De Belin v Australian Rugby League Commission Limited
[2019] FCA 688
•17 May 2019
FEDERAL COURT OF AUSTRALIA
De Belin v Australian Rugby League Commission Limited [2019] FCA 688
File number: NSD 309 of 2019 Judge: PERRY J Date of judgment: 17 May 2019 Catchwords: CONTRACTS – restraint of trade – where applicant is a professional rugby league player contracted by a club to play rugby league in the National Rugby League (NRL) Competition – where applicant licenced his name, image and reputation in his playing contract – where applicant charged with aggravated sexual assault in company – where applicant has pleaded not guilty but charges are not yet determined – where the applicant was automatically stood down from playing in the NRL Competition under a new rule automatically subjecting players charged with criminal offences punishable by a maximum penalty of 11 years to a “no-fault stand down condition” – where player stood down on full pay and permitted to continue to train with his club – whether the new rule was reasonably necessary to protect the legitimate interests of the respondents, having regard to the seriousness of the restraint imposed upon the player – where the evidence established a clear and present danger to the legitimate interests of the respondents – whether the new rule imposed an indefinite condition – whether the new rule operated in a relevantly retrospective way – where no opportunity for the applicant to make submissions or seek review of the application of the no-fault stand down condition – whether real danger of contempt of court if the NRL were to determine whether there had been a breach of the NRL Code of Conduct – application dismissed
TORTS – whether the imposition of the new rule constituted an unlawful interference with the applicant’s Playing Contract with his Club – whether the applicant had established any loss or damage as a result of the no-fault automatic stand down condition – where no intention established to induce or procure the interference in the Playing Contract – where the NRL Rules and interlocking contractual matrix provided that players are bound by the NRL Rules as amended from time to time
CONSUMER LAW – whether, before the new rule was adopted, the respondents had made misleading or deceptive statements in breach of s 18 of the Australian Consumer Law (ACL) – where the representations are not properly pleaded – whether any loss or damage established
CONSUMER LAW – whether, in imposing the new rule, the respondents engaged in unconscionable conduct contrary to s 21 of the ACL
Legislation: Australian Consumer Law s 18, 21, 22
Federal Court of Australia Act 1976 (Cth) s 21
Evidence Act 1995 (Cth) s 137
Restraints of Trade Act 1976 (NSW) s 4(1)
Federal Court Rules 2011 (Cth) r 16.02, 16.42
Cases cited: Adamson v New South Wales Rugby League Limited (1991) 27 FCR 535
Adamson v New South Wales Rugby League Limited (1991) 31 FCR 242; (1991) 103 ALR 319
Adamson v West Perth Football Club (1979) 27 ALR 475
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26
Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Ltd (1973) 133 CLR 288
Annetts v McCann (1990) 170 CLR 596
Ansett Transport Industries (Operations) Pty Limited v Commonwealth (1977) 139 CLR 54
Arnautovic v Cvitanovic [2011] FCA 809; (2011) 199 FCR 1
Australian Competition and Consumer Commission vColes Supermarkets Australia Pty Limited [2014] FCA 634; (2014) 317 ALR 73
Australian Competition and Consumer Commission v Medibank Private Limited [2018] FCAFC 235
Australian Competition and Consumer Commission v Oticon Australia Pty Limited [2018] FCA 1826
Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640
Australian Parking and Revenue Control Pty Ltd v Reino International Pty Ltd [2016] FCA 744
Avenia v Railway & Transport Health Fund Ltd [2017] FCA 859; (2017) 272 IR 151
Banque Commerciale SA (en liq) v Akhil Holdings Limited (1990) 169 CLR 279
Beetson v Humphreys (unreported, Supreme Court of New South Wales, David Hunt J, 30 April 1980)
Boase v Seven Network (Operations) Ltd [2005] WASC 269
Buckley v Tutty (1971) 125 CLR 353
Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60; (2004) 218 CLR 592
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304
Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389
Daebo Shipping Company Ltd v The Ship Go Star [2012] FCAFC 156; (2012) 207 FCR 220
Director of Public Prosecutions (Cth) v Wran (1987) 7 NSWLR 616
Downe v Sydney West Area Health Service (No 2) [2008] NSWSC 159; (2008) 71 NSWLR 633
Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82
Grieg v Insole [1978] 1 WLR 302
Hammond v Commonwealth (1982) 152 CLR 188
Harrington-Smith v Western Australia (No 2) [2003] FCA 893; (2003) 130 FCR 424
Henville v Walker [2001] HCA 52; (2001) 206 CLR 459
Ho v Powell [2001] NSWCA 168; (2001) 51 NSWLR 572
Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41
Hughes v Western Australian Cricket Association (Inc) (1986) 19 FCR 10
Industrial Alliance Life Insurance Company v Cabiakman [2004] 3 SCR 195
Informax International Pty Ltd v Clarius Group Ltd [2012] FCAFC 165; (2012) 207 FCR 298
Jarratt v Commissioner of Police [2005] HCA 50; (2005) 224 CLR 44
Jones v Dunkel (1959) 101 CLR 298
Maggbury Pty Limited v Hafele Australia Pty Limited [2001] HCA 70; (2001) 210 CLR 181
March v E & M H Stramare Pty Limited (1991) 171 CLR 506
McHugh v Australian Jockey Club Ltd [2014] FCAFC 45; (2014) 314 ALR 20
Mikaelian v Commonwealth Scientific and Industrial Research Organisation [1999] FCA 610; (1999) 163 ALR 172
Mirror Newspapers Limited v Harrison (1982) 149 CLR 293
National Coal Board v Galley [1958] 1 WLR 16; 1 All ER 91
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Company Ltd [1894] AC 535
Orton v Melman [1981] 1 NSWLR 583
Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; (2015) 236 FCR 199
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Peters (WA) Limited v Petersville Limited [2001] HCA 45; (2001) 205 CLR 126
Priest v New South Wales [2006] NSWSC 12
Queensland Co-operative Milling Association v Pamag Pty Limited (1973) 133 CLR 260
RAIA Insurance Brokers Limited v FAI General Insurance Co Limited (1990) 41 FCR 164
Riverwood International Australia Pty Ltd v McCormick [2000] FCA 889; (2000) 177 ALR 193
Roads and Traffic Authority v Royal [2008] HCA 19; (2008) 82 ALJR 870
S & V Nominees Pty Ltd (in liq) v Rabobank Australia Limited (No 2) [2011] FCA 1039
Schellenberg v Tunnel Holdings Pty Ltd [2000] HCA 18; (2000) 200 CLR 121
Trade Practices Commission v Legion Cabs (Trading) Co-op Society Ltd (1978) 35 FLR 372
Truth About Motorways Pty Limited v Macquarie Infrastructure Investment Management Limited [2000] HCA 11; (2000) 200 CLR 591
Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (1998) 42 IPR 1
Waddell v mathematics.com.au Pty Ltd [2013] NSWSC 142
Wardley Australia Limited v Western Australia (1992) 175 CLR 514
Watson v Foxman (1995) 49 NSWLR 315
Woolworths Ltd v Olson [2004] NSWCA 372
Zhu v Treasurer (NSW) [2004] HCA 56; (2004) 218 CLR 530
Date of hearing: 15-18 April 2019 Date of last submissions: 24 April 2019 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 405 Counsel for the Applicant: Mr M L D Einfeld QC with Mr B Dean Solicitor for the Applicant: Pikes & Verekers Counsel for the Respondents: Mr A Sullivan QC with Mr O Jones Solicitor for the Respondents: Kardos Scanlan ORDERS
NSD 309 of 2019 BETWEEN: JACK DE BELIN
Applicant
AND: AUSTRALIAN RUGBY LEAGUE COMMISSION LIMITED (ACN 003 107 293)
First Respondent
NATIONAL RUGBY LEAGUE LIMITED (ACN 082 088 962)
Second Respondent
JUDGE:
PERRY J
DATE OF ORDER:
17 MAY 2019
THE COURT ORDERS THAT:
1.The application is dismissed.
2.The applicant is to pay the costs of the respondents as agreed or assessed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
PERRY J:
1 INTRODUCTION
[1]
1.1 Overview of the issues
[1]
1.2 Summary of conclusions
[15]
2 WITNESSES
[16]
2.1 Overview
[16]
2.2 Principal witnesses called by Mr de Belin
[23]
2.2.1 Mr Timothy Lythe, COO, RLPA
[23]
2.2.2 Mr Stephen Gillis, Player Management Agent
[24]
2.3 The respondents’ principal witnesses
[26]
2.3.1 Mr Todd Greenberg, CEO, NRL
[26]
2.3.2 Mr Andrew Abdo, Chief Commercial Officer, NRL
[29]
2.3.3 Mr Bart Campbell, Chairman, Melbourne Storm
[31]
2.3.4 Mr Kevin Alavy, Managing Director, Futures
[33]
3 THE ARLC, NRL, RLPA AND THE NRL COMPETITION
[38]
4 THE CONTRACTUAL REGIME BETWEEN THE ARLC, THE NRL, THE CLUBS AND THE PLAYERS
[45]
4.1 Key documents comprising the contractual matrix
[45]
4.2 The Club Licence Agreement
[49]
4.3 The Playing Contract
[55]
4.4 The NRL Player Registration Application
[60]
4.5 The Collective Bargaining Agreement between the RLPA and the NRL
[64]
4.6 The NRL Rules and their place in the contractual matrix
[68]
4.6.1 Overview of the NRL Rules
[68]
4.6.2 The stated application of the NRL Rules as amended from time to time
[79]
4.6.3 What is the status of the Rules within the contractual matrix between the ARLC, the NRL, the clubs and the players?
[86]
4.7 Key concepts emerging from the contractual matrix
[97]
5 EVENTS LEADING TO THE MAKING OF THE NEW RULE
[103]
5.1 Preliminary
[103]
5.2 Revenue growth in the NRL Competition
[104]
5.3 The relationship between the values for which the NRL stands, its reputation and its financial interests
[112]
5.4 The problem of sexual and domestic violence against women within the NRL and the “summer from hell”
[127]
5.5 The charge laid against Mr de Belin on 13 December 2018 and subsequent reporting of detailed allegations comprising the basis of the charge on 12 February 2019
[137]
5.6 Reaction of fans
[147]
5.7 Reaction of NRL Competition sponsors and broadcasters
[155]
5.8 Impacts reported by the NRL clubs
[160]
5.9 Escalating concerns within the ARLC
[172]
5.10 Preparation of the recommendation for the Board of the ARLC and the RLPA’s position as communicated on 21 February 2019
[181]
5.11 The meeting on 27 February 2019 suggesting that Mr de Belin stand down voluntarily
[189]
5.12 Adoption of the new policy by the Board of Directors of the ARLC
[193]
5.13 The press conference on 28 February 2019 announcing the ARLC’s new policy
[195]
5.14 Responses to the new policy
[199]
5.15 Further consultation by the ARLC and the NRL with the RLPA following the announcement of the new policy
[201]
5.16 The amendment to the NRL Rules to insert rule 22A
[205]
6 ALLEGED RESTRAINT OF TRADE
[208]
6.1 Relevant principles
[208]
6.2 The reasonableness of the restraint imposed by the new rule
[226]
6.2.1 Approach to the issue in light of the relevant principles
[226]
6.2.2 The effect of the new rule on Mr de Belin and the impact of the severity of the restraint on his interests in approaching the reasonableness issue
[228]
6.2.3 What are the legitimate objects of the ARLC and the NRL sought to be protected by the restraint imposed by the new rule?
[238]
6.2.4 What is the degree of danger to the interests of the ARLC and NRL established by the evidence?
[245]
6.2.4.1 Did the respondents’ evidence about the dangers facing the ARLC and NRL rise above hearsay and speculation?
[245]
6.2.4.2 The evidence establishes a clear and present danger to the legitimate interests of the ARLC and the NRL
[257]
6.2.5 Is the restraint imposed by rule 22A upon Mr de Belin no more than is reasonably necessary or adequate to protect the legitimate interests of the ARLC and the NRL?
[268]
6.2.5.1 The issues
[268]
6.2.5.2 The decisions in Hughes and the World Series Cricket Case distinguished
[271]
6.2.5.3 Additional aspects of the new rule relevant to an assessment of its reasonableness
[285]
6.3 Would it be contrary to public policy to enforce the new rule on the grounds that the RLPA had not consented or been adequately consulted?
[305]
6.4 Conclusion on restraint of trade
[308]
7 THE CLAIM OF TORTIOUS INTERFERENCE WITH THE PLAYING CONTRACT
[309]
7.1 The claim
[309]
7.2 Relevant principles
[312]
7.3 The claim of tortious interference must be dismissed
[316]
8 ALLEGED MISLEADING OR DECEPTIVE CONDUCT CONTRARY TO S 18 OF THE ACL
[328]
8.1 Relevant principles
[328]
8.2 The issues
[330]
8.3 The difficulties in identifying the precise representations said to contravene s 18 of the ACL
[341]
8.4 Are the alleged conduct representations established?
[352]
8.5 Is the alleged suspension representation established?
[366]
8.6 Has the applicant established that he suffered loss or damage if the misleading or deceptive representations were made?
[372]
8.7 Should the grant of declaratory relief be refused in any event?
[378]
9 ALLEGED UNCONSCIONABLE CONDUCT CONTRARY TO S 21 OF THE ACL
[382]
9.1 Relevant principles
[382]
9.2 A threshold issue: does s 21 of the ACL apply?
[388]
9.3 Is there any evidence of loss or damage?
[392]
9.4 Did the respondents engage in unconscionable conduct in any event?
[393]
10 CONCLUSION
[405]
1. INTRODUCTION
1.1 Overview of the issues
The first respondent, the Australian Rugby League Commission Limited (ARLC), is the controlling body and administrator of the game of rugby league football in Australia. The ARLC is responsible for the overall strategic direction of the game of rugby league in Australia and for ensuring that the game is fostered and properly funded at all levels. In particular, it offers an established system for rugby league competitions known as the NRL Competition which is the national (and international to the extent of New Zealand) elite men’s rugby league competition in Australia. The NRL Competition is operated and managed by the second respondent, the National Rugby League Limited (NRL), a wholly controlled subsidiary of the ARLC. The ARLC and the NRL are companies limited by guarantee and are not-for-profit entities.
St George Illawarra Rugby League Football Club Pty Ltd (St George Illawarra) is one of the clubs licensed by the NRL to participate in the NRL Competition. The applicant, Mr Jack de Belin, is a professional rugby league player who is contracted by St George Illawarra to play rugby league in the NRL Competition. Since 2016 he has played for New South Wales Country in the annual City vs Country rugby league matches and for NSW in the State of Origin rugby league games. He turned 28 years of age in March 2019 and is in the second season of a three year contract with St George Illawarra. He will be 29 when his playing contract with St George Illawarra comes to an end.
Mr de Belin was charged on 13 December 2018 with one count of aggravated sexual assault in company of a 19 year old woman which allegedly took place on 9 December 2018 in New South Wales (the charge). He has pleaded not guilty to the charge and continues to maintain his innocence. The allegations against Mr de Belin have received extensive media coverage across Australia. It is important to emphasise at the outset that the question of Mr de Belin’s innocence or guilt does not arise in this proceeding and nothing in these reasons should be taken as addressing or commenting upon that question. Mr de Belin’s guilt or innocence will be tried in due course in another court, and in the meantime he is entitled to the presumption of innocence as the respondents accept.
When Mr de Belin was charged, the practice of the NRL was to permit players charged with criminal offences to continue to play in the NRL Competition pending the determination of the player’s guilt or innocence by a court. Subsequently, however, at a meeting on 28 February 2019, the Commission resolved unanimously to adopt a policy that players facing serious criminal charges no longer be permitted to continue to participate in the NRL Competition pending the determination of the charge (the new policy). In recommending this change to the Board of the Commission, Mr Todd Greenberg, the Chief Executive Officer (CEO) of the NRL, took into account a range of considerations including his assessment that if Mr de Belin and any other player facing a similarly serious criminal charge were permitted to play, this would be likely to cause significant damage to the reputation of the NRL Competition and the game of rugby league generally, and financial damage. The new policy was implemented by an amendment to the NRL Rules made on 11 March 2019 by the Board of the NRL to insert rule 22A (the new rule) three days before the 2019 season commenced (exhibit R6 at p. 11).
The new rule provides that where a player is charged with a “Serious Criminal Offence”, being defined as an offence punishable by a maximum penalty of 11 years’ imprisonment or more, the player will automatically be subject to a “No-Fault Stand Down Condition” on full pay until the relevant criminal offence has been determined by the court or withdrawn. In the case of players charged with a criminal offence carrying a lesser maximum penalty, a discretion is conferred on the CEO or Chief Operating Officer (COO) of the NRL to impose a no-fault stand down condition. In either case, for so long as a player is subject to the no-fault stand down condition, the player is precluded by rule 22A from participating in the NRL Competition and other competitions including the Representative Competitions, but is permitted to continue to train with his club’s training squad and is entitled to be paid the remuneration to which he is entitled under his Playing Contract.
These proceedings were instituted on 6 March 2019 after the announcement by the ARLC of the new policy. Following the making of the new rule and receipt on that day of a notice from the CEO of the NRL advising Mr de Belin that he had been stood down under the new rule, Mr de Belin filed an amended originating application and amended statement of claim (ASOC) on 20 March 2019.
The trial was set down for an expedited hearing and heard over four hearing days with extended sitting hours commencing on 15 April 2019. Over 3000 pages of evidence was filed with the bulk of the evidence being filed by the respondents who bore the onus of establishing the reasonableness of the restraint of trade, as I later explain.
Mr de Belin’s claims may be summarised as follows:
(1)The new rule is an unlawful restraint of trade (ASOC [29]-[39]).
(2)The imposition of the new rule constitutes a tortious interference with the Playing Contract between Mr de Belin and St George Illawarra (ASOC [40]-[41]).
(3)The respondents engaged in misleading and/or deceptive conduct in contravention of s 18 of the Australian Consumer Law (the ACL), being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the CCA) (ASOC [15]-[24]).
(4)The respondents have engaged in unconscionable conduct in relation to Mr de Belin in connection with the supply or possible supply of services by the respondents to the applicant and vice versa contrary to s 21 of the ACL (ASOC [25]-[28]).
I note that in closing address, Mr de Belin did not press an allegation of a lack of good faith by the respondents which had been pleaded as an aspect of the alleged unconscionable conduct (T478.33-35).
Among other things, by his prayer for relief Mr de Belin seeks declarations of the alleged contraventions of the ACL under s 21 of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) and a declaration that the new rule is void under s 22 of the FCA Act, together with injunctive relief to restrain the respondents from relying upon the new rule as it applies to him. Mr de Belin also seeks damages, including for damage to his reputation and for hurt feelings and anxiety. A claim for exemplary damages was abandoned in closing submissions. Further, a claim for aggravated damages was not pressed insofar as damages were sought for anxiety and stress (T411.1-16).
The central challenge by Mr de Belin is to the new rule itself. Importantly, it is accepted by the respondents that the new rule imposes a restraint of trade, being a restraint relevantly upon Mr de Belin’s ability to pursue his career as a professional rugby league player in Australia. The question therefore is whether that restraint is lawful. This requires an assessment of whether the new rule is objectively reasonable in the relevant circumstances, including in the context of the contractual arrangements between the parties. If those contractual arrangements expressly contemplate and provide for the imposition of the restraint of trade on Mr de Belin’s capacity to play, then the respondents also contend that the new rule could not logically constitute a wrongful interference with the contractual arrangements between the parties.
Furthermore, as the respondents submit, the allegation of unconscionability is pleaded in the ASOC so as to be, in effect, “parasitic” upon Mr de Belin succeeding in his other claims (Respondents’ Closing Submissions dated 18 April 2019 (RCS) at [69]). Specifically, Mr de Belin pleads that the respondents engaged in unconscionable conduct within the meaning of s 21 of the ACL by reason among other things of the respondents’ alleged misleading and deceptive conduct and conduct in restraint of trade: see ASOC at [25](d),(e),(l) and [25A].
Finally, the breaches of s 18 of the ACL relate to alleged conduct which preceded the making of the new rule on 11 March 2019. Mr de Belin alleges that, prior to that date, the respondents falsely represented that:
(1)they had suspended or stood down Mr de Belin from participating in the NRL Competition pending the determination of his criminal charges; and
(2)they had formed the view that Mr de Belin was guilty of the alleged offence, and had engaged in conduct warranting his immediate suspension as a player for the Club in breach of the NRL Code of Conduct, and that had brought the game of rugby league into disrepute.
While the question of the quantification of any damages was to be heard in the second stage of the trial depending upon the outcome of the first, the applicant accepted that damages for misleading and deceptive conduct “would not be vast” (T397.44).
1.2 Summary of conclusions
For the reasons set out below, the challenge to the new rule as an unlawful restraint of trade is dismissed. The new rule, as it purported to apply in the circumstances of this case, was reasonably necessary to protect the legitimate interests of the ARLC and the NRL, notwithstanding the seriousness of the restraint imposed upon Mr de Belin. The claims of unlawful interference with Mr de Belin’s Playing Contract and of breaches of ss 18 and 21 of the ACL are also dismissed.
2. WITNESSES
2.1 Overview
In support of his application, Mr de Belin relied upon the following affidavits:
(1)Mr Robert John Tassell, solicitor, sworn on 8 March 2019 and 19 March 2019 (Tassell 1 and 2 respectively);
(2)Mr Timothy Lythe, COO, Rugby League Players Association (the RLPA), sworn on 8 March 2019 (Lythe); and
(3)Mr Stephen Joseph Gillis, Player Management Agent, sworn on 19 March 2019 (Gillis).
I note that Mr de Belin did not give evidence. Mr Lythe and Mr Gillis were cross-examined and gave clear and credible evidence. None of the applicant’s witnesses’ credibility was in issue.
The respondents relied upon the following evidence:
(1)the affidavit of Mr Todd Greenberg, CEO of the NRL, sworn on 2 April 2019 (Greenberg);
(2)the two affidavits of Mr Andrew Stephen Abdo, Chief Commercial Officer, NRL, sworn on 2 April 2019 (with the second affidavit and its exhibit being the subject of a confidentiality order) and a third affidavit sworn on 3 April 2019 (Abdo 1, 2 and 3 respectively);
(3)the affidavit of Mr Bart Taylor Colin Campbell, Chairman of the Melbourne Storm Rugby League Football Club, sworn on 1 April 2019 (Campbell); and
(4)the affidavit of Mr Kevin Alavy, Global Managing Director of Futures Sport and Entertainment, affirmed (see T363) on 2 April 2019 (Alavy).
The respondents’ affidavit evidence was the subject of extensive objections by the applicant. As a result of rulings on a number of categories of evidence, the parties were able to agree upon those passages in the respondents’ witnesses’ affidavits which should be redacted or read subject to orders limiting the uses to which the evidence could be put pursuant to s 136 of the Evidence Act 1995 (Cth) (Evidence Act). In particular, some evidence was admitted for non-hearsay purposes only pursuant to s 136 of the Evidence Act, that is, as evidence of the fact that the words alleged were uttered but not as to the truth of the words uttered (the s 136 non-hearsay limitation). I note that not all evidence of a hearsay kind was subject to this limitation including some of the evidence as to what sponsors and others were alleged to have said.
While the applicant’s written submissions relied upon in closing submitted that “much of the Respondents’ evidence is inadmissible” (applicant’s outline of submissions dated 18 April 2019 (AOS) at [54.1]), I note that these written submissions were identical to those relied upon in opening before the rulings were made, save for the insertion of references to the transcript and evidence. In these circumstances, I consider that the applicant must be taken as not having pressed his remaining objections to the admissibility of material which were not specifically ruled upon or the subject of agreement. This accords with the approach adopted by senior counsel for the applicant, Mr Einfeld QC, in closing address who confined his submissions to the quality of the respondents’ evidence (see T478.43-479.29).
All of the respondents’ lay and expert witnesses were cross-examined. The applicant’s counsel correctly in my view accepted that all of the witnesses gave their evidence frankly and honestly, albeit that core opinions expressed by the respondents’ expert, Mr Alavy, were not admissible as I later explain.
No challenge was made to the integrity or credit of any of the remaining witnesses of fact who were unshaken in cross-examination, including Mr Greenberg who was cross-examined vigorously for six hours over two days. However, as intimated above, the applicant did challenge the sufficiency of their evidence to establish the propositions upon which the respondents relied in their defence, contending that much of the respondents’ evidence consisted of hearsay reports of what others may or may not have been thinking about Rugby League and its participants and/or was speculative (T478.40-46).
2.2 Principal witnesses called by Mr de Belin
2.2.1Mr Timothy Lythe, COO, RLPA
Mr Lythe is the COO of the RLPA. He initially joined the RLPA as General Counsel in April 2016 after leaving the Australian Cricketers’ Association where he had been Legal Counsel since November 2014. The RLPA is the collective representative body for professional rugby league players participating in the NRL Competition and related competitions. It represents them on matters affecting their employment and protects and promotes their welfare and interests.
2.2.2Mr Stephen Gillis, Player Management Agent
Mr Gillis is a principal and director of Gillis Schifcofske Sports Management Pty Ltd (GSSM). Mr de Belin has retained GSSM as his manager since 26 November 2016. Mr Gillis has worked closely with Mr de Belin since that time in managing and promoting his NRL playing career. Mr Gillis has over 25 years’ experience in managing the careers of rugby league players, the focus of his management since 1994 having been rugby league players, although his clients and GSSM’s clients also include rugby union players. At any one point in time, he manages approximately 40 NRL players (T75.7) and over his 25 years in the business, would have negotiated hundreds of player contracts (T75.15). He explained that management of the careers of rugby league players playing at the NRL level involved contract negotiations between the player and clubs, sourcing and negotiating contracts with sponsors for the players, and player welfare.
As I later explain, Mr Gillis was present at a meeting between Mr de Belin and Mr Greenberg, on 27 February 2019 at which Mr Greenberg suggested that Mr de Belin may voluntarily stand down from playing in the NRL Competition pending the determination of the criminal charge against him. The meeting featured in a number of Mr de Belin’s claims including as an aspect of the allegedly unconscionable conduct engaged in by the respondents.
2.3 The respondents’ principal witnesses
2.3.1Mr Todd Greenberg, CEO, NRL
Mr Greenberg has held the position of CEO of the NRL since March 2016. Before then, he had held the position of Head of Football from mid-2013. Mr Greenberg has worked in sports management for his entire professional life, having also held positions with Cricket NSW and the NRL Club known as the Canterbury Bankstown Bulldogs, as well as holding the position of General Manager of the ANZ Stadium between 2001 and 2008.
In his current role as CEO, Mr Greenberg is responsible for (Greenberg at [11]):
(1)the management of the NRL’s executive team across all areas of the game;
(2)providing strategic and operational leadership of the game of rugby league from the “grass-roots” to the elite competitions; and
(3)developing for approval by the Board, and then implementing, the game’s strategic and operational plans for the fostering, development, and growth of the game.
As CEO, Mr Greenberg considers that a significant part of his role is directed towards ensuring the continued success and growth of the NRL Competition.
2.3.2Mr Andrew Abdo, Chief Commercial Officer, NRL
Mr Abdo is a chartered accountant by profession and has held the position of Chief Commercial Officer (CCO) of the NRL for 3 years. Over the course of his 5 years with the NRL he has also held the positions of Head of Commercial and Strategy and Operations Manager. Mr Abdo’s role and responsibilities as CCO include:
(1)responsibility for generating and maintaining all revenue for the game including sponsorships, major events, retail, and marketing the Telstra Premiership (which is how the NRL Competition is branded) and other NRL brands and sub-brands;
(2)managing the NRL’s existing broadcast partnerships;
(3)government relations and investment;
(4)strategy on placement and management of major events; and
(5)working with NRL clubs on growth of their commercial revenue programs.
Mr Abdo also explained that his role as CCO is “in generating new business through liaising with corporate and government stakeholders, managing existing contractual obligations (including measuring and delivering return on investment) and protecting the brand and reputation of all our investors through their association with the game” (Abdo 1 at [25]). In addition, his role includes increasing the number of people interested in rugby league both in Australia and abroad through product innovation and brand positioning and marketing (Abdo 1 at [26]).
2.3.3Mr Bart Campbell, Chairman, Melbourne Storm
Mr Campbell has held the position of Chairman of the Melbourne Storm Rugby League Football Club since May 2013 when he acquired the Club from its previous owner, News Limited, and is one of its major shareholders.
Mr Campbell has 24 years’ involvement in sports marketing and management initially as a lawyer before starting a sports management agency in London in 1998. That agency was integrated into a sports and entertainment marketing company called “Essentially” of which he became CEO in 2006. That company was acquired by Chime Communications Plc and absorbed into its subsidiary, CSM Sports and Entertainment, a sports marketing company of which he was the Group Chief Operating Officer from 2009 to 2013. During that period it had 700 staff and operated in 13 countries, providing sports marketing services to a large number of national and international federations. In 2011 he founded the TLA sports marketing agency, a sports marketing and athlete management business working in Major League sports in the United States with a focus on Major League Baseball. TLA’s main offices are in London, New York and Melbourne. He completed work with TLA in 2018 (Campbell at [2]-[4]).
2.3.4Mr Kevin Alavy, Managing Director, Futures
Mr Alavy holds a Bachelor of Economics with first class Honours from the University of Warwick and worked as an econometrician from October 2000 until May 2002 when he founded the business known as Futures Sport and Entertainment (Futures). Futures provides sports business evaluation and consulting services for customers in a number of countries, including Australia where Mr Alavy is located. Their customers include the NRL, as well as Football Federation Australia, Cricket Australia, broadcasters and sports clubs. Mr Alavy explained that in association with his colleagues (presumably at Futures) he provides advice and data analytics research into issues regarding sports, including the Australian broadcast landscape, crowd attendance analysis, sponsorship measurement, brand health tracking via a methodology described as Net Promoter Score benchmarking, and player marketability.
Mr Alavy disclosed his existing connection with the NRL in his affidavit, stating that he had nonetheless endeavoured to set out his independent and balanced views on the questions which he was asked to address by the respondents (Alavy at [15]). He also stated that he had read the Expert Evidence Practice Note, including the Harmonised Expert Witness Code of Conduct which is annexure A to the Practice Note, and stated that he agreed to be bound by it (Alavy at [3]).
Expert opinion evidence is admissible under s 79(1) of the Evidence Act where the person has specialised knowledge based on the person’s training, study or experience where the opinion of that person is wholly or substantially based upon that knowledge. These requirements are mandatory: Harrington-Smith v Western Australia (No 2) [2003] FCA 893; (2003) 130 FCR 424 at [19] (Lindgren J).
The applicants did not suggest that Mr Alavy was not qualified to express opinions based on his specialised knowledge. Nonetheless, they objected to large segments of his evidence. In particular, objections by the applicant to Mr Alavy’s evidence to the extent that it was based upon the so-called Net Promoter Score (NPS) methodology were upheld at trial primarily on the basis that the question posed to members of the public in the surveys from which the Net Promoter Score was derived, namely, “On a 0-10 scale, to what extent would you recommend being a fan of [Rugby League] to friends and family?” (exhibit R6 at p. 549), could not on any view assist in the resolution of the issues in the case. In any event, the opinion expressed by Mr Alavy as to the supposed correlation between the charge against Mr de Belin, on the one hand, and a fall in the Net Promoter Score results, on the other hand, was entirely speculative in the absence of any evidence as to the factors underlying the answers to that question by interviewees. That ruling led to agreement between the parties as to those portions of Mr Alavy’s affidavit evidence which were redacted or could be relied upon only for a limited purpose pursuant to s 136 of the Evidence Act. As to the latter, it followed from the exclusion of Mr Alavy’s evidence about the NPS as inadmissible that evidence given by other witnesses who relied upon the NPS was subject to a limitation such that it could not be used as evidence establishing the correctness of the results of the surveys or the inferences which could be drawn from them for the purposes of this case (the s 136 survey evidence limitation).
The applicant also took issue more generally with the weight which could be attributed to Mr Alavy’s evidence in closing address. In the end result, while I accept that Mr Alavy was in a position to give evidence as to the nature of the NRL and Related Competitions, any threats to the rugby league in Australia, and the nature of the economic forces at work (see below at [246]), I found the evidence of the respondents’ other principal witnesses on these matters to be more compelling.
3. THE ARLC, NRL, RLPA AND THE NRL COMPETITION
The ARLC is the governing body of rugby league in Australia, setting the overall strategic direction for the game and assuming responsibility for funding, growing and fostering the game at all levels ([Greenberg at [6]; Abdo 1 at [4]). The objects of the ARLC are set out in its Constitution and include relevantly to:
(a) be the single controlling body and administrator of the Game;
(b) foster, develop, extend and provide adequate funding for the Game from the junior to elite levels and generally to act in the best interests of the Game;
…
(d) organise and conduct all State of Origin and Australian representative Games, …;
(e) organise and conduct the NRL Competition;
(f) foster the NRL Competition;
…
(h) promote and encourage either directly or indirectly the physical, cultural and intellectual welfare of young people in the community and in particular, the rugby league community; and
(i) promote and encourage either directly or indirectly sport and recreation, particularly rugby league football, in the interests of the social welfare of young persons.
(exhibit R2 at p. 5)
As is apparent, the ARLC’s objects emphasise the welfare of, and engagement with, young people in the community. These are particularly important for reasons I later explain.
The Queensland Rugby League and New South Wales Rugby League are members of the ARLC and are responsible for the overall management of semi-professional, amateur and junior rugby league in their states. There are also rugby league bodies in the other states and territories which are affiliated with the ARLC and are responsible for the conduct of rugby league in their respective states and territories (Abdo 1 at [7]).
The NRL Competition presently comprises 16 teams, with 9 from Sydney including St George Illawarra, and one team from each of Melbourne (the Melbourne Storm), Newcastle, Brisbane, North Queensland, the Gold Coast, New Zealand and Canberra. The competition is played over 25 regular season rounds, followed by a four week finals series. The 2019 season commenced on 14 March 2019 with the Grand Final on 6 October 2019. In addition the State of Origin competition between teams representing New South Wales and Queensland will be played over 3 games in June and July 2019 (Abdo 1 at [11]-[12]).
The objective recognised in the ARLC Constitution of conducting and fostering the NRL Competition as the elite level of the sport impacts directly upon the ARLC’s capacity to achieve its other objectives. As most of the revenue generated by the ARLC derives from its ownership of the NRL Competition, the ARLC’s capacity to adequately fund all levels of the game and to develop and grow the game depends upon the financial success of the NRL Competition (Greenberg at [14] et seq). As I later explain, in determining the reasonableness of the new rule, one of the contested issues between the parties concerns the financial impact, real and potential, upon the game if Mr de Belin and others against whom similarly serious criminal charges may be laid are permitted to continue to play pending the determination of such charges.
The NRL administers the NRL Rules which govern the conduct of the clubs, players and other participants in the NRL and Related Competitions (see rule 6, NRL Rules). Since 2012, an independent board was introduced to manage the ARLC and the NRL. The boards of directors of both entities are identical (Abdo 1 at [6]). Mr Peter Beattie is the current Chairman of the ARLC and a director of the NRL.
The RLPA represents:
(1)male rugby league players who are contracted to play for an NRL Club in the men’s NRL Competition; and
(2)female rugby league players who are contracted to play for an NRL Club in the women’s NRLW Competition.
Each of the sixteen NRL clubs have between 33 and 36 male players contracted in each season. There are therefore approximately 576 male members of the RLPA from time to time including Mr de Belin. There are four NRL clubs in the women’s NRL competition, such that there are approximately 88 female members from time to time. In addition, the RLPA represents players contracted to play for the Clubs who participate in either of the State Cup competitions administered by the New South Wales Rugby League and Queensland Rugby League respectively, with those players being associate members of the RLPA. Past player membership is also maintained for players who have previously held a playing contract in the NRL and NRLW competitions.
4. THE CONTRACTUAL REGIME BETWEEN THE ARLC, THE NRL, THE CLUBS AND THE PLAYERS
4.1 Key documents comprising the contractual matrix
There are several interlocking contractual documents governing the relationships between players registered to play in the NRL Competition including Mr de Belin, the clubs licensed to participate in the NRL Competition including St George Illawarra, and the NRL. As these documents form an essential part of the context against which the issues raised in this case fall to be determined, it is necessary to consider them in some detail.
The parties were agreed that the matrix of relevant contractual documents is as follows:
(1)The NRL Club Licence Agreement made between the NRL and St George Illawarra in 2011 (exhibit A5 at p. 11);
(2)the NRL Playing Contract made between St George Illawarra and Mr de Belin in 2017 (the Playing Contract) (exhibit A5 at p. 47);
(3)the NRL Rules consolidated as at 5 March 2018 which applied at the date that the new rule was purportedly made (exhibit A5 at p. 136);
(4)the NRL Rules consolidated as at 11 March 2019, i.e., as purportedly amended so as to incorporate the new rule (exhibit R6 at p. 11); and
(5)the Collective Bargaining Agreement dated 25 October 2017 which was adopted by a letter from the NRL to the ARLC dated 1 November 2017 (exhibit A5 at p. 107).
In addition, the respondents contended that the NRL Player Registration Application dated 13 February 2017 and completed by Mr de Belin (exhibit A5 at p. 95) in which he applied for registration by the NRL as a player in the NRL Competition constituted a binding contract (as to which see below at [63]).
As I later explain, the NRL Playing Contract and Remuneration Rules (Schedule 6 to the NRL Rules) (PCR Rules) require a club to enter into a Club Licence Agreement before it is permitted to participate in the NRL Competition and Related Competitions. Equally, a player must be registered under the NRL Rules and hold a Playing Contract with a club in order to participate in these competitions. As I also explain later, the Club Licence Agreements and the Playing Contracts comprise the means by which the NRL, the clubs and the players are bound by the Rules.
4.2 The Club Licence Agreement
Any club wishing to participate in the NRL Competition must enter into an NRL Club Licence Agreement with the NRL in accordance with the NRL Rules: see rule 7, NRL Rules and cl 22, PCR Rules; Abdo 1 at pp. 3-4. A copy of the Club Licence Agreement between the NRL and St George Illawarra dated 1 December 2011 (the Club Licence Agreement) was tendered as part of exhibit A5 at p. 11 (exhibit A5 comprises the annexures to Tassell 1). While the Club Licence Agreement states that it has an expiry date of 31 October 2018, it was not suggested that the terms of that agreement were no longer in force. Rather, as earlier mentioned, the parties were agreed that it constitutes a relevant contractual document for the purposes of this litigation: AOS at [3] and RCS at [65]; see also Abdo 1 at [15](a) and (b). As such, it is not in dispute that at all relevant times, the Club Licence Agreement accurately reflects the contractual relationship between the NRL and St George Illawarra, as do the other such agreements between the NRL and other clubs. Nor was it in dispute that the terms of all club licence agreements are relevantly the same.
Leaving aside the relationship between this agreement and the NRL Rules which I address separately, four points of particular relevance emerge from a consideration of the Club Licence Agreement.
First, by cl 2 of the Club Licence Agreement, the NRL grants the club a licence to participate in the NRL Competition on the terms and conditions contained in the agreement: see also cl 8(a). The intention stated in cl 3.1 is that “[t]he NRL Competition will be a first grade, national (and international to the extent of New Zealand) competition.” In furtherance of this intention, cl 9.1 imposes an obligation upon the club to participate in the NRL Competition with its best NRL Team, including as many of the top 25 players as possible. The Club is also required to make available its players for selection and participation in all Representative Matches: cl 6.1. These include the State of Origin match and representative and international rugby league matches representing Australia: see the definition of “Representative Match” in cl 1.1.
Secondly, the Club Licence Agreements between the NRL clubs and NRL acknowledge that the ARLC has the exclusive right to exploit the intellectual property rights in the NRL Competition, including the broadcasting, marketing, and sponsorship and naming rights (see e.g. cl 4 of the Club Licence Agreement). The ARLC also has the exclusive use of the field of play for signage at all matches in the NRL Competition, and the right to all ticketing and other revenue from the matches in the NRL Finals series, including the NRL Grand Final: Abdo 3 at [4]. However, under the Club Licence Agreements, the clubs are entitled to receive income distributions from the NRL Competition including a funding grant, a share of revenue generated by the NRL from centralised merchandising and marketing activities, and prize money (see e.g. cl 8 of the Club Licence Agreement; Abdo 3 at [6]). In addition, a limited number of revenue rights are reserved to the clubs under the Club Licence Agreements. These include limited rights to exploit certain intellectual property (“Licence Property” and “Player Property”) and the rights to ticketing revenue at matches played at its home ground in the regular season: Abdo 3 at [5]. “Licence Property” is all intellectual property created by, owned or licensed by or to the ARLC and in turn to the NRL, as well as all intellectual property created by, owned or licensed by or to the Club: cl 1.1.
Thirdly, in the context of this litigation the concept of “Player Property” is significant for reasons I later explain. It is defined in the Club Licence Agreement to mean “the name, photograph, likeness, image, reputation and identity of a Player” (cl 1.1). Under the Club Licence Agreement, the club grants the NRL an exclusive world-wide, royalty-free licence to use, and licence the use of, Licence Property and all Player Property for the term of the Agreement, including by the exercise of broadcasting rights, sponsorship and naming rights, and the right to sub-licence those rights to the ARLC (cl 14.2). In turn, the club is required to procure, as terms of each player’s Playing Contract, the grant of a licence from each player to use and licence the use of his Player Property on terms which authorise the NRL to further sub-license the use of Player Property to the ARLC (cl 14.3(a)). The value of the Player Property is protected by cl 14.3(b) whereby the parties agree that a player must not without written approval endorse products or services that conflict with the club’s sponsors, NRL sponsors, or sponsors of a representative match.
Fourthly, while the ARLC retains 20% of gross revenue derived from the exploitation of “Marketing Rights” (defined in cl 1.1 as “all rights to exploit the Property and Player Property by any means, including merchandising in any medium, and concession income for the Final Series”), the remaining 80% is paid to the NRL to be applied in accordance with cl 16.3. That clause in turn provides for the distribution of a percentage of revenue from the sale of merchandise incorporating the Player Property of one player only, to that player, and which relates predominantly to one NRL club or its team, to that NRL club. Otherwise, the remaining revenue is distributed equally among the clubs participating in the NRL Competition.
4.3 The Playing Contract
Mr de Belin entered into an NRL Playing Contract with St George Illawarra for the purposes of participating in the NRL Competition, Representative Competitions (if selected) and the Related Competitions (cl 1.1, Playing Contract) (exhibit A5 at p. 48). While the Playing Contract is dated 13 February 2017, it was time-stamped 9 March 2017 and commenced on 1 November 2017. The Playing Contract is expressed to terminate on 31 October 2020 subject to the parties agreeing in writing to a longer term or an earlier termination in accordance with the contract (cl 2.1, Playing Contract).
First, in compliance with St George Illawarra’s obligation under cl 12.1 of the Club Licence Agreement, the Playing Contract incorporates all of the standard terms contained in the NRL Playing Contract required by the PCR Rules and no other terms: see the acknowledgement signed by the club representative and Mr de Belin annexed to the Playing Contract (exhibit A5 at p. 80). Further, by cl 18.2(d) of the Playing Contract, Mr de Belin agreed that, if he is to maintain his registration with the NRL as a player, the Playing Contract, if varied, must at all times be varied in accordance with the PCR Rules.
Secondly, under cl 3.1 of the Playing Contract, Mr de Belin agreed to:
(a) whenever and wherever reasonably required, and to the best of his ability and skill, play the Game for the Club in the NRL Competition … the Representative Competitions (if so selected) and the Related Competitions;
…
(k) at all times, act in the best interests of the Club and the NRL; …
By cl 3.6 of the Playing Contract, St George Illawarra contracted to use its best endeavours to provide Mr de Belin an opportunity to train for and play the game either with a team in the NRL Competition or another team with which the club is affiliated, subject to Mr de Belin being physically and mentally able to perform to the level reasonably required of a professional rugby league player with his level of skill and experience.
Finally, by cl 3.3, Mr de Belin granted to the club a licence to use, and to licence the use of, his Player Property in line with the obligation imposed upon the club by cl 14.3(a) of the Club Licence Agreement: see above at [53].
4.4 The NRL Player Registration Application
Under cl 3.1(h) of his Playing Contract, Mr de Belin was also required to “complete, agree to and comply with the terms of the NRL Player Registration Application”. In compliance with this obligation, Mr de Belin applied to be registered by the NRL as a player in the NRL Competition with St George Illawarra on 13 February 2017 for the seasons covered by his Playing Contract. In the Player Registration Application Mr de Belin agreed that he was bound by the NRL Rules as amended from time to time (cl 2(a)).
Importantly, by cl 5 of his Application, Mr de Belin also acknowledged that:
(a) The NRL Competition and the National Youth Competition are the subject of significant public, commercial and media interest and its success depends on continuing and developing the interest that those groups have in associating with the NRL Competition, the National Youth Competition, the Clubs and the NRL Players;
(b) As a Player my conduct both on and off the field will be the subject of significant media and public scrutiny; and
(c) It is a fundamental requirement of my registration and my NRL Playing Contract that I maintain at all times a reputation for high standards of personal conduct, including a reputation for respect for women and children, the responsible consumption of any alcohol that I drink and for lawful and good behaviour generally.
A copy of the completed and signed application was attached to Mr de Belin’s Playing Contract.
In this regard, I note that one of the matters to which the Salary Cap Auditor must have regard in deciding whether to register a person as a player in the NRL Competition is “whether the person is a fit and proper person to be registered as a Player” (cl 44(1) and (2), PCR Rules).
Finally, irrespective of the Application’s status, it is plain from cl 14(2) of the NRL Rules that registration does not create an employer/employee or principal/agent relationship between the NRL and a player. That does not, of course, mean that registration did not create a contractual relationship between Mr de Belin and the NRL. In this regard, Mr de Belin asserted that the NRL Player Registration Application did not give rise to a contract between Mr de Belin and the NRL. However, no submissions were made in support of that proposition and, with respect, it would seem to ignore the terms of cl 2 (set out at [95] below) which evidences the existence of an offer and acceptance for consideration and an apparent intention by both parties to be bound by the terms in the Application for registration. Ultimately, however, neither party submitted that the question of whether the registration form was contractual in nature was material to the issues in the case (T416.36, 451.45). In this regard, Mr de Belin had agreed to comply with the NRL Rules in his Playing Contract which in turn required him to agree to the terms of the Player Registration Application. As such, his agreement to those terms is a part of his contractual obligations with the Club.
4.5 The Collective Bargaining Agreement between the RLPA and the NRL
The fourth contractual document of significance is the Collective Bargaining Agreement dated 25 October 2017 (the CBA) which was adopted by a letter from the NRL to the ARLC dated 1 November 2017 (exhibit A5 at p. 107). I note that the document is described as a “Term Sheet” comprising the terms and conditions of a Collective Bargaining Agreement, and makes reference to a “draft CBA of 31 March 2017” which was not before the Court. As all the parties referred to this document as the CBA, I will adopt the same approach. While Mr Einfeld noted in closing submissions that the CBA suffered from “apparent deficiencies” having regard to the principles in Masters v Cameron (1954) 91 CLR 353, both parties relied upon the CBA and the issue was unnecessary to decide in this case (T430.29; RCS at [87]; AOS at pp. 9 and 16).
The CBA is expressed to operate from 1 November 2017 until 31 October 2022 (or 31 October 2023 until a new CBA is concluded) and binds the Australian clubs and players, as well as the NRL and RLPA (exhibit A5 at pp. 108-109). The preamble states that the terms and conditions of the CBA “will be set out in more detail in a long form CBA to be executed by the parties as soon as practicable and which will accurately reflect the terms and conditions contained in this legally binding Term Sheet” (exhibit A5 at p. 108).
By virtue of rule 7 of the NRL Rules and the PCR Rules, each club participating in the NRL Competition is subject to a salary cap, being the maximum amount that the club is permitted to pay its players as a whole. This amount is set by agreement between the NRL and the RLPA in the CBA. The amount of the base salary cap agreed between the NRL and RLPA for the top 30 players in each Club for the 2018 season is $9.1m and for the 2019 season, $9.3m (Abdo 3 at [13]-[15]; exhibit A5 at p. 133). The purpose of the salary cap was explained by Mr Greenberg as twofold: “(1), for the competitiveness of the competition and, (2), to ensure clubs don’t go broke … trying to win a competition” (T293.11-19).
That accords with the discussion of the history of the salary cap in the reasons of Hill J at first instance in Adamson v New South Wales Rugby League Limited (1991) 27 FCR 535 (Adamson (FCA)) at 542-544 (adopted by Wilcox J on appeal in Adamson v New South Wales Rugby League Limited (1991) 31 FCR 242; (1991) 103 ALR 319 (Adamson (FCAFC)) at 254-255). In particular at 543, Hill J explained that:
The specific problem which gave rise to the recommendation of a salary cap was that some clubs had overspent on salaries to players in order that these clubs might remain competitive. As a result, clubs required additional finances, either from outside sources or from the League. Further, the poorer clubs could not remain competitive as they could not meet the demands of players and accordingly risked losing the services of their players to other and richer clubs.
4.6 The NRL Rules and their place in the contractual matrix
4.6.1Overview of the NRL Rules
The NRL Rules are administered by the Board of Directors of the NRL and the CEO under rule 6(1), and are intended relevantly “to regulate the conduct of Clubs, Game Participants, Match Officials, Players and Accredited Agents in order to organise, manage and administer the NRL Competition and the Related Competitions” (rule 6(2)). Under rule 7(2), the various Schedules to the NRL Rules are part of the Rules including the NRL Code of Conduct, the NRL Judiciary Code of Procedure, the NRL Appeals Committee Procedural Rules and the PCR Rules (Schedules 1, 4, 5 and 6 respectively). Further, rules 23 to 31A inclusive provide that every Club and every person bound by the Rules shall comply in all respects with the rules in the Schedules.
The NRL Rules themselves impose overarching obligations upon all of the various participants in the NRL Competition and provide for enforcement of those obligations, with the detailed obligations being set out in the various Schedules.
First, the NRL Rules require that, in order to participate in the NRL or Related Competitions, a Club must comply with the requirements of cl 22 of the PCR Rules, namely:
(1)be a party to a current Club Agreement within the meaning of the NRL Rules; and
(2)ensure that its officials and its players have complied with, and continue to comply with, the NRL Rules.
Equally, any person who participates or wishes to participate as a player in the NRL or Related Competitions must comply relevantly with the requirements of cl 23A of the PCR Rules, namely:
(1)have attained 18 years of age;
(2)have completed, agreed to the terms of, and executed an NRL Player Registration Application;
(3)be a party to a current NRL Playing Contract;
(4)be currently registered as a player within the meaning of PCR Rules, cl 38; and
(5)ensure that he has complied with, and continues to comply with, the provisions of the NRL Rules.
Equivalent obligations to register and comply with the NRL Rules are imposed upon every coach and trainer of a team in the NRL and related competitions (rules 17 and 18, NRL Rules), as well as every club official and other game participants if required (rules 19 and 20, NRL Rules).
Relevantly, the NRL Playing Contract must be in the form provided for by cl 28 of the PCR Rules, which regulates Playing Contracts. The detailed objects of these and the other measures set out in the PCR Rules are contained in cl 2 of those Rules and include:
(1)Respond to the need to provide, so far as practicable, a fair and even Rugby League competition;
(2)Protect the interests of Players who participate, or may participate, in the NRL Competition … and the Related Competitions;
(3)Regulate the conduct of Clubs and the persons bound by these Rules in certain respects in order to ensure that:
(a) The Clubs each compete on equal terms for the services of Players …
(b) The Grants made by the NRL to the Clubs are appropriated or expended by the Clubs prudently;
(c) The financial viability of each Club, so far as practicable, is protected;
...
(e) The playing strengths of Teams competing in the NRL Competition … are relatively even;
…
(g) The stronger Clubs are prevented from obtaining the services of an unfair proportion of the better Players and thereby dominating the NRL Competition …;
(h) A balance is struck between the financial viability of Clubs and fair payment for Players so as to enable the Players to earn a living from Rugby League as their primary source of income;
…
(18) Ensure that Rugby League is able to fairly compete with other sports and other forms of entertainment.
It was not in dispute that s 21 of the ACL applies only where a person is acting in connection with the supply or acquisition of goods or services to or from a person and, as such, applies to “contracts for services” but not “contracts of service” (see the definition of “services” in s 2, ACL).
The respondents submitted that s 21 of the ACL does not apply because the Playing Contracts were contracts of employment and therefore were “contracts of service” only: Adamson (FCAFC) at 258-262 (Wilcox J). In this regard, the definition of “services” in s 2, ACL excludes the performance of work under a contract of service: see Adamson v West Perth Football Club (1979) 27 ALR 475 at 505-506 (Northrop J). I note however that there was no suggestion that the fact that the Playing Contracts included provision for the licensing of Player Property meant that the Playing Contracts were at least to this extent a contract for the provision of services. While the point was not argued, it is arguable that these provisions are simply an incident of the contract of employment whereby the players put their skills and performance at the disposal of the club, and therefore that the whole Playing Contract is still properly characterised as a “contract of service”: see by analogy Adamson (FCAFC) at 261-262.
The applicant also argued that even if the Playing Contract is a contract of service, there may still be services provided by the NRL to Mr de Belin which would fall within the statutory definition of “services” (T416.11-31). This submission relies on the fact that the definition extends to services provided otherwise than under a contract: Adamson (FCAFC) at 262 (Wilcox J); see also Trade Practices Commission v Legion Cabs (Trading) Co-operative Society Ltd (1978) 35 FLR 372 at 380-381 (Franki J).
In circumstances where neither issue was the subject of detailed argument it is preferable to leave these issues for another day, when the claim must fail in any event for the reasons I explain below.
9.3 Is there any evidence of loss or damage?
As the applicant has not led any evidence in support of his claim for damages by reason of the alleged unconscionable conduct, the claim for damages on this ground must fail. However, as the applicant also seeks declaratory relief, it is still necessary to consider whether there was any breach of s 21.
9.4 Did the respondents engage in unconscionable conduct in any event?
The claim that the respondents engaged in unconscionable conduct is dependent to a significant degree upon the applicant succeeding in his claims that the new rule imposed an unlawful restraint of trade and that the respondents had engaged in misleading or deceptive conduct and interfered with the Playing Contract: see ASOC at [25](d),(e),(f),(l) and (m) and AOS at [32]-[41]. As the applicant summarised in his outline of submissions at [41]:
(a) the Respondents conduct a professional rugby league monopoly in Australia such that they have been able to implement the New Rule without any negotiation with the player;
(b) the amendment to the Playing Contract is not reasonably necessary to protect the Respondents’ commercial interests and are contrary to public policy;
(c) the Respondents have conducted a continuing public campaign involving misleading and deceptive conduct and sought to put pressure upon de Belin to have him stood down, despite having no existing legal basis to do so;
(d) the New Rule would unilaterally and automatically ban de Belin without a hearing or appeal and would do so retrospectively, in that it would operate upon a contract which had long since been finalised and executed;
(e) the New Rule would be implemented contrary to the terms and intent of the CBA;
(I note that I have omitted the reference in this summary to the allegation of a lack of good faith because this was abandoned at the hearing. Equally and for the same reason I take the applicant not to have pressed the allegation that the conduct and suspension representations were “arrogant [and] knowingly inaccurate” (in AOS at [32.2]) insofar as that was intended to imply a lack of good faith or deliberate falsity.)
It follows therefore from the dismissal of the claims of misleading and deceptive conduct that the applicant has not established the misrepresentations upon which he also seeks to rely in support of his unconscionable conduct claim (AOS at [32.1], [32.2], and [35] (alleging they were part of the “unfair tactics” employed by the respondents)). Similarly, as the unlawful restraint of trade claim was dismissed, the applicant has failed to establish that the new rule is not reasonably necessary for the protection of the respondents’ legitimate interests as a factor in support of his claim of unconscionable conduct (AOS at [34], [32.3.1]). Furthermore, the findings already made in the context of considering the restraint of trade claim with respect to the alleged retrospective and indefinite effects of the new rule equally answer the applicant’s reliance upon these alleged features of the new rule as unfair and unreasonable in the context of the unconscionability claim (AOS at [32.3.2]). The submission at AOS at [32.3.2] that the new rule was unfair and unreasonable because it prevented Mr de Belin from performing his obligations under the Playing Contract also ignores the fact that he agreed under the Playing Contract to be bound by the NRL Rules as amended from time to time and cannot stand in light of my finding that the restraint imposed upon him was reasonably necessary to the legitimate interests of the ARLC and the NRL.
It falls then to deal with the remaining facts which underpin the applicant’s unconscionability claim.
First, the applicant submits that the fact that no opportunity was afforded to Mr de Belin to negotiate or be heard before the ban was imposed was unfair and unreasonable (AOS at [32.3.5] and [33]). This submission, with respect, overlooks the fact that there is a CBA in place between the NRL and the RLPA, being the collective representative body for professional rugby league players that represents them on matters affecting their employment, and of which Mr de Belin is a member. The new rule was also inserted into the NRL Rules through an amendment which applies immediately to all players and not only to Mr de Belin. Further, there was consultation with the RLPA and its views were taken into account. In this regard, the letter of 21 February 2019 from Mr Prendergast, CEO of the RLPA, to Mr Greenberg discusses in detail the impact of any change in the policy to “suspend” a player pending the resolution of their criminal charges upon players in Mr de Belin’s position (exhibit R2 at p. 669). Furthermore, as I have earlier found, the applicant failed to establish that the RLPA was not properly consulted in accordance with the CBA between the NRL and the RLPA before the new rule was adopted (cf AOS at [32.3.4]). It follows that the applicant has not established that the lack of direct consultation or negotiation with him was unfair and unreasonable.
Secondly, the suggestion that Mr de Belin’s interests were disregarded (AOS at [33]) is not borne out by the evidence. In forming his recommendation for the Board, one significant matter which Mr Greenberg considered carefully was the effect that a stand down rule would have on a player who was ultimately found to be not guilty of the charge that he faced. As he said, “[e]ven if the player was paid during the time he was stood down I recognised that it had potential to impact on his career and that he may end up losing one or, even two, seasons of his career. This would be a significant period given the limited life span of the career of an NRL player” (Greenberg at [113](o); see also T241.7-19 (Greenberg)). The minutes of the meeting of the ARLC Board on 28 February 2019 also record that, before the resolution was passed adopting the new policy, matters discussed by the directors included:
(1)the RLPA’s position including as outlined in its letter dated 21 February 2019 (exhibit R2 at p. 669);
(2)the potential player welfare implications of the implementation of the recommended new policy, including the attitude of Mr de Belin’s club;
(3)the need for players who were stood down to be permitted to train with their club and have access to wellbeing and education support, as well as be paid their salary; and
(4)the need to ensure that any new policy or rule is clearly framed and explained as a “no-fault” stand down.
(exhibit R2 at p. 610-611)
Thirdly, no evidence was led as to any matters which the applicant would have wished to put to the Board or anyone else in the event that he had been given a right to make submissions before being stood down or if given a right of review. There was therefore no evidence that he would have made any submissions beyond those made by the RLPA, which specifically referred to Mr de Belin as an example of why he and other players in a similar position should not be stood down (exhibit R2 at p. 669).
Fourthly, the applicant also submits that “[u]ndue pressure was exerted upon and unfair tactics used” against him at the meeting between on 27 February 2019 (AOS at [35]). Specifically, the applicant alleges that Mr Greenberg informed Mr de Belin that if he did not voluntarily stand down, he would be stood down by the ARLC the following day in circumstances when Mr Greenberg knew or ought to have known that neither respondent had the power to suspend Mr de Belin the following day (ASOC at [25](k); AOS at [35]).
I note that Mr Gillis was also present at this meeting, as was Mr Johnston, the CEO of St George Illawarra (T310.27 (Greenberg); T448.19-27 (Mr Sullivan QC)). As St George Illawarra opposed the introduction of the new policy and Mr Johnston had advised Mr Beattie and Mr Greenberg that the Club would not stand Mr de Belin down while he awaits trial (as reported to the meeting of the ARLC Board on 28 February 2019 (exhibit R2 at p. 611)), it can be inferred that Mr Johnston was supportive of Mr de Belin personally and of his position at the meeting on 27 February. That inference can more confidently be drawn given that Mr Johnston was not called by Mr de Belin, and that Mr de Belin did not himself give evidence. As Mr Gillis is Mr de Belin’s manager and has worked closely with him in managing and promoting his playing career since late November 2016, it can also be inferred that Mr Gillis was supportive of Mr de Belin personally and of his position at the meeting even though his evidence did not touch on what happened at the meeting.
Mr Greenberg’s account of what happened at the meeting is therefore the only account of the meeting in evidence and I accept it as accurate. Specifically, Mr Greenberg said that:
[Mr Einfeld] On the day before the commission met, you had a meeting with Mr de Belin yourself; isn’t that right?‑‑‑ [Mr Greenberg] Yes. That’s correct.
At that meeting, you told Mr de Belin that he should stand down voluntarily?‑‑‑That’s incorrect.
Is it?‑‑‑Yes.
What’s incorrect about it?‑‑‑I suggested to him that he could do this in another way.
Do what in another way?‑‑‑He could take the narrative by standing down himself, if he chose ‑‑‑
Sorry. Take the narrative. What do you mean?‑‑‑So in other words instead of the commission enforcing this rule upon him the following day, if the board were to approve it, he had the opportunity to actually take the onus of responsibility on himself.
Do you mean by that that you told him that there were two possibilities: one was he stand voluntarily and the other was that he be stood down pursuant to the introduction of a new rule?‑‑‑No. I think there was three possibilities at that point.
Yes?‑‑‑One was that the commission wouldn’t endorse the new rule on the 28th. Two would – that the commission would change the rule on the 28th and I told him that was likely. And (3) was if he wanted to, he could take the onus of responsibility on himself.
Right. So does it come down to this: that you told him that the probability was that there would be a new rule introduced, which would have the effect of standing him down automatically, or he could stand down himself?‑‑‑Yes.
Is that the position? Right. And you told him that it was a probability that the new rule would be introduced, which would have the effect of automatically standing him down. That’s what you just told us?‑‑‑I said to him in – in – in my view, the rule was likely to be approved by the commission the following day.
Right. So it was likely, you told him – or the effect of what you told him was that it was likely he would be stood down the next day. Alternatively, he could, in effect, take that course for himself?‑‑‑Correct.
Right. In the corporate world, you would perhaps accept the analogy either resign or you will be sacked; do you agree?‑‑‑No. No.
Well, what’s the difference?‑‑‑The corporate world and the professional sporting world are very, very different.
No. But to use the language of the corporate world: you resign or you will be sacked. To use the language of the professional footballer: You can stand yourself down voluntarily or it’s likely you will be stood down?‑‑‑Yes. So sacked is not a word that I think describes the – the outcome of what was going to happen on the 28th.
Is that right?‑‑‑Yes.
You don’t think that it’s an effective sacking for a footballer to be stood down from performing his obligations under his playing contract with his club, for a period that you’re quite unable to define?‑‑‑No, I don’t.
Don’t you. Very well?‑‑‑I think when he’s fully paid, it doesn’t constitute a sacking.
I see. And do you not accept that if a player doesn’t play for a year or two, that that might have some impact upon his playing career?‑‑‑I do accept that.
(T239.40-241.8)
There is nothing that evidence, in my opinion, which suggests that Mr de Belin was being placed under undue pressure or taken advantage of. Furthermore, as the respondents submit, the submission that Mr de Belin was taken advantage of at the meeting makes little sense when Mr de Belin in fact rejected Mr Greenberg’s suggestion to step down of his own accord.
The applicant also contends that the relevant industry code for the purposes of s 22(1)(h) of the ACL until 11 March 2019 was the unamended NRL Rules and Code of Conduct which provided only for suspension after a finding of misconduct was made, in the course of which a player was afforded an opportunity to be heard (AOS at [37]). However, that overlooks the fact that under the contractual matrix governing the NRL Competition, all relevant participants including the players also agreed to be bound by the NRL Rules as amended from time to time, albeit that the power to amend was not unlimited as I have found. Indeed, it might be observed that this aspect of the NRL Rules is consistent more broadly with industry practice, as a consideration of similar amendments by the peak entities to the governing rules of national and international sports in the case law in the restraint of trade context suggests.
It follows for these reasons that the applicant has failed to establish the factual premises upon which he alleges that the respondents breached s 21 of the ACL. This is not to deny that Mr de Belin may personally feel strongly that the new rule is unfair. However, that is not the test under s 21.
10. CONCLUSION
It follows for these reasons that the application must be dismissed with costs.
I certify that the preceding four hundred and five (405) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perry. Associate:
Dated: 17 May 2019
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