Re Richard Gordon Barnard; Australian Indoor Soccer Federation Inc and Queensland Indoor Soccer Association Inc v Australian Soccer Federation; Ian P Brusasco; Alan J Vessey St Helen'S United Soccer and Recreation Club Pty Ltd and Coalstars Soccer [1988] FCA 139 (29 April 1988)

FEDERAL COURT OF AUSTRALIA

Re: RICHARD GORDON BARNARD; AUSTRALIAN INDOOR SOCCER FEDERATION INC. and
QUEENSLAND INDOOR SOCCER ASSOCIATION INC.
And: AUSTRALIAN SOCCER FEDERATION; IAN P. BRUSASCO; ALAN J. VESSEY ST. HELEN'S
UNITED SOCCER AND RECREATION CLUB PTY LTD and COALSTARS SOCCER FOOTBALL CLUB
INC.
No. QLD G40 of 1988
Trade Practices - Trade

COURT

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.(1)

CATCHWORDS

Trade Practices - ban by international sporting body - whether part-time professional soccer player protected by s.45 - meaning of "services".

Trade - Residual Matters - restraint of trade by arrangement between controlling bodies of sport - purpose to prevent players engaging in competing sport - whether prima facie valid - whether acting at behest of international controlling body a defence.

Trade Practices Act 1974, ss.4(1), 4D, 45

HEARING

BRISBANE
29:4:1988

Counsel for the applicants: Mr R.G. Bain

Solicitors for the applicants: Morris Fletcher & Cross

Counsel for the respondents: Mr P.A. Keane

Solicitors for the respondents: Westgarth Baldick

ORDER

Until the final determination of these proceedings or earlier order, the respondents and each of them be restrained from acting upon or in any way enforcing or attempting to enforce, in relation to the first applicant, the decision of the Australian Soccer Federation notified by the letters from the Executive Director of the Queensland Soccer Federation dated 15 February 1988, which letters begin, "At the Executive Meeting of the Australian Soccer Federation it was decided the Australian Soccer Federation is to proceed in accordance with the ruling of F.I.F.A. ...";

The costs of the application for the interlocutory injunction be the costs of the applicants in the proceedings.

NOTE: Settlement and entry of orders is dealt with in

Order 36 of the Federal Court Rules.

DECISION

This is an application for an interlocutory injunction to restrain the respondents from contravening s.45 of the Trade Practices Act 1974 from enforcing an arrangement said to be an unreasonable restraint of trade under the general law.

2. Association football, otherwise known as soccer, is controlled internationally by a body known as FIFA. Another sport called indoor soccer resembles the outdoor game, but is on a smaller scale and there are marked differences in the rules, particularly, of course, as to the number of players. It is controlled internationally by a body called FIFUSA. FIFA wishes to control indoor soccer as well as the traditional game, and to that end has directed the imposition of a ban against people such as the first applicant, who wishes to play both games. The ban is being imposed on the first applicant by the Queensland controlling body for outdoor soccer, but there is no suggestion in the evidence that it would have done so but for the insistence of FIFA.

3. Although the proceeding was only an interlocutory one, a considerable quantity of evidence was adduced. I have come to the conclusion, as a matter of law, that the ban appears to constitute an unreasonable restraint of trade as against the first applicant. An interlocutory injunction will issue.

4. The first applicant describes himself as a semi-professional player; his principal job is not playing soccer, but truck driving. He is 23 years old and has played outdoor soccer for 17 years. Until recently he played for Ipswich United Soccer Football Club, which is owned by the third respondent. On 19 August 1987, he entered into a contract to play for the fourth respondent, Coalstars. That contract would have involved his playing about 28 games per season on the basis of $70 per win and certain other payments. The contract provided that the first applicant would be available "to play in Indoor National Soccer League Competition and International Indoor Soccer Fixtures as required". That provision was inserted because of the prospect of a ban such as that referred to above. Inconsistently with its terms, Coalstars has since applied the ban to the first applicant.

5. The first applicant has played indoor soccer in recent years during what is described in the material as the off-season and each year he has played at National League level. He has recently been selected for the Australian squad in the Indoor Soccer World Cup which is to be held in this country in October 1988, apparently with some assistance from the Australian government.

6. No evidence was directed to the subject, but one might infer from the existence of the term just discussed that on occasions the first applicant's commitments to indoor soccer might clash with outdoor soccer fixtures. However, there is no suggestion that that possibility is the reason for the ban, which seems to have been prompted by FIFA's desire to expand into new territory and suppress the growth of FIFUSA's small empire. As the executive director for the Queensland Soccer Federation (Mr Vessey) said: "This action is all to do with the ASF giving effect to a directive from FIFA", the ASF being, of course, the Australian Soccer Federation, which is the first respondent. Mr Vessey is one of the representative respondents.

7. The second applicant is the organising body of indoor soccer in Australia and is affiliated with FIFUSA. Its interest in the matter is no doubt associated with the fact that the ban I have mentioned is of general application, covering not only the first applicant but other players and also referees. If FIFA's move is successful in this country, then it seems likely that the structure of the indoor soccer game organised under the second applicant will be severely damaged. I do not understand, however, that I am asked to grant a general injunction against the enforcement of the ban against all persons on an interlocutory basis. The immediate question is whether it is appropriate to protect the first applicant against the ban (which was imposed in February) pendente lite.

8. That having been said, it should be remarked that the arguments and material placed before the Court dealt with the matter on an Australia-wide basis and my reasoning may be thought applicable to the ban generally insofar as it applies in this country, although the injunction's operation is only on the rights of the first applicant. The only aspect of his position which is unlikely to be of general application is that Coalstars' enforcing the ban against him appears to be a breach of contract. But I do not base my decision on that foundation.

9. It is necessary to explain the position of some of the parties. The second applicant (AISF), the controlling body of indoor soccer in this country, came into existence as an unincorporated body in 1971, and was incorporated in 1983. The third applicant (QISA) is the Queensland branch of the second applicant and is incorporated under the Associations Incorporation Act (Q.).

10. The AISF receives substantial moneys from State bodies such as the QISA (the third applicant), from sponsorships and from government. It is of course responsible for Australian participation in the World Cup mentioned above.

11. The first respondent is affiliated with FIFA and its president, Sir Arthur George, is a member of the executive committee of FIFA. The second respondents, Messrs Brusasco and Vessey, were appointed on 11 March 1988 pursuant to O.6 r.13(2) of the Federal Court Rules and represent themselves and other members of the council of the Queensland Soccer Federation (QSF). The third and fourth respondents are respectively the owner of the club (Ipswich United) for which the first applicant played until recently, and the owner of the club to which he is currently contracted.

12. Of the contesting parties, those on the respondents' side are the more substantial. The ASF, in particular, receives large sums of money in the course of its activities. During the sixteen months to December 1986, it was paid $390,941 from sponsorship, and $387,346 from commissions on soccer pools. It also receives very large sums from other sources, and the QSF has a large income. The sums involved on the applicants' side are much smaller, as indoor soccer is, by comparison with the outdoor game, an infant sport. Nevertheless, it is clear that indoor soccer in this country involves significant sums of money and that those who engage in it successfully may expect to receive some payments.

13. As I have mentioned, the first applicant has made a contract to play with Coalstars. Apart from the ban, he would now be doing so and receiving remuneration. The contract is not conditional upon the first applicant's being registered with the QSF, but he has not been so registered for the current season because of the ban, and Coalstars will therefore not carry out the contract. I should add that the precise effect of registration under the constitutions and rules of the respondents is not made clear by the documents before the Court.

14. The dispute which has come to a head in these proceedings has shown signs of doing so for some years, and the outdoor soccer authorities have attempted to discourage persons such as the first applicant from playing indoor soccer. The respondents took a definitive stand only recently. In January 1988, Sir Arthur George informed an executive meeting of ASF that at the last executive meeting of FIFA "it was further confirmed that players and officials could not hold a dual position or registration with an organisation affiliated with FIFUSA and FIFA". In consequence, the committee of the ASF passed a resolution which was transmitted to QSF and then to the clubs. Vessey, the executive director of QSF, sent letters to the clubs dated 15 February 1988, and a particular one to the president of Ipswich United, reading as follows:

"Dear Glenn,

At the Executive Meeting of the Australian Soccer
Federation it was decided the Australian Soccer
Federation is to proceed in accordance with the
ruling of F.I.F.A. and accordingly -

(a) Registration be refused of any player playing
in a competition organised by FIFUSA or an
affiliate member of FIFUSA.

(b) That any registered player playing in any such
competition as referred to in (a) be requested
to refrain from playing.

If such request is refused such player shall be
guilty of any offence and be dealt with
accordingly.

Can you therefore determine from Richard Barnard
his intention in regard to future activities with
the Australian Indoor Soccer Federation as an
affiliate of FIFUSA and advise accordingly in
writing of his decision."

15. Letters of this sort informed other clubs of the ban which is attacked in these proceedings.

16. No argument was directed at the hearing to the question of FIFA's right to promulgate such a ban under its constitution and rules, nor as to the right of ASF or QSF under their respective constitutions and rules to act as they have done. Some reference is made in the material to various provisions of those documents, but it is by no means clear that what has been done has been properly done, so far as those constitutions and rules are concerned. For example, I have not been referred to, nor have I myself found, any provision in the statute and regulations of FIFA, placed before me on behalf of the respondents, entitling it to act as the controlling body of any sport other than association football, which indoor soccer plainly is not. Despite that, according to a telex from FIFA dated 4 November 1986:

"FIFA's first aim is that all activities related to
association football like 5-a-side or women's
football shall be under the authority and
jurisdiction of the national associations
affiliated to FIFA."

One can understand FIFA's ambition to expand its activities to the control of "related" sports, but it is by no means obvious that it has any right under its constitution to do so. I cannot reach even a provisional conclusion on that aspect of the matter or upon the question of the propriety, so far as the constitutions of the other respondent bodies are concerned, of what they have done, since these matters were not sufficiently litigated. I have mentioned the point merely to record that, although the case has been decided on the basis that the ban is authorised by the constitutions and rules of the various respondents, that is merely an assumption, and one whose correctness may well be arguable.

17. It was contended on behalf of the respondents that the first applicant should not have any relief because of his delay. The application was filed one week after sending of the letter which imposed the ban; the suggestion of delay has no substance.

18. It is of marginal relevance, but should be mentioned, that the attempts by FIFA to suppress its small competitor's growth have not been confined to this country. In Spain, for example, the evidence is that governmental steps were taken to protect the indoor game.

19. There is evidence that, as one would expect, FIFA has threatened to take steps against those outdoor soccer players or organisations who have any truck with FIFUSA. The possibility of its carrying out its threats was urged upon me as a reason of convenience for dismissing this application. That point is mentioned further below. So far as the first applicant is concerned, FIFA's attack on his subsidiary sport has already been effective. At the behest of the ASF, he cannot obtain registration and therefore cannot carry out his contract with Coalstars.

20. Mr Bain, for the applicants, put forward as his first argument that application of the ban would breach s.45 of the Trade Practices Act 1974 because, to put it shortly, of its effect on competition. It is unnecessary to set out the relevant provisions relied on, for the principal answer of the respondents, represented by Mr Keane, was that there was no supply or acquisition of goods or services, as there would have to be for s.45(2) to apply: see s.45(3) and s.4D(1). Mr Keane contended that, there being no supply of goods, the first applicant had to show that his soccer playing came within the definition of "services" in s.4(1). He said it did not, because of words at the conclusion of the definition: "... but does not include rights or benefits being the supply of goods or the performance of work under a contract of service." Reference was made to the decision of the High Court in Commissioner of Taxation v. Maddalena (1971) 45 ALJR 426, applied in Buckley v. Tutty [1971] HCA 71; (1971) 125 CLR 353 at p 372. In the latter case, the Court said that "The position of a professional footballer vis-a-vis his club is that of employer and employee ..."

21. It may be that not all professional footballers are within the ruling in Maddalena, but only those whose contracts are such as to provide for what might be described as the ordinary measure of control by the club over their activities as players. The contract here in question is devoid of any expression of such rights of control as were mentioned in Maddalena.

22. Further, the exclusion of "rights or benefits being ... the performance of work under a contract of service", on its natural reading, covers the rights of the employer to the performance of work, not any rights of an employee to be given work; cf. Trade Practices Commission v. Queensland Aggregates Pty Ltd (1981) 36 ALR 236. It is a question whether the club's performing its functions to enable the first applicant to receive the benefits he would get from playing constitutes "services", as falling within the expression "rights ... benefits, privileges or facilities", in the principal part of the definition; but see Adamson v. West Perth Football Club (Incorporated) [1979] FCA 81; (1979) 39 FLR 199 at p 228.

23. The points just mentioned appear to be arguable ones, but it is unnecessary to determine whether the applicants' case under the Trade Practices Act has sufficient strength to warrant the issue of an interlocutory injunction. That is so because in my view the case under the general law is fairly clear.

24. I have referred above to the contract between the first applicant and Coalstars, and to the fact that it contains an express term inconsistent with the application of the ban to the first applicant. His counsel did not argue the case on the basis of breach of contract. Perhaps that was because of a notion that the contract might be subject to an implied condition, namely the grant of registration to the first applicant by the QSF. If there is such a condition, and the contract has become or remains ineffective, then the first applicant sues simply as a stranger complaining of the effect upon him of arrangements between the respondents. The applicant does not need to be a member of or in contractual relations with any of the respondents in order to obtain relief: Buckley v. Tutty [1971] HCA 71; (1971) 125 CLR 353 at p 381.

25. It should be added that if there is a contract of service between an employer and an employee restricting the latter's other activities during the term of the engagement, that restraint is not immune: A. Schroeder Music Publishing Co. Ltd v. Macaulay (formerly Instone) (1974) 1 WLR 1308 (House of Lords). Further, "The courts in general take a stricter and less favourable view of covenants in restraint of trade entered into between employer and employee than of similar covenants between vendor and purchaser..." -Geraghty v. Minter [1979] HCA 42; (1979) 142 CLR 177 at p 185 per Gibbs J.

26. It was argued by counsel for the respondents that authority supporting such a claim as the first applicant makes under the general law is lacking. My view is that the football and cricket cases provide ample support. The issue in the transfer cases such as Buckley v. Tutty (above) was the validity of rules prohibiting or restricting players from engaging in new employment with another club. Here, the question is whether the first applicant may lawfully be stopped from engaging in another sport, or, to put it more precisely, whether he may lawfully be prevented from playing one sport if he engages in another. Accepting the principles on which Buckley v. Tutty and similar cases were decided, it is difficult to see any logical reason for declining to extend them to cases of this sort. That step was taken by Slade J. in the World Series Cricket case in 1977: Greig v. Insole (1978) 3 All ER 449, which concerned attempts by the International Cricket Conference and the Test and County Cricket Board - bodies corresponding to FIFA and the ASF - to ban from county cricket in England, and from test matches, men who played World Series cricket. It was held that in the circumstances of the case the bans were an unreasonable restraint of trade. The facts were very different from those of the present, but two points which make this case stronger should be noted. Firstly, in Greig v. Insole, the competition which the conventional cricket authorities were trying to suppress was from a fairly similar game, and secondly, playing commitments in one would commonly clash with those in the other: see p 499. As to the former point, it seems to me that indoor soccer should be regarded as either a different game, or at least not as a mere variant of the older game, as is one-day cricket. Then Toohey J. in Hughes v. Western Australian Cricket Association (Inc.) (1986) 69 ALR 660 applied the Buckley v. Tutty principles to a ban applied at the district cricket level, on the ground that the applicant Hughes had played in South Africa. These cases have in common that they recognise the rights of professional sportsmen and sports-women to be free of unreasonable restraints imposed by the sports' controlling bodies. I reject the respondents' contention that authority is lacking to support a suit of this type.

27. The first applicant has not to date been paid for playing indoor soccer. That is so, however, not because it is an amateur sport in the true sense, but simply because it has not yet built up sufficient support. The intention is to pay outstanding players such as the first applicant. If the sport becomes popular with the public, the rewards may ultimately be substantial. In considering whether the applicant is to be regarded as a professional player, regard should be had to the remarks of Toohey J. in the Hughes case at p 700. There, after pointing out that the evidence was that Hughes had obtained only about $230 in his whole career from playing grade cricket, his Honour said, "But playing club cricket is an entry, if not the entry, to shield cricket and thence to test cricket". One should consider potential as well as past rewards. Attracting and holding the allegiance of professionals such as the first applicant appears to be essential to building the AISF's sport.

28. It does not appear to be necessary, however, to the success of the applicants' case that the AISF be found to be a body organising a sport with monetary rewards for the players. That is because the ban applies expressly to prevent the first applicant (among others) from engaging in outdoor soccer, a sport from which he would gain significant payments.

29. Even at an interlocutory stage the Court may and sometimes should decide legal questions: see the cases discussed in McCarthy v. Australian Rough Riders Association Incorporated [1988] FCA 333; (1988) ATPR 49,017 at 49,024 L. Any such decision, however, is subject to the possibility of being displaced if new facts emerge at the trial. I hold on the present evidence that the ban is of such a character that it must be tested against the principles which have been worked out relating to restraints of trade at common law. It follows that the ban is invalid "unless it is justified by the special circumstances of the case" (Buckley v. Tutty at p 376) and the onus of showing that the restraint affords no more than adequate protection to the interests of the ASF, the QSF and Coalstars lies on them: p 377.

30. It is not clear to me whether it is contended that the onus is, on the present evidence, satisfied. There is nothing in the material to suggest that the first applicant's activities interfere in any significant way with outdoor soccer or threaten it, other than as mere legitimate competition for public favour. The reason the ban was imposed was that FIFA required it and appeared to threaten retaliation if it were not applied. It was not argued that a ban on a professional player which would otherwise be unlawful under Australian law ceases to be so if an international sporting body insists upon it and talks of reprisals. FIFA's part in the matter was relied on as affecting the exercise of discretion, not the legality of the bans.

31. The question whether the onus is satisfied is one of law; see Buckley v. Tutty (p.377). It does not appear to me to be seriously arguable that the circumstances to which I have just referred are capable of satisfying it. Unreasonable restraints cannot be validated by being applied by or at the behest of persons with power to do harm to those who will not obey their dictates.

32. On the material presently before the Court, nothing has been shown to suggest a real likelihood that the respondents will at the trial succeed in putting forward some new facts on which to base a contention that the ban can be justified in law. In those circumstances, the question of the balance of convenience, while requiring consideration, must be looked at on the basis that the first applicant's case has strength and that of the respondents is obscure. It is plainly inconvenient for the first applicant to be banned. The only inconvenience which arises on the other side is the necessity of dealing with FIFA - but that must be faced if what appears to be the first applicant's rights are ever to be enforced, either at this interlocutory stage or at the final hearing.

33. It remains to be considered in what form the relief should be granted. In Buckley v. Tutty, the order which was upheld (with a variation not presently material) by the High Court restrained the defendants "from acting upon or in any way enforcing, or attempting to enforce the said Rules against or in any respect so as to affect the plaintiff". That is, the Court did not attempt to list the ways in which the restraint might be sought to be enforced by the defendants, but simply stopped them from attempting to give effect to the impugned rules. An example of a broadly-expressed injunction in another field is Waddell v. The Australian Workers' Union [1922] HCA 29; (1922) 30 CLR 570 at p 578. There, a union was restrained by the High Court from "doing anything (inter alia) in furtherance of the 'fighting policy' of the said organization as published in the 'Australian Worker' newspaper dated 1st June 1922". An order in the Buckley v. Tutty form has the advantage of simplicity; the respondents will understand that they must in all respects act as if the ban were inapplicable to Barnard.

34. With certain recognised exceptions (see "Snell's Principles of Equity", p.644) an undertaking as to damages is almost always required of an applicant for an interlocutory injunction. Here, the financial stake of the first applicant is very small; although he is a talented player, he is unlikely to earn any great sum from either indoor or outdoor soccer. It appears to me impractical and unjust to require him to risk ruin in order to vindicate his rights against the might of FIFA. Lord Wilberforce said in F Hoffmann-La Roche & Co. A.G. v. Secretary of State for Trade and Industry (1975) AC 295 at p 357, speaking of the undertaking as to damages:

"It does not, of course, follow that because there
is power to impose the condition it ought to be
imposed in this case, or similar cases. Regard
must be had to the nature of the dispute and the
position of the disputants."

35. There, the fact that the applicant for the injunction was the Crown acting in the public interest was regarded as important, but his Lordship's quoted remarks do not appear to have necessarily been confined to such applications. Lord Diplock expressed the view that the former practice of not requiring the Crown to give an undertaking as to damages could no longer be supported (p 362), but nevertheless, an undertaking should not be exacted. Here, I take into account that the ban has been imposed at the direction of a body not party to the suit and the absence of any evidence that it is necessary to protect the respondents' interests. It may be that some such evidence will be adduced at the trial, resulting in success for the respondents. It would in my view be unjust to expose the first applicant to the risk of having to pay damages, in that event. With some hesitation, I hold that the circumstances are sufficiently unusual to justify following the course of not requiring an undertaking as to damages.

36. There will be an order that until the final determination of these proceedings or earlier order, the respondents and each of them be restrained from acting upon or in any way enforcing or attempting to enforce, in relation to the first applicant, the decision of the Australian Soccer Federation notified by letters from the Executive Director of the Queensland Soccer Federation dated 15 February 1988, which letters begin, "At the Executive Meeting of the Australian Soccer Federation it was decided the Australian Soccer Federation is to proceed in accordance with the ruling of F.I.F.A. ..."

37. The costs of the application for the interlocutory injunction will be costs of the applicants in the proceedings. I shall give directions, in view of the nature of the matter, designed to achieve an early trial; so far as the Court is concerned, the case can be determined without much delay.