St George Soccer Football Association Inc v Soccer NSW Ltd
[2005] NSWSC 1095
•26 October 2005
CITATION: St George Soccer Football Association Inc v Soccer NSW Ltd [2005] NSWSC 1095
HEARING DATE(S): 25/10/05
JUDGMENT DATE :
26 October 2005JURISDICTION: Equity Division
JUDGMENT OF: Barrett J
DECISION: Application for interlocutory injunction dismissed with costs
CATCHWORDS: EQUITY - interlocutory injunction - whether serious questions to be tried - where balance of convenience lies - relevance of potential hardship to third parties - CORPORATIONS - rights of members - class rights - distinction between variation of rights of class of members and variation of composition of class of members - ESTOPPEL - whether unambiguous representations made - whether relied upon - CONTRACT - "process contract" - whether formed - whether legal relationships intended
LEGISLATION CITED: Corporations Act 2001 (Cth) s.246B
CASES CITED: Council of the City of Botany Bay v Soccer NSW [2004] NSWSC 1262
Forbes v Australian Yachting Federation Inc (1996) 131 FLR 241
Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1
Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459PARTIES: St George Soccer Football Association Incorporated - First Plaintiff
Bonnyrigg White Eagles Sports Club Limited - Second Plaintiff
Soccer NSW Limited - DefendantFILE NUMBER(S): SC 5501/05
COUNSEL: Mr P. Roberts SC/Mr S.J. Philips - Plaintiffs
Mr M. Christie/Mr M.S. White - DefendantSOLICITORS: Levitt Robinson - Plaintiffs
Minter Ellison - Defendant
LOWER COURT JURISDICTION:
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
Barrett J
Wednesday 26 October 2005.
5501/05 St GEORGE SOCCER FOOTBALL ASSOCIATION INCORPORATED & ANOR v SOCCER NSW LIMITED
Judgment
1 The plaintiffs, St George Soccer Football Association Incorporated and Bonnyrigg White Eagles Sports Club Limited (which I shall call “St George” and “Bonnyrigg”), are soccer football clubs based in different parts of Sydney. Each has participated for a number of years in the first division or premier league competition conducted by the defendant, Soccer NSW Limited (“Soccer NSW”).
2 By their summons filed on 21 October, the plaintiffs seek relief directed towards review and modification of a decision announced by Soccer NSW on 14 October regarding reorganisation of the first division competition to be conducted in 2006, which is to commence towards the end of January. In the first instance, St George and Bonnyrigg seek an interlocutory injunction restraining Soccer NSW from giving effect to the decision about the new competition announced on 14 October and from registering any players, coaches or officials for the new competition.
3 I infer from the names of St George and Bonnyrigg that each has separate legal personality, St George being incorporated under the Associations Incorporations Act 1984 and Bonnyrigg being a company registered or deemed registered under the Corporations Act 2001 (Cth). Soccer NSW is such a company. It is limited by guarantee and each of St George and Bonnyrigg is a member of it in the company law sense.
4 Soccer NSW has for many years undertaken the organisation of soccer competitions in Sydney in furtherance of its objects which include fostering and promotion of the sport of soccer football.
5 I am dealing now with the application for interlocutory relief. Soccer NSW resists that application. It says that the question to be tried, if it exists at all, is weak and that, in any event, the balance of convenience favours the defendant.
6 In pursuing their interlocutory application, St George and Bonnyrigg have defined their claims in points of claim that were handed up upon the hearing of the application. The first contention is that, having regard to the constitution of Soccer NSW and provisions of the Corporations Act, a decision purportedly made by the board of Soccer NSW with respect to the number of clubs to participate in the 2006 competition was a decision that could only have been made by the members in a general meeting. Second, St George and Bonnyrigg say that by reason of representations made by Soccer NSW in the course of developing the proposals for reconfiguration of the competition, Soccer NSW is estopped from implementing its decision. Third, there is a complaint or, as it is put, a suspicion that the board of Soccer NSW did not properly, fairly and consistently apply its own criteria in coming to the relevant decision.
7 The decision in question is in essence a decision to reduce the number of clubs in the first division or premier league competition. In the 2005 season, 16 clubs participated, including St George and Bonnyrigg. The decision they now challenge is a decision that only 10 clubs should participate in the corresponding competition in 2006 and that St George and Bonnyrigg should not be among those 10 clubs.
8 The limited evidence adduced on the hearing of the interlocutory application shows that plans to reorganise the competition were in existence by May 2005. On 29 July, Soccer NSW issued a report on the structure of the competition. A new business plan was released early in August. These documents were circulated among the member clubs. On 22 August, there was a meeting of representatives of a number of the premier league clubs, styled “Premier League Clubs Forum”. The main subject of discussion according to the minutes was a "competition made up of 12 clubs rather than 14 or 16" and whether the proposal to re-arrange the competition should be fast tracked. There was a vote on this and, of the 14 clubs present, seven were in favour and seven against. Those present agreed that there was an urgent need for a meeting with "our board" to discuss the new competition. This was obviously a reference to the Soccer NSW board. The minutes also refer to rejection of the new competition by the clubs present.
9 Another meeting of the Premier League Clubs Forum took place on 30 August. Directors of Soccer NSW were present, including the chairman. Handwritten notes or minutes in evidence show that there was comprehensive discussion of the proposed criteria for participation in the new competition and that, according to the chairman, 28 expressions of interest had been received from clubs, all of which had taken positive steps to meet the relevant criteria. The criteria mentioned were no doubt those emerging from the business plan which envisaged a structure based on up to 12 teams with district or regional representation while also maintaining quality. The concept of some regional criterion such that there should be a limit on the number of clubs from any one area of Sydney was apparently new.
10 St George and Bonnyrigg, along with other clubs, submitted applications to Soccer NSW for inclusion in the 2006 competition. On 14 October they learned of Soccer NSW’s decision to limit the 2006 competition to 10 clubs and to exclude St George and Bonnyrigg. Each of them maintains that it satisfies Soccer NSW's stated criteria and is better qualified than some of the clubs which were successful in their applications.
11 The first matter in relation to which a serious question to be tried is said to arise is the company law matter. An appreciation of the case St George and Bonnyrigg seek to make on that front involves in the first instance a consideration of certain aspects of the constitution of Soccer NSW. Clause 3 of the constitution provides for classes of members. It is accepted, as I understand it, that St George and Bonnyrigg were both so-called "club members" being the class contemplated by clauses 3(i) and 3(a) of the constitution.
12 Provisions with respect of voting at meetings of members are contained in clauses 21 to 26 and clause 42 of the constitution. It is fair to say that there are puzzling aspects of those provisions but that it is tolerably clear that they put into effect for the purposes of voting at meetings of members the provisions in schedule A to the constitution. Those provisions also throw up difficulties of interpretation. Schedule A is as follows:
- “1.1 Unless otherwise determined by General Meeting or this Schedule, Club Members at any Annual General Meeting or General Meeting shall be entitled to the voting percentage allocated to the Division or Competition listed below with such voting percentage apportioned pro rata to each Club Members admitted in the respective Division or Competition.
DIVISION/COMPETITION VOTING PERCENTAGE
| Division 1 | 48 |
| Division 2 | 26 |
| Division 3 | 11 |
| National or Interstate Competition | 11 |
- 1.2 Notwithstanding Article 3(a) of this Constitution where any Division listed above does not have at least 10 Club Members who satisfy the criteria of admission to such Division as in force from time to time, the Board of Directors may determine in their absolute discretion to cancel amend, restructure or suspend that Division from Competition.
- 1.3 (a) Where a Division is cancelled from competition the
Council of Clubs may in a Council Meeting determine the distribution of the voting percentage to Club Members or Associate Members.
- (b) Where the number of Club Members referred to in Article 4(e)(i) of the Constitution are from time to time less than 6 the percentage vote of those Club Members shall be proportionally reduced by such number as less than 6.
- (c) The percentage vote so reduced in 1.3(b) in this Schedule shall be distributed in the same manner as that of the percentage vote resulting from a cancelled Division.
- 1.4 Notwithstanding anything to the contrary in this Schedule no Division or competition shall at any one time be entitled to have in excess of 48% of the aggregate percentage vote for each Division or Competition.”
13 St George and Bonnyrigg contend that, having regard to clause 26 of the constitution (which I need not set out), the club members in the division 1 competition between them enjoy not 48 per cent of the total voting rights as schedule A would tend to imply, but 48 per cent of 50 per cent of the total voting rights. It is sufficient for present purposes to note that the club members in division 1 of the competition together enjoy, for the purposes of voting at meetings of members, a fixed percentage of total voting rights which is, as among those club members, divided “pro rata to each Club Members [sic] admitted in the respective Division or Competition”. Thus, if there are 16 division 1 club members, each enjoys one sixteenth of the fixed percentage of the voting rights allocated to all of the division 1 club members.
14 The contention of each of St George and Bonnyrigg is that its exclusion from the premier league or division 1 competition will mean that it ceases to enjoy its one sixteenth of the fixed percentage of voting rights belonging to the division 1 club members as a group; and that there is therefore a variation or cancellation of right of members in a class of members within the meaning of s.246B of the Corporations Act:
“ Varying and cancelling class rights
(1) If a company has a constitution that sets out the procedure for varying or cancelling:If constitution sets out procedure
- (a) for a company with a share capital—rights attached to shares in a class of shares; or
(b) for a company without a share capital—rights of members in a class of members;
those rights may be varied or cancelled only in accordance with the procedure. The procedure may be changed only if the procedure itself is complied with.
(2) If a company does not have a constitution, or has a constitution that does not set out the procedure for varying or cancelling
If constitution does not set out procedure
- (a) for a company with a share capital—rights attached to shares in a class of shares; or
(b) for a company without a share capital—rights of members in a class of members;
those rights may be varied or cancelled only by special resolution of the company and:
(c) by special resolution passed at a meeting:
- (i) for a company with a share capital of the class of members holding shares in the class; or
(ii) for a company without a share capital of the class of members whose rights are being varied or cancelled; or
(4) An offence based on subsection (3) is an offence of strict liability.”
(3) The company must give written notice of the variation or cancellation to the members of the class within 7 days after the variation or cancellation is made.
15 It was not suggested in submissions that the constitution contains a provision of the kind referred to in s.246B(1). That being so, it is s.246B(2) that must be considered. The relevant question is therefore the question posed by s.246B(2)(b), that is, whether “rights of members in a class of members” have been or are to be “varied or cancelled”.
16 The significant point in this part of the case is that, even under the new arrangements, there will continue to be club members and that there will continue to be club members admitted to division 1. That class of members will continue to enjoy the voting rights given to the class by schedule A. The difference will be in the composition of the class. Whereas St George and Bonnyrigg have hitherto been within the class, their exclusion from the division 1 competition will for the future mean that they are outside the class. It follows, in my view, that whereas the rights of St George and Bonnyrigg as members will change because of the different status they come to have in relation to the competition, there will be no variation of the rights of the members of the class, that is the class consisting of division 1 club members as a whole. There will merely be a change in the composition of the class. That is something that is expressly contemplated by schedule A. I refer in particular to its clause 1.2.
17 To amplify on this I should refer to another part of the constitution, namely, clause 46 which empowers the board of Soccer NSW to make, vary and rescind regulations to give effect to and implement the company's objects. A set of regulations is in evidence and is said by Soccer NSW to have been promulgated pursuant to clause 46 of the constitution. That, strictly speaking, has not been proved and the plaintiffs do not concede that the document in evidence has that status. But assuming that it has, it is clear that among the regulations made by the board are regulations concerning the New South Wales premier league competition. It is sufficient to quote regulation 26.3(d) which reads:
- “The board of directors will be responsible for selection of all the clubs to compete in this competition from applications submitted in writing by the prescribed date each season.”
18 Regulation 26.3(a) makes eligible for selection clubs which are members or associate members of Soccer NSW. The regulations make it clear that clubs actually participating in the premier league or division 1 competition in a particular season will be selected by the board for the purposes of that season from among eligible member class. This, to my mind, confirms that the composition of the class upon which, as a class, schedule A to the constitution confers a specified proportion of relevant voting rights may change from time to time as a result of decisions of the board.
19 I am, for these reasons, of the opinion that the case the plaintiffs seek to advance on the company law matter by reference to section 246B of the Corporations Act is very weak indeed. The plaintiffs do not seek to argue any other company law ground. In particular, they do not seek to rely on provisions such as ss.232 and 233 and allegations of oppression, unfair prejudice or unfair discrimination as in the factually somewhat similar case of Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459 which concerned exclusion of the Western Suburbs Club from the Sydney rugby league competition.
20 The next part of the plaintiff's case is based on the proposition that Soccer NSW is estopped from proceeding with the new competition otherwise than on a basis that involves 12 participating teams or clubs.
21 The first point to be made good by the plaintiffs if they are to succeed on this part of the case is that Soccer NSW made to them an unambiguous representation to the effect that the new competition would involve 12 participating clubs. The evidence shows that, at the club forum on 22 August, and, it appears, at earlier meetings of the clubs at which representatives of Soccer NSW were present, there was discussion and expression of opinion on the desirability of a 12 team competition as opposed to a 14 or 16 team competition. There was a division of opinion among the clubs on this. It is said that at one such meeting in June a director of Soccer NSW said, “Okay, it will be a 12 team comp with a starting date of January”. Later, however, Soccer NSW circulated the new competition business plan dated 8 August. That document was expressed in the introductory executive summary to represent a framework by which Soccer NSW would establish a new competition to begin in January 2006 to replace the premier league. It was said in the introduction that the document was “a tool which clubs seeking to join the new competition can use as a basis for their own planning and in the preparation of their applications for membership”. A competition structure was then set out under several points. The first was, “up to 12 teams with district/regional representation”. In the detailed provisions following there are references to a new competition, “that would have no more than 12 teams” and “that will comprise no more than 12 clubs” and with “up to a maximum number of 12 clubs”. There is also one reference to “a structure that provides for 12 teams” without any words such as, “up to”, “no more than” or “maximum”.
22 The several references to a maximum number of clubs are accompanied by references to geographical factors spelled out in greater detail in other parts of the document. It is made clear that a geographic spread of clubs would be sought with a limit on the number from a particular region. Business plan and capacity to meet membership criteria were also identified as factors that would be taken into account in deciding competing applications referable to a particular region, as of course was team quality.
23 It is upon this business plan document that the plaintiffs place strong reliance in saying that there were representations by Soccer NSW that there would be 12 clubs in the division 1 competition under the new system. But that, in my view, is simply not borne out by the content of the document. There is, as I have said, one reference to 12 clubs or teams, neither more nor less, but that is in the context of several references to 12 as a maximum. On any fair reading, the document as a whole indicated that there would be not more than 12, not that there would be exactly 12; and the references to a maximum number occurred in the context of clear indications that Soccer NSW would be applying geographic criteria, business plan criteria and other criteria which would have made it clear to any reader that no particular number was, as it were, guaranteed within the stated maximum of 12. There was clearly to be an assessment or selection procedure which might produce a final number of participant clubs less than 12.
24 The case the plaintiffs seek to advance as to the making of the representation upon which they rely for an estoppel is accordingly a very weak case. No unambiguous statement to the effect that there would be, come what may, 12 teams appears to have been made on any consistent basis.
25 But even if it were shown that unambiguous representations to the effect for which the plaintiffs contend had been made, they could not succeed in the estoppel case unless they showed that they had relied on the representations to their detriment. I quote in that connection a summation of the principles to be derived from the judgments in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 given by Priestley JA in Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 at p.472:
- “The following can I think be distilled from the reasons in Waltons notwithstanding the somewhat different language used by different judges. (1) Common law and equitable estoppel are separate categories, although they have many ideas in common.
(2) Common law estoppel operates upon a representation of existing fact, and when certain conditions are fulfilled, establishes a state of affairs by reference to which the legal relation between the parties is to be decided. This estoppel does not itself create a right against the party estoppel. The right flows from the court's decision on the state of affairs established by the estoppel.
(3) Equitable estoppel operates upon representations or promises as to future conduct, including promises about legal relations. When certain conditions are fulfilled, this kind of estoppel is itself an equity, a source of legal obligation. (4) Cases described as estoppel by encouragement, estoppel by acquiescence, proprietary estoppel and promissory estoppel are all species of equitable estoppel. (5) For equitable estoppel to operate in circumstances such as those of the present case there must be the creation or encouragement by the defendant in the plaintiff of an assumption that a contract will come into existence or a promise be performed, and reliance on that by the plaintiff, in circumstances where departure from the assumption by the defendant would be unconscionable. (6) Equitable estoppel may lead to the plaintiff acquiring an estate or interest in land; that is, in the common metaphor, it may be a sword. (7) The remedy granted to satisfy the equity (which either is the estoppel or created by it) will be what is necessary to prevent detriment resulting from the unconscionable conduct. (Rather than burden the text at this point with lengthy citations from the reasons in Waltons from which I have drawn these propositions, I have set out the references in a schedule at
the end.)”
26 The essence, therefore, is concerned with creation of an assumption that legal relations will be entered into, which assumption is relied upon by the plaintiff in circumstances making departure from it by the defendant unconscionable.
27 In the present case, the standard form of application clubs aspiring to inclusion in the new division 1 competition were invited to submit to Soccer NSW contained a relevant statement by the applicant club. It says:
- “In lodging this application the club has not relied upon any representations made by Soccer NSW in the new competition business plan and has made its own interpretations and conclusions.”
This obviously militates strongly against any finding of reliance – added to which the whole context was one in which an application was being made for consideration as part of a process that clearly involved discretion on the part of Soccer NSW.
28 It is not possible to find relevant reliance with any clarity. Nor is it possible to find in any clear way that St George or Bonnyrigg has acted to its detriment in reliance upon anything Soccer NSW said. Each has made its application and thereby taken its chance. That cannot be said in any clear way to involve detriment. There is accordingly at the very best an extremely weak case on the estoppel aspect.
29 The final aspect of the plaintiff's case turns on the proposition that, in selecting the 10 clubs for the new competition, Soccer NSW did not properly, fairly and consistently apply the criteria it had itself published. The nature of the legal wrong asserted in this branch of the case is not explicitly stated. It seems likely that the allegation would be that there was what has been called a “process contract” or a “pre-award contract”, that is, the kind of contract that can arise where tenders are called and the party calling them is seen to come under contractual obligations to responders to proceed according to the process spelled out in the tender invitation. The implications of contracts of this kind were considered by Finn J in Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151. His Honour decided in that case that the invitation to tender and an invitee's response by way of submission of a tender gave rise to a contract an implied term of which was that the invitor was bound to exhibit fair dealing in the conduct of the tender process.
30 The alternative possibility for which the defendant would contend is that, as in Forbes v Australian Yachting Federation Inc (1996) 131 FLR 241 and Council of the City of Botany Bay v Soccer NSW [2004] NSWSC 1262, there simply was no creation of legal relationships and no intention to create them when applications were invited.
31 There is, in my view, a question to be tried as to whether, in the particular case, the invitation by Soccer NSW to submit applications for participation in the 2006 division 1 competition gave rise to a contract between Soccer NSW and each club which responded to the invitation by submitting an application including, of course, St George and Bonnyrigg. Assuming that such a contract of the process contract or pre-award contract kind did come into existence, there is then the question whether there was a breach.
32 St George and Bonnyrigg say that they have reason to infer that Soccer NSW did not apply the admission criteria properly, fairly and consistently. That seems to presuppose the implication of a term of the kind Finn J found to be implied in the Hughes Aircraft case. The points of claim refer to three matters, leaving aside the complaint that Soccer NSW has refused to release any documents disclosing the basis on which the decision about which clubs were to participate was made. First, it is said that, if the criteria had been applied fairly and consistently, both St George and Bonnyrigg should have been admitted. That of itself does not point to any particular alleged departure from the criteria. Secondly, it is said that some of the selected clubs were inferior to St George and Bonnyrigg in terms of the selection criteria. The only matter specifically mentioned at the hearing that might bear on this is the strong performances of the St George and Bonnyrigg teams, the latter in particular, in the 2005 competition. But playing quality, of course, is only one of many criteria identified by Soccer NSW as relevant to its decision. The third matter alleged is that the decision excluding St George and Bonnyrigg was contrary to representations made by the president and other representatives of Soccer NSW to representatives of St George and Bonnyrigg before the decision was made. This I must confess is something that I cannot see as having any relevance to the question whether the stated criteria were fairly and consistently applied.
33 An important point here is that the discretionary nature of the decision-making process and the importance of a mix of criteria were emphasised in the documents associated with the request for applications. Playing quality alone was clearly insufficient to satisfy the criteria. Importance was attached to geographic factors, business plan, ground quality and other matters.
34 In my assessment, the case the plaintiffs seek to advance on the basis of non-adherence to stated criteria is a weak case, even if they successfully negotiate the hurdle of establishing that the invitation to apply to division 1 participation and an individual response to it gave rise to a contract analogous to that in the Hughes Aircraft case.
35 I turn now to the balance of convenience, observing as I do so that all the questions to be tried, as I have said, are quite weak. That is relevant to the approach to the balance of convenience.
36 The contention of St George and Bonnyrigg is that, unless Soccer NSW is restrained pending trial from giving effect to its decision as to the configuration of the 2006 competition, each of them will suffer prejudice by reason of its players and coaches leaving it to play with other clubs, or at least that there is a distinct likelihood that that will happen. There is evidence of players and at least one coach having been approached by other clubs. In the specific instances referred to in the affidavits, the responses were generally to the effect that the persons concerned would wait and see what happened with the club's attempt to be reinstated to the competition. The plaintiffs note that movements from one club to another are recognised formally by a system of registration: hence the feature of the interlocutory orders that seeks to prevent such registrations by Soccer NSW.
37 Soccer NSW as defendant refers to a number of matters relevant to the balance of convenience. First, there is evidence that negotiations are in train for sponsorship, advertising and televising of the 2006 competition. There is an apprehension that interlocutory orders would interfere with this and could cause substantial commercial and financial loss. Second, the defendant questions the value of an undertaking as to damages given by either of the plaintiffs, pointing to the most recent balance sheet of each plaintiff in the possession of the defendant. Third, the defendant says that the potentially adverse impact of the interlocutory orders on the 10 clubs that have been selected to participate is something to be taken into account, they not having been joined as parties by the defendants and therefore having had no opportunity to be heard.
38 The hardship to which the plaintiffs point is not, it seems to me, something that is likely to be alleviated to any great extent if at all by the grant of interlocutory relief sought. Uncertainty about the configuration of the 2006 competition and the inclusion or non-inclusion of St George and Bonnyrigg will exist until these proceedings reach a final hearing and are finally determined. Whether or not Soccer NSW is restrained pending trial from giving effect to its decision regarding the new competition and from registering players, coaches and officials for it, individuals will make plans for their futures based on what they know – basically, that the new competition is to involve 10 clubs, among which St George and Bonnyrigg are not included, unless, in due course, those two clubs succeed in their legal moves to compel some other configuration which includes them.
39 There will thus be a situation of uncertainty pending the trial and the determination of the substantive proceedings in which some individuals may decide to wait and see and others may be prepared to predict or assume a particular outcome and tailor their actions accordingly, either by staying where they are, confident that that will best serve their interests, or by moving elsewhere (or at least making plans to do so) because they see a more certain future there. No interlocutory order is going to change those patterns of behaviour. That is because the interlocutory order of its nature provides no measure of the certainty on the basis of which individuals would obviously prefer to plan and act.
40 For this reason I cannot regard as at all compelling the contentions of St George and Bonnyrigg as to the hardship they will suffer if there is no interlocutory relief. The same is in a general sense true of the defendant's contention based on interference with negotiations for advertising, sponsorship and televising. The other parties to those proposed arrangements will be influenced in the final analysis by the ultimate decision about the competition's configuration, whether or not there are interim orders. Until the matter proceeds to a final hearing and is finally determined, the uncertainty that besets players, coaches and officials besets also the commercial parties with which Soccer NSW is conducting negotiations.
41 There is, however, substance in the submissions made on behalf of the defendant as to the adequacy of an undertaking as to damages given by either St George or Bonnyrigg. I do not intend to go into detail. The balance sheets of the two clubs are in evidence, or at least the most recent balance sheets in the possession of Soccer NSW are in evidence. It is fair to say (and this is no criticism, bearing in mind that we are dealing here with sporting organisations which no doubt depend heavily on the efforts of voluntary workers) that neither club is of any significant financial substance and that inability to honour an undertaking would be quite likely, particularly if the undertaking came to apply to damages for commercial losses of the kind Soccer NSW apprehends.
42 While the matter I have just mentioned goes some way towards favouring the defendant on the balance of convenience, the final matter on which the defendant relies points strongly in that direction. If the interlocutory orders are made, there could well be adverse consequences for third parties in the form of the 10 clubs that have been selected for the new competition. They will be inhibited in their preparations for the new season and this will be in circumstances where they are not parties and have had no opportunity to be heard. They may well have legal rights against the defendant, Soccer NSW, flowing from its decision about the configuration of the new competition and the choice of the 10 participants. The interlocutory restraints St George and Bonnyrigg seek could put Soccer NSW in a position where it was forced to act inconsistently with the rights of the 10 selected clubs to the detriment of one or more of the 10.
43 That is a consideration relevant to the balance of convenience. I refer in that connection to what was said by members of the High Court in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 at pp.41-42:
- “ In applications to grant interlocutory injunctions, the court is concerned to examine and in appropriate cases to protect, pending the trial, the moving party's right to relief against that party's opponent. But the rights of plaintiff and defendant are not the only rights considered in determining where the balance of convenience lies. In Wood v Sutcliffe (1851) 2 Sim (NS) 163 at 165-166 Sir Richard Kindersley V-C said:
- ‘[W]henever a Court of Equity is asked for an injunction in cases of such a nature as this, it must have regard not only to the dry strict rights of the Plaintiff and Defendant, but also to the surrounding circumstances, to the rights or interests of other persons which may be more or less involved: it must, I say, have regard to those circumstances before it exercises its jurisdiction (which is unquestionably a strong one), of granting an injunction.’
- ‘Courts of equity will not ordinarily and without special necessity interfere by injunction where the injunction will have the effect of very materially injuring the rights of third persons not before the court.’
- ‘the interests of the public and of third persons are relevant and have more or less weight according to the other material circumstances. So it has been said that courts of equity “upon principle, will not ordinarily and without special necessity interfere by injunction, where the injunction will have the effect of very materially injuring the rights of third persons not before the courts”. Regard must be had “not only to the dry strict rights of the plaintiff and the defendant, but also the surrounding circumstances, to the rights or interests of other persons which may be more or less involved”. So it is that where the plaintiff has prima facie a right to specific relief, the court will, in accordance with these principles, weigh the disadvantage or hardship that he would suffer if relief were refused against any hardship or disadvantage that might be caused to third persons or to the public generally if relief were granted, even though these latter considerations are only rarely found to be decisive. (Conversely, detriment that might be caused to third persons or to the public generally if an injunction were refused is taken into account.)’”
44 The inherent weakness of the plaintiff's case, coupled with the balance of convenience factors which, on balance, favour the defendant, means that the discretion of the court should be exercised against the grant of the interlocutory relief which, as I have said, would not, in any event, secure any measure of interim protection for the plaintiffs.
45 The interlocutory application will therefore be dismissed but, acknowledging as I do the aspects of urgency that clearly exist, I will, if asked, direct that the proceedings be placed in the expedition list this Friday, 28 October, so that application can be made for an early hearing.
[Mr Roberts SC made such an application on behalf of the plaintiffs.]
46 I order that the proceedings be placed in the expedition list on Friday 28 October so that an application can be made for an early hearing.
[Counsel addressed on costs]
47 The defendant seeks a costs order. There is no reason why the ordinary rule should not apply so that costs follow the event. The interlocutory application is therefore not only dismissed but dismissed with costs.
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