Adamson, Brian Ronald v The West Australian National Football League (Inc)

[1978] FCA 54

CATCHWORDS

Contract arrangement or understanding containing

excluslonary provlslon or substantially essening

compe'clticnin a market - Football League and Club

Rules preventlng professlonal football player

from playlng wlth club of cholce - Interlocutory

Rellef - prlnclples for grant of - Trade Practlces

-- Act 1974 (as amended) s.45(2),(3); s.80 - Judiciary

- Act 1903 (Cth) s.78B.

BR1A.V RONALD ADAMSON v THE WEST AUSTRALIAN

PTATIONAI, FOOTBALL LEAGUE (INC.) & ORS

No. VG.18 of 1978

CORAM: Smlthers, Deane and Flsher JJ.

30 June, 1978

Sydney.

IN THE FEDERAL COURT OF AUSTRALIA )

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WESTERN AUSTRALIA DISTRICT REGISTRY No. VG.18 of 1978

)

DIVISION GENERAL 1

BETWEEN:

BRIAN RONALD ADAMSON

Appellant

- AND:

Respondents

ORDER

JUDGES FIAKING ORDER: Smlthers, Deane and Flsher JJ.

DATE OF ORDER:	30 June, 1978
WHERE MADE:	Sydney

THE COURT ORDERS THAT:

upon certain undertakings glven by the partles

(1) that the first and second named respondents and each of

them whether by their servants, agents or howsoever othervnse

be forthwith restrained from contlnulng to refuse to grant

a clearance to the appellant to the South Australlan

Natlonal Football League Incorporated pursuant to the

provlsions of the Interstate Clearance and Permit

Regulatlons of the Natlonal Football League Incorporated.

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( 3 . )	Service of t h i s order on the	respondents	be	dispensed
~ 1 1 t h .

( 3 ) T l n s order be passed and entered forthwith.

(4 ) Liber ty be reserved to a l l par t ies to apply as they may

be advlsed.

( 5 ) The respondents pay one-half of the appellant's costs of

thls appeal .

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I N THE	FEDERAL	COURT OF AUSTRFLIA	)
1

WESTERN AUSTRALIA	DISTRICT	REGISTRY	)	No. VG.18 of 1978
1

GENERAL D I V I S I O N 1

BETWEEN :

BRIAN RONALD ADAMSON

A p p e l l a n t

-	AND:
THE WEST AUSTRALIAN NATIONAL
FOOTBALL EAGUE ( I N C . ) , THE WEST
PERTH FOOTBALL CLUB ( I N C . ) and I
THE SOUTH AUSTRALIA3T NATIONAL
FOOTBALL EAGUE ( I N C . )

R e s p o n d e n t s

CORAM: S m l t h e r s , D e a n e and Flsher JJ.

JUDGMENT OF THE COURT

D e l i v e r e d by Smlthers J.:

Thls i s an appeal f r o m the refusal by N o r t h r o p , J. t o

make ln te r locutory orders, pendlng the fma l d e t e r m i n a t i o n

of the proceedlngs, restraining the respondents from glvmg

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effect t o thelr rules t o the extent t o which those r u l e s w o u l d

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operate t o prevent the N o r w o o d Football C l u b ( I n c o r p o r a t e d )

( " t h e N o r w o o d C l u b " ) p lay lng the appellant I n Its A u s t r a l i a n Ru les footbal l t e a m In the competltlon conducted I n A d e l a i d e

:

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by the thlrd-named respondent, the South Australlan Natlonal

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Football League ( Incorporated) ('the South Australldn Leayue" ) .

We shall for convenience refer to Australian Rules football as

"football" I

The matter 1 s of conslderable urgency in that on one vlev

the appellant wlll lose the posslbillty of playmg wlth the

Norwood Club durlng the 1978 season unless interlocutory ehef

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is granted today. In the circumstances, It is plalnly desirable

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that we give our decision forthwth wlthout benefit of the time

for conslderation wh'hlch we would otherwise have wlshed to enloy.

The appellant 1 s a professlonal football player who 1 s

resldent in South Auscralla. He wlshes to play football, durlng

the current football season, as an employee of th'e Eorwood Club.

That club IS, apparently, prepared to employ him as such a player

provlded it can do so irlthout breach of the rules of the South

Australian League of kihich It 1 s a member.

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Australlan League. The overall organlsatlon of football throughout

Australla has been descrlbed by counsel for the appellant as a

"pyramid-llke structure". In so far as the appellant 1 s concerned, ;

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he comes v l t h l n t h a t structure I n that having played wlth the

West Per th club he 1s reg is te red as a player w t h tha t c lub .

A t the top of the pyramld are t h e r u l e s of the Nat lonal

League. Beneath those rules come t h e rules of the var lous

bod les a f f l l l a t ed to the Na t iona l League, lncludlng the West

Australlan League and the South Australian League. Beneath

those a f f l l l a t ed bod les come the rules of the clubs vhlch

c o n s t l t u t e them, lncludlng both the V7est Perth Club (under the

West Australlan League), and the Norwood Club (under the South

Australlan League) -

I t i s unnecessary for u s t o examme m de ta l l t he p rov i s ions

and the ln te r locklng ef fec t of these varlous sets of rules. It

suff lces for present purposes to say that under these rules t h e

appellant 1 s p r e c l u d e d , s u b ~ e c t t o an appellate procedure wlthln

t h e r u l e s , from ever playlng footbal l wlth any club other than

the West Perth Club unless tha t c lub and a majorlty of the

other c lubs const l tut lng the West Australlan League consent to

h l s so doing , or the appel lan t f l r s t re f ra lns from playing football

f o r a perlod of three years. Thls poslt lon applles even though '

he l lves I n a s ta te o ther than Western Austral la , i s under no

subsls t ing contract wlth the West Perth Club and has no wlsh t o

pursue 111s occupatlon as a professlonal player of footbal l as an

employee of tha t c lub .

The prlmary case put on behalf of the appellant both before '

the learned Judge of f l r s t i n s t a n c e and t h l s c o u r t was and 1s

t ha t t he enforcement of t h e n rules by the respondents In so

f a r a s such r u l e s would In the clrcumstances of the case preclude

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the appellant from being employed as a team player by the

Noorwuud Club, would be contrary tu Llle p ' rov i s iu r l s of s.45( 2) (b) ,

(ii) of the Trade Practices Act 1974, (as amended) ("the Act")

in that it would Involve those respondents glvlng effect to an

arrangement or understandlng which has the purpose or has or 1 s

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llkely to have the effect of substantlally lessenlng "competltlon" 1.

vnthln the meanlng of that word as eflned by s.45(3) of the Act.

Before the learned Judge at flrst Instance It was argued

on behalf of the appellant that there were two alternatlve markets

wlnch were relevant for the purposes of s.45 of the Act. Those

markets were formulated, to adopt the summary whlch appears In

his Honour's ~udgment. as "a market throughout Australla In

which rootball clubs buy and sell the rights to the transfer

o€ football players and, alternatlvely, the market throughout

Australla in which footballers agree to play football for clubs

for monetary reward." Even lf the appellant succeeds In

establlshing the existence of these alleged "markets", he

plalnly faces a number of obstacles ~.vh~ch wl11 need to be over

come If he 1 s eventually to make good his case with respect to

these two alleged markets. One such obstacle results from the

deflnltlon of "services" contalned m s.4 of the Act which

excludes "rlghts or benefits belng the supply of goods or the

performance of work under a contract of service." Another In

the case of the flrst of such alleged markets 1s the need KO

show that the relevant rules have a purpose or eff ct of

substantlally lessenlng competlon, In a context where the exlstene

of both market and competlon within It 1 s Itself, at least In

part, the result of the very aspect of the system of which the

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appellant complains, namely, "the rlght" of a club to prevent

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a player who 1 s bound to it under the rules from playing with

any other club,. Hls Ho~lvur sLdLed that he was not sdtlsilerl

that a prlma facle case, in the sense xplained by the High

Court in Beecham GrouR Limited v Brlstol Laboratorles Pty.

Limited (1966) 116 CLR 616, of a purpose or effect of a

substantial lessenlng of competlon in relatlon to either of these	I
two markets had been made out.

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Before this court, the appellant repeated the argument by

reference to the two markets previously mwt oned and hls

primary case remalned unchanged in that his attack upon the

relevant rules was on the basls of an alleged infringement of

s.45(2)(b)(ii) of the Act. The prlnclpal argument advanced

before us m support of that case was however qulte dlfferent

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from the argument whlch was canvassed before the learned Judge

at flrst instance. The attack upon the Rules on the grounds

of alleged contraventlon of s.45(2)(b) 1 s clearly covered by

the Notice of Appeal. The evldentlary basls for the argument

advanced In its present form exlsted In the evidence led at first

Instance.

Accordlng to the principal argument now advanced before us,

the relevant markets were the markets in whlch the varlous clubs

wlthin the affiliated bodles of the Natlonal League competed

both for members and for spectators at the games or spectacles

In whlch they participated. Q

We have reached the concluslon that in all the clrcumstances L

the appellant should not be precluded from relymg on the new

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argument before us. Durlng the hearlng	of the appeal	we gave	i
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l e a v e t o t h e a p p e l l a n t t o supplement the ev ldence In re la t lon

t o t h e facts r e l e v a n t t o thls new argument by f i l l n g a new

a f f ldav l t . A s we have sald. however, the evldentlary basls f o r .

t h a t argument was a l ready In the mater ia l before us . .

A s t he argument was pu t , t he r e l evan t ru l e s (see I n

par t lcu lar r .33(7) of the r u l e s of the South Australlan League)

substant la l ly lessen competl t lon between the clubs competing

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wlthln the relevant markets m tha t they restrlct the ex ten t

t o which the c lubs may, for the purpose of lmprovmg the standard

and qua l l ty of the spec tac le or game i n whlch t h e i r teams

pa r t i c lpa t e , p l ay a player who would otherwise be ava l l ab le and

tvho was thought, for one reason or another, to be best sulted.

I t was argued, t o t ake the case of the Adelalde clubs, that

these corporatlons were, by observlng the relevant rules of the

South Australlan League, glvlng effect to an arrangement between ,

themselves that they would no t f ea tu re In the l r teams any player

who was reg ls te red wl th any other club wlthln the Natlonal

League unless the p layer	was released from the effect of such
r eg l s t r a t lon .

On behalf of the respondents, It was submit ted that the

markets t o whlch the appel lant re la ted hls submlsslons were no t ,

i n t he r e l evan t s ense , marke t s a t a l l : t ha t , even If they were,

t h e r e s t r i c t l o n s r e s u l t l n g from the observance of the rules

d ld not substant la l ly lessen competl t lon tnthln those markets ;

t h a t , i n any event , ne i ther the c lubs which employed teams, nor

t h e respondent Leagues, nor the Natlonal League were

"corporatlons" for the purposes of t he A c t : t h a t even If one

could ldent l fy a subs t an t i a l l e s senmg of competltlon In a

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relevant market, that lessenlng of competit lon vas outweighed

by the ove ra l l enhancement of competltlon whlch r e su l t ed from

the system embodled I n t h e r e l e v a n t r u l e s : t h a t , I n a l l t h e

clrcumstances, w e should not Interfere wlth the decision of the

~ u d g e a t f l r s t I n s t a n c e n o t t o g r a n t l n t e r l o c u t o r y rellef: and

t h a t , I n any event , we should refuse to grant lnter locutory

re l le f for the reason tha t we were precluded from so dolng by

the provls lons of s.78B of the Judiclary A c t 1903 ( C t h ) ( a s

amended). I t was further argued on behalf of the respondents I

t h a t even though the r e l evan t r e s t r i c t lons , acco rd ing to the

appellant's prlmary argument, were upon competitlon between

the clubs I n terms of t h e q u a h t y of t h e n p a r t l c l p a t l o n I n the ,

re levant games or spectacles , the excluslon m the de f ln l t l on o f

"services" t o whlch reference has already been made prevented

any b reach o f t he p rov i s ions o f s .45 (2 ) (b ) ( l i ) of t he A c t belng '

Involved.	See the de f in l t l on	of	"competlt lon"	contamed	ln
s .45 (3 ) .

In o rde r fo r t he appe l l an t t o be e n t l t l e d t o l n t e r l o c u t o r y

r e l l e f , It is necessary that he make out a prlma facle case I n

the sense explained by the Hlgh Court of Australia I n Beecham

Group Llmlted v Brls tol Laborator les Pty. Llmlted (supra). Thls t

Involves , as we understand the effect of what t h e n Honours

sa ld In tha t case , the appel lan t es tab l l sh lng tha t there a re

ser lous and c l l f f lcu l t ques t ions of lair or fact lnvolved I n t he

proceedlngs and tha t the appel lan t has a real prospect of

ul t imate success. It also involves the appel lant showlng t h a t ,

havlng regard t o conslderatlons such as the balance of convenlence,

lnter locutory rel lef should be granted. The learned ludge a t

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flrst	Ins t ance found tha t cons ide ra t lons r e l a tmg to the
balance	of convenlence favoured the appel lant . Thls r lndlng has

not been challenged by the respondents before us.

We have given careful conslderatlon to the submlsslon

made on behalf of the respondents that we should approach

the matter on t h e b a s l s t h a t we should only interfere with the

r e fusa l o f t he ~udge a t flrst lns t ance to g ran t i n t e r locu to ry

r e l l e f I f we were of t he view t h a t such r e f u s a l t o g r a n t r e l l e f

was clearly erroneous.

I n the ordlnary case, there 1 s no doubt much f o r c e I n

chat submlsslon. In the present matter, however, we have

permlt ted the appel lant to advance an argument which was not

advanced be fo re the ~udge of f l r s t I n s t a n c e and whlch was, i n

t he r e su l t and I n vlew of the clrcumstances m which h i s Honour

of necesslty dealt wlth the proceedmgs before hlm, not consldered

by hlm. The addltlonal evldence which we permi t ted to be placed

before u s on the appeal def lnes , wlth greater precls lon than

dld the evldence before his Honour, t he commerclal Interest of

t h e c lubs I n t h e t r a d l n g a c t l v i t l e s I n whlch, on the appe l l an t ’ s

argument, they are engaged.

I n t h l s s l t u a t l o n , w e th lnk lt necessary that we examlne

the argument whlch 1 s now advanced for ourselves and, I n t he

context of the approprlate pr lnclples , reach a dec is lon for 1

ourselves as to uhether the Issues involved i n t h a t argument are

su f f l c i en t ly complex and the appel lan t has suf f lc len t rea l

prospecr:	of	ul t lmate success to warrant the grant of mter locut-
o ry r e l l e f .

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We can see great force In a number of the arguments

advanced on behalf of the respondents and, If It were necessary

for us to reach a firm vlew as to what the ultlmate outcome of

the proceedlngs wlll be, \re would have no alternative but to

reserve our declslon. It is not, In the vlew we take, either

necessary, or Indeed, proper that we reach or express such a

flrm vlew at this stage of the proceedings. It 1 s only

necessary that, as has been sald, we be persuaded that there

are serlous and dlfflcult questions of fact or law involved m

the proceedlngs and that the appellant	has a real prospect of
ultimate success. We are so persuaded.

It follows that unless we are precluded from so doing by

the provislons of s.783 of the Judiciary Act, we are of the

opinlon that the appeal should be allowed and lnterlocutory

rellef should be granted.

In so far as the respondents' argument based on s.78B of

the Judlclary Act 1s concerned, we conslder that, in all the

clrcumstances, reasonable notlce has been glven to the relevant

Attorneys-General In compllance with the requirements of that

sectlon. In any event, we are of the vlew $hat the current

appeal constltutes, wlthln the meaning of s.73B(5), a proceedlng

relatlng to the grant of urgent relief of an interlocutory

nature and that the Interests of justlce clearly requlre that w

proceed to dlspose of the appeal wlthout delay. *

In the result, lt 1 s unnecessary that we consider whether

the appellant would, in any event, have been entltled to succeed

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m the appeal by reference to the arguments In relatlon to the

other markets whlch were propounded before the ludge	of flrst	r
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lnstance and whlch have been Lepeated before us by reason

of hls lnvoklng of the assoclated jurisdiction of the court

pursuant to the provlslons of	s.32(1) of the Federal Court of
Australla Act, 1976

The parties have agreed as to the appropriate undertaklngs

to be glben and orders to be made ln the event that we reach

the conclusion that the appeal should be upheld. Those

undertaklngs and orders have been reduced to writlng. They

clearly constltute a convenlent method of glvlng effect to our

declslon and we are prepared to accept the undertaklngs and

make orders in the form set out in that document.

SMITHERS, J: 1 suppose it now remalns for you gentlemen to glve us !

the approprlate undertaklngs whlch are set out In the document.

I take It that you do both glve us those undertaklngs?

MR. blEEN<EL: Yes. I am Instructed to glve the undertaklng set out I n

paragraphs 1 and 2 of the mlnutes, whlch I do give to the court

on behalf of the parties referred to.

I.1R. blEADOT.dS: Llkewlse, I glve the undertaklngs on behalf of the

respondents.

SMITHERS, J: In that event the sltuatlon 1 s that the undertaklngs

*

and orders are as follows:

(1)	Upon the appellant by hls counsel undertaklng to ablde
by any order which the court may make as to damages
in the evenr: that the court 1s of the oplnlon that the
respondents or any of them shall have suffered any by

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reason of t h e l n p n c t i o n h e r e m a f t e r set out which the

appellant ought to pay.

( 2 ) Upon the appel lant and the Norwood Football Club

Incorporated by their counsel undertak1ng:to slgn all

documents and take a l l s teps whlch are wlrhln their power I

to s lgn or take to e f fec t	the rec learance	of	the appel lant	,
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back t o t h e West Perth Football Club Incorporated In

the Western Australian Natlonal Pootball League Incorpor-

ated i n the event that the dlspute herem between the

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p a r t l e s 1 s fma l ly r e so lved by the court agalnst the

appel lant or I n the event t ha t t he Hlgh Court of Australla '.

makes the Order N l s i granted on 6 June 1978 absolute.	I.
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( 3 ) Upon the respondents by thelr counsel undertakmg to thls

day execute a l l documents and -Lake a l l s t e p s which a r e

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reasonably wl th ln then power to execute and take so a s t o

enab le the r eg l s t r a t ion th l s day of the appellant as a f o o t - .

bal l player of the Norwood Football Club Incorporated I n

i n accordance wlth the provlslons of Ru le 33 of the Rules

of t he South Australian Natlonal Football	League
Incorporated.

THIS COURT DOES ORDER t h a t t h e f i r s t and second named

respondents and each of them whether by the l r s e rvan t s ,

zgents or howsoever othermse be for thwlth restralned

from cont lnulng to re fuse to gran t a c learance to the

appel lan t to the South Australlan Natlonal Football League

Incorporated pursuant to the provislons of the Ipte*rstate

Clearance and Permlt Regulatlons of the National Football

Lcague Incorporated.

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(4)	Servlce of thls order on the respondents be dlspensed
with . ~
( 5 )	Thrs order be passed and entered forthwith.
( 6 )	Liberty be reserved to all partles to apply as they may
be advlsed.

The question arlses now as to whether either of you woald

llke to say anythlng as to costs.

PR. MERKEL: In my submmlsslon, thls 1 s an appllcatlon In xrhlch the

respondents ought to pay the appellant's costs. The reason I say I

that 1s that thls appllcatlon has been contested at all levels of !

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argument In these courts and the appellant has been successful in

seeklng the result he sought to achieve by the appeal. In those

clrcumstances, the costs ought to follow the event.

PR. P'BADOWS: On the basls that the court upheld the appeal, In my

submisslon there should be no order for costs agalnst the

respondents because It 1s apparent from the reasons of your

Honours that the case went off on a polnlr.which was not argued In

the court below, for that reason the respondents should not have

to bear the costs.

SMITHERS, J: In the Interval before returnmg to the court we dld give ,

some chought to this matter and we thought and contemplated that I

you would speak to us In the way you have done on the matter of

costs and we had declded what we would sa 7 If you dld.

Accordlngly, I have to say that, In n e w of the fact that

the appeal has, to no small extent, been concerned wlth an argument

which was not advanced by the appellant before the ludge of first ,

Instance, we consider the appropriate order for costs 1s that

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I c e r t l f y t h a t t h l s and t h e 1 2 precedmg

pages are a t r u e copy of t he Judgment of

the Court .

Assoclate to Fysher J.

Dated: 7.7.1978