Webb v Confederation of Australian Motor Sport Limited

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST

30061/02 Jonathon Stephen Webb v Confederation of Australian Motor Sport Limited

JUDGMENT 1 HIS HONOUR: The plaintiff, Jonathon Stephen Webb, is a racing car driver and a member of the Australian Racing Drivers' Club Limited, which is an affiliated club of the Confederation of Australian Motor Sport Limited (CAMS). 2 His membership of the Australian Racing Drivers Club Limited constitutes him a member of CAMS pursuant to clause 13(b) of the CAMS Constitution and he also holds a CAMS licence. By clause 14 of such Constitution all members acknowledge and agree that the Constitution constitutes a contract between each of them and CAMS, that they are bound by the Constitution and the National Competition Rules (NCR) and that they will comply with and observe the Constitution, the NCR and any Regulations, determination or resolution made or passed by the Board of CAMS, and that they are subject to the jurisdiction of CAMS. 3 Rule 47(iii) of the NCR provides that all licence holders are deemed to know the NCR and by applying for and being granted a licence by CAMS acknowledge that they must observe the NCR and be bound exclusively thereby. The driver/entrant licence issued to the plaintiff and signed by him also indicates agreement by him to abide by the NCR and the Constitution of CAMS. 4 NCR 57 provides, inter alia, that every person organising a competition or taking part therein, applying for a licence from CAMS, entering a competition or being a member of any club affiliated or associated with CAMS is deemed to have submitted themselves without reserve to the consequences resulting from the Rules and acknowledges and agrees the clause may be pleaded as an absolute bar to proceedings, suit or action against CAMS and "(iv) agrees that they will not become a party to any suit at law or in equity, against CAMS, its officials or any other person subject to these National Competition Rules until all remedies allowed by the Memorandum and Articles and the NCR have been exhausted, save with the written consent of CAMS." 5 NCR 183 sets out a number of matters which constitute a breach of the Rules, including the following: "(x) action by a competitor or a driver at or arising from a meeting, whether such action be deliberate or due to negligence or failure to exercise proper care and consideration, which action, having regard to all the circumstances, causes or is reasonably likely to cause, damage to other automobiles or property or injury to any other person, whether such automobiles, property or person are involved as participants or not." 6 NCR 212 governs Stewards' hearings while NCR 218 provides that a person affected by such a decision shall have a right of appeal which shall be heard and determined by a National Appeal Tribunal (NAT) appointed by CAMS and that any person aggrieved by a decision of an appeal tribunal shall have a right to seek leave to appeal to the Australian Motor Sport Appeal Court (AMSAC) in accordance with Appendix G to the NCR. 7 NCR 221 contains provisions to ensure the impartiality of any appeal tribunal and the available grounds of appeal are specified in NCR 225, namely · that the decision was against the weight of evidence, · that the decision was contrary to law, · that there was a denial of natural justice, · that the decision was ultra vires, · that the penalty applied was inadequate, and · that the penalty applied was excessive. 8 NCR 230 provides that in the case of a hearing by AMSAC all parties concerned and CAMS shall have the right to representation by advocates, and that evidence may be given on oath or affirmation unless the Court decides otherwise. Pursuant to NCR 231 and so far as is relevant, the courts of appeal and any tribunal appointed by CAMS may decide that a penalty appealed against may be waived, mitigated, increased or a fresh penalty imposed, but may not order any competition to be re-run. 9 Section 5 is headed 'Tribunals and Judicial Procedures' and contains general provisions relating to the constitution and conduct of tribunals (including appeal tribunals), witnesses, the nature of evidence, and the degree of proof required. 10 Clause 4(ii) of Section 5 deals with the procedure to be followed in appeal tribunals and provides for the calling of evidence both by the appellant and the respondent. Although the paragraph provides that the hearing must be restricted to the grounds of appeal which are stated in the appeal proper (see NCR 225) and to the evidence presented in the earlier hearing, it also provides: "Even should the Court or Tribunal decide to proceed by way of partial or complete rehearing, the appellant shall open; a rehearing in such circumstances is not to be taken as a proceeding ab initio; it is merely a convenient way of clarifying the issue and evidence." 11 Appendix G deals with AMSAC. Its functions include to act as a final court of appeal for Australian nationals after the earlier avenues of a charge or protest and an appeal to a NAT have been exhausted (cl 7). In such cases the right of appeal to AMSAC is dependant upon leave to appeal being granted by the Chairman of that Court in his absolute discretion, with no right of appeal against his decision in respect of granting or refusing such leave (cl 8(ii)). All parties have the right to be represented by an advocate (cl 13), and the powers of the Court include directing that evidence taken before it be given on oath or affirmation and making such order to amend the results of a competition as may seem to it, in the circumstances, desirable and fitting (cl 14). 12 A round of the Australian Porsche Cup, was held on 28-30 June 2002 at Barbagallo Raceway, Wanneroo, Western Australia. The plaintiff signed an entry form, his entry was accepted and he took part in the competition. 13 Following race 6 which he won, he was charged by the Stewards with a breach of NCR 183(x). The hearing before the Stewards took place immediately, purportedly pursuant to NCR 212. The plaintiff denied the charge but the Stewards found him guilty and imposed a penalty excluding him from the results of the race i.e. disqualification. The points awarded to the plaintiff for winning race 6 were expunged and his licence was endorsed with details of the finding and penalty (pursuant to NCR 203). The effect of the process was to deprive the plaintiff of overall success in the national championship with possible financial ramifications for him and the racing team associated with him. 14 The plaintiff appealed to NAT and on 11 July 2002 the appeal to that Tribunal was heard and dismissed. During the course of the Tribunal hearing, evidence was given by Mr Newton who is the race engineer for the team of which the plaintiff is a member. 15 The plaintiff then, by Summons filed 24 July 2002, amended 22 October 2002, sought declarations setting aside the hearings and determinations of the Stewards and of NAT and orders that the results of the relevant race be amended by recording the plaintiff as the winner thereof and cancelling the endorsement made on his competition licence. 16 The defendant, by Notice of Motion filed 15 October seeks a stay of proceedings on the Summons until such time as the plaintiff has exhausted all his rights of appeal to AMSAC. 17 One of the objects of our legal system is to enforce the performance of contracts which people have freely entered into, not to encourage them to break such contracts, and it appears to be now well established that where a contract provides for a dispute to be resolved in a particular way or in a particular tribunal, the Court will give effect to such provision, unless there is good reason for not doing so. This is most commonly done by granting a stay of proceedings, or an injunction to restrain the pending proceedings. As was stated by MacKinnon LJ in Racecourse Betting Control Board v Secretary for Air [1944] Ch 114 at 126: "… the court makes people abide by their contracts, and, therefore, will restrain a plaintiff from bringing an action which he is doing in breach of his agreement with the defendant that any dispute between them will be otherwise determined." 18 This power to stay proceedings has usually been exercised in cases where the agreement has provided for resolution of disputes in another jurisdiction: The Eleftheria [1970] P 94, FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association (1997) 41 NSWLR 559, Cattle KC Park Safe (SA) Pty Limited v Adelaide Terrace Investments Pty Limited (unreported - Federal Court - Finkelstein J - 15 May 1998), agreements to mediate: Hooper Bailie Associated Limited v Natcon Group Pty Limited (1992) 28 NSWLR 194 at 211, Aiton Australia Pty Limited v Transfield Pty Limited (1999) 153 FLR 236 at 244 (stay refused on discretionary grounds), or an agreement to submit to arbitration: Qantas Airways Ltd v Dillingham Corporation (1985) 4 NSWLR 113, Joy Manufacturing Co v AE Goodwin Ltd [1970] 1 NSWR 57. 19 Another relevant principle is that the courts are reluctant to interfere, save on a strictly limited basis, at the instance of parties affected by decisions of domestic tribunals to which there has been consensual submission, particularly sporting bodies: Australian Football League v Carlton Football Club Limited (1998) 2 VR 546 for the reasons given by Tadgell JA at 549 as follows: "For one thing, where the parties have agreed to have their disputes decided by domestic tribunals designated for the purpose, the courts have been in the habit of respecting the agreement or, one might say, not countenancing a breach of it by one party wishing to desert it and to resort to the civil courts for resolution of a dispute that the tribunal was designed to decide. For another thing, the courts have been prepared to recognise that there are some kinds of dispute that are much better decided by non-lawyers or people who have a special knowledge of or expertise in the matters giving rise to the dispute than a lawyer is likely to have. Again, the courts have been willing to understand that not every aspect of community life is conducted under the auspices of the State, that it is right that this should be so and that, sometimes, it is appropriate that State-appointed judges stay outside disputes of certain kinds which a private or domestic tribunal has been appointed to decide."

See also Calvin v Carr [1979] 1 NSWLR 1 at 15, Zusman v Royal Western Australian Bowling Association (Inc) [1999] WASC 86, Re Maggacis [1994] 1 Qd R 59 at 67, Smith v South Australian Hockey Association Inc (1988) 48 SASR 263 at 264. This is so particularly where any internal processes have not been exhausted, Croatia Sydney Soccer Football Club Limited v Soccer Australia Ltd (unreported - Einstein J - 23 September 1997) at p 46. 20 In White v Kuzych [1951] AC 585 a member of a trade union who had agreed to be bound by the Rules thereof, one of which was that he would not become a party to any legal proceedings against the union until he had exhausted all remedies allowed to him by such Rules, was expelled from the union and commenced proceedings to set the expulsion aside, but the Privy Council held he was not entitled to maintain the proceedings because he had not exhausted his rights of appeal under the union Rules. In delivering the advice of the Board, Viscount Simon said at 601: "Their Lordships are therefore constrained to hold that the conclusion reached by the general committee was subject to appeal. And they must respectfully repudiate both the correctness and the relevance of the view that it would have been useless for the respondent to appeal because the federation would be sure to decide against him. They see no reason whey the federation, if called on to deal with the appeal, should be assumed to be incapable of giving its honest attention to a complaint of unfairness or of undue severity, and of endeavouring to arrive at the right final decision. At any rate, this is the appeal which the respondent was bound by his contract to pursue before he could issue his writ. He has not done so, and on this ground their Lordships will humbly advise His Majesty that the appeal must be allowed." 21 In a number of cases relied on by the plaintiff, although there was provision in the Rules for an appeal process, there was no requirement that such internal appeal processes first be exhausted, e.g. Daly v Gallagher [1925] St R Qd 1, Lee v Showmen's Guild of Great Britain [1952] 2 QB 329, Bonsor v Musicians' Union [1954] 1 Ch 479, and they are distinguishable from the present case. 22 In Leigh v National Union of Railwaymen [1970] 1 Ch 326 at 334, Goff J said: "The first (proposition) is that even where there is an express provision in the rules that the plaintiff must first exhaust his domestic remedies, the Court is not absolutely bound by that because its jurisdiction cannot be ousted, but the plaintiff will have to show cause why it should interfere with the contractual position. This is consonant with the rule in the case of a submission to arbitration where the Court always has a discretion whether to stay an action but cause must be shown why it should not. The second proposition is largely converse of the first, namely that in the absence of such a provision the Court can readily, or at all events more readily, grant relief without prior recourse to the domestic remedies, but may require the plaintiff to resort first to those remedies." 23 It can therefore be seen that not only will the courts generally hold parties to agreements between them to resolve their disputes outside the court system unless there is good reason to do otherwise, but it is also reluctant to interfere in the proceedings of domestic tribunals, particularly sporting tribunals, where there are persons with special expertise available to determine the dispute, subject once again to the overriding proviso that the courts will interfere if it is necessary to do justice between the parties. 24 In the present case, Rules by which the plaintiff has agreed to be bound do not seek to oust the jurisdiction of the Court but merely require, as a condition precedent to such proceedings, that the party seeking relief first exhausts his or her remedies in the domestic tribunals provided. 25 Notwithstanding these considerations, the plaintiff contends that the stay of proceedings should be refused because the remedies available in AMSAC are futile and illusory, and as the plaintiff must ultimately succeed, he should be permitted to pursue his remedies in the Court forthwith. 26 He submits that the charge as laid by the Stewards was invalid and ineffective because it failed to identify with precision the nature of the charge, was apparently amended without notice, and was in any event a charge not known under the NCR. He also submits that at the hearing before the Stewards he was denied natural justice because he was not given adequate notice of the hearing, was denied the opportunity to call witnesses he wished to call, and having determined guilt, the Stewards afforded him no opportunity to make submissions as to penalty. He claims he was also denied procedural fairness by the Stewards' failure to give reasons for their decision. 27 He further submits that the proceedings before NAT were vitiated by the continued invalidity of the charge itself and that he was denied procedural fairness by NAT in that the videotape of the subject competition race was shown in the hearing room before the hearing commenced (although it is not clear whether it is claimed that the members of NAT saw it), that the reasons of NAT for its decision were inadequate, and that such reasons as were given were perverse. For reasons which appear hereunder, it is not appropriate that I express any views on the validity or otherwise of these submissions. 28 Finally he submits that an appeal to AMSAC would be futile and illusory for the following reasons: 1. Any appeal is subject to leave to appeal, which is in the absolute discretion of the Chairman of AMSAC. 2. It is confined to the grounds specified in NCR 225: Appendix G, cl 10 and the form at p 15.18 of the manual (Ex. 1). 3. Accordingly, if the Chairman gives leave, AMSAC must proceed to determine the issues before it on the evidence taken in the tribunal below, yet there is no transcript of the evidence either before the Stewards or NAT. 4. The deficiencies before the Stewards cannot be overcome by remitting the matter back to them as AMSAC can only remit matters back to the Stewards where there was a hearing as to a protest (and here there was not) as distinct from a charge: Appendix G, cl 7(i)(a) and (vii), and 5. The deficiencies before NAT cannot be overcome by remitting the matter back to that body because the proceedings before it were confined to the narrow legal grounds set out in NCR 225 upon the evidence taken before the Stewards as to which there is no transcript. 29 I have referred above to some of the provisions of Appendix G dealing with AMSAC, and I was informed from the Bar Table that most, if not all, of the current members of AMSAC are qualified and/or practising lawyers. In the event of any error of law in their determination of the appeal, the plaintiff will still have the right to approach the Court: Lee v Showmen's Guild of Great Britain, supra at 342 per Denning LJ. 30 One of the plaintiff's main complaints seems to be that the NCR prevent any fresh evidence being led in NAT or AMSAC; and that he is restricted to the evidence led before the Stewards. However, there is a degree of ambiguity in the various Rules and other provisions, and the fact is that in NAT, the plaintiff was allowed to adduce fresh evidence, namely that of Mr Newton, apparently without any argument or dispute, suggesting that it may be the general practice in such tribunals. If the plaintiff has been allowed to adduce fresh evidence before NAT, and have it taken into consideration, I fail to see how he can then complain that his right of appeal to NAT was illusory and futile because that body had no power to receive fresh evidence. It is not known at this stage whether he will be permitted to adduce fresh evidence (if he wishes) in AMSAC. 31 In my view AMSAC has ample power to deal with all of the objections and grounds of complaint sought to be relied on by the plaintiff and is competent to do so. In particular it is open to AMSAC to decide on the validity of the charge as framed, whether the plaintiff was denied procedural fairness at the Stewards' inquiry or on the appeal to NAT, and it appears that it has power to receive fresh evidence as to the merits of the matters complained of. 32 Even if it does not receive fresh evidence it has power to determine whether the decision was against the weight of evidence, and I assume for present purposes that in this regard it must take into account the evidence given by Mr Newton before NAT. In this regard I was informed from the Bar Table that although there is no transcript of the evidence before NAT there are notes of such evidence. 33 If AMSAC finds that there has been a breach of the Rules or of the law relating to domestic tribunals, or that on the evidence a breach of NCR 183(x) has not been made out, it may waive the penalty (NCR 231) and amend the results of the race (Appendix G, cl 13(xi)). Having regard to the nature of the appeal I consider that AMSAC would also have implied power to set aside the Stewards' finding and the endorsement on the applicant's licence. In these circumstances it cannot be said that the right of appeal to AMSAC is futile or illusory. 34 Another ground on which it was submitted that the right was futile or illusory was that any right of appeal was subject to leave to appeal being obtained from the Chairman in his absolute discretion. This creates no problem for the plaintiff because NCR 57 does not require the plaintiff to have an appeal heard by AMSAC before commencing any proceedings, but only that he first exhaust all remedies allowed by the Constitution and the NCR; so that if the plaintiff applied to the Chairman for leave to appeal and such leave was refused, the plaintiff would have exhausted all his remedies and there would no longer be any restrictions to him proceeding in the Court for relief. 35 There is another reason, in my view, why the stay should be granted. NCR 57 not only contains an agreement not to become a party to any proceedings against CAMS etc until all remedies under the Constitution and NCR of CAMS have been exhausted, but expressly provides that it may be pleaded as an absolute bar to proceedings against CAMS. Accordingly it would appear that if the stay were not granted the defendant would still be able to plead NCR 57 as a complete answer to the plaintiff's claim, no matter what defects in the proceedings of the Stewards or of NAT were established: cf White v Kuzych, above. 36 These proceedings brought by the plaintiff are based on his contractual rights as a member of an affiliate of CAMS. His only rights are those which arise under the Constitution and the NCR. His cause of action is therefore in contract, and AMSAC as the other party to the contract is entitled to rely on any other terms of the contract, one of which is NCR 57. 37 For these reasons I make the orders sought in paragraph 1 of the Notice of Motion and I order the plaintiff to pay the defendant's costs of the Motion. **********

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