Quadrascan Graphics Pty Ltd As Trustee of the Quad Unit Trust and Michael William Camfield and James John Kennedy v Crosfield Electronics Anz Pty Ltd and Burnhill Equipment Finance Anz Pty Ltd

[1988] FCA 26

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NOT FOR GENERAL DISTRIBUTION

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IN THE FEDERAL COURT	OF AUSTRALIA	)
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NEW SOUTH WALES DISTRICT REGISTRY	)	NSW G.95 O f 1988
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GENERAL DIVISION	1

BETWEEN :  STEVE CARFINO

I First Applicant MARINARO PTY LTD Second Applicant

AND: THE AUSTRALIAN BASKETBALL

FEDERATION INCORPORATED

First Respondent

TASMANIAN BASKETBALL

ASSOCIATION INCORPORATED

Second Respondent

HOBART BASKETBALL CLUB

INCORPORATED

Third Respondent

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undertaking as to damages

CORAM :	WILCOX J
PLACE :	SYDNEY
DATE :	1 FEBRUARY 1988

MINUTES OF ORDER

Upon the applicants by their counsel giving the usual

THE COURT ORDERS THAT:

1. Until further order, the respondents and each of

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them, their servants and agents, be restrained from:

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(i) refuslng to permit the applicant, Steve Carfino, from playing as a member of the team fielded by Sydney NEC Kings Club and :

(ii) taking any action by way of punlshment or reprisal as a result of his so playing, whether against the applicant or any other person or organisation.

2. The costs of the application be reserved.

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

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NOT FOR GENERAL DISTRIBUTION

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IN THE FEDERAL COURT	OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	) NSW G.95 of 1988	!"
)
GENERAL DIVISION	)

BETWEEN :  STEVE CARFINO . I . I .

First Applicant
MARINARO PTY LTD

Second Applicant

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AND :	THE AUSTRALIAN BASKETBALL
FEDERATION INCORPORATED  I '

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First Respondent

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TASMANIAN BASKETBALL

ASSOCIATION INCORPORATED	I
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Second Respondent
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HOBART BASKETBALL CLUB	,' I
INCORPORATED Third Respondent

CORAM :	WILCOX J
PLACE :	SYDNEY
DATE :	1 FEBRUARY 1988

EXTEMPORE REASONS FOR JUDGMENT

Last Frlday afternoon I was approached by counsel for the applicants, Steve Carfino and Marinaro Pty Ltd, seeking an

ex parte in~unction, the effect of which would have been to ~

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require the three respondents to this proceedlng, The

Australian Basketball Federation Incorporated, Tasmanian

Basketball Bssociatlon Incorporated and Hobart Basketball Club

Incorporated, to grant the necessary clearance to permit Mr

Carfino to play for a Sydney basketball club, known as Sydney	L -
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NEC Kings, in a competition organlsed by The Australian Basketball Federation and commencing on Friday nlght. That competition is known as the Australian Basketball Classic. Marinaro is involved because that company has undertaken the task of employing basketball players to play for the Sydney NEC Kings club.

I declined to make the orders requested by the

applicants on Friday afternoon because it seemed to me that to

do so would be to change the existing situation. I took the	i
view that ex parte orders, which	would change the status quo,
should not normally be made without the	affected persons
havlng notice of the application for	those orders.

Accordingly, I went no further than granting leave to the appllcants to serve short notice of the Application, made

returnable this morning. When the matter came before the

of resolving the lmmedlate problem.

Court this morning, counsel for the respondents appeared. consider the matter. Accordingly I stood the matter down until 2.15 p.m. in order to enable them some chance to obtain further instructlons, and perhaps to discuss some method

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It appears from the evidence before me that Sydney NEC Kings has been eliminated from the competition which	, . . .
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commenced on Friday night and will not be engaged	In the flnal

tonight, but that it is to play a prellmlnary exhibition

match. The club would wish to have the services of Mr Carfino for that match if possible. There is also an engagement for

the team to visit Tasmania next Friday and It is desired that

Mr Carfino be able to play at that time. The main competition

of the basketball year commences on 12 February and, not

unnaturally, the club wishes to settle its team as soon as

possible .

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This afternoon I was informed that no lnterlm

arrangement had been agreed.	Counsel for the applicants
thereupon renewed the application made ex parte on Friday.	It
seems to me that orders should be made which wlll enable Mr final resolution of this matter, or at least pending further consideration of the case.

The first matter which I have to conslder In

connection with the making of an interlocutory order is	i
whether there is a serious question to be trled. On behalf of	. .
the applicants, counsel has	Identified three causes of action.
In the first place, he says that what has occurred constitutes	!
a breach of s.45(2)(b) of the Trade Practices Act	1974.
Secondly, he says	that there is a breach of s.45D of the Trade
Practices Act; and, thirdly, that the rules and by-laws which	_ .

I On 3 November 1987, Mr Wayne Monaghan, who is

apparent	,ly the President of the thlrd respondent, wrote to Mr
Carfino	in America. He referred to the conversation with Mr
Adkins. In his letter he told Mr Carfino that he was legally bound to the club by way of contract for the 1988 NBL season.	: ' I
That is a reference to the National Basketball League. Mr	:
Monaghan referred to the possibility of Mr Carfino playing
wlth another NBL team and said that he would	appreciate the
courtesy of being told of his situation.	The letter goes on:

"I must point out that we would not conslder

releasing you from your contract unless that

team is prepared to offer satisfactory
compensation for the loss of your services to
us. Congratulations on making the 1987 NBL

All-Star team for the second year running.

I have cancelled the return ticket of your

l	flight to Australia with Quantas (SIC) and
would be pleased if you would return the
ticket to the above address. Also I have
advised the Department of Immigration of your .,
decision and your 'statement of positlon' as when you departed Australia.
I will forward any outstanding accounts/bllls
to you from Hobart that you may have left so that you can keep your name 'clean' with the
Immigration Department should you desire to
play with another NBL Team in the future."

Following the receipt of thls letter, Mr Carfino

apparently acted upon the basis that he would not be returning
to the Hobart club. He was contacted by a representative of
the second applicant and, as a result of that contact, he made
an agreement to play for Sydney NEC Kings subject to the
approprlate clearance being provided by the second respondent,
the Tasmanian Basketball Association, in accordance with the

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by-laws of the first respondent. For that purpose, an

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application for sponsorship was submitted to the Department of

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Immigration and Ethnic Affairs by the second applicant. This I .

was endorsed by the first respondent and approved. Mr Carfino

duly arrived back in Australia, his travel costs being met by
Marinaro. He sought a clearance from the Tasmanlan
Association, with which the Hobart club is afflllated, but
this was refused because of the oblections of the Hobart club.

He then appealed to the Management Committee of the Australian

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Basketball Federation pursuant to the rules of the Federation.	!
But the Federatlon refused to grant a clearance. The actual
decision is set out in a statement made by Mr Staunton,	! .
Executive Dlrector of the Federation, made on 28 January in these terms:

"The Management Committee of the Australian transfer from the Hobart Tassie Devils Club.

Basketball Federation has been asked by Mr.

The Management Committee has perused a large amount of information supplied by both parties.

From that lnformation it appears that the club and the player are in dispute as to whether or not the contract between them 1s still In	i
existence.

It is not for the ABF to determlne such a	I ,
dispute. Accordingly until that dispute is	!
resolved the Management Committee will not

i consider approving the application for
interstate transfer."

The difficulty confronting the Management Commlttee

application for clearance was not granted and, consequently,

is obvious but the effect of its decision was that the for the Sydney club. Under those circumstances, he comes to

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l	this Court challenging the validity of the relevant rules. Those rules are contained in the by-laws of the Australian Basketball Federation. Part 4 of the by-laws deals wlth
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interstate transfers. Paragraph 4.1 provides:

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"Any person registered as a playing member a must first obtaln a certlficate of clearance from the Constituent Association in which he

1s registered before being eligible to

register as a playlng member of any other

Constltuent Associatlon or its affiliates."

Paragraph 4.2 prescribes a form of certificate of clearance.
Paragraph 4.3 provides a right of appeal to the Management

Committee against a decision by any constituent association to

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refuse to grant an interstate clearance.	Paragraph 4.4
states:

"The Management Committee shall be empowered to ratify or veto the declslon of the Constituent Association."

Paragraph 4.5 contains an exception relieving a person from obtaining a clearance in a case where his playing membership of a constituent association has lapsed for a perlod of 12 months immediately prlor to the date of hls application for membership of another constituent association.

The reference to constituent associations is a

reference to the various State organisations and, of course,

includes the second respondent, the Tasmanian Basketball

Association.	The effect of these rules is that a person who
is registered as a playing member of an association, or an	r
affiliate of an association in one State, as was Mr Carfino
when he was registered with the Hobart club, must obtain	a

certificate of clearance from the Tasmanian Assoclatlon or, on

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appeal, the Management Committee of the Federation, before
belng able to be registered by another constituent
assoclatlon. Although the rules do not spell this out, ~t is
accepted on all hands that, wlthout reglstration in New South

Wales, except in a special case, a person would not be

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entitled to play for a club afflliated with the Mew South
Wales Association.

Apparently the third respondent has taken the view that it has a subsisting contract with Mr Carfino and for that

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reason it will not agree to a clearance. I think that there

is a very strong argument that the contract made between Mr

Carfino and the Hobart Basketball Club has come to an end.	At
this stage, it is not possible to make any confident	findings

as to what passed in the various conversations last year.

Neither would it be appropriate to attempt to do so. But the

letter to which I have referred seems to me to indicate that

at that tune one of two events occurred. If it be the ..

position that Mr Carfino had lndlcated in the telephone

conversation to Mr Adkins that he would not return to Hobart,

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prima facie at least that would represent a repudiation of his

contract to play for the Hobart club in 1988. The letter from

Mr Monaghan made it quite plain that the club did not expect

Mr Carfino to return to Hobart.	I have in mlnd the reference
to the club cancelling his return air	ticket and to Mr

Monaghan's discussing the possibility of Mr Carfino playing

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for some other club. If there had been prior breach by Mr

Carfino, it seems to me strongly arguable that Mr Monaghan's

letter constituted an acceptance of that repudiation.

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Alternatively, It may be that there was no prior breach by Mr

Carfino and that the letter amounted to a repudiation by the

Hobart club. Mr Carfino, on that analysis, would have

accepted the repudiatlon by his subsequent conduct in entering
into an agreement with Marinaro and coming to Sydney to play

for Sydney NEC Kings.

As I say, it is not necessary or desirable to reach

any conclusion about this question, but I think that it would be very difficult for the Hobart club to make out a case that there is continuing obligation by Mr Carfino to play for that	..
club. It may be that there was a breach by him whlch enables the club to obtain damages:	but that is another matter.

In a sense, the contractual question is by the way:

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although it is undoubtedly the reason why the matter has come to this Court, both in the thinking of the Hobart club and in the view taken by the Management Committee of the Australian

Basketball Federation. The real question, in this Court, is whether there is a serious question to be tried on any of the

three bases referred to by counsel for the applicants.

As to the first basls, that 1s s.45(2)(b) of the

Trade Practices Act, I have difficulty in seeing that there is

a strong case. It seems to me that the decision of Northrop

J, in Adamson v West Perth Football Club (1979) 39 FLR.199, 1s

in point. Mr Rothman seeks to distinguish that case because

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of the interposition of Marinaro, but I did not think that . _ i

distinction very convincing. I do not say that a claim based

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on s.45(2)(b) will fall. But I Indicate that if the present

case depended only upon that section I would have serious doubts as to whether It ought to be regarded as raising a serious question to be tried.

However, Mr Rothman also relies on s.dSD(1) of the

Trade Practices Act, and it seems to me that there is a , -

stronger argument under this section. In essence what is said	..
1s that the three respondents are persons who, in concert with	1..
each other, are	engaglng In conduct which hlnders or prevents

the supply of services by Marinaro to the Sydney NEC Kings Club; the servlces, of course, being those of Mr Carfino. Sectlon 45D(1) was not relied upon in Adamson’s case, probably

because there was no party in the position of Marinaro.

without attempting to reach any conclusion on the matter it seems to me that there is a serious question arising

under s.45D. Indeed, the contrary was not put by counsel for

any of the respondents.

In connection with the third matter, restraint of

trade, once again Adamson provides some assistance. I have

some difficulty in distinguishing the decision of Northrop J
in that case, that the relevant rules constituted a restraint
of trade void at common law because of their unreasonableness.

The only factual distinction between the two cases seems to be

that, in the case of the rules there under consideration, it

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was necessary for a person not to play for three years in
order to avold the operation of the rules: whereas, in the

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current case, the relevant period is 12 months. Perhaps that	I .:
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is a sufficient point of distinction;	but I have reservations
about that.

It was put on behalf of the first respondent, in the

present case, that the rules as to clearance were merely
designed to achieve good order and to prevent players
breaching a contract with a club. I can understand the desire

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of the administrators in any sport to ensure orderliness in	! '
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relation to the relationship between players and their various
clubs.	No doubt the same submission was put in Adamson's

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case. But do not think that it provides an answer in law. there is a substantial argument in favour of this third leg of the applicant's claim.

It follows from all this that, in my opinion, there

is a serious question to be tried.

I turn to the question of the balance of convenience. The position is quite clear that, unless the Court intervenes,

Mr Carfino will not be allowed to play for the Sydney club.

This is not a case where the choice lies between him playing

for the Sydney club or for the Hobart club. There is evidence

that the Hobart club has already engaged two foreign players
for the 1988 season, and under the rules of the Basketball
Federation no club may play more than two foreign players.

Quite clearly the Hobart club has accepted that Mr Carfino

I will not play for it this season. As I have indicated, his

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return air ticket was cancelled.	He has never been asked to
attend for training wlth the Devils or to make	himself
available to play wlth that team in any game in 1988.	So the

choice lies between him playing for the Sydney club and not
playing at all.

When I inquired from counsel for the third respondent what damage would be suffered by the third respondent if Mr Carflno were to play for the Sydney club, pendlng resolution of the matter, he quite frankly indicated that there would be

no damage except that it might adversely affect the club's
negotiating position with the applicants in relatlon to a fee
to facilitate a clearance. I can understand this commercial

reality but I do not think that the balance of convenience is

to be determined by reference to such a conslderation. In my

view, consideration of the matters of convenience points

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strongly to the Court intervening to grant lnterim relief. k..'

The form of relief suggested by counsel for the

applicants would have required the respondents to grant a

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clearance to permit transfer to New South Wales; but subject

to an undertaking being taken from Mr Carfino, that if he
failed at the final hearing, he would do whatever was

necessary to have his membership transferred back to the

Hobart club.

It seems to me that this is unnecessarily

cumbersome. At my invitation counsel addressed themselves to

the question whether there would be any difficulty about an
interim order which simply restralned the respondents from

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declining to permit Mr Carfino to play with the Sydney club

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pending the outcome of the matter and restrainlng them from

taking any consequential action.

Counsel indicated that there

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would be no objection to an order along those lines.	It seems
to me that this is the appropriate order to be made.

Consequently, upon the applicants by their counsel

givlng the usual undertaking as to damages, I order that,
until further order, the respondents and each of them, thelr
servants and agents, be restrained from:

(i) refusing to permit the applicant, Steve Carfino, from playing as a member of the team fielded by Sydney NEC Kings Club and;

(ii) taking any action by way of punishment or reprlsal as a result of his so playing, whether against Mr Carflno or any other person or organlsation.

I reserve the costs of the application.

I certify this and the twelve (12)

preceding pages to be a true copy of

the Reasons for Judgment of
his Honour Justice	Wilcox.
*ssociate:/e/
Date:	5 February 1988
Counsel for the Appllcants:	Mr S C Rothman
Sollcitors for the Applicants:	Landerer & CO
Counsel for the First Respondent:	Mr M S Willmott
Solicitors for the First
Respondent:	L S Davis & Assoclates
Counsel for the Second and
Third Respondents:	Mr J D Cummins QC
Solicltors for the Second and
Thlrd Respondents:	Lowrie, Longbottom & Blissenden
Date(s) of hearing:	1 February 1988