Taekwondo Australia Ltd v TKD Sports Taekwondo Australia Incorporated
[2010] FCA 1492
•16 December 2010
FEDERAL COURT OF AUSTRALIA
Taekwondo Australia Ltd v TKD Sports Taekwondo Australia Incorporated [2010] FCA 1492
Citation: Taekwondo Australia Ltd v TKD Sports Taekwondo Australia Incorporated [2010] FCA 1492 Parties: TAEKWONDO AUSTRALIA LTD (ACN 139 237 522) v TKD SPORTS TAEKWONDO AUSTRALIA INCORPORATED (ABN 61 535 890 915), JOHN KOTSIFAS and STUART LEE File number: SAD 171 of 2010 Judge: LANDER J Date of judgment: 16 December 2010 Catchwords: PRACTICE AND PROCEDURE – interlocutory injunction – whether there is a serious question to be tried – whether the balance of convenience favours the granting of an injunction Cases cited: American Cyanamid Co-Ethicon Ltd [1975] AC 396 not followed
Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 followed
Beecham Group v Bristol Laboratories (1968) 118 CLR 618 followedDate of hearing: 16 December 2010 Place: Adelaide Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 32 Counsel for the Applicant: Mr S Walsh Solicitor for the Applicant: Griffins Lawyers Counsel for the Respondents: Mr G Harris Solicitor for the Respondents: Lander & Rogers Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 171 of 2010
BETWEEN: TAEKWONDO AUSTRALIA LTD (ACN 139 237 522)
ApplicantAND: TKD SPORTS TAEKWONDO AUSTRALIA INCORPORATED (ABN 61 535 890 915)
First RespondentJOHN KOTSIFAS
Second RespondentSTUART LEE
Third Respondent
JUDGE:
LANDER J
DATE OF ORDER:
16 DECEMBER 2010
WHERE MADE:
ADELAIDE
THE COURT ORDERS THAT:
1.The application be dismissed.
2.The applicant to pay the respondents’ costs of the application for the interlocutory injunction.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
SAD 171 of 2010
BETWEEN: TAEKWONDO AUSTRALIA LTD (ACN 139 237 522)
ApplicantAND: TKD SPORTS TAEKWONDO AUSTRALIA INCORPORATED (ABN 61 535 890 915)
First RespondentJOHN KOTSIFAS
Second RespondentSTUART LEE
Third Respondent
JUDGE:
LANDER J
DATE:
16 DECEMBER 2010
PLACE:
ADELAIDE
REASONS FOR JUDGMENT
The International Olympic Committee (IOC) is an international non-governmental not-for-profit organisation which has the mission, role and responsibilities assigned to it by the Olympic Charter. Essentially, its responsibilities are to conduct Olympic Games and to promote sport. In order to develop and promote the Olympic movement, the Committee is entitled to recognise international federations which are non-governmental organisations administering sports at world level and encompassing organisations administering such sports at a national level. Its obligations are recognised in clause 26 of the Olympic Charter.
It has recognised the World Taekwondo Federation as the international federation administering the sport of Taekwondo. International federations which are recognised by the IOC have the obligation of establishing their criteria for eligibility for the competition to the Olympic Games in conformity with the Olympic Charter and to submit those criteria to the IOC for approval. A person’s eligibility to participate in the Olympic Games is provided for in the Olympic Charter. Under clause 41 of the Olympic Charter that person must comply with the Olympic Charter as well as with the rules of the appropriate international federation as approved by the IOC.
Thus it is that a person who is to participate in the Olympic Games must conform with the rules of the international federation; in the case of the sport of Taekwondo the World Taekwondo Federation rules.
Each country and each self-governing territory is entitled to form a National Olympic Committee which has the responsibility of administering the delegated functions given by the Olympic Charter in the particular country. In the case of Australia, the National Olympic Committee is the Australian Olympic Committee (AOC).
Invitations to take part in the Olympic Games are sent out by the IOC to all National Olympic Committees one year before the Opening Ceremony. Clause 45.3 of the Olympic Charter provides:
An NOC shall only enter competitors upon the recommendations for entries given by national federations. If the NOC approves thereof, it shall transmit such entries to the OCOG (Organising Committee of the Olympic Games).
The Olympic Charter recognises, in the by-law to rule 46, the World Taekwondo Federation (WTF) as the International Federation. Thus the circumstances, so far as it concerns Australia at the moment, is that the AOC has the obligations imposed on it by the Olympic Charter. The WTF is the International Federation recognised by the Committee as the federation controlling the sport of Taekwondo throughout the world. As I have said, the mission of the AOC as the National Olympic Committee is to develop, promote and protect the Olympic movement in Australia in accordance with the Olympic Charter.
The AOC has, pursuant to clause 28 of the Olympic Charter, the exclusive authority for the representation of Australia at the Olympic Games and at the regional, continental, or world multi-sports competition patronised by the IOC. The AOC, like all national Olympic Committees, must include as members all national federations affiliated to the International Federations governing sports included in the program of the Olympic Games or their representatives. The WTF recognises the respondent to these proceedings as its representative in Australia.
It is only the international federations which can recognise the national federations and, as I have said, the WTF has exercised that power by recognising the respondent as the appropriate representative for the sport of Taekwondo in Australia. Ordinarily, the recognised body of the international federation would become affiliated, as the Olympic Charter suggests, with the National Organising Committee; that is, in Australia the AOC. In Australia, however, that has not occurred. The AOC continues to recognise the applicant as the body recognising the sport of Taekwondo in Australia rather than the respondent.
The end result of the AOC’s decision to recognise the applicant and WTF’s decision to recognise the respondent is to create a stalemate. That is because there is not a common representative of the sport recognised by the two bodies who have the responsibility for that recognition. Whilst that stalemate continues, it will not be possible for an Australian athlete in the sport of Taekwondo to compete at an Olympic Games because the international federation (WTF), which has the responsibility of certifying and nominating the athlete, in this case, is not recognised by the body (AOC) which has responsibility of nominating that athlete to the IOC.
The continued stalemate must be resolved for the good of the sport and for the good of the elite athletes in the sport. Very recently, the AOC has written to the parties advising that unless the applicant challenges the respondent’s membership of the WTF within 28 days, the AOC will consider the respondent’s application to be recognised as the national federation. If the AOC recognises the respondent as the national federation, then the stalemate will be brought to an end.
It is in those circumstances that this application is to be understood.
This is an application by the applicant for an interlocutory injunction to restrain the respondents from publishing any material making any representation to members of the public to the effect that the first respondent (STA) has the ability, right or power to conduct selection and/or qualification tournaments or events for Taekwondo athletes for the 2012 games, and from publishing any material or making any representation to members of the public to the effect that STA may nominate Taekwondo athletes for or that the first respondent can offer a pathway for qualification for Taekwondo athletes to the 2012 Olympic Games.
The statement of claim, which has been filed in support of the application for final relief, refers to a number of representations said to have been made by the respondent over a period of time commencing in November 2009 in relation to a representation which was made in relation to the Youth Olympic Games. The statement of claim pleads that from about June 2010 the first respondent through the agency of the second respondent sent emails to various head instructors of Taekwondo clubs throughout Australia which attracted a comparison of STA’s and Taekwondo Australia’s certificate fees. It claims that those representations were false.
It then claims that from July 2010 the first and second respondents published on STA’s website a newsletter, dated July 2010, which said that the World Taekwondo Federation has recognised STA, that STA is the national member association for Australia, and that STA is the only recognised Taekwondo organisation in Australia and the only organisation able to offer a pathway for athletes to qualify for the 2012 Olympic Games. The applicants complain that representations that the STA is able to offer a pathway for athletes to qualify for the 2012 Olympic Games have been made since that time and that those representations are false and constitute misleading and deceptive conduct which constitutes a contravention of s 52 of the Trade Practices Act 1974 (Cth).
The applicant also complains about a flyer which has been published by the STA in which the STA has stated:
2012 OLYMPIC QUALIFICATION SELECTION PROCESS
EVENT 1B TOURNAMENT
THIS IS THE SECOND EVENT OF THE OLYMPIC QUALIFICATION SELECTION PROCESS AND AUSTRALIAN TEAM SELECTION FOR THE WTF WORLD CHAMPIONSHIPS (KOREA – MAY 2011)The applicant claims that statement also amounts to misleading and deceptive conduct on the part of the respondents. Essentially, the applicant’s case is that the respondents’ misleading and deceptive conduct arises by reason of the STA asserting that it can provide a pathway for athletes to the Olympic Games. The applicant asserts that that is not the case; that in the end the only athletes who will be eligible to compete at the Olympic Games and, in particular, the London games, are those who will be nominated by the AOC; and the AOC, as presently constituted, would not nominate an athlete which has been nominated by the STA because the STA is not the recognised national federation in Australia.
STA, on the other hand, claims that its representations do not constitute claims that individual athletes will become eligible to participate in the Olympic Games or that, in fact, even that they would be nominated to participate in the Olympic Games. It states that it is merely offering a pathway, being the opportunity to compete in the tournaments run by the STA between now and the end of 2011. STA contends, and I think there is no dispute about this fact, that there are to be two further tournaments to be conducted by the WTF of which the respondent is undoubtedly a member, and that athletes must compete in those two tournaments to have any prospect of being able to compete at the Olympic Games.
Athletes who compete at those tournaments, if they finish at the appropriate level, will become eligible to be nominated to participate in the Olympic Games and may make a position available to Australia generally to compete at the Olympic Games. At the very most, only four positions will be available to Australia for participation in the Olympic Games and they will be made up of two men and two women in various weight divisions. STA recognises that eventually it will be for the AOC to recommend whether the persons who have become eligible by reason of their success in the competition are to represent Australia at the Olympic Games.
It however argues that it does provide a pathway to the Olympic Games in that it offers the tournaments which are the only way that any athlete in Australia can become eligible to compete in the Olympic Games.
The test for the granting of an interlocutory injunction is now well settled. In Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, Gummow and Hayne JJ said:
In all applications for an interlocutory injunction, a court would ask whether the plaintiff has shown that there is a serious question to be tried as to the plaintiff’s entitlement to relief, has shown that the plaintiff is likely to suffer injury for which damages will not be an adequate remedy, and has shown that the balance of convenience favours the granting of an injunction.
Justices Gummow and Hayne identified the test of a serious question to be tried which was stated in Beecham Group v Bristol Laboratories (1968) 118 CLR 618. In that case, at 622-23, the High Court identified a two-part test to decide whether to grant an injunction. The first limb is whether the plaintiff has made out a “prima facie case, in the sense that if the evidence were to remain as it is there is a probability that at the trial of the action the plaintiff will be entitled to relief ... Second, whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted”. The Court notes that as part of the second limb consideration must be given to circumstances which would make it unjust to grant an injunction, especially if another form of relief is possible. That test should be followed in preference to the test which was stated by the House of Lords in the American Cyanamid case: American Cyanamid Co-Ethicon Ltd [1975] AC 396. On this application I must consider whether there is a serious question to be tried, whether damages would be an adequate remedy and whether the balance of convenience favours the granting of an injunction.
I will say little about the first matter because this is a proceeding in my docket and eventually I will have to decide whether or not the representations do amount to misleading and deceptive conduct. Instead I will assume for the purpose of these reasons that a serious question to be tried has been made out by the plaintiff which would satisfy the test in Beecham Group v Bristol Laboratories 118 CLR 618 as explained in Australia Broadcasting Corporation v O’Neill 227 CLR 57. However, in my opinion, even if a serious question to be tried has been made out, the applicant has failed to satisfy the other two limbs.
The number of athletes at most who can compete in the Olympic Games are four. There are, no doubt, a number of athletes who would see themselves as competing at the elite level. However, any representations of the kind which are said to be misrepresentations are directed to a very small audience. In the end result, probably only four. Mr Gradisar, who is the chief executive officer of the applicant in his affidavit sworn yesterday, said the number may be as high as 250 to 300. Assuming his evidence to be correct, there are only 250 to 300 athletes within the applicant who would put themselves in the elite category.
The representations about which the applicant complains must, therefore, be considered in the light of the audience. The audience is small but it is a well informed audience. Persons who hope to become eligible to participate in the Olympic Games and compete in the Olympic Games must, it seems to me, have an idea of how they become eligible. They would know, it seems to me, that they must be endorsed by the national federation of WTF, which is in this case the respondent STA, and they would know that in due course their nomination will depend upon the AOC. Having regard to the amount of publicity in relation to this case, they would presently know that none of them will be able to participate in the Olympic Games but, in my opinion, the audience is small and well informed.
In those circumstances that is a reason, in my opinion, why the balance of convenience does not favour the grant of an injunction.
The applicant also has not shown that damages would not be an adequate remedy.
Because the audience is so small and the damage which is likely to be suffered so little, it cannot be said that damages would not be an adequate remedy. I am told that the STA charges its athlete members $28 for their membership of its organisation. I know on the evidence that many athletes are members of both organisations. I can infer that the membership of the applicant would cost not much more than the membership of the respondent.
Say membership of the applicant is a cost of $40, the damages which would be suffered by the applicant if 200 to 250 in the elite category all gave up their membership in the applicant at the same time would be in the order of $10,000.
In my opinion it is important that any athlete who wishes to participate eventually in the Olympic Games has the opportunity of doing so. An injunction of the kind which is being propounded by the applicants may stifle that opportunity. I think, therefore, that the applicant fails at both the damages level and at the balance of convenience level. For those reasons I indicated earlier today, the application should be dismissed.
After I indicated that the application would be dismissed, Mr Walsh QC brought to my attention an undertaking which had been offered by STA to the applicant in relation to one matter which has not been debated at this hearing and the respondent’s counsel gave that undertaking to the Court.
However, in the end result this is a matter which I do not think calls for an interlocutory injunction. The application is dismissed.
The applicant should pay the respondents’ costs of the application for the interlocutory injunction.
I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. Associate:
Dated: 14 January 2011
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