Ultra Management (Sports) Pty Ltd v Zibara - [2020] FCA 31

FEDERAL COURT OF AUSTRALIA
Ultra Management (Sports) Pty Ltd v Zibara [2020] FCA 31

File number(s): QUD 940 of 2018

Judge(s): GREENWOOD J

Date of judgment: 24 January 2020

Catchwords: EQUITY – consideration of the question of whether either or both of the two individual respondents engaged in conduct in breach of fiduciary obligations of loyalty and fidelity owed to the applicant – consideration of whether a remedy in the form of an account ought to be ordered as the expression of a claim for equitable compensation

Legislation: Corporations Act 2001 (Cth), ss 182, 183, 1317E, 1317H, 1324

Cases cited:
Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd [2018] HCA 43; (2018) 360 ALR 1

Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178

Gunasegaram v Blue Visions Management Pty Ltd; Blue Visions Management Pty Ltd v Chidiac [2018] NSWCA 179; (2018) 129 ACSR 265

Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544

Date of hearing: 1, 2, 3, 4 and 8 October 2019

Date of last submissions: 8 October 2019

Registry: Queensland

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: Commercial Contracts, Banking, Finance and Insurance

Category: Catchwords

Number of paragraphs: 208

Counsel for the Applicant: Mr R Perry QC and Mr I Erskine

Solicitor for the Applicant: Anthony Delaney Lawyers

Solicitor for the Respondents: Mr J M Ireland QC, McGirr Lawyers

ORDERS

QUD 940 of 2018

BETWEEN:
ULTRA MANAGEMENT (SPORTS) PTY LTD ACN 072 741 087

Applicant

AND:
ANTOUN COLIN ZIBARA

First Respondent

PATRICK THOMAS ANGELI

Second Respondent

GENESIS TALENT MANAGEMENT PTY LTD ACN 624 419 727

Third Respondent

JUDGE:

GREENWOOD J

DATE OF ORDER:

24 JANUARY 2020

THE COURT ORDERS THAT:
1.Judgment be entered for the applicant.
2.The applicant submit to the Court within 10 days a form of order for an account consistent with the reasons for judgment published today.
3.Costs are reserved.
4.Within two weeks, the parties are to put on written submissions in relation to the disposition of the costs of the proceeding.
5.The question of costs will be determined on the papers unless a party wishes to be heard orally on the question of costs of the proceeding.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
GREENWOOD J:

The essential question in issue in these proceedings is whether the first and second respondents (defendants) who were employees of the applicant (plaintiff) (and with particular relevance, employees of the applicant in the period from 20 June 2017 to December 2017), engaged in conduct constituting a breach of the duties of good faith and fidelity owed to the applicant and a breach of the duty owed to the applicant to avoid a conflict of interest and duty.
A preliminary question in issue was whether the scope or content of the role, tasks and duties to be performed by each employee gave rise to fiduciary duties or obligations owed to the applicant by each employee. The character of the relationship and the scope or content of the role, tasks and duties to be performed is ultimately a factual question leading to a conclusion of law. Although only aspects of the content of the role, tasks and duties of each former employee respondent were admitted in the pleading, ultimately the position adopted by the respondents in final submissions was that if the conduct said to constitute a breach of the fiduciary obligations owed to the applicant by the first and second respondents is made good, “it has to be conceded that there was a breach of fiduciary duty”: T, p 310, lns 43-44.
Thus, there is no issue in the proceeding that the first and second respondents owed fiduciary obligations to the applicant in the relevant period. Those obligations can be simply described as a duty of fidelity and a duty to avoid a conflict of interest and duty, that is, a conflict or as Deane J said in Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 at 199 a “significant possibility of conflict”, arising between the personal or self-interest of each of the first and second respondents and the duty owed by them to the applicant. I will return to a more precise formulation of the duty later in these reasons: see [188] and following, of these reasons.
The applicant initially made a number of claims for relief.
The first is a declaration pursuant to s 1317E of the Corporations Act 2001 (Cth) (the “Act”) that the first and second respondents, by the pleaded conduct, contravened ss 182 and 183 of the Act.
The second is an order pursuant to s 1317H of the Act that the respondents pay compensation to the applicant exceeding the sum of $750,000.00, including profits in accordance in s 1317H(2) of the Act.
The third is an injunction pursuant to s 1324 of the Act in particular terms.
The fourth is said to be in the alternative (and since it deals with financial questions, it seems to be in the alternative to the second order sought), at the election of the applicant, either equitable damages for breach of fiduciary duty or an account of profits.
As events transpired, the applicant made an election for the remedy of an account of profits as an expression of an entitlement to “equitable compensation” for breach of the fiduciary duties owed to the applicant. Apart from the contended breaches of fiduciary duties owed to the applicant, the applicant, in opening the case, pressed the notion that the contended conduct also engages a contravention of s 182 (and 183) of the Act in reliance on propositions drawn from a decision of the New South Wales Court of Appeal, Gunasegaram v Blue Visions Management Pty Ltd;Blue Visions Management Pty Ltd v Chidiac [2018] NSWCA 179; (2018) 129 ACSR 265, Basten JA at [14], [20], [43] (as to s 182 (1)(a) of the Act) and [44]. However, no claim is now made for an order for compensation under s 1317H of the Act nor is any injunction sought. Moreover, no claim of breach of any contended obligation of confidence in relation to identified information is pressed.
In substance, the remedy sought is an order that the respondents’ account to the applicant for any gains (profits) made by reason of the contended breaches of the fiduciary obligations owed to the applicant. The applicant says that the claims of contraventions of the Act were pressed in the opening on the footing that duties and prohibitions upon conduct also arise under the Act and those matters would become relevant should it be found that the applicant and the first and second respondents are not in a fiduciary relationship with the applicant. A question might well arise about whether the obligations contained in ss 182 and 183 of the Act are obligations to be discharged by the first and second respondents even though they may be found to be in a fiduciary relationship with the applicant and owe the relevant fiduciary duties to the applicant. The question of the overlap between those duties and obligations arising under ss 182 and 183 of the Act remains an outstanding question in the jurisprudence. However, that is not how the applicant puts its case. The applicant relies upon contended breaches of fiduciary duties owed to it and seeks the remedy of an account of profits in respect of those breaches. In this case, the respondents now concede that the former employees owed fiduciary obligations to the applicant in the relevant period.
For the purposes of an account of profits, the applicant seeks an order for all necessary accounts and inquiries to be conducted and an order that the respondents (each of them) pay to the applicant any sum found to be due to the applicant upon the taking of accounts and the making of such inquiries. I will return to the question of the remedy later in these reasons.
The factual context within which these questions arise will need to be examined in a little detail. The following three matters need to be noted at the outset. First, apart from tendering the emails of 21 November 2017 and 22 November 2017 passing between Mr Sam Ayoub and Mr Antoun Zibara (discussed at [53] to [56] of these reasons), the respondents adduced no evidence in the proceeding. They did not read and rely upon the affidavit of Mr Zibara or the affidavit of Mr Angeli. Thus, apart from those emails, all the evidence in the proceeding was called by the applicant.
Second, the respondents contend that the principal witness for the applicant, Mr Sam Ayoub (the applicant’s sole director and beneficial owner of its issued shares) is an “unconvincing witness” and his evidence should be approached “very guardedly” where it is uncorroborated by documents. I do not accept the breadth of that submission and I address that matter later in these reasons.
Third, the conduct of the proceeding at trail engaged these circumstances. The amended defence filed by the respondents simply pleaded in response to some of the significant contentions made against the respondents, limited factual assertions but otherwise the respondents “do not admit the allegations therein”: see, for example, para 20 of the statement of claim; para 20 of the amended defence. The factual case sought to be made by the respondents at trial, however, engaged an affirmative case. The applicant objected that the affirmative case was not pleaded and contended that it ought to have been pleaded. That contention was correct for two reasons. First, the affirmative case would give rise to the need or likely give rise to the need to examine documents relevant to the affirmative case. Second, once presented with a further amended pleading crystallising the affirmative case together with the relevant documents, instructions would need to be taken about it and aspects of it tested. As events transpired, the respondents sought leave to file and rely upon a further amended defence. They conceded that documents relevant to the amendments would need to be produced. The applicant took the position that it would not oppose leave if the documents could be produced immediately (especially because, obviously enough, the proceeding was in the course of trial). The trial was stood down on Friday 4 October 2019 for a number of hours to enable the question of the production of the relevant documents to be investigated. Production of the documents proved to be difficult and discussion took place about the possibility of producing the documents on either Saturday 5 October or Sunday 6 October 2019. However, producing the documents on either day would have put the applicant in a difficult position of trying to seek responses from any relevant person (such as a player or a player’s family members) over a week-end and or the public holiday on Monday 7 October 2019. The trial resumed on Tuesday 8 October 2019. At the outset, the respondents did not press their application for leave to further amend the defence. The respondents tendered the emails earlier described and then closed their case.
The applicant, Ultra Management (Sports) Pty Ltd (“UMS”) is a sports management company. It was incorporated on 6 February 1996 and its sole director is Mr Sam Ayoub. Mr Ayoub is the beneficial owner of two fully paid ordinary shares in the UMS. The core business of UMS consists of managing players in the Australian National Rugby League (the “NRL”) and the English Super League. UMS manages players in those leagues and players aspiring to play at the highest professional level in the sport.
Apart from the role of UMS, Mr Ayoub is accredited by and registered with the NRL as a “Player Agent” under the NRL’s Rugby League Accredited Player Agent Scheme (the “Accreditation Scheme”). Mr Ayoub has been a Player Agent for approximately 30 years. Mr Ayoub says that by delivering record setting contracts and endorsement deals, UMS has established itself as a substantial sports agency within the NRL.
The Operations Manager for the NRL Accreditation Scheme has been, for some considerable time, Mr Paul Massey, an NRL officer. Although the structure and operation of the Accreditation Scheme has changed in recent times, Mr Massey has continued to be involved in its operation.
Mr Ayoub says that UMS does not sign a large number of players. Rather, its philosophy is to identify players that have the unique potential to play in the NRL Competition and in the English Super League Competition and to do the best it can for the players in achieving entry into those competitions through contracts with clubs competing in those competitions. There are two aspects to the activities undertaken by UMS. The first involves UMS entering into management contracts with players under which UMS assumes obligations for a defined period to manage the interests of the players. The second aspect involves negotiating with clubs to seek to secure Player Contracts for the player with a particular club.
Mr Ayoub says that as a sports management agent, UMS undertakes contract negotiations for the player with clubs and seeks to procure sponsorship arrangements for the player and media opportunities for the player from time to time. Mr Ayoub identifies, by way of illustration, a list of players currently managed by UMS who play in the NRL or English Super League. So far as the NRL Competition is concerned, the clubs with whom UMS managed players have contracts include, South Sydney, the New Zealand Warriors, Parramatta, the Brisbane Broncos, the Melbourne Storm, the Sydney Roosters, the Canterbury Bulldogs and the North Queensland Cowboys. Although I have not reconciled Mr Ayoub’s list to the NRL list of competition participants, it seems to be the case that every NRL club is represented in Mr Ayoub’s list of UMS managed players. Some players are participants in the English Super League. Although there are notable current players in the list, Mr Ayoub identifies Jonathan Thurston as an iconic player who, throughout his playing career, was managed by UMS.
Mr Ayoub says that the NRL Accreditation Scheme is governed by scheme rules. He says that UMS operates under those rules and, as an Accredited Agent, he acts according to those rules. The objects of the rules include providing a mandatory scheme to accredit appropriately qualified persons as Rugby League Player Agents and to protect the welfare and interests of players who participate or who may participate in the NRL competition or other rugby league competitions. The rules also provide for the creation and publication by an Accreditation Committee, constituted within the Accreditation Scheme, of “approved Forms” or other documents for use under the Accreditation Scheme.
Those documents so created and published include a standard form of contract to be used as between a player and a Player Agent where the Player Agent is a company and a standard form of contract where the Player Agent is an individual. Obviously enough, the rules require the Management Contract to be properly signed and witnessed by the player and on behalf of the company. Where the player is under the age of 18 years, the Scheme Rules require the parents of the player to also execute the Management Contract. Mr Ayoub says that UMS’s usual practice is that the Management Contract with the Player is executed by the individual acting within and on behalf of UMS who is the Accredited Agent with the NRL. In the period relevant to these proceedings, the only Accredited Agents so acting within and on behalf of UMS were Mr Ayoub, as Director, and the first respondent Mr Antoun Zibara, as an employee of UMS.
As to Mr Zibara, he commenced employment with UMS on 1 November 2010 and his employment ceased on 15 December 2017.
Mr Ayoub says that although Mr Zibara was initially employed to provide secretarial support to UMS, UMS trained Mr Zibara to become a Player Agent for UMS and to generate business for UMS as a Player Agent. Mr Ayoub says that he assisted Mr Zibara to gain Agent Accreditation with the NRL. Mr Zibara was employed full time by UMS and from about November 2010 as a result of an agreement entered into between UMS and Mr Zibara, Mr Zibara’s role was to assist UMS with its “business generally and, in particular, with player recruitment and management”. Mr Zibara’s role involved scouting for and securing the management by UMS of new talented players for the NRL; supervising new and existing players on behalf of UMS; maintaining and fostering players; and attending to the day to day liaison with UMS contracted players and seeking to solve problems confronted by UMS contracted players. Mr Ayoub says that on behalf of UMS and at Mr Ayoub’s direction and under his control, Mr Zibara’s role was to recruit, manage and secure contracts for mainly younger school leaving age players. Mr Ayoub says that he would provide leads to Mr Zibara from scouts and other referral sources and also from independent enquiries he made. Mr Ayoub says that Mr Zibara’s role was to follow these leads which often involved travelling to meet players and parents either at their homes or at the playing fields or elsewhere. Mr Ayoub says that UMS provided Mr Zibara with the relevant resources to do these things and met the costs of doing so. Mr Zibara was assigned to manage a number of UMS’s clients. Mr Ayoub says that he spent considerable time during the course of Mr Zibara’s employment mentoring him and training him in the role of a Player Agent. Mr Ayoub says that Mr Zibara was “a trusted employee”. Mr Ayoub says that although Mr Zibara was good with the players, he lacked the ability to secure them the best possible deals and Mr Ayoub would often shadow the negotiations, step in and secure a better deal or step in and take over the management of players as they matured.
Mr Ayoub says that he is a “hands-on Director”. He says that he likes to know what is happening in respect of the players that UMS manages. He says that he discusses with his employees, regularly, the matters and events surrounding a player managed by UMS. He says that he regularly amended proposals and counter-offers for players where he believed those things required further attention and improvement. He says that Mr Zibara was to report to him on all matters concerning the performance of what he describes as the “Zibara Services”. At [33] I note further evidence of Mr Ayoub on the topic of the role and scope of the authority of Mr Zibara.
As to Mr Patrick Angeli Mr Ayoub says that Mr Angeli was employed by UMS from about 27 February 2017 until 15 December 2017. Mr Angeli was employed to assist UMS as an office administrator and in particular to assist with player recruitment management including assisting Mr Zibara in the services he provided; assisting in supervising new and existing players on behalf of UMS; assisting in maintaining and fostering players; and assisting in attending to the day to day liaison with contracted players. Mr Angeli’s affidavit was not read by the respondents. However, the applicant tendered particular paragraphs as statements against interest and as to Mr Angeli’s employment, the applicant tendered these paragraphs:
6.At UMS I assisted Antoun in relation to the management of contracted rugby league players. This principally involved junior players who participated in the under 16, under 18 and under 20 playing competitions.
13.Antoun was accredited with the [NRL] as a player manager and he signed management contracts on behalf of UMS. I did not. I helped him prepare management contracts and assisted him in the dealings with the players and the clubs.
Mr Ayoub also says that the business of acting as a manager for players is highly competitive.

As at 20 June 2017, UMS had entered into a number of management contracts with players including the following 18 players of relevance to this proceeding: Volkan Er, Elvino Maroulis, Phoenix Crossland, Lance Bagon, Hudson Young, Mosese Pope, Ben Tohi, Michael Cheer, Benjamin Mallia, Kai Parker, Aidan Gaffey, Thomas Gaffey, Dennis Mataia, Declan Casey, Jayden Tanner, Ezraa Coulston, Caleb Evans, Jayden Skinner.
As to these 18 players, as at 20 June 2017, the date of their contract with UMS and the term of their respective contracts was this: Volkan Er, contract date (cd) 15 April 2016, term (t) 5 years, expiry date (ed) 14 April 2021; Elvino Maroulis, (cd) 27 April 2017, (t) 5 years, (ed) 23 April 2022; Phoenix Crossland, (cd) 9 February 2017, (t) 3 years, (ed) 8 February 2020; Lance Bagon, (cd) 19 June 2017, (t) 5 years, (ed) 18 June 2022; Hudson Young, (cd) 8 February 2016, (t) 5 years, (ed) 7 February 2021; Mosese Pope, (cd) 21 February 2016, (t) 3 years, (ed) 20 February 2019; Michael Cheer, (cd) 15 November 2016, (t) 4 years, (ed) 14 November 2021; Benjamin Mallia, (cd) 13 January 2016, (t) 3 years, (ed) 12 January 2019; Kai Parker, (cd) 31 March 2017, (t) 5 years, (ed) 30 March 2022; Aidan Gaffey, (cd) 28 April 2017, (t) 3 years, (ed) 27 April 2020; Thomas Gaffey, (cd) 28 April 2017, (t) 3 years, (ed) 27 April 2020; Dennis Mataia, (cd) 9 July 2015, (t) 5 years, (ed) 8 July 2020; Declan Casey, (cd) 21 September 2015, (t) 5 years, (ed) 20 September 2020; Jayden Tanner, (cd) 8 December 2015, (t) 3 years, (ed) 7 December 2018; Ezraa Coulston, (cd) 19 April 2017, (t) 3 years, (ed) 19 April 2020; Caleb Evans (cd) 19 June 2017, (t) 3 years, (ed) 16 June 2020; Jayden Skinner, (cd) 9 March 2016, (t) 5 years, (ed) 8 March 2021.
Thus, as at 20 June 2017 UMS had contracts to manage the above players which, in the ordinary course, would have expired in respect of each player along the following time line: 7 December 2018, Jayden Tanner; 12 January 2019, Benjamin Mallia; 8 February 2019, Phoenix Crossland; 20 February 2019, Mosese Pope; 19 April 2020, Ezra Coulston; 27 April 2020, Aidan Gaffey; 27 April 2020, Thomas Gaffey; 16 June 2020, Caleb Evans; 8 July 2020, Dennis Mataia; 20 September 2020, Declan Casey; 7 February 2021, Hudson Young; 8 March 2021, Jayden Skinner; 14 April 2021 Volkan Er; 14 November 2021, Michael Cheer; 30 March 2022, Kai Parker; 23 April 2022, Elvino Maroulis; 18 June 2022, Lance Bagon. I will return to Ben Tohi’s circumstances later in these reasons. However, it is sufficient for present purposes to note that UMS had a contract with him commencing on 14 October 2016.
As to the remuneration arrangements under the various contracts that existed between UMS and Players as at 20 June 2017, the remuneration mechanism operated on the basis that UMS would be entitled to receive a sum equal to a certain percentage of all monies payable to a player pursuant to an “NRL Playing Contract, Playing Agreement or Non-Playing Agreement” and a certain percentage of any “Non-Playing agreement or Sponsorships, Endorsements, Speaking Engagements Etc but excluding in the case of any NRL Playing Contract or Playing Agreement” seven identified categories of benefits or assistance received by the player.
In terms of the practice within UMS in relation to the signing of contracts with players, Mr Ayoub gave evidence that there was “definitely a practice in place”. He gave evidence that he would discuss the particular players with Mr Zibara and Mr Angeli and “obviously we needed to agree on the particular players we would be signing and who we may have scouted”: T, p 64, lns 28-30. Mr Ayoub described the process of conducting discussions with the players about a management contract with UMS and should such a contract be entered into, the steps UMS would take to meet with clubs and negotiate contracts for the players. Proposals for a contract between a player and a club would be referred to the parents of the player if the player was under 18 or directly to the player if the player was over 18. Mr Ayoub gave evidence that in the majority of cases if not all cases, his authorisation was necessary with respect to the execution of either or both of those contracts: T, p 65, lns 1-2. I will return to that matter later in these reasons.
The affidavit of Mr Zibara was not read by the respondents. However, the applicant put into evidence particular paragraphs as statements against interest concerning Mr Zibara’s statements about the nature of his role and duties with UMS. Those paragraphs are these:
28.UMS provided sports management services and in particular UMS acted for rugby league players as a player agent and manager, representing them in their dealings with the clubs for which they played. This included the negotiation of player contracts. My job was to assist Sam Ayoub in “scouting” or talent spotting promising young players, and where appropriate offering them management contracts, negotiating playing contracts with the clubs and otherwise dealing on behalf of players with their clubs. This often would involve meeting and getting to know the families of young players and taking on the role of a mentor to them in some cases.
29.Between about February and December 2017 the Second Respondent (Patrick Angeli) was employed by UMS. He and I worked together, particularly in the recruitment of junior players and managing their football careers and their relationships with the clubs.
31.My work at UMS involved gaining and developing a good knowledge of the players involved in the game of rugby league, especially the junior players as they progressed through the ranks. UMS managed established NRL players and I was involved in some of that work but my focus was on recruitment and the management of the junior players.
34.I had by 2017 a degree of autonomy in my work. I made decisions to sign up young promising players. Usually Mr Sam Ayoub was not involved in my face to face negotiations with new recruits. I always told him about new player signings after the event or about new playing contracts that I was negotiating but by 2017 I did not seek or require approval from Mr Ayoub to go about my work. In particular Mr Ayoub did not sign player management contracts on behalf of UMS. Rather the contracts were prepared and signed by me on behalf of UMS. In many cases Mr Ayoub did not meet new recruits until after their management contract had been signed. He did not approve every contract in advance. At time he paid little attention to the details to my observation.
Mr Ayoub gave further evidence by an affidavit sworn on 25 September 2019. That affidavit responds to a number of propositions in the affidavit of Mr Zibara but of course Mr Zibara’s affidavit was not ultimately introduced into evidence. Nevertheless, Mr Ayoub gave this evidence about the scope of Mr Zibara’s role and the scope of his authority:
28.Zibara was to report to me on all matters concerning the performance of the Zibara Services.
29.I repeat that at all times during the course of Zibara’s employment, matters concerning player recruitment, management and contract negotiation, was done under my direction and control, unless it was done without my knowledge.
30.While Zibara was given some autonomy, it was controlled or within a controlled environment. Put another way, what Zibara did generally was policed (supervised) by me.
32.As far as I understood, and consistent with my directions, all player agent management contracts and player contracts were discussed with me, before they were lodged for registration – if they were not discussed with me earlier.
33.Zibara would meet with me or telephone me for such authority, and prior to executing any such contract on behalf of UMS. Zibara and I would speak at least weekly.
The applicant makes the point that the evidence of Mr Ayoub on the scope of the role and duties of Mr Zibara and the extent of Mr Zibara’s authority was not challenged in the cross-examination of Mr Ayoub.
The matters at [27] to [30] of these reasons are drawn from the documents. Although there is a challenge made by counsel for the respondents to the evidence of Mr Ayoub, the matters at [15] to [26], [31] and [33] are the subject of Mr Ayoub’s evidence (apart from the quoted tendered paragraphs of Mr Angeli’s affidavit), which I accept as to those matters. As already indicated, I will return to aspects of Mr Ayoub’s evidence later in these reasons.
Each of the contracts entered into between UMS and each of the players described earlier was entered into in the standard form of contract issued by the Accreditation Committee for a contract between a player and a management company. As to that form of contract, cl 6 provided for termination. That clause provided for these circumstances of termination. Clause 6(a) provides that where a player is in material breach of any of his obligations under the Agreement, the company may terminate the Agreement on giving seven days’ written notice to the player with the agreement coming to an end at the end of the period of notice. Clause 6(b) provides that where the company is in material breach or ceases to carry on business, the player may terminate the Agreement on seven days’ notice with the Agreement ending at the end of the period of notice. Clause 6(c) provides for a number of events. It says that where the player becomes bankrupt or enters into an arrangement or composition with creditors or where the company experiences a similar insolvency or related event, the other party may terminate the Agreement forthwith by written notice. It also says that where a principal of the company engages in behaviour unbecoming to his position and reputation or where either the player, or a principal of the company, is convicted of a criminal offence punishable by imprisonment exceeding two years or where a principal of the company has his accreditation cancelled or otherwise ceases to be an Accredited Agent, the other party may terminate the Agreement forthwith upon giving written notice.
That was the termination regime that subsisted as between UMS and each of the players described at [27] of these reasons under the Management Agreement as at 20 June 2017.
On 20 June 2017 Mr Massey sent an email to all NRL Accredited Agents (of which there are many) including Mr Ayoub. In that email Mr Massey said this:
Dear Agents
Please be advised that last night the Accreditation Committee resolved in accordance with Rule 3 of the Accredited Player and Agent Rules to amend the current rules and in addition to that provide each Agent with a revised contract between a Player and Agent (Form 3) and a revised contract between a Player and a Company (Form 4) for use.
In accordance with Rule 3 you are advised that these amendments to the Accredited Player and Agent Rules and Management Agreements (forms 3 and 4) will come into effect in 28 days from today’s date that being the 19th July 2017.
Further to this the Committee resolved that the use of the current agreement between [a] Player and a Company will cease immediately and any Company Management Agreements executed after this date and lodged with the Secretary for registration will not be accepted for entry on to the Register of Player and Agent Contracts.
Any Agent wishing to enter into a Management Agreement with a Player from this date until the 19th July 2017 will do so using the current Standard Player and Agent Contract as attached.
I have attached a copy of the amended documents as referred above and I have highlighted the amendments in yellow.
Following the expiry of the required 28 days’ notice I will disseminate to all Agents unmarked copies of the referred documents for use from that date forward.
I have also attached a copy of the unchanged standard Player and Agent Contract for use between this date and 19th July 2017.
Regards
Paul Massey
[emphasis added]
As the email says, it attaches the new Form 3 Agreement between a Player and an Agent and the new Form 4 Agreement between a Player and a Management Company, for use from 19 July 2017. It also attaches the then current Agreement in the old form for use between 20 June 2017 and the commencement of the new Agreements on 19 July 2017.
Relevantly for present purposes and at the centre of this case is the change to the termination arrangements in cl 6 of the new contract to be used as between a Player and a Company such as UMS. In the new contract, cl 6 has been redrawn and it contains 10 sub-paragraphs (a) to (j). Relevantly for present purposes cl 6(e) is in these terms:
(e)In the event that the Nominated Agent ceases to perform duties on behalf of or within the Company, the Player may terminate this agreement on the giving of seven (7) days’ written notice to the Company in which case this agreement will come to an end at the expiration of the period of notice.
Those contracts in evidence as at 20 June 2017 between UMS and the player contain a recital (Recital C) that a principal of UMS “namely Antoun Zibara is an accredited player agent pursuant to the Rugby League Player Agent Accreditation Scheme”. Under the new contract between a Player and a Company (Form 4), the contract recognises that the player is dealing with a “Nominated Agent” within the company much in the same way that a player was dealing with a “Principal” of the company under the earlier form of contract.
The significance of the new cl 6(e) is self-explanatory. It creates a circumstance in which, should the “Nominated Agent” under the contract cease to perform duties either on behalf of or within the company, the Player is entitled to terminate the Agreement on the giving of seven days’ written notice to the company in which case the Agreement comes to an end at the expiration of the period of notice.
As to the new cl 6(e), Mr Massey gave evidence about the clause. Although it had become “mandatory” that after 19 July 2017 any new contracts were to be on the basis of the new Forms 3 and 4, this notion of a “mandatory” use of those forms did not require that “existing contracts which did not contain clause 6(e) should be terminated and new contracts entered into with the new clause 6(e) after that date”: T, p 126, lns 18-22. Mr Massey gave evidence that the new clause 6(e) provided the players with “the ability to terminate the agreement that they were currently on should the nominated agent leave the employ of the company”, “[but] [only] for the relevant contracts after that time ... which contained clause 6(e)”: T, p 126, lns 32-38.
Mr Ayoub gave evidence about Mr Massey’s email of 20 June 2017.
Mr Ayoub said that he “certainly did” recall receiving Mr Massey’s email: T, p 65, ln 19. Mr Ayoub regarded the proposal to introduce the new clause 6(e) as a “significant change” to previous contracts and “created a situation of substantial risk” to Player Agent businesses such as UMS of losing players should an employed Accredited Player Agent leave the employ of the company. The risk was that a former employee who had a relationship with the player might leave the employ of the company and the player might follow that former employee to a competitor by exercising rights under cl 6(e) to terminate the management contract with the company.
On 20 June 2017 at 6.25 pm Mr Ayoub sent an email to Mr Zibara and Mr Angeli in relation to Mr Massey’s email. Mr Ayoub sought to convene a meeting with Mr Zibara and Mr Angeli the next day about Mr Massey’s email. Mr Ayoub had such a meeting the next day. Mr Ayoub was asked about that meeting and gave evidence that Mr Massey’s email was “significant in the scheme of things [as], it had a direct bearing on my business”: T, p 66, lns 8-10. Mr Ayoub says that he told Mr Zibara and Mr Angeli that UMS had received the email from Mr Massey and he asked them if they had read it. Mr Ayoub recalls Mr Zibara saying that he had read Mr Massey’s email. Mr Ayoub says that Mr Angeli sat with Mr Zibara during the meeting. Mr Ayoub says that he “made them [Mr Zibara and Mr Angeli] aware of the fact that – that basically, they don’t need to sign any contracts, the existing contracts run their course, and that was the extent of it”: T, p 66, lns 12-16. Mr Ayoub gave evidence that from his perspective there was “nil benefit at all” to his business in having the existing contracts with players terminated and new contracts entered into containing the new clause 6(e) “because it basically gave people a free pass potentially to terminate with a new contract [and] nothing needed to happen with our existing contracts” (T, p 66, lns 22-24) and “[t]hey [the existing contracts] were in place, they were in place for the term, and basically it was of value and benefit to the business”: T, p 66, lns 24-25. Mr Ayoub was asked whether Mr Zibara or Mr Angeli raised any question about the execution of new contracts in place of the existing contracts and Mr Ayoub gave evidence that Mr Zibara and Mr Angeli agreed with what Mr Ayoub had said: T, p 66, lns 27-29. I accept Mr Ayoub’s evidence on these matters.
Mr Massey gave evidence about his interaction with Mr Ayoub and Mr Zibara in relation to the new agreements and particularly clause 6(e). Mr Massey said that he received a telephone call from Mr Ayoub and Mr Zibara and he was asked a question “in regards to how clause 6(e) would affect the contract” with a player. Mr Massey answered the question by saying that if the player chose to use the right contained in clause 6(e) “that’s what it was intended for”: T, p 123, lns 1-7. Mr Massey said that Mr Ayoub and Mr Zibara called him. They were on a loud speaker at their end of the call. Mr Massey said that they were “seeking clarification or confirmation of the wording [of clause 6(e)] and the interpretation”. Mr Massey was asked when the call occurred and he said that he could not exactly say without referring to his notes “but it was in the weeks or months shortly after that material going out [Mr Massey’s email of 20 June 2017]”. Mr Massey produced a diary note of the conversation which shows that it occurred on 5 October 2017. It says:
051017Call from agent [Mr Zibara] who was on loud speaker with S A [Sam Ayoub], he inquired as to the position with the new management agreements if he was to sign his players to them. He has read the document and believes that if he has a player on a new company agreement then if he leaves Ultra the Player has the right to terminate. He referred to clause 6 (e).
It is common ground that the reference to “He” in the diary note is Mr Massey’s reference to Mr Zibara. I accept Mr Massey’s evidence generally.
In particular paragraphs of the affidavits of Mr Zibara and Mr Angeli tendered by the applicant, each respondent had something to say about the new clause 6(e) “break clause”. Mr Zibara says this:
52.In June 2017 the NRL issued a new form of contract to be adopted by managers which included a “break clause” permitting a player to terminate the management arrangement with UMS if an identified individual representing the manager left the organisation. UMS was required to use the new format.
53.After the new form of contract was received from the NRL, UMS adopted the new form for all contracts signed after that date to comply with NRL requirements.
Mr Angeli says this:
22.In June 2017 the NRL issued a new form of contract to be adopted by managers which included a “break clause” permitting a player to terminate the management arrangement with UMS if an identified individual representing the manager left the organisation. UMS was required to use the new format after we received it.
23.After the new form of contract was received from the NRL, UMS adopted the new form for all contracts signed after that date to comply with NRL requirements.
On the following dates, 16 of the original UMS contracts described in [28] of these reasons were replaced by the following new contracts between UMS and the Player: Volkan Er, contract date (cd) 23 October 2017, term (t) 4 years, expiry date (ed)14 April 2021; Elvino Maroulis, (cd) 28 October 2017 (t) 4 years, (ed) 23 April 2021; Phoenix Crossland, (cd) 18 October 2017, (t) 4 years, (ed) 17 October 2022; Lance Bagon, (cd) 6 September 2017, (t) 5 years, (ed) 5 September 2022; Hudson Young, (cd) 11 September 2017, (t) 5 years, (ed) 10 September 2022; Michael Cheer, (cd) 31 July 2017, (t) 5 years, (ed) 30 July 2022; Benjamin Mallia, (cd) 10 November 2017, (t) 5 years, (ed) 9 November 2022; Kai Parker, (cd) 28 October 2017, (t) 5 years, (ed) 27 October 2022; Aidan Gaffey, (cd) 6 October 2017, (t) 3 years, (ed) 5 October 2020; Thomas Gaffey (cd) 6 October 2017, (t) 3 years, (ed) 5 October 2020; Dennis Mataia, (cd) 5 October 2017, (t) 5 years, (ed) 4 October 2022; Declan Casey (cd) 27 October 2017, (t) 4 years (ed) 26 October 2021; Jayden Tanner (cd) 28 September 2017, (t) 3 years, (ed) 27 September 2020; Ezraa Coulston, (cd) 20 November 2017, (t) 3 years, (ed) 19 April 2020; Caleb Evans (cd) 17 August 2017, (t) 3 years, (ed) 16 August 2020; Jayden Skinner, (cd) 10 November 2017, (t) 5 years, (ed) 9 November 2022.

Each of those contracts were in the form of the new Form 4 as sent by Mr Massey to the agents in his email of 20 June 2017 and thus each contract contained the new termination provision in clause 6(e). Each contract recites Mr Zibara as the “Nominated Agent” and each contract is signed on behalf of UMS by Mr Zibara and witnessed by Mr Angeli.
As to Mosese Pope no new contract with UMS was brought into existence with him. Rather, UMS on 27 October 2017 released Mosese Pope from his contract. Similarly, no new contract was entered into with Ben Tohi. He too was released from his contract by UMS although in his case it was on 7 December 2017. I will return to the particular circumstances concerning those players later in these reasons.
On 20 November 2017, Mr Ayoub and Mr Zibara had a discussion about Mr Zibara’s future with UMS. Mr Ayoub describes the conversation he had with Mr Zibara in his oral evidence. When he and Mr Zibara “went for a walk” at Mr Zibara’s request to discuss possible future arrangements between UMS and Mr Zibara. On 21 November 2017, Mr Zibara sent an email to Mr Ayoub in these terms:
Hi Sam
I know we had a face to face discussion yesterday regarding my Resignation from Ultra Management (Sports), effective December 15^th, 2017. I just thought it would be sensible to send you an email, so that we both have a copy on the record.
Obviously you are aware that I will be taking up another opportunity in the first week of January next year, and that it was a decision I didn’t take lightly.
Thank you very much for the opportunities for professional and personal development that you have provided me during the last seven years. I have enjoyed working for the company and truly appreciate the support and guidance that you provided me during my tenure.
I will of course assist with the transition in any way I can, and will continue to perform my duties to the best of my ability throughout my final 4 weeks.
If possible, it would be great if you could write me a Reference Letter, to assist with any personal future employment.
Sam, I wish you, your family and UMS all the very best moving forward.
On 22 November 2017, Mr Ayoub responded by email advising Mr Zibara that his resignation had been accepted. Mr Ayoub also observed (referring to Mr Zibara’s reference in the earlier email to “taking up another opportunity in the first week of January next year”) that “[a]s conveyed to me you have accepted a role with your best mate in an online protein powder business”. Mr Ayoub wished Mr Zibara “the absolute best with all your future endeavours” and made a number of other observations which do not need to be noted here. Mr Ayoub concluded his email by wishing Mr Zibara “the utmost of luck in your future alternate industry endeavours” and “the absolute best”. One other aspect of the exchanges should be noted. In Mr Ayoub’s email of 22 November 2017, he drew Mr Zibara’s attention to a non-competition period contained within particular arrangements made between UMS and Mr Zibara which was said to operate up to 15 December 2020. That matter is not pressed by the applicant on the footing that the applicant concedes that the non-competition restraint could only be supported for a period of 12 months. However, it caused Mr Zibara to observe in his email of 22 November 2017 in response to Mr Ayoub’s email of 22 November 2017, as follows:
I am aware of my ethical obligations to you and the company and will of course provide you with my mobile phone, desktop computer & windows surface, car etc. I can also assure you that I would never disclose any company “secrets” or IP to any third party, remove files, delete emails etc (nor have I ever) now, or in the future.
As difficult as it has been, I have spoken with you openly and honestly over the past few weeks. You know the job offers that I was subject to within our industry and my response to those companies. I was then happy to disclose to you my immediate intentions once I cease my tenure at UMS.
On Monday, I also advised you of my desire to retain my Player Agent Accreditation, whereby you kindly offered to pay my annual Accreditation Fee, to which I respectfully declined. You also said to me that, “it’s probably not a good idea to advise clients that you will still be an active agent”, which I can understand and have agreed to oblige, out of respect to you. I will not be, nor have I the intention of contracting any clients contracted to UMS, post December 2015. So I am unsure as to why you have suggested that I verbally [commit] to no longer being active in the Rugby League Management space?
…
As to this email, Mr Ayoub says that he does not recall the email. He says that as part of the preparation process for his affidavit, he went back to his email account, searched for the email and located it in his inbox. He says that it was unopened.
Mr Ayoub was pressed in cross-examination about this email and his evidence that he could not recall receiving it. Mr Ayoub gave evidence that he had missed the email in his inbox and although he is “pretty attentive” to his emails, he says that he does miss some: T, p 159, lns 1-2. He says that the email was brought to his attention “recently”, “a few weeks ago”: T, p 159, lns 11-15 (that is, a few weeks prior to his giving evidence on 2 October 2019). The chronology seems to be this. Mr Zibara swore an affidavit in the proceeding on 20 September 2019 although, as already mentioned, the affidavit was not read in the case for the respondents. Mr Zibara exhibits to his affidavit as Annexure B the email of 21 November 2017 and Mr Zibara’s email of 22 November 2017 at 10.40 pm. Mr Ayoub swore a second affidavit in response to Mr Zibara’s affidavit on 25 September 2019 in which he addresses Mr Zibara’s email of 22 November 2017 and deposes to the matters described at [56] of these reasons. He then gave his oral evidence on 2 October 2019. I mention these matters in some detail because the respondents, in part, rely upon this matter as a basis for the proposition that Mr Ayoub’s evidence ought not be accepted unless supported by the documents. However, the chronology of events is largely consistent with Mr Ayoub’s evidence about when he first saw the email from Mr Zibara of 22 November 2017 and although the email was sent to him and was found in his inbox as part of the process of preparation, it is possible that Mr Ayoub simply missed the email. I certainly would not regard these matters as a basis on which I would characterise Mr Ayoub as a witness whose evidence ought not to be accepted unless supported by the documents. There are other matters which are said to support that submission and I will turn to those matters in due course.
Mr Angeli’s employment with UMS also came to an end on 15 December 2017.
The third respondent in these proceedings is Genesis Talent Management Pty Ltd (“Genesis”). That company was incorporated on 14 February 2018. The Directors are Antoun Zibara and Patrick Angeli, the first and second respondents. The company has two ordinary paid up shares one of which is held beneficially by Mr Angeli and the other is held beneficially by Mr Zibara. Mr Ayoub gave evidence that Genesis since its incorporation has been and remains in direct competition with UMS, that is to say, it provides player management services on the terms and conditions of the contracts published by the Accreditation Committee of the NRL.
It is now necessary to say some things about a number of the new contracts entered into between UMS and the Players described at [51] of these reasons.
Volkan Er
Volkan Er entered into a new contract with UMS on 23 October 2017 in place of his earlier contract of 15 April 2016. The earlier contract was for a term of five years expiring on 14 April 2021. Because Volkan Er was less than 18 years of age the contract was also signed by one of his parents. His new contract with UMS (also signed by his father as Volkan Er was still under 18) commenced on 23 October 2017 and was also expressed to expire on 14 April 2021. The earlier contract was signed for the company by Mr Zibara and witnessed by Ms Brown. The new contract was signed for the company by Mr Zibara and witnessed by Mr Angeli. Mr Ayoub gave evidence that neither Mr Zibara nor Mr Angeli sought Mr Ayoub’s consent or approval to replace the original UMS contract of 15 April 2016 with the new contract of 23 October 2017. Mr Ayoub also says that he did not authorise those steps to be taken by Mr Zibara and Mr Angeli. Mr Ayoub also says that he had no knowledge of the second UMS contract having been entered into.
On 13 March 2018 Volkan Er’s father sent the following email to Mr Ayoub:
Dear Sam
I am writing on behalf of my son Volkan Er, to advise that I would like to exercise clause 6(e) of his Management Agreement with your company, due to the fact Antoun is no longer a registered Agent with Ultra Management. I spoke with Paul Massey yesterday morning and after having read over my son’s Management Agreement again, I believe we are within our rights to terminate. Volkan signed with Antoun and they built a strong relationship over time, we do not feel that he should now inherit a manager, instead of being able to select one of his own. I am sure you understand.
Regards
Noel Er
On 29 March 2018, Noel Er sent another email to Mr Ayoub saying: “I am [hereby] terminating Volkan Er’s contract with you. From now on I intend to manage him”.
Although neither the affidavit of Mr Zibara nor the affidavit of Mr Angeli was read by them in their case on behalf of the respondents and thus neither respondent gave oral evidence either in chief or under cross-examination, the applicant tendered, as statements against interest, particular paragraphs of the witness statement of Mr Zibara and particular paragraphs of the witness statement of Mr Angeli concerning Volkan Er. The applicant tendered these paragraphs from Mr Angeli’s affidavit:
32.In about October 2017 I told Antoun that I had spoken to Volkan at a football game. I had said to Volkan words to the following effect. “There have been changes recently to the management agreement. Under the new form of agreement the player has more rights if his manager leaves”. Volkan said “that sounds better”. I said “talk to your parents and get them to speak to Antoun”.
33. After this I told Antoun what had been said between myself and Volkan.
34.A new management contract was later prepared by Antoun and myself and was signed by Volkan and his father. The contract was dated 23 October 2017.
The applicant tendered this statement by Mr Zibara:
64.In about October 2017 Patrick Angeli told me that he had spoken to Volkan’s father Noel Er at a game. Patrick asked me to speak to Noel.
On 30 November 2018 Volkan Er entered into a Player Management Contract with Genesis. The Nominated Agent is Mr Zibara. It provides for a remuneration entitlement as described at [30] of these reasons. It has a term ending on 30 November 2021, a period of three years.
On 13 March 2018, the same day as Noel Er’s first email to Mr Ayoub, Mr Massey had a telephone conversation with Mr Zibara. Mr Massey made the call to Mr Zibara to discuss with him an “email received from [S]am [Ayoub] in regards to him [Zibara] inducing players to go with him [and] also Pats involvement in this”: Mr Massey’s diary note of 13 March 2018, Exhibit 5 at p 78. Mr Massey’s diary note notes that Mr Zibara “refutes it”. Mr Massey’s diary note also records that he discussed with Mr Zibara “his entering into new [UMS] agreements for players who still had a long time to run on old agreements and why he put them on new ones with the 6(e) clause”. Mr Massey’s diary note notes the following comment and response from Mr Zibara at the end of his diary note of the conversation:
He made a brief comment “what was I meant to do leave with nothing”.
Mr Massey gave evidence that consequent upon a complaint by Mr Ayoub about Mr Zibara’s conduct, Mr Massey undertook an investigation “with respect to Mr Zibara and Mr Angeli” (T, p 119, lns 34-40) and in the course of that investigation, Mr Massey spoke to Mr Zibara. Mr Massey confirmed that his diary note of 13 March 2018 is a note of that conversation. Mr Massey gave evidence that at the conclusion of the conversation he made a record of Mr Zibara’s response reflected in the quote at [67] of these reasons.
As I have already indicated, I accept Mr Massey’s evidence. The remark made by Mr Zibara is a frank admission of the considerations which influenced him to bring into existence the contracts that discharged the earlier UMS contracts and replaced them with the new UMS contracts with the particular players so that should he leave UMS he would not be in a position of leaving “with nothing”. He would, in fact, have put himself in a position where he would be able to leave UMS “with something”, that is, the crystallised opportunity for any one of those players under the new UMS contracts containing the new clause 6(e) to bring their contract with UMS (and in substance with Mr Ayoub) to an end on seven days’ notice and then go to wherever Mr Zibara (and presumably, Mr Angeli) might be.
As it turned out, that would be the company Mr Zibara and Mr Angeli brought into existence on 14 February 2018, Genesis Talent Management Pty Ltd.
The answer given by Mr Zibara to Mr Massey on 13 March 2018 was an answer to a particularly relevant inquiry which Mr Zibara ultimately was not required to have to answer in the witness box. Mr Massey’s question was: “why did you enter into new agreements [for UMS] with players who still had a long time to run on the old agreements and why did you put them into new contracts with clause 6(e)”. Mr Zibara’s answer was: “what was I meant to do leave with nothing”.
Plainly enough, Mr Zibara was saying that he did not mean to leave UMS with nothing and since that response was in relation to the very question of why new contracts were put in place with clause 6(e), Mr Zibara was saying that he did not mean to leave UMS with nothing when new contracts could be put in place with clause 6(e) which would result in the possibility of Mr Zibara leaving UMS “with something”, namely, the opportunity to enable a player to terminate his contract with UMS and go wherever Mr Zibara might be performing the role of a Player Agent.
The remuneration payable to a Player Agent, whether an individual or a management company, by way of the particular percentage amounts adopted in the remuneration clause contained in the form of contract issued by the Accreditation Committee is the commercial lifeblood of the agent and this is particularly true of a player who is exhibiting potential to be successful in all fields of potential remuneration whether pursuant to a Playing Contract or arising out of sponsorships, endorsements, speaking engagements or other such non-player revenue. One can understand, as a matter of rational self-interest, why Mr Zibara did not want to find himself in a position where he might leave UMS “with nothing” but he nevertheless owed a duty to UMS to serve its interests and to not undermine its existing relationship with contracted players pursuant to which UMS would derive, or potentially derive, revenue in accordance with the remuneration clause in the earlier contracts terminated and replaced by Mr Zibara and Mr Angeli with the new contracts.
The adoption by the Accreditation Committee of the new form of contract containing the new clause 6(e) gave rise to a “break clause” (as Mr Zibara describes it in para 52 of his affidavit, being one of the paragraphs read into evidence by the applicant), which would be available only to players who were parties to such a contract. The introduction of the new form of contract to apply from 19 July 2017 meant that any new contract brought into existence after that date would contain the new break clause with the result that a player could give seven days’ notice to UMS of termination of the contract should Mr Zibara leave the employ of UMS. The new break clause would give the player an opportunity to leave UMS so as to follow Mr Zibara to wherever he might be in providing player management services, should he leave UMS. A contract containing clause 6(e) would certainly be of benefit to Mr Zibara should he leave UMS and should he be proposing to provide management services to players. Absent a new contract containing clause 6(e) the players contracted to UMS as at 20 June 2017 would not otherwise have been able to terminate those contracts at least so far as the event contemplated by clause 6(e) of the new contract is concerned. The termination of existing contracts on foot with a period to run and their substitution with the new form of contract was not required as an element of the introduction by the Accreditation Committee of the new form of contract. On the expiration of the term, any new contract would need to be on the terms of the new form of contract.
Phoenix Crossland
Phoenix Crossland entered into a management contract with UMS on 9 February 2017. The contract was to end on 8 February 2020, a term of three years. The recitals recognise that Mr Zibara is the “accredited player agent” pursuant to the Accreditation Scheme. The contract is signed for UMS by Mr Zibara and witnessed by Ms Brown.
In the paragraphs of Mr Zibara’s affidavit put into evidence by the applicant as statements against interest, Mr Zibara says this in relation to the arrangements with Phoenix Crossland:
80.I negotiated with Phoenix and his mother a three year management contract on behalf of UMS which was dated 9 February 2017. At the time I had a conversation with Nikki [Phoenix Crossland’s mother] in which words were said to the following effect:
Myself “We would like to sign Phoenix for five years”.
Nikki“I am prepared to sign him with UMS for three years and we will see how things go. If we are happy we would be prepared to extend it.
81.In October 2017 I had further discussions with Nikki who agreed to extend Phoenix’s contract with UMS from three to five years.
82.I prepared a new five year contract with Phoenix which was dated 18 October 2017.
83.When this was negotiated I recall going upstairs to Sam Ayoub’s office [and] there was a conversation in words to the following effect:
Myself“We have extended Phoenix Crossland’s contract from three to five years”.
Sam “That’s great news”.
86.Phoenix Crossland continues to play football with the Newcastle Knights. He is an outstanding player.
On 12 October 2017 Mr Zibara sent an email to Nikki Crossland referring to her discussion with Mr Angeli “over the weekend”. The email attached a new management agreement with UMS “as requested”. Mr Zibara observes in that email: “we are delighted that Phoenix has decided to extend his association with UMS for a further two years, he has a very bright future ahead and we are excited to be part of it”. On 19 October 2017 Mr Angeli sent an email to Nikki Crossland forwarding to her an email of 18 October 2017 attaching the “fully endorsed Management Agreement with Ultra Management (UMS)”.
In the new UMS contract, the contract commences on 18 October 2017 and ends on 17 October 2022. The earlier contract would have expired on 8 February 2020. The new contract conferred management rights on UMS for a further two years and eight months. The new UMS contract is signed for UMS by Mr Zibara and witnessed by Mr Angeli.
Mr Ayoub describes Phoenix Crossland as “a young star halfback, rated as the best prospect to come out of Newcastle since Andrew Johns”. He says that Phoenix Crossland “played Australian Schoolboy 15’s in 2015, NSW origin 16’s in 2016, [and] SG ball Newcastle Knights in 2017”. Mr Ayoub says that neither Mr Zibara nor Mr Angeli approached him for UMS’s consent or approval in relation to the second UMS contract of 18 October 2017. Mr Ayoub says that the direction issued by the Accreditation Committee on 20 June 2017 did not require UMS to enter into a new agreement with Phoenix Crossland and “in terms of UMS’s re-signing Players Contract Policy, it was not necessary to re-sign this Player at that time”.

In Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544, the Court (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ) observed at 557 that a fiduciary must account for a profit or benefit if it was obtained either when there was a conflict or possible conflict between his or her fiduciary duty and his or her personal interest or when the profit or benefit was obtained by reason of his or her fiduciary position or by reason of his or her taking advantage of opportunity or knowledge derived from his or her fiduciary position. The Court went on to make this observation at 557‑558:
The stringent rule that a fiduciary cannot profit from his trust is said to have two purposes: (1) that the fiduciary must account for what has been acquired at the expense of the trust, and (2) to ensure that fiduciaries generally conduct themselves “at a level higher than that trodden by the crowd”. The objectives which the rule seeks to achieve are to preclude the fiduciary from being swayed by considerations of personal interest and from accordingly misusing the fiduciary position for personal advantage.
[citations omitted]
As to Mr Angeli, I make these findings. Mr Angeli was also an employee of UMS who owed duties of absolute and disinterested loyalty to UMS. Mr Angeli assisted Mr Zibara in putting in place the new UMS contracts and in giving effect to the release of Mosese Pope and Ben Tohi. Mr Angeli knew on or about 21 June 2017 by reason of the meeting and the discussion described at [46] of these reasons that Mr Ayoub had taken the position that the contracts with his players were to run their course and that there was no need to re-sign the existing players. Moreover, Mr Angeli was the author of the emails to Ben Tohi in which he investigated whether Ben Tohi would be willing to enter into a new management contract enabling him to leave UMS should he and Mr Zibara leave UMS. He told Ben Tohi that there was nothing wrong with Tohi signing a new UMS contract enabling Tohi to leave UMS should the clause 6(e) events occur. There was certainly no suggestion that there would need to be a discussion with Mr Ayoub about that matter. Mr Angeli was also responsible for the exchanges with Benjamin Mallia in which he explained that Mallia would be able to leave UMS because “we put you on the new MA”. Mr Angeli is also a person who told Mallia in a Facebook message on 19 January 2018 that if Sam Ayoub or anyone else asks if Mallia has spoken with Angeli, Mallia ought to say “nah”. In Facebook exchanges with Jayden Tanner, Mr Angeli encouraged him to tell any inquirer untruths: see [138]. I am satisfied that Mr Angeli knew and appreciated that as each new UMS contract was put in place, as he assisted Mr Zibara in doing so, he was assisting Mr Zibara to undermine the existing contractual arrangements between UMS and the relevant players and that in doing so he was being disloyal to UMS and Mr Ayoub. In doing so, he was assisting Mr Zibara in the breaches of Mr Zibara’s fiduciary duty and he did so with knowledge that Mr Ayoub did not want to re-sign any of the players whose contracts had time to run. I am satisfied that when Mr Angeli did these things he was transgressing ordinary standards of honest behaviour in his dealings with Mr Ayoub and UMS. I am also satisfied that Mr Angeli behaved in like terms concerning the release of Pope and Tohi from their UMS contracts.
I am satisfied that but for the breach of fiduciary duty by Mr Zibara, the players who terminated their new UMS contracts in reliance on clause 6(e) would not have had the benefit of such a contract and would not have been able to bring the existing UMS contract to an end. I am also satisfied that but for the breach of fiduciary duty by Mr Zibara, neither Mosese Pope nor Ben Tohi would have been released from their existing UMS contract by UMS. I am satisfied that but for the breach of fiduciary duty by Mr Zibara, the contracts between Genesis and Crossland, Bagon, Er and Pope of 21 October 2018, 28 November 2018, 30 November 2018 and 20 December 2018, respectively, conferring a benefit or gain upon Genesis, would not have been entered into. I am satisfied that Mr Angeli was knowingly concerned in these breaches by Mr Zibara. Genesis, as mentioned earlier, is a company wholly owned by Mr Zibara and Mr Angeli which for present purposes is the vehicle by which they have chosen to derive a benefit or gain arising out of entering into the new UMS contracts with players who were then able to be freed up from their existing contracts with UMS through the vehicle of clause 6(e) of the new contract, or otherwise released from UMS contracts.
As to the equitable remedy of an account, Gageler J said this at [75] in Foresters:
[75] The equitable remedy of account is a personal order. The order operates to require that a defendant pay to a plaintiff the monetary value of a benefit or gain to the defendant. Although commonly referred to as an “account of profits”, there is no reason why a benefit or gain to be made the subject of an account must answer the description of a “profit” in conventional accounting terms. Nor is there any reason why that benefit or gain must answer the description of “property” or must have sufficient certainty as to be capable of forming the subject matter of a trust. The benefit or gain can be expectant or contingent. Indeed, it is commonplace that a benefit or gain the subject of any account might encompass an ongoing business. And it is commonplace that the benefit or gain to be made the subject of an order to account might extend to the whole of the ongoing business or be limited to a part of the business identified by reference to both a specified scope or commercial activities and a specified period of commercial activities which need not be confined to a past period but may be a period which extends into the future.
In Foresters, in the particular circumstances of that case, a proposition was put to the Court that although a liability to account for profits would include profits that have been made, the liability to account did not extend to an assessment of anticipated future profits rather than actual profits and therefore anticipated future profits were irrecoverable. In that context, Kiefel CJ, Keane and Edelman JJ said this as a matter of principle at [24]:
[24]. As to principle, to confine the account in this way would sever the process of accounting for, and disgorgement of, profit from its rationale in the principle of ensuring that the wrongdoer should not be permitted to gain from the wrongdoing. As to authority, the liability to account for a profit was described in Warman as concerned with “a profit or benefit” in language divorced from a confined conception of benefit as accrued profit in narrow accounting terms. In any event, it is artificial to require disgorgement of realised profits but not to allow unrealised profits that will be realised upon performance of the relevant contract where there is no reason to expect that performance will not occur. As Millett LJ said in Potton Ltd v Yorkclose Ltd:
“Unrealised profits are actual profits. Profits are made when they are earned, recognised when they are brought into accounts, and realised when they accrue, that is to say when a legal right arises to receive payment. As a matter of ordinary accounting practice, profits are seldom recognised before they accrue, but this is a matter of prudence only; in a proper case they may be recognised before they accrue. Whether or not recognised, however, they are not profits which could or should have been made or which are merely capable of being made, but profits which have actually been made though not yet realised.”
In this case, the respondents say that the applicant has failed to prove that the respondents have derived any profit or gain at all and in the absence of any proof of profit or gain, the applicant is simply not entitled to the remedy of an account. In other words, the liability of the respondents to an order for an account has not been made out.
In this case causation has been made out: [192] of these reasons. As to the benefit or gain, Genesis entered into a management contract with Phoenix Crossland which commenced on 29 October 2018 and concludes on 29 October 2021. The term of the contract covers the 2019, 2020 and 2021 playing seasons. The “NRL Club” recorded in the contract for Crossland is the Newcastle Knights. By clause 5(b), if on or subsequent to 29 October 2018 but before 29 October 2021, Genesis successfully negotiates and secures for the player “an NRL Playing Contract, Playing Agreement or Non-Playing Agreement”, (as those terms are defined at clause 20 of the management contract) then the player shall pay to Genesis the amounts contemplated by clause 5(b)(i). That clause contemplates a sum equal to a nominated percentage of all moneys that become payable to the player pursuant to any of those agreements. In addition, the player shall pay to Genesis a nominated percentage of any non-playing agreement for sponsorships, endorsements and speaking engagements but excluding, in the case of any NRL Playing Contract or Playing Agreement particular classes of benefits, assistance, payments or expenses. An “NRL Playing Contract” means a contract in the form approved by the NRL between an “NRL Club” on the one hand and a player on the other hand by which that player agrees to play the “Game” of rugby league football for that NRL Club in the National Rugby League Competition arranged and administered by the NRL. A “Playing Agreement” means any contract, agreement or arrangement (other than an NRL Playing Contract) pursuant to which a player agrees to play the game of rugby league football in a competition other than the NRL Competition. A “Non-Playing Agreement” means any sponsorship, promotional or other contract, agreement or arrangement by which a player agrees for reward to permit the use of his “Player Property” or to perform other services not requiring the playing of the “Game”. The term “Player Property” means the name, photograph, likeness, reputation and identity of the player.
Clause 5(c) provides that for the purposes of clause 5(b)(i), the sums payable to Genesis by the player shall not fall due for payment until the player has actually received payment under his NRL Playing Contract, Playing Agreement or Non-Playing Agreement as follows: in the case of any NRL Playing Contract or Playing Agreement, for payments in the nature of sign-on fees or playing fees, the player is obliged to pay the relevant percentage of those payments once he receives them; in the case of any NRL Playing Contract or Playing Agreement, for payments in the nature of match fees or any other graduated payments, the player is obliged to pay the relevant percentage of those payments as and when he receives them; in the case of any Non-Playing Agreement, the player is not obliged to pay the relevant percentage until the player has actually received payment of all moneys that are payable to him pursuant to the Non-Playing Agreement.
Clause 5(f) provides that, to remove any doubt, in any case to which clause 5(b)(i) applies, the player’s obligation to pay continues after the expiry date with respect to any moneys payable to him pursuant to any NRL Playing Contract, Playing Agreement or Non-Playing Agreement secured for the player by Genesis during the term; if the contract is terminated pursuant to clause 6, any obligation on the part of the player to pay moneys arising under clause 5(b)(i) prior to termination continues after termination concerning any NRL Playing Contract, Playing Agreement or Non-Playing Agreement secured for the player by Genesis during the term of the contract. Clause 5(f)(iii) provides that if the player becomes permanently disabled or the agreement is terminated by reason of some physical disability on the part of the player, the remuneration payable to Genesis is to be limited to fees calculated by reference to the total payment made to the player including any termination payment.
The contract made between Genesis and Volkan Er dated 30 November 2018 provides for a term commencing on that date and ending on 30 November 2021. It too spans the 2019, 2020 and 2021 playing seasons. The NRL Club recited in the contract is the “South Sydney Rabbitohs”. The remuneration clause 5 with associated definitions is in the same terms as described above. It is not necessary to identify in these reasons the relevant percentages for any of the players.
The contract made between Genesis and Lance Bagon dated 28 November 2018 provides for a term commencing on 28 November 2018 and ending on 28 November 2021. It too spans the 2019, 2020 and 2021 playing seasons. The NRL Club recited in the contract is the “Brisbane Broncos”. The remuneration clause 5 with associated definitions is in the same terms as described above.
The contract made between Genesis and Mosese Pope dated 20 November 2018 is slightly different to the other three contracts as it contains a Schedule cross-referenced to particular clauses. The term of the contract commenced on 20 December 2018 and ends on 20 December 2021. It too spans the 2019, 2020 and 2021 playing seasons. The remuneration clause is clause 6. Clause 6(a) provides that the player shall be obliged to pay to Genesis fees in consideration for the provision of the services agreed to be undertaken by Genesis for the player (as described in Schedule 2 to the Agreement), in the amounts set out in Schedule 2 to the Agreement. Clause 4(a) of Schedule 2 provides that if, during the term, Genesis negotiates and secures for the player an NRL Player Contract or Playing Agreement (as defined), then the player shall pay to Genesis a certain percentage of the “Playing Fees” (a term defined to mean the payment set out in Schedule 1 of an NRL Player Contract) received by the player pursuant to his NRL Player Contract and/or a certain percentage of the playing fees received by the player pursuant to his Playing Agreement (as defined) for the term of those contracts. Clause 4(b) provides that in relation to any match fees negotiated by Genesis “into the Player’s NRL Player Contract or Playing Agreement”, Genesis will be entitled to receive a certain percentage of all match fees paid to the player under his NRL Player Contract or Playing Agreement (subject to the exclusion of certain mandated match fees). Clause 4(d) provides that if during the term Genesis negotiates and secures for the player a Non-Playing Agreement (as defined) then the player shall pay to Genesis as a fee a certain percentage of all moneys received by the player pursuant to the Non-Playing Agreement.
In the case of Mosese Pope, the player and the “Canterbury Bankstown Bulldogs” were parties to an NSWRL Playing Contract dated 9 September 2016 and the parties agreed that the contract payment would be varied such that the Club agreed to increase the playing fee for the 2019 season by a certain amount such that the 2019 playing fee was a particular amount. Accordingly, Genesis was entitled to a certain fee pursuant to clause 6 and clause 4 of Schedule 2. The variation to the NSWRL Playing Contract is dated 20 March 2019.
Genesis is in the market for the provision of management services. It thus engages in commercial rivalry for the provision of those services to players. It depends upon the derivation of revenue in the form of the commissions already described. I am satisfied that the applicant has demonstrated that the respondents either by Genesis directly, or indirectly as individuals through their shareholding in Genesis, have derived a benefit or a gain by reason of the company’s entitlement to remuneration under each of the four contracts described at [192] of these reasons brought into existence as a result of the breaches of fiduciary duty. The benefit or gain derived in this way will be available to Genesis and the individual respondents for the life of each of those contracts.
However, it needs to be remembered that the provision of management services to a player gives rise to a threshold of engagement between the agent and the player such that it is, according to Mr Ayoub’s evidence in his second affidavit sworn 25 September 2019, not uncommon for players who sign a management agreement, at least in Mr Ayoub’s experience in managing players, “to stay with me for a substantial period of time – and more than 80% of career term players that I sign stay with me for the duration of their professional career”: para 126.
Mr Ayoub also says that it is not unusual for UMS to not only act for a player but also to act for that player’s son thus establishing a relationship and connection with what Mr Ayoub describes as the “next generation”. Mr Ayoub gives these brief examples: UMS managed Adrian Lam for the whole of his professional career as a player in Sydney and in England (Wigan) from 1994 to 2004 and still manages him as a coach at Wigan; Mr Ayoub is godfather to Adrian’s son Lachlan Lam and Mr Ayoub manages him. Lachlan Lam in the 2019 season played for the Roosters; UMS managed Julian O’Neill from the mid-1990’s for the rest of his professional career including his period in the English competition; Mr Ayoub is godfather to Julian’s son Ethan O’Neill and he manages him. Ethan O’Neill is a contracted player for the Roosters.
On the basis of this evidence, it seems to be a feature of the provision of management services to rugby league players that once a relationship is established with a managing agent, it tends overwhelmingly to endure. To the extent that there is any doubt about that matter, it is sufficient to recognise that the NRL itself recognised on 20 June 2017 that as from 19 July 2017 future contracts would need to contain a break clause that enabled a player to end an existing management contract on seven days’ notice and, in effect, follow the departing employee to that person’s new place where he or she would continue to provide management services. It follows that once Mr Zibara and Mr Angeli have secured a management contract with a player, there is a real chance that the management contract will be renewed upon the expiration of the term.
Accordingly, the remedy of an account should not only take into account any benefit or gain derived during the period of the management contracts as between Genesis and each player according to their term but also any benefit or gain arising out of a renewal of a management contract with those players. That follows because the management contract entered into with Crossland, Bagon, Er and Pope in 2018 are the expression of the gain or benefit derived by reason of the breaches of fiduciary duty owed by Mr Zibara and Mr Angeli to UMS and the enduring benefit or gain is the benefit of sustaining the relationship consolidated by reason of the breaches of fiduciary duty and the gain is the continuing right to receive remuneration or fees based upon the percentaged calculations contained in subsequent agreements which have come to pass because of the benefit.
The respondents will be ordered to account to the applicant on both bases. Directions will be made as to the filing and serving of submissions on costs. The applicant will be directed to submit a proposed form of order consistent with these reasons.

I certify that the preceding two hundred and eight (208) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.
Associate:
Dated: 24 January 2020

File number(s):	QUD 940 of 2018
Judge(s):	GREENWOOD J
Date of judgment:	24 January 2020
Catchwords:	EQUITY – consideration of the question of whether either or both of the two individual respondents engaged in conduct in breach of fiduciary obligations of loyalty and fidelity owed to the applicant – consideration of whether a remedy in the form of an account ought to be ordered as the expression of a claim for equitable compensation
Legislation:	Corporations Act 2001 (Cth), ss 182, 183, 1317E, 1317H, 1324
Cases cited:	Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd [2018] HCA 43; (2018) 360 ALR 1 Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 Gunasegaram v Blue Visions Management Pty Ltd; Blue Visions Management Pty Ltd v Chidiac [2018] NSWCA 179; (2018) 129 ACSR 265 Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544
Date of hearing:	1, 2, 3, 4 and 8 October 2019
Date of last submissions:	8 October 2019
Registry:	Queensland
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Commercial Contracts, Banking, Finance and Insurance
Category:	Catchwords
Number of paragraphs:	208
Counsel for the Applicant:	Mr R Perry QC and Mr I Erskine
Solicitor for the Applicant:	Anthony Delaney Lawyers
Solicitor for the Respondents:	Mr J M Ireland QC, McGirr Lawyers

JUDGE:	GREENWOOD J
DATE OF ORDER:	24 JANUARY 2020