Buckley v Tutty [1971] HCA 71;

Buckley v Tutty [1971] HCA 71; - HCA 1971 case summary — Zoe

[29]

9. The respondent wishes to continue to play professional football but believes that he would be able to obtain from other district clubs terms more favourable than those which have been offered to him by the Balmain Club. The effect of the rules of the League, from a practical point of view, is that while the respondent remains on the retain list of the Balmain Club he cannot transfer to any other district club and no other district club can include him as a player in any of its teams withou incurring the sanctions that the League may apply, including the loss of any match in which he plays. Unless the Balmain Club agrees either to strike him off its list of registered players, or to his transfer, or the Qualification and Permit Committee allows an appeal against a refusal to place him on a transfer list, he will remain registered with that club indefinitely whether he plays with it or not. If the Balmain Club agrees to put him on a transfer list the amount of the transfer fee which it may fix will (subject to appeal to the Qualification and Permit Committee) be entirely within its discretion and will probably be determined having regard amongst other things to what the club considers it has spent on the respondent and to what it will cost to replace him. If it matters the evidence shows that between the introduction of the present transfer system on 26th October 1959 and 2nd April 1970, eighty players have appealed against the refusal of a club to place them on the transfer list and 163 have appealed against the amount of transfer fee placed on them; of these appeals, fifteen and ninety-two respectively were successful. One of the witnesses, Drewes, the chairman of the Qualification and Permit Committee, said that unless the committee formed the view that a player was being victimized he would have no chance of getting a transfer if the committee considered that he had any obligations to his club. If, for example, the club had spent money on training him, or had lent him money, and wished to retain him for his football ability his appeal would not be likely to succeed. It further appears that because of agreements that have been made with the governing bodies of the sport in Queensland (the only other State in Australia in which Rugby League is extensively played) New Zealand and England a player registered in New South Wales could not play with any club within the jurisdiction of those governing bodies unless he had first obtained a clearance from his club in New South Wales. (at p370)

[40]

13. However it was submitted on behalf of the appellants that if professional footballers engage in trade the Rules do not operate in restraint of that trade but rather foster and encourage it. The League, so it was said, has promoted the sport and provided an organization within which opportunities are provided for players who wish to do so to turn their skill to profit and it is not a restraint of the trade of a player who wishes to remain a member of the League to require him to abide by its rules while he takes advantage of the benefits membership affords. Alternatively it was put that the League was analogous, not to an association of employers, but to a large corporation which conducts numerous enterprises and provides opportunities for many people to find employment, and which may (subject no doubt to any statutory restriction or to the determination of any industrial tribunal) impose rules that prevent the transfer of employees from one of its own branches or factories to another. We do not find it helpful to pursue analogies or to consider questions which do not fall for decision in the case before us. However, the suggested analogy of a corporation which is itself an employer is inappropriate to the present case. The League may sometimes employ footballers - e.g. those who play in State teams - but it is not the sole, or the most important, employer. One of the principal functions of the League is to control, either directly (as in the case of district clubs) or indirectly (through The Country Rugby Football League of New South Wales), the bodies who are employers of Rugby League professionals. The district clubs which provide employment for professional footballers are, in truth, in keen competition for the more skilful players. The rules however prevent professional players from making the most of the fact that there are clubs prepared to bid for their services. If valid, the rules prevent a professional player who is a member of one club, even if he is not contractually bound to play for it, from becoming employed as a professional footballer by another club, except with the concurrence of the former club or the Qualification and Permit Committee. This is plainly a fetter on the right of a player to seek and engage in employment. It is not to the point to say that the player may resign from the League. If he does resign he may perhaps obtain employment as a labourer or as a cricketer but he will not be able to obtain employment as a professional Rugby League footballer, either in New South Wales or in a number of other places. The rules in our opinion operate as a restraint of trade. In this respect also we respectfully agree with the decision in Eastham v. Newcastle United Football Club Ltd. (1964) Ch 413, and, for the reasons we have given, we consider that the decision in Elford v. Buckley (1969) 90 WN (Pt 1) (NSW) 756, that the rules of the League relating to the retention and transfer of players do not attract the doctrine of restraint of trade, was erroneous and should be overruled. (at p373)

[43]

(See also (1934) 51 CLR, at p 376 and per Starke J (1934) 51 CLR, at p 384) The League is not without property, although it may well be right to say that its rules do not give to its members any civil right of a proprietary nature. Whether the League is a body that stands apart from private gain and material advantage is doubtful, since the regulation of the activities of professional players and of the rewards that district clubs may obtain from transfer fees forms part of its functions. Whether or not what was said in Cameron v. Hogan [1934] HCA 24; (1934) 51 CLR 358 is applicable to the position of the League, the rules would not form part of a contract between the members if it were concluded that it was not intended that their provisions should give rise to enforceable legal relations. The provisions of r. 15 that every member upon joining becomes entitled to all the privileges the League can impart in accordance with the rules has been thought to support the conclusion that there is a contractual relation between the members of the League: See Hawick v. Flegg (1958) 75 WN (NSW) 255, at p 259; r. 18 of the former rules of the League which is there mentioned corresponded with the present r. 15. On the other hand, the provisions of r. 1 (c) which purport to make the League the final court of appeal in all matters of dispute, and the provisions of r. 98 which make the General Committee the sole interpreter of the rules, point in the opposite direction. Moreover, as we have pointed out, the rules leave in some obscurity the question who are the members of the League, and this circumstance makes it more difficult to conclude that it was intended that the rules should form part of a binding contract between, inter alios, the many thousands of persons who are members of the district clubs. It is however unnecessary to resolve in the present case the questions of difficulty that would arise if, e.g., plaintiffs suing on behalf of the League sought to enjoin an alleged member from committing a breach of the rules or if a person claiming to be a member sought damages for a breach of the contract said to be constituted by the rules. To succeed against the first and second appellants in the present case the respondent need not establish that the rules constituted a contract between the members of the League. Nor is it necessary to determine, for the purposes of the claims against the third appellant, whether the effect of the oral agreement made in May 1968 between the respondent and a representative of the Balmain Club was that the parties to that agreement were contractually bound to each other in terms of the rules notwithstanding that the playing season referred to in the agreement had expired. It is unnecessary to decide these matters because the doctrine of the common law that invalidates restraints of trade is not limited to contractual provisions. There is both ancient and modern authority for the proposition that the rules as to restraint of trade apply to all restraints, howsoever imposed, and whether voluntary or involuntary. In Dickson v. Pharmaceutical Society of Great Britain (1970) AC 403, at p 440, Lord Wilberforce said:

[53]

17. It is a legitimate object of the League and of the district clubs to ensure that the teams fielded in the competitions are as strong and well matched as possible, for in that way the support of the public will be attracted and maintained, and players will be afforded the best opportunity of developing and displaying their skill. It is therefore legitimate to aim to provide a system that will ensure sufficient stability of membership to permit those who play for a club to be trained as a team and to develop a team spirit, and that will prevent the stronger clubs obtaining all the best players, thus leaving the weaker clubs with teams that are unable effectively to compete with their stronger opponents. It is, of course, impossible to ensure by any means that the membership of a football club will remain for ever unchanged. Some players will cease to play for the club whatever the system. On the other hand, even if there were no restraint on the movement of players, not all players would go; some might not be fortunate enough to receive offers and others to whom offers were made might for one reason or another not wish to accept them. Moreover a club may ensure some continuity of membership by binding its professional players by contract to remain employed for a number of years and, if necessary, by staggering the periods for which different players are engaged. It may nevertheless be reasonable to lay down some qualifications for membership of a club, or to impose some restrictions on the transfer of professional players from one club to another or on the extent to which a club may entice players away from another club. It is not for a court to advise in advance what restraints would be reasonable; our function is only to consider whether the rules in their present form impose a greater restraint than is necessary for the adequate protection of the interests of the League and its members. In our opinion the rules now under consideration go beyond what is reasonable in two main respects. In the first place, they enable a club to prevent any professional who has played in one of its teams from playing with another club, notwithstanding that he has ceased to play for the club which retains him and no longer receives any remuneration from that club. There is no time limited for the exercise of this power; a club may retain a former player no matter how short the period of his employment with it may have been or how much time has elapsed since his engagement expired. A member may be retained even by a club which refuses to employ him, or, if he is employed, to select him to play in any team. We are not satisfied that the interests of the League or of the district clubs would be jeopardised if the rules did not contain provisions so drastic. (at p378)

[62]

However, in these passages their Lordships were speaking of a contractual restraint which all parties to the contract were willing to observe. To say that a restraint is unenforceable does not mean that the law will simply ignore its existence or that the only remedy of a person upon whom it is sought to be imposed is to defend such legal proceedings as are brought to enforce it. The law treats unreasonable restraints as unenforceable because it is contrary to the public welfare that a man should unreasonably be prevented from earning his living in whatever lawful way he chooses and that the public should unreasonably be deprived of the services of a man prepared to engage in employment. It would indeed be a strange weakness in the law if it afforded no protection to a person who was against his will subjected in fact to an unreasonable restraint of trade. However, it seems to us now to be established that in an appropriate case a member of an association may obtain a declaration that a rule of the association which affects him is unreasonably in restraint of trade and an injunction to prevent the rule being applied against him. In McEllistrim v. Ballymacelligott Co-operative Agricultural and Dairy Society Ltd. (1919) AC 548, the appellant was a shareholder in the respondent society, whose rules bound the society and its members as if each had covenanted to observe the same. The House of Lords held that one of the rules of the society was unreasonably in restraint of trade, and therefore ultra vires. It was declared that the offending rule was illegal as in restraint of trade and ultra vires the society, and an injunction was issued restraining the respondent from acting upon or putting in force the said rule against the appellant. In Dickson v. Pharmaceutical Society of Great Britain (1970) AC 403 the restraint contained in the society's rules was involuntary and not contractual, but this was not regarded as material, and similar orders were made. In that case Lord Upjohn said (1970) AC, at p 433:

At a glance

Court

Decision date

Source

Judgment (69 paragraphs)

Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353 (13 December 1971)

Parties

Cases Cited (5)