Astrodome Hire Pty Ltd v Victorian Football League

[1988] FCA 574

JUDGMENT No. . 5?%...8.&.....

IN THE FEDERAL COURT OF AUSTRALIA	)
VICTORIA DISTRICT REGISTRY	) No. VG333 of 1988
GENERAL DIVISION	1

BETWEEN:  ASTRODOME HIRE PTY. LTD.

Applicant

VICTORIAN FOOTBALL LEAGUE

Re.spondent

CORAM:	Jenkinson J.
PLACE:	I-felbourne
-	DATE :	6 September, 1988

FEDERAL COURT OF

REASONS FOR JUDGMENT

Application for interlocutory injunctions.

Last year the applicant conducted for profit an

entertainment in a park which adjoins the Melbourne Cricket

Ground, on the day	when	the respondent was conducting in that
enclosure the game for the premiership of the	1987	football

competition whrch the respondent controls. Thls game, called th

Grand Final, is attended by upwards of 80,000 people each year on

a Saturday afternoon in September. Except for	the members of two
clubs, those who enter the enclosure	to watch the game gain

admlttance by the production of a ticket to admit one person,

which the respondent sells. The applicant provided for each

person who was admitted to its entertainment one such a ticket.

I Admission to the entertainment afforded the entrant access to food

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and drink and some unspecified "entertainment" provided by the

applicant in one of several marquees. After enjoying these

benefits for several hours the entrant could walk through the park
and enter the Nelbourne Cricket Ground and watch the Grand Final.

Sale of the right to admittance to the entertainment and of the

concomitant beneflts (lncludingthe ticket admitting the holder to

the Melbourne Cricket Ground) was for	a sum of money. To a single
member of the public admittance to	a marquee called a corporate

club marquee was sold.	To a person who desired to select	the
persons who should be admitted	to a particular marquee	the
applicant sold the right	to occupation	of that marquee by not more

than 50 persons, together with the right of each of t ose persons

to.en]oy the provision of food, drink and ticket.

The IiIelbourne City Council has selected the applicant,

from tenderers which included the respondent, as grantee of the

only licence granted	to provide an entertainment of that kind in
the park on the day of the Grand Final this September.	It had
been represented to the Town Clerk by the Chairman	of the

Victorian Football League Commission, ROSS Oakley, that the

respondent and the football clubs which participate in the

football competition which the respondent controls had made an

agreement before 2 6 May 1988 in the following terms:

"As agreed, clubs will not sell multiple

tickets to organisations such as V-Line and

the	corporate tent village people, who are
going to on sell them to the publlc at	a
consrderable profit	as we believe this is

merely a sophisticated form of scalping.

Needless to say, any significant allocation of tickets by a club to one of these

organisations who are going to advertise them

as part of a package on offer to the public,

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will have their allocation and a penalty

allocation deleted from their internal sales

next season. "

In a letter dated 26 May 1988 which included that representation

Mr. Oakley observed:

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"I would like at thls point o Indicate that the VFL is not against the construction of a hospitality village in order to add colour to

the Grand Final event, but if there is going

to be	such a village then the VFL would be
looking to control it and run	it on behalf of

the clubs and club supporters."

In a letter dated 30 May 1988 to the clubs from Mr. Oakley which

specified the arrangements for the distribution of tickets of admittance to the final games, including the Grand Final, this year, the following passage appeared:

"2.4 Grand Final

Tickets will be sold to competing club

members only on the basis of one ticket

per membership ticket presented.

In order to assist the smooth sale o f

tickets Bass and VFL staff will be

available at various Bass outlets to

supervise the correct distribution of

tickets.

As indicated at the recent General

Managers' Meeting, we received a great deal of bad publicity as a result of tickets being sold to groups such as

V-Line and the Corporate Tent Village	L
Organisatlon.	As agreed, clubs will not

sell multrple tickets to organisations of this nature who are going to on-sell them to the public at a considerable profit,

as we believe	this	is merely a	. .
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sophisticated form of scalping.	. -
We are, of course, not opposed to clubs
allocating tickets to members of the club	;. . ?
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that are also Involved in lunches o r

breakfasts associated with the Grand

Final. However, these groups must	be
internal coteries	o r support groups of
the club.

Any club that has doubts about an

arrangement	thaey	may	be
contemplating	entering	into	should

contact the VFL for clearance. Needless

to say, any significant allocation of

tickets by a club to one of these

organisations who are golng	to advertise
them as part of a package on offer to	the

public, will have this allocation and a
penalty allocation deleted from their
internal sales next season.

To protect our members we believe we must get to a situation where finals tickets

are not made available to orqanisations -

outside the VFL structure that are . -

contemplating	their	on-sale	f o r	a	:
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prof i t . "

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After the grant of the licence by the Melbourne City

Council and after agents of the applicant had suggested to the respondent that the two corporations should co-operate in the

staging of the entertainment, Mr. oakley sent to the Managing

Director of a company associated with the applicant a letter dated

5 August 1988 which Included this passage:

"The VFL's	position in this matter is quite
clear.	We believe this Village should be run
by the VFL as	the owner of the event and we do

not believe that there is room for a third
party promoter in this equation, which on our
calculations will inflate the selling price by

at least one-third.

We are prepared to make an offer to your

organisation that would require you assigning

the rights to the Village to the	VFL for a
figure of $10,000.''
The applicant cannot easily attract customers	to its

entertainment unless it can provide them wi tickets to the Grand

Final. The applicant contends that	the respondent's direction, or
exhortation coupled with e threat	of a diminished allocation of
tickets to next year's Grand Final,	to the clubs that they refuse
to allocate tickets to the applicant is	a breach of s.46 of the
Trade Practices Act 1974.

Clubs are licensed by the respondent subject to the

condition that their articles of association prohibit "the issue

of multiple memberships", that is the holding by one person of

more than one membership. If, therefore, a club were to make

tickets available to the applicant's customers as members of that

club, some means would have	to be devised to enable the name, at
least, of each customer to be communicated to the club	so that he
or she could be admitted to membership. Alternatively,	a club

might, but for the prohibition of sales of tickets to the

applicant, allocate the tickets from	a stock which	is made
available to each club for sale	or gift, at	the club's discretion,
to persons the club desires to favour.	(If the club makes	a gift,

.it must pay the respondent the price of the ticket.)

Mr. Archibald P . C . , who appeared with Mr. Magee for the

respondent, submitted that the market suggested by the applicant

as that in which the respondent has a substantial degree of power

- the market for tickets to the Grand Final - had not been shown by evidence to be such "a market" as that word, where it first occurs in s.46(1), contemplates. I think there is a serious

question to be tried as to whether there be not a market in which

the buyers are consumers - persons who desire to obtain a ticket

for the purpose of using it to gain admittance to the Grand Final

- and the sellers are those willing and able to sell such tickets.

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To the objection by Mr. Archibald that there has not been shown to

be so confined a market and that the market might rather be for

admittance to football games, or to football games of certain

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kinds, I think it is probably a sufficient answer	to say that in
this country this Grand Final is	so special an occasion that a
market exists which	1s confined in the way the applicant suggests.

If there be such a market there can be no doubt that the

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respondent has a substantial degree of power in it, for all the

tickets are produced by the respondent and the first sale of every

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ticket is by the respondent. Yet the respondent is not the only
seller in the market. Those who are able to buy tickets from the

respondent may compete with the respondent for the custom of

buyers who are in the sense I have indicated consumers of the

tickets. Denial of tickets by the respondent to another seller is

in my opinion	a taking advantage by the respondent	of its power in
that market.

The applicant's case is that, in breach of s .46 , the

respondent has by its prohibition of sales of tickets to the

applicant taken advantage of its power in that market, which I will call the ticket market, for the purpose of eliminating or substantially damaging one of its competitors, namely the

applicant, in another market. This other market is the market for

provision on Grand Final day of entertainment before the game

commences at a place other than the Melbourne Cricket Ground for

persons who either are going to attend the game or desire for one

reason or another to associate at the place of ent rtainment with

other persons,	or other classes of persons, who will be attending
the entertainment. The sellers in this market are those who	.

provide, or aspire to provide, such entertainment and the buyers

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are those who either wish themselves to attend the entertainment
o r who wish to procure for others, as a favour to those others,

the right to attend the entertainment.

If there be such a market, the competitors in it are,

according to the evidence before me, presently very few. There

was evidence that North Melbourne Football Club, one	of the clubs
which participate in the football competition,	has for some years

provided such an entertainment. For the price it will charge this

year that club provides, not only a breakfast in a hotel	at which
celebrities will	be present, but also a ticket to the Grand Final.

It is in my opinion seriously arguable that the "other market"

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suggested by counsel for the applicant has an existence, even if

it be new born. Even if a ticket to the Grand Frnal be not an essential component part of that which is the subject of that

other market, the ticket is on the evidence a powerful inducement

to the customer, and it cannot be doubted that inability to offer

l	the ticket would substantially damage a seller who was competing
in that other market. Although the respondent has not yet itself
provided an entertainment of the kind which is the subject of the
market, its attempt to win the llcence of the Melbourne City
Council as well as other evidence of its aspiration to provide
such an entertalnment shows it to be a competitor in that market.

Mr. Archibald submitted that the evidence showed no

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purpose in the respondent to achieve any of the effects specified

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in paragraphs (a), (b) and (c) of sub-section 46(1). The

respondent's object was, it was submitted, to ensure, so far as it

could, that	a "consumer" of a Grand Final ticket would pay no more
for his ticket than the price fixed	by the respondent, and that

the members of the clubs which participated in the competition

would have access to tickets in accordance with a fair and orderly

allocation system, and that members of the public who were not

club members would enjoy similar benefits, but subject to the

preference which was accorded to club members.	It was to achieve
that purpose that sales were prohlbited to such	as the applicant,

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who would add to the respondent's price of a ticket to the Grand

Final enough to ensure that he price payable for the

entertainment and the ticket to the Grand Final yielded	a profit
to him who charged that latter price, it was submitted. If	a

League football club charged a price for entertainment and Grand

Final ticket which yielded the club a profit, as it was suggested

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that the North Melbourne Football Club did, the profit was , .

committed to the good of the club's members and of the competition

and of Australian Rules football, objectives which it was the

I	respondent's function to pursue, according to the submission. If
the respondent itself were to provide entertainment, no ticket
sale linked to admission to that entertainment was contemplated,
according to evldence on behalf of the respondent.

On the whole of the evidence there is, as I find, a

serious question to	be tried as to whether a substantial purpose
of the respondent was to damage substantially the applicant as	a

competitor of the respondent in the "other market". Such a purpose may have co-existed with other purposes of the kind to

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which some of the evidence	- and by submission,	Mr. Archibald -
pointed.

Discretionary considerations on balance lead to the

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conclusion that the respondent be restrained from attempting to

prevent acquisltion by the applicant of Grand Final tickets this
year. The principal detriments to the respondent which the grant
of interlocutory relief may cause are, first, the weakening of
that system whlch the respondent claims to be directed to
ensuring, inter alia, that a "consumer" of a Grand Final ticket

should pay no more for his ticket than the price fixed by the

respondent, unless what he pays in excess of that price goes into

the coffers of a club engaged in the football competltion which the respondent controls, and, second, che public disapprobation of the respondent which the sale of tickets, by persons other than

the respondent, in conjunction with other benefits, for prices

which are believed to yield profits to the sellers is thought

likely to excite. If the applicant fails in this proceeding the

weakening of the system will be transient. The respondent will be

able to preserve itself from public dispprobation by making it

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well known that	it has been constrained by curial order to suffer
what it would otherwise have prevented. The applicant is likely,

if it cannot supply tickets, to sustain, in addition to a

calculable loss, impairment of the goodwill It has been acqulring

and would, if it could supply tickets, be acqulring in the conduct . .

of the business of providing entertainments associated with other

events. That impairment might well prove incapable of reasonably

accurate monetary evaluation. Further, if there has been a	, >
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contravention of s . 4 6 in which the. respondent proposes to

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persevere, there 1s a public interest in restraining the

! contravention. As I have indicated, there is in my opinion a

serious question of such contravention to be tried.

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It will be ordered that until after the	1988 premiership	I .
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of the Victorian Football League has been decided or until further

order in the meantime the respondent be restrained whether by L .-

itself its servants or agents o r otherwise howsoever from -

(a) withholding delivery to a Victorian Football League

club of any ticket of admlttance to a football game known as the

Victorian Football League 1988 Grand Final for a reason which, o r

for reasons any one of which, involves consideration	of delivery
thought to have been made or thought likely to	be made by that

club or by a servant or agent of that club of a ticket of

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admittance to such a football game to the applicant or to any

other person at the request of the applicant; and

(b) attempting by any means whatever, except by

referring to a condition of a Vlctorian Football League club's

licence concerning multiple membership, to dissuade a Victorian
Football League club	o r any servant or agent of such a club from
delivering a ticket of admittance to such	a football game to the

applicant or to any other person at the request of the applicant.

It is to be hoped that no misunderstanding of the effect

of these orders arises : they do not free a club or a servant o r

agent of a club from any contractual obligation. The reference to

one condition of a club's licence has been made because the

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Court's attention was directed to that particular condition by e

of the parties to this proceeding, not because the Court has .

undertaken any independent enquiry to determine whether there are

contractual obligations of a club affecting the club's

transactions, with respect to tickets, in which the appllcant is

involved.

The orders will	be made upon the applicant's giving the	1.	.
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usual undertaking as to damages. Each	p rty's costs of the claims	I
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for interlocutory relief will be reserved.

I certify that this and the 10

preceding pages are a true copy of the Reasons for Judgment herein of

Honourable	the Justice Mr.
Jenkinson.

Associate

Dated: 6 September, 1988 F

Counsel for the Applicant Mr. R. Merkel P.C. and Mr. M.R.

Shatin .<

Solicitors for the Applicant :  Testart Robinson & Pitts

.

Counsel for the Respondent	:	Mr. A.C. Archibald Q.C. and Mr.	I .
F.N. Magee	:

Solicitors for the Respondent: J.M. Browne & Co.

Dates of Hearing 24, 25, 26 and 29 August, 1988