Arfmas Pty Ltd v Victorian Football League

[1988] FCA 158

i

IN THE FEDERAL COURT	)	LIMITED DISTRIBUTION
OF AUSTRALIA	)
WESTERN	AUSTRALIA	)
DISTRICT	REGISTRY	)

GENERAL	DIVISION	1	WAG 38 Of 1986
B E T W E E N :	LTD	PTY	ARFMAS
Flrst Applicant MAURICE JOSEPH RIOLI

Second Applicant

and

VICTORIAN FOOTBALL LEAGUE

Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER:  FRENCH J.

DATE OF ORDER: 31 March 1988

WHERE MADE:	PERTH
THE COURT ORDERS	THAT:

1.	The proceedings be transferred to the Victorian	District
Registry, General Division.
2.	The motion ia otherwise dismissed.

T

3.         Each party is to bear its own costs of the motion.

Note: Settlement and entry of Orders is dealt with in
Order 36 of the Federal Court Rules.

I .

L- OUDGMENT No. l

IN THE FEDERAL COURT	)	LTMITED DISTRIBIJTION
OF AUSTRALIA	)
WESTERN	AUSTRALIA	)
DISTRICT	EGISTRY	1

GENERAL DIVISION 1 WAG 38 of 1986

B E T W E E N :	ARFMAS PTY LTD
First Applicant MAURICE JOSEPH RIOLI

Second Applicant

and

VICTORIAN FOOTUALL LEAGUE

Respondent

CORAM:  FRENCH J.

31 MARCH 1988

EX TEMPORE
REASONS FOR JUDGMENT
ON MOTION TO CHANGE VENUE

AND FOR SECURITY FOR COSTS

These proceedings are brought by a footballer and his

corporate manager. Maurice Rioli is a name well known in Western

Australian football circles. On 30 April 1986 he and his manager,

Arfmas Pty Ltd ("Arfmas"), commenced proceedings against the

Victorian Football League in the Western Australian Registry of

the Federal Court.

By their statement of claim, Rioli and Arfmas say that

he was resident in Western Australia and played football here for

South Fremantle Football Club for a number of years until 1981.

ne then transferred to Victoria and played	for the Richmond
Football Club	in the years 1982 to 1985 inclusive. In 1985, he

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says, Richmond's flnanclal dlfflcultles were such that it was unable to meet its commitments to him and agreed to release him to play wlth the Sydney Swans Football Club which, although based In

Sydney, is, like Richmond, a member O F the Victorian Football

League ( "VFL" ) .

According to the statement of claim Rioli and Arfmas

made agreements with successive controllers of the Sydney Swans

whereby, for a substantial remuneration, Rloli was to play for the

Club for three seasons in 1986, 1987 and 1988. He moved to Sydney

and resigned from hls employment with the Department	of	Youth,
Sport and Recreation	in Victoria. However, he alleges, and	it is

admitted, that the VFL refused to grant him a permit to play with

the Sydney Swans. The basis of that refusal, as set out in the

amended defence, was that the Sydney Swans had exceeded the limits

o n players' salaries permitted by VFL Rules. According to Rioll,

he then entered into new arrangements with Richmond in 1986 on
conditions much less favourable than those secured with the Sydney

Swans.

The statement of claim alleges that the VFL is a trading

corporation, formed in Victoria by a number of football clubs, including Richmond and the Sydney Swans, and that it conducts professional Australian Rules Football competitions for remuneration in Victoria, New South Wales, Western Australia and

Queensland. Rather unhelpfully, these allegations are neither

admitted nor denied in the defence.

Rioli and ArEmas allege that the conduct of the VFL In

refusi ng a permlt was in contravention of ss.45 and 47 of the Trade Practices Act and amounted to "an unlawful restraint O E

trade at common law". The conduct was also said to amount to

"intentional, unjustified and unlawful interference ... with a

contract" between Arfmas and Sydney Rules Pty LtL, the relevant

controller of the Sydney Swans. At this stage I make no comment

on whether the pleading recited discloses any cause of action,

although it is alleged by the amended defence that it does not.

On 2 May 1986, Muirhead J. made an interlocutory

Order directing the VFL to grant such permit as might be necessary
to enable Rioli to play for the Sydney Swans. That permit was

granted but, in the event, Rioli's arrangements with the Club fell

through and he reverted to Richmond. On 23 May a further order

was made by Muirhead J. rescinding the substantive part of the

order of 2 May so that Rioli could be permitted to play with

Richmond.

The application has progressed to the point hat

pleadings have been amended, particulars provided and discovery

and specific discovery given.

The VFL now moves for an order that the proceedings be transferred to the Victorian Registry of this Court. The motion

is Supported by an affidavit sworn by JeffKey Michael Browne, who

is the solicitor on record for the VFL. According to Browne,

whose affidavit was not sub~ect to any contradiction by way O F answering affidavit O L otherwise, he has enqaged senior counsel at the Melbourne Bar. He has interviewed and proofed a number of witnesses on advice Erom that counsel. Of those he has named only one, Brian Desmond Ward, a solicitor of Melbourne, as a person who will be called to give evidence. However, it is clear from his affidavit that the other persons named are potential witnesses.

In addition, he says that it may become necessary for the VFL to

call evidence from officers O E the Richmond Football	Club and the
nine other Victorian clubs engaged	in the competition. The VFL
has also engaged the services	of two Melbourne based economists as

expert witnesses; they are on retainer and the expense to the VFL

of bringing them to Perth would add substantially to the costs of

the action. It may	also be necessary,	it is said, to call
evidence from an officer	of the Victorian Department	of Youth,
Sport and Recreation and an officer	of	the Sydney Swans. All the

potential witnesses mentioned are resident in or about Melbourne,

save for the officer of the Sydney Swans who would, no doubt,	be
called from Sydney.

A c c o r d i n g t o Mr Browne, the cost of bringing these

witnesses to Perth would be substantial and a great deal of

expense would be associated with their travel and accommodation
which could be avoided if the matter were to be transferred to the
Victorian Registry of the Court.

There 1s no answering affidavit flled on behalf of

either Arfmas or R1011 to indicate what, if any, pre~ul?icp tbe applicants would suffer were the matter to be transferred, and what benefits they would derive from Its retention in the Perth Registry. It is common ground and, ln any event, a notorious fact, that Rioli is now playing football in Western Australia. It also appears, from the evidence, that the offlcers of Arfmas are resident in Western Australia. Beyond that, I am unaided by the applicants in my ability to assess the impact of the proposed change of venue upon their interests. The rather disturbing

explanation grven for the absence of that evidence was that the matter had not been attended to by the relevant solicitor in the

off ice of the sol	icltors for	the applicants, but no applicat	,ion
for an adjournment	was sought and,	after this lapse of time, it	is

doubtful that such an application would have been granted.

The notice for change of venue is brought by reference

to s.48 of the Federal Court of Australia Act and Orders 10 and 30

of the Federal Court Rules. Order 10 r.l(2)(f) empowers the Court

in any pending proceeding to:-

" ( f )	direct that the proceeding be transferred to a place at which there is a Registry other than the then proper place. Where the proceeding is so transferred, the Registrar at the proper place from which the proceeding is transferred shall transmit all documents in his charge relating to the proceeding to the Registrar at the proper place to which the proceeding is transferred".
Order 30 r.G provides that:-
"(l)	S u h ~ e c t to sub-rules ( 2 ) and ( 3 ) , unless the place
of trial has been fixed by the Court, the trial of
a proceeding shall be at the proper place.

( 2 ) The Court on the application of a party or of its

own motlon may direct hat he trial of a

proceeding be fixed at	a	place other than the
proper place.

( 3 ) In thls rule a reference to the trial of a

proceeding shall include a reference to any

lnterlocutory hearing in the proceedlng".

The term "proper place" 1s defined in 0.1 r . 4 as:-

""proper place"	in relation to any proceeding -
(a)	where there has been no transfer means the place at whlch the proceeding was commenced;
(b)	where there has been a transfer means the place to which the proceeding was transferred."

In TVW Enterprises Limited v Magna Techtronics

(Australia) Pty Ltd (1987) ATPR (Digest) 46,022, I held that the

criterion for determining whether or not the proceeding should be transferred to another venue was that enunciated by Pincus J. in

Hodder v The Australian Workers Union (1984) 4 FCR 541. That is

to say, the applicant for transfer must show a manifest

preponderance of convenience in favour of the proposed change. On
the material prksently before me which largely comprises the
uncontradicted evidence of the respondent, and in the absence of
any evidence from the applicants, I am satisfied that it has been
shown that there is a manifest preponderance of convenience in

favour of the Victorian Reqistry as the place	to which this
proceeding should b e transferred.	I propose to order that it be

transferred to that Registry. In so orderlng, I wish to make it

clear that if there are elements of any further interlocutory

proceedings or elements oE the trial itself whlch may conveniently

be heard in Perth, it is open to either party to make application

to an appropriate ludge for orders accordingly. At this stage

however, the point has been reached where the matter is

substantielly ready for trial and the balance of convenience is

manifestly in favour of it proceeding in Victoria. Sublect to

such adjqqtments as might be made by particular Orders in relation

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rlocutory proceedings or the venue for

epects of the trial, the appropriate course	of action
fer and I order accordingly.

ent also seeks an order that the first

ovide security for the costs of the respondent. In hat motion, there is filed an affidavit, again sworn

which he points out that the annual return of the

nt for the year ended 30 June 1986, shows an excess

S over assets and that share capital and reserves

is submitted by Mr Browne, in his affidavit, that

the company will not cover the cost of a successful

ffers his estimate that the costs associated with
the proceedings will be approximately $100,000 and

that the party/party component will be a7proximately S70,nOO.

That kind of qlobal statement faces the ciiEficulty that i t 1 5 not supported by any draft b l l l of costs and ordinarily, in cases such

a s t h l s , a detailed break-down oE the basis unon which the

estimate of costs is arrived at is expected. vowever, the figures

are not contradicted by any evidence from the applicants and I can, I thlnk, infer that the cost of conductlng the defence of the proceedings will certainly be substantial and w ~ l l , if the matter goes forward to trial, run into tens of thousands of dollars, even if it 1s not as high as the figures proposed by Mr Rrowne.

On the question of the delay that has occurred in

seeking this order, Mr Browne said that it has only now become

apparent to the respondent that the first and second applicants

are determined to proceed given that interlocutory steps are

nearing completion and the first and second applicants have	not
withdrawn. There	is nothing in the material to suggest that there

was any indication, at any stage in these proceedings, that the

first and second applicants were not determined to proceed and	In
the absence of any such indication,	I find it very difficult to

accept the explanation proferred. Nevertheless, accepting that

the costs will be substantial and that the company is not asset

rich, there are discretionary considerations bearing upon whether

an order for security should be made.

There are two sources of the power for making such an

order. One is s.56 of the Federal Court of Australia Act, the

Other which is relied upon in this caSe is sub-s.533(11 of the

Companies (k!este:n Australta) Code 1981, which p ~ 0 ~ 1 d ~ s : -

"Where a corporation is plaintiff in any action or other legal nroceedinq, the court havlng jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his defence, require sufficient security to be given

€or those costs and stay all proceedings until the

security is given."

That section can apply to proceedings in this Court by
virtue of s.79 of the Judiciary Act and, in that respect, I refer

to Bell Wholesale Company Pty Ltd v Gates Export Corporation 52

ALR 176, - Sent v Jet Corporation of Australia Pty Ltd 5 4 ALR 237.

I approach the discretion conferred by s.533 on the basis that it is a general discretion not fettered by any requirement for a predisposition in favour of a grant o f an order €or security for costs and have regard to various factors that were referred to by M r Templeman in support of the motion. One of those is the question that has to be taken into account in such an

application of whether the order sought would frustrate the

applicant's claim. In this case, I cannot assume that the order

sought would frustrate the first applicant's claim because there

1s absolutely no evidence as to the effect of such an order upon

its ability to prosecute the proceedings.

It is also open to the Court to take into account the
merits of the applicants' claim and, in that respect, M r Templeman

made reference to the reported view O F senlot counsel f o r the defence that the respondent has a qood defence to the? actlon. I do not think that that 1s a factor of any slqnlflcance 1n thls conslderation. What has to be considered is whether the clalm 1s bona fide and if , prima facie, it is completely lackinq in merlt or has questionable bona fides, then that is a factor in favour of the grant of security. As I said to Mr Stevenson in the course O E argument, I have considerable difflculty in extractlng from the facts pleaded in the amended statement of claim lust how it 1s that s s . 4 5 and 4 7 of the Trade Practices Act are said to apply to the case. However, I have not come to any concluded view on that matter. It is just an expression of difficulty and certainly not a view that would support a conclusion, at this stage, that the applicant's claim is without merit.

It is also relevant for the Court to consider whether, if the corporate applicant be impecunious, there is any evidence to show that that impecuniosity can be attributed to the respondent. If such is the case, it would weigh against an order for security. Here, there is no such evidence. Indeed, the first

applicant has had nothing to say of its finances, beyond such	submissions as Mr Stevenson put to me based upon the return
exhibited to Mr Browne's affidavit.

There is, however, a fourth factor, one which in this

case is critical, and that is the matter of delay. It is well established that if an application for security is to be made, it

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11.

must be made promptly - Foss Fxport Agency Pty 1,td v Trotman

(1950) 6 7 W.!:. (NSW) 1 , nuckley v R e n n e l l D e s l q n and Construction

Pty Ltd ( 1 9 7 4 ) 1 ACLR 3 0 1 . As I said, in discussing this

principle generally In Brian S. Fencott and Associates Pty Ltd v Eretta Pty Ltd (NO. WAG R3 of 1 9 8 4 : unrep.: French J.; 31/3 /87 at

3 9 - 4 0 ) :-

"The further a plaintiff has proceeded in an action and

the greater the costs it has been allowed to incur

without steps being taken to apply for an order for

security for costs, the more difficult it will be to persuade the Court that such an order is not, in the

circumstances, un€air or oppressive."

The first applicant is not assisted in the application

of this factor by its resounding silence on the question of any

prejudice which might arise from delay. However, the point has

been reached where almost all interlocutory proceedings are

complete. The case was commenced early in 1986 . It is now almost

ready for trial.	In my opinion, it is far too late in the day for
the respondent to seek an order for security for costs	from the
first applicant and, on that basis, I	propose to dismiss the
motion insofar as it seeks such an order.

I will therefore order that the proceedings be

transferred to the Victorian Registry, General Division and the

motion be otherwise dismissed. As to the costs of the motion, it seems to me that one could fairly regard this as something of a

draw, but I will hear the parties on that.

. 1 2 .

(The parties made submissions on the questions O E costs)

I propose to order simply that each party bear its own

costs of the motion.

I certify that this and the preceding eleven (11) pages are a true copy of the Reasons €OK Judgment of his Honour Justice French.

Date :

Counsel for the Applicants: Mr M.J. Stevenson

Solicitors for the Applicants: Jackson McDonald

Counsel for the Respondent: Mr A.J.	Templeman Q.C. with M K S.
scott
Solicitors for the Respondent: J.M. Browne h Co.,	by their agents
Stables h Co.
Date of Hearing:	31 March 1988

!

Date of Judgment:  31 March 1988