Hughes, K.J. v. Western Australian Cricket Association & Ors [1986] FCA 465

Federal Court of Australia|1986-07-01|Before: Toohey J

Trade Fractices - application under s.82 of Trade Practices Act and accrued jurisdiction - alleged contravention by respondents of

s.45 of the Act - first and second respondents incorporated under Associations Incorporation Act - whether trading corporations in terms of $.4(1) of Trade Practices Act - summary of relevant principles - whether jurisdiction of the Court conditional upon existence of a trading corporation - disqualification of applicant from district cricket consequent upon applicant's participation in South African cricket tour - applicant disqualified pursuant to amended Cricket Council rule - no provision in original rule for disqualification for breach of rule - rule amended by resolution at Cricket Council meeting - Council's understanding of operation of original rule in relation to South African cricketers the subject of a resolution at an earlier meeting - whether conduct of Council members at relevant meetings constituted a contract arrangement or understanding in terms of 5.45 of the Act - resolution to amend found to amount to an understanding between first, second and third respondents - whether understanding contained an exclusionary provision 1n terms of ss.45 and 4D of the Act - meaning of 'purpose' in s.4D - competition between second and third respondents for services of cricketers - whether second and third respondents 'competitive with each other' in terms of s.4D - disqualification provision directed inter alia at applicant and other 'rebel cricketers' - whether 'particular persons' in terms of s.4D - exclusion of South African cricketers from district cricket competition as a result of rule - whether likely effect thereof to substantially lessen competition in terms of s.45 - meaning of 'substantial lessening of competition' - consideration of relevant markets - decision by Cricket Council to reject motion for reinstatement of applicant - whether decision constitutes giving effect to an exclusionary provision or a provision likely to substantially lessen competition in terms of s.45 - contravention of s.45 by first respondent ~ whether second and third respondents involved in the contravention in terms of s.75B ~ disqualification provision automatic in operation and indefinite in duration - whether unreasonable restraint of trade - whether in breach of applicant's alleged right to work - rule prohibits participation in unrecognised matches without the consent of the Cricket Council - permission to play in South Africa sought by applicant - no reply received - whether failure

by Council to give any or proper consideration to applicant's application for consent - whether decision to disqualify ultra

vires ~ alleged agreement between respondents to injure or punish applicant by disqualifying him from district competition ~ whether

a conspiracy between respondents - whether respondents acted in bad faith or as a result of bias - allegation that applicant disqualified for political reasons - whether disqualification

contrary to the Equal Opportunity Act - first respondent party to deed in settlement of litigation concerning effect of South African tour on applicant's participation in test and interstate cricket - whether disqualification of applicant from grade cricket in breach of express or implied term of deed - religt@ep

Trade Practices Act 1974 s5s.4(1), 4D, 4E., 45 Equal Opportunity Act 1984 (W.A.) ss.4, 53, 154

MI. LAWLEY DISTRICT CRICKET CLUB (INC.); MELVILLE CRICKET CLUB (INC.);

SUBIACO FLOREAT CRICKET CLUB (INC.); BAYSWATER-MORLEY CRICKET CLUB (INC.); PERTH CRICKET CLUB (INC.);

FREMANTLE DISTRICT CRICKET CLUB (INC. ); CLAREMONT-COTTESLOE CRICKET CLUB (INC.); SOUTH PERTH CRICKET CLUB (INC.); MIDLAND-GUILDFORD CRICKET CLUB (INC.); WANNEROO DISTRICT CRICKET CLUB (INC. ) and

LESLIE ANNISON (sued on behalf of himself and all other members of the Southern District Cricket Club);

GREGORY BUNNEY (sued on behalf of himself and all other members of the Scarborough Cricket Club);

MICHAEL SNELL (sued on behalf of himself and all other members of the Nedlands Cricket Club);

PHILLIP CLIFFORD (sued on behalf of himself and all other members of the University Cricket Club)

KEVIN MORRIS TAYLFORTH (sued on behalf of himself and all other members of the Cricket Council of Western Australia Australian Cricket Association (Inc. )

WESTERN AUSTRALIA DISTRICT PEGISTEY GENERAL DIVISION

WANNEROO DISTRICT CRICKET CLUB (INC. } Second Respondents

LESLIE ANNISON (sued on behalf of himself and all other members of the Southern District Cricket Club); GREGORY BUNNEY (sued on behalf of himself and all other members of the Scarborough Cricket Club); MICHAEL SNELL (sued on behalf of himself and all other members of the Nedlands Cricket Club); PHILLIP CLIFFORD (sued on behalf of himself and all other members of the University Cricket Club)

KEVIN MORRIS TAYLFORTH (sued on behalf of himself and all other members of the Cricket Council of Western Australia Australian Cricket Association (Inc.) Fourth Respondent

CONTENTS Introduction The parties The applicant's concern Rules of the Cricket Council The background Trading corporations Is the W.A.C.A. a trading corporation? Are the incorporated clubs trading corporations? Jurisdiction Section 45 of the Trade Practices Act Was there a contract? Was there an arrangement or understanding? Exclusionary provision Substantially lessening competition Giving effect to ... Restraint of trade Right to work Ultra vires Conspiracy Equal Opportunity Act 1984 Bad faith and bias Deed of Settlement Jurisdiction revisited Relief

WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION

WANNEROO DISTRICT CRICKET CLUB (INC.) Second Respondents

LESLIE ANNISON (sued on behalf of himself and all other members of the Southern District Cricket Club);

and all other members of the Scarborough Cricket Club);

and all other members of the Nedlands Cricket Club);

PHILLIP CLIFFORD (sued on behalf of himself and all other members of the University Cricket Club)

KEVIN MORRIS TAYLFORTH (sued on behalf of himself and all other members of the Cricket Council of Western Australia Australian Cricket Association (Inc.)

In his opening address, counsel for the applicant described this case as one of immense technical difficulty but having at its core the right of a person to earna living in a chosen trade or profession in the country and state of his choice. By way of riposte, counsel for the respondents said in

his opening address that the case had nothing whatsoever to do

with the applicant's right to work, that it concerned the

obligation of the applicant to play the game of cricket according to its rules and that, notwithstanding the applicant's attempt to

dress up his case in a wide variety of the most complex technical and legal attacks upon the conduct of the respondents, it would be found that the respondents were doing no more than exercising

Of one thing there can be no argument. The applicant's case as presented was indeed complex, both as to fact and law. It invoived the meaning and operation of several difficult provisions

of the Trade Practices Act 1974, coupled with a detailed

examination of a number of common law causes of action, in particular restraint of trade, conspiracy, ultra vires, bad faith and bias anda claim under the Equal Opportunity Act 1984 of Western Australia. At the forefront of the proceeding was a

challenge to the jurisdiction of this Court to entertain the

The hearing occupied twenty-one davs and was preceded by a number of interlocutory applications relating to pleadings,

discovery, interrogatories and the issue of a subpoena duces tecum

returnable before the hearing. No doubt the hearing would have been longer had it not been for two considerations. The first was that, by agreement between the parties, evidence was admitted on affidavit. Twenty-four affidavits were filed on behalf of the applicant and twenty-seven on behalf of the respondents. Most of the deponents were cross-examined and the respondents attacked

much of the contents of the affidavits filed on behalf of the

applicant. As aresult a number of paragraphs and parts of paragraphs were disallowed. The second consideration related to the admission of documentary evidence. The Court was presented

with files containing 459 documents which the parties had agreed

as to authenticity. However they reserved their rights to object

to the admission of documents on the ground of relevance and

otherwise. In a number of cases objections were made and upheld and in other cases counsel did not press for the admission of documents. In the end 223 documents were tendered in this way;

It is necessary now to say something about the parties to this litigation. The applicant is a professional cricketer, that much is admitted. It is also admitted that he is and was at all material times engaged as a professional cricketer by Subiaco Floreat Cricket Club (Inc.), though the terms of his

engagement assume some importance. That is a matter to which I

shall refer later. He first plaved A grade cricket as a sixteen vear old in 1969. He first plaved for Western Australia in the 1974-75 season and for Australia in 1976. He was captain of the Western Australian side in 1980-81 and thereafter until the commencement of the 1985-86 season. He captained Australia in the second test against Pakistan in 1978-79 at the W.A.C.A. qround.

The applicant's reputation as a cricketer 1s unquestioned.

The first respondent ("the W.A.C.A.") and the second respondents are bodies incorporated under the provisions of the

Associations Incorporation Act 1895 of Western Australia. That

Act provides for the incorporation of a range of associations but 1t has no application to "associations for the purpose of trading

or securing pecuniary profit to the members from the transactions

thereof"(s.2). One question that will arise for consideration in these reasons is the significance of incorporation under the Associations Incorporation Act for the argument that the respondents are trading corporations within the Trade Practices

Act. The W.A.C.A. is responsible for the promotion of cricket in

Each of the second respondents is responsible for club

cricket in a particular district. The third respondents are cricket clubs and are similarly responsible but they are not incorporated. The fourth respondent, Mr. Taylforth, is the chairman of the Cricket Council and was sued in a representative capacity. I shall refer to the fourth respondent as the Cricket

Council and to Mr. Taylforth by name when it is his conduct that

1s under consideration. The Cricket Council is established bv

"There shall be a Cricket Council consisting of the Chairman for the time being of the Council, the

delegates elected annually by the several clubs associated with the Council (herein referred to as the Associated Clubs), two delegates appointed by the Executive, and such other delegates as the Council may from time to time admit in accordance with the rules framed by it under the power in that behalf herein conferred on it".

Rule 36 of the rules of the W.A.C.A. empowers the Cricket Council to make by-laws and regulations for the control and management of matters within its own jurisdiction and to issue its own rules under separate cover. Rule 37 sets out the

functions of the Cricket Council, the first of which is the

control and management of all associated club matches. (There is a difference in the numbering of these rules as they appear in Ex.10 and in "The Western Cricketer", a publication of the W.A.C.A. I have followed counsel in using the numbering in the latter.) The second and third respondents comprise the Associated Clubs. While the Cricket Council is established by the rules of the W.A.C.A., the executive of the W.A.C.A. appoints delegates to the Council. It was the applicant's case that the Cricket Council was an autonomous body and that, while the first, second and third respondents were responsible for whatever was done by their delegates, the Council was not in any sense an agent of the W.A.C.A. The respondents did not appear to dissent from this view of the matter. But they did contend that the members of the

Cricket Council, though appointed by the W.A.C.A. and the

The applicant alleges that the W.A.C.A. and the incorporated clubs are trading corporations within the meaning of the Trade Practices Act. This 1s denied by those respondents. The issue is quite crucial to the application of the Trade Practices Act. The respondents say that 1t 18 crucial also to the jurisdiction of this Court to entertain any of the applicant's claims. The applicant contends that the jurisdiction of this Court does not depend upon upholding the claim that one or more of the respondents 1s a trading corporation, so long as the Court 1s satisfied that the claim is a hona fide one. This is a matter to

With four exceptions, the respondents were represented by the one firm of solicitors and by the same counsel and have common interests. The exceptions are Subiaco Floreat Cricket Club (Inc.) (of which the applicant is a member), Claremont-Cottesloe Cricket Club (Inc.), Gregory Bunney who is sued on behalf of members of Scarborough Cricket Club and Phillip Clifford who is sued on behalf of University Cricket Club. These four respondents were content to abide by any order the Court might make. No claim for damages or costs was pursued against them but the applicant seeks to have them bound, together with the other respondents, by

any declaratory or injunctive relief that may be granted.

In essence the applicant's concern is that, by reason of

his decision to play cricket in South Africa between 1 November

1985 and 31 March 1986 and again between 1 October 1986 and 31 March 1987, he has been barred from test cricket, Sheffield Shield cricket (that 1s, interstate cricket) and club or district cricket. The playing of club cricket is not a legal prerequisite to the playing of shield and test cricket. But there 1s no doubt that a player who 1s not available for club cricket may lose the chance to maintain his skills, 1s away from the eyes of the selectors and therefore has a reduced chance of selection for shield and test cricket. And in a more general way his skills as

a cricketer may suffer. I accept the applicant's statement in an

"District cricket not only provides me with valuable match practice and training for the purposes of

capacity to fulfil sponsorship obligations and also to attract future Australian sponsorship".

The applicant's disbarment from playing test and shield cricket was not directly involved in these proceedings. It was however the subject of litigation in the Supreme Court of Victoria and the terms upon which that litigation was settled have relevance to the issues with which this Court is presently concerned. The applicant's disbarment from playing club cricket, which it is said resulted from a decision of the Cricket Council,

is the matter of which direct complaint is now made.

To understand how the applicant's disqualification from

club cricket is said to have arisen, reference must be made to

¥.2:38:1 of the rules of the Cricket Council. This rule was amended on 4 November 1985; it 1s necessary to have regard to its

original form and its form as amended. Originally it provided:

"No Club or Affiliated Association and no member of any Club or Affiliated Association and no player registered

as such under these Rules shall arrange or take part in any cricket match within or without the State of Western Australia other than a match recognised by the Australian Cricket Board or the Association without first obtaining the consent in writing of the International and Interstate Cricket Committee of the Association provided that: This Rule shall not apply to the arranging of or taking part in any match declared by the International and Interstate Cricket Committee to be a social match".

"No Club or Affiliated Association and no member of any Club or Affiliated Association and no player registered

first obtaining the consent in writing of the Cricket Council of the Association provided that: This Rule

shall not apply to the arranging of or taking part in any match declared by the International and Interstate

Cricket Committee to be a_ social match. Any player found in breach of this rule is automatically disqualified until reinstated by the Cricket Council".

The amended rule differs from the original rule in two important respects. First, the amended rule substituted the Cricket Council for the International and Interstate Cricket Committee ("the I. and I. Committee") as the body whose consent is required. The I. and I. Committee is also a creation of the rules of the W.A.C.A. It consists of seven members, to be elected annually, and a general manager (r.39). Its primary function is

to arrange and control all international and interstate matches,

but 1t also appoints the W.A.C.A. representatives to the Australian Cricket Board (r.42). The second difference is that the original rule said nothing as to the consequences for a player who was in breach of the rule. The amended rule provides automatic disqualification until the player is reinstated by the

Reference must also be made to r.2:39:5 of the Cricket

Council rules, which has not been amended. It reads:

"If a club allows a player disqualified pursuant to

these Rules or disqualified by order of the Council, to play in a match in a team of that club after notice of that player's disqualification has been received by the club the club commits an offence and if the offence is proved upon complaint to the Council the club shall be liable to a fine and shall be deemed to have lost the match to the opposing club. If the match is so lost the Council shall declare the match to have been a first innings win or an outright win with first innings lead to the opposing club. A complaint under this Rule may be lodged by the Grade Committee or the opposing club".

As the rules of the Cricket Council stood before 4 November 1985 (and as they stand now), there was provision for disqualifying a player whose name appeared in a list of defaulters furnished by the secretary of a club (r.2:39). There was and is provision for the prosecution of a player "for an act or omission deemed to be an offence under these rules" (r.2:24). Rule 2:24 contains the procedure which must be followed in such a case - a complaint, followed by a hearing - and r.2:25:2 empowers the Council to impose the prescribed penalty or if none is prescribed "such penalty ... as it thinks fit". But none of these rules is

relevant to the situation of the applicant. I conclude that

before 4 November 1985 playing in an unrecognised match could not

result in disqualification of the player from playing in club matches, at any rate not without following the procedure in

r.2:25. That procedure was not followed in the applicant's case.

Despite the welter of evidence led on both sides, the events giving rise to this application fall within a fairly narrow compass. To a large extent the facts are not in dispute though questions of credibility arise, particularly in regard to meetings of the Cricket Council held on 25 September, 4 November 1985 and

On 15 May 1985 the applicant executed an agreement with The South African Cricket Union ("S.A.C.U."). He agreed to take part in cricket tours in South Africa during the periods 1 November 1985-31 March 1986 and 1 October 1986-31 March 1987. In addition to meeting costs associated with the applicant's movements to and from South Africa and costs associated with the tours, S.A.C.U. agreed to pay the applicant $A200,000. This amount was expressed to be free of tax; it is umnecessary to mention the formula by which income tax was taken into account. Other Australian cricket players entered into comparable

agreements about the same time, probably a little earlier.

In or about May 1985 the Australian Cricket Board (of which the W.A.C.A. was a member along with other state cricket

associations) and Frederick William Cecil Bennett, the Chairman of

the Cricket Board, instituted proceedings in the Supreme Court of Victoria. There were two actions, No. 1497 of 1985 relating to players other than the applicant, and No. 1811 of 1985 relating to the applicant. In each case the plaintiffs sought injunctions, damages and other relief so as to restrain the defendants from giving effect to their agreements with S.A.C.U. The basis of the actions lay in the contention that the defendants were then bound to the Cricket Board and had undertaken not to play ina cricket match, other than a match controlled by the Cricket Board or one of its constituent members or approved by the Cricket Board, and in particular had contracted not, without the permission of the

Cricket Board, to play cricket outside Australia. Those

The Victorian actions were settled right at the death knock and a deed of settlement dated 29 July 1985 was executed by all concerned including the applicant. It will be necessary, later in these reasons, to refer to certain parts of the deed because one cause of action upon which the applicant relies is that the W.A.C.A. is in breach of the deed. For the purpose of this recital of facts, it is enough to note that a consequence of the deed was that the applicant might participate in the South African tours without being in breach of any contract between himself and the plaintiffs in the actions (which included the W.A.C.A.), but that he accepted the lawfulness of bans imposed by the Australian Cricket Board rendering him ineligible tobe a member of a team representing an Australian state before 1 October

1987 and rendering him ineligible to be a member of an Australian

team before 1 October 1988. The deed made no reference to the

By letter dated 11 November 1985 Robert John Parry, who was the applicant's business manager as well as being club coach for Bayswater-Morley Cricket Club (Inc.), wrote to the chairman of the Cricket Council. He did so in the name of the applicant,

pursuant to a power-of-attorney which he held. The applicant was

"I refer to Cricket Council Rule 2.38.1 concerning the playing by a club member in a match other than one

organised by the Australian Cricket Board or your Association.

Accordingly I wish to seek your Councils consent to allow me to play in such games as have been organised

by The South African Cricket Union during this 1985/86 summer season."

Paragraph 26 of the statement of claim pleads that the fourth respondent failed to reply to the applicant's request. Paragraph 27 pleads that the fourth respondent failed to give any or any proper consideration to the request. Paragraph 17 of the defence denies paras.26 and 27. Such a denial, without any positive affirmation that the fourth respondent did reply or did give proper consideration, offends the rules of pleading and would have been struck out, had application been made to this end. No such application was made. It is quite clear that the Cricket Council did not reply to the request. Whether it gave any or

proper consideration thereto will be looked at later in these

occurred. In particular there had been two meetings of the

Cricket Council, one on 25 September and one on 4 November. At

the meeting on 25 September, which was a special meeting, it was

"That the Cricket Council has come to an understanding that the Rule regarding unrecognised matches cannot be invoked until the players take part in such matches."

It was common ground that this was a reference to r.2:38:1. There

"The Cricket Council, at this time, does not intend taking any action against the proposed South African tour players. The Rules as they stand would prevent them from playing upon their return; however, there has been notice given of a proposed notice of motion to review the applicable Rules prior to that time".

At the meeting on 4 November r.2:38:1 was amended in the two

respects already noted. First, the Cricket Council was substituted for the I. and I. Committee as the hody whose consent to play in an unrecognised match was required. Second, the

"Any player found in breach of this Rule is automatically disqualified until re-instated by the Cricket Council".

In its amended form r.2:38:1 gives rise to several questions. When is a match "recognised" by the Cricket Board or

the W.A.C.A.? What is meant by "found" in breach of the rule?

What is meant by "automatically disqualified"? These questions

must be looked at, but at this stage I shall continue with the

As at 4 November 1985 the applicant had not (nor for that matter had anv of the players contracted to plav in South

Africa) taken part im a tour match. The first match he plaved in

There was an ordinary meeting of the Cricket Council on 6 Januarv 1986. A number of matters were canvassed. Towards the end of the meeting there was amotion by Mr. Burgess, the president of Subiaco Floreat Cricket Club (Inc.) which was seconded by Mr. Bunney, the president of Scarborough Cricket Club (to which Thomas George Hogan and Gregory Shipperd, other South

"... the South african tourists be re-instated to W.A.C.A. Grade and Toyota Cup fixtures on their return

so that they may fulfil their obligations to their clubs".

The minutes of the meeting report the fate of that motion in the

"The Fremantle Club/A. Dougan was opposed to their re-instatement this season.

F. O'Driscoll considered that re-instatement would be in direct opposition to the motion carried by Council on the A.C.B. Code of Behaviour.

P,. Clifford supported the motion on legal grounds.

Mr. Dougan was the delegate to the Cricket Council of Fremantle District Cricket Club (Inc.). Mr. O'Driscoll was the President of

Mt. Lawley Cricket Club (Inc.) and its delegate to the Council.

On 3 February 1986 there was held what the minutes describe as "special and ordinary meetings of the Cricket Council". Item 26.2 of the minutes, under the heading of "Special Business", deals with "Players undertaking unofficial tours of

South Africa". As to that matter, the minutes record:

"MOVED (D. Fitzgerald/M. Parr) that T. Hogan, G. Shipperd, K. Hughes and T. Alderman be reinstated so

that they may participate in Swan Gold League and Toyota Cup following their return from South Africa and enable them to fulfill their obligations to their respective District Clubs.

In support of the motion D. Fitzgerald read from a prepared statement. Following discussion the motion was put and LOST (7/8).

The University, Scarborough, Subiaco-Floreat and Claremont-Cottesloe delegates requested that the

minutes record that they had voted in favour of the motion".

Mr. Fitzgerald was the delegate of Scarborough Cricket Club. Mr. Parr was the delegate from Subiaco Floreat Cricket Club (Inc.), the club to which the applicant belonged. Mention has been made already of Messrs. Hogan and Shipperd. Terrence

There was a further special meeting of the Cricket Council on 19 February 1986. The meeting was requisitioned when it was learned that Charles Arthur Bull, the delegate to the

Cricket Council from South Perth Cricket Club (Inc.), had at the

meeting on 3 February voted against reinstatement contrary to the unstructions of his club. At the meeting on 19 February Mr. Bull explained that he had misunderstood how he should vote. Mr. Taylforth., as chairman of the meeting, ruled that the Cricket Council had "no authority or power to deal with a matter concerning a delegate and his club and therefore the matter... was outside the jurisdiction of the Council". Mr. Burgess

and Mr. Bunnev moved and seconded respectively a motion of dissent to the chairman's ruling but that motion was lost six votes to

eleven. The chairman then declared the meeting closed.

The circumstances in which Mr. Bull apparently misunderstood his club's instructions and voted against reinstatement rather than for it were not explained satisfactorily. Mr. Bull gave evidence in which he denied that the vote he cast in error was any more than a misunderstanding of what had taken place at the meeting of his club preceding the Cricket Council meeting on 6 January. It was not his club's practice to arm its delegate with written instructions as to how to vote on matters arising or likely to arise at a meeting of the Cricket Council. But its delegate was expected to vote in accordance with the views of the club as made known at its meetings. Despite cross-examination and re-examination of Mr. Bull, I am by no means clear what he meant by saying that he had misunderstood his instructions. Did he mishear what he was told at the meeting of the club, did he hear correctly and then become confused or did he simply forget what he had been told by the club? Later in these reasons I shall say more about

Mr. Bull's conduct, in the context that the members of the Cricket

Council were acting in bad faith and were biased. At this stage I voice my concern that, on such an important matter, the

explanation forthcoming went little further than that there had

Had Mr. Bull voted in accordance with the views of his club, the motion to reinstate the applicant would have been passed eight votes to seven. While one cannot forecast what might have happened thereafter, at least in terms of +.2:38:1 and while the motion for reinstatement stood the applicant would not have been disqualified from playing for his club. This might have had the

further consequence that this long and costly piece of litigation

The jurisdiction of the Federal Court is attracted by reason of the claim made under the Trade Practices Act. Put shortly, the claim is that the conduct of the respondents at each of the meetings on 25 September and 4 November 1985 constituted a contract, arrangement or understanding which contained an exclusionary provision contrary to sub-para.45(2)(a)(i) of the Act and that a provision of that contract, arrangement or understanding had as its purpose, or had or was likely to have the effect, of substantially lessening competition in contravention of sub-para.45(2)(a)(ii) of the Act. Furthermore, it is said, their conduct thereafter gave effect to each such provision in

contravention of sub-paras.45(2)(b)(i) and (ii) of the Act.

Sub-section 45(2) strikes at conduct by a corporation. The applicant contends that all the incorporated respondents are trading corporations, hence corporations within sub-s.4(1) the

Trade Practices Act. But he says that inany event it is

sufficient if there be one corporation that engaged in conduct in breach of the sub-section. It is enough, he says, if the W.A.C.A. be a trading corporation even 1f, contrary to his submission, the incorporated clubs are held not' to be. The respondents, while recognising a distinction between the activities of the W.A.C.A. and the clubs, contend that none of the incorporated respondents

The last few years have seen several decisions, particularly by the High Court, in which the notion of a_ trading corporation has been examined. It is not my intention to refer to those decisions in great detail but rather to state the principles that appear to emerge from them and then to apply those principles

The mere fact that a corporation trades does not mean that it

is a trading corporation. Reg. v. Trade Practices Tribunal;

Ex parte St. George County Council (1974) 130 C.L.R. 533 at

543, 562 ("St. George County Council"); Req. v. Federal Court

of Australia; Ex parte W.A. National Football Leaque

(1978-1979) 143 C.L.R. 190 at 219, 234 ("Adamson").

The purpose of incorporation, propounded in St. George County Council, is no longer a valid test. The test is one of the

current activities of the corporation. Adamson; State

Superannuation Board v. Trade Practices Commission (1983) 57

But the current activities test 1s not the sole criterion for determining whether a corporation is a trading corporation. Thus where a corporation has not begun to trade, its character may be found in its constitution. Even when there are current activities, the corporation's constitution is not

completely aurrelevant Fencott v. Muller (1982-1983) 152 C.L.R. 570 at 602.

Views as to the necessary extent of trading activity have varied. It must be a substantial corporate activity (Barwick C.J. in Adamson at 208); the trading activities must form a sufficiently significant proportion of the corporation's overall activities (Mason J. in Adamson at 233, with Jacobs J, concurring at 237); the trading activities should not he insubstantial (Murphy J. in Adamson at 239); the corporation must carry on trading activities on a significant scale (Mason, Murphy and Deane JJ. in State Superannuation Board at 96; Deane J. in Commonwealth v. Tasmania (1983) 46 A.L.R. 625 at 833).

An incorporated sporting body can be a trading corporation if

In particular, incorporation under a statute such as the

Associations Incorporation Act does not prevent a corporate

body from being a trading corporation if its activities

Trading denotes the activity of providing, for reward, goods or services. Re Ku-ring Gai Co-operative Building Scciety

(No. 12) Ltd. (1978) 22 A.L.R. 621 at 624-625; St. George

County Council at 569-570; Bevanere Pty. Ltd. v. Lubidineuse

The Trade Practices Act itself draws a distinction between

trading corporations and financial corporations; nevertheless

Adamson repays closer consideration for it is the nearest on the facts to the case now before the Court. It concerned a professional football player who was registered with the West Perth Football Club (Inc.) ("West Perth"), a body

incorporated under the Associations Incorporation Act 1895. The

ciub was amember of the Western Australian National Football League ("the W.A. League") which was incorporated under the same Act. Adamson received an offer inviting him to play with the Norwood Football Club (Inc.) ("Norwood") in South Australia, a

body which was incorporated under the Associations Incorporation Act 1956 of that state and which was a member of the South

Australian National Football League ("the 8.A. League"), also incorporated under that Act. The W.A. League and the S.A. League

were members of the National Fvotball League of Australia, a

company limited by quarantee incorporated under the Companies Act

The case concerned the refusal of West Perth and in turn the W.A. League to grant a clearance to Adamson to play for Norwood. Adamson sued West Perth, the W.A. League and the S.A. League in the Federal Court, alleging that they were trading corporations and that their actions in relation to the clearance application were breaches of sub-s.45(2) of the Trade Practices Act. At this point of these reasons for judgment, I am concerned only with the view taken by the majority of the High Court - Barwick C.J., Mason, Jacobs and Murphy Jd., with Gibbs, Stephen and Aickin JJ. dissenting - that West Perth and the W.A. League

Mention has already been made of the tests propounded in Adamson for determining whether an incorporated body is a trading corporation. In the course of his reasons for judgment, Mason J.

considered in some detail the activities of the relevant bodies.

It is in that regard that the facts of Adamson have particular

In finding that the W.A. League had trading activities so extensive as to leave no doubt that it was a trading

"The W.A. League has as its principal object the promotion, control, management and encouragement of Australian Rules football matches and competitions. It controls and manages the competition between the Perth clubs, adjudicating on disputes between clubs and on complaints against officials and players, imposing

At a glance

Court

Decision date

Before

Source

Judgment (839 paragraphs)

Cited By (4)