Western Sydney Wanderers FC Pty Ltd v Football Australia Limited

Case •

[2024] NSWSC 426

•

19 April 2024

No judgment structure available for this case.

Supreme Court


New South Wales

Medium Neutral Citation: Western Sydney Wanderers FC Pty Ltd v Football Australia Limited [2024] NSWSC 426
Hearing dates: 26 July 2023
Date of orders: 19 April 2024
Decision date: 19 April 2024
Jurisdiction:Equity
Before: Richmond J
Decision:

See [88]–[89]

Catchwords:

ASSOCIATIONS AND CLUBS — domestic and private tribunals — interpretation of rules governing domestic sporting tribunal

CONTRACTS — construction — interpretation — natural and ordinary meaning

Cases Cited:

Australian Broadcasting Commission v Australian Performing Rights Association Ltd (1973) 129 CLR 99; [1973] HCA 36

Australian Football League v Carlton Football Club [1998] 2 VR 546

Australian Vintage Ltd v Belvino Investments No 2 Pty Ltd (2015) 90 NSWLR 367; [2015] NSWCA 275

Barrie Toepfer Earthmoving and Land Management Pty Ltd v CGU Insurance Ltd (2016) 75 MVR 108; [2016] NSWCA 67

Cameron Australasia Pty Ltd v AED Oil Ltd [2015] VSC 163

Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 at 510; [1986] HCA 82

Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7

Funtastic Ltd v Madman Film and Media Pty Ltd [2016] VSC 708

H & E Van Der Sterren v Cibernetics(Holdings) Pty Ltd (1970) 44 ALJR 157

Incollingo v Tax Practitioners Board [2023] FCA 878

Legal & General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314

Morris v Victorian Farmers Federation [2022] VSC 407

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37

Notesco Pty Ltd v Australian Financial Complaints Authority Ltd (2022) 365 FLR 163; [2022] NSWSC 285

Schott AG v Melton Willows Pty Ltd [2023] VSC 364

Shoalhaven City Council v Firedam Civil Engineering Pty Ltd (2011) 244 CLR 305; [2011] HCA 38

Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47

Singh v Singh [2023] NSWSC 436

Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; [2005] HCA 17

Texts Cited:

JW Carter, Contract Law in Australia (JW Carter Publishing, 8th ed, 2023)

Macquarie Dictionary, 9th ed, 2023

Category:Principal judgment
Parties: Western Sydney Wanderers FC Pty Ltd (Plaintiff)
Football Australia Ltd (First Defendant)
Daniel Lopar (Second Defendant)
Representation:

Counsel:
F Corsaro SC (Plaintiff)
I Griscti (First Defendant)
C P O’Neill (Second Defendant)

Solicitors:
Turner Freeman (Plaintiff)
Bird & Bird (First Defendant)
Professional Footballers Australia (Second Defendant)
File Number(s): 2023/163078

JUDGMENT

  1. In these proceedings the plaintiff, Western Sydney Wanderers FC Pty Ltd (the Club), seeks orders setting aside a contractual determination made by the National Dispute Resolution Chamber (NDRC), a body established by the first defendant, Football Australia Limited (FA), of a ‘grievance’ which the second defendant, Daniel Lopar (Mr Lopar), had against the Club in respect of his player salary payments.

  2. The NDRC purported to determine that dispute by making, on 10 February 2023, the following determination which was sent by email to the Club on 14 February 2023:

The Player has succeeded in establishing that the Club breached the Standard Playing Contract dated 15 January 2020 in a manner entitling him to terminate it, pursuant to clause 20.4(b) thereof. The Club is to pay the Player damages in respect of the loss occasioned by that breach in the sum of AUD$464,427.55.

  1. The Club challenges the enforceability of that determination and by its amended summons seeks the following relief:

  1. a declaration that the Determination is null and void;

  2. a declaration that the Determination was not made in accordance with National Dispute Resolution Chamber Regulations and therefore [is] not valid and binding on the plaintiff; and

  3. the first defendant be restrained from requiring the plaintiff to pay the sum of $471,303.00 as required by the Determination.

Evidence

  1. Evidence was given for the plaintiff by Armando Gardiman, the plaintiff’s solicitor, and John Tsatsimas, the Chief Executive Officer of the plaintiff during the course of the dispute between the plaintiff and Mr Lopar. Each of them was cross-examined. I considered each of them to be a truthful and reliable witness and accept their evidence.

  2. Evidence was given for the defendants by Stuart Kempson, a solicitor employed by FA with the title Legal Counsel, and Angela Collins, a solicitor employed by Professional Footballers Australia Inc, with the title Head of Legal. Mr Kempson was cross-examined. I considered him to be a truthful and reliable witness and accept his evidence.

Background

  1. The Club is a football club that competes in the Hyundai A-League National Football Competition (the Competition) as ‘The Western Sydney Wanderers FC’. At all relevant times, FA was the entity responsible for administering and promoting the Competition, in which the Club competed pursuant to a participation agreement with FA.

  2. Players competing in the Competition may only do so pursuant to an A-League Standard Player Contract entered into by the player with the club which employs him and FA (SPC). The terms of employment of players competing in the Competition are governed by a collective bargaining agreement (CBA) concluded by FA and the Professional Footballers Association (PFA), the exclusive representative body for professional footballers in Australia.

  3. Under cl 18.1 of the SPC, the parties agree to comply with, among other things, the ‘Grievance Procedure’, and under cl 19 each party agrees to submit exclusively to the jurisdiction of the ‘Grievance Procedure’ which is expressed to be final and binding on the parties. The Grievance Procedure that was in place at the relevant time was established by the Grievance Procedure By-Law promulgated by FA. That provided that disputes should be resolved by the NDRC, in accordance with the National Dispute Resolution Chamber Regulations (NDRC Regulations). It will be necessary to return to the NDRC Regulations later in this judgment.

  4. Mr Lopar is a Swiss national and professional football player previously employed by the Club as a ‘goalkeeper’. Mr Lopar was first employed by the Club pursuant to a SPC concluded on 22 June 2019, for a term from 1 July 2019 to 31 May 2020 (First SPC) to play for the Club in the 2019/2020 season of the Competition at an annual salary of $170,000 inclusive of superannuation.

  5. On 15 January 2020, the Club and Mr Lopar entered into a further SPC for a term from 1 June 2020 to 31 May 2022 (Second SPC), anticipating Mr Lopar competing for the Club in the Competition for the two subsequent football seasons (2020/2021 and 2021/2022) at an annual salary of $318,000 inclusive of superannuation.

  6. On 24 March 2020, FA suspended the 2019/2020 season of the Competition as a result of the COVID-19 pandemic. Following the suspension of the season, the Club stood down a number of players, including Mr Lopar. Mr Lopar returned to Switzerland, and when the season resumed in July 2020, Mr Lopar did not return to play for the club, and by agreement no further salary payments were made pursuant to the First SPC for that season. The term of the First SPC had been extended to cover the extension of the period of the 2019/2020 season of the Competition, and the term of the Second SPC was correspondingly altered to commence on 1 September 2020.

  7. On around 17 June 2020, Mr Lopar and the Club agreed to amend the Second SPC in certain respects including that Mr Lopar’s salary for the 2020/21 season would be reduced to $288,500 (inclusive of superannuation) for a shortened contract year 2020/21 from 1 September 2020 to 31 May 2021. This represented a monthly salary of $26,500 (inclusive of superannuation). This meant that Mr Lopar’s salary for the 2020/21 season was reduced by 25% which was the same for all other players who had signed a SPC for that season.

  8. Mr Lopar returned to Sydney in October 2020 and commenced pre-season training with the club, apparently with the intention of playing in the 2020/2021 season of the Competition.

  9. From September 2020, the Club had discussions with its players (including by a zoom call on 16 September 2020 in which Mr Lopar participated), in which senior management of the Club asked the players contracted for the 2020/21 season to accept a 15% reduction in their salary payments until the end of the season. The Club asserts, and Mr Lopar denies, that he agreed to this 15% reduction along with the other players.

  10. On around 17 November 2020, the Club provided each of its contracted players, including Mr Lopar, a new version of the SPC for the 2020/21 and 2021/22 seasons which provided for a reduction in each player’s salary for the 2020/21 season of 15%.

  11. From September to December 2020, the Club paid Mr Lopar 85 per cent of the salary payments under the Second SPC. The PFA, on behalf of Mr Lopar, issued a notice of breach on 18 November 2020 seeking that the alleged underpayment be remedied. The Club did not pay Mr Lopar any further amounts. On 8 December 2020, Mr Lopar terminated the Second SPC.

  12. On 4 August 2021, Mr Lopar initiated proceedings before the NDRC by filing an NDRC Application form seeking damages for the alleged breach of the Second SPC (the NDRC Proceedings). Ultimately, Mr Lopar was successful in obtaining a determination that he was entitled to payment of the sum of $464,427.55 (the Lopar Determination).

  13. The conduct of the NDRC Proceedings is at issue in these proceedings. The plaintiff claims that the Lopar Determination was not made in accordance with the NDRC Regulations, and therefore lacks any foundation in the operative contract between the parties, the Second SPC. The consequence being that the Lopar Determination cannot be enforced through the contractual mechanisms envisaged in the Second SPC.

  14. The defendants do not dispute that the Lopar Determination was not made in strict accordance with the NDRC Regulations. The defendants’ position, as it emerged at trial, is that these defects did not substantially change the position of the parties in the NDRC Proceedings, and any prospective invalidity of the Determination is effectively cured by a provision of the NDRC Regulations.

The NDRC

  1. The NDRC is the body designated to resolve disputes between clubs competing in the Competition and players, as well as between clubs and FA. The NDRC is convened in accordance with the NDRC Regulations. It is common ground between the parties that the NDRC Regulations were validly incorporated into the Second SPC by reference. The objective of the NDRC Regulations is stated in cl 2.3 as follows:

2.3 The objective of these Regulations is to enable the NDRC to hear and determine Disputes justly and to this end:

(a) enshrine the right of a party to be heard before an independent and impartial body in a fair and equitable manner;

(b) save parties time and expense;

(c) ensure matters are dealt with fairly and expeditiously; and

(d) apply uniformly and equally to all Players regardless of their nationality or whether they are members of a Club based in Australia or outside Australia, such as New Zealand.

  1. The NDRC is designed to operate with a roster of 10 arbitrators, five nominated by FA and five nominated by the PFA who will be appointed to the roster if approved by the other: NDRC Regulations cl 5.1.

  2. Clause 5.1(e) of the NDRC Regulations provides (emphasis added): “[FA] and the PFA must agree on the appointment of a Chair and a Deputy Chair of the NDRC”. The terms Chair and Deputy Chair were defined as follows:

Chair means the Arbitrator appointed by mutual agreement of FFA and the PFA to chair the NDRC in accordance with clause 5.1(e)

Deputy Chair means the Arbitrator appointed by mutual agreement of FFA and the PFA to be the deputy chair of the NDRC in accordance with clause 5.1(e).

  1. FA must also appoint an Administrator of the NDRC to oversee its operations: cl 3.

  2. Different categories of disputes require either a single arbitrator or a panel of three. The parties accept that the dispute was a ‘Player Dispute with an International Dimension’ for the purposes of cl 5.2(b) of the NDRC Regulations. This meant that the panel hearing the NDRC Proceedings had to be convened in accordance with cl 5.2(b) which provided (emphasis added):

(b) Subject to clause 5.2(c), Player Disputes of an International Dimension must be heard by a Panel of three (3) Arbitrators comprising:

(i) the Chair or the Deputy Chair;

(ii) one Arbitrator nominated to the Roster of Arbitrators by [FA], and

(iii) one Arbitrator nominated to the Roster of Arbitrators by the PFA.

  1. It is not in dispute that cl 5.2(c) is irrelevant here. It will be necessary to return to the requirements of this clause later in this judgment. It may be noted that it was a mandatory requirement that the NDRC panel comprise either the Chair or Deputy Chair and in addition two Arbitrators on the roster of Arbitrators, one of whom had previously been nominated by FA and the other of whom had previously been nominated by PFA.

  2. The NDRC Regulations set out the processes for lodging and prosecuting a dispute, including timeframes and hearing requirements.

  3. The NDRC determines a matter by issuing a ‘Determination’, defined in cl 1 as follows:

Determination means a determination of a Dispute by a Panel of the NDRC to be in the form and having the content prescribed in clause 15.

  1. The term “Panel” is defined to mean ‘a panel of one (1) or three (3) Arbitrators convened to hear and determine a Dispute in accordance with clause 5.2’.

  2. Clause 15 relevantly provides (emphasis added):

15.1 A Determination must be made in writing and:

(a) contain the names of the Arbitrator(s);

(b) provide the reasons on which the Determination is based;

(c) be signed by the Chair or the Deputy Chair (sitting on the Panel as applicable) or sole Arbitrator (as applicable); and

(d) contain the date on which, and the place where, the Determination was made.

  1. Determinations have ‘immediate effect’: cl 15.5.

  2. The Determination of a Dispute by a Panel made in accordance with the NDRC Regulations is intended to be final and binding on the parties subject to a limited right to appeal under cl 20.1, as stated in the following (emphasis added):

2.5 FFA, PFA and Players submit to the jurisdiction outlined in these Regulations and agree that:

(a) all Disputes will be solely and exclusively heard and determined by the NDRC,

(b) it will not attempt to commence proceedings in relation to any Dispute in any court of law or tribunal; and

(c) subject to a party’s right to appeal a Determination in accordance with these Regulations, a Determination made in accordance with these Regulations is final and binding on all parties.

…

21.1 Subject only to the rights of appeal specified in these Regulations, a Determination of a Panel is final and binding on all parties. Unless otherwise specified in a particular regulation or by the Panel who made the Determination, the parties undertake to carry out the final Determination without delay.

…

22.1 The Determination of a Dispute made in accordance with these Regulations will be final and binding on the parties and neither FFA, the PFA, a Club, a Player nor an Affected Party who joins any proceedings in accordance with these Regulations may institute or maintain proceedings in any court of law or tribunal.

  1. If a party fails to comply with a Determination, cl 21.3 provides a non-exhaustive list of possible consequences, including that the party may be:

(a) sanctioned by FFA with a fine for failing to comply with the instructions issued by a Panel;

(b) given a final time limit by FFA in which to settle the debt; and

(c) if it is a Club, sanctioned with a deduction of competition points if it has not paid by the final time limit.

  1. The requirements for appeals are set out in cl 20. The sole grounds for appealing a determination are the denial of a reasonable opportunity to be heard, that the determination was affected by bias and/or that the determination was one that was not reasonably open on the evidence before the panel. Relevant to this dispute, NDRC Regulations cl 20.2(b)(i)(B) provides that for a dispute of the present kind an application form must be lodged with the Administrator within seven days of receipt of the determination. Clause 20.2(c) provides that (emphasis added):

(c) The period for lodgement of the appeal set out in clause 20.2(b)(i) must expire at midnight (AEST) on the last day of the limitation period. The Chair of the Panel may extend this period in exceptional circumstances.

  1. Clause 25 provides:

25. SUBSTANTIAL COMPLIANCE

No proceedings before the NDRC in relation to a Dispute will be invalidated for any defect whether of substance or of form in any notice or report or by reason of non-compliance with any term of these Regulations, unless the Chair so determines.

The conduct of the NDRC Proceedings

  1. Mr Lopar lodged an application form and notice of grievance on 4 August 2021 initiating the NDRC Proceedings in accordance with the Second SPC and NDRC Regulations.

  2. As at 4 August 2021 there was no Chair or Deputy Chair appointed in accordance with NDRC Regulations cl 5.1(e). The previous chair, Mr Kite SC, had been removed on 28 April 2021 and a new Chair was not appointed until 7 September 2022 when Mr Kitching was appointed, which was after the hearing of the NDRC Proceedings. The Administrator was Mr Kempson who gave evidence in these proceedings as noted before.

  3. The roster of arbitrators in place at the time of the institution of the NDRC Proceedings comprised:

  1. FA Nominees: Dominic Villa, Peter Speed, Shaun McCarthy, Arthur Koumoukelis, and Anthony Lo Surdo SC

  2. PFA Nominees: Professor Jack Anderson, Rebecca Ogge, Ben Ihle QC, Elle Nikou Madalin, and Simon Philips.

  1. On 14 September 2021, Mr Kempson corresponded with Mr Lo Surdo SC seeking him to act as the chair of the panel hearing the dispute between Mr Lopar and the Club, as well as for two other panel members to hear the proceedings. Mr Lo Surdo SC indicated that he had spoken to Mr Philips who had indicated that he was able to sit on the panel hearing the dispute. Mr Kempson subsequently contacted Mr Philips and Ms Nikou Madalin, who confirmed their availability.

  2. On 21 September 2021, Mr Kempson then emailed Ms Angela Collins of the PFA, who represented Mr Lopar in the NDRC Proceedings, advising that he proposed a panel comprising Mr Lo Surdo SC, Mr Philips and Ms Madalin, and suggesting that Mr Lo Surdo should sit as the acting chair in the absence of a Chair or Deputy Chair of the NDRC. This communication was not copied to the Club or its representatives. Ms Collins confirmed that the PFA was comfortable with the composition of the panel “with Mr Lo Surdo as Chair in this matter”. Mr Kempson accepted in cross-examination that he did not communicate to the Club that FA and PFA had agreed that Mr Lo Surdo act as chair of the Panel for this matter.

  3. On 27 September 2021, Mr Kempson emailed John Tsatsimas, then the CEO of the Club, stating that “we have finalised a panel to hear this dispute, consisting of Anthony Lo Surdo SC, Simon Philips and Ellie Nikou Madalin”. Mr Kempson’s email did not mention that none of these persons was Chair or Deputy Chair of the NDRC or that Mr Lo Surdo was to “act” as Chair on the Panel.

  4. At this point it is clear that the composition of the Panel did not comply with the requirements under cl 5.2(b) in two ways:

  1. The Panel did not consist of the Chair or the Deputy Chair of the NDRC (given that these positions were not filled at the relevant times); and

  2. The Panel consisted of two PFA nominees (Mr Philips and Ms Madalin), neither of whom were the Chair or Deputy Chair.

  1. In early March 2022, the NDRC Proceedings were set down for a hearing on 27 May 2022. On 27 April 2022, Mr Lo Surdo SC informed Mr Kempson that he was unlikely to be available to sit on the hearing of the Panel on 27 May 2022, and arrangements were made for Mr Shaun McCarthy to sit on the Panel in his place, also sitting as the ‘chair’. Mr McCarthy was also a FA nominee.

  1. On 4 May 2022, a pre-hearing conference was held between the parties on Microsoft Teams. The persons participating were Mr Kempton as Administrator, Mr Ian Latham (on behalf of the Club), Mr Callan O’Neill (on behalf of Mr Lopar), Mr Jack Kaye (on behalf of PFA) and the three members of the Panel (being Mr McCarthy, Mr Philips and Ms Madalin).

  2. Mr Kempson accepted in cross-examination that at no stage during the process of determination of the grievance was the Club asked to consent to the composition of the Panel, nor did he inform the Club that the person who was referred to by him in email correspondence as the ‘chair’ of the Panel (first Mr Lo Surdo and later Mr McCarthy) was not the Chair of the NDRC but only the person who was to act as chair of the Panel for this particular matter. His evidence was that he tried to remedy the situation of there being no appointed Chair of the NDRC by obtaining the agreement of FA and PFA for Mr McCarthy (and before him Mr Lo Surdo) to act as chair of the Panel for this particular matter. However, he did not advise the Club that the person who acted as the chair of the Panel which heard the grievance (Mr McCarthy) was not either the Chair or Deputy Chair of the NDRC.

  3. The defendants did not advance an argument at trial that there had been an agreement between the parties for a change or divergence from the procedure laid down in cl 5.2(b), nor that there had been a waiver by the Club of its right to challenge the jurisdiction of the Panel on the basis that it was not properly constituted. The evidence of Mr Tsatsimas was that he assumed that the administrator had established the panel in accordance with the NDRC Regulations.

  4. The hearing of the Panel (comprising Mr McCarthy, Mr Philips and Ms Madalin) took place over two days, on 27 May 2022 and 29 July 2022.

  5. On 10 February 2023, the Panel delivered the Lopar Determination to the parties which stated on the cover page that the Panel (referred to as the ‘Chamber Committee’) comprised ‘Shaun McCarthy (Chair), Simon Phillips and Elle Nikou Madalin’. The time period for an appeal under the NDRC Regulations expired on 21 February 2023.

  6. On 28 February 2023, the Club filed an application seeking an appeal of the Lopar Determination to the NDRC Administrator. On 1 March 2023, the NDRC Administrator informed the Club that the application was made out of time, and that an application could be made to the Chair of the NDRC to extend the period of time for an appeal.

  7. The Club lodged an application for extension of time, which was rejected by Mr Kitching on 12 April 2023 on the basis that there were no exceptional circumstances. Mr Kitching was, at this time, the Chair of the NDRC but he was not the chair of the Panel which heard the grievance.

Issues for determination

  1. The Club contends that there are two defects in the procedures adopted by the NDRC:

  1. the Panel was not composed in accordance with the regulations, for the reasons identified in [41], with the consequence that the Lopar Determination was in breach of cl 15 of the NDRC Regulations as it was not signed by the Chair or Deputy Chair sitting on the panel; and

  2. the application for leave to file an application out of time was not determined in accordance with cl 20.2(c) of the NDRC Regulations.

  1. The Club submitted that the consequence of the first defect is that the Lopar Determination was not made in accordance with the Second SPC, and therefore is not ‘final and binding’ on the parties, to adopt the language of cll 21.1 and 22.1. However, if the Club were only successful on the second issue it would only be entitled to a declaration that the Lopar Determination was not enforceable until the leave to appeal application was determined in accordance with cl 20.2(c).

  2. At the hearing, the defendants did not dispute that the Panel which made the Lopar Determination was not in compliance with cl 5.2(b) of the NDRC Regulations, nor that the Lopar Determination was not signed by the Chair or Deputy Chair of the NDRC sitting on the panel in breach of cl 15 of the NDRC Regulations. Rather, the defendants contended that cl 25 of the NDRC Regulations operated to cure any non-compliance and render the Lopar Determination enforceable under the Second SPC.

  3. The defendants submitted that:

  1. the composition of the Panel was a minor defect in the NDRC Proceedings, as it was always contemplated by the parties that a panel could be composed of two PFA nominees and one FA nominee (when there is a Chair that was a PFA nominee);

  2. the failure of the Chair or Deputy Chair to sign the Lopar Determination did not change any of the substantive rights under the NDRC Regulations and, in any event, an acting chair signed the document; and

  3. the Club is attempting to litigate the merits of the leave to appeal issue, contrary to cl 22 of the NDRC Regulations.

  1. The resolution of the first issue turns on the proper construction of cl 25 of the NDRC Regulations. For the reasons that follow, the Club has established that the Lopar Determination was not made in accordance with the Second SPC as a consequence of the Panel not being properly constituted.

The proper construction of clause 25 of the NDRC Regulations

  1. Clause 25 provides:

No proceedings before the NDRC in relation to a Dispute will be invalidated for any defect whether of substance or of form in any notice or report or by reason of non-compliance with any term of these Regulations, unless the Chair so determines.

  1. The principles to be applied to determine the meaning of cl 25 were not in dispute. The terms of the NDRC Regulations must be given the meaning that a reasonable businessperson would understand the words to mean. That requires a consideration of the language used by the parties, the surrounding circumstances objectively known to them and the commercial purpose or object to be secured by the contract; see generally Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 at [46]–[52]; Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 at [78].

  2. Further, it may be noted that:

  1. A commercial contract should be construed as a whole and, if possible, so as to render its terms harmonious: Australian Broadcasting Commission v Australian Performing Rights Association Ltd (1973) 129 CLR 99 at 109; [1973] HCA 36.

  2. Unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a business-like interpretation on the assumption that the parties intended to produce a commercial result, and consequently should construe a contract to avoid making commercial nonsense or working commercial inconvenience: Electricity Generation at [35].

  3. If the language of the contract is open to two constructions, preference will be given to the construction which avoids consequences which appear to be capricious, unreasonable, inconvenient or unjust: Australian Broadcasting Commission at 109.

  1. Importantly, the NDRC Regulations form part of a standard agreement entered into by the Club and Mr Lopar. They are to be understood against the backdrop of extensive negotiations by FA and the PFA, as well as the applicable collective bargaining agreements that govern the terms on which players are employed by football clubs to compete in the Competition.

The plaintiff’s submissions

  1. The Club’s submission was that non-compliance with the NDRC Regulations deprives any determination of a ‘final and binding’ character, and that cl 25 does not change this position. The Club submitted that cl 25 operates to cure minor procedural defects that occur in proceedings before the NDRC and ensures that the proceedings as a whole are not invalidated (ie. that the proceedings commenced by the notice of grievance are not dismissed without a final and binding determination being made).

  2. The Club submitted that the broad meaning given to the words under the defendants’ construction defeated the main object of the contract. By analogy to the construction of exception clauses, it submitted cl 25 could not be construed in a manner that would tend to defeat the main objectives of the contract.

  3. Further, even if the defendants’ position was adopted, cl 25 was frustrated as there was no Chair that could determine if the proceedings were invalidated.

The defendants’ submissions

  1. The defendants submitted that cl 25 was an express agreement by the parties that non-compliance with the requirements in cl 5.2 regarding the composition of the Panel fell within cl 25 due to the words ‘by reason of non-compliance with any term of these Regulations’. Consequently, that non-compliance has no bearing on the enforceability of the Lopar Determination. This is because the parties have agreed, in cl 25, that non-compliance with the rules will not be fatal to ‘proceedings before the NDRC’ unless the Chair determines that they ought to be ‘invalidated’. The defendants submitted that the reference to ‘proceedings’ in this context should be read to include any determination rendered by a panel.

  2. This was said to be consistent with the purpose of the NDRC Regulations, as it facilitates the parties’ agreement to resolve all disputes before the NDRC and not a court: cl 22.1. To the extent possible, the parties have attempted, through cl 25, to ensure that any dispute remains within the NDRC and is determined promptly.

  3. The second defendant draws an analogy to commercial arbitration, where minor breaches of arbitral procedure will not render an award liable to be set aside: Cameron Australasia Pty Ltd v AED Oil Ltd [2015] VSC 163 at [53] (Croft J). The composition of the panel was a minor defect in the proceedings because the parties had contemplated a scenario where there were two nominees of one interest group and one of the other as the Chair or Deputy Chair was required to be drawn from the roster of arbitrators.

  4. The defendants also submitted that the reference in cl 25 to ‘the Chair’ should be read as a reference to the chair of the panel determining the dispute and not the chair of the NDRC (as the term is defined in the NDRC Regulations).

Consideration

  1. Starting with the text of cl 25, the critical words are the opening words “No proceedings before the NDRC in relation to a dispute will be invalidated”. The focus of the provision is on avoiding the “invalidation” of “proceedings” before the NDRC by reason of either (a) a defect (whether of substance or form) in any notice or report, or (b) non-compliance with any term of the NDRC Regulations. There is no dispute that the failure to constitute the Panel which heard Mr Lopar’s grievance fell within (b). What the clause does in those circumstances is ensure that the “proceedings” are not thereby invalidated.

  2. The dictionary meaning of “invalidate” is “1. To render invalid; 2. To deprive of legal force or efficacy” (Macquarie Dictionary, 9th ed, 2023).

  3. The dictionary meaning of “proceedings” in a legal context is “a. the instituting or carrying on of an action at law; b. a legal step or measure” (Macquarie Dictionary, 9th ed, 2023). In an appropriate context, ‘proceedings’ will extend beyond the invocation of the jurisdiction of a court of law, to “a legal process of some kind by which evidence may be taken, or to which the rules of evidence apply, and containing at least some kind of adjudication in favour or against someone, which ordinarily imports obligations of procedural fairness in relation to such an adjudication”: Incollingo v Tax Practitioners Board [2023] FCA 878 at [93]–[97] per Bromwich J.

  4. In my view, in the context in which “proceedings” appears in cl 25, that term is being used in the sense referred to by Bromwich J in Incollingo set out above, and means a legal process which takes place for the resolution of a Dispute commencing with the making of an application under cl 6 of the NDRC Regulations and continuing to the final determination of the Dispute by the making of a determination under cl 15 or a finalisation of any appeal from that determination under cl 20.

  5. This meaning accords with the use of the word “proceedings” in other provisions of the NDRC Regulations, see e.g. cl 7.1 (referring to “institution of proceedings (including appeals) under these Regulations…”), cl 9.1 (dealing with allowing persons to be joined to the “proceedings”), cl 10.2 (dealing with the Panel issuing directions with respect to “the proceedings”), and cl 18.2 (dealing with the termination of “the proceedings”). It may be contrasted with cl 12.2 which states that “the proceedings before the Panel must comprise: (a) written submissions, materials, documents or other evidence a party intends to rely on in the hearing; and (b) subject to cl 12.3, an oral hearing”. Proceedings in this particular context is being used to refer to the process before the Panel which hears the grievance rather than in the wider sense used in cl 25.

  6. On this meaning of “proceedings”, cl 25 does not render valid a determination which has not been made in accordance with the requirements of the NDRC Regulations, in particular cl 5.2(b) and cl 15, rather what it does is ensure that the proceedings as a whole are not rendered invalid by that non-compliance. Hence, while the failure to comply with cl 5.2(b) and cl 15 will have the result that the Lopar Determination is not final and binding, the dispute is still before the NDRC and it would be necessary for the administrator to convene a new panel in accordance with cl 5.2(b) to hear the dispute.

  7. This meaning of “proceedings” gives cl 25 a coherent operation with other provisions of the NDRC Regulations of which two kinds may be mentioned. First, cl 2.5 and cl 22.1 make a determination final and binding but only if the determination is “made in accordance with these Regulations”. It would be an odd result if a determination which was not made in accordance with the Regulations was rendered valid by cl 25. The specific provisions (cll 2.5 and 22) should not be overridden by the general (cl 25) without a clear indication that this was intended. Second, there are provisions in the NDRC Regulations which set out mandatory requirements for the process by which a determination is to be made, in particular cl 5.2 which sets out mandatory requirements (“must be heard by”) for the constitution of a Panel to hear the different types of disputes which are to be determined, and cl 15.1 stating how a determination is made (“must be made in writing and…provide the reasons on which the Determination is based…”). Again, it would be an odd result if a determination made orally and/or without reasons was validated through the operation of cl 25. Once it is appreciated that cl 25 is simply not directed at validating a determination which fails to comply with the requirements of the NDRC Regulations, any potential incoherence falls away.

  8. Where a domestic tribunal determines a dispute and founds the binding nature of its determination in contract (rather than in accordance with a statute or other instrument), that decision must be ‘consonant’ with the terms of the contract: Australian Football League v Carlton Football Club [1998] 2 VR 546, 550 (Tagdell JA); Singh v Singh [2023] NSWSC 436 at [49] (Kunc J); Morris v Victorian Farmers Federation [2022] VSC 407 at [74] (Dixon J). The Court’s role in such a circumstance was aptly put by Rees J in Notesco Pty Ltd v Australian Financial Complaints Authority Ltd (2022) 365 FLR 163; [2022] NSWSC 285 at [21]:

As explained by Tadgell JA in Australian Football League v Carlton Football Club Ltd [1998] 2 VR 546, if a domestic tribunal’s decisions owes its binding quality to a contract… the courts will recognise that the decision must be consonant with the contract and, if not, a declaration to that effect may be obtained and an appropriate injunction granted at the suit of an aggrieved person whom the decision purports to bind: at 550; followed in Mickovski v Financial Ombudsman Service Ltd (2012) 36 VR 456; [2012] VSCA 185 at [38]. The power of a Court to review the decision of a body… may be seen as deriving as a matter of law from the necessity for the attainment of justice in respect of the functions of tribunals of the general type in question or it may be seen as deriving as a matter of fact from the necessity to give business efficacy to the particular contract in issue…

  1. In the present case, the decision of the relevant ‘tribunal’ (the NDRC) is not consonant with the terms of the contract (being the Second SPC).

  2. A similar approach applies in relation to an expert determination pursuant to a contract: Shoalhaven City Council v Firedam Civil Engineering Pty Ltd (2011) 244 CLR 305; [2011] HCA 38 at [27] (French CJ, Crennan and Kiefel CJ); Legal & General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314, 335–336; Schott AG v Melton Willows Pty Ltd [2023] VSC 364 at [52] (Stynes J); Funtastic Ltd v Madman Film and Media Pty Ltd [2016] VSC 708 at [50] (Almond J); Australian Vintage Ltd v Belvino Investments No 2 Pty Ltd (2015) 90 NSWLR 367; [2015] NSWCA 275 at [74] (Bathurst CJ). The underlying policy reason is that a determination not made in accordance with the contract undermines the consent of the parties to have their rights determined in the manner envisaged when the agreement was taken out.

  3. I understand the defendants’ submission to be that the determination was made in accordance with the agreement of the parties because they had agreed through cl 25 that compliance with the NDRC Regulations was not required for the determination to be enforceable. I reject that submission because it fails to give the correct meaning to “proceedings” in cl 25.

  4. Clause 25 must be read in its context and given an interpretation that supplies a ‘a congruent operation to the various components of the whole’: Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522; [2005] HCA 17 at [16] (Gleeson CJ, McHugh, Gummow and Kirby JJ). The defendant’s construction of cl 25 does not sit coherently with the provisions in cll 2.5(b) and 22.1 that a determination is only final and binding where it is ‘made in accordance with these regulations’.

  5. Relevant in this regard are the following provisions that sit outside the NDRC Regulations but form part of the context in which they operate. Clause 6.1(b) of the Grievance Procedure By-Law states:

6.1 Each Constituent submits exclusively to the jurisdiction of the FA Grievance Procedure and agrees that…

(b) the determination of a matter made in accordance with the Judicial Bodies By-Law, the National Arbitration Tribunal Regulations, the National Dispute Resolution Chamber Regulations or the Complaints, Disputes and Discipline Policy is final and binding on all parties…

  1. Clause 7.3 of the Grievance Procedure By-Law states:

The jurisdiction of the National Dispute Resolution Chamber to hear and determine disputes is specified in the National Dispute Resolution Chamber Regulations and such disputes must be administered and heard in accordance with the National Dispute Resolution Chamber Regulations.

  1. Clause 19.2(a)(ii) of the Second SPC states:

19.2 Grievance Procedure

(a) Each Party submits exclusively to the jurisdiction of the Grievance Procedure and agrees that…

(ii) the determination of a matter made in accordance with…National Dispute Resolution Chamber Regulations is final and binding on all parties…

  1. The primary purpose of the NDRC Regulations is to set out the rules under which the parties have agreed to be bound by a determination of their rights under significant contractual relations. The NDRC forms an important part of a broader sets of rules that govern the way that players and clubs resolve disputes. The NDRC Regulations must be understood as a document that makes explicit the conditions on which the parties have consented to this form of dispute resolution.

  1. Reflecting that purpose, the NDRC Regulations and other instruments forming part of the Second SPC made repeated reference to a determination only being valid if it was made in accordance with the regulations.

  2. The defendants’ interpretation of cl 25 treats it as operating in a similar manner to an exclusion or limitation clause. A principle of construction that applies to such clauses is that the provisions must not be construed in a manner that tends to defeat the main object and purpose of the contract: Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 at 510; [1986] HCA 82; H & E Van Der Sterren v Cibernetics (Holdings) Pty Ltd (1970) 44 ALJR 157 at 158; JW Carter, Contract Law in Australia (JW Carter Publishing, 8th ed, 2023) [14-13].

  3. If cl 25 meant that compliance with the NDRC Regulations was not necessary for a binding determination to be made, that would undermine the parties’ intention in agreeing to be bound by a series of rules that delineate the circumstances in which the parties consent to a final and binding determination of their rights without recourse to a court. The term must be read in a way that does not tend to defeat the purpose and object of the whole contract: see [83].

  4. It may be noted that the heading to cl 25 reads ‘substantial compliance’; which may be taken into account in interpreting the clause, there being no provision in the NDRC Regulations to the contrary: Barrie Toepfer Earthmoving and Land Management Pty Ltd v CGU Insurance Ltd (2016) 75 MVR 108; [2016] NSWCA 67 at [85] (Meagher JA). However, I do not consider that in this case the heading assists with the interpretation of cl 25, one way or the other.

Failure to properly determine the application for leave to appeal

  1. In light of my conclusion on the first issue, this issue drops away. However, in case I am wrong on the first issue, I can deal with it shortly. Clause 20.2(c) of the NDRC Regulations provides:

The period for lodgment for appeal set out in cl 20.2(b)(i) must expire at midnight (AEST) on the last day of the limitation period. The Chair of the Panel may extend this period in exceptional circumstances.

  1. The “limitation period” referred to was, in this case, 7 days after receipt of the Panel’s written determination. The Chair of the Panel was Mr McCarthy. The person who determined the application was Mr Kitching. It follows while Mr Kitching was the Chair at the relevant time, he was not the Chair of the Panel which made the determination. Accordingly, the application for leave to appeal out of time has not been determined.

Conclusion

  1. For the above reasons, the Lopar Determination is not final and binding because it was not made in accordance with the NDRC Regulations. I consider the appropriate orders are declarations that:

  1. The Determination dated 10 February 2023 was not made in accordance with the National Dispute Resolution Chamber Regulations and therefore is not final and binding on the plaintiff.

  2. The plaintiff has no obligation to pay the sum of $464,427.55 as required by the Determination.

  1. As the Club has been successful, the defendants should pay the plaintiff’s costs on the ordinary basis, as agreed or assessed.

  2. As the amount referred to in the second declaration at [88(2)] above differs from the relief sought in the summons, I will stand the matter over for a short period to allow the parties to address the form of final orders.

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Decision last updated: 19 April 2024

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