Equity - Injunction - Application for interlocutory injunction to restrain defendant from giving effect to its decision to suspend plaintiff - Serious question to be tried - Whether damages would be adequate remedy - Balance of convenience

Contract - Voluntary sporting association - Whether contractual agreement exists between plaintiff and defendant - Whether contract was breached - Covenant in restraint of trade not limited to contractual relationships

Interlocutory injunction granted to restrain defendant from giving effect to its decision until trial

Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148

Cohen v Peko Wallsend Ltd (1986) 68 ALA 394

Dickason v Edwards [1910] HCA 7; [1910] 10 CLR 243

Hickman v Kent & Romney Marsh Sheep Breeders' Association [1915] 1 Ch 881

McInnes v Onslow Fane (1978) 3 All ER 211

McKinnon v Grogan [1974] 1 NSWLR 295

McNab v Auburn Soccer Sports Club Ltd [1975] 1 NSWLR 54

Mott v Mount Eden Gold Mines (1994) 12 ACLC 319

Ridge v Baldwin [1963] UKHL 2; [1963] 2 All ER 66

Russell v Duke of Norfolk [1949] 1 All ER 109

Zusman v Royal Western Australian Bowling Association (Inc) [1999] WASC 86

1 TEMPLEMAN J: The plaintiff, Mr Peter Rush, is a dedicated amateur player and coach of Australian rules football. He has played some 240 games for the Maylands Amateur Football Club and some 150 games for the Bayswater Amateur Football Club ("the Bayswater Club") which is his present club. He has been the Secretary of the Bayswater Club; and he has coached there since 1992. He was accredited as a coach by the Football Development Trust in 1994 and again in 2000.

2 Apart from being a player and coach, it appears that the plaintiff has also been the financial saviour of the Bayswater Club. As its secretary, he contributed $2,000 of his own money to the club, when it was in such dire financial straits, as a result of misappropriation, that it would otherwise have been unable to continue. According to the President of the Bayswater Club, the plaintiff is one of their most popular and valuable members.

3 Despite the plaintiff's impressive record, on 23 August 2000 he was suspended for a period of 10 years from acting as a player, coach or official within the Western Australian Amateur Football League (Inc) ("the League"). The plaintiff is now 41 years old. The effect of his suspension is therefore to exclude him permanently from participating in amateur football.

4 The decision to suspend the plaintiff was taken by the Management Committee of the League at a meeting held to discuss an incident which had occurred during a match played on 19 August 2000 between the Bayswater D Reserve team and the Willetton Amateur Football Club. About one minute before the end of the game, a member of the Bayswater team punched one of the field umpires. It was the plaintiff, as the Bayswater coach, who had included the offending member in the team.

5 According to the plaintiff (and his evidence has not been disputed) he was unaware that the offending member had been suspended for hitting an umpire on a previous occasion, and was playing under a false name.

6 The plaintiff was informed by the President of the Bayswater Club, Mr Peter Zelesco, that he was required to attend the meeting of the Management Committee held on 23 August. However, the plaintiff was told only that the meeting had been convened to discuss the incident and the publicity which flowed from it. The plaintiff was not told of any proposal to discipline him. No charge or complaint was put to the plaintiff.

7 According to the plaintiff, whose evidence has not been disputed, the President of the League told him at the meeting it was his fault that the offending player had hit the umpire: that the player was under suspension for four years for hitting an umpire and that the plaintiff should have known better. The plaintiff was told that he had played several players under assumed names and had been doing so for three to four weeks.

8 It is the plaintiff's evidence that several members of the Committee asked him questions and that one Committee member, in particular, said he must have known that the offending player was under suspension. The plaintiff said he hardly knew the player and had no idea that he was under suspension.

9 After some 20 minutes of discussion, the plaintiff and Mr Zelesco were asked to wait outside the meeting. They waited for about 10 minutes and were then recalled. The President of the League then informed the plaintiff that he had been suspended for 10 years from having any involvement in amateur football.

10 The plaintiff appealed against the decision. He did so by an undated letter written on his behalf by Mr Zelesco in his capacity as President of the Bayswater club.

11 On 14 March 2001, the Executive Officer of the league notified Mr Zelesco that at a special meeting it had been agreed unanimously that the plaintiff's disqualification and the penalties imposed against the Bayswater club would stand without alteration.

12 On 3 May 2001, the plaintiff commenced proceedings against the League by writ of summons. He seeks a declaration that the decision of the League's Management Committee to suspend him is void and of no effect. He seeks a permanent injunction to restrain the League from acting on or giving effect to the decision in any way.

13 The application before me is for an interlocutory injunction, effectively until trial, to restrain the League from giving effect to the decision to suspend the plaintiff. In dealing with this application, I am required to determine whether there is a serious question to be tried. If so, it will be necessary to consider whether, if the plaintiff was successful in his action, damages would provide him with an adequate remedy. If damages would be not an adequate remedy, I am required to consider whether the balance of convenience lies in the plaintiff's favour to an extent which would justify the grant of an interlocutory injunction. In considering that issue, I am entitled to take into account the strength of the plaintiff's case.

15 The plaintiff puts his case in two ways. He contends that either because he is a member of the Bayswater club (which is itself a member of the League) or because he is registered with the League as a player, the League is obliged, as a matter of law, to abide by its rules in relation to disciplinary proceedings: and that it has not done so in the plaintiff's case.

16 Secondly, the plaintiff contends that the decision to suspend him for 10 years, at least insofar as it prevents him from coaching, constitutes an unreasonable restraint of trade and is therefore void.

17 The starting point for a consideration of the first limb of the plaintiff's claim, is the well known passage in the joint judgment of Rich, Dixon, Evatt and McTiernan JJ in Cameron v Hogan [1934] HCA 24; (1934) 51 CLR 358, 370 - 1, that:

"There are ... reasons which justify the statement that, at common law as well as in equity, no actionable breach of contract was committed by an unauthorised resolution expelling a member of a voluntary association, or by the failure on the part of its officers to observe the rules regulating its affairs, unless the members enjoyed under them some civil right of a proprietary nature. ... One reason which must contribute in a great degree to produce the result is the general character of the voluntary associations which are likely to be formed without property and without giving to their members civil right of a proprietary nature. They are for the most part bodies of persons who have combined to further some common end or interest, which is social, sporting, political, scientific, religious, artistic or humanitarian in character, or otherwise stands apart from private gain and material advantage. Such associations are established upon a consensual basis, but, unless there were some clear positive indication that the members contemplated the creation of legal relations inter se, the rules adopted for their governance would not be treated as amounting to an enforceable contract."

18 It is submitted on behalf of the League, that the principle set out in this passage is of direct application in the present case with the result that the plaintiff is bound to fail. It is submitted further that the plaintiff is not a member of the League and that in any event, he has not "civil right of a proprietary nature" as a result of his involvement with the League.

19 It is clear, in my view, that the plaintiff is not a member of the League. Clause 7 of the Constitution of the League provides that clubs may be admitted as members, each club being represented by a delegate. In addition, persons comprising the Executive of the League and its Management Committee are members. So too are life members elected pursuant to rule 8. The plaintiff does not fall within any of these categories.

20 Although he claims to be a life member, I am satisfied that he is not a life member within cl 8 of the Constitution, which applies to persons who have "rendered outstanding service to the league" and who are elected life members by a three quarters majority of those present and eligible to vote at an annual general meeting of the council.

21 The plaintiff is entitled to free admission to matches controlled by the League in recognition of his having played 150 games. A person enjoying this privilege is said to have had conferred on him a "player life membership" by the League. However, this is not life membership within the Constitution.

22 Nor do I consider the plaintiff to be a member by virtue of his membership of the Bayswater club. If that were so, then every member of every unincorporated club would be a member of the League.

23 It is submitted on behalf of the plaintiff, that this must be the logical conclusion, arising from the fact that the Bayswater club, at least, is an unincorporated association. Since such an association has no legal persona apart from its members, only they could enter into contractual relations with the League. While I see the logical attraction of the conclusion that the members must therefore be the contracting members, that is not, I think, the intention of the constitution.

24 Indeed, it seems to me that the practical difficulty flowing from the proposition that the League must be taken to have contracted with all the members of the Bayswater club, lends weight to the League's submission that there was never any intention to create legal relations between the League and each individual member of the constituent clubs. This point was made by the High Court in Buckley v Tutty [1971] HCA 71; (1971) 125 CLR 353 at 375.

25 I am therefore satisfied that the plaintiff's contention that he is a member of the League by virtue of his membership of the Bayswater club, does not raise a serious question to be tried. I turn then to consider the plaintiff's position as a registered player.

26 It is the plaintiff's evidence that some 23 years ago, he registered as a player with the League. The plaintiff did not keep a copy of the application which he then completed. However, there is in evidence a copy of the application form in current use. It is not contended by the League that the current form differs in any way from that completed by the plaintiff when he applied for registration.

27 The form requires the applicant to give his name, date of birth, address and occupation. The applicant then nominates the club for which he wishes to play. He is then required to set out the names of the club or clubs with which he has played previously or has been permitted to play. The applicant is then required to certify that he is not a player who is at present under disqualification from playing for any club in any league or association and that he agrees to abide by the constitution and by-laws of the League.

28 The secretary of the club is required to sign the application form to certify that he has stressed to the applicant the important point that the applicant will not be permitted to take part in any match under the control of the League unless he is an amateur; that is, one who has not participated at any time in Australian football for monetary gain.

29 In addition to completing the application form, the applicant is required to make a statutory declaration, in accordance with s 106 of the Evidence Act 1906. The purpose of the statutory declaration is to confirm the amateur status of the applicant, either as a person who does not play football for pecuniary gain, or "by due process of Reinstatement of Amateur Status" pursuant to the rule 5.1 of the League's by-laws.

30 In my view, it is clear from the tenor of the application form and the statutory declaration, that registration as a player with the League is no mere formality. It requires the applicant to make a serious commitment which is reinforced by his agreement to abide by the Constitution and by-laws of the League.

31 That being so, there is, in my view, a serious question whether these matters constitute a "clear positive indication" that registered players and the League contemplated the creation of legal relations between them so as to be outside the general principle stated by the majority of the High Court in Cameron v Hogan (supra). I therefore consider there is merit in the submission by counsel for the plaintiff that registered players, who had bound themselves to agree to abide by the Constitution and by-laws of the League, would be astonished to learn that they would have no redress against the League if it chose not to abide by its constitution and by-laws in its dealings with them. In short, I think it arguable that a contract should be implied between the plaintiff and the League to the effect that the League will abide by its constitution and by-laws in dealing with him. A similar conclusion was reached in Hawick v Flegg (1958) 75 WN (NSW) 255, 259.

32 That is not, however, the end of the matter. It will not avail the plaintiff to establish that a contract exists between him and the League, unless he can demonstrate that, in ordering his suspension, the League was in breach of that contract.

33 The plaintiff contends that the League was in breach for failing to abide by those of its by-laws contained in rules 8.1 to 8.4 which require a Protests and Disputes Tribunal, appointed by the Management Committee, to hear all the charges in respect of offences under the laws of the game. Further, the rules require the Executive Officer of the League to submit a charge to be heard and determined by the Tribunal. The rules provide that any player or official "concerned in any matter before the Tribunal" is entitled to appear before it. Such a person, unless the Tribunal directs otherwise, may be accompanied and may be represented at the hearing of the charge by a representative of his club. In short, the rules in Part 8 of the by-laws ensure that the rules of natural justice are observed in the proceedings of the Tribunal.

34 It is not necessary to set out the relevant rules in any detail because it is accepted by the League that these procedures were not followed in the plaintiff's case. It is the League's contention that it was not obliged to proceed against the plaintiff by way of a charge before the Tribunal. That is because, it is submitted, the Management Committee had jurisdiction itself to discipline the plaintiff in the way that it did.

35 The League relies on rules 9.1 to 9.5 of its by-laws, which are concerned with "Offences, Penalties & Judicial proceedings". They are in the following terms:

"9.1 The Management Committee may by resolution from time to time declare any acts or omissions by players, officials or clubs to be offences under these Rules and may also declare the penalty for such offences.

9.2 It is an offence for any player or official to commit any of the offences referred to in Section 8.4 of these rules.

9.3 Clubs of the League shall be held responsible for the conduct and the behaviour of their members at matches and shall be liable to any penalty imposed by the Management Committee and shall include any misconduct or misbehaviour by their members at, and or during, such matches, which in the opinion of the Management Committee is detrimental to the image of the Amateur League.

9.4 Any player or official who acts or conducts himself in a manner prejudicial to the good order, management, control and administration of amateur football commits an offence under these Rules, shall be liable to a fine not exceeding $500.00 and in the case of a player, disqualified from playing during such term as [......] deems fit or, in the case of an official in any capacity either permanently or during such time as determined.

9.5 Where no specific penalty is prescribed in respect of any offence under these Rules or under the laws of the game, the P & D Tribunal may impose a fine not exceeding $1,000 or disqualification for such person as it deems fit, or both."

I have inserted the [......] in rule 9.4, because there is obviously something missing from it. I shall consider, in due course, what the missing word(s) might be.

36 It is thus apparent that while the Tribunal established in Part 8 is to hear all charges in respect of "offences under the laws of the game" the Management Committee has a residual jurisdiction to declare acts or omissions by players, officials or clubs, to be "offences under these Rules": rule 9.1.

37 Rule 9.2 makes it an offence for a player or official either to fail to attend a Tribunal hearing, or to misconduct himself in the way set out in rule 8.4.

38 Rule 9.3 empowers the Management Committee to impose penalties for misconduct which, while not amounting to offences under the laws of the game (which would be dealt with by the Tribunal pursuant to rule 8) are nevertheless detrimental to the image of the amateur league.

39 While rule 9.3 is directed to clubs, rule 9.4 is directed to players or officials who conduct themselves in a manner prejudicial to the good order etc of amateur football. Any player or official misconducting himself commits an offence under the rules and may be disciplined. The question is, by which body may the player or official be so disciplined? The question arises because of the omission from rule 9.4 to which I have referred above.

40 It is submitted by the League that the missing words are "the Management Committee", with the result, first, that the Management Committee has a residual jurisdiction to discipline and disqualify any player or official for misconduct: and secondly, that in so doing, there is no requirement to observe the rules of natural justice. That is because, it is submitted, rule 9.4 contains no procedural requirements such as those to be observed in hearings before the Tribunal, which do embody these rules.

41 I am not persuaded that I should accept either of those submissions: or that the second necessarily follows from the first.

42 In my view, the words missing from rule 9.4 are more likely to be "the P & D Tribunal". If that was so, then rules 9.4 and rule 9.5 would complement each other. Rule 9.4 would make it an offence under the Rules for a player or official to conduct himself in a manner prejudicial to the good order (etc) of amateur football. Such an offence would attract a specific penalty of a $500 fine, and disqualification by the Tribunal.

43 This construction would complement the power of the Tribunal under rule 9.5 to impose a fine of $1,000 and/or disqualification in respect of any offence for which no specific penalty had been presented.

44 I assume for present purposes that the League regards the plaintiff's conduct as falling within rule 9.4. If that is so, and if on the true construction of the rule the plaintiff should have been disciplined by the Tribunal, there has been a clear breach of the by-law.

45 Let it now be supposed that the missing words in rule 9.4 are "the Management Committee". In that case, rules 9.3 and 9.4 would be complementary to some extent. Rule 9.3 permits the Management Committee to discipline club members of the League in respect of conduct and behaviour of their members.

46 In the same way, rule 9.4 would permit the Management Committee to discipline a player or official for prejudicial conduct of a similar kind to that which would entitle it to discipline the club made responsible for such conduct by rule 9.3.

47 I say only "conduct of a similar kind", because different terminology is used. Rule 9.3 refers to misconduct or behaviour which is,

"detrimental to the image of the Amateur League,"

"prejudicial to the good order, management, control and administration of amateur football."

48 Further, it is to be noted that whereas conduct proscribed by rule 9.4 constitutes an offence under the Rules, conduct falling within rule 9.3 does not: at least, not expressly.

49 While the construction is eminently arguable, it seems to me that rules 9.4 and 9.5 relate more closely to each other than do rules 9.3 and 9.4. That is why I think the words omitted from rule 9.4 are more likely to be "the P & D Tribunal".

50 If I am wrong in that view, does it follow that rule 9.4 excludes the rules of natural justice? If it does, a person who committed an offence for which no specific penalty was prescribed would be entitled to the protection afforded by the rules of natural justice, whereas a person who committed the offence of what may be described as prejudicial conduct would have no such protection.

51 Although in the first case the person concerned might be fined $1,000, whereas he could be fined only $500 in the second, in neither case is there any limit to the disqualification which could be imposed on him.

52 That being so, I find it difficult to discern an intention to exclude the rules of natural justice in the second case: that is, in proceedings under rule 9.4. Where the rules of a body such as the League have the potential for a draconian effect on a person who is bound by them, the courts will be less inclined to conclude that the rules of natural justice have been excluded: see Australian Football League v Carlton Football Club Ltd [1998] 2 VR 546, 550 for a broad statement of the principles applicable in these cases.

53 For present purposes, I consider that a player registered with the League should be treated as if he were a member. That is because of the assumed intention that a legal relationship should exist between them and because of the extent of the disciplinary jurisdiction which the League is able to exercise in relation to its players.

54 Although a registered player has no proprietary right or interest in the League, as I understand it, his right to play or participate in Australian Rules football in this State, as an amateur, is governed exclusively by the League. While no pecuniary value can be placed on that right, it nevertheless has considerable value to those who play the game for the love of it. No greater control could be exercised by an association over its members than to deprive them permanently of that enjoyment.

55 In any event, I think it arguable that the plaintiff's ability and potential to derive income from coaching is a proprietary right. This would also distinguish the present case from Cameron v Hogan (supra) : see Ex parte Appleton [1982] Qd R 107.

56 Given that there is an omission from rule 9.4, which is therefore ambiguous, I am satisfied that there is a serious question to be tried as to the true construction of the by-laws. The question is whether the Management Committee were entitled to discipline the plaintiff at all on 23 August 2000, and if they were, whether they were entitled to do so without charging the plaintiff and without giving him an opportunity to be heard in his defence.

57 It is conceded by the League that if the suspension imposed on the plaintiff constituted a restraint of trade, it would be unlawful and therefore void. In my view, that is a proper concession because, as was held by the High Court in Buckley v Tutty (supra) at p 375, the common law doctrine which invalidates restraints of trade is not limited to cases in which a contractual relationship exists between the parties.

58 The evidence upon which the plaintiff's restraint of trade claim is based is that he has earned money from coaching. His uncontested evidence is that he normally receives about $1,000 per year for coaching the Bayswater Club Reserve team. However, he received no payment in the year 2000 because of the Club's financial position. The plaintiff also says that if he coached the D League team, as he has in the past, he could earn up to $4,000 per season.

59 The plaintiff is a self-employed carpet cleaner. He is married and has a five-year-old child. There is no evidence about the income he derives from his business. That being so, I am unable to form any view about the economic significance to the plaintiff of the income he has derived from coaching. Clearly, it was of no significance in the year 2000, when he earned nothing. Nor is there evidence about the plaintiff's potential to earn $4,000 per season from coaching: a figure which seems to be inconsistent with his previous earnings.

60 Counsel for the plaintiff relied on Shepherd v South Australian Amateur Football League Inc (1986) 44 SASR 579. The plaintiff in that case was a semi-professional football player who was suspended for seven years for abusing and striking an umpire. In 1983 he had earned $570 from playing for his club. Had he been able to join an A Grade team, he could have earned $40 per match.

61 The plaintiff in Shepherd had regular work as a barman, but there seems to have been no evidence about his income from that employment. The trial judge said he was willing to assume that the plaintiff's probable loss of income during the period of his suspension was enough to bring him within an exception to the rule in Cameron v Hogan (supra): but it was not necessary for that point to be decided because the plaintiff was not entitled to relief in any event. The plaintiff had sought to set aside the decision to suspend him on the ground that it was unreasonable. But it was held that the Court should not interfere, given that the plaintiff had no complaint about the way in which the defendant had conducted itself.

62 Shepherd's case does not, therefore, involve the restraint of trade doctrine. It provides no assistance to the plaintiff in this aspect of his case: although it does assist him in the first limb.

63 Such is the paucity of evidence about the significance of the plaintiff's earnings (actual and potential) from coaching, it is difficult to conclude that there is a serious question to be tried. However, it will be open to the plaintiff to adduce more detailed evidence at trial. The questions may also be explored whether the restraint of trade doctrine applies in the present circumstances: and if so, whether a restraint for ten years - which is effectively a life time ban for the plaintiff - constitutes an unreasonable restraint.

64 For the reasons set out above, it is clear that damages would not be an adequate remedy. Even though the plaintiff could be compensated in money for any loss of income from coaching, he could not easily be compensated in that way for the loss of enjoyment of playing the game which has been such a major part of his life for some 23 years.

65 In my view, the balance of convenience favours the plaintiff. It would obviously work an injustice to him to deny him the opportunity to play and coach pending trial, if he was to prove successful at trial. On the other hand, if the League was successful at trial, I am unable to see what harm might befall it as a result of an injunction granted in the interim. Indeed, none was identified by its counsel.

66 The League's submission is first, that there is no urgency in the matter: and secondly that the Court should not interfere on an interlocutory basis with decisions of a non-profit sporting association.

67 As to the first submission, the urgency lies in the fact that the season is of limited duration, and the plaintiff cannot recapture the time he has lost. Further, there is evidence that the suspension has prevented the plaintiff from obtaining employment as the general manager of the Swan Districts Football Club.

68 It is true that there has been some delay in commencing the proceedings. However, counsel for the plaintiff told me, without objection, that the decision to litigate was not taken lightly: and was taken only after all other avenues had been exhausted.

69 I am not persuaded that there is any merit in the League's second submission. I accept that the courts are generally reluctant to interfere with voluntary sporting associations; although that reluctance is less marked in exclusion cases such as this, than in cases where the complaint is that the association has declined to admit or licence an applicant. However, whether or not such reluctance is appropriate in this case must depend on the outcome of the trial, when the issues can be explored fully.

70 There is another factor to be considered. It is the plaintiff's evidence that people with whom he is acquainted through amateur football are ignoring him. The plaintiff believes that is because those people think it was he who hit the umpire, so draconian is the penalty imposed on him.

71 If the League's position is vindicated at trial, then so be it. But I think it desirable, pending trial, to avoid as far as possible the risk of an injustice to the plaintiff resulting from an unwarranted slur on his reputation.

72 I emphasise that I should not be taken as expressing any view about the merits of the League's decision. Indeed, counsel for the plaintiff made it plain from the outset that the merits of the decision were not in issue in these proceedings. The questions for trial are whether the rules of natural justice should have been observed by the League in taking its decision: and whether the decision constitutes an unreasonable restraint of trade.

73 In all the circumstances, I am satisfied that the plaintiff should have an injunction to restrain the League from giving effect to its decision until trial. I will hear from counsel as to the precise form of order.