doubt that it was a trading corporation, Mason
J. said at 234:
"The W.A. League has as its principal object the
promotion, control, management and encouragement of
Australian Rules football matches and competitions. It
controls and manages the competition between the Perth
clubs, adjudicating on disputes between clubs and on
complaints against officials and players, imposing
penalties where they are considered appropriate. The
clubs are members of the League and pay a small
subscription to it. The proceeds of each League
competition match are received by the League. Under
its constitution the W.A. League retains 20 per cent of
these proceeds or such greater percentage as it may
require, and the balance is equally divided among the
member clubs. . . . Apart from gate receipts from
competition matches the League has a variety of other
sources of income. They include: (a) receipts from
interstate and other matches which it promotes or
arranges; (b) receipts from broadcasting and television
rights granted in respect of games which it promotes or
arranges; (c) income from promotion, sponsorship and
advertising; (d) rent for use of part of its premises;
(e) catering rights at Subiaco Oval in Perth which it
holds on lease; (f) income from the sale of, and
advertising revenue from, its weekly programme".
38. His Honour rejected the argument that the trading activities of the
League were incidental to its main objects viz. the promotion
and
encouragement of the sport as a recreation. He continued at 235:
"This to my mind is an inversion of the true position.
To me it seems that the sport is promoted and
encouraged as a means of ensuring the receipt of the
large financial returns which are associated with it.
The financial revenue of the Leagues is so great and
the commercial means by which it is achieved so varied
that I have no hesitation in concluding that trading
constitutes their principal activity. In saying this I
treat all their activities which I have listed and
which produce revenue as trading activities. I do not
limit the concept of trading to buying and selling at a
profit; it extends to business activities carried on
with a view to earning revenue".
39. Mason J. recognised that West Perth stood in a somewhat different
category to the W.A. League. Its principal objects were to
foster Australian
Rules Football, to provide facilities for playing it and to provide
recreational and sporting facilities for its
members. At 236 he said:
"West Perth derives income from two main sources:
first, from the operations of its football team in the
competition run by the W.A. League; secondly, from
various trading activities which it conducts. The
first source of income includes the distribution
received by it as a member club of the W.A. League and
membership fees for admission to matches in which its
teams participate. The second source of income is from
bar trading and catering . . . a third and minor source
of income is revenue from the sale of club ties,
objects and souvenirs.
The fact that West Perth is a club and that
therefore its sales of liquor and food are largely made
to members does not in my view affect its character as
a trading corporation. There is no reason why an
incorporated club which is heavily engaged in trading
activities should not be held to be such a corporation,
despite the fact that its trading activities are
related to its character as a club and that it provides
social functions, amenities and services for its
members.
The principal activity of the Club is its
participation as a member club of the W.A. League in
the competitions which it runs. Indeed, that is West
Perth's major source of income. The comment which
Fletcher Moulton L.J. made of the Crystal Palace Club
in Walker v. Crystal Palace Football Club Ltd. (1910) 1
KB 87 applies with equal force to West Perth. His
Lordship said at p. 92:
'Here is a company that carries on the game of
football as a trade, getting up and taking
part in football matches'.
The only qualification to be made is that West Perth
does not arrange or manage the competition matches".
40. In State Superannuation Board at 96, Mason, Murphy and Deane JJ. referred
with approval to what Mason J. had said in Adamson
at 233 when he noted that
"trading corporation" is essentially:
". . . a description or label given to a corporation when
its trading activities form a sufficiently significant
proportion of its overall activities as to merit its
description as a trading corporation".
41. While the authorities to which I have referred seek to define or describe
a trading corporation, they do not in express terms
offer a process by which
the question whether a corporation is a trading corporation may be determined.
Mr. Archer, of counsel for
the respondents, suggested what he described as a
"three-stage test". This involved identifying the totality of the activities
of
the corporation, identifying those activities properly characterised as
trading activities and then evaluating the extent of the
trading activities
against the totality of activities.
42. That approach seems to me consistent with what the High Court said in
Adamson and other cases and I am content to adopt it. But
as I shall point
out, especially in relation to the clubs, there are difficulties involved in
comparing economic and non-economic
activities.
43. Against the background of the general principles to which I have referred
and the detailed analysis by Mason J. in Adamson, I
now look at the position
of the W.A.C.A. and thereafter at the incorporated clubs.
Is the W.A.C.A. a trading corporation?
44. Much of the W.A.C.A.'s activities can be gleaned from The Western
Cricketer, its 1984-85 year book, and from the affidavit of
Peter Brian
Rakich, its treasurer, to which are exhibited a number of documents relating
to the association's financial affairs.
45. The total revenue derived by the W.A.C.A. during 1984-85 was $3.2 million
and its expected revenue for 1985-86 is $3.4 million.
The income for the
earlier year produced a surplus of $195,000; a surplus of about $100,000 is
expected for the latter year. It is
revenue rather than profit to which the
courts look in determining the character of a corporation. That is not to say
that profit
is irrelevant; but clearly the amount of profit may not, for
various reasons, reflect the extent of trading activities.
46. The income of the W.A.C.A. is derived principally from ground revenue (it
receives 15% of gate takings for international and
interstate matches
conducted by the Australian Cricket Board), membership subscriptions, bar
trading and bottle shop, sponsorship
(including perimeter advertising and
sponsors' boxes), interest on investments, money from such sources as the
lease of indoor cricket
nets, fund-raising and catering facilities. As well it
receives a distribution from the Australian Cricket Board of the W.A.C.A.'s
share, not only of gate receipts but of sponsorship and advertising and the
sale of television rights for international and interstate
matches.
47. The activities producing these sources of income closely resemble those
of the W.A. League considered in Adamson. One point of
distinction is that,
while it is clubs that constitute membership of the W.A. League, the W.A.C.A.
has members in the ordinary sense.
They are persons who pay annual
subscriptions which entitle them to use the various facilities of the
association including attendance
at interstate and international matches
without charge. Persons do not join the W.A.C.A. to play cricket but rather to
watch it.
If they wish to play, they join clubs.
48. The income derived from the W.A.C.A. is expended mainly in administration
costs, the expense of maintaining stands and other
equipment, the cost
involved in approaching sponsors and arranging promotions, and depreciation.
49. Within this overall picture of income and expenditure, the W.A.C.A.
treats as separate entities the I. and I. Committee and the
Cricket Council.
According to Mr. Rakich, the costs of the I. and I. Committee generally exceed
the revenue it generates. Its sources
of revenue comprise a distribution from
the Australian Cricket Board, sponsorship of the Sheffield Shield team and a
proportion of
gate receipts for interstate and international matches held at
W.A.C.A. ground. The expenses of that committee relate to coaching
and
administering the Sheffield Shield team, paying out prize money to the state
team, some of the expense of staging shield and
international matches and
paying state players for their involvement in shield cricket.
50. The revenue of the Cricket Council is derived mainly from sponsorships
received for district competition as a whole. Its expenses
relate to the costs
of organising fixtures and the competition at district cricket level.
51. As I understand the picture from the evidence of Mr. Rakich and the
various documents tendered in evidence, the I. and I. Committee
and the
Cricket Council do not operate at a profit and their losses are absorbed by
the W.A.C.A. itself. For the purpose of determining
whether or not the
W.A.C.A. is a trading corporation, it is appropriate to look at the overall
situation of the W.A.C.A. Counsel
for the parties did not suggest otherwise in
the course of their final addresses.
52. The W.A.C.A.'s income of $3.2 million for 1984-85 included membership
fees amounting to $650,000 or thereabouts and a distribution
from the
Australian Cricket Board of $375,000. Because of the way in which various
statements of revenue and expenditure have been
prepared, it is not easy to
set out all the relevant information in a concise manner. But by way of
illustration, the income from
members' catering was $224,345, the income from
the public bar was $119,112, and $249,155 came from what was described as
members'
club trading. The anticipated figures for 1985-86 reflect much the
same pattern.
53. The president of the W.A.C.A.'s review, in his annual report for 1984-85
(The Western Cricketer 66-67), speaks of a dream to
transform the W.A.C.A.
ground into an international stadium beginning to come true. It speaks of an
expectation that league football
will be played at the W.A.C.A. in 1987; of
plans for the America's Cup season that include an England Australia test
match, a W.A.C.A.
international tournament as part of a festival of sport, a
commemorative mass to welcome the Pope to Western Australia - "dramatising
the
W.A.C.A.'s exceptional facilities for the handling of huge crowds at major
public events"; and of what are described as three
"huge night-time
spectaculars under the new floodlights - a New Year's Eve Concert with leading
world artists, an America's Cup Ball,
and a Military Tattoo climaxing the 1987
Festival of Perth - all in the open air on the historic Oval".
54. I accept that, in accordance with its rules, a primary object of the
W.A.C.A. is the promotion and control of cricket in Western
Australia (r.
3(a)). However its objects do include the promotion of "recreation
entertainment and amusement" in general terms (r.
3(d)) and the availability
of the ground "for the purposes of public recreation, gatherings of societies,
concerts, entertainments
and amusements" (r. 3(f)). It is apparent that a very
substantial part of the activities of the W.A.C.A. are of a trading character,
involving the provision of goods and services not only to its members but to
the large numbers of the public who make use of those
facilities. I do not
accept the submissions of counsel for the respondents that the only trading
activities of the W.A.C.A. are "the
conducting of the bar and catering
facilities". In promoting and controlling cricket in Western Australia the
W.A.C.A. has found
itself a complex and sophisticated organisation, receiving
and disbursing large sums of money, forever expanding the scope of its
activities beyond cricket to other forms of entertainment, charging admission
to its ground for cricket and other activities, providing
bar and restaurant
facilities for all who attend (not just members) and generally engaging in
many activities that are of a trading
nature. By any test those activities are
substantial.
55. I find that the W.A.C.A. is a trading corporation.
Are the incorporated clubs trading corporations?
56. The position of the incorporated clubs must now be considered. While some
of their activities have a counterpart in the activities
of the W.A.C.A.,
there are important differences. The membership of the clubs is mainly made up
from those interested in playing
cricket although some members are supporters
only. The clubs do not charge entrance fees to their games; anyone may watch a
club
game without payment, though bar facilities are only available to members
and their guests in accordance with the licensing provisions
of Western
Australia. There are differences in degree, though not in kind, in the
activities conducted by different clubs.
57. With the clubs, a comparison of activities is more difficult than in the
case of the W.A.C.A. Where all activities are income
producing, it may not be
hard to single out some as trading activities and quantify their signficance,
even if only in a broad way.
But where some activities are income producing
and others are not, the exercise is not so straight-forward. For instance, it
is apparent
that most of the time spent by members of the clubs is on the
playing of cricket, whether at training sessions or at matches. This
is an
activity which does not directly produce income at the club level though of
course it has incidents such as sponsorships which
are income producing. How
then is the comparison to be made? The amount of revenue produced from a
particular activity may not be
a satisfactory guide. A trading activity may
represent a significant part of a club's income but be relatively
insignificant in an
overall consideration of the club's activities. There is
no ready answer to these difficulties: in the end. I must come back to what
Mason J. said in Adamson at 233:
"'Trading corporation' is not and never has been a term
of art or one having a special legal meaning. . . .
Essentially it is a description or label given to a
corporation when its trading activities form a
sufficiently significant proportion of its overall
activities as to merit its description as a trading
corporation."
58. The clubs' incomes are derived from a number of sources. They include
subscriptions (there are different rates for players and
non-players), a grant
from the W.A.C.A., prize money from competitions in the Swan Gold League and
Toyota Cup games for A grade palyers,
donations, fund-raising, interest on
investments, bar trading, sponsorship and advertisements.
59. It will be necessary to look at sponsorships when considering whether
there is a relevant market for the purpose of
s.45
of the
Trade Practices Act
.
At this point in the reasons for judgment their relevance lies in the income
that they provide to clubs. At the time of the hearing
the Swan Brewery Co.
Ltd. sponsored each cricket club, though it did so through an arrangement made
with the W.A.C.A. Individual
clubs have their own sponsors. For instance,
during the 1985-86 season Subiaco Floreat Cricket Club (Inc.) had as sponsors
Town &
Country W.A. Building Society, Kimberley N.Z.I. Finance Ltd., Fortron
Automotive Treatments Pty. Ltd., Ledge Leasing Pty. Ltd., Ray
Fitzgerald &
Co., The York Motor Museum and Settlers House Pty. Ltd. In most, but by no
means all, cases sponsors have their place
of business within the district of
the particular cricket club. And in most cases sponsorships are obtained
through some personal
connection with a player or club supporter.
60. Counsel for the applicant prepared graphs showing, in respect of the
clubs for which figures were available, their gross incomes
for 1985 and 1986
and the break up of those incomes. Because of the significance attached by the
applicant to these figures, I shall
set out in a summary way their import.
Bayswater-Morley Cricket Club (Inc.) 1986
Gross income: $27,207.79
Players subscriptions: 11.77%
Investment interest: .15%
Fund-raising: 7.06%
Sponsorship and advertisements: 11.92%
Bar trading: 63.94%
Other: 5.16%
Claremont-Cottesloe Cricket Club (Inc.) 1985
Gross revenue: $38,693
Subscriptions: 15.85%
Non-playing members: 2.22%
W.A.C.A. grant 7.75%
Prize money: 2.61%
Investment interest: 2.40%
Fund-raising: 18.69%
Sponsorship and advertisements: 8.96%
Bar trading: 32.40%
Other: 9.12%
Fremantle District Cricket Club (Inc.) 1986
Gross income: $63,970.17
Subscriptions: 3.89%
Non-playing membership: 3.56%
W.A.C.A. financial grant: 6.22%
Donations: .54%
Fund-raising: 7.53%
Sponsorships and advertising: 12.93%
Bar trading: 56.48%
Other: 8.85%
Midland-Guildford Cricket Club (Inc.) 1985
Gross income: $52,683.67
Subscriptions: 7.61%
Non-playing membership: 1.14%
W.A.C.A. financial grant: 5.69%
Prize money: 9.32%
Investment interest: .13%
Donations: 7.42%
Fund-raising: 16.36%
Bar trading: 46.64%
Other: 5.69%
Mt. Lawley District Cricket Club (Inc.) 1985
Gross revenue: $50,202
Subscriptions: 11.23%
Non-playing membership: 2.76%
W.A.C.A. financial grant: 6.51%
Prize money: 5.58%
Investment interest: 1.82%
Donations: 1.55%
Fund-raising: 6.58%
Sponsorship and advertisements: 5.88%
Bar trading: 52.66%
Other: 5.43%
Mt. Lawley District Cricket Club (Inc.) 1986
Gross revenue: $56,383
Subscriptions: 9.36%
Non-playing membership 4.03%
Prizes: 2.48%
Grants: 6.38%
Sponsorship and advertisements: 19.55%
Donations: 1.10%
Investment interest: 2.38%
Bar trading: 42.28%
Other: 12.44%
North Perth Cricket Club (Inc.) 1985
Gross revenue: $32,152.85
Subscriptions: 11.88%
Non-playing members: 1.21%
Registration and ball fees: 3.84%
W.A.C.A. grant: 9.33%
Sponsorship and donations: 11.76%
Investment interest: 1.45%
Bar sales: 19.34%
Other trading sales: 37.85%
Other: 3.34%
Perth Cricket Club (Inc.) 1985
Gross income: $30,871
Subscriptions: 28.1%
W.A.C.A. financial grant
and prize money: 13.8%
Donations: 8.18%
Fund-raising: .1%
Bar trading: 49.82%
South Perth Cricket Club (Inc.) 1985
Gross revenue: $22,428
Subscriptions: 14.36%
Non-playing membership: 2.14%
Prize money: 14.31%
Investment income: .95%
Donations: 14.7%
Fund-raising: 13.70%
Bar trading: 33.35%
Other: 6.49%
61. Similar statistics were provided for some non-incorporated clubs but they
cannot be treated as relevant for present purposes.
It is apparent that bar
trading represents a substantial source of revenue to the clubs, ranging from
19% to 63% approximately.
62. In Adamson Mason J. referred to the income of West Perth from bar trading
in 1976 and 1977 and its net profit on trading in those
years. Counsel for the
present applicant sought to adduce evidence relating to other aspects of West
Perth's finances in 1976 and
1977, with a view to showing the relationship
between bar trading and other sources of income and then making some
comparison of
the percentages involved with those relating to the cricket
clubs. The object of this exercise was to show that, if West Perth was
held to
be a trading corporation by reference to its activities, the inference could
properly be drawn that the cricket clubs were
likewise trading corporations.
Counsel for the respondents objected to this course on the ground that it was
an impermissible attempt
to put before the Court evidence that did not emerge
from the judgments themselves. I allowed the material relating to West Perth
on the ground that it might afford some basis for comparison between the
football club and the cricket clubs but not, as it were,
to supplement the
reasons for judgment. They must speak for themselves and any inferences to be
drawn from them must be found within
the four corners of the reasons. In any
event, neither Mason J. nor the other members of the court in Adamson made
percentage comparisons.
It was enough for Mason J. that West Perth was
"heavily engaged in trading activities" (at 236).
63. It is clear from Adamson that the fact that a corporation's trading
activities are related to its character as a club in the
provision of social
functions, amenities and services for its members does not prevent it from
being a trading corporation. Nevertheless
there are important differences
between the situation in Adamson and that existing here. Underlying the
decision in Adamson is the
acceptance by the High Court that the playing of
football by West Perth was a means of ensuring large financial returns, that
its
players were all paid and that the club's principal activity was its
participation as a member of the W.A. League in the competitions
which it ran.
64. The cricket clubs are basically amateur bodies and their activities are
essentially directed to the playing of cricket. They
make no charge for
admission to matches. Except in the case of someone who is a player coach, the
general rule is that payments are
not made to players other than to those in A
grade. Within A grade some clubs pay an incentive related to runs scored,
wickets taken
or the like. But the amounts involved are small indeed and in no
way capable of providing a living for a player. The evidence revealed
cases of
particular players in particular clubs who were paid a fixed annual fee.
Usually they were player coaches who were paid
because of the time they were
required to spend in coaching activities. There were instances of players,
sometimes brought from outside
Australia, who were paid for services as a
means of improving the position of the club in competition. But even then the
amounts
involved were minimal by contemporary sporting standards and the
player depended upon the provision of a job outside cricket to obtain
a
livelihood. Melville Cricket Club (Inc.) did not pay its players incentive
payments. Midland-Guildford Cricket Club (Inc.) offered
no incentive scheme.
Its players in the successful Toyota Cup team in 1985 secured one-third of the
prize money in the form of cash
and free attendance at the club's annual
dinner. Wanneroo District Cricket Club (Inc.) offered no incentive scheme; its
only payment
was to its coach.
65. The respondents drew no distinction between particular incorporated clubs
in terms of their character as a trading corporation.
The applicant submitted
that while all the incorporated clubs were trading corporations, it was open
to the Court to find that some
were and some were not. The principal activity
of the clubs is the playing of cricket, a game which is played for pleasure
rather
than reward, though the playing of district cricket is undoubtedly the
means by which players are selected for shield matches and
in turn for test
matches, at which point reward becomes an important consideration. Although
the clubs have activities which are
of a trading nature, in particular the
provision of bar facilities, I do not regard these as so significant as to
impose on the clubs
the character of a trading corporation. To point, as the
applicant did to the revenue of particular clubs and the percentage of that
income derived from bar sales is relevant but not overly persuasive. It does
not sufficiently account for the time spent by the clubs
in activities that
are not income-producing viz. the playing of cricket which is their primary
function.
66. None of the clubs carries on the game of cricket as a trade. Though the
extent of particular activities varies from club to club,
there is no basis
for drawing a distinction between them for the purpose of the present
analysis. The applicant has failed to establish
that any of the incorporated
clubs is a trading corporation.
Jurisdiction
67. As already mentioned, the respondents challenged the jurisdiction of this
Court to entertain any of the applicant's claims. The
applicant submitted that
the Court had jurisdiction, attracted by reason of the claim made under the
Trade Practices Act
whether or not that claim succeeded and whether or not the
Court found that any of the respondents was a trading corporation.
68.
Section 86
of the
Trade Practices Act
confers on the Federal Court
jurisdiction to hear and determine actions, prosecutions and other proceedings
under
Part IV
of the Act, being the part concerned with restrictive trade
practices and into which s. 45 falls. That jurisdiction is expressed
to be
exclusive of the jurisdiction of any other court other than the High Court
under s. 75 of the Constitution. The effect of s.
86 is to confer upon the
Federal Court jurisdiction to hear and determine not only claims arising under
Part IV of the
Trade Practices Act
but also other claims, federal or
non-federal, arising out of the same matter or controversy. Philip Morris Inc.
v. Adam P. Brown
Male Fashions Pty. Ltd.
(1981) 148 CLR 457
; Fencott v. Muller
supra This additional jurisdiction is part of the accrued jurisdiction of the
Court; it does not derive from s.
32 of the Federal Court Act whereby, to the
extent that the Constitution permits, jurisdiction is conferred on the Federal
Court
"in respect of matters not otherwise within its jurisdiction that are
associated with matters in which the jurisdiction of the Court
is invoked".
The exercise of this accrued jurisdiction is discretionary. Stack v. Coast
Securities (No. 9) Pty. Ltd.
[1983] HCA 36
;
(1983) 57 ALJR 731.
69. The jurisdiction of the Federal Court is attracted whenever there is
before it a claim arising under a law of the Parliament
in respect of which
the Parliament has conferred jurisdiction on the Court. This is the effect of
ss. 75, 76 and 77 of the Constitution,
read with sub-s.19(1) of the
Federal
Court of Australia Act 1976
. When the Court has before it a claim arising
under a law made by the Parliament in respect of which jurisdiction has been
conferred
upon the Court, the determination of the claim or matter is itself
sufficient to attract the federal jurisdiction essential for the
complete
adjudication of the matter. Once jurisdiction is acquired, it is not lost by
reason of the rejection of the claim or the
matter attracting federal
jurisdiction R. v. Carter; Ex parte Kisch
[1934] HCA 50
;
(1934) 52 CLR 221
at 224; R. v.
Bevan; Ex parte Elias and Gordon
[1942] HCA 12
;
(1942) 66 CLR 452
at 466. Nevertheless the
claim or matter attracting federal jurisdiction must be raised bona fide.
70. But I do not accept the applicant's submission that it is enough, for
this Court to exercise jurisdiction, that there be an arguable
case that one
of the respondents is a trading corporation. The existence of a trading
corporation is essential. The point is made
succinctly by Gibbs J. (as he then
was) in Adamson at 215:
"The fact that a person whose conduct is said to be
regulated by s. 45 of the Act is a trading corporation
within s. 51 (xx.) of the Constitution is a condition
of the jurisdiction of the Federal Court in a case such
as the present. If that were not so, the investiture
of jurisdiction on that Court would be pro tanto
invalid. In the present case the question whether the
prosecutors are trading corporations is therefore a
jurisdictional, preliminary or collateral fact which
this Court must decide for itself on an application for
prohibition".
As Gibbs J. pointed out, the Federal Court must decide for itself whether a
corporation is a trading corporation for the purpose
of determining whether it
has jurisdiction in the application before it. Its decision however is not
conclusive. In the present case
I have found that the W.A.C.A., which is said
to have acted in contravention of
s. 45
of the
Trade Practices Act
, is a
trading corporation.
71. When I have dealt with the issues arising under
s. 45
of the
Trade
Practices Act
I shall turn to the other causes of action upon which the
applicant relies. It will then be necessary to consider whether those claims
truly arise under the accrued jurisdiction of the Court and perhaps whether
the notion of pendent party jurisdiction is relevant
to the position of those
respondents which are not trading corporations. For the moment, it is a
sufficient basis for exercising
jurisdiction in regard to the claims under the
Trade Practices Act
that one of the respondents alleged to have acted in
contravention of the Act is a trading corporation.
Section 45
of the
Trade Practices Act
72.
Section 45
of the
Trade Practices Act
finds its place in
Part IV
-
Restrictive Trade Practices. By way of introduction I refer to some remarks of
Deane J. in Refrigerated Express Lines (A/asia)
Pty. Ltd. v. Australian Meat
and Live-stock Corporation (No. 2)
[1980] FCA 38
;
(1980) 44 FLR 455
at 460-461:
"The general purpose and scope of the Part can be
described by saying that it contains provisions which
proscribe and regulate agreements and conduct and which
are aimed at procuring and maintaining competition in
trade and commerce. Broadly speaking, those provisions
either control or proscribe the making of certain
contracts or arrangements or the reaching of certain
understandings, the giving or extracting of certain
covenants in relation to land, the engaging in conduct
involving a secondary boycott, engaging in the
practices of monopolization, exclusive dealing or
resale price maintenance, engaging in predatory price
discrimination, and the increasing of market share by
means of a take-over or merger".
73. Sub-section 45(2) contains several prohibitions. Paragraph (a) prohibits
a contract, arrangement or understanding if:
(i) the proposed contract, arrangement or understanding contains
an exclusionary provision; or
(ii) a provision of the proposed contract, arrangement or
understanding has the purpose, or would have or be likely to
have the effect, of substantially lessening competition.
Paragraph (b) prohibits the giving effect to a provision of a contract,
arrangement or understanding if that provision:
(i) is an exclusionary provision; or
(ii) has the purpose, or has or is likely to have the effect, of
substantially lessening competition.
74. The statement of claim pleads conduct on the part of the respondents both
in terms of making a contract or arrangement or arriving
at an understanding
falling within para.45(2) (a) and giving effect to a provision of a contract,
arrangement or understanding falling
within para.45(2)(b). The conduct of the
respondents at the meeting of the Cricket Council on 25 September 1985 is said
to have constituted
a contract, arrangement or understanding which contained
an exclusionary provision and which also had as its purpose; or had or was
likely to have the effect of substantially lessening competition. This is a
reliance upon sub-paras. (i) and (ii) of para.45(2) (a).
The conduct of the
respondents at the meeting of the Cricket Council on 4 November 1985 is
likewise pleaded as having been in contravention
of sub-paras. (i) and (ii) of
para.45(2) (a). There is a further pleading that since December 1985 the
respondents have given effect
to the contracts, arrangements or understandings
reached at the meetings on 25 September and 4 November, in particular by their
conduct
at the Cricket Council meetings on 6 January, 3 February and 19
February 1986. In so doing, it is said, the respondents acted in
contravention
of sub-paras. (i) and (ii) of para.45(2)(b).
75. Sub-section 45(2) contains a number of concepts, some of which are
defined in the Act. "Exclusionary provision" is defined in
s.4D as a provision
of a contract, arrangement or understanding between competitors which has the
purpose of restricting either the
supply of goods or services by all or any of
those competitors to particular persons or the acquisition of goods or
services by all
or any of those competitors from particular persons.
76. "Competition" itself is defined in sub-s.45(3) to mean competition in any
market in which a corporation that is a party to the
contract, arrangement or
understanding supplies or acquires, or is likely to supply or acquire, goods
or services or would, but for
the provision, supply or acquire, or be likely
to supply or acquire, goods or services.
77. "Market" is defined in s.4E, when used in relation to goods or services,
to include a market for those goods or services and
other goods or services
that are substitutable for, or otherwise competitive with, those goods or
services.
78. The application of s.45 to a given set of facts can be and often is a
difficult exercise. But the starting point must be a consideration
of whether
there was any contract, arrangement or understanding within the terms of the
section.
79. The terms "contract", "arrangement" and "understanding" are not defined
in the
Trade Practices Act
. Contract has been taken to have its ordinary
meaning of something that is enforceable at law. A number of decisions have
tended
to treat arrangement and understanding as synonymous, being something
less than a binding contract or agreement. See Trade Practices
Commission v.
Tubemakers of Australia Ltd.
[1983] FCA 93
;
(1983) 47 ALR 719
at 734-735 where the cases are
noted. It has been generally accepted that, for there to be an arrangement or
understanding, there
must be some communication between the parties concerned
and each must raise an expectation in the mind of the others. Whether each
must accept an obligation qua the others is debatable. In Morphett Arms Hotel
Pty. Ltd. v. Trade Practices Commission
[1980] FCA 46
;
(1980) 30 ALR 88
at 91 Bowen C.J.
commented:
"As at present advised, it seems to me that one could
have an understanding between two or more persons
restricted to the conduct which one of them will pursue
insofar as the other party or parties to the
understanding are concerned".
See also Trade Practices Commission v. T.N.T. Management Pty. Ltd.
(1985) 58
ALR 423
at 446-449 ("the TNT case") Recently, in Trade Practices Commission v.
David Jones (Australia) Pty. Ltd.
(1986) ATPR 40-671
, Fisher J. said at 47,416
in relation to sub-para.45(2)(a)(ii):
". . . I am of opinion that a person may be a party to the
understanding provided he is aware of although not
necessarily committed to each provision".
I respectfully adopt that approach.
Was there a contract?
80. Thus the first question to be answered in relation to
s.45
is - was there
a contract, arrangement or understanding between the respondents or any of
them at the meeting on 25 September 1985
or at the meeting on 4 November 1985?
81. Reference has already been made to the constitution and rules of the
W.A.C.A. and also of the Cricket Council. The primary object
of the W.A.C.A.
is the promotion and control of the game of cricket in Western Australia
(r.3(a)). The objects of the Cricket Council
include the control and
management of Associated Club matches, the selection of teams to represent the
W.A.C.A. in international,
Sheffield Shield and other representative matches,
and the regulation and administration of the registration, qualification and
eligibility
of players to play in matches between the Associated Clubs
(r.37(f)). The Cricket Council is empowered by r.36 to make by-laws and
regulations for the control and management of matches within its jurisdiction.
The second and third respondents in the present proceeding
(fifteen clubs in
all) comprise the Associated Clubs. Their delegates, together with the
Chairman of the Council, two delegates appointed
by the executive of the
W.A.C.A. and such other delegates as the Council may admit, constitute the
Cricket Council (r.35). While
the rules of every club were not tendered in
evidence, a number were. Allowing for differences in terminology, each of
those tendered
referred to the affiliation of the club with the W.A.C.A. It is
a reasonable inference that all the respondent clubs, incorporated
and
unincorporated, have a similar provision. Certainly there was no suggestion to
the contrary.
82. A resolution of the Cricket Council made pursuant to its rules is binding
upon the Associated Clubs. That much is clear from
the overall structure of
the rules of the Cricket Council and the place of clubs within that structure.
In principle too I think
a resolution is binding upon the W.A.C.A., though it
is hard to know what action could be taken against that body to enforce the
resolution. There was some debate by counsel as to whether the W.A.C.A. and
the clubs, as opposed to their delegates, were the members
of the Council. I
am of opinion that, by appointing delegates, there was no "denudation of power
and authority", to borrow the words
of Lord Coleridge C.J. in Huth v. Clarke
(1890) 25 QBD 391
at 394. A delegate, as generally understood, "means little
more than an agent" (Wills J. in Huth v. Clarke at 395). To the extent
that
conduct at a meeting of the Cricket Council does give rise to a contract,
arrangement or understanding between those present,
it is a contract,
arrangement or understanding by which the W.A.C.A. and the Associated Clubs
would ordinarily be bound or be parties
to. As to the fourth respondent - Mr.
Taylforth in his representative capacity - I do not see the Cricket Council
itself being a
party to a contract, arrangement or understanding,
independently of the W.A.C.A. and the Associated Clubs who comprise it.
83. Does it follow that a resolution of the Cricket Council constitutes a
contract between the constituent members? This must be
a question of
intention. Whether the rules of an organization form part of a contract
between its members depends upon the existence
of an intention that the rules
"should give rise to enforceable legal relations". Buckley v. Tutty
[1971] HCA 71
;
(1971) 125
CLR 353
at 374. In the present case I think one needs to be careful in
applying too readily judicial decisions and statements relating to
an
individual member of a particular industrial union or club. Whether the rules
of a particular club constitute a contract between
its members is not
necessarily the same question as whether the rules of the Cricket Council give
rise to a contract between its
constituent members. The position is somewhat
complicated because r.24(2)(c) of the W.A.C.A.'s rules provides that a person
who is
a financial playing member of one of the Associated Clubs may be
elected as an ordinary member of the W.A.C.A. Nevertheless the question
here
arises, not vis-a-vis a player and his club or a player and the W.A.C.A., but
as to the W.A.C.A. and the clubs vis-a-vis each
other.
84. When a club becomes an Associated Club, it undoubtedly assumes
obligations which are intended to have contractual effect. It
undertakes to
provide and maintain to the satisfaction of the Council various facilities
(Cricket Council r.2:16:3) and there are
fines and penalties provided for a
breach of those obligations (rr.2:24, 2:31). And a club that allows a
disqualified player to play
in a match, after notice of disqualification,
commits an offence. If the offence is proved upon complaint to the Council (a
complaint
may be lodged by the Grades Committee of the opposing club), the
club is liable to a fine and is deemed to have lost the match to
the opposing
club (r.2:39:5). Of course a club obtains benefits in return. In my view the
rules of the Cricket Council are capable
of giving rise to legally enforceable
rights and obligations between the Council and the Associated Clubs.
85. But what of the W.A.C.A.? The rules are silent as to its rights and
obligations except perhaps r.2:38:1 which, as already noted,
speaks of a match
"recognised by the Australian Cricket Board or the Association". The W.A.C.A.
stands in a peculiar position within
the framework of the Cricket Council
Rules. It is conceivable that in a particular situation the W.A.C.A. may be a
party to a contract
made by reason of something done at a meeting of the
Council. But I do not think that an amendment to rules of itself involves a
contract to which the W.A.C.A. is a party.
86. In any event I am of the opinion that the resolutions at the meeting of
the Cricket Council on 25 September 1985 did not constitute
a contract between
those taking part. One resolution was that "the Cricket Council has come to an
understanding that the rule (r.2:38:1)
regarding unrecognised matches cannot
be invoked until the players take part in such matches". This was no more than
an expression
of understanding as to what the rule meant. It was then resolved
that the following statement would be issued on behalf of the Cricket
Council:
"The Cricket Council, at this time, does not intend
taking any action against proposed South African tour
players. The Rules as they stand would prevent them
from playing upon their return; however, there has been
notice given of a proposed notice of motion to review
the applicable Rules prior to that time".
The further resolution was, I think, no more than a consequence of the earlier
resolution and a statement of present intention and
advertance as to the
future. Neither gave rise to enforceable legal relations.
87. But it seems to me that the resolution of 4 November 1985, amending r.
2:38:1 by including a provision for automatic disqualification,
did constitute
a contract between the Associated Clubs. It was certainly intended to affect
not only the members of the clubs but
the clubs themselves. By reason of r.
2:39:5, a club permitting a disqualified player to play risked the serious
sanctions contained
in that rule. I am satisfied that, in the language of
Buckley v. Tutty, it was intended that the amendment "should give rise to
enforceable
legal relations" between the clubs.
88. Mr. Archer submitted that in reality the decisions made at the meeting on
4 November did no more than "give teeth" to r. 2:38:1.
But the words added to
r. 2:38:1 went much further than that. They imposed on an offending player
automatic disqualification until
reinstated by the Council, a provision that
hitherto did not exist.
89. However, if the W.A.C.A. was not a party to the contract, there cannot
have been a contract in contravention of sub-s. 45 (2).
I deal later with the
relationship between ss. 82 and 75B of the Act. For the present it is enough
to say that a contract made between
parties who are not corporations within
the meaning of the Act cannot be a contract to which sub-s. 45 (2) applies. It
follows that,
notwithstanding the existence of a contract between the
Associated Clubs, no corporation made a contract in contravention of sub-s.
45
(2).
90. This part of the applicant's claim must fail.
Was there an arrangement or understanding?
91. In my opinion the resolutions at the meeting on 25 September did not
constitute a relevant arrangement or understanding between
the members of the
Cricket Council. They may have constituted an understanding as to what r.
2:38:1 meant and when it could be applied.
But, that was not an understanding
within sub-s. 45 (2) of the
Trade Practices Act
. It was merely an
understanding as to what was the situation under a particular rule of the
Council.
92. In the applicant's submission, those present at the meeting on 25
September misunderstood r. 2:38:1. Perhaps they did. But any
misunderstanding
carried no consequences; it merely evidenced a state of mind that might become
relevant at some later date.
93. I am satisfied that there was an understanding at the meeting on 4
November 1985, an understanding that, by reason of the decision
to amend r.
2:38:1, the applicant (as well as other players) would be prevented from
playing district cricket in Western Australia
because of his participation in
the South African tour. There was undoubtedly communication between the
delegates to the Cricket
Council at the meeting and a consideration by them of
events giving rise to what was seen as justification for the amendments to
r.2:38:1. At the meeting on 25 September Mr. Rigg (chairman of the executive
of the W.A.C.A., chairman of the I. and I. Committee
and a delegate from the
W.A.C.A. to the Australian Cricket Board) had in the words of the minutes of
that meeting -
"presented a resume of events regarding discussions
concerning the rebel cricketers to tour South Africa.
He pointed out that of the other States South Australia
and New South Wales had banned their rebel players from
participating in club cricket".
94. There was an expectation in the minds of all present that the W.A.C.A.
and the Associated Clubs would abide by the decisions
reached. True it is that
the W.A.C.A. is unable to enforce a Cricket Council rule; it is the Council
itself that takes that course.
Nevertheless there was an assumption of
obligation on the part of the clubs and a recognition by all delegates that
the amendments,
with which they would abide while they remained part of the
rules, had important consequences for the playing of cricket in Western
Australia. That, in my view, was sufficient to constitute an understanding
between all those present. In short then, I am of the
opinion that there was
an understanding reached by those present at the meeting on 4 November 1985 on
behalf of the organizations
they represented. The next question must be - did
that understanding contain an exclusionary provision or did a provision of the
understanding have the purpose, or have or be likely to have the effect, of
substantially lessening competition within sub-s. 45(2)
of the
Trade Practices
Act
?
Exclusionary provision
95. Section 4D defines what is an exclusionary provision. In the context of
sub-s. 45 (2), an exclusionary provision has been described
as a collective
boycott. Of s. 4D, Franki J. said in the T.N.T. case at 498-501:
"Section 4D(1) may be divided into the following
elements each of which must be established:-
(1) There must be a provision of an arrangement or
understanding made between persons, any two or more
of whom are competitive with each other . . .
(2) The provision must be for the purpose of
preventing, restricting or limiting one of the acts
referred to in s. 4D(1) (b) . . .
(3) The requirement of s. 4D(1) (b) (i) and (ii) that 'the
purpose of' relates to the supply of services to or
the acquisition of services from particular persons
in particular circumstances or in particular
conditions must be satisfied".
96. For the conditions of s. 4D to be met, there must be two or more parties
to a contract, arrangement or understanding, at least
one of which is a
corporation as defined in the Act and at least two of which are competitive
with each other. Those persons must
be in competition with each other in
relation to the supply or acquisition of goods or services to which the
relevant provision of
the contract, arrangement or understanding relates.
97. While it is necessary that there be only one corporation, a party to a
contract, arrangement or understanding who is not a corporation
is not liable
under s.45 except through s. 82 read with s. 75B. The latter section provides
that a person involved in a contravention
of Part IV in terms of s. 82 means a
person who has aided, abetted, counselled or procured the contravention; has
induced, whether
by threats or promises or otherwise, the contravention; has
been in any way, directly or indirectly, knowingly concerned in, or party
to,
the contravention; or has conspired with others to effect the contravention.
98. The exclusionary provision need not restrict all of the parties to the
understanding; sub-s. 4D(1) speaks of "all or any of the
parties". In the
applicant's submission, all of the district clubs, incorporated and
unincorporated, are competitive with each other,
both for the services of
cricketers and for other services including patronage and commercial
sponsorship. The applicant concedes
that the W.A.C.A. is not a competitor of
the clubs in this respect. But, it is said, if the W.A.C.A. is a trading
corporation and
if one or more of the provisions of a contract, arrangement or
understanding are exclusionary, then the W.A.C.A., as a party to that
understanding, is in contravention of sub-paras. (a) (i) and (b) (i) of sub-s.
45 (2). Any club that is a party, but is not a trading
corporation, is liable
by reason of s. 75B.
99. I accept the general tenor of these submissions. I have found the
W.A.C.A. to be a trading corporation. If it made a contract
or arrangement or
arrived at an understanding in contravention of sub-s. 45 (2), its liability
derives from s. 82. Any liability
on the part of the other respondents must
derive from s. 82, read with s. 75B. Section 75B is not a source of liability;
its function
is to define the words "person involved in the contravention"
used in sub-s. 82 (1). See Nella v. Kingia Pty. Ltd.
(1986) ATPR 40-723
at
47,920-47,921. The applicant concedes that the W.A.C.A. is not competitive
with the clubs in any relevant respect. But if the
clubs are competitive with
each other and are parties to a contract, arrangement or understanding that is
in contravention of sub-s.
45 (2), the W.A.C.A. and the clubs (incorporated
and unincorporated) may all be liable to the applicant. However there are a
number
of steps the applicant must take before he achieves that end.
100. The clubs are in my view competitive with each other for the services of
cricketers. For reasons that I shall explain later,
I am not persuaded that
they are competitive for patronage and commercial sponsorship. Certainly the
competition for the services
of players is low key and is conducted to a large
extent in a manner consistent with the notion of club cricket as an amateur
activity.
A player is usually sounded out as to his interest in joining
another club before any formal approach is made. The incentive offered
is not
always financial; it may be the prospect of playing for a club that has good
morale and is enjoying some success in district
cricket. But naturally winning
is seen as important and if a team's chances will be enhanced by the addition
of a player from another
club, overtures are undoubtedly made. I give some
examples.
101. The minutes of the committee meeting of Nedlands Cricket Club held on 25
June 1985 list several players as possible transferees
from other clubs. Mr.
Davis, who was the president of North Perth Cricket Club (Inc.) in 1985 agreed
that his club recruited players
from other clubs. The approach was usually
made by the president or secretary or someone knowing the player and a "key
player" might
be offered remuneration. Mr. Vodanovic, the president of Perth
Cricket Club (Inc.), spoke of the club's recruitment committee which
sought to
attract mature players from other clubs. Mr. Robinson, the delegate of
Bayswater-Morley Cricket Club (Inc.) to the Cricket
Council, agreed that his
club approached players from time to time to join the club. The financial
incentives available to players
were made known to them. Mr. Robinson
instanced an approach made during the 1981-1982 season to Mr. Baker who was
then playing for
Melville Cricket Club (Inc.). Mr. Baker was offered $2,000
plus incentives to join Bayswater-Morley Cricket Club (Inc.). Mr. Annison,
who
was president of Southern District Cricket Club in 1985, agreed that his club
received from Fremantle District Cricket Club (Inc.)
$2,000 as a transfer fee
for Mr. Porter. Mr. Newby, the president of Melville Cricket Club (Inc.),
spoke of an offer of $2,500 to
Mr. Maguire to leave his club and join Melville
Cricket Club (Inc.) as captain/coach of the A grade team. These examples can
be multiplied.
Financial and other constraints preclude an aggressive
programme of luring players from one club to another but I am satisfied, for
the reasons given, that the clubs are competitive with each other for the
services of players.
102. For s.4D to operate in the present case, the exclusionary provision must
have the purpose of preventing, restricting or limiting
the supply or
acquisition of goods or services by all or any of the parties to the contract,
arrangement or understanding. Pursuant
to s.4F, a provision of an
understanding has a particular purpose if the provision was included in the
understanding "for that purpose
or for purposes that included or include that
purpose" and "that purpose was or is a substantial purpose". It is apparent,
from the
use of the word "substantial", that the purpose in question need not
be the only nor the dominant purpose. Various views have been
expressed as to
the meaning of "substantial" - see Festival Industries Pty. Ltd. v. Mikasa
(N.S.W.) Pty. Ltd.
(1972-1973) ALR 921
at 929; Peter Williamson Pty. Ltd. v.
Capitol Motors Ltd.
(1982) 41 ALR 613
at 620-621. The term imports a notion of
relativity and suggests something that is more than trivial or minimal.
Tillmanns Butcheries
Pty. Ltd. v. Australasian Meat Industry Employees' Union
[1979] FCA 85
;
(1949) 42 FLR 331
at 338-339, 348 ("Tillmanns case"). It is the immediate
rather than the ultimate purpose that is to be considered Barneys Blu-Crete
Pty. Ltd. v. The Australian Workers' Union
(1979) ATPR 40-139
at 18,509;
Tillmanns case at 338
103. There has been a difference of judicial opinion as to whether "purpose"
is to be ascertained subjectively or objectively. In
Tillmanns case at 348,
Deane J. spoke of purpose in s.45D(1) as "the operative subjective purpose of
those engaging in the relevant
conduct in concert". In the T.N.T. case at 500
Franki J. said, in relation to para.4D(1)(b), that "the word 'purpose' is used
objectively
. . .". In regard to
s.47
of the
Trade Practices Act
, Fox J. in
O'Brien Glass Industries Ltd. v. Cool and Sons Pty. Ltd.
[1983] FCA 191
;
(1983) ATPR 40-376
at
44,455 took the view that a subjective test was appropriate. He acknowledged
that if there was no evidence of an express purpose,
purpose had to be implied
by considering what was done and intended and what would be the natural
consequences of that conduct. In
Dandy Power Equipment Pty. Ltd. v. Mercury
Marine Pty. Ltd.
[1982] FCA 178
;
(1982) ATPR 40-315
Smithers J. contrasted s.47 of the Act
with s.45D and, noting what Deane J. had said in Tillmanns case, was of the
view that the
former was "dealing with the nature of conduct rather than the
minds of actors" (at 43,899).
104. I accept the view that it is the subjective purpose of those engaging in
the relevant conduct with which the Court is concerned.
All other
considerations aside, the use in sub-s.45(2) of "purpose" and "effect" tends
to suggest that a subjective approach is intended
by the former expression.
The application of a subjective test does not exclude a consideration of the
circumstances surrounding
the reaching of the understanding.
105. In resisting the argument that any understanding reached at the meeting
on 4 November 1985 contained an exclusionary provision,
the respondents
contended that r.2:38:1 protected the interests of the W.A.C.A. and the
Cricket Council in ensuring the proper control
and regulation of district
cricket in Western Australia, in ensuring the fairness of district
competition, in protecting resources
spent in organising district cricket
competition and in providing for all district cricket players clear and
certain rules of the
competition in which they engage. That submission is
sound as far as it goes but it does not present the complete picture.
106. The respondents argued that they were not competitive within s.4D for
they were not in competition with each other for the services
of the
applicant. The submission was elaborated by the proposition that r.2:38:1
operates only when a player has breached the rule.
And, so the argument ran,
there was simply no evidence of competition between any of the respondents for
the services of a player
who breached the rule. But it is a provision of the
contract, arrangement or understanding with which sub-s.45(2) is concerned.
The
question is whether a provision is exclusionary and was reached between
persons who were relevantly competitive. In my view it is
not to the point to
ask whether the respondents were competitive for the services of a cricketer
who is in breach of r.2:38:1. The
question is whether they were competitive
for the services of a cricketer affected by the operation of the rule and
whether they
entered into a contract or arrived at an understanding (more
accurately, a provision of the understanding) for the purpose of preventing,
restricting or limiting the supply of services from the applicant.
107. In the applicant's submission, while the protection of the interests of
the W.A.C.A. and the Cricket Council may have been the
ultimate purpose of
r.2:38:1, there was ample evidence that the rule was amended on 4 November
1985 for the purpose of preventing
the supply of services by cricketers to
their clubs or the acquisition of services by their clubs, in the case of
those players who
played in unrecognised matches in South Africa. This, it was
said, affected not only the applicant but also members of other clubs
who had
made agreements with S.A.C.U. - Messrs. Alderman, Shipperd and Hogan.
108. Counsel for the applicant referred to the affidavits sworn by Mr.
Taylforth on 27 February and 12 June 1986. In those affidavits
Mr. Taylforth
deposed that, if the applicant were permitted to play club cricket, it was
conceivable other states would retaliate
in a political way by influencing the
Australian Cricket Board, through their delegates, to withdraw support from
the W.A.C.A. They
might, for instance, influence the Cricket Board to withhold
funding for the America's Cup Festival of Sport week in January 1987.
He
contended that the other mainland states have restrained the South African
tourists from playing at club level and that they would
take "a dim view" of
Western Australia permitting the tourists to participate in club competition
in order to protect and advance
their own interests. He referred to those
people "who strongly oppose personal benefit being derived by individuals from
providing
services to a country which practises a racial policy condemned by
most of the civilised western world".
109. Referring to the meeting on 25 September 1985, Mr. Taylforth deposed
that it was a special meeting convened to consider the
position of the South
African tourists in relation to district cricket. It was agreed among the
delegates that the matches to be
played by the South African tourists in South
Africa would be "unrecognised matches" for the purposes of r.2:38:1. None of
the delegates
wanted to go so far as to say that the players would be banned
as from the date of the meeting; but all agreed that, once the tourists
had
played in South Africa, they would be disqualified from playing district
cricket. Mr. Taylforth also deposed that the discussion
on 25 September was
only in the context of the interpretation and application of the rules of the
Cricket Council and was not directed
to any notion of causing harm to the
tourists, in particular to the applicant. Nevertheless, the applicant
submitted, the immediate
purpose of the understanding reached at that meeting
was to prevent the acquisition of the services of the four players concerned.
110. I have already found that at the meeting on 25 September 1985 there was
no contract and there was no relevant arrangement or
understanding. The
meeting on 4 November 1985 calls for further consideration in the light of my
finding that there was an understanding
between the clubs and the W.A.C.A.
through their delegates, reflected in the amendments to r.2:38:1. The minutes
of that meeting
provide evidence that the purpose of amending the rule was to
exclude any player who played in an unrecognised match from district
cricket
competition. In its terms the amendment was not confined to those who played
in South Africa. Nevertheless, there is no doubt
that a substantial purpose of
the amendment was to disqualify the applicant, among others, from playing club
cricket if he played
in South Africa.
111. Sub-paragraph 4D (1)(b)(i) was amended by the Trade Practices Revision
Act, which was assented to on 13 May 1986 and took effect
as from 1 June. But,
in its unamended form which is the form relevant to this proceeding, the
sub-paragraph refers to the purpose
of preventing, restricting or limiting the
supply of services to or the acquisition of services from "particular
persons", not particular
"classes of persons". The identity of the persons
excluded must be known or capable of ascertainment. The provision is not
directed
to the exclusion of the entirety of the available body of persons who
could conceivably be called upon to perform the relevant services.
The
question is one of fact. Bullock v. The Federated Furnishing Trades Society
Australasia
(1985) ATPR 40-577.
In the T.N.T. case Franki J. held at 500 that
the class of persons in question was not sufficiently particular.
112. Certainly the amended rule does not refer to individual cricketers and
is of general application. Nevertheless, all the circumstances
establish the
existence of four cricketers from Western Australia (Messrs. Hughes, Alderman,
Shipperd and Hogan) who were and who
were known by the respondents to be
directly affected by the amendment to r.2:38:1. The background of the "rebel
cricketers" had
been explained by Mr. Rigg at the meeting on 25 September 1985
and that was the background against which the amendment was passed.
In my view
the existence or otherwise of "particular persons" is to be determined as a
matter of substance and not of form. There
can be no doubt that the amendment
was aimed at the applicant as well as others.
113. Paragraph 4D(1)(b) refers inter alia to "services". This term is defined
by sub-s.4(1) to include
". . . any rights . . . , benefits, privileges or facilities
that are, or are to be, provided, granted or conferred
in trade or commerce, and . . . , includes the rights,
benefits, privileges or facilities that are, or are to
be, provided, granted or conferred under -
(a) a contract for or in relation to -
(i) the performance of work (including work
of a professional nature) whether with or
without the supply of goods;
(ii) the provision of, or the use or enjoyment
of facilities for, amusement,
entertainment, recreation or
instruction; . . .
but does not include rights or benefits being the
supply of goods or the performance of work under a
contract of service".
114. The applicant was not, at the relevant times, employed under a contract
of service. A sportsman may be engaged under a contract
of service - see for
instance Commissioner of Taxation of the Commonwealth v. Maddalena
(1971) 45
ALJR 426
Professional footballers may be engaged under a contract of service
as was held in Maddalena and as appears to have been assumed
by Northrop J. in
Adamson. The applicant is in rather a different position. The arrangement he
has with Subiaco Floreat Cricket Club
(Inc.) is set out in a letter from the
club to him dated 1 June 1985 which reads:
"We confirm your financial playing arrangements with our
Club for 1985/86 and 1986/87 A Grade Pennant matches
are as follows:
Per Match Played
(1) One dollar for every run scored.
(2) Fifty dollars additional for a win.
Monies due to you will be paid at the end of each
season".
115. The arrangement places no obligation on the applicant to play in any
particular match. There are no provisions from which the
right of control,
which has been significant in such contract of service cases as Zuijs v. Wirth
Bros. Pty. Ltd.
[1955] HCA 73
;
(1955) 93 CLR 561
; Humberstone v. Northern Timber Mills
[1949] HCA 49
;
(1949)
79 CLR 389
; Queensland Stations Pty. Ltd. v. Federal Commissioner of Taxation
[1945] HCA 13
;
(1945) 70 CLR 539
may be inferred. The applicant's services to the club to
which he belongs fall within sub-para. (a)(i) of the definition of "services"
in sub-s.4(1). The applicant derives income from the playing of sport and from
activities connected with his playing, in particular
the income he derives
from Town & Country W.A. Building Society through public appearances and the
like, from the commercial endorsement
of products and from media activities.
In this respect, the services he provides are services in trade or commerce.
116. The applicant is employed by Perth Rentors Pty. Ltd. of which he is a
director. That company has entered into an agreement with
Town & Country W.A.
Building Society to provide the applicant's services to the society as a
marketing consultant. At the time of
the hearing the applicant was on leave
without pay from the society. Perth Rentors Pty. Ltd. has also entered into
contracts of sponsorship
by virtue of which the applicant is obliged to
promote sporting goods, in consideration of which the company receives an
annual payment.
At the time of giving evidence the applicant said that he was
aware of only one existing sponsorship arrangement, that made with
the Gray
Nicholls Group for the promotion of cricketing equipment. I accept the
evidence of the applicant that his income is directly
or indirectly related to
his cricketing activities. I also accept his evidence that he regards district
cricket as the basis for
pursuing his career as a cricketer, notwithstanding
that over the last few years he has not participated in district cricket to
any
great degree. It provides him with the opportunity to maintain his skills
as a cricketer, to earn some money from incentive payments
and more broadly to
keep his name before the public through media reports of his performances.
117. Once it is found that there is a contract, arrangement or understanding,
any provision having the purpose of preventing, restricting
or limiting the
acquisition of the services of particular sports persons by any club will be
an exclusionary provision.
118. I am not aware of any decision that goes so far as to apply the
exclusionary provision to a person in the position of the applicant.
That may
be simply a reflection of the embryonic state of this part of the law. But if
on the proper construction of the relevant
sections of the
Trade Practices Act
and a correct application of the sections to the facts of the case there
appears to have been a contravention of sub-para. 45(2)(a),
novelty is no
sufficient reason for refusing to hold that there has been a contravention.
119. I am of the opinion that the decision to amend r. 2:38:1 reached at the
meeting on 4 November 1985 constituted an understanding
between the clubs and
the W.A.C.A., which understanding contained an exclusionary provision within
sub-s. 45(2) of the
Trade Practices Act
. All were parties to the contravention
so far as the understanding was concerned; hence
s. 82
, in the case of the
W.A.C.A., and
s. 82
read with s. 75B in the case of the clubs, render all
liable. See Yorke v. Lucas
[1985] HCA 65
;
(1985) 61 ALR 307.
Substantially lessening competition
120. The other limb of
s.45
upon which the applicant relies is the
"substantially lessening competition" provision to be found in sub-paras.
(a)(ii) and (b)(ii)
of sub-s.45(2). Again, certain of the concepts involved
are defined in the Act.
121. "Competition" is defined in sub-s. 45(3) to mean:
". . . competition in any market in which a corporation
that is a party to the contract, arrangement or
understanding . . . or any body corporate related to such
a corporation, supplies or acquires, or is likely to
supply or acquire, goods or services or would, but for
the provision, supply or acquire, or be likely to
supply or acquire, goods or services".
122. "Market" itself is not truly defined, though s.4E identifies market as a
market in Australia and provides that, when used in
relation to any goods or
services, the term "includes a market for those goods or services and other
goods or services that are substitutable
for, or otherwise competitive with,
the first mentioned goods or services".
123. Sub-section 45(4) provides that, for the purposes of the application of
s.45 in relation to a particular corporation, a provision
of a contract,
arrangement or understanding is deemed to have or be likely to have the effect
of substantially lessening competition
if that provision and the other
provisions of the contract, arrangement or understanding together have or are
likely to have that
effect.
124. There is a provision in the interpretation section of the Act, sub-s.
4(1), that "competition" includes "competition from imported
goods or from
services rendered by persons not resident or not carrying on business in
Australia". That provision has no relevance
to the present proceeding.
125. It is as well to keep in mind some remarks by Northrop J. in Adamson v.
West Perth Football Club Incorporated
[1979] FCA 81
;
(1979) 27 ALR 475
at 503:
"The word 'competition' when used in a commercial or
economic sense is not to be confused with the word
'competition' when used in a sporting sense when the
word has a different meaning. Sporting teams compete
with each other to win a sporting event. Football
teams engage in matches. They compete against each
other to win a premiership . . . care must be taken to
ensure that the use of the word 'competition' does not
cause confusion".
126. At the heart of this limb of s.45 is the notion of market. In Trade
Practices Commission v. Ansett Transport Industries (Operations)
Pty. Ltd.
[1978] FCA 21
;
(1978) 32 FLR 305
at 311 Northrop J. referred with apparent approval to what
had been said by the Trade Practices Tribunal in Re Queensland Co-operative
Milling Association Ltd.
(1976) 25 FLR 169
at 190:
"We take the concept of a market to be basically a very
simple idea. A market is the area of close competition
between firms or, putting it a little differently, the
field of rivalry between them . . . Within the bounds
of a market there is substitution - substitution
between one product and another, and between one source
of supply and another, in response to changing prices.
So a market is the field of actual and potential
transactions between buyers and sellers amongst whom
there can be strong substitution, at least in the long
run, if given a sufficient price incentive".
See also Trade Practices Commission v. Nicholas Enterprises Pty. Ltd.
(1979)
ATPR 40-126
at 18,355-8 and the T.N.T. case at 507-511.
127. In the present case the applicant pleads relevant markets for the
purpose of s.45 in these terms:
(i) the market for club membership and subscriptions from
playing and non-playing members
(ii) the market for patronage of club facilities and services
for which charges are made
(iii) the market for sponsorship of club activities by commercial
organizations including prize-money
and the market comprised by these three markets taken together as a single
market
(iv) the market throughout Western Australia in which cricketers
sell their skills or services and clubs buy the skills or
services of the cricketers.
128. In the applicant's submission, the first three markets have not been
specifically broached before. However, they were pleaded
as part of the
"spectator" market in Walsh v. Victorian Football League
(1983) ATPR 40-422
("Walsh v. V.F.L.") In Adamson the applicant pleaded three markets - the
"spectator market", being the market in and around Adelaide
in which clubs
competed for spectators to attend football matches; the "club-to-club market",
being the market throughout Australia
in which clubs bought and sold the right
to the transfer of football players from one club to another; and the "club to
footballer
market", being the market throughout Australia in which clubs
competed with each other to attract professional footballers to provide
their
services to the club.
129. At the hearing before Northrop J., following the proceedings in the High
Court, his Honour rejected the first two as relevant
markets for the purpose
of s.45. He rejected the club-to-club market on the basis that such a market
depended for its existence on
the clearance and permit regulations of the
various clubs and leagues and, if those regulations did not exist, there would
be no
club-to-club market within the framework of the remaining rules and
regulations (27 ALR at 504). The applicant had no quarrel with
this approach.
Northrop J. rejected the spectator market on similar grounds, reasoning that
in so far as the clubs were in competition
with each other, they were in
competition at the direction of the S.A. League which staged matches between
clubs, determined which
clubs should be admitted to the League and the
admission prices to be charged. The League also determined the order in which
matches
were to be played, in a way conducive to attracting as many spectators
to matches as possible. Northrop J. said "The sporting entertainment
is
provided by the league, the clubs being used as pawns directed by the league"
(27 ALR at 503).
130. Counsel for the applicant submitted that Northrop J. was wrong in this
approach, contending that a spectator market is a relevant
market for the
purpose of s.45. In his submission, the fact of a regulated activity does not
prevent room for competition in all
situations. The S.A. League did not choose
the players engaged by the clubs, even though those players were registered
with the League.
Clubs might compete to attract footballers in an attempt to
improve the quality of their teams and this had a tendency to attract
more
spectators to the matches in which those teams played, thereby increasing the
financial returns to the clubs through gate receipts
and ancillary activities.
In that sense, no individual club had control over spectator attendance by its
choice of players.
131. A spectator market was also pleaded in Walsh v. V.F.L., relating not
only to the selling of club memberships and seats at games,
but also to the
receipt of commercial sponsorship, the sale of television and broadcasting
rights and the granting of concessions
to refreshment sellers and others. As
the hearing was of an interlocutory nature, Woodward J. did not find it
necessary to express
a concluded view on this matter.
132. In Adamson v. West Perth Football Club Incorporated Northrop J. accepted
the club-to-footballer market for the purpose of s.45.
It was a market in
which footballers sold their skills or services and football clubs bought
them.
133. The view taken by Northrop J. was that the W.A. League and West Perth,
by complying with the permit and clearance provisions,
were parties to a
contract, arrangement or understanding whereby a footballer was not free to
play for the club of his choice. It
followed that the provisions substantially
lessened competition. The reason why Northrop J. rejected Adamson's claim was
because
of a finding that he was employed under a contract of service.
134. Returning to the present case, the applicant argued that the fourth
market is relevant since the applicant was not employed
under a contract of
service. At the same time, the services he provided fell within the definition
in sub-s.4(1).
135. In the applicant's submission, it is not necessary for all of the
parties to a contract, arrangement or understanding to be
in competition with
each other for the purpose of sub-s.45(3). It is necessary only that two of
the parties be in competition, in
which event all who are trading corporations
will be primarily liable for a contravention of the second limb of s.45 and
those who
are not may be liable through s.75B. The basis for this submission
is the language of sub-s.45(3) itself and the construction placed
on the
provision in Trade Practices Commission v. David Jones (Australia) Pty.
Limited at 40-671. As indicated earlier, I accept
that submission.
136. The
Trade Practices Act
does not define what is meant by "substantial
lessening of competition". The term is one of relativity. Dandy Power
Equipment Pty.
Ltd. v. Mercury Marine Pty. Ltd. at 43,877-43,888; Radio 2UE
Sydney Pty. Ltd. v. Stereo FM Pty. Ltd.
[1982] FCA 206
;
(1982) ATPR 40-318
at 43,918
137. In the present case, the applicant conceded that there was little
evidence that any contract, arrangement or understanding within
the second
limb of sub-s.45(2) was made expressly for the purpose of substantially
lessening competition. Nevertheless he contended
that the purpose of the
Cricket Council in amending r.2:38:1 and in coming to an understanding that
the applicant was disqualified
from club games, was to disqualify the South
African tourists from competing at club level. This, it is said, could have
the effect
or likely effect of substantially lessening competition, even
though the Cricket Council did not expressly assess the effect of this
conduct. Thus, "purpose", "effect" and "likely effect" are closely linked.
138. Counsel for the applicant accepted the existence of a difficulty in
establishing that there had been a substantial lessening
of competition
because the issues in the case did not emerge until three weeks before the end
of the 1985-86 cricketing season. Counsel
therefore fastened onto the likely
effect of such a provision. "Likely effect" was considered in Tillmanns case.
Bowen C.J. thought
it meant "more probable than not" or "more than a remote or
bare chance" (42 FLR at 339). Deane J. thought that it involved the idea
of a
real chance or possibility (42 FLR at 347).
139. The applicant's case was that the effect of the amendments to r. 2:38:1
was to disqualify, not only the applicant, but also
Messrs. Alderman, Hogan
and Shipperd. In his counsel's submission the evidence established, so far as
the player market is concerned,
that players of the standing and calibre of
Messrs. Hughes, Alderman, Hogan and Shipperd have a direct influence on the
on-field
success of a club at district level so that clubs are eager to
acquire their services; that in some cases the better known and more
talented
players attract transfer fees, thereby evidencing some competition between
clubs for the services of such players; and that
there was evidence from
cricketers and club officials of economic rivalry between clubs to acquire the
services of players from other
clubs for valuable consideration.
140. The submission continued that it was clear that the removal of the four
players from the cricket competition by operation of
r. 2:38:1 and the
agreement of the Cricket Council on 25 September 1985 will have an effect on
the economic competition whereby the
clubs engage in economic rivalry in
seeking to attract players and to acquire their services.
141. In answer to a submission on behalf of the respondents that only 4 out
of approximately 900 players were affected by the provisions
and that this
could in no way be said to involve a substantial lessening of competition, the
applicant argued that there were only
some 150 A grade cricketers playing each
week and of these only few were sufficiently talented to be selected for state
and test
teams. Hence, the removal of four cricketers who are well known as
successful, experienced and talented players could be enough to
substantially
lessen competition in the player market.
142. The applicant further contended that r.2:38:1 operated, not only to
disqualify Messrs. Hughes, Alderman, Shipperd and Hogan
from playing club
cricket, but had the potential to affect all players who play in unrecognised
matches.
143. As to the markets for club membership, patronage, and sponsorship, the
applicant made these submissions. The evidence established
that clubs with
players of the ability and standing of Messrs. Hughes, Alderman, Shipperd and
Hogan attracted substantial levels
of sponsorship, patronage and member
support because those players were members of their clubs. If those players
remain disqualified,
the level of sponsorship, patronage and support of their
clubs will fall. Conceding that there was little evidence that existing
patrons and members of clubs are actively solicited by other clubs, the
applicant argued that there was evidence that patrons and
members were
attracted to attend games at clubs other than their own clubs when players of
high reputation were participating. There
was evidence that clubs engaged in
keen economic rivalry in seeking out sponsors and potential patrons and
members. If the disqualifications
resulted in only some of the existing or
potential sponsors withdrawing their services, the effect would be to hinder
or lessen competition.
And so, it was argued, the likely effect of r.2:38:1
and the understanding reached on 25 September 1985 will be to substantially
lessen competition in the four markets pleaded. It followed that the making of
those provisions and the giving effect to them by
the Cricket Council was
conduct in contravention of sub-paras. (a)(ii) and (b)(ii) of sub-s. 45(2).
144. I have set out at some length the applicant's submissions in regard to
this limb of sub-s. 45(2) because of the novelty of the
present situation. Not
surprisingly, the respondents took issue with the applicant on the various
arguments to which I have referred.
145. I am satisfied of the existence of a market in Western Australia in
which clubs compete to attract cricketers, both generally
and from within
other clubs. My reasons for reaching this conclusion are set out at some
length earlier in this judgment and I shall
not repeat what appears there. The
applicant has failed to persuade me of the existence of the other markets
pleaded. I shall deal
with each of those markets in turn.
146. The evidence did not establish a market for club membership and
subscriptions from playing and non-playing members. By and large,
persons
become members of the cricket club in the district in which they live. A
person may wish to retain membership of a club with
which he has been
associated for many years, even after leaving the district. But in such a case
there is no relevant market for
he is not susceptible to overtures from the
club in the district to which he has moved. In this respect there is no "field
of rivalry"
between the clubs; if there is, it is of such a limited extent as
to be insignificant.
147. Likewise, the evidence did not establish the existence of a market for
patronage of club facilities and services for which charges
are made. Indeed
it is rather hard to distinguish this alleged market from the one just
considered. Clubs do not set out to attract
patrons by reason of the
facilities they offer, as opposed to the interest they engender through the
playing of cricket. Certainly
some clubs had higher bar trading figures than
others and the percentage of income derived from bar trading differed
considerably
from club to club. But there were various explanations for these
differences, including the population of the district, the sophistication
of
the facilities offered and the hours of bar trading. But the evidence did not
warrant a conclusion that, as between themselves,
the clubs competed for
patrons.
148. I have said already something about the sponsorship of club activities.
Much evidence was adduced by affidavit and through cross-examination
as to the
number of sponsors each club had, the whereabouts of the sponsors and the
financial benefit that could be expected from
them. It is unnecessary to
canvass this evidence in great detail but some references are useful. When
considering the evidence led
as to sponsorship, I have kept in mind that the
issue is whether there is a relevant market for sponsors. There was a great
deal
of evidence as to the sort of benefits sponsors might get, ranging from
substantial signs on score boards and sight screens to logos
on shirts worn by
players. But it is not enough, to establish a market, to show that sponsors
benefit from sponsorship. The question
is whether the clubs compete for
sponsors.
149. Counsel for the applicant placed some emphasis on evidence such as that
of Mark Robert Lawrence, the managing director of Phoenix
Motors Pty. Ltd.,
whose business is within the area of Wanneroo District Cricket Club (Inc.).
Mr. Lawrence's company sponsors that
club and Scarborough Cricket Club. In an
affidavit sworn on behalf of the applicant Mr. Lawrence deposed that, if the
applicant and
Messrs. Hogan, Shipperd and Alderman were prevented from
participating in district cricket, his company would reconsider its position
regarding sponsorship of the two clubs. Phoenix Motors Pty. Ltd. has no
connection with Subiaco Floreat Cricket Club (Inc.), the
club to which the
aplicant and Mr. Alderman belong, but I took Mr. Lawrence to be saying that
the reconsideration would come about
because the absence of such players would
reduce spectator interest in district cricket. But Mr. Lawrence did not say
that his company
would consider transferring its sponsorship to a club that
had outstanding players. And this points up that, while in some cases
sponsorship of a club produces a financial return to the sponsor and while
clubs do make efforts to attract sponsors, there is in
truth no competition
between the clubs vis-a-vis particular sponsors. Thus there is no relevant
market.
150. It is clear from the evidence of such witnesses as Alan David Bolton,
one of the vice-presidents of Subiaco Floreat Cricket
Club (Inc.), Roy Parnaby
Davis, the president of North Perth Cricket Club (Inc.) and Kenneth John
Oates, the president of Wanneroo
Cricket Club (Inc.) that there is very often
a personal connection between the sponsor and a member of the club. Some of
the amounts
paid by sponsors are very small indeed and are looked on as little
more than a donation.
151. The applicant has failed to establish a market for club membership and
subscriptions, or for patronage of club facilities and
services, or for
sponsorship of club activities, or indeed a market comprised of all three. The
applicant has established a market
in which the services of cricketers are
sought by clubs in circumstances involving a financial incentive. But I do not
accept that
the understanding reached at the meeting on 4 November 1985 had
the purpose or had or was likely to have the effect of substantially
lessening
competition within sub-para.45(2)(a)(ii). The amendment to r.2:38:1 excluded
the applicant from playing for any club. It
may be that the absence of
outstanding players from district cricket lessens spectator interest in that
cricket. But I am not persuaded
that their absence lessens competition between
the clubs, for all clubs are deprived of access to their services.
152. This claim must fail.
Giving effect to . . .
153. Paragraph 41 of the statement of claim pleads that since December 1985
the respondents have given effect to the contracts, arrangements
or
understandings pleaded earlier. This is a reference to para.45 (2) (b) of the
Act.
154. This allegation adds little to the body of the statement of claim. If
there was no contract, arrangement or understanding at
either of the meetings
on 25 September and 4 November 1985, there was nothing to give effect to. If
there was a contract, arrangement
or understanding at either or both of those
meetings, it is hard to see how giving effect thereto advances the applicant's
case.
One can imagine particular circumstances in which giving effect to a
contract, arrangement or understanding might strengthen an applicant's
entitlement to an injunction or justify some particular head of damage. But
that is not the case here.
155. Paragraph 41 of the statement of claim sets up by way of particulars
paras.30-32 which relate to the meetings of the Cricket
Council held on 6
January, 3 February and 19 February 1986. At the first two meetings the
Council rejected a motion for reinstatement
of the applicant and at the third
of those meetings Mr. Taylforth, as chairman, ruled that the Council had no
authority to consider
Mr. Bull's failure to implement his club's instructions.
156. The words "give effect to" are not technical words and should be given
their ordinary meaning, though they are defined in sub-s.4(1)
to include "do
an act or thing in pursuance of or in accordance with or enforce or purport to
enforce". As there was no contract,
arrangement or understanding within
sub-s.45(2) arising from the meeting on 25 September, there was nothing to
give effect to. I
have found that, arising from the meeting on 4 November,
there was an understanding containing an exclusionary provision. The decision
to reject the motion for reinstatement of the applicant was, I think, giving
effect to an exclusionary provision though it adds nothing
to the applicant's
case to say so. Furthermore, those clubs whose delegates supported
reinstatement cannot be said to have given
effect to the understanding. At the
meeting on 3 February the delegates from University Cricket Club, Scarborough
Cricket Club, Subiaco
Floreat Cricket Club (Inc.) and Claremont-Cottesloe
Cricket Club (Inc.) asked that the minutes record that they had voted in
favour
of the motion for reinstatement.
157. In the circumstances it is unnecessary to say anymore about this aspect
of the claim. So far as the meeting on 19 February 1986
is concerned, I do not
accept that the chairman's ruling or the decision to reject a motion
dissenting from that ruling gave effect
to the understanding arising from the
meeting on 4 November. It was a procedural matter and no more.
Restraint of trade
158. Among the many causes of action invoked by the applicant, that which
comes closest to the s.45 claim is a cause of action based
on restraint of
trade.
159. I have some sympathy with the respondents' complaint that, in support of
this cause of action as well as others, the applicant's
counsel furnished a
great deal of written material relating to a number of decided cases, many of
which had little to do with the
issues involved in this proceeding. It is
important therefore to identify precisely the case pleaded against the
respondents and
to focus only on those judicial decisions that have relevant
factual resemblances to the present proceeding or which contain statements
of
principle that may properly be applied here.
160. Paragraph 39 of the statement of claim pleads that if the Cricket
Council has disqualified the applicant in accordance with
the provisions of
amended r.2:38:1, a proposition which is denied, the amended rule or the
giving effect to it "constitutes an unreasonable
restraint of trade in
relation to him and is void and/or unenforceable and by reason thereof the
Applicant is not lawfully disqualified".
There is an alternative plea that the
amended rule or giving effect to it "constitutes a breach of the Applicant's
right to work
and is void on the grounds that it is contrary to public
policy". The alternative proposition is one that goes beyond the notion
of
restraint of trade and must be dealt with separately.
161. The respondents deny para.39 of the statement of claim and say further
that the amended rule does not, in its terms, impose
a restraint of trade or,
if it does, it is a restraint "which is reasonable in the circumstances in
that its purpose is to control
and regulate the game of cricket in Western
Australia and is a legitimate protection of the First and Fourth Respondents'
interest
therein . . ." (defence, para.26).
162. In further and better particulars of defence, they identify those
interests as:
"(1) the interest of ensuring the proper control and
regulation of district cricket in Western
Australia;
(2) the interest of ensuring the fairness of the
district cricket competition;
(3) the interest of protecting the resources spent in
organising the district cricket competition;
(4) the interest of providing for all district cricket
players clear and certain rules of the
competition".
163. It is now well established that the doctrine of restraint of trade may
operate in the case of sports persons who derive income
from the sport they
play. Eastham v. Newcastle United Football Club Limited
(1964) Ch 413
; Buckley
v. Tutty at 353; Greig v. Insole
(1978) 1 WLR 302
; Blackler v. New Zealand
Rugby Football League
(1968) NZLR 547.
As the High Court pointed out in
Buckley v. Tutty at 371, it is unnecessary to consider whether a professional
sports person, who
habitually plays the game for reward, practises a trade
within the ordinary meaning of that expression. "The doctrine regarding
restraint
of trade is not limited to any category of skilled occupations but
applies to employment generally".
164. It is not essential that the sports person derive his or her entire
income from practising the sport. Many of the cases have
concerned footballers
who played for reward but who were gainfully employed in other occupations as
well. It is not to the point
that many, if not most, of those playing the
sport in question do so as amateurs, so long as the person whose rights or
interests
are said to have been affected is a professional. In that regard,
the respondents admit in their defence that the applicant is and
was at all
material times "engaged as a professional cricketer by Subiaco Floreat Cricket
Club (Inc.)".
165. It is true that the applicant's direct earnings from district cricket
itself are meagre indeed. He said in evidence:
"Last year, I would say it would be about the first time
I received money for playing grade cricket in my whole
career, and I think that sum was about $230 or
something".
But playing club cricket is an entry, if not the entry, to shield cricket and
thence to test cricket. The income the applicant derived
and continues to
derive from Town & Country Building Society and from media contacts
undoubtedly stems primarily from his reputation
as an international cricketer.
But it is not possible or realistic to attempt some dissection of the levels
at which he plays with
a view to assigning income to particular levels. For
the purposes of the notion of restraint of trade, the applicant is a
professional
cricketer whose livelihood is likely to be affected by his
inability to play club cricket.
166. The applicant gave particulars of his income from various sources since
1979. I shall not set out this information in its entirety
and shall restrict
it to the last two years. The applicant identified three categories:
(i) direct sporting income, including match playing fees, prizes
and bonuses
1983-1984 $48,977.00
1984-1985 $35,379.00
(ii) indirect sporting income, including key player agreements,
product endorsements, television appearances and sponsor
payments
1983-1984 $20,490.00
1984-1985 $19,782.00
(iii) other income, including wages and salary from regular
employment
1983-1984 $21,409.00
1984-1985 $18,907.00
167. In this regard, there was a submission made on behalf of the respondents
that cannot be accepted. It was said that, because
of his large earnings from
playing cricket in South Africa, the disqualification of the applicant at club
level had no impact on
his financial return from playing cricket. But it is no
answer to a claim that a contract or rules operate in restraint of trade,
to
point to income earning activities that may be carried out elsewhere.
168. In the present case the applicant has played cricket all his life in
Western Australia save for those occasions on which he
has played shield and
test cricket outside the state including, of course, the recent occasions on
which he has played in South Africa.
If in truth there has been conduct in
restraint of trade so far as the playing of cricket in Western Australia is
concerned, that
conduct is not saved by an argument that the applicant may
earn as much, indeed more, by playing cricket elsewhere. The existence
of a
restraint and its reasonableness must be judged with reference to the
activities that the applicant carries and proposes to
carry out.
169. There is another matter of a preliminary nature, though it goes very
much to the question whether restraint of trade can apply
in the present case
at all. It is the conduct of the Cricket Council of which the applicant
complains. The applicant himself is not
a member of the Council; it is the
W.A.C.A. and the Associated Clubs whose delegates comprise the Council. The
Council is established
by the rules of the W.A.C.A. and the applicant is not a
member of that body. At any rate there was no evidence of his membership.
Can
he then be heard to say that a rule of the Council is void as being in
restraint of trade?
170. In my view he can be so heard. It is not necessary for an applicant to
show that rules which he seeks to impugn constitute a
contract between him and
the association in question. Eastham v. Newcastle United Football Club Limited
at 441-442; Buckley v. Tutty
at 375; Greig v. Insole at 345; Foschini v.
V.F.L. and South Melbourne Club Limited (unreported judgment of Supreme Court
of Victoria
delivered 15 April 1983); Nagle v. Feilden
(1966) 2 QB 633
at 644,
650
171. In Buckley v. Tutty at 381 the High Court said that since the respondent
was a member both of the New South Wales Rugby Football
League and the Balmain
District Rugby League Football Club, McEllistrim v. Ballymacelligott
Co-operative Agricultural and Dairy Society
Ltd.
(1919) AC 548
and Dickson v.
Pharmaceutical Society of Great Britain
(1970) AC 403
were sufficient
authority for the view that the Supreme Court had power to make a declaration
and grant an injunction. The Court
continued:
"However, since we have said that we regard the
question, what persons are members of the League, as
not altogether clear, we would add that even if the
respondent had been a stranger to those organizations
he would have had a right to relief".
172. Counsel for the respondents invited me to decline to follow this dictum
of the High Court and the dictum of Wilberforce J.
in Eastham v. Newcastle
United Football Club Ltd. at 446, on which it was based. This would indeed be
a bold course. Even if what
the High Court said was obiter, it was obiter in a
joint judgment of the five members constituting the court. In any event, the
dictum
is in my respectful view entirely in accord with the principle that,
where the rules of an association place an unjustifiable restraint
on the
income earning activities of a person, a court is not precluded from granting
appropriate relief merely because that person
is not a member of the
association.
173. Against that background I turn to consider whether r.2:38:1 as amended
constitutes an unreasonable restraint of trade so far
as the applicant is
concerned.
174. It is for the applicant to show that r.2:38:1 as amended is in restraint
of trade. If he makes good that case, it is for the
respondents to establish
circumstances which show that the restraint affords no more than adequate
protection to their interests.
"It is a question of law whether the
circumstances justify the restraint" (Buckley v. Tutty at 377). I am of
opinion that r.2:38:1
is in restraint of trade so far as the applicant is
concerned. Its effect is to preclude him from taking part in any cricket match
within or without Western Australia other than a match recognised by the
Australian Cricket Board or the W.A.C.A., without first
obtaining the consent
in writing of the Cricket Council. The fact that he takes part with the
approval of his club is of no account.
If found in breach of the rule, he is
automatically disqualified until reinstated by the Council.
175. There is a question whether "found" in the rule implies some hearing at
which it is formally determined that a player is in
breach of the rule or
whether it means no more than that a player who is in breach of the rule is
thereby disqualified and remains
so until reinstated. The use of the term
"automatically disqualified" suggests that the rule is to operate by its own
force and effect
and that no formal finding of the Cricket Council is
required. There can be no doubt that the members of the Cricket Council
treated
the rule as having an automatic operation. If this were not so, the
motion considered at meetings of the Council on 6 January and
3 February 1986
for reinstatement of the applicant and other players would have been a
pointless exercise.
176. Whichever view is taken of the way in which the concluding words of the
rule operate, they involve the disqualification of a
player who is in breach,
a disqualification that is indefinite in its duration. The impact of the rule
is made all the clearer by
r.2:39:5, whereby a club allowing a disqualified
player to play for that club commits an offence, is liable to a fine and is
deemed
to have lost the match to the opposing club.
177. Thus r.2:38:1 operates so that a player who is in breach is effectively
precluded from playing for his club. This in turn has
the likely, even if not
direct, consequence that the player will not be selected for shield cricket or
in turn for test cricket.
The impact on a player's capacity to earn money from
playing cricket is apparent.
178. The next question is - have the respondents made good their defence that
the restraint was reasonable in the circumstances,
having as its purpose the
control and regulation of cricket in Western Australia? As already noted, the
functions of the Cricket
Council include the control and management of all
Associated Club matches. They also include the selection of teams to represent
the W.A.C.A. in all international and shield matches and also the regulation
and administration of the registration, qualification
and eligibility of
players to play in matches between the Associated Clubs (r.37). It is clear
then that the Cricket Council reaches
beyond the clubs themselves to the
players. The broad proposition that the Cricket Council has a responsibility
for the orderly playing
of cricket in Western Australia may readily be
accepted. But is that purpose served by a provision that a player who plays in
an
unrecognised match, without the necessary consent, is disqualified? Is it
reasonable that his fate turn on such an uncertain expression
as "a match
recognised by the Australian Cricket Board or the Association"? Is it
reasonable that he be disqualified for an indefinite
time? Is it reasonable
that the rule operate to impose an automatic disqualification without giving
the player an opportunity to
be heard? Is it reasonable that there be no right
of appeal from a refusal of the Cricket Council to give its consent or from a
disqualification
itself? Is it reasonable that a player be precluded from
playing overseas by an automatic disqualification provision? Is it reasonable
that the rule operate retrospectively so that a player who contracted to play
in an unrecognised match without the required consent
before 4 November 1986,
when no automatic disqualification existed, is nevertheless automatically
disqualified by reason of the amendment?
179. It is relevant that, so far as the applicant is concerned, the amendment
to r.2:38:1 had a retrospective operation - see Greig
v. Insole at 352. It is
true that as at 4 November 1985 the applicant had not played a match in South
Africa (his first match was
on 9 November). But he had contracted to play as
early as May 1985 and the existence of a contract with S.A.C.U. was certainly
known
to the respondents by November 1985. They were also aware in a general
way of the settlement of the Victorian litigation and none
of the respondents
suggested that the amendments to r.2:38:1 were by way of implementing that
settlement. Clearly they were not.
180. The totality of these considerations leads me to conclude that the
operation of r.2:38:1 goes beyond a restraint reasonably
related to the
objects of the Cricket Council and those who comprise its membership and that
it is void. That consideration is reinforced
by reference to the public
interest which lies, I think, in having every opportunity to see first class
cricketers in action.
181. The rule is the product of the actions of the first, second and third
respondents through their delegates. The applicant has
made good this cause of
action against them and against the Cricket Council.
Right to work
182. This conclusion makes it unnecessary to deal with the so called "right
to work" pleaded in para.39 of the statement of claim.
183. In any event I am not persuaded that there is such a right, at least in
the broad and unqualified terms argued for on behalf
of the applicant.
Certainly there is Nagle v. Feilden in which it was held that the practice by
the Jockey Club of Great Britain
in refusing trainers licences to women on the
basis of sex discrimination as opposed to merits, constituted a prima facie
case of
interference with a person's right to work at his trade or profession.
But that case and other cases can be explained by reference
to the particular
facts and the nature of the disqualification and the circumstances in which it
was imposed.
184. In my view there cannot be inferred from that decision or any other some
over-arching principle whereby any interference with
a person's entitlement to
work constitutes a tort or otherwise gives rise to a cause of action.
Ultra vires
185. I turn now to the other causes of action pleaded on behalf of the
applicant. I do so with the general observation that there
is much overlapping
and profusion of pleading that together make it difficult at times to discern
precisely what is being said on
the applicant's behalf.
186. First there must be considered what the applicant's counsel described as
procedural ultra vires, an argument that there had
been a failure to comply
with the mandatory requirements of the rules of the Cricket Council. The
relevant pleading is to be found
in paras.25-27 and 33-38 of the statement of
claim.
187. The first complaint is that by letter dated 11 November 1985 the
applicant sought the consent of the Cricket Council to play
in South Africa
and that the Council failed to reply to that request or to give it any proper
consideration. It is then said that
the respondents failed to inform the
applicant or his club of the fact of his purported disqualification; that the
Cricket Council
made no finding as required by r.2:38:1; that the applicant
has never been in breach of that rule; that at all material times the
South
African tour games were recognised by the Australian Cricket Board; that, if
they were not, the Council failed to make the
necessary finding; and that in
consequence the applicant was not lawfully disqualified from playing cricket
for his club.
188. I accept, as I have said earlier in these reasons, that the Cricket
Council did fail to respond to the applicant's letter of
11 November 1985. It
is also clear that the Council gave no consideration to that request. Why the
Cricket Council did not reply
is not at all clear. Both Mr. Taylforth, the
chairman of the Council and Mr. Sweetapple, its secretary, deposed that it was
not the
practice of the Council to supply written replies to correspondence
from a member of a club. Whether this is the Council's practice
(and there was
evidence from Mr. Rigg, the chairman of the Executive Committee and chairman
of the I. and I. Committee of the W.A.C.A.
that a similar application by Mr.
Alderman had been the subject of a written reply) is not greatly in point. If
a player seeks the
consent in writing required by r.2:38:1, surely he or his
club is entitled to a written reply? In any event, there was no reply of
any
kind to the applicant's letter of 11 November.
189. While the Cricket Council's failure to reply to the applicant's letter
was an act of discourtesy, it does not follow that it
had any legal
implications as between the applicant and the Cricket Council. Indeed, in my
view, it had none. Nevertheless it has
evidentiary implications, for a failure
to reply might go some distance to proving that the Cricket Council gave no
proper consideration
to the application for consent contained in the letter of
11 November.
190. The contention that the respondents failed to inform the applicant of
his "purported disqualification" depends upon establishing
that there was in
fact a purported disqualification. Paragraph 35 of the statement of claim
pleads that at none of the meetings of
the Cricket Council since 4 November
1985 was there a finding that the applicant was in breach of r.2:38:1.
Paragraph 22 of the defence
denies this allegation. This is another
unsatisfactory plea since it is apparent from the way in which the case was
argued that the
respondents contend that no finding was necessary. They did
not suggest that a finding had been made. I have already said something
about
the operation of the concluding portion of r.2:38:1. One thing is clear - the
Cricket Council certainly proceeded on the basis
that the applicant had been
disqualified. The motions for his reinstatement would have made no sense
otherwise. It is apparent from
the evidence of those who attended the relevant
meetings of the Cricket Council, in particular Messrs. Taylforth, O'Driscoll,
Sweetapple,
Beech and Rigg that the members of the Cricket Council gave no
particular consideration to what was meant by an unrecognised match.
They
proceeded on the basis that, by playing in South Africa, the applicant had
played in an unrecognised match and that, at any
rate following the amendment
to r.2:38:1 at the meeting on 4 November 1985, he was thereby disqualified in
terms of the rule.
191. It was part of the applicant's case on the question of ultra vires that
the delegates to the Cricket Council reached a decision
to disqualify him
without any detailed knowledge of the terms of the deed of settlement of the
Victorian litigation. It may be accepted
that the delegates, at any rate most
of them, had no detailed knowledge of the terms of settlement of that
litigation. But I am unable
to see the relevance of that matter to the
considerations of the meetings of the Council.
192. Nevertheless I am satisfied that at none of its meetings did the
delegates to the Cricket Council give consideration to the
applicant's letter
of 11 November 1985. The letter itself sought consent "to play in such games
as have been organised by The South
African Cricket Union during this 1985/86
summer season". By then the applicant had played in South Africa so, strictly
speaking,
the application should have been for reinstatement. But since the
respondents gave no consideration to the letter, the distinction
is not, I
think, vital to the applicant's case. On this aspect of the case, the
appropriate relief is to remit that matter to the
Cricket Council for its
consideration. Since the applicant has made good other causes of action
warranting wider relief, I need say
no more about procedural ultra vires.
Conspiracy
193. The next cause of action to be considered is that of conspiracy. In The
Law of Torts 6th ed. 663, Professor Fleming says:
"Today, the tort of conspiracy is regarded as anomalous,
if not anachronistic. It is therefore kept within the
narrowest limits of compelling precedent. Its
principal remaining role is to strike at those rare
combinations whose predominant motive is not
self-interest but injury to the plaintiff or the
promotion of some other 'unjustifiable' end".
194. While a malevolent intent is not an essential ingredient of the tort
(Crofter Handwoven Harris Tweed Co. v. Veitch
[1941] UKHL 2
;
(1942) AC 435
at 471-472), it
does involve a combination the real purpose of which ". . . is the inflicting
of damage on A as distinguished from
serving the bona fide and legitimate
interests of those who so combine" (Crofter Handwoven Harris Tweed Co. v.
Veitch at 443). Like
fraud, it is not an allegation that should lightly be
made.
195. Paragraph 42 of the statement of claim pleads that since July 1985, the
respondents between themselves in conjunction with others
"wrongfully and
maliciously conspired and combined amongst themselves to injure the Applicant
in his said business as a professional
cricketer".
196. The particulars provided of the alleged conspiracy are simply a
repetition of paras.29A-32 of the statement of claim which,
broadly speaking,
plead the various meetings of the Cricket Council to which reference has
already been made and the disqualification
of the applicant from club cricket.
But at the very heart of a claim for conspiracy is the existence of an
agreement between two
or more persons, made for the purpose of injuring
another. Where is the agreement from which the alleged conspiracy is said to
derive?
The applicant's submissions focused very much upon the requirement of
intention to injure. They asserted that the intention of the
respondents was
to disqualify the applicant from grade cricket and that thereby the applicant
suffered damage. But an intention to
injure is not an element independent of
the agreement made or combination entered into; it must be found in that
agreement or combination.
197. In my view the applicant failed to show that there was any agreement
made between the respondents, or any of them to injure
him. There was conduct
that injured him and it was the conduct of the respondents. But more is
required before the respondents can
be held to have conspired. For this reason
I am of the opinion that there is little to be gained by referring to the many
cases mentioned
by counsel for the applicant that deal with the notion of
intention to injure, the concept of purpose and the nature of the damage
that
may be suffered. These matters only arise once a relevant agreement has been
proved and this the applicant failed to do. In
fairness to the respondents I
should say that I do not think they did conspire to injure the applicant. They
were acting in what
they saw as the best interests of cricket though, in doing
so, they acted in contravention of the
Trade Practices Act
and in restraint of
trade. Conspiracy is a serious allegation to make and it was not sustained.
198. I would add this comment. The claim for conspiracy includes a claim for
exemplary damages. Exemplary damages may be awarded
in actions for tort if it
appears that the respondents' conduct in committing the wrong exhibited a
contumelious disregard of the
applicant's rights. Uren v. John Fairfax & Sons
Pty. Ltd.
[1966] HCA 40
;
(1965-1966) 117 CLR 118
; Australian Consolidated Press Limited v.
Uren
[1966] HCA 37
;
(1968) 117 CLR 185
But the statement of claim did not in terms claim
exemplary damages and no evidence was offered to provide a basis for such an
award.
199. The claim in conspiracy must fail.
Equal Opportunity Act 1984
200. Paragraph 43 of the statement of claim pleads that, if the Cricket
Council disqualified the applicant in accordance with the
provisions of
amended r.2:38:1, "such conduct is unlawful in that it constitutes
discrimination against the Applicant on the grounds
of religious or political
conviction contrary to provisions of the
Equal Opportunity Act 1984
(W.A.)".
201. The respondents made a number of answers to this claim, some, of fact
and some law. Their primary answer was to point to sub-s.
154 (1) of the Act
which reads:
"A contravention of this Act shall attract no sanction
or consequence, whether criminal or civil, except to
the extent expressly provided by this Act".
The respondents drew attention to the Commissioner for Equal Opportunity, an
office established by the Act, s. 80 of which empowers
the Commissioner to do
various things including investigate complaints. They pointed also to the
Equal Opportunity Tribunal established
by the Act which may hear complaints
and order the payment of damages by way of compensation. Nowhere in the Act,
they said, is there
any entitlement to relief by reason of any discrimination,
other than that to which I have just referred.
202. The applicant's answer is that sub-s. 154(1) is concerned with attempts
to enforce the provisions of the Act by the imposition
of penalties. He says
that "consequence" must be read ejusdem generis as referring to an attempt to
enforce a provision of the Act
by the imposition of a penalty. Whatever sub-s.
154(1) means, there is no justification, in my view, for giving the term
"consequence"
other than its natural meaning. The terms "sanction" and
"consequence" are expressed disjunctively and there is simply no genus to
control those words.
203. The applicant argued that the power of the Federal Court, conferred by
s. 21
of the
Federal Court of Australia Act 1976
, to make declarations is not
ousted by sub-s. 154(1) of the
Equal Opportunity Act
. A declaration does not
impose a sanction or consequence; it simply involves a statement of the
existing law. His counsel referred
to Forster v. Jododex Australia Pty. Ltd.
[1972] HCA 61
;
(1972) 127 CLR 421
and London Borough of Ealing v. Race Relations Board
(1972)
1 All ER 105
Cf Kessell v. Human Rights Commission
(1986) EOC 92-146
, a
decision of the High Court of New Zealand.
204. In my view it is clear that the Act intends no consequences to arise
from conduct which contravenes it, except through the Act
itself. It is not
that the jurisdiction of the Federal Court is ousted. Nor for that matter is
the jurisdiction of the Supreme Court
ousted, for clearly that Court may grant
declaratory relief in regard to conduct of the Commission or the Tribunal. But
the Act gives
rise to no rights or obligations vis-a-vis others except through
the machinery of the Act itself. That conclusion is enough to dispose
of the
applicant's claim under this head.
205. As to the merits of the claim, sub-s. 53(1) of the
Equal Opportunity Act
provides that a person discriminates against another on the ground of
religious or political conviction if, on the ground of the
religious or
political conviction of the aggrieved person, "the discriminator treats the
aggrieved person less favourably than in
the same circumstances or in
circumstances that are not materially different, the discriminator treats or
would treat a person of
a different religious or political conviction".
Sub-section 4(3) construes "religious or political conviction" so as to
include "a
lack or absence of religious or political conviction".
206. The applicant argued that the South African tour involved strong
political issues and beliefs on the part of the respondents.
He pointed to The
Western Cricketer where, at p. 8, reference is made to the proposed South
African tour as running "counter to the
policy of the Australian Cricket Board
and its member States, which have decided against sporting links with South
Africa. In making
the tour, the players are also in complete conflict with the
Australian Government's policy on South Africa as highlighted in the
Gleneagles Agreement". This view, the applicant said, was reinforced by the
evidence of Mr. Taylforth who referred to the applicant's
"commitment to play
in South Africa against the policy of the present and previous Government, and
against the policy of the Australian
Cricket Board and the Western Australian
Cricket Association". Mr. Taylforth also referred to "those who strongly
oppose personal
benefit being derived by individuals from providing services
to a country which practises a racial policy condemned by most of the
civilised western world".
207. The applicant said that he held no relevant political conviction and I
accept that evidence. There is no doubt that r.2:38:1
was amended against the
background of the South African tour which had then begun. Nevertheless I am
not persuaded that there was
any discrimination against the applicant by
reason of political convictions which he held or did not hold. Rather the
W.A.C.A. saw
the tour as inimical to cricket, as appears from a further
passage on p. 8 of The Western Cricketer:
"The rebel tour poses a clear threat to Australian
cricket, firstly by promoting an alternative
competition to the Australian Cricket Board's
International Programme and thereby weakening its
standing in terms of other sports and entertainment
activities. Secondly, it must inevitably weaken the
standard of the Australian domestic competition and
thus weaken Australia's competitive position against
other cricket nations".
208. Both on the law and on the facts this claim must fail.
Bad faith and bias
209. The applicant made a further complaint, of bad faith or bias on the part
of the respondents. This is pleaded in para. 44 of
the statement of claim by
reference to what is described as the agreement and understanding arrived at
by the Cricket Council on
25 September 1985 and the subsequent
disqualification of the applicant. This is said to have been a decision made
in bad faith and
to have been affected by bias. The particulars given of this
plea are not easy to follow.
210. First, the applicant repeats paras. 33-38 of the statement of claim,
being the paragraphs that relate to the failure of the
respondents to inform
the applicant or his club of his purported disqualification; the failure on
the part of the Cricket Council
to make a finding in accordance with r.2:38:1;
the contention that the decision to disqualify the applicant was ultra vires;
and
the argument that the South African tour games were recognised by the
Australian Cricket Board.
211. The particulars then refer to the applicant's disqualification for an
unlimited duration; the circumstances surrounding the
settlement of the
Victorian litigation; the role of certain persons in relevant proceedings; the
argument that the decision to disqualify
the applicant was contrary to the
legitimate objects of the W.A.C.A. and was not made in the best interests of
the respondents but
for the purpose of punishing the applicant; the fact that
the decision was made in the course or furtherance of the conspiracy alleged;
the failure on the part of the Cricket Council to reply to the applicant's
request of 11 November 1985 or to give any proper consideration
to that
request; the agreement on the part of the Cricket Council to prevent the
applicant and Messrs. Alderman, Hogan and Shipperd
from playing district
cricket in Western Australia at a time when r.2:38:1 did not provide for their
disqualification; and a repetition
of the proposition that the Cricket Council
made that agreement or reached that understanding without full knowledge of
the terms
of settlement of the Victorian litigation and without knowledge of
whether the South African tour matches were recognised matches.
212. The particulars of bad faith or bias are complex and unnecessarily
confusing. Equally, many of the cases to which counsel for
the applicant
referred in the written submissions filed are of little assistance.
213. In so far as the applicant relies upon procedural ultra vires, I have
dealt with that matter. It seems to me to add little to
the applicant's claim
to plead that matter as constituting bad faith or bias. In so far as the
particulars go beyond procedural ultra
vires to what the applicant describes
as substantive ultra vires, I am not persuaded that any decision reached was
contrary to the
legitimate objects of the W.A.C.A. Whether such a decision
advanced those objects is another matter. In the same way, to argue that
there
was a decision made to disqualify the applicant and that it was made in the
course or furtherance of the alleged conspiracy,
adds nothing to the
applicant's claim. In any event I have rejected the conspiracy claim. As I
suggested to counsel for the applicant
during the course of final address, if
the Court found a conspiracy as alleged, it would have little difficulty in
finding that the
respondents had acted in bad faith or were biased. But it
would serve no purpose to make such a finding if a conspiracy was established.
214. Certainly a purpose of the amendment of r.2:38:1 was, borrowing Mr.
O'Driscoll's phrase, to give it teeth. That is apparent
also from the evidence
of Messrs. Moody, Vodanovic, Edwards and Taylforth concerning the meeting on 4
November 1985. But that does
not mean that its purpose was to punish the
applicant. Furthermore if that was the purpose of the amendment, it does not
follow as
a matter of course that any decision taken was made in bad faith or
was biased. There can be no doubt that many of those concerned
with the
administration of cricket in Western Australia saw r.2:38:1 as operating for
the protection of grade cricket and in turn
shield and test cricket. They may
have been wrong in that view but being wrong is not equivalent to acting in
bad faith or with bias.
215. This plea of bad faith or bias also involved, as the case was presented,
questions of natural justice. The applicant pointed
to the fact that the
meetings which led to his disqualification were attended by Mr. Taylforth and
Mr. O'Driscoll, who were executive
members of the W.A.C.A., and by delegates
of the W.A.C.A., which was a member of the Australian Cricket Board. In the
circumstances,
it is said, Mr. Taylforth, Mr. O'Driscoll and the delegates
should not have participated in the decision to disqualify. It is said
that
they had a prior involvement or prejudgment of the matter in question, that
they exhibited prejudice or personal animosity to
the applicant and that
generally their conduct reflected bad faith or bias on their part.
216. I do not accept this submission. Unquestionably Mr. Taylforth and Mr.
O'Driscoll had views, and at least in Mr. Taylforth's
case strong views, on
Australian cricketers playing in South Africa. But one was the chairman of and
the other a delegate to the
Cricket Council. They were entitled to be present
and to express their views although, in Mr. Taylforth's case, consistently
with
his position as chairman. There was no hearing of a charge against the
applicant; he was disqualified by reason of the operation
of r.2:38:1 as
amended.
217. In his closing address, counsel for the respondents criticized strongly
the allegations of bad faith and bias on the ground
that the applicant's
counsel had failed to put to the respondents' relevant witnesses questions
aimed at establishing bad faith and
bias on their part. There is force in this
criticism. When there is an allegation of bad faith and an allegation of
actual bias (which
was the case here), not only is it proper to put those
allegations to the relevant witnesses but failure to do so must cast a real
cloud over the genuineness of the claim. It may also carry the consequences
arising from what is known as the rule in Browne v. Dunn
(a reference to
Browne v. Dunn (1894) 6 R 67), that is, acceptance of the other party's
evidence on the matter. I am not suggesting
that it is necessary to put in so
many words to a witness that he acted in bad faith or was biased; it is enough
to ask questions
from which it is clear that the witnesses' motives are under
attack. But in my view the cross-examination of witnesses such as Messrs.
Taylforth, O'Driscoll, Rigg and Bull fell short of what was required.
218. For instance, in final address counsel for the applicant invited the
Court to find that Mr. Bull voted contrary to his club's
wishes at the
instigation of Mr. Taylforth or other members of the executive committee of
the W.A.C.A. Had Mr. Bull done so, it would
have been a serious matter and
gone very much to strengthen the applicant's claim of bad faith on the part of
the respondents. If
the Court was to be invited to draw this conclusion, it
was imperative that the matter be put to Mr. Bull as well as to other relevant
witnesses. Mr. Bull was asked in cross-examination whether he had any
discussions with Mr. Taylforth about any matters on the Cricket
Council agenda
during the period with which this case is concerned. He was also asked whether
he had any discussions with Mr. Taylforth
about the way in which he should
vote. But it was not put to Mr. Bull that he voted contrary to the
instructions of his club at the
instigation of Mr. Taylforth or anyone else.
In my view that matter should have been put directly to Mr. Bull if it was
intended
to ask the Court to draw the inference referred to by counsel in
address.
219. For all these reasons, the claim of bad faith and bias must fail.
Deed of Settlement
220. Finally, it is necessary to say something about the claim that the
W.A.C.A. breached certain of the terms of the deed of settlement
reached in
the Victorian litigation.
221. Paragraph 23 of the statement of claim pleads that it was an express or
implied term of that deed that the W.A.C.A. "would take
no further action
against the Applicant arising out of his participation in the said South
African tours and in particular would
not impose or seek to impose
restrictions upon his eligibility to play District Cricket within the State of
Western Australia".
222. Paragraph 23A gives particulars of the way in which the W.A.C.A. is said
to have breached the deed. It alleges that the imposition
of a
disqualification on the applicant constituted the making of a claim or
alternatively the taking of further action against the
applicant "arising out
of his participation in the said South African tours".
223. This claim can be disposed of quite shortly. There was certainly no
express term of the deed that precluded the W.A.C.A. imposing
or seeking to
impose restrictions upon the playing of district cricket by the applicant. Of
course the W.A.C.A. could not do so in
any event except through the Cricket
Council. Counsel for the applicant was unable to point to any provision of the
deed which in
express terms or as a matter of construction precluded the
W.A.C.A. from taking the action it is said to have taken. As appears from
its
recitals, the deed is concerned with the playing of test and interstate
cricket and the actions of the defendant players in contracting
with S.A.C.U.
224. By cl.2.2 of the deed the plaintiffs (the W.A.C.A. and other state
associations together with Mr. Bennett as chairman of the
Australian Cricket
Board) agreed, not directly or indirectly.
"(a) to institute any court proceedings seeking orders
restraining or having the effect of restraining any
member of the team from playing or participating in
the first and second tours or restraining or having
the effect of restraining S.A.C.U. from giving
effect to and carrying out its contractual
obligations to the defendant players and the
remaining players ('any further court
proceedings');
(b) to counsel, encourage or assist any person in
commencing or prosecuting any further court
proceedings".
225. There is nothing in this undertaking or in any other undertaking by the
plaintiffs which can fairly be construed as a prohibition
against
disqualification from club cricket by reason of participation in the South
African tours.
226. Before a term may be implied in a contract, it must be necessary to give
business efficacy to the contract. It is not enough
that it be reasonable to
imply the term. See Codelfa Construction Pty. Ltd. v. State Rail Authority of
N.S.W.
[1982] HCA 24
;
(1981-1982) 149 CLR 337
, especially Mason J. at 346-347 The implication
of the term sought to be implied by the applicant is not necessary to give
business
efficacy to the deed of settlement nor is it so obvious that, in the
language of the cases, "it goes without saying". The deed of
settlement refers
expressly to test and interstate cricket matches. It makes no reference to
club matches, no doubt because this
matter was left to the clubs themselves
and to bodies such as the Cricket Council, none of which was a party to the
deed.
227. I accept the submission of counsel for the respondents that the deed is
directed towards alleged breaches by the applicant and
other players of their
obligations to the Cricket Board and through the Board to its individual
constituent associations. The release
contained in the deed is not concerned
with district cricket nor with the entitlement of the applicant and the other
players to play
in any matches other than those in which they were contracted
with the Cricket Board to play.
228. The claim under the deed must fail.
Jurisdiction revisited
229. I have found the W.A.C.A. to be a trading corporation. If, as I have
found, the W.A.C.A. was in contravention of sub-s.45(2)
of the
Trade Practices
Act
, the other second and third respondents may be liable as parties to a
contract, arrangement or understanding in breach of that provision
or if they
otherwise come within s.75B of the Act. No particular question of jurisdiction
arises in this regard.
230. As to the various common law causes of action invoked by the applicant,
I am of opinion that there is in this case "a single
justiciable controversy
of which a federal issue forms an integral part" (Stack v. Coast Securities
(No. 9) Pty. Ltd. at 742). And
it is appropriate for this Court to deal with
those causes of action since there is a common substratum of facts relevant to
them.
Indeed, with the possible exception of the claim under the
Equal
Opportunity Act 1984
, the facts relating to each of the causes of action
pleaded are very much the same.
231. It is unnecessary therefore to consider the doctrine of pendent party
jurisdiction to which counsel for the applicant referred,
relying upon Kennedy
v. Australasian Coal and Shale Employees Federation
(1983) 50 ALR 735.
See the
discussion in Allen v. Sideris
[1984] FCA 244
;
(1984) 9 IR 68
at 80-81
Relief
232. In regard to the contravention by the first, second and third
respondents of sub-s.45(2) of the
Trade Practices Act
, the applicant is
entitled to declaratory relief. I propose to hear from counsel as to the form
of the declaration or declarations
and also whether injunctive relief is
appropriate.
233. The applicant claimed damages pursuant to sub-s.82(2) of the
Trade
Practices Act
and other orders (undefined) pursuant to s.87 of the Act. There
is also a claim for damages at common law. Other than the claim for
exemplary
damages for conspiracy (which I have rejected), the applicant drew no
particular distinction between the damages to which
he claimed to be entitled
under the Act and at law. However the only damages to which the applicant is
entitled are under the Act.
234. The respondents argued that, in view of the moneys the applicant will
receive under his contract with S.A.C.U., there was no
justification for any
award of damages in favour of the applicant, whatever cause of action he might
succeed in. Certainly the evidence
did not warrant an award of other than
minimal damages. That is not directly due to the payments to be made under the
S.A.C.U. contract.
Rather, because of his commitment to the South African
tours, the applicant's availability for district cricket in the 1985-86 and
1986-87 seasons must necessarily be very limited. What may happen thereafter
is a matter of speculation.
235. I approach the assessment of damages on the basis that, because of the
applicant's disqualification from club cricket, he has
lost the very small
amount he stood to win from incentive payments in the 1985-86 season. If I am
right in the view I have taken
of matters arising under sub-s.45(2) and
restraint of trade, the applicant will not be precluded from playing district
cricket hereafter
by reason of r.2:38:1. Hence no further damage may be
suffered. Counsel for the applicant accepted that damages for future loss were
inappropriate. A reasonable assessment of the loss incurred would be, I think,
$250. The evidence did not justify any wider award
of damages; nor were
damages at the forefront of the applicant's case. Because of what was said by
counsel for the applicant when
the case began, a matter referred to earlier in
these reasons, no damages are payable by Subiaco Floreat Cricket Club (Inc.),
Claremont-Cottesloe
Cricket Club (Inc.), Gregory Bunney and Phillip Clifford.
Nor are damages payable by the fourth respondent for it was the conduct
of the
W.A.C.A. and the Associated Clubs that was in contravention of
sub-para.45(2)(a(i) of the
Trade Practices Act
.
236. As to my finding that r.2:38:1 as amended is void, the applicant is
entitled to declaratory relief to that effect against all
respondents. Whether
a declaration that the applicant has not been disqualified from playing
district cricket is necessary or appropriate
is a matter on which I shall hear
from counsel.
Summary of findings and conclusions
237. Because of the complexity of this matter, it may be helpful to set out
in a summary way my findings and conclusions. Before
doing so, I would just
say this. It is apparent from the evidence in this case and what has been said
and written over the last twelve
months that strong views are held as to the
propriety of the applicant and others playing cricket in South Africa. That is
not a
matter with which the Court is concerned. Its task is to find the
relevant facts and ascertain the relevant legal principles (relevancy
being
determined by the pleadings filed), then apply those principles to those
facts. That is the nature of the judicial process.
238. I now summarise, while making it clear that what follows is by way of
summary and must be read in the light of the reasons for
judgment generally.
(1) The Court had jurisdiction to deal with all the applicant's
claims.
(2) The W.A.C.A. is a trading corporation.
(3) None of the incorporated clubs is a trading corporation.
(4) At the meeting on 25 September 1985 there was no contract,
arrangement or understanding within sub-s.45(2) of the Trade
Practices Act 1974.
(5) At the meeting of the Cricket Council on 4 November 1985
there was an understanding between the W.A.C.A. and the
Associated Clubs.
(6) That understanding was one that, by reason of the decision to
amend r.2:38:1, the applicant would be prevented from playing
district cricket in Western Australia because of his
participation in the South African tour.
(7) The understanding reached at the meeting on 4 November 1985
contained an exclusionary provision in contravention of
sub-para.45(2)(a)(i) of the Act.
(8) The understanding did not contain a provision having the
purpose, or having or likely to have the effect, of
substantially lessening competition within
sub-para.(2)(a)(ii) of the Act.
(9) Rule 2:38:1 as amended at the meeting of the Cricket Council
on 4 November 1985 is in restraint of the applicant's trade
as a cricketer and the rule is void.
(10) The claim for breach of right to work fails.
(11) The claim based on procedural ultra vires succeeds.
(12) The claim based on conspiracy fails.
(13) The claim under the
Equal Opportunity Act 1984
fails.
(14) The claim based on bad faith and bias fails.
(15) The claim based on the deed of settlement fails.
(16) The applicant is entitled to damages in the sum of, $250,
payable by the first, second and third respondents, other
than Subiaco Floreat Cricket Club (Inc.), Claremont-Cottesloe
Cricket Club (Inc.), Gregory Bunney, Phillip Clifford.
(17) The applicant is entitled to declaratory relief in respect of
r.2:38:1 against all respondents.
239. I shall hear from counsel, at a time to be fixed, as to the form of
judgment to which the applicant is entitled in the light
of these reasons for
judgment including the question of injunctive relief. I shall also hear at
that time as to the question of costs.