South Sydney District Rugby League Football Club Ltd v News Limited - [2001] FCA 862

FEDERAL COURT OF AUSTRALIA
South Sydney District Rugby League Football Club Ltd v News Limited
[2001] FCA 862
TRADE PRACTICES – exclusionary provision – rival rugby league competitions with total of 20 teams – agreement in 1997 for uniform competition which by 2000 would consist of 14 teams – agreement that criteria would be developed to determine which clubs, if any, were to be excluded – criteria applied in October 1999 with appellant being excluded from 2000 competition – whether proscribed exclusionary purpose established – whether a “particular class of persons” can be defined in part by fact of exclusion – whether restricting number of persons to or from whom services are supplied or acquired constitutes “restricting or limiting” supply or acquisition of services – whether parties to an exclusionary provision must be competitive with each other at time provision takes effect – discretion to grant injunction – likelihood of threatened conduct occurring – whether damages an adequate remedy.
WORDS OR PHRASES – “particular persons”, “particular class”, “purpose”, “restricting or limiting”.
Trade Practices Act 1974 (Cth) ss 4D,4F, 45(2)(a)(i), 45(2)(b)(i), 80(4), 82
Acts Interpretation Act 1901 (Cth) s 29(b)
News Ltd v Australian Rugby Football League Ltd (1996) 58 FCR 447 mentioned
News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 mentioned
South Sydney District Rugby League Football Club Ltd v News Ltd (1999) 169 ALR 120 mentioned
South Sydney District Rugby League Football Club Ltd v News Ltd (2000) 177 ALR 611 considered
ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460 applied
Rutman Wine Co v E & J Gallo Winery 82 F2d 729 (1987) at 735 mentioned
Newton v Commissioner of Taxation [1958] AC 450 at 465 mentioned
Hughes v Western Australian Cricket Association (1986) 19 FCR 10 at 37-38 mentioned
Wribrass Pty Ltd v Swallow (1979) 38 FLR 92 at 102 mentioned
Industrial Enterprises Ltd v Federated Storemen and Packers’ Union of Australia (1979) ATPR 40-100 mentioned
Tillmans Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union (1979) 42 FLR 331 at 338 and 351 mentioned
Transport Workers Union of Australia v Leon Laidely Pty Ltd (1980) 43 FLR 168 mentioned
Jewel Food Stores Pty Ltd v Amalgamated Milk Vendors Association Inc (1989) 24 FCR 127 at 133-135 considered
Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 discussed
Byrne v Australian Airlines Ltd (1994) 47 FCR 300 at 304-305 mentioned
Eastern Express Pty Ltd v General Newspapers Pty Ltd (1991) 30 FCR 385 at 420 mentioned
Castlemaine Tooheys Ltd v Williams & Hodgson Transport Pty Ltd (1985) 7 FCR 432 at 531-532 mentioned
Australian Competition and Consumer Commission v Visy Paper Pty Ltd [2000] FCA 240 mentioned
Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 at 318 mentioned
Health Services for Men Pty Ltd v D’Souza (2000) 48 NSWLR 448 at 461 mentioned
ICI Australian Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 256-257 mentioned
Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 178 ALR 253 at [60] mentioned
Gallagher v Pioneer Concrete (NSW) Pty Ltd (1993) 113 ALR 159 mentioned
Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464 mentioned
Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 mentioned
Devenish v Jewel Food Stores Pty Ltd (1991) 172 CLR 32 mentioned
Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) 42 FCR 470 mentioned
Trade Practices Commission v The Gillette Company (1993) 45 FCR 366 mentioned.
SOUTH SYDNEY DISTICT RUGBY LEAGUE FOOTBALL CLUB LIMITED v
NEWS LIMITED & ORS
N 1264 OF 2000
HEEREY, MOORE & MERKEL JJ
6 JULY 2001
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 1264 OF 2000

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

SOUTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED
(ACN 002 487 390)
APPELLANT

AND:

NEWS LIMITED
(ACN 007 871 178)
FIRST RESPONDENT

NATIONAL RUGBY LEAGUE INVESTMENTS PTY LIMITED
(ACN 081 778 538)
SECOND RESPONDENT

AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED (ACN 003 107 292)
THIRD RESPONDENT

NATIONAL RUGBY LEAGUE LIMITED
(ACN 082 088 962)
FOURTH RESPONDENT

AND the Fifth to Twenty-third Respondents set out in the Schedule

JUDGES:

HEEREY, MOORE AND MERKEL JJ

DATE OF ORDER:

6 JULY 2001

WHERE MADE:

MELBOURNE

THE COURT MAKES THE FOLLOWING ORDERS:
1.   The appeal be allowed.
2. A declaration that the making and arriving at of the Understanding described in para 10 of the Third Further Amended Statement of Claim (“the Statement of Claim”), the Memorandum of Understanding described in para 22A of the Statement of Claim, and the Merger Agreement described in par 22B of the Statement of Claim contravened s 45(2)(a)(i) of the Trade Practices Act 1974 (Cth) (“the Act”).
3. A declaration that by giving effect to the fourteen team term described in pars 19, 22A and 22B of the Statement of Claim the first, second, third and fourth respondents contravened s 45(2)(b)(i) of the Trade Practices Act 1974 (Cth) (“the Act”).
4.   The first, second, third and fourth respondents whether by their agents, servants or howsoever otherwise be restrained from giving effect to, or continuing to give effect to, the fourteen team term referred to in order 3 above.
5. The matter be remitted to the trial judge for the assessment, under s 82 of the Act, of the loss or damage (if any) suffered by the appellant by reason of the conduct of the first, second, third and fourth respondents described in orders 2 and 3 above, and for the determination of the costs of the proceedings below.
6.   The first, second, third and fourth respondents pay the appellant’s costs of and incidental to the appeal.
Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DISTRIBUTION

NEW SOUTH WALES DISTRICT REGISTRY

N 1264 OF 2000

BETWEEN:

SOUTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED (ACN 002 487 390)
APPELLANT

AND:

NEWS LIMITED (ACN 007 871 178)
FIRST RESPONDENT

NATIONAL RUGBY LEAGUE INVESTMENTS PTY LIMITED (ACN 081 778 538)
SECOND RESPONDENT

AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED (ACN 003 107 292)
THIRD RESPONDENT

NATIONAL RUGBY LEAGUE LIMITED (ACN 082 088 962)
FOURTH RESPONDENT

AND the Fifth to Twenty-third Respondents set out in the Schedule

JUDGES:

HEEREY, MOORE & MERKEL JJ

DATE:

6 JULY 2001

PLACE:

SYDNEY

REASONS FOR JUDGMENT
HEEREY J
I          INTRODUCTION

From 1908 the New South Wales Rugby League (NSWRL) conducted a rugby league competition in that State. A leading club from the inception of the competition was the appellant South Sydney District Rugby League Football Club Limited (Souths). Playing in their traditional red and green, Souths teams won more premierships than any other club in the competition’s history. Souths’ nickname was “the Rabbitohs” which comes from the cries of rabbit vendors in the streets of Redfern and other parts of South Sydney in former years. To its supporters, Souths was a much loved institution inspiring great loyalty.
By the early 1990s the competition was being conducted by the NSWRL on behalf of the third respondent the Australian Rugby Football League Limited (ARL). Clubs from outside New South Wales had joined. By 1995 the competition comprised 20 clubs.
During 1995 there was a split in top level rugby league in Australia. The first respondent News Ltd (News), a large media company, sponsored a rival competition, called Super League, consisting of some clubs who broke away from the ARL/NSWRL competition together with some new entrants. Other clubs, including Souths, continued to play in the ARL/NSWRL competition. Heavy litigation followed. The ARL was initially successful: News Ltd v Australian Rugby Football League Ltd (1996) 58 FCR 447. However the decision of the primary judge was reversed on appeal: News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410. The Super League competition commenced in 1997 with ten clubs. The ARL/NSWRL competition continued with twelve clubs.
As early as May 1997 the existence of two rival competitions was proving to be financially disastrous and damaging to the game of rugby league. Following extensive negotiations between ARL and News an agreement was reached in December 1997 for a unified competition, to be called the National Rugby League (NRL) Competition. Although formal documentation was not completed until 14 May 1998, a critical step occurred on 19 December 1997 when ARL and News each publicly announced details of an in principle agreement, hereafter referred to as “the Understanding”. All ARL/NSWRL clubs approved the terms of the Understanding, with the exception of Souths and Balmain, another club from the inner suburbs of Sydney.
Relevantly for present purposes the essential elements of the Understanding were
·     a 50/50 partnership between News and ARL
·     a united NRL Competition
·     a joint venture company would grant licences to participate in the NRL Competition
·     applicants would have to satisfy licence criteria determined by that company
·     twenty teams would be licensed to play in 1998 on a one year licence, but Brisbane, Newcastle and Auckland would be assessed against criteria for five year licences
·     sixteen teams would be licensed to play in 1999
·     fourteen teams would be licensed to play in 2000 (hereafter referred to as “the 14-team term”)
·     mergers or joint ventures before March 1998 would receive a $4 million grant for the 1998 and 1999 competitions and a five year licence
·     mergers or joint ventures before December 1998 would receive a $4 million grant for the 1999 competition and a five year licence
·     in a fourteen team competition there would be no less than six teams and no more than eight teams from Sydney and no less than six teams and no more than eight teams from outside Sydney (hereafter referred to as “the 8-6/6-8 split”)
·     all things being equal, licences were to be allocated in the following order of priority:
·merged clubs
·regional clubs
·stand alone Sydney clubs
The legal structure ultimately adopted was as follows. National Rugby League Investments Ltd (NRLI), a subsidiary of News, and ARL entered into a partnership (the NRL Partnership). The NRL Partnership entered into a services agreement with the fourth respondent National Rugby League Ltd (NRL), a not-for-profit company limited by guarantee and owned equally by ARL and News, under which NRL was to operate and manage the NRL Competition.
On 18 February 1998 ARL and News and some other parties executed a Memorandum of Understanding (MoU) which essentially set out the Understanding of the previous December in more formal and detailed terms. Clause 7.2 of the MoU provided that before 1 May 1998 NRL
(a)would inform all clubs that no less than sixteen teams, but no more than twenty teams (the actual number to be determined by NRL subject to the approval of the NRL Partnership) would be granted a franchise to play in 1999, and no more than fourteen teams would be granted a franchise to play in 2000; and
(b)would release the franchise criteria for 1999 and beyond.
By cl 7.5 it was provided that no more than fourteen teams would participate in the 2000 competition “on varying terms depending on the level of satisfaction of the franchise criteria”.
On 14 May 1998 the parties executed an agreement (the Merger Agreement) which was the final contractual documentation. The terms of the MoU already referred to were included, except that the date for informing clubs and releasing the franchise criteria for 1999 and beyond became 30 June 1998.
On 8 May 1998 NRL published draft admission criteria. The draft stated that aims of the criteria were to “create and maintain a viable national competition” and to “set and apply criteria for inclusion in the competition in a fair and reasonable manner”. An extensive consultative process followed. The draft was explained to the clubs and comments received from them. A consultant statistician provided a number of reports dealing with such topics as how the criteria interacted, what risk there was of perceived bias in the proposed weighting system, and the transparency and integrity of the criteria.
Souths made some comments which were expressed to be “without prejudice to its right to pursue relief in the courts”. It restated its opposition to the reduction of teams from twenty. It put the view that
“… rugby league is an icon to be preserved for the people who love and support it, not a product to be carved up to the media for their own financial gratification.”
After further discussion and consideration NRL on 8 September 1998 published the finalised version of the criteria. There were three classes of criteria: (i) Basic Criteria, to be satisfied by all clubs, dealing with such matters as playing facilities and solvency, (ii) Qualifying Criteria, which applied only to the Brisbane, Auckland and Newcastle clubs and (iii) Selection Criteria, which were to be applied to all clubs that had participated in the “relevant years” (these were specified by individual criteria) save for clubs that had merged early enough for the newly merged entity to participate in the 1999 competition. Only St George and Illawarra effected an “early enough” joint venture. The Selection Criteria provided for a matrix of six criteria: Crowd numbers (home games), crowd numbers (away games), competition points, gate receipts (home games), sponsorship and other income and profitability. Points were to be awarded on a scale of 1-20. For example, 20 points would be awarded to the club with the highest aggregate crowd at home games, 19 points to the club with the next highest aggregate and so on. There was to be weighting for points for gate receipts (1.25) and sponsorship and other income (2).
Souths played in the NRL Competition in 1998 and 1999. In 1998 twenty clubs participated, including the new club Melbourne. At the end of that year Gold Coast and Adelaide withdrew and St George and Illawarra entered into a joint venture.
The 1999 competition consisted of 17 teams. During that year Balmain and Wests obtained NRL approval for a joint venture.
On 1 October 1999 Souths was informed that it was one of the clubs that had met the Basic Criteria and thus would be subject to the Selection Criteria. Norths failed for solvency reasons to meet the Basic Criteria. The net result was that ten clubs were applying under the Selection Criteria for nine licences, the remaining five licences having gone to Brisbane, Auckland and Newcastle and the two joint venture entities, St George – Illawarra and Wests – Balmain.
On 15 October the NRL Board considered the recommendation of its admission criteria committee, the effect of which was that Souths missed out. NRL advised Souths accordingly by letter on the same day. On 27 October NRL approved a joint venture between Manly and Norths.
On 12 November 1999 Souths commenced the present proceeding and sought an interlocutory injunction which would have the effect of requiring ARL and News to allow it to participate in the 2000 NRL Competition. That application was dismissed by Hely J: South Sydney District Rugby League Football Club Ltd v News Ltd (1999) 169 ALR 120. The substantive trial was held before Finn J over 40 days between June and September 2000. On 3 November 2000 his Honour gave judgment dismissing the application: South Sydney District Rugby League Football Club Ltd v News Ltd (2000) 177 ALR 611. Souths now appeal from that decision.
II THE JUDGMENT OF THE PRIMARY JUDGE
Although Souths relied at trial on causes of action in contract and for misleading and deceptive conduct contrary to s 52 of the Trade Practices Act 1974 (Cth) (the Act), the only part of his Honour’s judgment challenged on appeal was his rejection of Souths’ case that the 14-team term was an exclusionary provision within the meaning of s 4D of the Act and that by entering into the Understanding, the MoU and the Merger Agreement, all of which contained that term, ARL and News contravened s 45(2)(a)(i) of the Act. (Also alleged was a giving effect to that exclusionary term contrary to s 45(2)(b)(i). However this part of the case does not call for separate consideration.)
1. Legislation
Section 45(2) of the Act provides:
“(2) A corporation shall not:
(a)make a contract or arrangement, or arrive 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; or
(b)give effect to a provision of a contract, arrangement or understanding, whether the contract or arrangement was made, or the understanding was arrived at, before or after the commencement of this section, if that provision:
(i)is an exclusionary provision; or
(ii)has the purpose, or has or is likely to have the effect, of substantially lessening competition.
By virtue of s 4 the formula “give effect to” includes “do an act or thing in pursuance of or in accordance with or enforce or purport to enforce”.
“Exclusionary provision” is defined in s 4D(1) as follows:
“(1)A provision of a contract, arrangement or understanding, or of a proposed contract, arrangement or understanding, shall be taken to be an exclusionary provision for the purposes of this Act if:
(a)the contract or arrangement was made, or the understanding was arrived at, or the proposed contract or arrangement is to be made, or the proposed understanding is to be arrived at, between persons any 2 or more of whom are competitive with each other; and
(b)the provision has the purpose of preventing, restricting or limiting:
(i)the supply of goods or services to, or the acquisition of goods or services from, particular persons or classes of persons; or
(ii)the supply of goods or services to, or the acquisition of goods or services from, particular persons or classes of persons in particular circumstances or on particular conditions;
by all or any of the parties to the contract, arrangement or understanding or of the proposed parties to the proposed contract, arrangement or understanding or, if a party or proposed party is a body corporate, by a body corporate that is related to the body corporate.”
As to “competitive”, s 4D(2) provides:
“(2) A person shall be deemed to be competitive with another person for the purposes of subsection (1) if, and only if, the first-mentioned person or a body corporate that is related to that person is, or is likely to be, or, but for the provision of any contract, arrangement or understanding or of any proposed contract, arrangement or understanding, would be, or would be likely to be, in competition with the other person, or with a body corporate that is related to the other person, in relation to the supply or acquisition of all or any of the goods or services to which the relevant provision of the contract, arrangement or understanding or of the proposed contract, arrangement or understanding relates.”
As to “purpose”, s 4F(1) provides:
“(1) For the purposes of this Act:
(a)a provision of a contract, arrangement or understanding or of a proposed contract, arrangement or understanding, or a covenant or a proposed covenant, shall be deemed to have had, or to have, a particular purpose if:
(i)the provision was included in the contract, arrangement or understanding or is to be included in the proposed contract, arrangement or understanding, or the covenant was required to be given or the proposed covenant is to be required to be given, as the case may be, for that purpose or for purposes that included or include that purpose; and
(ii)that purpose was or is a substantial purpose; and
(b)a person shall be deemed to have engaged or to engage in conduct for a particular purpose or a particular reason if:
(i)the person engaged or engages in the conduct for purposes that included or include that purpose or for reasons that included or include that reason, as the case may be; and
(ii)that purpose or reason was or is a substantial purpose or reason.”
2. Souths’ case

It was Souths’ case that the purpose of the 14-team term was to prevent, restrict or limit the supply or acquisition of four discrete types of services:
(i)Organising and running top level rugby league competitions (competition organising services);
(ii) Acquiring the services of rugby league teams (team services);
(iii)Supplying entertainment services (i.e. top level rugby league matches) (entertainment services); and
(iv)Providing funding to clubs participating in the top level rugby league competitions (funding services).
His Honour rejected Souths’ case on two main grounds. First, the 14-team term did not have the proscribed purpose ([279]-[286]) and, secondly, there were not “particular persons or classes of persons” which were the object of such a purpose ([289]-[292]).
3. Agency
A preliminary issue was whether NRL was acting as the agent of the NRL Partnership. His Honour held that notwithstanding provisions in the services agreement that NRL acted “solely as an independent contractor”, NRL was on a proper analysis of the evidence acting as agent: see [138] to [167] and in particular [160].
4. Timing
It was not in dispute that at the time of the Understanding News and ARL were competitive with each other for the supply of competition organising services and the acquisition of team services.
His Honour held that the parties to an exclusionary provision need not be in competition with each other at the time the provision takes effect. Therefore it was no answer to Souths’ case for the respondents to say that at the time the 14-team term came into effect, that is to say in the 2000 season, News and ARL would no longer be in competition with each other: [191] to [201].
5. Purpose
His Honour observed (at [208]) that while the purpose of a provision may be evidenced in the effects it produces, the purpose for its inclusion in a contract, arrangement or understanding is not to be determined necessarily by, or simply by reference to, its effects. What has to be ascertained is the reason (or reasons) for its inclusion. And that reason, or those reasons, could be determined by ascertaining the effect or effects the parties subjectively sought to achieve through the inclusion of the provision in the contract, arrangement or understanding.
His Honour first dealt with the supply of competition organising services and team services. Souths argued that notwithstanding that News and ARL had the purpose of encouraging mergers or joint ventures to avoid exclusion of clubs from these services, it was one of their purposes that, if the requisite reduction in numbers could not be so achieved, then one or more of the clubs that had participated in the 1997 season of either competition would be denied entry in 2000. It was said that this purpose was a substantial one, even if it was a subsidiary and immediate purpose and not the dominant and ultimate purpose, for the inclusion of the 14-team term.
His Honour (at [215] to [250]) reviewed the historical background of the Understanding, including the following:
·     The Bradley Report, commissioned by ARL/NSWRL in 1992 when there were sixteen clubs in the competition including eleven Sydney clubs, recommended the reduction of the total number to fourteen, to enable two complete rounds to be played, and the number of Sydney clubs to five
·     By 1995 the competition had increased to twenty teams, the four new entrants all being from outside New South Wales (South Queensland, North Queensland, Perth and Auckland)
·     As already mentioned, the Super League was established in 1995. Its competition was projected to start in 1996 but that was prevented by the injunction granted at first instance. Two new clubs – Adelaide and Newcastle – joined the Super League
·     After the Full Court’s reversal of the primary decision the Super League competition commenced in 1997
·     By May 1997 it was clear to Mr Neil Whittaker (CEO of ARL and General Manager of NSWRL) and the Chairmen of both bodies that fans had been alienated, the ability to attract sponsors had been damaged, there had been an explosion in player salaries and other expenses and a number of clubs in both competitions were in a precarious financial position
·     Mr Whittaker then believed the future of the game was in doubt unless there was a return to a single competition, the number of participating clubs was reduced to a number that would allow the competition to be compelling to spectators, economically viable and competitive, there was a reduction in the Sydney teams to a number that was economically sustainable in that area and the competition had a significant national spread. He did not believe that two competitions could survive
·     From June onwards there were intensive discussions within ARL and NSWRL of possible alternatives. Financial modelling indicated that a fourteen team competition was preferable
·     From June onwards there were many discussions between Mr Whittaker and other ARL/NSWRL representatives and Mr Ian Frykberg of Super League and Mr Peter Macourt of News
·     Major issues in these discussions were the number of teams in any new competition (ARL at one stage wanting sixteen from 2000 onwards and News insisting on fourteen) and the identification of clubs which might form mergers or joint ventures and financial incentives for such a purpose.
His Honour made findings as to the beliefs and motivations of the principal negotiators (at [252] to [260]).
Mr Macourt accepted Mr Frykberg’s advice that the fairest and most attractive competition would be a home and away one and that fourteen teams was a maximum for such a competition. From his (Mr Macourt’s) financial modelling a competition of that size would be viable. He accepted in cross-examination that the process of reducing the teams to fourteen by 2000 had to be “buttressed” by some provision for excluding a club or clubs if there was one or more too many. He also accepted that the purpose of excluding by criteria a club or clubs if more than fourteen applied was central to the Understanding.
Mr Frykberg said the purpose in pursuing a merged competition was to ensure that rugby league was financially viable and sustainable in the future. Three important aspects of such a competition were: (a) a home and away competition constrained by climatic conditions and competing media demands between summer and winter sports; (b) competitors had to be financially viable; and (c) the quality had to be consistently high. The best number of teams was fourteen. He considered that a fourteen team competition could be achieved without exclusion of any club and that a reduction to fourteen teams was likely to occur through mergers and joint ventures. He accepted in cross-examination that an essential element of the Understanding was that there had to be a mechanism in place which would arrive at fourteen teams as agreed, but it was his “fervent view… that no club would be excluded”.
Mr Whittaker’s purpose was to secure the future of the game through a merged competition. He agreed to fourteen as News’ position was that that figure was not negotiable. His view in December 1997 and thereafter was that a fourteen team competition could be achieved without any club who wished to participate being excluded. Financial considerations would lead teams to form joint ventures or mergers or choose to play in a state-based competition. He accepted there had to be a mechanism in place to determine which teams would gain admission if more than fourteen applied.
His Honour’s reasoning was as follows ([269] et seq):
·     A clear and intended effect of the 14-team term was that the NRL Partnership would not provide its competition-organising services to, or acquire team services from, a greater number of teams than the number so fixed
·     A foreseeable and, for News and ARL, foreseen consequence of the 14-team term was that if more than the stipulated number sought participation in the NRL Competition, the excess (howsoever determined) would be denied the provision of the NRL Partnership competition-organising services and they would not have their team services acquired by the Partnership
·     The NRL Competition was not simply to be a unified competition and no more; rather it was a distinctive one with particular, often interrelated, objectives including
·a national competition
·financially viable with club expenditure (particularly on player salaries) reined in significantly
·of a quality that would sustain community interest and be attractive to television broadcasters
·a smaller competition with a fixed number of teams rather than an aggregate of those competing in the two existing competitions and which wished to continue
·a reduction in the number of Sydney teams
·     reduction in the number of Sydney teams plus the need for a smaller competition prompted the early recognition in negotiations of the need for a policy of positive incentives for mergers and joint ventures
·     mergers and joint ventures came to be seen by Mr Whittaker and Mr Frykberg as the means available to clubs to accept the foreseeable consequence of the 14-team term should there be more than that number of teams wishing to participate in the 2000 season.
His Honour concluded (at [274]) that the primary purpose of the Understanding itself was to constitute a partnership to own and conduct the proposed NRL Competition which was “… a new competition that supplanted the two competitions it was designed to replace”. As with the 8-6/6-8 split, the 14-team term for 2000 “provided one of the defining characteristics of the new competition”: [275]. Those terms were included in the Understanding for the purposes of achieving the objectives referred to: [276]. His Honour accepted that the 14-team term limited, and was intended to limit, the number of clubs for the supply to and acquisition of services by the NRL Partnership. It equally had that foreseeable, and foreseen, consequence. But it did not follow that a purpose for including the 14-team term was to prevent the supply of services to, or acquisition of services from clubs in excess of the stipulated fourteen. ARL and News proposed to create a new business running a new competition having particular characteristics, one of which was that it would have a maximum number of clubs. For present purposes it did not matter what the number was. What was important was that the competition so designed embodied a limit to the number of clubs to or from which the NRL Partnership would provide or acquire services.
His Honour said:
“[281] … One can envisage a size provision with its proposed ancillary criteria being designed with the substantial purpose in mind, not merely of limiting the size of the competition for reasons that are considered to be in the interests of the game and it stakeholders, but of specifically targeting a club or clubs that is or are anticipated to be applicants for selection. Such is far from the present case. A selection process having more applicants than positions necessarily results in there being winners and losers. What for s 4D purposes is important for those who lose is the manner of their losing.
[282] There is a significant difference between being merely an unsuccessful contender for selection in a process not designed to preordain that particular outcome and being a target for exclusion in a selection process designed to that end. The latter, but not the former, if otherwise the product of a s 4D understanding, is capable of being found to be an exclusionary provision.”
His Honour concluded that the evidence as to the adoption of the 14-team term was “bereft of any indication that its purpose was to prevent the supply of services to, or the acquisition of services from, any person or class of persons. The term had an intended effect and foreseen consequences”. But these did not, in his Honour’s view require it to be found that a purpose of the term’s inclusion in the Understanding was a purpose proscribed by s 4D(1).
His Honour then said:
“[284] I accept the evidence of Mr Whittaker that he believed the 14 teams for 2000 could be, and of Mr Frykberg that they would be, achieved without resort to exclusion. And I consider the early and continuing significance they attributed to the formation of mergers and joint ventures as being consistent with the absence of a proscribed purpose. The significance so attributed to mergers, etc, evidenced a form of recognition of both the wish and the need to maintain some level of participation of the established clubs in a competition not designed to accommodate them all individually.
[286] For these reasons I conclude that the term does not fall within s 4D(1) in that it was not included in the 19 December Understanding for a purpose that included the prevention of the supply of competition organising services or of the acquisition of team services.”
His Honour found it unnecessary to consider funding services as a separate issue: [187]. Such services were inextricably bound up with competition organising services and team services. As to entertainment services, it was not a purpose of the 14-team term to deprive fans of such services. On the contrary, it was to enhance such services: [302]-[303].
6. Particular class of persons
His Honour’s finding as to lack of the proscribed purpose was determinative of the case. However he went on to consider a number of other issues, commencing with the question whether “the person or class said to be prevented from supplying or acquiring the relevant services is not a ‘particular class of persons’ for the purposes of s 4D(1)” (at [287]).
At this point mention should be made of Souths’ pleading. In the final version of the statement of claim par 20 dealt with the supply of competition organising services by ARL and News and par 21 with the acquisition of team services by those respondents. Paragraph 20 alleged that the 14-team term had the purpose of (a) restricting or limiting the supply of competition organising services to particular persons, namely
“the clubs which had participated in the ARL competition and the Super League competition prior to 19 December 1997 and who had not withdrawn from those competitions before that date.”
and (b) preventing the supply of competition organising services to particular classes of persons, namely
“(i)the clubs which participated in the 1997 ARL and Super League competitions and who had not withdrawn from those competitions before that date, other than the 14 clubs (including merged clubs as a single club), who would be selected to participate in the competition from the year 2000; and
(ii)all rugby league clubs which were willing and able to participate competitively in a top level rugby league competition other than the 14 clubs (including merged clubs as a single club) who would be selected to participate in the NRL competition from the year 2000.”
Paragraph 21 dealt with purpose in relation to the acquisition of team services by ARL and News in terms which precisely mirrored par 20.
Thus Souths’ pleading alleged a purpose, in relation to the relevant services, of
· restricting or limiting supply to or acquisition from particular persons
· preventing supply to or acquisition from particular classes of persons
Notwithstanding that pleading, the argument on appeal (and one suspects, at trial also) paid little separate attention to “particular persons” as an element distinct from “particular classes of persons”. No doubt the explanation for this is that on any view the clubs, if any, to be excluded in 2000 could not be identified as at 19 December 1997. So attention naturally focused on whether or not there was a “particular class of persons” with which the relevant purpose was concerned.
On the appeal Souths’ written submissions (par 31) defined the “particular class” in terms which, although in different language, did not differ in substance from pars 20(b)(i) and 21(b)(i) of the statement of claim. The submissions said:
“31. The excluded class consisted of a club or clubs which had played in one or other of the rival competitions but whose team would not be one of the fourteen teams selected to participate in the competition from 2000.”
The class alleged in pars 20(a)(ii) and 21(b)(ii) was not mentioned on the appeal. No more need be said about it.
His Honour (at [291]) rejected the argument that a s 4D(1) class could be constituted simply by the defining characteristic of failing to secure selection for entry in the 2000 NRL Competition. Those who failed to be selected could properly be described as a class in that failure was a shared and defining characteristic of the class. But his Honour said that in the setting of s 4D(1):
“… to be able to say that one belongs to a class (whatever its defining characteristic) is of no practical significance unless that class is the object of the proscribed purpose – unless it is ‘aimed at specifically’….”
His Honour’s conclusion was in these terms:
“[292] In the present case while the purpose of having resort to the proposed selection criteria underpinning the 14-team term was to differentiate between those who would and those who would not be selected for participation in the 2000 competition, it did not on the evidence before me have or have as well the purpose of discriminating against a particular applicant or class of applicants for selection. (It is unnecessary in this to consider the priority order provision which is not the subject of challenge and which is, in my view, inoffensive in any event.) Not having that purpose, the fact that a group could exist that could be said to constitute a class by reason of the fact of their not being selected is without significance or consequence for s 4D purposes.
[293] In the event then, I am not satisfied that Souths has made out its claim. I would, though, make this additional comment. If Souths’ contention is correct it seemingly would carry the consequence that, if competitors later enter into partnership and define the scope of the partnership business in a way that curtails the range or extent of services they will now supply compared with those they supplied competitively when sole traders, no matter how justifiable their reasons for so doing, they will have agreed to an exclusionary provision.”
7. Restricting or limiting the supply or acquisition of services
On Souths’ case supply and acquisition of services was to be restricted or limited in respect of the twenty two clubs that participated in the two 1997 competitions by the stipulation that such services would not be supplied to or acquired from more than fourteen clubs from 2000.
His Honour held (at [299]) that s 4D(1) is concerned with partial supply to, or acquisition of services from, particular persons or classes of persons. The “restriction or limitation” was directed to supply or acquisition of part only of services, not to supply or acquisition or services to or from some only of particular persons. Moreover, as at 19 December 1997 it was contemplated (as subsequently in fact happened) that the new Melbourne club would field a team in the 1998 competition and be involved in the selection process for 2000. His Honour said [299] that
“… (t)o ignore Melbourne, or for that matter merged or joint venture teams, simply contrives artificially the particular persons at whom the proscribed purpose is alleged to be directed.”
In this regard his Honour adopted the construction preferred by Hely J: 169 ALR at [61].
III SOUTHS’ ARGUMENT ON APPEAL
Souths contended that s 4D is only concerned with whether an understanding contains a provision which has the proscribed purpose – not whether the purpose or overall objective of the understanding as a whole offends s 4D. It did not follow that, because the 14-team term was the only available means to secure the objectives of the Understanding, the adoption of that term had no other purpose than to achieve those objectives.

The primary judge was wrongly influenced by his assessment that the overall objectives of the Understanding – a viable, unified national rugby league competition – were commercially legitimate and that there were no means available, other than the 14-team term, to achieve the same objective. Section 4D is not subject to an implied qualification excluding arrangements assessed by the Court as reasonable and not anti-competitive. It is a per se proscription. If the agreement for the NRL Competition conferred a public benefit then ARL and News should have sought authorisation by the Australian Competition and Consumer Commission under Pt VII of the Act.
It was irrelevant that the 14-team term did not specifically target a club or clubs which were anticipated to be applicants for selection.
As to the “particular persons or classes or persons” point, there was an excluded class consisting of a club or clubs which had played in one or other of the rival competitions but whose team would not be one of the fourteen selected for the NRL Competition in 2000. It was not necessary that at the time the exclusionary provision was entered into the identity of the members of the excluded class could then be ascertained. The class may be identified by the fact of exclusion itself. The present case was indistinguishable from the decision of a Full Court of this Court in ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460.
As to the “restricting or limiting” point, ARL and News had supplied competition organising services to or acquired team services from the twenty-two clubs in the competing competition services in 1997. Those clubs constituted a “particular class of persons”. The 14-team term meant that such services not be supplied to or acquired from more than fourteen of those clubs. Hence there was a “restricting or limiting” of the supply or acquisition of such services. Section 4D(1)(b) was not confined to the supply or acquisition of partial services, in the sense of supply or acquisition of some only of services previously supplied or acquired.
ARL and News should be restrained by injunction from continuing to give effect to the 14-team term by continuing to exclude Souths from participation in the NRL Competition in pursuance of that term.
IV RESPONDENTS’ ARGUMENTS ON APPEAL
News and NRL were separately represented, as were ARL and the clubs in the NRL Competition. They supported the reasoning of Finn J. They also contended that the judgment could be supported on other grounds, some of which had not found favour with his Honour, viz
(i) NRL was not the agent of the NRL Partnership,
(ii)For the purposes of s 4D, parties must be in competition with each other at the time the exclusionary provision takes effect,
(iii)Section 47(4) of the Act provided a defence to Souths’ claim,
(iv)Even if Souths succeeded, no more than declaratory relief and damages were appropriate; as a matter of discretion an injunction should not be granted.
V PURPOSE
Making a contract etc containing an exclusionary provision contrary to s 45(2)(a)(i) or giving effect to such a provision contrary to s 45(2)(b)(i) is prohibited, whether or not such conduct lessens competition, or has the potential to do so.
In its 1976 review of the Act the Swanson Committee recommended (par 4.116) that a “substantial adverse effect on competition” should be necessary, but in the amendments made by the Trade Practices Amendment Act 1978 (Cth) this course was not taken. In 1993 the Hilmer Committee recommended against any change: National Competition Policy Report at 46.
In “Competition Law and Policy: Cases and Materials” (1999) at 233 Clarke and Corones comment:
“One reason for this strict approach to boycotts may be that they are seen as objectionable on non-economic grounds as well as because of their potential to have an adverse impact on competition. In particular, they are disliked because they can be used to take away the freedom of firms and individuals to trade as they wish and because they can be used to threaten the very existence, commercially or professionally, of targets having little or no countervailing economic power. The potential for boycotts to generate and exploit power is seen as inherently objectionable, regardless of whether or not they are used to lessen competition. For this reason, they are seen as being properly the subject of a per se prohibition.”
In the United States by contrast, the anti-competitive purpose need not be directed at particular persons or classes of persons. As was said in Rutman Wine Co v E & J Gallo Winery 82 F2d 729 (1987) at 735:
“The intent proscribed by the antitrust laws lies in the purpose to harm competition in the relevant market, not to harm a particular competitor.”
“Purpose” as used in s 4D is an ordinary English word and not a technical legal or economic term. Standard dictionary definitions include
“an intended or desired result; end or aim” (Macquarie)
“an object to be attained, an intention, an aim” (New Shorter Oxford)
It was put in argument on behalf of News, and I accept, that your purpose is “what you wish to achieve”.
That meaning is consistent with the construction put on “purpose” in s 260 of the Income Tax Assessment Act 1936 (Cth) by the Privy Council in Newton v Commissioner of Taxation [1958] AC 450 at 465:
“The word ‘purpose’ means, not motive but the effect which it is sought to achieve – the end in view.”
It was common ground that the purpose spoken of in s 4D is the actual subjective purpose of the individuals by whom the provision was included in the contract, arrangement or understanding in question: Pont Data 27 FCR at 474-477, approving Hughes v Western Australian Cricket Association (1986) 19 FCR 10 at 37-38.
In that setting, the findings of his Honour as to the states of mind of Messrs Whittaker, Macourt and Frykberg are critical and, in my opinion, determinative of this appeal.
On his Honour’s findings none of those gentlemen wanted or desired or sought to achieve the exclusion of Souths (or any other club or clubs) from the 14-team competition in 2000. They believed that in the two years that followed mergers and joint ventures – encouraged by very substantial financial assistance – would result in all clubs being accommodated in a 14-team competition, which was in their view the only viable solution for the possibly terminal crisis facing top level rugby league in Australia.
His Honour’s fact finding was not challenged on appeal. Moreover, its inherent logic is compelling. Why would the men running rugby league want to exclude Souths, or any other club? As far as can be ascertained from the arguments on the appeal, Souths’ case did not suggest any personal antagonism towards it, or any other club or clubs, as explaining the adoption of the 14-team term. To exclude a club would run the risk of many, if not most, of its supporters turning away from the game. That would be to nobody’s benefit. On the other hand, a merger or joint venture might not be the ideal solution, but could rationally be seen as a lot better than the disappearance of a club’s name from senior competition. And it would not matter whether or not Souths or any particular club or clubs merged, as long as there were no more than fourteen clubs (an outcome which of course could also be achieved by the voluntary withdrawal or collapse of one or more clubs, something which had already happened with some clubs).
The recognition of a possible outcome detracting from the desired purpose does not alter the nature of the purpose. Assume a surgeon is about to perform a major operation which historically has had a fatal outcome in ten per cent of cases. The surgeon knows and accepts this, but believes the operation is essential and the risk acceptable (as does the properly informed patient). If the operation is not performed the patient is likely to die anyway. The operation is performed but the risk materialises and the patient dies. It would surely be a misuse of language to say that the purpose (or a purpose) of the surgeon in performing the operation was to cause the patient’s death.
Souths relied on a line of cases in this Court under s 45D of the Act: Wribrass Pty Ltd v Swallow (1979) 38 FLR 92 at 102, Industrial Enterprises Ltd v Federated Storemen and Packers’ Union of Australia (1979) ATPR 40-100, Tillmans Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union (1979) 42 FLR 331 at 338 and 351, Transport Workers Union of Australia v Leon Laidely Pty Ltd (1980) 43 FLR 168 at 171, 1769-180 and Jewel Food Stores Pty Ltd v Amalgamated Milk Vendors Association Inc (1989) 24 FCR 127 at 133-135.
Typically these cases involved A and B (say a Union and its members) taking action against C (say calling C’s workers out on strike) with the object of preventing or persuading C from dealing with D in order to bring pressure on D in relation to some dispute between A and B on the one hand and D on the other. There will be a contravention of s 45D where the conduct of A and B is engaged in for the purpose, and would have or be likely to have the effect, of causing substantial loss or damage to the business of D. This is known as a secondary boycott.
Time and again unions and workers in such cases argued that their purpose was not to cause loss or damage to D but to protect their working conditions or achieve other union objectives. The response was always the same, perhaps best exemplified in the judgment of Bowen CJ (with whom Evatt J agreed) in Tillmans. His Honour said (at 338):
“Nevertheless, the fact that a union and its members acting together have a union purpose does not necessarily exclude the possibility that they had, also, the purpose of causing substantial loss or damage to the business of a corporation. The statement of Evatt J in McKernan v Fraser (1931) 46 CLR 343 is apposite. His Honour in that case (at 403) said: ‘Sir Godfrey Lushington said, in special reference to combined action against employers or non-unionists on the part of unionists, that to ask the question whether they acted to defend their own trade interests or to injure their economic adversary for the time being, is equivalent to asking of a soldier, who shoots to kill in battle, whether he does so for the purpose of injuring his enemy or of defending his country. The analogy is sound, because combined strike action is usually undertaken for the purpose, both of causing harm to the employers and for the improvement or maintenance of the standards of unionists.’”
Those cases are far removed from the present one. The achievement of the union purpose and the loss or damage to D were inevitable concomitants, two sides of the one coin. They were consequences of the one act, like the soldier shooting to kill. You could not have one without the other, however much you protested that you did not really want the other.
In the present case, however, the purpose has to be characterised as at 19 December 1997 (and also at the time of the February 1998 MoU and the May 1998 Merger Agreement, but the situation was not relevantly different on those dates). Any exclusion of a club from the 2000 14-team competition was two years in the future. It was something hypothetical and dependant on multiple, interacting contingencies. As at 19 December 1997
·     the need to exclude a club or clubs in 2000 might not arise
·     if it did arise, it could not be determined which club or clubs would not comply with the criteria, since the criteria were yet to be defined
·     when the criteria were defined, whether Souths or any other club complied would depend not only on its own compliance but on how its own compliance compared with that of other clubs.
Merkel J has suggested that the conditionality of the alleged purpose is covered by s 4D(b)(ii) which extends to an exclusionary purpose which may be operative in “particular circumstances”. The short answer is that such a contention was neither pleaded nor argued by Souths. Paragraphs 20 and 21 of the statement of claim allege a purpose of restricting or limiting (sub-par (a)) or preventing (sub-par(b)) which is quite unconditional. Reliance was placed on s 4D(b)(i) which is distinct from s 4D(b)(ii). It is only the latter which speaks of “particular circumstances” or “particular conditions”. Had Souths sought to rely either primarily or in the alternative on a purpose of restricting etc which was to operate only in “particular circumstances”, it would have been essential to so plead and to give particulars as to what the “particular circumstances” were. Such a pleading may well have affected the way evidence was adduced. In any case, the expression “in particular circumstances or on particular conditions” in s 4D(1)(b)(ii) contemplates in my opinion something which the contravenors actually intend will happen, for example a term that they will be supplying goods or services to a particular customer only on payment of cash on delivery or where those customers accept certain obligations (as for example in Pont Data).
The question of substantial purpose within the meaning of s 4F does not arise. For the reasons mentioned, exclusion of clubs was not a purpose at all.
VI PARTICULAR CLASSES OF PERSONS
It was common ground that as a matter of language “particular” in s 4D(1)(b)(i) qualifies “classes of persons” as well as “persons”. Also the plural “persons” and “classes of persons” includes the singular “person” and “class of persons”: Acts Interpretation Act 1901 (Cth) s 29(b).
Argument on this issue revolved around the decision of the Full Court in Pont Data. In Pont Data ASX supplied information in electronic form concerning stock exchange transactions to Pont Data and other subscribers. Pont Data then supplied the information to its own customers. ASX was a competitor of Pont Data in relation to the supply of such information. ASX required Pont Data to enter into supply contracts which inter alia required Pont Data to disclose to ASX the names of its customers. Those customers (called “Licensees”) were to enter into a tripartite agreement called a “Dynamic Agreement” with ASX and Pont Data under which the Licensees were restricted as to the use of the information, and in particular as to reselling it. Pont Data itself was not to sell the information to any person other than a Licensee. Pont Data alleged a contravention of ss 45, 46 and 49 of the Act.
Relevantly for present purposes the Full Court held that persons other than those bound into the Dynamic Agreement as Licensees were a “particular class” within the meaning of s 4D(1)(b). Their Honours said (27 FCR at 488):
“… the appellants contended that the restraints upon the use of the Signal C information by persons other than those bound into the Dynamic Agreement as ‘Licensees’ could not have the purpose of preventing, restricting or limiting the supply of services to a ‘particular’ class of persons, or the acquisition of services by a ‘particular’ class of persons. It was said that the persons or classes excluded must still be ‘identified’ if s 4D is to apply. That may be conceded, but they are identified, in the present case, by the characteristic that they may not be supplied with the information in question, unless they accept and become bound by the restraints imposed by the Dynamic Agreement. Such persons come within a particular category or description defined by a collective formula: cf Pearks v Moseley, Re Moseley’s Trusts (1980) 5 App Cas 714 at 723. They ordinarily would be treated as constituting a particular class, even though at any one time the identity of all the members of the class might not readily be ascertainable. What distinguishes the class and makes it particular is that its members are objects of an anti-competitive purpose, with which s 4D is concerned.”
In the last sentence of that passage the reference to “anti-competitive purpose” perhaps overlooks the fact that, as already mentioned ([61] to [64] above), the “exclusionary provision” of s 4D which forms part of the s 45(2)(a)(i) and s 45(2)(b)(i) proscription is not concerned with protecting competition as such. By contrast, other parts of s 45(2) are so concerned: see s 45(2)(a)(ii) and s 45(2)(b)(ii), both of which refer to the purpose or effect of “substantially lessening competition”. In Pont Data the Court had to deal with both limbs of s 45(2)(a) and s 45(2)(b). Indeed the primary judge (Wilcox J) had only made findings in relation to the “substantially lessening competition” limbs of s 45(2)(a) and (b) and found it unnecessary to decide whether the agreements contained an exclusionary provision: Pont Data Australia Pty Ltd v ASX Operations Ltd (1990) 21 FCR 385 at 419-420. The point was raised on appeal by way of notice of contention: 27 FCR at 473. Somehow it seems anti-competitive purpose has been transposed from the s 45(2)(a)(ii) and (b)(ii) issues to the s 45(2)(a) (i) and (b)(i) issues.
In the present case it was not in dispute that a class may be a particular class even though at any one time the identity of all members of the class might not readily be ascertainable. But there remains the issue whether, as the respondents argued, there must be a common feature distinguishing persons who form the class other than the mere fact of them being subjects of exclusion. In the interlocutory judgment Hely J thought there was “some force” in such a submission but that Pont Data “provides otherwise”: 169 ALR at [87].
Since Pont Data the High Court has considered a statutory provision which, although far removed in subject matter from s 45 and s 4D, uses analogous language and concepts. In Applicant A v Minister for Immigration and Ethnic Affairs (1997) 190 CLR 225 the issue was whether the appellants were refugees within the meaning of Art 1 of the Convention Relating to the Status of Refugees, that provision being incorporated by s 4(1) of the Migration Act 1958 (Cth) as it then stood. The Convention provided relevantly that a refugee was any person who “owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion is outside the country of his nationality and unable or, owing to such fear, unwilling to avail himself of the protection of that country”. The appellants, a married couple who had one child and wished to have more, feared that if they were returned to the People’s Republic of China that country’s one child policy would be enforced against them by compulsory sterilisation or abortion.
The High Court (Dawson, McHugh and Gummow JJ, Brennan CJ and Kirby J dissenting) held that the appellants were not members of a “particular social group”.
Dawson J said (at 241):
“The word ‘particular’ in the definition merely indicates that there must be an identifiable social group such that a group can be pointed to as a particular social group. A particular social group, therefore, is a collection of persons who share a certain characteristic or element which unites them and enables them to be set apart from society at large. That is to say, not only must such persons exhibit some common element; the element must unite them, making those who share it a cognisable group within their society.”
His Honour went on to observe that there was no reason to confine a particular social group to small groups or to large ones; nor was there anything which would suggest that the uniting particular must be voluntary. His Honour continued (at 242):
“However, one important limitation which is, I think, obvious is that the characteristic or element which unites the group cannot be a common fear of persecution. There is more than a hint of circularity in the view that a number of persons may be held to fear persecution by reason of membership of a particular social group where what is said to unite those persons into a particular social group is their common fear of persecution. A group thus defined does not have anything in common save fear of persecution, and allowing such a group to constitute a particular social group for the purposes of the Convention ‘completely reverses the statutory definition of Convention refugee in issue (wherein persecution must be driven by one of the enumerated grounds and not vice versa)’ Chan v Canada [1993] 3 FC 675 at 692-693 per Heald JA.”

Later his Honour said (at 249):
“In truth, the social group contended for by counsel for the appellants may be described in these words of Beaumont, Hill and Heerey JJ in the court below:
‘X fears persecution by reason of circumstances A, B and C which are applicable to him or her. X is therefore a member of a particular social group constituted by all people to whom circumstances A, B and C are applicable.’
As their Honours pointed out, that is an argument which has been rejected by a line of United States cases. The argument amounts to little more than the assertion of common demographic factors. What the appellants need to demonstrate is that circumstances A, B and C, or any one of them, operate to unite people such that they are an identifiable social group apart from the fact that they all face persecution. They have not done so.”
Likewise McHugh J said (at 263) that persons seeking to fall within the definition of “refugee” in the Convention
“… must demonstrate that the form of persecution that they fear is not a defining characteristic of the ‘particular social group’ … the group must exist independently of, and not be defined by, the persecution.”
Gummow J (at 285-287) held to the same effect.
This approach can logically be applied to the concept of “particular classes of persons” in s 4D. It is also consistent with the notion of boycott. While this term does not appear in the language of s 45, s 4D or s 45D it is widely used to encapsulate the concept underlying parts of those sections, which, as already mentioned ([61] to [64] above), are concerned with matters other than competition regulation. The word comes from the name of Captain Hugh Boycott whose activities made him obnoxious in the eyes of tenant farmers in County Mayo in the 1880s. The whole point of a boycott is that the conduct or interests of some person or class of persons is seen as being inimical to the interests of the boycotters. The boycott is adopted as a means of inflicting some adverse consequences on that person or class. A boycott necessarily involves a target, a person or persons “aimed at specifically”: News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 577. It is hard to see how this notion can apply to a class not defined in advance but only defined in an essential respect by the fact of exclusion, if and when it happens. And if it is wrong, as I think it is, to have a class defined by the fact of exclusion, it is in principle no different when exclusion is one of a number of defining characteristics. Either way, the class cannot be ascertained unless and until all putative members satisfy the test of exclusion – whether or not other tests must be satisfied.
Looked at another way, if a particular class can be defined by the fact of exclusion, in effect the “class” becomes the whole world, because anybody has the potential to be excluded. This is actually what happened with the Melbourne club, which was not in either competition in 1997, or indeed in existence then, but became one of the ten clubs competing for the remaining nine licences for 2000. In theory at least, other applicant clubs could have emerged in the meantime.
The way that Finn J dealt with this issue (at [287] – [292]) has already been mentioned. I would approach the matter perhaps somewhat differently. As indeed his Honour noted, the components of s 4D, although requiring individual analysis, also have to be considered as part of an organic whole. There must be a purpose of preventing etc supply etc to a particular class of persons. “Particular” in this context means
“pertaining to some one person, thing, group, class, occasion etc, rather than to others or all; special, not general” (Macquarie)
“relating to a single definite thing or person, a set of things or persons, as distinct from others; of one’s (its, etc) aim; special; not general” (Shorter Oxford)
So there has to be an identified and defined class of persons in the minds of the alleged contravenors at the time the exclusionary provision is included in the contract etc. The class must then be “aimed at specifically”. The class must be defined by some shared characteristic before it can be aimed at. The rules of good marksmanship dictate that the shooter first identifies the target and then aims at it.
In this context it is worth repeating the observation of Finn J (at [292]) already quoted above. If Souths’ argument is correct, competitors who enter into a partnership and agree to provide a lesser range of goods or services (or deal with a narrower range of customers) will have contravened s 45(2). Nothing in the stated object of the Act (“to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection”: s 2) would suggest such a startling result.
Once attention is diverted from the essential elements of boycott proscribed by s 45(2) and s 4D – the targeting of a particular person or class of persons identified at the time the exclusionary provision is created – there is an inevitable slide into prohibition of conduct which amounts to no more than persons deciding the limits of the business in which they wish to engage.
The respondents did not submit that Pont Data was wrongly decided in regard to the present issue. We were not therefore asked to turn our minds to the special considerations which apply when a Full Court is asked to reconsider and depart from a decision of an earlier Full Court: see Byrne v Australian Airlines Ltd (1994) 47 FCR 300 at 304-305. Rather it was contended Pont Data was distinguishable. As was Hely J, I am not persuaded that it is. An essential element of the Full Court’s ruling is that a “particular class” within the meaning of s 4D(1)(b) can be defined by the fact of exclusion.
Were this issue determinative an appropriate course would be to reconvene the Court for further argument as to whether Pont Data should be followed. But since the effect of the other judgments is that the appeal will succeed on other grounds, the expense of such a course is not warranted.
VII RESTRICTING OR LIMITING
Contrary to Souths’ argument, in my opinion the natural meaning of “restricting or limiting” in s 4D(1)(b) is that it is the supply or acquisition of goods or services, not the persons or classes of persons, that must be the subject of the restriction or limitation.
The section is concerned with provisions which might interfere with (to use a neutral term) the flow of goods and services. Such an interference can occur by stopping (preventing) the flow or doing something less than stopping, which still amounts to an interference. For example there might be a restricting, in that deliveries are only to be made on weekdays, or a limiting in that goods above a stipulated number or value are not to be supplied.
There could of course also be an interference taking the form of a reduction in the number of persons to or from whom goods or services have been supplied or acquired. But this eventuality is dealt with under the element of “particular persons or classes of persons”. If competitors X and Y each previously supplied goods to each of A, B and C and insert a provision in a contract between them that henceforth they (X and Y) will only supply A and B, the provision would fall within s 4D(1)(b)(i) since it would have the purpose of preventing the supply of goods to a particular person, namely C.
I would agree with and adopt the way the matter was put by Hely J. His Honour said (169 ALR at [61]) that
“… there was to be no restriction or limitation (in the sense of partial supply or acquisition) of services to the 1997 clubs. Some would be fully supplied, and would fully supply NRL, and others not at all.”
In my view, Finn J was correct in holding that Souths’ claim failed on this issue also.
VIII SUMMARY OF CONCLUSIONS ON SOUTHS’ APPEAL
Before passing to the matters raised by the respondents by way of notice of contention, it is convenient to summarise my views on the outcome of Souths’ appeal case, expressed in terms of Finn J’s findings. (The sequence is that of Souths’ pleading, although his Honour dealt with issues in the reverse sequence.)
· restricting or limiting supply to or acquisition from particular persons:
·no proscribed purpose because result not intended or desired
·no partial supply or acquisition
·no “particular persons” because clubs other than 1977 clubs might be affected (eg Melbourne)
· preventing supply to or acquisition from particular classes of persons:
·no proscribed purpose (for the same reason)
·no “particular class” of persons because exclusion part of class definition.
Moore J has found a restricting or limiting of services in that the services in 2000 would relate, in the case of some clubs, to a hybrid team of two or more merged or joint venture clubs.
This case was not pleaded and not run at first instance. I am not sure it was even put on appeal. Since the nature of the restricting or limiting is an aspect of the alleged proscribed purpose, and since the latter is a question of fact, it is too late to raise such an argument. It raises an infinite range of factual dispute. For example, it could be said that if St George providing in 2000 a team in conjunction with Illawarra called St George-Illawarra is to be characterised as a different team from that fielded in 1997, then equally a team fielded by St George in one week in 1997 (or 2000) might contain different players from that of the previous week and so be not the “same service”. By the same token, a change in name, nickname, colours or sponsorship might all be said to make a team “different” and thus not the “same service”. Moreover, as already mentioned, reduction to fourteen teams in 2000 by mergers and joint ventures was not the only possibility as at 1997. There could be a withdrawal of clubs
In any case, the prospect of clubs merging or entering into joint ventures was seen, in 1997, as one which would necessarily involve the voluntary choice of those clubs. Substantial financial incentives were offered. If clubs freely exercised that choice so as to get the money and avoid or lessen the risk of exclusion, then that was a matter for them. The concept of boycott in s 45(2) and s 4D does not seem to fit the situation where the supposed target is not a passive victim but freely enters into a mutually satisfactory agreement with the supposed boycotters.
IX AGENCY
There was a very detailed attack by News and ARL on his Honour’s finding that NRL relevantly was acting as their agent.
However, as Senior Counsel for Souths put it, this was a “self-generated issue”. To establish that the 14-team term was an exclusionary provision within the meaning of s 4D, Souths did not have to establish that NRL was the agent of the NRL Partnership in the sense of being authorised by the Partnership to enter into contractual obligations which would bind the Partnership as principal. The case did not (relevantly for present purposes) concern the contractual liability of the NRL Partnership to anybody.
Rather it was a question whether the 14-team term had the purpose of preventing, restricting or limiting the supply or acquisition of the relevant services “by” News and ARL. If the other elements of 4D were made out, it would not matter that the role of NRL was filled by a totally independent entity – say, a company which held itself out as an organiser of sporting competitions.
X TIMING
It is helpful for the consideration of this issue to identify the elements of s 4D(2) in the form adopted by Finn J. His Honour said:
“[192] Section 4D(2) can be said to deem one person to be competitive with another if, and only if, the first mentioned person:
(i)     is in competition with the other; or
(ii)     is likely to be in competition with the other; or
(iii)    but for the provision of any contract, arrangement or understanding, would be or would be likely to be in competition with the other; or
(iv)    but for the provision of any proposed contract, arrangement or understanding, would be or would be likely to be in competition with the other –
in relation to the supply or acquisition of all or any of the goods or services to which the relevant provision of the contract, arrangement or understanding relates.”
Before his Honour, and on appeal, the respondents argued that Souths had to show that News and ARL would have been competitive for the relevant services in the year 2000 and thereafter, that is to say at the time the exclusionary provision was to take effect. On their construction the concluding words of s 4D(2) (“all or any of the … services to which the relevant [exclusionary] provision … relates”) make any temporal limitation on the operation of the exclusionary provision intrinsic to the designation or characterisation of the services themselves. The relevant services were not just competition organising services and team services but competition organising services and team services for the year 2000.
But I agree with his Honour’s view (at [198]) that insofar as s 4D(2) imposes a temporal requirement as to when the parties are to be in competition, that is to be found in the range of possibilities envisaged by the contingencies of s 4D(2) itself ((i) to (iv) in his Honour’s analysis at [192] quoted above).
The respondents’ argument involves importing an additional requirement into s 4D(2). True it is that the competition must relate to the relevant services which are the subject of the provision, so that the “area of competition coincide(s) with the area of contractual regulation” (Eastern Express Pty Ltd v General Newspapers Pty Ltd (1991) 30 FCR 385 at 420), but the section says nothing of the time, manner or place of the delivery of those services and whether the parties must be competitive in any or all of these circumstances of delivery of the services.
The time at which services are provided does not define the nature of, or characterise, the services themselves in respect of which competition must be demonstrated. Both in 1997 when the arrangement was made, and in the year 2000, the relevant services remain the same: the supply and acquisition of services in the course of organising and running top level rugby league competitions. Section 4D(1)(b)(ii) recognises that the circumstances in which a service would be supplied (which may include the time at which the service would be supplied) is not a defining characteristic of the service itself. The fact that the exclusionary provision limits the supply of services from a given year may be a particular circumstance (dealt with by s 4D(1)(b)(ii)) in which the supply of services will be prevented, restricted or limited, but is not a defining feature of the services themselves.
In the nature of things a provision which has the purpose of preventing, restricting or limiting the supply or acquisition of goods or services will operate in the future. Such a provision might operate immediately after the arrangement was made or after some lapse of time, and might operate either indefinitely or for a limited period. In every case it will operate for the future. Section 4D(2) then provides that the person shall be deemed to be competitive with another person if, inter alia, the person “is” in competition with the other in relation to the supply or acquisition of services to which the provision relates.
I would accordingly, as did his Honour, uphold Souths’ argument on this issue. It is therefore unnecessary to consider two further issues. The first is whether “likely” and “would likely to be” require a probability of being in competition as distinct from a “real chance or possibility”. The former construction would require a departure from the decision of the Full Court in News Ltd v Australian Rugby LtdLeague (1996) 64 FCR 410 at 564-565. The second further issue is, depending on which construction is adopted, whether on the evidence there was a probability or a possibility that News and ARL would have been in competition in and from 2000.
XI SECTION 47(4)
Broadly speaking, s 45 does not apply to exclusive dealing arrangements; conduct of that kind is regulated by s 47: see the judgment below at [314] and also per Hely J, 169 ALR at [90], [92].
Section 45(6) excludes from the operation of s 45, inter alia, making a contract, arrangement or understanding which contains a provision, the giving effect to which would constitute a contravention of s 47.
Section 47(4) in so far as presently relevant provides:
“A corporation … engages in the practice of exclusive dealing if the corporation:
(a) acquires … services;
(b) …
on the condition that the person from whom the corporation acquires … services … will not supply … services …
(c) to particular persons or classes of persons or to persons other than particular persons or classes of persons.”
His Honour held (at [315], [316]) that for the purposes of s 47(4) the relevant services had to be acquired by NRL on its own account and that his finding as to agency made the defence unavailable. However, his Honour expressed the view that, absent agency, s 47(4) would apply, on the following basis:
“[320] If, for s 47(4) purposes, the partnership acquired services from NRL under the Services Agreement on condition that it not supply competition organising services to particular persons or classes of persons, an incident of that condition would be that team services not be acquired from those same particular persons or classes of persons. I incline, then, to the view that s 47(4) would provide a defence to Souths’ case in relation to its team services claim.”
As Souths submit, the Court must look at the commercial reality of the dealings between the parties. The central consideration is always the actual conduct of the parties in their business dealings in which contractual terms or other forms of commitment play a part: Castlemaine Tooheys Ltd v Williams & Hodgson Transport Pty Ltd (1985) 7 FCR 432 at 531-532, Australian Competition and Consumer Commission v Visy Paper Pty Ltd [2000] FCA 140.
Souths go on to argue, correctly in my view, that even if NRL is not found to be the agent of the NRL Partnership, it cannot reasonably be said that there was any prospect that NRL would seek to offer services to clubs other than the clubs nominated by the Partnership so as to invoke the alleged “condition” which would trigger s 47(4). There is no basis on which to find a real “design or intention” on the part of News and ARL “to prevent” NRL dealing with other clubs in competition with the NRL Partnership in a manner envisaged by s 47(4). NRL would only ever do what it was directed to do.
I conclude that if Souths otherwise succeeded, s 47(4) would not avail News and AFL.
XII DISCRETIONARY GRANT OF INJUNCTION
His Honour held (at [327] - [328]) that even if Souths made out its s 45 claims the injunctive relief sought ought to be refused. Souths’ s 45 claims go no further than an assertion that it cannot lawfully be excluded in reliance on the 14-team term. But it could be excluded for any other lawful reason. If it was refused admission into the 2001 competition (or, relevantly for this Court, the 2002 and subsequent competitions) this would not necessarily involve any impropriety on the part of NRL or the NRL Partnership. The prohibitory injunction sought would in substance involve no more than a declaration of right cast in injunctive form. This is usually undesirable: Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 at 318, Health Services for Men Pty Ltd v D’Souza (2000) 48 NSWLR 448 at 461.
However, his Honour did not refer to s 80(4)(a) of the Act, which expressly provides that the power to grant an injunction restraining a person from engaging in conduct in contravention of the Act may be exercised whether or not it appears to the Court that the person intends to engage again, or continue to engage, in conduct of that kind.

Mr Whittaker’s evidence was to the same effect. In cross examination Mr Whittaker accepted that a “fundamental” part of the merger agreement was the formulation of the criteria to determine who would participate from 2000 onwards if there were more than fourteen teams seeking entry.
The trial judge found that there was no purpose to the fourteen team term other than achieving the NRL partners’ overall objective of a viable and sustainable national competition. His Honour said at [285] that the fourteen team term was “only a means” to achieving the NRL partners overall objective. His Honour (at [280]) did not regard the number selected as significant; he said any competition would have a maximum number of teams. However, in the present case the precise number was regarded by the NRL partners as significant. It appears that Mr Whittaker unsuccessfully sought a sixteen team limit as he expected that that limit would probably avoid any exclusion, with the consequence that with that limit there may have been no exclusionary purpose. News, however, required the fourteen team limit as a buttress or sanction to secure exclusion if the merger and regional provisions failed to achieve their objective of fourteen teams. It is the exclusionary purpose of the fourteen team term, rather than any other, that is in issue in the present case.
His Honour also drew some support for his conclusions from his finding that there were no other means available to achieve the NRL partners’ objective. If there was an absence of any other means, which is not self-evident, that only serves to emphasise the significance attached by the parties to the means chosen by them to secure their objective. If, however, his Honour was seeking to import some rule of reason or, put another way, to treat as relevant a public benefit in securing the merger or its objectives by limiting the competition to fourteen teams, that can be of no relevance to whether the fourteen team term is an exclusionary provision. Public benefit is relevant to whether, under s 88(1)(b) of the Act, an authorisation should be granted in respect of an exclusionary provision on the ground that the provision has resulted or is likely to result in such a benefit to the public that the contract, arrangement or understanding of which the provision forms part should be given effect to: see s 90(8)(b) of the Act. As the NRL partners did not apply for an authorisation, the issue of public benefit or the lack of any other means of achieving the partners’ objectives is not relevant to whether the fourteen team term is an exclusionary provision.
The trial judge’s conclusion that the fourteen team term was only a means to an end did not absolve him from determining the purpose of the means selected; whether it was a substantial purpose and, if so, whether it was a proscribed exclusionary purpose.
The problem of distinguishing between the purpose of the means selected to achieve the end and the end itself is not new. In Jewel Food Stores Pty Ltd v Amalgamated Milk Vendors Association Inc (1989) 24 FCR 127 (“Jewel Food Stores”) the Full Court, in the context of a claim of contravention of s 45D of the Act, considered whether the purpose of certain milk vendors, in denying supply to Jewel Food Stores (a large retailer), was to protect their businesses (the ultimate end sought) or to cause harm to Jewel Food Stores (the immediate means selected). Sheppard and Wilcox JJ, in deciding that it was no defence to say that the immediate purpose of inflicting harm was not a substantial purpose because it was not the ultimate purpose of the conduct in question, said at 134-135:
“The only relevant question is whether, despite the existence of that [ultimate] purpose, the respondents had, as a substantial purpose, the infliction of damage upon the business of the appellant.
As we see the case, there can be no doubt that the respondents possessed such a purpose. It is true that this purpose was an immediate purpose rather than an ultimate purpose, but it is too late in the day to contend, at least in this Court, that the only type of purpose which may satisfy a description in s 45D(1)(b) is an ultimate purpose. The point was made in Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union (1979) 42 FLR 331. In that case Bowen CJ, with whom Evatt J agreed, dealt with duality of purpose in this way (at 338):
‘Nevertheless, the fact that a union and its members acting together have a union purpose does not necessarily exclude the possibility that they had, also, the purpose of causing substantial loss or damage to the business of a corporation. The statement of Evatt J in McKernan v Fraser (1931) 46 CLR 343 is apposite. His Honour in that case (at 403) said: ‘Sir Godfrey Lushington said, in special reference to combined action against employers or non-unionists on the part of unionists, that to ask the question whether they act to defend their own trade interests or to injure their economic adversary for the time being is equivalent to asking of a soldier, who shoots to kill in battle, whether he does so for the purpose of injuring his enemy or of defending his country. The analogy is sound because combined strike action is usually undertaken for the purpose both of causing harm to the employers and for the improvement of maintenance of the standards of unionists.’’
…
Ordinarily, the purpose of inflicting damage upon the business of a person is to cause that person to modify its behaviour in some way for the advantage of the person occasioning the damage, or its members. In other words the damage is a means to an end. Consequently, although a primary purpose of the milk vendors was to protect their own businesses, another purpose which they had was to damage or injure the appellant’s business. That was the means by which they intended to achieve their primary purpose. Upon the view of s 45D(1) long accepted in this Court, that is enough.”
Although the decision of the Full Court was reversed on appeal on a different issue (see Devenish v Jewel Food Stores Pty Limited (1991) 172 CLR 32) nothing was said that would cast doubt on the above passage.
A similar situation arose in Pont Data which I discuss in more detail later in these reasons. In that case the ultimate purpose of the respondent, ASX, was to prevent and deter competition in the wholesale and retail markets respectively for certain information services. The means selected by ASX to achieve that purpose was to require persons who wished to acquire the information services to, inter alia, agree to restraints that prevented them from reselling the information. The exclusionary purpose of the means selected by ASX led the Full Court to conclude that that means constituted an exclusionary provision irrespective of whether ASX’s ultimate purpose was a proscribed exclusionary purpose for the purposes of s 4D(1).
An analogous approach can be taken with respect to the fourteen team term. The ultimate purpose of the term (the end) is the achievement of a viable and sustainable national competition, but its immediate purpose (the means) is to exclude any clubs or entities in excess of the fourteen selected to provide teams to participate in the 2000 NRL competition. Put another way, the immediate purpose is to limit or restrict the supply or acquisition of the relevant services to or from (as the case may be) the fourteen clubs or entities selected to provide the fourteen teams. The ARL partners’ contention that the possibility of exclusion as a result of the fourteen team term was an “undesired consequence” of the term incorrectly focuses on the purpose of cl 7 rather than on the purpose of the fourteen team term.
Of course, in Jewel Food Stores the purpose of the means employed was to cause immediate injury or harm to secure the ultimate end sought to be achieved. Similarly, in Pont Data the means was immediate and direct. In the present case the purpose of the means employed was to exclude, but only if exclusion was required because there were more than fourteen clubs or entities seeking to provide teams to participate in the 2000 NRL competition. If the case were to be decided under s 4D(b)(i) an issue might arise as to whether the purpose of the fourteen team term was truly exclusionary, as the exclusionary outcome was qualified by the intent that it occur in the circumstance that the inducement to clubs to merge, or to regional clubs to enter the competition, failed to reduce to fourteen the number of clubs or entities applying to participate in the 2000 NRL competition. However, as explained above, s 4D(1)(b)(ii) extends the proscribed exclusionary purpose to one that may be operative in “particular circumstances”. Thus, the fact that the exclusionary outcome was intended to bring about certain consequences in particular circumstances (that is, where there were more eligible clubs or entities applying than licences available) does not take the fourteen team term outside of the operation of s 4D(1)(b)(ii).
As noted earlier, little attention was given to the significance of the additional words in s 4D(1)(b)(ii). Nonetheless, it is quite clear the case was contested by the parties on the basis that it was always Souths’ case that the exclusionary purpose was intended to be operative in the circumstance that there were more applicants than teams. The trial judge stated Souths’ case in those terms (at [263]) and found (at [269] and [283]) that there “can be no controversy” that exclusion was an intended effect and foreseen consequence in that circumstance. Indeed, that conclusion followed from the evidence given by Messers Frykberg, McCourt and Whittaker.
While that particular circumstance may not have been expressly stated in Souths’ pleadings it was plainly implicit as it was the only circumstance in which the fourteen team term could have, or be intended to have, an exclusionary outcome. Further it was, and remained, Souths’ case that the fourteen team term was an exclusionary provision within the meaning of s 4D(1) of the Act. Indeed, the trial judge’s finding that the term was not an exclusionary provision was Souths’ first ground of appeal.
In all the circumstances I am satisfied that the issue of whether the fourteen team term was an exclusionary provision, as defined in s 4D(1) of the Act, was “fairly fought out” at trial and on appeal (Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in Liquidation) (1916) 22 CLR 490 at 417). Thus, even if I am in error in concluding that the “particular circumstances” element in s 4D(b)(ii) was implicit in the pleading, it was nonetheless one of the issues litigated at trial and on appeal: see Water Board v Moustakas (1988) 180 CLR 491 at 497.
On the issue of substantiality of purpose the trial judge accepted that the means chosen to achieve the fourteen team limitation was one of the “defining characteristics of the new competition” and “a fundamental element of the peace deal” between the ARL and News. It is clear the exclusionary purpose of the provision, the “buttress” to secure the fourteen team outcome, was a significant operative purpose and therefore, in my view, a “substantial” purpose. Even if substantiality requires a higher threshold such as “considerable or large”, I am satisfied that the evidence accepted by the trial judge established that the exclusionary purpose was a substantial purpose of News, the party through whose efforts the fourteen team term was introduced. The exclusionary purpose was also, albeit more reluctantly in the events that occurred, a substantial purpose of ARL.
However, I agree with the trial judge that under s 4D(1) any exclusionary purpose, and the objects to which it is directed, are parts of “a composite whole”. Accordingly, determination of the issue of exclusionary purpose requires consideration of the objects of that purpose.
Souths’ case was one of prevention of the supply or acquisition of the relevant services to or from a particular class of persons, and the restriction or limitation of the supply or acquisition of the relevant services to or from particular persons. The particular class of persons pleaded was, in substance, the existing ARL and Super League clubs and any other top level rugby league clubs that wished to be included in, but were excluded from, the fourteen team 2000 NRL competition.
Of course, the finalised version of the selection criteria, which would lead to exclusion, was not published until 8 September 1998. The stated aim of the finalised criteria was to “create and maintain a viable national competition” by applying criteria for inclusion in the competition “in a fair and reasonable manner”. While it is correct that the criteria were not in existence at the time of the contracts, arrangements and understandings relied upon by Souths, I do not regard anything of significance as turning upon that fact. It is clear that the aim stated in the finalised criteria fairly stated what was always intended by the NRL partners, namely that if there were more clubs than licences available, the clubs that were to be excluded from the 2000 NRL competition were those who were least able to satisfy the criteria that were to be designed by the NRL partners to ensure what they considered to be appropriate to achieve a viable and sustainable national competition.
One of the main issues on this appeal concerned whether the clubs or entities intended to be excluded from the competition, by reason of failing to meet the selection criteria are members of a particular class of persons. The distinction between a class of persons and a particular class of persons, in the context of s 4D, was considered by the Full Court in Pont Data. Pont Data was a subscriber for information within the exclusive control of ASX. The information (known as Signal C) related to the trading operations of the stock markets conducted by ASX or its subsidiaries and other sources. ASX (which, for convenience, I treat as including its wholly owned subsidiary ASXO) was a competitor of Pont Data in relation to the supply of such information. ASX required Pont Data to enter into supply contracts which required Pont Data to disclose to ASX the names of its customers. In order to receive the information, the customers (“licensees”) were required to enter into a tripartite agreement (the “Dynamic Agreement”) with ASX and Pont Data under which the licensees were restricted as to the use of the information and, in particular, as to reselling it. Pont Data was not to sell the information to any person other than a licensee. Pont Data alleged, inter alia, that the Dynamic Agreement contained an exclusionary provision.
The Full Court looked at the subjective purposes of ASX, the party as a result of whose efforts the exclusionary provision was included in the Dynamic Agreement. The trial judge found the restriction imposed on Pont Data that it require licensees not to resell the information to have had the purpose of preventing, restricting or limiting the supply of information services by Pont Data to any person other than a licensee restricted under the Dynamic Agreement from reselling the information.
The Full Court dealt with the s 4D claim at 487-488:
“The submission for Pont was that:
(i)Pont and ASXO (alias JECNET) as parties to the Dynamic Agreement were competitors in relation to the sale of the information contained in Signal C;
(ii)That agreement obliged one of the parties, Pont, not to sell or supply the information, whether alone or with other information, to any person other than the Licensee; and
(iii)Having regard to the finding of the primary judge as to purpose, when dealing with s 46(1)(c), it is clear that those provisions had the purpose of preventing or restricting or limiting the supply of services by Pont to any person other than a Licensee who was a party to the agreement in question. In this connection, Pont pointed to cl 3(2), and 3(6) of the Dynamic Agreement; no complaint was made as to the provision dealing with price.
In response, the appellants [ASX] referred to the form taken by s 4D before it took its present form after it was amended by s 6 of the Trade Practices Revision Act 1986 (Cth), which inserted the words ‘or classes of persons’ after ‘particular persons’. The amendment appears to have been made in the light of what had been said as to the limitations upon the phrase ‘particular persons’ in Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464 at 473, and in Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 at 75-76. The result would appear to broaden the definition of s 4D by going from particular persons to particular classes of persons.
However, in a submission having an unpleasing resonance of the class-closing rules and of distinctions between general, special and ‘hybrid’ powers of appointment, the appellants contended that the restraints upon the use of the Signal C information by persons other than those bound into the Dynamic Agreement as ‘Licensees’ could not have the purpose of preventing, restricting or limiting the supply of services to a ‘particular’ class of persons, or the acquisition of services by a ‘particular’ class of persons. It was said that the persons or classes excluded must still be ‘identified’ if s.4D is to apply. That may be conceded, but they are identified, in the present case, by the characteristic that they may not be supplied with the information in question, unless they accept and become bound by the restraints imposed by the Dynamic Agreement. Such persons come within a particular category or description defined by a collective formula: cf Pearks v Moseley (1880) 5 App Cas 714 at 723. They ordinarily would be treated as constituting a particular class, even though at any one time the identity of all the members of the class might not readily be ascertainable. What distinguishes the class and makes it particular is that its members are objects of an anti-competitive purpose, with which s. 4D is concerned.
As we understood the argument for the appellants, if their submission as to the construction of the phrase ‘particular persons or classes of persons’ was not accepted, and if, as has proved to be the case, the Court upheld the holding of the primary Judge as to ‘purpose’ in the setting of s 46 (1)(c), that holding also provided a sufficient footing for a holding of ‘purpose’ for s. 4D. In the result, we would accept the submission for the respondent [Pont Data] that its case on s. 4D has been made good.”
In the application for interlocutory relief in the present matter ((1999) 169 ALR 133) Hely J stated at [76]:
“The respondents submitted that the distinguishing feature of the class cannot be the fact of exclusion itself. In other words, in order for persons the target of an exclusionary provision to be a class, there must be a common feature distinguishing those persons other than the mere fact of them being subjects of exclusion. It may be thought that there is some force in this submission. However, Pont Data provides otherwise: a class may be identified by reference to the fact that its members may not be supplied with services unless those members accept and become bound by restraints imposed by, in that case, the supply agreement. This suggests that the unifying characteristic of a group can include the fact of exclusion itself. Here, the unifying characteristic of the group is that the relevant clubs were participants in the 1997 competitions, and are not within the groups to be carved out therefrom.”
On one view, as pleaded, the defining factor that distinguishes the class intended to be excluded from the 2000 NRL competition, and makes it particular, is the fact of exclusion. However, in the present case it is more accurate to identify the distinguishing exclusionary factor by reference to the reason for the intended exclusion, that is, a club’s failure to meet the requisite level in the selection criteria for inclusion in the fourteen team NRL competition as from 2000 by reason of fourteen other clubs better satisfying the criteria. In Pont Data, where the subjects of the exclusionary provision were aimed at for a reason or purpose (in that case, ASX’s anti-competitive purpose), the reason or purpose was found to be of assistance in defining or distinguishing the class excluded.

In each case it is necessary to identify the characteristic distinguishing the class in order to determine if it is sufficiently particular to constitute a particular class that is the object of an exclusionary purpose proscribed by s 4D(1). The fact of exclusion, without more, may not be a sufficient formula or distinguishing characteristic to identify the particular class intended to be excluded.
In Pont Data the main issue under s 4D(1) related to whether the class, the object of ASX’s anti-competitive purpose, was a particular class. The immediate reason or purpose of ASX for the restraint imposed on the licensees was the anti-competitive purpose of preventing the reselling of information by restricting or limiting the information services to licensees willing to accept the restraint on reselling. Thus, the exclusionary purpose of preventing supply of the information services was directed at those unwilling to accept the restraint, namely, potential competitors in the relevant markets for the information. The Full Court regarded the particular characteristic of not being entitled to receive the Signal C information without signing the Dynamic Agreement as sufficient to enable the members of the relevant class to come within a particular category or description or to be defined by a collective formula and thereby constitute a particular class. The fact that at any one time the identity of all of the members of the class was not readily ascertainable did not prevent the class from being a particular class. The Court appeared to treat as significant the fact that the members of the class were the objects of ASX’s anti-competitive purpose.
Souths claimed that, save that the NRL partners had an exclusionary rather an anti-competitive purpose, the present case falls within the principles acted upon in Pont Data. In my view it is more accurate to say that Souths’ case is supported by the outcome in Pont Data. As set out above in my carrot and stick explanation, a significant effect or result sought to be achieved by the NRL partners by the fourteen team term was to prevent the supply or acquisition of the relevant services to or from such of the still existing ARL and Super League clubs, merged clubs (being new legal entities) or the regional clubs (including the new clubs that were intended to be established, Central Coast and Melbourne) as were eligible, and ready, willing and able, to participate in the NRL competition, other than the fourteen clubs or entities which best satisfied the selection criteria. The prevention of supply or acquisition was intended to be achieved by restricting or limiting the supply or acquisition of the relevant services to the fourteen clubs or entities which were eligible, and ready, willing and able, to participate in the competition and best satisfied the criteria for participation. The characteristic that identified and distinguished the class intended to be excluded from participation, and makes it particular, was that its members, the top level rugby league clubs eligible to participate (for example, by meeting the “Basic Criteria”) but not achieving the requisite level in the selection criteria achieved by fourteen other clubs or entities, would not be supplied with team organisation services and team services would not be acquired from them. Accordingly, the particular class the subject of the NRL partners’ exclusionary purpose has a distinguishing or identifying characteristic in addition to the mere fact of exclusion. As explained above, the evaluation of particularity in the context of s 4D(1) involves questions of fact and degree. Although the matter is not free of doubt, I have concluded that the objects of the NRL partners exclusionary purpose are sufficiently distinguishable and specific to constitute a particular class.
In summary, the class aimed at by the NRL partners’ exclusionary purpose of preventing the supply or acquisition of the relevant services by or from the NRL partners was a particular class of persons for the purposes of s 4D(1). Analogously to Pont Data the proscribed exclusionary purpose of the NRL partners was to prevent supply or acquisition to or from a particular class of persons (the excluded class) by restricting or limiting supply or acquisition to or from the clubs or entities selected to be included in the 2000 NRL competition. Accordingly, Souths has established that the trial judge erred in dismissing its case in so far as it relied upon s 4D(1) of the Act.
Souths also argued that the fourteen team term had the purpose of restricting or limiting supply or acquisition of the relevant services to or from particular persons namely, the twenty remaining clubs that had participated in the 1997 ARL and Super League competition. I have some difficulty with the restriction or limitation case pleaded by Souths. In order to succeed, Souths must establish that the twenty clubs were the objects of the NRL partners’ purpose to restrict or limit the relevant supply or acquisition of services. The evidence, however, does not appear to support that conclusion. Rather, as explained above, the persons in respect of whom the relevant supply or acquisition of services in the 2000 NRL competition was intended to be restricted or limited (by the services being reduced to fourteen teams) were such of the still existing twenty clubs, merged clubs or regional clubs that met the criteria to participate in the 2000 NRL competition. Thus, any such exclusionary purpose of limitation or restriction was directed at members of a class, rather than particular persons.
Finally, that brings me to the question of relief. Souths is entitled to declaratory relief that the making and arriving at of the December 1997 Understanding, the February 1998 MoU and the Merger Agreement, and the giving of effect to the fourteen team term contained in those contracts, arrangements or understandings, contravened s 45(2) of the Act.
However, before the trial judge and on appeal the principal remedy Souths sought was an injunction restraining News, ARL and NRL from excluding Souths from the NRL competition in reliance upon the fourteen team term. The form of the relief sought by Souths confuses two discrete issues; giving effect to the fourteen team term and Souths’ entitlement to be included in the NRL competition. The former but not the latter issue is relevant to the appeal. A difficulty that has beset Souths’ claim to injunctive relief to date stems from the fact that, implicitly if not explicitly, it appears to be seeking an order for admission into the NRL competition, an order to which Souths is not entitled as a matter of legal right.
Section 80 of the Act confers power upon the Court to grant an injunction where it is satisfied that a person is engaging, or proposing to engage, in conduct that constitutes or would constitute, inter alia, a contravention of the Act. As was explained in ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248, s 80 confers a very broad discretion on the Court which, although devoid of traditional equitable constraints, must be exercised judicially, appropriately and consistently with the policy of the Act: see Lockhart J at 256, Gummow J at 267 and French J at 268. See also Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1997) 78 FCR 197 at 203-204.
It follows from my conclusion on Souths’ s 4D(1) case that when it commenced its proceeding in the Court, subject to any relevant discretionary considerations, its entitlement as a matter of legal right was to restrain News, NRLI, ARL and NRL from giving effect to the fourteen team term (s 45(2)(b) of the Act). The NRL partners and NRL have continued to give effect to the fourteen team term in their respective roles in conducting and operating the NRL competition from and since 2000. As explained earlier in these reasons I agree with the trial judge’s conclusion that the fourteen team term was intended to express “what for the future was to be the status quo”. Accordingly, in the absence of appropriate injunctive relief, if Souths applied for a licence to participate in the 2002 NRL competition it would again be prevented from being granted the licence by reason of the fourteen team term. In these circumstances, the injunctive relief to which Souths is, prima facie, entitled is an injunction to restrain News, NLRI, ARL and NRL from giving effect to, or continuing to give effect to, the fourteen team term. That relief does not require that Souths be included in the 2002 NRL competition nor does it require that the NRL competition be a fifteen team competition. Rather, the relief would remove the unlawful fetter of the fourteen team term which led to Souths’ exclusion from the 2000 NRL competition.
In my view there are no valid discretionary reasons for refusing injunctive relief in the present case. Sections 45(2) and 4D(1) operate to prohibit competitors (News and ARL) from entering into an agreement, arrangement or understanding for the purpose, inter alia, of preventing the supply or acquisition of services to or from a particular class of persons. While the exclusionary provision in the present case may be unexceptionable if it were imposed by a sole competition organiser, it is a per se contravention of the Act in the event that two competing organisers agree to impose it in pursuit of their exclusionary purpose. That purpose is critical to the conclusions I have reached. Thus, in the usual course, an injunction would be granted to restrain the repetition of a per se contravention of Pt IV of the Act.
I do not accept the argument that an injunction should be refused as it would, in effect, prohibit a “legitimate commercial endeavour” by the NRL partners to establish, in the public interest, any viable and sustainable national competition with an agreed limitation on the number of competing teams. It is suggested that a sixteen team competition, the imposition of the “Basic Criteria”, or any other limitations on entry, would likewise constitute exclusionary provisions and that the Court ought not make an order that would have the effect of causing a different breach to the one complained of. As explained above, in my view the sixteen team competition proposed by ARL probably did not have an exclusionary purpose. The “Basic Criteria” intended to be, and in fact, used by the NRL partners to determine the clubs that were able to compete in their top level rugby league competition also probably did not have an exclusionary purpose. That is because those provisions do not target for exclusion any particular persons or class of persons and, to the extent there might be any exclusionary purpose, it is not a substantial purpose. Rather, and unlike the fourteen team term, such provisions appear to be intended, inter alia, to include all of the top level rugby league clubs or entities that were likely to be eligible, and ready, willing and able, to participate in the 2000 NRL competition. Even if such provisions had an exclusionary effect it does not follow that they had an exclusionary purpose. In any event, the injunction that I regard as appropriate in the present case does not have the effect of mandating any conduct that would result in a different breach of the Act.
I also do not accept that injunctive relief should be refused on public policy grounds. Implicit in that contention is the suggestion that the fourteen team term would satisfy the public benefit test under the Act and therefore would be authorised. The short answer to the contention is that whether the provision can satisfy the test is not self evident and, in any event, that is a matter that is required to be determined in accordance with the procedures laid down in the Act. In that regard I note that in the February 1998 MoU the NRL partners agreed that they “will (if necessary) inform, and make a joint submission to, the ACCC (about the Merger)”. Plainly, the parties were aware that the merger of their respective competitions raised issues under Pt IV of the Act but they proceeded with the merger without seeking any authorisation for it. In my view it is inconsistent with the policy of the Act for the Court to refuse injunctive relief in respect of conduct that contravenes the Act on the ground that the parties might satisfy the public benefit test, particularly where those parties have wilfully abstained from seeking an authorisation for their conduct. Further, while it may be accepted that there is a public benefit in a unified competition it does not follow that such a competition could only be viable or sustainable if it were limited to fourteen teams. That was not the ARL’s view when it sought a sixteen team limitation.
Damages is not an adequate remedy. The raison d’être of Souths is to compete in the top level rugby league competition, rather than to reap an award of damages for being wrongfully excluded from competing in that competition.
Finally, I do not consider that there is any substance in the claims of the NRL partners of delay and harm to third parties. Souths has not delayed but rather has acted reasonably in only bringing its claim when it was excluded from the 2000 NRL competition. Further, as the relief I would grant does not mandate any particular conduct I do not accept that that relief will result in undue harm to any innocent third parties.
Souths is also entitled, under s 82 of the Act, to damages to be assessed in respect of any loss and damage suffered by it by the conduct of News, NLRI, ARL and NRL that contravened s 45(2) of the Act. Accordingly, the assessment of damages should be remitted to the trial judge.
Souths has succeeded on its appeal. I would order that the main respondents to the appeal, News, NLRI, ARL and NRL pay Souths’ costs of the appeal. Souths failed on its misleading and deceptive conduct and contract causes of action at trial. Some allowance in respect of the costs of that failure may be appropriate as those causes of action were not pursued on the appeal. In all the circumstances the determination of the costs of the proceedings below should be remitted to the trial judge.

I certify that the preceding ninety-five (95) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.

Associate:
Dated: 6 July 2001

Counsel for the Applicant: Mr D F Jackson QC with Mr R W White SC, Ms A Silink

Solicitor for the Applicant: Nicholas G Pappas & Company

Counsel for the First and Second Respondents: Mr N C Hutley SC with Ms S J Goddard

Solicitor for the First and Second Respondents: Allens Arthur Robinson

Counsel for the Third Respondent: Mr D Campbell with Mr S Hughes

Solicitor for the Third Respondent: Colin W Love & Co

Counsel for the Fourth Respondent: Mr A J Meagher SC with Mr J E Marshall

Solicitor for the Fourth Respondent: Minter Ellison

Counsel for the Fifth, Seventh, Ninth, Tenth, Eleventh, Twelfth, Thirteenth, Sixteenth, Seventeenth, Eighteenth, Nineteenth, Twentieth, Twenty-first, Twenty-second, Twenty-third Respondents. Mr A Coleman

Solicitor for the Fifth, Seventh, Ninth, Tenth, Eleventh, Twelfth, Thirteenth, Fifteenth, Sixteenth, Seventeenth, Eighteenth, Nineteenth, Twentieth, Twenty-first, Twenty-second, Twenty-third Respondents. Henry Davis York

Date of Hearing: 7, 8 & 9 May 2001

Date of Judgment: 6 July 2001
THE SCHEDULE

CANBERRA DISTRICT RUGBY LEAGUE
FOOTBALL CLUB LIMITED (ACN 008 568 634)
Fifth Respondent

CANTERBURY-BANKSTOWN RUGBY
LEAGUE CLUB LTD (ACN 001 869 405)
Sixth Respondent

CRONULLA-SUTHERLAND DISTRICT RUGBY
LEAGUE FOOTBALL CLUB LIMITED (ACN 002 692 186)
Seventh Respondent

NEWCASTLE KNIGHTS LIMITED (ACN 003 363 228)
Eighth Respondent
ST GEORGE ILLAWARRA RUGBY LEAGUE

FOOTBALL CLUB PTY LIMITED (ACN 085 008 340)
Ninth Respondent

BRISBANE BRONCOS RUGBY LEAGUE
CLUB LIMITED (ACN 010 769 025)
Tenth Respondent

COWBOYS RUGBY LEAGUE

FOOTBALL LIMITED (ACN 060 382 961)
Eleventh Respondent

MELBOURNE STORM RUGBY

LEAGUE CLUB LIMITED (ACN 081 369 468)
Twelfth Respondent

MANLY WARRINGAH DISTRICT RUGBY LEAGUE
FOOTBALL CLUB LIMITED (ACN 003 348 436)
Thirteenth Respondent

NORTH SYDNEY DISTRICT RUGBY LEAGUE
FOOTBALL CLUB LIMITED (ACN 003 009 158)
Fourteenth Respondent

EASTERN SUBURBS DISTRICT RUGBY LEAGUE
FOOTBALL CLUB LIMITED (ACN 002 687 416)
Fifteenth Respondent

PENRITH DISTRICT RUGBY LEAGUE FOOTBALL
CLUB LIMITED (ACN 003 908 583)
Sixteenth Respondent

PARRAMATTA DISTRICT RUGBY LEAGUE
CLUB LTD (ACN 002 254 980)
Seventeenth Respondent

WESTS TIGERS RUGBY LEAGUE FOOTBALL
PTY LIMITED (ACN 090 076 403)
Eighteenth Respondent

AUCKLAND WARRIORS RUGBY

LEAGUE LIMITED (Registered in NZ No. 508 646)
Nineteenth Respondent

MANLY-NORTHS RUGBY LEAGUE FOOTBALL CLUB PTY LTD
(ACN 090 093 833)

Twentieth Respondent
VALIMANDA PTY LTD (ACN 002 639 778)
Twenty-first Respondent

AH CB PTY LIMITED (ACN 068 819 152)
Twenty-second Respondent

BRISBANE BRONCOS CORPORATION PTY LTD (ACN 057 607 208)
Twenty-third Respondent

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 1264 OF 2000

BETWEEN:	SOUTH SYDNEY DISTRICT RUGBY LEAGUE FOOTBALL CLUB LIMITED (ACN 002 487 390) APPELLANT
AND:	NEWS LIMITED (ACN 007 871 178) FIRST RESPONDENT NATIONAL RUGBY LEAGUE INVESTMENTS PTY LIMITED (ACN 081 778 538) SECOND RESPONDENT AUSTRALIAN RUGBY FOOTBALL LEAGUE LIMITED (ACN 003 107 292) THIRD RESPONDENT NATIONAL RUGBY LEAGUE LIMITED (ACN 082 088 962) FOURTH RESPONDENT AND the Fifth to Twenty-third Respondents set out in the Schedule
JUDGES:	HEEREY, MOORE AND MERKEL JJ
DATE OF ORDER:	6 JULY 2001
WHERE MADE:	MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA	GENERAL DISTRIBUTION
NEW SOUTH WALES DISTRICT REGISTRY	N 1264 OF 2000

JUDGES:	HEEREY, MOORE & MERKEL JJ
DATE:	6 JULY 2001
PLACE:	SYDNEY

Counsel for the Applicant:	Mr D F Jackson QC with Mr R W White SC, Ms A Silink
Solicitor for the Applicant:	Nicholas G Pappas & Company
Counsel for the First and Second Respondents:	Mr N C Hutley SC with Ms S J Goddard
Solicitor for the First and Second Respondents:	Allens Arthur Robinson
Counsel for the Third Respondent:	Mr D Campbell with Mr S Hughes
Solicitor for the Third Respondent:	Colin W Love & Co
Counsel for the Fourth Respondent:	Mr A J Meagher SC with Mr J E Marshall
Solicitor for the Fourth Respondent:	Minter Ellison
Counsel for the Fifth, Seventh, Ninth, Tenth, Eleventh, Twelfth, Thirteenth, Sixteenth, Seventeenth, Eighteenth, Nineteenth, Twentieth, Twenty-first, Twenty-second, Twenty-third Respondents.	Mr A Coleman
Solicitor for the Fifth, Seventh, Ninth, Tenth, Eleventh, Twelfth, Thirteenth, Fifteenth, Sixteenth, Seventeenth, Eighteenth, Nineteenth, Twentieth, Twenty-first, Twenty-second, Twenty-third Respondents.	Henry Davis York
Date of Hearing:	7, 8 & 9 May 2001
Date of Judgment:	6 July 2001