Melbourne Juventus Soccer Club Ltd v Australian Soccer Federation Ltd

[1995] FCA 825

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIAN DISTRICT REGISTRY
GENERAL DIVISION  No VG 3398 of 1995

MELBOURNE JUVENTUS SOCCER CLUB LIMITED

Applicant
  -and-

AUSTRALIAN SOCCER FEDERATION LIMITED

Respondent

Coram:    Olney J

Place:    Melbourne

Date:     8 September 1995

REASONS FOR JUDGMENT

By its application filed herein on 26 July 1995 the applicant seeks amongst other things, injunctive relief to prevent the respondent from - (a) giving effect to a decision made on 26 June 1995 to reduce the number of clubs which will constitute the National Soccer League for the 1995/96 season to not more than 12, and (b) excluding the applicant from the National Soccer League in 1995/96, other than by reason of a determination made bona fide in accordance with the memorandum and articles of association of the respondent.

Central to the applicant's case are the provisions of article 88 of the respondent's articles of association, which require the respondent to conduct a National Soccer League constituted by not less than 14 teams.

It is common cause that article 88 requires that the National Soccer League be constituted by no less than 14 teams and the
respondent accepts that to be so.   The governing body of the respondent has convened a general meeting of the company to be held on 13 September 1995 for the purpose of admitting two new clubs as members of the respondent and also for the purpose of amending article 88 by removing the requirement that the National Soccer League be constituted by not less than 14 teams.

The applicant presently seeks interlocutory relief to restrain the respondent from admitting the two new clubs and from convening a general meeting for the purpose of considering, discussing and determining a proposal to amend article 88(3)(c) so as to provide that the minimum number of teams in the National Soccer League be not less than 12 and, further, from taking any step to reduce the number of clubs constituting the National Soccer League in 1995/96 to less than 14.

Several things can be said about the relief that is sought.   First, the meeting has already been convened, in the sense that the required notice of meeting has been given in accordance with the articles of association and, indeed, that notice was given prior to the filing of the notice of motion.  Second, it does not appear that the admission of two additional clubs as members of the respondent can have any bearing upon the ultimate outcome of these proceedings and third, the respondent can only reduce the number of teams in the National Soccer League if article 88 is amended to permit that to be done.   In substance, the applicant seeks the intervention of the Court to prevent the members of the respondent from considering and voting upon a motion to amend the articles of the company at a properly convened general meeting.

The basis of the applicant's claim for such relief is that it would be oppressive if the amendment were passed because it fears that it would not be one of the 12 (or whatever number is decided) clubs to constitute the National Soccer League in 1995/96.   The applicant's fear is well founded.   The evidence strongly suggests that even if 14 teams constitute the National Soccer League in 1995/96, the applicant would not be one of them. According to the criteria adopted to assess the standing of the various clubs, the applicant has scored very poorly and although the detailed information is and remains confidential, it is fair to say that even disregarding the geography criterion to which reference was made in argument, the applicant's relative position in the ranking of the clubs in question would not change.

As a matter of general principle, I know of no authority which suggests that it is oppressive conduct for a corporation to cause a meeting to be convened in accordance with its articles of association to permit the members to consider and vote upon a resolution to amend the articles.   And even if in some circumstances, such as a case where voting power is unfairly distributed amongst the members, it be possible to regard conduct which is contemplated by the articles of association to be oppressive, that case is not this case.   In my opinion, the Court should not intervene so as to interfere with the ordinary democratic processes contemplated by the articles of association of the respondent.   The applicant has not established that there is a serious question to be tried as to the claim that the conduct of convening the meeting proposed to be held on 13 September 1995 is oppressive.

The applicant's argument in support of the motion contradicts the arguments advanced on other occasions, when it was said on the applicant's behalf that the only way to effect the proposed change in the constitution of the National Soccer League is by way of amendment to the articles of association.  Nor has it been shown that there is any reasonable basis to fear that the applicant is likely to be excluded from the National Soccer League in 1995/96 other than by reason of a determination made bona fide in accordance with the memorandum and articles of association of the respondent.

In case it is thought to be important, and I do not think that it is, I am of the view that the convening of the meeting of 13 September 1995 and, indeed, the amending of the respondent's articles at that meeting, if that be the result of the meeting, is in no way contrary to the order made by Ryan J on 8 August 1995 and if it were thought otherwise I would vary that order to permit the meeting to be held.

In my opinion, there is no merit in the argument presently advanced by the applicant and the motion should be dismissed.

I certify that this and the preceding 4 pages are a true copy of the Reasons for Judgment of the Honourable Justice Olney

Associate:

Dated:  8 September 1995

Heard:       8 September 1995

Place:       Melbourne

Judgment:     8 September 1995

Appearances:

Mr S. Wilson QC and Ms M. Warren (instructed by Abbott Stillman & Wilson) appeared for the applicant.

Mr J. Sher QC (instructed by Brian Ward & Partners) appeared for the respondent.