Christopher John De Pasquale v The Australian Chess Federation Incorporation Ao 1325 [2000] ACTSC 94 (20 October 2000)

Last Updated: 20 October 2000

CHRISTOPHER JOHN DE PASQUALE v THE AUSTRALIAN CHESS FEDERATION INCORPORATION (AO 1325) [2000] ACTSC 94 (20 October 2000)

CATCHWORDS

CONTRACT - voluntary association and member - implied terms of good faith and fairness in selection process - declaration refused.

Associations Incorporation Act 1991 (ACT)

Alcatel Australia Ltd v Scarcella & Ors (1998) 44 NSWLR 349

No. SC 686 of 2000

Judge: Gray J

Supreme Court of the ACT

Date: 20 October 2000

IN THE SUPREME COURT OF THE )

) No. SC 686 of 2000

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: CHRISTOPHER JOHN DE PASQUALE

Plaintiff

AND: THE AUSTRALIAN CHESS FEDERATION INCORPORATED (AO 1325)

Defendant

ORDER

Judge: Gray J

Date: 20 October 2000

Place: Canberra

THE COURT ORDERS THAT:

1. The application be dismissed.

1. By application dated 12 October 2000, Mr de Pasquale, the plaintiff, seeks orders and declarations concerning the selection by the Australian Chess Federation Incorporated (ACF) of the Australian Olympiad Team for the Chess Olympiad in Istanbul, Turkey in October/November 2000. The imminence of this event requires that this issue be dealt with urgently and there is an obvious need for the matter to be determined forthwith.

2. The statement of claim sought relief by way of certain orders directing that the selection process be set aside and convening another, but orders of that nature were not pressed. In any event, I do not consider that I have the power to make orders of the nature sought. The plaintiff did press for declarations which, as amended by leave, were in these terms:

"Further or in the alternative

2.

(a) A declaration that the decision of the defendant in selecting or ratifying the selection of an Olympiad Team to represent Australia at the Chess Olympiad is invalid;

(b) A declaration that the plaintiff should have been selected as a member of the Olympiad Team."

3. The plaintiff is a member of the Elwood Chess Club, an affiliate of the Victorian Chess Association. The Victorian Chess Association is an Affiliated State Association of the defendant. The defendant is an association incorporated pursuant to the Associations Incorporation Act 1991 of the Australian Capital Territory. No point is taken as to the asserted fact of the plaintiff's membership of the defendant.

4. The internal affairs and the rights and obligations of the members of the defendant are regulated by a Constitution and by-laws. Pursuant to clause 4(a) of that Constitution, the defendant:

"... shall endeavour to provide the following privileges for affiliated State Associations and persons nominated by them:

...

ii the right to participate in activities conducted by or on behalf of the Federation or in activities conducted by others for which nomination, endorsement or approval of the Federation is a requirement, including:

1. National championships,

2. International competitions for individuals and teams,

3. Such other activities as the Federation may from time to time conduct, control, authorise or participate in. ..."

5. The procedures of the defendant applicable to the selection of players to represent Australia in international events are set out in the ACF Selection Procedures By-law ("the Selection by-law"). Clause 3(c) of the Selection by-law provides that the following criteria should be considered in appointing selectors for any specific event:

"i Lack of bias;

ii Ability to evaluate and compare the playing strength of all candidates for selection;

iii Lack of personal interest."

The plaintiff expressly eschews any notion of bad faith or bias existing on the part of the defendant or its appointed selectors.

6. Clause 4 of the Selection by-law sets out the relevant criteria for selecting team members:

"a. Selectors may consider whatever information in respect of each candidate as they may consider relevant.

b. Selectors shall list all applicants in order of playing strength, with the strongest player ranked no. 1, the second strongest no. 2, etc.

c. The player with the lowest total of ranking numbers shall be the first selection, or in the case of a team, board 1. ..."

7. Clause 6 of the Selection by-law sets out the procedure for seeking and receiving applications for selection. The procedure incorporates, inter alia, the following requirement:

"e. To be eligible to represent Australia in funded overseas chess events, a player must have played a minimum of 20 rated games in the 12 months prior to the date of application for selection, unless granted a waiver by the ACF due to special circumstances."

8. By way of electronic communication, being the ACF e-mail Bulletin No. 52 dated 6 February 2000, the defendant extended an invitation for selection for the Australian Olympiad Team ("the Olympiad Team") to be held in Istanbul, Turkey in October/November 2000. The notice was in these terms:

"Chess Olympiad, Istanbul, Turkey October/November 2000.

Persons wishing to be selected for either the Australian Olympiad Team or the Australian Women's Olympiad Team are invited to contact Robert Jamieson by 28.2.00.

It is intended to selected [sic] a squad of 10 players for the Olympiad and 8 players for the Women's Olympiad. The Olympiad teams will then be selected from these squads at the end of the Koshnitsky Chess Festival based on players' current form at that time."

9. By an electronic communication sent to the defendant prior to 28 February 2000, the plaintiff applied for selection as a member of the Olympiad Team.

10. By way of electronic communication being ACF e-mail Bulletin No. 60 dated 2 April 2000, the defendant announced an Olympiad squad of 10 players, from whom the final Olympiad team of six players would be chosen. The plaintiff was not included in the squad.

11. The defendant announced, by way of an electronic communication being the ACF e-mail Bulletin No. 78 of 15 August 2000, an Olympiad Team of six players and two reserves. The plaintiff was not included in the team or named as a reserve.

12. Following the withdrawal of two team members in or around August 2000, and the removal from the team of one team reserve who had not satisfied the eligibility criteria set out in clause 6(e) of the Selection by-law, two further team members were selected and the plaintiff was named as a reserve to the Olympiad Team

13. Although the plaintiff's statement of claim is couched in terms redolent of judicial review in alleging breaches of the rules of natural justice and procedural fairness, the statement of claim is really directed to what Mr Galbally QC, for the plaintiff, described as an implied contractual term to act in good faith (by selecting the Olympiad Team from selected squads "at the end of the Koshnitsky Chess Festival based on players' current form at that time"), or in addition or alternatively an implied term to act fairly. The implied term to act fairly was variously expressed as containing an obligation to give due weight to current form or, alternatively, as a process replacing or overriding selection in accordance with the criteria of playing strength referred to in Clause 4(b) of the Selection by-law.

14. The defendant, through its counsel Mr Pesman, conceded a contract between the plaintiff and the defendant but no concession was made as to its terms and conditions. In particular, although it was said the contract may have an underlying term of fairness that, for example, would prevent the selection process from taking completely irrelevant considerations into account, it by no means had any implied term in the terms for which the plaintiff contended.

15. This is not a case where the parties have agreed to vary the terms of the contract. It is a case put on the basis that the contract has an implied term. That is said to come about by the actions of the defendant in the course of the contract. I do not think that an implied term can be created that way, but as the parties have assumed that it can, I will proceed on this assumption. In that regard, it seems to me that the biggest obstacle the plaintiff faces is not the importation of a term of good faith or fairness, but rather such term in the precise form that the plaintiff needs to contradict the express terms of the criteria provided to the selection committee.

16. The rules governing the implication of terms into a contract are well settled. The plaintiff relied upon Alcatel Australia Ltd v Scarcella & Ors (1998) 44 NSWLR 349 in relation to the implication of a term of good faith. At p 363, Sheller JA said:

"The rules governing such implication are found in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council, Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596 and Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337. Priestley JA said (at 256):

"Those rules are that the implied term must be reasonable and equitable; necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; so obvious that `it goes without saying'; capable of clear expression; and must not contradict any express term of the contract.""

17. The plaintiff does not suggest that by acting on the criteria expressed in the Selection by-law the defendant would be acting in a manner that was not fair nor in good faith. Rather, it is put that the existing criteria be replaced as a consequence of the reference in the e-mail to selection based on the player's current form at the end of the Koshnitsky Chess Festival. I am not prepared to accede to that.

18. What the plaintiff contends for as an implied term is no more reasonable and equitable than the provisions existing in the Selection by-laws. Nor does it give business efficacy to the contract. It is not so obvious that "it goes without saying". Most particularly, on the plaintiff's argument, it would contradict what I am prepared to find as an express term of what may be said to be the contract between the parties namely, the criteria for selection set out in the Selection by-laws.

19. The general invitation proffered by the defendant, and upon which the plaintiff relies, should not have to bear the scrutiny and analysis to which the plaintiff subjected it. It was a general e-mail inviting applications. It did not purport to charge the defendant's Constitution and by-laws and I accept that it was not intended to do so. Nor could it be reasonably construed as doing so, quite apart from the lack of any evidence that it was intended to radically change the defendant's selection criteria. I accept the view expressed by Mr Jamieson, the deputy president of the defendant, who drafted the e-mail for the president to send out, that the ordinary person (by that, I take it to mean the members) would have well understood that the criterion of selection based on playing strength was not affected by the reference to player's current form.

20. The evidence put forward by the plaintiff from Mr Rozycki and Mr West dealt with aspects of what might be involved in an assessment of "current form". It served to confirm what a subjective and uncertain concept that it is. Certainly, its imputation into any contract between the plaintiff and defendant could not be said to be so obvious that "it goes without saying". Nor should it be allowed to contradict an express term.

21. I am also satisfied from the evidence of Mr Parr, one of the selectors, that the Selection Committee properly carried out its task in accordance with the Selection by-laws. Even to the extent that that "current form" was a consideration, it was not overlooked in their careful and detailed selection consideration.

22. Given that the team is now selected, it is a substantial burden that the plaintiff carries to cause me to exercise a discretion which would have the effect of upsetting that in the absence of some strong element of unfairness to him. Certainly not without, at least, hearing from the other persons affected. Even without hearing from them, in the circumstances that the plaintiff has put forward and, even if I fully accepted the plaintiff's argument, I would not have been prepared to exercise my discretion to make the declarations sought.

23. I should note that Mr Pesman strongly contested my jurisdiction to make the second of the declarations sought by the plaintiff, and he may well be right. However, irrespective of any question of jurisdiction to make the declarations sought, I can see no basis upon which they should be made.

24. I dismiss the application.

I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Gray.

Associate:

Date: 20 October 2000

Counsel for the Plaintiff: Mr D Galbally, QC with Mr T Thomas

Solicitor for the Plaintiff: Vandenberg Reid

Counsel for the Defendant: Mr M Pesman

Solicitor for the Defendant: Allen Allen & Hemsley

By their Agents

Deacons

Date of hearing: 19 October 2000

Date of judgment: 20 October 2000