Francis v South Sydney District Rugby League Football Club Ltd - [2002] FCA 1306

FEDERAL COURT OF AUSTRALIA
Francis v South Sydney District Rugby League Football Club Ltd
[2002] FCA 1306
AGENCY – professional Rugby League Football player, injured in a match – claims that his coach promised him a contract with club for following year if he would defer question of surgery until end of current season, and resume playing after three weeks, rather than having immediate surgery and be off field for virtually whole of remainder of current season – player defers surgery and resumes playing after three weeks – club subsequently makes plain to player and his manager that club will not be exercising its option to renew his contract for following year’s season – towards end of season, player ceases playing and has surgery – club does not wish to retain player for following year – player cannot obtain engagement by any other club – player claims inadequate time had remained available for him to become marketable for following year – his being out of competition that year signifies no club interested in him for subsequent years – claim against club for damages for loss of career as professional football player – actual and ostensible authority of coach to engage player on behalf of club – power of coach to render club liable for breach of contract, breach of fiduciary duty, negligence, misleading or deceptive conduct – state of mind of player and his manager as to coach’s authority to commit club – attribution of manager’s knowledge of coach’s lack of authority to his client-player.
CONTRACT – consideration – promise to perform existing contractual duty owed by promisee to promisor – whether good consideration for promisor’s promise.
CONTRACT – repudiation – whether innocent party obliged to elect to accept and to sue at once for damages.
CONTRACT – acceptance – whether conduct relied on as constituting acceptance of offer accompanied by intention of accepting it.
ESTOPPEL – unreasonableness of reliance on representation.
FIDUCIARY DUTY – whether owed by football club to employed professional First Grade Rugby League player – whether fiduciary duty is owed by employers to employees generally in respect of making of statement when reliance on the statement would be unreasonable – whether statement by coach to player can put club in breach of fiduciary duty.
NEGLIGENCE – promise or assurance given by coach of football club to player that he will have a contract with club for following year’s football season – whether made in course of coach’s duties – whether club vicariously liable for its coach’s statement.
NEGLIGENCE – duty of care – whether duty of care arises in respect of making of statement when reliance on the statement would be unreasonable.
TRADE PRACTICES – whether football club’s conduct towards its employed professional Rugby League Football player was unconscionable – whether club’s coach’s conduct was to be attributed to club under subs 84(2) of the Trade Practices Act1974 (Cth) – whether subs 84(2) a code – whether other principles of vicarious liability apply.
UNCONSCIONABLE CONDUCT – whether conduct of football club towards its employed professional First Grade Rugby League player was unconscionable – whether player suffered from a “special disability” or “special disadvantage” – meaning of “unconscionable”.
Evidence Act 1995 (Cth) s 59, s 60
Trade Practices Act 1974 (Cth) s 84(2), s 51AA, s 51AC
Fuller v Benett (1843) 2 Hare 394 (67 ER 162) followed
Vane v Vane (1872) LR 8 Ch App 383 followed
Taylor v Yorkshire Insurance Co Ltd [1913] 2 IR 1 followed
Ford Excavations Pty Ltd v Do Carmo [1981] 2 NSWLR 253 followed
Ex parte Delhasse; Re Megevand (1878) LR 7 Ch D 511 followed
Adam v Newbigging (1888) LR 13 App Cas 308 followed
R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Ltd (1952) 85 CLR 138 followed
Garnac Grain Co Inc v HMF Faure & Fairclough Ltd [1968] AC 1130 followed
Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303 followed
Jones v Dunkel (1959) 101 CLR 298 distinguished
Payne v Parker [1976] 1 NSWLR 191 (CA) followed
Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157 cited
Smith v Samuels (1976) 12 SASR 573 cited
Shum Yip Properties Development Ltd v Chatswood Investment and Development Co Pty Ltd (2002) 40 ACSR 619 cited
Fabre v Arenales (1992) 27 NSWLR 437 (CA) followed
Papakosmas v The Queen (1999) 196 CLR 297 followed
Powell v Lee (1908) 99 LT 284 followed
Gjergja v Cooper [1987] VR 167 followed
Loftus v Roberts (1902) 18 TLR 532 followed
Beattie v Fine [1925] VLR 363 followed
Stocks & Holdings (Constructors) Pty Ltd v Arrowsmith (1964) 112 CLR 646 followed
Elibank-Murray v Dunne (1982) NSW Conv R §55-048 followed
Mobil Oil Australia Ltd v Wellcome International Pty Ltd (1998) 81 FCR 475 cited
R v Clarke (1927) 40 CLR 227 followed
Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 followed
Crabb v Arun District Council [1976] Ch 179 distinguished
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 followed
Chin v Minister for Education of Western Australia [2000] WASC 304 cited
Securities and Exchange Commission v Chenery Corp 318 US 80 (1943) cited
Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165 cited
Hollingsworth v Commissioner of Police (1999) 47 NSWLR 151 distinguished
Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 distinguished
Nottingham University v Fishel [2000] ICR 1462 followed
News Limited v Australian Rugby League Football Ltd (1996) 64 FCR 410 followed
Blomley v Ryan (1956) 99 CLR 362 cited
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 cited
Louth v Diprose (1992) 175 CLR 621 cited
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 185 ALR 1 cited
Australian Competition and Consumer Commission v Samton Holdings Pty Ltd (2002) 189 ALR 76 cited
Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 cited
Australian Competition and Consumer Commission v Simply No Knead (Franchising) Pty Ltd (2000) 104 FCR 253 cited
Monroe Topple & Associates Pty Ltd v The Institute of Chartered Accountants in Australia (2001) 23 ATPR (Digest) §46-212 cited
Cameron v Qantas Airways Ltd (1995) 55 FCR 147 cited
Hurley v McDonald’s Australia Ltd (2000) 22 ATPR §41-741 cited
Commonwealth v Verwayen (1990) 170 CLR 394 cited
Scott v Davis (2000) 204 CLR 333 cited
Hollis v Vabu Pty Ltd (2001) 207 CLR 21 cited
NMFM Property Pty Ltd v Citibank Ltd (2000) 107 FCR 270 cited
Mutual Life & Citizens’ Assurance Co Ltd v Evatt (1968) 122 CLR 556 (HC); (1970) 122 CLR 628 (PC) followed
L Shaddock & Associates Pty Ltd v The Council of the City of Parramatta (1981) 150 CLR 225 followed
San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340 followed
Norris v Sibberas [1990] VR 161 followed
White and Carter (Councils) Ltd v McGregor [1962] AC 413 cited
MICHAEL GARY FRANCIS v SOUTH SYDNEY DISTRICT RUGBY LEAGUE
FOOTBALL CLUB LIMITED (ACN 002 487 390)
N 1477 OF 1999
LINDGREN J
8 NOVEMBER 2002
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 1477 OF 1999

BETWEEN:

MICHAEL GARY FRANCIS
APPLICANT

AND:

SOUTH SYDNEY DISTRICT RUGBY LEAGUE
FOOTBALL CLUB LIMITED (ACN 002 487 390)
RESPONDENT

JUDGE:

LINDGREN J

DATE OF ORDER:

8 NOVEMBER 2002

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.        The application be dismissed.
2.        The applicant pay the respondent’s costs.
Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 1477 OF 1999

BETWEEN:
MICHAEL GARY FRANCIS
APPLICANT

AND:

SOUTH SYDNEY DISTRICT RUGBY LEAGUE
FOOTBALL CLUB LIMITED (ACN 002 487 390)
RESPONDENT

TABLE OF CONTENTS
par no.

INTRODUCTION  [1]–[4]
PLEADING  [5]–[18]
FACTS IN OUTLINE  [19]–[93]
General  [19]–[32]
Chronological account  [33]–[93]

VARIOUS WRITTEN CONTRACTUAL ARRANGEMENTS  [94]–[140]
1.        Souths’ Retention Committee and Selection Committee  [95]–[117]
General – actual and apparent authority to engage players              [95]–[106]
                Francis’s understanding  [107]–[114]
Keenan’s understanding  [115]–[117]

2.        The CS Agreement between Souths and SMC  [118]–[127]
3.        The Agreement (between Francis and AMI)  [128]–[131]
4.        The 1996 Playing Contract  [132]–[140]
CERTAIN ASPECTS OF THE EVIDENCE  [141]–[200]
1.        Witnesses – credit  [141]–[143]
2.        Failure of either party to call Martin  [144]–[158]
par no.

3.Martin’s alleged statement to Francis in their face to face

conversation on Monday 25 May 1998  [159]–[170]
4.Martin’s alleged statement to Keenan over the telephone on

Tuesday 26 May 1998  [171]–[175]
5.Martin’s alleged statement to Leisa Francis on or about
Tuesday 26 May 1998  [176]–[181]

6.        Martin’s alleged statement to Francis on or about Saturday
           30 May 1998  [182]
7.Keenan’s telephone conversation with Cookson on or about
22 June 1998 and Keenan’s letter following  [183]–[193]

8.Telephone conversation between Keenan and Coleman in late
July 1998 (following Round 20) [194]–[200]

CAUSES OF ACTION  [201]–[325]
1.1Breach of implied contractual duty of Souths to act reasonably
and in good faith towards Francis when requiring or selecting
Francis to play, or giving him orders relating to training or playing     [202]–[230]
1.2Breach of contract made in or about May to July 1998 that Souths
would re-sign Francis for the 1999 season on the terms contained
in the option provision in the 1996 Playing Contract or on such
other terms as Francis was prepared to agree to   [231]–[259]

2.        Breach of fiduciary duty  [260]–[272]
3. Contravention of the TP Act [273]–[291]
4.        Unconscionable conduct and estoppel  [292]–[310]
5.        Negligence  [311]–[325]
LOSS OR DAMAGE  [326]–[343]
CONCLUSION  [344]

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 1477 OF 1999

BETWEEN:

MICHAEL GARY FRANCIS
APPLICANT

AND:

SOUTH SYDNEY DISTRICT RUGBY LEAGUE
FOOTBALL CLUB LIMITED (ACN 002 487 390)
RESPONDENT

JUDGE:

LINDGREN J

DATE:

8 NOVEMBER 2002

PLACE:

SYDNEY

REASONS FOR JUDGMENT
INTRODUCTION

The applicant (“Francis”) claims that the respondent (“Souths” and “the Club”) is liable to compensate him for the loss of his career as a professional First Grade Rugby League Football player. (Francis’s amended statement of claim refers to Rugby League as “the Game”, as I will sometimes do.)
When playing First Grade Rugby League for Souths in a match against the Newcastle Knights on Sunday 24 May 1998, Round 11 of the 1998 season, Francis suffered an injury to his left shoulder – a grade III acromio-clavicular (“AC”) joint dislocation (“grade III” indicates the most severe kind). If he were to have had immediate surgery he would, in effect, not have been able to resume playing for nearly the whole of the remainder of the 1998 season, but would have been fit for both pre-season training and the football season itself in 1999. An alternative possibility was to resume playing after only three weeks off the field and to play out the 1998 season with the benefit of physiotherapy, a training régime specially designed for him and the use of painkilling injections, as necessary. A third possibility, which was referred to in the evidence but which did not play a significant part in the case, was simply to rest for eight weeks before playing again.
Francis claims that Souths promised him a contract for the 1999 season if he deferred surgery and followed the second course mentioned. In fact, he did not play in Round 12 (29–31 May 1998), Round 13 (6/7 June 1998) or Round 14 (12–14 June 1998) but resumed playing in Round 15 (20/21 June 1998) and played through to Round 21 (31 July–2 August 1998). He says that following Round 21 he decided he could not continue because of the pain he was experiencing and because his loss of strength and bulk made him less effective as a player and more vulnerable to injury. At that time only three matches (Rounds 22, 23 and 24) remained to be played, since Souths had not reached the finals which were to occupy five weeks following Round 24.
After ceasing to play, Francis underwent surgery on 11 September 1998. He claims that it was not until 7 November 1998 that he learned for certain that Souths did not wish to retain him for 1999. He claims he attempted to find another club which would give him a contract but was unsuccessful because there remained insufficient time available for him to recover from his operation and to build up his bulk and strength adequately for the 1999 season. According to Francis’s claim, his absence from the competition in 1999 meant that he had no recent “track record” on which a club could be expected to engage him for 2000 or subsequent years.
PLEADING
By his amended statement of claim (“the Pleading”), Francis pleads breach of contract, breach of fiduciary duty, misleading and deceptive conduct, “unconscionable conduct and estoppel” and negligence. Notwithstanding the mode of expression in [8] to [18] below, my account there of the Pleading does not include any finding of fact.
It is part of the background that Francis had a written contract dated 14 August 1996 with Souths (“the 1996 Playing Contract”) which was for a period commencing on that date and ending on 31 October 1998. This contract covered the 1997 and 1998 seasons. It stipulated for 1997 a “playing fee” (sometimes called a “sign-on fee”) of $80,000 and a “match fee” of $2,000 for every First Grade game in which Francis participated “either as a member of the starting line up or as a fresh Reserve”. Since Francis played thirteen such games in 1997, he earned $106,000 in that year. For the 1998 season, the 1996 Playing Contract provided for a playing fee equal to the total of $80,000 and the total amount of the match fees which had been paid to Francis in 1997 ($26,000) – a total playing fee of $106,000. In addition, it provided that Francis was to receive a match fee of $1,000 for every First Grade game in which he participated in 1998, either as a member of the starting line up or as a fresh Reserve. By the end of the 1998 season he had played twelve such games and therefore had earned match fees totalling $12,000, which, with the playing fee of $106,000, made a total of $118,000 earned in 1998.
The 1996 Playing Contract gave Souths an option to retain Francis for the 1999 season on the basis of a sign on fee of $150,000 plus a match fee of $1,500 for every First Grade game in which he participated in that season, either as a member of the starting line up or as a fresh Reserve. The option was exercisable by the Club’s informing Francis, in writing, of its exercise by 31 August 1998. Accordingly, Francis’s playing performance in 1998 down to 31 August was of obvious significance both for him and for Souths, because of its relevance to Souths’ decision as to whether to exercise its option.
There are two breach of contract cases: first, breach of implied terms of the 1996 Playing Contract, and, secondly, breach of an alleged “Contract for the 1999 Season”. As to the former, it was implied by cll 3(a), 3(d) and 10(3)(f) of the 1996 Playing Contract (set out at [134] below) and by law that Souths “would, and was under a duty to, act reasonably and in good faith towards” Francis whenever it required or selected him to play and whenever it gave him orders relating to training for, and the playing of, the Game (3). (Numerals in bold are references to paragraphs of the Pleading.) Unreasonably and in bad faith, Souths selected and ordered Francis to play after 24 May 1998 until he ceased playing after Round 21 of the 1998 season, knowing that he had dislocated his left AC joint on that date. Particulars of Souths’ alleged unreasonableness and bad faith are:
- that Souths failed to have regard to a recommendation made on or about 25 May 1998, the day after Francis’s injury, by Dr Nathan Gibbs, that Francis have immediate AC joint reconstruction;
- that Souths failed to have regard to Francis’s state of health in determining his obligation to play to the best of his ability or at all; and
- that Souths threatened and represented to Francis that it would re-sign him for 1999 only if he continued to play, and deferred his AC joint reconstruction until after the 1998 season. (4)
The second breach of contract case is that “in or about May to July 1998” the parties entered into a further agreement by which Souths promised to re-sign Francis for 1999 on the terms of the option in the 1996 Playing Contract or “such other terms as [Francis] was prepared to agree to”, if Francis deferred having an operation on his dislocated AC joint and continued playing in the 1998 season “for as long as he could”. The Contract for the 1999 Season was express or partly express and partly implied:
(a)In so far as the Contract for the 1999 Season was express, it was made orally on or about Monday 25 May 1998 between Francis and Steve Martin (“Martin”) who was Souths’ “Head Coach” and the coach of Souths’ First Grade team.
(b)In so far as the Contract for the 1999 Season was implied, the implication arose from the following circumstances:
(i)that Souths’ new First Grade coach who replaced Martin, Craig Coleman (“Coleman”), in or about June 1998, knowingly allowed Francis to play during the 1998 season while injured;
(ii)that Souths failed to correct a letter written by Francis’s Manager, Greg Keenan (“Keenan”), to Souths’ Operations Manager, Frank Cookson (“Cookson”), on 26 June 1998, in which Keenan confirmed his understanding that Souths was willing to re-sign Francis for 1999 “for a lesser sign on fee than provided under the option clause in the 1996 Playing Contract”;
(iii)that the implication was necessary to give business efficacy to Souths’ promise to re-sign Francis for 1999 in circumstances in which the implied term was “so obvious that it [went] without saying”; and
(iv)that Coleman made an oral statement to Keenan at about the end of July 1998 that Keenan should tell Francis not to worry and that while Coleman was at Souths, Francis would be at Souths too. (6)
Pursuant to the Contract for the 1999 Season, Francis deferred having his operation until after the 1998 season and kept playing for Souths in that season for as long as he could, which was until about the end of July 1998, when pain prevented him from continuing. (7) In breach of the Contract for the 1999 Season, Souths “refused and failed to exercise [its] option and to contract with [Francis] on any basis for [1999]”. (8)
The alleged fiduciary duty is based on the terms of the 1996 Playing Contract and the relationship between Souths and Francis. By cl 1 of that contract, that relationship was characterised as that of employer and employee.(9) By cl 26, Francis was not to enter into any discussion, negotiation, contract, agreement, arrangement, understanding or option to play the Game for any other club for the term of the 1996 Playing Contract, that is, from 14 August 1996 to 31 October 1998.(10) “In the circumstances, and by reason of the relationship between [Francis and Souths]”, Souths owed Francis a fiduciary duty (a) not to use its powers or discretions or both under the 1996 Playing Contract to gain an advantage for itself to the detriment of Francis, and (b) to act reasonably and in good faith towards him.(11) Souths breached its fiduciary duty by using its power and/or discretion under the 1996 Playing Contract to gain an advantage for itself to Francis’s detriment, and acted unreasonably and in bad faith towards Francis. As particulars of the breach, the Pleading first repeats the particulars of unreasonableness and bad faith given at [8] above in relation to the first breach of contract case. Secondly, it states as particulars that by requiring Francis to continue to play with his injury in 1998, Souths gained an advantage in disregard of Francis’s interests and to his detriment, in that, because Francis did not have surgery until after the 1998 season, Souths was able to gain his services during that season while his performance and reputation were diminished, with the result that he was prevented from being available to play in the pre–1999 playing season and therefore from entering into a playing contract for the 1999 season with Souths or with any other club. (12)

The claim of misleading and deceptive conduct is based on three representations (collectively and individually, “the Representations”). The first two Representations were made by Souths “in or about May 1998”. The first was that Souths would re-sign Francis for 1999 only if he continued to play the Game in the 1998 season with his injury and deferred surgery until after that season. (In substance this was a representation that if Francis did not do as mentioned, Souths would not re-sign him for 1999 and I will refer to it as “the negative Representation”.) The second was that if Francis continued to play the Game in the 1998 season with his injury and deferred surgery until after that season, Souths would re-sign him for 1999. (This was in positive terms and I will refer to it as “the positive Representation”.) The first two of the three Representations were express, or partly express and partly implied. In so far as they were express, they were made orally by coach Martin on or about 25 May 1998 to Francis and, separately, to Keenan. In so far as they were implied, they were implied:
- by Souths’ new First Grade coach, Coleman, in or about June 1998, knowingly allowing Francis to play during the 1998 season while injured;
- by Souths’ not correcting the letter from Keenan dated 26 June 1998 referred to in [9] above;
- by the oral statement by Coleman to Keenan at about the end of July 1998 mentioned in [9] above; and
- by an oral statement by Cookson to Keenan on 22 June 1998 to the effect that Souths was not exercising its option over Francis for 1999 but would be prepared to discuss a lesser figure for that season. (13)
The third Representation is distinct from the first two. It was made by Souths in or about July 1998 when Coleman represented to Francis, through his manager and agent Keenan, that Francis should not be worried about a contract with Souths for 1999 and that while Coleman was with Souths, Francis would be with Souths. (13A) (It will be noted that Coleman’s alleged statement to Keenan at about the end of July 1998 is also a circumstance from which the first two Representations are said to have arisen.)
Induced by the Representations, Francis continued to play in the 1998 season, carrying his injury, and he deferred surgery until, substantially, the end of that season.(14) The Representations were “false and misleading”, in that:
- Souths did not re-sign Francis for 1999;
- there were no reasonable grounds for the making of the Representations;
- Souths failed to advise Francis that it had no obligation to re-sign him for 1999;
- Souths failed to advise Francis that it might not re-sign him for 1999;
- Souths failed to advise Francis that its option to re-sign him was not conditional upon his playing the Game in circumstances in which he had a dislocated AC joint;
- Souths failed to advise Francis that omitting to have surgery until after the 1998 season might preclude him from being available to play in the pre-1999 playing season, and so, from entering into a playing contract for 1999 with Souths or with any other club; and
- Francis should have been worried, and been advised by Souths to be worried, about the possibility of his not receiving a contract with Souths for the 1999 season. (15)
In the circumstances, Souths, in trade or commerce, engaged in misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) (“the TP Act”) and s 42 of the Fair Trading Act 1987 (NSW) (“the FT Act”). Francis also relies on s 51A of the TP Act and s 41 of the FT Act. Finally, in making the Representations, Souths engaged in conduct which was, in relation to employment that was or might be offered by it, liable to mislead Francis as a person seeking employment by Souths after the 1998 season, as to the availability, nature, terms, conditions or other matters relating to that employment, and was therefore in contravention of s 53B of the TP Act. (16)
The pleading of unconscionable conduct and estoppel commences by asserting that Francis expected that a legal relationship would exist between him and Souths pursuant to his being re-signed to play for Souths in 1999 on the terms of the option provision in the 1996 Playing Contract or such other terms as he was prepared to agree to, and that Souths would not be free to withdraw from that legal relationship.(17) Souths induced Francis to have that expectation by making the Representations.(18) Francis acted in reliance on the expectation engendered by Souths by continuing to play for Souths during the 1998 season while injured and deferring his AC joint reconstruction,(19) as Souths knew and intended him to do.(20) Francis’s doing so would occasion detriment to him if the expectation was not fulfilled,(21) yet Souths failed to act so as to avoid that detriment, by fulfilling the expectation or otherwise.(22) As a result, Souths is estopped from denying the existence of the Contract for the 1999 Season(23) or, in the alternative, engaged in conduct that is unconscionable within the meaning of the general law and contrary to s 51AA of the TP Act.(24) Further, or in the alternative, Souths in trade or commerce, in connection with the supply or possible supply of services to Francis, engaged in conduct that was unconscionable and contrary to s 51AB of the TP Act and s 43 of the FT Act or s 51AC of the TP Act.(25)
Finally, the claim in negligence commences with the contention that the Representations were made at a time when Souths knew or should have known that Francis was relying on Souths to exercise due care, skill and diligence in making the Representations; that Francis would or might act on the Representations; and that if he did so and they proved to be untrue or misleading or deceptive, he would or might suffer loss or damage.(26) By reason of the relationship between Francis and Souths and in the circumstances, Souths owed Francis a duty in making the Representations “to exercise all due care, skill and diligence”.(27) In breach of that duty, Souths failed to advise Francis:
(a)that there was no obligation on Souths under the 1996 Playing Contract to re-sign him for 1999;
(b) that it might not re-sign him for the 1999 playing season;
(c) that he was not obliged to play in the 1998 season with a dislocated AC joint;
(d)that Souths’ option to re-sign him was not conditional on his playing in circumstances in which he had a dislocated AC joint;
(e)that deferring surgery until after the 1998 season might preclude him from being available to play in the pre-1999 playing season and so from entering into a playing contract for that season with Souths or with any other club; and, lastly,
(f)that he should have been worried about whether Souths would re-sign him for the 1999 season.(28)
As particulars of loss and damage, Francis asserts the loss of not being re-signed by Souths for 1999, quantified at $186,000, or, in the alternative, the loss associated with not being able to sign with another club because he underwent his AC joint reconstruction after the 1998 season, also quantified at $186,000. In addition, Francis gives as particulars, the loss of the opportunity to play for Souths or any other club participating in the 1999 “National Rugby League Premiership Competition” after the 1998 season, and the consequential loss of income over a playing life of six years, quantified at $186,000 per year ($1,116,000).(29) The sum of $186,000 is clearly arrived at by reference to the terms of the option in the 1996 Playing Contract – a sign-on fee of $150,000 plus match fees of $36,000 representing a match fee of $1,500 for each of 24 supposed matches.
FACTS IN OUTLINE
General
Francis was born on 7 February 1974 and so was twenty-four years old in the 1998 football season. He played the Game in his school years. He played up to 1990 at De La Salle College, Lithgow. In 1991 and 1992, his last two years of high school, Francis attended, and played the Game at, St Gregory’s College, Campbelltown, where he received a football scholarship. He played in that College’s first 13, ultimately captaining that side in 1992, his final year at school. In 1992, Francis also played in the Australian Schoolboys Rugby League Football team, where he was a front-row forward and Vice Captain. He sat for the Higher School Certificate at the end of 1992.
Senior counsel for Francis relied, not only on his client’s strong sporting performance, but also on his weak academic performance. I will not dwell on the evidence of the latter. I accept, as Francis himself put it, that he was at school to play football rather than to study. I accept that his level of educational attainment was not high and that he is a slow reader.
It was Francis’s childhood dream to play the Game as a professional. In 1992, his last year at school, he decided he should employ a manager. On 24 July 1992 he entered into a three year written contract with All Sports Management Pty Ltd (“All Sports”), a company run by Wayne Beavis, which he engaged as his manager for three years to 24 July 1995. All Sports was required to advise Francis and to negotiate contracts for him to play the Game. All Sports negotiated Francis’s first contract with Souths which was a three year playing contract dated 23 October 1992. That contract covered the 1993, 1994 and 1995 seasons. In 1993, he played mainly in Souths’ Under 21 Years team, although he also played several Reserve and First Grade games. In 1994 he played in Souths’ Reserve Grade team and played several games in First Grade. In 1995, most of the games he played for Souths were in its First Grade team, where, again, his position was that of front-row forward.
In November 1995, Francis, then aged 21, retained solicitors to act for him in relation to his contractual arrangement with All Sports. Although his three year contract with All Sports had ended on 24 July 1995, he instructed his solicitors to write to All Sports so that it understood he was no longer bound to it.
Apparently without the assistance of any manager or lawyer, on 30 November 1995 Francis entered into a one year playing contract with Souths. This contract covered the period 1 November 1995 to 31 October 1996. It provided for a playing fee of $70,000. As well, in 1996, during the Australian off-season, he played for a short time for the London Broncos in England.
Francis entered into a Management Agreement (“the Agreement”) dated 1 July 1996 with AMI Rugby League Pty Ltd (“AMI”, which stands for “Athlete Management International”), a sports management company which was managed and directed by Keenan. For convenience, I will usually refer to Keenan rather than to AMI. The Agreement was for a period commencing on 1 July 1996 and ending on the expiry of the 1996 Playing Contract negotiated by Keenan, or on 1 July 1998, whichever should occur last. Since Keenan negotiated the 1996 Playing Contract which was to terminate on 31 October 1998, the Agreement was, in effect, for a period expiring on that date also. Under cl 4(c) of the Agreement, Keenan was to “negotiate terms acceptable to [Francis] in respect of all offers made to [Francis] by Employer Entities and ensure any contracts made [were] properly documented or recorded”.
The Agreement was negotiated between Francis and Keenan. Keenan gave Francis a draft to take away and consider. Until 27 May 1996, Keenan had been practising as a solicitor employed by Gadens Ridgeway. According to Keenan’s notes, Francis and Keenan had discussions on 31 May 1996, 11, 24 and 28 June 1996, and 1 July 1996. A note of Keenan’s dated 31 May 1996 records that “Greg Herder” was Francis’s solicitor, but Francis testified that Mr Herder was attending to his conveyancing work and did not advise him on the Agreement. Francis had a draft of the Agreement for some four days before telling Keenan he would sign it. However, Francis said he did not read the draft and trusted Keenan.
Keenan negotiated the 1996 Playing Contract with Souths. He commenced doing so immediately after Francis retained him on 1 July 1996. Keenan had a practice of making file notes of important events concerning his clients’ affairs whenever possible. The negotiation of the 1996 Playing Contract spanned the period from at least 8 July 1996 to 13 August 1996 when Keenan told Cookson that Francis accepted Souths’ offer. According to Keenan, the negotiation was a “true negotiation”. Initially, on 25 July 1996, Francis instructed Keenan to reject Souths’ offer of 16 July 1996 and to put a counter offer. On 3 August 1996, Francis, Keenan and Cookson met at the Charing Cross Hotel, where Cookson lived and worked. Keenan made a file note of the meeting. The file note suggested that the three men discussed various aspects of the proposed contract and that Francis tried to get more money, but Cookson stood firm, as Keenan had told Francis he was likely to do. On 14 August 1996 Francis signed the 1996 Playing Contract and Keenan signed as a witness to his signature. I accept that during the meeting on 3 August 1996 Francis took the initiative of seeking to extract more money from Cookson. Keenan’s file notes during the negotiations with Souths also show that Keenan was endeavouring to secure more lucrative terms for Francis from other clubs but that apparently none were available. (I will deal with the terms of the 1996 Playing Contract later.)
The above account of the part Francis played from 1992 to 1996 in negotiating and entering into contracts relating to professional Rugby League Football shows that he was not entirely a “babe in the woods” in his later dealings with Souths in 1998, with which the present case is concerned.
In the 1997 season, Francis played First Grade and Reserve Grade games for Souths. It was injury which caused him to play in Reserve Grade.
In the 1998 season, Francis commenced playing in Round 4 after recovering from an injury in a pre-season trial game. As noted earlier, he ceased playing following Round 21. Of the intervening eighteen rounds, he missed three rounds (12, 13 and 14) due to the injury with which this case is concerned. Of the fifteen rounds he played, twelve games were in First Grade and three were in Reserve Grade.
During the course of the hearing there were various assessments of Francis’s ability as a professional footballer in 1998. Wayne Pearce (“Pearce”), who was called by Francis to testify in this respect, was well qualified to do so. Pearce played 192 First Grade games for the Balmain Club from 1980 to 1990, fifteen representative games for New South Wales, and eighteen test matches for Australia; he was the coach of the First Grade Team of the Balmain Club from 1994 to 1999 and of the West Tigers from 1999 to 2000; and he coached the New South Wales State of Origin Team in 1999, 2000 and 2001. He said that in 1998 he considered Francis to be “a very tough, uncompromising, good football player, with a very high work rate on the field”. Sean Garlick (“Garlick”) was the Captain of Souths’ First Grade team in 1998 and 1999. He retired from professional football at the end of the 1999 season, having played 162 First Grade games. Souths called him as a witness. His affidavit included the following:
“I can describe Francis as an aggressive footballer who always would give his all in every game he played. However, while very aggressive, I would characterise him as having limited ball skills. As such, Francis had a restricted ability to promote second phase play and would therefore invariably be tackled with the ball.”
Scott Campbell was Head Trainer at Souths in 1998. He described Francis as “one of the first front-rowers picked for the First Grade side in the Club”. He testified that Francis was “very committed to fitness training” and that he “endeavoured to ensure that he was at peak fitness at all times”. Darryl Neville, who was appointed coach of Souths’ Reserve Grade team at the beginning of the 1998 season, described Francis as “a very tough, good first grade football player”.
Descriptions of Francis as a player by other witnesses with relevant knowledge and experience included “aggressive”, “go forward”, “workmanlike”, “solid”, “straight up and down”, “a good first-grade player”, “uncompromising”, “very tough”, “of a good character”, a player who relied on the physical side of his game rather than skill level, and a player who ran for the man rather than the gap.
My conclusion is that Francis was a generally well regarded front-row forward, but was not a player whom clubs felt they “must have” or whose engagement they should secure as a matter of high priority. In addition, it was common knowledge in 1998 that the Rugby League competition in 1999 was to have a reduced number of participating teams, with the result that there would be a surplus of players seeking engagements. Keenan conceded that as early as 27 May 1998 he had formed the opinion that it was unlikely that Souths would exercise its option over Francis, because of the reduction in market prices due to the forthcoming change just mentioned. When Francis was told on 22 June 1998 that Souths was not interested in exercising its option over him for 1999, his response was to tell Keenan that he had thought that might happen, adding that the reduced number of teams for 1999 would give rise to a glut of players. I will return to the subject of Francis’s prospects later when dealing with the issue of loss or damage.
Chronological account
I will now outline in chronological order the major events of 1998 (the numbers in brackets in the left-hand column are the numbers of the rounds in the 1998 season):
(1)     13–15 March   )          Francis did not play because he was recovering from
(2)     20–22 March   )          the pre-season trial game mentioned above
(3)     27–29 March   )
(4)     3–5 April        )
(5)     10–12 April     )          Francis played Reserve Grade
(6)     17–19 April     )
(7)     25/26 April     )
(8)     1–3 May         )          Francis played First Grade
(9)     8–10 May       )
(10)     15–17 May     )
(11)23/24 May                  While playing in the First Grade match between Souths
and the Newcastle Knights, Francis sustained the injury
in question to his left shoulder. Dr Andrew McDonald, Souths’ Medical Officer, was present. He told Francis that the injury appeared to be a grade III left joint dislocation and that he would need to see him first thing the following morning, when the shoulder would have to be X-rayed. In the meanwhile, Francis’s left shoulder was placed in a sling and Dr McDonald prescribed analgesic medications.
Monday 25 May 1998
On this day, Francis attended upon Dr McDonald at the South Sydney Sports Medicine Centre, where he practised. Dr McDonald arranged for Francis’s shoulder to be X-rayed. There are differences between Francis’s and Dr McDonald’s versions of their conversation. It is common ground that Dr McDonald recommended “conservative”, in the sense of “non-surgical”, treatment which would see Francis back on the field within a few weeks, and that Francis resisted this suggestion in favour of immediate surgery. Dr McDonald told Francis he would refer him to see Dr Daniel Biggs, orthopaedic specialist, the next day for a second opinion. In the letter of referral, Dr McDonald informed Dr Biggs:
“He wants surgery for cosmetic reasons. I have explained that as a rule he could return to sport earlier with conservative [treatment] and have the surgery at the end of the year”.
On his regular “Monday injury list” addressed to Martin, Dr McDonald recorded in respect of Francis “grade III injury left A.C. joint. Seeing surgeon tomorrow. Out at least 2-3 weeks”.
After leaving Dr McDonald, Francis encountered Dr Gibbs, who also practised in the South Sydney Sports Medicine Centre, and from whom Francis had obtained “second opinions” in the past. He consulted Dr Gibbs, telling him he wanted surgery to improve his shoulder cosmetically and that he was to see Dr Biggs. Dr Gibbs inspected X-rays of Francis’s left shoulder and advised Francis of the “pros and cons” of immediate surgery as against playing on with the aid of painkillers. Francis told Dr Gibbs he wanted to have immediate surgery, and Dr Gibbs arranged for Dr Des Bokor, an orthopaedic surgeon, to perform the operation.

Francis claims that he had a critical conversation with Souths’ Head Coach and First Grade coach Martin, in the presence of assistant First Grade coach Coleman, in which Martin promised Francis a contract for the 1999 season if he resumed playing after three weeks and deferred his operation until after the end of the season. Martin was not called by either party. Francis and Coleman differ as to what Martin said to Francis and as to where the conversation took place. Francis says it took place in the cafeteria at Souths Leagues Club; Coleman says it took place outside the dressing sheds at Redfern Oval where Souths trained. Coleman said he did not have lunch with Martin and that he lunched alone at a Chinese restaurant, as was his practice on Mondays.
That night (Monday 25 May) Francis told his sister Leisa Francis, with whom he lived, of his conversation with Martin.
Monday 25 or Tuesday 26 May 1998
Francis met with Keenan in a coffee shop in Sydney and told him what had happened including his conversation with Martin (Francis says this happened on Monday 25 May 1998, Keenan says Tuesday 26 May 1998).
Tuesday 26 May 1998
Keenan telephoned Mark Dickens of the Balmain Club as to whether that Club was interested in engaging Francis. It was agreed that he (Keenan) would telephone Pearce. He did so, leaving a message for Pearce to telephone him.
Keenan telephoned Dr Gibbs and Martin. According to Keenan, Dr Gibbs told him that Francis wanted to have surgery on his shoulder, that Francis did not “feel he [could] be competitive with the injury”, and that Dr Gibbs had booked him in with a leading orthopaedic surgeon for an operation.
According to Keenan’s affidavit, Martin told him that Francis must be back playing in three weeks’ time, failing which he would have to find another club for the 1999 season because Souths would not re-sign him. According to Keenan’s affidavit, Martin also said that Souths would re-sign Francis if he played out the rest of the 1998 season, and that the choice was Francis’s. Keenan’s contemporaneous note stated only, “You’ll only re-sign Francis if he plays out the rest of the season and has op. after season finished”.
Keenan told Francis of his conversation with Martin, making a contemporaneous written note to the effect that Francis said he wanted both to stay at Souths and to have his shoulder “fixed”, but that he had “no choice” but to play out the season.
Francis saw Dr Biggs. (The evidence does not establish whether Francis saw Dr Biggs before or after Keenan spoke to Francis on this day.) Dr Biggs was not called as a witness. Dr McDonald, who was not in his surgery on Tuesday 26 May, says he telephoned Dr Biggs from his mobile phone and that Dr Biggs told him that he (Dr Biggs) had advised Francis that he had a good chance of recovery without surgery, and that he (Dr Biggs) could not promise him a better result with surgery. According to Dr McDonald, Dr Biggs told him that Francis was concerned over the appearance of his left shoulder and had said he wanted to have surgery. Finally, according to Dr McDonald, Dr Biggs said he had asked his secretary to arrange a booking for Francis for surgery.
Dr Biggs wrote to Dr McDonald on 26 May 1998. Dr McDonald says he would have received this letter after that date. The letter stated that Francis was not happy with the appearance of his shoulder and was keen to proceed to surgery. The letter advised that overall, “the results of early operative intervention are better than a late reconstruction, even though 80% of grade III AC joints do settle with conservative treatment”. The letter stated that Dr Biggs would arrange for Francis to undergo a reconstruction in “the not too distant future”.
Tuesday 26 May 1998 or Wednesday 27 May 1998
Leisa Francis telephoned Martin and claims Martin told her that Souths wanted Francis “back on the paddock” within three weeks; that there was no reason why he could not comply; that if he failed to comply Souths would not re-sign him for 1999; but that if he did comply Souths would re-sign him for 1999.
Dr McDonald says he telephoned Francis and told him that Dr Biggs agreed with him (Dr McDonald) that Francis had a good chance of recovery with conservative (non-surgical) treatment. He told Francis that he (Dr McDonald) would be recommending conservative treatment to Souths and that if Francis did not regain full function of the shoulder or was concerned with its appearance, he (Dr McDonald) could arrange for surgery to be performed at the end of the season. According to Dr McDonald, Francis said in strong terms that regardless of Dr Biggs’ advice and of the position being taken by Souths, he was going to see Dr Gibbs to have his shoulder fixed.
Wednesday 27 May 1998
Pearce returned Keenan’s telephone call. Keenan inquired whether the Balmain Club might be interested in Francis for the 1999 season (Keenan did not tell Pearce about Francis’s injury). According to Keenan, Pearce replied that Balmain would like to discuss the matter further after 30 June 1998 (there was an “anti-tampering” rule which prohibited discussions with players under contract with another club until after 30 June). Keenan informed Francis of the details of this conversation.
On or about Saturday 30 May 1998
According to Francis, outside Martin’s office, Martin told Francis of Leisa Francis’s telephone call and said that if Francis wanted a contract for 1999 he would have to be back on the field within three weeks.
According to Francis and his sister, that night at home, upon Francis’s raising the subject of her telephone call to Martin, she told her brother what Martin had said to her.
Shortly afterwards
Dr McDonald’s Monday “injury list” addressed to Martin stated in relation to Francis: “left A.C. joint injury (Continuing conservative management)”.
A few days to a week later
Francis changed his mind, deciding to play out the season and to defer his operation. He informed Dr Gibbs and Keenan of this decision and cancelled the appointment that he had with Dr Bokor for the operation. According to both Francis and Dr Gibbs, Dr Gibbs’ response when Francis told him of his decision was to advise him to make sure he had a contract with Souths for 1999, because if he had the operation after the end of the 1998 season he would miss pre-season training for 1999 which would make it difficult for him to secure a contract with another club for that year. Both Dr Gibbs and Francis say Francis replied that Martin had assured him that Souths would re-sign him for 1999.
(12)     29–31 May     Francis did not play
2 June             Francis recommenced training, but his training was


modified by head trainer, Scott Campbell (“Campbell”)
(13)     6/7 June          Francis did not play
Monday 9 June 1998
Dr McDonald’s Monday “injury list” addressed to Martin stated in relation to Francis: “left A.C. joint (Unlikely to be fit to play this week)”.
(14) 12–14 June Francis did not play
Monday 15 June 1998
Dr McDonald’s Monday “injury list” addressed to Martin stated in relation to Francis: “left A.C. joint. (Possibly fit to play this week)”.
About a week before Francis’s return to the field for Round 15
According to Garlick, he and Francis had a conversation in Souths’ dressing room at Redfern Oval in which Francis sought Garlick’s opinion as to what course he should follow in relation to his shoulder; Garlick advised him to continue playing; and Francis said he had decided to do so because if he could not do himself any more damage, he had nothing to lose and he might as well continue playing and earning match fees. Francis denies that the conversation took place.
(15) 20/21 June Francis resumed playing. He says he was programmed to play
First Grade but was dropped to Reserve Grade for having been late for training.
From his resumption of play in Round 15 to Round 21, Francis’s weight training régime continued to be for lower body strength only; according to Campbell, Francis continued to have no weight training for upper body strength or heavy physical contact training. (Later, Campbell said that Francis could do “very little upper body strength training, including weights” and referred to Francis’s inability to undertake upper body weight training “to the maximum potential”.) As a result, according to both Francis and Campbell, Francis’s strength and bulk deteriorated.
From his resumption of play, Francis needed painkilling injections before matches, usually at half-time and sometimes after full-time.
Monday 22 June 1998
Dr McDonald’s Monday “injury list” addressed to Martin stated in relation to Francis: “left A.C. joint injury. (Fit to play)”.
Cookson and Keenan spoke on the telephone. They disagree in certain respects as to what was said. It is common ground that Cookson informed Keenan that Souths was not going to exercise its option over Francis for 1999. Ultimately, Keenan says Cookson said that Souths was interested in re-signing Francis and “would be prepared to discuss a lesser figure”. Cookson says he said merely that Souths “might be prepared to discuss” a lesser figure. The difference between their recollections is inconsequential for present purposes, in my view.
Cookson said that, as far as he was concerned, at the time:
·     Souths was not “genuinely interested” in re-signing Francis for 1999;
·     it was “fairly unlikely” that Souths would negotiate with Francis in the future; and
·     there was no necessity to meet with Keenan “unless Souths was genuinely interested in re-signing [Francis] for the 1999 season”.
Keenan made a contemporaneous note of the conversation which stated “Club not exercising option. You happy to talk about a lesser figure. I’ll confirm this in writing”.
According to Keenan’s testimony, it did not surprise Keenan that Souths wanted to reduce the 1999 sign-on fee for Francis. The reason, he said, was that the “war” between the Australian Rugby League and the Super League had ended with the result that less teams, and therefore less players, were to be involved, with a consequential decrease in the market value of players “by as much as 30%”.
Shortly afterwards, according to Keenan, he telephoned Francis and told him that Cookson had said Souths would not be exercising its option because of the high sign-on fee, but was interested in re-signing him “with a lesser sign-on fee and a higher incentive”. Keenan says Francis responded by saying that he thought this might happen “now that the ARL and Super League war is over”. Francis asked Keenan how much Cookson wanted to pay as a sign-on fee and Keenan said he did not know but would write to Cookson.
A few days later (late June or early July 1998)
Francis telephoned Martin who also said that Souths was not going to exercise its option but said it was “looking to put [Francis] on a greater incentive contract with a lesser sign-on fee.” According to Francis, he replied “OK, that seems reasonable”. Francis says that he believed at the time that a new contract would be negotiated.
26 June 1998
Keenan wrote to Cookson purporting to confirm that Cookson had told him on 22 June that Souths would not exercise its option over Francis but was “prepared to discuss a lesser figure”. The letter invited a reply by 30 June 1998 if it misstated the effect of the conversation. There was no reply. Cookson testified orally that he had not replied because Keenan’s letter accurately reflected the conversation. Keenan testified orally that he had expected no reply.
Keenan says he tried to contact Cookson from 1 July to September 1998 about the issue of Souths’ interest in retaining Francis for the 1999 season. Cookson agrees, but in the context that his understanding was that Keenan was always wishing to speak to him about contracts for his clients, of whom Francis was one. Cookson said he saw no necessity for a meeting unless Souths “was genuinely interested” at some time in this period in re-signing Francis, and it was not.
(16) 26–28 June Francis played First Grade
30 June 1998
Souths’ Board of Directors noted a dispute between Martin and the Retention Committee over selection of the First Grade team and resolved to “put in place” a Selection Committee to select teams. A few days later, such a Committee, comprising George Piggins, Darrell Bampton and Martin, was in place.
(17) 3–5 July Francis played First Grade
(18) 10–12 July Francis played First Grade
Following Round 18 (apparently on 13 or 14 July 1998)
Souths stood down Martin as coach of the First Grade team and appointed Coleman caretaker Head Coach and coach of the First Grade team in his place until the end of the 1998 season. (Later, Coleman was appointed for the 1999 season also.) On Coleman’s recommendation, Souths’ Selection Committee (now George Piggins, Darrell Bampton and Coleman) selected Francis for the interchange bench rather than as a member of the run on team.
(19) 17–19 July Starting on the interchange bench, Francis played First
Grade.
(20) 24–26 July Starting on the interchange bench, Francis played First Grade.
Late July 1998 (following Round 20)
Keenan had a telephone conversation with Coleman in which, according to Keenan, Coleman said “I love Mick. Whilst I am at Souths, Mick will be at Souths”. Coleman denies making this statement. Subsequently, Keenan relayed to Francis the statement as attributed by him to Coleman.
(21) 31 July–2 August Starting on the interchange bench, Francis played First
Grade. (This was the last match he played in 1998.)
After Round 21
Francis says he decided that he could not continue playing because of pain and his deteriorated physical condition. Francis told Keenan he had decided to cease playing and to have his shoulder operation.
Campbell states that by this time Francis’s fitness and strength, particularly of his upper body, were poor. Coleman claims (Francis denies) that Souths’ Selection Committee, on his (Coleman’s) recommendation, dropped Francis to Reserve Grade. In Reserve Grade he would not earn match fees.
Francis says he told Coleman he could not continue because of pain and his deteriorated physical condition and that he wanted to have his operation, and that Coleman replied: “OK ... I will see you next year”. Coleman denies this conversation and claims (Francis denies) he told Francis he had better get to training and that Cookson was going to fine him for his failure to attend training.
On or about Thursday 6 August 1998
Francis told his sister of his decision to cease playing and of his conversation with Coleman.
(22)     7–9 August                Francis did not play
12 August                  Souths terminated Martin’s contract
(23)     14–16 August            Francis did not play
Towards the end of the 1998 season
Coleman says he informed Cookson and Darrell Bampton, both members of Souths’ Retention Committee, that he thought Souths should not retain Francis for 1999 because his performance was not up to First Grade standard, and that they accepted his recommendation.
(24) 21–23 August Francis did not play (Round 24 was the last round of the season
and was followed by five weeks of finals for which Souths did
not qualify)
Some time before 28 August 1998
Francis telephoned Dr Gibbs and told him he had ceased playing and wished to undergo surgery. Dr Gibbs said he would again refer Francis to Dr Bokor and did so.
Monday 28 August 1998
Dr Bokor reported to Dr Gibbs that he had again seen Francis and that arrangements would be made for surgery.
Dr McDonald’s Monday “injury list”, now addressed to Coleman, stated in relation to Francis: “left A.C. joint reconstruction”.
31 August 1998
This was the last day for notification by Souths of the exercise of its option over Francis for the 1999 season. As foreshadowed by Cookson on 22 June 1998, Souths did not exercise the option.
On or about 1 September 1998 (or perhaps as early as 28 August)
According to Francis’s affidavit, he went to see Pearce at Balmain Leagues Club to “cover” himself by “negotiating” with that club. Pearce told Francis he was concerned about his shoulder operation which he had left too late (the operation was yet to take place on 11 September 1998), and which would now cause him to miss pre-season training for the 1999 season. Pearce also told him he had lost a lot of bulk and that he would be behind the other players in pre-season training. Pearce said he would think about the matter further. After the conversation Pearce decided not to recommend to the Balmain Club’s Retention Committee that Francis be engaged for the 1999 season.
4 September 1998
Francis called on Dr Gibbs to collect the letter of referral to Dr Bokor for the operation. Francis subsequently made an appointment with Dr Bokor to have the operation.
11 September 1998
Francis underwent reconstructive surgery by Dr Bokor on his left AC joint.
28 October 1998
Francis and Keenan separately telephoned Dr Gibbs about a fine imposed by Souths on Francis for non-attendance at training.
2 November 1998
Dr Gibbs wrote to Cookson in support of Francis’s case for revocation of fines which Souths had imposed on him for non-attendance at training.
On or about 7 November 1998
Over coffee, Ian Rubin (“Rubin”), another Souths’ player, showed Francis a list of players whom Souths was signing for the 1999 season, from which it was clear that Souths did not intend to re-sign Francis (or Rubin). This signified to Francis that he was “released” to play for other clubs.
Later the same day or a few days later
Francis informed Keenan that his name did not appear on Souths’ list of players for 1999 and Keenan undertook to check the position. Keenan’s testimony was that the absence of Francis’s name from the list did not surprise him at all and that for some time, at least from Francis’s operation on 11 September 1998, he had thought it unlikely that Souths would wish to retain Francis at all for 1999. He said that he undertook to check the position with Cookson because Francis used to telephone him “all the time”, expressing concern over what he was going to be doing in 1999, and that he (Keenan) wanted “to put finality to the situation”.
Keenan obtained confirmation from Cookson and advised Francis. Francis went to see Cookson at the Charing Cross Hotel. The two men differ as to what was said. Francis says he asserted that he had continued to play for Souths after injuring his shoulder on the strength of representations made by Martin and Coleman that he would be re-signed for the 1999 season. Francis alleges that Cookson responded that the Club had changed its mind and that Francis was “worth a million dollars off the field, but not worth two bob on it”. Cookson denies that Francis made the alleged initial statement and denies making the response attributed to him.
15 November 1998
Cookson replied to Dr Gibbs’ letter of 2 November 1998 advising him that the fines would be revoked.
Late November 1998
Keenan asked Pearce whether Balmain was interested in Francis for 1999 and Pearce replied that he did not “think” Balmain was interested. (Keenan was to make a further unfruitful inquiry of Pearce on 4 February 1999.)
End of 1998
For financial reasons, Francis moved from Sydney to Terrigal on the New South Wales Central Coast to live. Living costs there were less than in Sydney and he was able to work in his family’s pizza business, where he continued to work down to the time of the hearing.
March/April 1999
Francis signed a contract to play for the Western Suburbs District Rugby League Football Club Ltd (“Wests”) which provided for match fees of $1,500 for a win and $750 for a draw in First Grade and no sign-on fee. Francis attended some training sessions with Wests but played only one match for that Club, and says that he decided to cease because of:
·     the time and expense of travel to training and matches, for which Wests said it could not afford to reimburse him;
·     the poor standing of Wests (it came last in the competition in 1998 and 1999);
·     his unfitness because of lack of participation with any club in 1999 pre-season training; and
·     Wests’ expectation that it would not be in the competition the following year (2000).
June 1999

Francis played in England for about 12 weeks, earning, he says, a “net” sum of about $5,000.
The year 2000
Souths was not included in the National Rugby League competition.
VARIOUS WRITTEN CONTRACTUAL ARRANGEMENTS
Several written contractual arrangements feature in the case. In discussing the first of them, I find it convenient also to resolve the important issues of the actual and apparent authority of coaches Martin and Coleman, and Francis’s (and Keenan’s) understanding as to their authority to commit Souths to engage Francis for the 1999 season.
1. Souths’ Retention Committee and Selection Committee
General– actual and apparent authority to engage players
In the first half of 1997 Souths entered into contractual arrangements with associated entities, including South Sydney Junior Rugby League Football Club Ltd (“Juniors”), which provided for the establishment of a “Retention Committee” and a “Selection Committee” for Souths. The arrangements presently relevant are found in a confidential “Offer” document (there were also a “Retention Committee Trust Deed” dated 28 February 1997 and a “Deed for Financial Assistance” dated 3 March 1997).
Juniors offered to provide financial assistance to Souths in each of 1997, 1998 and 1999 on certain conditions. One condition was that Souths would appoint Cookson as its Operations Manager as from a date not later than 1 January 1997. Another was that there was to be a Retention Committee comprising the Operations Manager, two nominees of Juniors and two nominees of Souths. The Retention Committee’s functions were to include the appointment of a coach for each Souths side, the appointment of a “Selection Committee” comprising three persons being the coach of the team being selected and two other persons, and:
“to negotiate with coaches, players, trainers, medical and administration staff, in the name and on behalf of Souths, but not to incur any personal liability in so doing, with a view to entering into contracts for services with those persons.”
The evidence suggests it was Souths’ Retention Committee that had appointed Martin as coach in about July or August 1997.
The Offer document also set out the functions of the Operations Manager, which included acting as Chairman of the Retention Committee, and, in the event of an equality of votes on that Committee, exercising a casting vote in addition to his ordinary vote.
Cookson testified that at the relevant time in 1998, the Retention Committee comprised himself as Chairman, two nominees of Juniors, namely, Rod Gorman and Stephen (Mick) Fisher, and two nominees of Souths, namely, George Piggins and Les Bell. (Mr Bell was later replaced by Darrell Bampton.)
I am satisfied that it was only the Retention Committee that had actual authority to exercise, or to undertake to exercise, Souths’ option over Francis for 1999, or to commit Souths to any other form of engagement of Francis for that year. The Retention Committee did not delegate that authority to anyone. In particular, it did not authorise Souths’ Head Coach and coach of its First Grade team, Martin (or, later, the caretaker Head Coach and coach of the First Grade team, Coleman), to promise Francis a contract for the 1999 season, or hold him out as having that authority, or implicate itself in any way in his making any such commitment. Nor is it established by the evidence that it was within the usual authority of a football club’s Head Coach and coach of its First Grade team to commit the club to engage a player, and so Martin (and Coleman) did not have ostensible authority to do so by reason of the holding of those positions. Further, there is no evidence to indicate that Souths allowed Martin (or Coleman) to act in a manner which might create the appearance that he had authority from Souths to engage a player.
The fact, if it was the fact, that the Retention Committee had always previously successfully negotiated a contract with every player recommended to it by the Head Coach, and by Martin in particular, does not establish that Martin had actual or apparent authority himself, to engage players, or that he was held out by Souths as having that authority. Nor is actual or apparent authority established by the fact, if it was the fact, that the Retention Committee never once imposed on Martin a player against his will. Nor is actual or apparent authority established by the fact that, as Keenan said, and I accept, there were cases in which he had not pursued trying to win over the Retention Committee because of his understanding that the coach would get his way, as the coach did, in favour of Keenan’s client.
I accept that in the ordinary course Martin would recommend to Souths’ Retention Committee the players he wanted for a season. No doubt Martin would take into account various factors in deciding upon the players to be recommended. I accept that the Retention Committee would not impose a player on him for a season unilaterally, without discussion with him or against his will. But ultimately it remained for the Committee to decide whether it could afford, and would sanction a negotiation with, all the players recommended by the coach. It was the Retention Committee that would decide whether to seek to engage a player, and it was Cookson who would negotiate terms with a player or his agent.
At the time of the parting of the ways between Souths and Martin in July 1998, they were in dispute as to whether the provisions of an unexecuted Coaching Services Agreement (“the CS Agreement”) between Souths and Steve Martin Consulting Limited (“SMC”), referred to below, were in force as the terms of the contractual arrangement between Souths and Martin or SMC. If they were, those terms and the terms of Francis’s 1996 Playing Contract, also referred to below, lend additional support to the proposition that Martin lacked actual or ostensible authority to commit Souths either to exercise its option in the 1996 Playing Contract or to engage Francis on any other particular terms or at all for 1999. But it is sufficient to say that Martin (and later, Coleman) lacked actual and apparent authority simply because they were no more than coaches and the evidence does not establish that either of them had greater actual or apparent authority to bind Souths than any authority which might ordinarily attach to the position of “coach”.
I accept that the Retention Committee would have “thought long and hard” before imposing on Martin for a season a player he did not want, and perhaps even before refusing outright to engage a player he did want, but it is a different thing to say that the Committee would necessarily engage any player he did want. A moment’s thought indicates that the amount of money available for payment to players would be a critical factor. Indeed, this matter was of such importance that the “Chief Executive’s Report” contained in Souths’ Annual Report for 1997, notes: “Frank Cookson, as ... Chairman of the Retention Committee had a difficult assignment in player purchases with the unrealistic value of players on the market”. Clearly, the amount of money to be paid for players was not within the province of a coach to determine. A coach might recommend the engagement of numerous highly priced players but his club might not have, or be willing to allocate, the required funds. If Martin had authority to commit Souths to engage for a forthcoming season any player he, as coach, might wish to have, including at a level of remuneration reasonable for the particular player, he could, and presumably would, commit Souths to the very best squad of available players, leaving it to Souths to find and pay a presumably large aggregate amount of remuneration which might well be beyond its financial capacity. It is noteworthy too that the amount of money a player is able to command is not constant throughout the player’s career. As younger players acquire new skills and experience and older players lose strength, energy and enthusiasm, the market value of a particular player will change. Accordingly, a player’s worth to a club will vary from season to season. Francis is a case in point.
Counsel for Francis appears to submit that a coach’s authority to select players for a particular game or for particular games bears upon the question of whether a player can expect to be re-signed. I reject this submission. The mere fact that a coach chooses a player for a particular game or for particular games does not mean that the club will wish to engage him in preference to others for the next season: other more desirable players may emerge. And if the club would like to engage the player for the following year’s season, the club’s financial circumstances and the fee which the player is able to command may put him outside the club’s capacity to pay.
In so far as Francis’s case relies on the ostensible authority of Martin or Coleman to commit Souths to engage Francis, it fails because neither of them was held out as having the requisite authority and because Francis did not believe either of them had authority.
In the absence of a holding out by Souths of its coach as authorised to engage players, or to commit Souths to engage them, any subjective understanding that Francis or Keenan may have had as to Martin’s (or Coleman’s) authority is irrelevant. But I make the following observations in relation to their understandings.
Francis’s understanding
I consider first, Francis’s own understanding as to Martin’s authority. It is noteworthy at the outset that upon learning of Francis’s decision to play on, Dr Gibbs advised Francis that if he was going to play through the season with painkillers and defer surgery until the off-season, he must make sure he had a contract with Souths.
Francis conceded that he had never negotiated a contract with a coach. Francis asserted, however, that “as far as [he] was concerned” Martin “was speaking for the Club”, and he explained, “He’s the first grade coach, he’s the boss, why wouldn’t I believe that?”. Francis said that his belief at the time was that Martin’s promise was a promise that the option would be exercised. Francis said that his understanding was that Martin decided what players should be engaged and that Cookson discussed the money with them. He said that “whatever [Martin] wanted, he got”. Thus, Francis understood that Martin had to “get” his way with a superior authority within Souths, even if Francis understood that he had always succeeded. I regard this testimony of Francis as to his understanding as testimony of his belief that Souths had always sought to give effect to Martin’s wishes as to the composition of the First Grade team for the forthcoming season, but that whether a contract eventuated depended on whether Cookson, on behalf of the Retention Committee, reached agreement with the player or his agent on terms, including fees.
Francis said that he understood there was a Retention Committee within Souths comprising Cookson, George Piggins “and a couple of Juniors people”, but said that Cookson had never explained that Committee’s role to him.
When asked whether he had believed as at 25 May 1998 that Martin had any authority to promise that the option would be exercised, Francis replied: “I believe Mr Martin had most of the authority as far as I was concerned.” Francis said that he understood there was some kind of committee in Souths with authority to “buy” players; that he did not know whether Martin was part of that committee; but that, be that as it may, Martin had “a lot of influence on the committee” because the committee would not buy players if the coach was not going to use them. He added: “So the coach has got 99 per cent of the influence on whoever he wants”. Asked specifically whether he understood that Cookson’s approval of the engagement of a player was required, he said: “It wasn’t just Mr Cookson, it was Mr Martin”.
In testifying in relation to the list of players shown to him on 7 November 1998 by Rubin, Francis stated “[t]here’s a list from Craig Coleman’s office so probably it wasn’t official but it give[s] you a good indication [of] who’s going to be there and who wasn’t [sic]”. This response by Francis also establishes that he understood that, although a coach’s wishes might carry great weight and influence as to whether a player should or should not be retained, ultimately a coach was incapable of concluding an arrangement on behalf of the Club in that respect.
There was evidence directed specifically to the question of Martin’s authority to exercise Souths’ option or to commit Souths to an exercise of it. In cross-examination, Francis acknowledged that at the time of entering into the 1996 Playing Contract he understood that the option had to be exercised, if it was to be exercised at all, by notice in writing by 31 August 1998. He also agreed that it was never his belief that Martin was entitled to give on behalf of Souths such a written notice of exercise of the option.
I think the state of Francis’s understanding in 1998 is exposed clearly enough by the evidence: he understood that neither Martin nor Coleman was able unilaterally to commit Souths to retain him for 1999. His understanding was that ultimately the most either of them could promise was that he would bring his no doubt important influence to bear in favour of a negotiation with Francis with a view to his retention. Therefore, Francis knew that there was at least some risk, which he had to assess, in relying on what either Martin or Coleman might say, and that they could do no more than pledge him their personal support in discussions with Cookson and the Retention Committee.
Souths submits that in addition to his subjective knowledge of the coaches’ lack of authority, Francis had notice of it through Keenan. In the course of negotiating the 1996 Playing Contract for Francis, Keenan received a letter dated 16 July 1996 from Cookson informing him that Souths’ Retention Committee had decided to make Francis the offer set out in that letter. Accordingly, in the course of performing what Francis had appointed him to do, negotiating a contract with a club for Francis’s services (see [128]-[131] below), Keenan was expressly informed that within Souths it was the Retention Committee which had authority to commit it contractually to players. If it matters (in view of the terms of Francis’s written retainer of AMI), Francis testified that he knew a manager’s function was to negotiate and advise, adding:
“All you’ve got to do is play football, he should look after the rest.”
I accept Souths’ submission that Francis had knowledge of the information conveyed to Keenan that the authority within Souths to decide to engage a player rested with the Retention Committee: cf Fuller v Benett (1843) 2 Hare 394 (67 ER 162); Vane v Vane (1872) LR 8 Ch App 383 at 399 per James LJ; Taylor v Yorkshire Insurance Co Ltd [1913] 2 IR 1; Ford Excavations Pty Ltd v Do Carmo [1981] 2 NSWLR 253 at 266 per Hutley JA.
Keenan’s understanding
My finding above as to Francis’s understanding makes any consideration of that of Keenan superfluous. I shall, however, briefly state my findings in relation to it without discussing the question of its potential relevance. I turn now to consider Keenan’s understanding as to Martin’s authority. Keenan conceded in cross-examination that he knew that contractual arrangements between Souths and players were the responsibility of Souths’ Retention Committee, of which he knew that no coach was a member. Keenan said that a club would not sign a player whom the coach did not want because the coach would not select him to play. He said:
“the first hurdle is to get the coach on side to push for the inclusion of the player in the playing squad for the following season. And, if you’ve got the coach’s support, then a lot of the times that can be enough because he’ll do the rest of the job for you.”
This testimony is inconsistent with a belief on Keenan’s part that a coach had authority unilaterally to engage players.
Later Keenan conceded that “in [his] mind there was clearly no contract [made by Martin] because if there was a contract [then he] would have sought to enforce it and ha[ve] the terms finalised”. Moreover, he said he reminded Francis that no money had been discussed “but that Steve had given his commitment that Mick would be there if he kept playing”. (my emphasis)
I think that like Francis, Keenan did not believe that Martin was in a position, without reference to any superior authority within Souths, to commit Souths to engage Francis for the 1999 season, whether on the terms of the option, or on other particular terms or at all, and that the most he could do was to pledge his personal support for retention of Francis in 1999.
2. The CS Agreement between Souths and SMC
Souths submits that the coaching services of Martin were provided to Souths pursuant to the CS Agreement. The copy of that agreement in evidence is not an original or a copy of an executed original: it is a copy of an “original” which bears certain initialling. It is not dated, apart from the typed year “1998”. As noted above, in July 1998, Souths and Martin were in dispute as to whether the terms of the document had contractual force. Souths did not lead evidence that it had paid SMC rather than Martin. Although I will discuss the CS Agreement below as if it had contractual force, my conclusion that Martin was not in such a position that his supposed promise could render Souths contractually liable is supported even if he was employed as Head Coach and coach of the First Grade team directly by Souths. The reason is that it was beyond the actual or apparent authority of a coach to engage players.
The CS Agreement recited that SMC was able to provide the professional football coaching services of Martin pursuant to a certain Service Agreement between SMC and Martin (not in evidence), and that SMC had negotiated with Souths for the provision of such services to Souths upon the terms and conditions set forth in the CS Agreement. Under cl 1 of the CS Agreement, the period of that Agreement was two years from 1 October 1997 to 30 September 1999. By cl 2 SMC undertook to provide to Souths:
“the services of Martin as a duly qualified rugby league football coach to provide the professional services of Head Coach for the South Sydney First Division Rugby League Football Teams for the 1998 and 1999 rugby league football seasons upon and subject to the terms and conditions contained in [the] Agreement.”
The 1998 season was defined as the season from 1 October 1997 to 30 September 1998 and the 1999 season as the season from 1 October 1998 to 30 September 1999 (cl 20).
SMC undertook to procure Martin’s ongoing performance as Head Coach for Souths in accordance with the terms and conditions set out in the document (cl 3). For example, Martin was to carry out to the best of his skills and ability “those duties reasonably and customarily required of a professional rugby league football coach”, which specifically included certain duties specified in the document. Martin was, “as Chairman of Selectors, [to] be responsible for all Senior Grade team’s [sic] selections in conjunction with the Selection Panel”. The penultimate par (g) of subcl 3(iv), provided that Martin was to be answerable to the Football Manager (Cookson) and to the Retention Committee, when and if required.
In sum, if the CS Agreement was in force, Martin was still no more than a “professional rugby league football coach”, albeit not one employed by Souths, and he had no actual or ostensible authority, by reason of occupying that position, to commit Souths to engage a player.
There was evidence, which I accept, that down to 30 June 1998, Martin selected the players to play in the First Grade team each week after discussion with other Souths coaches and without reference to any Selection Panel. The issue of the right of selection of those to play was a source of dispute between Martin and Souths’ Retention Committee. It was not until 30 June 1998 that Souths’ Board of Directors appointed a Selection Committee, although the Offer document discussed earlier had provided for it to do so. Martin asserted to Souths that when he was appointed he was assured he would have the ultimate say over the selection of players to compose the teams for matches. But whether before or after the change made as from early July 1998, Martin was only ever a coach. Selection of the players to play in a particular match or in particular matches is vastly different from contracting with players for a forthcoming season – a business transaction involving a financial commitment.

In relation to the third Representation, as explained earlier, Coleman made it on his own behalf rather than on behalf of Souths; Francis did not rely on it as a commitment by Souths; and, if he did, he suffered no significant detriment in consequence.
If Francis relied on the supposed statements by coaches Martin and Coleman as assurances by Souths that Souths would give him a contract for the 1999 season, that reliance was unreasonable in view of their lack of apparent authority to commit Souths, Francis’s understanding that it still remained for the coach to get his way within Souths, and the absence of any specification by Martin or Coleman of terms. What is the effect, in the context of the claim of negligence, of unreasonableness of reliance? A duty of care in the making of a statement will not arise unless the person making the statement knows or ought to know, not only that the advisee is likely to act in reliance on it, but also that it would be reasonable for him or her to do so: see, for example, Mutual Life & Citizens’ Assurance Co Ltd v Evatt (1968) 122 CLR 556 (HC) at 571-573 per Barwick CJ; (1970) 122 CLR 628 (PC) at 645 per Lords Reid and Morris (dissenting, but not on this point); L Shaddock & Associates Pty Ltd v The Council of the City of Parramatta (1981) 150 CLR 225 at 231 per Gibbs CJ; San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340 esp at 359 per Gibbs CJ, Mason, Wilson and Dawson JJ; Norris v Sibberas [1990] VR 161 at 171-172 per Marks J, with whom Murphy J and Beach J agreed; and see Trindade and Cane, The Law of Torts in Australia (3^rd ed, 1999) at 386; Balkin and Davis, Law of Torts (2^nd ed, 1996) at 415, 420; Clerk & Lindsell on Torts (18^th ed, 2000) at [7-96], [7-111], [7-116]. Martin knew or ought to have known that Francis was likely to take into account in assessing the likelihood of his remaining at Souths in 1999 what he (Martin) said, but only as a pledge of Martin’s personal support likely to be acquiesced in by the Retention Committee. (There is no evidence that Martin reneged on that pledge or intended to do so if he had remained at Souths.) It was not reasonable for Francis to rely on what Martin said as a statement binding on Souths and it cannot be said that Martin ought to have foreseen reliance of that kind as reasonable. Accordingly, Martin did not owe Francis a duty of care in making the supposed second Representation. The same line of reasoning applies a fortiori in relation to the supposed third Representation by Coleman.
I turn now to the particulars of negligence given in the Pleading. Particulars (a)–(f) of the claim of breach of the duty of care were set out at [17] earlier. They all consist of failures to advise. I do not think it was required that Souths advise Francis of any of those matters in order to discharge its assumed duty of care. Some of paras (a)–(f) call for special comment as follows:
(a)that there was no obligation under the 1996 Playing Contract [for Souths] to re-sign [Francis] for the 1999 playing season;
(b) that [Souths] might not re-sign [Francis] for the 1999 playing season;
Particulars (a) and (b) were inherent in the nature of Souths’ option. Moreover, Francis conceded that he knew that it was Souths’ option and that Souths had the choice whether or not to exercise it.
(c) that [Francis] was not obliged to play in the 1998 season with a dislocated AC joint;
In my opinion, for the reasons previously given, Francis was obliged to play in the 1998 season with his dislocated AC joint because he was reasonably directed to do so with the non-surgical treatment referred to by Dr McDonald. Therefore it would have been untrue for Souths to have given him the advice referred to in particular (c). In any event Souths and Francis appear to have proceeded on the basis that if Francis insisted on immediate surgery, as a physical matter he would have had his way. (One may ask rhetorically: What could Souths have done to prevent him?)
(d)that Souths’ option to re-sign [Francis] was not conditional upon his playing [the Game] in circumstances in which he had a dislocated AC joint;
Particular (d), if I understand it correctly, was inherent in the nature of Souths’ option: Souths would have had its option whether or not Francis played on.
(e)that deferring surgery until after the 1998 season might preclude [Francis] from being available to play in the pre-1999 playing season and so from entering into a playing contract for that season with Souths or with any other club
As this particular accepts, it was not certain that deferring surgery until after the 1998 season would preclude Francis from being available in the 1999 pre-season, and, in consequence, from entering into a playing contract for 1999 with Souths or with any other club. The particular refers to a mere possibility. But the content of Souths’ duty of care must be consistent with the 1996 Playing Contract. That contract allowed Souths to give only reasonable directions. Once it is accepted, as I have found, that Souths’ direction to Francis to return to the field was reasonable, it is difficult to see what scope there is for breach of a duty of care.
I do not think that in giving to Francis the reasonable direction to return to the field, Souths was required by its duty of care to draw his attention to possible adverse consequences of its reasonable direction. Francis himself was not without experience in assessing where his best interests lay. I do not think Souths was required by the assumed duty of care to advise him in that respect.
(f)that [Francis] should have been worried about whether Souths would re-sign him for the 1999 season.
This particular has reference to the alleged “I love Mick” statement by Coleman to Keenan in late July 1998. For reasons given earlier, this was a statement Coleman made on his own behalf rather than on behalf of Souths. It could only be reasonably understood as such. Souths was not obliged by its supposed duty of care to give Francis countervailing advice. It would have been unreasonable for Francis to act in reliance on Coleman’s pledge of personal loyalty as a commitment by Souths, and Francis did not in fact incur significant detriment in reliance on it.
For the above reasons, the claim in negligence is not made out.
LOSS OR DAMAGE (Pleading, par 29)
I noted at [18] the particulars of loss and damage given in the Pleading. It will be recalled that they were based squarely on the terms of Souths’ option over Francis for the 1999 season. In his written submissions, Francis referred to evidence:
· from Keenan that the market price for players decreased by as much as 30 per cent due to the end of “the Super League war”; and
· that five front-row and second-row forwards who had played with him for Souths in 1998 obtained contracts in 1999 and a later year or later years.
The other five players were: Terry Hermansson, Matt Parsons, Ian Rubin, Paul McNicholas and Justin Doyle. Francis submits that his record with Souths in 1998 was better than four of these five other players. Their contracts were in evidence and their terms were summarised in submissions. Finally, Francis submits that his damages should be assessed as follows:
“(a)for the 1999 season the option fee of $150,000 plus, say, $22,500 for first grade match payments (which assumes he played in 15 first grade matches in 1999 at $1,500 per game), calculated in accordance with the option provision of the 1996 contract; plus
(b)$100,000 for each of the 2000, 2001, 2002 and 2003 seasons being the remuneration which he would probably have earned except for Souths’ conduct.”
In terms of the Pleading, Francis did not testify that he would have been “prepared to accept” any particular terms for the 1999 season, although he said in answer to a question in cross-examination that as at 1 September 1998 his expectation was that Souths would offer him about $100,000 as a sign-on fee for 1999.
The playing contracts of the other five players mentioned were all in the standard form of the New South Wales Rugby League and Australian Rugby League form of playing contract, although the special conditions contained in them would have to be taken into account if a comparison had to be made. The level of earnings of other players is irrelevant to the alternative terms of the Contract for the 1999 Season pleaded: the terms of the option or such terms as Francis might be prepared to agree to.
If Francis’s submission is to be understood, notwithstanding the Pleading, that the Contract for the 1999 Season impliedly provided for “reasonable” terms, the evidence does not establish what they were, apart from the terms of the standard form of Playing Contract mentioned. There was no evidence led from other clubs of what fees they would have offered Francis in the new market circumstances of 1999 and there was no expert testimony as to his value in those circumstances, in each case on the assumption that he had undergone surgery without delay following the injury and missed virtually all of the 1998 season.
Several considerations cause me to conclude that Francis has not proved that he suffered any loss or damage caused by any wrong which the law recognises committed by Souths.
I accept that being out of the Game in 1999 would pose a real obstacle to securing a contract for 2000 and for later years, and therefore I need consider only the cause of Francis’s being out of the Game in 1999.
Francis claims to recover expectation damages on all the causes of action pleaded. This is inappropriate but, in view of my conclusion just stated, I need not discuss the different measures applicable to the various causes of action.
I am in fact not persuaded that Francis was in any worse position in relation to obtaining a contract for the 1999 season than he would have been if he had undergone surgery in late May/early June 1998 rather than on 11 September 1998. Other professional footballers played “carrying injuries”, sometimes throughout a season. I have referred at [218] and [219] to Terry Hill of the Manly Club and Paul McNicholas of Souths. The evidence reveals that Paul McNicholas secured a contract with Souths for 1999.
Pearce divided the pre-season into the “off-season” (down to Christmas) and “pre-season, strictly so-called” (from the beginning of January to the first round of the season). The medical evidence, which I accept, is that by the end of twelve weeks following reconstructive surgery of the kind undergone by Francis, a player who had undergone a program of rehabilitative physiotherapy and exercises would be fully recovered in the sense of being able to participate fully in the Game. Pearce said that in the off-season (from the end of a season down to Christmas) players engage in strength based training requiring the use of arms and shoulders. He said that Francis had lost bulk following his operation. He said that if Francis had been “fit and ready to do [the] full off season” he would have been “signable” for 1999. I find that although Francis had fully recovered from his operation and was able to participate fully in the Game by 4 December 1998 (if he was not, that was because he or those assisting him had not taken appropriate steps during the twelve week period following 11 September), he had lost bulk and was not at peak condition at that date. I also find that with training throughout the pre-season, he would have been able to build up bulk so as to be back at the peak of fitness by the start of the 1999 season at the beginning of March of that year.
In my opinion, if any club had had a strong interest in engaging Francis for 1999, the fact that he had lost bulk and was not at the peak of fitness as at 4 December 1998 would not have been an obstacle. It would have been known that he had had surgery on 11 September 1998, was fully recovered from the operation, was able to participate fully in pre-season training and would be back to full bulk and fitness by the start of the 1999 season.
According to Keenan, the only clubs that expressed the slightest interest in Francis for 1999 were Souths, Balmain and Adelaide. Of these three, Balmain’s interest was, on the evidence, the strongest. Pearce said to Keenan on 27 May 1998 (being uninformed of Francis’s injury the previous weekend) that he would be interested in talking to Francis and that Balmain would be quite “interested in discussing the signing of Michael” after 30 June 1998 when such discussions were able to take place consistently with the League’s “anti-tampering” rules. In his affidavit Pearce stated as follows:
“I was interested in Michael as I believed Michael’s ability lay in his aggression, strength, speed and high work rate. Michael was one of the lighter front-row forwards in the ARL and NRL competition but this was compensated by his tough uncompromising way and also his high work-rate.”
Pearce also stated in his affidavit:
“But for Michael Francis’s physical condition in September 1998, I would have been very keen to have Balmain sign Michael Francis and would have recommended the Balmain Retention Committee negotiate with Michael Francis with a view to signing Michael with Balmain.”
But Pearce did not contact Keenan after 30 June 1998. Nor did he address what the position would have been if Francis had had his operation in late May/early June. It must always be borne in mind that, if Francis had undergone surgery then, he would certainly have been out of the Game for nearly all of what remained of Souths’ participation in the 1998 season. Moreover, apparently, the most that Pearce could say in the witness box about his assessment of Francis’s ability as a player was this :
“... my recollections are that, yes, he was solid without being the best player on the field, which he never was. He was the sort of aggressive go-forward player that I thought would benefit the Tigers [the Balmain Club] at the time.”
The fact that there was no contact between Pearce and Keenan from 27 May 1998 to a time between 28 August and 1 September 1998 suggests a lack of any real interest on Pearce’s part in seeing Francis signed.
I am doubtful whether, even in the absence of injury, Francis would, in the new market circumstances, have secured a contract for the 1999 season with Souths or with any other club, other than the arrangement he in fact made with Wests. But I will assume that he would have. The alternatives of his absence from the field in 1998 (if he had had surgery in late May/early June) and of his need to regain bulk during the 1999 pre-season (as he in fact needed to do), would be equally apt or inapt to militate against his securing a contract in the new, more difficult market conditions of 1999.
It remains to mention three other matters in relation to loss or damage. The first is that from 22 June 1998 Keenan and Francis knew that Souths would not be exercising its options, but “would” or “might” be prepared to discuss a lesser figure. Francis knew then that agreement might never be reached on the lesser figure. Certainly from that time he knew he could no longer rely on any representation or assurance that he would be with Souths in 1999. He could have proceeded without delay after 22 June 1998 to have his operation. Keenan conceded that, if Francis had done so, there would have been sufficient time for him to withdraw from the competition and be fit for the 1999 pre-season, but said he was still “pretty confident” at that stage that Souths would re-sign Francis. At least in relation to the non-contractual causes of action, Francis’s loss or damage would have to be identified on the basis that Souths was not liable for the delay in surgery beyond say late June/early July.
The second matter relates to the effect of Cookson’s words to Keenan on 22 June 1998 on the recovery of damages for breach of the supposed Contract for the 1999 Season. For present purposes, it must be assumed that all difficulties in connection with the making of that contract do not exist. It must be assumed, for example, that Souths’ direction to Francis to continue playing was in fact, and contrary to my finding, unreasonable, and that Francis had accepted Souths’ offer by deferring surgery and returning to the field for the one match in Round 15 (20/21 June 1998).
Cookson’s words to Keenan on 22 June 1998 would, on my view of them (see [192] earlier) have constituted a repudiation of the supposed Contract for the 1999 Season. Would Francis have been obliged to elect to accept that repudiation and have his operation as soon as possible after 22 June, rather than continuing to defer surgery and to play matches in the 1998 season? If not, apparently he would have been entitled to continue to defer surgery; continue to play throughout the 1998 season (Souths would cooperate in view of its stance that Francis was obliged to play on in any event); after the end of the season, undergo surgery; then present himself to Souths for training with a view to playing in the 1999 season; then, when Souths refused to cooperate (as, ex hypothesi, it would) treat that refusal as a repudiation, accept it and sue Souths then for damages.
In my opinion, contrary to Souths’ submission, Francis would not have been obliged to accept Souths’ repudiation, committed through Cookson, on 22 June 1998. Generally speaking, it is not incumbent on the innocent contracting party to exercise the right of election between accepting a wrongful repudiation on the one hand and maintaining the contract on foot on the other. This is the principle of the well known House of Lords decision in White and Carter (Councils) Ltd v McGregor [1962] AC 413. Much has been written about that principle, but a discussion of it would be superfluous to the necessities of this case. It suffices to note that a particular reason why the principle would be appropriately applied in the circumstances of this case is that, in the circumstances hypothesized, it would be Souths’ own contention that Francis was obliged under the 1996 Playing Contract, and, independently of any Contract for the 1999 Season, to continue playing throughout the 1998 season. Since it would be the wish of both Souths and Francis that he continue playing to the end of the 1998 season, it would be an unreasonable intrusion into the parties’ contractual relationship for a court to require Francis to accept Souths’ repudiation in the hope of minimising the damages payable by Souths.
The third matter relates to the delay between very early August (after Round 21 on 31 July–2 August) when Francis decided to cease playing and 11 September 1998 when he had his operation. For part of this period, Souths is not responsible either. Dr Gibbs explained that because Francis had cancelled the earlier arrangement which had been made with Dr Bokor for surgery, he (Dr Gibbs) thought it would not have been a “wise move” for him to use his good offices with Dr Bokor and his staff to seek an early date for Francis’s operation. Dr Gibbs said:
“ ... knowing Dr Bokor very well, he’s a very good surgeon, I have good access to actually being able to book players in for operations which most doctors would not have. Michael, when he cancelled that operation, obviously caused a bit of angst amongst Dr Bokor’s office so unfortunately the second time around I couldn’t pre-book his operation, I knew that wouldn’t be a wise move. Hence the delay [to] in the mid-September surgery date.”
I infer that if the earlier appointment with Dr Bokor had not been made, as Francis had insisted it should, an appointment earlier than the one for 11 September would have been made for his actual operation. I infer that it would have been made for mid-August. The cross-examination of Dr Gibbs included the following:
“Can I suggest this to you that if Mr Francis had had his operation in say the middle of August 1998, he would have been fit to return to the field within 12 weeks of that time? --- Yes.”
Thus, although it is a minor issue in the case, once it is accepted, as I have found, that Souths’ direction to Francis to continue playing was reasonable, the first appointment with Dr Bokor must have been made (at Francis’s insistence) unreasonably and the delay in the operation from mid-August to 11 September and its sequelae cannot be laid at Souths’ door, even for the purpose, for example, of the cause of action for breach of the Contract for the 1999 Season.
CONCLUSION

For the above reasons the application should be dismissed with costs.

I certify that the preceding three hundred and forty-three (344) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.
Associate:
Dated: 8 November 2002

Counsel for the applicant: Mr PM Biscoe QC and Mr M Zammit

Solicitors for the applicant: Woods & Day

Counsel for the respondent: Mr M G Scheib

Solicitors for the respondent: Nicholas G Pappas & Company

Dates of Hearing: 3, 4, 5, 6, 10, 11 December 2001,
5 April 2002

Date of Judgment: 8 November 2002

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1477 OF 1999

BETWEEN:	MICHAEL GARY FRANCIS APPLICANT
AND:	SOUTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED (ACN 002 487 390) RESPONDENT
JUDGE:	LINDGREN J
DATE OF ORDER:	8 NOVEMBER 2002
WHERE MADE:	SYDNEY

JUDGE:	LINDGREN J
DATE:	8 NOVEMBER 2002
PLACE:	SYDNEY

Counsel for the applicant:	Mr PM Biscoe QC and Mr M Zammit
Solicitors for the applicant:	Woods & Day
Counsel for the respondent:	Mr M G Scheib
Solicitors for the respondent:	Nicholas G Pappas & Company
Dates of Hearing:	3, 4, 5, 6, 10, 11 December 2001, 5 April 2002
Date of Judgment:	8 November 2002