Whittlesea Juventus International Football Club Inc v Football Federation Victoria Inc
[2009] VSC 123
•27 March 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
No. 5564 of 2009
| WHITTLESEA JUVENTUS INTERNATIONAL FOOTBALL CLUB INC (A0025001P) | Plaintiff |
| v | |
| FOOTBALL FEDERATION VICTORIA INCORPORATED (ABN 97 592 993 965) | Defendant |
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JUDGE: | HARPER J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 20 & 24 MARCH 2009 | |
DATE OF JUDGMENT: | 27 MARCH 2009 | |
CASE MAY BE CITED AS: | WHITTLESEA JUVENTUS INTERNATIONAL FOOTBALL CLUB INC v FOOTBALL FEDERATION VICTORIA INC | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 123 | |
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INJUNCTIONS – interlocutory relief - Alleged breach by the defendant of its contractual obligations to the plaintiff – Breach of natural justice - Duty of good faith and fidelity –Principles to be followed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr H Carmichael | Oakley Thompson & Co Pty Ltd |
| For the Defendants | Mr A Nolan SC with Mr J M Brereton | Lander & Rogers |
HIS HONOUR:
This is an application by the plaintiff for interlocutory relief. It seeks injunctions the effect of which, if granted, will be to require the defendant, Football Federation Victoria (“FFV”), to register certain of the plaintiff’s junior teams in the FFV’s highest grade, its junior “Super League”.
Because this is an interlocutory application, and one with a degree of urgency attached to it, the evidence available to me is limited. Its source is to be found principally in two affidavits: one sworn on behalf of the plaintiff by its President (Mr Chris Dzanovski) on 18 March 2009, and the other sworn on behalf of FFV by its Chief Executive Officer (Mr Mark Rendell) on 20 March this year. Moreover, I must limit my findings of fact to those strictly necessary to dispose of this application; and even then those findings must, given the limited scope of my task and of the evidence before me, be tentative. Nothing I say is intended to inhibit the trial judge as the ultimate tribunal of fact.
The defendant is the governing body for football (soccer) in Victoria. The plaintiff, whose teams play under the name “Whittlesea Zebras”, is one of its affiliated Clubs. Through the plaintiff’s incorporated predecessors, and under different names, the plaintiff has participated in competitive football since 1948. But it was, until about the commencement of season 2007, based in the eastern suburbs of Melbourne.
In 2006, the plaintiff – then the Bulleen Juventus International Football Club - contemplated a change of location to FFV’s North West Zone. Also envisaged were a change of name, and a merger with the Whittlesea Stallions, an existing Whittlesea football club.
The present dispute arises because a former official of the Stallions, who later became president of the Zebras, has since November last year left the Zebras - the club with which (according to the evidence available to me) he once claimed the Stallions had merged - to resurrect his former club, and put Stallions onto the football field once more. He has been joined by two other former Stallion officials who were also once members of the Zebra’s governing body. Indeed, they held the positions of, respectively, the Zebra’s treasurer and secretary.
These three men have persuaded the FFV that no merger took place. Having accepted this claim, which the plaintiff disputes, the FFV allocated places in its top junior grades, the Super League, to the Stallions. At the same time, the defendant denied these places to the Zebras. The Zebras seek by the present application to get them back.
All the evidence before me leads me to a clear conclusion: that an agreement was reached according to which the Stallions and the Zebras were to merge. And, in Mr Rendell’s words, “for the 2007 and 2008 seasons, the FFV treated the new club as though it had amalgamated”.[1]
[1]Affidavit of Mark Rendell sworn 20 March 2009, para. 8.
The Federation had good reason to act in this way. By February 2007, the plaintiff’s change of name from the Bulleeen Juventus International Football Club Inc to the Whittlesea Juventus International Football Club Inc had been registered with Consumer Affairs Victoria. At about the same time, the other party to the merger was acting consistently with it. At a special general meeting of the Whittlesea Stallions held on 21 March 2007, the members present unanimously passed a resolution to the effect that the merger take place.
The Chair of that meeting of the Stallions was Mr Serge Costanzo. He subsequently became the plaintiff’s secretary, retaining that position through the balance of 2007 and thereafter until the plaintiff’s annual general meeting in October 2008. Also present at the March 2007 meeting was Mr Giovanni (John) Spadaro, who as the plaintiff’s treasurer over the same period joined Mr Costanzo on the plaintiff’s Board. Two other Stallions members who voted in favour of the merger (Mr Sam Cuteri and Mr Frank Montagnese) similarly became members of that Board. Through 2007 and until 14 October 2008, when the plaintiff’s annual general meeting for that year was held, they occupied the positions of, respectively, president and vice-president of the plaintiff.
There is another possibly significant point to be made about Mr Costanzo. The members of the FFV are individuals, not clubs. By clause 3.2 of the Constitution of the FFV, its directors must invite two zone representatives elected from each zone, and the chair of each standing committee, to apply for membership; and must admit as members those who accept. On the evidence before me, Mr Costanzo was at the relevant times a FFV North West Zone representative and a FFV member. He therefore enjoyed whatever particular influence members were accorded in the counsels of the FFV by virtue of their membership. Another man once closely associated with the Whittlesea Stallions, Mr Nick Monteleone, was and is a Board member of the defendant. The evidence does not disclose whether Mr Monteleone was involved in any of the decisions by FFV which are now the subject of the plaintiff’s attack; but (on the evidence at my disposal) Mr Costanzo certainly was.
But that is to digress somewhat. What needs to be emphasised here is the reality of the merger between the Whittlesea Stallions and the Whittlesea Zebras. On the evidence before me, at some time before the beginning of the 2007 junior football season the Stallions ceased to function - both on and off the field. Not only did former Stallions officials and members take senior office on the Zebras governing body, but no Stallions teams were entered in the FFV’s competitions – or anywhere else. True, some players were registered under the Stallions’ name in 2007, but after the merger they played, in Zebra colours, for the Whittlesea Zebras. That was their club. It was the Whittlesea Zebras which put them onto the football pitch each week, and it was with the Whittlesea Zebras that FFV dealt in relation to all questions concerning the place of players and their teams in FFV competitions. And while some players might have been originally registered as Stallions in 2007, albeit that they competed during that season as junior members of the Whittlesea Juventus International Football Club, there were none such by 2008. In that, the most recent season of FFV football, no players were registered as Stallions. If during that period the FFV dealt with the Whittlesea Stallions Football Club at all, it did so only on the basis that that club was a non-competing entity.
As a matter of reality, therefore, the merger was a fact both on and off the field. But when it came to the crunch, FFV made the mistake of ignoring the reality. It concentrated instead on legal niceties alone. This is always dangerous, and in this instance particularly so. If an analysis of the legal position leads to a result that is totally out of alignment with the real world, a re-analysis of the legal position is always wise, even if ultimately (as seldom, but sometimes, happens) the legal position prevails.
The legal analysis undertaken by the defendant revealed that, instead of the disappearance of the Stallions as an incorporated entity, its registration as such remained. Likewise, a search of the Consumer and Business Affairs website disclosed “no evidence that the purported amalgamation had occurred”.[2] Each of the clubs “continued to have separate registrations”.[3] True enough, but hardly reliable evidence of anything, since (as Mr Rendell’s affidavit goes on to say) neither the Zebras nor the Stallions had lodged any annual (or, it would seem, any other) returns with Consumer Affairs Victoria for some time - a period the length of which Mr Rendell does not describe. In other words, the search results were consistent with the conclusion that a merger might have occurred but, consistently with a generally poor record of compliance with notification and reporting requirements, the authorities had not been properly informed.
[2]Affidavit of Mark Rendell sworn 20 March 2009, para. 19(d).
[3]Ibid.
It seems from Mr Rendell’s affidavit that, in seeking to ascertain whether or not a merger had been effected, he concentrated his attention on the records maintained by Consumer Affairs Victoria. According to his affidavit evidence, he merely “reviewed the relevant FFV rules”.[4] That review, however, reminded him of rule 6. Its effect is that clubs which intend to merge must provide to the FFV a number of documents. The first is a written application for approval of the merger. This was done by the Stallions by letter dated 16 October 2006 (albeit without any specific reference to the FFV’s approval) and by the plaintiff by letter dated 16 February 2007.
[4]Ibid, para. 19(a).
Rule 6 next provides that the merging clubs send to the Federation a notice of general meeting of each; a copy of a signed record of attendances; and a copy of the minutes of the relevant general meeting, signed by the club’s office bearers. The evidence does not reveal whether either the Zebras or the Stallions did this before Mr Dzanovski exhibited to his affidavit all three of the requisite documents as they pertained to the Stallions (save that the minutes of the Stallions meeting were not signed). There remains a gap in the evidence about the Zebra’s compliance with this requirement.
A number of points should be noted in this context. First, rule 6 was complied with, in part at least (although probably not in whole). Secondly, on 31 July 2007 Mr Dzanovski wrote to Mr Rendell enclosing “a full and completed set of the Club’s (that is, the Whittlesea Zebra’s) Constitution”. He added that the Club trusts “this completes all the necessary paperwork”. Mr Rendell does not deny receipt of this letter. Nor is there anything in Mr Rendell’s affidavit to suggest that, in response, FFV sought additional information or documentation. For his part, Mr Dzanovski swears that “at no time between 31 July 2007 and 24 November 2008 did the Federation advise the plaintiff that it required further paper work or documentation before the Federation would approve the amalgamation”.[5]
[5]Affidavit of Chris Dzanovski sworn 18 March 2009, at para.55.
The third point is that, if any defect in the documentation as required by the rules was a concern when, in November 2008, FFV was about to decide that no merger had occurred, the Federation should have specified the defect. The evidence is that it informed the plaintiff of a general failure to document the merger. There is nothing in the materials available to me to suggest that FFV told the plaintiff that rule 6 had not been complied with – or that FFV identified the specific document or documents that the plaintiff must lodge so as to ensure compliance. Mr Rendell did seek “any … documents which [the plaintiff] says evidences that the amalgamation had occurred”.[6] But he already had, at the least, the letter of 21 July 2007, which with its attachments was clearly relevant to and consistent with the merger.
[6]Affidavit of Mark Rendell sworn 20 March 2009, para. 29(a)(iii).
The fourth point is that FFV proceeded for two years on the basis that a merger had taken place. It is, it seems to me, difficult if not impossible for the FFV now to assert and rely upon a breach of its own rules.
The fifth point is that the responsible officials of the Zebras at the relevant time, or at least during a large part of the relevant time, were and are the very persons who claim that no merger occurred. To the extent that that claim, as accepted by the defendant, is based upon a failure by the Zebras to comply with FFV rules, it is those officials who must bear at least a large part of the responsibility. Yet by its response to those claims, the FFV has rewarded the delinquent officials by allowing them (they having re-joined the Stallions) to take the Zebra’s places in the Super League while relegating the Zebras to the status of a “new” entrant, with the special disadvantage in obtaining grounds on which to hold their home games, that “new” status entails.
The defendant might respond that the lack of proper notification to Consumer Affairs Victoria is evidence of a failure to merge; and it was this evidence that persuaded FFV to the conclusion that no merger had occurred. Again, however, any such failure may well have been the responsibility of the three former Zebra officials – the officials who have resurrected the Stallions, and who now stand to gain from the position taken by the defendant. In any event, such lack of evidence of a merger as is evident in the records of Consumer Affairs is merely one pointer among many. It seems to me to be extremely thin when set beside the evidence of what happened on and off the football pitch over the two seasons of 2007 and 2008.
For reasons not revealed by Mr Rendell, in early November 2008 the Federation began an investigation into whether the merger between the Stallions and the Zebras had been consummated. As a result, Mr Rendell formed the opinion that it had not. On 19 November he met with two men he describes in his affidavit as “the Stallion representatives”.[7] Mr Cuteri was one of them.
[7]At para. 24.
A meeting between Mr Rendell, other officers of the defendant, and Mr Dzanovski was held on 20 November. It was then that, according to Mr Rendell, he asked for the documentation to which he refers in paragraph 29 of his affidavit. He says in the next paragraph that he told Mr Dzanovski that, should FFV decide that amalgamation had not occurred, it would proceed to decide “how the FFV would deal with the situation that had been created by the fact that the Zebras [and] Stallions … had competed as the one club for the 2007 and 2008 seasons”.
This is what the Federation did. It decided that no merger had been effected, although there was evidence of an intention to merge. In a letter dated 24 November from FFV, the plaintiff was told that both the Zebras and the Stallions were recognised as being “separate entities”, entitled to enter teams in competitions run by the FFV. But (the letter continued) the Zebras were required to field at least five junior teams, all of which would “be considered new entrants and [as] such would need to … [apply] … through the normal channels”. The letter continued:
The junior teams and their respective positions which played under the “Whittlesea Zebras” in 2008 will remain with the [Whittlesea Stallions].
The use of the word “remain” in this context is, it seems to me, wholly inappropriate. The Stallions had no teams and no positions in season 2007, or in season 2008. By no stretch of the imagination could they be said to “remain” (or have remained) in the Super League during those two periods.
The Federation came to these decisions without giving the plaintiff any opportunity to make submissions about them before it knew that those particular decisions might be made. Given their importance, it seems to me that the defendant’s failure to alert the plaintiff to the possibility that it would be treated as a new entrant in the junior competitions, and that four of its junior teams would lose the Super League status for which they qualified by reason of their 2008 performances amounts to a denial of natural justice.
Because the Super League is the highest grade in which junior teams can compete under the FFV banner, places in it are prized. Teams gain those places if they qualify for them by reason of their success in the previous season. Places are retained if a team already in the Super League does well enough in one season to qualify for the next. Places are lost if a team finishes one season at a particular point in the ladder of teams against which it competed during that season. It is the evidence of Mr Dzanovski that a very great amount of time and effort is put into the training and preparation of those teams which have qualified for it, and that clubs look to secure their future senior players from those juniors good enough to play in Super League matches. Parents being parents, they too are much influenced, when deciding with whom their sons might play and which clubs they might join, by reference to the club’s entry or otherwise of teams in the Super League. For the purposes of this application, I accept this evidence.
The defendant submits that, by rule 5.1 under the heading “Junior Leagues” of its junior boys and junior girls rules of competition, it has the power in its absolute discretion to determine the composition of each League. I accept that this is so. But where a decision has the effect of depriving a club of places in the Super League and giving them instead to a club that had for two previous seasons no teams of any kind in that competition, that decision ought not be made without given the team or teams whose place or places might be lost the right to be heard on the point. After all, the concept of the Super League is founded on the proposition that places will be won, retained or lost on merit. Of course, on occasion merit might properly give way to other considerations. Discipline is a possible example of one of them. But here, the plaintiff’s teams have been removed from the Super League, despite having qualified and with no suggestion of any reason other than someone’s failure to submit, two years before, some forms which have never been precisely identified. Not only that, but other teams, associated with persons who may well have been responsible for that failure (I make no finding on the point) have been handed the places thus taken away. And, by no criteria associated with football success, have these latter teams qualified for the places they have thus been allotted. It is at least strongly arguable that not even unfettered discretion can justify this without a hearing.
There is another point. By relegating the Zebra teams which competed in 2008 to the status of “new” teams, the Federation has saddled them with rule 7.2, which provides that new clubs may not use grounds that are already occupied by existing FFV clubs. It seems, therefore, that the Stallions will obtain access to grounds in preference to the Zebras.
One reason for not granting the relief which the plaintiff seeks is that there has been a very considerable lapse of time between the date when the plaintiff was notified of the relevant decisions and its taking these proceedings. It seems to me that that delay has not been adequately explained in the plaintiff's material.
The defendant submits that on this basis the application should be refused. It submits, and I accept, that the delay will cause the defendant much difficulty in reorganising fixtures for a season which begins on 26 April this year, a mere few weeks away.
I have taken this circumstance carefully into account. In the end, however, it seems to me that the injustice done to the plaintiff by the relevant decisions of the Federation is, if the facts as I have recounted them are made good, so great as to outweigh the inconvenience caused by the plaintiff’s delay in bringing the matter to court. It is, after all, only some six working days now since the expiry of the date by which affiliated clubs are required to enter teams in the FFV's junior competitions for 2009.
I accept, as I have said, that those six days are important. I accept that decisions may already have been made by the defendant which will have to be re-examined or indeed revoked. It does not necessarily follow, however, that the defendant will of necessity, by reason of the relief I propose to grant to the plaintiff, deny the Stallions a position in a particular Super League competition. It may be that both the Stallions and the Zebras can compete in the same section of the Super League. I must leave that to the parties, and in particular the defendant, to work out. I simply make the point that I do not intend by anything I do today to require FFV to, as it were, deregister the Stallions from the right to compete in the Super League in 2009.
For the reasons which I have endeavoured to articulate, it seems to me that the plaintiff is entitled to relief of the kind it seeks. That relief is set out in an amended summons which was filed on behalf of the plaintiff during the course of the hearing before me. But, if the plaintiff is to take advantage of it, it must act quickly. I will accordingly order that:
1. Subject to order 2 below:
(a)The Defendant be restrained from refusing or failing to register (in the Plaintiff’s name) for Super League competition in 2009 the Whittlesea Zebras 2008 under 14 team;
(b)The Defendant be restrained from refusing or failing to register (in the Plaintiff’s name) for Super League competition in 2009 the Whittlesea Zebras 2008 under 13A team;
(c)The Defendant be restrained from refusing or failing to register (in the Plaintiff’s name) for Super League competition in 2009 the Whittlesea Zebras 2008 Under 12A team; and
(d) The Defendant be restrained from refusing or failing to register (in the Plaintiff’s name) for Super League competition in 2009 the Whittlesea Zebras 2008 under 15A team.
2.Any application for registration of the Plaintiff’s teams be lodged with the Defendant by 4.30 pm on Wednesday 1 April 2009.
3. There be liberty to apply.
4. The costs of this interlocutory application be reserved.
Giving effect to these orders will involve an allocation of the venues on which those Zebra teams which are to compete in the Super League are to play. This was not a matter which occupied much if any time in submissions before me. Consistently with these reasons for judgment, however, and subject to the right of either party to return to me pursuant to liberty to apply, it seems to me that the defendant must do all it reasonably can to facilitate the acquisition by the relevant Zebra teams of a location for their matches. If that involves a clash between the Zebras and the Stallions, where both seek the use of the same venue at the same time, my present view is that the Federation must give precedence to the claims of the Zebras. If that causes, or is thought to cause, injustice to the Stallions, then I may be in a position to hear the parties, and to give leave to the Stallions to participate in the debate, about the matter. I can make no definitive decision on these issues at this point, especially since the allocation of playing venues is, as I understand it, in the end a question for the relevant municipal authority to resolve.
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