Tonga National Rugby League v Rugby League International Federation

LEGISLATION CITED : Restraints of Trade Act 1976 (NSW)

Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 Orton v Melman [1981] 1 NSWLR 583 CASES CITED : Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 Woolworths Ltd v Olson [2004] NSWCA 372 Buckley v Tutty (1971) 125 CLR 353 Hepworth Manufacturing Co Ltd v Ryott [1920] 1 Ch 1

TEXTS CITED : J D Heydon, The Restraint of Trade Doctrine, 3rd ed (2008)

Tonga National Rugby League Incorporated & 2 Ors PARTIES : v Rugby League International Federation Ltd

COUNSEL : Plaintiffs: S J Stanton Defendants: A Sullivan QC, S W Climpson & J McLeod

SOLICITORS : Plaintiffs: Carters Law Firm Defendants: Colin Love & Company Lawyers

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5342/08 Tonga National Rugby League Incorporated & 2 Ors v Rugby League International Federation Ltd JUDGMENT 1 HIS HONOUR: Because time is limited and my delivery of reasons for judgment on Friday's application will be interrupted by other matters in today's list and by referrals, I will announce my conclusion first and then deal with the question my Associate has raised with the parties this morning, and anything that may arise out of that. I will then deliver my reasons as time permits. 2 The plaintiffs, being Tonga National Rugby League Incorporated and Messrs Fui Fui Moi Moi and Taniela Tuiaki, seek an interim order pending the determination of these proceedings that the defendant, whom I will call "the Federation", by its servants and agents be restrained from preventing, impeding or interfering with the nomination of Messrs Moi Moi and Tuiaki for selection in the Tonga National Rugby League side to play in the World Cup Tournament 2008 in the course of and for the duration of the tournament. 3 The plaintiffs contend that at a final hearing that they would be entitled to a declaration that the rules of the Federation, which the Federation says make Messrs Moi Moi and Tuiaki ineligible to play for Tonga, are invalid as an unlawful restraint of trade. 4 It was on this basis that the plaintiffs argued they are entitled to the interim injunction sought. 5 I have concluded that an interim injunction, whose effect would be to preclude the Federation from enforcing the rules, should be refused. 6 The question of the eligibility of Messrs Moi Moi and Tuiaki to play for the Tonga National Rugby League was dealt with by the Federation on the basis that those players are ineligible to play for Tonga until the expiry of what is called in the rules the "Election Period", being two years from the date they last played for Tonga, or the end of the World Cup tournament, whichever is the earlier. 7 Whilst the Federation has stated that this period does not expire until the end of the World Cup, there was no evidence on the application as to whether that is so or not. 8 Accordingly, this morning my Associate advised the parties that I wished to be informed as to what that date is or dates are. There should be no controversy about it. If the date or dates they last played for Tonga is more than two years before the last game of the tournament, that may affect the relief sought. The proceeding would need to be listed for further submissions.

[The parties advised his Honour that both players last played for Tonga on 12 November 2006.]

[His Honour continued.] 9 The first plaintiff, Tonga National Rugby League Incorporated, is an affiliate member of the Federation and a participant in the 2008 Rugby League World Cup which began on Saturday just passed. 10 Tonga plays its first match tonight. 11 Mr Fui Fui Moi Moi and Mr Taniela Tuiaki, the second and third plaintiffs, are professional rugby league footballers. They play for the Parramatta and Wests Tigers clubs respectively in the NRL competition. 12 Mr Moi Moi has played for the New Zealand A side in 2002 and for the Tongan national side from 2003 to 2006. Mr Tuiaki played for the Tongan national side in 2006. In 2007 they were both selected to play and played matches for New Zealand. Neither has been selected to play for New Zealand in the 2008 Rugby League World Cup. Tonga is anxious to secure their services and has selected them in their squad. 13 Under the rules of the Federation, it was said that neither is eligible. The Federation is the organiser of the tournament. 14 In substance, its rules provide that where a player is eligible to play for more than one country, which is the case for both Messrs Moi Moi and Tuiaki, the player is not eligible to play senior representative rugby league for any other country until the earlier of the end of the next World Cup tournament or the expiry of two years after he is deemed to have elected to play for that country by playing a senior international match. This is called the Election Period. Within an Election Period, a player may change from one country to another with the approval of the Federation, but he may only change once in each Election Period. 15 The plaintiffs challenge the validity of the rule which, it was assumed, renders Messrs Moi Moi and Tuiaki ineligible to pay for Tonga in the current tournament. 16 The relevant rules provide: " 3.1. A player is eligible to play an International Match for:- (a) the country in which he was born; (b) the country in which either of his parents or any of his grandparents was born; (c) the country which has been his principal place of residence for a period of three years up to the date of his selection; (d) the country for which he last played representative International Rugby League football at any age level prior to the introduction of this Constitution; (e) a country for which he has gained Senior International honours in any sport. ... 3.3 A player who is eligible to play for more than one country shall be entitled to elect for which country he wishes to play. When a player plays a Senior International Match for a country, he is deemed to have elected to play for that country. Subject to Rule 3.5, once an election is made the player may not play Senior representative rugby league for any other country until the end of the next World Cup tournament, or the expiry of two years, whichever is earlier ('Election Period'). 3.4 After the expiry of an Election Period, the player may elect to play for another country if he is eligible, but once he so elects (or is deemed to elect by playing in a Senior International Match) he may not play for another country until the expiry of another Election Period. 3.5 During an Election Period, a player may change from one country to another for which he is eligible pursuant to Rule 3.1, with the approval of the Federation (but he may only change once in each Election Period). "

17 Mr Moi Moi was born in Tonga and then resided in New Zealand. He played for the New Zealand A team in 2002. In about 2003 he migrated to Australia where he has since lived and worked as a professional rugby league footballer. 18 Mr Tuiaki was born in New Zealand to Tongan parents and also has Tongan grandparents. Since 2005 he has played in Sydney as a professional rugby league footballer. 19 They both appear to be eligible under rule 3.1 to play for three countries, namely, Tonga, New Zealand and Australia, but subject to the operation of rules 3.3 to 3.5. 20 As I have said, Mr Moi Moi played for the Tongan national side in 2003, 2004, 2005 and 2006. Mr Tuiaki played for the Tongan national side in 2006. They both played for Tonga in 2006 in the qualifying matches for the 2008 World Cup. The evidence on the application did not establish the dates in which they played their last games for Tonga. I was informed this morning that they last played for Tonga on 12 November 2006 against England. 21 In about September or October 2007 they were both selected to play and played for New Zealand. 22 To be eligible to play for New Zealand approval was needed from the Federation. At a meeting of the executive of the Federation held on 3 October 2007, approval was given to them for them to play for New Zealand. 23 The minutes note that the Tongan coach was not going to stand in the way of the two players playing for New Zealand. The minutes noted that in Mr Moi Moi's contract with his club, he would be paid a bonus if he represented New Zealand. It was also noted that if the players were not allowed to play, they would miss out on a test match on 14 October 2007, the "All Golds" tour, and a test match the next year in Sydney. 24 The Board of the Tonga National Rugby League did not object to them playing for New Zealand. 25 Mr Edwards, a lawyer and a director of the first plaintiff, was advised at the time that the rules provided that a player could make one election change in two years to switch and play for another country. He said he was told this was a new rule change. However, the rules have so provided for many years and as an affiliate member, Tonga could be expected to be aware of the rules in any event. The question of whether this was a rule change is not important. 26 The Tonga National Rugby League Board decided that it should not stand in the way of players earning their livelihood. 27 At least Mr Edwards also considered that other players considering representing Tonga might be discouraged from doing so if they were thereafter restricted in maximising their income because they had played for Tonga. 28 So far as appears from the evidence, no submissions were made to the Federation by Tonga that approval should not be given to Messrs Moi Moi and Tuiaki playing for New Zealand because they would then, or could then, be ineligible to play for Tonga in the World Cup, notwithstanding that they had played for Tonga in the qualifying games. 29 Messrs Moi Moi and Tuiaki depose that they were not told that this would be the result of their playing for New Zealand. 30 As I have said, neither player has been selected to play for New Zealand in the World Cup. 31 On 3 October 2008, Mr Stanton, barrister, made representations to the Chairman of the Federation on behalf of the two players that if they were selected to play for Tonga, they should be allowed to play in the tournament. He referred to, and enclosed, a copy of a letter dated 24 July 2008 in which he asked for copies of the rules and said that he had been advised that the rules had been changed without consultation with Tonga to allow the two players to play for New Zealand in 2007. 32 In the earlier letter he contended, somewhat curiously, that the 2007 decision was unfair and the so-called amendment adversely affected Tonga. 33 The Chairman of the Federation replied on 8 October 2008. He said that the earlier letter had never been received. He pointed out that the rules had not been amended and that the players in question had applied for approval in 2007 to allow them to play for New Zealand, and that Tonga had not objected. 34 Under the Participation Agreement between the Federation and the Tonga National Rugby League, the latter was required to provide a final list of players and non-playing members of its squad by 9 October 2008. It was required to submit a final list of either 23 or 24 players. 35 Tonga submitted a list which included Messrs Tuiaki and Moi Moi as players numbered 23 and 24, and added two additional names. 36 On 9 October 2008 the executive of the Federation resolved to refuse the applications. 37 According to Mr Baitieri, the International Rugby League Federation Development Manager, the applications were refused: " ... on the basis that those players had, in or about October 2007, elected to change from playing for Tonga, to New Zealand, and were seeking another change within two years from that election and before the end of the next World Cup. "

38 The decision was conveyed by a media release on 10 October 2008 which stated: " Under RLIF rules, players who are eligible to play for more than one country must elect which country they will represent. Once this has been done, a player may not change his election until the completion of the next World Cup, or after having not represented that country for two years. A player is allowed only one application under this rule in any two-year period. In 2007 the RLIF Executive had approved applications from both Moimoi and Tuiaki to change their 'country of election' from Tonga to New Zealand. This was approved and each played for the Kiwis in last year's tour of England and France. A separate application from the two players was also tabled last night seeking to change their election a second time to again be available for Tonga for the 2008 World Cup. This application was rejected. "

39 It appears that the assumption on which the application was dealt with, and the assumption on which the case was presented on Friday, was that the Election Period would not expire until the end of the World Cup. However, there was no evidence as to when the relevant Election Period began by the players playing their last game for Tonga. I will return to this in due course. 40 Proceedings were commenced on Thursday 23 October 2008 when I made orders for short service. 41 On Friday 24 October 2008 I heard the plaintiffs' application for an order that: " 3. An interim order pending the determination of these proceedings that the Federation by its servants and agents be restrained from preventing, impeding or how so otherwise interfering with the nomination of Fui Fui Moi Moi and Taniela Tuiaki from being selected in the Tonga National Rugby League side to play in the World Cup Tournament 2008 in Sydney and elsewhere in the course of and for the duration of the tournament. "

42 The basis on which that relief is claimed is that it is said that at a final hearing, the Court should declare that rules 3.3 to 3.5 constitute "an unreasonable restraint of trade contrary to the Restraints of Trade Act 1976". 43 The plaintiffs also seek a final injunction in the same terms as the interim injunction sought. 44 Because of the lateness of which the application is brought, the claim for interim relief will effectively determine the claim for final injunctive relief. 45 It was common ground that the ineligibility of Messrs Moi Moi and Tuiaki to play for any country other than New Zealand would cease at the end of the Election Period, and that that would be no later than the end of the World Cup tournament. 46 On the application for an interlocutory injunction on the basis argued on Friday, the plaintiffs must show, first, that there is a serious question to be tried that rules 3.3 to 3.5 are invalid; secondly, that the balance of convenience favours the grant of the injunction and, thirdly, that damages are not an adequate remedy. Discretionary considerations also arise because of the delay in bringing the claim, and also, so it is contended, because the Participation Agreement provides a different mechanism for determining the dispute. 47 Because the decision to grant or refuse the interlocutory injunction will, in a practical sense, determine the substance of the issue in the proceedings, it is appropriate to evaluate the strength of the plaintiffs' case for final relief for the purposes of assessing the balance of convenience (Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 at 536). 48 Notwithstanding the terms of the declaration sought, the question on the plaintiffs' claim for final relief is whether the rules are invalid at common law as an unreasonable restraint of trade. 49 No reference was made in argument to the Restraints of Trade Act 1976 (NSW), except I was informed the defendants did not contest that the Act applied. 50 The approach under s 4 of that Act is that the Court first decides on the proper construction of the restraint in question, whether the restraint has been breached. If so, the next question is whether the restraint, as it applies to the particular breach in question, rather than to all possible breaches, is against public policy. If not, the provision is valid in its application to the conduct which infringes the relevant provision, unless an order is made under s 4(3) of the Act. See Orton v Melman [1981] 1 NSWLR 583; Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317; Woolworths Ltd v Olson [2004] NSWCA 372. 51 No argument was addressed to s 4(3). 52 Notwithstanding the terms of the declaration sought, it would be sufficient at the final hearing for the plaintiffs to show that, as applied to the facts of this case, the rules were invalid as being contrary to public policy because they are a restraint upon trade which is wider than necessary to protect the reasonable interests of the Federation and its members and affiliate members (Buckley v Tutty (1971) 125 CLR 353 at 375-377).

53 It is not disputed that if the rules operate as a restraint on the trade of the second and third plaintiffs, those plaintiffs are entitled to apply for relief, notwithstanding that they are not parties to any contract imposing the restraint. 54 It was submitted for the defendant that the rules do not operate as a restraint of trade at all. The defendant submitted that the first plaintiff is not engaging in trade by participating in the 2008 World Cup, or at least there is no evidence to show that it is. 55 Also, it was submitted that its participation in the tournament is not restrained merely because it cannot select two particular players in a squad of 24. 56 As to the second and third plaintiffs, it is accepted that the rules operate as a restraint on them playing for Tonga; but it is submitted that in playing for Tonga, they would not be engaging in a trade even in the sense of restricting their employment. They are professional rugby league footballers, but they are employed by Sydney clubs in the NRL competition. So far as the evidence shows, that employment and the remuneration they gain from it would be unaffected by whether they participated in the World Cup for Tonga or not. 57 Counsel for the defendant referred to J D Heydon, The Restraint of Trade Doctrine, 3rd ed (2008) at 58 where the learned author said: "'Trade' is not to be read narrowly so that for example it is not limited to any category of skilled occupation and applies to employment generally.

'Trade' includes the exercise of a professional calling ." 58 Counsel for the defendant submitted that there was no evidence that Messrs Moi Moi and Tuiaki would be engaged in any employment if they played for Tonga in the World Cup, and there was no evidence that their existing employment would be in any way affected. 59 Hence, it was submitted that the plaintiffs did not get to first base in showing a serious question to be tried, irrespective of the reasonableness of the rules. 60 I do not accept the defendant's submissions in this respect, insofar as they apply to the position of the second and third plaintiffs. 61 In Buckley v Tutty (at 371), the High Court cited with approval Atkin LJ in Hepworth Manufacturing Co Ltd v Ryott [1920] 1 Ch 1 at 26 where his Lordship said: " It is a misapprehension to suggest that this doctrine is confined merely to restraint of trade in any ordinary meaning of the word 'trade'; it extends further than trade, it undoubtedly extends to the exercise of a man's profession or calling. "

62 Messrs Moi Moi and Tuiaki would be exercising their calling as professional rugby league footballers if they were able to participate in the competition. Hence, in my view, the restraint on them doing so is a restraint on their trade within the scope of the doctrine. 63 It is more doubtful that the first plaintiff is carrying on a trade, even in the extended sense of the term, in participating in the competition. It is also doubtful that the fact that the first plaintiff's pool of available players is reduced by two, if the rules are valid, operates as a restraint on its trade. 64 It is true that the two players in question are considered to be of a higher calibre than alternatives, and thus are likely to assist the first plaintiff in being successful in the competition. On the other hand, if the rules are invalid, all countries would potentially have a wider pool of players from whom to choose. Assuming that the first plaintiff would be engaging in trade (within the sense of the doctrine) by competing in the World Cup, which is far from self-evident, there is nothing to show, on the evidence on this application, that it would be more competitive if the restraint did not exist. 65 I think it doubtful that the first plaintiff could establish at a final hearing that, so far as it is affected by the rules, they operate as a restraint on its trade. 66 The next question is whether any plaintiffs can show that the restraint is wider than necessary to protect the reasonable interests of the Federation and its members. 67 The plaintiffs' main attack was not on the rule in all possible applications, but in its operation where the player who had changed countries in one Election Period was not selected to play for that new country in the tournament. It seemed to be implicit in the plaintiffs' submissions that if New Zealand had selected the second and third plaintiffs for the World Cup, Tonga could not complain. But it was said that because New Zealand had not done so, it was unreasonable that Messrs Moi Moi and Tuiaki could not play for their country of origin, or for their parents' country of origin. 68 It was submitted it was in the interests of the Federation and members to have the best available players compete in the tournament as this would enhance the attraction of the games. 69 The defendant's evidence was that the eligibility rules were drafted to preserve a balance in a case where a player was eligible to play for more than one country between the flexibility of allowing him to move between teams, and the credibility of an international competition. It was said that that credibility would be harmed by the too frequent chopping and changing between teams. 70 Prima facie, the concern that the credibility of international competition would be hurt by players frequently changing their allegiance is legitimate. That this is so appears from the rules governing tournaments between countries in other sports. 71 The rules of the International Olympic Committee and of the international governing bodies for the sports of cricket, football, rugby, basketball and tennis all place restrictions on the right of players to play for another country once he, or in some cases, she, has represented a country at a particular level. 72 In the case of basketball, the choice is irrevocable once a player reaches 18. Similar provision is made for the sport of rugby by regulation 8 of the regulations of the International Rugby Board ("the IRB"). 73 The IRB explains the rationale or philosophy of its rule, which precludes a player who has played in specified senior teams for one country from playing in like teams for another country, at least once the player has turned 18, as follows: " The rationale/philosophy of Regulation 8 is to ensure that Players selected to represent either the senior and next senior fifteen-a-side National Representative Teams of a Union or a Union's senior National Representative Sevens Team have a genuine, close, credible and established national link with the country of the Union for which they have been selected. Such a national link is essential to maintain the unique characteristics and culture of elite international sporting competition between Unions. The integrity of International Matches between Unions depends upon strict adherence to the eligibility criteria set out in the Regulations ".

74 In the case of football, if a player has more than one nationality, or acquires a new nationality, or is eligible to play for several representative teams due to his nationality, the player may, up to his 21st birthday and only once, request a change of the national association for which he is eligible to play international matches. This right is also subject to certain conditions. 75 In the case of Davis Cup tennis, cricket and the International Olympic Committee, a player can change countries after specified waiting periods of three or four years. 76 Of the rules of the international sports which are in evidence, the rules of the Federation allow the greatest opportunity for a player to change countries. 77 Prima facie, it is no answer to the Federation's claim to enforce the rule to preserve the credibility of the game at an international level by players being associated with national teams, to say that the rule deprives other countries of good players. That would be so whether the players in question are chosen for the teams for which they are currently eligible or not. It is inherent in any such system limiting the eligibility of players that good players with skills who might otherwise enhance the competition, may not be able to play because they are not chosen by the only team for which they are eligible. The competition is not one between the best players spread between all the competing teams, but is a competition between countries. 78 Prima facie, that fact requires that there be rules to define a player's connection to the country he represents and which reasonably may restrict his ability to change allegiances. 79 The evidence suggests that the Federation's rules are the most liberal, from a player's perspective, and therefore, the least likely to be capable of being successfully challenged as an unreasonable restraint of the trade. 80 The notion of reasonableness requires consideration of the effect of the rules on the players affected. 81 Messrs Moi Moi and Tuiaki earned additional money by playing for New Zealand in 2007. Mr Moi Moi also received an increase in wages paid by his club. They remain eligible to play for New Zealand in the World Cup. The fact they were not selected and would now like to revert to their preferred country, having taken the benefit of switching allegiance once, does not indicate that the rules operate unfairly towards them. 82 Both Messrs Moi Moi and Tuiaki say that when they were selected to play for New Zealand, they were not told that this would prevent them from playing for Tonga in the World Cup in 2008. That evidence has not been tested. If it is true, the players would appear not to have been well served by those acting for them in 2007, or the national bodies of either country. 83 Any such failure of communication does not affect the reasonableness of the rules. 84 The plaintiffs' affidavits referred to a change made to a different rule of the Federation. That rule had concerned a minimum number of players from the country's domestic league required to be included in its squad. It appears that the change was influenced by representations from the first plaintiff. I do not consider this evidence to be relevant. The fact that the Federation could change the rules, and the fact it has changed other rules, says nothing as to the reasonableness of the rules in question. 85 I consider that the plaintiffs have only slight prospects of success at a final hearing in demonstrating that the rules are invalid. 86 If an interlocutory injunction were granted, but it was held at a final hearing, as I think is likely, that the rules are valid, the result would be that Tonga would have played with two ineligible players. That may cast doubts on the results of the games, and could lead to justifiable complaint from Tonga's opponents if Tonga were successful in games in which the second and third plaintiffs played when they were ineligible. 87 There is also a risk that the credibility of the tournament would be weakened if the players who, prima facie, are ineligible to play, were allowed to do so on the basis that they have a weak case to have the rules declared invalid, which has not been finally determined. 88 The status quo is that the rules have been in operation in the same terms as at present since about 1998 or 1999. The first plaintiff has been aware of the rules and their terms since at least 2007, if not before then. 89 The Federation announced the rejection of the application made by Messrs Moi Moi and Tuiaki that they be permitted to play on 10 October 2008. 90 Notwithstanding that the World Cup was scheduled to begin on 25 October 2008, proceedings were not commenced until 23 October 2008. Mere delay may be a bar to interlocutory relief. 91 Given the delay, and given the prima facie weakness of plaintiffs' claim, the balance of convenience favours maintaining the status quo, namely, that the defendant not be restrained from applying the rules to the plaintiffs in accordance with their terms. 92 It is unnecessary to consider the defendant's further submission that a mechanism provided in the Participation Agreement for the resolution of disputes is an absolute bar, or a discretionary bar, to the plaintiffs' claims. It is accepted that, as the second and third plaintiffs are not parties to that agreement, so far as their claims are concerned, it could only be a discretionary factor. 93 In the light of my conclusion, it is not necessary to take that matter further. 94 As I have said, the evidence was curiously silent as to the last dates on which Messrs Moi Moi and Tuiaki played for Tonga. Their application was dealt with by the Federation on the basis that the Election Period, which started on their last electing to play for Tonga by playing for that country, continued, notwithstanding their later playing for New Zealand. 95 If that were not so, and if a new Election Period began on a player playing for a new country pursuant to an approval given under rule 3.5, it would then always be open to a player to seek a fresh approval for a change as the Election Period would have begun again. 96 Although the question was not the subject of any detailed submissions, it appears that the Election Period will therefore expire at the earlier of the end of the World Cup tournament or the expiry of two years from the date the second and third plaintiffs last played for Tonga. 97 As a result of an enquiry I caused to be made this morning, I was informed that it was common ground that both players last played for Tonga on 12 November 2006. 98 Subject to hearing any submissions to the contrary, it seems to me, therefore, prima facie, that those players having been selected in the first 24 players in the Tongan squad would be eligible to play in games in the tournament which occur after 12 November 2008. 99 The schedule shows that the semi-finals and the final are to take place on 15, 16 and 22 November 2008. 100 It is at least arguable that the second and third plaintiffs would be eligible to play for Tonga in those games if Tonga were successful in reaching that stage of the competition. 101 Accordingly, before I make orders disposing of this application, I have invited the parties to make submissions on that question and the matter has been stood over to tomorrow at 10.00 am for that purpose.

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