Team Dynamik Pty Ltd v Confederation of Australian Motor Sports Ltd
[2004] VSC 363
•9 September 2004
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
No. 7990 of 2004
| TEAM DYNAMIK PTY LTD | Plaintiff |
| v | |
| CONFEDERATION OF AUSTRALIAN MOTOR SPORTS LTD & OTHERS | Defendants |
---
JUDGE: | Cummins J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 8 September 2004 | |
DATE OF JUDGMENT: | 9 September 2004 | |
CASE MAY BE CITED AS: | Team Dynamik Pty Ltd v C.A.M.S. & Ors | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 363 | |
---
Domestic tribunals – associations and clubs – natural justice – restraint of trade - ouster of legal practitioners – interlocutory relief refused.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | J. Middleton QC D. Dealehr N. Russell | John K. Reinehr |
| For the Defendants | Mr C. Blanden | Allens Arthur Robinson |
HIS HONOUR:
The town of Woomera lies 500 kilometres north-west of Adelaide in the middle of desert country. "Woomera" means spear-launcher. It is a prohibited area under Regulation 35 Defence Force Regulations 1952 made pursuant to the Defence Act 1903. Eight kilometres from the town centre is the Woomera runway and associated roads and facilities.
The 500 kilometres from Adelaide and the eight kilometres to the Woomera runway amply fulfil Robert Frost's description of the road less travelled. It was this road that, the first defendant says, the plaintiff took with one of its vehicles for the purpose of clandestine and illegal testing of one its cars. The vehicle was unmarked and unidentified.
On Saturday 21 August 2004 at 9.15 a.m. the following event occurred, in the words of the Technical Director and Team Manager of the plaintiff:
"The second stage product testing was conducted by me at the Woomera facility on 20 and 21 August 204. On 21 August 2004, to my surprise, I was tapped on the shoulder by Mr Tony Manson, an AVESCO official, demanding that I hand over to him the electronic control unit, ECU, fitted to TD003. Tony then inspected and took a number of photographs of TD003. I was quite shocked at his presence, as I believed the Woomera facility to be a secure environment where unauthorised entry was not permitted. Because of the sensitivity of the intellectual property concerned I was loath to engage in any discussion with Tony Manson other than to tell him TD003 was not registered. I was also very concerned that the integrity of the product test was compromised by what I saw as a security breach, and the test might be misconstrued by Manson, which it was. Tony Manson did not ask what we were doing, and he made no inquiries of what the test was about".
The first defendant has a matrix of rules for the fair and sports-like competition in V8 Supercars, a pivotal element of which is strictly limited and supervised testing of vehicles. The first defendant says that the plaintiff was acting in breach of those rules on Friday 20 and Saturday 21 August 2004 at the remote location, and has charged the plaintiff accordingly.
The breaches are in layperson's terms stated in the Notice to Attend Inquiry, Exhibit BRA6 to the affidavit of Mr B.R. Alexander of 8 September 2004. The notice dated 2 September 2004 to Team Dynamik Pty Ltd states:
"You are required to attend an inquiry at Round 9 of the V8 Supercar Championships Series at Sandown Motor Raceway on Thursday 9 September 2004 at 1000 hours. … The inquiry is in respect of a Report received from Mr Kelvin O'Reilly, General Manager of TEGA Pty Ltd and Mr Wayne Cattach, Chief Executive Officer of AVESCO Pty Ltd, alleging Team Dynamik failed to comply with the AVESCO Operations Manual Rules (see attached)."
The alleged breaches are attached to the Notice dated 31 August 2004, being a report to the Stewards of the V8 Supercar stewards from Mr O'Reilly and Mr Cattish and in relevant part state as follows:
"Team Dynamik are reported to the Stewards for having committed various breaches of the AVESCO Regulations Manual as detailed herein by conducting an illegal test activity using a V8 Supercar on Friday 20 August and Saturday 21 August 2004 at the Woomera Rocket Range in South Australia. The primary identified breach occurred at approximately 0945 on 21 August and was directly observed by the AVESCO Operations Manager, Mr Tony Manson."
Then various alleged breaches are there set forth, the general allegation being that:
"Team Dynamik has … tested a car in contravention of the provisions of (the Rules) and, in so doing, has breached significant and fundamental rules of both a technical and sporting nature as detailed herein."
The allegations include the following: that on 20 and 21 August 2004 Team Dynamik conducted an illegal testing activity by starting and driving a V8 Supercar identified on the proving range at the Woomera Rocket Range; conducting such testing activity with the express intention of gaining information and data for analysis for its own use that could assist it with the preparation of a V8 Supercar at a race or races some time in the future; that Team Dynamik conducted a test of a V8 Supercar at a test track other than the test track as nominated by Team Dynamik on the 2004 Entry Registration Form, the nominated test track for Team Dynamik being Mallala Motorsport Park; that Team Dynamik conducted a test at a test track that does not hold a CAMS track licence; that Team Dynamik did not complete accurately and fully its TEGA log of the activities at Woomera on 20 and 21 August 2004; that Team Dynamik used Dunlop Control Tyres on a V8 Supercar for which it had not advised TEGA; that the car was being tested with more than the specified number and types of sensors permitted to be used on the car at any time; that "Team Dynamik knowingly and wilfully and with intent breached (the Rules) ... in an attempt to gain a competitive advantage and to gain additional data derived from testing activities without the utilisation of the allocated quota of its test days."
The allegations continue:
"TEGA and AVESCO allege that these breaches were not inadvertent, but that they were intentional, wilful and covert in nature. The testing activities were conducted over a two-day period, at a time when Team Dynamik would have expected that TEGA's technical staff and AVESCO's operation staff would be fully occupied with the conduct of the final round of the Konica Minolta Series at the Mallala Circuit."
The Notice of breach concludes as follows:
"Team Dynamik:
· Drove over six hours north of Adelaide to a sporadically used rocket and proving range in the middle of the desert to conduct a test activity over a two-day period;
· Disguised their transporter by placing white vinyl over all the identifying team and sponsor marks featured on the transporter;
· Removed all external identifying marks on the car;
· Covered up the roll cage identification number that ties the car back to the CAMS log book, and hence ownership of the car to the team;
· When questioned at the site of the testing activity, claimed no knowledge of the existence of the critical identifying marks on the car, and stated that the car was unregistered;
· Installed an extensive range of illegal sensors on the car, including additional wheel/tyre sensors and a pilot tube which was clearly intended to gain additional aerodynamic data for the use of the team."
The Notice concludes:
"In support of the above, TEGA and AVESCO intends to:
· Call upon Mr Tony Mansen, AVESCO operations manager, to supply an eye witness account and testimony of the breach;
· Supply analysis by Mr Carl Jacobs of the data stored in the TEGA ECU, confiscated from the car at the test;
· Tender various photographic evidence taken at the site of the test of the activities being conducted; and
· Tender various photographic evidence taken at the test of the non-compliance of the V8 Supercar with the technical and control tyre regulations and category."
As I say, that Notice to Attend was provided to the plaintiff by the first defendant on 2 September 2004, for hearing to commence today, Thursday 9 September at 10 a.m. The second, third and fourth defendants are stewards, the second defendant being the Chief Steward V8 Supercars.
The plaintiff says it was not doing prohibited testing at all. The plaintiff says rather testing was being independently conducted by its technical director and team manager of a riblet surface coat product to reduce surface friction on cars for potential commercial exploitation in the marketplace. To that end, numerous exhibits were tendered with the affidavit of Mr Oscar Fioronotto, technical director and team manager, sworn 8 September 2004. I have examined all those exhibits overnight. Mr Kieran Wills, director of the plaintiff company, by affidavit sworn 8 September 2004 says likewise, calling the work development of a "revolutionary aero-dynamic surface friction reduction coating for vehicles, based on NASA technology" (paragraph 10 of his affidavit.) Reliance is placed on the exhibits to his affidavit, including KW6, a letter from Mr Wills to Mr Fioronotto of 18 August 2004 to that effect. Again, I have read all those exhibits overnight.
The essential chronology of the matter is this. On 20 and 21 August 2004 testing (for whatever purpose) occurred at Woomera. That was a Friday and a Saturday. On 31 August 2004 the Report which I have cited, alleging breaches, was provided by the officers to CAMS V8 Supercar Stewards. On 2 September the Executive Officer - Racing, by fax to the plaintiff, forwarded the Notice to Attend Inquiry, and the next day the same by letter, to be held at Sandown on 9 September. On 6 September the plaintiff's solicitors, by letter, sought an adjournment of the hearing. On 7 September the Chief Steward declined the adjournment. On 8 September process was issued in this Court by the plaintiff. I heard the matter yesterday afternoon in the Practice Court, along with a multitude of other matters, and this morning at 9 a.m. this judgment is being orally given.
By summons on originating motion both issued yesterday, an injunction is sought that the hearing of the Inquiry not proceed until 4 p.m. on 20 September 2004. Various other Orders are sought. Declarations are sought by the originating motion filed with the summons as to the various Rules, to which I shall shortly come, being first that the alleged misconduct specified in the Notice to Attend Inquiry is not a matter in respect of which an Inquiry may properly be held; that the various Rules constitute an unreasonable restraint of trade on the business of the plaintiff, are invalid, and have no effect against the plaintiff, and operate to deny natural justice to the plaintiff; and accordingly it is sought to have those Rules suspended in relation to the plaintiff until the hearing in this Court finally of the matter.
The first defendant, whom I shall call CAMS, has, as I have stated, a matrix of rules to govern the fair and sports-like conduct of V8 Supercar racing. The derivation of authority is as follows. Motor sport throughout the world is directed and conducted by the Federation de l'Automobile (FIA), which was founded in 1904 and enjoys consultative status with the United Nations. It delegates authority to make and enforce rules and regulations for the control of the motor sport to one member in each country. That authority is called the Sporting Power. A member delegated the Sporting Power is known as a National Sporting Authority, with the acronym ASN. The first defendant, CAMS, was founded as the Confederation of Australian Motor Sport in 1953, and incorporated as CAMS Limited in 1995. The name of the company was changed to the Confederation of Australian Motor Sport Limited in July 2000. It is a company limited by guarantee. CAMS is the national sporting authority entrusted with the Sporting Power in Australia. It was delegated that Power by the FIA in 1970. The delegation of the Sporting Power to CAMS was on condition that CAMS exercised the Sporting Power in the interests of international motor sport and in accordance with the FIA Statutes and Regulations. As the national sporting authority for Australia, CAMS is responsible for the enforcement of the FIA International Sporting Code. That code is exhibited as Exhibit 1 to the affidavit of Mr B.R. Alexander, Executive Officer - Motor Racing with CAMS, sworn 8 September 2004 in this matter.
Sections 7 to 13 of the CAMS 2003 Manual contain rules and regulations in respect of categories of automobile competition. In each category there are a number of groups of vehicles eligible to compete. Within racing category 7, group 3A is V8 Supercars. Responsibility for management of the V8 Supercar category has been delegated by CAMS pursuant to the NCR to the Australian Vee Eight Supercar Company Pty. Ltd. (AVESCO). Team Dynamik is the holder of two level-1 team licence arrangements entitling it to compete in the 2004 V8 Supercar Championship Series. It has two registered vehicles to participate in that Championship Series. By Clause 7.3 of the Agreement, the plaintiff agreed to comply with the AVESCO Rules.
AVESCO has developed the AVESCO Operations Manual which sets out Rules governing the administration and operation of V8 motor racing, including Judicial, Technical, Supporting and Operational Rules. I turn to the Rules. They are exhibited as Exhibit BRA to the affidavit of Mr Alexander to which I have referred.
Rule A 4.1.3 relevantly provides:
"Every person to whom these Rules apply … is deemed to have … agreed that they will not become party to any suit at law or equity against the FIA or AVESCO ... until all remedies allowed by these Rules ... have been exhausted, save with the prior written permission of the FIA, the relevant ASN or AVESCO or TEGA as the case may be."
Division B of the Rules is what are termed the "Judicial Rules". Rule B 1.5.4, headed "Representation", provides:
"Other than a Steward duly appointed to a Meeting, at any inquiry a person attending: … will not be entitled to be, be assisted, have present or be represented at any Inquiry in any circumstances by a person who is, or was, a legal practitioner nor will they be permitted to read from or present any submission prepared by a person who is, or was, a legal practitioner."
Rule B 2.6.2 provides:
"To the extent that the rules of natural justice require that a person be given adequate notice or sufficient time to prepare for any Inquiry, those requirements are expressly excluded."
Rule B 2.3, headed "Impartiality", provides:
"The Stewards will conduct all Inquiries and make all decisions in good faith and in an unbiased manner."
Rule B 3.7 provides:
"No person or entity is permitted to comment to any other person or entity on the proceedings of, or any evidence or information given to, any Inquiry until such Inquiry is completed and the decision of the Stewards has been released."
Provision by Rule B 5 is made for appeal from a decision of the Stewards. Rule B 5.4.1 provides:
"Subject to rule B 5.4.2, an appellant ... is not permitted to have or to have been a legal practitioner."
Rule B 5.4.2 provides:
"In its absolute discretion, the Chair of the Court may permit representation of an appellant by an advocate where undue hardship would, in the opinion of the Chair, result from personal representation alone."
Rule B 5.4.4 provides:
"The right to an advocate does not mean the right to legal representation or assistance in any circumstances, and any advocate permitted pursuant to Rule B 5.4.2 or person providing assistance to the appellant must not be, nor have been, a registered legal practitioner."
Rule B 6.3.2 provides:
"Unless otherwise specified, the Stewards will only have jurisdiction to conduct an Inquiry into an alleged breach of these Rules if the act or omission constituted in the alleged breach … arose at, out of, or has any connection with, a Meeting or other V8 Supercar activity."
In extensive submissions, Mr Middleton QC, leading Mr Dealehr and Mr Russell, has submitted that the Rules both individually and by their matrix constitute unlawful rules in that they are a restraint of trade, deny natural justice and are unfair, and ought properly found the temporary relief that is presently sought: that is to say, the injunction to be issued pending final hearing by this Court of the matter at a later date. Mr Middleton in particular focused upon the exclusion of lawyers from the Inquiry and the exclusion of legal assistance from the Inquiry.
Mr Middleton commenced as a threshold criterion with Rule B 6.3.2 and submitted that the matter purportedly to be heard at Sandown this morning does not come with Rule B 6.3.2; namely, that it "arose out of, or has any connection with, a meeting or other V8 Supercar activity." If the first defendant's allegations are correct, I see no validity in Mr Middleton's submission, because it is the contention of the first defendant that testing was occurring at Woomera in order to give the plaintiff an unfair advantage in V8 Supercar racing contrary to the Rules. That plainly comes within Rule B 6.3.2. (I have already noted that the plaintiff says the testing in Woomera was nothing to do with the V8 Supercar racing but was for an extraneous and unrelated commercial purpose to do with the marketplace).
Mr Middleton further submitted that it was draconian to prohibit, as does Rule B 3.7, comment to any person until an Inquiry is completed.
Mr Middleton focused essentially upon the exclusion of lawyers and restraint of trade and said that in matters such as this involving matters of significant complexity, seriousness, commercial significance and with large sums invested and to be made and lost the Court ought to intervene because of the breaches of fundamental principle which he submitted were enshrined in the Rules.
The most useful statement of basal principle, with respect, I consider is contained in Australian Football League and Ors v Carlton Football Club and Anor (1998) 2 VR 546, particularly at 549-550. At 549 Tadgell J.A. said in relation to the exclusion of lawyers, and natural justice:
"The reason for the courts' declining to interfere in cases such as these have been various. For one thing, where the parties have agreed to have their disputes decided by domestic tribunals designated for the purpose, the courts have been in the habit of respecting the agreement or, one might say, not countenancing a breach of it by one party wishing to desert it and to resort to the civil courts for resolution of a dispute that the tribunal was designed to decide. For another thing, the courts have been prepared to recognise that there are some kinds of dispute that are much better decided by non-lawyers or people who have a special knowledge of or expertise in the matters giving rise to the dispute than a lawyer is likely to have. Again, the courts have been willing to understand that not every aspect of community life is conducted under the auspices of the State, that it is right that this should be so, and that, sometimes, it is appropriate that State-appointed judges stay outside disputes of certain kinds which a private or domestic tribunal have been appointed to decide. The courts have not taken the view that a privately-funded, privately-managed organisation - even one with numerous adherents or devotees and enjoying widespread community popularity - is necessarily to be subject to control by the courts. That is certainly not to say that such an organisation may treat itself as above the law: it is merely to acknowledge that the courts will not discourage private organisations from ordering their own affairs within acceptable limits."
Mr Middleton relied upon a passage at 550 in which His Honour proceeds:
"If, for example, the effect of the decision is unreasonably in restraint of trade the courts could declare it invalid. ... If it is a decision that does not seem to be made in good faith, or to be the product of bias or other dishonesty, or not to be made in accordance with the principles of natural justice, the courts will upset it; and the basis for doing so in these several circumstances has been variously expressed."
The proceedings here are not wholly subject to the rules of natural justice (Rule B 2.6.2). However, Mr Blanden relied upon Rule B 2.3, "The Stewards will conduct all Inquiries and make all decisions in good faith and in an unbiased matter." Mr Blanden for the defendants relied in particular upon Webb v CAMS [2002] NSWSC 1075 (14 November 2002) in which Dunford J said in relevant part at paragraph 17:
"One of the objects of our legal system is to enforce the performance of contracts which people have freely entered into, not to encourage them to break such contracts, and it appears to be now well established that where a contract provides for a dispute to be resolved in a particular way or in a particular tribunal the Court will give effect to such decision unless there is good reason for not doing so. This is most commonly done by granting a stay of proceedings or an injunction to restrain defending proceedings."
His Honour then went on to cite MacKinnon L.J. in Racecourse Betting Control Board v Secretary for Air (1944) Ch 114 at 126. His Honour then stated at paragraph 19:
"Another relevant principle is that the courts are reluctant to interfere, save on a strictly limited basis, at the insistence of the parties affected by decisions of domestic tribunals to which there has been consensual submission, particularly sporting bodies."
Then, referring to Australian Football League v Carlton Football Club his Honour stated:
"This is particularly so where any internal processes have not been exhausted."
In my view the parties here have agreed voluntarily to the system which is proposed to be pursued. It is certainly premature for this Court to intervene. The proceedings have not even started. I do not know whether in half an hour's time at Sandown there will be an application for an adjournment, whether if there is it is justified and whether or not if it is made it would be granted. Certainly, in my view, the nature of the material before the tribunal at 10 a.m. comes within the description of Tadgell J.A. as a matter which is familiar to experts in the area, which experts would include the Stewards conducting the Inquiry and also the persons giving evidence, including the plaintiff, which is a knowledgeable corporation in the area of cars and motor sport.
Of course it is correct, as Mr Middleton has said, that these matters are serious, that they have commercial significance and cost, and that large sums are invested to be made and lost. However I see nothing in the context of the Rules or of this case which would warrant the Court interfering because lawyers are not permitted at this level. The parties seem to me to be entirely competent in the purview of the criterion laid down by Tadgell J.A. to understand, present, conduct and judge these proceedings. The arguments in favour of unfairness, restraint of trade and natural justice in my view do not prevail over the consensual agreement between the parties to follow this system of an holistic body of rules designed to ensure that legal technicalities are minimised and that the substance of the matter is dealt with by persons who know what they are talking about, which I am confident all these parties do. Significantly, the Rules require the Stewards to "conduct all Inquiries and make all decisions in good faith and in an unbiased manner" (Rule B 2.3, which is headed "Impartiality").
Accordingly, I am unsatisfied that injunctive relief ought issue. As I say, first, the matter is premature. Second, in any event I am unpersuaded on the criteria applicable to injunctive relief that the injunctive relief sought ought be granted.
Accordingly, I dismiss the summons. The original motion remains on the Court file for later pursuit by the plaintiff, should it wish to do so.
[Discussion as to costs]
HIS HONOUR: I direct that the costs of these proceedings of the defendants be paid by the plaintiff.
0
2
0