Ultra Management (Sports) Pty Ltd v Zibara
[2020] FCA 31
At a glance
Source factsCourt
Federal Court of Australia
Decision date
2020-01-24
Before
Mr J, Deane J, Greenwood J
Source
Original judgment source is linked above.
Judgment (14 paragraphs)
- Judgment be entered for the applicant.
- The applicant submit to the Court within 10 days a form of order for an account consistent with the reasons for judgment published today.
- Costs are reserved.
- Within two weeks, the parties are to put on written submissions in relation to the disposition of the costs of the proceeding.
- The question of costs will be determined on the papers unless a party wishes to be heard orally on the question of costs of the proceeding. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
GREENWOOD J: 1 The essential question in issue in these proceedings is whether the first and second respondents (defendants) who were employees of the applicant (plaintiff) (and with particular relevance, employees of the applicant in the period from 20 June 2017 to December 2017), engaged in conduct constituting a breach of the duties of good faith and fidelity owed to the applicant and a breach of the duty owed to the applicant to avoid a conflict of interest and duty. 2 A preliminary question in issue was whether the scope or content of the role, tasks and duties to be performed by each employee gave rise to fiduciary duties or obligations owed to the applicant by each employee. The character of the relationship and the scope or content of the role, tasks and duties to be performed is ultimately a factual question leading to a conclusion of law. Although only aspects of the content of the role, tasks and duties of each former employee respondent were admitted in the pleading, ultimately the position adopted by the respondents in final submissions was that if the conduct said to constitute a breach of the fiduciary obligations owed to the applicant by the first and second respondents is made good, "it has to be conceded that there was a breach of fiduciary duty": T, p 310, lns 43-44. 3 Thus, there is no issue in the proceeding that the first and second respondents owed fiduciary obligations to the applicant in the relevant period. Those obligations can be simply described as a duty of fidelity and a duty to avoid a conflict of interest and duty, that is, a conflict or as Deane J said in Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 at 199 a "significant possibility of conflict", arising between the personal or self-interest of each of the first and second respondents and the duty owed by them to the applicant. I will return to a more precise formulation of the duty later in these reasons: see [188] and following, of these reasons. 4 The applicant initially made a number of claims for relief. 5 The first is a declaration pursuant to s 1317E of the Corporations Act 2001 (Cth) (the "Act") that the first and second respondents, by the pleaded conduct, contravened ss 182 and 183 of the Act. 6 The second is an order pursuant to s 1317H of the Act that the respondents pay compensation to the applicant exceeding the sum of $750,000.00, including profits in accordance in s 1317H(2) of the Act. 7 The third is an injunction pursuant to s 1324 of the Act in particular terms. 8 The fourth is said to be in the alternative (and since it deals with financial questions, it seems to be in the alternative to the second order sought), at the election of the applicant, either equitable damages for breach of fiduciary duty or an account of profits. 9 As events transpired, the applicant made an election for the remedy of an account of profits as an expression of an entitlement to "equitable compensation" for breach of the fiduciary duties owed to the applicant. Apart from the contended breaches of fiduciary duties owed to the applicant, the applicant, in opening the case, pressed the notion that the contended conduct also engages a contravention of s 182 (and 183) of the Act in reliance on propositions drawn from a decision of the New South Wales Court of Appeal, Gunasegaram v Blue Visions Management Pty Ltd; Blue Visions Management Pty Ltd v Chidiac [2018] NSWCA 179; (2018) 129 ACSR 265, Basten JA at [14], [20], [43] (as to s 182 (1)(a) of the Act) and [44]. However, no claim is now made for an order for compensation under s 1317H of the Act nor is any injunction sought. Moreover, no claim of breach of any contended obligation of confidence in relation to identified information is pressed. 10 In substance, the remedy sought is an order that the respondents' account to the applicant for any gains (profits) made by reason of the contended breaches of the fiduciary obligations owed to the applicant. The applicant says that the claims of contraventions of the Act were pressed in the opening on the footing that duties and prohibitions upon conduct also arise under the Act and those matters would become relevant should it be found that the applicant and the first and second respondents are not in a fiduciary relationship with the applicant. A question might well arise about whether the obligations contained in ss 182 and 183 of the Act are obligations to be discharged by the first and second respondents even though they may be found to be in a fiduciary relationship with the applicant and owe the relevant fiduciary duties to the applicant. The question of the overlap between those duties and obligations arising under ss 182 and 183 of the Act remains an outstanding question in the jurisprudence. However, that is not how the applicant puts its case. The applicant relies upon contended breaches of fiduciary duties owed to it and seeks the remedy of an account of profits in respect of those breaches. In this case, the respondents now concede that the former employees owed fiduciary obligations to the applicant in the relevant period. 11 For the purposes of an account of profits, the applicant seeks an order for all necessary accounts and inquiries to be conducted and an order that the respondents (each of them) pay to the applicant any sum found to be due to the applicant upon the taking of accounts and the making of such inquiries. I will return to the question of the remedy later in these reasons. 12 The factual context within which these questions arise will need to be examined in a little detail. The following three matters need to be noted at the outset. First, apart from tendering the emails of 21 November 2017 and 22 November 2017 passing between Mr Sam Ayoub and Mr Antoun Zibara (discussed at [53] to [56] of these reasons), the respondents adduced no evidence in the proceeding. They did not read and rely upon the affidavit of Mr Zibara or the affidavit of Mr Angeli. Thus, apart from those emails, all the evidence in the proceeding was called by the applicant. 13 Second, the respondents contend that the principal witness for the applicant, Mr Sam Ayoub (the applicant's sole director and beneficial owner of its issued shares) is an "unconvincing witness" and his evidence should be approached "very guardedly" where it is uncorroborated by documents. I do not accept the breadth of that submission and I address that matter later in these reasons. 14 Third, the conduct of the proceeding at trail engaged these circumstances. The amended defence filed by the respondents simply pleaded in response to some of the significant contentions made against the respondents, limited factual assertions but otherwise the respondents "do not admit the allegations therein": see, for example, para 20 of the statement of claim; para 20 of the amended defence. The factual case sought to be made by the respondents at trial, however, engaged an affirmative case. The applicant objected that the affirmative case was not pleaded and contended that it ought to have been pleaded. That contention was correct for two reasons. First, the affirmative case would give rise to the need or likely give rise to the need to examine documents relevant to the affirmative case. Second, once presented with a further amended pleading crystallising the affirmative case together with the relevant documents, instructions would need to be taken about it and aspects of it tested. As events transpired, the respondents sought leave to file and rely upon a further amended defence. They conceded that documents relevant to the amendments would need to be produced. The applicant took the position that it would not oppose leave if the documents could be produced immediately (especially because, obviously enough, the proceeding was in the course of trial). The trial was stood down on Friday 4 October 2019 for a number of hours to enable the question of the production of the relevant documents to be investigated. Production of the documents proved to be difficult and discussion took place about the possibility of producing the documents on either Saturday 5 October or Sunday 6 October 2019. However, producing the documents on either day would have put the applicant in a difficult position of trying to seek responses from any relevant person (such as a player or a player's family members) over a week-end and or the public holiday on Monday 7 October 2019. The trial resumed on Tuesday 8 October 2019. At the outset, the respondents did not press their application for leave to further amend the defence. The respondents tendered the emails earlier described and then closed their case. 15 The applicant, Ultra Management (Sports) Pty Ltd ("UMS") is a sports management company. It was incorporated on 6 February 1996 and its sole director is Mr Sam Ayoub. Mr Ayoub is the beneficial owner of two fully paid ordinary shares in the UMS. The core business of UMS consists of managing players in the Australian National Rugby League (the "NRL") and the English Super League. UMS manages players in those leagues and players aspiring to play at the highest professional level in the sport. 16 Apart from the role of UMS, Mr Ayoub is accredited by and registered with the NRL as a "Player Agent" under the NRL's Rugby League Accredited Player Agent Scheme (the "Accreditation Scheme"). Mr Ayoub has been a Player Agent for approximately 30 years. Mr Ayoub says that by delivering record setting contracts and endorsement deals, UMS has established itself as a substantial sports agency within the NRL. 17 The Operations Manager for the NRL Accreditation Scheme has been, for some considerable time, Mr Paul Massey, an NRL officer. Although the structure and operation of the Accreditation Scheme has changed in recent times, Mr Massey has continued to be involved in its operation. 18 Mr Ayoub says that UMS does not sign a large number of players. Rather, its philosophy is to identify players that have the unique potential to play in the NRL Competition and in the English Super League Competition and to do the best it can for the players in achieving entry into those competitions through contracts with clubs competing in those competitions. There are two aspects to the activities undertaken by UMS. The first involves UMS entering into management contracts with players under which UMS assumes obligations for a defined period to manage the interests of the players. The second aspect involves negotiating with clubs to seek to secure Player Contracts for the player with a particular club. 19 Mr Ayoub says that as a sports management agent, UMS undertakes contract negotiations for the player with clubs and seeks to procure sponsorship arrangements for the player and media opportunities for the player from time to time. Mr Ayoub identifies, by way of illustration, a list of players currently managed by UMS who play in the NRL or English Super League. So far as the NRL Competition is concerned, the clubs with whom UMS managed players have contracts include, South Sydney, the New Zealand Warriors, Parramatta, the Brisbane Broncos, the Melbourne Storm, the Sydney Roosters, the Canterbury Bulldogs and the North Queensland Cowboys. Although I have not reconciled Mr Ayoub's list to the NRL list of competition participants, it seems to be the case that every NRL club is represented in Mr Ayoub's list of UMS managed players. Some players are participants in the English Super League. Although there are notable current players in the list, Mr Ayoub identifies Jonathan Thurston as an iconic player who, throughout his playing career, was managed by UMS. 20 Mr Ayoub says that the NRL Accreditation Scheme is governed by scheme rules. He says that UMS operates under those rules and, as an Accredited Agent, he acts according to those rules. The objects of the rules include providing a mandatory scheme to accredit appropriately qualified persons as Rugby League Player Agents and to protect the welfare and interests of players who participate or who may participate in the NRL competition or other rugby league competitions. The rules also provide for the creation and publication by an Accreditation Committee, constituted within the Accreditation Scheme, of "approved Forms" or other documents for use under the Accreditation Scheme. 21 Those documents so created and published include a standard form of contract to be used as between a player and a Player Agent where the Player Agent is a company and a standard form of contract where the Player Agent is an individual. Obviously enough, the rules require the Management Contract to be properly signed and witnessed by the player and on behalf of the company. Where the player is under the age of 18 years, the Scheme Rules require the parents of the player to also execute the Management Contract. Mr Ayoub says that UMS's usual practice is that the Management Contract with the Player is executed by the individual acting within and on behalf of UMS who is the Accredited Agent with the NRL. In the period relevant to these proceedings, the only Accredited Agents so acting within and on behalf of UMS were Mr Ayoub, as Director, and the first respondent Mr Antoun Zibara, as an employee of UMS. 22 As to Mr Zibara, he commenced employment with UMS on 1 November 2010 and his employment ceased on 15 December 2017. 23 Mr Ayoub says that although Mr Zibara was initially employed to provide secretarial support to UMS, UMS trained Mr Zibara to become a Player Agent for UMS and to generate business for UMS as a Player Agent. Mr Ayoub says that he assisted Mr Zibara to gain Agent Accreditation with the NRL. Mr Zibara was employed full time by UMS and from about November 2010 as a result of an agreement entered into between UMS and Mr Zibara, Mr Zibara's role was to assist UMS with its "business generally and, in particular, with player recruitment and management". Mr Zibara's role involved scouting for and securing the management by UMS of new talented players for the NRL; supervising new and existing players on behalf of UMS; maintaining and fostering players; and attending to the day to day liaison with UMS contracted players and seeking to solve problems confronted by UMS contracted players. Mr Ayoub says that on behalf of UMS and at Mr Ayoub's direction and under his control, Mr Zibara's role was to recruit, manage and secure contracts for mainly younger school leaving age players. Mr Ayoub says that he would provide leads to Mr Zibara from scouts and other referral sources and also from independent enquiries he made. Mr Ayoub says that Mr Zibara's role was to follow these leads which often involved travelling to meet players and parents either at their homes or at the playing fields or elsewhere. Mr Ayoub says that UMS provided Mr Zibara with the relevant resources to do these things and met the costs of doing so. Mr Zibara was assigned to manage a number of UMS's clients. Mr Ayoub says that he spent considerable time during the course of Mr Zibara's employment mentoring him and training him in the role of a Player Agent. Mr Ayoub says that Mr Zibara was "a trusted employee". Mr Ayoub says that although Mr Zibara was good with the players, he lacked the ability to secure them the best possible deals and Mr Ayoub would often shadow the negotiations, step in and secure a better deal or step in and take over the management of players as they matured. 24 Mr Ayoub says that he is a "hands-on Director". He says that he likes to know what is happening in respect of the players that UMS manages. He says that he discusses with his employees, regularly, the matters and events surrounding a player managed by UMS. He says that he regularly amended proposals and counter-offers for players where he believed those things required further attention and improvement. He says that Mr Zibara was to report to him on all matters concerning the performance of what he describes as the "Zibara Services". At [33] I note further evidence of Mr Ayoub on the topic of the role and scope of the authority of Mr Zibara. 25 As to Mr Patrick Angeli Mr Ayoub says that Mr Angeli was employed by UMS from about 27 February 2017 until 15 December 2017. Mr Angeli was employed to assist UMS as an office administrator and in particular to assist with player recruitment management including assisting Mr Zibara in the services he provided; assisting in supervising new and existing players on behalf of UMS; assisting in maintaining and fostering players; and assisting in attending to the day to day liaison with contracted players. Mr Angeli's affidavit was not read by the respondents. However, the applicant tendered particular paragraphs as statements against interest and as to Mr Angeli's employment, the applicant tendered these paragraphs: 6. At UMS I assisted Antoun in relation to the management of contracted rugby league players. This principally involved junior players who participated in the under 16, under 18 and under 20 playing competitions. 13. Antoun was accredited with the [NRL] as a player manager and he signed management contracts on behalf of UMS. I did not. I helped him prepare management contracts and assisted him in the dealings with the players and the clubs. 26 Mr Ayoub also says that the business of acting as a manager for players is highly competitive. 27 As at 20 June 2017, UMS had entered into a number of management contracts with players including the following 18 players of relevance to this proceeding: Volkan Er, Elvino Maroulis, Phoenix Crossland, Lance Bagon, Hudson Young, Mosese Pope, Ben Tohi, Michael Cheer, Benjamin Mallia, Kai Parker, Aidan Gaffey, Thomas Gaffey, Dennis Mataia, Declan Casey, Jayden Tanner, Ezraa Coulston, Caleb Evans, Jayden Skinner. 28 As to these 18 players, as at 20 June 2017, the date of their contract with UMS and the term of their respective contracts was this: Volkan Er, contract date (cd) 15 April 2016, term (t) 5 years, expiry date (ed) 14 April 2021; Elvino Maroulis, (cd) 27 April 2017, (t) 5 years, (ed) 23 April 2022; Phoenix Crossland, (cd) 9 February 2017, (t) 3 years, (ed) 8 February 2020; Lance Bagon, (cd) 19 June 2017, (t) 5 years, (ed) 18 June 2022; Hudson Young, (cd) 8 February 2016, (t) 5 years, (ed) 7 February 2021; Mosese Pope, (cd) 21 February 2016, (t) 3 years, (ed) 20 February 2019; Michael Cheer, (cd) 15 November 2016, (t) 4 years, (ed) 14 November 2021; Benjamin Mallia, (cd) 13 January 2016, (t) 3 years, (ed) 12 January 2019; Kai Parker, (cd) 31 March 2017, (t) 5 years, (ed) 30 March 2022; Aidan Gaffey, (cd) 28 April 2017, (t) 3 years, (ed) 27 April 2020; Thomas Gaffey, (cd) 28 April 2017, (t) 3 years, (ed) 27 April 2020; Dennis Mataia, (cd) 9 July 2015, (t) 5 years, (ed) 8 July 2020; Declan Casey, (cd) 21 September 2015, (t) 5 years, (ed) 20 September 2020; Jayden Tanner, (cd) 8 December 2015, (t) 3 years, (ed) 7 December 2018; Ezraa Coulston, (cd) 19 April 2017, (t) 3 years, (ed) 19 April 2020; Caleb Evans (cd) 19 June 2017, (t) 3 years, (ed) 16 June 2020; Jayden Skinner, (cd) 9 March 2016, (t) 5 years, (ed) 8 March 2021. 29 Thus, as at 20 June 2017 UMS had contracts to manage the above players which, in the ordinary course, would have expired in respect of each player along the following time line: 7 December 2018, Jayden Tanner; 12 January 2019, Benjamin Mallia; 8 February 2019, Phoenix Crossland; 20 February 2019, Mosese Pope; 19 April 2020, Ezra Coulston; 27 April 2020, Aidan Gaffey; 27 April 2020, Thomas Gaffey; 16 June 2020, Caleb Evans; 8 July 2020, Dennis Mataia; 20 September 2020, Declan Casey; 7 February 2021, Hudson Young; 8 March 2021, Jayden Skinner; 14 April 2021 Volkan Er; 14 November 2021, Michael Cheer; 30 March 2022, Kai Parker; 23 April 2022, Elvino Maroulis; 18 June 2022, Lance Bagon. I will return to Ben Tohi's circumstances later in these reasons. However, it is sufficient for present purposes to note that UMS had a contract with him commencing on 14 October 2016. 30 As to the remuneration arrangements under the various contracts that existed between UMS and Players as at 20 June 2017, the remuneration mechanism operated on the basis that UMS would be entitled to receive a sum equal to a certain percentage of all monies payable to a player pursuant to an "NRL Playing Contract, Playing Agreement or Non-Playing Agreement" and a certain percentage of any "Non-Playing agreement or Sponsorships, Endorsements, Speaking Engagements Etc but excluding in the case of any NRL Playing Contract or Playing Agreement" seven identified categories of benefits or assistance received by the player. 31 In terms of the practice within UMS in relation to the signing of contracts with players, Mr Ayoub gave evidence that there was "definitely a practice in place". He gave evidence that he would discuss the particular players with Mr Zibara and Mr Angeli and "obviously we needed to agree on the particular players we would be signing and who we may have scouted": T, p 64, lns 28-30. Mr Ayoub described the process of conducting discussions with the players about a management contract with UMS and should such a contract be entered into, the steps UMS would take to meet with clubs and negotiate contracts for the players. Proposals for a contract between a player and a club would be referred to the parents of the player if the player was under 18 or directly to the player if the player was over 18. Mr Ayoub gave evidence that in the majority of cases if not all cases, his authorisation was necessary with respect to the execution of either or both of those contracts: T, p 65, lns 1-2. I will return to that matter later in these reasons. 32 The affidavit of Mr Zibara was not read by the respondents. However, the applicant put into evidence particular paragraphs as statements against interest concerning Mr Zibara's statements about the nature of his role and duties with UMS. Those paragraphs are these: 28. UMS provided sports management services and in particular UMS acted for rugby league players as a player agent and manager, representing them in their dealings with the clubs for which they played. This included the negotiation of player contracts. My job was to assist Sam Ayoub in "scouting" or talent spotting promising young players, and where appropriate offering them management contracts, negotiating playing contracts with the clubs and otherwise dealing on behalf of players with their clubs. This often would involve meeting and getting to know the families of young players and taking on the role of a mentor to them in some cases. 29. Between about February and December 2017 the Second Respondent (Patrick Angeli) was employed by UMS. He and I worked together, particularly in the recruitment of junior players and managing their football careers and their relationships with the clubs. 31. My work at UMS involved gaining and developing a good knowledge of the players involved in the game of rugby league, especially the junior players as they progressed through the ranks. UMS managed established NRL players and I was involved in some of that work but my focus was on recruitment and the management of the junior players. 34. I had by 2017 a degree of autonomy in my work. I made decisions to sign up young promising players. Usually Mr Sam Ayoub was not involved in my face to face negotiations with new recruits. I always told him about new player signings after the event or about new playing contracts that I was negotiating but by 2017 I did not seek or require approval from Mr Ayoub to go about my work. In particular Mr Ayoub did not sign player management contracts on behalf of UMS. Rather the contracts were prepared and signed by me on behalf of UMS. In many cases Mr Ayoub did not meet new recruits until after their management contract had been signed. He did not approve every contract in advance. At time he paid little attention to the details to my observation. 33 Mr Ayoub gave further evidence by an affidavit sworn on 25 September 2019. That affidavit responds to a number of propositions in the affidavit of Mr Zibara but of course Mr Zibara's affidavit was not ultimately introduced into evidence. Nevertheless, Mr Ayoub gave this evidence about the scope of Mr Zibara's role and the scope of his authority: 28. Zibara was to report to me on all matters concerning the performance of the Zibara Services. 29. I repeat that at all times during the course of Zibara's employment, matters concerning player recruitment, management and contract negotiation, was done under my direction and control, unless it was done without my knowledge. 30. While Zibara was given some autonomy, it was controlled or within a controlled environment. Put another way, what Zibara did generally was policed (supervised) by me. 32. As far as I understood, and consistent with my directions, all player agent management contracts and player contracts were discussed with me, before they were lodged for registration - if they were not discussed with me earlier. 33. Zibara would meet with me or telephone me for such authority, and prior to executing any such contract on behalf of UMS. Zibara and I would speak at least weekly. 34 The applicant makes the point that the evidence of Mr Ayoub on the scope of the role and duties of Mr Zibara and the extent of Mr Zibara's authority was not challenged in the cross-examination of Mr Ayoub. 35 The matters at [27] to [30] of these reasons are drawn from the documents. Although there is a challenge made by counsel for the respondents to the evidence of Mr Ayoub, the matters at [15] to [26], [31] and [33] are the subject of Mr Ayoub's evidence (apart from the quoted tendered paragraphs of Mr Angeli's affidavit), which I accept as to those matters. As already indicated, I will return to aspects of Mr Ayoub's evidence later in these reasons. 36 Each of the contracts entered into between UMS and each of the players described earlier was entered into in the standard form of contract issued by the Accreditation Committee for a contract between a player and a management company. As to that form of contract, cl 6 provided for termination. That clause provided for these circumstances of termination. Clause 6(a) provides that where a player is in material breach of any of his obligations under the Agreement, the company may terminate the Agreement on giving seven days' written notice to the player with the agreement coming to an end at the end of the period of notice. Clause 6(b) provides that where the company is in material breach or ceases to carry on business, the player may terminate the Agreement on seven days' notice with the Agreement ending at the end of the period of notice. Clause 6(c) provides for a number of events. It says that where the player becomes bankrupt or enters into an arrangement or composition with creditors or where the company experiences a similar insolvency or related event, the other party may terminate the Agreement forthwith by written notice. It also says that where a principal of the company engages in behaviour unbecoming to his position and reputation or where either the player, or a principal of the company, is convicted of a criminal offence punishable by imprisonment exceeding two years or where a principal of the company has his accreditation cancelled or otherwise ceases to be an Accredited Agent, the other party may terminate the Agreement forthwith upon giving written notice. 37 That was the termination regime that subsisted as between UMS and each of the players described at [27] of these reasons under the Management Agreement as at 20 June 2017. 38 On 20 June 2017 Mr Massey sent an email to all NRL Accredited Agents (of which there are many) including Mr Ayoub. In that email Mr Massey said this: Dear Agents Please be advised that last night the Accreditation Committee resolved in accordance with Rule 3 of the Accredited Player and Agent Rules to amend the current rules and in addition to that provide each Agent with a revised contract between a Player and Agent (Form 3) and a revised contract between a Player and a Company (Form 4) for use. In accordance with Rule 3 you are advised that these amendments to the Accredited Player and Agent Rules and Management Agreements (forms 3 and 4) will come into effect in 28 days from today's date that being the 19th July 2017. Further to this the Committee resolved that the use of the current agreement between [a] Player and a Company will cease immediately and any Company Management Agreements executed after this date and lodged with the Secretary for registration will not be accepted for entry on to the Register of Player and Agent Contracts. Any Agent wishing to enter into a Management Agreement with a Player from this date until the 19th July 2017 will do so using the current Standard Player and Agent Contract as attached. I have attached a copy of the amended documents as referred above and I have highlighted the amendments in yellow. Following the expiry of the required 28 days' notice I will disseminate to all Agents unmarked copies of the referred documents for use from that date forward. I have also attached a copy of the unchanged standard Player and Agent Contract for use between this date and 19th July 2017. Regards Paul Massey [emphasis added] 39 As the email says, it attaches the new Form 3 Agreement between a Player and an Agent and the new Form 4 Agreement between a Player and a Management Company, for use from 19 July 2017. It also attaches the then current Agreement in the old form for use between 20 June 2017 and the commencement of the new Agreements on 19 July 2017. 40 Relevantly for present purposes and at the centre of this case is the change to the termination arrangements in cl 6 of the new contract to be used as between a Player and a Company such as UMS. In the new contract, cl 6 has been redrawn and it contains 10 sub-paragraphs (a) to (j). Relevantly for present purposes cl 6(e) is in these terms: (e) In the event that the Nominated Agent ceases to perform duties on behalf of or within the Company, the Player may terminate this agreement on the giving of seven (7) days' written notice to the Company in which case this agreement will come to an end at the expiration of the period of notice. 41 Those contracts in evidence as at 20 June 2017 between UMS and the player contain a recital (Recital C) that a principal of UMS "namely Antoun Zibara is an accredited player agent pursuant to the Rugby League Player Agent Accreditation Scheme". Under the new contract between a Player and a Company (Form 4), the contract recognises that the player is dealing with a "Nominated Agent" within the company much in the same way that a player was dealing with a "Principal" of the company under the earlier form of contract. 42 The significance of the new cl 6(e) is self-explanatory. It creates a circumstance in which, should the "Nominated Agent" under the contract cease to perform duties either on behalf of or within the company, the Player is entitled to terminate the Agreement on the giving of seven days' written notice to the company in which case the Agreement comes to an end at the expiration of the period of notice. 43 As to the new cl 6(e), Mr Massey gave evidence about the clause. Although it had become "mandatory" that after 19 July 2017 any new contracts were to be on the basis of the new Forms 3 and 4, this notion of a "mandatory" use of those forms did not require that "existing contracts which did not contain clause 6(e) should be terminated and new contracts entered into with the new clause 6(e) after that date": T, p 126, lns 18-22. Mr Massey gave evidence that the new clause 6(e) provided the players with "the ability to terminate the agreement that they were currently on should the nominated agent leave the employ of the company", "[but] [only] for the relevant contracts after that time ... which contained clause 6(e)": T, p 126, lns 32-38. 44 Mr Ayoub gave evidence about Mr Massey's email of 20 June 2017. 45 Mr Ayoub said that he "certainly did" recall receiving Mr Massey's email: T, p 65, ln 19. Mr Ayoub regarded the proposal to introduce the new clause 6(e) as a "significant change" to previous contracts and "created a situation of substantial risk" to Player Agent businesses such as UMS of losing players should an employed Accredited Player Agent leave the employ of the company. The risk was that a former employee who had a relationship with the player might leave the employ of the company and the player might follow that former employee to a competitor by exercising rights under cl 6(e) to terminate the management contract with the company. 46 On 20 June 2017 at 6.25 pm Mr Ayoub sent an email to Mr Zibara and Mr Angeli in relation to Mr Massey's email. Mr Ayoub sought to convene a meeting with Mr Zibara and Mr Angeli the next day about Mr Massey's email. Mr Ayoub had such a meeting the next day. Mr Ayoub was asked about that meeting and gave evidence that Mr Massey's email was "significant in the scheme of things [as], it had a direct bearing on my business": T, p 66, lns 8-10. Mr Ayoub says that he told Mr Zibara and Mr Angeli that UMS had received the email from Mr Massey and he asked them if they had read it. Mr Ayoub recalls Mr Zibara saying that he had read Mr Massey's email. Mr Ayoub says that Mr Angeli sat with Mr Zibara during the meeting. Mr Ayoub says that he "made them [Mr Zibara and Mr Angeli] aware of the fact that - that basically, they don't need to sign any contracts, the existing contracts run their course, and that was the extent of it": T, p 66, lns 12-16. Mr Ayoub gave evidence that from his perspective there was "nil benefit at all" to his business in having the existing contracts with players terminated and new contracts entered into containing the new clause 6(e) "because it basically gave people a free pass potentially to terminate with a new contract [and] nothing needed to happen with our existing contracts" (T, p 66, lns 22-24) and "[t]hey [the existing contracts] were in place, they were in place for the term, and basically it was of value and benefit to the business": T, p 66, lns 24-25. Mr Ayoub was asked whether Mr Zibara or Mr Angeli raised any question about the execution of new contracts in place of the existing contracts and Mr Ayoub gave evidence that Mr Zibara and Mr Angeli agreed with what Mr Ayoub had said: T, p 66, lns 27-29. I accept Mr Ayoub's evidence on these matters. 47 Mr Massey gave evidence about his interaction with Mr Ayoub and Mr Zibara in relation to the new agreements and particularly clause 6(e). Mr Massey said that he received a telephone call from Mr Ayoub and Mr Zibara and he was asked a question "in regards to how clause 6(e) would affect the contract" with a player. Mr Massey answered the question by saying that if the player chose to use the right contained in clause 6(e) "that's what it was intended for": T, p 123, lns 1-7. Mr Massey said that Mr Ayoub and Mr Zibara called him. They were on a loud speaker at their end of the call. Mr Massey said that they were "seeking clarification or confirmation of the wording [of clause 6(e)] and the interpretation". Mr Massey was asked when the call occurred and he said that he could not exactly say without referring to his notes "but it was in the weeks or months shortly after that material going out [Mr Massey's email of 20 June 2017]". Mr Massey produced a diary note of the conversation which shows that it occurred on 5 October 2017. It says: 051017 Call from agent [Mr Zibara] who was on loud speaker with S A [Sam Ayoub], he inquired as to the position with the new management agreements if he was to sign his players to them. He has read the document and believes that if he has a player on a new company agreement then if he leaves Ultra the Player has the right to terminate. He referred to clause 6 (e). 48 It is common ground that the reference to "He" in the diary note is Mr Massey's reference to Mr Zibara. I accept Mr Massey's evidence generally. 49 In particular paragraphs of the affidavits of Mr Zibara and Mr Angeli tendered by the applicant, each respondent had something to say about the new clause 6(e) "break clause". Mr Zibara says this: 52. In June 2017 the NRL issued a new form of contract to be adopted by managers which included a "break clause" permitting a player to terminate the management arrangement with UMS if an identified individual representing the manager left the organisation. UMS was required to use the new format. 53. After the new form of contract was received from the NRL, UMS adopted the new form for all contracts signed after that date to comply with NRL requirements. 50 Mr Angeli says this: 22. In June 2017 the NRL issued a new form of contract to be adopted by managers which included a "break clause" permitting a player to terminate the management arrangement with UMS if an identified individual representing the manager left the organisation. UMS was required to use the new format after we received it. 23. After the new form of contract was received from the NRL, UMS adopted the new form for all contracts signed after that date to comply with NRL requirements. 51 On the following dates, 16 of the original UMS contracts described in [28] of these reasons were replaced by the following new contracts between UMS and the Player: Volkan Er, contract date (cd) 23 October 2017, term (t) 4 years, expiry date (ed)14 April 2021; Elvino Maroulis, (cd) 28 October 2017 (t) 4 years, (ed) 23 April 2021; Phoenix Crossland, (cd) 18 October 2017, (t) 4 years, (ed) 17 October 2022; Lance Bagon, (cd) 6 September 2017, (t) 5 years, (ed) 5 September 2022; Hudson Young, (cd) 11 September 2017, (t) 5 years, (ed) 10 September 2022; Michael Cheer, (cd) 31 July 2017, (t) 5 years, (ed) 30 July 2022; Benjamin Mallia, (cd) 10 November 2017, (t) 5 years, (ed) 9 November 2022; Kai Parker, (cd) 28 October 2017, (t) 5 years, (ed) 27 October 2022; Aidan Gaffey, (cd) 6 October 2017, (t) 3 years, (ed) 5 October 2020; Thomas Gaffey (cd) 6 October 2017, (t) 3 years, (ed) 5 October 2020; Dennis Mataia, (cd) 5 October 2017, (t) 5 years, (ed) 4 October 2022; Declan Casey (cd) 27 October 2017, (t) 4 years (ed) 26 October 2021; Jayden Tanner (cd) 28 September 2017, (t) 3 years, (ed) 27 September 2020; Ezraa Coulston, (cd) 20 November 2017, (t) 3 years, (ed) 19 April 2020; Caleb Evans (cd) 17 August 2017, (t) 3 years, (ed) 16 August 2020; Jayden Skinner, (cd) 10 November 2017, (t) 5 years, (ed) 9 November 2022. 52 Each of those contracts were in the form of the new Form 4 as sent by Mr Massey to the agents in his email of 20 June 2017 and thus each contract contained the new termination provision in clause 6(e). Each contract recites Mr Zibara as the "Nominated Agent" and each contract is signed on behalf of UMS by Mr Zibara and witnessed by Mr Angeli. 53 As to Mosese Pope no new contract with UMS was brought into existence with him. Rather, UMS on 27 October 2017 released Mosese Pope from his contract. Similarly, no new contract was entered into with Ben Tohi. He too was released from his contract by UMS although in his case it was on 7 December 2017. I will return to the particular circumstances concerning those players later in these reasons. 54 On 20 November 2017, Mr Ayoub and Mr Zibara had a discussion about Mr Zibara's future with UMS. Mr Ayoub describes the conversation he had with Mr Zibara in his oral evidence. When he and Mr Zibara "went for a walk" at Mr Zibara's request to discuss possible future arrangements between UMS and Mr Zibara. On 21 November 2017, Mr Zibara sent an email to Mr Ayoub in these terms: Hi Sam I know we had a face to face discussion yesterday regarding my Resignation from Ultra Management (Sports), effective December 15th, 2017. I just thought it would be sensible to send you an email, so that we both have a copy on the record. Obviously you are aware that I will be taking up another opportunity in the first week of January next year, and that it was a decision I didn't take lightly. Thank you very much for the opportunities for professional and personal development that you have provided me during the last seven years. I have enjoyed working for the company and truly appreciate the support and guidance that you provided me during my tenure. I will of course assist with the transition in any way I can, and will continue to perform my duties to the best of my ability throughout my final 4 weeks. If possible, it would be great if you could write me a Reference Letter, to assist with any personal future employment. Sam, I wish you, your family and UMS all the very best moving forward. 55 On 22 November 2017, Mr Ayoub responded by email advising Mr Zibara that his resignation had been accepted. Mr Ayoub also observed (referring to Mr Zibara's reference in the earlier email to "taking up another opportunity in the first week of January next year") that "[a]s conveyed to me you have accepted a role with your best mate in an online protein powder business". Mr Ayoub wished Mr Zibara "the absolute best with all your future endeavours" and made a number of other observations which do not need to be noted here. Mr Ayoub concluded his email by wishing Mr Zibara "the utmost of luck in your future alternate industry endeavours" and "the absolute best". One other aspect of the exchanges should be noted. In Mr Ayoub's email of 22 November 2017, he drew Mr Zibara's attention to a non-competition period contained within particular arrangements made between UMS and Mr Zibara which was said to operate up to 15 December 2020. That matter is not pressed by the applicant on the footing that the applicant concedes that the non-competition restraint could only be supported for a period of 12 months. However, it caused Mr Zibara to observe in his email of 22 November 2017 in response to Mr Ayoub's email of 22 November 2017, as follows: I am aware of my ethical obligations to you and the company and will of course provide you with my mobile phone, desktop computer & windows surface, car etc. I can also assure you that I would never disclose any company "secrets" or IP to any third party, remove files, delete emails etc (nor have I ever) now, or in the future. As difficult as it has been, I have spoken with you openly and honestly over the past few weeks. You know the job offers that I was subject to within our industry and my response to those companies. I was then happy to disclose to you my immediate intentions once I cease my tenure at UMS. On Monday, I also advised you of my desire to retain my Player Agent Accreditation, whereby you kindly offered to pay my annual Accreditation Fee, to which I respectfully declined. You also said to me that, "it's probably not a good idea to advise clients that you will still be an active agent", which I can understand and have agreed to oblige, out of respect to you. I will not be, nor have I the intention of contracting any clients contracted to UMS, post December 2015. So I am unsure as to why you have suggested that I verbally [commit] to no longer being active in the Rugby League Management space? … 56 As to this email, Mr Ayoub says that he does not recall the email. He says that as part of the preparation process for his affidavit, he went back to his email account, searched for the email and located it in his inbox. He says that it was unopened. 57 Mr Ayoub was pressed in cross-examination about this email and his evidence that he could not recall receiving it. Mr Ayoub gave evidence that he had missed the email in his inbox and although he is "pretty attentive" to his emails, he says that he does miss some: T, p 159, lns 1-2. He says that the email was brought to his attention "recently", "a few weeks ago": T, p 159, lns 11-15 (that is, a few weeks prior to his giving evidence on 2 October 2019). The chronology seems to be this. Mr Zibara swore an affidavit in the proceeding on 20 September 2019 although, as already mentioned, the affidavit was not read in the case for the respondents. Mr Zibara exhibits to his affidavit as Annexure B the email of 21 November 2017 and Mr Zibara's email of 22 November 2017 at 10.40 pm. Mr Ayoub swore a second affidavit in response to Mr Zibara's affidavit on 25 September 2019 in which he addresses Mr Zibara's email of 22 November 2017 and deposes to the matters described at [56] of these reasons. He then gave his oral evidence on 2 October 2019. I mention these matters in some detail because the respondents, in part, rely upon this matter as a basis for the proposition that Mr Ayoub's evidence ought not be accepted unless supported by the documents. However, the chronology of events is largely consistent with Mr Ayoub's evidence about when he first saw the email from Mr Zibara of 22 November 2017 and although the email was sent to him and was found in his inbox as part of the process of preparation, it is possible that Mr Ayoub simply missed the email. I certainly would not regard these matters as a basis on which I would characterise Mr Ayoub as a witness whose evidence ought not to be accepted unless supported by the documents. There are other matters which are said to support that submission and I will turn to those matters in due course. 58 Mr Angeli's employment with UMS also came to an end on 15 December 2017. 59 The third respondent in these proceedings is Genesis Talent Management Pty Ltd ("Genesis"). That company was incorporated on 14 February 2018. The Directors are Antoun Zibara and Patrick Angeli, the first and second respondents. The company has two ordinary paid up shares one of which is held beneficially by Mr Angeli and the other is held beneficially by Mr Zibara. Mr Ayoub gave evidence that Genesis since its incorporation has been and remains in direct competition with UMS, that is to say, it provides player management services on the terms and conditions of the contracts published by the Accreditation Committee of the NRL. 60 It is now necessary to say some things about a number of the new contracts entered into between UMS and the Players described at [51] of these reasons.