OKEWOOD PTY LTD t/as PERTH GLORY -v- FOOTBALL FEDERATION AUSTRALIA LTD [2015] WASC 127 (13 April 2015)

2 The plaintiff and defendant have entered into a contractual agreement called a Club Participation Agreement, which is exhibit 1 in this application. In very broad terms, that agreement provides for the terms and conditions of the plaintiff's participation as a club called Perth Glory in a national soccer competition operated by the defendant.

3 There are a number of documents, referred to as statutes, regulations and rules, which, it seems, govern the running of that competition. The names of those instruments suggest they are made pursuant to some legislative authority. However, the plaintiff accepts that the instruments are purely contractual. Any alleged failure to comply with those instruments, if it is to engage rights, duties and liabilities of the plaintiff, must be referenced to a breach of the contractual terms of the Club Participation Agreement.

4 The rules governing the defendant's national competition include various provisions limiting the amounts of payments to players by clubs and requiring clubs to disclose payments made to players.

5 On 12 February 2015 and 1 April 2015 the defendant wrote to the plaintiff alleging that the plaintiff had breached those rules by conduct that was specified in those notices. Those notices provided the plaintiff with an opportunity to say why the defendant ought not exercise powers it claimed under the rules to determine whether there had been a breach of those requirements. The notices also provided the plaintiff with an opportunity to make submissions as to what consequence should follow from such breaches if they were established.

6 At about midday on 10 April 2015, the defendant received a letter of that date from the chief executive officer of the defendant. The letter indicated that the defendant had determined that the plaintiff had breached various requirements of the rules. The letter also indicated that the defendant had determined that certain sanctions should be imposed on the plaintiff's club.

7 The sanctions comprised various fines, with which I am not presently concerned, and the following sanction for the 2014 2015 contract year:

The Club is excluded from participation in the Hyundai A-League 2014/15 Finals Series and its place on the Hyundai A-League ladder at the conclusion of Round 27 will be adjusted so that it is recorded as finishing in seventh place.

8 The evidence indicates that there are three games remaining in the series before the finals series begins. The first, which is being kicked off as I now speak, is a game between Perth Glory and Sydney Football Club. Other fixtures are set for 19 April 2015 and 25 April 2015. As things stand, the plaintiff is in second place on the ALeague ladder. Although there is no evidence of this, I am told by counsel, and accept, that the top six teams will play the final series. The relegation of plaintiff to seventh place after its next two games will mean that its club is not eligible to participate in the finals series.

9 It is also clear from the terms of the sanction to which I have referred that that sanction will take effect only after round 27, that is, the round of games on the weekend of Saturday 25 April 2015.

10 After receiving the defendant's letter of 10 April 2015, the solicitors for the plaintiff wrote to the chief executive officer of the defendant responding to his letter. The response by the plaintiff's solicitors indicated that, unless by 3.45 pm Western Standard Time today Perth Glory received an unequivocal retraction of the defendant's purported determination and confirmation that the defendant will not act except by way of a properly constituted disciplinary hearing, the plaintiff would commence proceedings for immediate injunctive and declaratory relief.

11 It appears that that retraction and confirmation was not forthcoming because this afternoon the plaintiff has commenced proceedings in this court seeking urgent injunctive relief.

12 I am told by counsel for the plaintiff that the defendant has in fact issued a media statement announcing the imposition of the sanctions identified in the defendant's letter of 10 April 2015.

13 The plaintiff did notify the defendant of the hearing in this court, which was listed at 6.00 pm this evening, by email from the plaintiff's solicitors to a Ms Tracy Scott, with whom those solicitors had been dealing in relation to the salary cap controversy.

14 The message was not received by Ms Scott, who is in Sydney, until after 6.00 pm Eastern Standard Time. She advised the plaintiff's solicitors in an email, which has been produced to me, that the defendant is not in a position to appoint any representative for an injunctive hearing to be heard tonight. She asked the plaintiff's solicitors to advise this court of that fact in the event that the application for injunctive relief is agreed to be heard tonight.

15 Any injunction which I would grant ex parte would only be granted for a very short period of time, until an opportunity could be given to the defendant to be heard in relation to the matter. In practical terms it will be possible for me to list the matter for further hearing on Monday 13 April 2015, so the question which I must determine now is whether I should grant injunctive relief in the terms sought operating between tonight and Monday.

16 The principles governing the grant of an interim or interlocutory injunction are well known. They were referred to in some detail by Beech J in Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110. As his Honour observed in that case, the three primary interrelated considerations are whether there is a serious question to be tried or the plaintiff has made out a prima facie case; whether the plaintiff will suffer irreparable injury for which damages will not be adequate compensation unless an injunction is granted; and whether the balance of convenience favours the granting of an injunction.

The phrase 'prima facie case' does not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed. It is sufficient that the plaintiff show a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial. How strong the probability needs to be depends upon the nature of the rights the plaintiff asserts and the practical consequences likely to flow from the orders the plaintiff seeks.

...

As the apparent strength of the applicant's case diminishes, the balance of convenience moves against the making of an order. The grant of an injunction involves balancing the injustice which might be suffered by the defendant if the injunction is granted and the plaintiff later fails at trial, against the injustice which might be suffered by the plaintiff if the injunction is not granted and the plaintiff later succeeds at trial [9], [11]. (citations omitted)

18 Of course, those principles govern the grant of an interlocutory injunction. As an overlay in this case, the question must be asked whether the urgency of the matter, having regard to the circumstances to which I have referred, is so great as to justify proceeding ex parte in determining whether interlocutory injunctive relief ought to be granted. Alternatively, should the matter wait until at least Monday, when there will be some opportunity for the defendant to be represented and to make submissions in relation to the matter?

19 Turning to whether there is a serious question to be tried, as the High Court noted in ABC v Lenah Game Meats Pty Ltd [2001] HCA 63; 208 CLR 199:

The basic proposition remains that where interlocutory injunctive relief is sought ... it is necessary to identify the legal (which may be statutory) or equitable rights which are to be determined at trial and in respect of which there is sought final relief which may or may not be injunctive in nature [91]. (footnotes omitted)

Plaintiff's argument as to the appropriate adjudicating body

20 Speaking very broadly, the plaintiff's argument is that a combination of documents called the FFA Statutes, the Grievance Resolution Regulations and a the Player Conduct Rules provide for allegations of breach of the Player Conduct Rules, of the kind asserted in the show cause notices and the defendant's letter of 10 April 2015, to be resolved by a body established by Part V of the FFA Statutes called the Disciplinary Committee.

21 The plaintiff alleges that the defendant has acted inconsistently with those requirements by purporting to have its board determine the question of whether there has been a breach of the relevant rules and the sanction that should be imposed in response to that breach.

22 As evidence of the fact that the board of the defendant made the decision, the plaintiff relies on an email sent by Ms Scott on 9 April 2015 indicating that the board would make the decision. The plaintiff also relies on the following passage of the defendant's letter of 10 April 2015:

Appeal Rights

184. The PCRs provide that if the Club has a Grievance in relation to the decision of the FFA, the Club may appeal. FFA notes that the definition of Grievance that applies to the decisions made under the PCRs is that set out in clause 25.1 of the PCRs.

185. Clause 4.1 of the FFA Grievance Resolution Regulations provides that the appeal body that has jurisdiction to hear any appeal that you may bring is the FFA Disciplinary Committee. Clause 4.3 of the FFA Grievance Resolution Regulations sets out the form of the appeal documents.

186. If the Club decides to appeal it needs to be filed with FFA within seven business days of notice of this determination. This means that any appeal has to be lodged by 5pm Sydney time on Tuesday 21 April 2015. If the Club wishes any appeal it brings to be expedited it should obviously lodge its appeal as soon as possible. (original emphasis)

23 It appears from the passage that I have just quoted that the decision to impose the relevant sanctions was not made by the Disciplinary Committee, because otherwise reference to an appeal to that committee would not have been apt.

24 So, without having an opportunity to study the various rules and regulations in any great detail, it does (in the limited time I have had available to look at them) seem to me to be arguable that the question of the plaintiff's compliance with what I might call the salary cap rules and player payment disclosure rules should, under the terms of the various documents, have been determined by the Disciplinary Committee rather than the board.

25 However, it is necessary then to place that argument in the context of the agreement between the plaintiff and defendant to determine what term of that agreement has been breached. The plaintiff says that the allegation it has breached the salary cap rules and the player payment disclosure rules is a 'grievance'. It says that the FFA Statutes, Player Conduct Rules and Grievance Resolution Regulations require that dispute to be dealt with by the Disciplinary Committee. The plaintiff says that the conduct of the defendant's board in itself determining a sanction for breach of the salary cap rules and player payment disclosure rules, rather than having its Disciplinary Committee do so, was a breach of cl 4.1(d) of the Club Participation Agreement. Clause 4.1(d) requires the defendant to implement and enforce the rules and regulations, policies and procedures, player conduct rules, code of conduct, and grievance procedure. Again, it seems to me to be arguable that determining a grievance otherwise than in accordance with the documents to which I have referred would constitute a breach of cl 4.1(d) of the Club Participation Agreement.

26 There are, however, two additional matters that need to be noted.

27 The first matter is cl 15.4 of the Club Participation Agreement, which provides that the club (that is the plaintiff) submits exclusively to the jurisdiction of the grievance procedure and agrees that, unless and until exhausted, it will not attempt to resolve any grievance in a court of law.

28 The term 'grievance' is defined in the Club Participation Agreement to mean 'a dispute arising out of or in relation to the club's participation in the ALeague, the employment of Players or this Agreement, including a dispute about the breach, termination, validity or subject matter of the Rules and Regulations; Policies and Procedures; Player Contract Regulations; Collective Bargaining Agreement; Standard Player Contract; or Code of Conduct'. I infer reference to these rules and regulations encompasses the documents to which reference has already been made.

29 The term 'grievance procedure' means 'the ALeague procedure for the resolution of Grievances as specified in the Rules and Regulations'.

30 There seems to me, at this preliminary stage, to be a very strong argument that the dispute which the plaintiff seeks to agitate in this action, namely whether there has been a failure by the defendant to comply with the rules and procedures, is itself a grievance. That grievance could be submitted to the Disciplinary Committee, being a 'grievance' of the kind defined in the FFA Statutes.

31 The definition of 'Grievance' in the FFA Statutes is in somewhat different terms to the definition in the Club Participation Agreement. However, the definition in the FFA statutes includes 'a dispute or grievance that arises between Members and relates to a breach, termination, enforcement or subject matter of these FFA Statutes, including an alleged infringement of the National Registration Regulations'. Both the plaintiff and defendant are 'Members' for the purposes of this clause.

32 The term 'FFA Statutes' in this definition of 'Grievance' includes 'these statutes, including the annexures, and any other national regulations or national policies promulgated by FFA, as amended on notification from FFA from time to time'.

33 I also note that cl 27(2) of the FFA Statutes provides that:

Each Member submits exclusively to the jurisdiction of the Grievance Resolution Regulations and agrees that it will not attempt to resolve any Grievance in any court of law or tribunal.

34 It does seem to me that the plaintiff has a right to engage the grievance procedure before the Disciplinary Committee, in relation to the question of which body ought to have determined and imposed the sanctions. That alternative dispute resolution, or grievance, procedure not having been completed, this court would not ordinarily engage in the exercise of its jurisdiction in relation to an alleged breach of the Club Participation Agreement in the face of cl 15.4 of that agreement.

Conduct sought to be restrained in not a breach of the agreement

35 The second matter that must be noted is that what is sought to be restrained in this case is not action by the FFA board to impose a sanction, but the making of statements about the effect of the sanction which has been imposed. To put it another way, the injunction sought seeks to stop the defendant from saying that the sanction has been imposed.

36 Counsel for the plaintiff has not been able to identify any provision in the contractual documents which would be breached by the defendant saying that it had imposed a sanction on the plaintiff, other than a reference to cl 4.1(c) of the Club Participation Agreement. Clause 4.1(c) requires the defendant to 'maintain the professional standards of the ALeague, including in relation to play, match presentation, behaviour, refereeing and broadcast'. With respect to counsel's submissions, it seems to me to be drawing a very long bow to say that a statement by the defendant that it has imposed a sanction would be a breach of that clause.

37 So it does seem to me that, although there may be an argument, the case for the plaintiff obtaining either final relief generally in this court at this stage, or final relief that would prevent the defendant from saying it had imposed a sanction, is very weak.

38 I accept that, if there is a breach of the Club Participation Agreement in the manner alleged, then damages would not be an adequate remedy.

39 The plaintiff pointed to two kinds of prejudice that it would allegedly suffer in relation to the sanction if an injunction were not granted.

40 The first was a concern that if, as invited by par 184 186 of the defendant's letter (quoted above), the plaintiff lodged an appeal or grievance with the disciplinary committee, then the plaintiff would be making an election which would preclude it from asserting the 'invalidity' (as it puts it) of the board's decision to impose the sanctions. It is far from clear to me that that is a real concern, since the question of whether the rules have been complied with is itself a grievance. Raising that grievance (namely that there was a decision to impose a sanction not authorised by the rules and regulations) would not seem to me to involve an election inconsistent with an allegation that the decision was 'invalid'.

41 But, in any event, the appeal does not have to be lodged until Tuesday 21 April 2015, so there would be no prejudice to the plaintiff in terms of its appeal rights by delaying the grant of any injunctive relief to a point early next week when the defendant can be given some opportunity to be heard.

42 The other prejudice to which the plaintiff points is more ephemeral. It is said that players and other people associated with the plaintiff's soccer club will feel 'deflated' by the decision, and that that may affect the team's performance in the remaining games that are to be played before the finals season commences. There is not actually any evidence of that, but I can accept that notification of a decision that the club has been 'knocked out' of the finals (to speak colloquially) would have a depressing effect on club morale.

43 Nevertheless, it is difficult to see what practical difference the grant of an injunction tonight would have on that morale, as such an injunction would not prevent the club from being excluded from the finals, but would simply prevent the defendant from saying that the sanction had been imposed. Of course, the first of the remaining games is now well underway and any decision I make tonight will not have any impact on that game, even assuming that it otherwise might affect the morale of the club.

44 Further, the real prejudice that is suffered by maintaining the status quo (which includes the absence of an injunction between now and early next week) seems to me to be very slight, and not of a kind which would ordinarily justify a grant of injunctive relief.

45 The prejudice to the defendant in those circumstances would be that an injunction would be granted against them in circumstances where they have not had an opportunity to be heard.

46 It is not necessary for me to decide, at this point in time, whether a longerterm injunction ought be granted. The practical decision that I am required to make at this point in time is whether to grant an injunction ex parte tonight.

47 Taking all of those matters into account, I am not persuaded that it is appropriate for me to grant an injunction in the terms sought tonight. In my view the matter is not so urgent that it cannot wait until early next week when there will be an opportunity for the defendant to be represented and to make submissions in relation to the matter. In my view, the more appropriate course is to adjourn this application to 2.15 pm on Monday 13 April 2015 and to make a direction that the plaintiff give notice of the hearing on that date, the orders which I have made today, and a summary of the reasons for those orders to the defendant by 10.00 am tomorrow.