Hughes, K.J. v Western Australian Cricket Association

[1986] FCA 63

Re: KIMBERLEY JOHN HUGHES
And: WESTERN AUSTRALIAN CRICKET ASSOCIATION (INC.); MT. LAWLEY DISTRICT
CRICKET CLUB (INC.); MELVILLE CRICKET CLUB (INC.); NORTH PERTH CRICKET CLUB
(INC.); SUBIACO FLOREAT CRICKET CLUB (INC.); BAYSWATER-MORLEY CRICKET CLUB
(INC.); PERTH CRICKET CLUB (INC.); FREEMANTLE DISTRICT CRICKET CLUB (INC.);
CLAREMONT-COTTESLOE CRICKET CLUB (INC.); SOUTH PERTH CRICKET CLUB (INC.);
MIDLAND-GUILDFORD CRICKET CLUB (INC.); WANNEROO DISTRICT CRICKET CLUB (INC.)
and LESLIE ANNISON (sued on behalf of himself and all other members of the
Southern District Cricket Club; GREGORY BUNNEY (sued on behalf of himself and
all other members of the Scarborough Cricket Club); MICHAEL SNELL (sued on
behalf of himself and all other members of the Nedlands Cricket Club); PHILLIP
CLIFFORD (sued on behalf of himself and all other members of the University
Cricket Club) and KEVIN MORRIS TAYLFORTH (sued on behalf of himself and all
other members of the Cricket Council of Western Australian Cricket Association
(Inc.)
No. WA G14 of 1986
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Toohey J.

CATCHWORDS

Trade Practices - arrangement or understanding affecting competition - application for interlocutory injunction under s. 80 of Trade Practices Act and accrued jurisdiction - alleged disqualification by respondents of applicant from grade cricket subsequent to applicants participation in South African cricket tour - whether contrary to s. 45 of Trade Practices Act - whether in breach of Deed of Settlement - whether conspiracy to injure applicant in business as professional cricketer - applicant disqualified pursuant to Cricket Council rule - whether disqualification authorized by rule - whether rule unlawful restraint of trade - consideration of whether serious question to be tried - observations as to standard to be met - consideration of balance of convenience - alleged financial loss to applicant - whether adequately compensable in damages - injunction sought to restrain respondents from interfering with applicant's eligibility to play - whether in terms futile

Trade Practices Act 1974 ss. 45, 80

HEARING

PERTH

#DATE 7:3:1986

ORDER

The application for interlocutory injunction be dismissed.

The costs of the application be reserved.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

The matter presently before the Court is an application for an interlocutory injunction, until trial, restraining the first respondent and the fourth respondent from taking any action to interfere with the eligibility of the applicant for selection to play cricket in any A grade pennant fixture or Toyota Cup fixture.

1. The applicant, Mr. Hughes, is a well-known professional cricketer and was formerly captain of the Australian test team. He is engaged professionally by the Subiaco Floreat Cricket Club (Inc.). His participation in a recent cricket tour of South Africa has generated much controversy and strong feeling.

2. The first respondent, Western Australian Cricket Association (Inc.) ("W.A.C.A.") is incorporated under the provisions of the Associations' Incorporation Act 1895, a statute which permits the incorporation of associations formed for various purposes other than "trading or securing pecuniary profit to the members from the transactions thereof" (definition of "Association" in s. 2). The fourth respondent Kevin Morris Taylforth is sued in a representative capacity on behalf of all members of the Cricket Council of the W.A.C.A. The Cricket Council is established by the rules of the W.A.C.A. and comprises delegates from the associated clubs and others. It is empowered to make by-laws and regulations for the control and management of matters within its jurisdiction and to issue its own rules. The functions of the Cricket Council include the registration, qualification and eligibility of players for selection and the conditions upon which clubs may be admitted to or removed from affiliation with the W.A.C.A.

3. Each of the second respondents is concerned with the control, management and organization of a district club and each is a body incorporated under the provisions of the Associations' Incorporation Act. The third respondents are sued in their representative capacity as members of other cricket clubs which are unincorporated.

4. The question of interlocutory relief came before the Court on 21 February as a matter of urgency. To some extent it was in the nature of an ex parte application as service had not been effected on the second and third respondents. Counsel appeared for the first and fourth respondents, though at very short notice. An interim injunction was granted restraining the first and fourth respondents from taking any action to interfere with the applicant's eligibility for selection to play in any A grade pennant fixture or Toyota Cup fixture. The applicant's club was scheduled to play in the Toyota Cup on the following Sunday. The injunction was expressed to expire at 5.00 p.m. on Thursday, 27 February.

5. The hearing of a claim for an extension of the injunction was fixed for 10.15 a.m. on that day. Mr. Owen-Conway and Mr. Wheatley appeared for the applicant. Mr. Archer and Mr. McKerracher appeared for the first and fourth respondents and for a number of the second and third respondents. Some other respondents including the Subiaco Floreat Cricket Club appeared but only to indicate an intention to abide by whatever orders the Court might make. Affidavits were filed on both sides. Leave was given to the applicant to amend his application and statement of claim in several respects. Inevitably the Court became possessed of much more information than was available to it on 21 February. The Court had the benefit of detailed submissions for and against a continuance of the injunction, extending over two days. Late on Friday, 28 February I reserved my decision on the application to extend the injunction.

6. The applicant's main complaint is that, by their actions, the respondents have prevented him from playing cricket in A grade pennant fixtures and local fixtures such as the Toyota Cup. He claims that they have done this by relying upon r. 2.38.1 of the Cricket Council's rules which preclude a player from taking part in a cricket match other than a match recognized by the Australian Cricket Board or the W.A.C.A. without first obtaining the written consent of the Cricket Council. In its present form, that is as amended on 4 November 1985, the rule concludes:
   
   

"Any player found in breach of this rule is

automatically disqualified until reinstated by the

Cricket Council".

1. Rule 2.39.5 of the Cricket Council rules imposes a fine upon a club that allows a disqualified player to play in its team and that club "shall be deemed to have lost the match to the opposing club".

2. In 1985 the applicant entered into a written agreement with the South African Cricket Union to participate in cricket tours of South Africa between 1 November 1985 and 31 March 1986 and between 1 October 1986 and 31 March 1987. As a consequence, the W.A.C.A. and other state cricket associations, as members of the Australian Cricket Board, instituted proceedings in the Supreme Court of Victoria against the applicant and other players. The object of those proceedings was to prevent the defendants from playing in South Africa. Those proceedings were defended. In August 1985 the litigation was resolved by a deed of settlement. The Australian Cricket Board imposed bans on the applicant rendering him ineligible to play for Australia or any state. The deed provided that, while the applicant did not admit the entitlement of the Board and its constituent members to impose the bans, he released the Board and its members from all claims he might have in respect of the bans. The applicant claims that it was an express or implied term of the deed that the W.A.C.A. would take no further action against him by reason of his participation in the South African tours and in particular would not impose or seek to impose restrictions upon his eligibility to play district cricket in Western Australia.

3. The principal cause of action pleaded against the first and fourth respondents invokes s. 45 of the Trade Practices Act 1974. That section strikes at contracts, arrangements or understandings restricting dealings or affecting competition. Sub-section 45(2) prohibits a corporation from making a contract or arrangement or arriving at an understanding if:
   
   

"(i) the proposed contract, arrangement or

understanding contains an exclusionary provision; or

(ii) a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially

lessening competition".

The term "competition" is defined in sub-s. 45(3). The applicant acknowledges that the first respondent is not directly concerned with competition in a market, saying that that is the province of the clubs. But, it is said, the conduct of the first respondent and of the other respondents at meetings of the Cricket Council in January and February 1986 has lessened competition by excluding the applicant from grade cricket. The relevant competition, the applicant submits, arises from the participation by clubs in markets which para. 5 of the statement of claim defines as:

"(i) the market for club membership and subscriptions from playing and non-playing members and patronage of club facilities and services for which charges are made;

(ii) the market for sponsorship of club activities by commercial organisations including prize money;

and the market comprised by these two markets

taken together as a single market."

1. It is the cause of action under s. 45 that attracts the jurisdiction of the Federal Court. The other causes of action, arising under the Court's accrued jurisdiction, may be summed up in this way. The conduct of the respondents in excluding the applicant from grade cricket was an unauthorized and unlawful act because there was no compliance with r. 2.38.1. Furthermore, that rule constitutes an unlawful restraint of trade. The deed of settlement prevents the respondents from taking any action to interfere with the applicant's participation in local cricket. Finally, and by way of recent amendment, there is an allegation against all respondents of conspiracy to injure the applicant in his business as a professional cricketer.

2. The respondents contend that, for the purpose of deciding whether an injunction shall continue, the Court must look at the material presently before it. It should not assume that the applicant may improve his position by additional evidence when the matter comes to trial. Krakouer v. Croxford (unreported decision of O'Bryan J. delivered 9 August 1985). Viewed in that light, the respondents submit, not only has the applicant failed to demonstrate that there is a serious question to be tried but it is quite apparent that he cannot sustain any of the causes of action pleaded.

3. Underlying the respondents' attack on the various causes of action pleaded is a fundamental challenge to the jurisdiction of the Federal Court. The basis of that challenge lies in the submission that none of the respondents is a trading corporation, hence that none is a corporation within the meaning of that term in the Trade Practices Act. The respondents argue that, at any rate on the evidence presently available, there is nothing to show that any of the respondents is a trading corporation. The respondents say that the receipt of income - from subscriptions, entrance fees and sponsorship - does not constitute any of the respondents a trading corporation. They seek to distinguish the position of the Football Leagues in R. v. Federal Court of Australia; Ex parte W.A. National Football League (1978-1979) 143 CLR 190. In that event, they say, there can be no jurisdiction in this Court to deal with any of the applicant's causes of action.

4. Counsel for the respondents launched a strong attack on any cause of action under s. 45. The attack was along these lines. There is no evidence that the W.A.C.A. or any of the respondents is a party to any contract, arrangement or understanding. There has been an amendment of the rules of the W.A.C.A. but those rules have no contractual force and their amendment cannot constitute a contract. Cameron v. Hogan (1934) 51 CLR 358; Tutty v. Buckley (1970) 92 WN (NSW) 329. All that happened was that the clubs, acting within the constitution of the W.ACA, voted on an amendment to the rules. "Competition" is given a specific meaning in sub-s. 45(3) and, so defined, it has no application to what has happened. The clubs do not "compete" for the services of cricketers. There is no "exclusionary provision" within the meaning of s. 4D for there is no evidence that the respondents had any of the purposes referred to in that section. Equally they did not have a purpose of substantially lessening any competition. There are some 1,000 players in the Perth district competition and, if r. 2.38.1 is enforced, one player, certainly no more than four, may be prevented from playing in local fixtures. This cannot be described as a substantial lessening of competition.

5. The respondents attacked the cause of action based on the deed of settlement, arguing that there is no term in that deed, express or implied, lending any support to what is pleaded in para. 24 of the statement of claim. The deed, it is said, is aimed at resolving claims which the parties may have against each other; it is not concerned with the future playing of cricket.

6. The respondents argued that r. 2.38.1 does not impose any restraint of trade at common law. It has nothing to do with the transfer of players or transfer fees. It simply requires the approval of the Cricket Council before players may participate in games not recognized by the W.A.C.A.

7. As to the claim in conspiracy, the respondents say that this must fail in limine for there is simply no evidence of any intention on the part of the respondents to injure the applicant as opposed to protecting their own interests. See McKernan v. Fraser (1931) 46 CLR 343; Lonrho Ltd. v. Shell Petroleum Co. Ltd. (No. 2) (1982) AC 173.

8. These are powerful attacks on the statement of claim. Counsel for the applicant made submissions in answer, challenging the respondents' understanding of the applicant's claim both on the law and on the facts. As to jurisdiction, they argued that the W.A.C.A. and the incorporated clubs are trading corporations but that, in any event, the characterisation of the corporations is simply an element in the applicant's causes of action. An ultimate finding that there is no trading corporation does not deprive the Court of jurisdiction to deal with the "matter" before it. It is true that, as the authorities now stand, the applicant does not have to demonstrate a prima facie case but rather show that there is a serious question to be tried. See Epitoma Pty. Ltd. v. Australasian Meat Industry Employees' Union (No. 2) (1984) 54 ALR 730 where the authorities are discussed. This does not mean an applicant may simply offer the Court propositions of law and fact and argue that, because they have some complexity, it necessarily follows that the requisite standard has been met. An applicant must show that there is in truth a serious question to be tried. I find it unnecessary to unravel the arguments that have been put on both sides so far as the strength of any cause of action is concerned. I accept that there is a serious question to be tried; but, in my view, there are considerations strongly against an extension of the injunction.

9. The Court now has before it a great deal of evidence that was not available to it at the first hearing. It is possible to assess with greater confidence the implications for the applicant, on the one hand, if an extension of the injunction is refused and for the respondents, on the other, if an extension is granted. In this regard it is important to appreciate what the injunction sought is about and what it is not about. It is not about the applicant's livelihood for that is derived, at any rate for the time being, from cricketing and allied activities not affected by any rules of the W.A.C.A. That is not to say that to disqualify the applicant from participating in grade fixtures will not cause him some financial loss. But in the circumstances that loss is minimal. At the time of the hearing there were only two grade fixtures remaining this season, to be played on 1, 2, 8 and 15 March. The Toyota Cup semi-final is scheduled for Sunday, 9 March and the Toyota Cup final for 16 March. Assuming that the applicant is selected by his club and assuming that the club participates in all remaining fixtures, any income the applicant will derive will be small indeed, particularly measured against his earnings from other sources. In this regard I was provided with evidence of the applicant's earnings from the concluded and proposed tours of South Africa. As Mr. Taylforth deposes in an affidavit sworn in these proceedings, any income the applicant may lose "is certainly not a sum that exceeds an award in damages which the Respondents could pay in the event this honourable Court found in favour of the Applicant following a trial".

10. On the other hand, the respondents argue, if the applicant does play in any of the remaining fixtures and thereafter fails to make good his case against them, there will have to be replays and this may affect, not only the matches in question, but matches in lower grades if the applicant's inclusion results in other players having participated in matches at lower than usual grades. The facilities extended by local authorities for cricket purposes do not extend beyond 31 March so that it would be virtually impossible to replay affected fixtures.

11. It is important to appreciate that the interim injunction granted by the Court on 21 February in no way ensured that the applicant would have participated in the following weekend's Toyota Cup fixture, had it not been a wash-out. The injunction did no more than prevent the first and fourth respondents from taking any action to interfere with the eligibility of the applicant to play in any A grade pennant fixture or Toyota Cup fixture. The responsibility still lay on the Subiaco Floreat Cricket Club to make its selection of players and, had the match been played, it would have had to make that selection with an awareness that the applicant was regarded as a disqualified player. The club would have had to make its own assessment of the applicant's position under the Cricket Council rules. The same would be true if the injunction were now extended, for the actions of the applicant that gave rise to his alleged disqualification took place before any application was made to this Court.

12. The W.A.C.A. says that an injunction will create serious administrative difficulties for it, particularly if the applicant plays in any of the remaining matches and its actions are vindicated by the Court at the substantive hearing. Evidence was given to the Court, by affidavit, newspaper reports and television coverage, of incidents that took place when the applicant played in grade fixtures late last year. There were anti-apartheid demonstrations, with some violence and some damage to pitches. The respondents say they fear a recurrence of these incidents if the applicant is permitted to play in the remaining matches. Once again, it is important to stress that the Court is not being asked to make an order and indeed could not make an order that took from the Subiaco Floreat Cricket Club or any club the right to make its own selection of players for the remaining matches. What it is being asked to do is to enjoin the first and fourth respondents from taking any action to interfere with the applicant's eligibility to play. For this reason, it seems to me that the matters to which I have just referred do not truly arise at this stage.

1. Counsel for the respondents argued that the applicant has proceeded on a false assumption. He has assumed that, if an interlocutory injunction is granted, he will be able to play cricket and, if an injunction is refused, he will not be able to play. I agree with counsel for the respondents that this is not the way in which the granting or refusal of an injunction should be viewed. If r. 2.38.1 is valid and operative against the applicant, certain consequences will follow if he plays in any of the remaining matches. If, for any of the reasons advanced by the applicant in his statement of claim, the rule has no effect on him, those consequences will not follow if he plays. Until there is a substantive hearing of the application, it must be for all those concerned in this litigation to assess their positions. It would be quite wrong for the applicant or the Subiaco Floreat Cricket Club or anyone else to proceed on the assumption that if there is an interlocutory injunction as sought, no adverse consequences may follow if the applicant is selected to play. It would be equally wrong for anyone to assume that, if an injunction is refused, there has been some pronouncement by the Court adverse to the applicant's eligibility.

2. Relying on decisions mentioned in Spry's Equitable Remedies 3rd ed. 388-390, counsel for the respondents argued that any injunction would be futile and that accordingly it should be refused by the Court. In one sense the injunction sought would not be futile. In so far as it seeks to restrain the respondents from doing anything to interfere with the applicant's eligibility, it would prevent the W.A.C.A. or Cricket Council from taking any further action having any consequences for the applicant's eligibility. But there is no suggestion that this is likely to happen; the first and fourth respondents take their stand very firmly on the position that they say now exists. I am persuaded to refuse an injunction until trial because I do not think it would achieve anything. It would make no difference to whatever situation in law now exists and would give the applicant no protection that he does not already have. But there is a danger that the grant of an injunction would be seen by many as being not futile and as reflecting some concluded view by the Court regarding the merits of the substantive application. This is something I have sought to dispel more than once during the course of argument before me but I am not persuaded that the risk does not still exist. There are very good reasons for not adding to the position of the parties the further complication of an interlocutory injunction.

3. In summary then, I accept that the causes of action pleaded raise a serious question to be tried. However I am of the opinion that an extension of the injunction should be refused. Because I am of that view, I think it undesirable to express views about complex questions of law and fact, which views are more appropriately expressed in the context of a substantive hearing. I am of the opinion that to refuse an injunction will not cause the applicant financial loss so long as the decision of the Court is properly understood. If there is financial loss, it will be compensable in damages. The first respondent, in particular, is in a position to meet any award of damages the applicant may receive. To grant an injunction may cause the first and fourth respondents some administrative inconvenience. But, more importantly, the grant of an injunction is likely to be misconstrued by those concerned with the administration and playing of cricket in this State and by cricket supporters and so divert attention from the fact that the relationship at law between the applicant and the respondents does not turn upon the granting or refusal of an injunction.

4. In all the circumstances, the earlier injunction having expired, I make no further order by way of injunctive relief. I order that the costs of the application for an interlocutory injunction be reserved. I shall hear from counsel as to the directions thought most appropriate to bring about an early hearing of the substantive application.