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[2020] FCA 31
Federal Court of Australia
2020-01-24
Mr J, Deane J, Greenwood J
Original judgment source is linked above.
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.
Volkan Er 61 Volkan Er entered into a new contract with UMS on 23 October 2017 in place of his earlier contract of 15 April 2016. The earlier contract was for a term of five years expiring on 14 April 2021. Because Volkan Er was less than 18 years of age the contract was also signed by one of his parents. His new contract with UMS (also signed by his father as Volkan Er was still under 18) commenced on 23 October 2017 and was also expressed to expire on 14 April 2021. The earlier contract was signed for the company by Mr Zibara and witnessed by Ms Brown. The new contract was signed for the company by Mr Zibara and witnessed by Mr Angeli. Mr Ayoub gave evidence that neither Mr Zibara nor Mr Angeli sought Mr Ayoub's consent or approval to replace the original UMS contract of 15 April 2016 with the new contract of 23 October 2017. Mr Ayoub also says that he did not authorise those steps to be taken by Mr Zibara and Mr Angeli. Mr Ayoub also says that he had no knowledge of the second UMS contract having been entered into. 62 On 13 March 2018 Volkan Er's father sent the following email to Mr Ayoub: Dear Sam I am writing on behalf of my son Volkan Er, to advise that I would like to exercise clause 6(e) of his Management Agreement with your company, due to the fact Antoun is no longer a registered Agent with Ultra Management. I spoke with Paul Massey yesterday morning and after having read over my son's Management Agreement again, I believe we are within our rights to terminate. Volkan signed with Antoun and they built a strong relationship over time, we do not feel that he should now inherit a manager, instead of being able to select one of his own. I am sure you understand. Regards Noel Er 63 On 29 March 2018, Noel Er sent another email to Mr Ayoub saying: "I am [hereby] terminating Volkan Er's contract with you. From now on I intend to manage him". 64 Although neither the affidavit of Mr Zibara nor the affidavit of Mr Angeli was read by them in their case on behalf of the respondents and thus neither respondent gave oral evidence either in chief or under cross-examination, the applicant tendered, as statements against interest, particular paragraphs of the witness statement of Mr Zibara and particular paragraphs of the witness statement of Mr Angeli concerning Volkan Er. The applicant tendered these paragraphs from Mr Angeli's affidavit: 32. In about October 2017 I told Antoun that I had spoken to Volkan at a football game. I had said to Volkan words to the following effect. "There have been changes recently to the management agreement. Under the new form of agreement the player has more rights if his manager leaves". Volkan said "that sounds better". I said "talk to your parents and get them to speak to Antoun". 33. After this I told Antoun what had been said between myself and Volkan. 34. A new management contract was later prepared by Antoun and myself and was signed by Volkan and his father. The contract was dated 23 October 2017. 65 The applicant tendered this statement by Mr Zibara: 64. In about October 2017 Patrick Angeli told me that he had spoken to Volkan's father Noel Er at a game. Patrick asked me to speak to Noel. 66 On 30 November 2018 Volkan Er entered into a Player Management Contract with Genesis. The Nominated Agent is Mr Zibara. It provides for a remuneration entitlement as described at [30] of these reasons. It has a term ending on 30 November 2021, a period of three years. 67 On 13 March 2018, the same day as Noel Er's first email to Mr Ayoub, Mr Massey had a telephone conversation with Mr Zibara. Mr Massey made the call to Mr Zibara to discuss with him an "email received from [S]am [Ayoub] in regards to him [Zibara] inducing players to go with him [and] also Pats involvement in this": Mr Massey's diary note of 13 March 2018, Exhibit 5 at p 78. Mr Massey's diary note notes that Mr Zibara "refutes it". Mr Massey's diary note also records that he discussed with Mr Zibara "his entering into new [UMS] agreements for players who still had a long time to run on old agreements and why he put them on new ones with the 6(e) clause". Mr Massey's diary note notes the following comment and response from Mr Zibara at the end of his diary note of the conversation: He made a brief comment "what was I meant to do leave with nothing". 68 Mr Massey gave evidence that consequent upon a complaint by Mr Ayoub about Mr Zibara's conduct, Mr Massey undertook an investigation "with respect to Mr Zibara and Mr Angeli" (T, p 119, lns 34-40) and in the course of that investigation, Mr Massey spoke to Mr Zibara. Mr Massey confirmed that his diary note of 13 March 2018 is a note of that conversation. Mr Massey gave evidence that at the conclusion of the conversation he made a record of Mr Zibara's response reflected in the quote at [67] of these reasons. 69 As I have already indicated, I accept Mr Massey's evidence. The remark made by Mr Zibara is a frank admission of the considerations which influenced him to bring into existence the contracts that discharged the earlier UMS contracts and replaced them with the new UMS contracts with the particular players so that should he leave UMS he would not be in a position of leaving "with nothing". He would, in fact, have put himself in a position where he would be able to leave UMS "with something", that is, the crystallised opportunity for any one of those players under the new UMS contracts containing the new clause 6(e) to bring their contract with UMS (and in substance with Mr Ayoub) to an end on seven days' notice and then go to wherever Mr Zibara (and presumably, Mr Angeli) might be. 70 As it turned out, that would be the company Mr Zibara and Mr Angeli brought into existence on 14 February 2018, Genesis Talent Management Pty Ltd. 71 The answer given by Mr Zibara to Mr Massey on 13 March 2018 was an answer to a particularly relevant inquiry which Mr Zibara ultimately was not required to have to answer in the witness box. Mr Massey's question was: "why did you enter into new agreements [for UMS] with players who still had a long time to run on the old agreements and why did you put them into new contracts with clause 6(e)". Mr Zibara's answer was: "what was I meant to do leave with nothing". 72 Plainly enough, Mr Zibara was saying that he did not mean to leave UMS with nothing and since that response was in relation to the very question of why new contracts were put in place with clause 6(e), Mr Zibara was saying that he did not mean to leave UMS with nothing when new contracts could be put in place with clause 6(e) which would result in the possibility of Mr Zibara leaving UMS "with something", namely, the opportunity to enable a player to terminate his contract with UMS and go wherever Mr Zibara might be performing the role of a Player Agent. 73 The remuneration payable to a Player Agent, whether an individual or a management company, by way of the particular percentage amounts adopted in the remuneration clause contained in the form of contract issued by the Accreditation Committee is the commercial lifeblood of the agent and this is particularly true of a player who is exhibiting potential to be successful in all fields of potential remuneration whether pursuant to a Playing Contract or arising out of sponsorships, endorsements, speaking engagements or other such non-player revenue. One can understand, as a matter of rational self-interest, why Mr Zibara did not want to find himself in a position where he might leave UMS "with nothing" but he nevertheless owed a duty to UMS to serve its interests and to not undermine its existing relationship with contracted players pursuant to which UMS would derive, or potentially derive, revenue in accordance with the remuneration clause in the earlier contracts terminated and replaced by Mr Zibara and Mr Angeli with the new contracts. 74 The adoption by the Accreditation Committee of the new form of contract containing the new clause 6(e) gave rise to a "break clause" (as Mr Zibara describes it in para 52 of his affidavit, being one of the paragraphs read into evidence by the applicant), which would be available only to players who were parties to such a contract. The introduction of the new form of contract to apply from 19 July 2017 meant that any new contract brought into existence after that date would contain the new break clause with the result that a player could give seven days' notice to UMS of termination of the contract should Mr Zibara leave the employ of UMS. The new break clause would give the player an opportunity to leave UMS so as to follow Mr Zibara to wherever he might be in providing player management services, should he leave UMS. A contract containing clause 6(e) would certainly be of benefit to Mr Zibara should he leave UMS and should he be proposing to provide management services to players. Absent a new contract containing clause 6(e) the players contracted to UMS as at 20 June 2017 would not otherwise have been able to terminate those contracts at least so far as the event contemplated by clause 6(e) of the new contract is concerned. The termination of existing contracts on foot with a period to run and their substitution with the new form of contract was not required as an element of the introduction by the Accreditation Committee of the new form of contract. On the expiration of the term, any new contract would need to be on the terms of the new form of contract.
Phoenix Crossland 75 Phoenix Crossland entered into a management contract with UMS on 9 February 2017. The contract was to end on 8 February 2020, a term of three years. The recitals recognise that Mr Zibara is the "accredited player agent" pursuant to the Accreditation Scheme. The contract is signed for UMS by Mr Zibara and witnessed by Ms Brown. 76 In the paragraphs of Mr Zibara's affidavit put into evidence by the applicant as statements against interest, Mr Zibara says this in relation to the arrangements with Phoenix Crossland: 80. I negotiated with Phoenix and his mother a three year management contract on behalf of UMS which was dated 9 February 2017. At the time I had a conversation with Nikki [Phoenix Crossland's mother] in which words were said to the following effect: Myself "We would like to sign Phoenix for five years". Nikki "I am prepared to sign him with UMS for three years and we will see how things go. If we are happy we would be prepared to extend it. 81. In October 2017 I had further discussions with Nikki who agreed to extend Phoenix's contract with UMS from three to five years. 82. I prepared a new five year contract with Phoenix which was dated 18 October 2017. 83. When this was negotiated I recall going upstairs to Sam Ayoub's office [and] there was a conversation in words to the following effect: Myself "We have extended Phoenix Crossland's contract from three to five years". Sam "That's great news". 86. Phoenix Crossland continues to play football with the Newcastle Knights. He is an outstanding player. 77 On 12 October 2017 Mr Zibara sent an email to Nikki Crossland referring to her discussion with Mr Angeli "over the weekend". The email attached a new management agreement with UMS "as requested". Mr Zibara observes in that email: "we are delighted that Phoenix has decided to extend his association with UMS for a further two years, he has a very bright future ahead and we are excited to be part of it". On 19 October 2017 Mr Angeli sent an email to Nikki Crossland forwarding to her an email of 18 October 2017 attaching the "fully endorsed Management Agreement with Ultra Management (UMS)". 78 In the new UMS contract, the contract commences on 18 October 2017 and ends on 17 October 2022. The earlier contract would have expired on 8 February 2020. The new contract conferred management rights on UMS for a further two years and eight months. The new UMS contract is signed for UMS by Mr Zibara and witnessed by Mr Angeli. 79 Mr Ayoub describes Phoenix Crossland as "a young star halfback, rated as the best prospect to come out of Newcastle since Andrew Johns". He says that Phoenix Crossland "played Australian Schoolboy 15's in 2015, NSW origin 16's in 2016, [and] SG ball Newcastle Knights in 2017". Mr Ayoub says that neither Mr Zibara nor Mr Angeli approached him for UMS's consent or approval in relation to the second UMS contract of 18 October 2017. Mr Ayoub says that the direction issued by the Accreditation Committee on 20 June 2017 did not require UMS to enter into a new agreement with Phoenix Crossland and "in terms of UMS's re-signing Players Contract Policy, it was not necessary to re-sign this Player at that time". 80 On 22 February 2018 Mr Ayoub sent an email to Nikki Crossland advising that Antoun Zibara had elected to move on and take up a full-time role with an online supplements company. Mr Ayoub advised Nikki Crossland that Liam Ayoub, Sam Ayoub's son, had joined the UMS team on a full-time basis and that Liam would be taking on the role of looking after the interests of UMS's clients. Mrs Crossland responded on 5 March 2018 to advise that she and Phoenix had decided that it would be in Phoenix's best interests to terminate the agreement with UMS. Mrs Crossland observes: "we understand that we are within our rights to end the relationship between Phoenix, ourselves and UMS and would like to employ clause 6(e) [quoting the clause] … I am hereby giving you the required notice to terminate the agreement". That email was copied to Mr Massey who responded noting "the provision of the required 7 days' notice of termination". Some further discussions seem to have taken place. However, on 7 March 2018 Mrs Crossland advised Mr Ayoub that she and Phoenix were going to maintain their decision to remove Phoenix from management under UMS. 81 On 21 October 2018 Phoenix Crossland entered into a Management Agreement with Genesis commencing on 29 October 2018 and ending on 29 October 2021, a period of three years. The contract is signed for Genesis by Mr Zibara and witnessed by Mr Angeli. 82 The applicant contends that the chronology of events in relation to Phoenix Crossland is "particularly telling" in terms of conduct on the part of Mr Zibara and Mr Angeli in bringing into existence, in breach of their duty to UMS, a contract containing the new clause 6(e) as a mechanism for enabling Phoenix Crossland to bring his contract with UMS to an end should Mr Zibara leave UMS, when the circumstances of the earlier contract reveal that Phoenix Crossland's contract would have continued in the ordinary course until 8 February 2020. The applicant says that Mr Zibara had the conversation with Mr Massey, described earlier, on 5 October 2017 in relation to the operation of clause 6(e) and by 18 October 2017 a new contract was brought into existence for a new term ending on 17 October 2022. The applicant says that in the paragraphs drawn from Mr Zibara's statement, Mr Zibara says that he told Mr Ayoub that Phoenix Crossland's contract had been "extended" from three to five years. The applicant says that putting the position to Mr Ayoub in that way was simply a "half-truth" because the contract had not been extended from three to five years. Rather, the earlier contract had been discharged in favour of a new contract ending on 17 October 2022 which contained the new clause 6(e). The applicant contends that Mr Zibara and Mr Angeli owed an obligation to UMS to tell Mr Ayoub that what was proposed was discharging or terminating the earlier contract in favour of a new contract which would require UMS to use the form published by the Accreditation Committee containing clause 6(e). The applicant describes this conduct as an "egregious breach" having regard to a player of potential of Phoenix Crossland. The applicant says that Mr Zibara and Mr Angeli well knew that Phoenix Crossland was "one of the real prospects in the UMS stable" and each of them failed to tell Mr Ayoub that a new contract had been struck which would enable Phoenix Crossland to leave UMS and follow Mr Zibara should Mr Zibara leave UMS. 83 The respondents say that in substance the contract with Phoenix Crossland was being extended for a significant period from 8 February 2020 to 17 October 2022, a period of 2 years and 8 months and simply extending the existing contract would have subverted, in effect, the NRL policy underlying the adoption of the new form of contract containing the new clause 6(e). I will return to that matter later in these reasons.
Elvino Maroulis 84 Elvino Maroulis entered into a management contract with UMS on 24 April 2017 with the term ending on 23 April 2021, a period of four years. The contract was signed on behalf of UMS by Mr Zibara and witnessed by Paul Maroulis. Because Elvino Maroulis was under 18 years of age, the contract was also signed by Paul Maroulis as the parent of Elvino and witnessed by Evelina Maroulis. 85 On 21 November 2017 Mr Angeli sent an email to Evelina Maroulis (addressed to Vino), Elvino's mother attaching "your fully endorsed Management Agreement with Ultra Management (UMS)". On 28 October 2017 Elvino Maroulis entered into a new contract with UMS commencing on that date and ending on 23 April 2021, a period of 3 years and six months. Both contracts provided for a term ending on the same date, 23 April 2021. The new contract was signed on behalf of UMS by Mr Zibara and witnessed by Mr Angeli. It too was signed by the parent or guardian of Elvino in this case, Evelina Maroulis and the name of the witness is not at all clear. 86 Mr Ayoub says that neither Mr Zibara nor Mr Angeli approached him to obtain UMS's consent or approval in relation to the new UMS contract of 28 October 2017. The new contract is in the form of the new NRL Contract containing the new clause 6(e). Mr Ayoub says it was not necessary to "re-sign" any of the then contracted players including Elvino Maroulis and it was not necessary to "re-sign" Elvino Maroulis on 28 October 2017. 87 No benefit was conferred upon UMS in bringing into existence a new contract with Elvino Maroulis. 88 On 11 March 2018 Paul and Evelina Maroulis sent an email to UMS in response to Mr Ayoub's email of 22 February 2018 advising of Mr Zibara's departure from UMS. In that email, Paul and Evelina Maroulis explain this about the signing of the new contract with UMS: We do recall having signed an agreement when signing up with Antoun, that if Antoun were to resign from Ultra Management Sports Elvino would be free from his contractual agreement with Ultra Management Sports, and would no longer be signed under this agreement. We signed this after discussing with Antoun what would happen if any changes occurred within Ultra Management Sports and he was no longer an Agent with your organisation. As parents we have a right to ask such questions as our child is only young and his career and development is fragile, so we want to know he has freedom and flexibility when signing contracts and has a right to choose those he is surrounded with on a professional level. This is how the signing of said contract came to be. 89 In that email, Paul and Evelina Maroulis advise UMS that Elvino does not want to be assigned to another player agent by UMS "but wants the opportunity to play as a player without an agent to further evaluate his next career move, and meet with other player agents from other companies in the future". As already mentioned, Mr Ayoub's evidence is that Mr Zibara did not seek his approval in relation to the new arrangements or, it seems, explain to Mr Ayoub the thinking reflected in the explanation put to the parents of Elvino Maroulis about providing them with an opportunity to terminate the arrangements with UMS should Mr Zibara leave UMS.
Lance Bagon 90 Lance Bagon entered into a Management Agreement with UMS on 19 June 2017 for a term commencing on that date and ending on 16 June 2022, a period of five years. The contract was signed for UMS by Mr Zibara and witnessed by Sam Ayoub. Because the player was under 18 years of age the contract was also signed by his guardian. On 17 July 2017 Mr Zibara sent an email to Lance Bagon in these terms: As discussed over the weekend, attached is the new Management Agreement implemented by the NRL. Once signed and returned (do not date), I will date the Agreement to finish on June 21st 2022, which only be a few days after our original agreement. It will need to be signed again, as per below. Just return it via email, that will be the easiest and most efficient way. Should you have any questions, please do not hesitate to contact me. 91 Mr Zibara's reference to "as per below" was a reference to an earlier email from him on 6 June 2017 to Lance Bagon and his mother Rene in which he sent them the UMS Management Agreement to be signed by Lance Bagon and his guardian which became the original UMS Agreement of 19 June 2017. 92 A new agreement with UMS was brought into existence pursuant to the email of 17 July 2017 quoted above and the new Agreement is dated 6 September 2017. It commences on that date and ends on 5 September 2022, a five year period. The Agreement is signed for UMS by Mr Zibara and witnessed by Mr Angeli. It is signed by Lance Bagon and his guardian Rene Bagon. Notwithstanding that as recently as 19 June 2017 a five year contract had been entered into between Lance Bagon, his guardian and UMS, that contract ending on 16 June 2022 was replaced on 6 September 2017 with another contract which contained clause 6(e) ending on 5 September 2022 (slightly later than the original term). Mr Ayoub says that he did not authorise entry into nor did he have knowledge of the second UMS Agreement of 6 September 2017 sent to Lance Bagon and his mother on 17 July 2017. Mr Ayoub says that neither Mr Zibara nor Mr Angeli sought Mr Ayoub's consent or approval to enter into the new UMS Contract of 6 September 2017. Mr Ayoub also says that it was not necessary to "re-sign" Lance Bagon and his guardian to a new contract. On 22 February 2018 Mr Ayoub sent an email to Lance Bagon introducing Liam Ayoub to him as UMS's agent representative. On 8 April 2018 Rene Bagon responded to Mr Ayoub in these terms: After a lengthy discussion between myself and my son, Lance Bagon [w]e have decided to cease his relationship with your company. Please understand this is not a decision that we have made lightly, but ultimately we think that this is a decision that is for the best. We have reviewed the agreement and have noted that there is a clause in said agreement that gives us the freedom to do so. Kind regards, Rene Bagon 93 That clause, of course, is clause 6(e) of the new Management Agreement. 94 On 28 November 2018 Lance Bagon entered into a Management Agreement with Genesis commencing on 28 November 2018 and ending on 28 November 2021, a period of three years.
Mrs Illopau (Illy) Tohi and Penioni (Ben) Tohi 95 Mrs Illy Tohi gave evidence in the form of a witness summary and also gave oral evidence in the proceeding. Mr Ayoub gave evidence that Ben Tohi was a player managed by UMS. He says that UMS entered into a Management Agreement with him and his guardian on 14 October 2016 expiring on 13 October 2021, a five year period. That contract, plainly enough, was in the form of the agreement issued by the Accreditation Committee prior to the commencement of the new form of agreement on 19 July 2017 containing clause 6(e). In some of the material there is a suggestion that the agreement was a three year agreement and in the evidence of Illy Tohi, she says that she recalls that the Agreement was a two year agreement expiring on 13 October 2018. In any event, it is common ground that there was in existence a UMS Management Agreement dated 14 October 2016 and that in November 2017 Illy Tohi was sent by Mr Angeli a new UMS contract arising out of discussions between Illy Tohi and Mr Zibara. The circumstances relating to those events are described shortly. 96 At the time of entry into the Agreement of 14 October 2016 Ben Tohi was 15. He would turn 16 in 2017. In 2016 Ben Tohi was selected in the Parramatta "Eels" Harold Matthews Junior representative squad. Ahead of the 2017 season he was disappointed to be overlooked for that squad. At about this time, Ben Tohi was approached by Antoun Zibara. It seems that Mr Zibara told him that he worked for UMS. At this time, Ben's father was managing Ben's career. Illy Tohi was open to the idea of Ben engaging a player manager. She spoke with Mr Zibara over the phone. She says that she understood that UMS was an agency "owned and operated by a more senior agent, and Antoun's boss, Sam Ayoub". Illy Tohi says that she told Mr Zibara of Ben's disappointment about being overlooked by the Parramatta Eels for the 2017 Howard Matthews Squad. She says that within a short space of time Mr Zibara had spoken with the club and had convinced them to include Ben in the training squad which ultimately resulted in Ben playing for the club that season. Illy Tohi was impressed with this result and on 14 October 2016 she and Ben entered into the Management Agreement with UMS which she understand was to expire on 13 October 2018. She considered Mr Zibara to be Ben's agent. They had a good relationship. Ben was happy with him. At some time in 2017 the Parramatta club offered Ben a contract extension. Although she was happy with this proposal, she wanted the new contract with the club to include some provision for the payment of a contribution to education expenses on behalf of Ben as he was looking at leaving school before too long. This she made clear to Mr Zibara. 97 Illy Tohi gave evidence that she recalls having a particular conversation with Mr Zibara surrounding, initially, Ben's proposed contract with Parramatta. She says that in that conversation she went on to talk to him about who would be managing Ben on an on-going basis. She says that Mr Zibara explained to her that he was proposing to "move on and set up his own set-up company and Ben would be one of the few players that he would be looking at taking with him": T, p 84, lns 8-10. She says that during the conversation she questioned Antoun about whether "that was some sort of breach of contract for Ben": T, p 84, lns 10-11. She says that in the first instance she had two real concerns. One was the relationship which Mr Zibara had with her son having regard to the fact that Ben was a minor and quite impressionable. The second concern was what Mr Zibara's proposal might "mean for Ben in terms of his … current management contract: T, p 84, lns 13-14. She says that Antoun reassured her that "the NRL had [brought] out some new rules where, if the manager left, the player would then follow that manager": T, p 84, lns 14-16. She says that she "got some satisfaction out of that, or certainty, I should say": T, p 84, lns 16-17. She says that the second "concern" or "component" of her concerns was "where [Ben] wanted to be": T, p 84, ln 18. She says that because of Ben's relationship with Antoun, "he chose to go and sign with Antoun": T, p 84, ln 19. She says that as a result of those things or those considerations, a player management contract was signed as between Ben and UMS in November 2017: T, p 84, lns 24-25. 98 Illy Tohi was asked some questions about these matters in cross-examination by Mr Ireland QC for the respondents. She gave evidence that she could not recall when the matter of a new UMS Management Contract was raised with her. She says it was raised by Antoun Zibara. She knows that an email was sent to her on 20 November 2017 by Patrick Angeli. That email said this: Hi Illy, Page 15 of the management agreement, could you please sign underneath Ben's signature where it says "witness" and it asks if you are a parent or Guardian. This page must be signed by you to be lodged with NRL. Sorry for the inconvenience. Kind regards, Patrick Angeli 99 The Agreement was returned to Patrick Angeli by email including Illy Tohi's signature on page 15, on 21 November 2017. 100 Illy Tohi gave evidence that 20 November 2017 was when she looked at the detail of the agreement for the first time. She recalls reading it. She recalls clause 6(e) and says that that was something that she "wanted further clarification from Antoun about at that stage": T, p 91, lns 1-2. She spoke with Mr Zibara and asked '"Why - is this legal? Does this affect Ben? If he was to sign this how does that sit in terms of the NRL? Please explain it to me". "And he just put in simple terms that the new rules had come out. Players can leave with their managers if they chose to. It's not - they can terminate their contract with their current management company": T, p 91, lns 11-16. She says that she understood that explanation and repeated her observation that her first consideration was how the new arrangements were going to affect her son and the second consideration was where did her son want to be, having regard to the consideration that he was 17 years of age: T, p 91, lns 37-42. 101 The events leading up to 20-21 November 2017 included these events. On 6 November 2017 Mr Angeli sent a number of text messages to Ben Tohi. One text message said this: I've gotta talk to you about something important, but you've got to keep it to yourself and your parents. 102 Later on in the same day, Mr Angeli sent the following text: [S]o [A]ntoun and I have been talking lately. We're sort of weighing up our options going forward with work. So you are on a management agreement like everybody has one. So on your current agreement let's say [A]ntoun and I left, you would have to stay with the company [UMS] till it runs out. In July, the NRL introduced new management agreements that say if we were to leave then you would be able to give notice and say you're leaving too. The rest of the document is exactly the same apart from that new clause. We can't say 100% that we would leave, but we wanted to know if you would want a new management agreement to give you that option if it happened. 103 In another text message on the same day Mr Angeli said this: [W]e can't take everybody or else it will look bad, but we've got a lot of confidence in you going forward and we wanna be able to look after you and see how far we can take it together. 104 Mr Angeli also said this: We haven't told anybody else [at] Parra, so we can keep it between all of us. There's nothing wrong with you signing a new one, but if there starts to be rumours we could leave it could be a headache. 105 Ben Tohi responded by saying: "Yeah, I know what you mean" and Mr Angeli responded: "smart man, talk it over with Mum and Dad. They have any questions just ring us and we can explain it all out. But maybe the sooner the better". 106 On 12 November 2017 Mr Angeli sent an email to Ben Tohi saying that it had been "[g]reat to talk to you and mum last week" and attached the Management Agreement to be entered into with UMS. The email set out instructions about how the document ought to be executed and the various places for signing. 107 Illy Tohi said that she was annoyed by this email to Ben because he was still under 18 and as his parent, she felt that the new agreement should have been emailed to her initially. She says that Mr Zibara told her that the urgency surrounding the matter related to the contract offer from Parramatta and she got "the impression the new player management agreement needed to be executed before the Eels deal could be signed off". She says that she appreciated that the new management contract would go beyond the current arrangement with the Eels. She says that she was not aware of "what Antoun or Patrick did after the new player management agreement was sent to Patrick by email on 21 November 2017". 108 Illy Tohi also says that she was not aware that Patrick had sent an email to Mr Massey on 7 December 2017 requesting that Ben be released as a player from UMS. In that email of 7 December 2017 Mr Angeli said this: "Hi Paul, Just writing to advise that we are releasing the below players from their obligation to Ultra Management (Sports) - Penioni Tohi ... [one of 32 players released by that email]". 109 On 25 December 2017 Illy Tohi received a text message from Mr Zibara wishing her a Merry Christmas and providing her with his new mobile phone number. On 20 February 2018 Illy Tohi sent Mr Zibara a text message requesting Mr Zibara to provide her with his email address. Mr Zibara responded the same day saying that he would have his new email up and running either today or tomorrow so maybe she should use his personal email which he quoted. On 15 March 2018 Mr Zibara sent her a text message in these terms: Hi, Illy, Hope all is well. Just making sure you got my email the other day and wanted to know if you had any questions? No rush coming back to me. Talk soon. Antoun 110 Mr Zibara seems to have sent another text to Illy Tohi on 15 March saying: "Morning Illy. I know you're busy, sorry to pester you! Just checking you got that email & all is sweet from your end? Cheers Antoun". 111 On 19 March 2018 Mr Zibara sent the following email to Illy Tohi: Hi Illy, Thanks for the email, all is in order. Would you be okay if I was to hold off lodging it for a little while? I can still liaise with Parra on behalf of Ben no problem, just the ex-boss is trying to make life hard! So I would rather lay low when it comes to ex ums clients being signed with my company. Doesn't change anything other than the nrl won't have a copy of the agreement for now. Antoun 112 Illy Tohi says that the reference to "it" in the text is a reference to a contract which had been sent to her in March as a proposed new contract between Ben Tohi and Mr Zibara's new company. She knew by this time that Mr Zibara had left UMS: T, p 96, lns 5-29. Illy Tohi did not sign the contract with Mr Zibara's new company and although at this stage Ben wanted to stay with Mr Zibara, Illy Tohi's thinking changed in relation to that matter: T, p 97, lns 27-34. Illy Tohi gave evidence that thinking through the events, she realised that she had started to change her thoughts around Antoun probably at about the time that Ben was selected to play in a tournament for Westfields in respect of which Parramatta was to pay his attendance fee. Illy says that she "could not get hold of Antoun" to obtain confirmation that the arrangements had been "fixed up" which put at risk "Ben taking the field on the day". She says that she had to do some chasing up with Mr Zibara and it was at this point in time that she "started to understand something's not quite right there for Ben's contract": T, p 97, lns 39-46. She then spoke with Sam Ayoub and Liam Ayoub as "Antoun had not returned any calls at that point in time". Although she had not met either Sam Ayoub or Liam Ayoub, she called Mr Zibara's old mobile phone number for UMS and Liam Ayoub answered. She made herself known and arranged a meeting with them. She says that she was quite anxious to sort things out so that Ben could take the field in the upcoming tournament. Due to her concern about who was speaking to Parramatta in order for her son to take the field for the upcoming tournament and her uncertainty about these things, she asked Sam Ayoub and Liam Ayoub to clarify things at a meeting. She says that they told her that he was under no management agreement with UMS at that point in time: T, p 98, ln 36. In due course a fresh contract was signed with UMS: T, p 98, lns 38-39. Ben took the field for the tournament in question. 113 I accept the evidence of Mrs Tohi and Ben Tohi.
Benjamin Mallia 114 Benjamin Mallia entered into a Management Agreement with UMS on 13 January 2016 with the term expiring on 12 January 2019, a period of three years. On 10 November 2017 Benjamin Mallia entered into a new contract with UMS commencing on 10 November 2017 and ending on 9 November 2022, a period of five years. The new UMS contract was signed for UMS by Mr Zibara on 13 November 2017 and witnessed by Mr Angeli. It was signed by the player and also by the player's Guardian Elisa Mallia, on 10 November 2017. The notification form at page 15, a copy of which is sent to the NRL, recites that the "club" relating to the player is the "Bulldogs". 115 The applicant relies upon a series of Facebook exchanges between Benjamin Mallia and Patrick Angeli commencing on January 18 2018 after both Mr Zibara and Mr Angeli had left UMS effective on 15 December 2017. Even though the exchanges post-date their departure and post-date the events of entry into the new UMS contract commencing 10 November 2017 in discharge of the earlier contract of 13 January 2016, these exchanges are said, in effect, to be consistent with a failure on the part of Mr Angeli to disclose the new arrangements with Benjamin Mallia to Sam Ayoub. 116 The exchanges occur, so far as Mr Angeli is concerned, under his Facebook pseudonym of Patrick Thomas. 117 The exchanges are these. January 18, 2018. 9.14 pm. Patrick Thomas (PT) That's [#ucked] me a bit, because Sam might be there. January 18, 2018. 9.15 pm. Benjamin Mallia (BM) Ha … awkward break up? January 18, 2018. 9.15 pm. PT Yeah, not good at all lol. Trying to lay low for a little but sneak to games. Will be back up and running by next month hopefully. January 18, 2018. 9.16 pm. PT So don't think we've forgotten ya [with a smiling emoji with a heart]. January 18, 2018. 9.38 pm. BM So. January 18, 2018. 9.38 pm. BM Am I technically with Sam. January 18, 2018. 9.40 pm. PT If sam or someone is there they'll more than likely try and talk to you. Technically you're still with Antoun at Ultra Management. As a favour to Sam he left his accreditation with Ultra until Sam got a replacement, but he's going to move it from there soon and at that time you'll be able to leave because we put you on the new MA. January 18, 2018. 11.49 pm. BM Ahhh okay I got ya. January 19, 2018. 8.06 am. PT Yeah, don't worry I'll keep you in the loop the whole time. Main thing is if Sam or anyone else asks if you've spoken to me you say nah. January 20, 2018. 9.10 am. PT Good luck today gorgeous [the same smiling emoji as before]. January 20, 2018. 10.08 am. BM Thanks big fella, you going to be there? January 20, 2018. 10.09 am. PT Nah, as much as I wanted to be. Only because dragons are playing the roosters before you guys. Adrian Lamb is the [R]oosters 18's coach and Sam is his son's godfather so he might be there. Gotta lay low for at least one more week [sad face emoji inserted]. January 20, 2018. 10.10 am. BM That's fine but they aren't playing before us. [emphasis added]
Hudson Young 118 On 8 February 2016 Hudson Young entered into a Management Agreement with UMS with a term commencing on that date and ending on 7 February 2021, a period of five years. The Agreement was also signed by his mother, Linda Martin, as Hudson Young was then about 4 months away from turning 18. The contract was signed for UMS by Mr Zibara. Hudson Young already knew Mr Zibara and contacted him with a view to taking up a management arrangement with UMS. Hudson Young met Sam Ayoub at UMS's office at the signing of a Playing Contract with the Canberra Raiders. He had seen Mr Ayoub at different games and he says that Mr Ayoub had a high profile in the NRL. He says that on 6 September 2017 he received an email from Mr Zibara concerning an NRL Playing Contract with the Raiders and a new Management Agreement with UMS. The email was relevantly in these terms: Hi Mate As discussed, please see attached your NRL Playing Contract with the Raiders. If you could arrange to have it signed and witnessed as per below, and return it back to me via email [w]e will then forward [it] onto the Club for registration [the email then sets out seven directions for signing the contract ]. Also as we discussed, now that you are over 18, it is preferable that a new Management Agreement be signed. You will need to sign in the following places [the email sets out five directions for signing the new Management Agreement with UMS] Again, once completed just scan and return to me via email and I will lodge it with the NRL. Should you have any questions, please do not hesitate to contact me. Kind regards Antoun Zibara Ultra Management (Sports) Pty Ltd [emphasis added] 119 Although the email refers to a discussion about the NRL Playing Contract with the Raiders, Hudson Young does not recall that earlier discussion. The new UMS contract is dated 11 September 2017 and Hudson Young thinks it was signed around that time. He says that he left it to Mr Zibara "to make sure the thing got registered properly with the NRL": T, p 256, lns 24-44. Hudson Young says that he accepted or believed what Mr Zibara said in the email of 6 September 2017 "to be true" which seems to be a reference to Mr Zibara's remark (apart from any of the other factual matters in that email) that now that Hudson Young was over 18, it was preferable that a new Management Agreement be signed. 120 Hudson Young says that Mr Zibara attended Canberra on 11 September 2017 and in Mr Zibara's presence, Hudson Young executed a playing contract with the Raiders that had been dated 28 July 2017 for a period commencing 11 November 2017 and terminating on 31 October 2019. It was at this time that Mr Hudson Young executed the new UMS contract in the presence of Mr Zibara. Hudson Young says that he recalls Mr Zibara telling him just prior to execution of the new UMS Contract, words to the effect that "the NRL required all players to execute the new Player Agent Contract". Hudson Young says that he believed this to be true. He says that he does not know why Mr Zibara asked him to enter into the new UMS Contract although the email of 6 September 2017 puts the need to do so on the footing that now that he was over 18 years of age it was preferable that a new Management Agreement be signed. 121 Hudson Young also says in his witness summary which he adopted that he has "some further recollection of Antoun communicating with him via the telephone that the new NRL Player Agent Management Contract needed to be put in place and it allowed for him to leave at any time". At about this time in September 2017 to the end of the playing season, Hudson Young was playing NRL games for the Canberra Raiders in the Under 20's competition. Hudson Young now has a contract playing in the senior NRL competition. 122 Mr Ayoub says that neither Mr Zibara nor Mr Angeli sought his consent or approval in relation to the new UMS Management Agreement. He says that he did not authorise entry into that agreement and had no knowledge that it had been entered into. He says that Hudson Young's contract, as at 11 September 2017 had an unexpired term ending on 7 February 2021 and that it was not necessary to "re-sign" a contract with him when the contract still had 3 years and 5 months to run. 123 Hudson Young says that he recalls sometime in early March 2013 telephoning Mr Zibara about the possibility of his brother signing a Player Agent Management Contract. During this telephone conversation Mr Zibara told him that he was no longer with UMS. In his witness summary he says he thinks Mr Zibara told him that he was now running his own business as an NRL Agent. In his oral evidence his recollection was that Mr Zibara contacted him and told him that he wasn't going to be a player agent any more. He thought Mr Zibara told him that he was going to do something else - move into supplements and something else: T, p 257, lns 21-30. Hudson Young cannot remember the date of the conversation. In his oral evidence he said that he never had a conversation with Mr Zibara concerning Mr Zibara continuing to be a player manager: T, p 257, lns 35-36. He then said "that's why I requested a release from Sam because I was under the impression that Sam didn't want to". Hudson Young did not finish that sentence as counsel for the respondents said: "I understand. It was on the basis that he wasn't going - that Antoun wasn't going to be around anymore?" to which, the answer was yes. Hudson Young accepted that that was why he had requested, at his own initiative, a release from the contract with UMS and from Sam Ayoub: T, p 257, lns 34-46. In his witness summary, Hudson Young says that Mr Zibara did not actually ask him to go with him although he made it plain to him that Sam Ayoub was not interested in him. In the witness summary he recounts at paras 50 and 51 two statements made to him by Mr Zibara in the course of a telephone conversation. He did not give evidence along those lines in his oral evidence when responding to the matters at T, p 257, lns 34-46 and T, p 258, lns 1-10. In his oral evidence, Hudson Young was about to say that he requested a release from Sam Ayoub because he was under the impression that Sam Ayoub didn't want to do something. It may be that he was going to finish the sentence by saying that he was under the impression that Sam Ayoub did not want to "manage him", as he says in his witness summary, and to that extent I accept the first and third sentences of para 51 of the witness summary. 124 On 22 February 2018, Mr Ayoub sent an email to Hudson Young in similar terms to the email described earlier in which he introduces the role to now be played by Liam Ayoub as a representative of UMS. 125 On 12 March 2018 Hudson Young sent Sam Ayoub an email requesting a release from his UMS contract. It seems that before this email he had a telephone conversation with Mr Massey who confirmed that the contract of 11 September 2017 contained a clause that enabled him to terminate the contract where the agent managing him, Mr Zibara, had left the UMS business. Mr Ayoub says that after the receipt of the email of 12 March he made arrangements to meet with Hudson Young because he wanted to know "what was being said about me [and] UMS and why younger players did not seem to want to stay with UMS". Hudson Young says that he met with Sam Ayoub in Canberra on 5 April 2018. Mr Ayoub says that Hudson Young said words to the effect "you only manage high profile players". Mr Ayoub said that that was not true and told him that UMS strives to get the very best for all players it manages. Mr Ayoub encouraged Hudson Young to reappoint UMS and he did so on 5 April 2018 for a period commencing on that date and expiring on 4 April 2023, a period of five years. 126 Subject to the qualification concerning paras 50 and 51 of Hudson Young's witness summary, I accept the evidence of Hudson Young and Sam Ayoub on these matters concerning the history of the arrangements with Hudson Young.
Mosese Pope 127 Mr Ayoub says that Mosese Pope was a player managed by UMS. He entered into a Management Agreement with UMS on 21 February 2016 expiring on 20 February 2019, a period of three years. He says that on 27 October 2017 Mr Angeli sent an email to Mr Massey copied to the UMS email reception address in which he said to Mr Massey that he was "[j]ust writing to advise that we release the following players from their obligations [to] Ultra Management (Sports) - Mosese Pope [and four others]". The email concludes by saying that should Mr Massey have any questions, he ought not "hesitate to contact Antoun". 128 Mr Ayoub says that copying the email to the UMS reception email account was, in effect, sending the email "to himself". Mr Ayoub says that as a result of this email, the NRL Register of Player Management Agreements was changed to record that Mosese Pope had become a free agent as UMS had released him from his Management Agreement. Mr Ayoub says that he was not aware that Mosese Pope "was being, or had been, released" and he says that he did not authorise or direct that Mosese Pope be released. He says that there were no genuine reasons for the player to be released. 129 On 20 December 2018 Mosese Pope entered into a Management Agreement with Genesis commencing on that date and expiring on 20 December 2021, a period of three years. Fees payable to Genesis are set out at clause 4 of Schedule 2 having regard to clause 6 of the Agreement dealing with that topic. The Agreement is signed for Genesis by Mr Zibara and witnessed by Mr Angeli. The Agreement is also signed by Mosese Pope's parent or guardian as the player was still under the age of 18 years at the time of signing the Genesis Management Agreement. Mosese Pope entered into a Playing Contract with the Canterbury Bankstown Bulldogs Rugby League Club on 9 September 2016 and entered into a variation to that Playing Contract on 20 February 2019 providing for particular remuneration to the player and in consequence payment obligations to Genesis.
Shane Evans and Caleb Evans 130 Shane Evans is the father of Caleb Evans. Shane Evans says that throughout Caleb's childhood he has been an outstanding rugby league player. He has played in a range of positions. In 2017 he was playing rugby league for Logan Brothers and was selected to play for the Queensland under 15's side. In June 2017 Shane Evans spoke with Mr Zibara. Shane Evans understood that Mr Zibara was employed by UMS. He had a discussion with Mr Zibara about his son's future in Rugby League and the management of his career by UMS. On 5 June 2017 Mr Evans received an email from Mr Zibara in which Mr Zibara said: "We would be delighted to assist Caleb with his promising Rugby League aspirations, if given the opportunity". Mr Zibara said that the first step would be to formalise "the association between Caleb and myself". Mr Zibara said that under the NRL Accreditation Scheme "we are required to obtain an authority by way of a Standard NRL Management Agreement". The email attached a Standard Form of Agreement as between UMS and Caleb Evans. Because Caleb Evans s under the age of 18, the contract was to be also signed by his father. The contract was signed by Caleb Evans and his father on 19 June 2017 and signed for the company by Mr Zibara on 25 June 2017, witnessed that day by Mr Sam Ayoub. The contract provides for a term of management commencing on 17 June 2017 and ending on 16 June 2020, a period of three years. The email of 5 June 2017 gave directions as to execution of the contract and said that UMS would advise the Brisbane Broncos that "Caleb has come on board with our agency". Caleb Evans ultimately obtained a Player Contract with the Brisbane Broncos. 131 In his witness summary, Shane Evans says that at some time prior to 14 August 2017, he recalls coming home from work and receiving a phone call from Mr Zibara to his mobile phone. He says, in his witness summary, that he recalls Mr Zibara saying something to the following effect: "I'm not going to be with Ultra Sport Management anymore. I am going to send a new Agents Contract for you to sign. With the new contract, Caleb can leave whenever he wants to. If someone asks you don't tell them that I spoke to you". He says that a short time later a new NRL Player Agent Contract was emailed to him by Mr Zibara. He says that Caleb and he and his wife executed the second UMS Contract on 17 August 2017 and it was then returned to UMS. The second UMS Contract is dated 17 August 2017. It has a term commencing on that date, ending on 16 August 2020, a period of three years. It is signed for UMS by Mr Zibara and witnessed by Mr Angeli. The new UMS Contract is also signed by Shane Evans as Caleb's Guardian and his signature is witnessed by Sarah Evans, his wife. 132 Apart from the witness summary Shane Evans gave oral evidence. He adopted his witness summary (but for the deletions at paras 14, 30, 31 and 32), which includes the matters described above. As to his witness summary, Mr Evans said that it had been emailed to him a couple of days before he gave his evidence and he had read it. He said that the interview leading to the preparation of the witness summary occurred a couple of weeks earlier. Mr Evans came to Sydney from Queensland on the morning that he gave evidence, looked at the document, approved it as correct and signed it. Mr Evans said that in the preparation of the witness summary, he was asked by the solicitor for the applicant whether he could remember any conversation with Mr Zibara regarding the contract. He says that the call from the applicant's solicitor came "pretty out of the blue" and that is why he could not be "precise in every detail": T, p 231, lns 3-31. Mr Evans gave evidence that sometime between the signing of the first Contract with UMS (on 17 June 2017 by Caleb and 19 June 2017 by Shane Evans) and the signing of the second Contract on 17 August 2017, Shane Evans spoke, on only one occasion with Mr Zibara and that was by phone: T, p 232, lns 5-11. Mr Evans says that he did not ever meet face to face with Mr Zibara. He says that after 17 August, he cannot recall meeting Mr Zibara at any time. He said it was only one phone call "in between that period between me and Antoun". Mr Evans was asked: "And that was when he suggested a second contract, is that right?" Mr Evans said it was and gave evidence that Mr Zibara said "he was going to make a second contract and Caleb could leave the company if he wanted to". Mr Evans says that he remembers that clearly: T, p 232, lns 23-29. Mr Evans says that he thought that that was a good idea because "I did want to go with Antoun, yes"; T, p 232, lns 31-32. Mr Evans said this about the conversation in the following exchange at T, p 232, lns 34-47; T, p 233, lns 1-17: Mr Ireland So he said to you something like this, "There's a new form of contract that has been approved by the NRL"? Mr Evans Yes. Mr Ireland And under that if ...? Mr Evans Caleb can leave if he wants to. He can leave the contract he's in now if he wants to. Mr Ireland And that gave Caleb and you, I guess, because you were singing for him, a certain degree of flexibility, whether to go or stay, if in the event that Antoun left? Mr Evans Yes. Mr Ireland That's your understanding of what the change was? Mr Evans Yes. I was all new to this, so I knew no ins and outs of how everything worked …. You know, I hadn't met Sam or Liam at that time. Mr Ireland And so this was all sort of raised with you by Antoun. Mr Evans Yes. Mr Ireland In August 2017. Mr Evans I can't recall the actual day … Mr Ireland Well, it must have been before the second contract was signed? Mr Evans Yes exactly. Mr Ireland And he said, "Look, there's a new contract on the go … I'm thinking of doing it what do you think". And you said, "That's a good idea. We will do that"? Mr Evans Well, I said to him we - I would go to - if - we liked Antoun and we wanted to stay with Antoun and we would go to Sports Management and talk to them and say that we would want to go with him. But after the conversation that we had - during the conversation I felt a bit uneasy with - with it after I had got off the phone, because he [Caleb] had signed with Ultra Management. 133 After this exchange, Mr Evans was again asked to recount the conversation (as Mr Ireland for the respondents thought that Mr Evans was giving evidence of the conversation assisted by what he had said in his witness summary). This exchange occurred: Mr Ireland Just turn [your witness summary over]. Mr Evans Yes. Mr Ireland I want you to tell his Honour what the conversation was that you've been referring to with Antoun. Whatever you say and what words did he say? Mr Evans What did Antoun say to me? Mr Ireland Yes, about the new contract? Mr Evans He just said he was going to make up - he was going to send through a new contract that enables Caleb to get out of his contract that he's [in] with Sports Management and if he wants to leave. Mr Ireland And that's it. Mr Evans Yes. Mr Ireland Nothing else? Mr Evans No. 134 I accept the evidence of Shane Evans.
Jayden Tanner 135 As a junior rugby league player, Jayden Tanner played for the Western City Tigers, as a junior club. He was chosen in his first junior representative squad when chosen for the Parramatta Eels Harold Matthews squad for the 2016 season. At about this time, September 2015, he met Mr Zibara through a good friend. He says that Mr Zibara told him that he had potential to be a top tier player. He says that he and the family decided that an agreement would be entered into with UMS. On 8 December 2015 Jayden Tanner entered into a Management Contract with UMS for a term commencing on that date and ending on 7 December 2018, a three year period. The contract was signed by Mr Zibara for UMS and witnessed by Ms Brown. The contract was also signed by Jayden Tanner's Guardian as Jayden was under 18 years of age. Jayden Tanner says that he was aware that Mr Zibara worked for UMS and that UMS was owned and operated by Sam Ayoub. Mr Zibara would attend matches in which Jayden Tanner played a number of his junior games. He says that Mr Zibara negotiated a two year contract for him with the Parramatta Eels dated 25 July 2016. In the following year he was part of Parramatta's Under 18's Development Squad. He sought a release from the Eels Playing Contract in mid-2017. He says that in September 2017 Mr Zibara secured a Playing Contract for him with the Cronulla Sharks dated 28 September 2017. At the time he signed that contract he also signed a second Management Agreement with UMS dated 28 September 2017. That contract provides for a term commencing on 28 September 2017 and ending on 27 September 2020, a three year period. It was signed for UMS by Mr Zibara and witnessed by Mr Angeli. It was also signed by Jayden Tanner's Guardian. 136 Jayden Tanner says that at the time he signed the new UMS Agreement he was not aware of any new or different terms to those contained in the earlier UMS Agreement. He says that he is now aware that the second UMS Agreement permitted him to terminate the new UMS Agreement should it be the case that Mr Zibara ceased employment with UMS. 137 He says he first became aware that Mr Zibara had ceased his employment with UMS when he received a text message through Facebook Messenger from Mr Angeli in early December 2017. The exchanges with Mr Angeli were these: Angeli [Some remarks about Tommy de Meio] He's getting summoned to the office next week to find out antoun is leaving. Angeli Forgot to mention he resigned last Monday, sam hasn't let him tell any clients. Tanner Hang on what? What's he doing? Angeli He's resigned, so we're leaving. He's still going to manage. Lol don't need to panic. Tanner Yeah he is just leaving the company? Angeli Yep. Tanner Oh ok fair enough. Angeli Yeah that's why we re-signed you, so you could get out early. Angeli But we'll let you know what to do etc. Tanner So expect a phone call from Antoun? Angeli Yeah once he leaves, I'll send you his new number and you can get in contact with him. Angeli But no need to panic. Tanner Yeah alright no worries. Angeli Keep that under your hat, nobody knows yet. Only gonna start leaking in the next couple of weeks. Tanner Yeah alright I'll keep it hush hush. Angeli Good man, we'll tell Luke when we leave, but his MA expires in April and he's contracted so he'll be sweet. Tanner Fair enough. Angeli Since you were end of the year we re-did you so we could do your next deal. Tanner Yeah I understand. [emphasis added] 138 As mentioned, those exchanges occurred in early December 2017. Jayden Tanner says that on 10 December 2017 at 11.40 a.m. he received the following message from Mr Angeli: Btw Antoun's just called your mum and dad letting them know he's left, you guys will probably get a call from Sam or his son saying catch up and meet them. Just play it dumb. In the meantime Antoun's new number going forward [the number]. 139 On 1 February 2018, there were further exchanges with Angeli by Facebook Messenger in these terms: Angeli JT just giving you a heads up. Sam or someone from the office will be out there Friday night at the trial, they'll probably try and touch base with you guys before then to let you know. Tanner Yeah alright too easy. Angeli You'll be right. Just remember haven't spoken. Tanner Yeah so I won't say anything? Angeli Just say "Nah haven't heard from either of the boys since last year". Angeli If he asks. Tanner Yeah okay. Angeli He might try and add you on Facebook like he tried to do with Dec [a laughing emoji]. 140 The following exchange occurred on 3 February 2018: Angeli Meet your new best friend last night? Tanner Who's that? Angeli Sam haha. Tanner Nah he had a word with dad tho. Angeli How'd that go? Tanner I think he played dumb. Angeli I'm sure he would have done a good job. Did he tell him Antoun had left or that he was on leave? Tanner I'm not sure all he said was he didn't say much. Angeli Sounds like you really missed out ha ha. How was the trial anyway? 141 In early 2018 Sam Ayoub made contact with Jayden Tanner's family and met with his father while Jayden was playing a game at Leichardt. From early February 2018 communications between Jayden Tanner and Mr Angeli and Mr Zibara became less frequent with little contact with Mr Zibara after early February 2018. Jayden Tanner is now managed by UMS represented by Liam Ayoub. I accept his evidence.
Mr Sam Ayoub 142 Mr Ireland, for the respondents, contends that Mr Ayoub was an "unconvincing witness" and became an advocate for his case from the witness box "on occasion". Mr Ireland contends that Mr Ayoub "pretended" not to have seen two important emails at the time they were sent, where the effect of his having received the emails was damaging to assertions made by him in his evidence. Thus, it is said that his evidence should be approached "very guardedly where it is uncorroborated by documents". 143 I do not accept that submission. 144 It needs to be kept firmly in mind as a threshold matter that the evidence of Mr Ayoub is unchallenged by any evidence from Mr Zibara or Mr Angeli on any and every aspect of the case made against them. Significant factual contentions given in evidence by Mr Ayoub were not the subject of cross-examination at all. As to the evidence of Mr Ayoub, criticism is made that he would not answer questions directly. That characterisation of his evidence is unfair. He did answer questions put to him. Sometimes he sought to give his answer context or explain aspects of the subject matter of the question thought by him to be relevant to the answer. To the extent that an answer was thought not to engage the precision of the question, it was put again. To the extent that a question was thought by counsel for the applicant to unfairly state the effect of the evidence given by Mr Ayoub and being put to him, objection was taken and the question was made clear. 145 Nevertheless, I accept that Mr Ayoub occasionally exhibited a sense of being defensive of his position when pressed by reasonably vigorous questioning from Mr Ireland about particular topics. However, his demeanour in that regard does not lead to the conclusion that I am pressed to reach in the submissions by the respondents about Mr Ayoub's evidence. 146 Nevertheless I will examine aspects of Mr Ayoub's evidence said to exhibit the concerns put by Mr Ireland. 147 In his submissions, Mr Ireland refers to conduct on the part of Mr Ayoub in pretending not to have seen two important emails. To the extent that reliance is placed upon Mr Ayoub's evidence of having no recollection of having seen the email from Mr Zibara of 22 November 2017, I have already addressed that matter. I do not accept that Mr Ayoub was pretending not to have seen that email. 148 The second email is an email sent by Mr Angeli on 7 December 2017 at 4.13 pm to Mr Massey. This email is mentioned earlier at [108] of these reasons in the context of the circumstances relating to Ben Tohi. The email was copied to two email addresses. The first is the "reception" email address for UMS and Mr Ayoub gave evidence that having regard to Mr Angeli's duties, sending an email to that email address is, in effect, copying it to himself. However this email unlike the email of 27 October 2017 discussed at [127] of these reasons concerning Mosese Pope was also copied to the email address for Sam Ayoub. 149 The email contains a list of 32 players with their dates of birth set out in the email and it tells Mr Massey that "we are releasing the below players from their obligation to Ultra Management (Sports)". 150 As to this question of a release of the players, a suggestion was put to Mr Ayoub that a meeting took place "on or before [or] around" 7 December 2017 between Mr Ayoub, Mr Zibara and Mr Angeli in Mr Ayoub's office at which a discussion took place about the players which were to be or could be released by UMS. Mr Ayoub thought that there could possibly have been a meeting with Mr Zibara but definitely not with "the two of them": T, p 160, lns 1-3; T, p 161, ln 4. 151 It was suggested to Mr Ayoub that at the suggested meeting in his office, Mr Ayoub asked them, or one of them, to produce a list of junior players and that Mr Ayoub sat with a highlighter and chose and authorised the release of certain players for notification to Mr Massey. It was suggested to Mr Ayoub that following the suggested meeting, at his request, a list was prepared and sent to Mr Massey by email on 7 December 2017, to which Mr Ayoub responded: "not to my knowledge whatsoever" (T, p 161, lns 6-15) which I take to be a rejection of all of the elements put to him. Objection was taken by counsel for UMS that no list said to have been made at the suggested meeting on or about the nominated date was put to Mr Ayoub. That resulted in Mr Ayoub being taken to the email as sent which was said to have emerged at his request out of the meeting at which the selection was said to have been made in the way it was said to have been made. 152 In Mr Ayoub's affidavit sworn 13 August 2019 he says this about the email (and annexes a copy of the email and pp 304 and 305 of his affidavit): 288. However, on 7 December 2017, at 4.13 pm that day, Angeli sent an email communication to Massey, and advised that UMS was releasing, inter alia, Tohi. 289. Neither UMS (nor myself) did authorise or direct Angeli to cause for Tohi to be released from his player management contract. I had no knowledge that Angeli sent that email. 153 Mr Ayoub accepted that the email was in UMS's possession when his affidavit was prepared. Mr Ayoub said "… I've seen that email" (T, p 163, ln 2) but said that he did not recall it: T, p 163, ln 5. He said that he did not see it "at the time": T, p 163, ln 12. It was suggested to Mr Ayoub that he told Angeli to make the list; to release the players on the list; and to send a copy to Mr Ayoub. Mr Ayoub denied all of those things: T, p 163, lns 16-20. 154 Mr Ayoub was asked: "Is that the first time you've seen that email" which seemed to be a question of whether, sitting in the witness box giving evidence, was it the first time Mr Ayoub had seen the email. He responded: "I'm pretty sure. I can only tell you from my recollection that this is the first time I have seen this email", "from my recollection": T, p 163, lns 25-29. 155 Mr Ayoub was asked "whether we could rely on that answer" to which he responded: "My discussion with them at the time was to not release players ... I didn't instruct them to do anything because I didn't want them to take players from my business without me having the opportunity to go through them": T, p 163, lns 31-35. 156 Mr Ayoub was asked again whether his evidence was "that's the first time you've seen that email". He responded: "I am [saying] that's the first time I've seen that email to my recollection, because I did not want them removing any players from my business": T, p 164, lns 15-18. 157 Mr Ayoub was again taken to the email as exhibited to his affidavit and the proposition put to him was that his evidence had been that he "had never seen it before" to which he said: "I don't recall seeing it before" (T, p 166, lns 15-16), which I take to mean that, sitting in the witness box, his present recollection was that he did not recall seeing it before although plainly, objectively, he had seen the email before because it was annexed to his affidavit. When pressed again he said: "I can honestly say I don't recall seeing it": T, p 166, lns 24-25. 158 The Court drew attention to the care needed with the question put to Mr Ayoub because the precise evidence was that his present recollection was that he did not recall having seen the email, not that he had never seen the email: T, p 166, lns 35-45. As a result, Mr Ayoub was asked, whether, although he did not now recall having seen the email before, it was nevertheless obviously the position that he had seen it before having now looked at his affidavit. He responded by saying: "I honestly do not recall that. I do not recall that I saw it": T, p 167, lns 15-16. Mr Ayoub also said: "I cannot explain why I didn't see it and why I can't recall it. But I do not recall it". 159 The suggestion was put to Mr Ayoub that the truth of the matter is that he received a copy of the email and he read it at the time. Mr Ayoub responded: "I didn't get a copy of it. I don't recall it because I know what I did back then". Mr Ayoub when pressed again along the same lines said: "I deny I saw it at the time. I don't recall that email. I do not recall that email": T, p 167, lns 28-43. 160 Mr Ayoub was pressed with the proposition that he did not want to admit that he had previously denied seeing the email: T, p 168, ln 24. An objection was taken that this proposition, and the earlier propositions put to him, misstated his evidence. The objection was that Mr Ayoub's oral evidence was that "he has no recollection now of having seen it previously" and although it is obviously annexed to his affidavit, his evidence is that "he has no recollection of it happening at the relevant time, that is, December [2017]". Mr Ireland was allowed to pursue the line of inquiry about Mr Ayoub having said in the affidavit at para 289 that he had no knowledge that Angeli had sent the email. Mr Ayoub was pressed with the notion that his evidence about his present recollection and his state of knowledge in December 2017 was untrue. He denied that proposition. He was pressed with the proposition that he did not want to admit having seen the email in December 2017 because he thinks it might damage his case, and that he had sanctioned the release of the list of players after a meeting as previously described with Mr Zibara and Mr Angeli. He responded: "I can assure you I didn't sanction the list of players": T, p 169, lns 19-20. As to the suggested meeting, discussion of names and agreement and authorisation to release the players, Mr Ayoub said: "That isn't the case and wasn't the case because ... they had instructions from me to not release any of our players - not to sign any contracts for any of our players or release any of our players till I had the opportunity to go through my work, my business after they had left": T, p 169, lns16-29. 161 Mr Ayoub was asked to look at the list of players. He said: "… there was definitely no reason for me to approve release of the majority of these players [b]ut, in particular, more so, some of the younger ones that were in our management": T, p 170, lns 16-19. Mr Ayoub was asked which players would they be. He said that young Jacob Alick, Ben Tohi, Caleb Tull, were players that he most definitely would not have released and he would have had second thoughts on quite a few in the list at that time. 162 Although these various suggestions were put to Mr Ayoub in cross-examination, there was ultimately no evidence from Mr Zibara or Mr Angeli about such a meeting having taken place; either of them having proffered a list of players to Mr Ayoub; the examination and discussion of players on the list; Mr Ayoub having marked the list with a highlighter identifying those players to be released; Mr Ayoub having given an instruction and an authorisation to either or both of them to release any player; and, to notify Mr Massey of players having been released. 163 All of those matters are elements of the factual framework put to Mr Ayoub about the origin of the 7 December 2017 email. Had the email evolved in the way put to Mr Ayoub (supported by probative evidence), the question of its origin and impact at the time (7 December 2017) on the mind, memory and conduct of Mr Ayoub would have been one thing. Mr Ayoub says that he had no knowledge that Mr Angeli sent the email (shortly before his employment ended on 15 December). He says that he has no recollection of having seen the email previously. Plainly, he saw the email earlier because it is annexed to his affidavit. The question, however, is whether there is a sufficient basis for rejecting, as untruthful, his evidence that he has no present recollection of having seen it previously. In my view, it would be quite wrong to do so. He also says that he has no recollection of having seen the email at the time. The basis for challenging that evidence is that the email was actually copied to his email address on 7 December 2017. Did he see it at the time? He says not, on oath. He also says that there are players on the list, identified by him, who he would not have released as doing so was against his interests and the interests of UMS. I am not willing to reject his evidence as untruthful. I accept that Mr Ayoub seemed unwilling to recognise the objective fact that the email was available to him on or about 13 August 2019 as his solicitors had annexed it to his affidavit for him to read, approve and swear. His evidence however is directed to his recollection of the email. I accept his evidence on this topic. 164 There is one further matter that should be mentioned which concerns Mr Ayoub's evidence about the importance of the new contract containing the new clause 6(e). Mr Ayoub gave evidence that the new contract with its new break clause was a significant change to the previous contracts giving rise to a situation of substantial risk to UMS: see [45] of these reasons. Mr Ayoub gave oral evidence in cross-examination that he was "pretty riled" by Mr Massey's email of 20 June 2017 and it "would have a bearing on my business": T, p 173, lns 1-2; lns 9-10. Propositions were put to Mr Ayoub that Mr Zibara was the UMS representative for the junior players which presented a structural risk for UMS. Mr Ayoub did not agree with the premise of the question and observed that there "would have been more contracted players to myself": T, p 174, ln 21 and he thought that he "may have more junior players signed than he [Mr Zibara] does". Mr Ayoub was asked, whatever the number may have been as to those matters, whether he realised that the new rule, clause 6(e), meant that where Mr Zibara was the nominated agent for a player, UMS was vulnerable if the new contract came in for that player because the player could go with Mr Zibara if Mr Zibara left UMS. Mr Ayoub's response was that "the majority of contracts were signed before that needed to take place", that is, the question would not presently arise because the majority of the UMS contracts were in place and had time to run: T, p 173, lns 37-40. 165 Mr Ayoub was said to be not responding to the question asked of him. However the answer was a response to the question. Mr Ayoub was pressed with the state of his realisation of the risk to UMS brought about by clause 6(e) and it was put to him that if Mr Zibara was the nominated agent and a new contract came to pass with the relevant player, clause 6(e) "would kick in" and his business would be under "some threat": T, p 174, lns 9-17. Mr Ayoub responded, "[w]ell, no, I didn't realise it at the time and - that wasn't a concern to me - that particular aspect of it". 166 This answer was said to suggest that Mr Ayoub was actually not concerned about the introduction of the new clause 6(e). However, Mr Ayoub immediately added at T, p 174, lns 24-25, "[o]f course, it has - of course, it was something significant that I needed to be concerned about". He also said that he "thought it was going to affect our contracts": T, p 175, ln 47. 167 Mr Ayoub's evidence, fairly understood, is that at the moment of introduction of clause 6(e), operative for new contracts from 19 July 2017, the need to put in place new contracts did not arise because the majority of the contracts were signed with time to run and that as to future contracts when the time arose to enter into such a contract with a player, there would be a future risk to the business as a player could end the contract and follow the nominated agent to wherever he or she might go. Mr Ayoub gave evidence that "[s]o I did specifically instruct them [Mr Zibara and Mr Angeli] not to res-sign them [players] to new contracts especially when most of them were signed to three and five year contracts only recently": T, p 176, lns 11-13. Mr Ayoub was pressed with the suggestion that that evidence was not true. He denied that suggestion. 168 I accept the evidence of Mr Ayoub on these matters and generally. 169 I also accept the evidence of Ms Tina Brown and Mr Liam Ayoub. It is not necessary to examine the evidence of those witnesses in these reasons.
Findings 170 As to Mr Zibara I make these findings. 171 Mr Zibara was a trusted employee of UMS. The scope and content of his duties and responsibilities are those described by Mr Ayoub. At some point between publication of the new form of contract containing the new clause 6(e) on 20 June 2017, and 21 November 2017, Mr Zibara decided to leave UMS. It is not possible to say precisely when he formed an intention to leave UMS. However, some things are clear and I so find. 172 First, within a day of Mr Massey publishing the proposed new form of contract to be used by an agent or a management company when contracting for the provision of management services to a player to be adopted as from 19 July 2017 containing the new clause 6(e), Mr Zibara had read Mr Massey's email and the changes to the contract and attended a meeting with Mr Ayoub at which the events described at [46] of these reasons occurred. Mr Angeli was present at that meeting. 173 Second, I am satisfied that either at that meeting or within a reasonably short period of time from that meeting, Mr Zibara knew that a player who became a party to one of the new management contracts with clause 6(e) would be entitled to terminate the contract on seven days' notice should the nominated agent under that contract leave the employ of the management company; that the existing contracts between UMS and a player did not contain such a clause conferring such a right in the player; that although the new form of management contract conferred a portability benefit on seven days' notice on a player by being able to bring such a contract to an end in accordance with clause 6(e), the utility of the clause for the nominated agent was such that a player could end the contract and follow the nominated agent to the place from which the agent would be then providing management services either by himself, as an employee of another company or through his own business structures or arrangements; that in order for an UMS contracted player to be able to enjoy the benefit of such a right and potentially exercise such a right, that player could only do so if the player entered into a new contract with UMS in accordance with new published form of contract; that Mr Ayoub had made a decision to let the existing UMS contracts run their course and Mr Ayoub's position was that there was no need to re-sign any of the players; that upon the expiration of the term of each existing management contract between UMS and a player, a new management contract would have to be in accordance with the new form of contract containing the new clause 6(e) but absent waiting out the expiration of each current UMS contract and then securing a renewal agreement containing clause 6(e), the new "break clause" could only be engaged if a new contract was put in place to replace the current UMS contracts . 174 Third, Mr Zibara caused new contracts in accordance with the new form of contract containing clause 6(e) to be entered into on the following dates with the following 16 players who were then already in a contractual relationship with UMS in circumstances where the term of the contract had significant time to run: Michael Cheer, 31 July 2017; Caleb Evans, 17 August 2017; Lance Bagon, 6 September 2017; Hudson Young, 11 September 2017; Jayden Tanner, 28 September 2017; Dennis Mataia, 5 October 2017; Thomas Gaffey, 6 October 2017; Aidan Gaffey, 6 October 2017; Phoenix Crossland, 18 October 2017; Volkan Er, 23 October 2017; Declan Casey, 27 October 2017; Elvino Maroulis, 28 October 2017; Kai Parker, 28 October 2017; Ben Mallia, 10 November 2017; Jayden Skinner, 10 November 2017; Ezraa Coulston, 20 November 2017. 175 Fourth, having regard to the evidence of Mr Ayoub described at [46] of these reasons; his oral evidence described earlier concerning the direction he gave to Mr Zibara and Mr Angeli that it was not necessary to re-sign players; and his evidence generally, I am satisfied that Mr Zibara did not seek the consent or authority of Mr Ayoub to discharge the existing contracts and enter into the replacement contracts described at [174]. Mr Zibara did not disclose to Mr Ayoub that he was taking steps, or that, after the event he had taken steps, to replace UMS's current contracts with new contracts which conferred the seven day portability benefit upon a player and correspondingly conferred a benefit upon Mr Zibara of enabling him to engage with a player who had exercised a right under the new contract to terminate that contract with UMS in the event that Mr Zibara elected to leave his employment with UMS. More specifically, I accept that Mr Zibara did not seek the consent of Mr Ayoub to replace the existing UMS contracts with Er, Maroulis, Crossland, Bagon, and Young, with new UMS contracts incorporating clause 6(e). I accept that Mr Zibara did not disclose to Mr Ayoub that he was taking steps, or that after the event he had taken steps, to replace those current contracts with the new UMS contracts. 176 Fifth, Mr Zibara did not seek the consent or approval of Mr Ayoub to release Pope on 27 October 2017 or to release the players set out in the email to Mr Massey on 7 December 2017. 177 Although it is not possible to look into the mind of Mr Zibara and determine when he decided to leave UMS, the following events suggest that the possibility of his leaving UMS had become, in his mind, a "significant possibility" fairly early on following upon the catalytic announcement of the form of the new contract on 20 June 2017 to be entered into concerning management contracts on and after 19 July 2017. Mr Shane Evans recounts a telephone conversation some time before 14 August 2017 (or at least before 19 August 2017, the date of Caleb's new UMS contract) with Mr Zibara when he was told that Mr Zibara was "not going to be with [UMS] anymore" and a new UMS contract would be sent to him for Caleb to sign (that is, a contract which would contain the new clause 6(e)). Shane Evans remembers clearly being told that under the new contract "Caleb could leave [UMS] if he wanted to". This made Shane Evans "feel a bit uneasy" because Caleb had signed with UMS. The new contract would enable Caleb to get out of his contract with UMS: see: [131]-[133] of these reasons. Obviously enough, UMS and Mr Ayoub had an interest in changes to the arrangements between UMS and Shane and Caleb Evans but Mr Zibara disclosed none of this to Mr Ayoub. 178 The new UMS contract with Michael Cheer was put in place as early as 31 July 2017. 179 The new UMS contract with Lance Bagon was entered into on 6 September 2017. However, the email from Mr Zibara attaching the new UMS contract replacing the earlier UMS agreement of 19 June 2017 was dated 17 July 2017. Initially, the new contract was to end essentially on the same date as the earlier UMS contract. The end date of the earlier contract was 16 June 2022 and the end date recited in the email of 17 July 2017 was 21 June 2022. The new UMS contract recites an end date of 5 September 2022. No explanation of the need for a new contract is set out in the email. 180 The new UMS contract with Hudson Young is dated 11 September 2017. The email attaching the new contract with instructions about signing is dated 6 September 2017 and the explanation in the email of the need for a new contract was said to be that since Hudson Young was now over 18, it was "preferable" that a new management agreement be signed. It would, of course, contain the "break clause" should Mr Zibara leave UMS. None of this was disclosed to Mr Ayoub. 181 The new contract with Jayden Tanner was signed on 28 September 2017. It was signed on the same day that Jayden Tanner signed a Playing Contract with the Cronulla Sharks. Jayden Tanner says that he did not know that the new contract contained the break clause. So far as Mr Angeli is concerned, in relation to Jayden Tanner, Mr Angeli told him in an email in early December 2017 that Mr Zibara had resigned from UMS "and so we're leaving". He also said that Mr Zibara "was still going to manage" and "that's why we-signed you so you could get out early", and that being so, Mr Angeli said that Mr Zibara and he would "let you know what to do". 182 On 5 October 2017, Mr Zibara had the conversation described at [47] of these reasons with Mr Massey. Thereafter, new UMS contracts were signed with existing UMS contracted players, on 5 October, two on 6 October, 18 October, 23 October, 27 October, and two on 28 October, 2017. Three contracts were signed in November 2017: see [174] of these reasons. Those contracts signed in October included new UMS contracts with Volkan Er, Phoenix Crossland and Elvino Maroulis. 183 As to Phoenix Crossland, his new contract provided for a significant extension of the term by a further two years and eight months. I accept that it would have been inconsistent with the spirit and policy of the new NRL approach to players contracting with an agent, to have simply extended the earlier contract. However, UMS and Mr Ayoub had a significant interest in the existing contractual arrangement with Phoenix Crossland. Mr Zibara ought to have disclosed to Mr Ayoub that what was contemplated was an extension of the contract which involved bringing the existing contract to an end and entering into a new UMS contract. Mr Ayoub, upon proper disclosure of that matter, might have elected not to extend the Crossland contract but rather rely upon the existing contract and let it run its course, as he had indicated earlier as his position generally. 184 As to Illy Tohi and Ben Tohi, Illy Tohi recalls a conversation with Mr Zibara in November to the effect that he was looking at setting up his own company and taking Ben with him: see the discussion at [97]-[100]. 185 On 13 March 2018, Mr Zibara made the remark to Mr Massey the subject of the observations I have already made at [67]-[73] of these reasons. 186 Having regard to all of these matters, I am willing to draw an inference that from about July 2017 Mr Zibara had in mind the possibility that he might leave UMS; that the possibility of such an event arose because of the opportunity available to him to readily retain his relationship with a player should he leave UMS if such a player could call on clause 6(e) in a contract with UMS; and that the possibility that he might leave UMS (provided players with whom he had a relationship were able to do so in reliance on a contract containing clause 6(e)) was a real or significant possibility. 187 I am satisfied that from July 2017 Mr Zibara found himself in a position where his personal interest in putting players in a position where they could quickly leave UMS and follow him should he leave UMS, by causing new UMS contracts to be entered into containing clause 6(e), came into conflict with his duty of loyalty to UMS. I am satisfied that Mr Zibara preferred his personal interest in respect of the 16 players described at [174] of these reasons to that of the duty of loyalty he owed to UMS. Those contracts include the new UMS contracts with Volkan Er, Phoenix Crossland and Lance Bagon which were subsequently terminated in reliance upon clause 6(e) by the players leading to contracts being entered into between those players and Genesis. As to Illy Tohi and Ben Tohi, Mr Zibara sought to bring into existence a new UMS contract with them. In doing so, he was preferring his self-interest to that of his duty of loyalty to UMS. In the case of Mosese Pope, the expression of preferring his personal interest to that of his duty of loyalty to UMS is to be found in causing Pope to be released from his UMS contract on 27 October 2017. He also preferred his personal interest to that of his duty of loyalty to UMS in causing Ben Tohi to be released from his UMS contract on 7 December 2017. When all of these events occurred as I have just described, both Mr Zibara and Mr Angeli were persons who owed a duty of loyalty to UMS which is described as a duty of absolute and disinterested loyalty to UMS imposed by proscriptive obligations in which equity regards the conduct in question as unconscionable thus attracting equitable remedies. I am satisfied that when Mr Zibara engaged in the conduct, he did so with full knowledge that in bringing the new contracts into existence, he was undermining the existing contractual arrangement between the players and UMS. 188 In Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd [2018] HCA 43; (2018) 360 ALR 1 ("Foresters"), Gageler J described the equitable principles, in this way: [67] The fiduciary duty that an employee has to an employer within the scope of the relationship of employment, no less than the fiduciary duty that any other person in a fiduciary position has to any other person to whom the fiduciary duty is owed within the scope of the venture or undertaking in respect of which the person in the fiduciary position has undertaken or assumed a responsibility to act in the exclusive interests of that other person, is a duty of "absolute and disinterested loyalty". That duty of loyalty is imposed in equity by means of two overlapping "proscriptive obligations". Each proscriptive obligation, or "theme," is "descriptive of circumstances in which equity will regard conduct of a particular kind as unconscionable and consequently attracting equitable remedies". [68] "The first" often referred to as the "conflict rule", "is that which appropriates for the benefit of the person to whom the fiduciary duty is owed any benefit or gain obtained or received by the fiduciary in circumstances where there existed a conflict of personal interest and fiduciary duty or a significant possibility of such conflict: the objective is to preclude the fiduciary from being swayed by considerations of personal interest". The unconscionability which attracts equitable remedies in circumstances where the conflict rule alone is invoked lies not so much in receipt by the fiduciary of the benefit or gain (over which the fiduciary need not have control) as in retention by the fiduciary of the benefit or gain which in conscience ought to be disgorged to the principal. [69] "The second", often referred to as the "profit rule", "is that which requires the fiduciary to account for any benefit or gain obtained or received by reason of or by use of [the] fiduciary position or of opportunity or knowledge resulting from it: the objective is to preclude the fiduciary from actually misusing [the fiduciary's] position for [the fiduciary's] personal advantage." The unconscionability which attracts equitable remedies in such circumstances lies in pursuit by the fiduciary of self-interest, or, more precisely, in pursuit of an interest other than the exclusive interest of the principal. [70] Consistently with the objective of imposing each obligation, in neither case does the benefit or gain to the fiduciary need to be at the expense of the principal, though it may be. And in neither case does the fiduciary need to act dishonestly or fraudulently, or otherwise than in good faith, though again the fiduciary may do so. Where a fiduciary does act dishonestly and fraudulently, however, the dishonest and fraudulent character of the breach of fiduciary duty is not without consequence for the intensity of the equitable remedies available against the defaulting fiduciary. More important for present purposes is that the dishonest and fraudulent character of the conduct of the fiduciary gives rise to the potential for similar remedies to be available in equity against another person who might knowingly participate in the fiduciary's breach. [71] Knowing participation by a non-fiduciary in a dishonest and fraudulent breach of fiduciary duty is conduct which is regarded in equity as itself unconscionable and as attracting equitable remedies against the knowing participant of the same kind as those available against the errant fiduciary. Knowing participation in a dishonest and fraudulent breach of fiduciary duty includes knowingly assisting the fiduciary in the execution of a "dishonest and fraudulent design" on the part of the fiduciary to engage in the conduct that is in breach of fiduciary duty. The requisite element of dishonesty and fraud on the part of the fiduciary is met where the conduct which constitutes the breach transgresses ordinary standards of honest behaviour. Correspondingly, the requisite element of knowledge on the part of the participant is met where the participant has knowledge of circumstances which would indicate the fact of the dishonesty on the part of the fiduciary to an honest and reasonable person. [citations omitted] 189 These principles discussed by Gageler J in Foresters address matters of general principle about the nature of the duty of an employee within the scope of the relationship of employment which are directly applicable to the circumstances of Mr Zibara's employment and that of Mr Angeli. Gageler J also discusses the duty implications relevant to the circumstances before the Court in Foresters where the contention was that Foresters, in taking up a proposal put to it by two employees, Mr Woff and Mr Corby, of the claimants (the claimants being Lifeplan Australia Friendly Society Ltd ("Lifeplan") and its wholly owned subsidiary, Funeral Plan Management Pty Ltd ("FPM"), knowingly took advantage of Messrs Woff and Corby's dishonest and fraudulent design which involved breaches of fiduciary duty, in order to enhance its business by appropriating the business connections of Lifeplan and FPM. The further question addressed by Gageler J was the question of the basis upon which knowing participation by a non-fiduciary in a dishonest and fraudulent breach of fiduciary duty gives rise to unconscionability and the equitable remedies attracted by such conduct. In this case both Mr Zibara and Mr Angeli owed fiduciary obligations to UMS. The vehicle they created for the purpose of deriving the gain or benefit arising out of the breaches of fiduciary duty was wholly owned by them. In equity, Genesis is regarded as Mr Zibara and Mr Angeli. 190 In Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544, the Court (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ) observed at 557 that a fiduciary must account for a profit or benefit if it was obtained either when there was a conflict or possible conflict between his or her fiduciary duty and his or her personal interest or when the profit or benefit was obtained by reason of his or her fiduciary position or by reason of his or her taking advantage of opportunity or knowledge derived from his or her fiduciary position. The Court went on to make this observation at 557-558: The stringent rule that a fiduciary cannot profit from his trust is said to have two purposes: (1) that the fiduciary must account for what has been acquired at the expense of the trust, and (2) to ensure that fiduciaries generally conduct themselves "at a level higher than that trodden by the crowd". The objectives which the rule seeks to achieve are to preclude the fiduciary from being swayed by considerations of personal interest and from accordingly misusing the fiduciary position for personal advantage. [citations omitted] 191 As to Mr Angeli, I make these findings. Mr Angeli was also an employee of UMS who owed duties of absolute and disinterested loyalty to UMS. Mr Angeli assisted Mr Zibara in putting in place the new UMS contracts and in giving effect to the release of Mosese Pope and Ben Tohi. Mr Angeli knew on or about 21 June 2017 by reason of the meeting and the discussion described at [46] of these reasons that Mr Ayoub had taken the position that the contracts with his players were to run their course and that there was no need to re-sign the existing players. Moreover, Mr Angeli was the author of the emails to Ben Tohi in which he investigated whether Ben Tohi would be willing to enter into a new management contract enabling him to leave UMS should he and Mr Zibara leave UMS. He told Ben Tohi that there was nothing wrong with Tohi signing a new UMS contract enabling Tohi to leave UMS should the clause 6(e) events occur. There was certainly no suggestion that there would need to be a discussion with Mr Ayoub about that matter. Mr Angeli was also responsible for the exchanges with Benjamin Mallia in which he explained that Mallia would be able to leave UMS because "we put you on the new MA". Mr Angeli is also a person who told Mallia in a Facebook message on 19 January 2018 that if Sam Ayoub or anyone else asks if Mallia has spoken with Angeli, Mallia ought to say "nah". In Facebook exchanges with Jayden Tanner, Mr Angeli encouraged him to tell any inquirer untruths: see [138]. I am satisfied that Mr Angeli knew and appreciated that as each new UMS contract was put in place, as he assisted Mr Zibara in doing so, he was assisting Mr Zibara to undermine the existing contractual arrangements between UMS and the relevant players and that in doing so he was being disloyal to UMS and Mr Ayoub. In doing so, he was assisting Mr Zibara in the breaches of Mr Zibara's fiduciary duty and he did so with knowledge that Mr Ayoub did not want to re-sign any of the players whose contracts had time to run. I am satisfied that when Mr Angeli did these things he was transgressing ordinary standards of honest behaviour in his dealings with Mr Ayoub and UMS. I am also satisfied that Mr Angeli behaved in like terms concerning the release of Pope and Tohi from their UMS contracts. 192 I am satisfied that but for the breach of fiduciary duty by Mr Zibara, the players who terminated their new UMS contracts in reliance on clause 6(e) would not have had the benefit of such a contract and would not have been able to bring the existing UMS contract to an end. I am also satisfied that but for the breach of fiduciary duty by Mr Zibara, neither Mosese Pope nor Ben Tohi would have been released from their existing UMS contract by UMS. I am satisfied that but for the breach of fiduciary duty by Mr Zibara, the contracts between Genesis and Crossland, Bagon, Er and Pope of 21 October 2018, 28 November 2018, 30 November 2018 and 20 December 2018, respectively, conferring a benefit or gain upon Genesis, would not have been entered into. I am satisfied that Mr Angeli was knowingly concerned in these breaches by Mr Zibara. Genesis, as mentioned earlier, is a company wholly owned by Mr Zibara and Mr Angeli which for present purposes is the vehicle by which they have chosen to derive a benefit or gain arising out of entering into the new UMS contracts with players who were then able to be freed up from their existing contracts with UMS through the vehicle of clause 6(e) of the new contract, or otherwise released from UMS contracts. 193 As to the equitable remedy of an account, Gageler J said this at [75] in Foresters: [75] The equitable remedy of account is a personal order. The order operates to require that a defendant pay to a plaintiff the monetary value of a benefit or gain to the defendant. Although commonly referred to as an "account of profits", there is no reason why a benefit or gain to be made the subject of an account must answer the description of a "profit" in conventional accounting terms. Nor is there any reason why that benefit or gain must answer the description of "property" or must have sufficient certainty as to be capable of forming the subject matter of a trust. The benefit or gain can be expectant or contingent. Indeed, it is commonplace that a benefit or gain the subject of any account might encompass an ongoing business. And it is commonplace that the benefit or gain to be made the subject of an order to account might extend to the whole of the ongoing business or be limited to a part of the business identified by reference to both a specified scope or commercial activities and a specified period of commercial activities which need not be confined to a past period but may be a period which extends into the future. 194 In Foresters, in the particular circumstances of that case, a proposition was put to the Court that although a liability to account for profits would include profits that have been made, the liability to account did not extend to an assessment of anticipated future profits rather than actual profits and therefore anticipated future profits were irrecoverable. In that context, Kiefel CJ, Keane and Edelman JJ said this as a matter of principle at [24]: [24]. As to principle, to confine the account in this way would sever the process of accounting for, and disgorgement of, profit from its rationale in the principle of ensuring that the wrongdoer should not be permitted to gain from the wrongdoing. As to authority, the liability to account for a profit was described in Warman as concerned with "a profit or benefit" in language divorced from a confined conception of benefit as accrued profit in narrow accounting terms. In any event, it is artificial to require disgorgement of realised profits but not to allow unrealised profits that will be realised upon performance of the relevant contract where there is no reason to expect that performance will not occur. As Millett LJ said in Potton Ltd v Yorkclose Ltd: "Unrealised profits are actual profits. Profits are made when they are earned, recognised when they are brought into accounts, and realised when they accrue, that is to say when a legal right arises to receive payment. As a matter of ordinary accounting practice, profits are seldom recognised before they accrue, but this is a matter of prudence only; in a proper case they may be recognised before they accrue. Whether or not recognised, however, they are not profits which could or should have been made or which are merely capable of being made, but profits which have actually been made though not yet realised." 195 In this case, the respondents say that the applicant has failed to prove that the respondents have derived any profit or gain at all and in the absence of any proof of profit or gain, the applicant is simply not entitled to the remedy of an account. In other words, the liability of the respondents to an order for an account has not been made out. 196 In this case causation has been made out: [192] of these reasons. As to the benefit or gain, Genesis entered into a management contract with Phoenix Crossland which commenced on 29 October 2018 and concludes on 29 October 2021. The term of the contract covers the 2019, 2020 and 2021 playing seasons. The "NRL Club" recorded in the contract for Crossland is the Newcastle Knights. By clause 5(b), if on or subsequent to 29 October 2018 but before 29 October 2021, Genesis successfully negotiates and secures for the player "an NRL Playing Contract, Playing Agreement or Non-Playing Agreement", (as those terms are defined at clause 20 of the management contract) then the player shall pay to Genesis the amounts contemplated by clause 5(b)(i). That clause contemplates a sum equal to a nominated percentage of all moneys that become payable to the player pursuant to any of those agreements. In addition, the player shall pay to Genesis a nominated percentage of any non-playing agreement for sponsorships, endorsements and speaking engagements but excluding, in the case of any NRL Playing Contract or Playing Agreement particular classes of benefits, assistance, payments or expenses. An "NRL Playing Contract" means a contract in the form approved by the NRL between an "NRL Club" on the one hand and a player on the other hand by which that player agrees to play the "Game" of rugby league football for that NRL Club in the National Rugby League Competition arranged and administered by the NRL. A "Playing Agreement" means any contract, agreement or arrangement (other than an NRL Playing Contract) pursuant to which a player agrees to play the game of rugby league football in a competition other than the NRL Competition. A "Non-Playing Agreement" means any sponsorship, promotional or other contract, agreement or arrangement by which a player agrees for reward to permit the use of his "Player Property" or to perform other services not requiring the playing of the "Game". The term "Player Property" means the name, photograph, likeness, reputation and identity of the player. 197 Clause 5(c) provides that for the purposes of clause 5(b)(i), the sums payable to Genesis by the player shall not fall due for payment until the player has actually received payment under his NRL Playing Contract, Playing Agreement or Non-Playing Agreement as follows: in the case of any NRL Playing Contract or Playing Agreement, for payments in the nature of sign-on fees or playing fees, the player is obliged to pay the relevant percentage of those payments once he receives them; in the case of any NRL Playing Contract or Playing Agreement, for payments in the nature of match fees or any other graduated payments, the player is obliged to pay the relevant percentage of those payments as and when he receives them; in the case of any Non-Playing Agreement, the player is not obliged to pay the relevant percentage until the player has actually received payment of all moneys that are payable to him pursuant to the Non-Playing Agreement. 198 Clause 5(f) provides that, to remove any doubt, in any case to which clause 5(b)(i) applies, the player's obligation to pay continues after the expiry date with respect to any moneys payable to him pursuant to any NRL Playing Contract, Playing Agreement or Non-Playing Agreement secured for the player by Genesis during the term; if the contract is terminated pursuant to clause 6, any obligation on the part of the player to pay moneys arising under clause 5(b)(i) prior to termination continues after termination concerning any NRL Playing Contract, Playing Agreement or Non-Playing Agreement secured for the player by Genesis during the term of the contract. Clause 5(f)(iii) provides that if the player becomes permanently disabled or the agreement is terminated by reason of some physical disability on the part of the player, the remuneration payable to Genesis is to be limited to fees calculated by reference to the total payment made to the player including any termination payment. 199 The contract made between Genesis and Volkan Er dated 30 November 2018 provides for a term commencing on that date and ending on 30 November 2021. It too spans the 2019, 2020 and 2021 playing seasons. The NRL Club recited in the contract is the "South Sydney Rabbitohs". The remuneration clause 5 with associated definitions is in the same terms as described above. It is not necessary to identify in these reasons the relevant percentages for any of the players. 200 The contract made between Genesis and Lance Bagon dated 28 November 2018 provides for a term commencing on 28 November 2018 and ending on 28 November 2021. It too spans the 2019, 2020 and 2021 playing seasons. The NRL Club recited in the contract is the "Brisbane Broncos". The remuneration clause 5 with associated definitions is in the same terms as described above. 201 The contract made between Genesis and Mosese Pope dated 20 November 2018 is slightly different to the other three contracts as it contains a Schedule cross-referenced to particular clauses. The term of the contract commenced on 20 December 2018 and ends on 20 December 2021. It too spans the 2019, 2020 and 2021 playing seasons. The remuneration clause is clause 6. Clause 6(a) provides that the player shall be obliged to pay to Genesis fees in consideration for the provision of the services agreed to be undertaken by Genesis for the player (as described in Schedule 2 to the Agreement), in the amounts set out in Schedule 2 to the Agreement. Clause 4(a) of Schedule 2 provides that if, during the term, Genesis negotiates and secures for the player an NRL Player Contract or Playing Agreement (as defined), then the player shall pay to Genesis a certain percentage of the "Playing Fees" (a term defined to mean the payment set out in Schedule 1 of an NRL Player Contract) received by the player pursuant to his NRL Player Contract and/or a certain percentage of the playing fees received by the player pursuant to his Playing Agreement (as defined) for the term of those contracts. Clause 4(b) provides that in relation to any match fees negotiated by Genesis "into the Player's NRL Player Contract or Playing Agreement", Genesis will be entitled to receive a certain percentage of all match fees paid to the player under his NRL Player Contract or Playing Agreement (subject to the exclusion of certain mandated match fees). Clause 4(d) provides that if during the term Genesis negotiates and secures for the player a Non-Playing Agreement (as defined) then the player shall pay to Genesis as a fee a certain percentage of all moneys received by the player pursuant to the Non-Playing Agreement. 202 In the case of Mosese Pope, the player and the "Canterbury Bankstown Bulldogs" were parties to an NSWRL Playing Contract dated 9 September 2016 and the parties agreed that the contract payment would be varied such that the Club agreed to increase the playing fee for the 2019 season by a certain amount such that the 2019 playing fee was a particular amount. Accordingly, Genesis was entitled to a certain fee pursuant to clause 6 and clause 4 of Schedule 2. The variation to the NSWRL Playing Contract is dated 20 March 2019. 203 Genesis is in the market for the provision of management services. It thus engages in commercial rivalry for the provision of those services to players. It depends upon the derivation of revenue in the form of the commissions already described. I am satisfied that the applicant has demonstrated that the respondents either by Genesis directly, or indirectly as individuals through their shareholding in Genesis, have derived a benefit or a gain by reason of the company's entitlement to remuneration under each of the four contracts described at [192] of these reasons brought into existence as a result of the breaches of fiduciary duty. The benefit or gain derived in this way will be available to Genesis and the individual respondents for the life of each of those contracts. 204 However, it needs to be remembered that the provision of management services to a player gives rise to a threshold of engagement between the agent and the player such that it is, according to Mr Ayoub's evidence in his second affidavit sworn 25 September 2019, not uncommon for players who sign a management agreement, at least in Mr Ayoub's experience in managing players, "to stay with me for a substantial period of time - and more than 80% of career term players that I sign stay with me for the duration of their professional career": para 126. 205 Mr Ayoub also says that it is not unusual for UMS to not only act for a player but also to act for that player's son thus establishing a relationship and connection with what Mr Ayoub describes as the "next generation". Mr Ayoub gives these brief examples: UMS managed Adrian Lam for the whole of his professional career as a player in Sydney and in England (Wigan) from 1994 to 2004 and still manages him as a coach at Wigan; Mr Ayoub is godfather to Adrian's son Lachlan Lam and Mr Ayoub manages him. Lachlan Lam in the 2019 season played for the Roosters; UMS managed Julian O'Neill from the mid-1990's for the rest of his professional career including his period in the English competition; Mr Ayoub is godfather to Julian's son Ethan O'Neill and he manages him. Ethan O'Neill is a contracted player for the Roosters. 206 On the basis of this evidence, it seems to be a feature of the provision of management services to rugby league players that once a relationship is established with a managing agent, it tends overwhelmingly to endure. To the extent that there is any doubt about that matter, it is sufficient to recognise that the NRL itself recognised on 20 June 2017 that as from 19 July 2017 future contracts would need to contain a break clause that enabled a player to end an existing management contract on seven days' notice and, in effect, follow the departing employee to that person's new place where he or she would continue to provide management services. It follows that once Mr Zibara and Mr Angeli have secured a management contract with a player, there is a real chance that the management contract will be renewed upon the expiration of the term. 207 Accordingly, the remedy of an account should not only take into account any benefit or gain derived during the period of the management contracts as between Genesis and each player according to their term but also any benefit or gain arising out of a renewal of a management contract with those players. That follows because the management contract entered into with Crossland, Bagon, Er and Pope in 2018 are the expression of the gain or benefit derived by reason of the breaches of fiduciary duty owed by Mr Zibara and Mr Angeli to UMS and the enduring benefit or gain is the benefit of sustaining the relationship consolidated by reason of the breaches of fiduciary duty and the gain is the continuing right to receive remuneration or fees based upon the percentaged calculations contained in subsequent agreements which have come to pass because of the benefit. 208 The respondents will be ordered to account to the applicant on both bases. Directions will be made as to the filing and serving of submissions on costs. The applicant will be directed to submit a proposed form of order consistent with these reasons. I certify that the preceding two hundred and eight (208) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.
Ultra Management (Sports) Pty Ltd
Zibara
(2018) 360 ALR 1
(1984) 154 CLR 178
(1995) 182 CLR 544