Glenorchy District Football Club Inc v Football Tasmania Inc
[2001] FCA 895
•13 JULY 2001
FEDERAL COURT OF AUSTRALIA
Glenorchy District Football Club Inc v Football Tasmania Inc [2001] FCA 895
TRADE PRACTICES – application to strike out claims under Trade Practices Act 1974 (Cth) – alleged statements of respondent that it was not obliged to fund football competition for next year’s season – applicant alleged to have suffered loss – no pleading of reliance – implicit in pleading that applicant regarded statement as wrongful
Trade Practices Act 1976 (Cth) s 52
Federal Court Rules O 11 r 16GLENORCHY DISTRICT FOOTBALL CLUB INCORPORATED V FOOTBALL TASMANIA INCORPORATED
T 17 OF 2001HEEREY J
13 JULY 2001
MELBOURNE ( HEARD IN HOBART)
IN THE FEDERAL COURT OF AUSTRALIA
TASMANIA DISTRICT REGISTRY
T 17 OF 2001
BETWEEN:
GLENORCHY DISTRICT FOOTBALL CLUB INCORPORATED
APPLICANTAND:
FOOTBALL TASMANIA INCORPORATED
RESPONDENTJUDGE:
HEEREY J
DATE OF ORDER:
13 JULY 2001
WHERE MADE:
MELBOURNE (HEARD IN HOBART)
THE COURT ORDERS THAT:
1. The statement of claim is struck out.
2. The applicant have leave to replead within fourteen days.
3. The respondent file and serve a defence within fourteen days thereafter.
4. The applicant pay the respondent’s costs of the notice of motion dated 30 May 2001.
5. The directions hearing is adjourned to a date to be fixed by the District Registrar.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
TASMANIA DISTRICT REGISTRY
T 17 OF 2001
BETWEEN:
GLENORCHY DISTRICT FOOTBALL CLUB INCORPORATED
APPLICANTAND:
FOOTBALL TASMANIA INCORPORATED
RESPONDENT
JUDGE:
HEEREY J
DATE:
13 JULY 2001
PLACE:
MELBOURNE (HEARD IN HOBART)
REASONS FOR JUDGMENT
Up until thirteen or so years ago Australian Rules football in Tasmania was organised on a regional basis. There were leagues or associations in the South and the North, and on the North West Coast and the West Coast. Representative teams from those bodies played in intra-state matches.
This system was then replaced by the Statewide League which, as its name suggests, was a unified competition between clubs based in different parts of the State. The organisation of the Statewide League was conducted by Tasmanian State Football League Limited (TSFL) which in turn was subject to the management, control and funding of the respondent Football Tasmania Incorporated.
One of the clubs competing in the Statewide League was the applicant Glenorchy District Football Club Incorporated (Glenorchy).
After the 2000 season the Statewide League came to an end. Glenorchy joined a new regional competition in Southern Tasmania called the Southern Tasmanian Football League.
In the present proceeding, filed on 17 May 2001, Glenorchy complains about certain conduct of the respondent in connection with the termination of the Statewide League. The respondent seeks to strike out part of Glenorchy’s statement of claim pursuant to O 11 r 16 of the Federal Court Rules.
Statement of claim
After reciting the respective roles of the parties and the TSFL, the statement of claim alleges (par 9) that the respondent was under “a legal duty to manage and fund the Statewide Football competition for the seasons 2000 and 2001”. It is said (par 10) that this duty was a contractual duty and a fiduciary duty owed by the respondent to the TSFL and to Glenorchy arising from certain agreements and also “by reason of the control and power exercised” by the respondent over Glenorchy. It is then alleged (par 11) that on 12 December 2000 the respondent by general notice “to the media, the Tasmanian football community and (Glenorchy)” represented that it was under no duty to fund the Statewide League for 2001 and that Glenorchy should apply to join a regional competition. By par 12 it is alleged that this representation was misleading and deceptive and in breach of s 52 and s 51A of the Trade Practices Act 1974 (Cth) (the Act). Particulars under that paragraph allege that the representation was “false and contrary to the legal duty of the applicant to manage and fund the Statewide League for the 2001 season”. The representation was also said to “contradict” a number of agreements, which could only be modified by the agreement of the parties.
Paragraph 13 alleges that the notice of 12 December 2000 was misleading and deceptive and a breach of ss 52 and 51A because it wrongly alleged that the respondent was under no duty to fund the Statewide League unless there were six teams in the Statewide League and that Burnie Football Club had left the league. This was said to be false because as at 12 December 2000 Burnie Football Club had not left the league.
By par 14 it is alleged the representations of pars 11 and 13 were negligent and in breach of the “general duty of care” owed by the respondent to Glenorchy.
By par 15 it is alleged that “as a result of this misleading, deceptive and negligent conduct of the respondents (sic) (Glenorchy) applied for and ultimately gained admission to the Southern Tasmanian Football League”.
By par 16 it is alleged that a consequence of the conduct referred to is that Glenorchy suffered loss and damage. Details are given. They include expenses incurred on joining the Southern Tasmanian Football League such as affiliation fee and new uniforms and changing signs at the Glenorchy ground, and loss of sponsorship revenue which would have been obtained if Glenorchy continued to play in the Statewide League.
By par 17 it is alleged that the respondent was under a fiduciary duty to the TSFL and Glenorchy to display the utmost good faith to them in its dealings with them and to act reasonably and not do anything which would adversely the TSFL and Glenorchy.
By par 18 it is alleged this duty was owed to Glenorchy because that duty was owed to TSFL and because TSFL was “a representative body”, that duty was owed to the constituent members of TSFL including Glenorchy. Also the duty was owed because of the “power and control” of the respondent over Glenorchy, the “unequal bargaining position” between Glenorchy and the respondent arising from the dominant position the respondent had in the administration and control of Australian Rules football in Tasmania and “the unequal bargaining position of the parties”.
It is said (par 19) that the failure to “fund and manage” the Statewide League for the 2001 season was a breach of the fiduciary duty owed by the respondent to the applicant and (in par 20) that this was also unconscionable conduct in breach of ss 51AA and 51AB of the Act. Paragraph 21 alleges that as a consequence of the breach of fiduciary duty and the unconscionable conduct of the respondent Glenorchy has suffered loss and damage. This is quantified in the same way as previously.
By par 22 it is alleged that there was an agreement between Glenorchy and respondent to the effect that the respondent would conduct and fund the Statewide League for the 2001 season. Various particulars are given. It is alleged that the representation on 12 December 2000 and the failure to fund the Statewide League for 2001 were in breach of that agreement. Damages are claimed.
It is alleged (par 25) that there was a agreement between Glenorchy and the respondent to the effect that the respondent would fund the Statewide League for the 2000 season.
It is further alleged (par 25) that pursuant to another agreement in or about December 1999 the respondent agreed to pay Glenorchy $45,000 of the sponsorship money derived by the respondent and to share with the applicant a percentage of the gate from AFL practice matches held in Tasmania prior to the 2000 season. It is said that $13,000 is due under that agreement. Further it is said (par 29) that the respondent has further breached the fiduciary duty already referred to and ss 51AA and 51BB by failing to pay draft fees paid by AFL clubs for players playing in AFL football recruited from Glenorchy.
The respondent’s strikeout arguments
Counsel for the respondent sought to have struck out only those parts of the statement of claim pleading causes of action under the Act, in particular pars 12, 13, 15, 16, 20 and 21. In the event of such application being successful he contended the Federal Court would have no jurisdiction and the residue of the proceeding should be cross-vested to the Supreme Court of Tasmania.
Counsel contended that the allegedly false, deceptive and misleading statements of the respondent, and in particular the statement of 12 December 2000, could not have caused any loss to Glenorchy because it nowhere alleges that it believed those statements to be true and as a consequence suffered loss by acting upon them. On the contrary, counsel said, it is implicit in the statement of claim that Glenorchy always considered that the respondent was acting wrongly and making statements which were untrue.
I think this argument is correct. At the very least the statement of claim is ambiguous. It does not plead any reliance on the allegedly false statements and accordingly an essential element of causation is not raised. The same can be said for the claim in negligence – no reliance, no cause of action. It was suggested in the course of argument that Glenorchy may have suffered loss and damage by other clubs’ reliance on the 12 December 2000 statement in that it led them to agree to the termination of the Statewide League. If that be so, there is no hint of such a case in the statement of claim. In their present form pars 12, 13, 15 and 16 do not plead an arguable cause of action and should be struck out.
Then as to s 51AB, counsel says that the section is inapplicable as the relevant services are not of a kind ordinarily required for personal domestic or household use or consumption: s 51AB(5). This was accepted by counsel for Glenorchy as correct.
As to the existence of a fiduciary duty, counsel for the respondent conceded that it was arguable that such a duty existed. However he said that relief was not available to a party seeking to enforce a contract. No doubt usually cases of unconscionable conduct are concerned with parties seeking to avoid contractual liability because the other party has taken advantage of some special disability: see Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, Louth v Diprose (1992) 175 CLR 621. But I would not be satisfied, to the high standard required for a strikeout application, that doctrines of unconscionability can never be available to a party seeking to rely on a contract. For example, unconscionable conduct by a party breaching a contract may give the innocent party wider remedies under the Act than would be available at common law or even in equity.
As will appear above, it was not contended that those causes of action which plead a cause of action in contract should be struck out.
The net result is that some parts of the claim under the Act has not been shown to be sufficiently hopeless as to require striking out. Other parts need to be struck out but may be capable of re-formulation. Substantial repleading is necessary. The better course, I think, is that the statement of claim as a whole should be struck out with leave to replead within fourteen days. The respondent is to file and serve a defence within fourteen days thereafter.
Glenorchy must pay the respondent’s costs of the motion.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate:
Dated: 13 July 2001
Counsel for the Applicant: W Ayliffe Solicitor for the Applicant: Ayliffe & Ayliffe Counsel for the Respondent: R Curtis Solicitor for the Respondent: Abetz Curtis & Worsley Date of Hearing: 7 June 2001 Date of Judgment: 13 July 2001
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