Wickham and Others v Canberra District Rugby League Football Club Limited & Others [1998] ACTSC 95 (10 September 1998)

Last Updated: 13 October 1999

Wickham and Others v Canberra District Rugby League Football Club Limited & Others [1998] SCACT 95 ( 10 September 1998)

CATCHWORDS

TRADE PRACTICES - Trade Practices Act 1974 - claims to declarations that Competition Rules of Canberra District Junior Rugby League are unenforceable as restriction of competition under Act - whether clubs acquired players' services in a "market" - whether players' services supplied under contracts of service - onus on plaintiffs to prove services not so supplied - onus not discharged.

CONTRACT - whether Competition Rules unenforceable for restraint of trade at common law - restraint of trade admitted - nature and extent of trade restraint - onus on defendant to show restraint reasonable - restriction on capacity of players to transfer from one club during three year and four year period - restriction on capacity of player coming through Minor League to transfer to another club in Junior League - onus discharged.

HUMAN RIGHTS - "right to work" - Article 6 of International Covenant on Economic, Social and Cultural Rights - whether "right" relevant to reasonableness of restraint of trade - whether "right" affects reasonableness of Competition Rules.

Trade Practices Act 1974 (Cth), s.45

Associations Incorporation Act 1991

Industrial Relations Reform Act 1993 (Cth)

Hawick v Flegg (1958) 75 WN 255 referred

News Limited and Others v Australian Rugby Football League and Others (1996) 64 FCR 410 considered, distinguished

Adamson and Others v New South Wales Rugby League Limited and Others (1991) 31 FCR 241 applied, followed

Hughes v Western Australian Cricket Association (Inc) and Others (1986)

19 FCR 10   referred

Adamson, ex parte The Western Australian National Football League (Incorporated) and Another (1979) 53 ALJR 273 at 280 referred

Buckley and Others v Tutty [1971] HCA 71; (1971) 125 CLR 353 applied, distinguished

Minister for Immigration and Ethnic Affairs v Teoh [1995] HCA 20; (1995) 183 CLR 273 referred

McKellar v Smith [1982] 2 NSWLR 950 referred

International Covenant on Economic, Social and Cultural Rights, article 6

No. SC 00202 of 1998

No. SC 00204 of 1998

No. SC 00205 of 1998

Coram: Miles CJ

Supreme Court of the ACT

Date: 10 September 1998

IN THE SUPREME COURT OF THE )

) No. SC 00202 of 1998

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: LACHLAN WICKHAM

Plaintiff

AND: CANBERRA DISTRICT RUGBY

LEAGUE FOOTBALL CLUB LIMITED

First Defendant

AND: CANBERRA DISTRICT JUNIOR

RUGBY LEAGUE INC.

Second Defendant

AND: GINNINDERRA RUGBY LEAGUE

FOOTBALL CLUB

Third Defendant

No. SC 00204 of 1998

BETWEEN: JASON GRAHAM FRUEND

Plaintiff

AND: CANBERRA DISTRICT RUGBY

LEAGUE FOOTBALL CLUB LIMITED

First Defendant

AND: CANBERRA DISTRICT JUNIOR

RUGBY LEAGUE INC.

Second Defendant

AND: QUEANBEYAN UNITED RUGBY

LEAGUE FOOTBALL CLUB INC.

Third Defendant

No. SC 00205 of 1998

BETWEEN: JOEL CAPEN SWAYSLAND

Plaintiff

AND: CANBERRA DISTRICT RUGBY

LEAGUE FOOTBALL CLUB LIMITED

First Defendant

AND: CANBERRA DISTRICT JUNIOR

RUGBY LEAGUE INC.

Second Defendant

AND: QUEANBEYAN UNITED RUGBY

LEAGUE FOOTBALL CLUB

Third Defendant

REASONS FOR JUDGMENT

Coram: Miles CJ

Place: Canberra

Date of Judgment: 10 September 1998

1. The three plaintiffs bring separate proceedings, each relying upon his respective state of claim. By consent the proceedings were ordered to be heard together and were so heard. (A fourth plaintiff, Mathew Gary Jones, discontinued a similar claim).

2. Each plaintiff was a "rugby league football player" (the lower case spelling follows that of the statements of claim). Each plaintiff plays or has played for a club which fields a team or teams in a competition controlled by the second defendant, the Canberra District Junior Rugby League Inc., (the CDJRL). In accordance with the Competition Rules of the CDJRL, each plaintiff is registered by the CDJRL with the club for whom he has played. Each of the respective clubs with whom the plaintiff is registered is the third defendant in the proceedings. Each of the plaintiffs wants to play with another club, but the club with whom he is registered has refused to grant a clearance under certain of the Competition Rules. Each plaintiff seeks a declaration that the Competition Rules in question are unenforceable because they contravene subs.45(2) of the Trade Practices Act 1974 (Cth) (the Trade Practices Act) and because they "are invalid as constituting an unreasonable restraint of trade". Each plaintiff also seeks a declaration that the decision of his club and of the CDJRL to refuse to grant a clearance in his case is invalid.

3. Claims for certain restraining orders and claims for damages were abandoned at the commencement of the hearing. An application to further amend the statements of claim by the substitution of a claim for a different restraining order was made and refused, with liberty to renew the application upon the Court delivering judgment in the claim for declaratory relief.

4. The defences pleaded were as follows:

(i) the relevant Rules do not have the purpose, and do not have and are not likely to have the effect of substantially lessening the competition;

(ii) if, as alleged, the Rules would otherwise be subject to Section 45B of the Trade Practices Act, 1974 (which is denied), Section 45(5) precludes the operation of Section 45 as pleaded and relied upon by the Plaintiff;

(iii) as to the Plaintiff's reliance on Section 45B of the Trade Practices Act, 1974, there was not, and is not, a relevant market. Alternatively, competition in any relevant market has not been substantially lessened by Rules 17 and 18 as alleged or at all; and

(iv) if the Rules constitute a restraint of trade (which is denied) such restraint of trade is not unreasonable.

5. A further defence raised of res judicata relying on a decision of Higgins J on 29 March 1998 on the hearing of a motion was abandoned.

6. The essential facts are in a small compass. There was a substantial amount of documentary material, but counsel referred to little of it. Further, it needs to be said that much of the evidence (on affidavit) was ruled inadmissible as it amounted to no more than expressions of opinions and conclusions of witnesses. Paradoxically, many such conclusions and opinions given in evidence were not objected to. This may place the Court, as a fact finding tribunal, in an invidious position. Where evidence of a fact is given in inadmissible form a court may, assuming that the fact is relevant, take it that the fact is not in issue. On contested factual issues, evidence of opinion (other than in a field of expertise and on a relevant issue) and evidence consisting of irrelevant fact is, however, of no assistance to the fact finder. To take an example from the present case, the evidence of those who expressed opinions as to what is reasonable or desirable, or as to the purpose and effect of various rules and resolutions, is of minimal assistance.

7. The game of rugby league, as far as I can ascertain from the evidence and for relevant purposes, is organized as follows. The first defendant, Canberra District Rugby League Football Club Limited, exercises control of an area known as the Canberra District. That area consists of the whole of the Australian Capital Territory together with a segment-like part of New South Wales with Crookwell at the northern, Braidwood at the eastern and Cooma at the southern limits. Queanbeyan is somewhere near the centre. The first defendant (against whom the plaintiffs have discontinued) fields a team or teams (the Raiders) which represent the Canberra District in competitions organized elsewhere. That appears to be the main function of the first defendant and in the documentary evidence it is usually referred to as the District Club. It also has some ultimate measure of control over competitions within the Canberra District, but it is the CDJRL that has direct responsibility for the administration and organization of those competitions.

8. The CDJRL consists of a number of member clubs. The clubs themselves have members who may or may not be players. Insofar as the clubs are incorporated the members of the clubs are not, as such, members of the CDJRL: cp Hawick v Flegg (1958) 75 WN 255. A club may apply to enter teams of playing members in the various grades of competitions conducted by the CDJRL. There are A Grade, B Grade and C Grade competitions (unrestricted as to the age of players), and there are competitions limited to players within certain age limits. It appears that an individual club may apply to enter a team in more than one grade of competition and further may apply to enter more than one team in the same grade.

9. The CDJRL is incorporated under the Associations Incorporation Act 1991. It was common ground that the clubs that comprise the membership of the CDJRL are themselves incorporated either under that Act or similar legislation in New South Wales. It was suggested that the bulk of the members of the clubs are not players.

10. I have not overlooked the discussion of the background to the playing of rugby league in Australia by a Full Court of the Federal Court of Australia in News Limited and Others v Australian Rugby Football League and Others (1996) 64 FCR 410 but as the case was not referred to by counsel in the hearing before me, I make no further reference to it on questions of fact.

The Competition Rules

11. The Competition Rules (or to give them their full description, the Competition Rules and Playing Conditions) are reviewed annually at the Annual General Meeting of the CDJRL. The member clubs are bound by the Competition Rules. The latest of those in evidence are those which were in force in 1998.

12. Competition Rules 12 to 25 inclusive bear the heading "Registration and Clearance of Players". They impose a regime of compulsory registration of players with particular clubs. The registration is carried out by the CDJRL and not by the club. There are various compulsory conditions of registration. Under cl 13 the player must be a member of the club and not contracted to play for "any other Club or Rugby League body". If, prior to joining the club, the player was registered with another "Club, Body or League" he must submit a clearance from that organization. Registration is granted only on lodgement and approval by the CDJRL of an application for registration in the prescribed form completed and signed by the player and a duly authorised representative of the club.

13. Other material rules provide as follows. A club playing an unregistered player loses competition points and may incur a fine (cl 15). A club playing a player ineligible for an under age group match is liable to similar penalties (cl 22). There are a number of time constraints affecting registration.

14. Competition Rule 17 provides as follows:

"The term of registration for CDJRL competitions be (sic) three (3) consecutive football seasons (this rule commences to apply with players registered for the 1995 season).

(a) No player shall play with any two (2) clubs (within the boundaries of CDJRL) during his term of registration (3 years) unless under "special circumstances" and then only if agreed by his Club, and approved by the CDJRL.

(b) Any player who asks for a clearance from a club under the "special circumstances" clause, must be advised of the result within 14 days. If the request is refused, the player has the right of appeal to the Management Committee of CDJRL (or any body that it may appoint from time to time).

(c) Any appeal made by a player under the "special circumstances" clause must be forwarded to CDJRL within seven (7) days of the date the refusal is advised.

(d) For the purposes of this Rule, a player who is deregistered, other than for injury or to play representative or grade football with the District Club, by a Club is free to register with a Club of his choice.

(Note: This Rules passed by Resolution 917 of CDRL (Raiders) at their Directors meeting of 25 July 1994."

15. Competition Rule 18 provides as follows:

"Where a player has completed three (3) seasons with a Club in the Minor Rugby League competition between Grades G-D, he is to play his first season in a CDJRL competition with his parent Club unless given a clearance by that Club to play with another Club. (CDRL Resolution 758 of 7 February 1994.)"

16. At the time the proceedings were commenced, Competition Rule 41 provided as follows:

"When the junior representative matches are completed, players must return to the club with which they were playing when selected for the representative team and play the remainder of the season and the following season with that Club. This rule shall, from the beginning of the 1995 season, cover players selected in ACT and Monaro U/17, U/19 and Open Age representative teams".

17. On 4 August 1998 the Competition Rules were amended so that the following words were added to Competition Rule 41:

"This rule shall only apply to the representative selection of a player in the third year of his three year registration and shall only apply to extend a player's three (3) year registration with a club pursuant to r 17, for a further period of one year. At the end of a player's fourth year with his registered club he shall be entitled to transfer to and register with another club."

18. The prescribed form of player's registration signed by Lachlan Wickham and by Jason Fruend was in evidence. It contained the following provisions:

"Acknowledgements

I, the undersigned, agree to abide by the rules and by-laws of CDJRL and all rules and by-laws of the club and to observe all directions and/or additional rules, if any, which from time to time be made by the said club or bodies. I shall agree to any drug testing procedure instigated by the CDJRL at all times.

I have not signed any other registration form for the ........... season(s)."

19. On the evidence I make the following findings. Membership of a club is to be distinguished from registration as a player for the purpose of CDJRL competitions. In effect, once a player is registered with a club by the CDJRL, then that player is prohibited from playing rugby league except in accordance with the Competition Rules. The rules restrict the capacity of the clubs to organize games amongst their members and amongst themselves outside the CDJRL competition. They also restrict the capacity of players to play rugby league, whether within the Canberra District or elsewhere, and more particularly they restrict the capacity of players to play in the competitions organized by the CDJRL.

Trade Practices Act 1974

20. The plaintiffs' claims as pleaded appeared to rely on the whole of s 45(2) of the Trade Practices Act. However, at the hearing there was no reliance on sub-para 45(2)(a)(i) or sub-para 45(2)(b)(i). A claim under s 45B was expressly abandoned. The key provisions of the Trade Practices Act on which the plaintiffs rely are as follows:

"45. Contracts, arrangements or understandings that restrict dealings or affect competition

1. .....

2. A corporation shall not:

(a) make a contract or arrangement, or arrive at an understanding, if:

(i) ......

(ii) a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect of substantially lessening competition; or

(b) give effect to a provision of a contract, arrangement or understanding, whether the contract or arrangement was made, or the understanding was arrived at, before or after the commencement of this section, if that provision:

(i) is an exclusionary provision; or

(ii) has the purpose, or has or is likely to have the effect, of substantially lessening competition.

3. For the purposes of this section and section 45A, `competition' in relation to a provision of a contract, arrangement or understanding or of a proposed contract, arrangement or understanding, means competition in any market in which a corporation that is a party to the contract, arrangement or understanding or would be a party to the proposed contract, arrangement or understanding or any body corporate related to such a corporation, supplies or acquires or is likely to supply or acquire, goods or services or would, but for the provision, supply or acquire, or be likely to supply or acquire, goods or services.

.....

5. This section does not apply to or in relation to:

(a) a provision of a contract where the provision constitutes a covenant to which section 45B applies or, but for sub-section 45B(9) would apply;

(b) a provision of a proposed contract where the provision would constitute a covenant to which section 45B would apply or, but for subsection 45B(9), would apply; or

....."

21. Under subs 4(1) "market" is defined or described to exclude:

"...... rights or benefits being the supply of goods or the performance of work under a contract of service."

The Plaintiffs

22. The plaintiff, Lachlan Wickham, an apprentice electrician, is 21 years old. He signed a registration application to play with the third defendant in the action brought by him (the Ginninderra Bulls) at the age of 17. He knew nothing of the content of the relevant Competition Rules at that time and they were not explained to him. I am satisfied that he did not turn his mind to the question of a restriction on his right or capacity to play with another club until 1997.

23. In 1994 Mr. Wickham began playing first grade (that term appears to be interchangeable with A Grade) with the Ginninderra Bulls and was selected to play in a Raiders under 19 side in 1996. It is not clear whether the selection meant that he played for a representative team within the meaning of Competition Rule 41 but nothing turns on it.

24. In 1996 Mr. Wickham played first grade for the Ginninderra Bulls and was selected to play for the ACT senior representative team.

25. In 1997 Mr. Wickham continued to play first grade for the Ginninderra Bulls and once again represented the ACT. He became "disillusioned" with the Ginninderra Bulls because they did poorly in the competition, but he "decided to remain" at that stage. He later "decided to leave". Someone offered him a position with the Queanbeyan United Rugby League Club (the Queanbeyan Blues). That club is not party to the proceedings brought by Mr. Wickham. The coach of that club told him that he would receive $5,000 for playing one season. Someone else offered him a position with the first grade team of the Canberra City Tigers.

26. After subsequent discussions with persons representing the Queanbeyan Kangaroos Rugby League Club (the Queanbeyan Kangaroos) Mr. Wickham agreed to play with that club for payments of $130 per win and purses of $500 for every five wins.

27. Mr. Wickham believes that he is more likely to play representative football if he plays with a club "such as" the Queanbeyan Kangaroos. The basis of his belief was not stated but I accept it as genuine and reasonable. On 19 September 1997 Mr. Wickham applied for a clearance from the Ginninderra Bulls, but it was refused, pursuant to Competition Rule 41. On 4 February 1998 the management committee dismissed his appeal. He did not know of "the consequences of Competition Rule 41" until a representative of the Queanbeyan Kangaroos explained it to him immediately before the appeal. His solicitors later wrote to the Junior Rugby League on his behalf giving notice of legal proceedings unless he was granted a clearance.

28. Despite the lack of a clearance, Mr. Wickham began playing for the Queanbeyan Kangaroos. After he had played four matches, the Junior Rugby League deducted competition points from the Queanbeyan Kangaroos and imposed a fine on that club.

29. Jason Graham Fruend, a removalist, has been playing rugby league since he was a very small boy. He said that he started with the Queanbeyan Kangaroos at under 7 level and when at under 17 level he began to play with the Queanbeyan Blues. That club is the third defendant in the action brought by him. He signed the prescribed form for him to play with the latter team. There is no evidence whether or not he became registered before then and there is no evidence about any prior clearance from the Queanbeyan Kangaroos. When playing with the Queanbeyan Blues in 1996 and 1997, he was selected to play in representative sides. He was paid $100 for a first grade match, and $30 for each of two games in the under 19 level.

30. In 1998 Mr. Fruend decided that he wanted to return to the Queanbeyan Kangaroos. He considered then and does still that the move would help him in his ambition to play first grade and representative football. I have no doubt that the belief is genuine, but the reasons for holding it are not clear in Mr. Fruend's case. At some stage, someone purporting to speak on behalf of the Queanbeyan Kangaroos, offered to pay him the same rates as he received when he played for Queanbeyan Blues.

31. Mr. Fruend's application for a clearance was refused by the Queanbeyan Blues and an appeal from that refusal was dismissed by the management committee. He did not know of "the consequences of Competition Rule 17 and Competition Rule 41" until so informed by a representative of the Queanbeyan Kangaroos sometime before the appeal. On 18 March 1998. Mr. Fruend instructed the same solicitors as Mr. Wickham to write to the CDJRL on his behalf. In his case too the response was that "if he took the field with the Queanbeyan Kangaroos, he would be unregistered and uninsured". Nevertheless he played four matches with Queanbeyan Kangaroos until the CDJRL deducted competition points from that club and imposed a fine on it. He has not played competition for Queanbeyan Kangaroos since 24 April 1998.

32. Joel Capen Swaysland, a student aged 18, played for the Queanbeyan Blues from the under 14 level to the under 17 level. His evidence was that the Queanbeyan Blues in effect stood over him at the age of 13 and left him with no choice but to sign a registration form if he wished to play with that team. In that situation it is not surprising that he was told nothing about the rules and the limitation on his capacity to play with another club.

33. Like Mr. Wickham, Mr. Swaysland decided in 1998 to quit the Queanbeyan Blues and to play for the Queanbeyan Kangaroos. He too applied for a transfer and was refused, and his case followed a sequence similar to that in Mr. Wickham's case. However, Mr. Swaysland has never been paid by his present club. He expects to be paid if he goes to play with the Queanbeyan Kangaroos. He has not had any offers.

34. Mr. Swaysland was not clear why he was dissatisfied with playing for the Queanbeyan Blues or why he believes that his prospects are better with the Queanbeyan Kangaroos. He said that he "hates" his present club and wants to play with his mates.

35. Evidence was given by other witnesses as to the matters which give rise to the facts already outlined. It was of little assistance on the contested issues except to the extent that will be indicated.

Trade Practices Act issues

36. It appears to be common ground that the relevant market for the purposes of s.45 was, in general terms, a market for the services of players in the CDJRL competitions.

37. The first defence raised against this head of the plaintiffs' claim is that, according to s.45 and s.4(1), competition means competition in a market in which a corporation supplies or acquires goods or services but excludes a market for performance of work under a contract of service. It was submitted that the plaintiffs must prove that on the evidence the defendant clubs engaged players by entering into contracts for their services and not contracts of service. The evidence, so it was submitted, led to a conclusion that the players in the CDJRL competitions did not offer and the clubs did not acquire their services pursuant to a contract for services. For the plaintiffs it was submitted that none of the plaintiffs had entered into a contract of service with any club and, further, if I understand the submission correctly, that the evidence did not permit a conclusion that any players in the competition were engaged under a contract of service.

38. The evidence on the subject is unsatisfactory. I have already referred to the evidence given by the plaintiffs. Accepting their evidence on its face value, it shows that the Queanbeyan Blues paid Mr. Fruend $100 for the game played in first grade and $30 for each of two games played in the under 19 grade and that Queanbeyan Kangaroos were prepared to pay Mr. Wickham and Mr. Fruend $130 for each game played and won and a further $500 for every five games played and won. There was no evidence that any of the clubs made payments in the nature of wages or salary to their players. The evidence of witnesses other than the plaintiffs and the documentary material went only to show that some clubs had entered into signed playing contracts with some of their members, that some clubs make payments to players and that some clubs like the Queanbeyan Kangaroos and the Queanbeyan Blues have offered to make payments of a certain amount per game. However, these meagre facts do not prove one way or the other that the clubs have entered into any arrangements with players to perform work pursuant to a contract of service, or pursuant to a contract for services.

39. For the defendants it was submitted that in this respect the situation is indistinguishable from Adamson and Others v New South Wales Rugby League Limited and Others (1991) 31 FCR 241. In that case it was decided by Wilcox J and Sheppard J, Gummow J agreeing, that the participation by a player in a rugby league competition in New South Wales did not constitute the supply of "services" within s.4 since the rules in question in that case required the benefits provided by the players to the clubs to be under a contract of service and not a contract for services.

40. Mr. Lunney for the plaintiff sought to distinguish Adamson v NSW Rugby League Limited (1991) on the basis that in that case there was evidence of the contents of what were called "playing contracts", which evidence established that the contracts were indeed contracts of service. It was submitted that in the present case there is no such evidence. That submission is correct as far as it goes. But the question is, what does the evidence in the present case prove and does it lead to findings which discharge the onus of proof.

41. Some assistance may be obtained from the decision of the Full Court of the Federal Court of Australia in News Limited. In that case it had been conceded at the trial that contracts to play in competitions organized by the NSW Rugby League entered into between clubs and "premier" players were contracts of employment (that is to say, contracts of service within the Trade Practices Act). Further, the trial judge also found that contracts to play in a competition organized by the rival Super League were contracts of employment also. These facts prompted the trial judge to find that the competition was only in relation to the performance of work under a contract of service and was not in relation to the performance of services by premier players.

42. The Full Court held that it was not necessary to decide this issue but that the "better view" was that the clubs were, or were likely to be, in competition with each other in relation to the acquisition of the services of players. After referring to the standard form of contract of service, the articles and rules of the New South Wales Rugby League and the standard application for registration of a player, the Full Court observed that it was open to a club to engage the services of a player otherwise than under a contract of service. Hughes v Western Australian Cricket Association (Inc) and Others (1986) 19 FCR 10 was referred to as a case in which Toohey J positively found that a contract under which a professional cricketer agreed to play for a club was a contract for services.

43. In News Limited, the Full Court concluded at 571:

"...The form of the contract, whether one of employment or for services, was not to the point. The point was that premier players should play only in teams supplied by clubs operating under the auspices of the League and ARL.

In these circumstances, it seems to us that in the competition and rivalry between clubs for premier players there was a real chance or possibility that there could be competition to engage players otherwise than under a contract of service. It follows that, at the time the Commitment Agreements and Loyalty Agreements were executed, the clubs were likely to be in competition with each other for the `services' of premier players."

44. The conclusion of the Full Court was a conclusion of fact on the evidence. Nevertheless it disposes of any suggestion that there is a principle of law or a presumption of fact that people who play rugby league for reward do so pursuant to a contract of service. Further, in the News Limited case the Court was concerned with so-called "premier" players who participated in a highly commercialised sport. The competitions organized by the CDJRL in the present case hardly bear comparison. On the contrary, in my view, CDJRL players, on the evidence, can hardly be described as professionals. It is as well to bear in mind what was said by Barwick CJ in Re: Adamson, ex parte The Western Australian National Football League (Incorporated) and Another (1979) 53 ALJR 273 at 280:

"....Of course, football of any code may be a sport, as distinct from a trade, when played solely for its own sake as a pastime upon an amateur footing. But what the Club and the League conduct is far removed from any such concept of sport. The players are professionals employed for wages in the playing of the code. This Court decided in Buckley & Others v. Tutty [1971] HCA 71; (1971) 125 CLR 353, that such a player was an employee of the Club for which he played. It has been held that a clause similar to those in the rules of the prosecutors which restrain a player from playing elsewhere than with the Club with which he is registered without a clearance are void as in restraint of trade.

45. The plaintiffs have not shown that they, or any other players, are or are likely to become "professionals employed for wages in the playing of the code" whilst playing or contracted to play in CDJRL competitions. Whatever be the case in rugby league competitions organized by other bodies, the CDJRL competitions cannot be regarded as "far removed" from a sport played for its own sake as distinct from a trade. If there is a tendency towards the commercialisation of this or any other sport, then that tendency has not yet reached the stage in the CDJRL where the players can be regarded as employees or engaged under a contract of service. Nor can the clubs or the CDJRL be regarded as engaged in competition for the supply of services within the Trade Practices Act.

46. The plaintiffs' claim under the Trade Practices Act therefore fails at the threshold and it is unnecessary to consider whether the Competition Rules have or have not had the effect of substantially lessening competition, as it has not been shown that they are in any relevant competition at all.

47. The submission was also made separately as I understand it, that, assuming contrary to my finding, the clubs were engaged in the supply of services, there is no relevant market in those services in which competition could be lessened. However, the submission, as it seems to me, stands or falls on whether the market was one in services or in contracts of service, so that in essence this further submission is indistinguishable from that just discussed. Similarly, the reliance in the defence filed under s.45(5) is not relevant to the case put on behalf of the plaintiffs.

Restraint of trade

48. Under s.4M of the Trade Practices Act the law relating to restraint of trade, insofar as that law is capable of operating currently with the Trade Practices Act, continues in operation.

49. It is conceded on behalf of the defendants by Mr. Faulkner that the Competition Rules do operate in restraint of trade. The only issue argued is whether the restraint is justified as reasonable. The onus is on the defendants. Although the degree of proof needed to discharge the onus must be the civil onus, that is to say, proof on the balance of probability, the decision making process is not a matter of weighing up and balancing the legitimate interests of the defendant in maintaining the restraint against those of the plaintiffs, and others, in removing the restraint. In Adamson (1991), Gummow J said at 289:

"But in cases such as the present, when the court comes to deal with the issue of alleged reasonableness of the restraint, there is no occasion to put into the equation the exercise by the appellants of bargaining power in the negotiation by them of any contract they impugn as containing a restraint of trade. Nor is it to the point to inquire as to the adequacy of consideration received by the appellants as covenantors. The issue as to reasonableness is a more direct one.

In the present case, the issue may be propounded, consistently with what was said in Buckley v Tutty (at 376-377, 378) as being whether the restraint is reasonably related to the objects of the League or the clubs and affords no more than adequate protection to the interests of the League and the clubs. The onus, of course, to make out such justification rests upon the League and the clubs. The High Court did not state the ultimate question as being whether, in some broader sense, the restraint was unreasonable. The restraint in such cases strikes at the essential interest of each player in being free to play with the club of his choice. Therefore (and this vindicates the interests of the players) it is void, unless shown to provide no more than adequate protection to the interests of the sporting bodies. That inquiry may, as in this present case, require the court to have regard to the special character of the area in which the restraint operates, and thus "to the special interests of those concerned with the organisation of professional football" (an expression used by Wilberforce J in Eastham v Newcastle United Football Club Ltd (supra) (at 432)). In so doing, the court, perhaps inevitably, will have to consider aspects of the position of players because what is put forward as constituting those "special interests" of the organisers will include contentions as to why their dealings with players, pursuant to the combination, have to take, or should take, a particular form. But that is not to undertake a "balancing" exercise with a comparative evaluation of the weight of the interests of organisers and players. It is to test the justification attempted by those in adverse interest, in the litigation, to the players."

50. His Honour concluded that the trial judge was in error in balancing the competing interests of the League and the clubs on the one hand and the players on the other, and that it was impermissible to "lighten the burden carried by the respondents" (the League). His Honour continued at 290:

"What they had to show was that the restraint was reasonably related to the objects of the League or of the clubs, and that the restraint afforded no more that adequate protection to the interests of the League and the clubs."

51. Despite the concession on behalf of the defendants that the Competition Rules are in restraint of trade, there is nevertheless a question of identifying the subject matter of that trade on the one hand, and the nature and extent of the restraint, on the other. These were not matters that were pleaded or made the subject of particulars and the first was not the subject of submissions by counsel. The subject matter and area of the relevant trade is not the same as the "market" to which reference has been made in discussing the claim under the Trade Practices Act. Whether one is wider or narrower or whether they share anything in common, does not need to be decided. I take it that the trade with which the case is concerned is in the reciprocal benefits that the CDJRL and the clubs on the one hand, and the players on the other, confer on each other. The clubs provide training, playing and other club facilities for the enjoyment of the players; the players provide their skills for the promotion of the club's chances in the competition. In addition, the CDJRL organizes and provides competitions in which the players and clubs may develop their potential and the players and clubs participate in the competition, thus fostering the interest of the CDJRL in promoting the code within the district. The clubs and the players provide a pool from which a selection may be made for representative games against teams from outside the district and the competitions organized by the CDJRL facilitate selection from the pool. There are no doubt other aspects of the way in which the game is organized and the clubs and the CDJRL operate that could be said to be in the nature of trade.

52. However, as I have already indicated when dealing with the claim under the Trade Practices Act, the evidence does not show that the relationship of employer and employee exists between any of the clubs and their players. At the most, the evidence shows that from time to time some players receive payments for their performances. It also shows that a club may offer a "transfer fee" to another club for granting a clearance to a player in order that the player may register with the club offering the fee. The practice of offering or paying transfer fees operates outside the Competition Rules.

53. The restraint of trade in question must be evaluated in the light of the extent to which the club, the League and the players engage in trade in a real sense, and the answer must be - very little. In order to remain viable, the clubs must derive income and incur expenditure, which they do. The expenditure, on the evidence, ranges from the most basic expenses such as the hire of grounds on which to play, to more sophisticated, but no doubt, desirable arrangements such as the insurance of players. But overall the character of the CDJRL competition is that of a sport which has not yet become quite commercialised.

54. The nature of the restraint is threefold. First there is the so-called three year rule imposed by Competition Rule 17. This may be extended to a four year rule by the operations of Competition Rule 41. Then there is Competition Rule 18, the "first season" rule for those completing three seasons in the Minor League.

55. In general terms, the rules under challenge have to be read in the context of the Competition Rules as a whole and in the light of the rest of the evidence. In my view, they are not to be read like a contract wholly reduced to writing. They have to be read also in the context of what the evidence discloses as to the history and nature of the game in the district. They have to be read also in the context of the Memorandum and Articles of Association of the CDJRL. They are not to be construed as closely as a deed or a statute. In my view, properly construed, they establish a voluntary regime for the governance of a sport which is not essentially professional in nature, although it has commercial aspects. Although it is conceded that the challenged rules are in restraint of trade, it is to be emphasised that the CDJRL, the clubs and the players do not conduct their activities in what is predominantly a commercial environment, that their relationships with each other are not predominantly commercial in character, or in motivation.

56. In Buckley and Others v Tutty [1971] HCA 71; (1971) 125 CLR 353, the plaintiff, as the opening words of the joint judgment of the High Court state, was "a professional footballer". The Court at 372 acknowledged the argument that the rules in that case preventing transfer of a player from his club to another except, in effect, with the approval of his club, were not in restraint of trade but rather fostered and encouraged it. The Court, in rejecting the argument, observed at 372:

"The rules however prevent professional players from making the most of the fact that there are clubs prepared to bid for their services. If valid, the rules prevent a professional player who is a member of one club, even if he is not contractually bound to play for it, from becoming employed as a professional footballer by another club, except with the concurrence of the former club or the Qualification and Permit Committee. This is plainly a fetter on the right of a player to seek and engage in employment. It is not to the point to say that the player may resign from the League. If he does resign he may perhaps obtain employment as a labourer or as a cricketer but he will not be able to obtain employment as a professional Rugby League footballer, either in New South Wales or in a number of other places. The rules in our opinion operate as a restraint of trade. In this respect also we respectfully agree with the decision in Eastham v Newcastle United Football Club Ltd. [1964] Ch. 413, and, for the reasons we have given, we consider that the decision in Elford v Buckley (1969) 90 W.N. (Pt 1) (N.S.W.) 756, that the rules of the League relating to the retention and transfer of players do not attract the doctrine of restraint of trade, was erroneous and should be overruled."

57. In my respectful opinion, the nature and extent of the relevant restraint in the present case is similar to that described by the High Court. In another sense, the restraint in fact goes further in the present case. The players are restricted not so much in the capacity to obtain employment as footballers (that is no doubt a theoretical possibility), but in the capacity to play with clubs that might pay them to do so.

58. The High Court in deciding the question of whether the circumstances justified the restraint, went on to say at 377:

"It is common ground that the onus of establishing circumstances which show that the restraint affords no more than adequate protection to the interests of the league and the district clubs lay on the appellants. It is a question of law whether the circumstances justify the restraint.

It is a legitimate object of the League and of the district clubs to ensure that the teams fielded in the competitions are as strong and well matched as possible, for in that way the support of the public will be attracted and maintained, and players will be afforded the best opportunity of developing and displaying their skill. It is therefore legitimate to aim to provide a system that will ensure sufficient stability of membership to permit those who play for a club to be trained as a team and to develop a team spirit, and that will prevent the stronger clubs obtaining all the best players, thus leaving he weaker clubs with teams that are unable effectively to compete with their stronger opponents. It is, of course, impossible to ensure by any means that the membership of a football club will remain for ever unchanged. Some players will cease to play for the club whatever the system. On the other hand, even if there were no restraint on the movement of players, not all players would go; some might not be fortunate enough to receive offers and others to whom offers were made might for one reason or another not wish to accept them. Moreover a club may ensure some continuity of membership by binding its professional players by contract to remain employed for a number of years and, if necessary, by staggering the periods for which different players are engaged. it may nevertheless be reasonable to lay down some qualifications for membership of a club, or to impose some restrictions on the transfer of professional players from one club to another or on the extent to which a club may entice players away from another club. It is not for a court to advise in advance what restraints would be reasonable; our function is only to consider whether the rules in their present form impose a greater restraint than is necessary for the adequate protection of the interests of the League and its members."

59. The High Court decided that the rules under consideration went beyond what was reasonable in two respects. First, there was no time limit on the clubs' power to prevent any of its professional players from playing with another club, notwithstanding that the player had ceased to play for the club that retained him, or that that club ceased to employ him or ceased to select him to play. Secondly, the rules provided for a system whereby the player's club, although approving the transfer, could fix a substantial fee (most of which went to the club and not to the employee). Neither of those considerations apply in the present case.

60. On the contrary, the Competition Rules, in my view, tend to ensure the legitimate objects of the CDJRL and of the clubs that the teams be as strong and as well matched as possible, that sufficient stability of membership is achieved so as to provide training as a team and the development of team spirit and so as to prevent the stronger clubs becoming even stronger by enticing the better players from the weaker teams. Restraint in the short term of the capability of players to transfer from club to club may, in the long term tend to preserve competition among the clubs in the playing of the sport. Such a result in the long term must be in the interests of the playing members as a whole although individual players like the plaintiffs may not consider it to be in their interest at all.

61. It is submitted for the plaintiffs that the three year rule imposed by Competition Rule 17 fetters the right of a person to choose his or her employment during the term of registration, as indeed it does. The question is whether the defendants have shown that the fetter is reasonable. Having regard to the interests of the clubs and the CDJRL in maintaining some stability of membership and ensuring long-term competitiveness and viability, I do not think that three years is unreasonable.

62. Next, it is submitted that if three years is reasonable, then the extension of the player's registration by a further year when a player plays representative football, is unreasonable. Indeed, it was submitted that in its unamended form at the commencement of proceedings and until 4 August 1998, Competition Rule 41 meant that a talented player, capable of playing representative football in successive years, could do so in compliance with the Competition Rules only by playing for the same club indefinitely and that the only way he could free himself to play for another club was by electing not to play representative football for the whole of one season. However, I do not read the unamended Competition Rule 18 to impose such an unreasonable restriction. I think that the amendment of 4 August 1998 simply clarified what the rule meant all along. Further, I think that it is reasonable to extend the period by one year in the case of a player who plays representative football in the third year of his registration. During the previous years, the player has surely had the benefits of membership of and coaching by his club, the result of which is likely to have contributed to his development and his ability to play in representative teams. It is reasonable that his club should have the advantage of his continuing to play for one further season and it is not reasonable that another club, having noticed but not contributed to the player's prowess in representative games, reap the advantage that the player's club has helped nurture.

63. Lastly, there is Competition Rule 18. It does not sit easily in the framework of the other rules. It could be said to contradict Competition Rule 12 in that it envisages a year in which a player is bound to play or to continue to play for a club without having been registered with that club. This difficulty appears to arise from the absence of Competition Rules in the Minor League which are designed to complement the Competition Rules of the CDJRL. Competition Rule 18 is open to the construction that, in conjunction with Competition Rules 12, 17 and 41, a player can be tied to the same club for a total of seven years, and further, that those years, or some of them, need not be consecutive. However, I do not think that such is the intention or the effect of Competition Rule 18. Taken in the context of the rest of the Competition Rules and the evidence, I think that common sense should prevail and that Competition Rules 12 and 13 are to be read subject to Competition Rule 18, so that when a player has completed three consecutive seasons with a club in the Minor League competition, that player is not to play for another club in the CDJRL competition the following year unless he registers with his parent club or his parent club gives him a clearance. A rule to that effect goes no further than to protect the legitimate interests of the clubs and the CDJRL in nurturing young players and fostering continuity and stability in the teams in the competition, and is not unreasonable.

The right to work

64. It was submitted on behalf of the plaintiffs that they had a right to work for a club of their choice in the CDJRL area and that a restraint imposed upon the exercise of that right could not be reasonable.

65. Reference to a right to work can be found in Adamson's case in the judgment both at trial and on appeal. At 555 Hill J said that there could seldom be a greater restraint upon trade than to restrict an employee's right to choose his or her employer. On appeal, (1991) Wilcox J agreed, adding at 267:

"..... the right to choose between prospective employers is a fundamental element of a free society. It is the existence of that right which separates the free person from the serf.

66. Any court in this country would strike down a contract which gives rise to a condition of serfdom. It would do so in exercise of the undoubted but seldom used power to declare a contract void on grounds of public policy. However, it is doubtful whether the right identified in these statements by their Honours may be positively enforced by an action at law or in equity.

67. On the other hand, administrative decision makers are required to take into account relevant provisions of a treaty to which Australia is a party, notwithstanding that those provisions are not part of Australian domestic law: Minister for Immigration and Ethnic Affairs v Teoh [1995] HCA 20; (1995) 183 CLR 273.

68. It is difficult to see why judicial decision makers are not similarly obliged when called upon to exercise discretion or to decide a question of reasonableness: see McKellar v Smith [1982] 2 NSWLR 950.

69. The right to work is enshrined in article 6 of the International Covenant on Economic, Social and Cultural Rights. The article is reproduced in Schedule 8 to the Industrial Relations Reform Act 1993 (Cth). Although the relevant sections of that Act were repealed by the Workplace Relations and other Legislation Amendment Act 1996, the repealed s.170PA indicates that Australia has an international obligation to provide for those rights enshrined in the Covenant. Article 6 of the Covenant provides as follows:

"The State Parties to the present Covenant recognize the right to work, which includes the right of everyone to the opportunity to gain a living by work which he freely chooses or accepts, and will take appropriate steps to safeguard this right."

70. I do not think that the right to work contemplated by the Covenant is affected by the restraint imposed on players and clubs by the Competition Rules or that a recognition of that right means that the Court should not find that the restraint is reasonable.

Orders

71. I will hear the parties on the form of orders to be made in the light of those findings. Unless the parties wish to be heard, I propose to order that each plaintiff pay the costs of the second and third defendants in the proceedings brought by him. There is also the question of the costs of the first defendant in each proceeding and the costs generally in the proceedings brought by Mr. Mathew Gary Jones. Unless the parties wish to be heard, I would make no order as to costs in the latter instances.

I certify that this and the twenty-four (24) preceding pages are a true copy of the Reasons for Judgment herein of his Honour, the Chief Justice.

Associate:

Date: 10 September 1998

Counsel for the plaintiffs: G. Lunney

Instructing solicitor: Vandenberg Reid

Counsel for the defendants: I.D. Faulkner

Instructing solicitors: Colquhoun Murphy

Dates of hearing: 12 and 13 August 1998

Date of judgment: 10 September 1998