Sharp v National Rugby League Ltd

[2016] NSWSC 777

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Sharp v National Rugby League Ltd [2016] NSWSC 777
Hearing dates:	10 June 2016
Decision date:	10 June 2016
Jurisdiction:	Equity - Expedition List
Before:	Stevenson J
Decision:	Proceedings dismissed with costs
Catchwords:	COSTS - where plaintiffs’ substantive case failed -where plaintiffs’ contentions as to secondary aspect of case ultimately undisputed - whether plaintiffs achieved sufficient success on secondary issue to warrant there being no order as to costs of the proceedings
Legislation Cited:	Corporations Act 2001 (Cth) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Idoport Pty Ltd v National Australia Bank Ltd [2006] NSWSC 895 Sharp v National Rugby League [2016] NSWSC 730
Category:	Costs
Parties:	Stephen Sharp (First Plaintiff) Tom Issa (Second Plaintiff) Peter Serrao (Third Plaintiff) John Boulous (Fourth Plaintiff) Daniel Anderson (Fifth Plaintiff) National Rugby League Limited (Defendant)
Representation:	Counsel: A R Moses SC with R Gall (Plaintiffs) L V Gyles SC with C Colquhoun (Defendant)   Solicitors: Thompson Eslick Solicitors (Plaintiffs) Kennedys (Australasia) Pty Ltd (Defendant)
File Number(s):	SC 2016/135088

EX TEMPORE Judgment (REVISED)

1. On 7 June 2006 I delivered judgment in these proceedings in which I concluded they should be dismissed: Sharp v National Rugby League [2016] NSWSC 730.

2. I have now heard submissions as to costs.

3. I will use the same abbreviations as appear in the primary judgment.    

4. The general rule is of course that costs follow the event.

5. Mr Moses SC, who appears today for the plaintiffs, submits that the general rule should not be followed in this case and that each party should pay their own costs. That is because, he submitted, accepting that the NRL was successful on the issue of the proper construction of the Rules, the plaintiffs achieved substantial success in relation to the matters agitated before Darke J (as Duty Judge) on 3 May 2016 (the day proceedings were commenced and on which date an interlocutory order was made) and before me on 9 May 2016 (when I heard an application by the NRL to discharge the 3 May 2016 order).

6. Costs on 3 and 9 May 2016 were reserved.

7. The general rule is that costs reserved follow the event, even if the ultimately successful party was not successful in relation to interlocutory matters (Uniform Civil Procedure Rules 2005 (NSW) r 42.7 and see Idoport Pty Ltd v National Australia Bank Ltd [2006] NSWSC 895 per Einstein J at [5]).

8. However, every case depends on its particular circumstances.

9. The matters agitated on 3 May 2016 were in large part directed to the last sentence of the Notices, set out at [11] of the primary judgment. I discussed the significance of that sentence at [52] to [53], namely whether it purported to impose a fetter on the plaintiffs’ abilities to discharge their fiduciary and statutory obligations as directors and officers of the Club.

10. On 3 May 2016 Mr Gyles SC, who appeared with Mr Colquhoun for the NRL, accepted that "there may be some ambiguity" in the sentence but stated that the sentence was not intended “to provide a fetter" on the plaintiffs’ obligations. Ultimately an order was made by the parties which, I am told, reflected a concern that Darke J had expressed as to the possible meaning of that last sentence.

11. On 9 May 2016 I heard an application by the NRL to set aside that order. In written submissions delivered shortly before that hearing, Mr Gyles and Mr Colquhoun stated:

“Thus, properly construed, the final sentence does not seek to restrict, limit or fetter any conduct on the part of the plaintiffs. It therefore cannot be said to ‘restrict [their] functions as directors and officers of Parramatta Rugby League Club Limited contrary to the fiduciary obligations and statutory obligations pursuant to the Corporations Act 2001 (Cth) of directors and officers’.”

12. In oral submissions before me on 9 May 2016, Mr Gyles made clear that the NRL's position was that it was a matter for the plaintiffs to reconcile such tension as may have existed between the interim suspensions on the one hand and their fiduciary and statutory obligations as officers and directors of the Club on the other.

13. Ultimately, on 9 May 2016 it was agreed that the 3 May 2016 order be set aside upon the basis set out at [54] of the primary judgment.

14. In those circumstances, I do not see the plaintiffs as having achieved substantial success on 3 or 9 May 2016 such as to warrant segregating the costs on those days from those of the proceedings overall.          

15. Next, in his written submissions, Mr Moses submitted that this was a "test case", and that the NRL “is likely to be substantially advantaged by the favourable resolution of the construction of [its] Rules". Mr Moses did not develop that submission orally. I see no reason to conclude that this is a test case. There was no suggestion that any Rugby League club, apart from the Club, entertains any misapprehension as to what the Rules mean.

16. Mr Moses concluded his submissions by stating:

“Finally, and further to the above point, one of the basis for the Court finding for the Defendant’s construction was that there was an ‘obvious mistake’ in the NRL Rules (drafted by the Defendant and which can be amended unilaterally). This argument was not raised or plead by the Defendant and arose only during the course of the final hearing from a point raised by the Court.”

17. The “obvious mistake” is that to which I referred to at [46] to [51] of the primary judgment.

18. The implication of the submission appears to be that one reason the NRL was successful on the question of the proper construction of the Rules was a mistake in its own Rules, which it could unilaterally have corrected.

19. But that is not so. The “obvious mistake” did not provide a basis for my conclusion as to the proper construction of the Rules. In any event, I could not see what role the words mistakenly included ("cancelled or") would play in the plaintiffs’ argument, assuming they were not included mistakenly: see [51] of the primary judgment.

20. I order that the proceedings be dismissed with costs.

21. I order that the exhibits be retained pending the lapsing of the time prescribed by the rules for an appeal. Thereafter the exhibits may be returned.

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Amendments

16 June 2016 - Par 19 - reference to [5] corrected to [51]

15 June 2016 - Counsel added to Representation

Decision last updated: 16 June 2016