Goutzioulos v Victorian Soccer Federation Inc
[2004] VSC 173
•3 May 2004
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
PRACTICE COURT
No. 5645 of 2004
| GOUTZIOULOS AND ORS | Plaintiff |
| v | |
| VICTORIAN SOCCER FEDERATION INC | Defendant |
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JUDGE: | CHIEF JUSTICE WARREN | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 27 April 2004 | |
DATE OF JUDGMENT: | 3 May 2004 | |
CASE MAY BE CITED AS: | Goutzioulos v Victorian Soccer Federation | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 173 | |
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INJUNCTION – Restraint of trade – Rules of sporting club – Balance of convenience – Damages as appropriate remedy – Relief tantamount to mandatory injunction.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S. Moore | Didulica Legal |
| For the Defendant | A.A. Nolan | Lander & Rogers |
HER HONOUR:
The plaintiffs, a number of professional soccer players, seek interlocutory injunctions restraining the defendant a controlling soccer body, from acting upon a decision already made not to register each of the plaintiffs with certain soccer clubs.
Each of the plaintiffs, Goutzioulos, Spiteri and Boutsianis are professional soccer players who have played within Australia and overseas for periods varying between eight to 15 years. The defendant, the Victorian Soccer Federation Inc (“the VSF”) is the governing body for soccer in the State of Victoria. It operates a number of soccer competitions within the State including that which is described as the main or premier competition, the Victorian Premier League (“the VPL”) and, also, the State One Competition (“State One”).
There are certain background events as to the management and administration of soccer leagues that the plaintiffs rely upon. In the period from approximately 1997 until 4 April 2004 the leading soccer competition in a Australia was the National Soccer League (“the NSL”). The NSL was conducted by Soccer Australia Limited and later by its successor, the Australian Soccer Association Limited (“the ASA”). In late 2003 the ASA resolved to disband the NSL upon the completion of its then current competition, that date being 4 April 2004. It was resolved, further, that a new national soccer competition would commence but not until approximately August 2005. These resolutions as to the national competition have led to the outcome that no national soccer competition will be conducted in Australia for a period of 16 months between April 2004 and August 2005.
Each of the plaintiffs were employed by club participating in the NSL during the 2003-2004 national season. As a consequence of the resolution to establish a new soccer competition in August 2005, the plaintiffs are in the position that they are unable to compete in a national football competition until August 2005. The plaintiffs, therefore, wish to continue to play professional soccer and have sought to do so in one of the Victorian leagues, either the VPL or State One.
The Victorian governing body, VSF, applies particular rules in relation to senior players known as “the transfer regulations” [1]. Under the transfer regulations all players participating in the competitions conducted by the VSF must be registered with that organisation. Each of the plaintiffs applied for registration to play in one of the Victorian competitions: Goutzioulos first applied to play in the VPL and then applied to be registered for State One; both of Spiteri and Boutsianis applied to be registered to play in State One. All of the applications of the plaintiffs for registration were refused, one way or another, on 21 April 2004[2]. There were no reasons provided for the refusal for registration.
[1]The Registration and Transfer Procedures and Player Registration Guidelines 2004 Season (Senior Players).
[2]Previously, on 2 March 2004 the application of the first plaintiff to play in the VPL was unsuccessful. He then applied to play in State One.
I have considered the transfer regulations. The regulations that are the subject of the particular controversy appear in Clauses 12.1 to 12.4 of the Transfer Regulations.
In particular, the transfer regulations provide:
(1)that all NSL non-amateur players from non-Victorian NSL clubs must be transferred or registered by premier league clubs before the commencement of the premier league championship season[3];
(2)no transfer or registration is permitted unless such transfers are effected prior to the start of the premier league championship season[4];
(3)NSL players registered with a Victorian NSL club are only permitted to transfer to the Victorian Premier League between the period from 1 October 2003 to 30 April 2004 and such player may not subsequently transfer to other competitions in the same season unless otherwise allowed under the regulations[5];
(4)any NSL players who have been listed on a NSL senior team sheet in only four or less occasions, in the current seasons, and who took the field of play, may transfer to a State or other specified leagues at any time[6].
[3]Paragraph 12.1 of the transfer regulations.
[4]Paragraph 12.2 of the transfer regulations.
[5]Paragraph 12.3 of the transfer regulations.
[6]Paragraph 12.4 of the transfer regulations.
The plaintiffs seek orders to restrain the defendant on the grounds that the relevant parts of the transfer regulations (paragraphs 12.1 - 12.4) constitute an unlawful restraint of trade. The specific orders sought by the plaintiffs are an interlocutory injunction restraining the defendant from in any way enforcing the decisions not to register the plaintiffs as a player with State One or with a club participating in the VPL as the case may be. The plaintiffs seek further interlocutory orders that the defendant be restrained from applying its Constitution, the transfer regulations or any other rules or regulations such as to prevent the plaintiffs from being registered to play with a club of their choice participating in either the VPL or State One for the 2004 season.
Each of the plaintiffs complain that in the absence of registration or the capacity to play as if pursuant to registration they are denied an opportunity to work in their professional arena, that is, as professional soccer players, until August 2005. It was conceded in the course of argument that each of the plaintiffs is of mature years in terms of playing life: Goutzioulos is 26 and has played professional soccer for the past eight years; Spiteri is 30 and played as a professional soccer player for almost 13 years; Boutsianis is 32 and has played professional soccer for almost 15 years. None of the plaintiffs has been engaged in employment during their respective playing lifetimes save in areas related to soccer, except Boutsianis who worked for a very short period as a cleaner. Each of the plaintiffs has no other source of income and depends for his livelihood on earnings as a major soccer player. They have financial and in some instances family commitments that put them in a position where they need to earn their income as professional soccer players. They are also concerned that if they are unable to play soccer professionally until August 2005 they will lose the requisite level of skill and fitness such as to be recruited to the soccer entities operating by that time. Each of the plaintiffs aspires to playing in the new national competition proposed to commence under the auspices of the ASA in August 2005. It was common ground between the parties that when the new competition comes into operation it is likely that the number of teams and, therefore, the number of players will be substantially reduced. The plaintiffs expect, on the basis of public statements made by the ASA (and not challenged or questioned by the defendant in this application), that the number of playing positions will reduce dramatically. Furthermore, it is expected that as a result of the restructuring of the soccer season from August 2005 there is a likelihood of a number of Australian players returning from playing with overseas clubs leading to greater competition for selection.
At present the VPL and State One seasons are underway and the home and away seasons will end, the VPL on 1 August 2004 and State One, on 12 September 2004. The plaintiffs assert that in the absence of interlocutory relief it is unlikely, even if successful in the substantive proceeding, that they will be able to play before the end of the season. Goutzioulos has been available to play in Victoria since 29 February 2004 and Spiteri and Boutsianis have been available to play in Victoria since 4 April 2004.
The defendant through its chairman, Emanuel Steven Galanos asserted that an important aspect of the transfer regulations was to enable the development of soccer in Victoria and, in particular, to provide opportunities to lesser, presumably lower standard, NSL players to compete in the VPL. It seems that the defendant has a particular concern to control the recruitment of players in Victoria and to protect Victorian soccer from disproportionate representation of more senior players, such as those who return from international contracts in Europe and Asia[7]. It seems that as a consequence of this object, all interstate NSL players were required to complete their transfer to Victoria by 6 February 2004, that being the commencement date of the VPL season in accordance with paragraphs 12.1 and 12.2 of the transfer regulations. None of the plaintiffs was able to meet that requirement because as at that date, namely 4 February 2004, they were playing in the NSL competition.
[7]See affidavit of Galanos of 27 April 2004, paras [11] - [22].
The Constitution of the VSF provides, among other matters, that its purpose is to “support, protect and advance the game of soccer in the State of Victoria and throughout the Commonwealth of Australia” [8].
[8]Clause 3 of the VSF Constitution exhibited to the affidavit of John Didulica of 26 April 2004, Exhibit JD-3.
Galanos deposed in his affidavit that the Victorian Soccer Federation Commission (“the Commission”) is the governing body of the VSF. He deposed that the Commission adopted the transfer regulations and in so doing considered the imminent dissolution of the NSL. He deposed that at the time there were approximately 40 NSL players registered in Victoria and that most of those players transferred to the VPL clubs. He deposed that some other players were trying to obtain contracts overseas. Galanos said that the VPL clubs are unable to support the NSL players at the salaries they previously enjoyed at NSL level. Indeed, in the 2004 season each VPL club has a maximum payment for senior players of $100,000 per annum and each State One club has a maximum payment for senior players of $60,000 per annum. Galanos deposed that between 18 and 24 players must be paid by each club from the aforesaid maximum payments. He said that some players are paid per game whereas some are paid on the basis of an annual contract. Galanos deposed that the influx of the NSL players and their demands for greater salaries has placed individual clubs under pressure. He said most of the clubs are struggling to survive. He deposed, also, that each of the clubs were aware of the transfer rules and negotiated with players, both Victorian NSL players and non-Victorian NSL players, prior to February 2004. Galanos said that if the registration and transfer procedures were changed it would give rise to the prejudice to those clubs.
Galanos deposed, further, that in his view the professional development of Victorian players is likely to be adversely affected if there is uncertainty in relation to existing NSL contracts. He also said that it is the intention of the Commission to develop young Victorian players by providing them with opportunities at higher competition levels. He said, in his affidavit, that the return of NSL players to Victoria would lead to a dramatic reduction in opportunities for younger players in Victoria.
There is no issue between the parties as to the appropriate test to be applied in determining whether or not the injunction should be granted: Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3)[9].
[9](1998) 195 CLR 1.
I turn then to consider the matter of whether there is a serious question to be tried. For the plaintiffs it was alleged that the transfer regulations had the effect of constituting an unlawful restraint of trade. Reliance was placed upon Buckley v Tutty[10]; also, Hughes v WACA Inc[11]; Barnard v Australian Soccer Federation[12]; Hall v VFL[13] and other unreported authorities[14]. It was submitted for the plaintiffs that in all likelihood the decisions of the VSF to refuse registration for each of the plaintiffs was in all likelihood based upon paragraphs 12.1 - 12.4 of the transfer regulations. In reliance upon the authorities Buckley v Tutty[15] it was submitted that it is appropriate to consider and assess the transfer regulations in order to determine whether they constitute a restraint of trade. It was submitted that the transfer regulations give rise to two separate restraints, first, against former NFL players from non-Victorian NSL clubs and, secondly, against players from former Victorian NSL clubs.
[10](1971) 125 CLR 353, 380.
[11](1986) 69 ALR 660, 700.
[12](1988) 81 ALR 51.
[13](1982) VR 64.
[14]Nobes v Australian Cricket Board, unreported judgment of Marks J, Supreme Court of Victoria, 16 December 1991; Foschini v VFL, unreported judgment of Crockett J, Supreme Court of Victoria, 15 April 1983.
[15]At 369.
It was submitted that because Goutzioulos and Spiteri were formerly contracted to non-Victorian NSL clubs during the 2003-2004 NSL season, paragraphs 12.1 and 12.2 of the transfer regulations apply and, thus, each of those plaintiffs were required to be registered under the regulations with VPL clubs or State One clubs prior to the start of the VPL season, namely, prior to 6 February 2004. It was emphasised that by contrast, players from the Victorian NSL clubs could transfer to a VPL club by 30 April 2004 in accordance with paragraph 12.3 of the transfer regulations. It was submitted on behalf of Goutzioulos and Spiteri that it was practically impossible for them to transfer or achieve registration by 6 February 2004 as each of them was under contract with an NSL club until 30 June 2004. It was submitted that the effect of the transfer regulation (i.e. paragraphs 12.1 - 12.2) was that Goutzioulos and Spiteri would have been required to “walk out” of their NSL clubs and thereby breach their contracts with those clubs prior to the end of the NSL season in order to meet the requirements of the transfer regulations and effect transfer with the Victorian body by 4 February 2004. These were the matters relied upon in support of the asserted restraint on trade arising from the transfer regulations against Goutzioulos and Spiteri. In relation to Boutsianis it was submitted that he was employed by a Victorian NSL club for the 2003-2004 season and, as a consequence, he was subject to paragraph 12.3 of the transfer regulations. It was asserted that Boutsianis was unable to obtain the agreement of a VPL club and hence tried to effect participation with a State One club. Although his application for registration and transfer was lodged prior to 30 April 2004, apparently in accordance with paragraph 12.3 of the transfer regulations, his application was rejected for reasons that were not disclosed. It was submitted on behalf of Boutsianis that the only basis for rejection of his application for transfer is on the ground that paragraph 12.3 of the transfer regulations limits a player from a former Victorian NSL club to playing only in the VPL and not State One competition. It was submitted that if that is the proper construction of paragraph 12.3 of the transfer regulations it constitutes a restraint on trade as it prevents Boutsianis from pursuing his profession in that he is limited to only playing in the VPL and no other competition undertaken by the VSF.
For the plaintiffs it was submitted that the restraint of trade constituted by the transfer regulations was not reasonable: see Buckley v Tutty[16]; Geraghty v Minter[17]; also, Adamson v NSW Rugby League[18]. In summary, it was submitted for the plaintiffs that the transfer regulations had the practical effect of restraining Boutsianis and Spiteri, being from non-Victorian NSL clubs, from participating in competitions conducted by the VSF and hence was unreasonable. It was also submitted that the effect of the transfer regulations was to prevent Boutsianis, being a former Victorian NSL club player, from playing in professional competitions in Victoria other than the VPL. It was also argued that no legitimate or identifiable interest of the VSF or the public could be justified from the restraint of trade constituted by the transfer regulations.
[16]Ibid at 378.
[17](1979) 142 CLR 177, 185.
[18](1991) 103 ALR 318, 323.
For the defendant it was argued that the VSF had full power to make the transfer regulations under the terms of the constitution of the VSF. The body, so it was argued, was vested with the authority to act in the best interest of the promotion of soccer in Victoria as it considered appropriate and necessary. Of itself, reliance upon the constitutional power of the VSF is not necessarily a complete answer to the restraint of trade allegation by the plaintiffs. There was no issue that the VSF had power under its constitution to make rules upon the arrangements of player transfers. The issue was whether the rules arguably constituted a restraint of trade. There was no dispute that the plaintiffs were professional sportsmen deriving all or most of their livelihood from playing soccer.
The control and management of sports, such as football, involving clubs was considered by the Court of Appeal in Australian Football League v Carlton Football Club Limited[19]. There the majority, Tadgell and Hayne JJA, Ashley AJA dissenting, held that when a football player submits to the rules of a club and a governing association that player submits pursuant to contractual principles to the rules of the club and the governing association. Although the Australian Football League case was different on its facts, being concerned with players’ discipline and suspension, arguably the same principle can be extended and applied to this case. In the present case the plaintiffs wish to join clubs under the auspices of the VSF. They may be taken to being prepared to submit to the rules of the VSF and its affiliated clubs; to being prepared to treat with VSF with a view to playing under its constitution and rules. It seems illogical, therefore, on the one hand to say the players wish to join the VSF and transfer to one of its VPL or State One clubs, but, on the other hand, to say they are entitled to do so only on their terms. Notwithstanding the raising of this argument by the Court, the defendant displayed general disinterest and did not pursue the point and the plaintiffs did not answer the point adequately.
[19][1998] 2 VR 546.
Nonetheless, it seems to me that the VSF had power under its constitution to act in the interests of soccer in Victoria. The chairman of VSF has deposed as to the intentions of the VSF in his affidavit. I have difficulty comprehending that the VSF has acted unlawfully given its constitutional powers. Furthermore, the clubs to which the plaintiffs wish to transfer fall under the aegis of the VSF. Although not parties to the proceeding it is difficult to see how the plaintiffs could logically join those clubs pursuant to the transfers they seek to effect without submitting to the same rules to which the clubs are subject. The contractual principles recognised in the Australian Football League case seem to create an insurmountable obstacle to the plaintiffs’ arguable case. There is also then the constitutional power point. I have difficulty, therefore, in seeing that a substantive issue to be tried has been made out.
Nonetheless, even if it was, there is the matter of the balance of convenience. The defendant argued that at the time the plaintiffs entered into their NSL contracts, which allegedly precluded them from transferring to Victoria by the requisite date, they knew of the Victorian requirements, that is, the transfer regulations. That being so the knowledge, and acquiescence towards it, weighs against the plaintiffs. They may be deprived of the opportunity of playing their sport between the present and August 2005 but their circumstances are partly of their own making. That said, there is another factor. The plaintiffs’ claim is readily compensable by an appropriate award of damages. In assessing the balance of convenience the availability of damages as a remedy is a factor to be considered.
Weighing all these matters up the balance of convenience in my view weighs against the granting of the interlocutory relief sought.
Another matter warrants consideration. The nature of the relief sought by the plaintiff is arguably in the nature of a mandatory injunction. The mandatory nature arises from the effect of the orders sought which would be to compel the defendant to register or allow the transfer of the plaintiffs. The courts have demonstrated a reluctance to grant such relief on an interlocutory basis particularly where damages are available as a remedy. While exceptions will arise I do not see how one arises in this case.
It follows from these reasons that the application is refused and the summons should be dismissed.
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